Advancing Understanding of Offshore Oil and Gas Systemic Risk in the U.S. Gulf of Mexico Current State and Safety Reforms Since the Macondo Well–Deepwater Horizon Blowout (2023) / Chapter Skim
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1 Introduction
1 Introduction
Pages 7-38
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In this introduction the committee provides the definitions that it has used for systemic risk and industry systemic risk profile in developing this report. This is followed by a brief history of the offshore industry and its safety record and a brief summary of the multiple investigative reports that have identified the human, organizational, and regulatory failures that led to the Macondo disaster.
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2. Assess how various technological, regulatory, environmental, organiza tional, and process changes have contributed to increasing or decreasing the systemic risks of the offshore oil and gas operations since the release of the report Macondo Well Deepwater Horizon Blowout: Lessons for Im proving Offshore Drilling Safety (2012)
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A subsequent section of this chapter provides background on the concept of systemic risk and how the committee believes that it applies to the offshore oil and gas industry. In this regard, the committee agreed on the following definition.
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As with temporal changes in hazards, complex organizations can change over time in ways that influence systemic risk: • The effectiveness of barriers or controls can be degraded by eco nomic pressures; conflicting organizational goals and decreased emphasis on safety; changes in leadership; insufficient resources devoted to maintenance, training, and communications; declines in workforce situation awareness (SA) ; and other detrimental in fluences on organizational and individual performance (Reason, 1997)
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Brief History of the U.S. Offshore Industry Offshore drilling and production in the United States dates back more than 120 years.
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. In 1962, the industry introduced floating drilling rigs that could operate in deeper water than before (National Commission, 2011, p.
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As of the beginning of 2022, there were fewer than 1,700 offshore production platforms in the GoM. This total number of offshore platforms represents a decline of almost 50 percent from about 3,400 such facilities in 2010.8 This downward trend is primarily due to the decommissioning or abandonment of older production platforms located in shallow water that were no longer producing oil or gas profitably.
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The blowout and explosion on the Deepwater Horizon drilling rig in 2010 occurred at the same time that the crew was receiving a safety award from senior corporate managers to recognize the rig's exemplary occupational safety record. Occupational safety trends, as reviewed above, are not generally believed by experts to be indicative of risks of disasters such as major blowouts, explosions, fires, and spills from offshore wells (Hudson, 2009)
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Thus, there were three different agencies with fairly distinct oversight of different aspects of offshore safety. MMS had regulatory authority over drilling and production and shared occupational safety responsibility with USCG.
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The Events of April 20, 2010 Several post-Macondo investigative reports highlight the principal causes of the blowout and explosion, and whereas the reports offer somewhat 13 This text relies on the National Commission (2011, pp.
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The following examples of management 14 In addition to the National Commission and Chief Counsel's reports already cited, major investigations include BOEMRE (2011)
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: • The Chief Counsel of the National Commission concluded that the failures on the Deepwater Horizon traced back to management errors and lapses by BP and its contractors. For example, BP did not appreciate the risks of the Macondo well, nor did BP's Tem porary Abandonment Plan require an assessment of the risks by on-site BP and Transocean staff.
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in that organization. As summarized in Annex B, multiple independent reports linked the safety culture experienced on the Deepwater Horizon with decisions and inactions that led to blowout and explosion.
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Although this is not an exhaustive list, three examples of mechanisms associated with individuals' flawed decision making, referred to in several investigative reports of the Deepwater Horizon, are cognitive bias, interface design, and situation awareness. Cognitive Bias One way to understand cognitive bias is described in Daniel Kahneman's (2011)
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The CSB investigators concluded that the drilling crew's decision to accept that the bottom-hole cement plug was sound when the test results were conflicting (i.e., one of which showed pressure in the well and one of which did not) was an example of confirmation bias.
