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EXE:CUT1VE SUMMARY
About half the world's offshore oil and gas platforms are found in U.S. waters—about
one-fourth of U.~. gas production and one-eighth of domestic oil production comes from operations
on the outer continental shelf (OCS). On the whole-particularly in recent years-there have been
few major accidents involving exploration and production operations under the jurisdiction of the
Minerals Management Service (MMS) of the Department of the Interior. However, the massive oil
spill from the E'ocon Valdez on Alaska's Prince William Sound in March 1989 demonstrated
dramatically the serious environmental consequences of a major accident in the oil and gas industry.
That spill did not involve offshore oil exploration or production, but media focus on it
overshadowed a pipeline explosion under Department of Transportation jurisdiction that had taken
place aboard a Gulf of Mexico oil production platform only a few days earlier. That explosion
killed 7 workers and injured 10 others—a reminder that vigilance in OCS operations cannot be
relaxed.
The people of the United States have a right to expect that oil and gas drilling and production
operations on the OCS will be conducted with appropriate regard for safety of the public, operating
personnel, and the environment. This expectation is explicit and implicit in public legislation and
policy governing offshore operations. It is likewise embodied in the leases granted to offshore
operators. By law, leases are to be granted only to competent operators who can demonstrate that
they have the requisite resources to carry out operations in a safe and environmentally sound
manner. The Minerals Management Service (MMS) of the U.S. Department of the Interior is
charged with ensuring that only qualified operators are granted leases and that they carry out
operations in a safe and environmentally sound manner.
By law the primary responsibility for safes is placed on the operator. The MMS is charged with
ensuring that the operator carries out this responsibility in a fully satisfactory manner. The scope of
MMS's responsibility extends to the comprehensive regulation of fixed platforms and drilling and
production operations on both fixed and mobile platforms. To carry out its regulatory responsibility,
the MMS has promulgated regulations regarding safe operation, including the installation,
maintenance, and periodic testing of various safety devices. The MMS also has an inspection
program to verify that operators comply with regulations and operate in a safe and environmentally
sound manner. The inspection program is centered around compliance with a listing of "potential
incidents of non-compliance," or PINCs. Most PINCs relate to the verification of set-points and
functioning of specific safety devices, such as pressure gauges and pressure relief valves. Only a few
PINCs address general safety issues: for example, "are operations performed in a safe and
workmanlike manner?" and "are necessary precautions taken?"
The Outer Continental Shelf Lands Act of 1978 (OCSLA) specifies that all OCS facilities
must have at least one scheduled onsite inspection annually. In addition to the scheduled annual
inspection for each platform, the MMS is required to conduct periodic unannounced "Spot"
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inspections (administratively it has set a target of 50 percent of the drilling rigs and 10 percent of
the production platforms each year). During these inspections, the MMS inspector works through
the items on the PINC list—all items on the list in the case of annual inspections, some items in
spot inspections—witnessing tests of the items as they are performed by the operator's personnel.
Any deviation found constitutes a violation, and is termed an "incident of non-compliance" (INC),
which the operator must correct, subject to sanctions. The sanctions range from a warning, to a
shut-in [stoppage] of specific operations or the entire operation, to civil penalties, to criminal
penalties. INCs that require a total shut-in are infrequent, and civil penalties are rarely imposed.
Many INCs are corrected immediately, or if they involve a faulty piece of equipment, it is isolated,
taken out of service, and repaired without a complete shut-in of the entire faculty.
Tests conducted during inspections are identical to the routine and repetitive tests not
witnessed by MMS but required periodically as a matter of safe working practice. Actual tests
witnessed by MMS inspectors under the OCSLA comprise less than 10 percent of all those MMS
requires (Table 2-1~.
Despite OCSLA requirements, the MMS currently does not conduct an annual scheduled
inspection on all platforms, nor does it conduct as many spot inspections as it would like due to
limited inspection resources (dollars and personnel). Also, during the annual inspections not every
PINC item is inspected-although it is required by regulation. The growing complexity of production
platforms and the greater distances of new facilities from shore in the Gulf of Mexico are making it
increasingly difficult for MMS to satisfy this requirement of the law. In addition, government work
rules relating to overtime, time spent offshore, length of workday, and other factors, and the
necessity for helicopter transportation to platforms (with helicopters and pilots frequently standing
by for most of the day while the inspector does his work), have resulted in inspections that are
expensive and inefficient.
