SEMS After Deepwater Horizon

Oil and Gas Operators Have a Lot to Do Before November 15, 2011, to Meet the New SEMS Requirements

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Timing

As those with experience of process safety work will recognize, the implementation of a SEMS program is onerous—there is a lot of work to do. In the case of OSHA’s PSM standard in the early 1990s, the agency effectively provided industry with a five-year period in which to implement the program. No such grace period has been provided with SEMS. The program has to be completely in place by November 15, 2011.

Although that date is a deadline, offshore operators are not obliged to submit a written plan on the lines of the EPA’s risk management program (RMP). But they can be audited at any time, and they will have to defend their SEMS progress in the event of an accident.

Level of Compliance

Before the SEMS rule was issued, the MMS did some research to find out how many companies had a good SEMP program in place. The results of their work are shown in Table 2.

The agency divided oil and gas operators into three broad categories depending on their level of activity: High, Moderate and Low. The division depends on the thousands of barrels of oil equivalent (MMBOE) per day produced.

The first conclusion to be drawn from Table 1 is that large companies should have little trouble meeting the SEMS rule, since all thirteen of the large operators show that they are 100% in compliance with SEMP. This does not mean, however, that these companies do not have some make-up work to do. As already discussed, BOEMRE has added a considerable amount of material to SEMP. It is possible that some of the high-activity companies may still find that there are areas in which they do not meet the requirements of SEMS.

Table 2 shows that there are 41 moderate-activity operators. They report good compliance with SEMP. But, as discussed for the larger operators, they may still have a considerable amount of work to do to comply with the SEMS rule.

The largest number of operators is in the low-activity category. Table 2 shows that most of these operators do not have an effective SEMP. Given the very short amount of time available to implement a SEMS program, these companies will be challenged to meet the deadline.

A final comment to be made about Table 2 is that the information in it is based on self-reporting, not on an independent audit. Therefore, it is possible that some companies may have indulged in a little unjustified optimism or wishful thinking. It has also been reported (Bromwich, 2011) that the percentage of companies meeting the SEMP requirements has been slipping.

Plan B

Those companies that do not have a full SEMP in place will have to implement a catch-up plan. The development and organization of such a plan is outside the scope of this article, but the following high-level guidance is offered.

The plan should be risk-based. This means that a company will identify those areas or operations that are of the highest risk and address them first. Doing so not only helps minimize the possibility of a catastrophic event, but also provides a good defense should the facility be audited.

Based on the risk plan, it is suggested that the SEMS work be organized as follows:

  1. Update the P&IDs and other critical technical documents.
  2. Ensure that the management of change program is working effectively.
  3. Conduct a major hazards analysis (MHA).
  4. Start the HAZOPs, prioritized according to the findings of the MHA.
  5. Implement the findings of the HAZOPs and other studies.
  6. Repeat for the lower risk items.

Rather than conduct a risk ranking, another approach would be to work on the following four elements first:

  • Mechanical Integrity
  • Operating Procedures
  • Hazards Analysis
  • Management of Change

These elements were selected by MMS in the early versions of SEMS as being the most critical, based on their own research. Therefore to give them priority would make sense. Details as to how to implement these elements are provided by Sutton (2010). Also, the Offshore Operators Committee is developing useful industry guidance.

It is likely that BOEMRE will have trouble conducting a large number of audits in the near future because it faces the same ramp-up problems as does industry, particularly the need to find and hire properly qualified process safety professionals. Still, it will probably conduct some early audits—if only to set a precedent.

Concusions

Of the many changes that have come out of the Deepwater Horizon catastrophe one of the most important is that companies operating on the outer continental shelf have to implement a SEMS, and they have to do it quickly; November 15, 2011, will soon arrive. It is likely that the regulators will themselves have trouble getting up to speed. Nevertheless, they may conduct audits at any time, and those audits could result is serious penalties.

For those companies that clearly are not going to meet the deadline, it is suggested that a risk-based approach be used to create a plan and then that the plan be followed.


Citations

BOEMRE. 30 CFR Part 250. "Oil and Gas and Sulfur Operations in the Outer Continental Shelf—Safety and Environmental Management Systems." 2010.

Bromwich, M. "Future of Offshore Oil and Gas Development in the U.S." Offshore Technology Conference. May 2011.

Sutton, Ian S. Process Risk and Reliability Management. Elsevier, Oxford, England. 2010.


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