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Home My WebLink AboutBinders 9-10Interim Final Drilling Safety Rule W41 Final Safety and Environmental Management Systems (BEMs) w4310-MR-P DEPARTMENT OF THE INTERIOR Bureau of Ocean Energy Management, Regulation and Enforcement 30 CFR Part 250 [Docket ID: BOEM-2010-0034] RIN 1010—AD68 Oil and Gas and Sulphur Operations in the Outer Continental Shelf —Increased Safety Measures for Energy Development on the Outer Continental Shelf AGENCY: Bureau of Ocean Energy Management, Regulation and Enforcement, (BOEMRE), Interior. ACTION: Interim final rule with request for comments. SUMMARY: This interim final rule implements certain safety measures recommended in the report entitled, "Increased Safety Measures for Energy Development on the Outer Continental Shelf' (Safety Measures Report), dated May 27, 2010. The President directed the Department of the Interior to develop the Safety Measures Report to identify mcasures necessary to improve the safety of oil and gas exploration and development on the Outer Continental Shelf in light of the Deepwater Horizon event on April 20, 2010, and resulting oil spill. To implement the practices recommended in the Safety Measures Report, the Bureau of Ocean Energy Management, Regulation and Enforcement is amending drilling regulations related to well control, including: subsea and surface blowout preventers, well casing and cementing, secondary intervention, unplanned disconnects, recordkeeping, well completion, and well plugging. DATES: Effective Date: This rule becomes effective on [INSERT DATE OF 0 • PUBLICATION IN THE FEDERAL REGISTER]. The incorporation by reference of the publication listed in the regulations is approved by the Director of the Federal Register as of [INSERT DATE OF PUBLICATION IN THE FEDERAL REGISTER]. Submit comments on the interim final rule by [INSERT DATE 60 DAYS AFTER DATE OF PUBLICATION IN THE FEDERAL REGISTER]. BOEMRE 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 rule by [INSERT DATE 60 DAYS AFTER DATE OF PUBLICATION IN THE FEDERAL REGISTER]. ADDRESSES: You may submit comments on the interim final rulemaking by any of the following methods. Please use the Regulation Identifier Number (RIN) 1010-AD68 as an identifier in your message. See also Public Availability of Comments under Procedural Matters. • Federal eRulemaking Portal: htty://www.regutations.gov. In the entry titled "Enter Keyword or ID," enter BOEM-2010-0034 then click search. Follow the instructions to submit public comments and view supporting and related materials available for this rulemaking. BOEMRE will post all comments. • Mail or hand -carry comments to the Department of the Interior; Bureau of Ocean Energy Management, Regulation and Enforcement; Attention: Regulations and Standards Branch (RSB); 381 Elden Street, MS-4024, Herndon, Virginia 20170-4817. Please reference "Increased Safety Measures for Energy Development on the Outer Continental Shelf, 1010—AD68" in your comments and include your name and return address. 0 2 0 • Send comments on the information collection in this rule to: Department of the Interior; Bureau of Ocean Energy Management, Regulation and Enforcement; Attention: Cheryl Blundon; 381 Elden Street, MS-4024; Herndon, Virginia 20170-4817. Please reference Information Collection 1010-0185 in your comment and include your name and address. FOR FURTHER INFORMATION CONTACT: Amy C. White, Office of Offshore Regulatory Programs, Regulations and Standards Branch, Bureau of Ocean Energy Management, Regulation and Enforcement, 703-787-1665, amy.white@boemre.gov. SUPPLEMENTARY INFORMATION: Table of Contents I. Background • II. Request for Comments on Interim Final Rule and Effective Date III. Overview of Requirements in the Interim Final Rule • IV. Source of Specific Provisions Addressed in the Interim Final Rule V. Justification for Interim Final Rulemaking VI. Section -By -Section Discussion of Requirements in the Interim Final Rule VII. Additional Recommendations in the Safety Measures Report not Covered in this Interim Final Rule 1. Background This interim final rule promulgated for the prevention of waste and conservation of natural resources of the Outer Continental Shelf, establishes regulations based on certain recommendations in the May 27, 2010, report from the Secretary of the Interior to the President entitled, "Increased Safety Measures for Energy Development on the Outer 3 0 Continental Shelf' (Safety Measures Report). The President directed that the Department 0 of the Interior (DOI) develop this report as a result of the Deepwater Horizon event on April 20, 2010. This event, which involved a blowout of the BP Macondo well and an explosion on the Transocean Deepwater Horizon mobile offshore drilling unit (MODU), resulted in the deaths of 11 workers, an oil spill of national significance, and the sinking of the Deepwater Horizon MODU. On June 2, 2010, the Secretary of the Interior directed the Bureau of Ocean Energy Management, Regulation and Enforcement (BOEMRE) (formerly the Minerals Management Service) to adopt the recommendations contained in the Safety Measures Report and to implement them as soon as possible. The Safety Measures Report recommended a series of steps to improve the safety of offshore oil and gas drilling operations in Federal waters. It outlined a number of specific measures designed to ensure sufficient redundancy in blowout preventers (BOPS), promote well integrity, enhance well control, and facilitate a culture of safety through operational and personnel management. The Safety Measures Report recommended that certain measures be implemented immediately through a Notice to Lessees and Operators (NTL). It identified other measures as being appropriate to address through an emergency rulemaking process. The Safety Measures Report recognized that other recommendations would require additional review and refinement through technical reviews by the DOI, through information supplied as a result of the numerous investigations into the root causes of the Deepwater Horizon explosion, and through the longer -term recommendations of DOI strike teams and inter -agency work groups. The Safety Measures Report recommended that these other measures be addressed through notice and comment rulemaking, as appropriate. 4 0 On June 8, 2010, BOEMRE issued an NTL addressing those recommendations identified in the Safety Measures Report as warranting immediate implementation (NTL No.2010-N05 — Increased Safety Measures for Energy Development on the OCS). This interim final rule clarifies existing regulatory requirements that were addressed by certain portions of NTL No. 2010-N05. This rule incorporates specific details included in 2010-N05 by codifying these into regulations. The rule does not codify the one-time requirements from NTL No. 2010-N05, such as the one-time requirement for recertification of all BOP equipment used in new floating operations, which will be evaluated and considered for future rulemakings as appropriate. This interim final rule also addresses measures identified in the Safety Measures Report as appropriate for implementation through emergency rulemaking, with certain exceptions discussed later. It also includes other provisions from the Safety Measures Report that BOEMRE considers appropriate for immediate implementation in this interim final rule. As provided for in the Safety Measures Report, BOEMRE will continue to review other safety measures. These include items that may be appropriate for rulemaking in the near future, as well as measures that will require further study, whether through DOI-led strike teams, inter -agency workgroups, or other means. The following table provides a summary of the interim final rule requirements, estimated annual costs to implement the requirements, and the operator's ability to comply with the requirements. Additional discussion on all the requirements follows in the remainder of the preamble. Summary of Interim Final Rule Compliance • • Operator cost Operator Ability Citation and to Implement to Comply with Requirement Recommendation Applies to per Year* Require ent § 250.198(a)(3) Based on NTL No. All operators Administrative All documents 2010 N05. provision that does incorporated by reference not impose "should" and "shall" compliance times mean "must" beyond the substantive provisions involved. § 250.198(h)(79) Safety Measures All Additional Incorporation by Report: II.B.3.7: applications information Reference of API RP 65 Enforce Tighter for permit to provision does not — Part 2 Isolating Primary Cementing drill impose compliance Potential Flow Zones Practices (APDs).** times beyond the During Well substantive Construction provisions involved. § 250.415(f) Safety Measures Submitted New engineering Written description of Report: II.B.3.7: with APD. requirement. how the operator Enforce Tighter Applies to all BOEMRE believes evaluated the best Primary Cementing APDs. that most operators practices included in API Practices will be able to RP 65- Part 2. The comply with this description must identify requirement with mechanical barriers and no significant cementing practices to be delays*** because used for each casing this can be string. completed concurrently with other tasks. § 250.416(d) Safety Measures Submitted Information is Include schematics of all Report: I.B.5: with APD. readily available. control systems and Secondary Control Applies to all Should not delay control pods. System APDs. submission of the Requirement and APD. Guidelines § 250.416(e) Safety Measures Submitted Because there are Independent third party Report: I.C.7: with APD. multiple verification that the Develop New Applies to all engineering firms blind -shear rams Testing APDs. available to do this installed are capable of Requirements. work, and because shearing any drill pipe in Also in NTL No. operators have had the hole. N05. 51,200,000 advance notice of this requirement in § 250.416(f) Safety Measures Submitted Independent third party Report: I.B.2: with APD. both the Safety verification that subsea Order BOP All APDs for Measures Report BOP is designed for Equipment well with and NTL No. N05, specific equipment on rig Compatibility subsea BOP BOEMRE believes and specific well design. Verification for stack. Subsea that most operators Each Floating BOP stacks will be able to Vessel and for are usually comply with this Each New Well. employed in requirement with Also in NTL No. I dee water. I I no significant delay r� U • • Operator cost Operator Ability Citation and to Implement to Comply with Requirement Recommendation Applies to per Year* Requirement N05. and provide information in the APD. § 250.416(g) Based on NTL No. All APDs. Related to Qualification for 2010 N-05. requirements for independent third parties. independent third party certifications. § 250.420(a)(6) Safety Measure Submitted $6,000,000 Because there are Certification by a Report: II.B.1.3: with APD. multiple professional engineer New Casing and Applies to all engineering firms that there are two Cement Design APDs. available to do this independent tested Requirements: Two work and because barriers and that the Independent operators have had casing and cementing Barriers. This advance notice of design are appropriate requirement was this requirement in also addressed in both the Safety NTL No. N05. Measures Report and NTL No. N05, BOEMRE believes operators will be able to comply with this requirement with no significant delays and provide information in the APD. § 250.420(b)(3) Safety Measure Completed $10,300,000 Completed during Installation of dual Report: II.B.1.3: during the the casing and mechanical barriers in New Casing and casing and cementing of the addition to cement for Cement Design cementing of well. Compliance final casing string. Requirements: Two the well. It with this Independent applies to all requirement may Barriers. This wells drilled. minimally increase requirement was the time to drill also addressed in each well. NTL No. N05. § 250.423(b) Safety Measure Complied Because operators The operator must Report: II.B.2.5: with after the had advance notice perform a pressure test New Casing installation of this requirement on the casing seal Installation of each in both the Safety assembly to ensure Procedures. This casing string Measures Report proper installation of requirement was or liner for and NTL No. N05, casing or liner. The also addressed in all wells BOEMRE believes operator must ensure that NTL No. N05. drilled with a operators should be the latching mechanisms subsea BOP complying with or lock down stack. It is this requirement. mechanisms are engaged tested after upon installation of each the casing string or liner. installation of the casing or liner. 9 Operator cost Operator Ability Citation and to Implement to Comply with Requirement Recommendation Applies to per Year* Requirement § 250.423(c) Safety Measure Tested after $45,100,000 Compliance with The operator must Report: I1.13.2.6: running the this requirement perform a negative Develop Additional casing. All will increase the pressure test to ensure Requirements or wells, time to drill each proper casing Guidelines for involves all subsea well installation. This test Casing. rigs with resulting in must be performed for surface and additional costs. the intermediate and subsurface BOEMRE production casing strings. BOPS in all estimates several water depths. hours of additional drilling time for each well. § 250.442(c) Safety Measure Applies to all All rigs should be § 250.515(e) Report: I.B.5: subsea BOP able to comply § 250.615(e) Secondary Control stacks. with requirement. Have a subsea BOP stack System All rigs currently equipped with remotely Requirements and have ROV operated vehicle (ROV) Guidelines. This intervention intervention capability. requirement was capability; At a minimum, the ROV also addressed in approximately 80% must be capable of NTL No. N05. of subsea BOP closing one set of pipe stacks currently rams, closing one set of have all the blind -shear rams, and specified unlatching the lower capabilities. Other marine riser package. 20% are expected to be able to comply romptl . § 250.442(c) Safety Measure Ongoing BOEMRE believes § 250.515(e) Report: I.B.6: New requirement. all rigs operating § 250.615(e) ROV Operating All subsea on OCS are already Maintain an ROV and Capabilities; BOP stacks in compliance. have a trained ROV crew II.A.1: Establish regardless of on each floating drilling Deepwater Well- water depth. rig on a continuous basis. Control Procedure Guidelines § 250.442(f) Safety Measure Anytime BOEMRE believes § 250.515(e) Report: I.B.5: drilling all DP rigs § 250.615(e) Secondary Control occurs with operating on OCS Provide autoshear and System subsea BOP currently comply deadman systems for Requirements and stacks on DP with this dynamically positioned Guidelines rigs. requirement. (DP) rigs. § 250.442(e) Safety Measure Ongoing Requires trained § 250.515(e) Report: II.A.1: requirement. ROV crew; for rigs § 250.615(e) Establish Applies to all not already in Establish minimum Deepwater Well- personnel compliance, requirements for Control Procedure that operate additional training personnel authorized to Guidelines subsea BOP or hiring of new operate critical BOP stacks. crew may be equipment. Majority of necessary. drilling rigs Additional training • Operator cost Operator Ability Citation and to Implement to Comply with Requirement Recommendation Applies to per Year* Requirement that use could take days to subsea BOP weeks, depending stacks upon how well operate in existing crews are deepwater. trained. However, BOEMRE believes no rigs should be operating without adequately trained personnel. § 250.446(a) Safety Measure Ongoing All rigs should be § 250.516(h) Report: I.B.5: requirement. able to comply § 250.516(g) Secondary Control All BOP with requirement. § 250.617 System stacks. All Require documentation Requirements and water depths. of BOP inspections and Guidelines maintenance according to API RP 53. § 250.4496) Safety Measure § 250.516(d)(8) Report: I.B.5: § 250.616(h)(1) Secondary Control All rigs should be Test all ROV System able to comply intervention functions on Requirements and with requirement. the subsea BOP stack Guidelines; I.C.7: This requirement during the stump test. Develop New During the not expected to Test at least one set of Testing stump test result in significant rams during the initial Requirements. and initial delay. Compliance test on the seafloor. test on the seafloor. All $118,200,000 with this requirement will § 250.449(k) Safety Measure § 250.516(d)(9) Report: I.B.5: subsea BOP slightly increase § 250.616(h)(2) Secondary Control stacks. All the time to drill Function test autoshear System water depths. each deepwater and deadman systems on Requirements and well drilled with a the subsea BOP stack Guidelines; I.C.7: subsea BOP, during the stump test. Develop New resulting in Test the deadman system Testing additional costs. during the initial test on Requirements the seafloor. § 250.451(i) Safety Measure Emergency S2,600,000 Compliance with If the blind -shear or Report: I.C.7: activation of this requirement casing shear rams are Develop New blind or will increase activated in a well Testing casing shear drilling costs when control situation, the Requirements. This rams. such an emergency BOP must be retrieved requirement was occurs. and fully inspected and also addressed in tested NTL No. N05. § 250.4560) Safety Measure Submit with New requirement. Before displacing kill- Report: II.A.2: APD or Operator should be weight drilling fluid from New Fluid application able to provide this the wellbore, the operator Displacement for permit to information in must receive approval Procedures modify APD or APM from the District APM . All without significant • • 1] Operator cost Operator Ability Citation and to Implement to Comply with Requirement Recommendation Applies to per Year* Requirement Manager. The operator wells where delay. must submit the reasons the operator for displacing the kill- wants to weight drilling fluid and displace kill - provide detailed step -by- weight fluids. step procedures This could describing how the occur on all operator will safely rigs that use displace these fluids. either a surface or subsurface BOP stack. Could occur with all water depths. Subpart O, §§ 250.1500- Safety Measure All wells BOEMRE believes 250.1510 Report: II.A.1: drilled with that the majority of Requires that rig Establish subsea BOP operators have personnel are trained in Deepwater Well- stack. addressed this deepwater well control Control Procedure requirement. There and the specific duties, Guidelines should not be any equipment, and delay for this techniques associated requirement. with dee water drilling. § 250.1712(g) Safety Measure Submitted Operator should be § 250.1721(h) Report: II.B.1.3: with APM. able to comply Certification by a New Casing and All with no significant professional engineer of Cement Design abandonment delay and provide the well abandonment Requirements: Two operations information in design and procedures; Independent Tested regardless of application for that there will be at least Barriers BOP type or permit to modify two independent tested water depth. (APM). Estimate barriers, including one that this could take mechanical barrier, an operator as across each flow path much as several during abandonment days to comply activities; and that the with new plug meets the requirement. requirements in the table Depends on in § 250.1715 operator's internal review process. * Costs that were not provided did not add a meaningful value in comparison of the cost of drilling a well. ** All APDs means all wells drilled with a surface BOP and all wells drilled with a subsurface BOP. Includes all water depths. *** Requirements noted as "no significant delay" are anticipated to require no more than 1 week to achieve compliance. While individually each activity could take a day and possibly up to 5 days to complete, it is anticipated that companies will build this into their schedules with no resulting overall delay. Total Estimates of Costs and Benefits 10 • Total Estimated Annual Compliance Costs $183.1 million Total Estimated Annual Avoided Social Costs (Benefits) $631.4 million — B* *DOI estimated the cost of a hypothetical spill in the future at $16.3 billion, and also estimated the baseline likelihood of a catastrophic blowout event and spill occurring, based on historical trends and the number of expected future wells, to be once every 26 years. These estimates are necessarily uncertain, and are discussed in more detail in the RIA. Combining the baseline likelihood of occurrence with the cost of a hypothetical spill implies that the expected annualized spill cost is about $631 million. This rulemaking will not reduce the probability of a future spill to zero; therefore, `B" in the table above represents the adjustment in annual avoided social costs expected from this rulemaking based on the non -zero remaining probability of a spill after this rule is put into place. Thus, the difference between the avoided costs with and without their rule represents its expected benefits. This remaining probability is uncertain. For example, to balance the $183 million annual cost imposed by these regulations with the expected benefits, the reliability of the well control system needs to improve by about 29 percent ($183 million / $631 million). Although we have found no studies that evaluate the degree of actual improvement that could be expected from dual mechanical barriers, negative pressure tests, and a seafloor ROV function test, we believe it reasonable to anticipate that such measures will increase the reliability of the well control systems, and therefore that the benefits of this rulemaking justify the costs. 11. Request for Comments on Interim Final Rule and Effective Date This is an interim final rulemaking with request for comments; it is effective immediately upon publication. The Administrative Procedure Act (APA) requires that an agency publish a proposed rule in the Federal Re ig ster with notice and an opportunity for public comment, unless the agency, for good cause, finds that providing notice and soliciting comments in advance of promulgating the rule would be impracticable, unnecessary, or contrary to the public interest (5 U.S.C. 553(b)). BOEMRE determined that there is good cause for publishing this interim final rule without prior notice and comment based on its findings, consistent with preliminary information that is available as a result of investigations into the Deepwater Horizon event, that certain equipment, systems, and improved practices are immediately necessary for the safety of offshore oil and gas drilling operations on the Outer Continental Shelf (OCS), and that these improved drilling practices are either not addressed or not sufficiently detailed by current regulations. Immediate imposition of the requirements contained in this interim final rule 0 is necessary because BOEMRE views strict adherence to improved safety practices set 11 iforth herein as necessary to achieving safer conditions that, together with other wild well control and oil spill response capabilities, will allow it to permit future OCS drilling operations. Following notice and comment procedures would be impracticable in these circumstances. Furthermore, following notice and comment procedures would be contrary to the public interest because the delay in implementation of this interim final rule could result in harm to public safety and the environment. Failure to adhere to the safety practices required by this interim final rule increases the risk of a blowout and subsequent oil spill, with serious consequences to the health and safety of workers and the environment. As discussed in Section 5, "Justification for the Interim Final Rulemaking," while investigation and information -gathering into the Deepwater Horizon blowout and spill continues, preliminary evidence suggests problems with the Macondo well's line of defense, which could include blowout preventer (BOP) systems, casing and cementing programs, and fluid displacement procedures. Evidence further suggests that it is unlikely that these problems are unique to the Deepwater Horizon event; for example, most BOPs used in drilling on the OCS are of similar design and are produced by a limited number of manufacturers. The interim final rule's provisions thus incorporate targeted measures to promote the integrity of the well and enhance well control, including provisions specifically identified by the Safety Measures Report as warranting immediate implementation. For example, the requirement that operators have all well casing designs and cementing systems/procedures certified by a Professional Engineer. Similarly, BOEMRE determined that the immediate necessity for improved equipment, systems, and practices also provides good cause to impose an immediate 12 ieffective date. The APA requires an agency to publish a rule not less than 30 days before its effective date, except as otherwise provided by the agency for good cause found and published with the rule (5 U.S.C. 553(d)(3)). Just as BOEMRE found that providing notice and an opportunity to comment is impracticable and contrary to the public interest, BOEMRE finds that a 30-day delay after publication of this interim final rule compromises the safety of offshore oil and gas drilling. To the extent that the 30-day period is intended to allow regulated parties to adjust to new requirements, information gathered by BOEMRE in advance of this rulemaking indicates that the oil and gas industry is well aware of the general provisions in this interim final rule. Most of the provisions in the rule were identified in the Safety Measures Report, and industry is already working to implement them. We note that in developing the Safety Measures Report on which this interim final rule is based, the Department consulted with a wide range of experts in state and Federal governments, academic institutions, and industry and advocacy organizations. In addition, the draft recommendations of the Safety Measure Report were peer reviewed by seven experts identified by the National Academy of Engineering (NAE). Further explanation of the justification for this interim final rulemaking is provided in section V, "Justification for Interim Final Rulemaking." While BOEMRE will not solicit comments before the effective date, BOEMRE will accept and consider public comments on this rule that are submitted within 60 days of its publication in the Federal Register. After reviewing the public comments, BOEMRE will publish a notice in the Federal Register that will respond to comments and will either: 1. confirm this rule as a final rule with no additional changes, or 13 • 2. issue a revised final rule with modifications, based on public comments. III. Overview of Requirements in the Interim Final Rule As recommended in the Safety Measures Report, this interim final rule imposes a number of prescriptive, near -term requirements. Other longer -term safety measures and performance -based standards recommended in the Safety Measures Report will be analyzed for implementation in future rulemakings. Information from the many investigations and other information sources will also be analyzed and considered in firture rulemakings. In developing the Safety Measures Report on which this interim final rule is based, the Department consulted with experts in state and Federal government, academic institutions, and industry and advocacy organizations. In addition, draft recommendations were peer reviewed by seven experts identified by the NAE. The primary purpose of this interim final rule is to clarify and incorporate safeguards that will decrease the likelihood of a blowout during drilling operations on the OCS. The safeguards address well bore integrity and well control equipment, and this interim final rule focuses on those two overarching issues. This rule will therefore promulgate OCS- wide provisions that will: 1. Establish new casing installation requirements, 2. Establish new cementing requirements (incorporate American Petroleum Institute (API) Recommended Practice (RP) 65—Part 2, Isolating Potential Flow Zones During Well Construction), 3. Require independent third party verification of blind -shear ram capability, 4. Require independent third party verification of subsea BOP stack compatibility, 5. Require new casing and cementing integrity tests, 14 • 6. Establish new requirements for subsea secondary BOP intervention, 7. Require function testing for subsea secondary BOP intervention, 8. Require documentation for BOP inspections and maintenance, 9. Require a Registered Professional Engineer to certify casing and cementing requirements, and 10. Establish new requirements for specific well control training to include deepwater operations. As stated, the intent of this interim final rule is to improve safety related to both well bore integrity and well control equipment. Well bore integrity provides the first line of defense against a blowout by preventing a loss of well control. Well bore integrity includes appropriate use of drilling fluids and • the casing and cementing program. Drilling fluids and the casing and cementing program are used to balance the pressure in the borehole against the fluid pressure of the • formation, preventing an uncontrolled influx of fluid into the wellbore. The specific provisions in this rule that address well bore integrity are: 1. Incorporating by reference API RP 65—Part 2, Isolating Potential Flow Zones During Well Construction; 2. Submission of certification by a Registered Professional Engineer that the casing and cementing program is appropriate for the purpose for which it is intended under expected wellbore pressure; 3. Requirements for two independent test barriers across each flow path during well completion activities (also certified by a Registered Professional Engineer); 4. Ensuring proper installation of the casing or liner in the subsea wellhead or liner 15 • hanger; and 5. Approval from the District Manager before displacing kill -weight drilling fluid; 6. Deepwater well control training for rig personnel. Well control equipment is the general term for the technologies used to control a well by mechanical means in the event that other well control mechanisms fail. Well control equipment includes control systems that activate the BOPS, either through a control panel on the drilling rig or through Remotely Operated Vehicles (ROVs) that directly interface with the subsea BOP to activate the appropriate rams. The provisions in this rule that address well control equipment include: 1. Submission of documentation and schematics for all control systems; 2. A requirement for independent third party verification that the blind -shear rams are capable of cutting any drill pipe in the hole under maximum anticipated surface pressure (MASP); 3. A requirement for a subsea BOP stack equipped with ROV intervention capability. At a minimum, the ROV must be capable of closing one set of pipe rams, closing one set of blind -shear rams, and unlatching the Lower Marine Riser Package (LMRP); 4. A requirement for maintaining an ROV and having a trained ROV crew on each floating drilling rig on a continuous basis; 5. A requirement for autoshear and deadman systems for dynamically positioned rigs; 6. Establishment of minimum requirements for personnel authorized to operate critical BOP equipment; 16 • • 7. A requirement for documentation of subsea BOP inspections and maintenance according to API RP 53, Recommended Practices for Blowout Prevention Equipment Systems for Drilling Wells; 8. Required testing of all ROV intervention functions on the subsea BOP stack during the stump test and testing at least one set of rams during the initial test on the seafloor; 9. Required function testing of autoshear and deadman systems on the subsea BOP stack during the stump test and testing the deadman system during the initial test on the seafloor; and 10. Required pressure testing if any shear rams are used in an emergency. The following table shows where recommendations from the Safety Measures Report are implemented in the interim final rule. Safety Measures Report Recommendation Interim Final Rule Citation Subpart A — General II.B.3.7: Enforce Tighter Primary Cementing § 250.198 Documents incorporated by reference. Practices. Subpart D- Oil and Gas Drilling Operations II.B.3.7: Enforce Tighter Primary Cementing § 250.415 What must my casing and cementing Practices. programs include? I.A.2: Order BOP Equipment Compatibility § 250.416 What must I include in the diverter and Verification for Each Floating Vessel and for Each BOP descriptions? New Well. I.B.5: Secondary Control System Requirement and Guidelines. I.C.7: Develop New Testing Requirements. II.B.1.3: New Casing and Cement Design § 250.418 What additional information must I submit Requirements: Two Independent Barriers. with my APD? I.C.7: Develop New Testing Requirements. II.B.1.3: New Casing and Cement Design § 250.420 What well casing and cementing Requirements: Two Independent Barriers. requirements must I meet? II.B.1.3: New Casing and Cement Design § 250.423 What are the requirements for pressure Requirements: Two Independent Barriers. testing casing? II.B.2.5: New Casing Installation Procedures. II.B.2.6: Develop Additional Requirements or Guidelines for Casing Installation. I.B.5: Secondary Control System Requirements and § 250.442 What are the requirements for a subsea Guidelines. BOP system? I.B.6: New ROV Operating Capabilities. II.A.1: Establish Dee water Well -Control Procedure 17 • Safety Measures Report Recommendation Interim Final Rule Citation Guidelines. I.B.5: Secondary Control System Requirements and § 250.446 What are the BOP maintenance and Guidelines. inspection requirements? I.B.5: Secondary Control System Requirements and § 250.449 What additional BOP testing requirements Guidelines. must I meet? I.C.7: Develop New Testing Requirements. I.C.7: Develop New Testing Requirements. § 250.451 What must I do in certain situations involving BOP equipment ors stems? II.A.2: New Fluid Displacement Procedures. § 250.456 What safe practices must the drilling fluid ro ram follow? Subpart E — Oil and Gas Well -Completion Operations I.B.5: Secondary Control System Requirements and § 250.515 Blowout prevention equipment. Guidelines. I.B.6: New ROV Operating Capabilities. II.A.1: Establish Deepwater Well -Control Procedure Guidelines. I.B.5: Secondary Control System Requirements and § 250.516 Blowout preventer system tests, Guidelines and recommendation. inspections, and maintenance. I.C.7: Develop New Testing Requirements. Subpart F — Oil and Gas Well-Workover Operations I.B.5: Secondary Control System Requirements and § 250.615 Blowout prevention equipment. Guidelines. I.B.6: New ROV Operating Capabilities. II.A.1: Establish Deepwater Well -Control Procedure Guidelines. I.B.5: Secondary Control System Requirements and § 250.616 Blowout preventer system testing, records, Guidelines and recommendation. and drills. I.C.7: Develop New Testing Requirements. I.B.5: Secondary Control System Requirements and § 250.617 What are my BOP inspection and Guidelines and recommendation. maintenance requirements? I.C.7: Develop New Testing Requirements. Subpart O — Well Control and Production Safet} Training II.A.1: Establish Deepwater Well -Control Procedure §§ 250.1500-250.1510. Guidelines. § 250.1503 What are my general responsibilities for training? Subpart Q — Decommissioning Activities II.B.1.3: New Casing and Cement Design § 250.1712 What information must I submit before I Requirements: Two Independent Tested Barriers. permanently pluga well or zone? II.B.1.3: New Casing and Cement Design § 250.1721 If I temporarily abandon a well that I Requirements: Two Independent Tested Barriers. I plan to re-enter, what must I do? IV. Source of Specific Provisions Addressed in the Interim Final Rule This interim final rule clarifies existing regulatory requirements that were addressed by certain portions of NTL No. 2010-N05 by codifying the specific details into regulations. It also addresses items in the Safety Measures Report either identified as 18 appropriate for implementation through emergency rulemaking, or which BOEMRE has determined will significantly increase OCS drilling safety and with which operators can readily comply. The following provides an explanation of each of these sources and provisions. Emergency Rulemakint! Recommendations from Safety Measures Report The Safety Measures Report identified four items for emergency rulemaking: 1. Develop secondary control system requirements; 2. Establish new blind -shear ram redundancy requirements; 3. Establish new deepwater well control procedure requirements; and 4. Adopt safety case requirements for floating drilling operations on the OCS. Of these four items, this interim final rule addresses: 1. secondary control system requirements; and 3. deepwater well control procedure requirements. This interim final rule does not include: 2. new blind -shear ram redundancy requirements; and 4. safety case requirements for floating drilling operations on the OCS. BOEMRE determined that, while new blind -shear ram redundancy requirements are important to offshore drilling safety, they are not appropriate for inclusion in this interim final rule. Installation of a second set of blind -shear rams will require major modifications to the BOP stack for most rigs on the OCS. Compliance with such a requirement is likely to take operators from 1 year to 18 months. Inclusion of a requirement that will necessitate a period of 1 year or more to comply is not appropriate for an interim final rule, the purpose of which is to have immediate effect. Given the necessary compliance periods, BOEMRE believes there will be sufficient opportunity to proceed through a notice and comment rulemaking. Operators should be aware, 19 • however, that BOEMRE intends to promptly initiate a notice and comment rulemaking • process to address this issue. Specifically, operators should be aware that BOEMRE is considering regulations to require the installation of a second set of blind -shear rams, appropriately spaced to ensure that at least one blind -shear ram cuts any drill pipe in the hole and seals the wellbore at any time. Operators should also be aware that BOEMRE is likewise considering requiring, through a notice and comment rulemaking, a set of casing shear rams capable of shearing any casing in the hole. This interim final rule addresses both new well bore integrity requirements and well control equipment requirements. The well bore integrity provisions impose requirements for casing and cementing design and installation, tighter cementing practices, the displacement of kill -weight fluids, and testing of independent well barriers. These new requirements ensure that there are additional physical barriers in the well to prevent oil and gas from escaping into the environment. These new requirements related to well bore integrity will considerably decrease the likelihood of a loss of well control. The well control equipment requirements in this interim final rule will help ensure the BOPs will operate in the event of an emergency and that the ROVs are capable of activating the BOPs. Together, these new requirements will help decrease the urgency of immediately requiring blind -shear ram redundancy on BOPs, and have factored into BOEMRE's decision to address such requirements through a standard rulemaking process. BOEMRE also determined not to include safety case requirements for floating drilling operations in this interim final rule. A safety case is a comprehensive, structured documentation system to reduce operating risks for offshore drilling. A drilling safety case would establish risk assessment and mitigation processes to manage a drilling 20 contractor's controls related to health, safety, and environmental aspects of operations. BOEMRE is evaluating how a drilling safety case should be most appropriately integrated with an overall Safety and Environmental Management System (SEMS) approach, which BOEMRE may implement through a separate rulemaking process. As directed in the Safety Measures Report, BOEMRE will work with offshore operators and drilling contractors, appropriate government agencies, and other appropriate stakeholders to consider the type of well construction interfacing document that will best connect the requirements of a safety case to existing well design and construction documents. BOEMRE therefore intends to pursue adoption of appropriate safety case requirements through a separate rulemaking process once the necessary analyses have been completed. Requirements from NTL No. 2010-N05 • Of the requirements in this interim final rule, the following table clarifies existing regulations by codifying provisions of NTL No. 2010-N05: • NTL No. 2010-N05 Provision Interim Final Rule Citations Documentation that the BOP has been maintained § 250.446 What are the BOP maintenance and according to the regulations at § 250.446(a), inspection requirements? maintain these records and make them available § 250.516 Blowout preventer system tests, upon request (safety report rec. I.A.I). inspections, and maintenance. § 250.617 What are my BOP inspection and maintenance requirements? Independent third party verification that the BOP § 250.416 What must I include in the diverter and stack is designed for the specific equipment on the BOP descriptions? rig and compatible with the specific well location, well design, and well execution plan; that the BOP stack has not been compromised or damaged from previous service; and that the BOP stack will operate in the conditions in which it will be used (safety report rec. I.A.2). Secondary control system with ROV intervention § 250.442 What are the requirements for a subsea capabilities, including the ability to close one set BOP system? of blind -shear rams and one set of pipe rams and § 250.515 Blowout prevention equipment. unlatch the LMRP (safety report rec. I.B.5). § 250.615 Blowout prevention equipment. Emergency shut-in system in the event that you § 250.442 What are the requirements for a subsea lose power to the BOP stack, have an unplanned BOP system? disconnection of the riser from the BOP stack, or § 250.515 Blowout prevention equipment. experience another emergency situation (safety § 250.615 Blowout prevention equipment. report rec. I.B.5). 