GCREAG Regulatory Update
March 2014
Jodie Connor
J. Connor Consulting, Inc.
Key Topics
•
•
•
•
•
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Status of Agency changes
Lease Sales
Proposed Rules
Offshore Safety Institute Update
Incident Data Update
Civil Penalties Paid
Reorganization
Sec. of the Interior
Sally Jewel
Asst. Secretary Policy,
Management & Budget
Rhea S. Suh (Tommy Beaudreau
– nominated)
ONRR
Gregory Gould
• Revenue Collections
Asst. Secretary
Land & Minerals Management
Tommy Beaudreau (Janice
Schneider - nominated)
BSEE
Brian Salerno
•Permits
•Inspections
•Spill Response
IRU
•Investigate Allegations
of Misconduct
BOEM
Tommy Beaudreau
(Open)
•Leasing
•NEPA Analysis
•Resource Evaluation
BOEM CPA/EPA Lease Sale
BOEM Final Notice of Sale
• Central Planning Area Sale 231
• Eastern Planning Area Sale 225
• 9:00 a.m., Wednesday, March 19, 2014
• Mercedes-Benz Superdome – New Orleans
Oil Spill Limit of Liability
BOEM Proposed Regulation – 2/24/14
Comment Period ends – 3/26/14
• Add a new subpart to 30 CFR 553 regarding Limits of Liability for
Offshore Facilities
– Designed to increase the limit of liability for damages applicable
to offshore facilities under OPA 90, from $75 million to $133.65
million, to reflect significant increases in the Consumer Price
Index since 1990
• This increase reflects a 78.2 percent increase in the
Consumer Price Index from 1990 through 2013.
– Establish a methodology BOEM would use to periodically adjust
limits of liability for inflation
Oil Spill Limit of Liability
• Future CPI adjustments to the offshore facility
limit of liability in § 553.702 will be published in
the Federal Register
• Not later than every three years from the year the
limit of liability was last adjusted for inflation,
BOEM will evaluate whether the cumulative
percent change in the Annual CPI-U since that year
has reached a significance threshold of three
percent or greater.
Oil Spill Financial Responsibility
• OSFR is not increased by the proposed rule
• BOEM may propose various changes to the Oil Spill Financial
Responsibility regulations in a separate rulemaking
• Stats provided in Federal Register
Companies Required to Provide OSFR
Total
$70 MM or
Less
$105 MM
$150 MM*
170
110
5
55
* Most companies self insure or use guarantor
BSEE Proposed Rulemaking
• Published proposed rulemaking
• Oil and Gas Production Safety Systems – Subpart H
– Published August 22, 2013, comment period was
extended and closed December 5, 2013
– Includes: Safety and pollution prevention equipment
lifecycle analysis, production safety systems,
subsurface safety devices, and safety device testing
• In preparation, due out mid-2014
• Blowout Prevention Systems
• Arctic (joint with BOEM)
BSEE Proposed Rulemaking
• Upcoming rulemaking
– Suspensions of Production and Operations
– Natural Gas Fluids Measurement
– Oil Spill Mechanical Recovery
BSEE/USCG Quarterly Meeting
• 2/19/14 First 2014 Quarterly
Meeting at Headquarters
– GOM operations updates from
both BSEE and USCG
– Developing and capturing offshore
facility data and creating a system
to share that information
– BSEE and USCG inspection
requirements for offshore rigs and
fixed facilities
– Creation of joint training
opportunities for personnel
BSEE INCIDENT REPORT
OCS Incidents/Spills by Category: CY 2007 – 2013
TYPE
2007
2008
2009
2010
2011
2012
2013
5
11
4
12
3
4
3
423
318
285
273
213
253
226
7
8
6
4
3
4
9
FIRES/EXPLOSIONS
110
139
133
126
103
134
97
COLLISIONS
20
22
29
8
14
9
19
SPILLS ≥ 50 bbls
4
33
11
5
3
8
^
OTHER
268
278
308
155
186
236
272
INCIDENT TOTAL
FOR THE YEAR
837
809
776
583
525
648
626
FATALITIES
INJURIES
LOSS OF WELL