The MMS therefore asked the committee to explore alternative ways of deploying MMS
inspection resources to carry out its safety responsibilities. In particular, MMS seeks an alternative
to annual inspection of all safety devices on the platforms so that it can focus its resources more
intensively on particular OCS facilities and operations that need them. In brief, MMS seeks to gain
greater efficiency in the use of inspection resources and a greater assurance that it is carrying out its
mission as effectively as possible.
The committee reviewed the situation in detail and supports the MMS position that it can be
more effective if given the freedom to apply its resources selectively to the areas of greatest need.4
In arriving at this conclusion, the committee evaluated the current inspection program as well as five
possible alternative inspection programs:
1. increased inspection onsite by MMS;
2. inspection of a sampling of PINCs during annual inspections, and increased spot
inspections;
3. annual inspection of a sampling of facilities, and increased spot inspections;
4. third-party inspection with government audit; and
5. self-inspection.
1An important qualification to this endorsement is that it applies only to production facilities and
operations. For drilling facilities and operations, the current program of frequent and
comprehensive inspections should continue because of (1) the high frequency of "events" (i.e.,
accidents) per facility for drilling facilities as compared to production facilities, and (2) the large
population of workers on a facility while it is engaged in drilling operations. Additionally, the
committee believes that at an early date MMS should introduce the enhanced data collection and
safety analysis program discussed in Chapter 7 to the fullest extent possible.
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The first three alternatives are modified versions of the present MMS inspection system. The other
two involve a fundamental departure from current practice.
The committee evaluated the present program and the five alternatives in view of
considerations deemed important from the standpoint of effectiveness and acceptability of any OCS
inspection program. They included the following:
Does the alternative being considered promote safety awareness?
Does it help to maintain public confidence in the safety of OCS operations?
Does it use inspection resources efficiently?
What is the impact on the qualifications and training of the inspector force?
Does the program provide for identification of safety trends and warnings?
Does it promote safety performance accountability?
Is it adaptable to changing circumstances?
Are there valid precedents?
Based on its assessment of present and alternative inspection programs, the committee
concluded that the present program is conducted conscientiously and supports the need to ensure
compliance with inspection requirements as stated in the OCSLA. However, the program does not
incorporate the necessary data and information collection and analytical activity for systematically
upgrading safety performance requirements for OCS operations.
The committee recommended that the current inspection program be modified to enhance its
effectiveness at present levels of personnel and funding through implementation of alternative 2
(inspection of a sampling of PINCs-rather than all the PINCs~uring the annual inspection,
together with increased spot inspections). Such a program would be more efficient and as effective
as the present program in ensuring compliance with the PINC list. Importantly, it also would free
resources for complementary activities that would significantly improve the present program. The
inspector resources made available by having to witness fewer tests should be redirected toward
.
increased spot inspections, instituted systematically on the basis of inspection results,
operator safety histories, and interviews with the operator personnel; and
~ . ~ . .
.
analysis ot data to Gentry emerging safety problems and general safety trends.
The alternative program would continue to require each operator to perform and record in a
prescribed format all the scheduled inspections/tests (both those specified by MMS and those in the
operator's own facility inspection program) with only selective inspections/tests—derived from a
sampling plan-being witnessed by MMS to verify the operator's performance of the inspections/tests.
Ultimately, as experience and confidence in the effectiveness of the sampling plans is developed, the
inspection program might be modified further into alternative 3, sampling of facilities for annual
inspection (with increased spot inspections), in which only a limited number of facilities would be
subjected to an intensive annual inspection and one spot inspection per year (as a minimum) would
be conducted at the others.
Beyond its principal recommendation, the committee also made a number of observations and
recommendations to MMS regarding ways to improve its oversight of safety performance on the
OCS. Among these are the following:
The committee recommends that MMS improve its collection, analysis, and use of
safety-related data regarding offshore operations. This recommendation is based on the fact that
improvements in safety performance derive in large part from past lessons. To learn from past
experience demands a clear perception of what that experience has been. This means that the data
base on OCS operations must be made more comprehensive and accessible. It must include more
information, which must be organized and processed so that proper inferences can be made,
conclusions clearly drawn, and lessons readily learned.
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The main near-term use of an expanded and enhanced data base would be the development of
a sampling plan for selecting PINCs to be inspected. To that end, it would be crucial to have
available data on past INCs—their numbers, types, and frequency of occurrence on different kinds of
facilities and on specific facilities. Access to INC-to-PINC ratios for each PINC over time would
provide a valuable index for determining which PINCs should be sampled, how often, and on which
facilities. The safety analysis program should include monitoring and review of operator records
ashore and analysis of data and subjective observations to reveal safety trends.
