BSEE Gets Out the INC Pen: Fines on Contractors

According to information on the BSEE website, the agency is following through on its threats to fine contractors.  In the past, BSEE only assigned Incidents of Non-Compliance (INCs) to oil and gas operators, but last summer it issued an interim policy, Issuance of an Incident of Non Compliance to a Contractor, which said “BSEE will, in appropriate circumstances, issue incidents of noncompliance (INCs) to contractors for serious violations of BSEE regulations.”

BSEE logo

Now nine months into the year, BSEE’s website section on penalties indicates that, of seven INCs leveled against companies in 2013, four of them have been to contractors.   The number may actually be much higher, because BSEE only publicizes the INCs that it writes as a result of incidents, not inspections.   So the agency is most definitely following through on its threat to hold contractors accountable for what BSEE considers to be safety or environmental lapses.

This is not a minor issue to contractors either.  Penalties can run up to $40,000 per violation, per day, not to mention the harm it could do to a contractor’s relationship with its offshore oil and gas customers.

However, it is possible that the BSEE INCs to contractors may not stand up in court.   One of the contractors that received an INC is challenging the penalty,

arguing that the agency does not have the regulatory authority to INC contractors.   BSEE disagrees.  It may be up to an administrative law appeals process to sort it all out.   But even if BSEE loses this round, many believe that it could still impose INCs on contractors at some point in the future, as long as it goes through the process of developing regulations on contractor INCs and allows the industry and public to make comments.

Bottom line:  Did anyone need another reminder that the costs of failing to have a strong safety and environmental management approach are too high to ignore?

Worker Fatalities Down in U.S. but Oil and Gas Fatalities Rise

Government Statistics show a preliminary total of 4,383 workers dies on the job in 2012, a drop of more than 300 from the year before. But the stats show a dramatic rise in oil and gas fatalities. There were 138 fatalities at drilling and production facilities, and increase of 23%. We have a lot of work to do!

The numbers come from the Bureau of Labor Statistics’ Census of Fatal Occupational Injuries Summary.
Details at http://www.bls.gov/news.release/cfoi.nr0.htm.

Has SEMS Made Offshore Safer? – Conference-goers Divided on Question.

We are now nearly two years into the new SEMS rules. Are we better off? Participants at a conference this week weighed in. I had the pleasure of moderating a panel on contractor safety under SEMS at the Offshore Process Safety Conference held in Houston last week. The participants were:

• Heather Corken, Partner, Bracewell & Giuliani
• Steve Langlinais, Global QHSE Manager, Greene’s Energy Group
• Rick Bui, Vice President HS&E Sr. Baker Hughes
• Kevin Graham, Director of Compliance, M&H Energy Services
• David Dugas, Sr. EH&S Specialist, Apache
Probably the most knowledgeable group I could imagine on the subject of what contractors need to do under SEMS.

One thing we did as a part of the session was to survey the audience on whether they thought SEMs had made offshore safer and what they would change about SEMS. Here are the results:
66% say yes, SEMS has made offshore oil and gas safer
33% say no it has not.

An admittedly small and very unscientific survey, but some of their answers to the second question, are worth repeating:

On the second question (What would you change about SEMS?)  here is what they said:

  • “Include design standards.”
  • Give us more “examples of ‘good ’and ‘ bad’ from BSEE”
  • “Assure that people doing work offshore are knowledgeable enough to ensure that they prevent harm to people and/or to the environment” (That was from an audience member who said SEMS has not made us safer).
  • “Clearer guidelines on ‘required’ offshore training.”
  • “Accept it and get on with it, you are 20 years behind.” (Needless to say, that was from someone who said SEMS has made us safer).

What do you think? Safer? Not safer? What would you change?

Slower Than Molasses Response in Hawaii: A Lesson on Hazard Analysis

This story happened a couple thousand miles from oilfields, but it has a lesson about preparing for the unexpected.     If nothing else it is a reminder of how important it is to ID all the hazards in a hazard analysis. 233,000 gallons of molasses spilled in Honolulu Harbor. The company, which is very well prepared for oil or chemical spills, had nothing in its response plan for molasses. Just a reminder to everyone living in a SEMS world if we don’t identify what can go wrong during a hazard analysis, we can’t expect to prevent it or respond to it.    Here is the story from CBS: Molasses spill hits Hawaii