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BSEE moving to performance approach Wants to make increasing use of regulatory approach in which companies figure out how to meet safety and environmental standards Alan Bailey Petroleum News
During its short history, in the aftermath of the Deepwater Horizon disaster, the Department of the Interior’s Bureau of Safety and Environmental Enforcement, or BSEE, has forged ahead with the issue of a series of new offshore drilling rules and regulations. But the agency’s new three-year strategic plan, known as BSEE 2015, envisages a move towards setting safety and environmental standards — a performance-based approach to safety oversight — rather than using the traditional approach of prescribing to companies the specific safety techniques and technologies that they must use, James Watson, director of BSEE, told the Ocean Energy Safety Advisory Committee on Aug. 29 during the committee’s meeting in Anchorage, Alaska.
The Advisory Committee was formed in April 2011 to offer advice to the Department of the Interior on matters and actions relating to offshore energy safety — Watson was providing the committee and members of the public attending the committee meeting with an overview of actions that BSEE has been taking and the agency’s strategic direction.
Performance based The performance-based regulation involves setting safety standards and then allowing companies to figure out for themselves how meet those standards, thus encouraging innovation rather than straight-jacketing companies into prescribed ways of doing things.
“We’re wanting companies to be pro-active and manage their own safety and environmental enforcement,” Watson told Petroleum News. “We don’t want them to be totally dependent on a regulator to be there all the time.”
In his comments to the committee Watson contrasted the traditional U.S. approach to regulation to that in Norway where, rather than telling companies how to do things and issuing approvals, companies decide what to do, with the government maintaining oversight of company activities and telling a company to stop what it is doing if there are safety or environmental concerns.
Hybrid system Watson characterized his agency’s current approach to regulation as the beginnings of a hybrid system, in which traditional prescriptive regulations operate in parallel with a more performance based approach. A relatively new rule for the mandatory use of a safety and environmental system, or SEMS, during offshore drilling operations provides a stepping stone into the more performance oriented way of doing things.
Under the SEMS rule, a company has to implement a system that meets standards set by BSEE, with the company arranging an independent audit to verify compliance with BSEE’s requirements. The company itself has to write the management plan that spells out the safety system — there is no permit approval or BSEE sign off involved, Watson explained.
But under its hybrid approach, BSEE will continue to inspect oil and gas facilities, issue permits for approved actions such as drilling and production operations on the outer continental shelf, Watson said.
New rules And the agency is continuing to work on new rules for offshore energy operations. A final version of the drilling safety rule introduced in response to lessons learned from the Deepwater Horizon disaster has recently come out, and the agency is soon going to issue proposed new rules for blowout preventers and for production safety systems, Watson said.
The comment period for a proposed final SEMS rule has already closed. And BSEE has also been working on a new policy guideline for regulatory enforcement for contractors, as distinct from enforcement for oil and gas industry operators, he said.
Watson said that, with much emphasis on oil spill prevention in recent new rules and regulations, BSEE now needs to turn its attention towards oil spill response. The agency has published a notice to lessees, clarifying the application of the current regulations for oil spill response planning. But it would be better to modify the regulations themselves to spell out the agency’s expectations, and also to take account of new response technologies, organizational designs and other innovations.
“We know so much more now than we did when the current set of regulations were written,” Watson said.
Five elements Watson sees five key elements underpinning BSEE’s three-year strategic plan: achieving a continuous offshore safety and environmental performance and an offshore safety culture; promoting the use of innovative and best available, safest technology; effective regulatory enforcement; the recruitment and retention of appropriate personnel within the agency; and the implementation of information technology that will support the agency’s goals.
BSEE needs to build and sustain the organizational, technical and intellectual capacity to keep pace with what industry is doing, and to implement innovative regulations and enforcement procedures to enable that shift from a compliance approach to a performance-based approach. That, in turn, will require a lot of data.
“We need a lot of capacity to process that data and then have our people able to understand and use it,” Watson said.
And Watson sees BSEE’s hybrid approach to regulation as posing particular challenges to agency staff, given the motivation to pay particular attention to activities that staff have signed off on, rather than on activities where a company has been given more latitude to make its own decisions.
Recruitment Asked about progress in recruiting new staff, particularly university graduates, Watson said the agency had achieved some success in this area but was still finding recruitment to be challenging. Many people who have considered working for BSEE have ended up taking jobs in the industry, he said.
The agency still needs 200 more people and will be conducting further recruitment. And, with an intent to take people new to the field and develop them into fully fledged engineers, there is a need to constantly improve BSEE’s training programs, Watson said.
However, the tight federal budget is a cause for some concern in implementing the agency’s plans.
“I’m not as optimistic about our growth going forward as I once was,” Watson said.
On the other hand, BSEE has been strongly supported in 2012 and the agency’s strategic plan assumes at least some austerity. And some of BSEE’s income, rather than originating from U.S. treasury dollars, comes from fees and rents, which have been increasing in the past couple of years, Watson said.
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