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Suggested Citation:"1. Introduction." National Research Council. 1990. Alternatives for Inspecting Outer Continental Shelf Operations. Washington, DC: The National Academies Press. doi: 10.17226/1517.
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Suggested Citation:"1. Introduction." National Research Council. 1990. Alternatives for Inspecting Outer Continental Shelf Operations. Washington, DC: The National Academies Press. doi: 10.17226/1517.
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Suggested Citation:"1. Introduction." National Research Council. 1990. Alternatives for Inspecting Outer Continental Shelf Operations. Washington, DC: The National Academies Press. doi: 10.17226/1517.
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Suggested Citation:"1. Introduction." National Research Council. 1990. Alternatives for Inspecting Outer Continental Shelf Operations. Washington, DC: The National Academies Press. doi: 10.17226/1517.
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Suggested Citation:"1. Introduction." National Research Council. 1990. Alternatives for Inspecting Outer Continental Shelf Operations. Washington, DC: The National Academies Press. doi: 10.17226/1517.
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Suggested Citation:"1. Introduction." National Research Council. 1990. Alternatives for Inspecting Outer Continental Shelf Operations. Washington, DC: The National Academies Press. doi: 10.17226/1517.
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Suggested Citation:"1. Introduction." National Research Council. 1990. Alternatives for Inspecting Outer Continental Shelf Operations. Washington, DC: The National Academies Press. doi: 10.17226/1517.
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Suggested Citation:"1. Introduction." National Research Council. 1990. Alternatives for Inspecting Outer Continental Shelf Operations. Washington, DC: The National Academies Press. doi: 10.17226/1517.
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Suggested Citation:"1. Introduction." National Research Council. 1990. Alternatives for Inspecting Outer Continental Shelf Operations. Washington, DC: The National Academies Press. doi: 10.17226/1517.
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Suggested Citation:"1. Introduction." National Research Council. 1990. Alternatives for Inspecting Outer Continental Shelf Operations. Washington, DC: The National Academies Press. doi: 10.17226/1517.
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Suggested Citation:"1. Introduction." National Research Council. 1990. Alternatives for Inspecting Outer Continental Shelf Operations. Washington, DC: The National Academies Press. doi: 10.17226/1517.
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Suggested Citation:"1. Introduction." National Research Council. 1990. Alternatives for Inspecting Outer Continental Shelf Operations. Washington, DC: The National Academies Press. doi: 10.17226/1517.
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Suggested Citation:"1. Introduction." National Research Council. 1990. Alternatives for Inspecting Outer Continental Shelf Operations. Washington, DC: The National Academies Press. doi: 10.17226/1517.
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Suggested Citation:"1. Introduction." National Research Council. 1990. Alternatives for Inspecting Outer Continental Shelf Operations. Washington, DC: The National Academies Press. doi: 10.17226/1517.
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Below is the uncorrected machine-read text of this chapter, intended to provide our own search engines and external engines with highly rich, chapter-representative searchable text of each book. Because it is UNCORRECTED material, please consider the following text as a useful but insufficient proxy for the authoritative book pages.

1 INTRODUCTION The federal government has a multifaceted role with respect to activities on the outer continental shelf (OCS). It acts to manage OCS resources, to require that industry operations are conducted safely, to compile and disseminate information, and to foster the development and application of technology that will improve the safeW of OCS operations. Several agencies carry out this role. They include the Minerals Management Service (MMS) of the Department of the Interior, the U.S. Coast Guard (USCG), the Environmental Protection Agency (EPA), and elements of the Department of Transportation and the U.S. Army Corps of Engineers (COE). Inspection responsibility is shared by MMS and USCG. However, it is MMS that is responsible for inspecting operational aspects of OCS activity. Therefore, this report will deal almost exclusively with MMS programs. For a more detailed discussion of the history and purposes of federal management of OCS activities, see Appendix ~ Appendix B describes certain aspects of the USCG safety mission on the OCS and recent changes in its inspection strategy. OVERVIEW OF MMS FUNCTIONS The Safety Mission The MMS, in its eighth year of operations in 1989, is charged with promulgating and enforcing regulations over leasing and operations on the OCS, including the safety of life, property, and the environment. Prior to the formation of the MMS, these functions were performed by the U.S. The MMS activity is directed at carrying out national policy as specified Geological Survey (USGS). in the OCS Lands Act (OCSLA), which states in part Operations in the outer continental shelf should be conducted in a safe manner by well-trained personnel using technology, precautions, and techniques sufficient to prevent or minimize the likelihood of blowouts, loss of well control, fires, spillages, physical obstruction to other users of the waters or subsoil and seabed, or other occurrences which may cause damage to the environment or to property, or endanger life or health. (43 U.S.C. 1332) Other pertinent excerpts from the OCSLA appear in Appendix C. To carry out its safety role, MMS is concerned with most aspects of offshore operations. For example, it has promulgated regulations governing the application of technology to offshore oil and gas operations. As specified by law, leaseholders are required to use the "best available and safest 6