By comparing accident events data (1982 was selected as a recent sample year) with the PINC
list, the committee was persuaded that most of the items on the list are reliable safety devices and
their failure is not relevant to the kinds of accidents that actually occur. For that reason, the
committee believes that items on the PINC list should be continually reviewed, expanded, pruned, or
otherwise revised so that the PINC list focuses on the causes of accidents that actually are
experienced and their early warning signals. Analysis based on an improved data base would permit
this to be done with confidence.
The potential implementation of the selected-facilities inspection alternative (alternative 3) at a
later date would require even more extensive data, much of it facility specific. Putting this
alternative in place probably would require quantitative indices that characterize and measure the
safety of individual offshore operations. Among the factors that should be taken into account in
developing sampling indices would be the following:
· the occurrence of safety-related "events" aboard the facility;
· the occurrence of "near misses (i.e., operational disruptions that did not result in a
reportable accident);
recordkeeping),
.
the record of tests and inspections, in terms of safety equipment not working;
evidence of slipshod operation (e.g., poor maintenance, poor housekeeping, poor
the facility design, including features such as location and age;
evidence of lax safety attitudes of managers, supervisors, or operating personnel;
· the overall safety record of the operator as to all his facilities; and
the overall safety of all operators in the region or district.
From such quantitative, facility-specific information, a safety rating could be developed for
each platform, which would be updated continually with new data. The data base would be kept up
to date by requiring that all ~event" reports and specified operator's inspection and test results be
sent to MMS. Onshore review of records could then comprise a substantial part of the inspection.
Actual onsite inspections would be made more efficient by prior analysis of the information in the
data base. Inspection and test results submitted by the operator could be checked for consistency
with actual field inspection results.
The committee also recommended that MMS encourage its inspectors to look for emerging
and changing safety risks on OCS facilities. The position description, job assignments, and reward
structure for MMS inspectors should be amended to reflect the importance of risk identification and
reporting. Information on mishaps should be disseminated in a manner similar to safety alerts, and
should result in appropriate changes in permit requirements, training, and regulations.
The safety of a platform, or any other facility, is not determined just by the quality of its
operating manuals and the reliability of its equipment. Major factors are management's safety
policy, and the training and attitudes of personnel who manage and operate the facility. MMS
should make explicit in its safety management and inspection philosophy that monitoring of safety
attitudes of the operators and resulting necessary corrective action are essential. Subjective
judgments will be involved, but this fact should not be a deterrent. In fact, MMS inspectors and
supervisors should be trained in the techniques for and the importance of monitoring safety
attitudes. Moreover MMS should develop programs to provide motivation for operators to Think
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safety" that are broader and more publicized than the Safety Award for Excellence recognition
program currently in place.
The record of safety on the OCS has been good. In terms of injuries and fatalities, OCS
drilling and production operations are comparable to other hazardous activities onshore, such as
mining and construction. In terms of environmental impact, oil pollution from offshore operations
contributes less than any other significant source to the release of hydrocarbons into the marine
environment. U.S. offshore industry spillage contributes less than 5 percent of world spillage, and
over the past several years the average spill volumes and the amount spilled compared to total
production has been reduced.
Thus, MMS and the offshore industry are not faced with the problem of correcting a
manifestly poor safety record. The United States Ms succeeded under its present inspection
program in averting the kinds of catastrophic disasters that have befallen the offshore operations of
many other nations. Although the evidence of a direct connection is lacking, certainly the activities
and vigilance of the federal government have been a factor. However, an increase in the margin of
safety on the OCS can be achieved by improving the link between the MMS inspection program and
safety performance of the industry. The committee's recommendations are intended to accomplish
that end.
A final point made by the committee—and it is a crucial one-relates to attitudes. In
enterprises that~are subject to inspection by government or other authorities, the operators of the
enterprise often gradually drift to the point of view that the responsibility for safety lies with the
government and its inspectors. An attitude develops that the operator's responsibility and objective
is simply to pass the-inspection, an attitude the committee refers to as a "compliance mentality." It
is especially likely to develop when inspections are based on a routine checklist approach.
The committee emphasizes its belief that compliance does not equal safety. Thus, although it is
certainly desirable to have checklists to guide the inspectors, it is important for MMS to ensure that
operators do not sink into a compliance mentality. To reiterate: in practice and by law, the
operators bear the primary responsibility for safety. The MMS, for its part, is responsible for using
the best and most effective means it can devise to motivate operators to meet that responsibility.
Representative terms from entire chapter:
annual inspection
