Drilling advances

Vol. 233 No. 7

Take your regulator to dinner

Back in the day—around mid-2010—righteous indignation swept the U.S. over federal regulators getting far too cozy with the folks they were supposed to be regulating. Even though excessive fraternization was blamed in part for a wholesale shakeup of the regulatory structure, a government-sanctioned study now suggests a little schmoozing may be a good thing.

Among results of its study released in late June, the National Research Council (NRC) recommended inspectors no longer make fleeting visits to rigs, but rather have sleepovers where they can observe crews throughout their tours and interact during meals. The aim, according to the NRC, is to “enable inspectors to better judge the degree to which a safety culture exists there.” The study also concluded that the Bureau of Safety and Environmental Enforcement (BSEE) must hire more inspectors and called for the establishment of a so-called “whistleblower” program to encourage the anonymous reporting of HSE lapses without fear of retribution.

The latest codicil to the expanding anthology of recommendations and regulations post-Macondo, the NRC report followed on the heels of the BSEE saying it intends to have federal inspectors take up residency on the two rigs Shell will use in its upcoming Arctic exploration program off Alaska. The BSEE said once Shell receives final governmental approval to begin drilling, safety auditors would be stationed around the clock on the Kulluk and Discoverer rigs, which together are slated to drill up to five Chukchi and Beaufort Sea wells.

In encouraging rig inspectors to get more up close and personal with inspectees, the NRC report stands in stark contrast to the collective vitriol that helped fuel the dissolution of the veritable Minerals Management Service (MMS). As evidence of a too-chummy relationship between MMS auditors and the industry continued to mount, the regulatory agency was thrown aside and replaced with the self-explanatory BSEE and the Bureau of Ocean Energy Management (BOEM). 

Whereas the MMS had the dual functions of regulating the industry while also collecting billions in royalties from it, the belief was that having two independent agencies to handle the disparate responsibilities would be the cure-all to keeping regulators at arm’s length. Times change, however, and now it seems that going back to the future and breaking bread with the hands is a perfectly acceptable way to make sure all is safe and sound on the rig. There was a time when the frequency of rig inspections often was directly proportional to the quality of the galley. The better the caterer, the more often inspectors wanted to drop by for a look-see.

This raises another issue that the NRC insists has to be addressed at the get-go, namely the government’s tightened ethical standards (insert oxymoron reference). The creation of BSEE was accompanied with tougher ethics rules that barred regulators from accepting anything of even nominal value from industry personnel, and that includes helicopter flights, lodging and food. Lest inspectors are going to be required to charter their own transportation, pack a sleeping bag and their own groceries, that proviso could lead to some awkward moments, especially at mealtime. Imagine some inspector working under a chintzy government per diem stepping up to the chow line. “How much for the steak? Oh, OK, how about a taco?” Unless the policies are softened in due course, the inspectors BSEE wants to house on Shell’s rigs off Alaska best remember to bring along their fishing gear.

Other countries allow for inspectors to make overnight rig visits, and industry leaders say they have no problems with the NRC’s recommendation that the practice be extended to U.S-controlled waters. “If it’s a matter of having an inspector out there for a day or two, as opposed to making four or five different trips, that could make sense,” Erik Milito, an API director told the Houston Chronicle.

Help on the way? Yet, while having around-the-clock onboard inspectors is all well and good, the NRC pointed out that BSEE not only has to attract sufficiently qualified personnel, but also has to find a way to keep them on the government payroll. Even with only conducting flyby inspections, the agency admits it’s woefully understaffed. Original BSEE Director Michael R. Bromwich said last October, that the agency was swarming university campuses to nail down prospective inspectors. “We have since hired 122 new employees across various disciplines, but we need many more,” he said.

The operative word here is “qualified” and anyone with said qualifications likely could land more lucrative employment within the industry. Unless the material rewards are comparable, we could begin hearing an encore of the complaints of yesteryear that had regulators presenting what was supposed to be an unvarnished safety assessment in one hand while holding a resume in the other.

The personnel shortage promises to become even more acute with a proposed rule change that would no longer allow a company’s internal auditors to verify compliance with BSEE’s Safety and Environmental Management Systems (SEMS). Requiring outside auditors naturally means a need for individuals sufficiently schooled in what they are supposed to be auditing.

To help ease some of the added personnel constraints, the API-supported Center for Offshore Safety said in June that it is more than ready to help certify the outside auditors. The center is charged with assisting companies in developing all the elements necessary for a federally approved safety system, including hazards analysis, mechanical integrity and incident investigations.

Of course, it all boils down to who will be expected to pay for all this, but I’m sure we all know the answer to that one.