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


Memorandum submitted by the British Rig Owners' Association

EXECUTIVE SUMMARY

In considering deep water drilling in the UK, the British Rig Owners' Association, which represents mobile offshore units, including drilling units, operating under the UK's jurisdiction, remains confident about the safety of these operations in the UK and perceives significant benefit from their commencement. Differences between the UK safety regime and that of the USA are noted, as well as ongoing technological developments stemming from recent experience in the Gulf of Mexico, and the level of risk is therefore considered to be within acceptable bounds despite frequently severe environmental conditions west of Shetland.

1.  Introduction

1.1 The British Rig Owners' Association (BROA) is the association for persons or bodies corporate owning and/or managing mobile offshore units operating on a regular basis within the UK's jurisdiction. The membership includes companies operating Mobile Offshore Drilling Units (MODUs). BROA was established in 1982 to provide rig owners and managers with a forum for the discussion of common interests and to facilitate industry co-operation with the UK Government, the International Maritime Organization (IMO) and the European Community. As a primarily technical association, BROA provides a forum for discussion by the members of what are in the main part safety issues, and thereby both benefits from and contributes to the collaborative approach of the British offshore community in striving to achieve constant improvements in safety for those working in the industry.

1.2 In responding to this call for evidence, we focus (in sections 2, 3 and 4 of this document, respectively) upon the first three questions asked, which align with our areas of expertise as an association. BROA is ready and willing to enter into discussions on the subject with a view to providing the best possible information to the your Committee, and would be happy to be called to give oral evidence.

2  Implications of the Gulf of Mexico oil spil

2.1  Environmental implications

2.1.1 Events following the blow-out experienced by the Deepwater Horizon in the Gulf of Mexico have clearly demonstrated the difficulties in intervention following a deepwater incident and the potential for a significant oil spill to result in the event that a blow-out does occur. Shetland and surrounding landmasses are an environmentally sensitive area, as is the marine ecosystem in the region. Dominant surface water currents flow North East along the Rockall Trough and Faroe-Shetland Channel into the Norwegian Sea through the region of the Faroe and Shetland Islands, while demonstrating a high degree of local variability caused by eddies and the slope of the continental shelf around the West of Shetland field itself (Metoc PLC, 2002). Within the Rockall Trough and Faroe-Shetland Channel, the NE flowing surface waters comprise North Atlantic Water to a depth of ~500 metres while Faroe-Shetland Channel bottom water flows in the other direction below ~600 metres depth (Holliday et. al, 2000, Turrell et. al, 1999). While the ecology of the Rockall Trough is largely representative of the wider North Atlantic, that of the Faroe Shetland Channel is substantially less diverse due to limited recolonisation after glacial periods (Bett, 2001). Nonetheless, the area as a whole is considered ecologically rich in the global context of deep sea-floor habitats. Current hydrocarbon contamination in the area appears to be largely from sources other than the oil and gas industry (McDougall, 2000).

2.1.2 The dangers to the environment west of Shetland and in the Shetland and Faroe islands of an oil spill such as that seen in the Gulf of Mexico occurring are therefore significant and it is consequently important to guard against the potential for damage occuring. However, BROA believes this to be effectively catered for by the UK's regulatory regime, as well as the industry's proactive and responsible approach to safety, which has been a primary focus during more than two decades since the Piper Alpha disaster. We expand below on the various measures taken to ensure a safe operating environment on the UK's continental shelf and the specific considerations in the environment west of Shetland.

2.2  Technical implications

2.2.1 Industry in the UK has taken a proactive approach to developing technical mechanisms for the resolution of deep water oil leaks of the form which took place following the Deepwater Horizon incident. Another trade association, Oil and Gas UK, has commissioned research through its "Oil Spill Prevention and Response Advisory Group" into possible methods of applying a 'cap' to achieve either full or partial pressure containment, or to gather leaking hydrocarbons without restraining the well pressure. The proposals thus far involve operation by remotely operated vehicles (ROVs) and coupling via Cameron HC or Vetco H4 connectors. It is anticipated that a final concept and costing will probably be available within one month and more detailed engineering design will follow.

2.2.2 Within the BROA membership, work has been carried out as a direct result of the Deepwater Horizon accident to review equipment, maintenance systems and the feasibility of ROV intervention, as well as the training of personnel and the spectrum of staff attending well control courses.

