Rotten example - Hazards issue 113 January-March 2010

Hazards issue 113, January-March 2011

The UK is courting an offshore disaster

The UK’s offshore safety system has been hailed as a model of good practice. But US critics say they don’t want it over there, because it’s secretive, places too much trust in oil companies and contains very risky assumptions – including an allowable death rate of one in every thousand workers.

Rotten example
Hazards issue 113, January-March 2011

The April 2010 explosion on the Deepwater Horizon rig in the Gulf of Mexico killed 11 workers and unleashed an environmental catastrophe, but it was no accident.

And it wasn’t only the oil firms involved that were at fault. Regulation and enforcement had failed too, according to the January 2011 findings of an official investigation. A key recommendation of President Obama’s Oil Spill Commission is a shift by the US to a model based on the UK’s safety case system. This was introduced after the Piper Alpha rig – this time involving a US oil giant, Occidental, operating in UK waters – exploded in July 1988, killing 167 workers.

COST-CUTTER The report from the US presidential oil spill commission into the Gulf of Mexico oil disaster has concluded the US needed to expand and update drilling regulation and establish an independent drilling safety agency. The April 2010 blast aboard the Deepwater Horizon rig killed 11 people and caused one of the worst oil spills in history. more

The UK government is confident it is a system that works. Speaking on 8 June 1010, in the wake of Deepwater Horizon disaster, UK energy secretary Chris Huhne said after an “urgent review” of the UK system: “It's clear that our safety and environmental regulatory regime is fit for purpose. It is already among the most robust in the world and the industry's record in the North Sea is strong.”

There are many, however, that believe the UK is flirting with disaster.

The signs are there. While UK rigs haven’t exploded recently, many are quietly rotting. Accidents are up, and oversight is down. And the accident figures that are published, put a healthy gloss on what in fact is a more deadly performance.

Safety oversight

Major injuries in the UK offshore sector almost doubled from 106.3 per 100,000 in 2008/09 to 188 per 100,000 in 2009/10. The Health and Safety Executive’s figures, released in December 2010 and which exclude the 17 deaths last year in “offshore related travel incidents”, also show spills of hydrocarbons were up from 61 to 85.

WELL DANGEROUS Major injury rates in the UK offshore oil industry have soared, many rigs are rust buckets and experts fear a disaster could be round the corner.

Steve Walker, head of HSE’s offshore division and who last year extolled the virtues of the UK system before the US president’s oil commission, commented: “I am particularly disappointed, and concerned, that major and significant hydrocarbon releases are up by more than a third on last year.”

“This is a key indicator of how well the offshore industry is managing its major accident potential, and it really must up its game to identify and rectify the root causes of such events.”

Not that for much of the time anyone will be looking. Energy secretary Chris Huhne announced in June 2010 “plans to double the number of annual environmental inspections” offshore.

But these aren’t safety inspections, and the resources to undertake inspection work in any part of HSE’s operations has been hit dramatically by swingeing budget cuts (Hazards 113). HSE’s offshore division is barely coping with a falling head count. In June 2010, HSE told Hazards it had 98 offshore inspectors in 2008/9. By 2009/10 the number had dropped to 94, this set to fall to 90 inspectors in post in 2010/11.

An update to the HSE staffing figures obtained by Hazards in January 2011 revealed the downward trend was accelerating. There were just 83 offshore inspectors in post in December 2010. If you add in specialist offshore diver and well inspectors, HSE’s already diminished April 2010 complement of 109 offshore inspectors had by December 2010 fallen to 103.

Cut and paste case

In January 2011, a committee of MPs raised ‘serious doubts’ about the UK's ability to combat oil spills from deep sea rigs. The Energy and Climate Change Committee chair Tim Yeo said safety procedures could be “tightened up”, but said on the whole the industry is safe and the regulatory system “robust”, following reforms brought in after the Piper Alpha disaster.

He warned, however: “Companies cannot continue producing cut-and-paste oil spill response plans and rig operators must make it easier for staff to raise concerns without fear of intimidation.”

