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Oil Firms, Regulators Miss Major Accident Indicators: Gulf Spill Report

July 25, 2012

Transocean and BP, trade associations, and U.S. regulators largely judged the safety of offshore facilities by focusing on routine personal injury and fatality data such as dropped objects and trips and falls when they should have been more focused on managing the potential for catastrophic accidents, a federal report on the Gulf oil disaster says.

Investigators with the U.S. Chemical Safety Board (CSB) who examined the Deepwater Horizon explosion in the Gulf said that timely checks on safety critical equipment and response to well control events would provide a better assessment of the health of safety management systems.

These type of indicators may be precursors to the kind of tragedy that took 11n lives on the Deepwater Horizon drilling rig following the Macondo well blowout on April 20, 2010, the CSB said in a report released in Houston today that tracks with previous recommendations of the board.

“A number of past CSB investigations have found companies focusing on personal injury rates while virtually overlooking looming process safety issues – like the effectiveness of barriers against hazardous releases, automatic shutoff system failures, activation of pressure relief devices, and loss of containment of liquids and gases,” said CSB Chairperson Dr. Rafael Moure-Eraso. “Furthermore, we have found failures by companies to implement their own recommendations from previous accidents involving, for example, leaks of flammable materials.”

In its investigation of the Macondo disaster, the CSB found that BP and its contracted drilling rig operator, Transocean, were focused on personal safety issues such as worker injury rates, rather than broader safety issues involving the process of drilling for oil using a complex rig.

Citing what the report says was a lack of sustained focus on process safety, CSB investigator Cheryl MacKenzie described an “eerie resemblance” between the 2005 explosion at the BP Texas City refinery of March 2005 and the explosion aboard the Deepwater Horizon in 2010.

At the BP Texas City refinery on March 23, 2005, contract workers had just returned to temporary trailers at the plant after attending a celebratory lunch commending an excellent personal injury accident record. Shortly after lunch, an explosion occurred during process startup, killing 15 and injuring 180 others. At Macondo, BP and Transocean officials were in the process of lauding operators and workers for a low rate of personal injuries on the very day of that tragedy. Company VIP’s had flown to the rig in part to commend the workforce for zero lost-time incidents.

“The emphasis on personal injury and lost work-time data obscures the bigger picture: that companies need to develop indicators that give them realistic information about their potential for catastrophic accidents. How safety is measured and managed is at the very core of accident prevention,” MacKenzie said. “If companies are not measuring safety performance effectively and using those data to continuously improve, they will likely be left in the dark about their safety risks.”

A BP spokesman told the Associated Press that the company “stepped up” and developed more rigorous safety indicators following the accident.

The safety board said when BP looked at offshore endeavors it “focused on financial risks, not process safety risks.” And after the Deepwater Horizon explosion, the company’s own accident investigation report “recommended requiring hazard reviews of BP-owned and contracted rigs,” the safety board said.

“That’s very disturbing because the Gulf of Mexico belongs to the American people,” said former Sen. Bob Graham, who co-chaired a different government oil spill investigation, one appointed by President Barack Obama.

The CSB’s findings, which mostly mirror the report from Graham’s panel and another, pointed at a second standard for what BP owned and operated and what it didn’t. Graham said he didn’t know that. “If that’s true, it’s reprehensible,” Graham told The Associated Press.

Congressional Democrats requested the safety board investigation. The panel usually investigates deadly industrial accidents and makes recommendations but has no power to regulate, much like the National Transportation Safety Board.

The CSB has been criticized for its role in investigating the disaster. Transocean resisted complying with a subpoena arguing that the spill fell outside the board’s jurisdiction that involves industrial accidents onshore. An offshore rig is an ocean-going vessel that is motionless when drilling. The board also had to push to gain access to the examination of the blowout preventer, and at one point demanded that the analysis stop, saying representatives of the companies that made and maintained the 300-ton device have been getting preferential and sometimes hands-on access to it.

The CSB presentation said there is a difference between worker safety and making sure the entire rig and well are safe, and that’s where owner BP and rig operator Transocean were “inadequate.”

That federal oil spill commission report, co-chaired by Graham and former EPA chief William Reilly, and a National Academy of Engineering found similar problems.

Reducing lost time for workers and making sure they wear the right kind of boot is important, “but that really doesn’t have much to do with system safety,” said former Navy Secretary and now engineering professor Donald Winter, who chaired the National Academy of Engineering investigation. “It is fundamentally different.”

