2011IADC, Regulation, and LegislationJanuary/February

From the Chairman: Leadership, not politics

Matt Ralls, IADC 2011 Chairman
Matt Ralls, IADC 2011 Chairman

After months of hearings and investigations, the National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling released its report in early January. The commission concluded that there was a systemic flaw in the industry’s safety culture that led to the Macondo disaster and made a number of recommendations for how the industry should respond to that perceived failure, including the creation of a national safety institute.

Incidents such as Macondo, and Montara in the Timor Sea, may have underlying issues that appear to cry out for increased standards and regulations – and then again they may not. But the constant pressure from legislators, environmentalists and the public may put pressure on regulators to act, even if it is against the best interest of themselves, the public and indeed the national interest.

Thus far, only the US has given in to the temptation to turn a disastrous but incredibly infrequent event like Macondo into a political issue, imposing sanctions beyond existing laws and effectively creating political risk for companies looking to invest in the development of hydrocarbons in the US.

The moratorium on deepwater drilling and the “permitorium” on all drilling in the US GOM, along with promises early on by the administration to aggressively pursue criminal convictions, all frustrate the ability of the industry to understand the mistakes made on the Deepwater Horizon, to make the changes needed to ensure it doesn’t happen again and to communicate those lessons learned to other industry participants.

Presentations to the commission over the past several months have offered comparisons to other industry oversight groups, such as those from the nuclear power generation and airline industries. In my opinion, there is some merit to the concept of a single safety oversight organization that would establish safety policy for the entire industry based on best practices. To be sure, we should all continually strive for improvement in the safety of everything we do and be quick to share every good idea with everyone in the drilling industry; effective safety practices should never be considered proprietary.

However, there are obvious difficulties of getting governments around the world to agree on what a safety culture should look like and share responsibility for determining best practices. Drilling has become a very international business, with US activities representing an important but increasingly smaller percentage of worldwide activity, especially for offshore drilling.

The leverage of US industry groups or regulators to impose their views is dubious, particularly when other regulators in large offshore drilling markets consider their practices and standards to be superior to those in the US. And without international participation, it’s not clear how a US Gulf of Mexico safety institute would be effective or necessary.

But the fact is that, even without an overarching policy body, this industry has come a very long way over the past couple of decades in the way we think about safety and in the development of safety policies. I personally know members of the managements of many of the world’s largest drilling contractors and know they are truly dedicated to creating the safest possible working environments for their people.

And their efforts have borne fruit, creating a much safer industry with an incident rate well below the agricultural, construction and mining industries, and even below that of retail and healthcare. Certainly, there is more to be done, and it shouldn’t be left to regulators to determine how to get us to the next level in safety.

What the industry needs now is more leadership on a strong safety culture from all of us in management. We all start our meetings with safety briefings but often quickly move on to pressing operational or financial issues. Many meetings focused on safety are delegated to staff functions and, despite the efforts of even the most dedicated HSE personnel, may become routine or repetitive.

There’s an old saying that management gets what it inspects, not what it expects.  If we as senior managers spend 5%, even if it’s the first 5%, of our time in front of our coworkers on safety and then 95% on other matters, is it reasonable to assume that they will conclude that safety is our highest priority?

We need to continually engage everyone in the office and on the rig in a conversation on safety, emphasizing their individual responsibilities for the safety of everyone working around them. We need to make safety such an obvious priority in the way we manage that others seeking to emulate their company’s leadership will prioritize it in the same way.

Our managers and supervisors need to be rewarded as much for constantly demonstrating a commitment to safety as for their operational competency, recognizing that both are critical to creating a safe working environment. In short, let’s elevate the share of mind that we and our coworkers give to continuous improvement in our safety culture.

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