21 NTL No. 2010-N05 Provision Interim Final Rule Citations Function test the hot stabs that would be used to § 250.449 What additional BOP testing interface with the ROV intervention panel during requirements must I meet? the stump test (safety report rec. I.B.6). § 250.516 Blowout preventer system tests, inspections, and maintenance. § 250.616 Blowout preventer system testing, records, and drills. Independent third party verification that provides § 250.416 What must I include in the diverter and sufficient information showing that the blind -shear BOP descriptions? rams installed in the BOP stack are capable of shearing the drill pipe in the hole under maximum anticipated surface pressures (safety report rec. I.C.7). If the blind -shear rams or casing shear rams are § 250.451 What must I do in certain situations activated in a well control situation in which pipe involving BOP equipment or systems? or casing was sheared, operators must inspect and test the BOP stack and its components, after the situation is fully controlled (safety report rec. I.C.7). Have all well casing designs and cementing § 250.420 What well casing and cementing program/procedures certified by a Registered requirements must I meet? Professional Engineer, verifying the casing design § 250.1712 What information must I submit before is appropriate for the purpose for which it is I permanently plug a well or zone? intended under expected wellbore conditions § 250.1721 If I temporarily abandon a well that I (safety report rec. II.B.3). plan to re-enter, what must I do? Certain measures in NTL No. 2010-N05 are not included in this interim final rule. These are: 1. Verify compliance with existing BOEMRE regulations and with the BOEMRE/US Coast Guard National Safety Alert (safety report rec. III.A.1). 2. Submit BOP and well control system configuration information for a drilling rig that was being used on May 27, 2010 (safety report rec. I.C.8). 3. Operator must submit the relevant information required in NTL No. 2010-N05 prior to commencing operations if the operator had an Application for Permit to Drill (APD) or Application for Permit to Modify (APM) that was previously approved but drilling had not commenced as of May 27, 2010, and operator may not commence drilling without BOEMRE approval (general requirement for NTL not specified in Safety Measures Report). 22 0 Other Provisions from the Safety Measures Report in this Interim Final Rule The following provisions in this interim final rule are not covered in existing NTL No. 2010-N05 but are identified in the Safety Measures Report as being appropriate to implement either immediately or through an emergency rulemaking: Safety Measures Report Provision Interim Final Rule Citations Establish deepwater well control procedure § 250.442 What are the requirements for a subsea guidelines (safety report rec. II.A.1). BOP system? § 250.515 Blowout prevention equipment. § 250.615 Blowout prevention equipment. §§ 250.1500 through 250.1510 Subpart O-Well Control and Production Safety Training. Establish new fluid displacement procedures § 250.456 What safe practices must the drilling (safety report rec. II.A.2). fluid program follow? Develop additional requirements or guidelines for § 250.423 What are the requirements for pressure casing installation (safety report rec. II.B.2.6 . testing casing? BOEMRE has also included the following provision in this interim final rule from the Safety Measures Report: Safety Measures Report Provision Interim Final Rule Enforce tighter primary cementing practices (safety report ree.II.B.3.7) § 250.415 What must my casing and cementing pprograms include? This provision is recommended in the Safety Measures Report, although it is not specifically identified as requiring implementation immediately or through emergency rulemaking (this provision was also not addressed in NTL No. 2010-N05). BOEMRE has nonetheless determined that it is appropriate for inclusion in this interim final rule because it is consistent with the intent of the recommendations in the Safety Measures Report. Tighter cementing practices will increase the safety of offshore oil and gas drilling operations by improving cementing practices; they also will support the other requirements in this interim final rule. V. Justification for Interim Final Rulemaking Pursuant to the Outer Continental Shelf Lands Act (OCSLA), the Secretary has an . affirmative obligation to ensure that drilling operations undertaken on the OCS are 23 conducted in a manner that is safe for the human, marine, and coastal environment (43 U.S.C. 1332(6), 1334(a), 1347, and 1348; and 30 CFR 250.106). The April 20, 2010, blowout of the BP Macondo well and the explosion on the Deepwater Horizon killed 11 workers and resulted in the Nation's largest oil spill ever, with substantial environmental and economic impacts. On May 28, 2010, the Secretary ordered the suspension of certain oil and gas drilling operations in deepwater (greater than 500 feet). On July 12, 2010, the Secretary rescinded that order and replaced it with a new decision ordering the suspension in the Gulf of Mexico (GOM) and Pacific regions of the drilling of wells using subsea BOPS or surface BOPS on a floating facility, with certain exceptions for intervention wells, injection and disposal wells, abandonments, completions, and workovers. This suspension order applies by its terms until November 30, 2010, although the order notes that it could be lifted earlier than that date. As mentioned previously, on April 30, 2010, the President also directed the Secretary to conduct a thorough review of the Deepwater Horizon event and to report within 30 days on additional measures needed to improve the safety of oil and gas operations on the OCS. On May 27, 2010, the Secretary delivered the Safety Measures Report to the President. This Safety Measures Report incorporated recommendations from BOEMRE, as well as from a wide range of experts from government, academia, and industry. In developing the Safety Measures Report on which this interim final rule is based, the Department consulted with a wide range of experts in state and Federal government, academic institutions, and industry and advocacy organizations. In addition, draft recommendations were peer reviewed by seven experts identified by the NAE. 24 17J Numerous investigations are ongoing, and the precise causes of the well blowout and explosion are not fully known; however, the fact that a blowout occurred clearly indicates problems with the well's line of defense, which could include BOP systems, casing and cementing programs, and fluid displacement procedures. Accordingly, it is not necessary to await certainty regarding the cause of the blowout before promulgating this interim final rule. Circumstances suggest that, while a blowout and spill of this magnitude have not occurred before on the OCS, it is unlikely that the problems are unique to the Deepwater Horizon and BP's Macondo well. As noted in the July 12, 2010, decision of the Secretary to suspend certain offshore permitting and drilling activities, most BOPS used in drilling on the OCS are of similar design and are produced by a limited number of manufacturers. Furthermore, the BOPS for the relief wells drilled to intercept the Macondo well encountered unexpected performance problems, initially failing to pass new testing procedures developed in response to the Safety Measures Report, including failure of the deadman and autoshear functions. These multiple failures raise red flags as to the reliability of BOPS to adequately safeguard the lives of workers and protect the environment from oil spills in response to a large blowout. They also suggest the need to review regulations pertaining to well casing and design, the other area of likely failure in the Deepwater Horizon event. Even without the full results of the pending investigations, the obvious failures of well intervention and blowout containment systems demonstrate that previous regulatory assumptions concerning their reliability are inaccurate. The importance of these systems in preventing catastrophic blowouts and oil spills indicate that genuine harm could result 25 from delay and lead BOEMRE to conclude that immediate regulations are needed to better ensure the reliability of these systems, and to protect the lives of workers, human health, and the environment. This interim final rule therefore, specifically addresses measures that will increase the safety of these systems. It imposes requirements to give greater certainty that casing and cement design and fluid displacement are adequate for well bore integrity, and to enhance the reliability of well control equipment. The casing and cementing program and fluid displacement procedures are the first line of defense in preventing a loss of well control that could lead to a blowout. Casing and cement and drilling fluids are used to ensure the fluids in a formation do not enter the wellbore during drilling and completion operations. When a well is completed and production begins, the casing and cement continue to prevent uncontrolled flow of fluids into the wellbore. The integrity of the casing and cement are critical to proper well control. While the extent to which cementing and casing failures contributed to the Macondo blowout is not yet fully known, preliminary information suggests that the operator may have failed to follow best industry cementing and casing installation practices. The current regulations contain general cementing and casing requirements, but they do not specifically address best cementing and casing installation practices. This rulemaking will provide greater assurance that all operators will follow these safer practices, reducing the risk of a loss of well control. This interim final rule also strengthens requirements for BOPS. In the event of a loss of well control, rig operators use the BOPS to regain control of the well. This is done by closing the various rams on the BOP stack, which shut off the flow of formation fluids to 26 the surface. Secondary well control system requirements (i.e., ROV intervention capabilities and emergency back-up BOP control systems) ensure that rig operators are able to activate various BOP rams in the event the control system on the rig fails (e.g., loss of power). Requirements in this interim final rule impose new standards to enhance BOP reliability, thereby lessening the possibility of failures that could lead to an uncontrolled blowout and spill with potentially catastrophic consequences for workers and the environment. Given the Deepwater Horizon blowout and resulting spill, and because of the potential for grave harm to workers and the human, marine, and coastal environment from any additional events, BOEMRE concludes that existing regulations must be strengthened to more fully protect offshore workers, the environment, and the public, and . that this situation justifies immediate imposition of the requirements of this interim final rule. • This interim final rule applies to ongoing operations not covered by the Secretary's July 12, 2010, suspension decision in addition to those operations that were suspended by that decision. Immediate imposition of the requirements of this rule is necessary for both ongoing and suspended operations to ensure that all operations proceed in a more safe and reliable fashion in protection of human health and the environment. The July 12, 2010, suspension expires by its terms on November 30, 2010, and it could be lifted earlier. A standard APA notice and comment rulemaking process would place the effective date of these measures beyond the expiration date of the suspension, which would mean that these operations could resume without the benefit of the new safety measures being in place. Therefore, BOEMRE believes that the delay associated with 27 notice and comment has the potential to harm worker and public health and safety and the environment, and further justifies the immediate implementation of this interim final rule to all OCS drilling operations. To act otherwise has the potential to risk worker and environmental protection with inadequate regulatory coverage. BOEMRE is cognizant of the fact that the Secretary has the ability to extend the suspension of operations covered by his July 12, 2010, decision, or to apply the suspension to additional operations on the OCS. Immediate application of the safety measures in this interim final rule, however, will improve the reliability of well control systems, thereby allowing all oil and gas operations on the OCS to proceed in a more safe and environmentally sound manner. BOEMRE believes that much of the oil and gas industry is already well informed of 10 the general provisions in this interim final rule, most of which were identified in the Safety Measures Report. Information gathered by BOEMRE in advance of this • rulemaking indicates that BOP equipment manufacturers, drilling contractors, and operators are already working to address the recommendations. Establishing these requirements via an interim final rule will allow these entities to make informed financial and operational decisions earlier. As previously noted, these regulations were developed without the benefit of the conclusive findings from the ongoing investigations into the root causes of the explosions and fire on the Deepwater Horizon. In the future, based on the comments we receive on this rule and the additional findings of ongoing investigations, BOEMRE may issue additional regulations or amendments to these regulations that will be intended to further increase the safety of offshore oil and gas operations. 28 • VI. Section -By -Section Discussion of Requirements in the Interim Final Rule Documents incorporated by reference (§ 250.198) Code of Federal Regulations, Title 30 -- MINERAL RESOURCES BOEMRE is revising the title of Chapter II to, "CHAPTER II -- BUREAU OF OCEAN ENERGY MANAGEMENT, REGULATION AND ENFORCEMENT, DEPARTMENT OF THE INTERIOR." On June 18, 2010, the Secretary of the Interior changed the name of the Minerals Management Service (MMS) to the Bureau of Ocean Energy Management, Regulation and Enforcement (BOEMRE). This rule updates the heading of Chapter II in Title 30, Volume 2, of the Code of Federal Regulations to reflect this change. Paragraph (a)(3) was added to clarify that the documents incorporated by reference into the regulations are requirements. In the National Technology Transfer and Advancement Act of 1995, Congress directed Federal agencies to use technical standards that are developed or adopted by voluntary consensus standards bodies. In § 250.198, BOEMRE incorporates by reference many consensus technical standards including recommended practices, code requirements, and specifications. The effect of incorporating these standards into Federal regulations is confirmed in regulations issued by the Office of the Federal Re ig stet (1 CFR 51.9(b)), which requires agencies to inform the user that an incorporated publication is a requirement. When BOEMRE incorporates a document by reference, any recommendations in the document will be interpreted as requirements, unless otherwise specified. For example, this section incorporates API documents that recommend certain actions using the word should. In the Foreword to its recommended practices, API explains that the word shall 29 LJ indicates that the recommended practice has universal applicability to the specific activity, while the word should denotes a recommended practice where a safe comparable alternative practice is available. Despite this explanation, for API documents incorporated by reference into this part, the terms should and shall mean must. For example, API RP 53, sections 17.10, 17.11, 17.12, 18.10, 18.11, and 18.12, are currently incorporated by reference in § 250.446(a). By adding paragraph (a)(3) to this interim final rule, which explains that the words should and shall both mean must, BOEMRE clarifies to the operators that they must follow all of the provisions of these API RP 53 sections. Paragraph (h)(79) was added to this section and incorporates by reference API RP 65—Part 2, Isolating Potential Flow Zones During Well Construction, First Edition, May 2010. This document contains best practices for zone isolation in wells to prevent annular pressure and/or flow through or past pressure -containment barriers that are installed and verified during well construction. Barriers that seal wellbore and formation pressures or flows may include temporary pressure containment barriers like hydrostatic head pressure during cement curing, and permanent ones such as mechanical seals, shoe formations, and cement. Other well construction (well design, drilling, leak -off tests, etc.,) practices that may affect barrier sealing performance are addressed along with methods to help ensure positive effects or to minimize any negative ones. The incorporation by reference of API RP 65—Part 2 addresses the Safety Measures Report recommendation II.B.3.7: Enforce Tighter Primary Cementing Practices. The citations for API RP 53 in § 250.198(h)(63) were updated to include the requirements in § 250.516 and new § 250.617. W A consensus standard indicates acceptance and recognition across the industry that this technology is feasible. For example, in its recommended practice publications, including API RP 65—Part 2 and API RP 53, API explains that its publications are intended to facilitate the broad availability of proven, sound engineering, and operating practices. The recommended practices are created with input from oil and gas operators, drilling contractors, service companies, consultants, and regulators; therefore, the recommended practices reflect an agreement that the specified practices and technologies are available and appropriate. Even though the development of a standard does not represent a 100% agreement by the task group members, the process provides a means for industry and regulatory bodies to develop protocols for the highly specialized equipment and procedures used in offshore oil and gas work. BOEMRE would not have • the proper resources to develop information included in standards on its own (e.g. deepwater, High Pressure, High Temperature). BOEMRE regulatory program benefits • from using the expertise in industry on offshore operations through the standards development process. Furthermore, in the National Technology Transfer and Advancement Act of 1995, Congress directed Federal agencies to use technical standards that are developed or adopted by voluntary consensus standards bodies (htlp:Hstandards.gov/standards gov/nttaa.cfin). When a copyrighted technical industry standard is incorporated by reference into our regulations, BOEMRE is obligated to observe and protect that copyright. BOEMRE provides members of the public with website addresses where these standards may be accessed for viewing —sometimes for free and sometimes for a fee. The decision to charge a fee is decided by organizations developing the standard. 31 For the convenience of the viewing public who may not wish to purchase these documents, they may be inspected at the Bureau of Ocean Energy Management, Regulation and Enforcement, 381 Elden Street, Room 3313, Herndon, Virginia 20170; phone: 703-787-1587; or at the National Archives and Records Administration. For information on the availability of this material, call 202-741-6030, or go to: http://www.archives.gov/federal register/code of federal regulations/ibr locations.html. These documents will continue to be made available to the public for viewing when requested. Specific information on where these documents can be inspected or purchased can be found at § 250.198, Documents incorporated by reference. In addition, the API has decided to provide free online public access to 160 key industry standards, including a broad range of safety standards once changes to the API website are complete. The standards represent almost one-third of all API standards and will include all that are safety -related or have been incorporated into Federal regulations. The API will make these standards will be available online for review and hardcopies and printable versions will continue to be available for purchase. You may view or purchase these API documents at: http://www.apLgEg/. What must my casing and cementing programs include? (§ 250.415) In this section, BOEMRE added a new paragraph (f) requiring the operator to include in its APD an evaluation of the best practices identified in API RP 65—Part 2, Isolating Potential Flow Zones During Well Construction. We revised paragraphs (c), (d), and (e) to accommodate the new paragraph. Incorporating this document by reference will help ensure operators use best practices when designing their casing and cementing programs and will help ensure the integrity of the well, decreasing the risk of a loss of well control. 32 Operators must submit a written description of their evaluation to BOEMRE that includes the mechanical barriers and cementing practices the operators will use for each casing string. Operators must exercise due diligence in understanding the variables involved when planning the casing and cementing program. The API RP 65—Part 2 addresses mechanical barriers in section 3. A mechanical barrier, as defined by this document, is a verifiable seal achieved by mechanical means between two casing strings or a casing string and the borehole that isolates all potential flowing zones at or below the wellhead, BOP, or diverter. The use of downhole mechanical barriers is complementary to properly executed cementing and not a replacement. The applications of subsurface mechanical barriers must be chosen with care. . The API RP 65—Part 2, section 4, addresses cementing practices and factors affecting cementing. This section requires that casing and cementing programs address many of • the key drilling issues that affect the quality of a primary cementing operation. Section 4 includes the best practices for the factors that must be considered and addresses the interrelationship between drilling operations and cementing success. BOEMRE is requiring operators to document how they evaluated these best practices, to ensure operators consider them while developing their casing and cementing programs. BOEMRE believes that this is an appropriate document to incorporate by reference. The key to successful use of this document for OCS cementing operations is implementation. The regulations will require that the operator address the document during the preparation of the APD and describe the cementing practices and barriers used for casing string. Including this information on the APD will help assure best practices 33 are used for a particular operation. Incorporating this document will not address all issues associated with cementing practices; however, doing so gives the agency the ability to evaluate best cementing practices on a case by case basis. Additional cementing requirements may be identified as results of the many investigations of the Deepwater Horizon event but until then BOEMRE believes this is the best approach to requiring best cementing practices. These additions will allow BOEMRE to confirm that well construction is based on a complete evaluation of all critical factors (including mechanical barriers and cementing practices) involved in a casing and cementing program. This new requirement addresses Safety Measures Report recommendation II.B.3.7: Enforce Tighter Primary Cementing Practices. What must I include in the diverter and BOP descriptions? (§ 250.416) In this section, paragraph (d) was revised to include the submission of a schematic of all control systems, including primary control systems, secondary control systems, and pods for the BOP system. This requirement applies to both surface and subsea BOP systems. This will provide documentation for all control systems to BOEMRE. The location of the controls must be included. Secondary control systems include, but are not limited to, the following: ROV intervention panels located on the BOP, autoshear and deadman systems, power sources of each system, back up power sources, and acoustic systems. In this section, paragraph (e) was revised to require the operator to submit independent third party verification and supporting documentation that shows the blind - shear rams installed in the BOP stack are capable of shearing any drill pipe in the hole under maximum anticipated surface pressure, as recommended in the Safety Measures 34 • Report and included in NTL No. 2010-N05. This requirement applies to both surface and subsea BOP systems. The benefit of an independent third party is that it provides an objective and technically -informed review to properly verify capabilities of the blind - shear rams. Requiring independent third party verification and information about the blind -shear rams will help ensure that the appropriate shear rams are installed in the BOP. The documentation must include test results and calculations of shearing capacity of all pipe to be used in the well including correction for maximum anticipated surface pressure. Shearing capability tests can be performed on the drill pipe that requires the highest shear pressure. The operator must include a discussion on how the drill pipe used during the shear test required the highest shear pressure and was the most difficult to shear. The interim final rule will codify the section, "Verification that Blind -shear Rams Will Shear Pipe in the Hole" in NTL No. 2010-N05. Paragraph (f) was added to require independent third party verification that a subsea BOP stack is designed for the specific equipment used on the rig. The independent third party must verify that the subsea BOP stack is compatible with the specific well location, well design, and well execution plan. Information showing that the shear rams are appropriate for the project must be included. The independent third party must also verify that the subsea BOP stack has not been damaged or compromised from previous service. Last, the independent third party must verify that a subsea BOP stack will operate in the conditions in which it will be used. This will ensure that all factors of drilling with subsea BOPS are considered when choosing well control equipment. This requirement applies to all APDs that request to use a subsea BOP stack. It applies to completion, workover, or abandonment operations. The interim final rule will codify the 35 section, "BOP Compatibility Verification for All Wells" in NTL No. 2010-N05. Paragraph (g) was added and describes the criteria and documentation for an independent third party that must be submitted with the APD to BOEMRE for review. This is to ensure that the independent third party is capable of providing both an objective and a technically informed validation of the subjects being reviewed. The independent third party must be a technical classification society; an API licensed manufacturing, inspection, certification firm; or licensed professional engineering firm capable of providing the verifications required under this part. The independent third party must not be the original equipment manufacturer. The original equipment manufacturer is excluded because it has a financial interest in equipment being evaluated. Equipment manufacturers that do not have a financial interest in the equipment being evaluated may serve as an independent third party certifier if otherwise qualified. The operator must provide evidence to BOEMRE that the firm it is using is reputable; specifically, the firm or its employees hold appropriate licenses to perform the verification in the appropriate jurisdiction, the firm carries industry -standard levels of professional liability insurance, and the firm has no record of violations of applicable law. Prior to any shearing ram tests or inspections, the operator must also notify the District Manager 24 hours in advance. The operator must ensure an official representative of BOEMRE access to the location to potentially witness any testing or inspections, or to verify information submitted to BOEMRE. This approach to document the qualifications of the independent third party is the same approach being followed for the documenting the independent third party required by NTL No. 2010-N05. 36 U The revised requirements in paragraph (d) address Safety Measures Report recommendation I.B.5: Secondary Control System Requirements and Guidelines. The requirements in paragraph (e) address Safety Measures Report recommendation I.C.7: Develop New Testing Requirements. The new requirements in paragraph (f) address Safety Measures Report recommendation I.A.2: Order BOP Equipment Compatibility Verification for Each Floating Vessel and for Each New Well. The criteria required for the independent third party are also addressed in NTL No. 2010-N05. These requirements will help ensure that the rig operator has the appropriate control systems in place, aiding the rig operator's ability to regain control of a well in the event of a loss of well control. What additional information must I submit with my APD? (§ 250.418) In this section, new paragraph (h) was added that requires the operator to submit certifications of their casing and cementing program signed by a Registered Professional Engineer. The Registered Professional Engineer must be registered in a State in the United States but does not have to be a specific discipline. Certification by a Registered Professional Engineer will increase the likelihood that the casing and cementing program has been properly designed and implemented, and will provide adequate well control. The Registered Professional Engineer will certify that there will be at least two independent tested barriers across each flow path during well completion activities. The Registered Professional Engineer will also certify that the casing and cementing design is appropriate for the purpose for which it is intended under expected wellbore conditions. The operator must submit this certification to BOEMRE along with the APD. Paragraph (g) was revised to accommodate new paragraph (h). The interim final rule will codify 37 requirements addressed under the section, "Well Design and Construction for All Wells" in NTL No. 2010-N05. These requirements for additional barriers, and the certification of the cement design, will decrease the likelihood of a blowout. These requirements apply to new wells, sidetracks, bypasses, or deepened wells. In this section, a new paragraph (i) was added requiring the operator to submit a description of qualifications of any independent third party. Operators must formally notify BOEMRE of their independent third parties. The description must be submitted with the APD and may include the following: 1. Name and address of the individual or organization; 2. Size and type of the organization or corporation; 3. Previous experience as a Certified Entity, Certified Verification Agent (CVA), or • similar third -party representative; 4. Experience in design, fabrication, or installation of BOPs and related equipment; • 5. Technical capabilities (including professional certifications and organizational memberships) of the third party or the primary staff to be associated with the certifying functions for the specific project; 6. In-house availability of, or access to, appropriate technology (i.e., computer modeling programs and hardware, testing materials, and equipment); 7. Ability to perform and effectively manage certifying functions, inspections, and tests for the specific project considering current resource availability; 8. Previous experience with regulatory requirements and procedures; 9. Evidence that the third party is not owned or controlled by the designer, manufacturer, or supplier of the system or its subsystems to be inspected or tested under 38 regulations applicable to this device or any manufacturer of similar equipment or material; 10. The level of work to be performed by the third party; and 11. A list of documents and certifications expected to be furnished to BOEMRE by the third party. The new requirements address the Safety Measures Report recommendation II.B.1.3: New Casing and Cement Design Requirements: Two Independent Tested Barriers and recommendation I.C.7: Develop New Testing Requirements. What well casing and cementing requirements must I meet? (§ 250.420) In this section, new paragraph (a)(6) was added that requires the operators to submit certification of their casing and cementing program signed by a Registered Professional • Engineer (see discussion under section 250.418, above). The Registered Professional Engineer must be registered in a State in the United States. As mentioned previously, the • Registered Professional Engineer does not have to be from a specific discipline, but must be capable of reviewing and certifying that the casing design is appropriate for the purpose for which it is intended under expected wellbore conditions. The Registered Professional Engineer will certify that there will be at least two independent tested barriers, including one mechanical barrier, across each flow path during well completion activities. The Registered Professional Engineer will also certify the casing and cementing design is appropriate for the purpose for which it is intended under expected wellbore conditions. The operator must submit this certification to BOEMRE along with the APD. The operator should not deviate from the certified procedure; if the operator deviates from the certified procedures, they must contact the appropriate District 39 Manager. Paragraphs (a)(4) and (a)(5) were revised to accommodate the new paragraph (a)(6). The interim final rule will codify the section, "Well Design and Construction for All Wells" in NTL No. 2010-N05. The certification of the casing and cementing program will help ensure that the appropriate program is used for the well and decrease the likelihood of a blowout. A new paragraph (b)(3) was also added, requiring the operator to install dual mechanical barriers in addition to cement for the final casing string (or liner if it is the final string), to prevent flow in the event of a failure in the cement. These may include dual float valves, or one float valve and a mechanical barrier. The operator must document the installation of the dual mechanical barriers and submit this documentation to BOEMRE 30 days after installation. References to days in this rule are always in • calendar days. The interim final rule will codify the section, "Well Design and Construction for All Wells" in NTL No. 2010-N05. • These new requirements will help ensure that the best casing and cementing design will be used for a specific well. The new requirements in paragraphs (a)(6) and (b)(3) address the Safety Measures Report recommendation II.B.1.3: New Casing and Cement Design Requirements: Two Independent Tested Barriers. What are the requirements for pressure testing casing? (§ 250.423) This section was reorganized to accommodate new requirements: the current regulations were redesignated as paragraph (a) and new paragraphs (b) and (c) were added. Paragraph (b) requires the operator to perform a pressure test on the casing seal assembly to ensure proper installation of casing or liner in the subsea wellhead or liner hanger. This must be done for intermediate and production casing strings or liner. To 40 install casing in the subsea wellhead, the operator runs and lands the casing hanger tool, cements the casing, latches the casing hanger in place, and finally pressure sets and tests the seal. This test ensures that the casing hanger latching mechanism, or lockdown mechanism, is engaged, ensuring the integrity of the casing. The operator must submit the test procedures and criteria used for a successful test with the APD to BOEMRE for approval. The operator must record the test results and make the results available to BOEMRE upon request. As required in § 250.466, records for well operations must be kept onsite while drilling activities continue. The interim final rule will codify requirements addressed under the section, "Well Design and Construction for All Wells" in NTL No. 2010-N05. Paragraph (c) requires the operator to perform a negative pressure test on all wells to • ensure proper installation of casing for the intermediate and production casing strings. The operator must submit the procedures and criteria for a successful test with the APD 0 for approval. The operator must record the test results and make available to BOEMRE upon request. A negative pressure test will help ensure that the casing, along with the cement, provides a seal. The new requirements in this section will help ensure proper casing installation and evaluate the integrity of the casing and cement. The new requirements in this section address the Safety Measures Report recommendations II.B.1.3: New Casing and Cement Design Requirements: Two Independent Tested Barriers; II.B.2.5: New Casing Installation Procedures; and II.B.2.6: Develop Additional Requirements or Guidelines for Casing Installation. What are the requirements for a subsea BOP system? (§ 250.442) 41 This section requires that when drilling with a subsea BOP system, the BOP system must be installed before drilling below the surface casing. The table in this section outlines the requirements, including: a. the minimum number of each type of BOP, b. dual -pod control systems, c. accumulator operations, d. ROV intervention, e. maintaining an ROV and ROV crew training, f. autoshear and deadman capability and optional acoustic system for dynamically positioned rigs, g. accidental disconnect avoidance, h. BOP control panel labels, i. BOP management system, j. personnel training for BOP equipment, k. marine riser removal, and 1. avoiding ice scour. Paragraph (a) was revised to clarify that the blind -shear rams must be capable of shearing any drill pipe in the hole under maximum anticipated surface pressures. When drilling with a subsea BOP stack, the operator must have a minimum of four remote controlled hydraulically operated BOPs. The BOPS must include one annular preventer, two sets of pipe rams, and one set of blind -shear rams. The requirement in paragraph (b) to have an operable dual -pod control system and the requirement in paragraph (c) to follow API RP 53, Section 13.3, Accumulator Volumetric 42 Capacity, were not revised. The operator must meet the volume capacities for all subsea accumulators and must meet the closing times specified in API RP 53, Section 13.3.5, Accumulator Response Time: the BOP control system must be capable of closing each ram BOP in 45 seconds or less; closing time must not exceed 60 seconds for annular BOPs; operating response time for choke and kill valves must not exceed the minimum observed ram BOP close response time; and time to unlatch the LMRP must not exceed 45 seconds. Requirements related to ROV intervention in paragraph (d) were added. The subsea BOP stack must be equipped with ROV intervention capability to operate one set of pipe rams and one set of blind -shear rams as well as unlatch the LMRP. The BOP-ROV interface must allow sufficient volume to actuate all required functions. This requirement will ensure that the dedicated ROV has the capacity to close the BOP functions and secure the well in sufficient time during a well control event. The interim final rule will codify the section, "ROV Hot Stab Function Testing of the ROV Intervention Panel" in NTL No. 2010-N05. In paragraph (e), the operator is required to maintain an ROV and have a trained ROV crew on each floating drilling rig on a continuous basis. The crew must be trained in the operation of the ROV. The training must include simulator training on stabbing into an ROV intervention panel on a subsea BOP stack. This requirement will help provide assurance that a properly trained crew is available for use during an emergency situation. Requirements related to autoshear and deadman systems in paragraph (f) were added. Autoshear, deadman, and acoustic systems are all emergency systems. Dynamically positioned rigs must have autoshear and deadman systems. Autoshear system is defined 43 • as a safety system that is designed to automatically shut in the wellbore in the event of an unplanned disconnect of the LMRP. When the autoshear is armed, a disconnect of the LMRP closes the shear rams. Deadman system is defined as a safety system that is designed to automatically close the wellbore in the event of a simultaneous absence of hydraulic supply and signal transmission capacity in both subsea control pods. Both autoshear and deadman are considered "rapid discharge" systems. Dynamically positioned rigs may also use an acoustic system. An acoustic signal transmission may be used as an emergency backup that controls critical BOP functions. However, BOEMRE believes additional evaluation is necessary to determine the reliability of acoustic signal transmission as a mandatory backup control system. Industry, academics and other stakeholders have raised concerns about how the differences in water temperatures between water layers (deepwater thermocline) will affect the transmission of the acoustic signal to the BOP stack when installed in deepwater. Similar concerns were raised about how different salinities between water layers, noise from a wild well, or other subsea noise may interfere with the successful transmission of the acoustic signals to the BOP stack. Further investigation of these concerns is needed before deciding to require the installation of an acoustic backup control system. The interim final rule will codify the section, "Secondary Control System Requirements and Guidelines for Subsea BOP Stacks" in NTL No. 2010-N05. In paragraph (g), the operator is required to have operational or physical barrier(s) on BOP control panels to prevent accidental use of disconnect functions. The operator must incorporate enable buttons on control panels to ensure two-handed operation for all 44 • critical