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Preface
Although relatively few significant incidents have occurred on oil and
gas installations worldwide in recent years, those that have occurred
(especially the Macondo Well incident in April 2010) have underscored
the need to enhance the effectiveness of inspection programs for offshore
installations. From its inception in 1982 until October 2010, the Minerals
Management Service (MMS) of the U.S. Department of the Interior was
the responsible regulatory authority for the offshore oil and gas industry in
U.S. waters; during this period its role continued to develop as technolo-
gies, expectations, and guidelines for safe and environmentally friendly
operations evolved.
In the late 1980s, MMS approached the Marine Board of the National
Research Council (NRC) “to develop inspection strategies to improve
safety and the effectiveness of the inspection process” (NRC 1990, vi).
The committee that was formed was tasked with reviewing the cur-
rent inspection program for the Outer Continental Shelf (OCS), appraising
inspection practices elsewhere, developing alternatives for conducting
inspection programs and assessing their advantages and disadvantages,
and recommending alternative inspection procedures that might be
more effective and efficient.
Following the release of that report, the industry was encouraged to
adopt safety and environmental management programs voluntarily.
At the same time, MMS began examining its regulatory oversight and, in
mid-2009, proposed a rule that would have required offshore operators1
An operator is defined as “The individual, partnership, firm, or corporation having control or
1
management of operations on the leased area or a portion thereof. The operator may be a lessee,
designated agent of the lessee(s), or holder of operating rights under an approved operating
agreement” (API 2004, Appendix D).
vii
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Evaluating the Effectiveness of Offshore Safety and Environmental Management Systems
viii
to adopt four of the 12 elements of American Petroleum Institute (API)
Recommended Practice (RP) 75 (API 2004).
In April 2009, MMS again approached the Marine Board to request
that a study be conducted to review the MMS inspection program
for offshore facilities to assess its effectiveness in protecting human
safety and the environment. The Committee on Offshore Oil and Gas
Facilities Inspection Program of the MMS (which was later renamed the
Committee on the Effectiveness of Safety and Environmental Manage-
ment Systems for Outer Continental Shelf Oil and Gas Operations)
was tasked with
• Examining changes in the inspection program and process since the
1990 Marine Board study;
• Reviewing available trend data on inspections, safety, and environ-
mental damage;
• Examining analogous safety inspection programs in other regulatory
agencies and other nations for lessons that could be applied to MMS
inspections;
• Considering both the changes in the industry’s safety management
practices since the 1990 Marine Board report and the implications of
these changes for MMS inspection practices;
• Considering the effects of the current inspection program on offshore
safety and environmental protection; and
• Recommending changes, as appropriate, to the inspection program to
enhance effectiveness.
The committee includes members, practitioners, and academicians who
bring a broad spectrum of expertise that includes the areas of safety
management, human factors, risk assessment, organizational management
and management systems, offshore engineering, offshore platform design
and construction, offshore operations, and policy as well as the areas of
safety regulations and inspections in related industries. It was appointed
in November 2009, held its first meeting the following month, and
conducted site visits in March 2010 to the Pacific OCS region and to
the California State Lands Commission. The committee also scheduled
offshore site visits in May of that same year to the MMS Gulf of Mexico
region. Those visits, however, were overtaken by the unfolding events
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Preface
of the April 2010 Deepwater Horizon–Macondo well blowout, at which
time MMS officials requested that this project be put on hold while the
agency reevaluated its approach to safety.
Immediately after the Macondo well blowout, many investigations
and inquiries were launched and far-reaching changes in the U.S. off-
shore oil and gas industry were initiated. The Department of the Interior
undertook a major reorganization of MMS that initially separated the
agency’s revenue management functions from its nonfiscal responsi-
bilities (e.g., oversight and regulatory enforcement functions) and later
separated the ocean energy management functions from the safety and
environmental enforcement functions. In addition, the industry itself
began discussing plans to develop an independent organization to work
with both industry and the regulators to enhance the effectiveness of
safety and environmental regulations and programs.
In October 2010, the Bureau of Ocean Energy Management, Regulation
and Enforcement (BOEMRE) (formerly MMS) issued a final rule, Safety
and Environmental Management Systems (SEMS) (BOEMRE 2010),
which required adoption of API RP 75. In the SEMS rule, BOEMRE
recognized that its inspection program was too focused on mechanical
failures and that such failures represent a small minority of incidents.
With the issuance of the final rule, BOEMRE expanded its approach to
safety and environmental protection to encompass not only reliance on
inspection of hardware-oriented items related to potential incidents of
noncompliance, but also safety management. Operators were required
to specify how they would manage safety holistically to avoid injury
and spills.
