March 28, 2012 8:53 pm

Oil industry struggles to contain risks

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One of the main conclusions of the US government report into BP’s devastating spill in the Gulf of Mexico was that other countries with strong offshore oil industries such as Britain had better regulatory systems. While no rules could guarantee such a disaster would never happen, Britain was held up as having smarter regulations and risk controls.

Yet in the two years since the April 2010 Deepwater Horizon disaster, the North Sea has not been incident free. Over the past eight months alone, the UK has had to respond to two much smaller, but still serious, accidents which have once again thrown a spotlight on the safety and environmental risks of offshore drilling.

On Wednesday night, Total was still battling to contain a gas leak on its Elgin platform. Last August, an oil leak from an underwater pipeline serving Royal Dutch Shell’s Gannet Alpha platform spewed an estimated 218 tonnes into the sea, enough to fill a tenth of the capacity of an Olympic-size swimming pool, but still the biggest spill in UK waters for a decade.

Regulators have yet to start their investigations into the Total leak while those into the Shell incident continue, but officials insisted on Wednesday that, despite the headlines, Britain’s regulatory regime is robust.

Robert Paterson, health and safety director at Oil & Gas UK, the trade body, said the past 15 years had seen a 66 per cent reduction in injuries and a 70 per cent reduction in “major and significant hydrocarbon releases”.

It is a view generally shared by union leaders. Jake Molloy, regional organiser of the RMT, which represents oil workers, said the UK has a robust reporting system compared with other parts of the world. Nevertheless, things still go wrong because of poor management.

“It’s a good regime if it’s operated properly. But where it hasn’t operated [properly] ... you can have major incidents,” Mr Molloy said. “Some of the gas leaks we’ve had over the past years in the UK, it’s purely been down to good luck rather than management that people haven’t been killed.”

Enforcement notices
Total served on North Sea oil producers, 2005-2011
Shell 29
Petrofac 27
Maersk Oil 21
BP 14
Talisman 13
(Data reflect dutyholder at time notice was issued)
 Top UK oil and gas producers
1. BP  
2. Shell  
3. ConocoPhillips  
4. Total  
5. BG  
 Sources: Health & Safety Executive; Wood Mackenzie (2011 figures)

Britain’s current regulatory framework was introduced in 1990 after the explosions on the Piper Alpha platform in 1988 that killed 167 workers. Responsibility for handing out drilling permits and overseeing safety were split and are now held by the Department of Energy and Climate Change and the Health and Safety Executive respectively.

There were changes for companies too. The onus on proving there are adequate safety measures on offshore installations shifted away from the regulator and on to the companies.

Similar regulatory regimes are in place in Norway and the Netherlands, which share the North Sea with Britain. Yet Norway too has had its share of accidents and near misses. An official report published in November 2010 found that only luck saved Norway’s Statoil from a major accident on a drilling platform in May that year.

Regulators re-examined Britain’s offshore rules in light of the BP spill and generally found that standards were high. However an independent review by Geoffrey Maitland, published last December, warned there was no room for complacency and that it was useless if operators were not made to do what they said they would do. Regulators should therefore check that operators had concrete plans in place and were implementing them, the panel recommended.

Dangerous business: a history of North Sea accidents

April 1977 The blowout of the Ekofisk Bravo oil well in Norwegian waters causes the leakage of up to 202,000 barrels of oil into the North Sea

March 1980 Semi-submersible drilling rig Alexander L. Kielland capsizes in Norwegian waters killing 123 people

November 1986 A Boeing 234 Chinook helicopter crashes on a return flight from the Brent oilfield, killing 45 people

July 1988 167 workers are killed in an explosion and fire on Occidental Petroleum’s Piper Alpha rig in British waters, while 64 survived. It remains the world’s worst offshore oil disaster in terms of lives lost

July 1990 13 passengers and crew onboard a helicopter die attempting to land on the Brent Spar platform

August 2011 Royal Dutch Shell leaks more than 200 tonnes of oil into the sea, or 1,300 barrels, making it the biggest spill in UK waters for the past decade

March 2012 A leak at Total’s Elgin gas platform leads to the evacuation of 238 staff. Initial estimates put the spill at 4.5 tonnes so far, with the company still battling to bring it under control

One of the biggest concerns is the age of installations in the North Sea, which has been pumping oil and gas for over four decades. More than half of offshore installations have reached their expected original design life of 20 years – yet most are expected to keep operating for the foreseeable future.

The HSE last year launched a three-year inspection programme to determine how well companies are maintaining their installations. A previous round of inspections found widespread maintenance failures by offshore operators, with half of inspected installations found to be in poor shape.

Mr Molloy cited “ageing infrastructure, a lack of maintenance and installation integrity” among the union’s primary concerns.

The focus on safety is unlikely to go away, especially as companies explore ever deeper waters such as those west of the Shetland Islands. Environmental groups warned the Total gas leak underlined the risks of operating in more hostile environments.

“Drilling for gas and oil can never be safe,” said John Sauven, executive director of Greenpeace. “This incident shows us that if the oil and gas industry can’t contain leaks in supposedly less risky places like the North Sea then there’s no way they should be allowed to drill in fragile and high risk places like the Arctic.”

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