7 technologies" (BAST) that are economically feasible in all new drilling and production operations, and wherever practical in existing operations.4 Leaseholders are required to submit detailed plans governing exploration, development, production, and response to pollution accidents to MMS. Leaseholder preparations for well drilling and production, and their fitness to carry out these operations, are evaluated and verified. MMS maintains files on "events" (fatalities, fires, explosions, blowouts, and injuries associated with these incidents) and other unusual occurrences that halt operations, and inspects leaseholder facilities and operations, applying operating sanctions and civil and criminal penalties for infractions. MMS inspections are expected to contribute significantly to "assuring safe operations on the OCS as well as assuring that environmental concerns are protected" (U.S. Department of the Interior, 1987c). This concept is significant, in that it conveys a clear intention that the inspection element of the MMS's mission do more than merely ensure leaseholder compliance with the various regulations and requirements. In the final analysis, the effectiveness of the MMS's inspection program must be judged primarily by the degree to which it promotes operational safety and minimizes pollution. Inspection Budget The MMS carries out its inspection responsibilities under a major program, the OCS Lands Program. Inspection is part of a subsidiary Regulatory Program under the OCS Lands Program. Approximately $142 million in direct program funds were included in the final 1988 MMS budget. Out of this total, approximately $9 million is allocated for inspections. OVERVIEW OF THE OCS OPERATIONS This overview of offshore oil and gas drilling and production operations on the U.S. outer continental shelf describes the types of platforms, the drilling and production facilities in use; their age and geographic distribution; the systems and technologies involved; and the safety and environmental protection considerations that must be addressed. Facilities Offshore drilling and production processes and equipment are basically the same as those on land, except that offshore operations require some form of support to protect the facility from water and wave action. This is accomplished by using various types of temporarily positioned vessel-like mobile units, either bottom-supported or floating, and various types of derrick-like structures that are permanently positioned on pilings driven into the seabed (referred to collectively as "offshore platforms"~. In the Arctic, ice and gravel islands, concrete islands, and steel-sided caissons are also used to protect facilities from shifting ice as well as water and wave action. fin a 1979 report, the Marine Board construed this concept to require "the application of technology in the form of equipment, systems, procedures, and trained workers to ensure the highest degree of operating safety and reliability within reasonable economic limits" (National Research Council, 1979~.