functions. The new requirements in this paragraph will reduce the chances of an accidental disconnect by requiring two separate actions to activate all critical functions. In paragraph (h), the operator is required to clearly label all control panels for the subsea BOP system. The operator must include all BOP controls such as hydraulic control panels and ROV interface on the BOP. The new requirements in this paragraph will help to ensure that the correct function is executed. The labeling of all functions will also assist in proper usage in an emergency situation. In paragraph (i), the operator is required to develop and use a management system for operating the BOP system. This includes guidance to prevent accidental or unplanned disconnects of the system. This management system must include written procedures for operating the BOP stack and LMRP, and minimum knowledge requirements for personnel authorized to operate and maintain BOP components. A copy of these written procedures should be maintained on the drilling rig and in other readily accessible locations. These procedures must be made available to all relevant personnel. The new requirements in this paragraph will help to ensure that the correct function is executed in an emergency situation. Paragraph 0) requires the operator to establish minimum requirements for personnel authorized to operate critical BOP equipment. This training must include deepwater well control theory and practice in accordance with 30 CFR 250, subpart O, and a comprehensive knowledge of BOP hardware and control systems. Paragraphs (k) and (1) are currently required, but were reformatted into the table. Paragraph (k) requires the operator to displace the fluid in the riser with seawater before removing the marine riser; while conducting this operation, the operator must maintain 45 0 sufficient hydrostatic pressure on the well or take other suitable precautions to • compensate for the reduction in pressure to maintain well control. Paragraph (1) requires that when drilling in an ice -scour area, the BOP stack must be installed in a glory hole (a depression deep enough that the equipment is protected). These requirements help ensure enhanced operability of subsea BOP systems. These requirements will also help to ensure that the proper personnel are trained to have a comprehensive knowledge of well control equipment, maintain well control equipment, operate essential well control equipment, and manage a well control situation. The ROV intervention capability and autoshear and deadman requirements in this section address Safety Measures Report recommendation I.B.5: Secondary Control System Requirements and Guidelines, and recommendation I.B.6: New ROV Operating Capabilities. The new requirements also meet Safety Measures Report recommendation II.A.1: Establish Deepwater Well -Control Procedure Guidelines. What are the BOP maintenance and inspection requirements? (§ 250.446) Paragraph (a) of this section was changed to require the operator to document the maintenance and inspections of their BOP system. The requirement that BOP maintenance and inspections must meet or exceed the provisions of Sections 17.10 and 18.10, Inspections; Sections 17.11 and 18.11, Maintenance; and Sections 17.12 and 18.12, Quality Management; described in API RP 53, Recommended Practices for Blowout Prevention Equipment Systems for Drilling Wells (incorporated by reference as specified in § 250.198) was not changed. The operator must document the procedures used, record the results, and make the results available to BOEMRE upon request. The operator must maintain the records on the rig for 2 years or from the date of the last major wo • inspection, whichever is longer. The BOP maintenance, inspections, and quality management are essential components to ensuring BOP integrity and operability. According to API RP 53, Section 17.10 (surface BOPs) and Section 18.10 (subsea BOPS), operators must perform a between -well inspection, a visual inspection of flexible choke and kill lines, and a major 3-5 year inspection. According to API RP 53, Section 17.11 (surface BOPS) and Section 18.11 (subsea BOPS), operators are required to maintain BOP manuals, connections, replacement parts, torque requirements, equipment storage, lubricants and hydraulic fluids, weld repairs, and mud/gas separators. According to API RP 53, Section 17.12 (surface BOPs) and Section 18.12 (subsea BOPS), operators are required to have a planned maintenance system, with equipment identified, tasks specified, and the time intervals between tasks stated. Records of maintenance performed and repairs made must be retained on file at the rig site or readily available. The interim final rule will codify the section, `BOP Inspection, Maintenance, and Repair for All Wells" in NTL No. 2010-N05. The documentation for BOP maintenance, repairs, and inspections meet the Safety Measures Report recommendation I.B.5: Secondary Control System Requirements and Guidelines. What additional BOP testing requirements must I meet? (§ 250.449) New paragraphs 0) and (k) were added and paragraphs (h) and (i) were revised to accommodate the new paragraphs. New paragraph 0) requires the testing of ROV intervention functions on a subsea BOP stack. The ROV intervention functions must be tested during the stump test. This test must include ensuring that the hot stabs are function tested and are capable of actuating one set of pipe rams and one set of blind- 47 0 shear rams, as well as unlatching the LMRP. The operator must also test at least one set of rams during the initial test on the seafloor. The BOP-ROV interface must allow sufficient volume to actuate all required functions. The operator must document the test results and make them available to BOEMRE upon request. This will help to ensure that the ROV and hot stabs are capable of actuating the BOP rams and LMRP disconnect. The interim final rule will codify requirements addressed under the section, "ROV Hot Stab Function Testing of the ROV Intervention Panel" in NTL No. 2010-N05; which required testing of ROV intervention functions during the stump test. The interim final rule will also require function testing during the initial test on the seafloor. A successful test will help ensure that the ROV and BOP are capable of operating as designed under conditions at water depth. New paragraph (k) requires function testing of the autoshear and deadman systems on the BOP stack during the stump test. The operator must submit the testing procedures for these requirements with the APD or APM for BOEMRE approval. This should include the sequence of BOP functions that will activate when the autoshear and deadman systems are triggered. These requirements will help to ensure that a well is secured in an emergency situation, loss of power, or accidental disconnect, preventing the possible loss of well control. The ROV intervention capability and autoshear and deadman requirements in this section address Safety Measures Report recommendation I.B.5: Secondary Control System Requirements and Guidelines and recommendation I.C.7: Develop New Testing Requirements. What must I do in certain situations involving BOP equipment or systems? (§ 250.451) 48 A new item was added to the table, requiring the operator to perform a full pressure test when the blind -shear rams or casing shear rams are used in an emergency. Following activation of the blind -shear rams or casing shear rams, in which pipe or casing is sheared during a well control situation, the operator must retrieve and physically inspect the BOP and conduct a full pressure test of the BOP stack, after the situation is fully controlled. This will help ensure the integrity of the BOP and that the BOP will fully function and hold pressure after the event. If rams, sealing elements, or other equipment are damaged, they must be replaced or repaired. The interim final rule will codify the section, `BOP Inspection Testing after Well Control Event for All Wells" in NTL No. 2010-N05. The tests required after a well control event in this section addresses Safety Measures Report recommendation I.C.7: . Develop New Testing Requirements. What safe practices must the drilling fluid program follow? (§ 250.456) • A new paragraph 0) was added, the current 0) was redesignated to paragraph (k) and paragraph (i) was revised to accommodate the new paragraph. The new paragraph 0) requires approval from the District Manager before displacing kill -weight drilling fluid from the wellbore. The operator must submit with the APD or APM the reasons for displacing the kill -weight drilling fluid and provide detailed step-by-step written procedures describing how the operator will safely displace these fluids. The step-by- step displacement procedures must address the following: 1. Number and type of independent barriers that are in place for each flow path; 2. Tests to ensure integrity of independent barriers; 3. BOP procedures used while displacing kill weight fluids; and 49 0 4. Procedures to monitor fluids entering and leaving the wellbore. • These new requirements better ensure that well control is not compromised when displacing kill -weight fluid out of the wellbore. The requirement to submit procedures for kill -weight drilling fluid displacement in this section addresses Safety Measures Report recommendation II.A.2: New Fluid Displacement Procedures. Blowout prevention equipment. (§ 250.515) This section added requirements of § 250.442 in subpart D, Oil and Gas Drilling Operations, to the requirements for well completion operations using a subsea BOP stack. Blowout preventer system tests, inspections, and maintenance. (§ 250.516) Paragraph (d)(8) was added to require tests for ROV intervention functions during the stump test. Paragraph (d)(9) was added to require a function test of the autoshear and deadman system. Paragraph (d)(6) was revised to accommodate the new paragraphs. This section adds the requirements of § 250.449 in subpart D, Oil and Gas Drilling Operations, to the requirements for well completion operations using a subsea BOP stack. The interim final rule will require successful testing of both systems during the stump test. Successful tests will ensure the autoshear and deadman system are operating as designed. A function test of the deadman system is also required during the initial test on the seafloor. Successful testing the deadman system during the initial test on the seafloor will ensure the system is capable of operating as designed under conditions at water depth. Paragraphs (g) and (h) were revised to expand and clarify the requirements for inspections and maintenance. The BOP maintenance, inspections, and quality management are essential to BOP operability. This section adds requirements of 50 § 250.446 in subpart D, Oil and Gas Drilling Operations, to the requirements for well completion operations using a subsea BOP stack. The operator must maintain the records on the rig for 2 years or from the date of the last major inspection, whichever is longer. The documentation for BOP maintenance, repairs, and inspections meets the Safety Measures Report recommendation I.B.5: Secondary Control System Requirements and Guidelines and recommendation I.C.7: Develop New Testing Requirements. Blowout prevention equipment. (§ 250.615) This section added requirements of § 250.442 in subpart D, Oil and Gas Drilling Operations, to the requirements for well workover operations using a subsea BOP stack. Blowout preventer system testing, records, and drills. (§ 250.616) Paragraph (h)(1) was added to require tests for ROV intervention functions during the stump test. Paragraph (h)(2) was added to require a function test of the autoshear and deadman systems. Paragraph (h)(3) was added to require the use of water to stump test a subsea BOP system. This section adds the requirements of § 250.449 in subpart D, Oil and Gas Drilling Operations, to the requirements for well workover operations using a subsea BOP stack. The interim final rule will require testing of both systems during the stump test. Successful tests will ensure the autoshear and deadman systems are operating as designed. A function test of the deadman system is also required during the initial test on the seafloor. Testing the deadman system during the initial test on the seafloor will help ensure the system is capable of operating as designed under conditions at water depth. What are my BOP inspection and maintenance requirements? (§ 250.617) This section was added to apply the requirements of § 250.446 in subpart D, Oil and 51 Gas Drilling Operations, to the requirements for well workover operations using a subsea BOP stack. Definitions. (§ 250.1500) BOEMRE revised the definition of well control by creating separate definitions for the terms well servicing and well completion/well workover. A new definition for deepwater well control was added. The rule adds deepwater well control throughout subpart O as one of the subjects for employee and contract personnel training. This clarification helps ensure that rig personnel are trained in deepwater well control and the specific duties, equipment, and techniques associated with deepwater drilling. What are my general responsibilities for training? (§ 250.1503) • In this section, new paragraph (b) was added and current paragraphs (b) and (c) were redesignated as (c) and (d). The operator is required to ensure that employees and • contract personnel are trained in deepwater well control when conducting operations with a subsea BOP stack. They must have a comprehensive knowledge of deepwater well control equipment, practices, and theory. This clarification of existing requirements addresses Safety Measures Report recommendation II.A.1: Establish Deepwater Well - Control Procedure Guidelines. What information must I submit before I permanently plug a well or zone? (§ 250.1712), In this section, new paragraph (g) was added and paragraphs (e) and (f)(14) were revised to accommodate the new paragraph. New paragraph (g) requires operators to submit certification by a Registered Professional Engineer of the well abandonment 52 0 design and procedures. The Registered Professional Engineer must be registered in a U State in the United States. The Registered Professional Engineer does not have to be a specific discipline, but must be capable of reviewing and certifying that the casing design is appropriate for the purpose for which it is intended under expected wellbore conditions. The Registered Professional Engineer will certify that there will be at least two independent tested barriers, including one mechanical barrier, across each flow path during well abandonment activities. The Registered Professional Engineer will also certify that the plug meets the requirements in the table in § 250.1715. This will help ensure the integrity of the well. The operator must submit this certification along with the APM. The operator should not deviate from the certified procedure; if the operator deviates from the certified procedures, they must contact the appropriate District Manager. The interim final rule will codify the section, "Well Design and Construction for All Wells" in NTL No. 2010-N05. This new requirement addresses Safety Measures Report recommendation II.B.1.3: New Casing and Cement Design Requirements: Two Independent Tested Barriers. If I temporarily abandon a well that I plan to re-enter, what must I do? (§ 250.1721) In this section, new paragraph (h) was added to require operators to submit certification by a Registered Professional Engineer of the well abandonment design and procedures. The Registered Professional Engineer does not have to be a specific discipline. The Registered Professional Engineer must be registered in a State in the United States. As mentioned previously, the Registered Professional Engineer does not have to be a specific discipline, but must be capable of reviewing and certifying that the 53 • casing design is appropriate for the purpose for which it is intended under expected wellbore conditions. The Registered Professional Engineer will certify that there will be at least two independent tested barriers, including one mechanical barrier, across each flow path during well abandonment activities. This will help ensure the integrity of the well. The operator must submit this certification to BOEMRE along with the APM, as required in § 250.1712 and is responsible for ensuring that the approved well abandonment design and procedures are followed. The operator should not deviate from the certified procedure, if the operator deviates from the certified procedures they must contact the appropriate District Manager. Paragraphs (e) and (g)(3) were revised to accommodate the new paragraph. The interim final rule will codify requirements addressed under the section, "Well Design and Construction for All Wells" in NTL No. is2010-N05. This new requirement addresses Safety Measures Report recommendation II.B.1.3: New Casing and Cement Design Requirements: Two Independent Tested C, Barriers. VII. Additional Recommendations in the Safety Measures Report not Covered in this Interim Final Rule As discussed previously, this interim final rule incorporates some, but not all items from the Safety Measures Report. The following tables specifically identify which measures from the Safety Measures Report are not covered in the interim final rule. BOEMRE anticipates it will be able to address these measures in notice and comment rulemakings in the future. Items in the Safety Measures Report that are not covered in this interim final rule, and which BOEMRE anticipates addressing either in the near future, or at a later time after 54 • further review and analysis, are as follows: 0 Items for Future Rulemaking Number Recommendation I.A.3 Develop Formal Equipment Certification Requirements. I.B.4 New Blind Shear Ram Redundancy Requirement. II.B.3.8 Develop Additional Requirements or Guidelines for Evaluation of Cement Integrity. II.C.9 Increase Federal Government Wild -Well Intervention Capabilities. II.C.10 Study Innovative Wild -Well Intervention, Response Techniques, and Response Planning. III.C.2 Adopt Safety Case Requirements for Floating Drilling Operations on the OCS. III.C.4 Study Additional Safety Training and Certification Requirements. There are also certain items which, although they are included in this interim final rule, BOEMRE anticipates expanding upon in the future. BOEMRE is specifically considering additional rulemaking activity concerning the following: Items Included in this Rule Under Consideration for Expansion Number Recommendation I.B.5 Secondary Control System Requirements and Guidelines. I.B.6 New ROV Operating Capabilities. I1.A.1 Establish Deepwater Well -Control Procedure Guidelines. II.B.1.4 Study Formal Personnel Training Requirements for Casing and Cementing Operations. II.B.2.6 Develop Additional Requirements or Guidelines for Casing Installation. II.B.3.7 Enforce Tighter Primary Cementing Practices. Additionally, as discussed further, BOEMRE is examining a variety of other well control issues related to OCS drilling to determine how to improve future safety on the OCS in light of the Deepwater Horizon event. BOEMRE recognizes that this interim final rule does not fully address all issues associated with OCS drilling operations, although it is a critical step. We anticipate future rulemakings as we learn more about the causes of the Deepwater Horizon event and other issues associated with deepwater drilling operations. Future rulemakings will be based on recommendations in the Safety Measures Report that require further development, the results of the joint USCG-BOEMRE investigation, other investigations and inquiries, and findings from technology -focused research led by DOI strike teams 0 and interagency workgroups. Some of the issues that are addressed by this rulemaking, 55 • such as cementing and casing design, will be considered for additional rulemaking in the future. We will consider additional measures, after we have more thoroughly studied these issues and assessed the best approaches. BOEMRE has identified the following issues as likely topics for both near -term and future rulemakings: Well Control Issues While the content of these future rulemakings will depend in part on the findings of the various investigations, BOEMRE anticipates that future rules will focus on well control issues. More specifically this will include: 1. Cementing and casing —BOEMRE anticipates examining the need for additional cement evaluation procedures and training needs for personnel involved in cementing and • casing operations, and intends to incorporate findings as appropriate from the investigations related to the Deepwater Horizon event. 9 2. Fluid displacement —BOEMRE intends to further evaluate the effectiveness of new fluid displacement requirements to determine if it needs to establish different or enhanced fluid displacement procedures. 3. BOPs —BOEMRE anticipates rulemaking to address BOP recommendations resulting from the joint BOEMRE and United States Coast Guard investigation of the Deepwater Horizon event. Rulemaking will also likely address the requirement to have two sets of blind shear rams as recommended in the Safety Measures Report and discussed previously. Rulemakings will also likely consider requirements for casing shear rams, minimum number of pipe rams, second annular preventer for subsea BOP stacks, and electronic BOP logs. Another area mentioned in the Safety Measures Report 56 • is the need for periodic certification of the BOP stack or specific BOP components. • BOEMRE wishes to undertake additional research on how these certifications should be done and how often they should occur. 4. Secondary control systems and ROVs — Future rulemaking may address autoshear and deadman requirements for all rigs with subsea BOP stacks, enhanced ROV intervention capability, and subsea accumulator volumes to ensure fast closure of BOPS and choke and kill lines. The need for effective tertiary control systems, such as an acoustic system, will also be examined and addressed as appropriate. 5. Wild -well intervention techniques —BOEMRE will conduct research on this topic and evaluate the progress industry has made to establish deepwater wild -well intervention as it moves forward with rulemaking on wild well intervention. 6. Industry training —BOEMRE will investigate safety training requirements for deepwater drilling operations and determine the appropriate manner to regulate the training of personnel. 7. Oil spill response — BOEMRE anticipates future rulemaking to address the capture and disposition of oil released from a deepwater well blowout at the seafloor. 8. Organization and safety management — The Safety Measures Report recommended that the DOI evaluate the need to require all or part of the International Association of Drilling Contractors' Health, Safety, and Environmental Case Guidelines for Mobile Drilling Units. BOEMRE will evaluate the guidelines and determine how they will best fit with SEMS regulations that are being considered by BOEMRE for final publication in a separate rulemaking. BOEMRE published a notice of proposed rulemaking on SEMS requirements on June 17, 2009 (74 FR 28639). 57 Technical Consensus Standards BOEMRE is aware that various organizations which support the offshore oil and gas industry are also studying the possible causes of the Deepwater Horizon event. Based on their findings, these organizations may make recommendations to their members on practices to increase the safety of offshore oil and gas operations in general with specific recommendations related to deepwater drilling operations. BOEMRE is reviewing the following subjects: 1. API Documents Concerning Cementing Practices In § 250.198 of this interim final rule, BOEMRE incorporates API RP 65—Part 2, Isolating Potential Flow Zones During Well Construction, which summarizes best practices and addresses basic issues associated with cementing practices. The API has 41 additional documents that address cementing practices in more detail. 2. Discussion of Additional Specifications and Recommended Practices • API Spec 16A: Specification for Drill -through Equipment. This standard specifies requirements for performance, design, materials, testing and inspection, welding, marking, handling, storing, and shipping of drill -through equipment used for drilling for oil and gas. It also defines service conditions in terms of pressure, temperature, and wellbore fluids for which the equipment will be designed. This standard is applicable to, and establishes requirements for, the following specific equipment: ram BOPS; ram blocks, packers, and top seals; annular BOPS; annular packing units; hydraulic connectors; drilling spools; adapters; loose connectors; and clamps. 58 • API Spec 161): Specification for Control Systems for Drilling Well Control Equipment 0 and Control Systems for Diverter Equipment. This specification provides design standards for systems used to control the BOP and associated valves that control well pressure during drilling operations. Diverter control systems are included in this specification because they are included in the BOP control system. This specification addresses the following categories: control systems for surface BOP stacks, control systems for subsea BOP stacks, discrete hydraulic control systems for subsea BOP stacks, electro-hydraulic/multiplex control systems for subsea BOP stacks, control systems for diverter equipment, auxiliary equipment control systems and interfaces, emergency disconnect sequenced systems (EDS), backup systems, and special deepwater/harsh environment features. Certain standards in API Spec. 16D are of particular interest. These include optional sections — 5.7 Emergency Disconnect Sequenced Systems (EDS), 5.8 Backup Control Systems, and 5.9 Special Deepwater/Harsh Environment Features. The EDS systems are required for floating drilling rigs in order to quickly disconnect the riser in the event of an inability to maintain rig position within a prescribed watch circle. Backup Control Systems include standards on acoustic systems, ROV control systems, LMRP recovery systems, and backup power supply. The Deepwater/Harsh Environment features give specifications for autoshear and deadman systems. API Spec 171): Specification for Subsea Wellhead and Christmas Tree Equipment. This specification was formulated to provide for the availability of safe, dimensionally, and functionally interchangeable subsea wellhead, mudline, and tree equipment. The technical content provides requirements for performance, design, 59 imaterials, testing, inspection, welding, marking, handling, storing, and shipping. Critical components are those parts having a requirement specified in this document. Rework and repair of used equipment are beyond the scope of this specification. API Recommended Practice 17H, ISO 13628-8: Remotely Operated Vehicle (ROV) Interfaces on Subsea Production Systems. This recommended practice gives functional requirements and guidelines for ROV interfaces on subsea production systems for the petroleum and natural gas industries. It is applicable to both the selection and use of ROV interfaces on subsea production equipment, and provides guidance on design as well as the operational requirements for maximizing the potential of standard equipment and design principles. The auditable information for subsea systems this document offers allows interfacing and actuation by • ROV-operated systems, while it identifies issues that have to be considered when designing interfaces on subsea production systems. The framework and detailed specifications set out enable the user to select the correct interface for a specific application. API Recommended Practice 53: Recommended Practices for Blowout Prevention Equipment Systems for Drilling. This recommended practice provides guidance for installation and testing of surface and subsea BOP equipment systems. This equipment system consists of a BOP, choke and kill lines, marine riser, and auxiliary equipment. The primary function of a BOP equipment system is to confine wellbore fluids, provide a means to add fluids, and allow controlled volumes to be withdrawn from the wellbore. This recommended practice also addresses diverter systems. . Other items for consideration BOEMRE is also studying the following issues: 1. Following the certification of the BOP to meet the one-time requirement of NTL No. 2010-N05, frequency and conditions for recertification requirements. 2. Requirements for BOP equipment and other components of the BOP stack such as control panels, communication pods, accumulator systems, and choke and kill lines and the adequacy of API Spec 16A. 3. Standardization of the BOP-ROV interface to improve intervention capabilities. 4. Issues related to requiring a subsea isolation device that is independent of the BOP stack that is capable of operating critical functions that will shut in a well in emergency situations. • Procedural Matters Regulatory Planning and Review (Executive Order (E.O.) 12866) This interim final rule is a significant rule as determined by the Office of Management and Budget (OMB) and is subject to review under E.O. 12866. 1. This rule will have an annual effect of $100 million or more on the economy. The following discussion summarizes a detailed cost -benefit analysis that is available on www.Regulations.gov. Use the keyword/ID `BOEM-2010-0034" to locate the docket for this rule. Various events around the world as well as the US over the years demonstrate that catastrophic oil spills can and do occur. The costs associated with such spills can be tremendous. As a matter of policy, BOEMRE has decided that any reasonable measures to reduce the risks of another catastrophic spill occurring on the OCS should be put in 1 place and enforced. The requirements included in this rulemaking are such measures. They were identified in the May 27, 2010 report, Increased Safety Measures for Energy Development on the Outer Continental Shelf, for which the draft recommendations were peer -reviewed by seven experts identified by the National Academy of Engineering., or identified by industry or academic experts in materials presented to BOEMRE. While the estimated costs of this rulemaking, as reflected in the compliance costs of the enumerated requirements of approximately $180 million per year, have a strong foundation and are based on surveys of public and industry sources, quantification of the benefits is uncertain. The benefits are represented by the avoided costs of a catastrophic spill, which are estimated under the stipulated scenario as being $16.3 billion per spill avoided. These regulations will reduce the likelihood of another blowout and associated spill, but the risk reduction associated with the specific provisions of this rulemaking cannot be quantified because there are many complex factors that affect the risk of a blowout event. As noted by the Secretary of the Interior in his July 12 decision memo suspending certain drilling activities, drilling accidents can have a profound, devastating impact on the economic and environmental health of a region. The measures codified in this rule will reduce the likelihood of such an event in the future, at a cost that is not prohibitive, and therefore this rulemaking is justified. The purpose of a benefit -cost analysis is to provide policy makers and others with detailed information on the economic consequences of the regulatory requirements. The benefit -cost analysis for this rule was conducted using a scenario analysis. The benefit - cost analysis considers a regulation designed to reduce the likelihood of a catastrophic oil spill. The costs are the compliance costs of imposed regulation. If another catastrophic ►1 0 oil spill is prevented, the benefits are the avoided costs associated with a catastrophic oil spill (e.g., reduction in expected natural resource damages owing to the reduction in likelihood of failure). Avoided cost is an approximation of the "true" benefits of avoiding a catastrophic oil spill. A benefits transfer approach is used to estimate the avoided costs. The benefits transfer method estimates economic values by transferring existing benefit calculations from studies already completed for another location or issue to the case at hand. Accordingly, none of the avoided costs used for a hypothetical catastrophic spill rely upon, or should be taken to represent, our estimate for the BPDH event commencing on April 20, 2010. Three new requirements account for virtually all of the compliance costs imposed by • this regulation (1) use of dual mechanical barriers in addition to cement barriers in the final casing string to prevent hydrocarbon flow in the event of cement failure, (2) application of negative pressure tests to all intermediate and the production casing strings to ensure their proper installation, and (3) maintenance of standby ROV capability to close BOP rams and testing that capability after the BOP has been installed on the sea floor. BOEMRE estimates that these three requirements will impose compliance costs of approximately $174 million per year, representing 95 percent of the total annual compliance costs of $183 million associated with this rulemaking. These cost estimates were developed by BOEMRE based on public data sources and confidential information provided by several offshore operators and drilling companies. On the benefit side, the avoided costs for a hypothetical deepwater blowout resulting in a catastrophic oil spill are estimated to be about $16.3 billion (in 2010 dollars). Most 63 0 of this amount derives from detailed cleanup estimates developed using damage costs per barrel measures found in historical spill data (from all sources including pipeline, tanker, and shallow water as well as deepwater wells) and from aggregate damage measures contained in the legal settlement documents for past spills applied to a catastrophic deepwater spill of hypothetical size. The rest of the avoided cost amount represents the private costs for blowout containment operations. In sum, three components account for nearly the entire avoided spill cost total: (1) natural resource damage to habitat and creatures, 2) infrastructure salvage and cleanup operations of areas soiled by oil, and (3) containment and well -plugging actions plus lost hydrocarbons. The estimate of compliance costs is somewhat uncertain. This is the case primarily because the $183 million annual estimate is perhaps higher than the actual costs that will be incurred by society from this rule because industry is voluntarily undertaking some steps following the BPDH event that overlap those in this regulation. The Joint Industry Task Force draft recommendations include use of mechanical barriers and negative pressure tests. Voluntary action, perhaps spurred on as well by revised liability expectations and increased insurance prospects, means the incremental costs associated with these overlapping measures are not truly imposed solely by the new regulations. Less incremental required costs reduce the improvement in reliability necessary for expected benefits to cover the cost of complying with the new regulations. On the benefit side, the total avoided cost estimate of $16.3 billion (representing a measure of expected benefits for avoiding a future catastrophic oil spill) is highly uncertain because of the limited historical data upon which to judge the cost of failure, the disparity between the damages associated with spills of different sizes, locations, and season of occurrence, and .A owing to the fact that the measure employed reflects only those outlays that we have been able to calculate based primarily upon factors derived from past oil spills. Possible losses from human health effects or reduced property values have not been quantified in this analysis. Moreover, the likelihood of a future blow out leading to a catastrophic oil spill is difficult to quantify because of limited historical data on catastrophic offshore blowouts. Benefit -Cost Result: Based on the occurrence of only a single catastrophic blowout, the number of GOM deepwater wells drilled historically (4,123), and the forecasted future drilling activity in the GOM (160 deepwater wells per year), the baseline risk of a catastrophic blowout is estimated to be about once every 26 years. Combining the baseline likelihood of occurrence with the cost of a hypothetical spill implies that the expected annualized spill cost is about $631 million ($16.3 billion once in 26 years, equally likely in any I year). To balance the $183 million annual cost imposed by these regulations with the expected benefits, the reliability of the well control system needs to improve by about 29 percent ($183 million / $631 million). We have found no studies that evaluate the degree of actual improvement that could be expected from dual mechanical barriers, negative pressure tests, and a seafloor ROV function test. We request comment with supporting evidence on the reliability improvement likely from these new provisions. 2. This interim final rule will not adversely affect competition or State, local, or tribal governments or communities. 3. This interim final rule will not create a serious inconsistency or otherwise interfere with an action taken or planned by another agency. 65 4. This interim final rule will not alter the budgetary effects of entitlements, grants, user fees, or loan programs or the rights or obligations of their recipients. 5. This interim final rule will not raise novel legal or policy issues arising out of legal mandates, the President's priorities, or the principles set forth in E.O. 12866. Regulatory Flexibility Act: Initial Regulatory Flexibility Analysis Given the emergency nature of these rules, BOEMRE has not yet prepared a detailed Initial Regulatory Flexibility Analysis for this rule; however, BOEMRE intends to publish a supplemental Initial Regulatory Flexibility Analysis in the near future which will examine the impact of this regulation on small entities in greater detail than provided below. BOEMRE continues to be interested in all potential impacts of the interim final rule on small entities and welcomes comments on issues related to such impacts. These • comments will assist BOEMRE in conducting further analysis than provided below regarding the economic impact of these regulations on small entities, as well as an opportunity to examine regulatory alternatives that can accomplish BOEMRE's safety goals at a lower cost to small entities. This rulemaking affects lessees, operators of leases and drilling contractors on the OCS; thus this rule directly impacts small entities. This could include about 130 active Federal oil and gas lessees and more than a dozen drilling contractors and their suppliers. Small entities that operate under this rule are coded under the Small Business Administration's North American Industry Classification System (NAILS) 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, approximately 70 percent of companies • operating on the OCS (91) are considered small companies. Therefore, BOEMRE has determined that this proposed rule will have an impact on a substantial number of small entities. The ownership share of deepwater leases for small entities is estimated to only be 12 percent. While a larger percentage of the oil service industry supporting the deepwater operators are small businesses, the lessees that hire and direct these support businesses will bear the burden of this rule. Small companies hold 55 percent of shallow water leases but a smaller portion of the costs of these regulations will affect drilling operations in shallow water. This rule will affect every new well on the OCS. Tighter regulatory standards for drilling operations and the increased cost of meeting these requirements as a result of • regulations for extra tests and well standards will now be required. We estimate that this rulemaking will impose a recurring cost of $183 million each year for drilling OCS wells. is Every operator and drilling contractor both large and small must meet the same criteria for drilling operations regardless of company size. However, the overwhelming share of the cost imposed by these regulations will fall on companies drilling deepwater wells, which are predominately the larger companies. In fact, 90 percent of the total costs will be imposed on deepwater lessees and operators where small businesses only hold 12 percent of the leases. Less than 10 percent of the total costs will apply to shallow water leases where a 55 percent lease ownership share is held by small companies. Furthermore, these compliance costs only impact drilling operations. Drilling costs are only a share of the total costs incurred by a company operating on the OCS. Nonetheless, small companies as both lease -holders, and contractors serving lease - 67 • holders, will bear meaningful costs under these regulations. Of the annual $183 million in annual cost imposed by the rule, we estimate that the $20 million will apply to small businesses in deepwater and $9 million in shallow water. In total we estimate that $29 million or 15.8 percent of these regulations' cost will be borne by small businesses. Fiscal year 2009 aggregate annual Gulf of Mexico OCS oil and gas revenues were $31.3 billion. Using the same percentages of leases held as a proxy for production value in deep and shallow water, we estimate that 74 percent ($23.3 billion) of the OCS revenues are ultimately received by large companies and 26 percent ($8.1 billion) by small companies. As a share of fiscal year 2009 revenues this interim final rule would cost approximately 0.67 percent of OCS revenue for large companies and only 0.36 ($0.029/$8.1) percent for small companies. Even though this rule may not have a significant economic impact on small businesses, alternatives to ease impacts on small business were considered. One alternative is to exempt small businesses from the requirements of this interim final rule. A second alternative is to delay the implementation timelines to comply with the regulation. Both of these alternatives are being rejected by BOEMRE for this interim final rule because of the overriding need to reduce the chance of a catastrophic blowout event. We do not believe it is responsible for a regulator to compromise the safety of offshore personnel and the environment for any entity including small businesses. Offshore drilling is highly technical and can be hazardous, any delay may increase the interim risk of OCS drilling operations. Small Business Regulatory Enforcement Fairness Act This interim final rule is a major rule under the Small Business Regulatory • Enforcement Fairness Act (5 U.S.C. 801 et §N.). This interim final rule: a. Will have an annual effect on the economy of $100 million or more. This rule will affect every new well on the OCS, and every operator, both large and small must meet the same criteria for well construction regardless of company size. This rulemaking may have a significant economic effect on a substantial number of small entities and the impact on small businesses will be analyzed more thoroughly in an Initial Regulatory Flexibility Analysis. While large companies will bear the majority of these costs, small companies as both leaseholders and contractors supporting OCS drilling operations will be affected. Considering the new requirements for redundant barriers and new tests, we estimate that this rulemaking will add an average of about $1.42 million to each new deepwater • well drilled and completed with a MODU, $170 thousand for each new deepwater well drilled with a platform rig, and $90 thousand for each new shallow water well. While not an insignificant amount, we note this extra recurring cost is less than 2 percent of the cost of drilling a well in deepwater and around 1 percent for most shallow water wells. b. Will not cause a major increase in costs or prices for consumers, individual industries, Federal, State, or local government agencies, or geographic regions. The impact on domestic deepwater hydrocarbon production as a result of these regulations is expected to be negative, but the size of the impact is not expected to materially impact the world oil markets. The deepwater GOM is an oil province and the domestic crude oil prices are set by the world oil markets. Currently there is sufficient spare capacity in OPEC to offset a decrease in GOM deepwater production that could occur as a result of this rule. Therefore, the increase in the price of hydrocarbon products to consumers from the increased cost to drill and operate on the OCS is expected to be minimal. However, more of the oil for domestic consumption may be purchased from overseas markets because the cost of OCS oil and gas production will rise relative to other sources of supply. This shift would contribute negatively to our balance of trade. c. Will not have significant adverse effects on competition, innovation, or the ability of U.S.