Tracking SEMS – Finally, One Database That Connects Everything

pinion-logoOne of the biggest complaints I hear about SEMS is how hard it is to keep up with all the moving parts of a functioning SEMS plan.  Its ironic; SEMS standard for Safety and Environmental Management Systems, but companies are finding that managing all the details in their plans is next to impossible.   In some cases they are using two, three and even four different databases to track different elements.

This week, I was fortunate to participate in a demonstration project showing how a SEMS program can be tracked in a user friendly database. The database, called Pinion,  was developed by OQSG, a leader in the pipeline OQ world.   Our goal through the demonstration was to show how the database can be used to manage every section of a company’s SEMS.

The challenge for anyone who has to manage a SEMS program is that there are so many different and potentially unrelated part, but they need to be connected in a logical way. For example:

A change in equipment may prompt a management of change process, which in turn triggers new procedures. Workers may need to be trained and evaluated on those procedures and the maintenance process may change.   And on it goes.  

One reason that safety systems fail is that they become too complex to manage.  The problem with most databases is that they are designed to handle one piece of that – training or audits or equipment.  Companies wind up trying to manage multiple databases or paying the programming costs to make one type of database work for different types of data.

What makes the Pinion system different is that it is built to give customers a maximum amount of flexibility.   the system doesn’t really care whether the company is tracking training, equipment or processes.  Data is data.

SEMS processThe demonstration showed that Pinion can connect different SEMS elements together. Using Pinion a company can:

  1. Identify a piece of equipment;
  2. Pull up the maintenance and inspection records for that equipment;
  3. Access up to date operating procedures for that equipment;
  4. Identify all employees who have been trained and evaluated on those procedures; and
  5. Produce a report that shows that it is complying with the Mechanical Integrity, procedures and training requirements for any equipment it sends offshore.

Why is this important?  Because more and more contractors now realize that they need a SEMS plan that dovetails with their offshore operator customer’s plans.  They are finding that developing the policies is the easy part.  Keeping track of them is the challenge and it is a challenge that the Pinion system seems to be well suited for.

Let me know if you are interested in knowing more about what we are doing to tie company SEMS plans together.

 

Court Rules That BSEE Can Fine Contractors

BSEE logoBSEE can write Incidents of Noncompliance that penalize contractors working on offshore oil and gas projects, according to a ruling from Department of the Interior’s Board of Land Appeals Judge Christina Kalavritinos.   This is one of the most controversial issues facing offshore contractors and the ruling opens them up to heavy fines or potentially being blocked from working offshore if they violate BSEE regulations.

As background, the Incident of Noncompliance, or INC, process is BSEE’s chief tool for citing companies that break safety or environmental rules on the U.S. Outer Continental Shelf.  In the past, BSEE only wrote INCs on oil and gas companies, even if the contractor was really responsible for the violations.  That changed with the Macondo disaster, when BSEE cited one of the contractors involved in that incident.   The agency later released an Interim Policy in August of 2012 warning  that it would be citing contractors with cause (the term used in the offshore world is “INCing them”) and giving guidance to BSEE investigators on how to cite contractors.

Many in industry questioned whether BSEE had the right to INC contractors, since the regulations were so clearly tied to the leasing process, which involves operators, not contractors.   Others warned that the potential for being cited changed the risk potential for contractors and would create insurance and other problems.   On the other hand, many supported the change because it would hold contractors accountable when they commit violations.

Judge Kalavritinos reviewed the history and legislative intent behind the penalty regulations and determined that, in effect, the government has always had the ability to INC contractors, even if it has not used that power in the past.  In making the ruling, she set a three part test:

In order to establish that a contractor violated 30 C.F.R. § 250.107(a), BSEE
must demonstrate only that, in accordance with § 250.146(c), the contractor was
“the person actually performing the activity” that violated § 250.107(a); the activity
being performed constituted, in accordance with § 250.107(a), “operations” under
the lease; and the contractor failed to perform such operations, in accordance with
§ 250.107(a), “in a safe and workmanlike manner[.]” Here, BSEE properly concluded
that Island was actually performing the activity, which violated § 250.107(a), and
which constituted operations under the Lease, and failed to perform them in a safe and
workmanlike manner, thus violating § 250.107(a).

Meaning, if the contractor is doing a job that is part of the operations at the lease site and the work is not done in a “safe and workmanlike manner,” BSEE can INC the contractor.   The law firm Phelps Dunbar has provided a very good analysis of the ruling, as well as posting the original decision itself.

