U.S. offshore oil regulator sees growing safety culture

HOUSTON (Reuters) — The new head regulator of the United States offshore oil patch says the effort to avert another disaster like 2010's BP Plc's  Macondo well blowout may never be finished, and that experts at a national laboratory are helping it model deepwater risks.
"I don't think there is a point when you are done," Brian Salerno, director of the U.S. Bureau of Safety and Environmental Enforcement (BSEE), told Reuters during the Reuters Global Commodities Summit in Houston.

Salerno took over as director of BSEE in late August. BSEE is the enforcement side of the former U.S. Minerals Management Service and was created in 2011 after the BP well blowout to split safety and environmental enforcement from the management of offshore crude oil and natural gas resources.

Following the Macondo disaster, the worst U.S. offshore spill ever which killed 11 men and released more than four million barrels of oil into the Gulf of Mexico, stories emerged about MMS employees being too cozy with oil company officials which raised questions about the integrity of regulators.

Rules have since been tightened to redouble safety and disaster response standards.

"What we mean when we talk about safety culture is that it really takes root and is built into the actual business processes of the companies," Salerno said, adding that BSEE is working to introduce "an additional focus on how we manage risk, collectively."

"I've got less than two-and-a-half months stick time," Salerno said of his tenure at the helm of the agency, which included the three-week partial government shutdown that curtailed some of BSEE's work.

However, Salerno is no newcomer to maritime safety regulation. Prior to taking over BSEE, he retired as a vice-admiral after a 36-year career in the U.S. Coast Guard during which he served as deputy commandant for operations.

While the general impression may be that the Macondo crisis is over, some of the problems it revealed are only beginning to be understood, he said.

Looking at aviation safety model

"One thing we are missing is information on near misses," Salerno said.

Near misses are breakdowns, malfunctions and operational upsets that, had they not been caught in time, could result in disasters. Most near-misses do not release enough pollutants to require reporting to U.S. environmental agencies. They are often unknown to regulators, but after a disaster investigators see them as glaring warnings of impending tragedy.

By spring 2014, BSEE hopes to unveil a reporting system that will enable workers to report near misses to the agency through the U.S. Bureau of Transportation Statistics (BTS).

Workers will be able to report problems anonymously as BTS has the legal authority to keep its information confidential, Salerno said.
"It's done in aviation, and it can help them too in the industry," he said.

The near-miss reporting system will help the agency learn what energy companies are really doing to improve safety as they work with increasingly advanced technologies hundreds of miles offshore and thousands of feet below the surface to extract hydrocarbons from high-pressure, high-temperature wells.

Another process for building an effective safety culture in the offshore industry is the continuing auditing of safety plans being carried out by the companies.

Eventually, those audits will be performed by independent, rigorous third-party evaluators.

"We've got to get it to that point," Salerno said.

Research centers are also key contributors in developing the safest technologies for the industry. Currently, Argonne National Laboratory outside Chicago and OHMSETT, the National Oil Spill Response Research & Renewable Energy Test Facility in Leonardo, New Jersey, are working on new technologies.

BSEE is close to designating a location for the Ocean Energy Safety Institute, which will work to identify the best available technologies for safety and environmental protection.

One focus of research at OHMSETT is finding technologies for use in the Arctic Ocean off the coast of Alaska. The intensely cold region requires different systems than the balmy Gulf or the warm waters off the coast of California, where BSEE also regulates drilling and production operations.
Royal Dutch Shell Plc (RDSa.L) has submitted a plan to U.S. authorities for drilling off the shore of Alaska in 2014.

From Alaska to the Gulf, oil company plans for new wells mean higher demand for BSEE's services. The U.S. Gulf is expected to see its biggest uptick in output ever in coming years as a string of deepwater platforms ramp up production through 2016.

"From an industry perspective, business is booming. That means, from a BSEE perspective, business is booming," he said.

Salerno said another priority is the ability of producers to quickly respond to a blowout and cap a gushing leak within hours or days rather than the three months it took BP and other industry players to come up with the equipment that finally capped the Macondo well.

Those efforts include more research at OHMSETT on spill response technical capabilities and the use of dispersants to break up oil at the seabed in addition to sheens on the water's surface in both warm and cold environments.

He also said he is satisfied that the industry has met the post-Macondo requirement that deepwater producers have capping mechanisms ready for dispatch to a leaking well. Oil companies have formed consortiums that built multiple huge caps, much like the one that capped Macondo, and stationed them at various coastal sites for deployment if needed.

"The technology was developed in the midst of a crisis. You could probably have long discussions as to why nobody thought of it beforehand, why we needed a crisis to stimulate that, but sometimes that's where innovation comes from, unfortunately."