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A RECOMMENDED VERIFICATION SYSTEM As a result of the preceding analysis, the panel be- lieves that a third-party verification system could be insti- tuted and implemented by the USGS that would assure the pub- lic and the Congress that the best applicable scientific and technical knowledge available is being used in the design, building, installation, and operation of fixed offshore structures on the outer continental shelf. The panel has identified the elements of a verification system that it believes would enhance the capability of the USGS, but that would not be overly restrictive and rigid. The system is based on a combination of the desirable elements of the various systems reviewed by the panel, including the con- siderable wealth of experience already gained from opera- tions in the Gulf of Mexico. Some modifications to proce- dural details have been introduced to accommodate the variety of environments, experience in operations, and types of structures used in OCS development. The resulting system should be sufficiently flexible to allow adaptation to other offshore facilities that might be used for OCS oil and gas development. System Steps The basic steps encompassed in the proposed procedure are: 1. The operator (person, firm, corporation or other organization employed by the owners [of a platform] to conduct exploration, production, and recovery operations) submits to the USGS the structure verification plan. The cost of implementing the verification.plan is borne by the operator; 2. The USGS checks plan in-house (or with contract support in some cases); 3. The USGS approves plan if appropriate (an appeal route is provided for contested decisions); 4. The plan is implemented by the third-party engi- neering and inspection representatives as listed in the plan; 24

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25 5. The USGS monitors implementation of the plan for compliance, provides an appeal route, and insti- tutes a failure reporting and analysis system; 6. An independent board (similar to NTSB) conducts and/or reviews investigations of major acci- dents; 7. A step-by-step procedure for implementation and approval is provided to enable work to proceed in a timely manner. Contents of Verification Plan The verification plan submitted by the operator would describe the plan for design, construction, and installa- tion in sufficient detail to identify those aspects that ensure platform integrity. These include: 0 Definition of environmental performance criteria, which the structure must with- stand (e.g., a 100-year storm); 0 Design criteria and procedures, including probable names of designer and design consultants; 0 Fabrication procedures, including probable list of fabricators; 0 Installation procedures (conditions analyzed, such as launch, applicable pile-driving practices, etc.), including probable name of installation contractor; 0 Operating procedures and plans for post- installation and maintenance inspection procedures that relate to structural safety (inspection intervals and coverage); 0 Techniques and procedures to be used for verifying the structure: design review (engineering); tests (materials/ welding); and inspection procedures (fabrication, installation); and, 0 Nominations for the implementing third- party verification agents.

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26 Applicable Verification Standards, Codes, Practices The preparation and acceptance of verification plans should be based on applications of technology and engineer- ing practices that have been developed for OCS operations under specific environmental conditions. These practices include those of: 0 OCS Orders of the U.S.G.S.; 0 American National Standards Institute (ANSI); 0 American Society of Mechanical Engineers (ASME); 0 American Society of Testing Materials (ASTM); 0 The American Petroleum Institute (API); 0 The Federation Internationale de la Precontrainte (FIP); 0 American Concrete Institute (ACI); 0 Society of Naval Architects and Marine Engineers (SNAME); 0 Internal standards developed within individual organizations comprising the offshore industry; 0 American Welding Society (AWS); and, 0 other regulations and foreign standards as appli- cable to the specific structures for which the structure verification plan is submitted, e.g. Det norske Veritas Rules for Design, Construction and Inspection of Fixed Offshore Structures. These practices, standards, and codes should appear in the Federal Register publication and as practicable, undergo ANSI review. In the rapidly expanding offshore technology, the system must be flexible enough to accommodate applicable advances as soon as they appear in technical society publi- cations. As new documentation on environmental design conditions and recommended practices for design and construction become available, it should be incorporated into design and veri- fication programs, and when applicable, into the appropriate standards and design practices.

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27 Repeated Designs When the designs used are the same as those of pre- viously verified platforms, the design review verification step should be minimized. However, the review should take into account planned structural modifications and differ- ences in environmental loadings, if any. Flexibility to Accommodate Advanced Designs The need for flexibility in a verification system can- not be overstated. For example, the truly "frontier" structures will need design procedures and perhaps fabrica- tion and installation techniques that may not have been applied to other offshore structures. They may require new procedures and techniques that have not been recognized in the documentation governing verification. Consequently, verification for such structures cannot rely on a literal interpretation of the then accepted and standardized guide- lines, or wait while guidelines can be formulated through the Federal Register. Without flexibility, the new concepts needed in the design, building, and installation to meet conditions in more severe environments will be stifled. Furthermore, it must be recognized that building a platform is a step by step procedure, spanning a long period of time. These steps include detailed geologic and oceano- graphic investigation of the specific site, establishment of the system concept for development of the field, design of the structure, fabrication of principal components, transportation and installation of the basic structure at the site, completion of installation of the drilling and production equipment, after which the drilling can commence. Over that period of time, design details are completed, with such adjustments as may be required. The verification system should be sufficiently flex- ible to accommodate these steps. Inspection The inspection component of verification pertains to both fabrication and offshore phases. Fabrication inspec- tion will cover such items as welding and materials in order to confirm that the structure has been built to the approved design apecifications. At sea, it is necessary to confirm that the platform has been installed according to plan and that critical damage to the platform has either not occurred, or if it has, that it has been adequately repaired. Such inspection may require the use of remotely operated tele- vision, underwater photography, nondestructive test equipment and procedures, and trained inspection divers.

