On 14 December 2011 the Department of Energy and Climate Change (DECC) announced the findings of an independent review of health and safety and environment standards for the UK offshore oil and gas regime. Chaired by Professor Geoffrey Maitland of Imperial College, the panel review was commissioned by ministers following regulatory scrutiny at UK, EU and international level following the Deepwater Horizon incident. The review panel was tasked with considering recommendations from official reports relating to Deepwater Horizon, their relevance to the UK and to inform any modifications to the present regime as necessary. There are a number of significant implications arising. Regulators have been asked to work with industry to produce an agreed response to the report and action plan by July 2012.

The key points arising out of the review

The review acknowledged amongst other points the strength and robustness in the existing regime, the high regard held for UK regulators both domestically and internationally and the extent to which pro-active efforts by the industry and regulators have been made to further enhance measures since Deepwater Horizon. However, the review also identified areas which could be improved and has set out recommendations for further action aimed at improving the effectiveness of the existing system.

Main areas for improvement

In proposing 26 recommendations the review identified six areas for key improvements. Each area had numerous recommendations, outlined below on a non exhaustive basis:-

  1. The assured implementation of safety and environmental management systems
  • The development of the concept of the ‘Environmental Assurance Plan’ presently being considered by industry by using the Environmental Statement or the Environmental Management System as live tools to facilitate continuous goal setting approach and improvement. 
  • The identification and consistent treatment of more generic aspects of environmental assurance documents to ensure focused attention on areas of localised or specific risk.
  • Industry taking a greater ownership role of existing regulatory requirements including the review of contractual arrangements for preparing and updating documents and devising tools to progress improvement in assessment and protection. 
  • The regular review and revision of guidance documents relating to offshore environmental impact assessment, enforcement and regulatory activities.
  • The independent periodic review of a selection of approved Environmental Statements and Oil Pollution Emergency Plans (focusing on high risk wells).
  • Regular testing of the deployment of capping devices and requirements for maintenance, testing, training and verification. 
  • R&D regarding subsea application of dispersants and associated guidelines. 
  1. Improved learning and processes for disseminating best practice
  • The industry should agree principles to ensure concerns about proprietary information and legal exposure do not prevent rapid knowledge sharing amongst operators which could help mitigate against serious incidents.
  • Regulators to work with industry to develop competency guidelines for different offshore job functions and audit processes.
  • Operating companies to take steps to ensure safety representatives are provided with appropriate training (above the minimum), are involved in safety cases and encouraged to report process safety concerns.
  1. Further integration of regimes with the existing regulatory system
  • More formal mechanisms should be established to ensure seamless working between regulators. The preferred option is the creation of a joint ‘Competent Authority’ similar to the mainland.
  1. Clarification of the command and control structures in the event of a spill
  • The point at which command responsibility for the containment/clean-up operation should transfer from operator or contractor to the Government should be clarified. 
  • The establishment of a communication function to brief media and Government in the event of an incident of national significance.
  • More frequent contingency exercises and smaller scale exercises.
  1. Robust arrangements to cover liabilities in the event of spills 
  • The requirement to submit to DECC independent third party verification by an insurance expert of both the estimated costs and the ability to pay including the suitability of insurance cover to meet costs prior to consent being provided to drill a well.
  • Third party costs for high risk deepwater wells should be revised upwards. The costs should cover a 90 day release.
  • DECC should discuss ecosystem/biodiversity damage with industry with a ‘view to introducing provision to cover this aspect’. The suggestion is that the provision may be a charge in the event of an incident to fund long term remedial work. 
  • The urgent adoption of a clear claims and compensation procedure taking into account evaluations of the Deepwater Horizon claims.
  1. Intensified R&D to develop improved avoidance, capping, containment, clean up and impact monitoring of major offshore oil spill incidents.
  • The industry should work with operating and service companies to identify potential technology solutions to lower the risks of deepwater drilling, monitor compliance, improve best drilling practice, oil spill remediation and clean-up.
  • Regulators should encourage the development and implementation of new technology addressing offshore safety and environmental concerns. 
  • Regulators should identify key offshore safety and environmental technology gaps. Government should make this a priority area for joint-industry government project funding.

A copy of the report of the review is available at www.decc.gov.uk/assets/decc/11/meeting-energydemand/ oil-gas/3875-offshore-oil-gas-uk-ind-rev.pdf