Rigzone | 31 May 2016

How SEMS II Has Changed US Offshore Oil, Gas Operations

The impact of the 2010 Deepwater Horizon accident—in which 11 workers on board the Deepwater Horizon drilling rig were killed when BP’s Macondo well blew out—continues to reverberate across the oil and gas industry. In April of this year, the Bureau of Safety and Environmental Enforcement (BSEE) announced new oil well control rules to prevent another accident like Deepwater Horizon from occurring. Last fall, BP was ordered to pay more than USD 20 billion in criminal and civil penalties and clean-up costs, making the settlement the largest corporate settlement of its kind in US history. The rig’s owner, Transocean, and well partner Anadarko Petroleum also faced litigation and fines over the accident.

Deepwater Horizon—a saga to be retold in a movie debuting later this year—also has affected how audits of offshore oil and gas operations are conducted and how hazards are mitigated.

Brady Austin

Safety and Environmental Management Systems II (SEMS II), which includes 17 elements that oil and gas operators must address in offshore operations, have profoundly affected how oil and gas companies approach operations, Brady Austin, quality, health, safety, and environment service line owner with engineering, technical, and business services firm Lloyd’s Register, said. SEMS II, a nontraditional, performance-based tool used for integrating and managing offshore operations, was created to enhance the safety of operations by reducing the frequency and severity of accidents, according to a statement on BSEE’s website. Currently, SEMS II applies only to operators and lessees in U.S. waters.


EHS Journal | 23 May 2016

Evaluating Executives’ Commitment to EHS Audit Programs

Corporate environmental, health, and safety (EHS) audit programs require a substantial commitment on the part of executive management in order to be successful. Programs must be defined and implemented, resources committed, audits conducted, and deficiencies corrected.  If all goes well, there is a presumption that unwanted surprises and incidents will be rare, resulting in fewer management headaches and no material adverse personal consequences for senior managers.  Truly a win-win for both the company and its executives.

Sadly, it is not always the case that senior corporate executives participate actively in EHS audit programs. A passive approach is much more common as EHS compliance, and performance is often deemed to be the sole responsibility of the EHS and sustainability managers in the organization.  The premise of this article is that this passive approach is perilous for both the individual and the company.  Senior executives should be involved actively, and there are ways to test whether this involvement is real or not. What follows is a discussion of why participation is important and a way to test whether it is truly happening in a given organization.

EHS Journal | 17 May 2016

Environmental Compliance in India Through an Auditor’s Lens

India—A Rapidly Growing Economy
India, counted among the emerging economies of the world, is scripting its growth story today. Its economy grew at an accelerated rate of 7.6% in 2015–16. The Indian manufacturing sector is being given necessary impetus and the National Manufacturing Policy envisages enhancing the share of manufacturing sector in gross domestic product to 25%. To realize this vision and to put the economy on a faster growth track, the Indian government has taken up a series of initiatives with the core objectives of improving the ease of doing business. Some of the noted initiatives to promote industrialization in the country include Make in India, E-Biz Project, Start-Up India Action Plan, Skill development programs, streamlining the process for obtaining environment and forest clearances and labor sector reforms. However, rapid (and, so far, largely inadequately regulated) industrial growth in India over the past 2½ decades has led to an accelerated degradation of the environment, long-term adverse environmental impacts, and socioeconomic conflicts in various parts of the country.

Foundations of Environmental Regulations in India
India has a parliamentary form of government with separate executive, legislative, and judicial branches. The Indian constitution is one of the few in the world that contains provision relating to environment conservation. Article 21 of the Constitution of India guarantees the right to life and personal liberty as a fundamental right. The Supreme Court of India in 1978 breathed substantive life to this article in the case of Maneka Gandhi v Union of India (1978). In the case Subhash Kumar v State of Bihar (1991), the Supreme Court of India declared that Article 21 “includes the right of enjoyment of pollution-free water and air for full enjoyment of life”. Since then, right to live in a healthy environment has emerged as an inherent part of the Right to Life enshrined in Article 21. Introduction of the Public Interest Litigation (PIL) concept in India led to consequent liberalization of locus standi. The first PIL on environmental issues in the country before the Supreme Court of India was the case, Rural Litigation and Entitlement Kendra v State of UP (1988).

India has a number of acts and rules along with national and subnational policies and standards covering various environmental aspects. Environmental Democracy Index ranked India at the 20th position out of 70 countries by acknowledging India’s progress in enacting national laws to promote environmental democracy. However, the country does lack on the implementation and enforcement front of these laws and regulations.

How This Article Can Help
Often, those responsible for the implementation of these regulations in industries (e.g., the factory manager or the health, safety, and environment manager) are unaware of all the nuances of environmental regulations or are unclear about their interpretation, attracting avoidable liabilities for their facility and organisation. Hence, this article is designed as a quick review of some of the most common violations observed in India and reasons for the same.