In October 2011, BOEMRE was replaced by the Bureau of Ocean
Energy Management (BOEM) and the Bureau of Safety and Environ-
mental Enforcement (BSEE). BSEE has broad regulatory authority over
energy operations on the OCS, including oversight responsibility with
respect to the offshore installations involved in drilling and production
of oil and natural gas. Included in BSEE’s oversight authority is the
responsibility for conducting inspections and audits. It is expected that
the audit process will encourage owners and operators to develop a safe
and environmentally friendly operational process on offshore facilities and
that, if there are potential problems, these will be identified during the
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Evaluating the Effectiveness of Offshore Safety and Environmental Management Systems
x
audit process and subsequently addressed, thereby reducing the likelihood
of a major incident.
Following the restructuring of MMS and issuance of the final rule
in late 2010, BOEMRE requested that the scope of the present study
be changed from a review of the agency’s prior offshore facility safety
and environmental inspection program to one that provided guidance
on how the agency should evaluate and ensure the effectiveness of the
implementation of the new SEMS practices that were to be required
of offshore operators as of November 15, 2011. As a consequence, this
project was refocused, and the committee resumed its work in late
January 2011.
Under the new agreement with BOEMRE, the Committee on the
Effectiveness of Safety and Environmental Management Systems for
Outer Continental Shelf Oil and Gas Operations was tasked with prepar-
ing an interim report that would identify potential methods for assessing
the effectiveness of a company’s SEMS program and describe the pros
and cons of each method as they were known to that point. After the
committee resumed its activities, it met four times in 2011: March 3
and 4, August 31 and September 1, October 19 and 20, and December 1.
A subgroup of the committee also attended the BOEMRE-sponsored
Public Workshop on Offshore Energy Regulations on March 15, 2011,
to keep abreast of interpretation and proposed implementation of the
SEMS regulation (30 CFR 250, Subpart S).
The committee released its interim report on June 28, 2011 (TRB 2011).
After the October committee meeting, another subgroup of the committee
visited offshore facilities in the Gulf of Mexico region to complete the
data-gathering process.
This final report describes the various methods that BSEE may employ
to evaluate the effectiveness of an operator’s SEMS program, recommends
a holistic method that the committee believes should be adopted, and
provides guidance on how this goal can be accomplished. The committee
would like to note that some of the efforts that BSEE and the industry
have already undertaken in the aftermath of the Macondo well incident
are supported and reinforced by the recommendations in this report.
These are steps in the right direction that need to be built on in a timely
manner to ensure that operational and environmental risks are reduced.
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xi
Preface
ACKNOWLEDGMENTS
The work of the committee was greatly facilitated by the thoughtful advice
and background information provided by all of the presenters at its meet-
ings, other individuals with relevant technical expertise, and government
and industry officials who were consulted during the course of the study.
The committee also gratefully acknowledges the contributions of time
and information provided by the sponsor liaisons: Elmer Danenberger
(ret.), Douglas Slitor (ret.), David Nedorostek, and Staci King.
To obtain a better understanding of alternative regulatory approaches,
the committee also received presentations and briefings from Mike
Marshall, Process Safety Management Coordinator, U.S. Department of
Labor–Occupational Safety and Health Administration Directorate of
Enforcement Programs; Linda Zeiler, Acting Director, Technical Support,
Mine Safety and Health Administration; Magne Ognedal, Director General,
Petroleum Safety Authority Norway; Chet Miller, Inspector, California
District, Pacific OCS Region, BSEE; James Munro, Operations Manager,
Hazardous Installations Directorate, Offshore Division, United Kingdom
Health and Safety Executive; Jeff Scott, SempCheck Services; Ian Sutton,
Process Risk Management, AMEC Paragon; Anton du Preez, SempCheck
Services; Jack Toellner, Senior Technical Advisor—Safety, ExxonMobil
Development Company; Allen J. Verret, Executive Director, Offshore
Operators Committee; Charlie Williams, Well Delivery Manager and Chief
Scientist, Upstream Americas, Shell; Kyle Wingate, Principal Human
Factors Consultant, Scandpower, Inc., Lloyd’s Register Group; Peter
Masters, Product Manager, Lloyd’s Register Group Services Limited;
and Luiz Feijo, Manager, Project Development, ABS.
In addition, the committee thanks the many industry, trade association,
and state and local government representatives and other individuals who
provided input for this study. In particular, the committee would like to
thank the staff at the MMS (now BSEE) Pacific OCS regional office—
Phillip Schroeder, District Manager, California District; Rishi Tyagi,
Regional Supervisor, Office of Field Operations; Ralph Vasquez, Super-
visory Inspector; Chet A. Miller, Inspector; and Ellen Aronson, Regional
Directorate—and at the U.S. Coast Guard, Santa Barbara—Lt. Chad J.