2.3  Regulatory implications

2.3.1 The Health and Safety Executive's regulatory regime for the UK's offshore oil and gas industry is recognised globally as being of an extremely high quality. This is expanded upon in section 4, below. Given the responsive nature of the regime, it is expected that lessons to learn from events in the Gulf of Mexico will be accurately identified by the HSE and swiftly accounted for through their mechanisms for ensuring safe operation in the industry.

2.3.2 Not only the HSE, but also the Department of Energy and Climate Change, have already increased their inspections of the industry, in the latter case doubling their number of inspections (DECC, 2010). These additional inspections focus upon environmental areas. Moreover, further developments in requirements placed upon operators are expected to use the "safety case" methodology practised by the HSE since 1993. This method of verifying operators' standards requires operators to identify all hazards and to define means of mitigation in a written document which has to be reviewed and accepted by the HSE. Thereafter, verification is undertaken annually by an external body (eg a classification society), which ensures not only high safety standards, but proactive awareness of risks by the operator.

2.3.3 It is hoped that careful assessment of the tragic events in the Gulf of Mexico will enable the regulators and the industry alike to further improve the already extremely high UK operating standards and thereby enable continued exploitation of our offshore hydrocarbon resources in a safe and efficient manner.

2.4   Financial implications

2.4.1 Both regulatory and technological changes can result in financial burdens to individual operators or within the industry as a whole. The increased administrative burden of a heightened level of auditing and certification as described above in section 2.3 is significant, and more severe are the commercial implications of the resultant delay to the deployment of mobile assets or commencement of operations. Meanwhile, substantial changes to equipment specifications (for instance an increase in the size of permissible blow-out preventers through the incorporation of additional sets of shear rams) could restrict the access to the market of some existing rigs which were unable to handle such altered equipment because of its size or weight. The consequent reduction in competition would be expected to lead to higher supply chain costs, in general.

3. Hazards and risks of deepwater drilling west of Shetland

3.1 Environmental risks west of Shetland

3.1.1 The weather conditions in the west of Shetland region can be both extreme and rapidly changeable. However, it should be noted that UK operators are well used to North Sea conditions which are themselves far from benign. Furthermore, maritime safety equipment and practices on board mobile drilling units are of a high standard as a result of their compliance with the regulations of the International Maritime Organization, which is the source of international safety legislation for the world's shipping. With poor weather in the region a year-round phenomenon, there is no clearly defined season and, because of limited warning of deteriorating conditions, assets would stay on location during bad weather but disconnect for safety reasons from the wells with which they were engaged. The need to be able to do this in itself ensures frequent verification of the function of blow out preventers.

3.1.2 Were a serious incident to occur in the west of Shetland region during bad weather, the response would be likely to be impeded by the weather. Access to the platform and its surroundings would be difficult and rescue efforts hampered. Furthermore, oil containment booms could be rendered ineffectual by the wave heights associated with poor weather in the region, albeit that conditions themselves would assist the break-up of any oil slick. However, given that platforms would be disconnected from their wells during periods of severe weather, it is extremely unlikely that a safety or environmental incident involving their hydrocarbon related work would coincide with these conditions.

3.2 Logistics and availability of assets 3.2.1 It is acknowledged that there could be a limited supply of rigs in the west of Shetland area which could drill relief wells if this were to prove necessary. Furthermore, moving available rigs into position during seasons characterised by inclement weather would be logistically difficult because of the remoteness of the area and consequent period of exposure during transit. However, as shown by the Gulf of Mexico spill, relief wells represent a long term solution, rather than a rapid solution to escaping oil.

3.2-2 By contrast to rigs, there is a high availability of offshore support vessels (OSVs) in this area, including those with oil recovery capability. Unfortunately, the UK's domestic oil recovery capability through these vessels is weakened because of unfavourable regulations in this country which disadvantage UK flagged operators. BROA hopes that the numbers of available vessels may be increased, if necessary through changes to the regulations. However, other North Sea nations have a significant number of ships equipped for oil recovery and a multinational fleet operating in the North and Irish Seas forms the basis for a significant pool of available OSVs. These ships would not be restricted from bringing equipment or working on an incident in the UK by protectionist measures and so could be readily deployed to the task.

