Upstream oil and gas safety improves in the post-Deepwater Horizon era
So nothing like this catastrophe happens again.
The courage and fortitude of the oil & gas industry personnel caught up in the infamous Deepwater Horizon catastrophe has been commemorated, even in a Hollywood movie. Now seems an appropriate time to review the subsequent efforts by federal and industry regulatory bodies to minimize the chances of this type of accident occurring again.
The point is not to judge the validity or effectiveness of these new regulatory regimes, but simply to catalog who is doing what, and inform industry readers where things stand in 2017.
As a reminder, on April 20, 2010 a blowout incident occurred at the BP Macondo oil wellsite 50 miles off the coast of Louisiana in the Gulf of Mexico (GOM). During well-abandonment activities, control of the wellsite was lost. Explosions and fire led to the death of 11 crew members.
The Deepwater Horizon drilling rig sank. Massive marine and coastal damage occurred from a reported 4-million barrel of released oil. The U.S. Justice Department charges against BP related to the Deepwater Horizon disaster exceeded $20 billion, the largest such settlement ever reached.
The three major players in drilling the Macondo well were BP (the operator), Transocean (the drilling rig owner) and Halliburton, one of several technical oilfield services companies supporting the well.
The regulatory aftermath
Within five weeks of the incident, the Mineral Management Services (MMS), which had controlled offshore GOM operations since 1982, was reorganized and renamed as the Bureau of Ocean Energy Management Regulation and Enforcement (BOEMRE). A year later at BOEMRE the commercial side was split away (BOEM) and the Bureau of Safety and Environmental Enforcement (BSEE) was established.
The BSEE investigated the incident and issued their first formal report March 2011 pointing out failures which included mechanical-equipment limitations and human error.
Regulations promulgated by BSEE have enhanced well designs and standards. BSEE implemented a new Safety and Environmental Management System (SEMS) requirement. They have increased the number of inspectors and engineers in their workforce and are still hiring today.
BSEE has established performance-based standards for offshore operators to maintain an active, integrated program for safety and environmental management. Comprised of 13 key elements, SEMS has fundamentally changed the offshore landscape.
Operators were required to implement a SEMS program by November 15, 2011 and submit their first completed SEMS audit to BSEE by November 15, 2013. The SEMS II rule became effective on June 4, 2013. Operators were given until June 4, 2014 to comply with the provisions of the SEMS II rule, except for the auditing requirements. All SEMS audits were required to be compliant with the SEMS II rule by June 4, 2015.
BSEE also implemented a well-control ruling that stipulates stringent requirements for the design and implementation of blowout preventers (BOPs) and other well-controlled safety devices.
In parallel with the SEMS effort, BSEE worked closely with the American Petroleum Institute (API) to strengthen API's recommended practice 75, the workplace safety ruling that relates to safety- and environmental-management system programs. These programs were made mandatory where previously they were voluntary.
While the API subsequently issued statements that it doesn't agree with everything in the BSEE well-control ruling, it's expected the ruling will stand and in future be modified or interpreted as necessary going forward.
To help implement this new offshore safety initiative, the API, in conjunction with leading oil & gas companies, equipment and service providers, established the Center for Offshore Safety (COS) in early 2011. COS is led by highly respected industry veteran, Charlie Williams, who previously spent 40 years with Shell. COS has implemented the BSEE SEMS standards with a new framework primarily for drilling contractors and service firms, with the operators working closely on a collaborative basis. COS also put in place an audited third-party certification program and started compiling industry performance metrics on safety. To date a number of offshore technical service suppliers and rig contractors have been certified.
In December 2016, BSEE and COS, with support from the Society of Petroleum Engineers (SPE), contracted with the Bureau of Transportation Statistics, a division of the Department of Transportation (DoT), to collect, maintain and analyze safety data from the offshore industry. Previously COS had been collecting and analyzing such data manually. The DoT provides independence from BSEE, confidentiality and extensive statistical capabilities.
Forums for dialogue
"The Ocean Energy Safety Institute (OESI) was established in November of 2013. It is a partnership of three tier-one research universities: Texas A&M University, University of Texas and University of Houston. We're under a five-year contract with BSEE," said former Navy captain James Pettigrew, OESI Director of Operations.
OESI's stated mission is to "provide a forum for dialogue, shared learning, and cooperative research among academia, government, industry and non-governmental organizations. The OESI focus is on research into processes, technologies and activities that can help enable safer and environmentally responsible offshore operations."
As to the difference between OESI and COS, and how they relate to each other, "Our missions are certainly related, to further increase safer operations offshore; whereas our approaches are a bit different," Pettigrew explained. "COS being an Industry organization, it is focused on getting to the specifics of offshore incidents through its Learning from Incidents (LFI) and Safety Performance Indicator (SPI) programs.
"Additionally, their efforts in auditing safety and environmental management systems continue to identify areas for improvement in offshore safety culture," Pettigrew continued. "We have a close working relationship with COS and Charlie Williams, the executive director, has been a real mentor to me as I continue to learn the industry. We continue to discuss opportunities to develop research based on their findings."
Though OESI was born of BSEE, "We work very hard to make it representative of all the stakeholder groups," Pettigrew said. "We recently created an Advisory Committee with about 40 members. In addition to universities, it now includes global oil & gas operators, drilling companies, service companies trade groups, other regulators such as the Coast Guard and Department of Energy) and non-governmental organizations."
