Bad Week For Oil Transportation

Here’s a rundown of some of the headlines in the news in the last week:

So whether by rail, pipeline, highway or maritime, every oil and gas transportation mode, with the possible exception of pony express and airmail, has come in for a black eye in the media.

https://www.youtube.com/watch?v=ABC0HC5h3jA

For the industry, it is a reminder that its reputation is a cradle-to-grave proposition.  The public will judge oil and gas companies’ commitment to safety and protecting the environment for every step of the process, including transportation incidents that may happen dozens or even hundreds of miles from the oilfields.   It also means that critics will pounce on incidents that are unrelated to drilling and production to limit those activities.

In some ways it is not very different from the early days of U.S. drilling.   Back then oil was plentiful but the country lacked the infrastructure to transport the it from the oilfields.   Today, drilling is taking place in more than 30 states and in communities that have no experience with the industry’s activities.   It reminds me of a conversation I had with an industry veteran once about why some Gulf of Mexico port cities weren’t jumping off points for offshore oil and gas activities.   He said, “what do you think the garden club would say when a thousand trucks roll down main street every day?”

 For HSE professionals, it is a reminder that safety doesn’t stop at the wellhead.  That is one of the reasons that safety management systems, like SEMS, need to encompass the chain of custody issues in the supply chain.   An upstream safety manager with an oil company or a service company may not be able to control trains, pipelines and barges, but any safety professionals who aren’t beefing up their driving safety programs are missing the handwriting on the wall. 

British Raise Bar On Oil & Gas Helicopter Safety – Will It Impact The U.S.?

The UK Civil Aviation Authority (CAA) has announced a series of safety measures for offshore oil and gas-related helicopter flights at British North Sea facilities.   This comes after a full review of safety that was promoted by a scottish accident last august that killed four.   The measures include a number of permanent and temporary requirements.  Some could dramatically change the way offshore flights are handled.

Permanent:

  •  Prohibiting helicopter flights in the most severe sea conditions, so that the chance of a ditched helicopter capsizing is reduced and a rescue can be safely undertaken
  • Requiring all passengers to have better emergency breathing equipment to increase underwater survival time unless the helicopter is equipped with side floats
  • Over time, the CAA expects helicopter companies to make improvements to helicopters and survival equipment including:

• Fitting side floats
• Implementing automatic flotation equipment
• Adding hand holds next to push out windows
• Improvements to life rafts and lifejackets

  • The CAA will begin approving helidecks.

Temporary:

  • Pending further safety improvements to helicopters, passengers will only be able to fly if they are seated next to an emergency window exit to make it easier to get out of a helicopter in an emergency (unless helicopters are fitted with extra flotation devices or passengers are provided with better emergency breathing systems).

Will these recommendations make their way into U.S. regulations on helicopters?   Only time will tell, but there is one part that could most definitely affect U.S. offshore oil and gas.   The CAA wants the Offshore Petroleum Industry Training Organisation (OPITO) to enhance the quality and frequency of helicopter training given to oilfield workers.   That may include:

  • training workers to escape from a small window, rather than the standard size used now.
  • seeking more input from training providers in developing standards.

Significantly, the CAA says OPITO should enhance training frequency, but it does not recommend specific refresher durations.

The CAA expects OPITO to act by the fourth quarter of this year.   This could impact U.S. operations because many HUET courses taught in the U.S. follow OPITO standards.  So a change overseas is likely to change the way U.S. providers teach OPITO courses.  Over time it could also change the way non-OPITO HUET is taught because of the way some oil companies will require a certain certification 0r the equivalent.    In the past, those sorts of equivalency requirements have resulted in other providers increasing their standards as well.

 

Danger – Black Swans Loose on Texas Roads!

Emergency personnel attend to a man injured when a tractor he was driving overturned west of Kenedy, Texas in July 2013. Between 2009 and 2011 in Karnes, La Salle and Dimmit counties, crashes involving a commercial vehicle increased 470 percent. (San Antonio Express-News)

Oil and gas industry driving accidents are a hot button issue right now.  Increased industry activity has brought an increase in traffic incidents, especially in areas that have not seen that level of activity before.   However, recent statistics from Texas point to a strange twist to the accident numbers.

