As we enter the third month of 2024, BSEE has finally updated the incident tables to include 2022 data.
The OCS program managers I was privileged to work for would never have accepted such delays in posting fundamental safety data. Carolita Kallaur (RIP) wouldn’t tolerate a delay of 14 days in publishing quarterly incident statistics, let alone a delay of 14 months for annual data with no quarterly updates. Transparency and timeliness in informing the public about offshore safety performance was her highest priority. Cynthia Quarterman, Tom Readinger, and other OCS program leaders were similarly insistent on timeliness and transparency in the reporting of incident data.
The belated 2022 BSEE tables also include a glaring error. The most important figure, the number of fatalities, is incorrect. Five workers died from US OCS incidents in 2022, not one. The fatal helicopter crash at the West Delta 106 A helideck on 12/29/2022 that killed four workers (photos below) is inexplicably not included.
Is the failure to include this fatal incident a regulatory fragmentation issue? OCS safety data should be reported holistically and should not be parsed based on perceived regulatory jurisdiction? In any event, the tragic accident at the West Delta 106 A platform occurred at the helideck, which per the MOA with the Coast Guard is under BSEE jurisdiction.
It’s unfortunate that 2023 data are not available, even in summary form. At a minimum, BSEE should be proudly reporting that 2023 was the first zero fatality year on the US OCS since at least 1963! While acknowledging that this outstanding achievement will be difficult to repeat, it most certainly deserves public attention.
Lastly, what about incident data for the offshore wind program? When will these data be posted?
John Smith, a decommissioning specialist who retired from BOEM, has published numerous professional papers on the topic. He has kindly shared his comments (below) on the new GAO report.
The Appeal Process is Broken – The GAO should have emphasized this point. Companies routinely appeal orders to decommission platforms to forestall having to spend money on plugging wells and removing platforms, pipelines and other facilities. The appeal process commonly takes 5 or more years to reolove (e.g., DCOR appeal of BSEE order to decommission Platform Habitat).
Well P&A – BSEE has been negligent in requiring operators to plug and abandon wells no longer useful for operations. I’m shocked BSEE has curtailed or stopped issuing Inc’s for the failure of operators to P&A wells. That’s a major failure on the part of BSEE management. That may explain why operator performance criteria was proposed to be eliminated for financial assurance.
Failure to Issue Civil Penalties for Well P&A – From GAO Report “BSEE officials explained that their reluctance to pursue civil penalties stems in part from concerns about whether inducing financial harm against an operator is an effective approach to compel decommissioning. They expressed reservations about taking actions—such as issuing civil penalties—that might strain the financial resources of operators to the point of pushing them into bankruptcy.” This attitude underscores a real problem – an abrogation of regulatory and enforcement responsibility by BSEE.
POCS Well P&A – More than 700 wells have been drilled from the 23 California OCS platforms. The GAO report notes that approximately 200 are in the process of being plugged and abandoned – about 50% of those are probably associated with Gail, Grace, Harvest, Hermosa, Hidalgo, where P&A work has largely been completed by Chevron and Freeport McMoRan. The vast majority of the remaining 500 wells are no longer useful for operations and have been idle for several decades. Note POCS was never part of the Idle Well and Idle Iron Program, which was exclusive to the GOM. GAO gave POCS BSEE a pass by not highlighting that problem in POCS. It would have been interesting to know how many of the remaining 500 POCS wells are considered no longer useful for operations, and how many of those have been temporarily plugged and abandoned pursuant to regulations. The GAO report broke that down for the GOM.
Footnote 46 of GAO Report – “Two of the eight platforms due for decommissioning in the Pacific—platforms Hogan and Houchin—have posed serious safety, environmental, and financial risks, including poor safety compliance records, severe corrosion, and ongoing disputes about who will assume decommissioning liabilities for the platforms and their associated wells, according to BSEE officials and documentation. According to BSEE, these platforms are currently being attended, monitored, and maintained as part of an agreement between BSEE, BOEM, Interior’s Office of the Solicitor, and the three predecessor operators pending a decision from the Interior Board of Land Appeals on the predecessors’ appeal. BSEE estimates that approximately $5 million of the estimated costs to decommission 21 orphaned sidetrack wells associated with these platforms are uncovered by financial assurances.” $5 million divide 21 = $238,000 per well – extremely conservative cost estimate given age of wells, likely collapsed casing, and downwhole equipment that needs to be removed. The cost could easily be 3-4 times higher and there is no bonding so the federal government and taxpayers are on the hook for those costs.
Platform Hogan and Houchin Wells – approximately 75 wells were drilled from the platforms. It would be interesting to know the status of those wells. How many have been properly temporarily plugged and abandoned with long-term barriers installed to prevent leaks before decommissioning pursuant to OCS regulations? Are the 21 orphaned wells mentioned above the Signal wells? What about the other 54 wells? Have the predecessor lessees agreed they are responsible for plugging and abandoning those wells?
Platform Habitat – GAO could have noted this is another example of the broken appeal process. It would be interesting to know whether the 21 wells (primarily if not all gas wells) on Habitat have been temporarily abandoned. There are likely to be significant fugitive emission levels at the platform. Hopefully the APCD is on top of that. Note – the platform is unmanned and as I previously mentioned a potential catastrophe was avoided several years ago when a fire broke out on the platform.