8 Offshore Oil and Gas Operations Offshore oil and gas operations involve a number of distinct phases: exploration, development, production, and processing. Initial or exploratory drilling in offshore areas usually is done with drilling equipment carried on some type of temporarily emplaced mobile platform. These mobile platforms, together with the drilling equipment, often are referred to simply as "mobile offshore drilling units," or nMODUs." These mobile platforms include self-elevating jack-ups, submersibles, semisubmersibles, and drillships. Drillships and self-propelled units are capable of changing drilling sites without tug assistance. A drillship is essentially a conventional ship, outfitted with drilling equipment, which is used to drill exploratory wells in deep water far from land. Drillships and semisubmersibles usually are anchored on a site, but they may be dynamically positioned. If economically recoverable quantities of oil or gas are discovered after exploratory wells are drilled using mobile offshore drilling units, development wells are drilled. (Most deepwater exploratory wells are drilled as expendable wells and either are abandoned, even when productive, or temporarily abandoned and recompleted.) Development drilling can be done by a mobile offshore drilling unit, or by using drilling equipment hoisted onto the permanent production platform by barge-mounted cranes if the offshore platform (usually built in sections onshore) has been erected at the offshore development site. After the wells are drilled, the drilling equipment is removed, onshore-fabricated production equipment is placed on the platform, and the wells are connected. The production phase of operations then begins, continuing until the wells are depleted. Production commonly involves initial processing (consisting primarily of separation of gas, oil, water, and solids) performed on the platform. The gas and the oil are then transported to shore (generally through pipelines) for additional processing and/or refining. Offshore platforms are large structures designed to resist hurricane waves and winds. They are becoming even larger and more complex over time as oil and gas discoveries are being made in deeper waters. Both the number of wells per platform and the amount of onboard processing are a function of the economic benefits of distributing the higher costs of deeper water platforms among more wells.2 An additional influence on the number of wells per platform on the Pacific coast, where existing platforms are very close to shore, is the public pressure to reduce the visual impact of offshore activity. It is estimated that approximately 50 percent of platforms in the Gulf of Mexico contain some processing systems; all Pacific platforms include processing facilities. Achieving maximum production rates per well and the resort to multiple wells required by increasing offshore costs necessitate large production facilities. Remote locations and the economic need to maximize production require that operating personnel be quartered on the offshore platforms. Drilling operations are conducted around the clock and also require crews to be quartered on the platforms. Multiple-well drilling operations, multiple-well production facilities, high rates of production, and the presence of personnel quarters on platforms, particularly at remote locations, all present additional potential safety hazards to personnel, property, and the environment. Crew Size Both drilling and production crews usually spend seven days working offshore and seven days off duty onshore. While at an offshore location, most crews work on two shifts around the clock—12 hours on and 12 hours off. On a drilling facility the personnel complement consists of a total of about 20 to 25 people on average per shift. Three to four of the persons on each shift are salaried 2Over the period 1978-1987, the Gulf of Mexico average has been 6 wells per platform, and the Pacific average has varied from 44 to 56.

9 personnel (tool-pushers and supervisors); the remainder are hourly workers. Also on a drilling facility are a number of service personnel who provide specialist functions, such as cementing, logging, major maintenance, and galley and housekeeping support. Some of these reside on the platform, while others are aboard only periodically. Overall the average number of personnel on a drilling facility is 45. On a production platform, the crew varies with the number of wells and the complexity of the equipment. The majority of the members of a crew work during the day with only a skeleton crew on duty at night. In the Gulf of Mexico, many platforms are unmanned and are serviced from a central platform manned by 20 or fewer people, of whom 5 to 8 perform technical and administrative functions. In the western Gulf, where gas fields are more widely scattered and platforms are smaller, crew sizes tend to be smaller (2 to 10~. The average crew size is larger in the Pacific region because these platforms tend to have more oil wells per platform, are larger, and more equipment is required to process the heavy crude oil. The overall average number of on-site personnel on manned production facilities in Gulf of Mexico and Pacific production operations is estimated to be 12. Geographic Distribution MMS management of offshore oil and gas resources has been assigned to four OCS regions: Gulf of Mexico, Pacific, Alaska, and Atlantic. Each of these regions is subdivided into a number of areas, as shown in Figures 1-1 through 1-3. Since federal leasing began in 1954, over 537 million acres have been offered for lease and about 45 million acres have been leased (U.S. Department of the Interior, 1986b). Total "bonus" payments (for the leases) to the federal government in this same period exceeded $53 billion, and total oil and gas royalties were over $31 billion. By far the most production in the offshore regions has been in the Gulf of Mexico. Cumulatively, over 95 percent of the oil and over 99 percent of the gas produced on the OCS has come from the Gulf. However, this dominance appears to be lessening. In 1987 for example, 9.3 percent of the offshore crude oil came from the Pacific region, and new fields now coming on line there could increase production totals if objections to issuing permits are resolved (U.S. Department of the Interior, 1986b, 1987b). There is relatively little offshore activity in the Alaska and Atlantic regions. (Current Alaskan offshore oil and gas comes from fields in state waters.) The number of active drilling units historically has fluctuated roughly in accordance with the price of oil and the demand for petroleum products. Over the 21-month period from January 1985 to September 1986, for example, the number of active drilling units on the OCS went from 285 to 99. According to more recent data made available to the committee, in February 1988 there were 3,583 production platforms and about 200 drilling units operating in the OCS (MMS, personal communication).- Figure 1-4 shows historical data on the number of platforms installed and operating in the Gulf of Mexico. In the Gulf of Mexico, the depletion of shallow-water, nearshore oil and gas pools over time has led OCS operations into more distant locations and greater average water depths. In the Pacific region, little movement to greater depths has occurred since the initiation of the OCS leasing program. Platforms there are in water as shallow as 95 ft and as deep as 842 ft with the majority located at depths of 150 to 300 ft (MMS, internal memorandum 10/28/88~. Table 1-1 gives the range of depths of wells drilled in the Gulf of Mexico and Pacific OCS regions. Improved technology has made it possible to build conventional design production platforms in water over 1,000-ft deep. Iwo units are planned for installation off the California coast in 1992 at depths of 1,075 and 1,200 ft. New designs such as the compliant tower and tension-leg platform are expected to lead to emplacement of platforms in waters on both coasts up to 2,000- and 3,000-ft deep, respectively (U.S. Department of the Interior, 1986b).