4. Fitness for purpose of the UK safety and environmental regulatory regime

4.1 History and overview

4.1.1 The UK's regulatory regime for the offshore oil and gas industry is widely regarded as the best in the world. The HSE's Offshore Services Division (OSD) has been assembled over time specifically to address the needs of industry while enforcing safe practice across its range of activities. As such, they have become an extremely skilled regulator which is staffed by highly competent personnel who comprise a mixture of inspectors and specialists working together to focus on particular problems. This has enabled the HSE to remain responsive to new events and needs, supported by continuous monitoring and regular analysis of safety statistics for various aspects of the industry.

4.1.2 There has been a continuous focus on enhancing safety standards in the UK since the Piper Alpha disaster on the 6 July 1988. That major incident on our continental shelf, which shocked the country as a whole and especially the offshore community in Aberdeen, set the scene for safety practice in the industry ever since, as well as providing a graphic, and horrific, demonstration of the danger posed by offshore explosions. Following the Piper Alpha incident, industry associations including BROA, government and individual companies were involved in intense debate as to mechanisms for preventing any similar event from taking place in future. The inquiry carried out by Lord Cullen spent two years examining the contributory factors to the incident in detail and its 106 recommendations were accepted by the industry. Among those changes was a transfer of responsibility for the safety of the offshore industry from the Department of Energy to the HSE, which resulted in the establishment of the OSD in April 1991.

4.1.3 Shortly after the creation by the HSE of its Offshore Services Division, the new goal-setting regime of industry regulation began, the Safety Case Regulations 1992 coming into force on the 30 November, 1993. The safety case regime brought to the offshore industry the philosophy of self-regulation by those creating major hazards which had been practised onshore for the previous twenty years under the Health and Safety at Work Act. The regulations require a safety case to be made for each new installation and this case to be accepted by the HSE. By November 1995, they were fully retrospectively applied to pre-existing installations and in 2005, the regime was updated to be more fit for purpose. In the case of mobile installations including MODUs, the design of which is largely regulated through the International Maritime Organization's MODU Code and the UK's Maritime and Coastguard Agency, a safety case requirement applies before the commencement of operations; as with all installations, the safety case must cover the full range of operations being undertaken and their associated risks. Ongoing scrutiny is provided via a dedicated Inspector assigned to each Duty Holder, who is in turn are supported by Topic Assessors with remits such as Structural and Mechanical aspects.

4.1.4 Key Programmes on thematic areas are put in place by HSE, the next one being "KP4 - The Ageing & Life Extension Inspection Programme" which focuses on ageing Installations. Inspections will concentrate on these issues over and above the normal inspection process. KP4 will run until September 2013. It will include the development of technical information for operators on ageing installations covering three areas: structural integrity and the integrity of process plant, fire and explosion, and electrical and control systems. The objectives of the KP4 are:

¾  to identify duty holders' approaches to the management of the risks to asset integrity associated with ageing and life extension;

¾  to raise awareness of the need for specific consideration of ageing issues as a distinct activity within the asset integrity management process;

¾  to enforce an appropriate programme of remedial action where necessary; and

¾  to work with the offshore industry to establish a common approach to the management of ageing installations.

4.1.5 The HSE also engages directly with the industry through collaborative safety fora such as their Evacuation, Escape and Rescue Technical Advisory Group (EERTAG) and the Offshore Industry Advisory Committee (OIAC), and with other national regulators, for instance through the North Sea Offshore Authorities Forum (NSOAF). The sharing of knowledge and experience which this enables helps the HSE to remain responsive not only to the needs of industry, but also to arising safety matters and newly identified risks.

4.1.6 As a safety critical component, blow-out preventers are identified as falling under the HSE's verification scheme. Their operation, redundancy and maintenance, including closing rate and availability of tested backup, is closely monitored as a result. Tests of blow-out preventers must be documented for audit purposes. Furthermore, the design of wells themselves is carefully regulated and assessed (HSE, 1995).

4.2   Differences between the UK and the USA regimes

4.2.1 All emergency systems within the UK are based on major hazard risk analysis, ensuring the correct functioning of safety critical elements. The safety case regime ensures the proactivity of operators and goal-setting standards rather than the mere fulfilment of requirements. Furthermore, the nature of the way in which businesses are managed in UK is led by the HSE's encouragement of people to speak up if there is a concern, and operators have safety representatives and committees among their staff as a result. This is a part of the workforce route put in place by the HSE whereby part of an inspector's core role is to speak to workforce safety representatives without the presence of their management, creating an atmosphere in which any member of staff can comfortably highlight safety concerns. Drilling contractors' regimes in the UK therefore pride themselves on being inclusive of staff.