-based enterprises to compete with foreign -based enterprises. d. May have adverse effects on employment, investment, and productivity. A meaningful increase in costs as a result of more stringent regulations and increased drilling costs may result in a reduction in the pace of deepwater drilling activity on marginal offshore fields, and reduce investment in our domestic energy resources from what it otherwise would be, thereby reducing employment in OCS and related support • industries. The additional regulatory requirements in this rulemaking will increase drilling costs and add to the time it takes to drill deepwater wells. The resulting reduction • in profitability of drilling operations may cause some declines in related investment and employment. A typical deepwater well drilled by a MODU may cost $90-$100 million. The added cost of these regulations for a deepwater well is expected to be about $1.42 million; this is less than a 2 percent decrease in productivity for drilling a deepwater well as a result of these regulations. e. Accommodations for small business have not been made to avoid the risk of compromising the safety and environmental protections addressed in this rulemaking. Small businesses actively invest in offshore operations, owning a 12 percent interest in deepwater leases, most often as a minority partner. These regulations will make it more expensive for all interest holders in OCS leases, and we do not expect a disproportionate 70 impact on small businesses. However, we anticipate that the costs in this rule may contribute to one or more of the following: 1. Reduce the small business ownership share in individual deepwater leases. 2. Cause small businesses to target their investments more in shallow water leases. 3. Cause small businesses to target their investments more in onshore oil and gas operations or other natural resources. 4. Small businesses may choose to invest or partner in overseas natural resource operations. f. There are many small businesses that support offshore oil and gas drilling operations including service, supply, and consulting companies. They will also be affected by this rule. Because we can reasonably anticipate an overall decrease in deepwater drilling activity due to the increased cost and regulatory burden, some businesses that support drilling operations may experience reduced business activity. Some small business may therefore decide to focus more on shallow water or other oil and gas offshore provinces overseas. g. There are some small businesses that may benefit from this rulemaking. Companies that are involved with inspecting and certifying this equipment, as well as consulting companies specializing in safety and offshore drilling, could see long-term growth. Unfunded Mandates Reform Act of 1995 This rule will impose an unfunded mandate on State, local, or tribal governments or the private sector of more than $100 million per year. The rule will not have a significant or unique effect on State, local, or tribal governments or the private sector. A statement 71 containing the information required by the Unfunded Mandates Reform Act (2 U.S.C. 1501 et SeMc .) is not required. Takings Implication Assessment (E.O. 12630) Under the criteria in E.O. 12630, this rule does not have significant takings implications. The 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 rule does not have federalism implications. This rule will 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 rule will not affect that role. A Federalism Assessment is not required. Civil Justice Reform (E.O. l 2988) 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 rule and determined that it has no substantial effects on federally recognized Indian tribes. Paperwork Reduction Act (PRA) • 72 This rule contains a collection of information that was submitted to and approved by OMB under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et seg). The rule expands existing requirements, as well as adds new requirements in 30 CFR 250, subparts D, E, and F. The OMB approved these requirements and their respective burden hours under an emergency request, OMB Control Number 1010-0185, 44,731 hours (expiration 04/30/2011). We will be accepting comments on the information collection (IC) aspects and burdens of this rulemaking until 60 days after [INSERT DATE OF PUBLICATION IN THE FEDERAL REGISTER]. The title of the collection of information for this rule is 30 CFR 250, Increased Safetv Measures for Oil and Gas Drilling, Well -Completion, and Well-Workover Operations. Respondents primarily are the Federal OCS lessees and operators. The frequency of • response varies depending upon the requirement. Responses to this collection of information are mandatory. BOEMRE will protect proprietary information according to • the Freedom of Information Act (5 U.S.C. 552), its implementing regulations (43 CFR 2), 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. Even though this rulemaking becomes effective immediately, BOEMRE will be accepting comments, see the DATES section, including the IC aspects of the rulemaking. See the ADDRESSES section for how to submit comments. As discussed earlier in the preamble, this interim final rulemaking is a revision to various sections of the 30 CFR 250 regulations that will amend drilling regulations in subparts D, E, F, O, and Q. This includes requirements that will implement various safety measures that pertain to drilling operations. The information collected will ensure 73 0 sufficient redundancy in the BOPs; promote the integrity of the well and enhance well • control; and facilitate a culture of safety through operational and personnel management. This rule will promote human safety and environmental protection. Under § 250.198, this section lists all of the documents incorporated by reference in the 30 CFR 250 regulations. This rulemaking revises this section to include the new 30 CFR 250 document we are incorporating and the document already incorporated that we are updating. Under the PRA (5 CFR 1320), information and recordkeeping produced during customary and usual business activities are excluded from agency IC burdens. Information submitted or reported to the Federal Government that goes beyond these practices does count as burdens and is required to have OMB approval under the PRA. We consider all of the activities and operations performed in accordance with the documents incorporated by reference involved in this rulemaking to be customary and usual business activities because they are consensus standards developed by working task force groups. These groups are comprised of subject matter experts from the industry and government in the following fields: blowout preventer equipment, cementing, and well design. Any information and recordkeeping produced during the conduct of operations or activities performed under those standards, therefore, do not count as new or additional IC burdens. The rulemaking clarifies requirements, but does not change the hour burdens in 30 CFR 250, subpart O (1010-0128, expiration 11/30/2012). This rulemaking also references, but does not change, the requirements and burdens in 30 CFR 250, subpart Q (1010-0142, expiration 11/30/2010). However, the rule does change and add new requirements to those already approved for 30 CFR 250, subparts D, E, and F, as 74 • explained in the following paragraphs. The current regulations on Oil and Gas Drilling Operations and associated IC are located in 30 CFR 250, subpart D. The OMB approved the IC burden of the current subpart D regulations under control number 1010-0141 (expiration 11/30/2011). This interim final rule expands the current regulatory requirements and adds new requirements that pertain to subsea and surface BOPS, well casing and cementing, secondary intervention, unplanned disconnects, recordkeeping, well completion, and well plugging (+24,144 burden hours). The current regulations on Oil and Gas Well -Completion Operations and associated IC are located in 30 CFR 250, subpart E. The OMB approved the IC burden of the current subpart E regulations under control number 1010-0067 (expiration 12/31/2010). This interim final rule adds new regulatory requirements to this subpart that pertain to subsea and surface BOPS, secondary intervention, and well -completions (+ 4,669 burden hours). The current regulations on Oil and Gas Well-Workover Operations and associated IC are located in 30 CFR 250, subpart F. The OMB approved the IC burden of the current subpart F regulations under control number 1010-0043 (expiration 12/31/2010). This interim final rule adds new regulatory requirements to this subpart that pertain to subsea and surface BOPs, secondary intervention, unplanned disconnects, and well -workers (+15,918 burden hours). When this rulemaking becomes effective, the additional 30 CFR 250, subparts D, E, and F paperwork burdens will be incorporated into their respective primary collections; 1010-0141, 1010-0067, and 1010-0043, respectively. 75 • • The following table provides a breakdown of the new burdens. Citation Reporting & Recordkeeping Hour Average No. Annual 30 CFR 250 Requirement Burden of Annual Burden Responses Hours Subpart D 408, 409; 410- Apply for permit to drill/revised 6 MMS-123 4,200 418; 420(a)(6); APD that includes any/all supporting 700 423(b)(3), (c)(1); documentation/evidence [test 4490), (k)(1); results, calculations, verifications, plus various procedures, criteria, qualifications, references in etc.] and requests for various subparts A, B, approvals required in subpart D D, E, H, P, Q. (including §§ 250.423, 424, 427, 432, 442(c), 447, 448(c), 4490), (k), 451(g), 456(a)(3), (f), 460, 490(c)(1), (2)) and submitted via Form MMS-123 (Application for Permit to Drill). 416(g)(2) Provide 24 hour advance notice of 10 mins. 6 notifications 1 location of shearing ram tests or inspections; allow BOEMRE access to witness testing, inspections and information verification. 420(b)(3) Submit dual mechanical barrier 30 mins. 700 350 documentation after installation. submissions 423(a) Request approval of other pressure Burden covered under 1010- 0 casing test pressures per District 0141. Manager. 423(b)(4), (c)(2) Perform pressure casing test; 30 mins. 700 drilling 1,750 document results and make available ops x 5 tests to BOEMRE upon request. per cps = 3,500 tests 442(c) Request alternative method for the Burden covered under 1010- 0 accumulators stem. 0141. 442(h) Label all functions on allpanels; 30 mins. 30 panels 15 442(i) Develop written procedures for 4 30 procedures 120 management system for operating the BOP stack and LMRP. 4420) Establish minimum requirements for Burden covered under 1010- 0 authorized personnel to operate BOP 0128. equipment; require training. 446(a) Document BOP maintenance and 1 105 rigs 105 inspection procedures used; record results of BOP inspections and maintenance actions; maintain records for 2 years; make available to BOEMRE upon request. 449; 450; 467 Function test annular and rams; Burden covered under 1010- 0 document results every 7 days 0141. between BOP tests (biweekly). Note: art of BOP test. 76 • • • Citation Reporting & Recordkeeping Hour Average No. Annual 30 CFR 250 Requirement Burden of Annual Burden Responses Hours 4490)(2) Test all ROV intervention functions 10 110 wells 1,100 on your subsea BOP stack; document all test results; make available to BOEMRE upon request. 449(k)(2) Function test autoshear and deadman 30 mins. 110 wells 55 on your subsea BOP stack during stump test; document all test results; make available to BOEMRE upon request. 456(i) Record results of drilling fluid tests Burden covered under 10 10- 0 in drillin report. 0141. 4560) Submit detailed step by step 2 110 wells 220 procedures describing displacement of fluids with your APD/APM [this submission obtains District Manager approval]. 460; 465; 4490), Submit revised plans, changes, 4 MMS-124 16,228 (k)(1); 516(d)(8), well/drilling records, procedures, 4,057 (d)(9); 616(h)(1), certifications that include any/all (2); plus various supporting documentation etc., references in submitted on Form MMS-124 subparts A, D, E, (Application for Permit to Modify). F, H, P, and Q Subtotal 9,458 24,144 responses hours Subpart E 516(d)(8) Submit test procedures with your Burden covered under 10 10- 0 APM for approval. 0141. 516(d)(8) Function test ROV interventions on 10 110 wells 1,100 your subsea BOP stack; document al I test results; make available to BOEMRE upon request. 516(d)(9) Function test autoshear and deadman 30 mins. 1,048 524 on your subsea BOP stack during completions stump test; document all test results; make available to BOEMRE upon request. 516(g)(1) Document the procedures used for 7 days x 105 rigs / once 2,940 BOP inspections; record results; 12 hrs/ every 3 years maintain records for 2 years; make day = 84 = 35 per year available to BOEMRE upon request. 516(g)(2) Request alternative method to inspect Burden covered under 10 10- 0 a marine riser. 0067. 516(h) Document the procedures used for 1 105 rigs 105 BOP maintenance; record results; maintain records for 2 years; make available to BOEMRE upon request. 77 • • Citation Reporting & Recordkeeping Hour Average No. Annual 30 CFR 250 Requirement Burden of Annual Burden Responses Hours Subtotal 1,298 4,669 hours responses Subpart F 616(h)(1) Test all ROV intervention functions 10 hours 1,226 12,260 on your subsea BOP stack; document workovers all test results; make available to BOEMRE upon request. 616(h)(2) Function test autoshear and deadman 30 mins. 1,226 613 on your subsea BOP stack during workovers stump test; document all test results; make available to BOEMRE upon request. 617(a)(1) Document the procedures used for 7 days x 105 rigs / once 2,940 BOP inspections; record results; 12 hrs/ every 3 years maintain records for 2 years; make day = 84 = 35 per year available to BOEMRE upon request. 617(a)(2) Request approval to use alternative Burden covered under 1010- 0 method to inspect a marine riser. 0067. 617(b) Document the procedures used for 1 105 rigs 105 BOP maintenance; record results; maintain records for 2 years; make available to BOEMRE upon request. Subtotal 2,592 15,918 hours responses Subpart Q 1712(f), (g); Submit with your APM, Burden covered under 1010- 0 1721(h) archaeological and sensitive 0141. biological features; Registered Professional Engineer certification. 1721(e) Identify and report subsea wellheads, USCG requirements. 0 casing stubs, or other obstructions. Total 13,348 44,731 Responses Hours BOEMRE plans to follow this interim final rule with a request for a standard, 3-year approval by OMB. The request will be processed under OMB's normal clearance procedures in accordance with the provisions of OMB regulation 5 CFR 1320.10. To facilitate processing of the normal clearance submission to OMB, BOEMRE invites the general public to comment on: (1) Whether this collection of information is necessary • for the proper performance of BOEMRE's functions, including whether the information 78 . has practical utility; (2) the accuracy of the estimates of the burden of the information collection, including the validity of the methodologies and assumptions used; (3) ways to enhance the quality, utility, and clarity of the information to be collected; (4) ways to minimize the burden of the information collection on respondents, including through the use of automated collection techniques or other forms of information technology; and (5) estimates of capital or start up costs, and costs of operation, maintenance and purchase of services to provide the information. An agency may not conduct or sponsor, and you are not required to respond to, a collection of information unless it displays a currently valid OMB control number. The public may comment, at any time, on the accuracy of the IC burden in this rule and may submit any comments to the Department of the Interior; Bureau of Ocean Energy Management, Regulation and Enforcement; Attention: Regulations and Standards Branch; Mail Stop 4024; 381 Elden Street; Herndon, Virginia 20170-4817. National Environmental Policy Act of 1969 We have prepared an environmental assessment to determine whether this rule will have a significant impact on the quality of the human environment under the 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 we reached a Finding of No Significant Impact. A copy of the Environmental Assessment can be viewed at www.Regulations.gov (type in "environmental assessment" for the document type and use the keyword/ID `BOEM-2010-0034"). Data Quality Act i 79 • 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 § 515, 114 Stat. 2763, 2763A-153-154). Effects on the Energy Supply (E.O. 13211) This rule is a significant rule and is subject to review by the Office of Management and Budget under E.O. 12866. The rule does have an effect on energy supply, distribution, or use because its provisions may delay development of some OCS oil and gas resources. The delay stems from the extra drill time and cost imposed on new wells which will somewhat slow exploration and development operations. We estimate an average delay of 2 days and cost of $1.42 million for most deepwater wells in the GOM. Increased imports or inventory drawdowns should compensate for most of the delay or reduction in domestic production. The recurring costs imposed on new drilling by this rule are very small (2 percent) relative to the cost of drilling a well in deepwater. In view of the high risk -reward associated with deepwater exploration in general, we do not expect this small regulatory surcharge from this rule to result in meaningful reduction in discoveries. Thus, we expect the net change in supply associated with this rule will cause only a slight increase in oil and gas prices relative to what they otherwise would have been. Normal volatility in both oil and gas market prices overshadow these rule related price effects, so we consider this an insignificant effect on energy supply and price. 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: Ll OM • 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, email 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. • 81 • Appendix A BOEMRE Response to the Deepwater Horizon Event and Resulting Oil Spill I. Description On April 20, 2010, the crew of the Transocean drilling rig Deepwater Horizon was preparing to temporarily abandon BP's discovery well at the Macondo prospect, 52 miles from shore in 4,992 feet of water in the GOM. An explosion and subsequent fire on the rig caused 11 fatalities and several injuries. The rig sank 2 days later, resulting in an uncontrolled release of oil that was declared a spill of national significance. II. Status of BOEMRE/USCG Joint Investigation The DOI and USCG are undertaking a joint investigation into the causes of the explosions and fire on the Deepwater Horizon. This joint investigation includes members of BOEMRE and the USCG and involves issuing subpoenas for documents and testimony, obtaining expert analyses of data and reports, holding public hearings, calling witnesses, and taking any other steps necessary to determine the cause of the spill. The purpose of this joint investigation is to develop conclusions about the cause and recommendations for preventing a similar event. The facts collected at the public hearings, along with the lead investigators' conclusions and recommendations, will be forwarded to USCG Headquarters and BOEMRE for approval. Once approved, the final investigative report will be made available to the public and the media. The team has been given 9 months, from the date of the convening order (April 27, 2010), to submit the final report. III. DOI and BOEMRE actions In response to the Deepwater Horizon event, DOI and BOEMRE have taken several • actions, as outlined below. Numerous other investigations and reviews have been commenced, including an investigation by the DOI Safety Oversight Board; an investigation by the President's National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling; the USCG incident Specific Preparedness Review; a review by the National Academy of Engineering; a review by the U.S. Chemical Safety Board; and others. This Appendix addresses only BOEMRE actions. These are as follows: 1. Issued a Joint Safety Alert with USCG on April 30, 2010. 2. Published the Safety Measures Report on May 27, 2010, at the request of the President. 3. Issued National NTL No. 2010-N05, "Increased Safety Measures for Energy Development on the OCS," to implement the immediate recommendations from the Safety Measures Report. 4. Issued National NTL No. 2010-N06, "Information Requirements for Exploration Plans, Development and Production Plans, and Development Operations Coordination Documents on the OCS." 5. Implemented Secretarial Decision dated July 12, 2010, ordering the suspensions of drilling activities that use a subsea BOP stack and drilling from floating facilities with a surface BOP stack. 6. Held public meetings to collect information and views about deepwater drilling safety reforms, blowout containment, and oil spill response. 1. Joint USCG-BOEMRE Safety Alert On April 30, 2010, USCG and BOEMRE issued a National Safety Alert No. 2 concerning the Deepwater Horizon event and resulting oil spill. BOEMRE and the 83 0 USCG included the following safety recommendations to operators and drilling contractors: (1) Examine all well control equipment (both surface and subsea) currently being used to ensure that it has been properly maintained and is capable of shutting in the well during emergency operations. Ensure that the ROV hot -stabs are function -tested and are capable of actuating the BOP. (2) Review all rig drilling/casing/completion practices to ensure that well control contingencies are not compromised at any point while the BOP is installed on the wellhead. (3) Review all emergency shutdown and dynamic positioning procedures that interface with emergency well control operations. is (4) Inspect lifesaving and firefighting equipment for compliance with Federal requirements. (5) Ensure that all crew members are familiar with emergency/firefighting equipment, as well as participate in an abandon ship drill. Operators are reminded that the review of emergency equipment and drills should be conducted after each crew change out. (6) Exercise emergency power equipment to ensure proper operation. (7) Ensure that all personnel involved in well operations are properly trained and capable of performing their tasks under both normal drilling and emergency well control operations. 2. Safety Measures Report a. Summary 84 iOn April 30, 2010, the President ordered the Secretary of the Interior to conduct a thorough review of this event and to report, within 30 days, on what, if any, additional precautions and technologies should be required to improve the safety of oil and gas exploration and production operations on the OCS. The Safety Measures Report was presented to the President on May 27, 2010. A copy of the report is available at: hU://www.doi.gov/news/l2ressreleases/loader.cfm?csModule=security/getfile&Pa eg ID= 33646. The Safety Measures Report was developed without the benefit of the findings from the ongoing investigations into the root causes of the explosions and fire on the Deepwater Horizon and the resulting oil spill. In the coming months, those investigations will likely suggest refinements to some of this report's recommendations, as well as additional safety measures. The Safety Measures Report includes a history of OCS production, spills, and blowouts; a review of the existing U.S. regulatory and enforcement structure; a survey of other countries' regulatory approaches; and a summary of existing BOEMRE-sponsored studies on technologies that could reduce the risk of blowouts. The report examines all aspects of drilling operations, including equipment, procedures, personnel management, and inspections and verification in an effort to identify safety and environmental protection measures that would reduce the risk of a catastrophic event. In particular, this report examines several issues highlighted by the Deepwater Horizon event regarding operational and personnel safety while conducting drilling operations in deepwater environments. The Safety Measures Report includes a number of recommendations to improve the 85 • safety of oil and gas drilling operations on the OCS. These recommendations address: • Well -control and well abandonment operations; • Specific requirements for devices, such as BOPS and their testing; • Industry practices; • Worker training; • Inspection protocol and operator oversight; and • The responsibility of the Department for safety and enforcement. The draft recommendations were peer reviewed by seven experts identified by the National Academy of Engineering. b. Implementation teams To inform the efforts related to implementation of some of the recommendations from the Safety Measures Report, the DOI Safety Oversight 0 Board Report, the recommendations to be developed by the President's bipartisan • National Commission and other investigative and reviewing bodies, DOI is establishing Department -led implementation teams. These teams, initially described as "strike teams" in the Safety Measures Report, will evaluate various issues, both highly technical and non -technical. The implementation teams will seek input as appropriate from academia, industry, and other technical experts and stakeholders. They will develop and present their recommendations for further actions to address additional environmental protection and safety measures. The Department may use the recommendations from these implementation teams to: (1) Inform future rulemaking, (2) Develop internal policy for inspections and enforcement of regulations, MM 0 (3) Identify future research needs. 3. NTL No. 2010-NO5 - Increased Safety Measures for Energy Development on the OCS. The NTL No. 2010-NO5, "Increased Safety Measures for Energy Development on the OCS," addressed the recommendations from the Safety Measures Report that warranted immediate implementation. The link to this NTL is: http://www.gomr.boemre.gov/homepg/regulate/regs/ntls/20I ONTLs/ 10-nO5.pdf. BOEMRE issued this NTL on June 8, 2010, as a result of the Deepwater Horizon event. The NTL addresses the recommendations in the report to the President entitled, "Increased Safety Measures for Energy Development on the Outer Continental Shelf' dated May 27, 2010, and details under then -existing regulations the requirements lessees and operators must meet to operate on the OCS. Following are the specific items included in the NTL: Operators are required to: • Verify compliance with existing regulations and Safety Alert issued on April 30, 2010. • Submit BOP and well control system configuration information for the drilling rig that was being used. e Recertify all BOP equipment before resuming drilling. • Have documentation showing that the BOP has been maintained according to the regulations at 30 CFR 250.446(a). The operators are required to maintain records and make them available upon request. 87 • Obtain independent third party verification that the BOP stack is designed for the specific equipment on the rig and compatible with the specific well location, well design, and well execution plan; the BOP stack has not been compromised or damaged from previous service; and the BOP stack will operate in the conditions in which it will be used. • Have a secondary control system with ROV intervention capabilities, including the ability to close one set of blind -shear rams and one set of pipe rams and unlatch the LMRP. • Have an emergency shut-in system in the event that you lose power to the BOP stack, have an unplanned disconnection of the riser from the BOP stack, or experience another emergency situation. 0 • Function test the hot stabs that would be used to interface with the ROV intervention panel during the stump test. • Obtain an independent third party verification that provides sufficient information showing that the blind -shear rams installed in the BOP stack are capable of shearing the drill pipe in the hole under maximum anticipated surface pressures. • If the blind -shear rams or casing shear rams are activated in a well control situation in which pipe or casing was sheared, operators must inspect and test the BOP stack and its components, after the situation is fully controlled. • Have all well casing designs and cementing program/procedures certified by a Professional Engineer, verifying the casing design is appropriate for the purpose for which it is intended under expected wellbore conditions. • 0 • Submit the relevant information discussed in the NTL prior to commencing those operations, and drilling may not commence without BOEMRE approval. 4. NTL No. 2010-N06 - Information Requirements for Exploration Plans, Development and Production Plans, and Development Operations Coordination Documents on the OCS. The link to this NTL is: http://www.gomr.boemre.gov/homepg/regulate/regs/ntls/2010NTLs/ 10-nO6.pdf. BOEMRE issued this NTL on June 18, 2010. This NTL provides guidance to lessees and operators regarding the blowout and oil spill information required in the exploration and development plan documents submitted to BOEMRE, including: A blowout scenario as required by 30 CFR 250.213(g) and 250.243(h), including: Highest volume of liquid Hydrocarbons; Estimated flow rate, total volume, and maximum duration; Potential for the well to bridge over; Likelihood for surface intervention to stop the blowout; Availability of a rig to drill a relief well; Time frame to drill a relief well. A description of the assumptions and calculations used to determine the volume of the worst case discharge scenario, including: Well design; Reservoir characteristics; Fluid characteristics; Pressure, volume, and temperature characteristics; • Analog reservoir assumptions; Supporting calculations and models used in determining worst case scenario. 5. Secretarial Decision suspending drilling activities that use subsea BOP stacks and drilling from floating facilities with a surface BOP stack. On July 12, 2010, the Secretary issued a decision directing BOEMRE to suspend the drilling of wells using subsea BOPS or surface BOPS on floating facilities, and to cease approval of pending and future applications for permits to drill using subsea BOPS or surface BOPS on floating facilities. These directives apply in the GOM and Pacific regions through November 30, 2010, subject to modification if the Secretary determines that the significant threats to life, property, and the environment set forth in his decision have been sufficiently addressed. This includes additional information about the causes is of the Deepwater Horizon Oil Spill. Several investigations and reviews are being undertaken to identify the root causes of the disaster, including a joint BOEMRE-USCG • investigation, a review by the NAE, on -going Congressional inquiries, and the National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling (Presidential Commission). The results of these will better inform DOI decision -making and longer - term rulemaking. Following this decision, on July 12, 2010, BOEMRE issued suspension orders of most deepwater drilling operations on the OCS through November 30, 2010. BOEMRE stopped approval of pending and future deepwater drilling applications in the GOM and Pacific regions. 6. Held public meetings to collect information and views about deepwater drilling safety reforms, blowout containment, and oil spill response. .E 0 As directed by the Secretary in the Decision of July 12, 2010, the BOEMRE Director led a series of public meetings to collect information and views about deepwater drilling safety reforms, blowout containment, and oil spill response. The Director solicited input from the general public, state, and local leaders, experts from academia, the environmental community, and the oil and gas industry. The link to the Public Forums on Offshore Drilling is: http://www.boemre.izov/forums/. The webpage provides information and presentations from each meeting. The meetings were held in August and September in the following cities: New Orleans, Louisiana Mobile, Alabama Pensacola, Florida • Santa Barbara, California Anchorage, Alaska Houston, Texas Biloxi, Mississippi Lafayette, Louisiana. List of Subjects in 30 CFR Part 250: Administrative practice and procedure, Continental shelf, Incorporation by reference, Oil and gas exploration, Public lands --mineral resources, Public lands--rights-of-way, Reporting and recordkeeping requirements. October 1, 2010 Dated. Wilma A. Lewis Assistant Secretary — Land and Minerals Management. 91 . For the reasons stated in the preamble, under the authority of 43 U.S.C. 1334 and Section 2 or Reorganization Plan No.3 of 1950, 64 Stat. 1262, as amended, the Bureau of Ocean Energy Management, Regulation and Enforcement (BOEMRE) is amending 30 CFR chapter II as follows: Title 30 -- MINERAL RESOURCES CHAPTER II -- BUREAU OF OCEAN ENERGY MANAGEMENT, REGULATION AND ENFORCEMENT, DEPARTMENT OF THE INTERIOR PART 250—OIL AND GAS AND SULPHUR OPERATIONS IN THE OUTER CONTINENTAL SHELF 1. The authority citation for part 250 continues to read as follows: Authority: 31 U.S.C. 9701, 43 U.S.C. 1334. • 2. Amend § 250.198 by: a. Adding a new paragraph (a)(3), b. Revising paragraph (h)(63), and c. Adding new paragraph (h)(79) to read as follows: § 250.198 Documents incorporated by reference. (3) The effect of incorporation by reference of a document into the regulations in this part is that the incorporated document is a requirement. When a section in this part incorporates all of a document, you are responsible for complying with the provisions of that entire document, except to the extent that section provides otherwise. When a section in this part incorporates part of a document, you are responsible for complying with that part of the document as provided in that section. If any incorporated document 92 • uses the word should, it means must for purposes of these regulations. (h) * * * (63) API RP 53, Recommended Practices for Blowout Prevention Equipment Systems for Drilling Wells, Third Edition, March 1997; reaffirmed September 2004, Order No. G53003; incorporated by reference at § 250.442(c); § 250.446(a); § 250.516(g)(1); §250.516(h); and § 250.617(a)(1), and (b); * * * * * (79) API RP 65—Part 2, Isolating Potential Flow Zones During Well Construction; First Edition, May 2010; Product No. G65201; incorporated by reference at § 250.415(f). . 3. Amend § 250.415 as follows: a. Revise paragraphs (c), (d), and (e)(2), and b. Add new paragraph (f) to read as follows: § 250.415 What must my casing and cementing programs include? • (c) Type and amount of cement (in cubic feet) planned for each casing string; (d) * * * Your program must provide protection from thaw subsidence and freezeback effect, proper anchorage, and well control; (e) * (2) An "area known to contain a shallow water flow hazard" is a zone or geologic formation for which drilling has confirmed the presence of shallow water flow; and (f) A written description of how you evaluated the best practices included in API RP 93 • 65—Part 2, Isolating Potential Flow Zones During Well Construction (incorporated by reference as specified in § 250.198). Your written description must identify the mechanical barriers and cementing practices you will use for each casing string (reference API RP 65—Part 2, Sections 3 and 4). 4. Amend § 250.416 by revising paragraphs (d) and (e) and adding new paragraphs (f) and (g) to read as follows: § 250.416 What must I include in the diverter and BOP descriptions? (d) A schematic drawing of the BOP system that shows the inside diameter of the BOP stack, number and type of preventers, all control systems and pods, location of choke and kill lines, and associated valves; (e) Independent third party verification and supporting documentation that show the blind -shear rams installed in the BOP stack are capable of shearing any drill pipe in the hole under maximum anticipated surface pressure. The documentation must include test results and calculations of shearing capacity of all pipe to be used in the well including correction for MASP; (f) When you use a subsea BOP stack, independent third party verification that shows: (1) the BOP stack is designed for the specific equipment on the rig and for the specific well design; (2) The BOP stack has not been compromised or damaged from previous service; (3) The BOP stack will operate in the conditions in which it will be used; and 94 • (g) The qualifications of the independent third party referenced in paragraphs (e) and (f) of this section: (1) The independent third party in paragraph (e) in this section must be a technical classification society; an API -licensed manufacturing, inspection, or certification firm; or a licensed professional engineering firm capable of providing the verifications required under this part. The independent third party must not be the original equipment manufacturer (OEM). (2) You must: (i) Include evidence that the firm you are using is reputable, the firm or its employees hold appropriate licenses to perform the verification in the appropriate jurisdiction, the firm carries industry -standard levels of professional liability insurance, and the firm has • no record of violations of applicable law. (ii) Ensure that an official representative of BOEMRE will have access to the • location to witness any testing or inspections, and verify information submitted to BOEMRE. Prior to any shearing ram tests or inspections, you must notify the District Manager at least 24 hours in advance. 5. Amend § 250.418 as follows: a. Revise paragraph (g), b. Redesignate paragraph (h) as paragraph 0), and c. Add new paragraphs (h) and (i) to read as follows: § 250.418 What additional information must I submit with my APD? 95 • (g) A request for approval if you plan to wash out or displace some cement to facilitate casing removal upon well abandonment; (h) Certification of your casing and cementing program as required in § 250.420(a)(6); (i) Description of qualifications required by § 250.416(f) of any independent third party; and 6. Amend § 250.420 as follows: a. Revise paragraphs (a)(4) and (a)(5), b. Add new paragraph (a)(6), c. Add new paragraph (b)(3)to read as follows: • § 250.420 What well casing and cementing requirements must I meet? (a) * (4) Protect freshwater aquifers from contamination; (5) Support unconsolidated sediments; and (6) Include certification signed by a Registered Professional Engineer that there will be at least two independent tested barriers, including one mechanical barrier, across each flow path during well completion activities and that the casing and cementing design is appropriate for the purpose for which it is intended under expected wellbore conditions. The Registered Professional Engineer must be registered in a State in the United States. Submit this certification with your APD (Form MMS-123). (b) * 0 • (3) For the final casing string (or liner if it is your final string), you must install dual mechanical barriers in addition to cement, to prevent flow in the event of a failure in the cement. These may include dual float valves, or one float valve and a mechanical barrier. You must submit documentation to BOEMRE 30 days after installation of the dual mechanical barriers. 