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13 LIJ oh ~ cC C] 200 O G Er ~ O O ~ 100 LL En Z ~ Oh Go l Installed Each Year · Removed Each Year · Cumulative No. 1~ ~~ f V. ~ / / ~II~IlII~llll>Y ~ ~ o 1950 1 960 FIGURE 1-4 Gulf of Mexico installations. 1 970 YEAR TABLE 1-1 Number of Production Structures (OCS waterside 1 980 Water Depth (Ft) Gulf of Mexico Pacific 0-20 419 0 21-50 1412 0 51-100 830 1 101-150 352 1 151-200 269 6 201-300 246 5 301-400 61 2 401-500 - 11 1 501-900 7 5 >900 6 0 3613 21 4000 G LL 3000 m oh z LL 2000 cr LL ~ 0 1 000 c) ' O 1 990 aNumber of structures includes nonoperating facilities and therefore does not correspond precisely to the statistics presented in Figure 1-4. SOURCE: Minerals Management Service, data as of July 1988. Age Factors According to MMS data, at the end of 1986, 578 platforms in U.S. waters (roughly 17 percent were over 25 years old. The average age of production platforms is approximately 15 years. On

14 average, offshore production platforms are designed for and kept in service about 25 years (National Research Council, 1985~. This does not mean that platforms older than 25 years are unsound, nor are the systems or components on them necessarily inadequate. However, the age of these units does require that they be subjected to more intensive inspections of their structure and operating systems. Generally speaking, the service life of an offshore structure is determined by the depletion of economically recoverable oil and gas at the site. Apart from structures damaged by collision, fire, or storm, few offshore structures have been removed because they were no longer structurally sound or serviceable. Platforms are protected from corrosion in the splash zone by coating systems, and under water by cathodic systems. The integrity of the structure more often has been affected by unstable foundation soils and wind and wave forces than by the condition of the structure itself. The aging of offshore platforms raises concern—not primarily about their structural integrity but about the potential deterioration of onboard systems and facilities. Internal corrosion and erosion of piping on production and processing facilities is an age-related problem that requires sophisticated detection measurements. Growth in Number of Operating Companies The MMS has followed a policy of encouraging greater competition at lease sales and has attempted to make bidding more attractive to smaller companies (U.S. Department of the Interior, 1988c). In the August 1988 Gulf of Mexico sale, nine major oil companies accounted for only 52 percent of the high bids on tracts, with the other 48 percent being split among 33 different independent oil companies. As fields get older, there is an incentive for larger companies, with their relatively high overhead, to farm out the fields to smaller companies that can continue to make a profit due to their lower overhead. In addition, a lease holder may farm out a lease after drilling a discouraging exploratory well because further development would be incompatible with its economic objectives, while another—usually smaller~ompany, which is not burdened with high sunk investment costs, can use lower cost techniques or may have reached a different geological interpretation. The proliferation of operating companies can be seen in the fact that in 1983 there were only 20 companies operating up to five leases in the Gulf of Mexico OCS. By 1988, that number had grown to over 65. The safety implications of a proliferation of operators are hard to document. There are no statistics regarding the accident rate of companies that hold only one or two leases, as against companies that hold many leases. While there is no way to evaluate safety-consciousness of small companies, many companies exhibit the following characteristics that affect overall safety risks: · Typically they have no in-house safety staff, and usually they have minimal engineering and technical staffs to review field work and train field personnel in safety risks. · They use contract labor and outside consultants and undertake little, if any, onsite operator supervision. · Many have limited financial assets, which could lead to deferral of costly safety measures. Systems and Technologies The complexity of the inspection task is suggested by the following description of the mechanical, hydraulic, and electrical systems utilized in OCS operations.

