In the spring, the Bureau of Safety and Environmental Enforcement (BSEE) published its new rules on blowout preventers and well control for offshore oil and gas companies. Most of the attention was focused on impacts to drilling operations through tighter regulation of blowout equipment, maintenance and mud densities.
However, a new analysis indicates that the impact may be much broader, forcing changes to the entire offshore oil and gas industry. The analysis comes from the Van Ness Feldman law firm and it focuses on one small section of the rule.
Under the section of 30 CFR 250.107 titled “What must I do to protect health, safety, property, and the environment,” BSSE added this:
(a)(3) Utilizing recognized engineering practices that reduce risks to the lowest level practicable when conducting design, fabrication, installation, operation, inspection, repair, and maintenance activities;
The article points out three reasons why that is important:
- It applies to just about everything that happens on offshore leases. Instead of specifically targeting activities which control hydrocarbons in drilling and production, the section of the regulations applies to the entire process of exploration and development.
- What does the term Lowest Level Practicable mean? It doesn’t mean “lowest priced” and it may not even mean “reasonable.” One definition is “capable of being put into practice.” In BSEE regulations, a reference to “maximum extent practicable” means “within the limitations of available technology.” Chances are the courts will have to weigh in on what practicable means here.
- It is now the law! Industry experts will tell you they are always looking for ways to reduce risk and they are right. The challenges of offshore work, the costs of making a mistake and the level of government oversight have driven industry to work at a high level of safety. But now there is a regulation that says, if the decision is between two options, engineers needs to choose the one that presents the lowest level of risk and there are penalties for the operator and the contractor is that doesn’t happen.
How much offshore activity does this cover? Since almost all significant activities offshore take some level of engineering, it will impact a lot of activities. How about well interventions? Liftboat or crane operations? Pipelines that are regulated by BSEE?
What changes could it force? Here is a partial list:
- Construction and maintenance records. No documentation, no proof the rule is being followed.
- Documentation of engineering processes. Engineering is usually focused on designs and processes. Now it may need to look at how options were weighed in reaching decisions.
- SEMS compliance, especially contractor oversight. This has largely been performance-based, but this change could mean operators need to get into the decisionmaking process of their contractors.
- Coordination. What happens when an operator or contractor choice of the lowest risk option raises the risk for some other contractor or phase of a project? For example, a larger BOP with redundant systems may be better for preventing a blowout, but it may be too big to be safely installed by the driller. Who’s risk is more important?
This would be a good time to review your policies and decisionmaking processes, especially management of change. If you want to make sure your safety management system addresses this new change, contact us at Info@lifelinestrategies.com.