According to  the Fuelfix website, 2013 saw a drop in driving fatalities in the Eagle Ford area of Texas, where there has been such an increase in drilling activity.  In 2012, the 23 counties that make up the Eagle For experienced driving 248 fatalities and in 2013 there were 236.   That’s good news.

But the Texas Department of Transportation says if you add up the number of crashes resulting in serious injuries or fatalities, the number jumped by 26 percent between 2012 and 2013, up to a total of 3,430.

That is the danger of just looking at one metric of safety; if you just looked at fatalities, you would have missed the real trend.   Statisticians warn that random events behave in random ways.  An event can happen once and never repeat itself, or it can happen in strings.  They call those random events “black swans.”

So you could say that Texas has experienced a black swan event.  Fatalities dropped, but serious accidents skyrocketed.   We frequently see a similar disconnect in OSHA recordables, companies with the highest recordables may never have a fatality and every once in a while a company’s only recordable is a fatality.   Unfortunately, the difference between life and death in a serious crash can come down to chance – to a slight alteration of speed, location or driver attention.

Texas is stepping up its efforts to reduce accidents and fatalities.   TxDOT has launched a campaign called “Be Safe. Drive Smart,” which includes a series of  safety messages on TV, radio, billboards, and gas pumps.   The state says it hopes to partner with oil and gas companies to get the word out.

 

 

The Price Tag For Offshore Oil & Gas Spills Is Going Up.

The Bureau of Ocean Energy Management (BOEM) wants to increase the dollar liability for an oil spill from an offshore facility by nearly 80 percent.   The proposal was published in the Federal Register this morning. Right now, an oil and gas company that is responsible for a spill must pay the clean up costs, but its liability is capped at $75 million, an amount that hasn’t changed since the oil spill laws were enacted in 1990.   The proposal would increase that limit to $133.65 million.   The agency says that reflects the increase in inflation over the last 24 years and part of the regulation would automatically increase the limits by the annual inflation rate.

What types of facilities does it apply to?  Under the regulations, the limits apply to offshore production platforms, wells and pipelines.  In the case of drilling operations, it applies to everything related to well control or risers leading to the well, but does not include the MODU (they fall under the vessel rules).

Who does this apply to?  The responsible party is defined as the leaseholder where the spill occurs, the owner of a pipeline or, in the case of an abandoned well, the last owner.

Does this really cap liability?  Not really. the existing regulations say “this section does not apply if the incident was proximately caused by—

(A) gross negligence or willful misconduct of, or

(B) the violation of an applicable Federal safety, construction, or operating regulation.”

That means a company that fails either of those standards faces unlimited liability, which is why the post-spill legal maneuvering that always follows an incident is so important.

The proposal claims that this change should not have much of an impact on insurance rates, but the explanation of why the government believes that is a little murky.  One suspects the insurance companies will have the final word on that claim.

It also contains a somewhat surprising statement: “The Department is limiting the rulemaking comment period to 30 days since it does not anticipate receiving adverse comments on this rulemaking.”   Surprising to say they don’t expect adverse comments since this dramatically increases the exposure for offshore operators on the one hand and may not be high enough to satisfy environmentalists on the other hand.   That may mean that the agency has already vetted the proposal with industry and environmental groups and has their buy-in.

And there may be good reason for both sides to agree.   According to one article, one bill in Congress would have increased liability to $10 billion, but it ran into strong opposition.  That means increasing the limits with the inflation rate may be the only way to change it without a bruising fight in Congress.   And by the way, in Canada, the conservative government recently introduced legislation to up the liability limits to $1 billion for oil and gas facilities and nuclear power plants.

The comment period closes on March 26th.

Get On Top Of SEMS Skills and Knowledge With SEMSReady™

Offshore oil and gas companies are pushing contractors to evaluate their personnel to make sure they meet SEMS skills and knowledge requirements.   Now guidance from the Center for Offshore Safety outlines a skills and knowledge management system that contractors may be asked to comply with.

Make sure you are aligned with you customer’s requirements by attending one of our SEMSReady classes.  You will learn how to identify the critical tasks of offshore jobs and how to perform objective, auditable evaluations of those tasks.

Our next classes are scheduled for:

March 6, 2014: Lafayette, LA

March 13, 2014: Houston, TX

CLICK HERE TO REGISTER or for more information.

What Is OSHA’s Authority Offshore?