CONTROL
BSEE INCIDENT REPORT (OTHER)
OTHER
2007
2008
2009
2010
2011
2012
2013
Crane
127
164
170
81
94
120
137
Personnel/Material Handling
25
26
31
12
7
37
31
Gas Release
8
15
17
12
15
8
9
Structural Damage
6
13
10
0
8
6
5
Damaged Disabled Safety
System
3
1
4
6
2
4
2
H2S Release
2
3
4
3
0
1
6
Incident >$25K
10
3
4
6
5
4
12
Muster for Evacuation
18
37
51
25
35
41
52
Pipeline
6
11
11
6
6
3
8
Miscellaneous Other
63
5
6
4
14
12
10
OTHER (TOTALS)
268
278
308
155
186
236
272
BSEE Oversight
10 Yr Comparison of Civil Penalties
2013
No. of INCs with
Civil Penalties Pd
42
Total Civil
Penalty $
2,814,000
Highest
Penalty $
270,000
2012
31
2,022,500
480,000
2011
30
1,866,250
460,000
2010
26
2,073,000
435,000
2009
22
1,093,000
440,000
2008
31
2,210,250
505,000
2007
36
3,106,000
697,500
2006
41
1,480,000
165,000
2005
26
796,600
140,000
2004
21
885,750
190,000
Year
Prepared by JCC using data from BSEE.gov
BSEE Unannounced Exercise
• 2/19/14 – BSEE Unannounced SMT TTX
– Freeport McMoRan Oil & Gas
– Actual deployment of skimmers at three separate
locations
– Simulated dispersant use
– Simulated well containment and on-water spill
response.
– Participants included USCG, EPA, USFWL, NOAA, State
of Louisiana, State of Texas
Offshore Energy Safety Institute
• Accepting applications for Director
• Planning for a series of forums, to be hosted by
the Institute in 2014, covering topics:
– Risk, research, failure data reporting
– Best available and safest technologies
– Human factors of risk
Forms Update - APD / APM
• Application for Permit to Drill and Application
for Permit to Modify updates will include a
certification statement to state that false
submissions are subject to criminal penalties
• Minor APD modifications
• Comments on each are due by Feb. 3, 2014
Deepwater Initial EP Approval Times
Time Period
EP Avg. Approval
Time (Days)
Pre DWH
52
2010 (Post DWH)
234
2011
144
2012
121
2013
118
OCS Performance Measures Program
2004-2012
Analysis of Data – from BSEE’s website
• Data analyzed for period since mandatory
reporting for OCS operators was required
(2010 thru 2012).
• Most of the results were a mixed bag.
• Just a handful of measures showed significant
trending (those dealing with drilling).
OCS Performance Measures Program
2004-2012
• “Drilling, Workover, & Allied Services” hours
showed significant growth (up 76%).
– Drilling Recordables are down 34%.
– Drilling DARTs are down (37%).
– Combined (Production, Drilling, Construction)
Recordables and DARTs were down too, but that is
a result of the Drilling numbers driving the overall
numbers.
OCS Performance Measures Program
2004-2012
• Likewise, in the same period, BSEE’s oversight
of Drilling is up:
– Total OCS INCs are up 174%
– Total OCS Rigs inspected are up 76%
OCS Performance Measures Program
2004-2012
Observations
• BSEE targeting high risk drilling operations
• BSEE’s INCs are outpacing industry’s growth in
hours; they are tightening up on what
constitutes an INC
OCS Performance Measures Program
2004-2012
Conclusions
• If you conduct drilling or workovers, expect BSEE
to show up more frequently.
• If you conduct drilling or workovers, expect BSEE
to “INC” you more often.
• Contractors can expect to be INC’d too.
• BSEE needs to show the public they are having a
positive impact on safety on the OCS.
Down the Road
• March 10-12 Decommissioning & Abandonment Houston
• March 19 – Central GOM Lease Sale 231 – N.O.
• March 19 – Eastern GOM Lease Sale 225 – N.O.
(following CGOM sale)
• April 9-10 – Center for Offshore Safety 2nd Annual
Forum
• May 5-8 International Oil Spill Conference – Savannah,
GA
• June 4 - SEMS II Implementation Date