What does this decision mean?  First, a caveat.  This is the first ruling on an emerging issue (what lawyers call a case of first impression).  It may be appealed.  A different judge looking at a different case may have a different opinion.

However, it stands to alter the risk and liability balance offshore.   Contractors performing work need to know that they may face penalties if they break the rules and those penalties can be quite high.  One contractor was fined $430,000 in 2014.    This could change the way underwriters view policies and it may alter the liability under contracts between operators and contractors.   Phelps Dunbar also points out that this could affect marine companies that used to only be regulated by the Coast Guard, because it means BSEE may also take an active interest in their compliance.


This ruling makes it even more important that offshore contractors implement the right policies, training and skills and knowledge competency systems for their offshore work.   If you need help with any of your programs or would like a third party review of your safety systems, contact us at SEMS@lifelinestrategies.com or (985) 789-0577.


 

BSEE Considers Risk-based Inspection Program

Logo & SEMSSmaller oil and gas companies operating in U.S. offshore waters need to pay close attention to the message that is coming out of Washington these days.   That message is that the government expects them to maintain high safety standards and focus on preventing incidents, regardless of their size or any unique types of hazards they may face on their facilities.  Now it looks like companies may face targeted inspections.

Here’s why. The government’s challenge in enforcing offshore safety and environmental laws is finding a way to even a very uneven playing field.  Offshore oil and gas operations are a world of contrasts.  Shelf and deepwater.  Drilling, production and decommissioning.  Old and new facilities. Large operators and small operators.  Each different type of operation has its own hazards and risks.

Yet BSEE must push for the safest and most environmentally sound approach for the entire industry.  The deepwater Macondo incident and the regulations that follow highlight the problem.   Macondo was a large-scale disaster, both in loss of life and environmental harm.  The goal of the post-Macondo initiatives was to prevent that kind of accident from happening again.   There may be little chance that a smaller facility could have an incident on a Macondo scale, may they do have more, smaller-scale incidents.

How can the agency address both large-scale and smaller-scale incidents?  Officials with the agency appear to be wrestling with just that problem.    Last month, BSEE Director Brian Salerno wrote in an online blog that there is a discrepancy in offshore safety.   The Center for Offshore Safety has released its second annual safety report and it shows that COS members did not experience any fatalities or and one loss of well control in 2013 and 2014.    However, Salerno points out that the overall safety statistics for the U.S. Outer Continental Shelf showed three fatalities and eight well control incidents in 2013 alone.  The Director also points out that in 2013, COS members reported 23 lifting incidents versus 197 for all operators.  He concludes that “The disparity in numbers demonstrates that the COS membership is comprised of companies that have made a real commitment to safety. It makes sense that their performance in preventing such incidents would exceed industry norms.”

He is not saying that other operators do not share the same commitment to safety, but it is implied.   COS’s members are generally deepwater operators who have larger and newer projects.  Many of them have sold off the shelf projects which carry the headaches of older, smaller and lower profit-margin shelf projects.  Who bought them? Generally the operators who are not members of COS.    Those operators need to pay close attention to the words of Director Salerno.  BSEE is holding them to the same standard as the largest, most financially sound operators.

But COS members also need to be careful about not resting on their safety record.  As we have seen deepwater incidents carry the potential for enormous consequences.

Where does BSEE go next?  The agency is sending signals that it wants to shift to a risk-based inspection program.  One of the bullet points raised by BSEE officials at the September COS forum was the potential to use “SEMS Maturity as a factor in the Risk Based Inspection program.”   That means BSEE could factor plan sophistication into its decisions on who to inspect and how often.   It could look at previous incidents, equipment maintenance or other factors and target companies that don’t have what Director Salerno calls “a real commitment to safety.”

This is not the time for either large or small operators to be complacent about their approach to safety.

Offshore Cybersecurity: New BSEE/USCG Initiative

Every week seems to bring some new news on computer hackers or other cybersecurity breeches.  This week it was the revelation from the IRS that criminals may have accessed tax records for more than 300,000 people.  Last week it was word that hackers were able to break into the computer system of a moving Tesla electric car.

BSEE and the Coast Guard are trying to raise awareness that offshore computer systems are not immune to computer flaws.  Earlier this month, BSEE official Rachael Lipinski posted on the agency’s blog that officials are concerned about vulnerabilities in operator and service company IT systems:

In one instance, a drilling rig was overwhelmed by malicious computer software. The malware spread throughout the rig’s computers controlling its safety equipment and the rig was shut down for almost three weeks while technicians worked to clear the malware.