One of the questions I get most often when I teach my workshop on SEMS compliance is whether companies need to follow OSHA regulations offshore.  It is a complex question, because it depends on a confusing interpretation of the law plus the expectations of the oil and gas industry. Most of the answers are found in an OSHA instruction:  OSHA Authority Over Vessels and Facilities on or Adjacent to U.S. Navigable Waters and the Outer Continental Shelf (OCS) The basic rule of thumb on OSHA is that it does not have authority if another agency regulates safety issues.   The clearest example is that the Coast Guard regulates inspected vessels, so OSHA does not have authority over them.    But when you look at uninspected vessels (towboats, barges, etc.), it is a lot murkier.  The OSHA instruction goes into great detail on how vessel jurisdiction is to be determined. Whether OSHA regulations apply to offshore facility is a complex one that may be in flux.  The OSHA document says:

OSHA, in accordance with section 4(b)(1), still has responsibility for any hazardous working condition for which the U.S. Coast Guard or MMS has not yet promulgated a regulation (see Chao v. Mallard Bay Drilling, Inc., 534 U.S. 235 (2002)). As the U.S. Coast Guard or MMS promulgate additional worker safety and health regulations, OSHA’s application to OCS workplaces will diminish.

That implies that OSHA does have some authority over offshore facility safety and there is a Memorandum of Understanding between OSHA and the Coast Guard that says the Coast Guard will call OSHA when it sees an apparent violation of OSHA standards. However, the SEMS rule may have changed everything.   Remember that OSHA has responsibility over hazardous working conditions where other agencies do not have regulations.  When the SEMS rule came out in 2010, it appeared to make oil and gas companies responsible to BSEE for every safety issue imaginable:

§ 250.1901(a)   you must ensure that  your  SEMS program identifies, addresses, and  manages safety, environmental hazards, and impacts during the design, construction, start-up, operation, inspection, and maintenance of all new  and  existing facilities, including mobile offshore drilling units (MODU) 

I am just giving an opinion here, but that doesn’t seem to leave much room for OSHA authority.  Of course it may not matter for contractors, because operators universally take their lead on safety practices from OSHA regulations.  So the chances of a contractor being fined by OSHA for an offshore violation are relatively small, but when operators tell contractors to meet their policies on safe work practices, that generally means meeting OSHA standards.  Additionally, if BSEE decides to cite an operator or contractor, in the absence of a clear regulatory standard, it may look at accepted practice, which leads us right back to OSHA standards Again, this is just conjecture and someday all of this may be argued in court.  So if you have questions, you should consult an attorney on offshore compliance issues.

Oh, and one more thing – OSHA most definitely has authority on oil and gas facilities located in state waters, where BSEE does not have any authority.

Safety Violations – Am I Repeating Myself?

Those who do not remember the past are condemned to repeat it.  – George Santayana

 

Want to know how to spend a whole lot of money?   Violate an OSHA regulation…and then do it again.   First time offenses are capped at $7,000, unless it is found to be a willful violation.   However, if you repeat a violation, the penalty goes up to $70,000.   

Repeat offenses are difficult  for companies to overcome, because the the message they send to regulators is that the company doesn’t care enough to fix its mistakes.   There is a very simple explanation of the OSHA penalty regime on the American Professional Safety Trainers Alliance website.  They make the important point that the fine may be the least of your problems if you are tagged as a repeat offender, because there is also the likelihood that the media will pounce on the story, doing untold damage to the company’s reputation.

The other problem with the repeat offender fines are that they don’t really focus on the most dangerous violations.   As attorney Howard Mavity  very accurately points out in a recent blog on OSHA violations at stores:

  • Most big dollar OSHA penalties aren’t directly related to an employee death or serious injury.
  • The biggest dollar exposure comes from “Repeat” citations of up to $70,000 for each violation.
  • Once an employer is cited for a violation, the next violation within FIVE YEARS at ANY company location will be a repeat.  And each repeat citation during that five years drives up the penalties.
  • Common sense dictates that the most likely repeat items will be “routine” safety violations because of the sheer number of opportunities to occur, such as a damaged extension cord, a briefly blocked fire extinguisher or electric cabinet, one employee not given Hazard Communication training, a power strip used instead of a permanent electric fixture, or failure to provide annual fire extinguisher training.

In other words, a company that has been tagged by OSHA is automatically under more scrutiny and the smallest violation can trigger the biggest fine allowed by law.

