Lessons in offshore safety – how is Canada responding?

This blog appears with permission from Ocean Resources.

Lessons in safety
By Ryan Van Horne
Ocean Resources

It has been more than 30 years since Canada’s worst offshore tragedy.

In February 1982, the drill rig Ocean Ranger sank off Newfoundland with a loss of 84 lives. A Royal Commission that criticized industry for poor safety training, equipment, and lax inspection spurred a profound shift in Canada’s offshore.

The Ocean Ranger disaster isn’t the only accident that has an effect on safety in the offshore.

In July 1988, a fire aboard Piper Alpha, a North Sea production platform off Scotland, claimed the lives of 167 men. It is still the worst offshore accident in terms of lives lost.

In March 2009, Cougar Flight 91, which crashed off Newfoundland and Labrador with a loss of 17 lives, led to the Wells Inquiry, headed by former Newfoundland judge Robert Wells. That inquiry made a number of recommendations, most notably the creation of an autonomous and dedicated safety regulator.

More recently, the offshore safety debate was fueled by the Deepwater Horizon disaster in the Gulf of Mexico in April 2010. The drill rig exploded, killing 11 crew. The ensuing oil spill was the largest in U.S. history.

With so many tragedies from which to derive lessons, it’s fair to ask if Canadian governments, regulators and industry have learned enough and reacted appropriately.

That’s a question Richard Grant asks often. Grant is the president of Grantec Engineering Consultants Inc., a Hammonds Plains, NS, firm and vice-chair of the Canadian Strategic Steering Committee on Offshore Structures Standards.

“With respect to Ocean Ranger, a large number of lessons have been learned, including those pertaining to proper training of personnel on the rigs, emergency evacuation systems, response times and survival suits,” said Grant, who was a staff member at the Canada-Nova Scotia Offshore Petroleum Board (CNSOPB) from 1997 to 2002.

The same cannot be said for lessons that should have been learned from Piper Alpha, Grant says. Piper Alpha was designed as an oil production platform but later converted to gas production, which is what it was being used for when it was destroyed by fire.

Grant says the Canadian Offshore Installation Regulations, which date back to the 1980s, have not been updated to capture issues relating to fire and explosion safety on offshore platforms.

“Other jurisdictions, namely the UK and Norway, have worked diligently and quickly to address the shortcomings pertaining to fire and explosion safety,” says Grant.

For example, in 1995 the UK Health and Safety Executive (HandSE) introduced new regulations for the prevention of fires and explosions for offshore installations.

The HandSE also switched from a certification approach to a verification approach. A key aspect of this is that inspections of offshore installations are performed by “independent competent persons.” Canada, says Grant, is still using the dated pre-Piper Alpha certification approach.

Deepwater Horizon was an example of what can happen when you cut corners, Grant says. It also underscored the diligence required by regulators and the U.S. moved quickly to address that.

Other major players in the offshore industry, such as the United Kingdom, Norway and Australia, have switched to autonomous and dedicated safety regulators, something Grant says is necessary for the substantial reform needed in Canada.

Grant hopes it does not take another offshore disaster in Canada for governments to take a critical look at the regulatory regime. While he advocates a single national regulator, the most important area to focus on is improving the quality of inspections.

Inspectors “need to be highly skilled and they need to know what they are looking at,” Grant says.

There are several benefits to a single safety regulator, he adds, such as consistency, effectiveness and efficiency, and improved safety.

A big problem in Canada is the glacial pace of regulatory change.

“In the past 10 years only one such regulation has been produced for the Atlantic Canadian offshore – the drilling regulations. This speaks volumes about the inefficient regulatory development process in Canada.”

Grant found “many significant deficiencies in the Canadian offshore regulations” while he was with the CNSOPB, and little has been done to correct that.

There are three offshore regulators in Canada: the National Energy Board, the CNSOPB, and the Canada-Newfoundland and Labrador Offshore Petroleum Board (C-NLOPB), with the possibility of more.

Grant would like to see a review of the Canadian offshore regulatory system, similar to the one Australia did in 1999 when it used a team or respected international offshore safety specialists.

Andrew Younger, the energy critic for the Liberal Party of Nova Scotia, introduced a private member’s bill in the legislature last fall, urging the NDP government to start a conversation with the federal government about a single safety regulator.

Although the bill didn’t pass, that conversation has begun – with Ottawa and the Newfoundland and Labrador government.

“We are working with them to ensure we have structures in place that reflect regulatory best practice for safety,” says Nova Scotia Department of Energy spokeswoman Tracy Barron. “Justice Wells has raised serious issues and it’s important for us to consider his findings.”

