[Federal Register Volume 74, Number 115 (Wednesday, June 17, 2009)]
[Proposed Rules]
[Pages 28639-28654]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-14211]
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DEPARTMENT OF THE INTERIOR
Minerals Management Service
30 CFR Part 250
RIN 1010-AD15
[Docket ID MMS-2008-OMM-0003]
Safety and Environmental Management Systems for Outer Continental
Shelf Oil and Gas Operations
AGENCY: Minerals Management Service (MMS), Interior.
ACTION: Proposed rule.
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SUMMARY: The MMS proposes to require operators to develop and implement
a Safety and Environmental Management System to address oil and gas
operations in the Outer Continental Shelf. The Safety and Environmental
Management System would consist of four elements--Hazards Analysis,
Management of Change, Operating Procedures, and Mechanical Integrity--
that, until now, have not been covered in our regulations. The MMS
analyzed accident panel investigation reports, incident reports, and
incidents of noncompliance and determined that the root cause of most
safety and environmental accidents and incidents is one or more of
these four elements. The MMS believes that requiring operators to
implement a Safety and Environmental Management System will reduce the
risk and number of accidents, injuries, and spills during Outer
Continental Shelf activities.
DATES: Submit comments by September 15, 2009. The MMS may not fully
consider comments received after this date. Submit comments to the
Office of Management and Budget on the information collection burden in
this proposed rule by July 17, 2009. This does not affect the deadline
for the public to comment to MMS on the proposed regulations.
[[Page 28640]]
ADDRESSES: You may submit comments on the rulemaking by any of the
following methods. Please use the Regulation Identifier Number (RIN)
1010-AD15 as an identifier in your message. See also Public
Availability of Comments under Procedural Matters.
Federal eRulemaking Portal: http://www.regulations.gov.
Under the tab ``More Search Options,'' click ``Advanced Docket
Search,'' then select ``Minerals Management Service'' from the agency
drop-down menu, then click the submit button. In the Docket ID column,
select MMS-2008-OMM-0003 to submit public comments and to view
supporting and related materials available for this rulemaking.
Information on using Regulations.gov, including instructions for
accessing documents, submitting comments, and viewing the docket after
the close of the comment period, is available through the site's ``User
Tips'' link. The MMS will post all comments.
Mail or hand-carry comments to the Department of the
Interior; Minerals Management Service; Attention: Regulations and
Standards Branch (RSB); 381 Elden Street, MS-4024, Herndon, Virginia
20170-4817. Please reference ``Safety and Environmental Management
Systems for Outer Continental Shelf Oil and Gas Operations, 1010-AD15''
in your comments and include your name and return address.
Send comments on the information collection in this rule
to: Interior Desk Officer 1010-AD15, Office of Management and Budget;
202-395-6566 (fax); e-mail: [email protected]. Please also send
a copy to MMS.
FOR FURTHER INFORMATION CONTACT: For questions on technical issues
contact David Nedorostek, Safety and Enforcement Branch at
[email protected] or (703) 787-1029.
SUPPLEMENTARY INFORMATION: On May 22, 2006, MMS published an Advance
Notice of Proposed Rulemaking (ANPR) in the Federal Register (71 FR
29277) to seek comments and information on how to improve our
regulatory approach to Safety and Environmental Management Systems
(SEMS) for operations conducted in the Outer Continental Shelf (OCS).
The ANPR examined a variety of approaches to implementing SEMS from
voluntary to mandatory, and from partial SEMS to comprehensive SEMS.
During the ANPR comment period, eight comments were received from
the public. One comment recommended keeping SEMS voluntary. Three
comments recommended keeping SEMS voluntary, but if MMS decided to
mandate a SEMS, it should be a partial SEMS requirement due to the
number of accidents that are related to the four critical elements
identified. A partial SEMS would consist of: Hazards Analysis,
Management of Change, Operating Procedures, and Mechanical Integrity.
The other four comments received recommended that MMS move forward with
a comprehensive SEMS approach, i.e., the 12 elements listed in American
Petroleum Institute's (API) Recommended Practice (RP) 75, Development
of a Safety and Environmental Management Program for Offshore
Operations and Facilities, Third Edition, May 2004. A comprehensive
SEMS would consist of:
Safety and environmental information;
Hazards analysis;
Management of change;
Operating procedures;
Safe work practices;
Training;
Mechanical integrity;
Pre-startup review;
Emergency response and control;
Investigations of incidents;
Auditing; and
Records and documentation.
Most comments expressed that API RP 75 provides excellent guidance
on developing a SEMS plan, and allows operators and contractors to
tailor the program to their individual needs and corporate cultures.
The commenters do not support MMS approving SEMS plans, rather, a third
party should determine or certify whether a SEMS plan is viable,
because MMS may not have the resources and expertise to approve a
minimum of one plan for each OCS operator.
After reviewing and discussing the comments, MMS proposes to
require each offshore lessee/operator to develop, implement, maintain,
and operate under a SEMS program composed of the four elements. This
decision was based on incident investigation findings, and performance
reviews with operators which confirmed that the majority of the
accidents on the OCS are related to the four elements in the proposed
rule (i.e., Hazards Analysis, Management of Change, Operating
Procedures, and Mechanical Integrity). Since the existing regulations
(30 CFR 250) do not specifically address these four elements, MMS finds
that it is appropriate to cover these SEMS elements in its rule. Each
SEMS program would be tailored to the scale and complexity of the
company's operation, and structured to include accountability for
contractors and subcontractors. The SEMS program would describe
management commitment to safety and the environment, as well as
policies and procedures to assure safety and environmental protection
while conducting OCS operations (including those operations conducted
by contractor and subcontractor personnel). As company management and
worker attitudes play a critical role in determining the safety of
operations and environmental protection, a SEMS program would play a
major role in focusing the attention of top management on safety and
the marine and coastal environments. This will assure to the greatest
extent possible, a broad organizational commitment to human safety and
environmental protection.
The MMS proposes that the SEMS program contain the four elements
mentioned above which are described in greater detail as:
Hazards Analyses
This element would require that a hazards analysis (facility level)
be conducted for all facilities. The purpose of the analysis is to
identify, evaluate, and where unacceptable, reduce the likelihood and/
or minimize the consequences of uncontrolled releases of oil and gas
and other safety or environmental incidents. With respect to analysis
methods, MMS suggests that operators use API RP 14 C, Recommended
Practice for Analysis, Design, Installation, and Testing of Basic
Surface Safety Systems for Offshore Production Platforms, Seventh
Edition, March 2001; or API RP 14J, Recommended Practice for Design and
Hazards Analysis for Offshore Production Facilities, Second Edition,
May 2001, as guides, as well as other accepted documents and practices.
In addition, this element would also require that a job hazard analysis
(operations/task level) be performed to identify and evaluate hazards
of a job/task for the purpose of hazards control or elimination.
Management of Change (MOC)
This element would require lessees/operators to document and
analyze all proposed facility changes to determine possible adverse
safety and environmental impacts, with the exception of replacement in
kind. There are a number of specific topics to be covered in this
analysis, including changes in: facilities and procedures, personnel,
work practices, equipment (including addition of new equipment or
modifications to existing equipment), and the safety and environmental
implications of these changes.
[[Page 28641]]
Operating Procedures
This element would require OCS oil and gas operators' management
officials to include requirements for written facility operating
procedures designed to enhance efficient, safe, and environmentally
sound operations. While operating procedures are reviewed as part of
MOC procedures, MMS would also recommend that these procedures be
reviewed separately to ensure that they reflect current practices.
Mechanical Integrity
This element would require that procedures are in place to ensure
that equipment is designed, fabricated, installed, tested, inspected,
monitored, and maintained in a manner consistent with appropriate
service requirements, manufacturer's recommendations, and industry
standards to promote safe and environmentally sound operations in the
OCS.
The proposed decision to require a SEMS program consisting of the
four elements is based on incident investigation findings, an analyses
of Incidents of Noncompliance (INC) data, performance reviews with
operators, and the fact that existing MMS regulations do not address
these four elements. Requiring operators to implement these four
elements of an integrated SEMS program would address human factor
issues in safety and environmental protection. Most industrial
accidents and spills result from human error or organizational errors,
not device or equipment failure. These four elements would address
these types of accidents by encouraging the use of sound management
principles and safety procedures.
The MMS's evaluation of safety information, which led us to the
decision to require a SEMS program, included the following:
Accident Panel Investigation Reports
Accident panel investigation reports are prepared by MMS for select
major accidents. An analysis of 33 accident panel reports prepared by
MMS from 2000-2007 revealed that many fatalities and injuries occurred
while performing routine tasks such as drilling, construction, coil
tubing operations, and crane and other lifting events.
In addition, most of these accident panel reports made
recommendations that relate to one of the following four SEMS elements:
Hazards Analysis, Management of Change, Operating Procedures, and
Mechanical Integrity.
