U.S. looks to British model to improve offshore drilling safety

Even as the Obama administration allows offshore oil and gas operations to resume, government officials are working on a new safety strategy modeled after a British system that has substantially reduced oil spills.

Washington has long sought to head off disasters such as the BP gulf oil spill by drafting and trying to enforce hundreds of detailed rules and regulations. Not only has that approach proved cumbersome and often ineffective, it ran the risk of failing to identify potential problems.

The British system, by contrast, puts the burden — and ultimate legal and financial responsibility — on oil and gas companies to figure out the myriad ways something could go wrong on a drilling rig or production platform, then show regulators the practices and technologies that would be used to avoid or deal with the problems.

The safety record of British operations in the often-turbulent North Sea suggests it can have major advantages.

With the British approach, “you as the operator have to make sure you catch everything,” said John Crum, who has worked on offshore oil and gas projects in British waters and who is president of the North America unit of the independent oil company Apache.

“There’s no excuse for you if things go wrong, because you’re the one who wrote the plan,” he said.

Versions of the approach, known as “safety case,” are used by oil-producing countries around the world, from Norway to Australia, and many others are considering its adoption. Over the last decade, the safety case regime in Britain has led to a reduction in major offshore leaks by a factor of 10, according to Robin Pitblado of the risk management firm Det Norske Veritas.

The system was developed after a 1988 disaster in which a natural gas production platform called Piper Alpha blew up and sank off the Scottish coast, killing 167 men. A comprehensive, three-year investigation led the British government to overhaul its regulation of offshore oil and gas projects, beginning in the early 1990s.

According to industry and U.S. government officials, the Obama administration is studying the approach as a possible template for the United States.

“Safety case is something we’ve committed to taking a look at and integrating into our regulations,” said an Interior Department official.

Industry and administration officials say the U.S. may emerge with a hybrid system of traditional prescriptive regulations and safety case standards, creating a system that in many ways would demand more from regulators and oil companies.

Advocates predict that safety case would significantly reduce the danger of spills. And records indicate it could bring big gains in worker safety.

About 27,000 people work in the British section of the North Sea, and in 2008-09 there were no fatalities and 20 major injuries. By comparison, about 35,000 people work in the Gulf of Mexico, and over the same period there were four deaths and 285 injuries (the U.S. does not break down major and minor injuries).

The oil and gas industry, through a joint task force pulled together after the BP disaster, recommended the adoption of a safety case regime in the U.S., as have two industry groups, the International Assn. of Drilling Contractors and the American Petroleum Institute.

More recently, however, some companies have expressed reservations, fearing that any major change in the safety system could lead to long delays in bringing new wells on line.

Yet many companies long active in the North Sea, such as Royal Dutch Shell, use the approach in business units worldwide, and all but one of the 10 international drilling contractors in the Gulf of Mexico have worked in safety case regimes, said Alan Spackman, vice president of offshore technical and regulatory affairs at the International Assn. of Drilling Contractors.

Under the current U.S. system, before a company gets permission to drill, it must submit reams of technical information about its plans. Critics say that exercise may fail to anticipate all the risks and does not necessarily get those involved to communicate with one another.

Any safety system’s effectiveness depends heavily on how well it’s implemented, which depends on whether government agencies have the resources to keep a close eye on offshore operations.

On that point, the U.S. record is not encouraging.

For instance, the Gulf of Mexico has about 3,400 production platforms, most of them in shallow waters. That’s about 10 times as many as the British have in their section of the North Sea.

For Britain, the ratio of inspectors to oil and gas installations is about 1 to 3. In the U.S., it is 1 to 56.

Proponents of the safety case model say it pushes companies to think harder about worst-case scenarios and to upgrade their safety technology and practices to keep up with the evolving risks of ever-deeper drilling.

“It’s harder on the well operator,” North Sea veteran Crum said. “It requires you to write the rules and figure out the chance of this happening or that, and this is what you would do to prevent against it. What I like about it is that it makes you plan very well, makes you look at every aspect of what could potentially happen out there.”

In the North Sea, after oil firms come up with their scenarios, British regulators challenge assumptions the companies made for their disaster scenarios and spend days on the rigs reviewing the way a site is managed.

The penalties for safety violations under the British system are also levied more swiftly, and they can turn severe quickly, veterans of the system say.

In the U.S., the process takes longer and the oil industry has pressured inspectors, through their supervisors, to set aside violations — a possibility that a new system would not necessarily prevent.

Still, says Crum, “obviously, we need to change something, and I think this has a better chance of protecting the environment and people’s lives.”

nbanerjee@tribune.com