The CSB investigation team presented eight conclusions from the investigation to date:

  1. Transocean and BP had multiple safety management system deficiencies that contributed to the Macondo incident.
  2. Before the Macondo blowout, the safety approaches and metrics used by the two companies and U.S. trade associations did not adequately focus on major accident hazards. Recently BP officials informed CSB investigators that they are working to develop a more comprehensive offshore indicators program using leading and lagging metrics to help drive performance improvements.
  3. Systems used for measuring safety effectiveness in the offshore industry focused on personal safety and infrequent lagging indicators.
  4. The U.S. offshore regulator, the Department of the Interior, can achieve a greater impact on major accident prevention through the development of a leading and lagging process safety indicator program.
  5. Despite some significant progress with process safety indicator implementation in the downstream oil industry, in the offshore sector BP, Transocean, industry associations, and the regulator had not effectively learned critical lessons of Texas City and other serious process incidents at the time of the Macondo blowout.
  6. Companies and trade associations operating in other regulatory regimes outside the U.S. have developed effective indicator programs, recognizing the value of leading indicators, and using those indicators to drive continuous improvement.
  7. Trade associations and many of the same companies that operate in the U.S. are partnering with the regulators in other countries in advancing safety indicators programs.
  8. In the aftermath of the Macondo blowout, companies and trade associations in the U.S. are initiating efforts to advance the development of offshore major accident indicators.

The CSB investigative team also presented a number of preliminary findings of management system deficiencies underlying the Macondo blowout and explosion. The existence of these deficiencies – at the same time that the relevant companies and the regulator focused on personal safety metrics – underscore the need for more effective process safety indicators, investigators said. These system deficiencies included:

  1. BP and Transocean hazard assessment systems were inadequate. For example, the bridging document that sought to harmonize safety controls between BP and Transocean was a minimal document that focused only on six personal safety issues such as minimum heights for employing fall protection equipment. The document did not address major accident hazards like the potential for loss of well control.
  2. Hazard assessments of major accident risks on the Deepwater Horizon relied heavily on prompt, correct manual intervention by the rig crew to prevent a catastrophe, for example to divert the flow of flammable hydrocarbons away from the rig during a blowout. Depending on a human reaction alone during an emergency situation – with many distractions – is not a reliable safety layer. A comprehensive hazard assessment should have identified this risk.
  3. There were no written procedures for how to conduct the key “negative pressure test” which was conducted on the day of the incident and was necessary to confirm the integrity of the cement seal on the well. There were also no written criteria or safe limits defined for determining if the test was a success.
  4. Systems for managing the safety of process changes were inadequate. The plan to complete and “temporarily abandon” the Macondo drilling operation was changed five times during the week before the disaster, but there is no available documentation that management of change procedures or formal hazard assessments were conducted.
  5. Systems for investigating safety incidents and implementing and disseminating the findings were inadequate. Prior to the Macondo disaster in December 2009, Transocean operated the Sedco 711 drilling rig in the North Sea (BP was not involved). In an incident similar to Macondo, the Transocean crew had a delayed response to indications that hydrocarbons were flowing into the well. Mud and hydrocarbons eventually reached the rig floor at the sea surface, though they did not ignite in this case and the blowout preventer sealed the well. Transocean prepared an “Operations Advisory” discussing the lessons from the Sedco 711 incident, but it was not effectively communicated to employees beyond the North Sea.
  6. On the Deepwater Horizon, a little over a month before the Macondo blowout, there was a delay by operators in responding to a “well kick” – an unanticipated, hazardous influx of hydrocarbons into the wellbore that can precede a blowout. BP investigated the incident but after informal verbal discussions with Transocean, evidence indicates that Transocean did not implement changes based on the findings.

CSB investigators said that a “robust system of process safety indicators” might have revealed many of these management system deficiencies before the disaster occurred.

CSB’s MacKenzie said that Transocean primarily measured safety performance through two metrics: total recordable injuries and the “Total Potential Severity Rate.” Although Transocean gave itself a zero score for total recordable injuries following the tragedy, its scoring on the potential severity rate enabled top-level management at Transocean to receive financial bonuses for safety performance, according to CSB.

The focus on personal safety was reflected in a 2004 Transocean major accident hazard risk assessment of the Deepwater Horizon. The assessment made 27 recommendations for safety improvements – but almost all addressed personal safety issues and no recommendations addressed major accident risks such as gas entering the riser or well blowouts.

The CSB investigation is also looking at the role U.S. regulators and regulations played in the time preceeding the accident. The CSB found that BP was a finalist for a safety award from the Minerals Management Service (MMS), the former Department of the Interior agency overseeing offshore oil exploration and production, and that a total of 15 safety awards had been given to BP and Transocean over a period of years. The criteria used to determine the award candidates, CSB investigators said, focused on personal safety metrics and did not give an accurate measure of safety management system performance to control major accident hazards.

Following the Macondo blowout, a reorganization within the Interior Department created the Bureau of Safety and Environmental Enforcement (BSEE). Preliminary CSB findings indicate that some reporting requirements have become mandatory, but the focus remains on reporting major accident events such as fires rather than predictive, leading indicators.

The onshore refining industry, responding to a previous CSB recommendation to the American Petroleum Institute (API) and the United Steelworkers Union, is moving toward the development of key safety performance indicators.

The CSB is an independent federal agency charged with investigating serious chemical accidents. The agency’s board members are appointed by the president and confirmed by the Senate. The board does not issue citations or fines but does make safety recommendations to plants, industry organizations, labor groups, and regulatory agencies such as OSHA and EPA.

Source: U.S. Chemical safety Board

The Associated Press contributed to this story.

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