Stuart Pinks, CEO of the CNSOPB, thinks Canada has learned from previous accidents and says the safety regime in Nova Scotia is “robust” and the track record proves its adequacy.

“Does it mean that it is absolutely perfect and there can’t be some improvements?” says Pinks. “No, there’s always improvements that can be made and we’re constantly making improvements.”

The Nova Scotia and Newfoundland boards were created consistent with recommendations of the Hickman inquiry into the Ocean Ranger disaster. While some argue that the structure makes safety take a back seat, Pinks disagrees.

“Our decision-making hierarchy is set up such that safety and environmental protection are paramount in our decision making,” he says.

After the Wells inquiry, the CNSOPB looked for ways to give further separation to decision making.

The CNSOPB set up a separate committee at the board of directors’ level — the health, safety and environment committee – “to make sure that health, safety and environment are receiving the paramountcy in decision making that the board has dictated that it should,” says Pinks, who used to be the board’s chief safety officer. “Safety is No. 1 in my mind.”

Newfoundland and Labrador made a similar change based on the Wells inquiry, said C-NLOPB spokesman Sean Kelly.

“We have separated safety and operations to make two departments instead of one,” said Kelly. “Both departments will work closely together to ensure the Board maintains proper oversight of all aspects of offshore safety.”

Some argue that the safety regulator should not have any other role, such as approving exploration licenses. The flip side to that, though, is that the CNSOPB can make sure that safety maintains top priority.

“There are some significant advantages of an integrated regulator and I’ll give you a really good example with our last call for bids,” Pinks says, referring to Shell Canada’s pitch to drill in deep water.

All bidders had to submit a separate technical qualification bid with their commercial bid. If a company did not demonstrate proficiency in drilling in deep water – and experience doing so in the last 10 years – their commercial bid would have been returned unopened.

“We can move health, safety and environmental protection and additional measures right up front to assure that we are only granting licences to qualified and competent companies,” says Pinks.

The CNSOPB co-operates closely with its counterparts in Newfoundland and other jurisdictions. The board is also a member of the International Regulators Forum and routinely compares its regulatory regime to that of other major players in the offshore industry.

“I can pick up the phone and call the UK or Norway and say we’ve got such and such an issue in our offshore,” says Pinks. “Being able to talk to them is a real benefit for us.”

About 10 years ago, Pinks says industry lamented that the level of oversight in Nova Scotia and Newfoundland’s offshore was costly. After Deepwater Horizon, industry expressed gratitude that Atlantic Canada has such a strong regulatory regime.

Nova Scotia has enough challenges such as climate and tricky geology, it shouldn’t make reaping the benefits of its offshore resources more difficult by having an unnecessarily sticky regulatory regime.

For oil companies, time is money and so their biggest concern with the regulatory process is efficiency.

“They want a process that holds them to high standards, but is done in the most expedient way possible,” Pinks says.

Canada is switching to goal-based regulations because technology advances quickly and prescriptive regulations can become outdated.

Prescriptive regulations set goals for what industry must achieve in terms of managing safety and managing environmental protection. It allows for the adoption of new technology and new practices very quickly.

This presents a challenge, though, as the job of a safety inspector becomes more difficult under a goal-based regime.

“The competency expectations of your inspectors and your surveyors does go up under a goal-based regime,” Pinks says.

To account for that, CNSOPB has what he calls “a robust training budget” and much of that training is done internationally.

Proponents of a separate safety regulator point to the benefits of such a change, but it must be remembered that it is not a panacea. In the United Kingdom, which has a powerful and autonomous safety regulator, there were two helicopter crashes around the same time that Cougar Flight 91 crashed into the North Atlantic – one three weeks before and the other three weeks after.

There are inherent dangers in the offshore industry and proponents of change would be wise not to focus solely on the structure of a safety regulator.

Even Justice Wells did not do that, although his name has become synonymous with that idea.

Wells said the safety on offshore installations has been greatly improved and that helicopter travel is probably the most dangerous part of the industry.

Many criticized Transport Canada following Cougar Flight 91, but it is not simply an aviation issue. There are risks with respect to flying helicopters in an ocean environment and industry needs to mitigate those as much as possible.

Lastly, anyone responsible for improving offshore safety would do well to heed this advice from Justice Wells.

“The bright light of public scrutiny is the best way to ensure … we get safety right, while at the same time understanding that it is an ongoing journey which never ends at a final destination.”

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