Robuck, Supervisor, Marine Safety Detachment; and CWO4 J. P. Giles,
Senior Marine Inspector. The committee also appreciates having had the
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Evaluating the Effectiveness of Offshore Safety and Environmental Management Systems
xii
opportunity to meet with staff at the Mineral Resources Management
Division, California State Lands Commission: Mark Steinhilber, Senior
Process Safety Engineer; David Rodriguez, Associate Process Safety
Engineer; Peter V. Johnson, Operations Manager; and Jack L. Smith,
Senior Mineral Resources Engineer.
The committee also thanks the crew of Platform Gail off the coast of
California—especially Tony Martinez, Operations Foreman; and Chris,
Facilities Engineer—and the crew of Genesis Platform in the Gulf of
Mexico—especially Eric Farmer, Safety Management Systems Medic;
Mervin Broussard, Chevron Field Coordinator; and Joe St. Ann, Offshore
Installation Manager—who welcomed committee members onboard
their installations, as well as those who arranged these offshore visits,
particularly David Dykes, Douglas Slitor, and Ralph Vasquez.
This study was performed under the overall supervision of Stephen
R. Godwin, Director of Studies and Special Programs, Transportation
Research Board (TRB). The committee gratefully acknowledges the work
and support of Beverly Huey, who served as project director and under
whose guidance this study was initiated and undertaken. The committee
also acknowledges the work and support of Suzanne Schneider, Associate
Executive Director of TRB, who managed the review process; Janet M.
McNaughton, who edited the report and handled the editorial produc-
tion; Juanita Green, who managed the production; Jennifer J. Weeks,
who prepared the manuscript for prepublication web posting; and
Javy Awan, Director of Publications, under whose supervision the report
was prepared for publication. Claudia Sauls, Amelia Mathis, and Mai
Q. Le arranged meetings and provided administrative support to the
committee.
This report was reviewed in draft form by individuals chosen for their
diverse perspectives and technical expertise, in accordance with procedures
approved by the NRC Report Review Committee. The purpose of this
independent review is to provide candid and critical comments that will
assist the institution in making its published report as sound as possible
and to ensure that the report meets institutional standards for objectivity,
evidence, and responsiveness to the study charge. The review comments
and draft manuscript remain confidential to protect the integrity of the
deliberative process.
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xiii
Preface
The committee thanks the following individuals for their review of
this report: Richard Hartley, B&W Pantex, Amarillo, Texas; Morgan
L. Jones, PetroSkills, Tulsa, Oklahoma; Najmedin Meshkati, Univer-
sity of Southern California, Los Angeles; Ali Mosleh, University of
Maryland, College Park; Walt Rosenbusch, International Association of
Geophysical Contractors, Houston, Texas; Mark Steinhilber, California
State Lands Commission, Long Beach, California; Stanley C. Suboleski,
Virginia Polytechnic Institute and State University (ret.), Blacksburg;
and Allen J. Verret, Offshore Operators Committee, Metairie, Louisiana.
Although these reviewers provided many constructive comments and
suggestions, they were not asked to endorse the committee’s conclu-
sions or recommendations, nor did they see the final draft of the report
before its release.
The review of this report was overseen by Hyla S. Napadensky,
Grand Marais, Minnesota, and C. Michael Walton, University of Texas
at Austin. Appointed by NRC, they were responsible for making certain
that an independent examination of this report was carried out in accor-
dance with institutional procedures and that all review comments were
carefully considered. Responsibility for the final content of this report
rests entirely with the authoring committee and the institution.
Kenneth E. Arnold, Chair
Committee on the Effectiveness of Safety
and Environmental Management Systems for
Outer Continental Shelf Oil and Gas Operations
REFERENCES
Abbreviations
API American Petroleum Institute
BOEMRE Bureau of Ocean Energy Management, Regulation, and Enforcement
NRC National Research Council
TRB Transportation Research Board
API. 2004. Recommended Practice for Development of a Safety and Environmental
Management Program for Offshore Operations and Facilities, 3rd ed. API RP 75. API,
Washington, D.C.
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Evaluating the Effectiveness of Offshore Safety and Environmental Management Systems
xiv
BOEMRE. 2010. Oil and Gas and Sulphur Operations in the Outer Continental Shelf—
Safety and Environmental Management Systems. Federal Register, Vol. 75, No. 199,
Fri., Oct. 15, 2010, pp. 63610–63654.
NRC. 1990. Alternatives for Inspecting Outer Continental Shelf Operations. National
Academies Press, Washington, D.C.
TRB. 2011. Interim Report on the Effectiveness of Safety and Environmental Management
Systems for Outer Continental Shelf Oil and Gas Operations. http://onlinepubs.trb.org/
onlinepubs/sr/srSEMSInterimReport.pdf.