15 Drilling "Making holes requires a variety of equipment common to all drilling operations. They fall into four system categories (Baker, 1979~: 1. Power generating systems, which usually use diesel internal combustion engines (although gas turbines also are coming into use) to drive generators. In some locations, where platforms are nearshore or near other platforms containing electrical generation equipment, subsea cables are used to deliver power to the platform. 2. Hoisting systems, which include draw-works, weight indicators, catheads, crown and traveling blocks, derricks, and masts used for lifting drilling equipment and pipe. 3. Rotating systems, which include the entire drill string, from the swivel below the traveling block to the bit at the bottom of the drill hole, as well as the rotary table on the deck surrounding the drill string. 4. Circulating systems, which include the drilling fluid (~mud") and various circulating equipment (the mud pump and associated lines and hoses), as well as auxiliary equipment such as shale shakers and desanderse Circulating systems also include well control devices such as blowout preventers, degassers, and pit level indicators. Hoisting and rotating systems present the greatest potential for operational accidents resulting in death or injury. Circulation system failures can result in loss of well control and blowouts, accompanying fires, and personnel accidents. Moreover, such systems usually operate intermittently during drilling and require close attention to sensors and gauges while the hole is being made. Production Oil and gas production requires equipment to process the produced fluids, as illustrated in Figure 1-5. All contain pressurized electrical and/or lifting components that may involve safety hazards. These can be divided into systems as follows: . Separation systems effect the initial separation of well fluids into gas, oil, and water and remove the sediment. Depending on the flowing pressure of the wells or pipeline pressure, several separators operating at different pressures may be required. · Oil treating systems remove small amounts of solids and water left in the oil after separation. Oil treating equipment includes large settling tanks ("gunbarrels"), fired pressure vessels ("heater-treaters") and pressure vessels with electrostatic grids ("chem-electric treaters"~. · Water treating systems take the water from the separation and oil treating systems (which may contain as much as 2,000 mg oil per liter of water/oil mixture), remove the oil, and dispose of the water at sea (if the residual oil is less than the limitations established by the Environmental Protection Agency) or reinject it in disposal wells. · Gas compression systems use reciprocating or centrifugal compressors to compress the gas, recovered from various low pressure production equipment up to the pressure of the offshore . . pipe 1nes. · Gas treating (dehydrating) systems condition the gas for sales. Most gas sales contracts require that the water vapor in the gas be limited (normally to 7 pounds water per million standard cubic feet of natural gas). This usually is done using triethylene glycol (TEG) in a closed vessel lo absorb water vapor from the wet gas. · Well testing systems consisting of separators and/or treaters are used periodically on individual wells to measure their production of oil, gas, and water, so that the total daily production from the platform can be allocated properly to each well. · Utility systems include equipment designed to provide electricity, fuel gas, instrument air or gas, heat, fresh water, sewage treatment and fire fighting systems. · Water injection systems include systems for processing produced water or seawater for injection into the reservoir for waterflooding.

