On January 11 the President’s Oil Spill Commission will release the final report of their investigation on the BP Deepwater Horizon accident. On January 5 the Commission provided their overall conclusion:
“The blowout was not the product of a series of abberational decisions made by a rogue industry or government officials that could not have been anticipated or expected to occur again. Rather, the root causes are systemic, and absent significant reform in both industry practices and government policies, might well recur”
Professor Bob Bea, who led a U.C. Berkeley investigation of the accident commended the Commission’s conclusions and stated:
“This was a preventable disaster,” “We failed to manage and we were managed.”
The British House of Commons Energy and Climate Change Committee has issued a report titled “UK Deepwater Drilling—Implications of the Gulf of Mexico Oil Spill”. Their report echoed similar concerns; the Deepwater Horizon event is a story of systemic issues that should be of concern to all petroleum producers. (the two volume report is available on the Committee website at www.parliament.uk/ecc)
Late last year Captain Chesley B. “Sully” Sullenberger was interviewed for the Institute of Nuclear Power Operations’ publication “The Nuclear Professional”. He was asked about being a life-long learner, about the importance of learning and continuous improvement. Questioned about “How do we pass knowledge on to the next generation?” he replied:
It’s imperative as we transition to each new generation that we pass on important institutional knowledge, some of which is tacit knowledge. We must avoid the situation where we have to re-learn lessons that we’ve already paid a high price to learn. In the case of aviation, literally sometimes these lessons have been bought with lives.
I can enumerate all the major airline accidents in this country for the last 30 or 40 years by flight number, location and date, and by what specifically we learned and how our training and procedures were informed by that knowledge. We need to pass on that kind of institutional knowledge.
It requires a sort of mentorship where you’re not just teaching the how, you’re teaching the why. That’s particularly important when you face situations that you haven’t specifically trained for and you haven’t seen before. You have to know why we do what we do because when everything works right all the time, it’s easy to get complacent.
So as you read the main points of the British report, and later read (I hope) the report of the President’s Commission, what are your takeaways on what your organization should learn from the Deepwater Horizon event? What should be indelibly etched in the minds of decision makers at all levels, in industry and governance? And what should future generations know about this accident so that the event, those who died, and those who remain to deal with the aftermath will not be forgotten?
Main points of the report, as summarized in the British newspaper The Telegraph, are:
1. There was a lack of clarity over responsibility for drilling and oil response in the Falkland Islands. We recommend that the Government clarify what regulatory regimes apply to drilling and oil spill response in the Falkland Islands and who is responsible for enforcing them.
2. Oil company boards lack members with environmental experience. The industry should take steps to remedy this and the Government should encourage them to do so.
3. The UK regulatory framework is based on flexible, goal-setting principles that are superior to those under which the Deepwater Horizon operated.
4. Nevertheless, we are concerned that the offshore oil and gas industry is responding to disasters, rather than anticipating worst-case scenarios and planning for high-consequence, low-probability events.
5. It is imperative that there is someone offshore who has the authority to bring a halt to drilling operations at any time, without recourse to onshore management.
We urge the Government to seek assurances from industry that the prime duty of the people with whom this responsibility rests is the safety of personnel and the protection of the environment.
6. Given that the failure of the single blind-shear ram to fire on the Deepwater Horizon’s blowout preventer seems to have been one of the main causes of the blowout of the Macondo well, we recommend that the Health and Safety Executive specifically examine the case for prescribing that blowout preventers on the UK Continental Shelf are equipped with two blind shear rams.
7. While the flexibility of the UK safety regulation regime appears to have worked well, we recommend that for fail-safe devices such as the blowout preventer the Government should adopt minimum, prescriptive safety standards
8. We believe that the Government must ensure that the UK offshore inspection regime could not allow simple failures – such as a battery with insufficient charge – to go unchecked.
9. Whilst there is a risk of conflicts of interests affecting the judgement of independent competent persons who assess the design of wells we have had no evidence of such conflicts presented to us.
10. We recommend that the Government should discuss with the industry and unions what further steps are needed to prevent safety representatives from being or feeling intimidated into not reporting a hazard, potential or otherwise.
