center for offshore safety

Center for Offshore Safety



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center for offshore safety The Report to the President concerning the Deepwater Horizon catastrophe discussed the possibility of creating an industry-sponsored agency analogous to the nuclear industry's independent Institute of Nuclear Power Operations (INPO) - an organization that came out of another industrial catastrophe: the Three Mile Island accident. The President's Commission to do with that event said the following.  

[T]he nuclear industry must dramatically change its attitudes toward safety and regulations. The Commission has recommended that the new regulatory agency prescribe strict standards. At the same time . . . the industry must also set and police its own standards of excellence to ensure the effective management and safe operation of nuclear power plants.

There are three key elements to the above quotation as applied to the offshore oil and gas industry.

The first is to do with industry's attitude to regulations. At least up until the time of the Deepwater Horizon incident, many representatives of the industry were quite resistant to the need for increased regulations - specifically the need for regulated Safety and Environmental Management Systems (SEMS). The Commission's report suggests that a change is needed. After all, the oil industry does not own the Outer Continental Shelf. The federal government has the authority and responsibility to require industry to take whatever actions are needed to achieve safe operations.

The second feature of the quotation is that industry should set its own standards. The nuclear power industry did this through the creation of INPO. A similar organization in the offshore oil and gas industry would set standards, require that all facilities meet those standards, measure performance and compare facilities and companies with one another. Such actions would help ensure that the whole industry is not sullied by the under-performance of a just a few facilities. Moreover, because the offshore industry is so sophisticated technically, it is unlikely that the government regulators will ever possess all of the expertise needed to fully control the industry. Therefore, self-regulation in the manner in which it is carried out by INPO, is a sensible solution to this difficulty.

Thirdly, a key role of INPO is that it carries out thorough, but non-adversarial inspections of nuclear power plants. The inspectors are often employees of other power plants on loan to INPO. This practice encourages valuable cross-fertilization of ideas. The results of the inspections are confidential, shared only with the managers at the affected sites. Although some mechanism would be needed for protecting confidential information, such an approach could be a valuable way of improving offshore safety.

Industry Differences

It must be recognized, however, that there are fundamental differences between the two industries. Hence the model that works for the nuclear power industry may not be entirely appropriate for offshore operations. Some of these differences include the following.

  • Whereas the nuclear power industry has a small number of plants operating in the same way year after year, the offshore industry is much more dynamic. Rigs and platforms are constantly moving to new locations, and the operating conditions at each well are unique.

  • The oil and gas industry is much more fragmented than is the nuclear power industry. There are 104 nuclear power plants in the United States. On the other hand, there are thousands of companies operating offshore in one capacity or another.

  •  Oil and gas companies are in competition with one another in a manner that is not true for public utilities. The creation of an INPO-type organization, particularly with regard to exploration and drilling, would meet strong resistance because so much information is proprietary and/or a trade secret.

Center for Offshore Safety

Given this background the American Petroleum Institute (API) created the Center for Offshore Safety (COS) following Deepwater Horizon. This center would supplement and complement formal regulations; and would have a relationship to BSEE and the other agencies analogous to that between INPO and the Nuclear Regulatory Commission.

In March 2011, the API stated the following regarding the proposed Center.

"After extensive review and development, the oil and natural gas industry has approved the creation of the Center for Offshore Safety, which will promote the highest level of safety for offshore operations, through an effective program that addresses management practices, communication and teamwork, and which relies on independent, third-party auditing and verification," said Jack Gerard, . . . "The board directed API to further develop the operational framework and timeline for the center—working with other industry stakeholders - to enhance industry safety and environmental performance."

Today's actions follow API's August 2010 testimony and its October 2010 letter to the Presidential Oil Spill Commission, regarding the industry's review of five other safety programs, including: the U.K.'s Step Change in Safety, the chemical industry's Responsible Care® program, the Institute for Nuclear Power Operations, the OSHA Voluntary Protection Program, and the Safety Case Regime for international operators.

The Center for Offshore Safety will draw on the lessons learned from successful, existing safety programs, applying the best elements of these programs to accommodate the unique challenges of offshore oil and natural gas operations, and will rely on independent auditing and review by third-party certifiers, according to API.

"While many of the Center's structure and operating details have yet to be resolved," said Gerard, "the program will be run by the separately-funded standards and certification arm of the American Petroleum Institute, which receive regular audits and accreditation by the American National Standards Institute and the ANSI-ASQ National Accreditation Board."

The Center is based in Houston and will be open to all companies that operate in deepwater exploration and production. The focus of the center will be based on API's Recommended Practice 75, covering safety and environmental management systems, which was recently incorporated into federal regulations by BSEE, the successor to BOEMRE.

Probably the biggest challenge that the COS faces is ensuring that it is independent of the companies whose interests are advocated by the API. In order to achieve this goal the API is providing the COS with its own organizational structure. It will also be subject to independent, third-party auditing and verification to ensure its integrity.

Another challenge is that many organizations - individual companies, BSEE, and now API - will be conducting audits at the same time. Hence the demand for qualified Independent Third Party Auditors (I3Ps) is likely to exceed the supply.

COS Mission

The COS has the following mission statement:

Promote the highest level of safety for offshore drilling, completions and operations by effective leadership, communication, teamwork, utilization of disciplined safety management systems and independent third-party auditing and certification.

The organization aims to achieve the above goal by:
  • Assuring that third party certification program auditors meet the program’s goals and objectives
  • Compiling and analyzing key industry leading and lagging safety metrics
  • Coordinating Center sponsored functions designed to facilitate the sharing and learning process
  • Identifying and promoting opportunities for industry to continuously improve
  • Development of outreach programs to facilitate communicating with government and external stakeholders

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