The accident panel reports can be viewed at the following Web site
address:http://www.gomr.mms.gov/homepg/offshore/safety/acc_repo/accindex.html
Contributing Causes
--------------------------------------------------------------------------------------------------------------------------------------------------------
Hazards Operating Mechanical Management of Fatality
MMS report analysis procedures integrity change Injury number number
--------------------------------------------------------------------------------------------------------------------------------------------------------
MMS 2007-058...................................... X X ............... X ............... 1
MMS 2007-045...................................... X X ............... X ............... 1
MMS 2007-037...................................... X X ............... ............... ............... 1
MMS 2006-070...................................... X X X ............... ............... 1
MMS 2006-058...................................... X X ............... ............... ............... ...............
MMS 2006-047...................................... X X ............... ............... ............... ...............
MMS 2006-039...................................... ............... X ............... ............... ............... ...............
MMS 2006-021...................................... ............... X ............... ............... ............... ...............
MMS 2006-002...................................... X X ............... ............... ............... 1
MMS 2005-027...................................... ............... X X X ............... ...............
MMS 2005-007...................................... ............... X X ............... ............... ...............
MMS 2004-078...................................... X X ............... X ............... 1
MMS 2004-075...................................... X X X ............... ............... ...............
MMS 2004-048...................................... ............... X X ............... ............... ...............
MMS 2004-046...................................... X X ............... X 3 ...............
MMS 2004-010...................................... X ............... ............... ............... ............... ...............
MMS 2004-004...................................... X ............... ............... ............... ............... 1
MMS 2003-068...................................... ............... X ............... ............... ............... ...............
MMS 2003-046...................................... ............... X ............... ............... ............... ...............
MMS 2003-023...................................... ............... ............... ............... X ............... ...............
MMS 2002-080...................................... ............... ............... ............... X ............... ...............
MMS 2002-076...................................... X ............... X X ............... 1
MMS 2002-075...................................... X ............... ............... ............... ............... 1
MMS 2002-062...................................... ............... ............... ............... X 2 1
MMS 2002-059...................................... X ............... X ............... 1 1
MMS 2002-040...................................... ............... ............... X ............... ............... ...............
MMS 2001-084...................................... ............... ............... X X ............... ...............
MMS 2001-045...................................... ............... ............... X X ............... 1
MMS 2001-042...................................... X ............... X X ............... 1
MMS 2001-010...................................... X ............... ............... X 1 ...............
MMS 2001-009...................................... ............... X ............... X ............... ...............
MMS 2001-005...................................... X ............... ............... X ............... ...............
MMS 2000-089...................................... X ............... X ............... ............... 1
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Total = 33.................................... Total = 19 Total = 18 Total = 12 Total = 15 Total = 7 Total = 14
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The table shows that the accidents covered by 16 of the 33 panel
reports resulted in a combined 21 fatalities and injuries. The analysis
done on the accidents identified six contributing causes that are
related to the four elements: (1) A lack of communication between the
operator and contractor(s); (2) no job hazard analysis was conducted
prior to beginning work, or there was a lack of written procedures; (3)
an onsite supervisor failed to enforce existing procedures or
practices; (4) a lack of written safe work procedural guidelines; (5)
integrity of the facilities
[[Page 28642]]
and equipment were not maintained according to recommended practices;
and (6) workplace hazards were not identified or corrected. The MMS
maintains that at least some of these accidents could have been
minimized or even prevented if the operator had implemented a SEMS.
Incident Analysis
The MMS also conducted a study of 1,443 incidents that occurred in
OCS waters from 2001-2007 to determine if these events were associated
with any of the 4 SEMS elements. The events reviewed included 41
fatalities, 302 injuries, 10 losses of well control, 11 collisions, 476
fires, 356 pollution events, and 224 crane and other lifting events
(e.g., hoists, winches, etc.).
The majority of incidents occurring in the OCS were related to
operational and maintenance procedures or human error. These incidents
are not addressed by the hardware-oriented compliance inspections used
by MMS OCS inspectors. Additionally, of the 1,443 incidents involving
injuries, fires, and pollution on or from production facilities, only
25 were due to failure of a safety device. The majority of the 1,443
incidents had at least 1 of the following 4 elements as a contributing
cause for the event occurring:
------------------------------------------------------------------------
Number of
SEMS element incidents
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Management of Change....................................... 108
Hazards Analysis........................................... 185
Mechanical Integrity....................................... 475
Operating Procedures....................................... 481
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OCS Spill Analysis
The MMS performed a root cause analysis of OCS spills over 50
barrels (bbls) from 2001-2007 with respect to the 4 elements. While
root causes could be linked to failing to properly implement 1 of 4
elements, operating procedures and mechanical integrity contributed to
the greatest number of these spills, and the 4 elements together could
account for over \3/4\ of the OCS spills.
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2001 2002 2003 2004 2005 2006 2007 Sums
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Total OCS spills >50 bbl--Multiple spills, each 8 13 11 26 42 16 5 ......
>50 bbl, may occur during a single event. Spill
categories include: crude/condensate; refined
petroleum (diesel, mineral oil); synthetic-
based fluids; and chemical (e.g., ZnBr,
Glycol)........................................
Spills Related to Weather/Hurricanes............ ...... 4 ...... 15 35 4 1 ......
Spill Events Unrelated to Weather............... 8 9 11 9 7 12 4 ......
Suggested Root Cause--Related to API RP 75:
----------------------------------------------------------------------------------------------------------------
Hazards Analysis............................ 1 1 ...... ...... 1 1 ...... 4
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Management of Change........................ ...... 1 ...... 1 1 1 ...... 4
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Operating Procedures........................ 3 4 5 5 3 5 1 26
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Mechanical Integrity........................ 4 1 2 1 1 2 3 14
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Incidents of Noncompliance (INCs)
The MMS inspectors issue three General INCs (G-INCs) that
potentially relate to elements within a SEMS. The following summarizes
these INCs:
G-110 (Operations conducted in a safe and workmanlike
manner),
G-111 (Equipment maintained in a safe condition), and
G-112 (Safety of personnel and all necessary precautions
taken to correct and remove any hazards).
The MMS issued 3,132 of these types of G-INCs during 2003-2007 for
drilling and production activities. Of these 3,132 G-INCs, 2,964
(approximately 95 percent) were directly related to one or more of the
following four SEMS elements: Hazards Analysis (including job hazard
analysis), Operating Procedures, Mechanical Integrity, and Management
of Change. The following table depicts the G-INCs written for drilling
and production activities:
G-INCs Issued From 2003-2007
------------------------------------------------------------------------
Drilling Production
SEMS elements percentage percentage
------------------------------------------------------------------------
Management of Change........................ 10 11
Hazards Analysis............................ 25 16
Operating Procedures........................ 26 24
Mechanical Integrity........................ 39 49
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The MMS also reviewed records of violations of Environmental INCs
(E-INCs). The E-INCs focus on water quality as it relates to mud/oil/
chemical spills and marine debris (E-100 thru E-202). Over the past 7
years, MMS has issued about 150 E-INCs for non-compliant production and
drilling operations during field inspections each year. The data
indicate no discernible trend of improvement by industry over the past
7 years (see the following tables covering 2001-2007).
The MMS has issued many other INCs that relate to environmental
protection, including those that address flaring and venting
violations, broad-based non-compliance with lease stipulations,
approved plans, and permit applications. Similar trends to those
previously described for the issuance of E-INCs are also observed in
the issuance of other INCs that address environmental concerns.
[[Page 28643]]
Ratio of Total Production Operation E-INCs and Number of Components
Inspected per Year
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Components
Year Total E-INCs inspected Ratio *
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2001.......................... 156 66,065 0.0024
2002.......................... 173 68,355 0.0025
2003.......................... 134 66,056 0.0020
2004.......................... 141 67,267 0.0021
2005.......................... 122 61,520 0.0020
2006.......................... 133 56,930 0.0023
2007.......................... 111 46,384 0.0024
------------------------------------------------------------------------
* Rounded.
Ratio of Total Drilling Operation E-INCs and Number of Wells Spud per
Year
------------------------------------------------------------------------
Year Total E-INCs Wells spud Ratio *
------------------------------------------------------------------------
2001.......................... 19 1,264 0.015
2002.......................... 4 941 0.004
2003.......................... 10 893 0.011
2004.......................... 11 915 0.012
2005.......................... 10 817 0.012
2006.......................... 8 763 0.010
2007.......................... 7 607 0.012
------------------------------------------------------------------------
* Rounded.
As a result of MMS research conducted on accident panel
investigations and reports, incident analysis, and INCs, it appears
that equipment failure is rarely the primary cause of the incident or
accident. This is due to technological advances which have provided
industry with very efficient and reliable equipment for finding,
producing, and transporting offshore oil and gas. However, in most
cases, accidents and oil spills can be traced to human error and/or
organizational failures. For that reason, operators must ensure that
safe and environmentally sound operating practices are followed. The
MMS finds it important to focus our efforts on ensuring that those who
use the equipment do so safely and responsibly. More progress can be
made toward achieving our goal of clean and safe OCS operations by
concentrating on human behavior. The MMS regulations, historically,
have focused on the installation, operation, testing, and inspection of
safety and pollution prevention equipment, and risk based safety
practices related to personnel. Ensuring proper equipment operation,
however, does not necessarily ensure clean and safe operations. The
research consistently points to the disproportionate contribution of
human and organizational errors to accidents and oil spills. The MMS
believes that operations are safer when management systematically
encourages individuals to be safety conscious, provides adequate
resources, fosters safe worksite practices, promotes good housekeeping
habits, and assures that workers are properly trained. The MMS believes
that if OCS oil and gas operations are better planned and organized,
then the likelihood of injury to workers and the risk of environmental
pollution will be further reduced.
