Oil Spill Safety Bill Fails, Supporters Vow to Bring It Up Again

- Oil Spill Safety Bill Fails, Supporters Vow to Bring It Up Again

Wednesday, August 31, 2011
San Jose Mercury News, Calif.
by Paul Rogers

With the state agency that regulates oil tanker safety facing potential layoffs, a bill to raise the fee that oil companies pay to fund California's oil spill safety programs failed Tuesday in the state Senate.

The bill, a priority for environmental groups, has been staunchly opposed by BP PLC and the Western States Petroleum Association.

"We're not done," said Assemblyman Jared Huffman, D-San Rafael, the measure's author. "The fat lady hasn't sung. We still have a week and a half to bring it back."

The bill, AB 1112, already has passed the Assembly and needed 21 votes Tuesday to move to the governor's desk. But it failed, achieving 17 votes, with 14 senators voting no and nine not voting.

The bill would increase the fee that oil companies pay from 5 cents per barrel to 6.75 cents per barrel over the next three years. The money raises $25 million a year and provides the bulk of the budget for the state Office of Spill Prevention and Response, an arm of the state Department of Fish and Game.

State lawmakers passed the fee in 1990 after the Exxon Valdez spill to increase California's oil safety efforts. Since then, the amount of oil spilled into state waters has fallen by 95 percent. The money has funded emergency drills, tougher oversight of tankers and terminals, and scientific studies of oiled wildlife. Since the original fee passed, at 4 cents a barrel, it has been raised once, in 2002.

Capt. Scott Schaefer, administrator of the state oil spill agency, said that because of costs associated with new laws passed after the 2007 Cosco Busan oil spill in San Francisco Bay, the fund will be $5 million in deficit by 2013 without an increase.

Huffman said he will bring the bill up again before the end of the legislative session, Sept. 9. All 17 who voted for the bill were Democrats. Twelve of the 14 no votes were from Republicans, many of whom oppose increasing state fees and taxes. Environmental groups were surprised that several senators from coastal areas did not vote, including Sen. Leland Yee, of San Francisco; Juan Vargas, of San Diego; Curren Price and Alex Padilla, of Los Angeles; and Sam Blakeslee, whose district extends from San Luis Obispo along Monterey Bay to south San Jose.

"Sen. Yee supports the bill," said his spokesman Adam Keglin afterward. "He was off the floor at the time. It will come back up, and he'll vote for it as is."

Copyright (c) 2011 the San Jose Mercury News (San Jose, Calif.)

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Oil-Drilling Safety Bill Stalls Amid Fight over Oil Royalties

- Oil-Drilling Safety Bill Stalls Amid Fight over Oil Royalties

Friday, July 22, 2011
Dow Jones Newswires
WASHINGTON
by Tennille Tracy

A group of mostly Republican lawmakers blocked a key vote on legislation to strengthen oil-drilling safety Thursday after efforts to use the bill to steer billions of dollars of oil royalties to coastal states like Alaska and Louisiana appeared likely to fail.

The move postpones an important committee-level vote on offshore safety legislation that has been in the works for more than a year, following the Deepwater Horizon oil spill in 2010.

The delay gives more time to behind-the-scenes deal makers to work out a compromise on so-called revenue-sharing proposals, which would direct nearly 40% of royalty revenue away from the federal government and to the coastal states.

But the delay also raises questions about the fate of the offshore drilling safety legislation and the ability of lawmakers to move that bill to the floor of the Senate.

Events unfolded Thursday at the Senate Energy and Natural Resources Committee, which was scheduled to hold a much-anticipated vote on legislation that steps up enforcement of drilling safety standards and strengthens drilling safety provisions.

Heading into the vote, two coastal senators--Sens. Mary Landrieu (D., La.) and Lisa Murkowski (R., Alaska)--were actively recruiting support for an amendment that would steer 37.5% of oil royalties, which are currently collected by the federal government, to coastal states.

With the federal government reporting more than $5 billion in offshore royalty revenue in 2010, such a move would be a big win for coastal state governments. Landrieu has supported such a proposal for years, arguing that coastal states are entitled to some of the royalty revenue that comes from all production off their shores.

An existing law allows Gulf Coast states to collect 37.5% of royalty revenue on some leases, starting in 2017.

Because Landrieu and Murkowski need the support of at least some Democrats to attach the revenue-sharing amendment to the drilling safety bill, they decided in 11th-hour deal-making to create a fund to promote clean energy. In doing so, they hoped to attract the support of some Democrats, a Republican aide said.

