UK Deepwater Drilling-Implications of the Gulf of Mexico Oil Spill - Energy and Climate Change Contents

Memorandum submitted by the Institution of Mechanical Engineers

The Future of Deepwater Exploration and Production


This submission is from an experienced risk and reliability professional with 20+ years experience in the industry and involvement in professional engineering bodies. Deepwater exploration brings economic benefits and risks can be managed but only by a transparent and acceptable process which must be given precedence over experience and ego. Spin offs to emerging technologies such as coal gasification and carbon capture are also very valuable. Production effectiveness and integrity are closely related and considerations need to be re-united in a holistic positive measured process, safety regimes having concentrated too much on consequence mitigation rather than engineering integrity assurance. The engineering profession has been active in formalising methods and standards and is now actively addressing formalised practitioner competences. The forthcoming ISO for management contains the essential risk management framework but this cannot function without the appropriate political support.


I am a Chartered Engineer and Chartered Marine Engineer, currently member of Council and Chairman of the Institution of Mechanical Engineers Safety and Reliability Group and a Fellow and member of Council of the Safety and Reliability Society. I also attend the Inter (Engineering) Institutional Group on Safety, the Hazards Forum and have been active on the working group re-issuing Engineering Council Risk Guidelines.

Following "mainstream" engineering activities I specialised in performance and risk analysis and modelling, supporting design teams within several large oil and gas projects (green and brown-field) and later as a consultant carrying out detailed quantitative assessments for most of the majors within the North Sea, Far East and Australia including the DTI as well as in similar work in defence and transport. For the last five years I have been committed to very large heavy oil "upgrader" refineries project ($28 billion overall, $8 billion for the UK) and will be leading the team responsible for technical and business risk assurance, reporting to the sponsoring government and financial institutions.


What are the implications of the Gulf of Mexico oil spill for deepwater drilling in UK?

1.  There are currently several deepwater developments in place and several more are planned to the benefit of the British Economy. While there have not been any severe safety incidents the production performance has not been impressive (I carried out a detailed review for one operator). Given the awareness spurred by the GoM spill the public will demand (and deserve) greater transparency and effectiveness in integrity management if further development is to be allowed.

2.   They also deserve a more consistent revenue flow through better asset design and management. These are not mutually exclusive and indeed the better HSE performers are also the better revenue generators. If the continued exploitation of UK resources is to receive full public support then there must be visible evidence of well designed assets with consistent and stable performance in every aspect.

3. No-one intended the GoM (or any other) disaster to happen and those concerned did not believe that their safety process was incomplete and inadequate. They fell into the trap of placing reliance on "previous experience" or "expert opinion", especially in the field, in effect a subjective approach that lacked a continuous, objective, quantified risk

reference mechanism against which not only the expected but also the unexpected can be assessed.

4.   The current "status quo" of a "static" safety case, i.e. one that is not continually updated by feedback from actual conditions and inclusion of everyone involved will no longer convince the wider public and sufficient mechanisms to build and maintain confidence in a manner that the former can understand and support is essential, "black arts" may spawn "experts" and "gurus" but do little to contain risk.

To what extent is the existing UK safety and environmental regulatory regime fit for purpose?

5.  The purpose of regulation is to erect boundaries within which people are constrained to work through a structured, reasoned and recognised thought process before their intended actions are sanctioned or supportable.

6.   Since the Cullen report there has been a division between production and "safety" in the belief that an "independent" view of integrity is best. I am of the opinion that it is time for the two to be linked again, although perhaps retaining legislative independence because there has been too lax a control on performance effectiveness and disconnect between reliability of equipment and safety.

7.  Unlike the MoD the department responsible for oil and gas exploration and production did not direct licence holders (who are in many ways "contractors to bring the UK resource to market") to demonstrate their design and operations maximise revenue potential - safely, the best whole value proposition in production and integrity. Accordingly there has been, with too few exceptions a sorry history of poor design and operations which have resulted in production efficiency by their own design (based on the many assessments I have carried out for majors and government).

8.    Other fundamentally good performing assets were adversely affected by arbitrary cost cutting because the relationship between maintenance, support, production efficiency and integrity was not understood or denied in the face of short term pressures. Sadly the savings made were greatly outweighed by lost revenue because of the lack of (or in some cases dismissal) of objective measurement processes.

9.  While such analyses and processes to ensure good design and effective and efficient operations are mature and proven, especially in defence; their application in the North Sea has actually declined in the last 10 years having been resisted as an imposition by those focussed on rapid career progression and allergic to "inconvenient" news, sadly to the detriment of profit and consequent tax revenue and integrity.

