Safety During The Oil & Gas Upturn – A Deeper Dive.

Last month I posted something about what companies need to to do to prepare for the upturn in the oil and gas sector.  It generated more interest than probably any post I have submitted in the past and probably with good reason.  So I thought I should return to the topic with a deeper dive on the points that were raised by the post, beginning with the concern that safety seems to suffer as we go into an upswing.   As always, if you are concerned about any of this and need help making sure your safety and training programs are where they need to be, please contact us at info@lifelinestrategies.com or by calling (985) 789-0577.


BLM rigsNew Federal statistics show that in 2015, oil and gas injuries fell to their lowest level in at least a dozen years.  That is great news, but a little perspective is important.   The downturn has cost more than 80,000 jobs and the number of drilling rigs was also at its lowest rate in at least a dozen years.  Less work equals less opportunity for injuries.

But look at the activity that is going on and there is reason for concern.  The Denver Post recently published a series on safety in the oil patch and reporters looked at fatalities per rig.  They found that, on a per rig basis, Colorado had its second highest fatality rate in a decade in 2014, about one death for every 12 rigs.

Now we are entering what industry hopes is a recovery.   While the rig count is still way down by historical standards and fell slightly this week, it had risen for 17 straight weeks.   Shale players are starting to map out how they will bring on line the 5,000 or so drilled but uncompleted wells in the U.S.  The supply/demand curve is starting to tilt toward the demand side, at least for 2017.   There are even anecdotal reports of companies having a hard time finding experienced field hands in places like Pennsylvania.

The trouble is that history tells us the upswing can be a difficult time for safety, especially when the downturn has been as sustained as this one has been.  In this case, the increase in prices is likely to be modest and cost control will be very critical.  The main goal for companies will be to maximize revenue while still holding down expenses.  Crews work longer hours, managers take on more responsibility and the focus is on getting the job done.

We talked about this phenomenon of accidents increasing during the upturns in a blog last year, pointing out:

There seems to be a good deal of evidence that the problems come when we get back to work. That was the finding of a 2011 study done for the Centers for Disease Control. It looked at business cycles and industrial incidents and concluded that the construction, manufacturing, and mining industries tended to see incidents go up during the upswings.

A different study looked at workers comp claims during business cycles.  It found that:

There is fairly strong evidence that, relative to this trend, the frequency of workers’ compensation claims per hour worked tends to decline in recessions and increase in times of economic recovery. Some possible explanations are that during recessions:

  • There are fewer inexperienced workers;
  • The least safe equipment is taken out of use;
  • The pace of work is slower;
  • Workers fearing job loss may defer filing claims; and
  • Hazardous industries experience the largest decline in employment.

But during the recovery, what happens?

  • We hire new, possibly inexperienced workers (and research shows us workers are 46% more likely to be injured in the first year on the job);
  • We pull the old equipment out of mothballs; and
  • We work more overtime and longer hours.

In future posts, I will look at what companies should do now to avoid the potential for injuries as the work comes back.  For now, let me leave you will the best advice ever delivered in a TV show:

 

Texas Uses Funny Video to Promote Serious Message – End Unsafe Workplaces

The Texas Department of Insurance does a lot of things right, from an extensive library of free safety resources to free classes and workshops around the state.   Their approach is that safer workplaces mean fewer injuries which holds down workers comp claims and keeps citizens of the state healthier.

So in honor of Halloween, here is a video the department produced called Grim’s Bad Day, which helps promote their workplace safety hotline (1-800-452-9595):

 

SHHHHH…OSHA Very Quietly Issues Guidance on Injury Reporting

cropped-cropped-lifelinelogo-e1456288933132.pngWithout any real fanfare, OSHA has issued its promised guidance for employers on how to comply with the anti-retaliation and drug testing provisions of the new injury reporting regulations.   The regulations were released this summer, but they included some provisions that left employers confused and uncertain over how to comply.  In particular, the rules say OSHA can hold companies responsible if they are found to be discouraging employees from reporting injuries or retaliating against employees who do report.   They also included warnings that blanket drug testing policies may be viewed as a way to keep employees from reporting.