DANGEROUS WATERS UK-based oil multinational BP is failing to perform enough safety checks on operations in the North Sea, putting the safety of rig workers at risk, the Health and Safety Executive (HSE) has said. The company has until 31 May 2011 to remedy the criminal safety breaches identified in an HSE improvement notice. more

But according to Rena Steinzor, who like HSE’s Steve Walker gave evidence before the presidential commission, this is a problem inherent to the UK safety case system.

The University of Maryland law professor warned the “problem of cut-and-paste generic standards in safety protocols emerged with savage irony in the aftermath of the BP Gulf spill when... the company’s spill prevention control plan included a discussion of the consequences for walruses of a spill when such animals do not live in the area; the name of a deceased consultant on a list of experts to consult in the event of a spill; and a series of disconnected or wrong phone numbers as contacts during an emergency response.”

Steinzor describes the UK system as “wrong-headed” and believes adopting it in the US would show an “extremely unfortunate” lack of ambition.

“Oil rigs can be analogised to apartment houses operating on top of unpredictably active volcanoes,” she explained.

“Rather than relying on facility-specific and abstract demonstrations that risk levels in certain circumstances will result in the deaths of a certain number of workers, American regulatory reform should focus on mandating the installation of the best available ‘failsafe’ technology and teaching workers how to use it.

“Secret plans, as the safety cases are, have no place in the American regulatory system; compliance documents should be transparent and available to the public and to overseers who can hold them accountable.”

Words are cheap

As in the UK after Piper Alpha, the oil industry lobby in the US is strongly supportive of a safety case approach based on monitored self-regulation. Providing any level of monitoring was always a big ask for poorly resourced enforcement agencies. But as HSE’s tiny offshore enforcement division shrinks still further, the level of scrunity of oil company performance inevitably shrinks with it.

Steinzor says even when in full working order, the safety case system is far from safe by design. Cost is also part of the equation. “Safety cases are expected to reduce safety risks to a level ‘as low as reasonably practical’ (ALARP), which the British government has translated into two numbers: (1) a rig is considered safe if accidents aboard it will kill no more than 1 in 1,000 workers and (2) operators need spend no more than £1 million per life saved.

“Both numbers are far less demanding than standards in the United States, putting an alarmingly low dollar value on human life.”

Steinzor adds: “One final, distasteful feature of the British system is that all safety cases are treated as if they were government secrets. No-one except the company consultants, top level management, an assigned agency official, and - in limited circumstances - a worker representative is allowed to see the finished document in its entirety.”

Steinzor’s warnings have been voiced repeatedly by UK critics, many of whom believe the failure to prosecute Occidental after the 167 Piper Alpha deaths and the introduction of only a watered-down system of union safety reps’ rights in the wake of the disaster, were a signal to the industry it could continue to run its own hazardous show.

Prominent among the critics has been academic Dave Whyte. Writing in ‘Working disasters’, a 2006 analysis of the responses to workplace disasters including Piper Alpha, the Liverpool University safety policy expert warned the “supine, collusive ideology that dominates the regulatory landscape” means there is “little guarantee that another major disaster will not occur in the North Sea again.”

It’s a high cost, high risk, high profit industry. And events from the Deepwater Horizon blast in 2010 to Piper Alpha in 1988 show the industry has not learned its lessons, particularly when it comes to low probability, high impact disasters.

Robust argument?

While both UK energy secretary Chris Huhne and Tory energy committee chair Tim Yeo stress the “robust” nature of the UK regulatory regime, the offshore rigs they refer to may be anything but robust. A 21 December 2010 HSE report into external corrosion management on UK offshore facilities found many companies were neglecting general maintenance.

HSE inspections between July 2007 and March 2010 found the physical condition of installations varied from good to poor when looking at maintenance management systems for non-safety critical elements. Thirty inspections resulted in eight offshore companies - BP, Amec, Chevron, Maersk, ConocoPhillips, Marathon Oil UK, Petrofac and Wood Group Engineering – receiving a total of 10 enforcement notices for operating dangerously decrepit rigs.

Just because the flaws involved “non-safety critical elements”, doesn’t mean these couldn’t be the starting point to a major disaster.

Steinzor believes the latest HSE findings and earlier studies showing routine maintenance taking second place to production should be a warning sign.

“Because no major catastrophes have occurred in the British section of the North Sea since the 1988 Piper Alpha disaster, proponents of the safety case regime contend that the system is working, at least to the extent of preventing such hazards,” she said.

