Increasing the Safety of Offshore Drilling in the Atlantic

MEMORANDUM

TO: ALLYSON ANDERSON, ASSOCIATE DIRECTOR OF STRATEGIC ENGAGEMENT, BSEE

FROM: SARA NAGHAVI, ENVIRONMENTAL STUDIES STUDENT, DAVIDSON COLLEGE

SUBJECT: INCREASING THE SAFETY OF OFFSHORE DRILLING IN THE ATLANTIC

DATE: MAY 5, 2015

In April of 2010 4.2 million barrels of oil spilled into the Gulf of Mexico from the Deepwater Horizon rig, causing the biggest oil spill and the largest environmental disaster to date.¹ Now, five years later, President Obama released a plan to open drilling on the Outer Continental Shelf of the Atlantic Ocean.² If offshore drilling in the Atlantic is to occur, the effectiveness of operations must be substantially more reliable than in the past to protect the nation’s economic, environmental, and public health. The 95 percent of leftover oil has severely impaired the gulf ecosystem, negatively impacted livelihoods that its citizens rely on, and cost over $100 billion in restoration and losses.¹ Lessons learned from the Gulf spill must be strictly applied in order to protect the citizens of Atlantic coastal states, who have not consented to such operations. Below I propose and analyze three implementation options using weighted decision criteria to evaluate the effectiveness of each approach.

Offshore drilling on the Outer Continental Shelf. This expansion is considered a component of economic growth, but coastal natural resources must be protected for such growth to be successful.

It is vital to learn from the mistakes of the Deepwater spill that led to its downfall.

• Improper implementation of regulations led to ineffective oversight of drilling operations.³ There must be an industry wide shift from prioritizing profit to prioritizing risk prevention and implementation of best practices to uphold company reputations.³
• Equipment advancements are necessary to prevent the onset of spills. There is a focus on the improvement of blowout preventers, though investment in control and containment technology would improve cleanup preparedness, should there be a spill.⁴

The Bureau of Safety and Environmental Enforcement (BSEE) has created a mandatory Safety and Environmental Management Systems (SEMS) program for the industry to follow.⁵ The program promotes the structure for maintaining a safe working environment through proper training, the creation of management plans, and third party audits to learn how to improve operations in an effort to create a safety culture focused on constant improvement.^5,6 The program includes:

• Process-oriented regulations that promote collaborative accountability and the sharing of information among involved parties, to allow others to learn from success.³
• Risk assessments and procedural audits from third party agencies.³ Such measures ensure accountability of operations and change implementations.⁷

The use of nongovernmental programs. The Center for Offshore Safety has published user guides for its Safety Performance Indicators (SPI) Program and Learning from Incidents (LFI) Program that contain information for industry members to improve and share data and effective management methods.⁸

PROPOSED SOLUTIONS

The following options assess the possibility of implementation and anticipated response by involved parties as measures required for Atlantic offshore drilling. The nature of the industry and its potential detrimental outcomes necessitates the complete cooperation of all participants to ensure the greatest outcome for the parties involved. Political feasibility (PF), industrial feasibility (IF), cost effectiveness (CE), and social benefit (SB) factors have been assessed for the following proposed solutions. Social benefits are weighted more heavily (30%) than the others (20%) due to the historic effects an oil spill has on non-consenting citizens; the government must impose whatever regulations necessary to attempt to ensure the safety of such operations, if they are to allow drilling to occur. Cost effectiveness is also weighted more (30%) due to the understanding that funds must be allocated to prevent disastrous outcomes of offshore drilling. Option viability is rated on a scale of 1-3. A rating of “1” indicates low feasibility due to costs outweighing the benefits. A rating of “2” indicates moderate feasibility where the costs equal the benefits. A rating of “3” indicates high feasibility where the benefits outweigh the costs. It is difficult to rate environment benefits due to lack of statistics surrounding the probability of a spill, so such criteria have been omitted.

