Interior Department Releases Final Well Control Regulations to Ensure Safe and Responsible Offshore Oil and Gas Development

Office of the Secretary

Result of Extensive Consultation, Evaluation after Deepwater Horizon Tragedy

4/14/2016

Date: April 14, 2016
Contact: Jessica Kershaw, Interior_Press@ios.doi.gov
Gregory Julian (BSEE), bseepublicaffairs@bsee.gov

WASHINGTON – Secretary of the Interior Sally Jewell and Director of the Bureau of Safety and Environmental Enforcement Brian Salerno today announced final well control regulations to reduce the risk of an offshore oil or gas blowout that could result in the loss of life, serious injuries or substantial harm to the environment. The regulations represent one of the most significant safety and environmental protection reforms the Interior Department has undertaken since Deepwater Horizon, and builds upon a number of reforms instituted over the last six years to strengthen and modernize offshore energy standards and oversight.

“The well control rule is a vital part of our extensive reform agenda to strengthen, update and modernize our offshore energy program using lessons learned from Deepwater Horizon,” said Secretary Jewell. “I applaud BSEE for their work to develop a rule that takes into consideration an intensive analysis of the causes of the tragedy, advances in industry standards, best practices, as well as an unprecedented level of stakeholder outreach.”

The regulations build upon findings and recommendations from several investigations and reports concerning the root causes of Deepwater Horizon and extensive consultation with industry groups, equipment manufacturers, federal agencies, academia and environmental organizations.

The final rule is a comprehensive regulation addressing all dimensions of well control, including more stringent design requirements and operational procedures for critical well control equipment used in oil and gas operations on the U.S. Outer Continental Shelf.

Specifically, the final rule addresses the full range of systems and equipment related to well control operations, with a focus on blowout preventer requirements, well design, well control casing, cementing, real-time monitoring and subsea containment. The measures are designed to improve equipment reliability, especially for blowout preventers and blowout prevention technologies. The rule requires operability of equipment through rigorous testing and provides for the continuous oversight of operations, all with the goal of improving the reliability of equipment and systems to protect workers’ lives and the environment from the potentially devastating effects of blowouts and offshore oil spills.

The regulations combine prescriptive and performance-based measures to ensure that oil and gas companies and offshore rig operators are cultivating a greater culture of safety that minimizes risk. Key features of the rule include requirements for blowout preventer systems, double shear rams, third party reviews of equipment, real-time monitoring data, safe drilling margins, centralizers, inspection intervals, and other reforms related to well design and control, casing, cementing and subsea containment.

“We listened extensively to industry and other stakeholders and heard their concerns loud and clear -- about drilling margins, blowout preventer inspections, accumulator capacity, and real-time monitoring,” said Assistant Secretary for Land and Minerals Management Janice Schneider. “This rule includes both prescriptive and performance-based standards that are based on this extensive engagement and analysis.”

Based on robust, technical comments received during the rulemaking process, several adjustments were made to provisions of the proposed rule that are reflected in the final version. These changes preserve stringent requirements regarding the safety drilling margin, interval testing and major inspections for blowout preventers, and also incorporate criteria for alternative practices that are subject to review, justification and approval. This rule provides flexibility so that regulatory oversight keeps pace with technological changes, provided future innovations can meet the rule’s standards for safety performance.

The proposed rule was based upon significant input received from various investigations and reports of the Deepwater Horizon tragedy, in which a cascade of multiple failures resulted in the loss of well control, an explosion and fire which claimed the lives of 11 individuals, and subsequent months-long spill. These investigations and reports include  the Bureau of Ocean Energy Management, Regulation and Enforcement/U.S. Coast Guard Joint Investigation-Forensic Equipment Analysis (September 2011); National Academy of Engineering (May 2012); National Oil Spill Commission (January 2011); Ocean Energy Safety Advisory Committee and from over 170 commenters. Interior’s Bureau of Safety and Environmental Enforcement (BSEE) thoroughly analyzed the results of the investigations, including nearly 370 specific recommendations, and conducted extensive outreach to derive further enhancements from stakeholder input, academia, and industry best practices, standards and specifications.

In May 2012, BSEE’s offshore energy safety forum brought together federal policy makers, industry, academia and others to discuss additional steps the Bureau and the industry could take to continue to improve the reliability and safety of blowout preventers. Following the forum, BSEE conducted more than 50 meetings with various industry groups, trade associations, regulators, operators, equipment manufacturers and environmental organizations, receiving more than 5,000 pages of technical comments from 170 submitters.

“We have made it a priority to engage with industry to strengthen our understanding of emerging technology, to participate with standards development organizations and to seek out the perspectives of other stakeholders,” said BSEE Director Brian Salerno. “We collected best practices on preventing well control incidents and blowouts to inform the development of this rule.  As a result, this is one of the most comprehensive offshore safety and environmental protection rules ever developed by the Department of the Interior.”

The new rule is in harmony with industry’s best practices, standards and equipment specifications. For example, new drilling rigs already are being built pursuant to updated industry standards that BSEE used as a foundation for the rule. Furthermore, most rigs comply with recognized engineering practices and original equipment manufacturers requirements related to repair and training. For companies that may need time to bring their operations into compliance, most of the requirements do not become effective until 3 months after publication of the final rule. Moreover, several requirements have more extended timeframes for compliance.

Since Deepwater Horizon, the Department has overhauled federal oversight by restructuring to provide independent regulatory agencies that have clear missions and are better-resourced to carry out their work, while keeping pace with a rapidly evolving industry. BSEE strengthened preparedness and planning regulations applicable to oil and gas companies operating offshore, and raised the bar through new requirements for well design, production systems, blowout prevention and well control equipment.