16 H.P r L.P Code: H.P. High Pressure I.P. Intermediate Pressure L.P. Low Pressure FIGURE 1-5 Typical oil facility block diagram. These systems can be installed in =~ ~ ~ . , .... . ~ Gas Treatment Dehydration L.P. Gas _ Compression . _ l L Separation Water Treatment ~;~ I Sales many combinations. Vety few platforms include all systems. rut crumple, a save platform for a single well may contain only a simple utility system for instrument gas. Many gas platforms contain a simple utility .~~r~t~~m c~nOroti^- I 1 treating system, and test system. The control of production systems involves fewer uncertainties than drilling system control. The equipment that is in general use has been proven over many years of application both onshore and offshore. The systems generally operate at a steady-state condition so that monitoring sensors and gauges is relatively easy. Pressure is controlled by sensing the pressure in the gas space of a vessel and regulating the rate at which gas leaves the vessel through an automatic control valve. Level is controlled by sensing the gas/liquid or oil/water level in a vessel and regulating the rate at which liquid leaves through an automatic control v~,lv~" T."mnPr~t,~r" is ^~. Alma a. ~ _ process fluid temperature and regulating the Ilow of either a heat medium or fuel to a burner through an automatic control valve. These three variables can be controlled independently. --a—— ~~~~~~J ~ ,^~~ —~~A~~lV1~ O~~L~111~ ~111~1~ Weller art ~~ WllLl~JllCiU Uy ~~Il~lil~ ~ .. .. _ _ System Safety Management In general, from a production standpoint, the primary concern in the Gulf of Mexico is controlling the natural pressure of the field. In the Pacific, the concern is generating sufficient pressure to extract the oil. Design Considerations System safety management in oil and gas processing operations generally involves the extensive use of redundant systems and safety devices as well as generous safety factors in the design of

17 systems. The MMS requires adherence to American Petroleum Institute (API) guidelines (API recommended practice 14C), which provide two levels of protection beyond good process design. Producing wells are controlled by both subsurface and surface safety valves to avoid blowouts and overpressuring downstream processing equipment. Various sensors are used to detect a hazardous situation and automatically close the appropriate valves. All pressure vessels and piping are protected by pressure relieving devices if there is a possibility of exceeding the maximum allowable working pressures. MMS regulations require that all pressure vessels be American SocieW of Mechanical Engineers (ASME) Code stamped, although noncode vessels may be approved in some instances if hydrotested in accordance with regulations. All piping must be installed in accordance with American National Standards Institute (ANSI) B31.3 pressure piping code, and all electrical equipment must be installed and operated in accordance with the National Electric Code. Various mandated API guidelines and specific MMS requirements are referenced in the Code of Federal Regulations (C.F.R.) to amplify and clarifier these codes for application to the offshore environment. Firefighting systems are installed on platforms in accordance with API recommended practices and MMS requirements in work areas and in accordance with Coast Guard requirements for living accommodations. Flame, heat, smoke, and gas detectors generally are placed in potentially high-hazard areas. Many additional safety systems also are installed to achieve shut-in and containment of the various pressurized streams, should a failure occur. Manufacturing Standards for Safety Equipment The safety and pollution prevention equipment (SPPE) certification program conducted by MMS requires that all surface safety valves, subsurface safety valves, underwater safety valves, landing nipples, and locks used on the OCS be manufactured under American National Standards Institute/American Society of Mechanical Engineers Standard (ANSI/ASME) SSPE-1, Quality Assurance and Certification of Safer and Pollution Prevention Equipment used in Offshore Oil and Gas Operations. Training MMS regulations require that all lessee and contract personnel (rotary helpers, derrickmen, drillers, toolpushers, and operator's representatives) be trained in accordance with MMS Standard MMSS-OCS-T-1, Training and ~alipcations of Personnel in Well-Control Equipment and Techniques for Drilling on Offshore Locations (Second Edition, May 1982~. The MMS certifies well-control training programs and conducts onsite evaluations and unannounced audits of those programs to ensure that they are following their approved curricula. The MMS also requires that all lessee and contract personnel installing, inspecting, testing, and maintaining antipollution safety devices and systems be qualified under a program identified in the American Petroleum Institute's (API) recommended practice API RP T-2, Qualifications Programs for Oafish ore Production Personnel Who Work With Antipollution Safer Devices. Aspects of Safety on the OCS Safety in offshore oil and gas operations is of concern from the standpoint of crew safety, the safety of the facility itself, and the protection of the surrounding environment. The leaseholder is responsible for all operations including their effects on safety of people and property, and protection of the environment.

