The U.S. Chemical Safety Board’s Investigation into the Macondo Disaster Finds Offshore Risk Management and Regulatory Oversight still Inadequate in Gulf of Mexico
Washington, DC, April 13, 2016 – Offshore regulatory changes made thus far do not do enough to place the onus on industry to reduce risk, nor do they sufficiently empower the regulator to proactively oversee industry’s efforts to prevent another disaster like the Deepwater Horizon rig explosion and oil spill at the Macondo well in the Gulf of Mexico, an independent investigation by the U.S. Chemical Safety Board (CSB) warns.
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The CSB’s draft report found, “[A] culture of minimal regulatory compliance continues to exist in the Gulf of Mexico and risk reduction continues to prove elusive,” six years after the catastrophic April 20, 2010, event that killed 11 workers and caused the biggest oil spill in the history of offshore drilling. While the Macondo blowout occurred under the direction of Transocean and BP, it affected the oil and gas industry worldwide by demonstrating that high-hazard risk management continues to be a challenge in the offshore environment.
A complex interplay of physical, operational, and organizational barriers failed that day, sending oil and gas from deep below the ocean floor onto the drilling rig, triggering explosions and ensuing fire that left 11 of the 126 workers dead and critically injured at least 17 others.
The final volumes of the staff report await a board vote and include proposed safety recommendations to the U.S. Department of Interior’s Bureau of Safety and Environmental Enforcement (BSEE),the American Petroleum Institute, the Ocean Energy Safety Institute, and the Sustainability Account Standards Board.
“Offshore regulations in the US have been moving toward a performance-based approach, but in order for the changes to be effective, there are key regulatory attributes BSEE needs to pursue,” said CSB Chairperson Vanessa Allen Sutherland. “These include an adaptable oversight approach that continuously strives to reduce risk, proactive tools to evaluate and monitor safety performance, and meaningful worker participation. Successful safety and risk management will take a tripartite effort by industry, BSEE, and the workforce. Ultimately, this will require a culture shift for everyone.”
The Board previously released two volumes of findings on failures of the primary well control equipment, the blowout preventer, and safety management deficiencies by Transocean and BP. The drilling operation was nearly finished and Deepwater Horizon would have departed and given way to a production installation to extract the huge reservoirs of oil and gas BP had discovered 50 miles off the Louisiana coast.
As the well’s operator, BP designed the well, but most individuals employed on the Deepwater Horizon worked for the drilling contractor, Transocean, who owned the offshore facility and executed the well plan. The CSB’s investigators found both companies had corporate risk management policies more rigorous than what was required by regulation, but those policies were not implemented at Macondo. The investigators assert that changes are necessary to offshore regulations and guidance to clarify roles and responsibilities. Ultimately, current BSEE safety regulations do not place sufficient safety responsibility on the party with primary control of the risk during drilling operations.
Following the 2010 incident the Department of Interior reorganized how it regulated offshore drilling and production, splitting the former Minerals Management Service (MMS) into two separate branches, one to sell offshore oil leases (the Bureau of Ocean Energy Management) and the other to enforce safety and protect the environment (the Bureau of Safety and Environmental Enforcement).
The new Bureau of Safety and Environmental Enforcement quickly put additional regulations in place, but the CSB found they are lacking key concepts that are needed to more effectively reduce risks.
“[R]ecent changes to the U.S. offshore regulator’s organization and regulations, particularly the establishment of SEMS [the Safety and Environmental Management System], do not go far enough to ensure effective industry management and control of major hazards or prevent possible future Macondo-type incidents,” the draft report concludes.
In fact, the investigators said, many of the risk management policies Transocean and BP had in place before the disaster would have satisfied the new post-Macondo federal requirements. And a BSEE audit found that some companies are still placing more emphasis on documenting regulatory compliance than actually managing risks.
The draft report states that the new regulations establish activity-based safety and environmental management system elements, but lack risk reduction requirements and did not address the human and organizational factors that set the stage for accidents.
Lead Investigator and Human Factors Specialist Cheryl MacKenzie said, “One individual did not cause the Macondo event. A multitude of decisions and actions up and down the organizational chains of both BP and Transocean led to this disaster.”
“Zero incidents for a day, month, or even years do not preclude a company from facing a potentially catastrophic incident tomorrow,” said Investigator MacKenzie. “Compliance isn’t a paper exercise and it isn’t a fixed target.Circumstances – the work environment, technology and the workforce – inevitably change. Companies’ risk reduction efforts must keep up, and BSSE must continually engage industry in proactive ways to improve offshore safety.”
CSB investigators found that the crew did what made sense to them at the time, influenced by organizational practices and expectations, previous experiences, and normal human psychological processes. Seemingly inconsequential decisions made throughout the day of the blowout by management and workers culminated in unanticipated loss of well control the crew was not predisposed to anticipate.