While this proposed rule requires each offshore lessee/operator to
develop, implement, maintain, and operate a SEMS program consisting of
the 4 elements identified in this proposed rule, nothing prohibits the
lessee/operator from adopting a more comprehensive SEMS approach as set
forth in API RP 75. The MMS encourages industry to incorporate the
comprehensive elements in their SEMS program.
In addition to industry complying with the 4 elements and electing
to model their SEMS program after a comprehensive SEMS program such as
API RP 75, lessees and operators are also encouraged to consider
implementing the International Organization of Standardization (ISO)
9001, Quality Management Systems--Requirements; and ISO 14001,
Environmental Management Systems--Requirements.
This proposed rule would require lessees and operators to have
their SEMS program audited at least once every 3 years by either an
independent third party or by qualified personnel designated within the
company. A knowledgeable and experienced auditor would audit the SEMS
program to determine if an OCS lessee and operator is complying with
the SEMS plan. These audits would be conducted in an office environment
and/or in the field, and cover both a broad range of activities or be
focused on a particular area (e.g., records, gas compressors, blowout
preventers, or documentation) as appropriate. Auditors must meet the
qualifications as proposed in this rule.
The MMS may, at our discretion, evaluate independent third parties,
meet with lessees and operators to periodically review the results of
SEMS program audits, and conduct announced or unannounced evaluations
with MMS personnel and/or independent third parties to determine SEMS
plan compliance and effectiveness. The MMS would be more inclined to
conduct a SEMS evaluation on an operator that has a history of poor
performance. Poor performance may be based on the number and/or type of
incidents of non-compliance, civil or criminal penalties, injuries,
fatalities, accidents, fires, losses of well control, explosions,
collisions, pollution incidents, and/or damage to the marine
environment. Lessees and operators would be responsible for all costs
associated with any independent third party evaluation of their SEMS
plan.
In this proposed rule, MMS would require operators, on an annual
basis, to submit the number of hours worked for all company and
contract employees (people on the facility) during production,
drilling, pipeline, and construction activities (which includes the
adding or removing of equipment and/or facility modifications). This
information is submitted on Form
[[Page 28644]]
MMS-131 on an annual basis. We use the ``hours worked'' information to
calculate Occupational Safety and Health Administration-style safety
and health indices. The MMS considers the information to be significant
to help us evaluate industry's continued improvement of safety and
environmental management in the OCS. Information on Form MMS-131
includes company identification, number of company/contractor injuries
and/or illnesses suffered, company/contractor hours worked, EPA
National Pollutant Discharge Elimination System (NPDES) permit non-
compliances and oil spill volumes for spills less than 1 barrel. All
pieces of information are reported as collected during one calendar
year. We use the information obtained from this form to develop
industry average incident rates that help to describe how well the
offshore oil and gas industry is performing. Using the produced data
allows MMS to better focus our regulatory and research programs on
areas where the performance measures indicate that operators are having
difficulty meeting our expectations.
Additionally, operators can use the data to make individual
comparisons and evaluate trends. Knowing how the offshore industry as a
whole is doing, and where their own company ranks, provides company
management with information to focus on safety and environmental
improvement efforts. This information also provides offshore operators
with a credible data source to demonstrate how industry and individual
operators are performing.
The MMS does not want the SEMS program to be a paperwork exercise
conducted solely to meet regulatory requirements. Such an effort would
defeat the purpose of the proposed rule, which is to promote an
attitude, or performance mentality, that helps to achieve operational
safety and environmental protection through awareness and planning. The
MMS knows that many lessee/operators have already integrated similar
management programs into their operations and expects that most of the
remaining operators have some type of informal or undocumented
management program that addresses safety and environmental policies and
procedures. The MMS understands that the development and implementation
of this type of program may place an additional burden on some OCS
operators, in the short-term. However, MMS believes that a SEMS program
would benefit all lessees/operators in that it would identify and
mitigate hazards, assure safe work practices, manage changes, and
properly train offshore employees and contractors.
Comments on this proposed SEMS rule are requested. Commenters are
encouraged to submit detailed comments with justifications or
background information supporting their responses. In addition, we
intend to conduct at least one public workshop on this proposed SEMS
rule during the upcoming comment period. We will announce the time and
location in a separate document.
Procedural Matters
Regulatory Planning and Review (Executive Order (E.O.) 12866)
This proposed rule is not a significant rule as determined by the
Office of Management and Budget (OMB) and is not subject to review
under E.O. 12866.
(1) This proposed rule would not have an annual effect of $100
million or more on the economy. The MMS estimates that it would cost
OCS oil and gas lessees and operators $12,673,967 to comply with the
requirements in the proposed rulemaking. This estimate includes the
initial startup and development costs for lessees and operators to
develop and implement the proposed four elements of a SEMS. This is a
one-time cost of approximately $4,590,000. The MMS estimates that
annual recurring cost of the proposed rulemaking to be approximately
$8,083,967 for maintaining SEMS after implementation. Details on the
estimated costs for this rulemaking are further discussed in the
Regulatory Flexibility Act section. The proposed rulemaking would not
adversely affect in a material way the economy, productivity,
competition, jobs, the environment, public health or safety, or State,
local, or tribal governments or communities.
(2) This proposed rule would not create a serious inconsistency or
otherwise interfere with an action taken or planned by another agency.
(3) This proposed rule would not alter the budgetary effects of
entitlements, grants, user fees, or loan programs or the rights or
obligations of their recipients.
(4) This proposed rule would not raise novel legal or policy issues
arising out of legal mandate, the President's priorities, or the
principles set forth in E.O. 12866.
Regulatory Flexibility Act
While the proposed rule would affect a substantial number of small
entities, it would not have a significant economic effect on a
substantial number of small entities under the Regulatory Flexibility
Act (5 U.S.C. 601 et seq.).
Small lessees/operators that operate under this rule fall under the
Small Business Administration's (SBA) North American Industry
Classification System (NAICS) codes 211111, Crude Petroleum and Natural
Gas Extraction, and 213111, Drilling Oil and Gas Wells. For these NAICS
code classifications, a small company is one with fewer than 500
employees. Based on these criteria, an estimated 70 percent (91
operators) of them are considered small. This proposed rule, therefore,
would affect a substantial number of small entities.
Assumptions
In order to more accurately represent costs associated with
implementing this rule, MMS made the following assumptions concerning
the costs associated with the requirements in the proposed rulemaking.
Because of the wide variation in company size, we have
grouped operators into three classes (High, Moderate, and Low
Activity).
We have used the results of 10 years of voluntary SEMS
Performance Measures reporting by OCS operators to determine that 70 of
the 130 operators, at a minimum, are using SEMS. We suspect, however,
that this number is higher based on previous Annual Performance Review
Meetings where voluntary SEMS was a discussion topic.
We have used actual costs from safety management system
vendors to derive our estimated costs for industry.
We assume there are no new costs for the estimated 70
operators who are currently using SEMS, as their systems have already
been developed and they are expending funds to manage this process.
However, we have calculated costs associated with compliance that
require new work on their behalf and continued maintenance/
recordkeeping activities.
The estimated cost for the 60 remaining operators to
implement, develop, and manage the SEMS program is based on the
operator having an internet-based system, which has been determined to
be the most common approach used by operators.
Many operators are of such a modest size that a purchased
template from a safety management system vendor would meet their needs
and would comply with the proposed regulation. They would not need to
spend additional money to customize a template for their use.
High, Moderate, and Low Activity Definitions
Oil and gas operators in the OCS vary substantially in size and the
degree in which they are engaged in extracting oil
[[Page 28645]]
from the OCS. Of the 130 identified operators, there is a range in OCS
oil and gas activity from as little as 1 complex to nearly 500
facilities; and from as low as 15,000 barrels of oil equivalent (BOE)
annual production to more than 300 million BOE annual production.
Because of this tremendous variation in activity, MMS divides operators
into high, moderate, and low activity for the purpose of measuring
their performance. Using these same criteria (following this
paragraph), we have used these size categories to estimate costs
associated with developing, managing, and fulfilling reporting
requirements for the proposed SEMS rule.
The criteria that categorizes an operator as a high, moderate, or
low activity is as follows:
An operator that qualifies under the high activity
category would need to meet the following criteria:
Produce at least 10 million or more BOE (MMBOE) per year.
Operate a minimum of 1,000 in-service components or more
during the year.
An operator that qualifies under the moderate activity
category would need to meet the following criteria:
Produce at least 1 MMBOE, but less than 10 MMBOE, per
year.
Operate a minimum of 100 in-service components, but less
than 1,000 in-service components during the year.