But when a measure to create such a fund failed in the committee Thursday, the chance of success for the revenue-sharing plan decreased substantially. Several Republicans then walked out of the committee room, leaving the committee without enough members to hold a vote and effectively blocking any further action.

The fate of the offshore-drilling safety legislation is now uncertain, said Sen. Jeff Bingaman, a Democrat from New Mexico who chairs the energy committee. When asked by a reporter whether the bill could be revived, Bingaman shook his head and said, "I don't know."

Copyright (c) 2011 Dow Jones & Company, Inc.

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Toyota Working On New Safety Technology

- Toyota Working On New Safety Technology



Jul 21, 2011

Toyota (NYSE:TM) is working on a safety technology that takes control of the steering so the car can swerve away when it isn't able to stop before a collision.

The new technology system uses cameras along with enhanced radar called "millimeter-wave," which will be put in front of the vehicle to, to detect potential crashes such as pedestrians crossing on the road.

Toyota did not comment on when the feature might be offered on a commercial model, or in which markets, but officials implied it was geared up to be offered soon.

Toyota Motor has a potential upside of 8.8% based on a current price of $84.92 and an average consensus analyst price target of $92.4.

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Oil Cos Could Adopt BP's New Safety Standards - US Official

- Oil Cos Could Adopt BP's New Safety Standards - US Official

Friday, July 15, 2011
Dow Jones Newswires
WASHINGTON
by Tennille Tracy

The nation's top offshore drilling regulator welcomed a plan by BP Friday to voluntarily beef up safety standards and said ExxonMobil, Shell and other major oil companies are equipped to follow suit.

Speaking at a congressional hearing, the director of the Bureau of Ocean Energy Management, Regulation and Enforcement said BP knows it has to prove it can operate safely following last year's Deepwater Horizon oil spill in the Gulf of Mexico.

"BP has clearly been through a lot," said bureau Director Michael Bromwich. The company is going to have to "win back not only regulators' confidence, but the public's confidence as well."

BP disclosed Friday it was adopting drilling standards that go beyond existing federal requirements. Specifically, BP said it will require drillers to use more robust equipment, mandating subsea blowout preventers to be equipped with at least two blind shear rams.

BP also said it will use third parties to verify maintenance procedures and oversee testing, and enhance certain measures for responding to an oil spill.

Bromwich said he suspected that Exxon Mobil, Shell and other major oil operators could adopt similar measures, adding that the standards were technologically and economically viable for large companies.

Bromwich also said the measures that BP was undertaking could be folded into a set of new drilling regulations on which his agency is working. He said those new rules would be "broad" and "far-reaching," but he acknowledged the oil and natural-gas industry is wary of the agency adopting new requirements too often and too quickly.

Copyright (c) 2011 Dow Jones & Company, Inc.

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McMoran Unveils Davy Jones Find; Affirms Shallow-Water Projects' Safety

- McMoran Unveils Davy Jones Find; Affirms Shallow-Water Projects' Safety

Wednesday, June 29, 2011
Dow Jones Newswires
by Tess Stynes

McMoRan confirmed that its ultra-deep drilling programs in shallow waters of the Gulf of Mexico can be pursued safely, and unveiled more finds in its Davy Jones prospect.

The company said its exploration activities have indicated the potential for large accumulations of hydrocarbons at the deeper depths.

Its shares were up 8.6% at $18 in recent premarket trading. The stock through Tuesday's close has risen 50%.

McMoran, which focuses on such "deep gas plays" has been pinning its hopes on the Davy Jones project, which the company has said has the potential to be one of the largest on the Gulf's shelf in decades.

This month, one of its wells in the Davy Jones prospect encountered 192 net feet of potential hydrocarbons. McMoRan is evaluating development options and expects to complete the well in the second quarter of next year.

The company late this year also plans to complete and flow test another well, which it previously reported logged 200 net feet of hydrocarbon pay. McMoRan holds a 60.4% working interest and a 47.9% net revenue interest in Davy Jones.

Other working interest owners include Energy XXI (Bermuda) with a 15.8% interest, Nippon Oil Exploration USA Limited at 12%, W.A. "Tex" Moncrief, Jr. at 8.8% and a private investor with 3%.

McMoRan late last year acquired Plains Exploration & Production Co.'s shallow-water operations in the Gulf plus other assets in a deal initially valued at $818.1 million.

Copyright (c) 2011 Dow Jones & Company, Inc.