OESI was asked to do collaborative research between the three universities and other universities as needed, and to bring together all the stakeholder groups periodically to have forums for dialog. They also have been asked by BSEE to create some training and education opportunities for the regulator.
One of the continuing challenges is to stay relevant in the current low-price environment. Another is to understand changing industry requirements and ensure that attention is paid to current and future issues.
"Because OESI is a partnership with three universities, we are looked at as an academic entity; and right or wrong, sometimes academia may not stay focused on the gaps identified that are impacting offshore safety. One of our goals at OESI is to keep academia focused on the identified gaps, the research needed to fill those gaps, and where these topics come from; ultimately helping to further enable safer and environmentally responsible offshore operations."
Progress includes two delivered research projects. The first is on human factors and is derived from multiple OESI forums in which "human factors" is "a thread that has run through each of our forums, regardless of the topic."
In addition, a research report on zonal isolation and the modeling of cementing was delivered.
"Currently, we are putting together a strategic plan to develop courses of action to enable the transition of OESI to its next phase."
Other important participants
The Chemical Safety Board (CSB) is another important industry participant for anyone involved in design and construction of offshore facilities. Headquartered in Washington, DC, the agency's board members are appointed by the President and confirmed by the Senate.
The CSB is an independent federal agency normally charged with investigating industrial chemical accidents, but was asked by President Obama to review the Macondo disaster.
The CSB investigation of the Macondo incident covers technical, organizational and regulatory factors that contributed to the April 20 blowout. In 2014, the CSB produced an 11-minute animation describing the factors involved in the incident.
The primary efforts of BSEE, API, OESI and COS are focused on technical and equipment standards, including design of large-scale remediation equipment, the CSB examined the Macondo incident from a process-safety management perspective. While these concepts are very common in refining, petrochemical plants and industrial facilities around the world, they are not as commonplace in offshore oil & gas operations.
At a January 2017 meeting of the Society of Petroleum Engineers in Houston, Marybeth McCauley, Lead CSB Macondo investigator since 2010, presented the CSB approach and findings to about 40 offshore deepwater engineering veterans. Her presentation's basic theme was "equipment design is not the only factor important in safe offshore operations." An energetic discussion followed, with engineers supporting improved technical design and standards in discussion with the management system failure experts.
"As exemplified by the Macondo incident, the operator, service companies and drilling contractor must actively work to bridge the gap between the work-as-Imagined (WAI) by the drilling program technical team and the work-as-done (WAD) by the management of the well-operations crew on the rig," said McCauley.
The CSB report looks at the following:
- Events leading up to the Macondo tragedy;
- Technical findings related to BOP functioning;
- Human and organizational factors associated with the Macondo incident, including crew decision-making;
- The role of safety regulators overseeing offshore activities, including past deficiencies and present challenges.
When the response includes well containment and intervention
The offshore industry has responded to the need for rapid well control and containment of any future offshore blowouts, deepwater or otherwise. Independent third-party companies now offer sophisticated well-containment solutions. Marine Well Containment Company (MWCC) and Helix are leading the way in the GOM since the Macondo incident.
In July 2010, Shell, Chevron, ConocoPhillips and others recognized the need to be better prepared for deepwater well-control incident and founded MWCC, which introduced its interim containment system (ICS) in February 2011. Today, MWCC has 10 member companies and represents unprecedented industry collaboration.
MWCC's containment system is available for use in GOM water depths from 500 feet to 10,000 feet, with temperatures up to 350 degrees Fahrenheit and pressures up to 15k psi. The system can cap and flow an incident well as well as having capacity to process up to 100,000 barrels of liquid (BOPD) or 200 million cubic feet of gas (MMCSFD) per day.
Additionally, it can store up to 700,000 barrels of liquid in each of its two modular capture vessels (MCVs). The liquid is then brought onshore for further processing via shuttle tankers. Since their inception, MWCC has added expertise, personnel and facilities support through partnerships with Technip USA, Kiewit Offshore Services, WoodGroup PSN, Core Industries and other leading oil & gas service providers.
Helix, originally formed by a group of pioneering oilfield divers, specializes in subsea services, including laying pipelines, subsea engineering, the operation of state-of-the-art remote operated vehicles (ROVs), seabed trenching and geotechnical vehicles, and support vessels.
In January 2015, Helix, OneSubsea and Schlumberger formed the Subsea Services Alliance to develop technologies and deliver equipment and services to optimize the value chain of subsea well intervention systems. In well containment, the Helix Fast Response System (HFRS) can handle up to 55,000 BOPD, 70,000 BLPD and 95 MMSCFD, at 10,000 psi in water depths to 10,000 feet. [SUBHEAD]
Drilling wells and producing oil and gas is not easy in an environment 10,000-plus feet below the surface, and where total well depth can exceed 25,000 feet below surface, where operating pressures can exceed 10,000 psi and bottom-hole temperatures can range from 250 to 350 degrees F. We hope this brief history and review of important regulatory and industry safety initiatives now impacting offshore engineering designs will be of value, especially for those involved in such projects.
Marty Stetzer is president and Joseph Perino is a senior associate with EKT Interactive.
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