The US Bureau of Safety and Environmental Enforcement (BSEE) announced its final well control regulations on 14 April. “The well control rule is a vital part of our extensive reform agenda to strengthen, update and modernize our offshore energy program using lessons learned from Deepwater Horizon,” Secretary of the Interior Sally Jewell said. “I applaud BSEE for their work to develop a rule that takes into consideration an intensive analysis of the causes of the tragedy, advances in industry standards, best practices, as well as an unprecedented level of stakeholder outreach.”
The regulations build upon findings and recommendations from several investigations and reports concerning the root causes of Deepwater Horizon. The final rule is a comprehensive regulation addressing all dimensions of well control, including more stringent design requirements and operational procedures for critical well control equipment used in oil and gas operations on the US Outer Continental Shelf.
Specifically, the final rule addresses the full range of systems and equipment related to well control operations, with a focus on blowout preventer requirements, well design, well control casing, cementing, real-time monitoring and subsea containment. The measures are designed to improve equipment reliability, especially for blowout preventers and blowout prevention technologies. The rule requires operability of equipment through rigorous testing and provides for the continuous oversight of operations.
The regulations combine prescriptive and performance-based measures. Key features include requirements for blowout preventer systems, double shear rams, third-party reviews of equipment, real-time monitoring data, safe drilling margins, centralizers, inspection intervals, and other reforms related to well design and control, casing, cementing and subsea containment.
“As the owners of drilling rigs and blowout preventers, IADC members are acutely impacted by this rule,” IADC President Jason McFarland stated in a news release. “Since BSEE issued its initial proposal last year, our members have participated in joint industry workgroups to carefully consider each of the points of the lengthy and detailed well control rule and submitted comments several months ago. Those comments addressed serious issues with some of the technical requirements of the proposed rule, the timing of its implementation and what was determined to be an underestimation of the estimated costs of the proposed requirements.
“IADC’s subject matter experts will, over the next several days, continue to digest the technical aspects of the rule to determine its implications. Our hope, of course, is that BSEE took into consideration the meticulous work of so many industry experts in composing a final rule that enables safe offshore drilling activities without imposing undue financial hardship on those who operate on the outer continental shelf.
“What often gets lost in this discussion is how much work the industry has done since the Macondo incident to improve offshore safety,” Mr McFarland continued. “This industry did not wait for BSEE to issue regulations to make major changes to our operations and procedures. IADC members are committed to safety and have developed and implemented major changes with regard to equipment, procedures and safety protocols to protect against future well control incidents.”
BSEE has asserted that it engaged extensively with the industry to develop the rule. Assistant Secretary for Land and Minerals Management Janice Schneider said: “We listened extensively to industry and other stakeholders and heard their concerns loud and clear – about drilling margins, blowout preventer inspections, accumulator capacity, and real-time monitoring. This rule includes both prescriptive and performance-based standards that are based on this extensive engagement and analysis.”
US Sen. John Cornyn, R-Texas, had previously introduced an amendment to the Energy Policy Modernization Act. It would have required BSEE to consider the concerns and needs of industry experts before finalizing any rule. At the time he said the following on the Senate floor: “In typical bureaucratic fashion, the Bureau of Safety and Environmental Enforcement, BSEE, has refused to engage in discussions that might help clear up some confusion among stakeholders. They have been unwilling to take the time to fully vet the negative impact on their proposed rules and to talk to the people who know the most about it, and that would be the people who would be most affected by the rule.
“I know there is a natural reluctance to try to consult with and learn from the regulated industry. But the fact of the matter is often – and it’s true in this case – it’s that industry that understands the process and both the risks and what protective measures need to be taken in order to accomplish the objective.”
Several adjustments have been made to provisions of the proposed rule that are reflected in the final version, according to BSEE. These changes preserve stringent requirements regarding the safety drilling margin, interval testing and major inspections for blowout preventers, and incorporate criteria for alternative practices that are subject to review, justification and approval. The bureau said it believes the rule provides flexibility so that regulatory oversight can keep pace with technological changes, provided future innovations can meet the rule’s standards for safety performance.
According to BSEE, the proposed rule was based on significant input received from various investigations and reports of the Deepwater Horizon tragedy. These investigations and reports include the Bureau of Ocean Energy Management, Regulation and Enforcement/US Coast Guard Joint Investigation-Forensic Equipment Analysis (September 2011); National Academy of Engineering (May 2012); National Oil Spill Commission (January 2011); Ocean Energy Safety Advisory Committee and from over 170 commenters. BSEE analyzed the results of the investigations, including nearly 370 specific recommendations, and conducted extensive outreach to derive further enhancements from stakeholder input, academia, and industry best practices, standards and specifications.
In May 2012, BSEE’s offshore energy safety forum brought together federal policy makers, industry, academia, and others to discuss additional steps that BSEE and the industry could take to continue to improve the reliability and safety of blowout preventers. Following the forum, BSEE conducted more than 50 meetings with various industry groups, trade associations, regulators, operators, equipment manufacturers and environmental organizations, receiving more than 5,000 pages of technical comments from 170 submitters.
“We have made it a priority to engage with industry to strengthen our understanding of emerging technology, to participate with standards development organizations and to seek out the perspectives of other stakeholders,” BSEE Director Brian Salerno said. “We collected best practices on preventing well control incidents and blowouts to inform the development of this rule. As a result, this is one of the most comprehensive offshore safety and environmental protection rules ever developed by the Department of the Interior.”
The new rule is in harmony with industry’s best practices, standards and equipment specifications, according to BSEE. For example, new drilling rigs already are being built pursuant to updated industry standards that BSEE used as a foundation for the rule. Further, most rigs comply with recognized engineering practices and original equipment manufacturers requirements related to repair and training. For companies that may need time to bring their operations into compliance, most of the requirements do not become effective until three months after publication of the final rule. Moreover, several requirements have more extended timeframes for compliance.