[Federal Register Volume 62, Number 156 (Wednesday, August 13, 1997)]
[Notices]
[Pages 43345-43347]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-21346]
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DEPARTMENT OF THE INTERIOR
Minerals Management Service
Safety and Environmental Management Program (SEMP) on the Outer
Continental Shelf (OCS)
AGENCY: Minerals Management Service (MMS), Interior.
ACTION: Notice.
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SUMMARY: MMS has decided to continue its collaborative efforts with
representatives of OCS oil and gas operating companies to voluntarily
implement its SEMP initiative. We will continue to work with OCS
operators to enhance their performance in safety and environmental
protection through a variety of cooperative actions and agency
initiatives. The Agency will, however, increase its focus on the
performance records of companies, and will take increasingly firm
actions against poor performers.
DATES: MMS will consider all comments received by November 12, 1997.
Any comments received after November 12, 1997 may not be fully
considered.
ADDRESSES: Mail or hand-carry comments to the Department of the
Interior; Minerals Management Service; Mail Stop 4020; 381 Elden
Street; Herndon, Virginia 20170-4817; Attention: Rules Processing Team
(Comments).
FOR FURTHER INFORMATION CONTACT:
Jeff Wiese, Performance and Safety Branch at (703) 787-1591 or e-mail
to [email protected].
SUPPLEMENTARY INFORMATION:
What is SEMP?
SEMP is a safety systems management model designed around offshore
oil and gas exploration and development activities. This concept is
currently embodied in a publication of the American Petroleum Institute
(API) known as Recommended Practice 75 (RP75). This document is
available from the API; they can be reached by phone at (202) 682-8375.
Why is the MMS Promoting SEMP?
MMS has developed a sound regulatory program to protect the
public's interests in the exploration and development of OCS oil and
gas over the course of more than a quarter century. This program is
based, in large measure, on standards and recommended practices
developed in association with OCS stakeholders that delimit how a
``safe and prudent'' operator would conduct its business. This
regulatory program has historically focused on hardware and engineering
approaches to resolve offshore safety and operating issues. It has
been, as well, fairly prescriptive.
The SEMP concept was created to address the role of human and
organizational error to accidents. By some estimates, human and
organizational factors lie at the root cause of up to 80 percent of all
accidents.
Through SEMP, MMS is seeking alternative ways to complement our
current regulatory efforts to protect people and the environment during
oil and gas exploration and production activities taking place on the
U.S. OCS. MMS undertook this initiative following two separate, but
related, studies which indicated that many OCS operators were led by
the traditional, prescriptive regulatory approach of MMS to focus more
on compliance with existing rules than in systematically identifying
and mitigating all risks posed by their operations. Implementation of
SEMP squarely places the responsibility for protection of people,
facilities, and the environment on the shoulders of OCS operators.
What Related Past Actions Has MMS Taken?
MMS introduced its SEMP concept in the Federal Register on July 2,
1991 (56 FR 30400). In response, OCS operators requested that they be
given an opportunity to further develop SEMP and a chance to
demonstrate that they could voluntarily adopt it on a widespread basis.
MMS joined with a broad-based industry committee to refine the SEMP
concept under the aegis of the API. In May 1993, the API published RP75
as its response to SEMP. This document clearly reflects a consensus
both within MMS and the offshore industry on what course a safe and
prudent operator would steer--at a minimum. On June 30, 1994, MMS
published a notice in the Federal
[[Page 43346]]
Register (59 FR 33779) in which it said that RP75 generally captured
the agency's perception of what a SEMP should contain. At that time,
MMS committed to a 2-year moratorium on regulatory activity related to
SEMP during which it would closely monitor the voluntary adoption of
RP75 by OCS operators. MMS extended for one year its observation of
this experiment in a Federal Register notice published on July 18, 1996
(61 FR 37493).
Why Is This Action Being Taken by MMS?
MMS and representatives of the offshore oil and gas industry
previously agreed (see above) to allow industry to voluntarily
implement SEMP on a widespread basis. MMS originally established a two-
year window for this experiment and then later extended the window for
an additional year. This extension was announced even though MMS has
seen substantial progress across the board in program development.
There was not, however, sufficient evidence of field-level
implementation of SEMP at that time for the Agency to judge the results
of this experiment. The additional year has provided MMS with the
information needed to make its decision whether or not to require SEMP
at this time.
What Information Was Used to Make This Decision?
MMS has used a number of means to determine how well and how
widespread voluntary implementation of its SEMP initiative has been
undertaken by OCS operators. Among these means we have: (1)
collaborated with the major industry trade associations to conduct
year-end SEMP implementation surveys of all OCS operators over the past
three years (1994, 1995, and 1996); (2) cosponsored several SEMP
implementation workshops focused on challenges identified by operators
who responded to these surveys in which volunteers were recruited to
share best practices; (3) conducted twenty MMS-company SEMP
implementation interviews with a cross-section of operators (both major
and independent); and (4) probed whether and how well SEMP had been
implemented during routine inspections made by MMS at the operators's
offshore installations.