10.  The safety regimes have focused heavily on mitigating and managing consequences rather than fundamental integrity assurances in equipment and systems by design and ensuring the right testing and assurance mechanisms are in place and enforced. HSE would concur with this as much of their current focus demonstrates.

11.  An appropriate mechanical engineering analogy is of steam locomotive boilers which exploded with frightening regularity 150 years ago but by attention to materials, design and operations, not theoretical "safety cases", the risk was eliminated.

12.  HSE have over the last five years made strides in addressing the need to focus on making safety related engineering "work" in Key Programme 3 but they would admit there is a long way to go. They "invited" companies and contractors to a seminar for encouragement two years ago (at which I was an "observer") to enforce the thrust to "ensure it does what it says on the tin" - i.e. that it is reliable. A lot of the difficulty lies in the disjoint between the often well thought out and comprehensive strategies at management level and "experience" at grass roots level which carries on regardless. This is by no means unique to oil and gas as demonstrated in other recent accidents.

13.  Often the purpose of essential assurance actions are not fully understood by the persons carrying them out, demonstrated by "valve tested - now working" whereas continual feedback, especially when equipment does not "do what it is supposed to" adjusts actions and their frequency to meet quantified performance standards.

14.  Competences need formalisation. A significant number of self appointed "gurus" in safety and reliability emerged to meet the market demand since 1988 but whose qualifications and expertise often did not support the responsibilities they assume.

15.  The Professional Institutions have in recent years become more aware of the need to regularise competences and qualifications in the profession although even this has not been without resistance however all the relevant bodies from Engineering council to small training providers are making strides to bring a formality to this.

16. Suffice to say however that it needs to move from being optional and political support is essential for that. Clear reasoning supported by a joined up process, "thinking", as my colleague Prof John McDermid was quoted by Charles Haddon Cave QC in his report into the loss of Nimrod XV230 and this applies every bit as much in deepwater exploration and production, more so as there is very limited scope for it once a mishap occurs.

17.  A "joined up" holistic process of quantified production and integrity is essential. Too much revenue has been lost to date (cumulatively a large proportion of the current national debt) and is at risk in the future and furthermore the current procedures do not give any cause for HSE and others to feel confident on safety and environmental issues.

18.  The demonstrable transparency that the public need to feel at ease is best served by a partnership between the engineering profession and government.

19.  An assessment and authentication process needs to be in place for every asset and asset interaction from concept through to final environmentally responsible disposal. It must capture and contain every decision making mechanism, reflecting the risks and the cost benefits of every option taking into account risk. "Flying by the seat of the pants" is still too common and seems to have been a major contribution to the recent disaster. It is now time for cowboys to ride off into the sunset.

What are the hazards and risks of deepwater drilling to the west of Shetland?

20. Principally loss of containment of oil and/or gas with potentially immense safety and environmental consequences but unseen is the threat of lost revenue through poor design and ineffective operations.

21. Unlike Gulf of Mexico, or indeed North Sea, distances and sea conditions make rescue and mitigation much more difficult. These are very unlikely to arise from completely unknown sources and therefore potential hazards can be proactively identified, designed out or mitigated.

22. Identified consequences should form the basis of proactive contingency strategies aligned to know possibilities and criticalities as the core of ongoing risk assessment. This should be the "norm" and follow comprehensive guidelines and draw on specific competences (but not prescription) and not be left to the discretion of the individual practitioner.

Is deepwater oil and gas production necessary during the UK's transition to a low carbon economy?

23. Yes. There are, as yet aspects of society's needs where alternative fuels have not been identified or are unlikely to be (aircraft etc) in the foreseeable future. A balance is essential to bridge the gap and we should not be "feared" unnecessarily to exploit the potential.

To what extent would deepwater oil and gas resources contribute to the UK's security of supply?

24. Firstly by continuing supplies but also in stimulating technology development to allow UK to get better and exploit future resources more effectively. Other energy sources such as coal gasification, which has massive potential, has benefitted from drilling technology spun off from the impetus to exploit deep water resources.

25. Carbon capture and storage also benefits from this and will become much more expensive if left to develop alone without the ability to draw on the investment and experience of oil and gas production which of course can justify much greater levels of investment.

The mechanism necessary to assure safety

26. Safe engineering requires fit for purpose technology, workable and practical management strategies backed by comprehensive, co-ordinated and holistic performance measurement, not just good words and intentions. Engineering is not inherently unsafe it only becomes so when it is misapplied or mistreated.