This echos comments by both BSEE Director Salerno and USCG Admiral Thomas at the Offshore Technology Conference where they talked about the vulnerability of sophisticated systems.  One of the point they made is that security from outside hackers is a real concern but not the only concern.  The reliability and compatibility of technology used offshore is a genuine safety issue.

The real surprise here may be that we haven’t had more serious incidents offshore. We have seen examples of  flaws in Dynamic Positioning equipment. Industry is trying to address some offshore safety issues through a heavier reliance on automation and improved technology.   This is an issue that companies need to start incorporating into their SEMS programs.   A quick read of the regulations on Mechanical Integrity makes it clear that MI isn’t limited to valves, pressure vessels and “physical” equipment.   Does your MI program address potential vulnerabilities in IT systems and computer software?

 

How to Tie A Safety Bowtie – Video

bow tieIf you work in oil and gas and have not heard of the Bow Tie Risk Assessment Model, you will.  Bow ties have been around for at least 20 years, but have received widespread acceptance among oil and gas companies since the advent of the offshore Safety and Environmental Management Systems (SEMS ) rules.  In its simplest form, the Bow Tie Model allows you to visual hazards and controls.  it lays out:

  • hazards;
  • a loss of control leading to a catastrophic event (called the top event)
  • the consequences of that event; and
  • how you might prevent the top event or keep it from resulting in a catastrophe (called barriers).

The process can be much more complex and can be used to drive computer models on risk, but it is basically a way to see what you may be dealing with in managing safety.

As you might expect, the bow tie approach can be confusing and a lot of people only vaguely understand it.  This video was produced by Baker Hughes and it is as simple and easy to understand as any explanation of the Bow Tie Method I have seen.  It is worth a look because it is becoming a part of the fabric of safety management, at least in the offshore environment.

 

Introducing SEMS for Managers Workshops

The Safety and Environmental Management Systems rules (SEMS) touch every part of offshore oil and gas projects – operations, safety, training, equipment maintenance and recordkeeping.  In the current environment and with a new round of audits just around the corner, it is critical that Operator and Contractor staff with responsibility over any part of SEMS understand the rules and knows how it impacts them.

How is your company making sure managers and supervisors have the skills and knowledge on SEMS to make sure the company is in compliance?  How do they keep up with the latest government interpretations and industry best practices?

Introducing SEMS for Managers, a new workshop specifically designed for managers and supervisors who have SEMS responsibilities.   This one-day, highly interactive workshop puts SEMS into easily understood, common-sense terms.   It presents both the regulatory requirements of SEMS and a plain-language look at how the programs is actually being interpreted in the field.

Two workshops are scheduled for the beginning of August:

Tuesday, August 4 – Lafayette, LAClick here for more information.

Thursday, August 6 – Houston, TXClick here for more information.

The SEMS for Managers Workshop can also be held at your facility for your staff.   For more information, email kenwells@lifelinestrategies.com or call 985-789-0577.

Offshore Safety – What is working and what is not

For those who are not familiar with the Center for Offshore Safety (COS), it is the collective “campfire’ where the deepwater oil and gas industry can gather to discuss safety.   One of the more valuable things that COS does is define and track safety performance indicators and lessons learned from incidents in offshore oil and gas.  A recent COS  report digs into industry safety performance.   You can (and should) read the full report here, but here are some of the highlights.

Lifting incidents continue to be the main source of offshore safety incidents, accounting for nearly half of the incidents reported by COS members.   The next three sources were:

  1.  Process safety,
  2. Loss of station resulting in drive off or drift off and
  3. Life boat, life raft, or rescue boat.

Need help getting your safety management program in place or addressing SEMS requirements like procedures or training?  Contact me at KenWells@lifelinestrategies.com.


The high number of lifting incidents shouldn’t surprise anyone; it is the time when forces like gravity and kinetic energy can have the biggest impact on risk.   It is also the place where smart companies focus a lot of pre-planning, pre-slung loads and other safety measure.

The report then goes back and looks at some of the lessons that can be drawn from the incidents.    More than half of the identified areas for improvement were in safe work practices and operating procedures.   This is significant because, while safe work practices were one of the first areas that industry tackled when the SEMS rule went into effect, operating procedures continues to come up as an area for improvement.   About 30 percent of the incidents had roots in weak “Quality of Task Planning and Preparation,” In other words, crews are not planning well enough, either because they are not properly trained or supervised.

There is room improvement in the safety data COS collects.   One of the most significant problems is that it only represents deepwater operators who belong to COS.  But this is a groundbreaking report.  In the past, BSEE has gathered incident data and has publicized it in different forms.   Now industry is taking the lead in identifying weaknesses and addressing them in a very public way.

