NEWSMAKER:

Offshore regulator's tenure marked by new rules, 'near misses'

HOUSTON -- The watchdog of the nation's offshore oil and gas industry is taking on a new position in offshore safety in this city: at the top of a major division of one of the world's largest nonprofits.

James Watson led the Bureau of Safety and Environmental Enforcement from just after its founding in the wake of the 2010 Deepwater Horizon drilling rig explosion and oil leak in the Gulf of Mexico until he stepped aside last week, making way for U.S. Coast Guard Vice Adm. Brian Salerno to take over. Both BSEE and its sister agency, the Bureau of Offshore Energy Management, were formed from the division of the former Minerals Management Service.

Watson's new role will be as president of the Americas division of the American Bureau of Shipping, one of the largest marine classification organizations in the world certifying the integrity of vessels and offshore structures. Founded in New York during the Civil War, ABS moved its global headquarters to Houston in the early 1990s and today has more than 150 offices in 70 countries.

Taking time off from packing for his move, Watson reflected on his time helming BSEE in a telephone interview with EnergyWire. Though proud of what BSEE has accomplished during its short time of existence, he acknowledged that there was still much left to be done but said he feels the agency is on the right track.

"There had not been enough maintenance of rules as the industry pushed further and further offshore and goes into deep well sites, and this is going to be continuous," Watson said. "There's no point where we just stop updating the standards for which we do this oversight."

As an example, Watson pointed to BSEE's newly proposed offshore oil and gas production safety rule, which follows the now-instituted drilling safety rule. The agency posted its proposed rulemaking for offshore safety and opened it to public comment two weeks ago. Its drafters say that the rules have not been updated since the 1980s and needed reworking to reflect the huge advances that have occurred since then.

Though the industry has had only a couple of weeks to digest the proposal, Watson expressed satisfaction with the reactions that he's heard so far. "We think it's a pretty good rule," he said. "It's been pretty well received."

New rules governing the design, maintenance and testing of blowout preventers (BOPs) are also still pending, but Watson insisted that work on that front is moving ahead as planned. The industry has experienced two well blowouts in the Gulf of Mexico this summer, both involving shallow-water natural gas and condensate wells.

Watson said BSEE is working hard to finalize new BOP rules, and he expects proposals to be floated likely before the end of this year.

"We've had a lot of workshops, people coming in, we have an open door to the folks that have technical information to share about BOPs, we've had white papers and everything," Watson said. "Now we're to this stage where this rule is being drafted as a notice of proposed rule."

"I'm optimistic that it's going to be published ... in a few months, in the next fiscal year for sure, if not even before this calendar year is out," he added.

Tracking 'the incidents that didn't happen'

Watson just launched another effort toward improving safety that will be left to his successor to bring to fruition.

Last week, BSEE announced that it would be partnering with the Department of Transportation's Bureau of Transportation Safety (BTS) in an attempt to develop a system whereby offshore energy companies could confidentially disclose the occurrence of "near misses," or incidents where major accidents, injuries or environmental damages were narrowly avoided.

Some major oil and gas companies already track near-miss incidents, but only internally, and the data they collect aren't made public. Watson said he'd like to see a system in place that allows and encourages companies to share this data with each other, and confidentially with the government, so that all stakeholders could potentially learn from near-miss data and build upon it. He said BSEE is also reaching out to the industry nonprofit Center for Offshore Safety to help.

"Oftentimes, there are really good lessons learned from those near misses, either for training purposes for the people or for equipment, and we think there probably are some lessons to be learned for improving safety equipment, and maybe even our own inspection processes or our own permitting processes," Watson explained. BTS is already authorized to collect data and keep them confidential for companies that are reporting them, making it a good partner in this endeavor, he said.

Environmental groups have called for a public near-miss reporting system ever since the Deepwater Horizon accident. Watson said keeping it confidential and voluntary will be essential to gaining broad participation by offshore drillers and that even aggregate data collected by BTS, not specific to companies, will help improve health, safety and environmental protections across the industry.

"The key is to get voluntary reporting," he said. "There's certainly no way we can force companies to give us information that they don't want to give us unless there's a law or regulation that requires that, and those laws and regulations are limited to just these incidents where somebody has actually been killed or injured or there's serious property damage or environmental damage.

"We want to know the incidents that didn't happen."

A method for reporting near-miss incidents -- accidents or injuries avoided -- to a governmental oil and gas regulator has never been proposed before. If it ever becomes a reality, this new reporting system can be added to the list of other changes made in BSEE that have Watson's fingerprints on them. The former bureau director said he's excited by its potential.

"We're keen onto this, the Center for Offshore Safety is keen to do it, and we think that it's the right thing to do," he said. "The devil is in the details, so we're hoping this BTS collaboration will find the ticket forward on how to do this."