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23 Ongoing Configuration Control and Inspection Plans Post-installation changes affecting the platform (con- figuration control) and inspection plans relate to the establishment of a "regime for safety" that should result in continued structural integrity for the operational life- time of the structure until such time as it may be abandoned and removed. Such a "regime for safety" process includes: (1) ongoing configuration control; (2) planned periodic third-party inspections; (3) reverification either when changes in configuration are made which would affect struc- tural integrity or when the inspections show that because of major damage due to ship collisions, marine corrosion, and storms, repairs are necessary. Third-Party Verification Agents To be qualified as an independent verification agent (design reviewer or inspector), the design organization or personnel selected may not have corporate affiliation with the owner or operator; nor should they verify any of the design, fabrication, installation, or operation functions which they or a corporate affiliate have performed for the specific platform being verified. Third-party verification personnel may be independent consultants or may be drawn from the offshore industry and sources such as consulting firms, offshore engineering and inspection firms, and classification societies such as American Bureau of Shipping and Det norske Veritas. Verifi- cation reports prepared by these verifying agents are to be submitted by them to the government with copies to the opera- ting companies. Failure Reporting Failure reporting and analysis should deal with repairs made following the planned routine or emergency-caused in- spections, as well as with failures that occur (and are found) between inspections; the reporting can be implemented using the present USGS industry reporting system for safety devices. Accident Investigation and Review Accident investigation and review would occur only following major structural failures or other events as

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29 necessary. The investigation could be conducted by either the USGS or USCG at the request of the USGS. Post-inves- tigation review should be conducted by a detached high- level board such as the National Transportation Safety Board (NTSB). Review by such a board would provide a strong measure of credibility to the identification of the probable cause. Cost effectiveness should be high because of the past experience of NTSB and the infrequent occurrence of major structural failures. System Management, Approval, Appeal, and Audit There are a number of government functions not listed as a part of the contents of the submitted verification plan but critical within the overall verification system. These will include: management of the system, approval (disapproval), occasional appeal, and audit of the planned implementation. The purpose of the auditing function is to assure the USGS that the verifying agents are, in fact, conducting the verification procedure systematically, completely, and totally in compliance with the verification plan. Spot checks may be required in which inspection techniques and inspection records are carefully examined and authenticated. The provision of an effective appeal route is essential for settling disagreements encountered both in the verifi- cation plan review and in the implementation of the plan. Disagreements will, on occasion, be unavoidable because of the advancing nature of the engineering involved, the interpretation of the environmental data, and the lag in modifying codes, regulations, and standards which accommo- date the technical advancements. Analysis of Proposed System The components of the proposed system are summarized in Table I which includes further explanatory notes on each. As was done on pages 15 to 22 for the existing systems and Aerospace options, the panel reviewed its pro- posed system with respect to each of the criteria and needs established earlier. The proposed system, with its use of third-party veri- fication agents and the accident review board (similar to NTSB), appears capable of assuring the public that the

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30 TABLE I STRUCTURE VERIFICATION SYSTEM OUTLINE AND NOTES NOTES •rification Syste Management -USGS is regulatory agency and arbiter and auditor. -Verification agerts are generally fro* ABS, other classification societies, consulting firms, or other industries and sources such Am American Welding Society-qualified inspector!. Al1 of these are to be independent third parties as defined within this report. -Failure Reporting and Analysis -Procedures developed by USGS (possibly with contractor help) and promulgated by federal Register route. -Reporting by industry with USCS •ton i tor ing. -Collection and analyses by USGS (possibly with contractor help). -Analyses can also be made of data by USGS, industry, or other interested researchers. -Accident Investigation -Investigation conducted of major and Review failures or accidents by government agency (USGS or user.) . -Review by government board (special board or NTSB). (Use of USfiS and NTSB probably is most credible and cost effective approach). -Environmental Performance winds, ice seismic activity, etc. Criteria -USGS listing of hqw they are con- sidered, i.e., as max i mums from 100- year periods. -Can be developed for USGS by con- Federal Register route. -Environmental Conditions -Industry or government or jointly Operating Loads collected data. -Applicable conditions submitted by defined as the design progresses. standard codes, and ocs orders. -Specific procedures, analyses, etc. seleeted by operator and approved by USGS (possibly with the help of contractors!. by verification agents. -Materials -Selected by operator and approved by USGS. -Fabrication plans (Including -Selected by operators and approved inspection and quality by USGS. control) USGS monitoring and approval. -Verification Inspection ot -Verification agent selected by opera- Fabrication and Installation tor and approved by USGS. -Post Installation -Plans developed by operator with Periodic Inspection Plans LSGS approval. and Inspection -Inspect ion by verification agents. -Abandonment and Removal Plans -Development by operator with USGS -Abandonment and Removal -Conducted by operator-selected, USGS- agent inspection and reporting.