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Stronger Offshore Safety Rules Are Looming

- Stronger Offshore Safety Rules Are Looming

Thursday, June 23, 2011
Houston Chronicle
by Jennifer A. Dlouhy

The government is poised to propose new rules that aim to boost the safety of offshore drilling and tighten standards for emergency equipment guarding subsea wells, a top regulator said Wednesday.

The looming rules will build on already broad changes that the Bureau of Ocean Energy Management, Regulation and Enforcement has imposed since last year's Gulf oil spill, agency director Michael Bromwich said in a speech before the World National Oil Companies Congress in London.

For instance, regulators are planning to add teeth to a workplace safety rule they imposed last October requiring oil and gas companies to identify risks at every stage of offshore exploration and take steps to minimize human errors and operational hazards. That rule for the first time is forcing companies in U.S. waters to have safety and environmental management systems like those required in the North Sea.

The rules will require additional safety procedures, training programs and strengthened third-party auditing procedures, Bromwich said. The bureau is also readying new mandates for the blowout preventers, a last line of defense against un-expected oil and gas surges.

"Our goal will be a further set of enhancements that will increase drilling safety and diminish the risks of a major blowout," Bromwich said. "It will address weaknesses and necessary improvements to blowout preventers, as well as many other issues."

The regulations may include mandates governing the design of offshore wells and new standards for cement barriers.

For months, Bromwich has signaled that the new regulations are coming but insisted that they will go through a lengthy federal rule-making process, with time for public comment and guidance from interested stakeholders.

Industry leaders have complained about the shifting regulatory landscape since last year's spill and insisted companies need more certainty to plan investments. Many industry representatives objected to the pace of changes .

Copyright (c) 2011, Houston Chronicle

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RBG Scores Safety Milestone at Trinidad and Tobago

- RBG Scores Safety Milestone at Trinidad and Tobago

Wednesday, May 25, 2011
RBG

RBG has recorded a significant safety achievement by completing more than 2,000,000 man-hours without a lost time incident across the company's Trinidad and Tobago operations.

The achievement marks another major milestone in the company's REACH safety program which, since its launch in December 2009, has played a major role in reducing Lost Time Incident Frequency (LTIF) by 38.5% globally. REACH aims to create a stronger, safer culture throughout RBG and in 2011 the initiative will expand to improve the company's full HSEQ remit.

In 2010, RBG's Trinidad and Tobago team was recognised for its contribution to Neal & Massy Wood Group's (NMWG's) achievement of 5,000,000 man-hours LTI free.

RBG's facilities in Point Lisas and Galeota employ approximately 430 personnel and offer the company's full range of innovative products and services including fabric maintenance, bolt torquing, fabrication and welding, scaffolding and habitat supply to the regional oil, gas and petrochemical industry.

RBG's Trinidad and Tobago country manager, Ricardo Mahadeo said, "I am very proud of our employees and we are delighted to have reached such a significant milestone. Reaching more than 2,000,000 hours without an LTI is testament to the commitment of our team to highlight and eliminate risk from our operation. It is a remarkable accomplishment and we will continue to work hard to maintain the high safety standards we have set.

"REACH has helped us achieve these excellent levels of safety by engraining good safety practice as a normal part of our daily working lives."

RBG's Group HSEQ director, Mike Mann, said, "The commitment demonstrated by our Trinidad and Tobago employees to achieve this goal is a tremendous example of the RBG safety culture we are striving for. This represents the best of our company in terms of leadership, engagement, communications, and commitment to achieving safety excellence."

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DOE Forms Fracking Safety Panel

DOE Forms Fracking Safety Panel

Friday, May 06, 2011
U.S. Department of Energy

U.S. Energy Secretary Steven Chu on Thursday announced a group of environmental, industry and state regulatory experts who will make recommendations to improve the safety and environmental performance of natural gas hydraulic fracturing from shale formations. President Obama directed Secretary Chu to convene this group as part of the President's "Blueprint for a Secure Energy Future" plan to reduce America's oil dependence, save consumers money, and make the U.S. the leader in clean energy industries.

"America's vast natural gas resources can generate many new jobs and provide significant environmental benefits, but we need to ensure we harness these resources safely," said Chu. "I am looking forward to hearing from this diverse, respected group of experts on best practices for safe and responsible natural gas production."