An operator that qualifies under the low activity category
would need to meet the following criteria:
Produce less than 1 MMBOE per year.
Operate less than 100 in-service components during the
year.
Development of SEMS Program
After reviewing the voluntary SEMS submittals (OCS Performance
Measures Data, Form MMS-131) received from 1996-2006, an average of 70
operators (54 percent = 70/130) reported having a SEMS-type program in-
place. The other 60 operators (46 percent = 60/130) may not have a SEMS
program in-place or may have a SEMS program but are not participating
in the voluntary SEMS program.
The following table shows a breakdown by operator activity category
(high, moderate, low):
----------------------------------------------------------------------------------------------------------------
Number of Number of Total number of
Activity category operators operators with operators by
without SEMS SEMS activity
----------------------------------------------------------------------------------------------------------------
High...................................................... 0 13 13
Moderate.................................................. 12 29 41
Low....................................................... 48 28 76
-----------------------------------------------------
Total................................................. 60 70 130
----------------------------------------------------------------------------------------------------------------
As shown from the table, all high activity operators have a SEMS
program in-place; the moderate activity shows over 70 percent are
currently participating in a SEMS program; and finally, the low
activity shows almost 40 percent are using a SEMS program.
Information received from consultants and vendors stated that the
cost for an operator to buy a generic SEMS template is approximately
$2,500. If an operator decided to modify the generic SEMS template to
make it specific to their use, the cost would be an additional $10,000.
As mentioned in the assumptions, many operators would not spend the
additional $10,000 to customize a SEMS program for their use because it
would not be necessary.
If the 60 operators without a SEMS program decided to buy a SEMS
template, the cost would be $150,000 ($2,500 x 60). If all 60 operators
needed to modify the generic plans for their specific OCS operations,
which would be unlikely, an additional cost of $600,000 ($10,000 x 60)
would be incurred to perform these modifications. The total for all 60
operators to buy a template and then modify the template to their
philosophy is estimated at $750,000 ($150,000 + $600,000).
SEMS Implementation
This section provides the estimated cost for industry to implement
a SEMS. The following table shows a breakdown of the average number of
facilities and components for the 3 operator activity levels:
------------------------------------------------------------------------
Average no. of
Activity category components Average no. of
(per complex) complexes
------------------------------------------------------------------------
High.................................... 21 139
Moderate................................ 15 29
Low..................................... 16 6
------------------------------------------------------------------------
The total cost for implementing the SEMS program considers only the
60 operators that do not have a functional SEMS program. The other 70
operators are already managing their SEMS program throughout the
company.
Moderate Activity Category
A breakdown of the cost to implement and manage a SEMS program
consisting of the four elements (i.e., hazards analysis, management of
change, operating procedures, and mechanical integrity) was calculated
for a moderate activity operator as follows:
A hazards analysis for a moderate activity operator at the
complex level (facility risk assessment) would cost approximately
$102,000 for 29 facilities. This is a one-time implementation cost. In
following years, this cost would be less because the rule requires that
a hazards analysis be performed for changes in the process or the
equipment on a facility. We estimate that the annual cost for a
moderate activity operator to update a hazards analysis for the 29
facilities would be approximately $10,000 for 3 facilities (10 percent
of 29 facilities).
The job hazard analysis at the task level includes data
collection, analysis, and report development. This cost is included in
the hazards analysis.
The MOC cost is based on one change request per month and
it is dependent on the complexity of the change. The MOC cost will be
determined by the physical state of the
[[Page 28646]]
facilities, the status of technology, and the turnover of personnel.
The MOC would cost approximately $20,000 per year (includes the year to
implement SEMS) which also includes MOC data collection, evaluation,
and documentation update.
Based on information from consultants and vendors, a
lessee/operator would need to evaluate the operating procedures of
their facility each year. Also, the operating procedure cost would be
determined by the maintenance of such procedures. For most operators,
no formal evaluation is necessary since changes will be identified
through the job hazard analysis process and managed through the MOC
process. Operating procedures will cost approximately $18,000 per year
(includes the year to implement SEMS) which also includes data
collection, evaluation, documentation update, and recordkeeping.
The mechanical integrity cost is based on the assumption
that mechanical integrity is achieved through preventive maintenance.
The preventive maintenance program is defined prior to the
commissioning of the facility. The cost of maintenance is not included
in this assessment, only the cost of managing the program. Mechanical
integrity will cost approximately $20,000 per year (includes the year
to implement SEMS), which includes the quality assurance inspection
plan, evaluation of schedule appropriateness, communication of
maintenance program, salaries, maintenance and inspection reports, and
recordkeeping.
Auditing of the SEMS program is required once every 3
years and this cost would be approximately $15,000, for an average of
$5,000 per year. This cost includes developing audit protocols,
planning, performing audits, and recordkeeping. This is an annual cost
after implementation of SEMS.
The cost for report development, meetings, data
collection, recordkeeping, and analysis would be approximately $13,000
per year. This is an annual cost after implementation of SEMS.
The estimated cost for a moderate activity operator to implement
SEMS is $160,000. The estimated cost for the 12 moderate activity
operators to implement SEMS is $1,920,000 ($160,000 x 12 operators).
The itemized cost is:
Hazards analysis.................................... $102,000
Management of Change................................ 20,000
Operating Procedures................................ 18,000
Mechanical Integrity................................ 20,000
----------
Total.................................................... $160,000
The estimated average cost for a moderate activity operator to
maintain their SEMS program is $86,000 a year. The estimated cost for
the 12 moderate activity operators to initially maintain their SEMS
program is $1,032,000. The itemized cost is:
Hazards analysis.................................... $10,000
Management of Change................................ 20,000
Operating Procedures................................ 18,000
Mechanical Integrity................................ 20,000
Audits.............................................. 5,000
Report development and meetings..................... 13,000
----------
Total.................................................... $ 86,000
Once all moderate operators have a SEMS program implemented, the
estimated cost to maintain their SEMS program will be approximately
$3,526,000 ($86,000 per operator x 41 moderate activity operators =
$3,526,000).
Low Activity Category
A breakdown of the cost to implement and manage a SEMS program
consisting of the four elements (i.e., hazards analysis, management of
change, operating procedures, and mechanical integrity) was calculated
for a low activity operator as follows:
A hazards analysis for a low activity operator at the
complex level (facility risk assessment) would cost approximately
$22,000 for 6 facilities. This is a one-time implementation cost. In
following years, this cost would be less because the rule requires that
a hazards analysis be performed for changes in a process or equipment
on a facility. We estimate that the annual cost for a low activity
operator to update a hazards analysis would be approximately $2,000 for
1 facility.
The job hazard analysis at the task level includes data
collection, analysis, report development, and recordkeeping. This cost
is already included in the hazards analysis.
The MOC cost is based on one change request per month and
it is dependent on the complexity of the change. The MOC cost would be
determined by the physical state of the facilities, the status of
technology, and the turnover of personnel. The MOC would cost
approximately $5,000 per year (includes the year to implement SEMS)
which also includes MOC data collection, evaluation, documentation
update, and recordkeeping.
Based on information from consultants and vendors, a
lessee/operator would need to evaluate the operating procedures of
their facility each year. Also the operating procedure cost would be
determined by the maintenance of such procedures. For most operators,
no formal evaluation is necessary since changes will be identified
through the job hazard analysis process and managed through the MOC
process. Operating procedures will cost approximately $5,000 per year
(includes the year to implement SEMS) which also includes data
collection, evaluation, documentation update, and recordkeeping.
The mechanical integrity cost is based on the assumption
that mechanical integrity is achieved through preventive maintenance.
The preventive maintenance program is defined prior to the
commissioning of the facility. The cost of maintenance is not included
in this assessment, only the cost of managing the program. Mechanical
integrity will cost approximately $8,000 per year (includes the year to
implement SEMS), which also includes the quality assurance inspection
plan, evaluation of schedule appropriateness, communication of
maintenance program, maintenance, salaries, inspection reports, and
recordkeeping.
Auditing of the SEMS program is required once every 3
years and this cost would be approximately $6,000, for an average of
$2,000 per year. This cost includes developing audit protocols,
planning, performing audits, and recordkeeping. This is an annual cost
after implementation of SEMS.
The cost for report development, meetings, recordkeeping,
and data collection and analysis would be approximately $6,000 per
year. This is an annual cost after implementation of SEMS.
The estimated cost for a low activity operator to implement SEMS is
$40,000. The cost for the 48 low activity operators to implement SEMS
is $1,920,000 ($40,000 x 48 operators). The itemized cost is:
Hazards analysis.................................... $ 22,000
Management of Change................................ 5,000
Operating Procedures................................ 5,000
Mechanical Integrity................................ 8,000
----------
Total.................................................... $40,000
The estimated cost for a low activity operator to maintain their
SEMS program is $28,000 a year. The cost for the 48 low activity
operators to maintain SEMS is $1,344,000. The itemized cost is:
Hazards analysis.................................... $ 2,000
Management of Change................................ 5,000
Operating Procedures................................ 5,000
Mechanical Integrity................................ 8,000
Audits.............................................. 2,000
Report development and meetings..................... 6,000
----------
Total.................................................... $ 28,000
[[Page 28647]]
Once all low operators have a SEMS program implemented, the cost to
maintain their SEMS program will be approximately $2,128,000 ($28,000
per operator x 76 low activity operators = $2,128,000).
