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BACKGROUND The U.S. Geological Survey of the Department of the Interior is responsible for overseeing and regulating the structural integrity and operational safety of offshore petroleum drilling and production equipment as provided in the Outer Continental Shelf (OCS) Lands Act, August 7, 1953 [67 STAT.462; 43 U.S.C. 1331-1343].5 In carrying out this responsibility, the USGS develops regulations, after soli- citing public comments through announcement in the Federal Register, and issues them in the form of OCS Orders. Overall, the OCS Orders System has improved over the years; however, the provisions pertaining to structural integrity have remained relatively unchanged. However, the National Academy of Engineering's Marine Board (now the Marine Board, Assembly of Engineering, National Research Council) in its report in 1972 questioned the validity of approvals or inspections by the government of a platform that are based on the personal standards and expertise of the reviewers, rather than on a system of objective-oriented regulations and an interpretive system of industry standards. Regarding structural integrity, the report stated: The Order [OCS Order Number 8, Approval Procedure for the Installation and Operation of Platforms, Fixed and Mobile Structures, and Artificial Islands] requires statements by the operator as to sizes and loads on structural members and piling and then requires "the following certification signed and dated with the title of the company representative: Operator certified that this platform has been certified by a registered pro- fessional engineer and that the structure will be constructed, operated, and main- tained as described in the application, and any approved modification thereto.

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No criteria are given for the "registered professional engineer" to use in certifying the platform.6 Since that report was issued and as oil and gas op- erations have proliferated, the regulatory practices of the USGS have come under increased scrutiny by the Congress, the general public, and the petroleum industry. These facts as well as the projected expansion of petroleum op- erations into the hostile environments of the Gulf of Alaska and the middle and north Atlantic Ocean areas, led the USGS to re-examine the regulatory requirements pertain- ing to offshore platforms wherever they may be installed, to ensure the technical adequacy and safety of their design, construction, and operation. Accordingly, on January 29, 1976, the U.S. Geological Survey published a draft "Notice to Lessees and Operators of Federal Oil and Gas Leases in the OCS, Gulf of Mexico Area." [Issued by the Oil and Gas Supervisor, Field Op- erations] in the Federal Register (Vol. 41, No. 20) con- cerning the requirements for third-party inspections to be performed on all drilling and production operations.7 [Comments from the public were solicited.] The following excerpts from that notice state the purpose of third-party inspection and define third-party inspectors for drilling and production operations:* A. Purpose; The purpose of third-party inspections is to enhance the efforts, to identify undesirable trends, and to provide solutions to problem areas with respect to safety and pollution control in day-to-day operations. Third-party inspection data will be coded for inclusion in the Platform In- spection System of the Gulf of Mexico, OCS op- erations, to permit its retrieval separately from inspection data collected by USGS inspection personnel. *The panel defined a third-party verification agent which is later recommended for structural verification.

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Third-party inspections will not replace any portion of the present USGS inspections but will be an adjunct to them. B. Definitions; Third-party inspectors are defined as either:THpersonnel employed by the operator who are not directly responsible for the operation they are inspecting and who report directly to management, or (2) personnel who are employed by an outside firm with which the operator or group of operators contract inspection services. In January 1976, the USGS reguested the National Re- Search Council's Marine Board to provide a technical analysis and to recommend procedures for the review of the structural integrity of new fixed offshore structures. The purpose of the study was to: 0 Determine whether or not independent third- party review of offshore structures would be of sufficient benefit to the USGS, the companies involved in the design, fabrication, and instal- lation of offshore structures, the operating companies undertaking the recovery of offshore petroleum and gas resources, the public and the Congress, to warrant the time and costs involved; 0 Determine, if the answer to the above is affirma- tive, the scope and detail that should be recom- mended for such review and further, to determine the availability of criteria, guidelines, and engineering standards for performing the review; and, 0 Identify and determine the relative merits of alternative organizational concepts for certifi- cation. The panel limited its deliberations to the problems of design, fabrication, installation, and maintenance of fixed, bottom-founded, offshore oil and gas structures, that is, production platforms permanently fixed to the seabed by means of piling, spread footings, or other means. (Steel Jacket, Pile Supported; Steel Tower, Pile Supported; Concrete, Gravity; Articulated, Buoyant; Concrete/Steel Hybrid; Tension Leg; Guyed Tower; Monopod.) Other aspects of offshore oil and gas operations, i.e., the existence of pipelines, drilling operations, production equipment, operational safety would be considered only