A group of highly respected experts with experience in industry, environmental groups and state regulatory agencies will form a subcommittee of the Secretary of Energy's Advisory Board to conduct the review, and will work to identify, within 90 days of beginning their work, any immediate steps that can be taken to improve the safety and environmental performance of hydraulic fracturing. They will also develop, within six months of beginning their work, consensus recommended advice to the agencies on practices for shale extraction to ensure the protection of public health and the environment.

Membership of the group includes:

• John Deutch, Institute Professor at MIT (Chair)
  John Deutch served as Director of Energy Research, Acting Assistant Secretary for Energy Technology and Under Secretary of Energy for the U.S. Department of Energy in the Carter Administration and Undersecretary of Acquisition & Technology, Deputy Secretary of Defense and Director of Central Intelligence during the first Clinton Administration. Deutch also currently serves on the Board of Directors of Raytheon and Cheniere Energy and is a past director of Citigroup, Cummins Engine Company and Schlumberger. A chemist who has published more than 140 technical papers in physical chemistry, he has been a member of the MIT faculty since 1970, and has served as Chairman of the Department of Chemistry, Dean of Science and Provost.
• Stephen Holditch, Head of the Department of Petroleum Engineering, Texas A&M University
  Stephen Holditch serves as Head of Texas A&M's Harold Vance Department of Petroleum Engineering and serves on the Boards of Directors of Triangle Petroleum Corporation and Matador Resources Corporation Texas. In 1977, Dr. Holditch founded S.A. Holditch & Associates, a petroleum technology consulting firm which provided analysis of low permeability gas reservoirs and designed hydraulic fracture treatments. He served as president of the company until it was bought by Schlumberger in 1997. Holditch has worked for Schlumberger, Shell Oil Company and Pan American Petroleum Corporation.
• Fred Krupp, President, Environmental Defense Fund
  Fred Krupp has overseen the growth of EDF into a recognized worldwide leader in the environmental movement. Krupp is widely acknowledged as the foremost champion of harnessing market forces for environmental ends. He also helped launch a corporate coalition, the U.S. Climate Action Partnership, whose Fortune 500 members - Alcoa, GE, DuPont and dozens more - have called for strict limits on global warming pollution. Krupp is coauthor, with Miriam Horn, of New York Times Best Seller, Earth: The Sequel. Educated at Yale and the University of Michigan Law School, Krupp was among 16 people named as America's Best Leaders by U.S. News and World Report in 2007.
• Kathleen McGinty, Former Secretary of the Pennsylvania Department of Environmental Protection
  Kathleen McGinty is a respected environmental leader, having served as President Clinton's Chair of the White House Council on Environmental Quality and Legislative Assistant and Environment Advisor to then-Senator Al Gore. More recently, she served as Secretary of the Pennsylvania Department of Environmental Protection and as Chair of the Pennsylvania Energy Development Authority. McGinty is Senior Vice President of Weston Solutions, Inc. and a Director at NRG Energy.
• Susan Tierney, Managing Principal, Analysis Group
  Susan Tierney is chairman of the Board of the Energy Foundation, and serves on the Boards of Directors of the World Resources Institute and the Clean Air Task Force. Until recently, she was a co-chair of the National Commission on Energy Policy. Currently, she chairs the National Petroleum Council Policy Subgroup's study of North American natural gas and oil resources. Dr. Tierney served as Assistant Secretary for Policy at the U.S. Department Energy during the Clinton Administration. In Massachusetts, she served as Secretary of Environmental Affairs, Chair of the Board of the Massachusetts Water Resources Agency, Commissioner of the Massachusetts Department of Public Utilities and executive director of the Massachusetts Energy Facilities Siting Council.
• Daniel Yergin, Chairman, IHS Cambridge Energy Research Associates
  Daniel Yergin is the co-founder and chairman of IHS Cambridge Energy Research Associates. He is a member of the Board of the United States Energy Association and a member of the U.S. National Petroleum Council. He has chaired the U.S. Department of Energy's Task Force on Strategic Energy Research and Development. Yergin is also CNBC's Global Energy Expert and the author of the Pulitzer Prize-winning book, The Prize: The Epic Quest for Oil, Money and Power.
• Mark Zoback, Professor of Geophysics, Stanford University
  Mark Zoback is the Benjamin M. Page Professor of Geophysics at Stanford University. He was co-principal investigator of the San Andreas Fault Observatory at Depth project (SAFOD) and has been serving on a National Academy of Engineering committee investigating the Deepwater Horizon accident. He was the chairman and co-founder of GeoMechanics International and serves as a senior adviser to Baker Hughes, Inc. Prior to joining Stanford University, he served as chief of the Tectonophysics Branch of the U.S. Geological Survey Earthquake Hazards Reduction Program.