Cost to Submit to MMS
The following are the estimated costs for complying with the
proposed submittals to MMS and associated recordkeeping. The burden
hours, that these costs are based on, are addressed in the Paperwork
Reduction Act section.
A letter notifying the Regional Supervisory Field Office
(RSFO) when an operator plans on conducting an audit of their SEMS
program in order for MMS to participate as observers would cost
approximately $3,827 each year (see proposed Sec. 250.1910). This cost
is based on one-third of all 130 operators sending a notification
letter each year, with an estimated burden time of 1 hour.
A report must be sent to the RSFO within 30 days of the
audit completion date, once every 3 years. The report must outline the
results of the audit including deficiencies identified, a time-table or
schedule for implementing corrections to deficiencies, and the person
responsible for correcting each identified deficiency including their
job title (see proposed Sec. 250.1910). The annual cost would be
approximately $15,308. This cost is based on one-third of the all 130
operators submitting a report each year.
On an annual basis, Form MMS-131 (Performance Measures
Data) must be submitted to MMS which would cost approximately $92,560.
This cost is based on all 130 operators with an estimated time of 8
hours per response.
The MMS would conduct evaluations of SEMS programs. We
would require you to demonstrate and explain the procedures and
policies in your program and produce evidence, if needed, to support
your explanation which would cost approximately $4,272 a year (see
proposed Sec. 250.1913). This cost is based on conducting six
evaluations a year.
The total cost for required paperwork being submitted to MMS would
be approximately $115,967.
Summary of Annual Costs to Implement and Maintain SEMS
The total cost to implement and maintain SEMS is approximately
$12,673,967. This total includes an estimated $2,314,000 for high
activity operators (13) to maintain their SEMS program. We estimated
the cost to maintain SEMS for the high activity operator to be $178,000
per year. This estimated cost is greater than the low and moderate
activity operators because of the increased complexity of their
operations. We did not discuss this cost in detail because all the high
activity operators already have a SEMS program in place. A summary of
all the costs are shown below.
Buy/develop and implement SEMS Plan for operators $ 750,000
without a SEMS Implementation cost.....................
High activity operator cost (already $ -0-
implemented)...........................................
Moderate activity operator cost ($160,000 x 12)......... 1,920,000
Low activity operator cost ($40,000 x 48)...... 1,920,000
---------------
Total first year cost............................... $4,590,000
Maintain SEMS (Annual Cost after Implementation)........
High activity operator cost ($178,000 x 13).... $2,314,000
Moderate activity operator cost ($86,000 x 41). 3,526,000
Low activity operator cost ($28,000 x 76)...... 2,128,000
Submittals required by MMS (annual cost)................ 115,967
---------------
Total annual costs after implementation............. $8,083,967
Benefits of SEMS
The ultimate goal of SEMS is to promote safety and environmental
protection in the OCS during all offshore activities. Moreover,
increasing a system's level of safety leads to reduced material losses
and enhanced productivity. This supports the concept that safety is
good for business.
Some further benefits include:
Logical prioritization of safety needs--SEMS emphasizes
risk mitigation actions that provide the biggest impact on safety.
More efficient maintenance scheduling and resource
utilization--Effective hazard reporting in SEMS allows proactive
scheduling of maintenance tasks when resources are available,
increasing the likelihood that maintenance is performed on time and
more efficiently.
Compliance with legal responsibilities for safety--MMS
certification requirements mandate a number of safety processes and
standards that can be included in an organization's SEMS.
Avoiding incident investigation costs and operational
disruptions--Improved communication and risk mitigation will prevent
many accidents from occurring.
Reduction of the direct and indirect costs of accidents--
Civil penalties, repair costs, damage claims, and increased insurance
premiums are a few of the potential economic consequences of an
accidental mishap.
Establishing a marketable safety record--A record of
consistently safe operations can be used to attract new business and
investment.
Continuous improvement of operational processes--SEMS
allows for lessons learned to be incorporated into the system and lead
to superior operations.
Improved employee morale and productivity--Promoting
communication between management and the rest of the organization
prevents disenfranchisement and lifts morale.
The financial burden estimated for developing and managing a SEMS
program is minor compared to the costs associated with major accidents.
For example, in 1987 prior to industry having developed a safety
management template for offshore operations, the Mississippi Canyon
311, A (Bourbon), platform in the Gulf of Mexico was tilted to one side
by an extensive underground blowout. The cost associated with this
incident alone was $274,000,000. In 1989, a fire associated with a
pipeline repair killed 7 people and destroyed a major production
facility. A SEMS plan would have implemented several procedures and
evaluations that may have prevented these accidents. A SEMS plan is not
a guarantee of avoiding all accidents but MMS believes that a mandatory
SEMS program (4 elements) will reduce the likelihood of the types of
accidents and incidents discussed here and in the Preamble and will
also serve to raise the safety awareness of all personnel in the office
and field.
The proposed requirement for SEMS would not have a significant
economic effect on a substantial number of small entities. The MMS
estimates that over 40 percent of the small entities currently
operating on the OCS have already implemented a SEMS program that meets
the requirements under these proposed regulations. These small entities
(28 low activity and 10 medium activity operators) implemented SEMS
because it improved the efficiency and safety of their OCS operations.
The cost for the remaining 60 percent of small entities to implement
(approximately $52,500) and maintain (approximately $28,000) SEMS is
very small compared to the average annual revenues they would generate
($28,000,000) from the production of oil and gas. The MMS estimated the
annual revenue by multiplying the average production for a small entity
(700,000 BOE) times a conservative price for a barrel of oil
[[Page 28648]]
($40). Therefore, this proposed rulemaking would not have a significant
economic effect on a substantial number of small entities.
Your comments are important. The Small Business and Agriculture
Regulatory Enforcement Ombudsman and 10 Regional Fairness Boards were
established to receive comments from small businesses about Federal
agency enforcement actions. The Ombudsman will annually evaluate the
enforcement activities and rate each agency's responsiveness to small
business. If you wish to comment on the actions of MMS, call 1-888-734-
3247. You may comment to the Small Business Administration without fear
of retaliation. Allegations of discrimination/retaliation filed with
the SBA will be investigated for appropriate action.
Small Business Regulatory Enforcement Fairness Act
The proposed rule is not a major rule under 5 U.S.C. 804(2) of the
Small Business Regulatory Enforcement Fairness Act. This proposed rule:
a. Would not have an annual effect on the economy of $100 million
or more.
b. Would not cause a major increase in costs or prices for
consumers, individual industries, Federal, State, or local government
agencies, or geographic regions.
c. Would not have significant adverse effects on competition,
employment, investment, productivity, innovation, or the ability of
U.S.-based enterprises to compete with foreign-based enterprises.
Unfunded Mandates Reform Act of 1995
This proposed rule would not impose an unfunded mandate on State,
local, or tribal governments or the private sector of more than $100
million per year. The proposed rule would not have a significant or
unique effect on State, local, or tribal governments or the private
sector. A statement containing the information required by the Unfunded
Mandates Reform Act (2 U.S.C. 1501 et seq.) is not required.
Takings Implication Assessment (E.O. 12630)
Under the criteria in E.O. 12630, this proposed rule does not have
significant takings implications. The proposed rule is not a
governmental action capable of interference with constitutionally
protected property rights. A Takings Implication Assessment is not
required.
Federalism (E.O. 13132)
Under the criteria in E.O. 13132, this proposed rule does not have
federalism implications. This proposed rule would not substantially and
directly affect the relationship between the Federal and State
governments. To the extent that State and local governments have a role
in OCS activities, this proposed rule would not affect that role. A
Federalism Assessment is not required.
Civil Justice Reform (E.O. 12988)
This rule complies with the requirements of E.O. 12988.
Specifically, this rule:
(a) Meets the criteria of section 3(a) requiring that all
regulations be reviewed to eliminate errors and ambiguity and be
written to minimize litigation; and
(b) Meets the criteria of section 3(b)(2) requiring that all
regulations be written in clear language and contain clear legal
standards.
Consultation With Indian Tribes (E.O. 13175)
Under the criteria in E.O. 13175, we have evaluated this proposed
rule and determined that it has no substantial effects on federally
recognized Indian tribes. There are no Indian or tribal lands in the
OCS.
Paperwork Reduction Act (PRA)
This proposed rule contains a collection of information that has
been submitted to the Office of Management and Budget (OMB) for review
and approval under 44 U.S.C. 3507(d). As part of our continuing effort
to reduce paperwork and respondent burdens, MMS invites the public and
other Federal agencies to comment on any aspect of the reporting and
recordkeeping burden. If you wish to comment on the information
collection aspects of this proposed rule, you may send your comments
directly to OMB (see the ADDRESSES section of this notice). Please
identify your comments with 1010-AD15. Send a copy of your comments to
the Regulations and Standards Branch (RSB), Attn: Comments; 381 Elden
Street, MS-4024; Herndon, Virginia 20170-4817. Please reference 30 CFR
Part 250, Subpart S, Safety and Environmental Management Systems for
Outer Continental Shelf Oil and Gas Operations, 1010-AD15 in your
comments. You may obtain a copy of the supporting statement for the new
collection of information by contacting the Bureau's Information
Collection Clearance Officer at (202) 208-7744.