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31 industry is developing the OCS in an environmentally safe and resource-conservative manner. Initially, as in any new program, there will be a short supply of USGS personnel qualified in offshore structure technology. This deficiency can cause intolerable delays should the system be instituted hastily. Management Options The panel believes that a verification system could be instituted which would correspond to the Management Option listed in Table II. As will be noted, the functions marked by asterisks and identified as "establish criteria," "approve plan," "provide appeal route," "failure reporting and analysis," and "audit implementation" are considered to be primarily government responsibilities. The remaining functions are "prepare plan," "check plan," "implement plan," and "monitor imple- mentation." The management options for these functions should be balanced against considerations of credibility, accountability, and cost. The panel believes that the operator is the best quali- fied to prepare the plan ("prepare plan") according to gov- ernment guidelines since the industry will design, fabricate, and install the platform. Also, since the structure is owned and operated by the operator, it is in the best interests of both government and industry that the accountability reside with the operator. The plan, once prepared, ideally would be checked for technical and administrative adequacy by the USGS per- sonnel before approval; however, if the USGS checked all of the industry plans in detail, it would require a large staff of highly competent, technical manpower, whose work load would fluctuate considerably. Therefore, it may be more efficient for the USGS to contract for the actual checking process for selected submissions or portions thereof. The use of contractors to check all plans is pos- sible, but unwise, since the USGS must develop and maintain a strong in-house overall technical and management capability in the performance of its verification functions. For these reasons, the USGS, with contractor assistance, is indicated as having responsibility for the "check plan" function (USGS/Contractor). To assure credibility and accountability, contractors in the "check plan" function should be drawn from sources other than those industrial sources involved

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32 TABLE II Matrix of Options for Performance of Verification Functions ^\^ Possible Management Options Function N-v>>^^ 1 2 3 Establish Criteria* uses USGS USGS Prepare Plan Industry Third Party Third Party Check Plan USGS/ ** contractor USGS/ contractor Contractor Approve Plan* USGS USGS USGS * Provide Appeal Route USGS USGS USGS Implement Plan Third Parties Third Parties Third Parties Monitor Implemen- tation USGS/ contractor USGS/ contractor USGS/ contractor Failure Reporting* and Analysis USGS USGS USGS Audit Implemen- tation * USGS USGS USGS * Functions considered to be Government responsibilities ** USGS/contractor means, USGS personnel undertakes part of the function and may use contractors to assist for selected defineable portions.

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33 in the design, etc., of the structure involved.* The "implement plan" function will require the maximum number of capable personnel. If this function is performed by the USGS, a large staff would be necessary, particularly to handle peak-activity periods; furthermore, scheduling the government personnel to inspect, review, etc. could impose considerable unwanted delays. This function, however, can be carried out by industry, using qualified verification agents with the necessary skills who may be individuals or companies that have no corporate affiliation with the owner/ operator of the particular structural platform being verified. The operator's choice of third-party verification agents would be submitted in the verification plan for the USGS approval. A highly competent USGS staff will be necessary to monitor the implementation function properly ("monitor im- plementation") . By using monitor contractors, the size of the staff can be kept to a minimum; however, the USGS auditors should be used to spot check the entire implemen- tation program. The utilization of other agencies such as the Navy and the Coast Guard in the verification process was considered by the panel. For example, the USCG experience which could be applied to parts of verification include: 0 Safety of life at sea; 0 Pollution cleanup; 0 Effective relationships with groups such as ABS, technical societies, Intergovernmental Maritime Consultative Organization (IMCO); 0 Ship certification; 0 Failure and accident investigations; and, 0 Ongoing USCG marine engineering research and ship operations. *It is not believed necessary nor advisable, as indicated in the Aerospace options, for the consulting firms to divest themselves of other offshore design and engineering work to be qualified for such effort. In fact, the overriding re- quirement is for the expertise that can only be developed by being technically involved.

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34 The assignment of a group of USCG technical personnel might be considered for a two- to five-year period to aid in the verification system while a permanent USGS staff is formed. As the USGS competence was developed, the assigned USCG staff would be terminated. Separation of the development and regulatory functions by assignment of the latter to another agency to ensure public credibility was discussed by the panel. However, in view of the statutory basis for the USGS, which is discussed later, and the fact that meaningful regulation is dependent upon the understanding of the associated technology, this option may not be feasible at this time.