Offshore facility decommissioning is a frequent target of Federal auditors given the complex financial and regulatory challenges. Unfortunately, the reviews have done little to better protect the public interest. As have previous inquiries, the new GAO report (attached for your convenience) calls for improved regulations and enforcement practices. That, of course, has been the objective for decades, but the problems have only worsened.
While the GAO recommendations are unsurprising, the body of the report is informative. Most notably, GAO (p. 29) raises a significant inconsistency on a key provision in the proposed decommissioning financial assurance regulations published last year:
One of the five criteria BOEM would no longer use under the proposed rule is demonstrated reliability, as shown by record of compliance with laws, regulations, and lease terms, among other factors. BOEM’s June 2023 regulatory analysis concluded this criterion is not a good predictive indicator of default on decommissioning obligations. However, BOEM and BSEE officials we spoke with told us that poor compliance records—such as safety and maintenance issues or delayed decommissioning obligations—can be an indicator of potential decommissioning noncompliance or financial stress.
Why was there such a disconnect between the opinions of BOEM and BSEE officials (who are directly involved with decommissioning) and BOEM’s decision not to include a company’s compliance record among the factors to be considered in determining the need for supplemental financial assurance? As pointed out here and here, safety performance is arguably the most important predictor of financial failure and decommissioning noncompliance.
The GAO report correctly acknowledges the difficulties in disqualifying operating companies. However, the regulations at 30 CFR § 250.135 specifically provide for disqualification for poor performance. While the regulations could be tighter, enforcing disqualifications regulations is dependent on persistence and strong support from management and DOI attorneys. Given the political risks associated with disqualifying operators, that support is often lacking.
Disqualification difficulties make it imperative that BOEM carefully consider past performance before approving lease assignments or determining financial assurance amounts. Provisions in 30 CFR §585.408 and §585.107 could have been used to disapprove assignments to Signal Hill, Fieldwood, Cox, and other problem operators. The failure to do so has significantly delayed decommissioning and increased public exposure to financial risks.
In some cases, lease assignments to unqualified companies have not only been approved but they have been facilitated by BOEM/MMS. The case of Platforms Hogan and Houchin, in the Santa Barbara Channel, is a particularly good example. (Did GAO inquire about the Inspector General report on this matter or ask why that report has still not been released?)
Most operating companies are responsible about planning for and fulfilling their decommissioning obligations. The problem is the exceptions, and they are not difficult to identify if you look at compliance data and obtain input from BSEE inspection personnel.
Other important decommissioning questions that need to be considered:
Given that decommissioning responsibility is divided between BSEE and BOEM, is regulatory fragmentation limiting their efficiency and effectiveness? Is coordination between BSEE and BOEM delaying action on fitness to operate and disqualification matters?
“It’s great that the federal government finally has a loose game plan for getting oil companies to clean up their rusty messes,” said Miyoko Sakashita, oceans program director at the Center for Biological Diversity.
Complete removal may be the most politically expedient alternative in California, but it is by far the most environmentally damaging and poses the greatest safety risks. Old disputes about offshore oil and gas production should not be driving decommissioning policy.
Firstly, taking 2.5 years to publish an investigation report is unacceptable for an organization with BSEE’s talent, resources, and safety mandate. Unfortunately, such delays now seem to be the rule as the summary table (below) for the last 4 panel reports demonstrates. The most recent report implies that the actual investigation was completed in 2-3 months. Why were another 2+ years needed to publish the report? (Note that the lengthy and complex National Commission, BOEMRE, Chief Counsel, and NAE reports on the Macondo blowout were published 6 to to 17 months after the well was shut-in.)
incident date
report date
elapsed time (months)
incident type
5/15/2021
10/31/2023
29.5
fatality
1/24/2021
7/24/2023
30
fatality
8/23/2020
2/15/2023
30
fatality
7/25/2020
2/15/2023
31
spill
Four most recent BSEE panel reports
The subject (May 2021) fatality occurred during a casing integrity pressure test, and some of the risk factors were familiar:
The platform was installed 52 years prior to the incident, and had been shut-in for more than a year.
The well of concern (#27) was drilled in 1970, sidetracked in 1995, and last produced in February 2013.
Diagnostic tests clearly demonstrated communication between the tubing, production casing, and surface casing.
In light of the known well integrity issues and the absence of production for more than 8 years, the prudent action would have been to plug and abandon the well in a timely manner. However, under 30 CFR 250.526 as interpreted at the time, Fieldwood had another option – submit a casing pressure request to BSEE to confirm the integrity of the outermost 16″ casing and (per p. 10 of the report) “continue to operate the well in its existing condition.” Given that the well had not produced for 8 years and that the platform had been shut-in for more than a year, the option to continue operating the well should not have been applicable.
The only issue for Fieldwood to resolve with the regulator should have been the timing of the plugging operation. Additional well diagnostics would only serve to create new risks and further delay the well’s abandonment.