The PRA provides that an agency may not conduct or sponsor, and a
person is not required to respond to, a collection of information
unless it displays a currently valid OMB control number. The OMB is
required to make a decision concerning the collection of information
contained in these proposed regulations between 30 to 60 days after
publication of this document in the Federal Register. Therefore, a
comment to OMB is best assured of having its full effect if OMB
receives it by July 17, 2009. This does not affect the deadline for the
public to comment to MMS on the proposed regulations.
The title of the collection of information for the rule is 30 CFR
Part 250, Subpart S, Safety and Environmental Management Systems for
Outer Continental Shelf Oil and Gas Operations. Respondents are
approximately 130 Federal OCS lessees, operators, and/or other
independent third-parties. The MMS will use the information to:
Evaluate the effect of industry's continued improvement of safety and
environmental management of the OCS; develop an industry average that
helps to describe how well the offshore oil and gas industry is
performing; and judge the reasonableness of company requests for any
specific regulatory relief. Responses to this collection are mandatory.
The frequency of response varies, but is primarily annual. The
information collection (IC) does not include questions of a sensitive
nature. The MMS will protect proprietary information according to the
Freedom of Information Act (5 U.S.C. 522) and its implementing
regulations (43 CFR Part 2), and 30 CFR 250.197, Data and information
to be made available to the public or for limited inspection, and 30
CFR Part 252, OCS Oil and Gas Information Program.
During 1997, MMS, the U.S. Coast Guard, and representatives of the
OCS oil and gas industry worked together to develop a suite of
consensus formulas for gauging the industry's safety and environmental
performance. This resulted in the initiation of OMB approved Form MMS-
131, Performance Measures Data. With this new subpart, MMS will
continue to use the information collected on Form MMS-131 to calculate
annually, OCS-wide, performance indices based on those consensus
formulas to provide the public with information about performance
trends, and allow OCS lease operators to compare their performance with
industry averages. The results will be posted by MMS for use by the
public.
This rule and IC request also include the hours and requirements
already approved for Form MMS-131 in OMB Control Number 1010-0112, (280
hours, expiration 3/31/11). This collection is voluntary, but the
rulemaking will make this and the new requirements
[[Page 28649]]
mandatory. The current collection under 1010-0112 will be discontinued
when the final regulations become effective.
The following table details the IC burden for the proposed new
requirements in subpart S.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Reporting and recordkeeping Annual burden
Citation 30 CFR 250 subpart S requirement Hour burden Average number of annual responses hours
--------------------------------------------------------------------------------------------------------------------------------------------------------
Non-hour cost burdens
--------------------------------------------------------------------------------------------------------------------------------------------------------
1900.................................... Develop and implement a SEMS $2,500 per implementation x 60 operators = $150,000.
program. (One time
implementation cost of SEMS
template).
--------------------------------------------------------------------------------------------------------------------------------------------------------
1900.................................... In-house modification (one time $10,000 per implementation x 60 operators = $600,000.
implementation cost) of the
generic SEMS program to meet
needs of specific company.
--------------------------------------------------------------------------------------------------------------------------------------------------------
1900-1915............................... High Activity Operator: Maintain 2,000 13.......................................... 26,000
all records pertaining to your
SEMS program (e.g., operating
procedures, MOC, mechanical
integrity, 3rd party and
qualified personnel info, any
supporting documentation,
etc.), and retain for 5 years;
hazards analysis records retain
for the life of the operation;
upon request, make available to
MMS.
1900-1915............................... Moderate Activity Operator: 966 41.......................................... 39,606
Maintain all records pertaining
to your SEMS program (e.g.,
operating procedures, MOC,
mechanical integrity, 3rd party
and qualified personnel info,
any supporting documentation,
etc.), and retain for 5 years;
hazards analysis records retain
for the life of the operation;
upon request, make available to
MMS.
-----------------------------------------------------------------------------
Moderate Activity Operator $160,000 per moderate activity implementation x 12 operators = $1,920,000.
Implementation. (One time cost
to implement SEMS).
--------------------------------------------------------------------------------------------------------------------------------------------------------
1900-1915............................... Low Activity Operator: Maintain 315 76.......................................... 23,940
all records pertaining to your
SEMS program (e.g., operating
procedures, MOC, mechanical
integrity, 3rd party and
qualified personnel info, any
supporting documentation, etc),
and retain for 5 years; hazards
analysis records retain for the
life of the operation; upon
request, make available to MMS.
--------------------------------------------------------------------------------------------------------------------------------------------------------
Low Activity Operator $40,000 per low activity implementation x 48 operators = $1,920,000.
Implementation. (One time cost
to implement SEMS).
--------------------------------------------------------------------------------------------------------------------------------------------------------
1910.................................... Notify RSFO with audit schedule 1 130 operators/once every 3 years = 43 43 (rounded)
in timely manner. responses.
1910.................................... Submit audit report, once in 4 130 operators/once every 3 years = 43 172
every 3 years, within 30 days responses.
of audit including required
information; retain records for
5 years; upon request, make
available to MMS.
1913.................................... Demonstrate and explain, as 8 6........................................... 48
required, the policies and
procedures included in your
SEMS program; produce
supporting documentation if
required.
1915.................................... Submit Form MMS-131............. 8 130......................................... 1,040
--------------------------------------------------------------------------------------------------------------------------------------------------------
Total burden.......................................................................... 472 Responses............................... 90,849 Hours
--------------------------------------------------------------------------------------------------------------------------------------------------------
$4,590,000 Non-Hour Cost Burdens
--------------------------------------------------------------------------------------------------------------------------------------------------------
[[Page 28650]]
The MMS specifically solicits comments on the following questions:
(a) Is the proposed collection of information necessary for MMS to
properly perform its functions, and will it be useful?
(b) Are the estimates of the burden hours of the proposed
collection reasonable?
(c) Do you have any suggestions that would enhance the quality,
clarity, or usefulness of the information to be collected?
(d) Is there a way to minimize the information collection burden on
those who are to respond, including the use of appropriate automated
electronic, mechanical, or other forms of information technology?
In addition, the PRA requires agencies to estimate the total annual
reporting and recordkeeping non-hour cost burden resulting from the
collection of information. Other than the four non-hour cost burdens
for developing the program that are listed in the burden table, we have
not identified any other costs, and we solicit your comments on this
item. For reporting and recordkeeping only, your response should split
the cost estimate into two components: (a) Total capital and startup
cost component, and (b) annual operation, maintenance, and purchase of
services component. Your estimates should consider the costs to
generate, maintain, and disclose or provide the information. You should
describe the methods you use to estimate major cost factors, including
system and technology acquisition, expected useful life of capital
equipment, discount rate(s), and the period over which you incur costs.
Generally, your estimates should not include equipment or services
purchased:
(1) Before October 1, 1995;
(2) To comply with requirements not associated with the information
collection;
(3) For reasons other than to provide information or keep records
for the Government; or
(4) As part of customary and usual business or private practices.
National Environmental Policy Act of 1969
This rule does not constitute a major Federal action significantly
affecting the quality of the human environment. A detailed statement
under the National Environmental Policy Act of 1969 is not required
because the rule is covered by a categorical exclusion. This rule is
excluded from the requirement to prepare a detailed statement because
it qualifies as a regulation of an administrative and procedural
nature, in that the proposed rule only requires that industry develop a
SEMS program. (For further information see 43 CFR 46.210(i)). We have
also determined that the rule does not involve any of the extraordinary
circumstances listed in 43 CFR 46.215 that would require further
analysis under the National Environmental Policy Act.
Data Quality Act
In developing this rule we did not conduct or use a study,
experiment, or survey requiring peer review under the Data Quality Act
(Pub. L. 106-554, app. C Sec. 515, 114 Stat. 2763, 2763A-153-154).
Effects on the Energy Supply (E.O. 13211)
This rule is not a significant energy action under the definition
in E.O. 13211. A Statement of Energy Effects is not required.
Clarity of This Regulation
We are required by E.O. 12866, E.O. 12988, and by the Presidential
Memorandum of June 1, 1998, to write all rules in plain language. This
means that each rule we publish must:
(a) Be logically organized;
(b) Use the active voice to address readers directly;
(c) Use clear language rather than jargon;
(d) Be divided into short sections and sentences; and
(e) Use lists and tables wherever possible.
If you feel that we have not met these requirements, send us
comments by one of the methods listed in the ADDRESSES section. To
better help us revise the rule, your comments should be as specific as
possible. For example, you should tell us the numbers of the sections
or paragraphs that you find unclear, which sections or sentences are
too long, the sections where you feel lists or tables would be useful,
etc.