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Industry Panel: Consider 'Checklist' Approach to Offshore Safety

Industry Panel: Consider 'Checklist' Approach to Offshore Safety

Wednesday, May 04, 2011
Houston Chronicle
by Brett Clanton & Jennifer A. Dlouhy

As the global offshore oil and gas industry meets in Houston this week, leaders say they are aware the reputation of their business is still bruised after the BP Gulf of Mexico oil spill and that motorists and politicians are fuming over $4 gasoline prices.

But they cautioned Washington against overreaching with new regulation and taxes, stressing the enormity of the challenge ahead in meeting the world's surging energy needs.

"We cannot afford to have emotions control business and policy decisions," Zuhair Hussain, vice president of Saudi Aramco's drilling and workover unit, said during a panel discussion Tuesday at the 2011 Offshore Technology Conference.

With global energy demand expected to rise 40 percent by 2035, industry must be unencumbered to invest in finding more resources and developing new technology, said other panelists.

"You can't be emotional about our business based on gas prices," said Ali Moshiri, president of Chevron Corp.'s Africa and Latin America exploration and production company.

But Obama administration officials and oil company executives agreed that last year's Macondo well blowout, which killed 11 workers and launched the nation's worst oil spill, gave the industry a major image problem that could take years to quash.

Christopher Smith, U.S. deputy assistant energy secretary, noted that "blowout preventer" and "fracking" have become familiar words since the Deepwater Horizon disaster and amid controversy surrounding the fracturing process used to unlock natural gas. And that's not a good thing, he said.

"These terms have entered into the public consciousness in a way that is going to be a net negative for industry and for government as we try to advance our goals," Smith said.

But government, industry and environmentalists can work together on shared goals, such as advancing safe development of natural gas, he said.

Farouk Hussain Al Zanki, CEO of Kuwait Petroleum Corp., described a key lesson industry should take away from events of recent months, including the Gulf oil spill and Japan's tsunami-triggered nuclear power plant disaster.

"Energy safety has moved to the forefront of industry challenges," he said.

Dave Payne, Chevron's vice president of drilling and completions, said the damage from the spill will be particularly long-lasting.

"A large percentage of the American public doesn't understand our business," he said. "We have not regained trust. It will take us years as an industry to get to where we need to be."

He cautioned against an adversarial relationship between federal regulators and the offshore drilling industry. We "need a partnership with government," he said. "We cannot work at loggerheads with the government and be successful."

In an afternoon panel on the Gulf spill, speakers explored specific ways that the industry could learn from the blowout last year.

One big lesson: The data streaming from the seafloor to the drilling rig may not be displayed in the best way to help workers make quick decisions.

There's a concern that amid a barrage of data, "someone working in real time has to tease out" what's relevant "and make real consequential decisions on the fly," Smith said.

The oil and gas industry can take cues from how information is presented to pilots in airplane cockpits and engineers in nuclear reactors, he said.

"Instead of relying on a person who is smart and quick and who has that intestinal fortitude to stop work on a $350 million rig," Smith said, the airlines and nuclear industry use more checklists and automation.

Chevron's Payne said industry stalwarts likely would resist safety checklists, but acknowledged they could go a long way to improving safety offshore.

"We need to start bringing procedures and checklists into our business," he said. "We have an opportunity to work together as an industry and hold each other accountable."

OTC attendance so far is up about 10 percent from last year, when 72,900 came to the four-day annual event, said Stephen Graham, OTC's associate managing director.

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Offshore Officials Get In-Depth Look

Offshore Officials Get In-Depth Look

Thursday, April 14, 2011
Houston Chronicle
by Jennifer A. Dlouhy

The top U.S. officials in charge of offshore oil and gas exploration on Wednesday got a close-up look at the first deep-water drilling project approved since last year's oil spill.

Interior Secretary Ken Salazar and his chief offshore regulator, Michael Bromwich, spent two hours examining new safety systems -- including one spurred by the spill -- on the Ensco 8501 rig that is about to begin drilling a bypass well for Noble Energy in the Gulf of Mexico.

They touched drilling fluids hauled from pits on the semisubmersible rig, interviewed workers about their jobs and studied the systems used as a last line of defense against surging oil and gas.

Afterward, Salazar said he was impressed that "testing capabilities have been significantly enhanced since a year ago."

"We're starting to see the beginning of a significant change in the culture that holds great promise," Salazar added.

