DNV Reommends Changes to U.S. Safety Regime

Houston: “A step change can be achieved with respect to prevention and mitigation of major accidents through a performance based safety regime supported by a risk management approach. Empirically, the risk can be reduced by a factor of ten,” says Elisabeth Tørstad, DNV COO in the Americas and Sub-Saharan Africa.

As an input to the ongoing review of the U.S.’ current offshore safety regime, DNV is recommending considerable attention to several key aspects of safety management. DNV has for decades developed international safety and technology standards in cooperation with the industry and authorities.

“Based on this and several investigations of major accidents, we believe that the introduction of a risk management approach as basis for an improved regulatory regime within U.S. waters will improve the safety of offshore oil exploration and production. It will also meet the public expectations for assessment of all risks, as well as accommodate further development in safety and environmental protection,” said Tørstad.

Specifically, DNV contends that an efficient regime must possess the following characteristics:
•    Performance-based supplemented by prescriptive regulation
•    Consideration of technology, organisation and people
•    Clear roles and responsibilities
•    Enforced identification, reduction and control of risks
•    Shared performance monitoring
•    Practical and economic feasibility
•    Balance between risk, control and operations

Major accidents tend to lead to a review and revision of current practices and regulations with the objective of avoiding similar accidents in the future. This also appears to be the case after the tragic Deepwater Horizon blow-out accident and subsequent oil spill in the Gulf of Mexico. ”Much can be learned from this and other accidents, as well as drawing on global best practices,’’ said Tørstad.

Position paper
To explain these key aspects more in detail, DNV has developed a position paper as a contribution to the on-going policy discussion about how to improve safety and environmental protection of offshore oil and gas exploration, development and production. It can apply to the U.S. and other countries with offshore activities. The paper introduces the concept of performance based regulations to allow for different approaches to achieve safety targets performance targets based upon risk management.

DNV believes that an effective and robust safety regime for offshore energy exploration, development and production must be risk-informed and must possess the following characteristics:

Objective of an offshore safety regime
Deep water exploration and production of oil and gas will continue to be a vital part of our oil and gas supply. Because of this, additional focus on managing risk of deep water activities is needed to prevent consequences such as those from the Deepwater Horizon accident.

Performance-based supplemented by prescriptive regulation
DNV believes that an offshore safety regime based on a performance-based regulation requiring safety cases including risk assessments supplemented by required or recommended specific prescriptive regulation for selected areas is the most effective regime model. Areas that may be addressed by prescriptive regulation are typical facilities, components and situations where experience exists. The prescriptive regulation may include specific requirements supplemented e.g. by API standards and class societies such as DNV Offshore Codes.

Consideration of technology, organization and people
It is critical that an offshore safety regime properly accounts for technological, organizational and human factor defences – or barriers – in the prevention and mitigation of accidents throughout the lifetime of the offshore installation.

Clear roles and responsibilities
An effective offshore safety regime must ensure that clear roles and responsibilities are established between all parties involved. In particular, the role and responsibility between authority and operator is important. The choice of the performance based model is therefore natural when authorities want to minimize own risk and liability.

Enforced identification, reduction and control of risks
Risks such as those related to offshore drilling and operation can only be properly managed if the risks are known and understood by the operator (and subcontractors to operator) of the facility. Therefore, a key element in an offshore safety regime is that all parties are required to take an active role on undertaking holistic risk assessments for a specific installation through which preventive and mitigating means are identified and where all factors mentioned above are included in the safety and environmental models.

Shared performance monitoring
DNV believes that performance monitoring of all factors influencing a safe operation should take place throughout the life time of the facility. The monitoring should include the actual risks updated
regularly, the condition of the facility, people and organization as well as the condition of all barriers preventing and mitigating accidents.

Practical and economic feasibility
It is important that new regulation is practical and economically feasible in addition to ensuring sufficient safety and environmental protection. DNV recommends that the effectiveness of new regulation should be assessed on basis of a risk assessment where the reduction of risks (reduction of expected loss) due to the new or modified regulation is compared with the investment needed to implement the new or modified regulation.

A step change for major accidents
DNV believes that a step change for major accidents can be achieved, i.e. that the risk can be reduced by a factor of 10 by use of risk management. A holistic approach to address technical, procedural, human and organizational and cultural aspects is essential. Further, a detailed quantified safety and environmental model is necessary to underpin operational decision making to prevent major accidents.

Balance between risk, control and condition
It is important to have the right balance between the three elements risk, control and condition. A safety regime which has focus in only one or two of the elements will lead to ineffective risk management. A prescriptive regime focuses typically on control and condition but less on risk.