The resulting pressure test of the outermost (16″) casing was solely for the purpose of confirming a second well bore barrier. Per the report (p.10), there is a “known frequency of outermost casings in the GOM experiencing a loss of integrity as a result of corrosion.” Whether or not the 16″ casing passed the test, the inactive well had clear integrity issues and should have been plugged.
Fieldwood proceeded with the pressure test rather than correcting the problem. The regulations, as interpreted, thus facilitated the unsafe actions that followed. These factors heightened the operational risks:
Extensive scaffolding and a standby boat were needed for the test.
Process gas via temporary test equipment was used to conduct the test.
The Field-Person In Charge (PIC) heard about the test for the first time on the morning of the incident.
The PIC and victim had no procedures to follow, and had to figure out how to conduct the test on the fly.
A high pressure hose was connected without a pressure regulator or pressure safety valve.
The digital pressure gauge had two measurement modes, one to display pressure in psi and the other in bars. (One bar is equivalent to 14.5 psi. Assuming that the readings were in psi rather than bars would thus result in serious overpressure of the casing.)
Seconds after the victim told the field-PIC the pressure was 175 psi (presumably 175 bar and 2538 psi), the casing ruptured. The force of the explosion propelled the victim into the handrail approximately 4 feet away, which bent from the impact. The victim’s hardhat was projected 60 to 80 feet upwards, lodging into the piping.
The investigation report fails to address the wisdom of conducting the pressure test and the regulatory weaknesses that enabled Fieldwood to defer safety critical well plugging operations. The pressure test option in 30 CFR § 250.526, was not intended for long out-of-service wells with demonstrated well integrity issues. The only acceptable option was corrective action (plugging the well) without further delay. The pressure test option added risks without addressing the fundamental problem and helped enable the operator to further delay decommissioning obligations.
Postscript: According to BOEM data, the lease where the fatal incident occurred expired on 7/31/2021. Per the BSEE Borehole and structures files, neither the platform (#14) nor any of the other 4 structures remaining on the lease have been removed, and the well (#27) has yet to be plugged.
An excellent compliance and incident update by Jason Mathews is attached. BSEE’s focus on risk assessment, compliance and incident trends, high potential near-misses, medivac capabilities, hot work safety, lifting operations, and gas releases is encouraging. Good work by the folks in BSEE’s Gulf of Mexico Region.
Observations:
Zero 2023 occupational fatalities through Q3. Hoping this holds through the end of the year and beyond.
INCs/component are down but INCs/inspection are slightly higher. This may imply a relative increase in the inspection of high component deepwater facilities.
No. of hours worked is increasing; good sign for the offshore program.
Hand and finger injuries are driving up the injury count.
Well control incidents are stable at a low level.
Improved fire data help facilitate risk assessments
No YTD explosions
No. of collisions is down
10 YTD spills> 1 barrel (total volume not specified)
Some evidence of decline in lifting incidents in Q2 and Q3
Gas releases are up (aging facilities, decommissioning related?)
BSEE shouldn’t have to issue guidance about helicopter loading precautions that every worker and visitor should be taught before going offshore, but apparently they do. See the safety alert that is attached below.
In this alarming near-miss event, a helicopter was stationed on the facility’s helideck and a crew member approached the aircraft from the rear, entering the rotor arc area before the rotor blades had come to a complete stop. This unsafe action posed a significant threat to the safety of all personnel involved. An offshore helideck assistant repeated the unsafe behavior by approaching the helicopter from the rear, entering the vicinity of the tail rotor, and positioning themselves within the main rotor’s danger zone immediately after the helicopter had landed on the facility’s helideck.
Consistent with the findings of their inspections and data gathering (as discussed further here), BSEE has published a safety alert (attached) that identifies significant shortcomings in medical evacuation planning and performance.
The findings suggest that a renewed focus on medevac preparedness should be an immediate industry priority. Note the evacuation time, supply, training, and other planning issues summarized in the BSEE alert. Also note the helideck safety issues that were identified. These issues are particularly troubling in light of last December’s fatal crash.
The plan looks good. It appears to be consistent with previous contingency plans. Offshore operations should not be impacted.
“During the shutdown BSEE will continue critical permitting, oversight, preparedness verification, and related activities that are necessary to protect workers and the environment from operations associated with conventional and renewable energy development on the Outer Continental Shelf. Approximately 40% of the 851 BSEE employees will be retained to accomplish these activities and will be designated as exempt, as their salaries will be funded from non-lapsing prior year carryover. Should an extended shutdown occur, exhausting current funding sources, all the exempt personnel would be designated as excepted as they are essential for life and safety.”
Federal funding lapses, real or threatened, are rather common. They range from false alarms to the extended shutdown of 35 days that occurred in 2018-19. In no case have offshore oil and gas operations been significantly affected. BSEE and its predecessors developed and implemented contingency plans that identified “essential employees” needed to monitor operations and review necessary permits.
Hopefully, DOI will provide clarity on these matters today, since a Federal government shutdown could begin at midnight tomorrow. Needless to say, any disruption in ongoing oil and gas production operations would have significant safety and economic implications.
Bud's Offshore Energy (BOE) 