Oil and gas drilling companies are susceptible to even tougher enforcement under a new policy announced by the Occupational Safety and Health Administration.
Under the policy, oil and gas well drilling, well operations, and support work are designated by OSHA to be “high- hazard” for the Severe Violator Enforcement Program (SVEP), said Tom Galassi, the agency’s director of enforcement. His announcement came at a meeting of the American Bar Association’s Occupational Safety and Health Committee on March 18.
The new designation applies to three North American Industrial Classification System (NAICS) groups, Galassi said. They are:
- NAICS 211111, crude petroleum and natural gas extraction;
- NAICS 213111, drilling oil and gas wells; and
- NAICS 213112, support activities for oil and gas operations.
The “high hazard” designation means that if OSHA inspectors find multiple willful or repeat violations or issue failure-to-abate notices, or a combination of these violations and notices, the employer can be placed in SVEP, according to the program directive (https://www.osha.gov/OshDoc/Directive_pdf/CPL_02-00- 149.pdf).
The designation comes after government data for 2012 that showed a marked difference between the fatality rate for oil, gas, and mineral extraction workers compared to the general workforce. While the overall workforce fatality rate was 3.4 deaths for every 100,000 full-time workers, the rate for extraction workers was 15.9 deaths for the same number of workers, according to the Bureau of Labor Statistics. The rate is misleading as a tool for addressing the oil and gas industry alone, however, because it lumps fatalities in oil and gas with those experienced by the entire mineral extraction industry, including coal and other mineral resources extraction.
Galassi’s announcement has left industry employers wondering how OSHA plans to apply the new policy. The agency has yet to issue guidance on whether the expanded SVEP coverage applies to all activities performed by the industry or will be limited to certain hazards.
“No one knows, specifically, what those policies are,” Jackson Lewis attorney Tressi Cordaro told Bloomberg BNA March 24. Cordaro moderated the ABA panel at which Galassi spoke.
SVEP has been used to enforce OSHA’s National Emphasis Programs (NEPs), but the oil and gas industry has never been designated for national emphasis. NEPs are designed to target special concerns identified by the agency: falls, amputations, combustible dust, process safety management, silica, lead, trenching, and shipbreaking. However, several regional emphasis programs cover the oil and gas industry, and another ABA panelist, union safety activist Eric Frumin of Change to Win, told Bloomberg BNA that with the new policy, those regional oil and gas emphasis programs will carry the same weight as the NEPs.
Employers have every incentive to avoid a SVEP designation. Once tagged as a severe violator, the employer's other worksites are vulnerable to OSHA inspections, even if these sites have not experienced accidents or complaints. A company cannot exit SVEP until it has been in the program – and maintained a clean OSHA record – for at least three years. Even then, it must convince OSHA it deserves to leave SVEP. An employer's only option to avoid the three-year oversight is to challenge successfully violations that triggered the severe violator designation in the first place through the Occupational Safety and Health Act’s legal process.