7. Revise § 250.423 to read as follows: § 250.423 What are the requirements for pressure testing casing? (a) The table in this section describes the minimum test pressures for each string of casing. You may not resume drilling or other down -hole operations until you obtain a satisfactory pressure test. If the pressure declines more than 10 percent in a 30-minute • test, or if there is another indication of a leak, you must re -cement, repair the casing, or run additional casing to provide a proper seal. The District Manager may approve or require other casing test pressures. Casing type Minimum test pressure (1) Drive or Structural, Not required. (2) Conductor, 200 psi. (3) Surface, Intermediate, and Production, 1 70 percent of its minimum internal yield. (b) You must ensure proper installation of casing or liner in the subsea wellhead or liner hanger. (1) You must ensure that the latching mechanisms or lock down mechanisms are engaged upon installation of each casing string or liner. 97 • (2) You must perform a pressure test on the casing seal assembly to ensure proper installation of casing or liner. You must perform this test for the intermediate and production casing strings or liner. (3) You must submit for approval with your APD, test procedures and criteria for a successful test. (4) You must document all your test results and make them available to BOEMRE upon request. (c) You must perform a negative pressure test on all wells to ensure proper casing installation. You must perform this test for the intermediate and production casing strings. (1) You must submit for approval with your APD, test procedures and criteria for a • successful test. (2) You must document all your test results and make them available to BOEMRE upon request. 8. Amend § 250.442 by revising the section heading and the section to read as follows: § 250.442 What are the requirements for a subsea BOP system? When you drill with a subsea BOP system, you must install the BOP system before drilling below the surface casing. The District Manager may require you to install a subsea BOP system before drilling below the conductor casing if proposed casing setting depths or local geology indicate the need. The table in this paragraph outlines your requirements. When drilling with a subsea BOP system, you must: Additional requirements. a) Have at least four remote -controlled, You must have at least one annular BOP, two • When drilling with a subsea BOP system, you Additional requirements. must: hydraulically operated BOPS. BOPS equipped with pipe rams, and one BOP equipped with blind -shear rams. The blind -shear rams must be capable of shearing any drill pipe in the hole under maximum anticipated surface pressures. (b) Have an operable dual -pod control system to ensure proper and independent operation of the BOP system. (c) Have an accumulator system to provide fast The accumulator system must meet or exceed the closure of the BOP components and to operate all provisions of Section 13.3, Accumulator critical functions in case of a loss of the power Volumetric Capacity, in API RP 53, Recommended fluid connection to the surface. Practices for Blowout Prevention Equipment Systems for Drilling Wells (incorporated by reference as specified in § 250.198). The District Manager may approve a suitable alternate method. (d) Have a subsea BOP stack equipped with At a minimum, the ROV must be capable of remotely operated vehicle (ROV) intervention closing one set of pipe rams, closing one set of capability. blind -shear rams and unlatching the LMRP. (e) Maintain an ROV and have a trained ROV The crew must be trained in the operation of the crew on each floating drilling rig on a continuous ROV. The training must include simulator training basis. The crew must examine all ROV related on stabbing into an ROV intervention panel on a well control equipment (both surface and subsea) subsea BOP stack. to ensure that it is properly maintained and capable of shutting in the well during emergency operations. (f) Provide autoshear and deadman systems for (1) Autoshear system means a safety system that is dynamically positioned rigs. designed to automatically shut in the wellbore in the event of a disconnect of the LMRP. When the autoshear is armed, a disconnect of the LMRP closes the shear rams. This is considered a "rapid discharge" system. (2) Deadman System means a safety system that is designed to automatically close the wellbore in the event of a simultaneous absence of hydraulic supply and signal transmission capacity in both subsea control pods. This is considered a "rapid discharge" system. (3) You may also have an acoustics stem. (g) Have operational or physical barrier(s) on Incorporate enable buttons on control panels to BOP control panels to prevent accidental ensure two-handed operation for all critical disconnect functions. functions. (h) Clearly label all control panels for the subsea Label other BOP control panels such as hydraulic BOP system. control panel. (i) Develop and use a management system for The management system must include written operating the BOP system, including the procedures for operating the BOP stack and LMRP prevention of accidental or unplanned disconnects (including proper techniques to prevent accidental of the system. disconnection of these components) and minimum knowledge requirements for personnel authorized tooperate and maintain BOP components. (j) Establish minimum requirements for Personnel must have: personnel authorized to operate critical BOP (1) Training in deepwater well control theory and equipment. ractice according to the requirements of 30 CFR • • • When drilling with a subsea BOP system, you Additional requirements. must: 250, subpart O; and (2) A comprehensive knowledge of BOP hardware and controls stems. (k) Before removing the marine riser, displace the You must maintain sufficient hydrostatic pressure fluid in the riser with seawater. or take other suitable precautions to compensate for the reduction in pressure and to maintain a safe and controlled well condition. (1) Install the BOP stack in a glory hole when in Your glory hole must be deep enough to ensure that ice -scour area. the top of the stack is below the deepest probable ice -scour depth. 9. Amend § 250.446 by revising paragraph (a) to read as follows: § 250.446 What are the BOP maintenance and inspection requirements? (a) You must maintain and inspect your BOP system to ensure that the equipment functions properly. The BOP maintenance and inspections must meet or exceed the provisions of Sections 17.10 and 18.10, Inspections; Sections 17.11 and 18.11, Maintenance; and Sections 17.12 and 18.12, Quality Management, described in API RP 53, Recommended Practices for Blowout Prevention Equipment Systems for Drilling Wells (incorporated by reference as specified in § 250.198). You must document the procedures used, record the results of your BOP inspections and maintenance actions, and make available to BOEMRE upon request. You must maintain your records on the rig for 2 years or from the date of your last major inspection, whichever is longer; 10. Amend § 250.449, by revising paragraphs (h) and (i) and adding new paragraphs 0) and (k) to read as follows: § 250.449 What additional BOP testing requirements must 1 meet? (h) Function test annular and ram BOPS every 7 days between pressure tests; 100 • (i) Actuate safety valves assembled with proper casing connections before running casing; 0) Test all ROV intervention functions on your subsea BOP stack during the stump test. You must also test at least one set of rams during the initial test on the seafloor. You must submit test procedures with your APD or APM for District Manager approval. You must: (1) ensure that the ROV hot stabs are function tested and are capable of actuating, at a minimum, one set of pipe rams and one set of blind -shear rams and unlatching the LMRP; and (2) document all your test results and make them available to BOEMRE upon request; • (k) Function test autoshear and deadman systems on your subsea BOP stack during the stump test. You must also test the deadman system during the initial test on the • seafloor. (1) You must submit test procedures with your APD or APM for District Manager approval. (2) You must document all your test results and make them available to BOEMRE upon request. 11. Amend § 250.451 by adding new paragraph (i) to the table to read as follows: § 250.451 What must I do in certain situations involving BOP equipment or systems? If you encounter the following situation: Then you must ... i You activate blind -shear rams or casing Retrieve, physically inspect, and conduct a full 101 • shear rams during a well control situation, in which pipe or casing is sheared. pressure test of the BOP stack after the situation is fully controlled. 12. Amend § 250.456 by: a. Revising the last sentence in paragraph (i), b. Redesignating paragraph (j) as (k), and c. Adding a new paragraph (j) to read as follows: § 250.456 What safe practices must the drilling fluid program follow? (i) * * * You must record the results of these tests in the drilling fluid report; 0) Before displacing kill -weight drilling fluid from the wellbore, you must obtain prior approval from the District Manager. To obtain approval, you must submit with your APD or APM your reasons for displacing the kill -weight drilling fluid and provide • detailed step-by-step written procedures describing how you will safely displace these fluids. The step-by-step displacement procedures must address the following: (1) number and type of independent barriers that are in place for each flow path, (2) tests you will conduct to ensure integrity of independent barriers, (3) BOP procedures you will use while displacing kill weight fluids, and (4) procedures you will use to monitor fluids entering and leaving the wellbore; and * * * * * 13. Amend § 250.515 by adding new paragraphs (b)(5) and (e) to read as follows: § 250.515 Blowout prevention equipment. (b) * • When The minimum BOP stack must include 102 �J (5) You use a subsea BOP stack The requirements in § 250.442(a) of this part. (e) The subsea BOP system for well -completions must meet the requirements in § 250.442 of this part. 14. Amend § 250.516 by: a. Revising (d)(6); b. Adding new paragraphs (d)(8) and (d)(9); and c. Revising paragraphs (g) and (h) to read as follows: § 250.516 Blowout preventer system tests, inspections, and maintenance. * � x (d) * • (6) Pressure -test variable bore -pipe rams against all sizes of pipe in use, excluding drill collars and bottom -hole tools; (8) Test all ROV intervention functions on your subsea BOP stack during the stump test. You must also test at least one set of rams during the initial test on the seafloor. You must submit test procedures with your APM for District Manager approval. You must: (i) Ensure that the ROV hot stabs are function tested and are capable of actuating, at a minimum, one set of pipe rams and one set of blind -$hear rams and unlatching the LMRP; (ii) Document all your test results and make them available to BOEMRE upon 0 request; and 103 • (9) Function test autoshear and deadman systems on your subsea BOP stack during the stump test. You must also test the deadman system during the initial test on the seafloor. (i) You must submit test procedures with your APM for District Manager approval. (ii) You must document all your test results and make them available to BOEMRE upon request. (g) BOP inspections. (1) You must inspect your BOP system to ensure that the equipment functions properly. The BOP inspections must meet or exceed the provisions of Sections 17.10 and 18.10, Inspections, described in API RP 53, Recommended Practices for Blowout Prevention Equipment Systems for Drilling Wells (incorporated by • reference as specified in § 250.198). You must document the procedures used, record the results, and make them available to BOEMRE upon request. You must maintain your • records on the rig for 2 years or from the date of your last major inspection, whichever is longer. (2) You must visually inspect your BOP system and marine riser at least once each day if weather and sea conditions permit. You may use television cameras to inspect this equipment. The District Manager may approve alternate methods and frequencies to inspect a marine riser. (h) BOP maintenance. You must maintain your BOP system to ensure that the equipment functions properly. The BOP maintenance must meet or exceed the provisions of Sections 17.11 and 18.11, Maintenance; and Sections 17.12 and 18.12, Quality Management, described in API RP 53, Recommended Practices for Blowout 104 • Prevention Equipment Systems for Drilling Wells (incorporated by reference as specified in § 250.198). You must document the procedures used, record the results, and make available to BOEMRE upon request. You must maintain your records on the rig for 2 years or from the date of your last major inspection, whichever is longer. 0 15. Amend § 250.615 by: a. Adding new paragraph (b)(5), b. Redesignating paragraphs (e) through (g) as (f) through (h), and c. Adding new paragraph (e) to read as follows: § 250.615 Blowout prevention equipment. (b) When The minimum BOP stack must include 5) You use a subsea BOP stack The requirements in § 250.442 a of this part. (e) The subsea BOP system for well-workover operations must meet the requirements in § 250.442 of this part. 16. Amend § 250.616 by adding new paragraph (h) to read as follows: § 250.616 Blowout preventer system testing, records, and drills. (h) Stump test a subsea BOP system before installation. You must: (1) Test all ROV intervention functions on your subsea BOP stack during the stump test. You must also test at least one set of rams during the initial test on the seafloor. 105 • You must submit test procedures with your APM for District Manager approval. You must: (i) Ensure that the ROV hot stabs are function tested and are capable of actuating, at a minimum, one set of pipe rams and one set of blind -shear rams and unlatching the LMRP; (ii) Document all your test results and make them available to BOEMRE upon request; and (2) Function test autoshear and deadman systems on your subsea BOP stack during the stump test. You must also test the deadman system during the initial test on the seafloor. You must: (i) Submit test procedures with your APM for District Manager approval. is (ii) Document the results of each test and make them available to BOEMRE upon request. (3) Use water to stump test a subsea BOP system. You may use drilling or completion fluids to conduct subsequent tests of a subsea BOP system. §§ 250.617 and 250.618 [Redesignated as §§ 250.618 and 250.619] 17. Redesignate §§ 250.617 and 250.618 to §§ 250.618 and 250.619, respectively. 18. Add new § 250.617 to read as follows: § 250.617 What are my BOP inspection and maintenance requirements? (a) BOP inspections. (1) You must inspect your BOP system to ensure that the equipment functions properly. The BOP inspections must meet or exceed the provisions of Sections 17.10 and 18.10, Inspections, described in API RP 53, Recommended Practices for Blowout 106 • Prevention Equipment Systems for Drilling Wells (incorporated by reference as specified in § 250.198). You must document the procedures used, record the results, and make them available to BOEMRE upon request. You must maintain your records on the rig for 2 years or from the date of your last major inspection, whichever is longer. (2) You must visually inspect your BOP system and marine riser at least once each day if weather and sea conditions permit. You may use television cameras to inspect this equipment. The District Manager may approve alternate methods and frequencies to inspect a marine riser. (b) BOP maintenance. You must maintain your BOP system to ensure that the equipment functions properly. The BOP maintenance must meet or exceed the provisions of Sections 17.11 and 18.11, Maintenance; and Sections 17.12 and 18.12, • Quality Management, described in API RP 53, Recommended Practices for Blowout Prevention Equipment Systems for Drilling Wells (incorporated by reference as specified 0 in § 250.198). You must document the procedures used, record the results, and make them available to BOEMRE upon request. You must maintain your records on the rig for 2 years or from the date of your last major inspection, whichever is longer. 19. In §§ 250.1500: a. Amend the definition of "Contractor and contract personnel" and the definition of "Employee" by removing the phrase "well control or production safety", and in its place add the phrase "well control, deepwater well control, or production safety"; and 107 • b. Add definitions for "Deepwater well control", "Well completion/well workover", Well control", and "Well servicing" in alphabetical order to read as follows: § 250.1500 Definitions. Deepwater well control means well control when you are using a subsea BOP system. Well completion/well workover means those operations following the drilling of a well that are intended to establish or restore production. Well control means methods used to minimize the potential for the well to flow or kick and to maintain control of the well in the event of flow or a kick during drilling, well • completion, well workover, and well servicing operations. Well servicing means snubbing, coiled tubing, and wireline operations. • § 250.1501 [AMENDED] 20. In §§ 250.1501, remove the phrase "well control or production safety", and in its place add the phrase "well control, deepwater well control, or production safety". § 250.1503 [AMENDED] 21. In §§ 250.1503: a. Redesignating paragraphs (b) and (c) as paragraphs (c) and (d); b. Amending paragraphs (a), (c)(1), (c)(3) and (d)(1) by removing the phrase "well control or production safety", and in its place adding the phrase "well control, deepwater well control, or production safety"; 108 • c. Amend paragraph (a) by removing the phrase "well control and production safety", and in its place adding the phrase "well control, deepwater well control, and production safety"; and d. Adding new paragraph (b) to read as follows: § 250.1503 What are my general responsibilities for training? (b) If you conduct operations with a subsea BOP stack, your employees and contract personnel must be trained in deepwater well control. The trained employees and contract personnel must have a comprehensive knowledge of deepwater well control equipment, practices, and theory. § 250.1506 [AMENDED] • 22. In §§ 250.1506, amend paragraphs (a), (b), and (c) by removing the phrase "well control or production safety", and in its place adding the phrase "well control, deepwater • well control, or production safety". § 250.1507 [AMENDED] 23. In §§ 250.1507, amend paragraphs (c) and (d) by removing the phrase "well control and production safety", and in its place adding the phrase "well control, deepwater well control, and production safety". 109 • 24. Amend § 250.1712 by, a. Revising paragraph (e) and (f)(14); and b. Adding new paragraph (g) to read as follows: § 250.1712 What information must I submit before I permanently plug a well or zone? (e) A description of the work; (14) Your plans to protect archaeological and sensitive biological features, including anchor damage during plugging operations, a brief assessment of the environmental impacts of the plugging operations, and the procedures and mitigation measures you will • take to minimize such impacts; and (g) Certification by a Registered Professional Engineer of the well abandonment design and procedures; that there will be at least two independent tested barriers, including one mechanical barrier, across each flow path during abandonment activities; and that the plug meets the requirements in the table in § 250.1715. The Registered Professional Engineer must be registered in a State in the United States. You must submit this certification with your APM (Form MMS-124). 25. Amend § 250.1721 by: a. Revising paragraphs (e) and (g)(3), and b. Adding new paragraph (h) to read as follows: § 250.1721 If I temporarily abandon a well that I plan to re-enter, what must I do? • 110 (e) Identify and report subsea wellheads, casing stubs, or other obstructions that extend above the mud line according to U.S. Coast Guard (USCG) requirements; (g) * * * (3) A description of any remaining subsea wellheads, casing stubs, mudline suspension equipment, or other obstructions that extend above the seafloor; and (h) Submit certification by a Registered Professional Engineer of the well abandonment design and procedures; that there will be at least two independent tested barriers, including one mechanical barrier, across each flow path during abandonment activities; and that the plug meets the requirements in the table in § 250.1715. The • Registered Professional Engineer must be registered in a State in the United States. You must submit this certification with your APM (Form MMS-124) required by § 250.1712. [FR Doc. 2010-25256 Filed 10/07/2010 at 11:15 am; Publication Date: 10/14/2010] 111 • THE BUREAU OF OCEAN ENERGY MANAGEMENT, REGULATION AND ENFORCEMENT Office of Public Affairs FACT SHEET THE WORKPLACE SAFETY RULE On Safety and Environmental Management Systems (SEMS) The Bureau of Ocean Energy Management, Regulation and Enforcement (BOEM) will submit to the Federal Register for publication a final Workplace Safety Rule requiring offshore oil and gas operators to develop and maintain a Safety and Environmental Management System (SEMS). A SEMS is a comprehensive management program for identifying, addressing and managing operational safety hazards and impacts, with the goal of promoting both human safety and environmental protection. The Workplace Safety Rule covers all offshore oil and gas operations in Federal waters and makes mandatory the currently voluntary practices in the American Petroleum Institute's (API) Recommended Practice 75 (RP 75). A mandatory oil and gas SEMS program will enhance the safety and environmental protection of oil and gas drilling operations on the Outer Continental Shelf (OCS), particularly in light of the Deepwater Horizon explosion. BOEM was preparing to finalize the Workplace Safety Rule prior to the Deepwater Horizon explosion. Following the explosion and resulting oil spill, BOEM continued to carefully analyze the proposed rule, which proposed making mandatory the essential components of RP 75. BOEM has determined that it agrees with comments from some commenters urging BOEM to incorporate all of RP 75. BOEM intends to address additional safety management system provisions considered appropriate in light of the Deepwater Horizon oil spill in additional rulemakings in the near future. BOEM believes finalizing this Workplace Safety Rule at this time has the following benefits: • It will provide oversight and enforcement of SEMS provisions. Although many large operators on the OCS currently have a SEMS program, the voluntary nature of the programs limits their effectiveness; • It will impose the requirement for a SEMS program on all OCS operators; • It will address human factors behind accidents not reached by current regulations; and • It will provide a flexible approach to systematic safety that can keep up with evolving technologies. The 13 elements of RP 75 that the Workplace Safety Rule makes mandatory are as follows: • General provisions: for implementation, planning and management review and approval of the SEMS program. • • Safety and environmental information: safety and environmental information needed for any facility, e.g. design data; facility process such as flow diagrams; mechanical components such as piping and instrument diagrams; etc. • Hazards analysis: a facility -level risk assessment. • Management of change: program for addressing any facility or operational changes including management changes, shift changes, contractor changes, etc. • Operating procedures: evaluation of operations and written procedures. • Safe work practices: manuals, standards, rules of conduct, etc. • Training: safe work practices, technical training — includes contractors. • Mechanical integrity: preventive maintenance programs, quality control. • Pre -startup review: review of all systems. • Emergency response and control: emergency evacuation plans, oil spill contingency plans, etc.; in place and validated by drills. • Investigation of Incidents: procedures for investigating incidents, corrective action and follow-up. • Audits: rule strengthens RP 75 provisions by requiring an audit every 4 years, to an initial 2—year reevaluation; and then subsequent 3-year audit intervals. • Records and documentation: documentation required that describes all elements of SEMS program. • 2 4310-MR-P DEPARTMENT OF THE INTERIOR Bureau of Ocean Energy Management, Regulation and Enforcement 30 CFR Part 250 [Docket ID: BOEM-2010-00461 RIN 1010—AD15 Oil and Gas and Sulphur Operations in the Outer Continental Shelf —Safety and Environmental Management Systems. AGENCY: Bureau of Ocean Energy Management, Regulation and Enforcement (BOEMRE), Interior. ACTION: Final rule. SUMMARY: This final rule establishes a new subpart under the Bureau of Ocean Energy Management, Regulation and Enforcement (BOEMRE) regulations to require operators to develop and implement Safety and Environmental Management Systems (SEMS) for oil and gas and sulphur operations in the Outer Continental Shelf (OCS). This rulemaking will incorporate in its entirety and make mandatory the American Petroleum Institute's Recommended Practice 75, Development of a Safety and Environmental Management Program for Offshore Operations and Facilities, with respect to operations and activities under the jurisdiction of BOEMRE. This final rule will apply to all OCS oil and gas and sulphur operations and the facilities under BOEMRE jurisdiction including drilling, production, construction, well workover, well completion, well servicing, and DOI pipeline activities. The importance of this final rule is highlighted by the Deepwater Horizon event on April 20, 2010. Although the cause of 40 • 4310-M R-P DEPARTMENT OF THE INTERIOR Bureau of Ocean Energy Management, Regulation and Enforcement 30 CFR Part 250 (Docket ID: BOEM-2010-0046] RIN 1010—AD15 Oil and Gas and Sulphur Operations in the Outer Continental Shelf —Safety and Environmental Management Systems. AGENCY: Bureau of Ocean Energy Management, Regulation and Enforcement (BOEMRE), Interior. ACTION: Final rule. SUMMARY: This final rule establishes a new subpart under the Bureau of Ocean • Energy Management, Regulation and Enforcement (BOEMRE) regulations to require operators to develop and implement Safety and Environmental Management Systems SE( MS) for oil and gas and sulphur operations in the Outer Continental Shelf (OCS). This rulemaking will incorporate in its entirety and make mandatory the American Petroleum Institute's Recommended Practice 75, Development of a Safety and Environmental Management Program for Offshore Operations and Facilities, with respect to operations and activities under the jurisdiction of BOEMRE. This final rule will apply to all OCS oil and gas and sulphur operations and the facilities under BOEMRE jurisdiction including drilling, production, construction, well workover, well completion, well servicing, and DOI pipeline activities. The importance of this final rule is highlighted by the Deepwater Horizon event on April 20, 2010. Although the cause of 0 • the event is presently under investigation, it further illustrates the importance of ensuring safe operations on the OCS. BOEMRE believes that requiring operators to implement SEMS will reduce the risk and number of accidents, injuries, and spills during OCS activities. DATE: Effective Date: This rule becomes effective on November 15, 2010. The incorporation by reference of the publication listed in the regulation is approved by the Director of the Federal Register as of November 15, 2010. FOR FURTHER INFORMATION CONTACT: David Nedorostek, (703) 787-1029. SUPPLEMENTARY INFORMATION: On May 22, 2006, the former Minerals Management Service published an Advance Notice of Proposed Rulemaking (71 FR 29277), and then on June 17, 2009, BOEMRE (formerly MMS) published a Notice of • Proposed Rulemaking in the Federal Register entitled "Safety and Environmental Management Systems for Outer Continental Shelf Oil and Gas Operations" (74 FR 28639). The comment period for that proposed rule closed on September 15, 2009. In response to several requests, BOEMRE issued a National Notice to Lessees and Operators (NTL No. 2009-N05) on August 12, 2009, announcing a public meeting on September 2, 2009, in New Orleans, Louisiana, to discuss the proposed rule. Summary of the Final Rule BOEMRE is incorporating by reference, and making mandatory, the American Petroleum Institute's Recommended Practice for Development of a Safety and Environmental Management Program for Offshore Operations and Facilities (API RP 2 • • 75), Third Edition, May 2004, reaffirmed May 2008. This recommended practice, including its appendices, constitutes a complete Safety and Environmental Management System (SEMS) program. On May 22, 2006 BOEMRE published an Advance Notice of Proposed Rulemaking (ANPR) in the Federal Register (71 FR 29277) related to requiring a SEMS program. This was followed on June 17, 2009, by a Notice of Proposed Rulemaking (NPR). The ANPR discussed several options for implementing a SEMS program. One of these options was a comprehensive safety and environmental management approach by addressing all elements of API RP 75. API RP 75 consists of 13 sections, one of which is a "General" section. This relates to the 12 elements identified in the ANPR and states the overall principles for the SEMS program and establishes management's general responsibilities for its success. This General element is critical to the successful • implementation of the SEMS program in API RP 75, and BOEMRE is including it by p p � g incorporating by reference the entirety of API RP 75. The NPR proposed regulatory text premised on the four critical elements of API RP 75 (hazards analysis, management of change, operating procedures, and mechanical integrity). BOEMRE noted all elements of API RP 75 in the proposed rule, stating that a SEMS program should be modeled after the requirements of API RP 75, but did not propose to incorporate all elements of API RP 75. However, several comments suggested that BOEMRE should incorporate by reference and require implementation of all elements of API RP 75. BOEMRE has determined that for the SEMS program to be most effective, the entirety of API RP 75 needs to included in the program and has 0 • required as much in the final rule. BOEMRE also believes that adoption of API RP 75 in its entirety is consistent with the direction of the National Technology Transfer and Advancement Act of 1996, which directs agencies, wherever possible, to adopt private standards. This final rule will therefore require the operator (a lessee, the owner or holder of operating rights, or the designated operator) to integrate a comprehensive SEMS program into the management of their OCS operations, thereby providing for the prevention of waste and conservation of natural resources of the Outer Continental Shelf. In addition, BOEMRE is highlighting certain requirements from API RP 75 and further describing those requirements in the regulatory text to clarify compliance requirements. It is the intent of this rule to hold the operator accountable for the overall safety of the offshore facility, including ensuring that all contractors and subcontractors have safety policies • and procedures in place that support the implementation of the operator's SEMS program and align with the principles of managing safety set forth in API RP 75. Nothing in this final rule shall affect the Coast Guard's authority and jurisdiction over vessels and offshore facilities. This final rule will require all elements of API RP 75 as follows: (1) General, with additional clarification in § 250,1909, (2) Safety and Environmental Information, with additional clarification in § 250.1910, (3) Hazards Analysis, with additional clarification in § 250.1911, (4) Management of Change, with additional clarification in § 250.1912, (5) Operating Procedures, with additional clarification in § 250.1913, 4 • (6) Safe Work Practices, with additional clarification in § 250.1914, (7) Training, with additional clarification in § 250.1915, (8) Assurance of Quality and Mechanical Integrity of Critical Equipment, (Mechanical Integrity), with additional clarification in § 250.1916, (9) Pre -startup Review, with additional clarification in § 250.1917, (10) Emergency Response and Control, with additional clarification in § 250.1918, (11) Investigation of Incidents, with additional clarification in § 250.1919, (12) Audit of Safety and Environmental Management Program Elements, (Auditing), with additional clarification in §§ 250.1920, 1924, and 1925, and (13) Records and Documentation, (Recordkeeping and Documentation), with additional BOEMRE requirements in § 250.1928. BOEMRE also carried over other provisions that were contained in the proposed rule. Therefore, in implementing a comprehensive SEMS program that incorporates all of API RP 75, the operator needs to include the following in its SEMS program: (1) recordkeeping and documentation regarding specification of the amount of time records are to be kept; (2) clarification of the differences between hazards analysis (facility level) and job safety analysis (task level); (3) procedures to verify that contractors are conducting their activities in accordance with the operator's SEMS program and an evaluation to ensure that contractors have the skills and knowledge to perform their assigned duties, (4) an independent third -party or your designated and qualified personnel must 0 5 • conduct all SEMS audits; (5) audit documentation must be submitted to BOEMRE; (6) other documentation to be made available to BOEMRE upon request; (7) OCS performance measures data (Form MMS-131). The following table provides a summary of the individual provisions and their associated cost for implementation and annual maintenance of a SEMS program. No costs are identified for implementation of a SEMS program by high activity operators because all high activity operators currently have a SEMS program. Implementation costs for moderate and low activity operators that have a partial SEMS program are lower than those operators without a SEMS program. Elements Implementation Implementation Maintenance Maintenance Maintenance (Moderate) (Low) (High) (Moderate) (Low) Partial Full Partial Full $ 5,000 $ 50,000 $ 3,000 $ 2,000 General $18,000 $ 18,000 $5,000 Safety and $0 $ 22,000 $0 $ 8,000 $ 75,000 $ 12,000 $ 3,000 Environmental Infonnation Hazards $0 $ 98,000 $0 $ 23,000 $ 300,000 $ 34,000 $14,000 Analysis Management $0 $ 29,000 $0 $ 18,000 $ 150,000 $ 21,000 $ 7,000 of Change Operating $0 $ 20,000 $0 $ 10,000 $ 100,000 $ 17,000 $ 4,000 Procedures Safe Work $0 $ 28,000 $0 $ 12,000 $ 125,000 $ 17,000 $ 5,000 Practices Training $0 $ 30,000 $0 $ 14,000 $ 200,000 $ 25,000 $ 9,000 Mechanical $0 $ 38,000 $0 $ 19,000 $ 225,000 $ 27,000 $11,000 Integrity Pre -startup $ 25,000 $ 25,000 $8,000 $ 8,000 $ 125,000 $ 16,000 $ 5,000 Review Emergency $ 28,000 $ 28,000 $14,000 $ 14,000 $ 175,000 $ 24,000 $ 7,000 Response and Control Investigation $ 20,000 $ 20,000 $10,000 $ 10,000 $ 95,000 $ 17,000 $ 3,000 of Incidents Audits $ 3,000 $ 3,000 $ 2,000 $ 2,000 $ 15,000 $ 6,000 $ 6,000 Records and $ 6,000 $ 6,000 $ 4,000 $ 4,000 $ 30,000 $ 6,000 $ 4,000 0 6 1 Documentation Total 1 $100,000 1 $365,000 $43,000 _ $147,000 $1,665,000 $225,000 $80,000 Total One-time Implementation: $655,000 Total Annual Maintenance: $ 1,970,000 BOEMRE may enforce non-compliance with any of the requirements of 30 CFR part 250 subpart S, in a variety of ways. BOEMRE may issue incidents of non- compliance (INCs) following an inspection where BOEMRE determines that a facility is conducting operations that do not comply with the requirements of subpart S, or after a BOEMRE directed independent third -party SEMS audit. If BOEMRE identifies non- compliance with subpart S as a result of a regularly scheduled SEMS audit and all deficiencies discovered during the course of the audit are sent to BOEMRE with a schedule for their correction, then BOEMRE will consider this in deciding whether to issue an INC. However, if the operator does not meet its schedule of corrections, BOEMRE will be more likely to issue an INC. If non-compliance resulting from an inspection or BOEMRE-directed audit poses actual harm or threat to the human and marine environment, BOEMRE will proceed with a civil penalty review of that violation(s) subject to 30 CFR part 250, subpart N - Outer Continental Shelf Civil Penalties. Should non-compliance with subpart S display serious and pervasive safety management concerns, BOEMRE may restrict or revoke the operator's privilege to operate on the OCS as a designated operator or lessee operator through probationary or disqualification actions as detailed in § 250.135. Notice of Proposed Rulemaking Comments In response to the proposed rule, BOEMRE received 61 sets of comments, of which • 57 were from individual entities (companies, industry organizations, or private citizens). Some of the 61 comments were duplicates, not related to the proposed rule, or the same company submitting multiple comments. All of the comments received are posted on the BOEMRE Web site at: http://www.BOEMRE. gov/federalregisterIPublicComments/AD 15 SafetyEnvMgmtSysfor OCSOi1GasOperations.htm. Multiple comments stated that they do not support the proposed rule as written because it will eliminate the flexibility needed for any safety management system to work effectively, including flexibility inherent in the API RP 75 approach. Five comments received recommended that BOEMRE should move forward to implement its plan to require a SEMS for oil and gas and sulphur operations on the OCS • and that the proposed rule should require that offshore operators implement all elements of API RP 75. Other comments suggested various combinations of the API RP 75 elements. The majority of the comments received stated that SEMS should remain voluntary and the proposed rule, as written, would increase documentation and recordkeeping requirements and would not address human factors (i.e., errors, behavior, etc.). Several comments recommended that BOEMRE incorporate the JSA into current 30 CFR Part 250 regulations to address human factors as an alternative to incorporating the four elements. Numerous comments received from drilling, production, and service contractors stated that BOEMRE already has regulations in place to address employee training and 0 8 competency assessments in 30 CFR part 250, subpart O - Well Control and Production Safety Training, and recommended that BOEMRE strike the section relating to contractors from the rule because it is redundant with the existing subpart O regulations. A few comments received from industry trade organizations (API, International Association of Drilling Contractors (IADC), Offshore Operators Committee (OOC)) stated that the proposed rule as written will require lessees and operators to modify existing SEMS programs and that rewriting these programs would not prevent accidents or increase safety. In response to the comments we address the general comments and those that pertain to several sections of the rule first. Following that, we have a section -by -section discussion of the specific comments received and our response to those comments, • including any changes made to the final rule. GENERAL COMMENTS Contractor Selection Criteria Comment: Nearly every comment addressed contractor selection criteria. They stated that BOEMRE already has regulations in place (30 CFR part 250, subpart O - Well Control and Production Safety Training) that address training and competency assessment for contractors. In addition, they stated that BOEMRE was requiring contractors to have a SEMS program. Response: We incorporated by reference API RP 75, Section 7, which addresses training. Subpart O addresses training and competency for contractors. The operator may use the training requirements in subpart O to meet part of the requirements of 0 9 • Section 7. As part of their SEMS program, operators must establish and implement training programs so that all personnel are trained to work safely and are aware of environmental considerations offshore, in accordance with their duties. The SEMS program must address contractor training to ensure and verify that contractors have their own written safe work practices and contractors may adopt appropriate sections of the operator's SEMS program. The operator must have a SEMS program and is responsible for obtaining and evaluating information regarding the contract employer's safety performance and safety programs to ensure that skilled, knowledgeable, and properly trained personnel are working on the OCS. In order to comply with this rule, an operator must ensure that its contractors are conducting their operations in accordance with the operator's SEMS program. The operator must work with the contractor regarding • appropriate contractor safety and environmental policies and practices before a contractor begins work at the operator's facilities. Jurisdictional Authority Comment: Most comments expressed concern that BOEMRE had overstepped its jurisdictional authority by imposing management safety system requirements in the proposed rule on mobile offshore drilling units (MODUs). Comments questioned BOEMRE's authority to require an operator to have a SEMS on a MODU. Response: BOEMRE has jurisdictional authority to adopt and implement this rule. The final rule will require operators to have a SEMS for a MODU when it is under BOEMRE's jurisdiction such as during drilling, well workover, well completion, and servicing operations. 