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peripherally. Thus, mobile drilling ships and jack-up rigs were excluded from consideration. The panel also excluded consideration of verification techniques applied to the structural integrity of existing platforms. A verification procedure for these must take into account the number of existing platforms, their age, the technology used at the time of construction, the cost of bringing them up to acceptable construction design criteria, specifications, etc., and the value of remaining oil or gas reserves. Thus, the large number of existing platforms and the differences in their ages would require an evaluation procedure entirely different than the pro- cedure applied to new platforms. An additional limitation which the panel imposed on itself was the consideration of costs. Ultimately, the public will bear the total costs of operating the system either through taxes or increased prices for oil and gas. Therefore, the panel generally considered only the total costs and did not attempt to differentiate between "govern- ment costs" and "industry costs" except when necessary. Certification vs. Verification One of the first tasks on which the panel focused was selection of terminology to define accurately the process they were studying. Accordingly, the implications of the words "certification" and "verfication" were examined. The panel concluded that while the term "platform certification" as presently used by the USGS refers to certification by a professional engineer "...that the structure will be con- structed, operated and maintained as described in the ap- plication (of the owner/operator) and any approved modifi- cation thereto" the public and the Congress might infer that the structure was certified to withstand all environ- mental and man-made impacts upon the structure.8 However, it is not possible to certify unconditionally that the platform will at all times be safe for operating personnel, or withstand the effects of all storms and seismic condi- tions, collisions or accidents, or that the environment will not be endangered. Nevertheless, a procedure is required, whatever its designation, to assure the public, the Congress, the USGS and the owner/operator of the platform that the environ- mental and operating factors have been given consideration in the platform design, construction and installation. This

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procedure should also indicate that appropriate reviews and inspections have been conducted to document that the design, building, and installation of a platform are in conformance with the applicable performance criteria, specifications, etc. This procedure has been identified as "verification." Scope of Panel Study The panel examined numerous areas of concern associated with verification, including: 0 The overall objectives of verification; 0 The adequacy of the present USGS verification system; 0 The methodology and characteristics of other U.S. and foreign verification systems; 0 The adequacy of present industry design, fabrication, installation, and maintenance practices; 0 The legal and public-interest implications of veri- fication; 0 The need for, and the positive and negative effects of/ any change from the present system; 0 The criteria by which the verification system and organizational concepts might be judged for suit- ability and adequacy; 0 Third-party verification process by which design review and inspection of structures is performed and documented by independent third-party agents. There are numerous variations of third-party verification systems. Some permit the utiliza- tion of personnel employed by the companies in- volved in the design and construction of the structure; other systems permit only the use of outside, independent qualified personnel or organi- zations as verification agents with a full range of combinations. In this report, several types of verification processes are discussed.

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10 0 The use of various groups — USGS, and other govern- ment agencies, classification societies such as the American Bureau of Shipping (ABS), oil industry, engineering and construction firms, industry and professional societies, and independent consulting firms in a verification program. The USGS also requested that the panel consider a study being conducted by the Aerospace Corporation, under contract to the USGS, as it related to the panel's efforts and to com- ment as appropriate. The Aerospace study analyzed various cerification procedures and developed detailed cost estimates, personnel staffing and implementation requirements. The USGS arranged for Aerospace to apprise the panel of its progress. The USGS also provided the panel with the Aero- space final reports, Verification of Offshore Structures for Oil and Gas Development; Program Plan and Program Plan Implementation Option's — Veriflc'ati'oh_o'f Offshore Structures for Oil and Gas Development.3 Need for Verification No verification system can offer unconditional guaran- tees of structural integrity or even of the complete ade- quacy of design and construction procedures. The most that it can accomplish is to assure a high degree of probability that adequate or appropriate procedures, technology, and materials have been utilized, and that no recognizable prob- lems have been overlooked. The panel found no indication of major technical defi- ciencies requiring a more stringent verification system to improve the integrity of offshore structures in the geo- graphical areas where the majority of offshore structures now exist. They determined, however, that as oil and gas development extends into offshore locations more hostile than the Gulf of Mexico, and the design, installation and operation of such structures become more complex, a system is needed to: 0 Give formal and additional assurance to the public and the Congress of the integrity of fixed offshore structures in all U.S. waters; 0 Ensure a continuation of industry's excellent past performance as OCS operations are extended into frontier areas with harsher conditions.

