Offshore Oil & Gas Enforcement: Smarter, More Focused

The last decade has been a wild ride for offshore oil and gas in the Gulf of Mexico.   Macondo oil spill disaster.   Crash of oil prices.   New regulations like the Safety and Environmental Management (SEMS) rule.  Then there is decommissioning, a trend that which hasn’t gotten the attention it deserves.

It has been traumatic for industry, but it has also had a big impact on government regulators, who have gone through three name changes (MMS-to-BOEM-to-BSEE), four directors and a sea change in the way they do business.   So it is worth asking, how has BSEE – the Bureau of Safety and Environmental Enforcement – adapted.

A recent talk by a senior regional official with BSEE, Jason Mathews, gave a good picture of how BSEE is managing its resources through targeted enforcement.  The talk was given to the Gulf Coast Safety & Training Group, a Lafayette-based safety professionals organization.

First, a little background.  BSEE, like most enforcement agencies, doesn’t have a cop on every corner to catch violations or prevent every incident as they happen.  The SEMS regulations, which rely on companies to identify their specific risks and address them through safety systems, also change BSEE’s enforcement role.   Finally, low energy prices color everything offshore.  Budgets have been slashed.  Equipment is aging.  Companies are walking the difficult tightrope of maintaining safety while cutting the break-even price of the projects.

Based on Mr. Mathews presentation, BSEE is adapting to this new paradigm by taking more of a risk-based approach than we have seen in the past.   BSEE will continue the annual inspections that are required by regulation, but where additional inspections may have been more random, today they are focused.  Regulators pay close attention to trend analysis, key indicators for different oil and gas operators and performance on SEMS audits.  Companies with strong track records for compliance get fewer visits, possibly none beyond the annual inspection.  Companies with a history of incidents and violations get frequent visits.  Where success in the past may have been measured by how many violations (Incidents of Noncompliance or INCs) were found, now a company that shows a decline in INCs is a success story.

The basic assumption is that, if BSEE sees an unsafe trend and signals it will stiffen enforcement, industry will pick up on that and fix the problems.   Here’s one example of how that works.  In 2015 there was a jump in fires and other incidents involving compressors.   BSEE dedicated inspectors to check compressors at 50 platforms.   The action only resulted 13 INC violations, not exactly a wave of penalties.

But here is what happened as a result – Almost as soon as the inspections started, individual companies heard about them and addressed the problem on their own facilities.   Industry needed to be nudged, but it got the message quickly and fixed the problem.

Here’s what else happened – While BSEE was looking at compressors, it also looked at the safety systems in place to make sure the compressors were in compliance.   On a third of the facilities, it told operators they needed to improve their training for the equipment and, on a quarter of them, it told operators to beef up their mechanical integrity and quality assurance programs.  Several lacked operating procedures, a critical element for equipment like compressors.  Again, SEMS is supposed to focus on preventing future incidents and BSEE is adapting to make sure the elements of SEMS are in place and working.   In simple terms, BSEE is doing more with less.

In my next post, I will look at some of the safety issues and trends that are emerging in the Gulf.

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