27. Few applications really push technical frontiers and assurance can be achieved simply by pausing for thought at the appropriate moments and drawing on evidence of similar technology. Unfortunately there is often an unwillingness or inability to face the possibility that risks exist (it has been ok for xx years) or other perceived greater priorities have overruled, usually costs or ego.

28. The Engineering Professions and the specialist bodies have been striving to develop and refine usable techniques for some 40 years now, not without resistance and IMechE is taking the lead to bring a degree of co-ordination and collaboration to bear. (I would say that wouldn't I - but it is true, we are pushing the others hard and have significant representations from HSE, MoD etc. We are currently opening dialogue with the Cabinet Office).

29. A "management" ISO is imminent (i.e. will be published in a couple of years once it has overcome the filtering process) and is summarised below because it already forms the basis of a risk management strategy

29.1.  Develop a clear understanding of the purpose and the factors that could affect it.

29.2.  Establish the appropriate organisation to manage achievement of that purpose.

29.3.  Set out clear management responsibilities, boundaries and interfaces with mechanisms of assessment, analysis and authentication; emphasised as a good investment, not impediment or challenge to status.

29.4.  Inspire leadership to give a sense of visible direction and control from top to bottom.

29.5.  Demonstrate clear management commitment to compatible risk measurement and assessment processes integrated fully into the business processes, never "bolt on" or vulnerable to the reluctant or belligerent.

29.6.  Ensure commitment by all in setting objectives, satisfying needs and requirements.

29.7.  Formalise assigned and communicated management reporting systems.

29.8.  Proactively plan for measurable objectives which should have a credible time frame for achievement and can be actively verified and monitored to build a "corporate memory" from the outset.

29.9.  Listen to and address issues and concerns at every level, planning action accordingly to address them and implementing these actions into the management system. (Countless engineering mishaps have the root cause in unwillingness to consider the opinions of others.)

29.10.  Build awareness with relevant external parties to ensure they are aware of their responsibilities

29.11.  Ensure planned changes are subjected to formal change control mechanisms.

29.12.  Monitor the management system effectiveness from concept through design, manufacture, installation, commissioning and service from the outset.

29.13.  Instigate an appropriate audit programme, taking into consideration the criticality of the activities and processes concerned and the results of previous audits.

29.14.  Plan regular reviews of the management process.

30. Note that there is no mention of safety, reliability or any other terminology or "fancy flute music statistics" in the above. They are metrics which demonstrate the outcome of an effective management process, not the process itself.

What is the Engineering Profession doing to be better organised to respond to risks?

31. Safety and Reliability techniques have matured over 30 years but their application still remains voluntary and practitioners unregulated. The profession has now created clear lines of communication between the different bodies to ensure no aspect falls "between the gratings" or is too jealously guarded. Duty holders will be left in no doubt as to their roles and responsibilities and practitioners suitable enabled to discharge them.

32. To guard against the irrational portrayal of engineering as "unsafe" and hazardous outcomes "inevitable" amongst the less well informed to the detriment of mankind's well being and prosperity, engineers need to provide an effective, consistent and understandable risk management framework. There may seem to be many symptomatic root causes of failures there is actually only one, namely the unwillingness to dispassionately and objectively consider the proposed function with the fitness for purpose of the proposed response to it and putting aside short term considerations of which the greatest and most deadly are cost and ego.

33. Domestic appliances are an example of continuous improvement, and there is a trail of corporate corpses of those who dismissed the need for thinking about better performance in that area. The necessary techniques and processes to enable reliability exist in standards and are taught in mainstream academic institutions.

34. HSE have an initiative to bring this awareness to undergraduates (but incredibly is having difficulty in finding funds!). Many of the specialist assessment techniques are "owned" by cross industry specialist bodies (IOSH, SaRS etc) but their application is best steered through the relevant professional institutions and adapted to the specific industries by engineers intimately connected to them. This forms the strategy that the co-ordinated efforts of the engineering professions and specialist bodies are embracing.

35. This reins in both the "expert" who rains down the boiled oil of confusion completely divorced from any knowledge of the specific technology and the "experienced engineer" who feels any directive to carry out safety and reliability assessments, especially by those perceived as "amateurs" as a slight to their virility.

36. The Engineering Council Guidelines lay down the principles that engineers should follow. All this however will be "toothless" unless there is political awareness and firm legislative direction. There needs to be a partnership between government and the profession to achieve this, it will take a little time but it is imperative.

September 2010

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