Should vessels have Safety and Environmental Management Systems (SEMS) plans that align with their offshore oil customers’ SEMS plans? On September 10th, the Coast Guard published an Advanced Notice of Proposed Rulemaking (ANPRM) which would require SEMS plans for certain vessels working on the Outer Continental Shelf.
This may be one of the most significant regulatory changes facing the vessels that work in the oil and gas world. the Coast Guard says it “intends for this SEMS to be developed and implemented by the vessel’s owner or operator and compatible with a designated lease operator’s SEMS required under Bureau of Safety and Environmental Enforcement (BSEE) regulations. The Coast Guard seeks comments on whether a SEMS that incorporates the management program and principles of API RP 75 is appropriate for vessels engaged in OCS activities, would reduce risk and casualties, and improve safety on the OCS.”
The rule could affect 2200 vessels:
1,800 Offshore Supply Vessels (OSVs),
125 other vessels.
What’s behind the proposal?
Probably a lot of things, starting with the need to align MODUs with SEMS. SEMS is centered around managing safety and environmental requirements on facilities. On drilling projects, the operator has to have the SEMs plan but the facility is a MODU, and much of the facility-specific information is under the control of the drilling company. Both BSEE and the USCG want to make sure there is no disconnect between the operator’s SEMS and the driller’s safety program. By taking the lead in requiring MODUs to have SEMS plans, the Coast Guard may be sidestepping an inter-agency squabble over whether which agency controls safety on the vessels.
But there is more at stake with this rulemaking because it affects more than just MODUs. The reasoning for the Coast Guard is that the ISM code is not specific to offshore energy sectors, “this Code assumes a vessel’s mission is international transportation of cargo, not OCS activities.” Translation: ISM fits some but not all of the safety framework of offshore operations. For example, many crew members on an offshore construction vessel are not “seafarers” under STCW. The Coast Guard wants to close those gaps.
Finally, there is a deeper reason for this proposal. The Coast Guard regulations have not kept up with technology. The last revision to the Subchapter N regulations governing OCS safety came out before the first deepwater facility was even in production. Today, a lot of well activities are done on the ocean floor by workboats using ROVs. These boats fall into a regulatory shadow, largely outside the direct authority of BSEE and beyond the expertise of most Coast Guard personnel. The proposal would be one way to oversee those operations and provide the regulatory muscle to make sure operator SEMS and vessel safety programs are in line with each other.
An ANPRM is the first step towards a new regulation. It is when the agency asks industry and the public what the future regulations need to look like. In this case, the public comment period is open until December 9, 2013. Industry needs to take advantage of this opportunity to have its say.
New report on Decommissioning in the Gulf of Mexico – $1.3bn and $1.7bn spent on P&A work last year. An eye-popping figure. Apache leads the pack in money spent to remove structures. The report comes from Prof. Mark Kaiser of LSU, who has become one of the top experts on the impact of decommissioning work. Here is a story about the study.
SEMS came in response to a drilling accident, but this is a reminder that so much of the work in the Gulf is decommissioning (and with a lot of work comes a lot of risk).
That is not true in Louisiana where, for some reason, struck by deaths have been the number one cause of death at worksites. Last year, 24 workers died from struck by incidents in the state. OSHA officials discussed the problem and their initiative to address it at the Louisiana Governor’s Safety & Health Conference held in Baton Rouge this week. They said they worked closely with industry, especially in the construction trades, to address the problem. The results are impressive and encouraging. Where last year, there were 24 struck by deaths in Louisiana, so far for 2013 there have only been five. It is no longer the leading cause of death for workers in the state. Five is still too many, but the improvement is remarkable.
The important thing about this effort to reduce struck by incidents is that it appears to have been done with a high degree of cooperation and without a lot of headlines or adversarial finger pointing. Initiatives like this ought to be the model for how government and industry can work together to tackle a safety problem.
I took a quick look at my TWIC card today and realized two things:
It expired today.
Still glad I lost the mustache. It just wasn’t working.
We haven’t heard much about TWIC cards lately, but I am betting that a lot of us had our cards expire recently. TWIC Cards were valid for five years and the roll-out for implementation started in 2008, in other words five years ago. They are required at most port facilities and by anyone holding a merchant mariner document, but a lot of facilities also required them (pretty much because it was a cheap way to get the government to do a background check on everyone who came on site). As an indication of how many offshore workers got TWIC cards, Port Fourchon was one of the busiest ports for TWIC applications for a period of time. It was also the site of the only two known cases of workers trying to falsify TWIC cards.
