US Bureau of Safety and Environmental Enforcement Director Brian Salerno testified today (1 December) before a US congressional committee on Energy and Natural Resources defending a new well control rule, 30 CFR Part 250 released earlier this year, which the agency expects will improve offshore safety in response to the 2010 Deepwater Horizon accident.
However, Erik Milito, group director, Upstream and Industry Operations, API, testified at the committee hearing that various provisions of the proposed well control rule could actually serve to increase risk and reduce safety. He urged the committee to, “ensure that it is not implementing prescriptive requirements that will serve to inhibit innovation and technology advancement.”
Salerno faced questions about implementation from a panel of US Senators. At one point in the questions phase, US Senator Bill Cassidy (R-Louisiana) inquired about the possibility of the well control rule shifting command and control authority from rig to shore, which was brought up by API's Milito.
Salerno said the rule does not shift authority, stating that it addresses capability, "so that there would be a second set of eyes, so that you can have extra experts onshore and provide diagnostic expertise in assessing an anomaly."
When the new well control rule (Oil and Gas and Sulphur Operations in the Outer Continental Shelf — Blowout Preventer Systems and Well Control), was proposed in April, BSEE sent a call out for industry comments and, in July, groups such as the International Association of Drilling Contractors (IADC) named several areas of concern:
“Specifically with regard to drilling contractors, IADC identified three major areas of concern with the proposed rule. These include its prescriptive requirements that go beyond international standards and will negatively affect the US market for MODUs; the significant costs to drilling contractors to comply with the rule, which were not accounted for in BSEE’s impact analysis; and the inspection and more massive BOP equipment requirements, which will negatively impact operations."
Salerno testified before the congressional comittee that the new well control rule was born out of investigations and reports that took place following the deadly 2010 Deepwater Horizon accident, and incorporates recommendations made regarding blowout preventers (BOPs), well design, cementing, well integrity testing, kick detection and response, real-time monitoring of well operations, and other areas.
“The need for the well control rule is demonstrated by the fact that loss of well control incidents are happening at the same rate five years after the Macondo blowout as they were before,” Salerno added, saying that in 2013 and 2014, there were eight and seven loss of well control incidents per year, respectively, and occurring in all water depths.
Notably, Salerno recalled the 2013 Walter Oil & Gas blowout at South Timbalier 200 in the US Gulf of Mexico, which occurred in shallow waters off Louisiana, resulting in the evacuation of 44 workers, a fire that burned for 72 hours completely destroying the rig, and resulting in a financial loss of some $60 million.
Salerno told the hearing that the proposed well control rule seeks to mitigate or eliminate several different types of risk associated with drilling activities: "First, the rule implements many of the recommendations related to well-control equipment and fill gaps in the regulatory program. It calls for increases in the performance and reliability of well-control equipment, with particular focus on BOPs. It improves regulatory oversight of the design, fabrication, maintenance, inspection, and reporting requirements for critical equipment. It also seeks to gain information on leading and lagging indicators of BOP component failures and identify trends in those failures and help prevent accidents. Finally, the rule ensures that industry uses recognized engineering practices as well as innovative technology and techniques to increase overall safety."
Industry speaks out
 |
| API's Milito |
The International Association of Drilling Contractors (IADC) issued a statement Tuesday following the congressional hearing that urged further collaboration between industry and regulators. However, several offshore industry advocates have come out against the rule. And according to US Senator Lisa Murkowski (R-Alaska), industry experts have said the new rule is too prescriptive and would deny operators the flexibility to response to changing conditions in the field.
“At IADC, we welcome any opportunity to work collaboratively and constructively with BSEE and Director Salerno, as we believe in the need for better, more efficient regulation,” said Elizabeth Craddock, IADC Vice President, Policy and Government Affairs. “That is regulation that is fair, fit for purpose, practically implementable and affordable for our industry.
“That is why we, along with our industry partners, have requested more collaboration with BSEE to ensure that this rule does result in the safety improvements intended, because as currently drafted, the rule could result in unintended consequences which lead to less safe drilling. These issues can be addressed and we hope BSEE will make the changes needed,” she said.
National Ocean Industries Association (NOIA) President Randall Luthi released a statement after the hearing stating that it is in the best interest of regulators, industry and politicians alike to get the well control rule right.
“A rule as complex and sweeping as this proposal requires extensive and comprehensive dialogue between drilling engineers and experts and the regulators,” he urged. “While there has been progress in reaching agreement and understanding on some areas of the proposed rule, we still have substantial concerns with its prescriptive and one-size fits all provisions, which may have the unintended consequence of increasing, rather than decreasing, risk.
“Safety offshore is paramount, and rushing to finalize this rule by early 2016 could produce regulations that may not meet the most current safety standards and technology. This is truly a case where additional collaboration with industry experts will result in a better, more effective and workable rule. The quality of the final rule should take precedence over a politically-imposed deadline,” Luthi concluded.
Congressional comments
While the industry largely feels the new rule is too prescriptive, one ranking member of the Senate’s Energy and Natural Resources Committee, US Senator Maria Cantwell (D-Washington) (pictured, right) who spoke at the hearing today, called for congress to “swiftly” approve the proposed well control rule.
“Since 2010, there have been 23 separate ‘loss of well control incidents’,” Cantwell said during the hearing. “In fact, the administration estimates that we experience between six and eight of these incidents each year.
“We can’t afford this kind of risk,” Cantwell argued. “The residents, the environment, the coastal economies, the taxpayers—even the offshore oil and gas industry—cannot afford a repeat of the Deepwater Horizon disaster. Although none of the events since have been as significant as Deepwater Horizon, the fact that these keep happening only emphasizes the need for comprehensive and robust safety standards, which this rule provides.”
Cantwell concluded: “I recognize that no safety standard can be 100% fail-safe, but we can work to make incremental improvements to oil production procedures and safety. So, I urge my colleagues to recognize that we still have serious gaps in oil spill response technology.”
However, Murkowski (pictured right), another ranking member of the committee, believes current federal regulations make it too hard to get projects off the ground as it is.
“The truth is that our offshore regulatory system has too often held projects back – especially in my home state of Alaska,” Murkowski said during her opening statement at the hearing. “No one here will suggest that offshore production should go unregulated, or that safety should ever be anything but the very top priority, but when industry experts express concerns about the safety of proposed rules, we should all pay attention.”
US Senator Steve Daines (R-Montana) also argued against the proposed rule during the hearing, saying that it was," another attempt from the Obama Administration to reduce American energy production."
"In BSEE's own words, it's one of the 'most substantial rule makings in its history'," Daines said. The rule he said was more stringent than any other standard, continuing, Daines said: "Yet, the proposed rule and BSEE's rule-making process has shown disregard for the states that would be affected."
Read more
New regulations for offshore operators
Subscribe