0 10 • The U.S. Offshore Industry Safety Record Comment: Most comments expressed the view that the safety and environmental protection record of the offshore industry is excellent, and that imposing these new requirements is not justified. Response: BOEMRE disagrees that the final SEMS regulation is not justified in light of the available incident data and the trends identified through analyzing this data as discussed in the ANPR and preamble of the proposed SEMS rule. This analysis covers 10 years (from 2000 to 2009) of OCS oil and gas operations, including Incidents of Noncompliance (INCs), accident panel investigation reports, incident analysis, and OCS spill analysis. It shows that the majority of INCs and accidents during that period were related to human factors and not to equipment failure. Thus, additional regulations are needed to address how operators can reduce the risk of incidents during OCS activities. The ANPR and the proposed rule describe numerous incidents that indicate the need for a comprehensive SEMS program. The recent Deepwater Horizon incident is a significant reminder of the risk of offshore operations and the need to regularly evaluate measures that help ensure safe operations. A SEMS program will augment existing safety requirements. Root Cause Comment: Most comments stated that BOEMRE's assertion that "root cause analysis" points to the need for requiring the four proposed SEMS elements, is not supported by the BOEMRE's incident analysis. 0 11 • Response: BOEMRE believes that the SEMS regulation is justified given the available incident data trends and associated analysis discussed in the ANPR and preamble of the proposed and final SEMS rule. As mentioned previously, the analysis covered over 10 years and demonstrates that requiring operators to implement a SEMS program is likely to improve OCS safety. BOEMRE incident analysis supports adopting all 13 elements. Voluntary data submitted by industry should not be construed as BOEMRE data as it is incomplete and unverified. BOEMRE data is the only source of industry- wide data available. Job Safety Analysis/Job Hazards Analysis Comment: Most comments claimed that the job safety analysis/job hazards analysis is the only significant portion of the proposed rule that could affect the behavioral issues • related to an incident. Response: BOEMRE agrees that a JSA/JHA does address behavioral change with the goal of minimizing accidents, but disagrees that it is the only portion of the rule that bears on behavior. In the final rule, BOEMRE is incorporating all elements of API RP 75, much of which addresses behavioral issues and additional regulatory requirements to clarify expectations for compliance. Mandated SEMS Program Comment: Most comments strongly disagree that a mandated SEMS program as proposed is needed. The comments stated that a mandated program will not reduce OCS incidents any more than a voluntary SEMS program. As such, they recommend BOEMRE keep SEMS voluntary. • 12 • Response: BOEMRE disagrees. In 1998, operators accounting for 98 percent of OCS production reported that they were covered under a SEMS. By 2006, this number decreased to approximately 60 percent (see API RP 75 implementation survey at: hq://www.BOEMRE. ov�p/Rgports/survey98.htm). A voluntary SEMS program has not been adopted by all operators. The only way to ensure the adoption of a SEMS program by all operators is to require that all operators implement such a program. Comment: The other option proposed by some comments was to mandate a program for those operators who have a historical record of poor performance. Response: BOEMRE does not agree that this is the most effective approach. The purpose of requiring a SEMS program is to reduce the risk and number of incidents during OCS activities, which is not solely based or determined by an operator's past • record of poor performance. Withdraw proposed rule Comment: Many comments stated that BOEMRE should withdraw the proposed rule immediately and reevaluate the cost/benefits of mandating a program that, as recently as 2003, was determined by the agency to be performing well as a voluntary program. Response: BOEMRE disagrees. The only way to ensure SEMS programs are used across the entire OCS is to require a program for all operators. As of 2009, only 54 percent of OCS operators had a SEMS program, and not all of the 54 percent include the entirety of APR RP 75 in their SEMS program. Underestimated Cost Comment: Most comments expressed that BOEMRE significantly underestimated the • 13 cost of developing, revising, and implementing the SEMS program. Comments also stated that BOEMRE dramatically underestimated the major new documentation and reporting burden that the rule will impose on offshore operators. Response: BOEMRE re-evaluated the cost burden on industry by interviewing parties experienced in the development of SEMS programs, vendors that submit information for operators, and operators with designated personnel who work on SEMS issues. Based on this information, we have increased the non -hour cost and hour burdens. Should OCS companies have documented data that shows a higher cost to industry, they may submit comments at any time on the paperwork burden as stated in § 250.199(d). New Reporting, Documentation, and Recordkeeping Requirements Comment: Several comments claim that this proposed rule attempts to prescribe new • reporting, documentation, and recordkeeping requirements far above current levels in API RP 75, that will adversely impact OCS operators' businesses, both operationally and financially, while bringing little benefit towards improving safety of offshore operations. Response: BOEMRE changed the reporting and recordkeeping requirements from the proposed rule to the final rule. We are now incorporating all elements of API RP 75, with requirements in § 250.1928 to enhance documentation and recordkeeping. The reporting and recordkeeping requirements in this final rule are primarily submissions of documents that are directed by the adoption of API RP 75 and used to comply with this recommended practice. The reporting to BOEMRE is necessary to ensure the bureau has the appropriate documentation to monitor compliance with this rule. Comment: The operator can only supply the information on the Form MMS-131 by 14 is • collecting and consolidating information from their contractors, suppliers, and vendors and, in turn, any subcontractors or other workers involved in OCS operations. This is not a current practice and it will require a significant amount of time to establish and maintain a reporting system. Further complications will arise since a significant portion of work may be contracted out as "lump sum" turnkey projects where individual worker hours are not provided to the operator. Response: Such information is critical to the effective implementation of a SEMS program. While operators may not currently require contractors, suppliers, and vendors to submit this information, it is not unreasonable to expect them to provide it to the operator. Regarding "lump sum" turnkey projects, individual worker hours could be estimated as a normal practice. For example, a contractor may have workers who stay • offshore for 2 weeks at a time and work 12 hour shifts. Therefore, a crew of 20 people, could be estimated to work a total of 240 hours per day for 14 continuous days (240 hours x 14 days = 3, 360 hours). Comment: While most contractors on the OCS probably collect information regarding employee work hours and injuries/illnesses for their own use, they typically do so either on a quarterly or annual basis, not the per -contract basis which would be necessitated by the proposed action. Response: Operators will need to work with their contractors to establish the best approach to provide the information required by this rule. Comment: Collection and reporting of information that only becomes available post - contract is problematic. For example: Will the operator be expected to report days of 15 • • continuing restricted work activity for a contractor's employee injured while working for the operator after the termination of the contract? Response: Once the contract has been terminated, the contractor's employee is no longer working for the operating company in question. Form MMS-131 only requests that an operating company provide information for contractors under their employment during the calendar year. Operating companies will only be required to provide information tallied for the portion of the year the contractor is under the operating company's employment, not for the entire year. Comment: There is no consistent industry practice of collecting information regarding work hours and injuries/illnesses from sub -contractors and other (possibly occasional) workers. The proposed action would require the establishment of such an information • collection and reporting system. The collection of such information regarding occasional workers (e.g., equipment repair specialists), particularly those providing services on a per job (rather than hourly) basis will be particularly challenging. Response: In § 250.1914(e)(2), BOEMRE requires the operator to keep an injury/illness log, retain it for 2 years, and include this information on Form MMS-131. The operating company is responsible for collecting and submitting this data and will need to work with their contractors to establish a process for doing so. Comment: BOEMRE has not, with this proposed version of Form MMS-131, provided the necessary instructions and definitions for the user to understand the information collection and comply with the reporting requirement. The instructions and definitions should be made available, with the proposed form, for public comment. The information is 16 • collection should not be authorized until clear and unambiguous instructions are provided. Response: There is no need to make proposed Form MMS-131 available for public comment since it was previously made available for comment in the proposed rule. However, in light of your comment concerning the instructions, the BOEMRE is providing explicit instructions to guide respondents on completing the form. See Appendix 1 of the final rule. Comment: Cost and time estimates are more in line with the printing of manuals and instructions and not actual or historical costs we have as operators experienced for the development, implementation, and long term support of a new program. Response: BOEMRE re-evaluated the cost burden on industry by interviewing parties • experienced in the development of SEMS programs, vendors that submit information for operators, and operators with designated personnel who work on SEMS issues. Based on this information, we have increased the non -hour cost and hour burdens. If OCS companies have documented data that shows a higher cost to industry, they may submit comments at any time on the paperwork burden as stated in § 250.199(d). Comment: The proposed rule does not take into consideration the impact that the requirements and administrative burden will force on small independent contractors and service suppliers who perform a large portion of the field work typically carried out on OCS facilities. Response: The operators must submit Form MMS-131 to BOEMRE, not small independent contractors and service suppliers. BOEMRE foresees that the primary 0 17 • impact for these groups is that they are now expected to provide information on the man- hours. That task may be as simple as taking note of the time specific employees report in and out of a specific work site and tracking that data. Operators will need to work with their contractors to establish the best approach to provide the information required by this rule. Comment: We ask that BOEMRE appropriately acknowledge the entire burden being imposed by this rulemaking on the industry and account for it within its information collection budget. Response: This is discussed in more detail in the Procedural Matters of this rulemaking under the Regulatory Flexibility Act and Paperwork Reduction Act section. If OCS companies have documented data that shows a higher paperwork burden than what • BOEMRE estimates, they may submit comments at any time on the paperwork burden as stated in § 250.199(d). Unnecessary Burden on BOEMRE Comment: Most comments claim that implementing this proposed rule will create an additional burden to regional BOEMRE staff that will require additional inspector/auditor training and increased workloads. Response: While this is additional work, we consider this regulation critical to improve safety on the OCS. BOEMRE will adjust inspector training and workload as necessary to ensure effective implementation of the rule. Where BOEMRE Believes the Industry is Falling Short of Expectations Comment: Several comments would like to know specifically where BOEMRE believes • 18 • the industry is falling short of BOEMRE's expectations regarding safety and why the BOEMRE has not shared this information in the rulemaking. Response: The proposed rule was developed based upon 33 accident panel investigations, 1,443 incident analyses, and 3,132 INCs issued by the agency. Additional information about these items is publicly available at: hgp://www.BOEMRE.gov/incidents/index.htm and htip://www.gomr.BOEMRE.gov/homel2g/offshore/safety/acc repo/accindex.html. For the SEMS program to be most effective, the entirety of API RP 75 needs to be part of the program, which the final rule requires. Remove Prescriptive Language Comment: A few comments pointed out that if BOEMRE intends to require that each • SEMS conform to API RP 75, then the highly prescriptive language should be removed and the final rule should simply reference the appropriate sections in API RP 75. They recommend that BOEMRE incorporate by reference API RP 75 into the regulations and require compliance with the existing recommended practice. In addition, the comments state that the proposed rule, as written, not only represents an abrupt change from past direction of the BOEMRE, but it also penalizes those operators that took the initiative and developed programs patterned after the API RP 75 model. For operators that implement API RP 75 and continue to evolve their systems to keep abreast of changing operations, having the BOEMRE implement a 4 element SEMS will require them to go back and modify or change those systems to comply with new BOEMRE prescriptive requirements. These changes to programs that are working effectively will add minimal • 19 • if any added value. Response: The final rule incorporates, and thus prescribes, all of API RP 75, as well as requirements as detailed in 30 CFR 250 subpart S for recordkeeping and documentation, JSAs for activities identified in the SEMS programs, contractor selection criteria, and audit requirements. Implementation Comment: A commenter pointed out that the rule calls for the program to be implemented within 1 year after the final rule becomes effective. For operators that do not already have a written SEMS program that covers all of the elements, it will be impossible to develop the SEMS program, conduct all of the hazards analyses (facility), complete job hazards analysis for every job, write complete operating procedures, • establish a mechanical integrity program, and establish an audit program for everyone on their facilities. Even for those operators that have a SEMS in place, it is likely to take more than 1 year to compare their existing program to the prescriptive requirements in this rulemaking and make all of the required modifications. Therefore, if a mandatory program is adopted, the commenter recommends that a phased -in approach to implementation be adopted. Response: BOEMRE believes that 1 year is a sufficient amount of time for operators to develop their SEMS program, even if they do not already have a program in place. The final rule incorporates by reference, and thus prescribes, the entirety of API RP 75 together with related requirements for recordkeeping and documentation, JSAs for activities identified in the SEMS programs, and contractor selection criteria. BOEMRE 20 is • believes that 1 year is a sufficient amount of time for operators to put these related requirements of the program in place. Three Alternatives for Consideration Comment: A comment suggested that in lieu of pursuing the rulemaking in its current form, the BOEMRE should consider the following three alternatives: 1. Suspend the rulemaking and continue with the voluntary program currently in place. 2. Suspend the rulemaking and return to the Advance Notice of Proposed Rulemaking. 3. Abandon the concept of a new prescriptive section in the regulation and simply include the following language in § 250.107: • (e) You must have a safety and environmental management program in accordance with the American Petroleum Institute's Recommended Practice for Development of a Safety and Environmental Management Program for Offshore Operations and Facilities (API RP 75), incorporated by reference as specified in § 250.198. (1) At a minimum, your safety and environmental management program must include: (i) Hazards Analysis. You must perform a hazards analysis for all OCS facilities to identify, evaluate, and, where unacceptable, reduce the likelihood and minimize the consequences of uncontrolled releases and other safety or environmental incidents. This includes having a job safety analysis process. • 21 • Human factors should be considered in this analysis, (ii) Management of Change. You must establish procedures to identify and control hazards associated with change and maintain the accuracy of safety information, (iii) Operating Procedures. You must have written facility operating procedures designed to enhance efficient, safe, and environmentally sound operations, (iv) Mechanical Integrity. You must ensure that procedures are in place and implemented so that critical equipment for any facility subject to this recommended practice is designed, fabricated, installed, tested, inspected, monitored, and maintained in a manner consistent with appropriate service • requirements, manufacturer's recommendations, BOEMRE requirements, or industry standards, and (v) Documentation. You must establish a documentation system to ensure that records and documents are maintained in a manner sufficient to implement your safety and environmental management program. Records or documentation may be in either paper or electronic form. You must make this documentation available for BOEMRE inspection upon request... Response: BOEMRE disagrees with all three of the proposed alternatives. Not all operators on the OCS voluntarily submit Form MMS-131. A comprehensive SEMS program is important. The final rule incorporates, and thus prescribes, API RP 75, and requirements for recordkeeping and documentation necessary to implement API RP 75, 22 • JSAs for activities identified in the SEMS programs, contractor selection criteria and the option of utilizing either an independent third party or your designated and qualified personnel to conduct audits on your behalf. Potential Adverse Impacts to Drilling Contractors Comment: A commenter expressed concerned that any prescriptive imposition of mandatory SEMS elements upon operators has the potential to adversely impact drilling contractors' SEMS, if a careful balance between the operators' perceived need to impose those SEMS elements against the contractors' need to manage their own SEMS is not achieved. Clearly the goal should be that a drilling contractor should move between operators with little, if any, modification to the contractor's SEMS. Response: The final rule does not require that a contractor have a SEMS program. The • final rule requires operators to ensure that contractors have their own written safe work practices and provides that they may adopt appropriate sections of the operator's SEMS program. The operator must have a SEMS program and is responsible for obtaining and evaluating information regarding the contractor's safety performance and programs. An operator and contractor should agree on appropriate contractor's safety and environmental policies and practices before the contractor begins work at the operator's facilities. BOEMRE meetings with Industry Comment: Several comments state that BOEMRE should have held meetings with industry so that industry comments and views could have been placed on the record. An informal "workshop" without public recording of industry views is insufficient to reflect 23 • • the depth of concern held by exploration and production companies operating on the OCS and the numerous other companies that support their activities. Even though BOEMRE held a public meeting in September 2009, it did not have official recording of comments. Response: BOEMRE disagrees. BOEMRE has publicized its views that a SEMS rule is needed since 1993 at a variety of industry conferences and meetings. At these meetings, BOEMRE explained that the agency supported implementation of a comprehensive SEMS program. These meetings presented the industry with numerous opportunities for dialog with BOEMRE regarding this type of program. In 1994, API RP 75 was developed with input from industry. In addition, the BOEMRE published its views in an ANPR in 2006, which discussed BOEMRE's consideration of a comprehensive API RP 75-based program, and an NPR in 2009. At the September 2009 meeting, attendees were • encouraged to submit written comments. Rule Lacks Specifics Comment: Several comments stated that the proposed rule lacks specificity in some areas, as well as in the discussion on hazard/safety analyses. It is the commenters' concern that without specifics, there will be inconsistency with regard to interpretation, which will be difficult on the industry, as well as BOEMRE, to implement and enforce. Response: The final rule incorporates, at an appropriate level of detail, requirements necessary for recordkeeping and documentation to implement API RP 75, JSAs for activities identified in the SEMS programs, contractor selection criteria and the option of utilizing either an independent third party or your designated and qualified personnel to conduct audits on your behalf. • 24 • Amu Jurisdiction Comment: Several comments stated that it is not clear that BOEMRE is expanding its reach into other agencies' jurisdiction, and do not understand how this will help safety. BOEMRE's proposal to handle enforcement issues on MODUs, where the USCG has jurisdiction and has done a very good job over the years with their limited resources, is a duplication of efforts and a power grab by BOEMRE. Requiring mandatory reporting to BOEMRE when Occupational Safety and Health Administration (OSHA) is the appropriate agency is another area of duplication and another power grab by BOEMRE. The comments stated that they may be misreading the information, but it also appeared that BOEMRE is attempting to take over jurisdiction of Department of Transportation (DOT) regulated pipelines. If this is the case, here is another attempt at duplication or a • power grab by BOEMRE. Response: BOEMRE disagrees. A SEMS will and should apply to MODUs when they are under BOEMRE's jurisdiction (i.e., drilling, well workover, well completion, servicing operations). The final rule clarifies that the SEMS program must address DOI regulated pipelines only. BOEMRE, DOT, and USCG establish the requirements for workplace safety on the OCS with requirements that pertain to personal protection equipment, tripping and slipping hazards, deck openings, means of escape, fire extinguishers, and other workplace safety items. The OSHA requirements do not apply to OCS operations. Support for the Proposed Rule Comment: Some comments supported BOEMRE in requiring OCS oil and gas operators 25 • , to implement SEMS rules, which are intended to reduce human error and organizational failures. The analysis summarized in the proposed rule indicates that the elements are associated with contributing causes of most incidents, hence the rationale for focusing on them. Comments requested that this regulation require, rather than simply encourage, that offshore operators implement all elements of the API RP 75, as identified in the rulemaking notice. Response: Upon review of all the comments and the requirements of API RP 75, BOEMRE agrees that a SEMS program should be comprehensive to reduce human error and organizational failures. Therefore, BOEMRE incorporated all elements of API RP 75 with requirements necessary to implement API RP 75 and regulatory language to clarify expectations for compliance. • Comment Period Comment: The comment period to such a significant, formal rule, was not long enough and it is recommended that further discussions with industry be carried out prior to any final rulemaking. Response: BOEMRE disagrees. BOEMRE published an ANPR in 2006 notifying industry that we were considering requiring a comprehensive SEMS program and seeking comment. The proposed rule was published on June 17, 2009, with a 90-day comment period. BOEMRE also held a workshop on September 2, 2009 at which attendees were encouraged to submit written comments on the proposed rule. This comment period is consistent with comment periods for other rules of this magnitude. Thus, sufficient response time was afforded for interested parties to submit comments. 26 • General Comments Comment: A SEMS approach is more applicable to production facilities; MODU, liftboat, and coiled tubing operations are inherently more hazardous than production facility operations, and lead to more well control incidents. Response: BOEMRE believes that SEMS has merit for all OCS operations including, but not limited to, production, drilling, well completion, well workover, well servicing, and coiled tubing. For SEMS to be properly implemented, it needs to address all OCS operations. Liftboats are under the jurisdiction of the USCG and are not covered by this regulation. Comment: Support a more focused SEMS program for production facility management (excluding MODU operations), preferably one that is voluntary. Such a program, with • elements of hazards analysis and management of change, probably could be helpful especially for smaller operators. Response: BOEMRE disagrees. A SEMS should apply to MODUs and all other facilities under BOEMRE's jurisdiction. The final rule will require operators to have a SEMS for operations and activities onboard a MODU when it is under BOEMRE's jurisdiction such as drilling, well workover, well completion, and servicing operations. Comment: Does the definition of facility in this section apply to all the sections in subpart S? Response: BOEMRE is incorporating by reference API RP 75, including the definitions from Appendix D of API RP 75, except as revised in the final rule. Comment: How does BOEMRE perceive the difference between a Job Hazards • 27 • Analysis (JHA) and a Job Safety Analysis (JSA)? Response: A JSA is one form of hazards analysis. Hazards analysis is performed to identify and evaluate hazards for the purpose of their elimination or control. A JSA is a process used to review site -specific detailed job steps and uncover hazards associated with the specific job undertaken. To alleviate any confusion, BOEMRE replaced the term JHA with JSA in the final rule. Comment: Is the JHA for each general operation or for the immediate task at hand? Response: BOEMRE removed the term JHA from the final rule. In the final rulemaking, JSAs are required for the immediate tasks at hand and are not required for general operations. Comment: What is BOEMRE's expectation for what triggers an internal audit and • updating a facility hazards analysis? Response: The final rule requires operators to have their SEMS program audited by either an independent third party or your designated and qualified personnel, according to the requirements of this subpart and API RP 75, Section 12. The first audit must be within 2 years of the initial implementation of the SEMS program and at least once every 3 years thereafter. However, BOEMRE may issue additional guidance on this after the final rule is implemented. BOEMRE may direct specific operators to conduct additional independent third -party audits or BOEMRE may conduct an audit, if we identify safety or non-compliance concerns based on the results of inspections and evaluations, or as a result of an event. The operator must update the appropriate elements of their SEMS program, if there • 28 • are deficiencies identified in the audit. For updating a hazards analysis for a facility, we incorporated by reference the requirements of API RP 75, Section 4.4, which requires that if a management of change is conducted due to changes in personnel, facility and operating conditions, then the operator must conduct a hazard analysis on those changes. For simple and nearly identical facilities, such as well jackets and single well caissons, the operator may use the same single hazards analysis after verifying that any site - specific deviations have been identified and addressed (see § 250.1911). Comment: Recommend in proposed section § 250.1907 "What criteria for Mechanical Integrity must my SEMS program meet?" that "manufacturer's recommended limits" should be changed to manufacturers and/or engineering design limits. Response: We disagree; we believe that the manufactures recommended limits are the • most appropriate guidance to use. Comment: What are BOEMRE's definitions of temporary operations, personnel change, and facility? Response: See the scope of "facilities" addressed in § 250.1911 and Appendix D of API RP 75, incorporated by reference, which includes a definition of "facility." As to personnel change, we are now incorporating by reference API RP 75, Section 4, which defines "personnel change" in Section 4.3. The term "temporary operations" was removed from the final rule. It is the operator's responsibility to ensure all contractors subscribe to basic safety workplace principles that meet the spirit and intent of the operator's SEMS program. Comment: Does BOEMRE support API RP 75 guidance on MOC as being sufficient to 0 29 • direct operators in developing an effective MOC process? Response: The guidance provided in API RP 75, Section 4, which we incorporated by reference in the final rule, along with the requirement in § 250.1912 of the final rule provides sufficient guidelines and procedures on when and how to develop a MOC process. Comment: How does BOEMRE perceive the difference between documenting the inspection and tests that have been performed, and verification that inspections and tests are being performed? Response: BOEMRE will evaluate all of the documentation provided to verify that the inspections and tests were performed and that the operator continues to perform the inspections and tests, as described in their SEMS. BOEMRE is vigilant about operator • documentation and may use a variety of tools to determine the validity of operator records and that the operator is conducting all prescribed and appropriate tests, as identified in their SEMS. Comment: Are there contractor groups that BOEMRE believes are not being addressed by existing subpart O requirements — identify. We believe this is redundant with the existing subpart O program. Response: BOEMRE does not regulate contractors; we regulate operators. Subpart O applies to well control and production safety, whereas this SEMS final rule applies to operators who are performing or who have contractors performing maintenance or repair, turnaround, major renovation, or specialty work on or adjacent to a covered process. The training requirements of subpart O may be used to partially meet the SEMS requirements. • 30 0 Comment: Can you provide detailed instructions and examples for filling out Fonn MMS-131? Response: The form and instructions are in Appendix 1 which is incorporated by reference into the rule and is also set forth in the preamble of the final rule. Comment: BOEMRE fails to recognize that our voluntary safety and environmental programs are effective. Response: The voluntary programs may be effective for those who follow the guidance completely. However, more needs to be done to promote safety of the environment and the personnel working on the OCS by ensuring that everyone complies with API RP 75 and the requirements of this final rule. Comment: BOEMRE fails to understand that our safety record is good and is only • getting better. Response: The record of incidents that cause injuries, fatalities, fires, collisions, loss of well control, or explosions demonstrates the need for regular evaluation and improvement of safety standards. Comment: BOEMRE fails to understand that the prescriptive SEMS program will not address many of the incidents/accidents that the regulation is based on. Response: BOEMRE does not agree that the voluntary program has been as effective as it could be. Industry wide adoption of SEMS is crucial to enhancing safety in the OCS. Comment: BOEMRE wrote prescriptive requirements for all or part of 8 of the 12 SEMS elements in lieu of just following API RP 75. Response: BOEMRE is incorporating all elements of API RP 75 in the final rule, with • 31 • clarification of the proposed rule's requirements for JSA, recordkeeping and documentation requirements, contractor selection criteria, and the option of utilizing either an independent third party or your designated and qualified personnel to conduct audits on your behalf. Comment: The proposed rule changes the wording and expands on API RP 75, Section 5, dealing with environmental and occupation safety and health considerations. These requirements overlap with hazardous materials regulations, OPA 90, RCRA, NPDES, etc. How does BOEMRE think the addition of these requirements will impact safety performance more than the existing regulations of other agencies? Response: SEMS is a safety management system that will enhance the effectiveness of other laws and regulations. • Comment: BOEMRE should use an alternative compliance approach, i.e., those operator/lessees that have established Safety and Environmental Management Program (SEMP) (identified by BOEMRE as 56 percent or 73 of the 130 operators) and are within the BOEMRE standard of compliance as recognized in the annual Safe Award program that would be exempt from the proposed rule. Response: We believe that there are varying degrees of commitment and compliance with the voluntary SEMP program and that a mandatory program is the best way to ensure that operators implement a comprehensive approach to safety. Operators that have a comprehensive SEMS program in place addressing all of API RP 75 are already addressing many of the requirements in this final rule. Comment: Some operators have existing processes that address changes. Consideration 32 • • should be given to these existing processes and not develop a prescribed MOC process for changes that are already covered. Response: BOEMRE changed the final rule by incorporating by reference API RP 75, Section 4, to address MOCs. You may use your existing MOC process if it meets the requirements of API RP 75 and § 250.1912. Comment: We believe that the one size fits all approach to this rule does not take into account the diversity of operations that exists in the OCS. Response: SEMS is not a one size fits all program. In fact, SEMS encourages operators to consider unique circumstances and conditions. BOEMRE changed the final rule by incorporating all elements of API RP 75 and requirements for recordkeeping and documentation necessary to implement API RP 75, JSAs for activities identified in the SEMS programs, contractor selection criteria, and the option of utilizing either an • independent third arty or your designated and qualified personnel to conduct audits on p p � q your behalf to allow for the diversity of operations that exists on the OCS and within the company/operation. Comment: Please clarify if the parts of the proposed elements can be accomplished through other management systems; in other words, a comprehensive SEMS program can cover each of the proposed items without these necessarily being part of a single system. Response: In the final rule, we are requiring all operators to follow the elements of API RP 75 and requirements for recordkeeping and documentation, JSAs for activities identified in the SEMS programs, contractor selection criteria, and the option of utilizing either an independent third party or your designated and qualified personnel to conduct 33 • • audits on your behalf. As recognized in API RP 75, Section 1.3.1.1, some systems may have been developed using other guidelines. If a system was developed using other guidelines, when that system is assessed, the operator should focus on assuring that all the program elements from API RP 75 and this final rule are addressed. Comment: What data will be made available to the public? What measures will be in place to protect sensitive company data from being made public? Response: BOEMRE requires a copy of Form MMS-131 from an operator. The information on the Form MMS-131 is not protected from disclosure and is subject to the Freedom of Information Act (FOIA), should a member of the public request this information. BOEMRE may request a copy of the operator's SEMS and audits. BOEMRE will protect proprietary information under the Freedom of Information Act (5 • U.S.C. 522) and its implementing regulations (43 CFR Part 2); and 30 CFR 250.197. Comment: We further believe that the record retention requirements for the JSA and related index are unduly burdensome and contrary to BOEMRE's stated intent that the programs not become a paperwork exercise. The proposed rule also creates concern regarding "ownership" of the JSA/index once a MODU is no longer under contract for the operator under whose contract they were developed. Response: The retention in the final rule for the JSAs is now 30 days on -site and up to 2 years at a location of the operator's discretion. The JSA/index has been removed. Comment: A commenter believes that BOEMRE should have a separate section in the rulemaking that pertains only to hazards analysis for MODUs. Response: BOEMRE disagrees; the final rulemaking does not need a separate section 0 34 • for hazards analysis for MODUs. We incorporated by reference API RP 75, Section 3, for hazards analysis requirements, with requirements necessary to implement API RP 75 in § 250.1901 and § 250.1911. Comment: How do we overcome human error? Response: The intent of this rule is to reduce human error by focusing on a comprehensive SEMS program and JSAs. One result of an effectively implemented SEMS will be to reduce human error. Comment: If BOEMRE intends to require that each SEMS conform to API RP 75, then the highly prescriptive language should be removed and the final rule should simply reference the appropriate sections in API RP 75. Any exception or additions could be listed, similar to the approach taken in § 250.804. • Response: BOEMRE is incorporating by reference API RP 75 and requirements for recordkeeping and documentation necessary to implement API RP 75, JSAs for activities identified in the SEMS programs, contractor selection criteria and the option of utilizing either an independent third party or your designated and qualified personnel to conduct audits on your behalf. Comment: The rulemaking is confusing with respect to the 4 types of contractor requirements, e.g., MODUs; contractors brought onto platforms for painting/cleaning, etc.; contract operating companies; individuals working side by side with employees under head company rules. The word "employee" needs to be clarified -- just the operator's actual employees or whom? Response: We are replacing "employees" with "personnel" and defining "personnel" in • 35 • § 250.1903 in the final rule. The term "Personnel" means direct employee(s) of the operator and contracted workers who are involved with or affected by specific jobs or tasks. All personnel involved with or affected by a SEMS specific task must be trained by skilled and knowledgeable personnel to perform their assigned duties. Comment: A comment expressed the concern that we are accepting duplicated work that is already required by DOT, OSHA, and USCG — killing trees with all the paperwork submissions. Response: A number of federal agencies, including DOT, USCG, and BOEMRE have various responsibilities and authorities under a variety of statutes related to OCS matters. BOEMRE is not asking for duplication of paperwork that is already submitted to another government agency. Most of the information may be submitted electronically. • Section -by -Section Discussion The industry trade organizations (Offshore Operators Committee, American Petroleum Institute, International Association of Drilling Contractors) and OCS operators submitted extensive lists of specific comments for most sections of the proposed rule. We responded to those comments in the "General Comments" section. The following table addresses more specific comments not already addressed. Proposed Rule Comment received on proposed rule BOEMRE response to comment Citation 250.1903(b) Note that, at § 250.1903(b), BOEMRE As recognized in API RP 75, Section holds up ISO 14001 as an example of 1.3.1.1, some systems may have been other standards or guidelines that meet or developed using other guidelines. If an exceed API RP 75, seemingly operator has already developed a encouraging such an approach as ours. system using other guidelines, when However, a certified, active ISO 14001 the system is assessed, the focus should program will not comply with the I be on assuring that the necessary • 36 • • J Proposed Rule Comment received on proposed rule BOEMRE response to comment Citation proposed regulation. program elements from API RP 75 and the requirements necessary to implement API RP 75 in this final rule are addressed. 250.1905 Do DOI pipelines require separate It is up to the operator to decide to hazards analyses, or is it acceptable to combine or do a separate hazard combine with the facility with which it is analysis for the DOI pipelines and associated? associated facility. However, the analysis must comply with the API RP 75 and the requirements necessary to implement API RP 75 in this final rule. 250.1905 The regulated community has varying The terms JSA and JHA are different; degrees of understanding of the terms therefore, in this final rulemaking we JHA and JSA. The JSAs are typically will require only JSAs. We have viewed as a tool to perform the OSHA defined JSA in the general comments required JHA. Does BOEMRE consider section of the preamble. these terms the same? If not, please explain the difference from your understanding. The regulated community commonly understands JHA to be a broad analysis of the hazards for an overall operating procedure. A JSA is a review of a specific task at hand where the steps and hazards associated with a specific task are reviewed. To effect behavior change, we believe that a JSA is the more effective methodology than a JHA. However, it is not clear in the rulemaking which methodology BOEMRE is mandating. We note that BOEMRE Safety Alerts 276 and 282 have good descriptions of the difference between JHA and JSA. Recommendation: Please state the correlation to the appropriate section within API RP 75 such as "You must develop and implement a hazards analysis (facility level) as described in Section 3 of API RP 75." For clarity, we recommend that job hazards analysis be changed to job safety analysis in all laces in the regulation. 