It is to be noted that the status of compliance with environmental regulations and the drivers for achieving compliance vary widely between different industry sectors, scales of operations, and states. This article is based on the most common trends observed by the authors across various industry sectors and states in India. The views presented here do not represent the condition of any specific sector or group of industries; nor do they represent conditions in any particular state within India.

Offshore Energy Today | 17 May 2016

Regulator Rejects BP’s Environment Plan for Drilling Offshore Australia

Australian offshore petroleum regulator NOPSEMA has once again told BP to modify and resubmit their environment plan for exploration drilling in the Great Australian Bight because the plan does not meet the regulatory requirements.

BP’s environment plan was previously dismissed by the agency in November 2015, also because of a failure to meet the regulatory requirements.

According to the regulator, if BP accepts this opportunity, the modified plan is expected to be resubmitted by 15 July, at which time NOPSEMA will restart the assessment.

The regulator explained that an opportunity to modify and resubmit the plan was a normal part of its environment plan assessment process. In fact, NOPSEMA said, the regulator is required by law to provide a titleholder (the company proposing the activity) a reasonable opportunity to modify and resubmit their plan if it doesn’t meet the regulatory requirements for acceptance.

Rigzone | 16 May 2016

EPA Unveils New Rules To Cut Oil, Gas Methane Emissions

Oil and gas industry groups are calling the Obama administration’s final rule to cut methane emissions from US oil and gas production costly and unnecessary. They argue the industry already has made headway in reducing emissions through innovation and improvement in exploration and production methods.

The US Environmental Protection Agency (EPA) on 12 May said it is finalizing new regulations aimed at reducing methane, volatile organic compounds (VOCs), and toxic air emissions from new, modified, and reconstructed sources in US oil and gas operations.

The final standards for new and modified sources are expected to reduce 510,000 short tons of methane in 2025, the equivalent of reducing 11 million metric tons of carbon dioxide, the EPA said in a 12 May press statement. They also are expected to reduce 210,000 short tons of ozone-forming VOCs in 2025, along with 3,900 tons of air toxins, such as benzene, toluene, ethylbenzene, and xylene. These emissions are associated with health issues such as asthma, suspected in causing cancer and other health problems, EPA said.

EPA estimates the final rule will yield climate benefits of USD 690 million in 2025, which will outweigh estimated costs of USD 530 million in 2025. EPA also expects benefits to be seen from reductions in VOCs and air toxics but could not quantify those benefits.

The Hill | 3 May 2016

EPA Offers No Timetable for Methane Rule at Current Drilling Sites

A top Environmental Protection Agency (EPA) official said regulations on methane leaks from new oil and gas well are coming “soon” but sidestepped questions on when a similar rule for existing wells will come out.

The Obama administration is focused on first collecting data for a potential existing well rule, said Janet McCabe, head of the EPA’s Office of Air and Radiation. That type of information, she said, will help EPA regulators write a rule to cut down on drilling-site emissions of methane, a potent greenhouse gas.

But, challenged at a Bloomberg Government event on 27 April whether such a regulation will come before Obama leaves office, McCabe would not say. “We have been moving in a very methodical manner to address pollution in ways that withstood legal challenges and are making a difference on the ground, and that is what we’re doing,” she said. “We’re proceeding step by step by step, using our legal authorities to address these important issues. Every step that we’re taking is focused in that direction.”

Establishing rules on methane is one of the EPA’s top priorities before Obama leaves office next year.

The Durango Herald | 18 April 2016

Study: Energy Industry Supports Methane Rules in Colorado

Colorado’s oil and gas industry is generally supportive of the state’s comprehensive methane emissions regulations and views them as a cost-effective step toward reducing the venting, flaring, and leaking of natural gas from industrial drilling operations, a study released on 15 April shows.

The study, conducted by Keating Research on behalf of the Center for Methane Emissions Solutions, asked oil and gas representatives to discuss the impact of Colorado’s Regulation 7 on their operations. The center represents the interests of companies in the methane mitigation industry, such as those conducting leak detections and repairs.

Patrick Von Bargen, executive director of the center, said the first-of-its-kind study examined the impact of methane emissions regulations on the oil and gas industry. “The reason we commissioned this Colorado report is that Colorado has the most comprehensive set of methane regulations in the country right now,” Von Bargen said. “And as we were working with industry and with policymakers, we heard a lot of anecdotal information about how it was working in Colorado.”

Reuters | 14 April 2016

US Sets New Offshore Oil Safety Rules

The Obama administration on 14 April unveiled new oil well control rules to prevent the kind of blowout that happened 6 years ago on a BP rig in the Gulf of Mexico.

