This is Part 3 of a paper written following the BP Oil Spill in 2010 regarding US offshore safety. In this chapter, we take a look at the history of offshore drilling, offshore safety, and offshore policy in the United Kingdom, including incidents such as the Sea Gem and Piper Alpha.
Firstly, it is valuable to examine the United Kingdom’s drilling policy regime, where much of the regulation and subsequent industry implementation is a result of one devastating night in 1988.
The United Kingdom has a rich and turbulent history with offshore drilling. In 1965, the Sea Gem, a 5600 ton drilling barge, was the first rig to find oil in the North Sea. From the very beginning, the UK offshore industry was marked by disaster. In December 1965, only a few months after the rig began operations, the rig’s legs collapsed, destroying the rig and killing 13 crew members.
Soon after this, some of the first regulations were passed to specifically address offshore drilling safety issues. This is a trend that is evident from the very beginning; UK offshore drilling legislation has consistently been focused on safety and the creation of a safer environment for offshore drilling. Overall, these regulations were extremely prescriptive in nature, making very specific requirements of companies. These prescriptive regulations serve essentially as a checklist; each company is required to show inspectors that they have adhered to a list of safety requirements.
In fact, ironically, many of these prescriptive regulations were inspired by laws in the United States. As a 1964 letter from the British government states, “In some countries, notably in the United States of America, there are statutory provisions for regulating the management of Artificial Islands and Fixed Structures on the Outer Continental Shelf…a code of similar authority supported by credible sanctions ought to be made applicable to British structures…”. As a result of their prescriptive nature, many of these regulations were ultimately unsuccessful.
The new requirement for all rigs to have an Offshore Installation Manager, a master, or unequivocal captain of the rig, who can take charge in any emergency, proved to be ineffective. While, in theory, this OIM was supposed to have broad powers and the ability to take charge in any situation, in reality, he was often just a clerk with very little actual power. These regulations were ultimately formally codified in the Mineral Workings (Offshore Installations) Act of 1971.
Following this regulation, the North Sea was relatively peaceful until 1988, when a series of accidents devastated the United Kingdom, paving the path for a more serious regulatory regime. The Piper Alpha platform had been successfully been producing since 1976, but on July 6, 1988, an explosion and subsequent sinking of the rig killed 167 people, making it the most deadly offshore drilling disaster of all time. The explosion was caused when a large cloud of gas ignited, as it leaked from a pump that had recently had its safety valve removed. The incident shocked the nation, galvanizing regulators to identify the numerous holes in the drilling regulatory system.
The British Parliament commissioned Lord Cullen and the Cullen Inquiry to identify the causes of the disaster and to see how future British regulations could ensure that such an incident would never repeat itself. Lord Cullen’s inquiry made 106 recommendations for industry changes; ultimately, the vast majority of these recommendations were adopted by industry.
In addition, from a regulatory perspective, the agency recommended that the regulation of North Sea offshore resources be moved from the Department of Energy to the new office of the Health and Safety Executive. This switch was seen as an opportunity to avoid a conflict of interest; the same agency overseeing increases in offshore production should logically not also be responsible for offshore safety. The report also called for more significant training of employees, along with the appointment of safety representatives for each rig. These regulations were outlined in the The Offshore Installations (Safety Representatives and Safety Committees) Regulations of 1989 and the Offshore Installations (Emergency Pipe-line valve) Regulations of 1989.
While Lord Cullen’s report suggested many individual areas of change, its most significant mandate was for a fundamental transfer of regulatory authority in the United Kingdom. Prior to these reforms, the regulatory regime was top-down in nature with very specific, prescriptive rules made by regulators. Instead, Lord Cullen recommended a movement to more industry-run self-regulation.
In particular, Lord Cullen pioneered the “safety case” approach to regulation. Instead of top-down government regulations, it is up to industry to comprehensively research and present any safety risks, their relative chances of happening, and the safety mechanisms in place to ensure that they are fixed. In addition, the burden of proof is on industry to demonstrate that adequate safety mechanisms and plans are in place in the case of a major accident. Each company must operate on the ALARP (as low as reasonably practicable), meaning that all risks must be reduced to as low a level as possible without exorbitant expenses.
For every single rig, each company must create and submit a formal safety case, a comprehensive document that outlines significant hazards present in each installation, risk of occurrences, possible options for treating risks, and proper systems for emergency evacuation and rescue. In addition, the formal safety assessment requires the “identification and assessment of all hazards over the whole life cycle of a project, and across all stages from development to decommissioning”.
So, for every rig request that is processed, the onus is on the company to comprehensively demonstrate the safety of the installation. These groundbreaking offshore regulations were actually, in fact, based largely upon very similar regulations that applied to onshore installations. These regulations were encapsulated in the Offshore Installations (Safety Case) Regulations, which replaced the earlier Mineral Workings Act of 1971.
Perhaps the most substantial indication of the success of the UK’s regulatory system is that there have been no major incidents since 1988. Nevertheless, it is valuable to examine several safety statistics to better understand how successful these regulations have been.
The rate and occurrence of incidents has gradually decreased over time. This is a hallmark of the safety case, risk-based approach: over time, continued industry and government collaboration allows for the use of innovative and creative methods to achieve gradually stronger safety results. A recent discussion of the UK safety regime noted that each safety case is very expensive to create and process, around $1 million. This is the largest argument against the institution of similar safety cases in the United States; while they may be helpful, they can add seemingly unnecessary expense to companies.