250.1905 MODU, coiled tubing, and liftboat BOEMRE agrees with this comment operations are contracted. Subpart O pertaining to the current Subpart O already requires operators to verify well- regulation, in part. The operator is the control certification of contractor responsible party for all well control employees. Few operators possess activities and operations, whether or s ecialized knowled a that would trump not using contract personnel. If 37 • • 0 Proposed Rule Comment received on proposed rule BOEMRE response to comment Citation the certification of contractor employees. contractors are used, the operator is responsible for verifying that its contractors have the skills and knowledge to perform these operations in a safe manner. 250.1905 If a company contracts a MODU, the BOEMRE disagrees. The operator contractor would have to provide and must have a SEMS program. support its own hazards analyses (and BOEMRE's intent is to have a hazards SEMS program) vs. the operator for analysis as detailed in API RP 75, which it is working. The MODUs should Section 3 and the requirements in § not be included in the list of facilities 205.1911 of this final rule, of any covered by this rule. The MODU MODU under BOEMRE's jurisdiction. operator should have a mechanical The MODUs are considered facilities integrity and JSA program to cover when they are used for exploration, operations on the rig. development, production, and transportation activities for oil and gas and sulphur from areas leased in the OCS. 250.1905 We do not understand the reference to We are incorporating by reference API internal audit and know of no facility RP 75, Section 3, which includes specific audits that are required. We periodic analysis, to update the hazards noted that proposed § 250.1910 refers to analysis for compliance. You must a SEMS audit, but that is on the overall update your hazards analysis as program. Periodic analyses should be appropriate with typical review conducted as described in Section 3.4 of periods. The final rule requires the first API RP 75. Does this mean hazards audit within 2 years of implementation analyses must be updated (or revalidated) of the SEMS program and every 3 every 3 years in conjunction with the years thereafter, however, BOEMRE SEMS Audit? API RP 75 allows hazards may require additional independent analysis updates to be made at 5-10 year third party audits or BOEMRE may intervals based on risk. conduct our own audits based on poor operator performance or accidents. Recommendation: Change the last sentence to: the hazards analyses (facility level) must be reviewed periodically and updated as appropriate when changes are warranted to verify that it is consistent with the current operations on the facility, consistent with the requirements in Section 3.4 of API RP 75. 250.1905 We see no purpose in maintaining the The operator is responsible for hazards analysis on the facility. In many deciding where to keep the hazards cases, the facility may be an unmanned analysis for the life of the facility. facility with no storage capability. Does BOEMRE is removing the requirement BOEMRE really expect a MODU to store to maintain a hazards analysis on a a hazards analysis onboard the MODU facility. The JHAs were removed from from each and every operator who has the final rule and replaced with JSAs. performed such an analysis? As in API The JSAs must be retained for 30 days RP 75, the hazard report(facility level on the facility for BOEMRE inspection 38 • Proposed Rule Citation • 250.1905 250.1905 0 Comment received on proposed rule should be kept on file for the life of the facility. It is most appropriate that this file be kept in the operator's office where design and other facility related information is kept since this data will need to be referred to in conjunction with the hazards analysis. For job hazards analysis (commonly referred to as Job Safety Analysis-JSA), this should be kept where it is readily accessible to the personnel actually reviewing the analysis prior to performing the job it covers. Recommendation: The requirement for documentation should be changed to the following: You must document and maintain current analyses for each operation covered by this section for the life of the operation. Hazards analysis (facility level) should be retained in the operator's records where the facility design information is located. The JHA (operations/task level) should be kept in a location where it is readily accessible to personnel for review prior to conducting the operation or task the analysis covers. We suggest deleting "property damage" from the potential consequences included in the purpose of the facility level hazards analysis in § 250.1905. The philosophy adopted with respect to property damage, also referred to as "asset protection" should be at the operator's discretion, provided that the property damage does not subsequently lead to worker injuries, fatalities, or coastal or marine environmental impacts. We recommend the language in § 250.1905 be modified to state "You must ensure a hazards analysis (facility level) and a JHA (operations/task level) is developed and implemented for all your facilities" rather than "You must develop." The reason for this recommendation is that since MODUs are included as facilities in this subpart, it will then be clear that operators are only responsible to ensure the third -party contractors have performed a hazards 39 BOEMRE response to comment and must be made available to BOEMRE upon request for 2 years. You must maintain a copy of all SEMS program documents at an onshore location for 6 years. BOEMRE disagrees with the recommendation. Please see previous response. This specific reference to "property damage" is not in the final rule. BOEMRE is incorporating by reference API RP 75, which speaks to this issue. The final rule requires the operator to ensure the development and implementation of a hazards analysis in accordance with API RP 75 and to perform a JSA at the task level in accordance with § 250.1911. These must be included in the SEMS program. In order to comply with this rule, an operator and its contractors need to agree on appropriate contractor safety and environmental policies and practices before a contractor begins • • • Proposed Rule Comment received on proposed rule BOEMRE response to comment Citation analysis prior to conducting operations on work at the operator's facilities. the o erator's lease. 250.1905 Production contractor can have a The operator must develop and Lockout/Tagout (LOTO) Standard that implement a hazards analysis for all of outlines the general guidelines on how to their operations in accordance with the perform proper LOTO; but to generate a Section 3, Hazards Analysis and Hazard Assessment of a facility, the § 250.1911. In order to comply with contractor would need to have access to this rule, an operator and its contractors the drawings and/or facility to address need to agree on appropriate contractor site specific equipment and issues. In safety and environmental policies and some cases, contractors merely provide a practices before a contractor begins resource. This resource is supervised by work at the operator's facilities. the client onsite. 250.1905 We urge BOEMRE to revise § 250.1905 BOEMRE disagrees. When a drilling to make clear that drilling vessels or vessel is under BOEMRE's utility vessels are not required to be jurisdiction, it is the operator's managed under our SEMS. responsibility to have a SEMS program. In order to comply with this rule, an operator and its contractors need to agree on appropriate contractor safety and environmental policies and practices before a contractor begins work at the operator's facilities. 250.1905(a) Language in § 250.1905(a) should be Proposed § 250.1905 is reflected in the revised to state: "You must ensure an final rule at § 250.1911. The initial hazards analysis (facility level) is requirement to perform a hazards or has been performed on each facility on analysis for each facility within 1 year or before (THE DATE 1 YEAR AFTER of the effective date of the final rule THE EFFECTIVE DATE OF THE was retained. A previous hazards FINAL RULE)." analysis may be used as long as it meets the requirements of API RP 75 and § 250.1911 in the final rule. 250.1905(a) If an operator has not previously BOEMRE disagrees. The final rule conducted a hazards analysis on all of his requires the operator to have its SEMS platforms, it may be impossible to program in place within 1 year of the complete a hazards analysis of all of his effective date of the rule. The hazards platforms within 1 year of the effective analysis requirement must be in date of the final rule. A provision should accordance with the provisions of API be included for providing a prioritized list RP 75, Section 3 and the requirements of facilities to the Regional Supervisor in this final rule under § 250.1911, and along with the date that each hazards included in the SEMS program. analysis will be completed. This could be either in the rulemaking or a companion NTL. 250.1905(a) According to § 250.1905(a), we must do There is nothing in the rule that a separate Hazards Analysis for every prevents an operator from using the platform that we operate. Under our same hazards analysis for similar IMS, we get to the same place by doing a platforms. However, if one or more comprehensive hazards analysis(actually facilities are similar but have distinct 40 • • • Proposed Rule Comment received on proposed rule BOEMRE response to comment Citation a more rigorous "risk assessment") of all differences that require discrete of our operations, with evaluation and policies and procedures for safe ranking of risks and planned mitigations. operations meeting the SEMS elements, then you must develop a separate SEMS for each of those facilities. 250.1905(a) Element 1, "Hazards Analysis at the BOEMRE agrees. The API RP 14C is facility level" is already being achieved a good guideline for conducting a by following API RP 14C as a guideline hazards analysis for a production for Analysis, Design, Installation, and facility and it is referenced in API RP Testing of Surface Safety Systems. The 75. However, the hazards analyses JSA/JHA along with the "Stop Work must follow API RP 75, Section 3, with Authority" is already being utilized Gulf clarification in § 250,1911. wide. Furthermore, egress is identified in the platform submission process; chemicals and flammables kept on the facility are identified as part of the MSDS requirements; and mitigation of possible safety and health effects on employees are also already being performed. 250.1905(a)(1)(ii) We do not understand the requirement BOEMRE is incorporating by reference that special attention should be given to API RP 75. The operator must follow any incident in which you were issued an the guidelines under API RP 75, INC, civil or criminal penalty; nor do we Section 3, as clarified in § 250.1911. If understand what "special attention" BOEMRE evaluates a SEMS program, should cover; nor do we understand what the operator must submit to BOEMRE length of time we should consider. a revised SEMS program that addresses Further, we have no idea how the any identified deficiencies. enforcement action of a regulatory agency relates to hazards analysis. We agree that previous incidents related to the operation, to the extent known by the operator, should be evaluated regardless of whether or not they resulted in an enforcement action. It should be noted that in many cases, a facility may have had multiple previous operators and a complete history of previous incidents may not have been provided to the current operator. This provision was amended, striking Recommendation: Strike the sentence "special attention" while requiring the "Special... penalty." hazard analysis to address previous incidents. 250.1905(a)(1)(iv) It is not clear what BOEMRE's The requirements for a hazards analysis expectations are for a hazard review to are in API RP 75, Section 3 with cover coastal and marine environmental clarification in § 250.1911. impact. These potential impacts are already covered in the environmental 41 • 0 Proposed Rule Comment received on proposed rule BOEMRE response to comment Citation analysis conducted by BOEMRE for lease sales and exploration and development plans. The operator addresses these impacts in their EP, DOCD, and OSRPs. This requirement is duplicative of analysis already conducted in accordance with the BOEMRE regulations in 30 CFR Part 250, subpart B, and 30 CFR Part 254. Recommendation: Strike coastal and The rule was changed to say "human marine environmental impacts from the and marine environment." accident scenarios list. 250.1905(a)(2) Based on experience, a hazards analysis The hazards analysis team must meet team is composed of (at least) the requirements included in API RP individual(s) with experience in the 75, Section 3 and requirements operations being evaluated, and necessary to implement API RP 75 in individual(s) who are experienced in the the final rule under § 250.1911. hazards analysis methodology. The rule states that these individuals need to have experience with both. That may be an impractical requirement. Recommendation: Change the second BOEMRE agrees and has made the sentence to: "at least one person needs to change to the final rule. be experienced." 250.1905(b) There should be some prioritization in BOEMRE agrees that an operator can jobs/tasks to be evaluated. Everything an prioritize its JSA to maximize safety as operator does is primarily a job/task. long as it meets the provisions of the Routine jobs/tasks may be covered under final rule. BOEMRE removed JHA operating procedures and the hazards from the final rule. In the final analysis may be included in those rulemaking, JSAs are done for the procedures; therefore, a JSA may not be immediate tasks at hand (not used for necessary. Jobs/tasks that are not administrative or domestic services). If routinely done and not covered by the particular activity is conducted on a operating procedures should have a JSA. recurring basis, and the parameters do Jobs/tasks should be selected for analysis not change, the person in charge of the in priority order. We suggest the activity may decide that a JSA for each following prioritization: individual activity is not required. 1. Jobs with highest rate of accidents or greatest potential for injuries. 2. New jobs or non -routine jobs. 3. Changes in process and procedures. The requirement for an index was Recommendation: Remove section removed. (b)(2)_ 250.1905(b) The rulemaking also seems to envision We removed the requirement to that a "book" of JHAs/JSAs is maintained maintain a book/index, but we require at the job site. While this may be true for operators to keep a copy of the JSA for 42 • Proposed Rule Citation Comment received on proposed rule BOEMRE response to comment jobs/tasks that are routinely performed, in 30 days onsite and for 2 years at a many cases a JSA is completed for a non- location of the operator discretion and routine task (e.g., an unusual lifting make them available to BOEMRE operation). The best JSAs are prepared upon request. by the workers on location and are handwritten. They should be kept in a The requirements for JSAs are in the manner that the workers can easily access final rule, § 250.1911. them. The real value in the JSA is the "process" of the workers involved in the Recordkeeping and Documentation specific task actually discussing the requirements are in § 250.1928. hazards, agreeing on the individual roles and responsibilities and completing the JSA document. While it is important that JSAs for both routine and non -routine tasks be available for review by the workers until the job is completed, they may not be in a nice, neat, properly indexed book. We have no idea how the prescriptive documentation details in (b)(2) relate to keeping workers safe. They should be allowed to use whatever documentation technique works for them. 250.1905(b) The only element in the proposed The final rule distinguishes between a regulation that attempts to address worker broad facility based hazards analysis behavior is the task -specific "hazards conducted in accordance with API RP analysis." However, there is a lot of 75, Section 3 and a task level JSA, confusion throughout the regulated § 250.1911, as required in the final community about the terms "JHA" and rule. "JSA." We typically use the term "JHA" to mean a broad analysis of the hazards associated with a job or process. Such analysis is typically done by a diverse team and may be done in an office setting or at the job site. Many times, this analysis is included with a facility -level hazards analysis or operating procedures and in many cases covers routine tasks. We typically use the term `JSA" to be the analysis done by onsite workers immediately prior to performing a task, many times a non -routine task. Some workers start with a "go-by" and mark it up for the specific task at hand and others start with a blank piece of paper or form. We believe that the application of JSA has the best opportunity to impact worker behavior since it is the workers themselves that are identifying the hazards and developing lans, 43 • 0 Proposed Rule Comment received on proposed rule BOENIRE response to comment Citation procedures, safeguards, etc., to avoid an incident. 250.1905(b) Specific examples of practices within our The operator is required to follow API IMS would be unacceptable under the RP 75 as incorporated by reference and proposed SEMS regulations: we perform JSA's for those activities presently conduct JSAs for work with at identified in it's SEMS program, as least some level of risk, but not for every addressed in§ 250.1911. There are work project and activity. routine tasks performed in the offshore environment that may meet the requirements of SEMS under the Safe Work Practices and Operating Procedures elements. However, for such activities that deviate from their norm due to a change in environment, personnel, or equipment -related factors, or other activities that are non - routine procedures, a JSA must be conducted that identifies and accounts for routine variations or the uniqueness of the activity. 250.1905(b) A commenter is concerned by the BOEMRE replaced the term JHA with proposed requirement for a task -level JSA in the final rule. In the final JHA. While we understand that this may rulemaking, JSAs are done for the be more correctly described as a JSA, we immediate tasks at hand (not used for believe that there needs to be a better administrative or domestic services). understanding of both what constitutes a JSA, and for what tasks a JSA should be developed. Does BOEMRE expect a JSA for operation of a copy machine? 250.1905(b) Section 250.1905(b) states that a JHA There is nothing in the rule that must be performed for "each" work prevents an operator from using the project and activity. BOEMRE must same JSA for a particular activity that clarify this paragraph. There are many is conducted on a recurring basis as projects and activities that are considered long as the parameters of the activity "routine." Our company whole heartedly do not change. agrees that a thorough analysis should always be performed on all "non -routine" projects and activities. Our only concern is that a requirement for a JHA on all projects and activities would be overwhelming. The way the rule is written an operator would be required to perform a JHA for a simple activity such as obtaining tubing pressures or adjusting a level in a vessel. 250.1905(b)(2) We further believe that the record The operator may use programs already retention requirements for the JSA and in existence to comply with provisions related index are unduly burdensome and of this final rule, as long as your SEMS contrary to BOEMRE' stated intent that I program addresses all the elements in 44 • • Proposed Rule Comment received on proposed rule BOEMRE response to comment Citation the programs not become a paperwork API RP 75 and the requirements in the exercise. The proposal also creates final rule. concern regarding "ownership" of the JSAs/index once a MODU is no longer under contract for the operator under whose contract they were developed. Recommended: Strike this section. 250.1906(a) We assume that the 13 requirements for The operator may use programs already procedures can be covered collectively by in existence to comply with provisions other management systems, especially of this final rule. BOEMRE is with regards to chemicals and materials. incorporating by reference API RP 75, The scope of these requirements (7, 9-13) Section 5 with requirements necessary goes beyond API RP 75, as well as to implement API RP 75 in § 250.1913 OSHA PSM and EPA RMP. to address operating rocedures. 250.1906(a) Coupled with the requirement in BOEMRE requires operating § 250.1905 to develop a SEMS for procedures for a MODU under MODUs, § 250.1906(a)(1) and (a)(5) BOEMRE's jurisdiction. The would now require the operator to operator's operating procedures need to develop procedures for some drilling include provisions for evaluating facilities that we neither own nor operate. operating procedures in their contractor This would significantly add to the plans. Under § 250.1914 of the final documentation burden on the operators. rule operators must ensure that We do not believe this would benefit the contractors have their own written safe operator, the owner of the facility, or the work practices. Contractors may adopt personnel on the rig. Operators hire appropriate sections of the operator's contractors that have safety programs in SEMS program. Operator and place and are in compliance with contractor must document their applicable laws, but do not dictate to agreement on appropriate contractor them how to achieve that. The MODUs safety and environmental policies and already have operations manuals practices before the contractor begins developed in conformance with flag State work at the operator's facilities. requirements and/or IMO MODU Code and fall under the jurisdiction of the USCG. The proposed rule duplicates these requirements. Most operators do not have the resources or the expertise to develop operational procedures for drilling operations and depend on the contracted company who are the experts to develop their own procedures and safety systems. Recommendation: change to "implement written production facility operating procedures." 250.1906(a) It is easier to have site specific The operator is responsible for procedures that the operator can provide developing and implementing all training to the contractor (preferably operating procedures. Procedures before the contractor employees begin should be site specific for the task at M, • • 0 Proposed Rule Comment received on proposed rule BOEMRE response to comment Citation work), and verify competency so that hand e.g., drilling, cementing, coiled once the contractor's employees reach the tubing.. How operators decide to facility, there exists a clear understanding implement such operating procedures is of what is to be done, and how to do it. up to them, as long as they are in compliance with API RP 75, Section 5, and the requirements in § 250.1913 of the final rule. 250.1906(a) Our company agrees that operating BOEMRE understands that procedures are a valuable tool in regards standardizing procedures with respect to paragraphs (1) through (13). Our only to safe operations makes good sense concern is that a written procedure for where appropriate. An operator may paragraphs (1) through (13) must be site do so regarding like facilities but it is specific. For example, a written the operator's responsibility to identify procedure for paragraph (1) (initial any differences existing among similar startup) could only be followed for the facilities and identify those differences facility that it was written for. within their SEMS program. BOEMRE may require the operator to submit a complete SEMS for a particular facility should it deem the impact of the differences outweighs the similarities of the facilities. 250.1906(a)(1) Initial startup, startup following a BOEMRE disagrees and retained this turnaround, or startup after an emergency paragraph in the final rule. We shutdown are redundant and encompass incorporated by reference API RP 75, the same elements. We suggest they be Section 5 to address these terms. combined. 250.1906(a)(3) What does BOEMRE envision as This paragraph was deleted from the "temporary operations?" Please define or final rule. Section 5 of API RP 75 does explain. not define "temporary operations." 250.1906(a)(4) Does the BOEMRE mean Emergency BOEMRE agrees that it should be Shutdown Operations in (4)? If not, then addressed as "emergency shutdown lease define "emergency operations." operations". 250.1906(a)(7) Bypassing and flagging should be BOEMRE disagrees that "bypassing included in the individual operating and flagging out of service" should be procedure; it is not a separate operating a separate operating procedure in and rocedure in and of itself. of itself. 250.1906(a)(7) We recommend the wording in BOEMRE agrees that it should be § 250.1906(a)(7) be changed from addressed as "bypassing and flagging "bypassing and flagging" to "bypassing out of service." and flagging out of service." 250.1906(a)(8) "Safety and environmental consequences BOEMRE disagrees with this comment of deviating from your equipment and the operator must comply with the operating limits and steps required to provisions of operating procedures correct or avoid this deviation;" is already listed in § 250.1913(a)(8) and API RP covered by API RP 14C and is included 75, Section 5. in the individual operating procedures and is not a separate operating procedure in and of itself. 46 • • 0 Proposed Rule Comment received on proposed rule BOEMRE response to comment Citation Recommendation: Strike (a)(8). BOEMRE disagrees with this comment and the operator must comply with the provisions of operating procedures listed in § 250.1913(a)(8) and API RP 75, Section 5. 250.1906(a)(8-12) The intent of API RP 75 is to take BOEMRE is incorporating by reference environmental factors into consideration API RP 75. However, operators still during startup, normal operations, must comply with other Federal laws temporary operations... not developing and regulations. procedures specific to these issues. Specific environmental issues are covered under and or overlap with Hazardous Material Regulations, CERCLA, RCRA, H2S regulations, and NPDES. These sections should be removed. 250.1906(a)(13) "Coastal and marine environmental The overriding goal of SEMS is to impacts identified through your hazards protect the human and marine analysis" is taken into account in the environment. operating procedures themselves, they are not a separate operating procedure. Environmental impact identification is also covered in NPDES, air permit, and oil spill regulations and response plans. This section should be removed. 250.1906(b) Reword § 250.1906(b) to read, BOEMRE disagrees and is keeping this "Employees will have access to the and is incorporating by reference API appropriate procedures for their specific RP 75, Section 5. job/role in the operations." This is subtle, but procedures for specific roles should be available to those specific employees, rather than all employees having access to all procedures. 250.1906(b) We assume that procedures maintained See API RP 75, Section 13 and electronicall are considered accessible. § 250.1928. 250.1906(b) Please state what you mean as The API RP 75 does not address this "accessible." The facility where the work issue and the operator should define, in is conducted may be manned or their SEMS, where operating unmanned. We suggest that the operating procedures are to be kept. However, procedures be kept at the nearest manned you must be able to provide your facility. SEMS to BOEMRE upon request in a timely fashion. 250.1906(d) What specifically is meant by, "develop The intent of the SEMS rule is to and implement safe and environmentally ensure safe work practices for all sound work practices for identified operations on an OCS facility. hazards during operations?" Is this meant to be Safe Work Practices (e.g., Hot Work, Confined Space, SIMOPS etc.), or some other processes? This seems to be the intent of this whole element, if not all 47 • • Proposed Rule Comment received on proposed rule BOEMRE response to comment Citation of the SEMS rule. 250.1907 Is the intent of the mechanical integrity The final rule incorporates by reference element to cover critical equipment as API RP 75, Section 8 that addresses referred to in API RP 75? The way it is critical equipment and includes worded this element may cover more: requirements necessary to implement "Your mechanical integrity program must API RP 75 in § 250.1916. It is the encompass all equipment and systems operator's responsibility to meet the used to prevent or mitigate uncontrolled intent of SEMS as well as its releases of hydrocarbons, toxic requirements. The overriding goal of substances, or other materials that may SEMS is to protect the human and cause environmental or safety marine environment. The inventory of consequences." What are the types or harmful substances on offshore severity of such consequences? facilities is well known but will also evolve over time so it is incumbent upon the operator to keep all harmful substances controlled and contained. 250.1907 Does BOEMRE expect each operator to BOEMRE requires operating implement a mechanical integrity procedures for a MODU under program for each MODU that we contract BOEMRE's jurisdiction. The to work on our lease that we neither own operator's operating procedures need to nor operate? The MODU operator should include provisions for evaluating have a mechanical integrity program for operating procedures in their contractor his equipment. The operator should plans. Under § 250.1914 of the final verify that the MODU operator has such rule operators must ensure that a program. contractors have their own written safe work practices. Contractors may adopt Recommendation: You must develop appropriate sections of the operator's and implement written procedures that SEMS program. Operator and provide instructions to ensure the contractor must document their mechanical integrity and safe operation agreement on appropriate contractor of equipment through inspection, testing, safety and environmental policies and and quality assurance for equipment on practices before the contractor begins your facility used to prevent or mitigate work at the operator's facilities. uncontrolled releases of hydrocarbons, toxic substances, or other materials that may cause environmental or safety consequences. For MODUs operating on your lease, you must verify that the MODU operator has a mechanical integrity program that meets the requirement in this subpart. These procedures must address the following: 250.1907 Include the requirements in § 250.1907(i) BOEMRE disagrees and in the final in § 250.1907(a) rule will keep both sets of requirements separate. 250.1907 A contractor can have a mechanical BOEMRE agrees. The operator must integrity program for contractor owned have a mechanical integrity program in equipment (tools, vehicles, etc), but to accordance with the requirements of address the operator's equipment, again, I API RP 75, Section 8 and § 250.1916. 48 • 0 Proposed Rule Comment received on proposed rule BOEMRE response to comment Citation it is more practical for the operator to develop this program, then train the contractor in implementation. 250.1907 This entire element is already being BOEMRE disagrees. Subpart O addressed. Paragraph (a) is already addresses training related to well addressed by API RP 14C. Paragraph (b) control and production safety. We (training) is already being addressed as incorporated by reference API RP 75, part of the subpart O requirement. Section 8 and § 250.1916 to address Paragraphs (c) through (i) is being mechanical integrity. addressed through the requirements of API RP 14C along with the monthly, quarterly, semi-annual, and annual testing of the surface and sub -surface safety system. 250.1907(a) We suggest replacing "manufacturers We disagree; we believe that the design and material specifications" with manufacturer's design and material "applicable design and material specifications are the most appropriate specifications." The design, guidance to use. procurement, fabrication, etc., of equipment are not necessarily just based on manufacturers' specifications but could be based on API, company, or other applicable design and material specifications. 250.1907(b) Please note that there are typically no BOEMRE is incorporating by reference manufacturers recommended inspection API RP 75, Section 8 and § 250.1916 intervals for fixed equipment (pressure to address mechanical integrity. The vessels, piping, pipelines). operator's maintenance program must be structured to enhance safety and Maintenance intervals should be allowed protect the environment and must to be extended based on component sustain ongoing mechanical integrity. history, operating experience, and risk- Testing and inspection procedures must based decision making. follow commonly accepted standards and codes, such as API 510 and the manufacture's recommendations. 250.1907(b) Equipment may be maintained by The operator must have mechanical employees, contractors, or a mix. Some integrity in accordance with API RP specialized equipment is actually 75, Section 8 and § 250.1916, in their maintained by the manufacturer's SEMS program. Your contractors must representatives who periodically travel to conduct operations in accordance with offshore facilities to perform required your SEMS program. maintenance. Therefore, our employees do not need to be trained to do the actual maintenance work for all equipment in the mechanical integrity program. Recommended: Replace (b) with the following: the training of maintenance workers in the application of the rocedures, relevant hazards, and safe 49 • • Proposed Rule Comment received on proposed rule BOEMRE response to comment Citation work practices. 250.1907(c) We recommend deleting the language We disagree, we believe that the "meet the manufacturer's manufacture's recommendations are recommendations" in § 250.1907(c). appropriate to use. Many of our inspection and testing requirements, while meeting regulations, are risk based in approach. 250.1907(c) Specific examples of practices within our The operator is required to meet or IMS would be unacceptable under the exceed the inspection frequencies in 30 proposed SEMS regulations: We CFR part 250. presently feel free to inspect or test some equipment more frequently than necessary to gain some extra level of comfort, but we do not expect to be locked into a greater frequency. 250.1907(d) Is electronic documentation of the person To address recordkeeping and performing the inspection or test documentation, we incorporated by acceptable? Electronic work order reference API RP 75, Section 13, and systems are often used to schedule and additional reporting and documentation document inspections and tests. requirements in § 250.1928. Electronic records are acceptable to BOEMRE for most records. 250.1907(d) We recommend adding, "Electronic BOEMRE kept this paragraph in the documentation of the same information final rule. The final rule will also will suffice to meet this requirement" to address mechanical integrity § 250.1907(d). The requirement for documentation as described in API RP "signature" on inspection or test 75, Section 8. Electronic records are documentation should be modified to acceptable to BOEMRE for most encompass operators' use of electronic records, including electronic work management systems. Work orders, signatures. assigned to and completed by individuals within the software should be acceptable. 250.1907(d) The last sentence in § 250.1907(d) should BOEMRE agrees with this comment be modified to place an "or" between and made the text change in new § inspection and test, therefore changing the 250.1916(d). language to read "...and the results of the inspection or test." 250.1907(e) Correction of deficiencies before further Deficiencies are addressed in API RP use will prevent use of risk -based 75, Section 8 and § 250.1916(e). decision making, and the subsequent Under the final rule, the procedures for shut-in of operations may present Mechanical Integrity must address the additional hazards. Would this apply in correction of deficiencies associated the case of waiting on parts and while with equipment and systems that are mitigation measures are put in place? outside the manufacturer's Does it cover deficiencies that may not recommended limits before further use. affect operations integrity? Run to failure should be a viable option for some components. Suggest this requirement be based on risk. This is not a requirement 50 0 • Proposed Rule Comment received on proposed rule BOENIRE response to comment Citation in API RP 75. 250.1907(e) Specific examples of practices within our Under § 250.1916(e) of the final rule IMS that would be unacceptable under the operator must document the the proposed SEMS regulations: We procedures to correct critical equipment presently decide whether to take a piece deficiencies or operations. The of equipment out of service based upon operator may continue to use an IMS, if OUT judgment of actual risk (likelihood it meets the requirements of API RP 75 and consequence of failure). and the final rule and the operator addresses any deficiencies. We cannot accept only "judgment" as a means of the operator determining risk. The operator must account for what factors were considered in taking equipment out of service. This does not have to be an exhaustive analysis but it does need to reflect that all relevant SEMS elements were considered. Documenting the "likelihood and consequence of failure" comports with the intent of SEMS. 250.1907(f)-(i) How is this requirement different from BOEMRE disagrees with this comment (a), nor how it is to be implemented. and is incorporating by reference API Recommendation: Strike (f) RP 75 and requirements necessary to implement API RP 75 in the final rule. How is this requirement different from The operator must follow the (a), nor how it is to be implemented. requirements of API RP 75, Section 8 and the requirements in § 250.1916 for Recommendation: Strike (g) mechanical integrity. Paragraph (a) of Since BOEMRE has outlined prescriptive § 250.1916 provides an overview of the requirements for the inspection and requirements, while the subsequent testing and the documentation of those paragraphs provide more details. inspections and tests, we do not understand what the requirement in (h) is and how it is different from (c) and (d) above or how to implement it. Recommendation: Strike (h) We suggest this be included under (a) Recommendation: Strike (i) and include under (a). 250.1908 There is no mention if the MOC is for The operator must follow the either permanent and temporary changes requirements of API RP 75, Section 4 or just permanent changes. Please and § 250.1912 of the final rule for clarify. MOC, which requires procedures for any changes related to equipment, operating procedures, personnel changes, materials, and operating conditions, except for replacement in kind. This applies to permanent and 51 0 0 0 Proposed Rule Comment received on proposed rule BOEMRE response to comment Citation temporary changes. 250.1908 A production contractor can have a MOC The operator is responsible for process, but in order for the process to developing and implementing a MOC work, the operator (client) must be part of in accordance with API RP 75, Section the process. The scenario of the 4 and § 250.1912 of the final rule. The lessee/operator having a MOC process operator is responsible for coordinating that the contractor can be a part of is a with the contractor regarding MOC. better model. The operator must ensure that their contractor embraces safety principles that support their SEMS program. The MOC is a cooperative activity that makes all parties responsible for its success. 250.1908(a)(2) A process for changing operating BOEMRE is incorporating by reference procedures has already been established API RP 75, Section 4 for MOCs and in § 250.1906(c). The MOC process Section 5 for Operating Procedures and should simply identify that operating requirements under and §§ 250.1912 procedures either need to be changed (or and 250.1913 of the final rule. Under don't) as a result of changes to the §§ 250.1912 and 250.1913, the operator facility. The actual change to the must address MOC for operating operating procedures should not have to procedures. o through the MOC process. 250.1908(a)(3) Section 250.1908 proposes issuing MOCs BOEMRE disagrees with this comment for personnel changes, but does not and it is the operator's responsibility to define which personnel that encompasses. address personal changes. BOEMRE is It would be quite onerous if a MOC was incorporating by reference API RP 75, required for every single individual that Section 4 and requirements under § was changed out on a facility. To 250.1912, to address MOCs for provide clarity as to those personnel changes in personnel. API RP 75, changes that would require a MOC, we Section 4 includes the suggested propose adding the following language to language. The definition of contractors § 250.1908(3): "personnel with specific in § 250.1914(a) does not include those knowledge or experience who supervise providing domestic services. or operate, or support operations of a facility which would lead to a loss of knowledge or experience." 