Within days, the Ensco 8501 is set to begin drilling the well in Noble Energy's Santiago prospect 70 miles southeast of Venice, La., resuming work that started just four days before the blowout of BP's Macondo well and destruction of the Deepwater Horizon drilling rig last April 20.

Houston-based Noble drilled more than 7,000 feet below the seafloor in 6,500 feet of water before it was forced to plug the well under a moratorium on deep-water drilling that took effect weeks after the Macondo blowout.

The new bypass drilling is meant to get around the plugs in the original well.

Although Noble Energy is the operator of the project, with a 23.25 percent working interest, BP owns 46.5 percent of it. The other partners in the project are Red Willow Offshore and Houston Energy Deepwater Ventures.

Noble Energy secured its permit to resume work at the site on Feb. 28, becoming the first of 10 deep-water projects blocked by last year's ban that now have gotten the green light. So far, drilling has begun on just one: a well in Shell Oil's Cardamom Deep discovery 137 miles off the Louisiana coast.

One hundred twenty-three people now are working at the Noble Energy well, including 78 who work for Ensco and others employed by about a half-dozen other contractors.

Workers on the rig -- built as a collaboration between Ensco and Noble two and a half years ago -- stressed the safety practices onboard. At one point, an Ensco worker reminded Salazar and Bromwich to don protective glasses and earplugs.

 

Blowout preventer

Inside the drilling shack at the heart of the rig, the two officials pressed workers to answer questions about the blowout preventer designed as a final barrier against loss of well control. A four-month examination of the blowout preventer used at BP's well concluded it was unable to slash through off-center drill pipe, seal the well hole and trap oil underground.

Although blowout preventers are built to shear through drill pipe, they can't cut through thick joints connecting pipe. That means drillers must know whether narrow pipe or joints are passing through the device.

 

'Give me comfort?'

Salazar wanted to know what would ensure that pipe joints weren't in the way.

"What will give me comfort that in this rig, that will not happen?" he asked.

Don Williamson, the rig manager, stressed that the driller always knows the position of the pipe.

The Hydril blowout preventer being used at the Noble Energy well is two and a half years old -- the same age as the rig itself.

After last year's spill, the government stepped up testing requirements for blowout preventers, including access points called hot stab panels that allow remote controlled vehicles to operate equipment deep beneath the surface.

On the Ensco 8501, that meant installing new equipment from Oceaneering that allows the workers on the surface to conduct quicker, more efficient tests of the hot stab function.

"It's greatly enhanced our ability to test the stabs on the surface," said Rusty Critselous, a drill site leader for Noble Energy. "With this little unit, our hot stab lines are shorter and the testing process is quicker."

 

'New and better ways'

Bob Bemis, Noble Energy's vice president of environmental, health and safety, said the federal mandate prompted the change.

"That regulation is causing us to develop new and better ways to develop these testing techniques," Bemis said.

Bromwich, director of the Interior Department's Bureau of Ocean Energy Management, Regulation and Enforcement, observed later that it was gratifying that the federal requirements had spurred innovation, but said he would prefer the industry to have its own incentives for safety improvements.

"What's been missing from the industry over the last several decades has been the drive to innovate for safety without new requirements," Bromwich said.

The backdrop for the visit Wednesday was continuing tension between the oil industry and the Obama administration.

Oil industry representatives have complained that the administration is moving too slowly to restart offshore drilling following last year's spill.

Atlas Wins Contract to Improve Global Offshore Safety

Atlas Wins Contract to Improve Global Offshore Safety

Thursday, April 07, 2011

Atlas Interactive

Atlas Interactive has been awarded a major contract to develop and deliver new standardized safety training to the global oil and gas industry in a deal which is expected to deliver revenues upwards of $5 million (USD) over the first year.

Delivered in partnership with OPITO, the skills body which ensures safety and competency in the worldwide oil and gas industry, the agreement will offer Atlas the opportunity to train in excess of 1.5million direct workers in exploration and production to International Minimum Industry Training Standards (IMIST) over the next two years.

This global version of the MIST program which OPITO and Atlas have successfully piloted with over 48,000 oil and gas workers in the UK since 2009, is now being developed to standardize safety training for experienced workers in oil and gas provinces around the world.

IMIST will be launched in the Middle East in July, then rolled out across 30 countries worldwide throughout Asia, Africa and the United States. It will be delivered via e-learning and tailored to meet each region's specific workforce, language and geographic needs.