The message is that an OSHA violation may be willful or a simple mistake, but a repeat offense is unacceptable, any time, any place.

 

Real Life Safety Lessons – The Power (And The Problem) Of Video

I saw a video of a workover blowout.  It was shot on a worker’s cell phone, apparently in another country, and shows tubing flying out of the well like spaghetti.  I thought anyone who works in the field should see how wrong things can go and how fast they can get there if the crew isn’t careful.   Evidently about a half a million other viewers had similar thoughts.

 If a picture says a thousand words, videos like this are worth a million words.   We can talk about safe practices at every safety meeting, but seeing an event like this take place drives home the impact in a way that we can’t duplicate any other way.

But then there is the flip side of the coin.   At the start of the video, the photographer appears to be about 50 feet away.  Then about 40 seconds into the video he seems to wake up to the fact that he is too close, so he runs what appears to be about 25 feet further.   AND STOPS  TO PLAY PHOTOGRAPHER AGAIN!   You see a co-worker in the foreground who is even slower to realize the danger than he is.   This time the photgrapher only stops for another five seconds before everyone on the crew runs for cover.   He takes more video as the tubing whips through the worksite like a lariat.

The video is a great teachable moment for anyone who sees it, but the problem is that it was taken in the first place.   One of the things that social media, YouTube and cellphone cameras have done is to make us all reporters, able to capture the moment and broadcast it to the world.   But as this video demonstrates, this means a lot of worker’s first reaction is the reach for their phone and start shooting.

One of my fundamental beliefs is that safety has two main components:

  1. Trying to control hazards (barriers, PPE, etc.) and
  2. Trying to overcome all of the bone-headed, dangerous things that we humans do that goes against the hazard contriols we put in place.

So the second lesson of this video is that companies need to address the growing trend to “shoot first and run for cover later.”

How would you handle this one?

 

Safety: What’s Love Got To Do with It?

Special Valentines Day Edition!   

Here is the scenario:   A worker starts making mistakes on the job.  He forgets his safety glasses.  He can’t focus on the task in front of him.   Do you

a.   Drug test him?

b. Ask him if he just started dating?

Research is showing that falling in love really is like a drug. In fact the first stages of attraction affect the same parts of the brain as opiates.   In one recent study scientists took a group of volunteers who had been in love for less than six months.  They were given  a number of different facts and told to figure out which ones were important and which ones were irrelevant.   The love-struck participants had a hard time telling the difference between important and irrelevant information.  The conclusion was that they had a harder time paying attention and focusing on the task in front of them.

“When you have just become involved in a romantic relationship you’ll probably find it harder to focus on other things because you spend a large part of your cognitive resources on thinking of your beloved,” Henk Van Steenbergen says.

So if one of your co-workers starts talking about meeting the love of his life, you might want to keep him away from sharp objects for a while.

By the way, if you have a teenager, you already knew this and it didn’t take a study to prove it.

 

Safety – Goal-setting may be less important than the way you get there

Have you had even seen a safety guy go on a rant about “zero incident” policies?   They generally have three basic gripes:

  1. Workers see it as an unreachable goal, so they don’t take it seriously.
  2. If someone slips on the first of January, you just lost your goal for the rest of the year.
  3. Saying you want zero incidents doesn’t tell you how to get there.

All three are valid points, but I think the third is the most important one.   Stating a goal without creating a roadmap is like the wish you make before you blow out your birthday candles.   You have made the wish, but you haven’t taken the concrete steps to make it come true.

There was a very good article recently on the difference between goals and systems.  Author James Clear writes that goals may be what we want to happen, but we rarely achieve them unless we have a system (or process) for making our goals happen.  For example, a coach’s goals may be to win the championship, but his system is built on what the team does  in practice every day.  Similarly, a company’s safety goal may to be incident free, but success for that goal depends on how we execute our safety program every time we go to work.  He points out that goals focus success on something that may be off in the future (as in running a marathon in three months), rather than reinforcing the things we do right now (as in doing your daily workout to prepare for the marathon).  He also stresses that goals may depend on things that are out of our control, but process allows us to adapt and change to meet outside circumstances.

Finally, he asks a question that should be at the heart of every safety programIf you completely ignored your goals and focused only on your system, would you still get results?

If you never had a safety goal, but focused on making sure everyone works safely every day, would you still get the same results?