Offshore Safety in the Wake of the Macondo Disaster: The Role of the Regulator
124 Pages Posted: 17 Apr 2014
Date Written: April 16, 2014
April 20, 2014 marks the fourth anniversary of the disastrous blowout of BP's Macondo well in the Gulf of Mexico. Is the Gulf safer now, four years out? This two-part article assesses the changes that have occurred in order to answer this question.
Part One appeared at 36 Houston J. of International Law 147 (2014) and discussed three significant changes to business as usual: (1) the recognition of complacency as negligence; (2) the moratorium as a technology forcer; and (3) the globalization of best practices. All three of these changes require an effective regulator to ensure that the lessons of the Macondo disaster, most notably the lesson that complacency kills, are embedded into current and future offshore safety practices.
This Part Two examines the new entities that have been created to advance offshore safety in the Gulf and compares their accomplishments to date with the practices of experienced regulators of the offshore regimes used in Norway and the UK. Part Two first looks at the type of reports, audits and other tools used by these two North Sea regulators to monitor compliance with the "Safety Case" regimes used there. Offshore operators in the Gulf must now have a Safety and Environmental Management System (SEMS) in place. Some commentators have mistakenly concluded that the U.S. has adopted a Safety Case regime, but the U.S. SEMS system differs in major ways from what is regarded as the best offshore safety regime.
The Article then examines the SEMS system adopted in the U.S. and the roles of the two primary actors in this new offshore regime: BSEE, the new offshore regulator, and the industry's Center for Offshore Safety (COS), created under the technical standards unit of the American Petroleum Institute, the industry's trade association and chief lobbyist. Of the two, COS is found to be the dominant player in improving safety offshore to date. The new U.S. safety regime is almost entirely a construct of API's Recommended Practices and COS-created audit protocols. The API and COS standards have been formally incorporated into the new offshore regulations; they are the new rules governing safety offshore.
The role of this COS-created auditing system is then assessed in terms of the "new governance" of using private, third-party certification systems to enforce government regulations that are based largely on industry's Recommended Practices. The Article concludes that BSEE has a steep learning curve to climb before it becomes a competent regulator and offers six recommendations to help BSEE build competence and assure that the public interest is served when safety management is delegated to non-governmental actors. One recommendation is that BSEE trigger the "general duty" clause of the Outer Continental Shelf Lands Act that operators are responsible for providing a workplace "free from recognized hazards." Such a general duty is imposed in Safety Case regimes to advance risk awareness beyond mere compliance with specific SEMS elements.
The Article concludes that the weakness of the current U.S. offshore regulator is a "weak signal" that industry must heed by robust self-auditing of its own safety practices. Decades of an anti-government ideology in the U.S. have trumped sound regulation and it will take years to build an effective regulator of U.S. offshore waters.
Keywords: offshore regulation, offshore safety, offshore oil, oil and gas, safety management, energy policy
Suggested Citation: Suggested Citation