11. It is important and necessary that the offshore safety culture is cascaded throughout the supply chain, from existing contractors at all levels, through to new-entrants on to the UK Continental Shelf.
12. We recommend that the Government monitor any changes in the US regulatory regime to see if – in the light of the response to the Deepwater Horizon incident – the US establishes a new gold-standard of regulation, as the UK and Norway did after the Piper Alpha tragedy.
13. The Bly Report – BP’s internal investigation into the Deepwater Horizon incident— does not contain a root-cause analysis of the events that led to the blowout of the Macondo.
We urge the Government not to rely extensively on the Bly Report, given the controversy surrounding the responsibility for the incident and the design of the Macondo well.
14. We urge the Government to ensure that the licensing regime takes full account of high consequence, low probability events.
15. The Government should not automatically accept claims that companies have mitigated away the risk of such worst-case scenarios. We urge the Government to introduce this requirement as drilling ventures into increasingly extreme environments.
16. Given the high costs of the incident in the Gulf of Mexico, we believe that the OPOL (Offshore Pollution Liability Association) limit of $250m (£m) is insufficient. We are concerned that the OPOL provisions only cover direct damage and also that the precise definition of “direct damage” is unclear.
While membership of OPOL remains voluntary—despite it being a pre-requisite for a licence—its voluntary nature weakens its legality and the control and deployment of its funds. We believe this lack of legal control will allow polluters to claim that damages to biodiversity and ecosystems are indirect, and therefore do not qualify for compensation.
17. We conclude there needs to be clarity on the identity and hierarchy of liable parties to ensure that the Government, and hence the taxpayer, do not have to pay for the consequences of offshore incidents.
We conclude that any lack of clarity on liability will inhibit the payment of compensation to those affected by an offshore incident. We recommend that it should be a requirement of the licensing process that the licensee prove their ability to pay for the consequences of any incident that could occur.
We recognise that these measures could add to the cost of investing in new UK oil and gas production and urge the Treasury to reflect this when considering incentives to such investments.
18. We recommend that the Government consider whether compulsory third-party insurance should become a necessary requirement for small exploration and production companies.
19. We acknowledge that oil spill response plans often share procedures for dealing with oil spills. There is some concern that in the past this may have led to a culture of copying-and-pasting rather than the production of site-specific plans which recognise the drilling environment and the risk of high-consequence, low-probability events.
We recommend the Government re-examine oil spill response plans to ensure that this is not the case.
20. We recommend that the Government draw up clear guidelines on the sub-sea use of dispersants in tackling oil spills, based on the best available evidence of both their effectiveness and their environmental impact.
21. We welcome the development of new capping and containment systems capable of dealing with a sub-sea blowout. However, we feel that the absence of these devices before the Macondo incident is indicative of the industry’s and the regulator’s flawed approach to high-consequence, low-probability events.
22. There are serious doubts about the ability of oil spill response equipment to function in the harsh environment of the open Atlantic in the West of Shetland.
23. We conclude that – as it stands – the EU Environmental Liability Directive is unlikely to bring to account those responsible for environmental damage caused by an offshore incident such as happened in the Gulf of Mexico.
We recommend that the Government works with the EU to ensure a new directive is drawn up that follows the polluter-pays principle and unambiguously identifies who is responsible for the remediation of any environmental damage.
24. We utterly reject calls for increased regulatory oversight from the European Commission. We recommend that EU countries without a North Sea coastline should not be involved with discussions on regulation of the offshore industry on the UK Continental Shelf.
25. We conclude that a moratorium on offshore drilling in the UK Continental Shelf would cause drilling rigs and expertise to migrate to other parts of the globe.
A moratorium on deepwater drilling would decrease the UK’s security of supply and increase the UK’s reliance upon imports of oil and gas. A moratorium could also harm the economies of communities in Scotland who rely upon the UK offshore oil and gas industry as well as the wider British economy, to which the industry makes a major contribution. There is insufficient evidence of danger to support such a moratorium.
We conclude that there should not be a moratorium on deepwater drilling in the UK Continental Shelf.