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In Chapter 4 the committee returns to issues of training, certification, SA and performance, and human factors standards in its assessment of offshore systemic safety management. SYSTEMIC RISK CONCEPT APPLIED TO OFFSHORE SAFETY The SOT calls for the committee to Define the current profile of systemic risks of offshore oil and gas opera tions in the Gulf of Mexico that could lead to disasters.
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focus on very-large-scale, transnational systemic risks, others note that certain complex systems can pose major risks to society at smaller scales. Bieber (2018)
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argued that complex, tightly coupled technical systems operated by complex organizations are prone to failure -- what he called "normal" accidents. Normal accidents result from the unpredictability of interactions within complex systems and by "tight coupling," or the degree to which initial failures cascade throughout the system.17 Pidgeon (2011)
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(2009) argue that Perrow's and HRO theorists' assumption that failures of complex systems are initiated by a single precipitating event, such as an individual component failure (as also cited in ideas about systemic risk described above)
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, does not accept the view that such collapses occur because of a single precipitating incident. In drawing from the work of Perrow, Leveson, and Kahneman, the committee views offshore systemic risks as involving the interactions among the physical and operational system controls of complex engineered systems and the cognitive biases
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brief reviews of the offshore industry, offshore safety, the Macondo disaster, and relevant concepts in process safety management. In Chapters 2 and 3, and using the committee's definitions of systemic risk and systemic risk management, the committee addresses the second item in the SOT: Assess how various technological, regulatory, environmental, organiza tional, and process changes have contributed to increasing or decreasing the systemic risks of the offshore oil and gas operations since the release of the report Macondo Well Deepwater Horizon Blowout: Lessons for Improving Offshore Drilling Safety (2012)
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In Chapter 4 the committee also compares its estimate of the current systemic risk profile with its estimate of the risk profile at the time of Macondo. This comparison responds to the first sentence of the SOT, which asks the committee to "provide an assessment of the risk profile of offshore oil and gas operations over time." Chapter 5 addresses the fourth item of the committee's SOT: "Consider how the regulatory structure motivates or incentivizes technological, environmental, organizational, and process changes that could decrease the systemic risks of the offshore oil and gas operations." The third item of the SOT asks the committee to "Identify critical gaps and prioritize future needs for increased understanding, communication, and management of systemic risks related to the offshore oil and gas industry." The committee addresses this item through the conclusions it offers in Chapters 2 through 5 and as summarized in the Summary.
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2020. Theory of systemic risks: Insights from physics and chemistry.
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2021. Systemic risks -- Concepts and challenges for risk governance.
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2006. Situation awareness and safety in offshore drill crews.
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For example, exploratory drilling may be undertaken from several kinds of floating or bottom-supported rigs, with rig choice depending on site-specific factors such as water depth. However, the basic steps involved in drilling and completing a well are generic to most offshore fields.
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Some processes take place on the platform or on ancillary facilities, sometimes including the separation and processing of the oil and natural gas, treatment and disposal of extracted water and gases, and storage of the extracted product before it is exported by underwater pipeline or shuttle tanker. The specific design and configuration of the production installation depend on considerations such as water depth, marine and weather conditions, expected recovery volumes, distance from shore, and the need for oil and gas storage.
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management problems BP guidance on temporary abandonment arrived at the last minute that led to the blowout. Transocean and Sperry and was vague.
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overseeing Macondo Lack of strong safety culture was displayed by multiple flawed well. Regulators were not Flow of hydrocarbons decisions.
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close well may not have BSEE did not use avoided blowout but could Offshore drilling always involves a degree of difference between data about reportable have mitigated the scope of WAI and WAD. Neither Transocean nor BP bridged the gap between incidents (fires, kicks)
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. NOTE: BAST = best available and safest technologies; BOP = blowout preventer; BSEE = Bureau of Safety and Environmental Enforcement; OCSLA = Outer Continental Shelf Lands Act; TAP = temporary abandonment plan; WAD = work as done; WAI = work as imagined.
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