“But there's reason to believe trouble is ahead.”

References

Rena Steinzor. Deepwater Horizon spill commission waivers on self-regulation, endorses wrong-headed British 'safety cases' system, Center for Progressive Reform Blog, 11 January 2011.

Lessons from the North Sea: Should 'safety cases' come to America?, Boston College Environmental Affairs Law Review, published online ahead of print, 6 January 2011.

Oil spill commission website and final report [pdf]. BBC News Online. The Guardian.

UK increases North Sea rig inspections, DECC news release, 8 June 2010.

Energy and Climate Change Committee news release and report, 6 January 2011.

HSE offshore injury and incident statistics 2009/10, December 2010 [pdf].

External corrosion management report: Inspection report, December 2010 [pdf]. HSE news release.

Key Programme 3 (KP3): Asset integrity programme, HSE, November 2007 [pdf]. HSE news release, 21 November 2007.

Offshore KP3 report – Asset integrity: review of industry’s progress, HSE, July 2009 [pdf]. HSE news release, 14 July 2009.

Online resources

HSE safety cases webpages and offshore webpages.

Hazards website.

Cost-cutting blamed for Gulf oil disaster

The January 2011 report from the US presidential oil spill commission in to the Gulf of Mexico oil disaster concluded the US needed to expand and update drilling regulation and establish an independent drilling safety agency. The April 2010 blast aboard the Deepwater Horizon rig killed 11 people and caused one of the worst oil spills in history (Hazards 111).

The final report of the National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling, which President Barack Obama convened in May 2010, spread blame for the disaster widely, criticising BP, which owned the Macondo well; Transocean, which owned the rig; and Halliburton, which managed the well-sealing operation. It said the companies had cut corners to save time and money - decisions that contributed to the disaster.

The report describes BP’s preparedness plan, meant to detail how to cope with a spill, as “embarrassing.” And spill prevention technology available to the company also was not up to the task. “BP’s safety lapses have been chronic,” noted the commission’s report, which found that “despite the improvement in injury and spill rates during that decade, BP has caused a number of disastrous or potentially disastrous workplace incidents.” The company lacks a “consistent and reliable” way of managing risks, the commission added. “BP did not have adequate controls in place to ensure that key decisions in the months leading up to the blow-out were safe or sound from an engineering perspective,” the report found.

The commission concluded regulation and legislation governing offshore oil drilling failed adequately to protect oil workers and residents affected by the spill, which was “almost the inevitable result of years of industry and government complacency and lack of attention to safety.”

“Our exhaustive investigation finds that none of the major aspects of offshore drilling safety - not the regulatory oversight, not the industry safety standards, not the spill response practices - kept pace with the push into deep water,” said panel co-chair William Reilly. Former Florida senator Bob Graham, who sat on the panel, cited “significant errors and misjudgments” from BP, Halliburton and Transocean.

Oil Spill Commission. www.oilspillcommission.gov

BP rig workers at risk in UK waters

UK-based oil multinational BP is failing to perform enough safety checks on operations in the North Sea, putting the safety of rig workers at risk, the Health and Safety Executive (HSE) has said. The company has until 31 May to remedy the criminal safety breaches identified in an HSE improvement notice. The notice tells the company: “You are not carrying out suitable and sufficient assessments of the risks to the safety of your employees and other persons working on your offshore installations.”

The notice cites “recent examples” where HSE has operated unsafely, including one incidence where only one, rather than the required three, lifeboats was available. In another, a lubricant leak led to fire detection and suppression equipment being disabled. The absence of an operational risk assessment when performing a hazardous job on a third rig led a line to fail “catastrophically” on 24 September 2010 “discharging approximately 27 tonnes of fluid at 123 degrees centigrade.”

BP spokesperson Robert Wine commented: “We have already taken a number of actions to improve this aspect of risk management and will ensure all lessons are shared and implemented.” He added: “BP’s safety performance in the North Sea during 2010 improved considerably and we continue to pursue all opportunities to reduce and minimise safety and operational risk.”

BP was one of eight offshore operators to receive an improvement notice after an HSE investigation into rig maintenance. Its Magnus offshore installation had rusting walkways, stairways, gratings and handrails, putting staff at risk.