Industry Associations Comment on Proposed Changes to Offshore Well Control Regulations

The American Petroleum Institute (API), the International Association of Drilling Contractors (IADC), the Independent Petroleum Association of America (IPAA), the National Ocean Industries Association (NOIA), the Offshore Operators Committee (OOC), the Petroleum Equipment & Services Association (PESA), and the US Oil and Gas Association jointly submitted comments on proposed regulatory revisions to Blowout Preventer Systems and Well Control requirements in 30 C.F.R. part 250.

The Bureau of Safety and Environmental Enforcement (BSEE) published the proposed changes on May 2018, in a notice entitled, ‘‘Oil and Gas and Sulphur Operations in the Outer Continental Shelf—Blowout Preventer Systems and Well Control Revisions.’

BSEE is reviewing the entire Well Control Rule which updated requirements for equipment and operations for well control activities associated with drilling, completion, workover and decommissioning operations.

While the partnering organizations said they “welcome the Administration’s commitment to review the final Well Control Rule because some of its provisions actually made operating offshore less safe,” they added that “the proposed rulemaking leaves additional opportunity on the table.”

The letter then highlights aspects of the proposed rule that the organizations say, “would not advance safety and yet would have the greatest negative impact on the industry.”

Further comments include the following key takeaways:

On drilling margins: “The current 0.5 ppg margin is arbitrary and does not ensure safety. The industry believes that replacing the current requirement with a performance-based standard under which an approved safe drilling margin would be established on a case-by-case basis, based on data and analysis specific to a particular well, is a safe and better alternative. Such an alternative would provide a risk-based approach that ensures safety and provides investment certainty to the industry.”

“In instances where an operator encounters a lost circulation zone, that operator would need to remedy the situation to move forward. Particularly when the lost circulation zone is on bottom, drilling ahead to get through the lost circulation zone may be the safest option to restore the integrity of the well rather than suspending drilling operations altogether to remedy the situation. It is appropriate for operators to specify how they will remedy an anticipated loss of circulation on bottom in the well’s DWOP or APD. If an operator experiences an unanticipated loss of circulation or a reduced drilling margin, the operator should provide notice and the operator’s plan for remedying the issue to BSEE within a reasonable timeframe.”

On incorporating API Standard 53: The incorporation of API Standard 53 4 Prevention Equipment Systems for Drilling Wells, Fourth Edition (July 2016). Industry is finalizing the 5th edition and once it is published, consideration for incorporation by reference should be taken to ensure the U.S. OCS is operating to the latest API standard for well control systems, allowing for continued safety improvements into the future, and is consistent with the remainder of operations around the world.

BOP Equipment & Testing: Industry requests that BSEE align the proposed changes to the Well Control Rule with the 21- day testing interval outlined in API Standard 53 4th Edition (July 2016). This 21-day period has proven to provide assurance of a safe and reliable system without causing premature wear on the equipment. The existing 14-day regulation requirement results in an additional 53% of testing over a 12-month period with a corresponding increase in wear of seals and packers. Industry believes that the testing frequency of API Standard 53 4th Edition (July 2016) is the optimum requirement for worldwide operations. The 21-day testing period of API Standard 53 (July 2016) aligns with the global practice and capabilities of the existing technology installed and utilized in the GOM. If BSEE does not accept industry’s proposal regarding a 21-day BOP testing interval, then we recommend BSEE engage in a pilot 21-day testing program to gather the data needed for assessing the difference in BOPE performance between 14 and 21-day testing intervals.

On Real Time Monitoring (RTM): Industry recommends that RTM be applied to operations using subsea BOPs and surface BOPs from a floating rig defined by API Standard 53, which is already incorporated by reference into the regulations. This would clarify the intent of the RTM system and provide a clear and complete framework for RTM requirements.

With respect to specific operations under RTM (workover, completions, etc.), the covered operations will be defined by each individual Operator’s RTM plan, which takes into account the risk of the operation, the individual Operator’s Safety and Environmental Management System framework, and alignment through the permitting activity for the specific operation. These types of operations are generally lower risk due to lower complexity, known bottom hole conditions, and in the case of decommissioning, non-flowing wells.

On Containment: Industry supports the proposed changes to 30 CFR 250.462, which would clarify the source control equipment requirements based on the operator’s Regional Containment Demonstration (RCD) or Well Containment Plan (WCP). Similar to spill equipment (e.g. skimmers, sorbent boom, etc.), the majority of source control equipment has no other commercial purpose and is used solely for emergency containment operations, such as capping stacks, top hats and subsea dispersant wands. This unique containment equipment is maintained by specialty companies, is readily available for inspection at any time, and is maintained and stored for immediate use if an event occurs. Other equipment listed for source control that has broad commercial purpose, such as Remotely Operated Vehicles and vessels are readily available and frequently inspected and maintained for safe and efficient normal operations.

On Economic Analysis: API contracted Calash and Blade Energy Partners to perform an independent economic impact analysis of the proposed revisions “Oil and Gas and Sulphur Operations in the Outer Continental Shelf—Blowout Preventer Systems and Well Control Revisions.” The report supports BSEE’s assertion that the proposed rule increases the competitiveness of America’s offshore energy industry. Consistent with the Executive and Secretarial Orders, undue burden has been removed. The report further demonstrates that, without further revision as proposed in Attachment A, an increase in inappropriately restrictive enforcement of the rules still poses a significant financial threat to the industry without a measurable safety benefit. Specifically, the prescriptive drilling margin could be used to limit restrict future offshore development.

The full letter along with recommended text proposed by the letter’s authors can be accessed here.