What Conclusions Has MMS Made?
The SEMP initiative has served as a catalyst to refocus the
attention of both the offshore industry and MMS on bottom-line
performance and not solely on regulatory compliance. We have seen
strong evidence that adoption of SEMP cannot only accomplish public
objectives in the areas of promoting safety and environmental
protection, but it can also make good business sense by avoiding or
containing accident and pollution costs.
The vast majority of OCS operators have undertaken, in earnest, to
develop and implement SEMP plans. Many of these operators now have
plans generally in place, and they are beginning the continuous
improvement phase marked by the conduct of internal audits. Some
companies have even requested MMS participation in cooperative reviews
of their SEMP plans.
MMS takes notice that many operators have voluntarily embraced
safety systems management and SEMP. As with any voluntary effort, some
operators will choose not to participate. We believe that their safety
and environmental performance will suffer relative to their peers.
Accordingly, their opportunities to explain their poor performance to
MMS will increase.
The largest challenges that MMS sees in areas covered by SEMP are
how to better integrate the safety and environmental programs and
principles of OCS operators with those of their many contractors and
how to develop a common vocabulary upon which performance reviews will
be conducted.
What Decision Has MMS Reached?
We have decided to continue the non-regulatory, voluntary option
for SEMP as long as we continue to observe satisfactory implementation
efforts on an industry-wide basis. The Agency reserves the right, of
course, to incorporate all or any part of SEMP into its regulatory
program if we determine that such action would better serve the public
interest. Specific areas of RP75 will continue to be examined by MMS
for incorporation into its regulatory framework. The SEMP concept has
always been envisioned by both MMS and the offshore industry as a
strong tool to enhance safety and environmental performance. Given that
so many companies have now embraced the safety systems management
concepts embodied within SEMP, the Agency will now increasingly focus
and act on their related performance records.
What's Next?
Though we have decided to continue the non-regulatory approach to
implementing the SEMP initiative by OCS operators, MMS plans to stay
actively involved by promoting the concept and its adoption both
through collaborative activities and new Agency projects. As
appropriate, certain facets of SEMP may be reflected in our regulatory
program where they help both us and the offshore industry better focus
on performance. An immediate example would be our current performance-
based training project.
We plan to collaborate with representatives of the offshore
industry to track and improve the SEMP concept by: (1) making minor
improvements to RP75 through the committee process under the guidance
of the API; (2) conducting the fourth annual SEMP implementation survey
at the beginning of 1998; (3) continuing our efforts to develop and
implement commonly-defined measures of performance; (4) continuing to
work with volunteer companies to conduct cooperative, in-depth reviews
of their SEMP plans; (5) cosponsoring workshops, or research, that are
designed to develop or share best practices in the areas of safety and
environmental protection; and (6) working to identify specific MMS
regulations for which OCS operators, who can demonstrate solid
performance and a fully implemented SEMP, could individually request
approval for using alternative means of compliance.
For our part, MMS will be refocusing its attention on the bottom-
line performance of OCS operators by: (1) preparing internal analyses
that rank the performance of all OCS operators on a company-wide basis;
(2) conducting annual performance reviews with all OCS operators during
which both these performance analyses and those of the company,
together with related information, will be compared and discussed; (3)
increasingly risk-basing our inspection program--past safety and
environmental performance will play an important part in determining
the risk posed by an operator or their specific operations; and (4)
increasing the costs of poor performance by spending much more time
with poor performers, by factoring past performance into civil penalty
assessments, and by publishing a notice of all settled civil penalty
cases.
What More Can Companies Do?
One of SEMP's underlying principles is that management in the OCS
oil and gas companies must provide leadership and take responsibility
for ensuring that SEMP is properly implemented and that it is
effective. In that regard, we would appreciate being notified by a top
executive or operating official from each company as soon as that
company has fully implemented their SEMP plans at the field level. This
voluntary notification can be made by writing to the address listed at
the beginning of this notice; a copy to the appropriate MMS Regional
Director would also be
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appreciated. Additionally, companies could request that MMS participate
in cooperative performance review activities.
Two, one-day workshops have been scheduled (September 9, 1997 in
New Orleans and September 23, 1997 in Houston) to discuss
implementation of performance measures developed by a joint industry-
MMS work group. MMS will be sending notice of this workshop to all our
lessees and operators, as will all the major trade associations. Please
call the contact identified in the FOR FURTHER INFORMATION section at
the beginning of this notice if would like to discuss the workshops
further.
Dated: July 31, 1997.
Cynthia Quarterman,
Director, Minerals Management Service.
[FR Doc. 97-21346 Filed 8-12-97; 8:45 am]
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