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REUTERS SUMMIT-U.S. offshore oil regulator sees growing safety culture

Thu, 07th Nov 2013 17:47

(For other news from the Reuters Global Commodities Summit,click on http://www.reuters.com/summit/Commodities13)

By Erwin Seba and Kristen Hays

HOUSTON, Nov 7 (Reuters) - The new head regulator of theU.S. offshore oil patch says the effort to avert anotherdisaster like 2010's BP Plc Macondo well blowout maynever be finished, and that experts at a national laboratory arehelping it model deepwater risks.

"I don't think there is a point when you are done," BrianSalerno, director of the U.S. Bureau of Safety and EnvironmentalEnforcement (BSEE), told Reuters during the Reuters GlobalCommodities Summit in Houston.

Salerno took over as director of BSEE (pronounced "Bessie")in late August. BSEE is the enforcement side of the former U.S.Minerals Management Service and was created in 2011 after the BPwell blowout to split safety and environmental enforcement fromthe management of offshore crude oil and natural gas resources.

Following the Macondo disaster, the worst U.S. offshorespill ever which killed 11 men and released more than 4 millionbarrels of oil into the Gulf of Mexico, stories emerged aboutMMS employees being too cozy with oil company officials whichraised questions about the integrity of regulators.

Rules have since been tightened to redouble safety anddisaster response standards.

"What we mean when we talk about safety culture is that itreally takes root and is built into the actual businessprocesses of the companies," Salerno said, adding that BSEE isworking to introduce "an additional focus on how we manage risk,collectively."

"I've got less than 2-1/2 months stick time," Salerno saidof his tenure at the helm of the agency, which included thethree-week partial government shutdown that curtailed some ofBSEE's work.

However, Salerno is no newcomer to maritime safetyregulation. Prior to taking over BSEE, he retired as avice-admiral after a 36-year career in the U.S. Coast Guardduring which he served as deputy commandant for operations.

While the general impression may be that the Macondo crisisis over, some of the problems it revealed are only beginning tobe understood, he said.

LOOKING AT AVIATION SAFETY AS MODEL

"One thing we are missing is information on near misses,"Salerno said.

Near misses are breakdowns, malfunctions and operationalupsets that, had they not been caught in time, could result indisasters.

Most near-misses do not release enough pollutants to requirereporting to U.S. environmental agencies. They are often unknownto regulators, but after a disaster investigators see them asglaring warnings of impending tragedy.

By spring 2014, BSEE hopes to unveil a reporting system thatwill enable workers to report near misses to the agency throughthe U.S. Bureau of Transportation Statistics (BTS).

Workers will be able to report problems anonymously as BTShas the legal authority to keep its information confidential,Salerno said.

"It's done in aviation, and it can help them too in theindustry," he said.

The near-miss reporting system will help the agency learnwhat energy companies are really doing to improve safety as theywork with increasingly advanced technologies hundreds of milesoffshore and thousands of feet below the surface to extracthydrocarbons from high-pressure, high-temperature wells.

Another process for building an effective safety culture inthe offshore industry is the continuing auditing of safety plansbeing carried out by the companies.

Eventually, those audits will be performed by independent,rigorous third-party evaluators.

"We've got to get it to that point," Salerno said.

Research centers are also key contributors in developing thesafest technologies for the industry. Currently, ArgonneNational Laboratory outside Chicago and OHMSETT, the NationalOil Spill Response Research & Renewable Energy Test Facility inLeonardo, New Jersey, are working on new technologies.

BSEE is close to designating a location for the Ocean EnergySafety Institute, which will work to identify the best availabletechnologies for safety and environmental protection.

One focus of research at OHMSETT is finding technologies foruse in the Arctic Ocean off the coast of Alaska. The intenselycold region requires different systems than the balmy Gulf orthe warm waters off the coast of California, where BSEE alsoregulates drilling and production operations.

Royal Dutch Shell Plc has submitted a plan to U.S.authorities for drilling off the shore of Alaska in 2014.

From Alaska to the Gulf, oil company plans for new wellsmean higher demand for BSEE's services. The U.S. Gulf isexpected to see its biggest uptick in output ever in comingyears as a string of deepwater platforms ramp up productionthrough 2016.

"From an industry perspective, business is booming. Thatmeans, from a BSEE perspective, business is booming," he said.

Salerno said another priority is the ability of producers toquickly respond to a blowout and cap a gushing leak within hoursor days rather than the three months it took BP and otherindustry players to come up with the equipment that finallycapped the Macondo well.

Those efforts include more research at OHMSETT on spillresponse technical capabilities and the use of dispersants tobreak up oil at the seabed in addition to sheens on the water'ssurface in both warm and cold environments.

He also said he is satisfied that the industry has met thepost-Macondo requirement that deepwater producers have cappingmechanisms ready for dispatch to a leaking well. Oil companieshave formed consortiums that built multiple huge caps, much likethe one that capped Macondo, and stationed them at variouscoastal sites for deployment if needed.

"The technology was developed in the midst of a crisis. Youcould probably have long discussions as to why nobody thought ofit beforehand, why we needed a crisis to stimulate that, butsometimes that's where innovation comes from, unfortunately."

Follow Reuters Summits on Twitter @Reuters_Summits

(For more summit stories, see ) (Reporting by Erwin Seba and Kristen Hays; Editing by TerryWade and Jim Marshall)

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