Oil Rig Safety Regulation Violations
BSEE & BOEM Regulation of Offshore Oil & Gas Operations
The first offshore drilling began off the California coast in 1896, but official industry regulations were not implemented until the Outer Continental Shelf Lands Act (OCSLA) of 1953. Even then, enforcement was lacking. In the wake of the 2010 Deepwater Horizon disaster, the Bureau of Ocean Energy Management, Regulation and Enforcement was replaced by the Bureau of Ocean Energy Management (BOEM) and Bureau of Safety Environmental Enforcement (BSEE).
“The Mission of the Bureau of Ocean Energy Management is to manage development of U.S. Outer Continental Shelf energy and mineral resources in an environmentally and economically responsible way.” – BOEM Mission Statement
“The Bureau of Safety and Environmental Enforcement (BSEE) works to promote safety, protect the environment, and conserve resources offshore through vigorous regulatory oversight and enforcement.” – BSEE Mission Statement
BOEM’s functions include “offshore leasing, resource evaluation, review and administration of oil and gas exploration and development plans, renewable energy development, National Environmental Policy Act (NEPA) analysis and environmental studies.” BSEE’s functions include “the development and enforcement of safety and environmental regulations, permitting offshore exploration, development and production, inspections, offshore regulatory programs, oil spill response and newly formed training and environmental compliance programs."
Oil and gas operators working offshore have an obligation to comply with all applicable state and federal regulations pertaining to exploration, production, and every aspect of drilling and extraction operations, as well as storage and transportation of gas and oil products and byproducts.
Changes Since the 2010 BP Deepwater Horizon Oil Spill
After the Deepwater Horizon oil spill, the owners and operators of the rig (BP, Halliburton, TransOcean, and Anadarko) faced civil and criminal prosecution for violations of the Clean Water Act, Oil Pollution Act, and criminal statutes. After six years of litigation, the result was a $20.8 billion settlement, the largest in the history of the United States.
In 2012, BP pled guilty to 14 criminal counts and was sentenced to pay $4 billion in fines and penalties as a result of the April 2010 explosion. BP was found to have committed the following violations of federal regulations:
- BP failed to protect health, safety, property, and the environment by (1) performing all operations in a safe and workmanlike manner; and (2) maintaining all equipment and work areas in a safe condition.
- BP failed to take measures to prevent the unauthorized release of hydrocarbons into the Gulf of Mexico and created conditions that posed unreasonable risks to public health, property, aquatic life, wildlife, recreation, navigation, commercial fishing, or other uses of the ocean.
- BP failed to take necessary precautions to keep the well under control at all times.
- BP failed to cement the well in a manner that would properly control formation pressures and fluids and prevent the release of fluids from any stratum through the wellbore into offshore waters.
- BP failed to use a pressure integrity test and related hole-behavior observations, such as pore pressure test results, gas-cut drilling fluid, and well kicks to adjust drilling fluid program and setting depth of casing string.
- BP failed to conduct major inspections of all blowout preventer (BOP) stack components.
- BP failed to perform the negative test procedures detailed in an application for a permit to modify its plans.
After the 2010 oil spill tragedy that took the lives of 11 offshore workers and injured countless others, BSEE cracked down on offshore drilling, releasing updated safety rules. According to the Interior Department:
"The second regulation, known as the Workplace Safety Rule, requires offshore operators to have clear programs in place to identify potential hazards when they drill, clear protocol for addressing those hazards, and strong procedures and risk-reduction strategies for all phases of activity, from well design and construction to operation, maintenance, and decommissioning."
Some of the enhanced drilling regulations included the following:
- Operators must demonstrate they're prepared to deal with potential blow-out and worst-case discharge.
- Permit applications for drilling projects must meet new standards for well design, casing, and cementing.
- Permit applications must be independently certified by a professional engineer.
- There must be a corporate compliance statement and review of subsea blowout containment resources.
- Operators must maintain safety and environmental programs and follow performance-based standards for drilling and production, including equipment, safety practices, environmental safeguards, and management oversight of operations and contractors.
Nonetheless, some organizations, such as Oceana, still disapproved of the measures taken, insisting there were not enough improvements enacted. The senior campaign director at Oceana said, "Both industry and government get F's. Without stronger regulations, and better inspection and enforcement, oil companies will continue to put profits over safety and there will be more problems. It's not a matter of whether there will be another oil spill, but when."
Read more in Oceana's Offshore Drilling Reform Report Card 2012.
The Drilling Safety Rule
The drilling safety rule requires specific procedures to prevent blowouts. These procedures include cementing and casing and the appropriate use of drilling fluids. It also requires mechanisms such as blowout preventers that shut off the flow of oil and gas in the event of an accident. Furthermore, the drilling safety rule requires offshore operators to secure expert reviews of well design, construction, and flow-intervention mechanisms.
The rule was enacted after the 2010 Deepwater Horizon oil spill. In the words of the BSEE director, "This rule makes final important standards that were put in place shortly after that spill and is based on input from stakeholders and recommendations from the numerous investigations related to that tragedy."
When Companies Violate Oil Rig Safety Regulations
When companies in the offshore oil and gas sector ignore or blatantly violate safety regulations, there may be criminal and civil repercussions.
One of the most immediate consequences of violating safety regulations is the imposition of hefty fines. Regulatory bodies in the United States can levy significant penalties on companies that fail to adhere to oil rig safety standards. Companies may also face Jones Act or other lawsuits from injured workers, their families, or environmental groups. These lawsuits can lead to substantial compensation claims, including damages for injury, loss of life, environmental remediation, and economic losses caused by the incident.
In cases where negligence or willful violation of safety regulations leads to serious accidents or environmental disasters, criminal charges can be brought against the company and its executives. This might include charges of manslaughter, criminal negligence, or violations of environmental laws. Company officials found guilty of criminal violations can face prison sentences, especially in cases resulting in fatalities or significant environmental damage.
Beyond legal ramifications, companies found in violation of safety regulations often suffer severe reputational damage. This can lead to a loss of investor confidence, decreased stock value, and long-term harm to the company's brand. In severe cases, companies may lose their operational licenses and permits. This can lead to a halt in operations, affecting the company’s profitability and strategic plans.
If you were injured in an oil rig fire or explosion and you believe that your company's violations of federal regulations resulted in the accident, you could be entitled to both compensatory and punitive damages. After you have received the medical help you need, the next most important step you can take is to hire a competent offshore injury attorney.