18 Crew SafeW OCS operations present a continuing risk of accident and injury. Drilling operations involve moving heavy equipment into place (e.g., pulling or hauling pipe) and the continual adjustment of controls and rotary equipment. These operations are personnel intensive. Production operations likewise involve the continual maintenance of process equipment, as well as activities associated with changing flowrates and reservoir depletion. All offshore operations also involve the lifting and moving of heavy loads and other manual tasks. The workplace itself involves many sources of hazard. Offshore platforms have limited work areas, elevated walkways, and equipment installed in cramped spaces. Openings on the deck present crews with a risk of falls. Storms, wind, and lightning have been factors in workplace accidents. Well blowouts which can result in explosion and fire, as well as breaks and leaks in pipes or hoses, have been the source of most catastrophic accidents. The MMS defines as a "major accident" a fire or explosion that results in equipment or structural damage of $1 million or more, hydrocarbon spills of 200 barrels or more during a period of 30 days, or a fatality or serious personal injury (U.S. Department of the Interior, 1988a). There were a total of 206 fatalities reported over the 32-year period between June 1956 and December 1988. Seven fatalities occurred in early 1989, just before this report was completed. Protection of Facilities and Property The financial consequences of the loss of a platform and its onboard equipment as a result of a blowout, fire and explosion, storm damage, or a ship collision could amount to several hundred million dollars just in replacement costs. The construction and installation costs for Shell's Cognac platform (located in 1,025 ft of water) were $255 million when it was installed in 1978 (Cognac production facilities cost an added $35 million). While this facility still is one of the deepest production structures built, its cost is comparable to the costs for large facilities common to the Pacific Coast, which, although built in shallower water, have extensive processing facilities. Loss of production is also a major cost element. Fortunately the United States is not dependent on a few OCS production facilities as compared to Britain, whose North Sea production suffered a reduction of over 5 percent from the loss of the Piper Alpha production platform in 1988. Environmental Protection The environmental pollution record relating to oil production on the OCS has been good. Of some 5 billion barrels of oil produced between 1972 and 1986, only about 80,000 barrels were spilled (U.S. Department of the Interior, 1988b).3 While over 24,000 wells were drilled in that period, no blowouts occurred that resulted in significant amounts of oil reaching shore, impacting sensitive environments, or causing loss of resources. Pollution prevention has been an increasingly important priority of the leaseholders and the MMS. Accident and pollution statistics are examined in more detail in Chapter 2. 3Page 90, Table 64 (spills of 50 barrels or more) of U.S. Department of the Interior, 1988b. In 1987, 297 barrels were spilled that were not recorded in time to be included in this table. Note that accident event reports for 1972-1986 show that spills from major offshore pipelines accounted for over 47 percent (37,000 barrels) of the reported spillage (U.S. Department of the Interior' 1988a).

19 Conservation of Resources The loss of oil or gas because of accidents to facilities has a financial impact and potentially an environmental effect, but equally important, these losses deplete domestic resources making the United States even more dependent on imported oil. Resource losses from accidents on the OCS have been low, particularly during the last 15 years as noted in the discussion about environmental protection above. SUMMARY Offshore platforms and drilling and production facilities on the OCS now tend to be older (increasing average age) and are becoming larger and more complicated. Platforms in the Pacific OCS are more complex (more onboard processing) but are relatively near shore, while those in the Gulf of Mexico are situated farther from shore, at an increasing average water depth as new areas of the Gulf are placed under lease. Increasing distance from shore makes each unit more isolated and reliant on its onboard resources. The distance from shore support of Gulf facilities also inhibits frequent inspections by regulatory agencies. The greater size and complexity of the Pacific platforms currently requires larger crews. Through the years, the Gulf of Mexico facilities have provided over 95 percent of the United States offshore oil production. Over half of these facilities are more than 15 years old. Aging of production systems presents an obvious potential for operational malfunctions, both minor and catastrophic. The need for effective on-site safety programs is, therefore, becoming greater despite the good overall safety record of the last 15 years.

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Aggressive, effective safety inspection programs are key elements to ensuring that oil- and gas-producing platform operations on the outer continental shelf are conducted in a safe and environmentally sound manner. Although the oil and gas leaseholders themselves are primarily responsible for the soundness of their operations, the Minerals Management Service (MMS) of the Department of the Interior is charged with prescribing safe practices and inspecting platforms. In response to an MMS request, this book examines possible revisions of MMS's inspection system, appraises inspection practices elsewhere—both in government and industry—assesses the advantages and disadvantages of alternative procedures, and recommends potentially more efficient practices aimed at increasing industry's awareness of its accountability for safety.

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