1. No Change

• Congress is divided on the expansion of offshore drilling and what it should entail. Allowing drilling to occur without increased safety measures is unlikely. (PF: 1)
• Industry must change to prevent consumer backlash and opposition from coastal states. (IF: 1)
• The future costs that current inaction and lack of preparation will have are large. (CE: 1)
• Citizens would be angered by their lack of say and the lack of safety provisions. (SB: 1)

2. Use SEMS performance based regulation with additional SPI and LFI programs.

• The SEMS program has been implemented by the BSEE. Including information from the SPI and LFI program will enhance the information sharing aspect of the SEMS program, and such adjustments only need to be made through the BSEE. (PF: 3)
• The program is mandatory for future projects; proper use would require industry to qualitatively analyze their success and shortcomings and develop methods of improvement. (IF: 3)
• This solution tackles problems ahead of time through planning and maintenance. (CE: 3)
• This solution works to ensure the safety environment of rig workers, as well as makes the industry take responsibility for improving their actions. (SB: 3)

3. Require best control and containment technology available for spill preparedness.

• Although technology does exist for such equipment, the government must invest in finding the best the technology to control and contain a spill.⁹ (PF: 2)
• Industry tends to resist making such equipment mandatory due to costs, but they must understand the benefits such equipment would have if a spill were to occur. (IF: 2)
• This is an expensive endeavor upfront, but it would save billions of dollars in the future. (CE: 2)
• Coastal citizens and rig workers benefit from this spill prevention and cleanup equipment. (SB: 3)

4. Require submission of comprehensive Integrated Operations Plan to all involved agencies that mandates approval.

• Agencies involved in drilling regulations should review operation plans prior to onset of drilling in order to prevent unnecessary incidents. The agencies already have defined roles in offshore drilling regulations, though approval and requirement of subsequent changes would be time intensive. (PF: 2)
• There would be industrial resistance due to the time intensive nature of creating such a document and waiting for and then making required plan alterations. (IF: 1)
• This decreases the likelihood of a spill by making sure proper management steps are followed. (CE: 3; SB: 3)

RECCOMENDATION

While SEMS-based regulation receives the highest effectiveness score, I recommend a combination of solutions 2, 3, and 4 as the most feasible and effective provisions to prevent economic, environmental, and safety hazards associated with offshore drilling. Separately, these solutions tackle sections of potential drilling problems, but together they ensure the consciousness of the industry to plan ahead and prioritize the safety of its procedures as a means of being as cost effective as possible while accessing this resource. Although the economic costs of such implementation would be great, they pale in comparison to the costs that would be experienced should a spill occur. It should be understood that such access should be considered a privilege granted to those who have proved themselves worthy by adhering to guidelines and that can be taken away if proper compliance is not exemplified.

Bibliography

1. O’Malley, M. Don’t Drill Along the East Coast. The New York Times (2015). at <http://www.nytimes.com/2015/02/02/opinion/dont-drill-along-the-east-coast.html>
2. Davenport, C. New Sea Drilling Rule Planned, 5 Years After BP Oil Spill. The New York Times (2015). at <http://www.nytimes.com/2015/04/11/us/new-sea-drilling-rule-planned-5-years-after-bp-oil-spill.html>
3. Mills, R. W. & Koliba, C. J. The challenge of accountability in complex regulatory networks: The case of the Deepwater Horizon oil spill: Accountability in regulatory regimes. Regul. Gov. 9, 77–91 (2015).
4. Bureau of Safety and Environmental Enforcement & Bureau of Ocean Energy Management. Oil and Gas and Sulphur Operations on the Outer Continental Shelf-Requirements for Exploratory Drilling on the Artic Outer Continental Shelf. (2015). at <https://federalregister.gov/a/2015-03609>
5. Bureau of Safety and Environmental Enforcement. Safety and Environmental Management Systems (SEMS) Fact Sheet. at <http://www.bsee.gov/Regulations-and-Guidance/Safety-and-Environmental-Management-Systems—SEMS/Fact-Sheet/>
6. Office of Offshore Regulatory Programs. Safety and Environmental Management System Implementation. (2013). at <http://www.bsee.gov/WorkArea/DownloadAsset.aspx?id=36507222399>
7. Morris, D. SEMS Program Summary-First Audit Cycle (2011-2013). (2014). at <http://www.bsee.gov/uploadedFiles/BSEE/Regulations_and_Guidance/Safety_and_Environmental_Management_Systems_-_SEMS/SEMS%20Program%20Summary%208132014.pdf>
8. Center for Offshore Safety. Annual Performance Report for 2013 Reporting Year. 57 (2015).
9. Deep water: the Gulf oil disaster and the future of offshore drilling: report to the President. (National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling : For sale by the Supt. of Docs., U.S. G.P.O, 2011).