Saturday, January 8, 2011

Advance chapter release from BP Disaster Commission Report: Failures in Industry and Government

The U.S. National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling has released an advance chapter from its report on the BP Disaster.  Of particular note for Canadians is the report section dealing with regulatory failures by the former Minerals Management Service (MMS), which played a multi-function role similar to that of the National Energy Board (NEB) in Canada.  The NEB, like the National Commission in the U.S., is currently undertaking a review of the possibility of offshore drilling in Canada's North.  It remains to be seen whether anyone in Canada looks into the risk of regulatory failures in the NEB's oversight of environmental protection and safety in Canada's oil and gas industry.  Weak regulations combined with lax oversight leaves open the probability that major disasters will continue to occur.

Here's the section from the National Commission report on the MMS failure:

Regulatory Failures
Government also failed to provide the oversight necessary to prevent these lapses in judgment and management by private industry. As discussed in Chapter 3, MMS regulations were inadequate to address the risks of deepwater drilling. Many critical aspects of drilling operations were left to industry to decide without agency review. For instance, there was no requirement, let alone protocol, for a negative-pressure test, the misreading of which was a major contributor to the Macondo blowout. Nor were there detailed requirements related to the testing of the cement essential for well stability.

Responsibilities for these shortfalls are best not assigned to MMS alone. The root cause can be better found by considering how, as described in Chapter 3, efforts to expand regulatory oversight, tighten safety requirements, and provide funding to equip regulators with the resources, personnel, and training needed to be effective were either overtly resisted or not supported by industry, members of Congress, and several administrations. As a result, neither the regulations nor the regulators were asking the tough questions or requiring the demonstration of preparedness that could have avoided the Macondo disaster.

But even if MMS had the resources and political support needed to promulgate the kinds of regulations necessary to reduce risk, it would still have lacked personnel with the kinds of expertise and training needed to enforce those regulations effectively. The significance of inadequate training is underscored by MMS’s approval of BP’s request to set its temporary abandonment plug 3,300 feet below the mud line. At least in this instance, there was a MMS regulation that potentially applied. MMS regulations state that cement plugs for temporary abandonment should normally be installed “no more than 1,000 feet below the mud line,” but also allow the agency to approve “alternate requirements for subsea wells case-by-case.”173 Crucially, alternate procedures “must provide a level of safety and environmental protection that equals or surpasses current MMS requirements.”
BP asked for permission to set its unusually deep cement plug in an April 16 permit application to MMS.175 BP stated that it needed to set the plug deep in the well to minimize potential damage to the lockdown sleeve, and said it would increase the length of the cement plug to compensate for the added depth. An MMS official approved the request in less than 90 minutes.176 The official did so because, after speaking with BP, he was persuaded that 3,000 feet was needed to accommodate setting the lockdown sleeve, which he thought was important to do. It is not clear what, if any, steps the official took to determine whether BP’s proposed procedure would “provide a level of safety . . . that equal[ed] or surpass[ed]” a procedure in which the plug would have been set much higher up in the well.

MMS’s cursory review of the temporary abandonment procedure mirrors BP’s apparent lack of controls governing certain key engineering decisions. Like BP, MMS focused its engineering review on the initial well design, and paid far less attention to key decisions regarding procedures during the drilling of the well. Also like BP, MMS did not assess the full set of risks presented by the temporary abandonment procedure. The limited scope of the regulations is partly to blame. But MMS did not supplement the regulations with the training or the processes that would have provided its permitting official with the guidance and knowledge to make an adequate determination of the procedure’s safety. 
Read the advance release at: Chapter Four.