There was so much outcry that a lawsuit was filed and the enforcement date has been delayed twice.  Now it is set for December 1.  In the meantime, OSHA promised to release further guidance.


Are your policies and procedures up-to-date on the latest OSHA changes?  Do you have strategies to hold down injuries and the cost of injuries while still complying with the changes.   Contact us for assistance at info@lifelinestrategies.com.


The guidance did come out, buried in a memorandum and posted on OSHA’s website.  It is in dense, legalese which appears to be focused more on the lawsuit than on providing advice to the thousands of companies that now need to comply, but here is what it says:

Have Reporting Procedures – The regulations require that companies have a clear, reasonable policy allowing employees to report injuries.   In order to cite a company under this section, OSHA must “show that the employer either lacked a procedure for reporting work-related injuries or illnesses, or that the employer had a procedure that was unreasonable.”  The process can’t be a burden on employees or deter them from reporting.

OSHA says it would be reasonable to have employees report an injury to a supervisor by what ever means are convenient, it would be unreasonable to have them report in person.   Similarly, it would be reasonable to have employees report injuries as soon as “practicable,” such as the same day or the next day.  It would be unreasonable to require them to report immediately and to punish them if they don’t.   (This is just common sense when dealing with muscular injuries that may not present themselves until hours after the shift has ended).

Don’t Retaliate Against Employees Who Report – OSHA must have reasonable cause to cite en employer for this.  The memo states:

In this context, those elements include:

  1. The employee reported a work-related injury or illness;
  2. The employer took adverse action against the employee (that is, action that would deter a reasonable employee from accurately reporting a work-related injury or illness); and
  3. The employer took the adverse action because the employee reported a work-related injury or illness.

Discipline – OSHA makes clear that employers still have the ability to discipline employees, but only for violations of work or safety rules, not because they reported an injury.  In the real world, OSHA may have a difficult time making the case that the company only disciplined to retaliate against an employee who reported an injury.  However, the best way for the company to stay compliant is to make sure that employees who violate a rule are treated the same way  no matter whether an injury occurred.    For example, if a company does not do anything if an employee fails to wear PPE, but then fires the employee if an injury occurs while he was not wearing PPE, that may cross the line.

Drug-Testing – OSHA says requirements to drug test after an injury must be based on an objective, reasonable basis:

The central inquiry will be whether the employer had a reasonable basis for believing that drug use by the reporting employee could have contributed to the injury or illness. If so, it would be objectively reasonable to subject the employee to a drug test.

OSHA puts out a simple what-if to show how this might work:   What if a worker is injured by a crane?   If the company tests everyone who might have had a role, such as the crane operator and the signalman, that would probably be OK.  If the company only tests the injured worker, that might be a problem.

OSHA also says companies that are following federal law or state workers comp laws requiring testing are safe.

Incentives – OSHA has some language on incentives and it is worth reading, but it shows that OSHA is still struggling with the concept of incentives.   It says that, if a company holds a raffle every month that there are no injury reports and then cancels the raffle on a month where there is a report, that could be a violation.  However, if the company holds a general raffle to reward overall safe practices, such as training or proper use of PPE, that would be OK.

OSHA Delays New Injury Reporting Rules…Again.

OSHA has announced a second delay in its new rules on injury reporting.   The change in reporting was released this summer and it include some controversial provisions aimed at punishing companies that OSHA feels discourage employees from reporting injuries.  Those sections were supposed to go into effect in August, but in the face of a lawsuit and a great deal of opposition from industry OSHA delayed enforcement until November first.

Now OSHA has delayed the implementation yet again, this time until December 1.   The reason was a request from a federal judge in Texas who asked for more time to consider whether to grant an injunction against OSHA.

At the heart of the controversy is OSHA’s belief that some companies discourage employees from reporting injuries or that they may punish employees that do report.   The new regulations allow OSHA to cite companies if it finds the companies make it difficult to report, threaten employees who report or take steps to retaliate after a report.   One of the most surprising positions OSHA has taken is that blanket drug and alcohol testing may discourage reporting, so it should not be used, except as warranted.