For people who got their cards in that first wave and now find they are expiring, there is an extension process you can read about here. It gives you three more years for $60, but you have to apply at least 30 days before your current TWIC expires. The initial plans to have TWIC readers at ports and certain vessels has largely faded away because of problems with the reader system. However, it doesn’t look like there is any chance Congress will stop TWIC card requirements for individuals.
And there is a connection to SEMS. Don’t forget the Management section of SEMS requires all operators to make sure facilities are “in compliance with all applicable governmental regulations.” So better check those expiration dates.
And note to self: never, ever, ever grow the mustache back.
According to information on the BSEE website, the agency is following through on its threats to fine contractors. In the past, BSEE only assigned Incidents of Non-Compliance (INCs) to oil and gas operators, but last summer it issued an interim policy, Issuance of an Incident of Non Compliance to a Contractor, which said “BSEE will, in appropriate circumstances, issue incidents of noncompliance (INCs) to contractors for serious violations of BSEE regulations.”
Now nine months into the year, BSEE’s website section on penalties indicates that, of seven INCs leveled against companies in 2013, four of them have been to contractors. The number may actually be much higher, because BSEE only publicizes the INCs that it writes as a result of incidents, not inspections. So the agency is most definitely following through on its threat to hold contractors accountable for what BSEE considers to be safety or environmental lapses.
This is not a minor issue to contractors either. Penalties can run up to $40,000 per violation, per day, not to mention the harm it could do to a contractor’s relationship with its offshore oil and gas customers.
However, it is possible that the BSEE INCs to contractors may not stand up in court. One of the contractors that received an INC is challenging the penalty,
arguing that the agency does not have the regulatory authority to INC contractors. BSEE disagrees. It may be up to an administrative law appeals process to sort it all out. But even if BSEE loses this round, many believe that it could still impose INCs on contractors at some point in the future, as long as it goes through the process of developing regulations on contractor INCs and allows the industry and public to make comments.
Bottom line: Did anyone need another reminder that the costs of failing to have a strong safety and environmental management approach are too high to ignore?
Government Statistics show a preliminary total of 4,383 workers dies on the job in 2012, a drop of more than 300 from the year before. But the stats show a dramatic rise in oil and gas fatalities. There were 138 fatalities at drilling and production facilities, and increase of 23%. We have a lot of work to do!
We are now nearly two years into the new SEMS rules. Are we better off? Participants at a conference this week weighed in. I had the pleasure of moderating a panel on contractor safety under SEMS at the Offshore Process Safety Conference held in Houston last week. The participants were:
• Heather Corken, Partner, Bracewell & Giuliani
• Steve Langlinais, Global QHSE Manager, Greene’s Energy Group
• Rick Bui, Vice President HS&E Sr. Baker Hughes
• Kevin Graham, Director of Compliance, M&H Energy Services
• David Dugas, Sr. EH&S Specialist, Apache
Probably the most knowledgeable group I could imagine on the subject of what contractors need to do under SEMS.
One thing we did as a part of the session was to survey the audience on whether they thought SEMs had made offshore safer and what they would change about SEMS. Here are the results: 66% say yes, SEMS has made offshore oil and gas safer 33% say no it has not.
An admittedly small and very unscientific survey, but some of their answers to the second question, are worth repeating:
On the second question (What would you change about SEMS?) here is what they said:
“Include design standards.”
Give us more “examples of ‘good ’and ‘ bad’ from BSEE”
“Assure that people doing work offshore are knowledgeable enough to ensure that they prevent harm to people and/or to the environment” (That was from an audience member who said SEMS has not made us safer).
“Clearer guidelines on ‘required’ offshore training.”
“Accept it and get on with it, you are 20 years behind.” (Needless to say, that was from someone who said SEMS has made us safer).
What do you think? Safer? Not safer? What would you change?
In just two days last week, OSHA announced penalties against seven companies – the common thread, almost every one involved employees working at heights or working in trenches. The incidents are from different OSHA regions. Sounds like a good time to review company policies on working at heights and trenching and reinforce communications of those policies to personnel, doesn’t it?
This story happened a couple thousand miles from oilfields, but it has a lesson about preparing for the unexpected. If nothing else it is a reminder of how important it is to ID all the hazards in a hazard analysis. 233,000 gallons of molasses spilled in Honolulu Harbor. The company, which is very well prepared for oil or chemical spills, had nothing in its response plan for molasses. Just a reminder to everyone living in a SEMS world if we don’t identify what can go wrong during a hazard analysis, we can’t expect to prevent it or respond to it. Here is the story from CBS: Molasses spill hits Hawaii