Public Availability of Comments
Before including your address, phone number, e-mail address, or
other personal identifying information in your comment, you should be
aware that your entire comment--including your personal identifying
information--may be made publicly available at any time. While you can
ask us in your comment to withhold your personal identifying
information from public review, we cannot guarantee that we will be
able to do so.
List of Subjects in 30 CFR 250
Administrative practice and procedure, Continental shelf,
Environmental protection, Incorporation by reference, Public Lands--
mineral resources, Reporting and recordkeeping requirements.
Dated: June 4, 2009.
Assistant Secretary--Land and Minerals Management.
For the reasons stated in the preamble, Minerals Management Service
(MMS) proposes to amend 30 CFR part 250 as follows:
PART 250--OIL AND GAS AND SULPHUR OPERATIONS IN THE OUTER
CONTINENTAL SHELF
1. The authority citation for 30 CFR part 250 continues to read as
follows:
Authority: 31 U.S.C. 9701, 43 U.S.C. 1334.
2. In Sec. 250.197, redesignate, in the table, paragraphs (a)(7)
through (10) as paragraphs (a)(8) through (11), and add new paragraph
(a)(7) to the table for Form MMS-131, Performance Measures Data, to
read as follows:
Sec. 250.197 Data and information to be made available to the public
or for limited inspection.
* * * * *
(a) * * *
------------------------------------------------------------------------
Data and information Excepted data will
On form * * * not immediately be made available *
available are * * * * *
------------------------------------------------------------------------
* * * * * * *
(7) MMS-131, Performance Company Name(s); Aggregate data
Measures Data. Operator Code(s); collected yearly
Contact Name; E- will be published
mail Address; one month after
Telephone (Number); submission
Fax (Number). deadline; no
individual
company's data will
be made available
to the public.
* * * * * * *
------------------------------------------------------------------------
[[Page 28651]]
* * * * *
3. Amend Sec. 250.198 by adding the following document to the
table in paragraph (e) in alphanumerical order to read as follows:
Sec. 250.198 Documents incorporated by reference.
* * * * *
(e) * * *
------------------------------------------------------------------------
Title of documents Incorporated by reference at
------------------------------------------------------------------------
* * * * * * *
API RP 75 Development of a Safety and 250.1903.
Environmental Management Program, for
Offshore Operations and Facilities,
Third Edition, May 2004, Product No.
G07503.
* * * * * * *
------------------------------------------------------------------------
4. Revise Sec. 250.199(e)(17) to read as follows:
Sec. 250.199 Paperwork Reduction Act statements-information
collection.
* * * * *
(e) * * *
------------------------------------------------------------------------
30 CFR subpart, title and/or MMS Form Reasons for collecting
(OMB Control Number) information and how used
------------------------------------------------------------------------
* * * * * * *
(17) Subpart S, Safety and The information collected is to
Environmental Management Systems (1010- gather the raw Performance
xxxx), including Form MMS-131, Measures Data relating to risk
Performance Measures Data. and number of accidents,
injuries, and oil spills
during OCS activities. We use
the information obtained from
this form to develop an
industry average that helps to
describe how well the offshore
oil and gas industry is
performing in a safe manner.
* * * * * * *
------------------------------------------------------------------------
5. Add new subpart S to read as follows:
Subpart S--Safety and Environmental Management Systems (SEMS)
Sec.
Sec. 250.1900 Must I have a SEMS program?
Sec. 250.1901 What is the goal of my SEMS program?
Sec. 250.1902 When must I comply with the regulations in this
subpart?
Sec. 250.1903 May I use an industry standard to develop my SEMS
program?
Sec. 250.1904 What are my general responsibilities for SEMS?
Sec. 250.1905 What criteria for Hazards Analyses must my SEMS
program meet?
Sec. 250.1906 What criteria for Operating Procedures must my SEMS
program meet?
Sec. 250.1907 What criteria for Mechanical Integrity must my SEMS
program meet?
Sec. 250.1908 What criteria for Management of Change must my SEMS
program meet?
Sec. 250.1909 What criteria must be documented in my SEMS program
for contractor selection?
Sec. 250.1910 What are my responsibilities when conducting a SEMS
audit?
Sec. 250.1911 What are my documentation and recordkeeping
requirements?
Sec. 250.1912 What qualifications must an independent third party
or my designated and qualified personnel meet?
Sec. 250.1913 How will MMS determine if my SEMS program is
effective?
Sec. 250.1914 What happens if MMS finds shortcomings in my SEMS
program?
Sec. 250.1915 What are my responsibilities for submitting OCS
performance measure data?
Sec. 250.1900 Must I have a SEMS program?
You must develop, implement, and maintain a SEMS program. Your SEMS
program must address the following four elements:
(a) Hazards Analysis (including job hazard analysis), (b) Operating
Procedures, (c) Management of Change, and (d) Mechanical Integrity.
Sec. 250.1901 What is the goal of my SEMS program?
(a) The goal of your SEMS program must be to promote safety and
environmental protection in the OCS during all offshore activities.
(b) To accomplish this goal, you must ensure that your SEMS program
identifies, addresses, and manages safety and environmental hazards and
impacts during the design, construction, startup, operation,
inspection, and maintenance of new and existing OCS facilities and DOI
regulated pipelines.
Sec. 250.1902 When must I comply with the regulations in this
subpart?
You must comply with the provisions of this subpart on or before
[THE DATE 1 YEAR AFTER THE EFFECTIVE DATE OF THE FINAL RULE].
Sec. 250.1903 May I use an industry standard to develop my SEMS
program?
Your SEMS program must meet the minimum criteria outlined in this
subpart and should be modeled after the requirements in:
(a) API RP 75, Development of a Safety and Environmental Management
Program, for Offshore Operations and Facilities, Third Edition, May
2004 (incorporated by reference as specified in Sec. 250.198).
(b) Other standards or guidelines (e.g., ISO 9001, 14001) that meet
or exceed the API RP 75 standard.
Sec. 250.1904 What are my general responsibilities for SEMS?
(a) You are responsible for the development, support, and continued
improvement of your SEMS program.
(b) You must provide resources to implement and maintain your SEMS
program.
(c) You must appoint a management official to serve as the
operator's Management System Coordinator who will be responsible for
the following:
(1) Establishing, implementing, and maintaining SEMS program
procedures, (2) Reporting to your management annually on the
performance of the SEMS program and the need for improvement, and
(3) Reinforcing awareness of safety and environmental protection
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requirements throughout the organization.
Sec. 250.1905 What criteria for Hazards Analyses must my SEMS program
meet?
You must develop and implement a hazards analysis (facility level)
and a job hazard analysis (operations/task level) for all of your
facilities. For this subpart, facilities include all types of offshore
structures permanently or temporarily attached to the seabed (i.e.,
mobile offshore drilling units; floating production systems; floating
production, storage and offloading facilities; tension-leg platforms;
and spars) used for exploration, development, production, and
transportation activities for oil, gas, or sulphur from areas leased in
the OCS. Facilities also include DOI regulated pipelines. The purpose
of both the facility level and operations/task level hazards analyses
is to identify accident scenarios which could lead to worker injuries,
fatalities, property damage, discharges and emissions, coastal and
marine environmental impacts, or other adverse consequences. You must
document and maintain current analyses for each operation covered by
this section for the life of the operation at the facility. The
analyses must be updated when an internal audit is conducted to assure
that it is consistent with the current operations on your facility.
(a) Hazards Analysis (facility level). For a hazards analysis
(facility level), you must perform an initial hazards analysis on each
facility on or before [THE DATE 1 YEAR AFTER THE EFFECTIVE DATE OF THE
FINAL RULE]. The hazards analysis must be appropriate to the complexity
of the operation and must identify, evaluate, and manage the hazards
involved in the operation.
(1) The hazards analysis must address the following:
(i) Hazards of the operation;
(ii) Previous incidents related to the operation you are
evaluating. Special attention should be given in your hazards analysis
to any incident in which you were issued an Incident of Noncompliance,
civil, or criminal penalty;
(iii) Control technology applicable to the operation your hazards
analysis is evaluating;
(iv) A qualitative evaluation of the possible safety and health
effects on employees, and potential impacts to the coastal and marine
environments, which may result if the control technology fails; and
(2) The hazards analysis must be performed by a person(s) with
experience in the operations being evaluated. These individuals also
need to be experienced in the hazards analysis methodologies being
employed.
(3) You should assure that the recommendations in the hazards
analysis are resolved and that the resolution is documented.
(b) Job Hazard Analysis (operations/task level). Job hazard
analysis (operations/task level) must be conducted for each work
project and activity.
(1) You must keep a copy of the most recent job hazard analysis at
the job site, and they must be readily accessible to employees.
(2) You must complete and maintain an index naming the task, the
date the job hazard analysis was completed, and the date the analysis
was revised.
Sec. 250.1906 What criteria for Operating Procedures must my SEMS
program meet?
(a) You must develop and implement written operating procedures
that provide instructions for conducting safe and environmentally sound
activities involved in each operation addressed in your SEMS program.