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11 Primary Implementation Considerations The success of any verification system depends on sound scientific and technical knowledge and its documentation, and on qualified personnel. Knowledge of Offshore Technology R&D efforts by the U.S. offshore industry have been primarily responsible for the development of OCS technology to its present state of sophistication. The scientific and technical knowledge required to implement a verification system consists of: 0 Environmental data, including atmospheric, oceanic, and geotechnical; 0 Engineering properties of structural materials; 0 Structural design; 0 Response of structures to environmental loads; 0 Fabrication technology; 0 Inspection technology; and, 0 Installation technology. While the present state of scientific and technical knowledge provides a satisfactory basis on which to continue the development and regulation of the U.S. outer continental shelf oil and gas activities, it is essential that this basis is continually expanded and supported. There must be an uninterrupted flow of environmental data, sponsorship of background or basic research and a regulatory climate that is conducive to continued (or even enhanced) industry re- search and development efforts. In his paper prepared for the panel, Matlock listed some suggested opportunities for further research (see Appendix B). Status of Technical Documentation The technical documentation includes policy guidelines, the basic verification program plan, and the administrative and technical procedures, standards, environmental data, and manuals by which it is supported and implemented.

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12 The documentation now in use for offshore structures differs among government agencies, industrial groups, and certification organizations. To date, the technology has been developed and continually extended in a large measure by the U.S. offshore industry. The documentation of this knowledge exists in several forms, including: 0 Government regulations, such as the U.S. Code of Federal Regulations, USGS-OCS Orders, British Department of Energy Guidelines; 0 Classification Society Rules, such as those of Lloyd's Register of Shipping, Det norske Veritas (DNV), American Bureau of Shipping (ABS); 0 Quasi-public sets of nationally recognized standards, such as those of the American National Standards Institute (ANSI); 0 General professional and technical codes pre- pared by professional and technical organizations such as, the American Institute of Steel Construc- tion (AISC), the American Concrete Institute (ACI), the American Society of Metals (ASM), the American Society of Testing Materials (ASTM) , the Fe'dera- tion Internationale de la Precontrainte (FIP); and petroleum societies' recommended practices, such as American Petroleum Institute (API) API- RP2A (Recommended Practice for the Planning, Designing, and Constructing of Fixed Offshore Platforms); 0 Industrial firm design procedures and practices; and, 0 Technical literature. In its study for the USGS, the Aerospace Corporation reviewed API-RP2A and indicated which areas of the state of technology were satisfactory and which areas could be improved.10 While the panel does not entirely concur with their conclusions, the report does provide a start- ing point for improving the documentation of recommended practices. It is to be noted, however, that API-RP2A is cited in domestic and foreign government regulations as well as classification societies' rules and thus presents a fairly accurate picture of the state of knowledge of offshore technology as it is being applied.

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13 The task of translating the technical literature into standards is not trivial. It requires the constant exami- nation of the evolving technology, exchange of informa- tion within the offshore technology community, and the con- tinous translation of new knowledge into standards. The resulting standards can be selectively incorporated into the regulations through the Federal Register process which solicits comments from industry and the public prior to adoption of the change. Personnel The number, scope, and intricacy of the functions to be performed in a verification program dictates a need for personnel with outstanding technical capabilities in many areas. Their technical competence should be combined with strong managerial ability and sensitivity to the public interest. At the same time, such personnel should have a keen grasp of the role of the government, and the capa- bility of the industry. Verification Functions The panel identified the functions to be carried out in a verification system: 0 Establish environmental design and construction criteria and prepare basic implementing docu- mentation of policy, regulations, standards, and personnel qualifications; 0 Prepare detailed verification plans which list the criteria and procedures to be used in design, construction, installation, and main- tenance and the various design review, inspec- tion, test, and quality control activities; 0 Check and approve (with modifications, if needed) the verification plans; 0 Provide an appeal route for resolving conflicts; 0 Implement the plan (i.e., conduct design review, observe tests, inspect fabrication and installation, and review various quality-control activities); 0 Monitor the implementation;

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14 Operate the failure reporting and analysis system; and, Audit the overall implementation of the verifi- cation system.