The contract, which begins this month, supports an aggressive growth strategy for Atlas, which sees this deal as part of a strategic plan to double sales over the next three years.

Atlas chief executive John Rowley said, "This is a groundbreaking initiative in terms of the importance the industry is placing on health and safety. We are delighted to have been chosen to deliver the IMIST program, following a competitive tender process, for this global workforce and believe this is a clear indication of the industry's commitment to standardization and their willingness to embrace new technologies which can create a highly effective and efficient solution.

"For Atlas, this agreement will allow us to pursue our ambitious growth strategy in terms of penetration of the international oil and gas market, particularly in the emerging markets where Atlas has already secured some exciting new projects with national and international oil companies."

The IMIST standard ensures that trainees have the necessary safety awareness and training to avoid risk and ultimately incidents. The course contains up to nine modules incorporating safety observation systems, use of hazardous substances, working at height and mechanical lifting activities.

Training is undertaken via the internet and underpinned by Atlas' award winning innovative diagnostic tool called FAST TRACK which works by assessing a learner's knowledge gaps under time bound conditions. The content of the course that is then delivered to the learner is based on their personal knowledge gaps - saving time by only delivering the training that is required and ensuring 100% competency. This reduces 14 hours of classroom based content down to approximately two hours of e-learning content. Learners can take the course at any location - home, office or learning center – at any time, therefore reducing the burden of travel time and associated costs.

OPITO, which developed the IMIST course, aims to deliver common standards in the global oil and gas workforce that improve safety and competency.

The international organization works with Governments, national oil companies, multi-nationals and contractors to meet their skills needs to provide independent advice and guidance on effective management of workforce skills development, emergency response and occupational standards, qualifications and quality assurance of training delivery.

David Doig, CEO of OPITO Group, said, "The delivery and content of basic safety training varies dramatically from region to region and lacks consistency across the industry. Oil and gas workers should have confidence that their colleagues share the same level of safety training and the ultimate aim of IMIST is to make the working environment safer.
"Following a rigorous selection process we are delighted that Atlas Interactive will be developing and delivering the e-learning provision for the experienced worker program. Their technical expertise, knowledge of the oil and gas business and successful track record has proven invaluable in the development of the high quality safety training package for the industry."

Government Tries to Clarify Offshore Drilling Rules

Government Tries to Clarify Offshore Drilling Rules

Tuesday, March 29, 2011
Houston Chronicle

by  Jennifer A. Dlouhy

 

The federal government on Monday issued a five-page memo meant to clarify rules for offshore drilling, in response to oil and gas industry complaints that new mandates imposed since last year's Gulf spill are muddled.

The federal Bureau of Ocean Energy Management, Regulation and Enforcement also said it would reopen a public comment period to help guide the agency's possible rewrite of a drilling safety rule put in place last October.

"Our goal remains the same as it has been from day one: to ensure that offshore operations are conducted as safely as possible," said Michael Bromwich, the bureau's director. "This guidance document gives deep-water drilling operators additional information to help address some of the recurring issues that have been raised in our ongoing discussions with industry."

The document covers several areas but focuses on a major source of industry complaints: confusion about the wording of the October offshore drilling safety rule. That measure adopted two sets of recommended practices for emergency equipment and well design that had been developed by the American Petroleum Institute.

The problem was that instead of rewriting those mandates in their own words, government regulators simply referenced API documents and specified that any time the API recommended practices said "should" it now meant "must" under the interim drilling safety rule.

Industry representatives complained that the changes affected more than 14,000 discretionary provisions in 80 different standards, and in some cases, those new requirements were conflicting.

For instance, API's recommended well construction practices sometimes offer operators an array of options that might make sense, but the language of the rule seemed to make all of those options mandatory.

"There are areas where it says you should do this or you should do that," said Al Reese Jr., the chief operating officer of Houston-based ATP Oil & Gas. "But I can't turn left and turn right at the same time."

His company navigated the process and received a permit to resume a deep-water pro-ject in the Gulf of Mexico.

A positive step

The new guidance document clarifies that operators are allowed to select "any of the appropriate options," without getting special permission from the bureau.

It also suggests that oil and gas companies maintain documentation demonstrating they evaluated the recommended practices, even when the government's rule doesn't make them mandatory.

Erik Milito, the upstream director at the American Petroleum Institute, called the announcement a positive step.

"Ensuring a clear, consistent and efficient process for offshore regulatory requirements and for approvals of permits is a crucial component to steadily increasing offshore production," he said.