The Interior Department’s Bureau of Safety and Environmental Enforcement announced the finalized regulations, which include more stringent design requirements and operational procedures for offshore oil and gas operations.

The new standards come nearly 6 years after a deadly explosion and fire on the Deepwater Horizon oil rig off the cost of Louisiana, which led to the worst oil spill of all time.

The Macondo well blowout and the fire on 20 April 2010 killed 11 workers.

Interior Secretary Sally Jewell told reporters the rule took 6 years to complete because the agency wanted to understand the root cause of the disaster.

“There are a number of things that went wrong,” she said. “It was important that we understood those things and the evolution of technology.”

The Interior Department said it took into account industry and other stakeholder feedback since it first proposed the rule last April.

To improve the “culture of safety” on oil rigs and prevent future spills or blowouts, the new rule tightens requirements for blowout preventers, well design, well control casing, cementing, and subsea containment.

It also calls for real-time monitoring, third party reviews of equipment, regular inspections, and safe drilling margin requirements.

The agency estimates the new rule would cost the industry $890 million over a 10-year period, but would yield $1.5 billion in benefits.

Offshore Energy Today | 13 April 2016

Safety Watchdog Keeps an Eye on Statoil’s New Drilling Method

The Petroleum Safety Authority (PSA) has carried out an audit of how Statoil is meeting regulatory requirements relating to the use of a new method for drilling and well intervention at Gullfaks C, in the North Sea.

The PSA in December 2015 carried out an audit of Statoil’s planning and execution of the through tubing rotary drilling (TTRD) method for intervention, drilling, and completion of wells at Gullfaks C. The audit was conducted at Statoil’s premises at Sandsli.

TTRD involves drilling a sidetrack well from an existing, conventional well. According to Statoil, the greatest benefit of this method is that new reservoirs can be reached without the need to remove existing trees, production tubing, or casings.

Statoil also claimed that TTRD wells are particularly useful for reaching isolated pockets of oil and gas on mature fields in a cost-efficient manner.

In its report, the PSA said that these types of well operations differ in many respects from conventional methods and, therefore, may entail a different risk scenario.

The objective of the audit was to monitor how Statoil, along with its drilling contractor KCA Deutag and other stakeholders, is safeguarding the planning, experience transfer, and execution of TTRD operations with regard to the regulations and its own requirements, the PSA said. | 6 April 2016

Colorado Governor, Industry Urge Cautious Hand in Regulating Oil and Gas

Collaboration and negotiation allowed Colorado to draw up oil and gas regulations that protect the public and the environment while encouraging a lucrative state industry, the governor and the president of an industry group say.

Gov. John Hickenlooper and American Petroleum Institute President Jack Gerard talked on 31 March about regulation, the future of the industry, and the possibility of limits on hydraulic fracturing.

Hickenlooper—a Democrat and a former petroleum geologist—and Gerard appeared together at an industry forum in Denver. Gerard discussed the industry later in an interview.

EHS Journal | 31 March 2016

Column: The Problems With Many Corporate Audits

Many companies have policies in place that specify the frequency of their internal environmental audits. Once a year or every other year, a company does an internal audit or hires external auditors to do it.

When a company has a major chemical accident, investigative bodies such as the US Chemical Safety Board looks into the causes of the accident. More often than not, these investigative bodies discover that internal audits had identified the root cause of these accidents.

And, yet, the facility still blew up and killed hundreds of workers. Why is that? Why didn’t senior management pay heed to the warning signs highlighted in the audit reports?

There are basically several underlying reasons.

The first reason is that many corporate auditors look for “consistent” audits. They want to see consistency year after year. Yet, good audits are never consistent. At a recent conference of auditors, many environmental managers said they wanted the same old external auditors to do their audits every year in order to get “consistent” results. They didn’t want to spend time explaining their manufacturing process to a new external auditor. They wanted someone who is very familiar with their operation.

Fuelfix | 17 March 2016

Obama Tightens Air Standards on Offshore Drilling

The Obama administration continued its crack down on air pollution from oil and gas operations on 17 March, this time targeting offshore drilling.

The Bureau of Ocean Energy Management (BOEM) announced it was developing new air standards for the first time in more than three decades. Looking at operations in the Gulf of Mexico and Arctic Ocean, the proposed rules are designed to rein in emissions on everything from offshore platforms to the ice breakers that clear the way off the coast of Alaska.

With proposals already pending on natural gas leaks and the practice of flaring gas at oil wells, the administration is seeking to clean up an industry that had largely avoided the tough air pollution standards placed on power plants and other large industrial operations.

“This proposal incorporates key aspects of today’s practices into our regulations, while also bringing our regulations up to speed with the best available science,” BOEM Director Abigail Hopper said in a statement.