The delay may simply mean that industry has another 30 days to come into compliance.  Or it may mean that the court is wrestling with serious issues surrounding the rule change and may ultimately block the new regulations.

That said, companies should review their policies to ensure that they properly communicate to employees that they do have a right to report injuries and that the company wants to encourage reporting.

If you have questions about addressing the change, please feel free to contact me at info@lifelinestrategies.com or by calling 986-789-0577.

How Are You Preparing For The Oil Industry Rebound?

The much-promised rebound in oil prices is starting to look real.  Brent Crude has been over $50 all month.  Predictions of $60 by Christmas are looking like more than wishful thinking. Oil companies are entering their budget cycles with some level of optimism for the first time since 2014.

So are you ready to get back to work?   For many oil and gas service companies, the honest answer may be no.  We may not have the people in the right places to do the work.   By one estimate, the American oil and gas industry shed more than 220,000 jobs, but the true number may be much higher when you count trucking, construction and other providers who may not show up under the “oil and gas” category.   That is a lot of positions to fill. We’ve been to this rodeo before and we know that, when business ramps up, we see the big increase in injuries, accidents and claims.

So what should a company be doing now to take advantage of the coming upturn?  Here is a short checklist:

____ Safety Plan Review:  There have been some changes to regulations since the downturn and some new customer requirements.   More than that, operators are likely to want your safety program to follow a SEMS or other safety management format.   In most cases, I find companies already have the safety management elements; they just need to be revised and reformatted, but it can mean the difference between getting and losing a job.

____ Pre-employment and Post-Offer Testing:  Drug and alcohol testing is a must.   Depending on the job, compliance testing (audio, respiratory fit tests, etc.) may be required.  Physicals and physical assessments should be a part of your program.   Making sure new people can perform job functions is critical when there are so many new hires.  If you don’t budget for testing and have an organized process for onboarding, you risk having injury costs eat up any profits from the new work.

_____ Injury Case Management: Honestly, this hasn’t been much of a problem during the downturn.  Less work.  Fewer injuries.  More time for safety managers to stay on top of injuries.   That all changes when it gets busy.   One of the secrets of successful safety programs is that they focus on case management to keep unwarranted recordables down, help workers get well and back on the job more quickly and minimize workers comp costs.   This is the time to line up a provider who can help support case management so you can focus on preventing accidents.

____ Job Descriptions and Skills Assessments:   This may be a head-scratcher, but if you don’t have accurate job descriptions, how do you know what new hires will do?  And if you don’t have a methodology to assess workers on the particular skills that make up the job descriptions, how do you know whether you have the right people doing the jobs?   Sure, every company has a number of in-house subject matter experts who know every job inside and out. However, those people are worth their weight in gold and they won’t have time to look over every new employee’s shoulder.

_____ Operating Procedures: See above.   Too many companies rely on head knowledge, not written knowledge.  The most experienced people will be too busy to share everything they know.  You also run the risk that they will be hired away just when you need them most.  Operators and government inspectors have already said many service company SOPs are inadequate.   It only gets worse when a lot of new people head out into the field.   Now is the time to make sure procedures are correct and can guide a new employee in the job.

_____ Training:  Review your introductory training.    Does it meet your needs?   How will you make sure every new employee is ready when things get busy.    What about supervisory training?   Supervisors and mid-managers are the most important part of your workforce when new jobs start up.  They need to be ready to lead their crews.

That is a short list.  There are many other things that companies need to have ready when things pick up.  However, we need to remember that we call them “service companies” for a reason.  Service is delivered by people and having the right people ready to do the job is the most important investment you can make when business returns.

Lifeline Strategies has expertise in each of these areas.  If you want to be ready to take advantage of the upswing in the oil and gas cycle, let’s talk.   We can help develop a plan of action or provide you with solutions for any of the challenges listed above.  Contact us at info@lifelinestrategies.com or call at (985) 789-0577.