'Departure documents'

With Monday's memo, the ocean energy bureau also formalized a process it has used in approving six deep-water drilling projects in the Gulf of Mexico -- "departure documents" that specify how individual operators are not strictly following the API recommended practices incorporated in the drilling safety rule.

The ocean energy bureau said that whenever oil companies intend to deviate from the recommended practices incorporated in the rule, they must get approval to use alternate procedures or equipment.

The bureau said that it is evaluating potential revisions to the drilling safety rule "in light of comments received from the public and other considerations."

The government said that it will reopen the public comment period, probably within a month, giving people another chance to tell the bureau what works and what doesn't.

Any rewrite of the rule would take months, or longer.

ExxonMobil Gets BOEMRE Nod for GOM Deepwater Drilling Permit

Tuesday, March 22, 2011

The Bureau of Ocean Energy Management, Regulation and Enforcement (BOEMRE) approved a fourth deepwater drilling permit that complies with rigorous new safety standards implemented in the wake of the Deepwater Horizon explosion and resulting oil spill. This includes satisfying the requirement to demonstrate the capacity to contain a subsea blowout. The approved permit is a revised permit to drill a new well for ExxonMobil's Well #3 in Keathley Canyon Block 919 in 6,941 ft. water depth, approximately 240 miles off the Louisiana coastline, south of Lafayette, La. This is the first permit approved that designates the Marine Well Containment Company (MWCC) containment system as its containment solution.

"Today's permit approval is the fourth to be approved in the month since the industry confirmed its capability to contain a deepwater loss of well control and blowout. We will continue to review and approve applications that demonstrate the ability to operate safely in deep water," said BOEMRE Director Michael R. Bromwich. "As we have seen, the rate of deepwater permit applications is increasing, which reflects growing confidence in the industry that it understands and can comply with the applicable requirements, including the containment requirement. We expect additional permit approvals in the near future."

ExxonMobil's Well #3 is a new well. The operator had a rig on-location and an approved Permit to Drill a New Well when activities were suspended due to the temporary drilling suspensions imposed following the Deepwater Horizon oil spill.

ExxonMobil has contracted with the MWCC to use its capping stack to stop the flow of oil should a well control event occur. As part of its approval process, the bureau reviewed ExxonMobil's containment capability available for the specific well proposed in the permit application and confirmed that the capabilities of the capping stack met the requirements specific to the proposed well's characteristics.

BOEMRE has worked diligently to help industry adapt to and comply with new, rigorous safety practices. These standards ensure that oil and gas development continues, while also incorporating key lessons learned from the Deepwater Horizon oil spill. This new permit meets the new safety regulations and information requirements in Notices to Lessees (NTL) N06 and N10, and the Interim Final Safety Rule.

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UK Govt: Deepwater Oil Drilling Safety Rules Fit for Purpose

Tuesday, March 22, 2011

Dow Jones Newswires

by  James Herron

 

The U.K. government gave its regulatory regime for deep water offshore oil and gas drilling a largely clean bill of health, saying that existing rules address most of the concerns raised by a parliamentary committee studying the impact of the Deepwater Horizon disaster in the Gulf of Mexico.

U.K. lawmakers on the Energy and Climate Change Committee had raised serious doubts in January about whether the oil industry is prepared to tackle a deep water blowout and oil spill should it occur in the North Sea, but the government's response to these concerns published Tuesday said existing rules are adequate.
"The U.K. government has already taken a number of actions (such as increasing the number of environmental inspectors and inspections to mobile rigs) to further bolster the already robust U.K. regulatory regime," the government report said.

One of the Committee's principal concerns--that the oil industry couldn't handle an oil spill in the rough seas west of the Shetland Islands--has already been dealt with, the government said. Chevron has developed a cap that can be used to seal a blowout in this area that will be available for anybody to use, the government said. Additional capping devices are also in development, it said.

The government did promise to assess in partnership with the oil industry whether oil rigs' blowout preventers--the crucial piece of equipment that failed aboard the Deepwater Horizon--should be upgraded to include extra failsafes, called blind shear rams. This assessment won't be concluded before summer, it said.

"We will also be considering the requirement of [compulsory] insurance as part of our review," it said.
Existing rules cover the other main concerns of the U.K. lawmakers--that companies spill response plans aren't adequate for the least likely but highest risk accidents; that existing financial provisions wouldn't cover the cost of a large spill; and that workers aboard offshore rigs fear reprisals if they raise safety concerns--the government said.

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