In my last post I looked at the ways that the government agency overseeing offshore safety is addressing the challenge. As a followup, here is a look at some of the trends impacting offshore safety.
The safety net is bumping into the bottom line in offshore oil and gas. We are three years onto a truly savage downturn in prices and at least one Supermajor wonders if the phrase “lower for longer” should really be “lower forever.”
So, this is a good time to step back and look at some of the trends in the Gulf of Mexico especially the ones that reflect safety. Much of this information comes from a presentation that Jason Mathews, one of the Bureau of Safety and Environmental Enforcement’s (BSEE’s) officials in the Gulf, gave to the Gulf Safety and Training Group in Lafayette last month. Here are a few trends to look at:
Incidents are way down – Just about every incident category saw declines between 2011 and 2015 and 2016. Recognize that most numbers were pretty small to begin with, but fatalities, injuries, loss of well control and fires all dropped by 25-35% over the period. Gulf activity is down, which contributes to the drop in incidents, but so are budgets and staff. With a sustained downturn, you would expect safety to suffer, but the statistics say otherwise. Two possible explanations are that:
- We have reduced turnover, which means less training needed, and
- Companies are down to their most qualified employees.
By comparison, 2013, with its $100 a barrel spikes saw a dramatic jump in incident as companies scrambled to hire to meet the demand.
The SEMS Rule is still a work in progress – Under the Safety and Environmental Management Systems (SEMS) regulations, companies analyze their hazards, develop systems to manage safety and environmental compliance, and have their programs audited. Companies have now gone through two audits and BSEE has studied the results. While SEMS has helped make offshore work safer, there is still work to be done.
For example, BSEE found that more than 40% of the audits had problems with operating procedures. Nearly the same number had problems with the Management of Change element. The top five areas with problems were:
- Hazard Analysis
- Mechanical Integrity
- Safe Work Practices
- Management of Change
- Operating Procedures
Need help bringing your staff or contractors up-to-date on SEMS or teaching people to write SEMS-compliant operating procedures? We have classes in those subjects. Contact us at email@example.com
A couple of observations on this – First, some of those issues involve contractors, who are not required to have a SEMS plan. An industry working group, which I participate on, is re-writing the RP 74 standard that is the basis for SEMS and, at this point, plan to require everyone working offshore, operators and contractors, to have a plan.
Second, SEMS is an area where companies may need to refocus their efforts. The rule has been in place for a few years. A lot of new managers have taken over responsibility for SEMS plans. There is a tendency by all of us towards complacency. It may be time to refresh training and thoroughly review the policies and procedures in place.
Decommissioning – We are removing structures a lot faster than we are putting them in. According to government tallies, there were more than 3,000 platforms in the Gulf. According to the BSEE presentation last month, there are now 2100 platforms, meaning we have seen nearly 1/3 of the platforms removed since the Macondo oil spill. So while we focus attention on the new, shiny projects going into deepwater areas, there has been a tremendous increase in platform decommissioning and removal.
Decommissioning brings its own hazards and types of incidents. Projects are unlikely to produce Macondo-sized disasters, but they carry a high risk of individual fatalities and injuries. SEMS wasn’t created to specifically address these types of operations and the strengths and weaknesses of apply a process safety approach like SEMS to individual decommissioning projects really hasn’t been tested.
Aging Iron – The platforms and pipelines in the Gulf are showing their age. It is common in a downturn to delay replacing equipment. Those are manageable risks. You budget for increased maintenance and inspections so that you can prevent equipment failures or respond to them quickly. However, Mechanical Integrity (the systems needed to keep critical equipment functioning) shows up as the number two area of concern from the SEMS audits. Similarly, when BSEE performed a targeted inspection of compressors in the Gulf, it found that about 25 percent of the facilities it visited needed to improve their Mechanical Integrity program.
We need to remember that the Gulf of Mexico is one of the safest areas in the world to produce oil, but it has that distinction because government regulators and industry have identified and addressed safety trends. These are four trends we need to take seriously.