These procedures must address the following:
(1) Initial startup;
(2) Normal operations;
(3) Temporary operations;
(4) Emergency operations;
(5) Normal shutdown;
(6) Startup following a turnaround, or after an emergency shutdown;
(7) Bypassing and flagging;
(8) Safety and environmental consequences of deviating from your
equipment operating limits and steps required to correct or avoid this
deviation;
(9) Properties of, and hazards presented by, the chemicals used in
the operations;
(10) Precautions you will take to prevent the exposure of chemicals
used in your operations to personnel and the environment. The
precautions must include control technology, personal protective
equipment, and measures to be taken if physical contact or airborne
exposure occurs;
(11) Raw materials used in your operations and the quality control
procedures you used in purchasing these raw materials;
(12) Control of hazardous chemical inventory; and
(13) Coastal and marine environmental impacts identified through
your hazards analysis.
(b) Operating procedures must be accessible to all employees
involved in the operations.
(c) Operating procedures must be reviewed as often as necessary to
assure they reflect any changes made to your operations.
(d) You must develop and implement safe and environmentally sound
work practices for identified hazards during operations.
Sec. 250.1907 What criteria for Mechanical Integrity must my SEMS
program meet?
You must develop and implement written procedures that provide
instructions to ensure the mechanical integrity and safe operation of
equipment through inspection, testing, and quality assurance. The
purpose of mechanical integrity is to ensure that equipment is fit-for-
service. Your mechanical integrity program must encompass all equipment
and systems used to prevent or mitigate uncontrolled releases of
hydrocarbons, toxic substances, or other materials that may cause
environmental or safety consequences. These procedures must address the
following:
(a) The design, procurement, fabrication, installation,
calibration, and maintenance of your equipment and systems in
accordance with the manufacturer's design and material specifications.
(b) The training of each employee involved in maintaining your
equipment and systems so that your employees can implement your
mechanical integrity program.
(c) The frequency of inspections and tests of your equipment and
systems must be in accordance with MMS regulations and meet the
manufacturer's recommendations. Inspections and tests can be performed
more frequently if determined to be necessary by prior operating
experience.
(d) The documentation of each inspection and test that has been
performed on your equipment and systems. This documentation must
identify the date of the inspection or test, the name and position, and
include the signature of the person who performed the inspection or
test, the serial number or other identifier of the equipment on which
the inspection or test was performed, a description of the inspection
or test performed, and the results of the inspection test.
(e) The correction of deficiencies associated with equipment and
systems that are outside the manufacturer's recommended limits before
further use.
(f) The installation of new equipment and constructing systems. The
procedures must address the application for which they will be used.
(g) The modification of existing equipment and systems. The
procedures must assure that they are modified for
[[Page 28653]]
the application for which they will be used.
(h) The verification that inspections and tests are being
performed. The procedures must be appropriate to assure that equipment
and systems are installed consistent with design specifications and the
manufacturer's instructions.
(i) The assurance that maintenance materials, spare parts, and
equipment are suitable for the applications for which they will be
used.
Sec. 250.1908 What criteria for Management of Change must my SEMS
program meet?
(a) You must develop and implement written management of change
procedures for modifications associated with the following:
(1) Equipment,
(2) Operating procedures,
(3) Personnel changes (including contractors),
(4) Materials, and
(5) Operating conditions.
(b) Management of change procedures do not apply to situations
involving replacement in kind (such as, replacement of one component by
another component with the same performance capabilities).
(c) You must review all changes prior to their implementation.
(d) The following items must be included in your management of
change procedures:
(1) The technical basis for the change;
(2) Impact of the change on safety, health, and the coastal and
marine environments;
(3) Necessary time period to implement the change; and
(4) Management approval procedures for the change.
(e) Employees, including contractors whose job tasks will be
affected by a change in the operation, must be informed of, and trained
in, the change prior to startup of the process or affected part of the
operation; and
(f) If a management of change results in a change in the operating
procedures of your SEMS program, such changes must be documented and
dated.
Sec. 250.1909 What criteria must be documented in my SEMS program for
contractor selection?
Your SEMS program must document contractor selection criteria. When
selecting a contractor, you must obtain and evaluate information
regarding the contractor's safety and environmental performance.
(a) A contractor is anyone performing work for the lessee. However,
these requirements do not apply to contractors providing domestic
services to the lessee or other contractors. Domestic services include
janitorial work, food and beverage service, laundry service,
housekeeping, and similar activities.
(b) You must document that your contracted employees are competent
in the work practices necessary to perform their job in a safe and
environmentally sound manner, and have policies and practices in place
that are consistent with your SEMS program. Documentation of each
contracted employee's competency to perform his/her job and a copy of
the contractor's SEMS program must be kept by the operator and the
contractor at the facility where the contracted operations are being
performed.
Sec. 250.1910 What are my responsibilities when conducting a SEMS
audit?
(a) You must perform an audit of your entire SEMS program at least
once every 3 years to evaluate compliance with the requirements of this
subpart, and to identify areas in which safety and environmental
performance needs to be improved. You must have your SEMS program
audited by either an independent third party or your designated and
qualified personnel (see Sec. 250.1912).
(b) Representatives from MMS may participate in your SEMS audit as
observers. You must notify the Regional Supervisory Field Office (RSFO)
at least 30 days prior to conducting your audit so that MMS may make
arrangements to participate in the audit.
(c) You must submit a report to the RSFO within 30 days of the
audit completion date. The report must outline the results of the audit
including deficiencies identified, a timetable or schedule for
implementing corrections to deficiencies, and the person responsible
for correcting each identified deficiency including their job title.
(d) The MMS may verify that corrective actions have been undertaken
and that these actions effectively address the audit findings. Upon
request, you must make available for MMS review:
(1) Your SEMS program, including information about your
contractors;
(2) The qualifications of your designated and qualified personnel
or your independent third party;
(3) The SEMS report prepared by your designated and qualified
personnel or your independent third party;
(4) The SEMS audits conducted of your program; and
(5) Other supporting documents or information.
(e) You must retain copies of either the independent third party's
SEMS records or self audit for a period of 5 years.
Sec. 250.1911 What are my documentation and recordkeeping
requirements?
(a) Your SEMS program procedures must ensure that records and
documents are maintained for a period of 5 years in an effective
manner. Effective document and record control includes the means of
identifying, collecting, indexing, filing, storing, maintaining, and
retrieving the documents and records.
(b) Records must be dated, signed, and include information on
compliance with applicable legal requirements and the results of SEMS
audits and reviews. Details of deficiencies, corrective and
preventative actions, participation in training, permits, licenses, or
other forms of legal authorization, inspection and calibration
activity, and results of operational controls (maintenance, design, and
manufacture) should also be included.
Sec. 250.1912 What qualifications must an independent third party or
my designated and qualified personnel meet?
(a) An independent third party or designated and qualified
personnel must possess the following qualifications:
(1) Previous experience with SEMS, or similar management related
programs;
(2) Technical capabilities of the individual or organization for
the specific project;
(3) In-house availability of or access to technology, including
computer programs or hardware to be used for this specific project;
(4) Ability to perform the independent third party functions for
the specific project considering current commitments;
(5) Previous experience with MMS regulatory requirements and
procedures; and
(6) Procedures to avoid conflicts of interest with the SEMS program
they are reviewing.
(b) You must document the qualifications for the independent third
party or your designated and qualified personnel.
(c) The MMS reserves the right to evaluate independent third
parties as needed.
Sec. 250.1913 How will MMS determine if my SEMS program is effective?
(a) The MMS or its authorized representative may evaluate or visit
your facility to determine whether your SEMS program is in place,
adequate,
[[Page 28654]]
and effective in protecting the safety and health of workers, the
environment, and preventing incidents. These evaluations or visits may
be random or based upon the OCS lease operator's or contractor's
performance.
(b) The MMS or its authorized representative may evaluate your SEMS
program, including documentation of contractors, independent third
parties, and designated and qualified personnel, and audit reports to
assess your SEMS program.
(1) You must be prepared to explain and demonstrate the procedures
and policies included in your SEMS program and produce evidence to
support your explanation.
(2) The MMS or its authorized representative may conduct a site
visit on your facility to verify that personnel are following your SEMS
program and can explain and demonstrate the procedures and policies
included in your SEMS program and produce evidence to support their
explanation for a specific task.
(3) If MMS directs you to do an evaluation, you will be responsible
for all costs associated with the evaluation of your SEMS program.
Sec. 250.1914 What happens if MMS finds shortcomings in my SEMS
program?
If MMS determines that your SEMS program is not in compliance with
this subpart, we may initiate one or more of the following enforcement
actions:
(a) Issue an Incident(s) of Noncompliance;
(b) Require you to revise and submit to MMS your plan to address
identified deficiencies in your SEMS program;
(c) Assess civil/criminal penalties; or
(d) Initiate probationary or disqualification procedures from
serving as an OCS operator.
Sec. 250.1915 What are my responsibilities for submitting OCS
performance measure data?
You must submit Form MMS-131 on an annual basis, for the previous
calendar year, by March 31 of each year.
[FR Doc. E9-14211 Filed 6-16-09; 8:45 am]
BILLING CODE 4310-MR-P