4.2.2 With specific regard to blow-out preventers and well design, the HSE's wells inspectors view safety cases for proposals in critical detail, while the choice and function of blow-out preventers are subject to careful ongoing verification. The USA's requirements, meanwhile, are restricted to specifying equipment and training. These are believed to be particularly substantive advantages of the UK's regime which dramatically reduce the risk of a blow-out occurring and therefore necessitating the activation of response plans.

4.3   Effectiveness of the UK regime

4.3.1 The emphasis of the HSE's safety regime on the design, installation and testing of blow-out preventers, and their safety-case assessment of the design of proposed wells, as well as the responsibility taken by operators for assessing the safety of hazardous operations, are believed to be major contributory factors to the widely held perception of the UK's continental shelf as a safe environment in the context of the global offshore industry. This would be as much the case West of Shetland as it has been in areas of the UK's continental shelf which have previously been exploited. The current regulatory regime has successfully governed the safe progression to deeper waters and harsher environments during the last decade and a half and, in doing so, has already demonstrated its versatility.

4.3.2 In the event that an incident and/or oil spill does occur within UK waters, the MCA has a well developed set of procedures in the form of the National Contingency Plan for Marine Pollution from Shipping and Offshore Installations (MCA, National Contingency Plan). This document provides the basis for a pre-determined decision making framework. Moreover, conventions and bilateral agreements with other nations as laid out in Appendix C of that document strengthen the capability for response. The consolidation of relevant emergency powers in areas under the auspices of the Department for Transport and the Department of Energy and Climate Change for use by the Secretary of State's Representative for for Maritime Salvage and Intervention (SOSREP) provides for decisive and well managed responses to safety and pollution incidents.

5.   CONCLUSIONS

5.1 Deepwater drilling, because of its technical complexity and the difficulty of direct intervention at the well head, poses risks over and above the same activity in shallower locations and these are exacerbated by the environmental conditions west of Shetland. For that reason, the industry is moving swiftly to respond to the environmental effects of the oil spill in the Gulf of Mexico by developing engineering solutions to the problem of stemming the flow of oil in the very unlikely event that a deep water blow out did occur in the UK. Primarily, however, BROA believes that the robustness of the UK's safety regime, its focus upon well design and testing and verification of blow out preventers, and the steps taken by both industry and regulators to continually enhance safety since the Piper Alpha disaster of 1988 mitigate those risks of a blow-out occurring to acceptable levels. While the precise causes of the Deepwater Horizon incident are not yet known, it would be considered by BROA, given the differences in the UK's and USA's regulatory and inspection regimes, to be premature to take restrictive regulatory action in the UK based upon a presumption of risk that a similar accident might take place west of Shetland.

September 2010

REFERENCES

Bett, B J, 2001. UK Atlantic Margin Environmental Survey: Introduction and overview of bathyal benthic ecology. Continental Shelf Research, 21, 917-956.

DECC, 2010. UK increases North Sea rig inspections (Press Release)

http://www.decc.gov.uk/en/content/cms/news/pn10—067/pn10—067.aspx

Holliday, N P, Pollard, R T , Read, J F and Leach, H, 2000. Water mass properties and fluxes in the Rockall Trough; 1975-1998. Deep-Sea Research I, 47, 1303-1332.

HSE, 1995. The Offshore Installations and Pipeline Works (Management and Administration) Regulations 1995. SI1995/738.

MCA. National Contingency Plan for Marine Pollution from Shipping and Offshore Installations.

http://www.mcga.gov.uk/c4mca/mcga-contin.pdf

McDougall, J, 2000. The significance of hydrocarbons in the surficial sediments from Atlantic Margin regions, Section 5.1 in Environmental Surveys of the Seafloor of the UK Atlantic Margin, Atlantic Frontier Environmental Network [CD-ROM] ISBN 09538399-0-7.

Metoc PLC, 2002. Description of Currents West of Shetland - Metoc Briefing Note No: 977, Prepared for BP.

Turrell, W R, Slesser, G, Adams, R D, Payne, R and Gillibrand, P A, 1999. Decadal variability in the composition of Faroe Shetland Channel bottom water. Deep-Sea Research I, 46, 1-25.



 
previous page contents next page

House of Commons home page Parliament home page House of Lords home page search page enquiries index

© Parliamentary copyright 2011
Prepared 6 January 2011