By: Jacqueline L. Weaver
In February 2011, at the invitation of Professor Alastair Lucas at the University of Calgary, I spoke on the U of C campus about the causes and consequences of the BP oil spill in the Gulf of Mexico as of that date. That invitation led me on a three-year journey that culminated in two lengthy articles, just published in the Houston Journal of International Law, seeking to assess what has changed in offshore safety in the Gulf since the blowout (see “Offshore Safety in the Wake of the Macondo Disaster: Business as Usual or Sea Change?”, (2014) 36 Houston J. Int’l L. 148 (Part One) and “Offshore Safety in the Wake of the Macondo Disaster: the Role of the Regulator” (2014) 36 Houston J. Int’l L. 380 (Part Two)). This brief post summarizes my main findings on the state of safety in the Gulf today. I am deeply grateful for the “push” that the U of C Law School gave me with its invitation to speak and its gracious hospitality during my visit there.
April 20th marks the fourth anniversary of the Macondo well blowout in the deep waters of the Gulf of Mexico. Eleven workers died and almost 5 million barrels of oil poured into the Gulf during the next 87 days. Yet the worst environmental disaster in U.S. history failed to trigger any changes by the U.S. Congress in safety or environmental laws offshore. Drilling activity in the Gulf today surpasses that in April 2010. It is time to ask: Is drilling in the Gulf safer now than it was pre-Macondo?
One is tempted to answer with the quip of a popular Russian comedian after the fall of the Soviet Union: “Much has changed, but nothing has happened. Or is it that much has happened but nothing has changed?”
In reality, much has happened. Several new entities exist, some created literally overnight in the wake of the Macondo disaster, with acronyms such as BSEE, COS, and MWCC. Have they made the Gulf safer now?
Three changes to business as usual are easy to identify. First is a tsunami of invention, such as new capping stacks for subsea intervention and containment. The MWCC is the Marine Well Containment Company, quickly formed with $1 billion in funding from four major oil companies to develop capping stack technology. Industry has also developed better blowout preventers tested in better labs, better clean-up techniques and drones and sensors to monitor well conditions in real-time, and better algorithms in drilling software programs. Operators can now bring pre-positioned capping stacks to the scene of a blowout in days, not weeks. BP can pack a containment device into seven large planes and fly it anywhere in the world.
Second is industry and regulator recognition that complacency kills. Industry and government both assumed that because no Macondo-like disaster had ever occurred in the Gulf, all was fine. Yet, this very complacency is a root cause of accidents, as experts in safety management know. Few workers ever experience a serious workplace incident. After a frightening event, stronger safety controls are heeded for a time, but then time dims the memory of the event. Cutting corners here and there saves time and money and has no obvious consequence. Complacency sets in and the system drifts into an unsafe state. Macondo-like disasters are high-consequence, low-frequency events, but they are highly probable because complacent managers do not notice the drift.
Third is the quick adoption of a Safety and Environmental Management System (SEMS) requirement as a new regulation offshore, adopted in a seeming nano-second after industry had lobbied against even a modest version of it for years. The SEMS rule is the mechanism to prevent workers and management from becoming complacent. It institutionalizes planning, procedures and training that keep safety always in mind.
Much has happened, indeed, but is offshore drilling in the Gulf really safer now? All three of these changes require an effective and competent regulator to assure that the operators’ SEMS plans are actually put into practice to prevent the drift into complacency and also to assure that the Best Available and Safest Technology, or BAST, is used offshore, as required by statute.
The new offshore safety regulator is BSEE, the Bureau of Safety and Environmental Enforcement. BSEE’s own website acknowledges that the agency must undergo a total human capital transformation before it can perform its tasks adequately. Its predecessor agency was starved of funds for years and lacked the technical staff that could keep up with operators as they pushed into the deep waters of the Gulf. BSEE must become an expert agency that can develop protocols for determining BAST, not only in the Gulf but in the far harsher Arctic. And it must develop the ability to assess the audits submitted by operators to BSEE, audits that seek to assure the SEMS plans are being implemented. BSEE must also become a data-rich agency, able to analyze “near misses” offshore and to share “lessons learned” from them with the offshore industry and with the public that BSEE serves. To date, BSEE has only taken “first steps” toward these essential tasks. The acute shortage of trained professionals is stunting its growth.
Meanwhile, meet the Center for Offshore Safety, or COS. Created by the large operators in the Gulf in early 2011, this Center’s mission is to “promote the highest level of safety” for offshore operations through “leadership and effective management systems.” The Center created standardized documents that operators can use to do a thorough SEMS audit. Then COS built a process for certifying expert auditors who could do rigorous assessments of operators’ SEMS programs. BSEE then embraced the audit system created by COS and formally incorporated the COS audit protocols into the new SEMS rule.
The SEMS auditing system in use in the Gulf today is almost wholly a construct of the offshore industry itself. It is fair to say that COS has been and still is the dominant player in raising safety standards offshore today. It has created the audit system that operators must use in the Gulf of Mexico, a system based almost entirely on its parent API’s Recommended Practice 75 and on its newly created COS audit protocols.
The SEMS regulatory framework looks like “industry self-regulation through third-party audits.” The use of third?party verification (3PV) privatizes the verification process by requiring companies to hire independent auditors to determine compliance. The system can be simultaneously criticized for allowing too much industry self-regulation and for allowing operators to outsource their SEMS audits to third-party consultants rather than take responsibility for regulating themselves internally. The new agency, BSEE, does not conduct the audits and is left outside the “learning loop.”
Suppose now that an offshore deepwater operator has received a COS certificate, privately issued by COS to a member company as a sort of “Good Housekeeping Seal of Approval” that indicates successful SEMS compliance. Suppose, then, that this operator has a Macondo-like incident. Will COS be in the hot seat at subsequent congressional hearings as the dominant player in the offshore safety regime? Or will BSEE be faulted as having allowed regulation to be outsourced to COS and to third-party providers? COS and BSEE are allied in the need to assure this new SEMS system works well.
An under-resourced regulator is a non-trivial safety risk for industry. Industry’s own European trade association, the OGP, has warned its members that if a regulator is not providing robust oversight, then “an important piece of the technical assurance process may be missing. This is a ‘weak signal’ that should lead the OGP member to carry out a more extensive self-audit to compensate for the lack of competent oversight.”
Message to U.S. politicians and industry lobbyists: Pay heed to the “weak signals” that you create when an anti-government ideology trumps sound regulation. A good regulator can be industry’s best friend. That is the ultimate lesson of Macondo, four years out.
Jacqueline L. Weaver is the A.A. White Professor of Law at the University of Houston Law Center. The University of Calgary Faculty of Law partners with the University of Houston Law Center to offer a joint JD through the International Energy Lawyers Program.