News Column

Tougher Rules Proposed for Offshore Oil Drilling

August 22, 2013
drilling offshore
Offshore oil platform (file photo)

The Obama administration on Wednesday proposed a rule to tighten standards for oil and gas production systems used offshore, in a bid to keep pace with the industry's march into deeper waters and more challenging terrain.

The 149-page proposal by the Bureau of Safety and Environmental Enforcement also would require more rigorous lifetime assessments of critical safety and pollution prevention equipment, such as foam firefighting systems and electronic emergency shutdown devices.

The measure has been in the works for years, as offshore regulators sought to update standards that haven't been revised significantly since 1988 even as the industry has ventured farther into offshore territory.

The new rule "will help regulations keep pace with changing technologies that have enabled the industry to explore and develop resources in deeper waters," said James Watson, director of the safety bureau.

Equipment deep down

One major technological change is the increasing reliance on production equipment far beneath the surface of the sea, including trees -- the assemblies of valves and fittings mounted on wellheads and used to control the flow of oil and gas.

Over decades of offshore work, oil and gas companies generally placed trees above water, where they were easily accessible.

But as deep-water production has grown, the bureau said, many wells producing from water depths greater than 4,000 feet use trees located on the seafloor, where workers can't directly access the device's valves and gauges. Instead, pressure, temperature and flow rate are monitored remotely.

New technologies also include stronger alloys and equipment meant to withstand higher temperatures underground and stronger pressures under thousands of feet of water. Even close to shore, the industry is using new methods to eke oil and gas from existing reservoirs.

The proposed rule would apply to 3,000 existing production facilities on the United States' outer continental shelf, from tiny unmanned single well caissons built years ago to massive new deep-water facilities with scores of workers on board.

The rule would require companies operating offshore to report failures in safety and pollution prevention equipment more frequently and to better document maintenance of the systems. The government also is proposing the equipment be subjected to "life cycle analysis," a rigorous, continual review covering the entire lifespan of the devices, from their design and manufacturing to their final decommissioning.

Sharpening the focus

Although the American Petroleum Institute's industry standards already recommend such analysis, the bureau said the proposed rule "would codify aspects of the life cycle analysis into the regulations and bring attention to its importance."

Offshore regulators also are insisting on more rigorous design standards and testing of valves that allow the flow of oil and gas to be halted in an emergency.

Other changes stem from recent accidents or agency investigations.

For instance, the new rule would require that engineering documents be stamped by registered professional engineers and made available to federal regulators on request, following the safety bureau's investigation into the availability of approved schematics on BP's Atlantis production platform.

The proposed rule also incorporates more than a dozen practices for offshore production facilities that the American Petroleum Institute recommends and which it says underscore the industry's commitment to safety.

"Since this is a major revision to the existing rule, we are reviewing it carefully and will submit comments," said Brian Straessle, a spokesman for the trade group.

'Best available'

One proposal sure to get industry scrutiny mandates that energy companies use the "best available and safest technology" whenever the safety bureau deems it economically feasible for new drilling and production operations or practicable on existing operations. That revises regulations that now require the use of best available and safer technology "whenever practical."

In practice, this would mean the safety bureau generally would dictate what best safety technology is economically feasible, but offshore operators could ask for exceptions when the cost of the technology outweighed its benefits.

Federal officials said the change was meant to steer the regulation closer to the mandates in the Outer Continental Shelf Lands Act, the statute that governs offshore energy development. But industry representatives were skeptical and signaled they would study the section closely.

Giving the safety bureau the decisive role over what qualifies as the best available safest technology seems to be a departure from regulators' stated intent to adopt more performance-based standards for offshore energy work, rather than prescriptive rules.

The public has 60 days to comment on the proposed rule. The industry is expected to ask for more time to weigh in, given the breadth of the proposal.

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