BSEE Chief: Contractor SEMS Compliance a Priority

Now that the SEMS II deadline has passed, the big question is, where will BSEE focus its attention?    The answer is in a new interview with  Bureau of Safety and Environmental Enforcement Director Brian Salerno.   According to the interview that Salerno gave to Platt’s Energy Week, getting contractors and sub contractors on board with operator SESM plans is a priority.    He told Platts, ““The challenge, really, is to get all of them to work together seamlessly and safely.”

The comments are in line with speeches Director Salerno made in Houston this spring in which he talked about the need for contractors to adopt a strong safety culture and that BSEE was searching for ways to improve the safety connections between operators, contrctors and their subs.

Director Salerno said the industry is making progress on improving coordination but said it will take time to meet the goal.  He did not elaborate on how the agency may enforce the SEMS rule to speed up that progress.    He also discussed the first round of operator SEMS audits that were completed in November, saying there was a high rate of compliance, but that the results were a “mixed bag” and BSEE is looking at ways to increase the value of the audits in the future.

Read more here and access the video interview here.

 

 

 

SEMS growing pains – Two years and counting

The current OTC issue of Offshore Magazine has an article I authored looking at the first two years of SEMS implementation and trends to watch for this year.    You can read the article here.

In the piece, I look at the audits that operators were required to conduct in 2013 and  at the changes that will come with SEMS II next month.   Beyond that, the article looks at a couple of the more controversial aspects of SEMS:

  1. What happens to SEMS in a period of operator cost-cutting – It is natural for any new program to have certain inefficiencies and cost issues when it is first implemented and then to have an effort to make them more cost-effective once they are in place.  In this case, that movement is happening as oil and gas companies are looking for savings throughout their organizations and at least one major oil and gas CEO is questioning whether the cost of the post-Macondo safety measures has been too high.
  2. When do we see the safety benefits of SEMS? – Millions of dollars and untold hours have been spent by industry to comply with SEMS and the statistical results do not show that we have accomplished much.   It is unfair to expect immediate improvements from a safety systems approach, but how long should we wait before it is reasonable to expect a bigger bang for the buck from SEMS?

On a related note, I will be putting on one more SEMS workshop for Contractors before the new SEMS II requirements kick in.   The class will be held on May 21 in Lafayette.

Click on the Classes and Workshops page for information on this and other classes.

SEMS Management of Change: Why One Size Doesn’t Fit All

One of the most frequent requests I have been getting from customers is for help with Management of Change policies under SEMS.   It has really been driven home to me that one size doesn’t fit all when it comes to MOCs.   The regulations are somewhat specific about what should be considered, but this is one of those areas of safety management where the solution needs to fit the problem.

First of all, what are we trying to accomplish with MOCs?   When they work, MOC procedures are a common-sense way to make sure you haven’t missed anything.  You considered:

  • Options
  • Impacts
  • Implementation
  • Responsibility

Yes, there are regulatory requirements for what things need to be considered, but the goal here is to make the best decision, not to be a slave to the regulations, right?

So what are we considering?

Personnel MOCs vs. everything else – The MOC concept first emerged as a way to weigh decisions involving equipment,  operating procedures,materials, and operating conditions – tangible, quantifiable things that can be measured and defined.    The idea of using MOCs to address personnel came later and is a bad fit.    Trying to apply a cookie-cutter MOC policy to both equipment changes and personnel changes is a waste of time.

Levels of complexity – Some decisions take a formal process.   SMEs gather around the table.   Pros and cons are debated.   Decisions that have a long half-life should be thoroughly vetted and everyone should understand the stakes.   For others, it takes a mental discipline.   Did I think through the options and consider the ramifications.  If that little alarm of doubt goes off in my head, I know I need to kick it up to another level.

Field vs. HQ decisions – In truth we make hundreds of MOC decisions in the field that do not require a full review.   The CEO doesn’t need to be involved in deciding whether the crew drinks decaf.  On the other hand, some of the most dangerous decisions a company makes are made in the boardroom or on the engineering design table.   We are back to the difference between occupational safety and organizational safety, which is one of the fundamental balancing acts of any safety management approach.   Field MOCs need to be clear, simple and easy to follow.   They are focused on the here and now and they need to give workers a clear path to know when they need to kick it up to management. Management decisions on the other hand need to anticipate the impact of a decision years down the road.    For example, the field crew needs a process to consider a workaround.  The CEO needs to be involved in a decision to reduce the size of a mentoring program that may help train future leaders.

All of this argues for a flexible MOC approach that focuses on the goal – wise decisions – instead of a slavish process.