The CSB’s report emphasizes the need for an assessment of human performance expectations and thorough consideration of human factors as they relate to safety systems intended to control or mitigate hazards. Of particular importance and highlighted in the CSB’s report is the need for social and cognitive skills training for improved interactions and decision-making, in conjunction with technical competencies. The dynamic and complex offshore work environment must be considered in order to overcome cognitive biases and other mental traps that may influence decision-making.
“In the aftermath of a catastrophe, the individuals immediately involved in the activities that precipitated the event often receive much of the focus and subsequent blame,” the draft report said, but the problem really rests with companies’ entire safety culture.
The CSB’s draft report discusses the influence of culture on major accident prevention and the importance of identifying incongruities among proclaimed values, actual practices, and unstated basic assumptions.
The emerging lessons of Macondo demonstrate the criticality of the human component within safe offshore operations. Yet, the SEMS Rule very minimally addresses human factors and API’s Recommend Practice 75 merely suggests that human factors be “considered” in a limited number of safety management aspects. There remains a dearth of U.S. regulatory requirements or national industry guidance aimed at improving the incorporation of human factors during safety critical offshore operations.
“In the complex offshore drilling industry, the key to ensuring safety is not just teaching people procedures, but how to adapt and be flexible during pressure-packed emergencies,” Investigator MacKenzie said. “Industry’s focus must shift from correcting individual ‘errors’ identified post-incident to a systematic approach for managing human factors.”.
The report details the oversight and influence of boards of directors, shareholders, and SEC reporting requirements on an organization’s focus on major accident prevention, as well as the need for further improvements in the development and use of process safety indicators and barrier metrics.
Beyond BP and Transocean, the CSB found the U.S. offshore industry regulations and guidance do not sufficiently address the critical role process safety indicators and corporate governance can play in preventing catastrophes.
“While safety management of offshore drilling and completion in the Gulf of Mexico is now mandatory, the SEMS Rule lacks a number of critical attributes. These attributes, if implemented, will put more onus on industry to demonstrate in practice that they are effectively reducing their major accident risks to the greatest extent feasible and give BSEE more explicit authority to proactively oversee industry’s risk reduction efforts,” says Investigation Manager Don Holmstrom.
The two volumes propose 11 recommendations for safety change.
CSB recommends revision and augmentation of existing offshore oil and gas safety regulations, including the SEMS Rule, to a more robust risk management regulatory framework that embodies key regulatory attributes found in other global offshore regions, including systematic analysis and documentation by the responsible companies that risks have been reduced to As Low As Reasonably Practicable (ALARP) and barriers are effective to manage major accident hazards.
The CSB recommends augmenting the capabilities and functioning of BSEE to empower it with explicit authority to proactively assess industry major hazard documentation and practices; improving the offshore indicator reporting program to focus on leading process safety and barrier metrics; strengthening worker engagement in major hazard management, including worker-elected representatives, committees and tripartite collaboration between regulator, industry and workforce; and expanding staff numbers and competencies such as human factors and process safety, to achieve more robust regulatory oversight.
Three additional recommendations concern developing industry guidance on human factors and corporate governance and establishing a process safety culture improvement program.
The CSB proposes one recommendation to the American Petroleum Institute to revise API Recommended Practice 75 to expand SEMS responsibilities beyond just the operator; include explicit and expanded responsibilities for human factors, corporate governance, workforce involvement, contractor oversight, and key performance indicators; and incorporate the principles of a risk reduction concept (e.g., ALARP) and the hierarchy of controls. A proposed recommendation is also made to the Ocean Energy Safety Institute to conduct further study on riser gas unloading scenarios and publicize those learnings to advance industry understanding of this well operations risk.
Finally, the CSB issues one recommendation to the Sustainability Accounting Standards Board (SASB) to update, strengthen, and finalize the SASB’s provisional Oil & Gas Exploration & Production Sustainability Accounting Standard to expand its reporting recommendations to include disclosure of additional leading and lagging indicators.
Transocean challenged CSB’s jurisdiction in this case, but a federal district court in 2013 confirmed the Board’s authority to conduct offshore investigations, which was affirmed by the U.S. Court of Appeals for the Fifth Circuit in 2014. As a result of the district court order, Transocean handed over thousands of documents subpoenaed by the CSB’s investigators.
The CSB does not issue citations or fines, but by law conducts independent investigations of major industrial chemistry accidents, prepares root cause analyses and delivers safety recommendations to the regulatory agencies, industry, labor organizations and others. CSB board members are appointed by the President and confirmed by the Senate. The investigative staff includes chemical and mechanical engineers, industrial safety experts, and other specialists with experience in the private and public sectors.