250.1908(a)(4) What does BOEMRE envision as a BOEMRE is incorporating by reference change in material that requires a MOC API RP 75, Section 4 and requirements that is not already covered under under § 250.1912 to address MOCs. equipment? The operator must adopt these requirements in the SEMS. Materials that are not covered under equipment could include process chemicals and maintenance materials; these are mentioned in API RP 75. 250.1908(a)(5) We assume that changes in operating BOEMRE is incorporatingb reference 52 • 0 Proposed Rule Comment received on proposed rule BOEMRE response to comment Citation conditions include such things as changes API RP 75, Section 4 and requirements to the operating envelope (pressure, under § 250.1912 to address MOCs. temperature, flow rates, material API RP 4.2e addresses changes in chemistry, etc.) as described in the operating conditions. The operator facility design basis or a change in the must adopt these requirements in the chemistry of the product that was not SEMS. considered in the equipment specification. If our assumption is not correct, please clarify. 250.1908(c) What does BOEMRE envision by the BOEMRE is incorporating by reference following requirement: "You must review API RP 75, Section 4, and all changes prior to their requirements under § 250.1912 to implementation?" address MOCs. Section 250.1912(c) requires the operator to review all changes prior to their implementation and API RP 75 section 4.3 addresses this review related to changes in personnel. This review is required to ensure the safety of personnel. 250.1908(c) Specific examples of practices within our BOEMRE is incorporating by reference IMS that would be unacceptable under API RP 75, Section 4 and requirements the proposed SEMS regulations: We under § 250.1912 to address MOCs. presently allow immediate approval of The operator may continue to use an work considered to be for emergency IMS, if it meets the requirements of situations without prior MOC review and API RP 75 and the final regulation. approval, subsequently working through Emergency situations are addressed in MOC as a follow-up. the final rule under § 250.1918 and requires the operator to have emergency response and control plans in place and ready for immediate im lementation. 250.1908(f) We assume that the documentation for If the management of change results in this step will be under § 250.1906(c). and change in the operating procedure, this change must documented as provide in § 250.1912(f) in the final rule 250.1909 The final rule must distinguish between While BOEMRE does not directly "contractor employees" and "contracted regulate the operator/contactor employees." relationship, it is the responsibility of both the operator and contractor to conduct activities so that they comport with the operator's SEMS. 250.1909 1. How does this part relate to subpart 1. Subpart O specifically applies to O? personnel involved in well control and production safety system operations, while subpart S applies to all aspects of OCS operations under BOEMRE jurisdiction. 53 • Proposed Rule Citation 250.1909 • Comment received on proposed rule 2. This section could conflict with subpart O and become detrimental to operators. BOEMRE already has regulations in place to address training and competency assessments for both operator employees and contractors. 30 CFR Part 250, subpart O, Well Control and Production Safety Training, clearly states that operators must ensure that both employees and contract personnel understand and can properly perform their duties; § 250.1503(b)(3) requires operators to have procedures "for verifying that all employees and contractor personnel engaged in well control or production safety operations can perform their assigned duties." In fact, BOEMRE periodically assesses the Subpart O program by auditing and testing as described in § 250.1507(d), which states `BOEMRE or its authorized representative may conduct testing at either onshore or offshore locations. Tests will be designed to evaluate the competency of your employees or contract personnel in performing their assigned well control and production safety duties. You are responsible for the costs associated with this testing, excluding salary and travel costs for BOEMRE personnel." We find that the proposed language in § 250.1909 is redundant with existing regulations under 30 CFR Part 250, subpart O, and therefore, should be eliminated from the proposed rule. If you do not agree, then please clarify the relationship between this proposed rule and the requirements in subpart O and identify what contractor groups have otherwise not been addressed by the existing subpart O requirements. If BOEMRE has concerns regarding 54 BOEMRE response to comment 2. BOEMRE disagrees. Subpart O complements a SEMS program. The operator may use the training requirements of subpart O to meet the SEMS requirements in API RP 75 Section 7 as incorporated by reference and the requirements in § 250.1915. BOEMRE disagrees. The SEMS rule applies to contractors performing maintenance or repair, turnaround, major renovation, or specialty work on or adjacent to a covered process. This section was renumbered as § 250.1914 in the final rule. The operator is responsible for obtaining and evaluating information regarding the contract employer's safety performance and programs and informs contract employers of the known potential fire, explosion, or toxic release hazards related to the contractor's work and the process. The operator may use the training requirements of subpart O to meet the SEMS requirements in API RP 75, Section 7, as incorporated by reference and § 250.1915. BOEMRE disagrees. Subpart O complements a SEMS program. All personnel with the operator's SEMS program need to be trained to competently perform their assigned duties. The operator may use the training requirements of subpart O to meet the SEMS requirements in API RP 75, Section 7, as incorporated by reference and § 250.1915 in the final rule. • • Proposed Rule Comment received on proposed rule BOEMRE response to comment Citation contractor selection or competency, then the appropriate regulation to address such concerns is within the subpart O program. Recommendation: Strike § 250.1909 in its entirety. 250.1909 The current BOEMRE regulations under subpart O specifically applies to subpart O at § 250.1500 require operators personnel involved in well control and to ensure and document that their production safety system operations company and contract employees are The SEMS rule applies to contractors competent to perform their assigned jobs. performing maintenance or repair, Therefore, the section on contractor turnaround, major renovation, or selection and competency in the proposed specialty work on, or adjacent to, a rule is redundant and not needed. If covered process. This section was BOEMRE felt it necessary, subpart O renumbered as § 250.1914 in the final could be expanded to include any worker rule. The operator is responsible for groups not already covered in the current obtaining and evaluating information rule. In the event BOEMRE proceeds regarding the contract employer's with an entirely new rulemaking, we safety performance and programs and recommend a performance based rule be informing contract employers of the written (like subpart O) to allow known potential fire, explosion, or operators to utilize their existing safety toxic release hazards related to the and environmental management contractor's work and the process. The programs instead of a detailed, operator may use the training prescriptive program as proposed in this requirements of subpart O to rulemaking. Companies could then substantially meet the SEMS certify to BOEMRE that their programs requirements in API RP 75, Section 7, include the required elements and use as incorporated by reference and the their documentation and audit systems requirements necessary to implement that are already in place and working. API RP 75 in § 250.1915. The contactor must ensure that all personnel not mentioned in subpart O are also competent in conducting their job and subscribe to safe work practices as identified in the operator's SEMS program. 250.1909 While the proposed rule states the BOEMRE disagrees; SEMS must required SEMS program must include include everyone working on a facility; each of the 4 elements described, we criteria for contractor selection are an believe the § 250.1909 "What criteria important part of that. Contractor must be documented in my SEMS criteria are addressed in Section 6.4 program for contractor selection?" is and Appendix A of API RP 75 as actually a 5`h element that has been incorporated by reference. We added without the justification and included this in the final rule with rationale used to validate inclusion of the requirements necessary to implement other 4 elements. API RP 75 in § 250.1914. 250.1909 If contractors are to be "accountable" for The operator is responsible for having a SEMS activities, their scale, complexity SEMS program in place. The operator and scope of work should also be taken is responsible for coordinating with the 55 0 O 0 Proposed Rule Citation 250.1909 250.1909 Comment received on proposed rule into account. Example: contractor services vary from "Labor" (i.e., production operators), "Equipment" (i.e., Generators, machinery rentals) or both "Labor and Equipment" (i.e., drilling rig, welding machine, and welder), etc. A contractor supplying "Labor" services should not be required to have a SEMS program, but the competency to work within the clients program (i.e., perform JSAs, initiate MOC process, utilize Operating Procedures in performance of duties, perform level one visual Mechanical Integrity inspections in accordance with a lessee's SEMS program). A contractor only supplying "Equipment" should have a Mechanical Integrity Plan and Operating Procedures that accompany the equipment and limited hazards analysis pertaining to his equipment. A contractor supplying "Labor and Equipment" should have a SEMS program that covers his equipment and the operation thereof. There is no indication in the data used for the proposed rule that "Contractor Selection" contributed to the incidents analyzed by the BOEMRE. The proposed rule would require the lessee/operator to develop a SEMS. However, § 250.1909 states that the lessee must document that their contractors have policies and practices that are consistent with the lessee's plan. Furthermore, it states that a copy of the contractor's SEMS program must be kept by the operator and the contractor at each facility where contract operations are being performed. Our company has 50 to 60 customers. To strive for consistency with 50 to 60 individual programs is unrealistic and places an unnecessary burden on all contract operators. Our company either manages or operates over 600 platforms in the GOM. The paperwork burden of supplying and maintaining a SEMS program for each 56 BOEMRE response to comment contractor regarding their SEMS program. The operator must ensure that their contractor embraces safety principles that support their SEMS program. Contractors perform a majority of the work on the OCS and the selection of skilled, knowledgeable, and trained contractor personnel by the operator is an important part of ensuring that the SEMS program works. The operator is responsible for having a SEMS program in place. The operator is responsible for coordinating with the contractor regarding their SEMS program. The operator must ensure that their contractor embraces safety principles that support their SEMS program. Under § 250.1914 in the final rule the operators must obtain and evaluate information regarding the contractor's safety and environmental performance when selecting a contractor. Operators must ensure that contractors have their own written safe work practices. Contractors may adopt appropriate sections of the operator's SEMS program. Operator and contractor must s • 0 Proposed Rule Citation 250.1909 250.1909 Comment received on proposed rule facility (again, consistent with that individual customer) could only be done at a tremendous cost of not only man hours but monetary investment that may not be recoverable. There is absolutely no need for further expansion of contractor selection and contractor documentation in any SEMS program. Subpart O already addresses contractor evaluations and contractor selection. This portion of the proposed rule is redundant and attempts to expand once again on the definition of "Production Operations." BOEMRE cannot expect the operator or lessee to evaluate, test, and document the competency of these hired professionals as they are by name certified to perform their tasks and possess unique knowledge. Additionally, contractor selection does not affect human factors. 57 BOEMRE response to comment document their agreement on appropriate contractor safety and environmental policies and practices before the contractor begins work at the operator's facilities. Subpart O applies to personnel involved in well control and production safety system operations. Section 250.1914 of the final rule applies to contractors performing maintenance or repair, turnaround, major renovation, or specialty work on, or adjacent to, a covered process, as well as Appendix A of API RP 75. The operator is responsible for verifying that contractor personnel can perform their assigned duties and informs contract employers of all hazards related to the contractor's work and the process. The operator may use the training requirements of Subpart O to meet the SEMS requirements in API RP 75 Section 7 as incorporated by reference and § 250.1915 of the final rule. BOEMRE disagrees. The operator is accountable for contractor personnel activities and equipment. BOEMRE does not expect the operator to test their contractors. BOEMRE does expect the operator to evaluate their contractor's ability to perform the job that they are hired to do and to document that they have done so. Under § 250.1914 in the final rule the operators must obtain and evaluate information regarding the contractor's safety and environmental performance when selecting a contractor. Operators must ensure that contractors have their own written safe work practices. Contractors may adopt appropriate sections of the operator's SEMS program. Operator and contractor must document their agreement on appropriate contractor safety and environmental policies and practices before the contractor begins work at the operator's facilities. • Proposed Rule Citation 250.1909 250.1909 Comment received on proposed rule We are concerned with the ambiguous language related to contractors and contracted personnel. BOEMRE fails to clearly distinguish between contracted individuals acting in the same capacity as an employee, and companies contracted to perform specialized services for a lessee, leading to perhaps unintended applications. For example, § 250.1909(a) of the proposed rule states, "A contractor is anyone performing work for the lessee." This could be construed as including emergency response operations even though these are not integral to oil and gas exploration and production operations. We support the OOC comment that the section relating to contractors be stricken from the rule, as redundant with existing subpart O regulations. In the alternative, we request that the currently overbroad language be clarified to define contractors, and contracted personnel, and to confirm that the rule does not apply to emergency response contractors even though they are contracted to perform work for a lessee in the OCS. The data used in the proposed rule makes no mention of problems regarding contractor competency, training, MOC, mechanical integrity, etc. BOEMRE response to comment BOEMRE disagrees. Subpart O applies to personnel involved in well control and production safety system operations. Section 250.1914 of the final rule applies to contractors performing maintenance or repair, turnaround, major renovation, or specialty work on, or adjacent to, a covered process and Appendix A of API RP 75. The operator is responsible for obtaining and evaluating information regarding the contract employer's safety perfonnance and safety programs and informs contract employers of the known potential fire, explosion, or toxic release hazards related to the contractor's work and the process. The operator may use the training requirements of subpart O to meet the SEMS requirements in API RP 75, Section 7 as incorporated by reference. The API RP 75 defines contractor as "The individual, partnership, firm, or corporation retained by the owner or operator to perform work or provide supplies or equipment. The term contractor must also include subcontractors". Contractors perform the majority of the work on the OCS and as such, selecting skilled, knowledgeable, and trained contractor personnel by the operator will help achieve safe OCS operations. Under § 250.1914 in the final rule the operators must obtain and evaluate information regarding the contractor's safety and environmental performance when selecting a contractor. Operators must ensure that contractors have their own written safe work practices. Contractors may adopt appropriate sections of the operator's SEMS program. Operator and contractor must document their agreement on appropriate contractor safety and environmental policies and practices before the contractor begins work at the operator's facilities. • Proposed Rule Comment received on proposed rule BOEMRE response to comment Citation 250.1909(b) 1. Are electronic copies of contractor's 1. Electronic copies of contractor's competencies and SEMS programs competencies and SEMS programs are acceptable? acceptable. See API RP 75, Section 13 and § 250.1928 2. Do we need to keep competencies for 2. In § 250.1914 of the final rule, the each individual contractor? SEMS must include procedures and verification that the operator's contractor and employees understand and can perform their assigned duties, as well as Appendix A of API RP 75, which addresses contractor selection criteria. The operator is responsible for ensuring and validating the competency of their contractors; the method for doing so must be detailed in their SEMS program. The operator may request specific performance information from contractors. 250.1910 We recommend that the prescriptive BOEMRE incorporated by reference language be replaced with the following: API RP 75, Section 12 and "You must audit your SEMS program in requirements necessary to implement accordance with API RP 75, Section 12, API RP 75 in the final rule under § Audit of Safety and Environmental 250.1920 to address audits and Management Program Elements." documentation. The final rule gives the option of utilizing either an independent third party or your designated and qualified personnel to conduct audits on your behalf. 250.1910(a) We believe timing for audits should be BOEMRE incorporated by reference based on performance and risk rather than API RP 75. Audit frequency is a prescribed schedule as described in addressed in § 250.1920 of the final § 250.1910(a). rule. The operators must have their SEMS programs audited by either an independent third party or your designated and qualified personnel to conduct audits on your behalf according to the requirements of this subpart and API RP 75, Section 12 within 2 years of the initial implementation of the SEMS program and at least once every 3 years thereafter 250.1910(b) As part of our SEMS program, we audit Audit frequency is addressed in all facilities (offshore and on) on a 3-5 § 250.1920 of the final rule. The year basis and roll up results of audits operators must have their SEMS from each year to evaluate our program programs audited by either an as a whole. We assume this is acceptable independent third party or your in accordance with this section. I designated and qualified personnel to 59 • O 0 Proposed Rule Comment received on proposed rule BOEIIRE response to comment Citation conduct audits on your behalf according to the requirements of this subpart and API RP 75, Section 12 within 2 years of the initial implementation of the SEMS program Which part of this audit process would and at least once every 3 years the BOEMRE want to be invited to thereafter. participate/observe? In § 250.1920(b), the operator must notify the BOEMRE 30 days in advance to allow BOEMRE to participate in/observe the operators SEMS audit. BOEMRE may participate or observe the audit of any of the elements in the final rule. 250.1910(b) We recommend deleting language at BOEMRE disagrees; we maintained § 250.1910(b) requiring notification to this requirement in the final rule, so BOEMRE prior to conducting an audit. that BOEMRE may observe SEMS audits under § 250.1924(c). 250.1910(b) How does BOEMRE envision If BOEMRE decides to participate in a participating in an audit as just as an SEMS audit, our activities may include observer? These seem to be one or more of the following: contradictory terms. If BOEMRE is • Observation merely going to observe and not do or say • Requesting documentation anything, then perhaps better wording • Revising SEMS program would be "Representatives from . Other duties as needed BOEMRE may observe your SEMS BOEMRE may participate as observers audit." Further, if BOEMRE is going to to verify compliance. BOEMRE may simply observe, what is the purpose of issue warnings, PINCs, or INCs, under observing the audit? § 250.1927. 250.1910(b) The wording in this section also seems to BOEMRE disagrees. In the final rule indicate that the SEMS audit will be BOEMRE may participate in the audit conducted in a meeting style; otherwise, in the field and office locations as how will BOEMRE observe the audit? needed. How BOEMRE participates in the audit will be based on how the operator conducts its audit. 250.1910(b) and Will the BOEMRE write INCs on the BOEMRE may write INCs based on (c) issues self -discovered on audits (either as the severity of the issues discovered a participant or following review of the during an audit (either as a participant audit report)? or following the review of the audit report). If the BOEMRE discovers an issue when reviewing the audit report, we will consider whether the extent to which the operator has addressed the issue when deciding if we should write an INC. BOEMRE will consider all relevant factors when considering issuing an INC, including the fact that the operator self -discovered the 60 • Ci7 O Proposed Rule Comment received on proposed rule BOEMRE response to comment Citation deficiency. BOEMRE encourages operators to identify deficiencies during their audits and looks favorably on audits detailing such, before deciding if a self -discovered deficiency warrants receiving an INC. BOEMRE recognizes the intent of the operator's audit is to find deficiencies and make the necessary corrections to enhance safety and BOEMRE does not intend for audits to be used as a punitive exercise. 250.1910(c) When does BOEMRE consider the audit The audit is complete when any to be completed? We consider the audit deficiencies in a SEMS program are to be completed when the final audit corrected and documented. If there are report is issued. no deficiencies, the audit is complete when the final audit report is issued and submitted to BOEMRE. 250.1910(c) Given the language in § 250.1910(d), it In § 250.1920 of the final rule, the appears that BOEMRE does not envision operator must require the Independent receiving the actual SEMS audit report. Third Party to submit an audit report of the findings and conclusions of the Recommendation: You must submit a audit to BOEMRE within 30 days of report to the BOEMRE within 30 days the audit completion date. The report after the issuance of the final SEMS must outline the results of the audit, report by your designated and qualified including deficiencies identified. personnel or your independent third - party. The report need not be the full SEMS report but must outline.... 250.1910(c) We agree with the BOEMRE proposal to The audit reports are critical documents periodically review the results of SEMS that BOEMRE needs to ensure that audits based on operator performance your audit protocols are true to the through unannounced or announced intent of this subpart and that any inspections. However, we are not deficiencies have been addressed supportive of the language at appropriately and in a timely manner. § 250.1910(c) that requires producing a In § 250.1920 of the final rule, the separate report solely for BOEMRE operator must require the Independent purposes within 30 days of the Third Party or your designated and completion of an audit. This is an qualified personnel to submit an audit administrative burden and does not meet report of the findings and conclusions the intent of the proposed regulation that of the audit to BOEMRE within 30 the rule not be a paperwork exercise. We days of the audit completion date. The suggest adding language to § 250.1910(c) report must outline the results of the that BOEMRE could review audit reports audit, including deficiencies identified. during inspections or upon request that would provide BOEMRE unimpeded access to any audit findings at their discretion. 250.1910(d) What does BOEMRE envision as the There is not a significant difference 61 • U Proposed Rule Comment received on proposed rule BOEMRE response to comment Citation difference between verifying corrective between the two sections in regards to actions from an audit in § 250.1910(d) verifying corrective actions. and § 250.1913? 250.1910(c) What is the purpose of retaining copies of BOEMRE is incorporating by reference the audit for 5 years, when the program API RP 75, Section 12 and § 250.1920 has to be audited every 3 years? of the final rule will require independent third party or your Recommendation: You must retain designated and qualified personnel to copies of either the independent third- conduct audits on your behalf. The final parry's SEMS records or self audit for a rule has additional recordkeeping minimum period of 3 years or until the requirements that are not in API RP 75. completion of the next audit. In § 250.1920 of the final rule, the operator must require the Independent Third Party or your designated and qualified personnel to submit an audit report of the findings and conclusions of the audit to BOEMRE within 30 days of the audit completion date and to keep copies of the audits for 6 years . Requiring the operators to keep the audits for 6 years ensures that they have copies of audits for at least 2 audit cycles for reference. 250.1911 We recommend that the prescriptive BOEMRE incorporated by reference language be replaced with the following: API RP 75, Section 13, and additional "Your SEMS program procedures and recordkeeping and documentation documents must be maintained in requirements in § 250.1928. accordance with API RP 75, Section 13, Records and Documentation." 250.1911 Which records need to be kept to comply The response to these questions are with this part? Which records need to be addressed in API RP 75, which signed and dated? Only those records BOEMRE incorporated by reference, specifically referred to in this proposed and additional recordkeeping and rule? API RP 75 provides guidance and documentation requirements in examples for this section. § 250.1928. 250.1911 The proposed regulation has exhaustive BOEMRE incorporated by reference prescriptive documentation and API RP 75, Section 13, and additional recordkeeping requirements imbedded recordkeeping and documentation throughout the rule. Existing programs requirements in § 250.1928. will have to be rewritten by all operators to incorporate these prescriptive requirements. We do not believe that this level of prescriptive documentation and recordkeeping will increase safety. The API RP 75 has a records and documentation section. If BOEMRE is going to require documentation and recordkeeping, then again, we strongly recommend that Section 13 of API RP 75 62 C� • 0 Proposed Rule Comment received on proposed rule BOEIVIRE response to comment Citation be ado ted in the final rulemakin . 250.1912(c) When will BOEMRE evaluate the The operator must use an independent independent third -party? Before or after third -party or your designated and they are used for a SEMS audit? What is qualified personnel performing independent the evaluation criterion? third party functions. BOEMRE will not If BOEMRE finds deficiencies in the approve, but will evaluate, the third -party and they have already independent third -party or your performed a SEMS audit, does that put designated and qualified personnel; the audit results in jeopardy or require a however, if there are deficiencies in the new audit be performed? audit, we will take appropriate action. The independent third -party or your designated and qualified personnel must meet the requirements of § 250.1926. 250.1913(a) "Adequate" and "effective" are very In the final rule, BOEMRE removed subjective terms. What criteria will the term "adequate" and adopted most BOEMRE utilize to determine if a of the recommended language. This is program is adequate and/or effective? now in § 250.1924. Many operators currently have well developed programs, but may still have injuries and incidents. Would these programs be deemed adequate and effective? Recommendation: (a) BOEMRE or its authorized representative may evaluate or visit your facility to determine whether your SEMS program is in place and being followed. These evaluations or visits may be random or based upon the OCS lease operator's or contractor's performance. 250.1913(a) BOEMRE is in a much better position, The final rule will require operators to than a third -party company to approve the use an independent third -party or lessee's SEMS Programs for the designated and qualified personnel following reasons: performing independent third party 1. BOEMRE is a government agency and functions to audit a SEMS program. therefore does not have a conflict of BOEMRE will not approve SEMS interest. Whereas a third -party company programs because the intent is to have is a for -profit entity and would be subject a program that evolves and adapts, as to the pressures of financial interest. needed. This allows operators to tailor Additionally, third- party companies the program to their individual needs could be approving programs that they and corporate cultures on an ongoing have produced. basis. 2. BOEMRE has ready access to all offshore leases. Under § 250.1925 of the final rule, BOEMRE may conduct an audit if BOEMRE identifies safety or non- compliance concerns based on the results of our inspections and 63 • • 0 Proposed Rule Comment received on proposed rule BOEMRE response to comment Citation evaluations, or as a result of an event. 250.1913(b) What are the qualifications of the BOEMRE will use appropriate BOEMRE representatives conducting BOEMRE personnel with the proper these evaluations? Are they familiar with credentials and training to ensure management systems and auditing consistency. protocols? 250.1914 We have serious concerns about the BOEMRE continually works to address consistency of enforcement actions. How inconsistency. We have demonstrated will BOEMRE ensure the consistency of improvements in this area for the last evaluation? 10 years. BOEMRE has established internal processes to help ensure consistency in enforcement. 250.1915 1. Please provide detailed instructions 1. See Appendix I in preamble of the and examples for filling out MMS-131. final rule. 2. Who within BOEMRE is the form to 2. The form may be sent to the Safety be sent to and by what method.... paper, and Enforcement Branch by fax to electronic, etc.? (703) 787-1575, by email to semp(iWEMRE.gov, , or by mail to 381 Elden St., MS-4023, Herndon, VA 20170. 3. By calendar year, we assume that you 3. For this application, the BOEMRE mean Jan 1 to Dec 31. If not, please considers a calendar year to cover the clarify. time from January ls` to December 31S` 4. Please state how BOEMRE will utilize 4. BOEMRE uses the data collected in the data. Form MMS-131 to calculate 20 annual, OCS-wide, performance indices. The indices provide information about performance and safety trends; they also allow OCS operators to compare their performance with industry averages. 5. Please include provisions for holding 5. The information on Form MMS-131 the individual company data confidential. is not protected from disclosure and is subject to FOIA should a member of the public request this information. 6. We also point out the authority to 6. BOEMRE disagrees. The OSHA require employers to collect and report does not have authority for OCS oil and work -hours and injury/incident data of gas and sulphur activities. this type actually rests with the USCG based on the MOU between USCG and OSHA dated 19 December 1979. Furthermore, the collection and reporting of injuries and illnesses on the OCS falls under the currently pending USCG 64 0 • Proposed Rule Comment received on proposed rule BOEMRE response to comment Citation rulemaking (RIN 1625-AA18) issued on 27 June 1995, and entitled Outer Continental Shelf Activities. Coordination by BOEMRE with the USCG is recommended to consolidate and coordinate their efforts and avoid any duplication of requirements and unnecessary burdens. The following lists the citation for the proposed rulemaking and what the current citation is in the final rulemaking. Proposed Rulemaking Citation Final Rulemaking Citation § 250.1900 Must I have a SEMS § 250.1900 Must I have a SEMS program? program? § 250.1901 What is the goal of my SEMS § 250.1901 What is the goal of my SEMS program? program? § 250.1902 When must I comply with the § 250.1900(a). Must I have a SEMS regulations in this subpart? program? § 250.1903 May I use an industry Removed. standard to develop my SEMS program? § 250.1904 What are my general § 250.1909 What is management's responsibilities for SEMS? general responsibilities for the SEMS program? § 250.1905 What criteria for Hazards § 250.1911 Analyses must my SEMS program meet? § 250.1906 What criteria for Operating § 250.1913 Procedures must my SEMS program meet? § 250.1907 What criteria for Mechanical § 250.1916 Integrity must my SEMS program meet? § 250.1908 What criteria for Management § 250.1912 of Change must my SEMS program meet? § 250.1909 What criteria must be § 250.1914 What criteria must be documented in my SEMS program for documented in my SEMS program for safe contractor selection? work practices and contractor selection? § 250.1910 What are my responsibilities § 250.1920 when conducting a SEMS audit? § 250.1911 What are my documentation § 250.1928 and recordkee ing requirements? § 250.1912 What qualifications must an § 250.1926 65 • 0 Proposed Rulemaking Citation Final Rulemaking Citation independent third -party or my designated and qualified personnel meet? § 250.1913 How will BOEMRE § 250.1924 determine if my SEMS program is effective? § 250.1914 What happens if BOEMRE § 250.1927 finds shortcomings in my SEMS program? § 250.1915 What are my responsibilities § 250.1929 for submitting OCS performance measure data? [NEW SECTION] § 250.1903 Definitions [NEW SECTION] § 250.1904 Documents incorporated by reference [NEW SECTION] § 250.1910 What safety and environmental information is required? [NEW SECTION] § 250.1914 What criteria must be documented in my SEMS program for safe work practices and contractor selection? [NEW SECTION] § 250.1915 What criteria for training must be in my SEMS program? [NEW SECTION] § 250.1917 What criteria for pre -start up review must be in my SEMS program? [NEW SECTION] § 250.1918 What criteria for emergency response and control must be in my SEMS? [NEW SECTION] § 250.1919 What criteria for investigation of incidents must be in my SEMS program? [NEW SECTION] § 250.1925 May BOEMRE direct me to conduct additional audits? Appendix 1 Instructions on how to fill out Form MMS-131 — Performance Measures Data. 1. On the line titled, "Company Name(s)," enter the name(s) of the operating company(ies) that are the owners of the data that need to be entered on the remainder of • 66 • this form. 2. Directly across from your entry on "Company Names," please enter the name of the Bureau of Ocean Energy Management, Regulation and Enforcement (BOEMRE) Region where your operating company(ies) have worked and generated the data to be entered on the remainder of this form. 3. On the line titled, "Operator Code(s),*" please enter all the known operator codes for the company name or names that you have entered above. 4. Directly across from your entry on "Operator Codes," please enter the Calendar Year the data to be entered on the remainder of the form was generated. 5. On the line titled, "Contact Name," please enter the name of your chosen contact person. This person should be knowledgeable about the data your company has submitted on this form as they will be the first person the BOEMRE contacts should the bureau have any questions about the data you have provided. 6. Directly across from your entry on "Contact Name," please input an active, valid email address for your "Contact Name." 7. Enter an active and valid telephone number on the line titled, "Telephone." This • telephone number should belong to your "Contact Name." 8. Enter an active and valid fax number on the line titled, "Fax." This fax number should be accessible to your "Contact Name." 9. Enter the date this form was submitted to the BOEMRE on the line titled, "Date Submitted." 10. On line A, in the column labeled, "Production Operations," enter the total number of company employee recordable injuries and illnesses accrued in each of the four quarters of the calendar year. Only the total number of recordable injuries and illnesses suffered by operating company employees while they were in engaged in production operations may be entered here. 11. On line A, in the column labeled, "Drilling** Operations," enter the total number of company employee recordable injuries and illnesses accrued in each of the four quarters of the calendar year. Only the total number of recordable injuries and illnesses suffered by operating company employees while they were engaged in drilling operations may be entered here. 12. On line A, in the column labeled, "Construction Operations," enter the total number of company employee recordable injuries and illnesses accrued in each of the four • 67 • quarters of the calendar year. Only the total number of recordable injuries and illnesses suffered by operating company employees while they were engaged in construction operations may be entered here. 13. On line B, in the column labeled, "Production Operations," enter the total number of contract employee recordable injuries and illnesses accrued in each of the four quarters of the calendar year. Only the total number of recordable injuries and illnesses suffered by contract employees while they were engaged in production operations may be entered here. 14. On line B, in the column labeled, "Drilling ** Operations," enter the total number of contract employee recordable injuries and illnesses accrued in each of the four quarters of the calendar year. Only the total number of recordable injuries and illnesses suffered by contract employees while they were engaged in drilling operations may be entered here. 15. On line B, in the column labeled, "Construction Operations," enter the total number of contract employee recordable injuries and illnesses accrued in each of the four quarters of the calendar year. Only the total number of recordable injuries and illnesses suffered by contract employees while they were engaged in construction operations may be entered here. 16. On line C, in the column labeled, "Production Operations," enter the total number of • company employee DART recordable injuries and illnesses accrued in each of the four quarters of the calendar year. Only the total number of DART recordable injuries and illnesses suffered by operating company employees while they were engaged in production operations may be entered here. 17. On line C, in the column labeled, "Drilling** Operations," enter the total number of company employee DART recordable injuries and illnesses accrued in each of the four quarters of the calendar year. Only the total number of DART recordable injuries and illnesses suffered by operating company employees while they were engaged in drilling operations may be entered here. 18. On line C, in the column labeled, "Construction Operations," enter the total number of company employee DART recordable injuries and illnesses accrued in each of the four quarters of the calendar year. Only the total number of DART recordable injuries and illnesses suffered by operating company employees while they were engaged in construction operations may be entered here. 19. On line D, in the column labeled, "Production Operations," enter the total number of contract employee DART recordable injuries and illnesses accrued in each of the four quarters of the calendar year. Only the total number of DART recordable injuries and illnesses suffered by contract employees while they were engaged in production operations may be entered here. • 68 • �c �c 20. On line D, in the column labeled, "Drilling" Operations,ff enter the total number of contract employee DART recordable injuries and illnesses accrued in each of the four quarters of the calendar year. Only the total number of DART recordable injuries and illnesses suffered by contract employees while they were engaged in drilling operations may be entered here. 21. On line D, in the column labeled, "Construction Operations," enter the total number of contract employee DART recordable injuries and illnesses accrued in each of the four quarters of the calendar year. Only the total number of DART recordable injuries and illnesses suffered by contract employees while they were engaged in construction operations may be entered here. 22. On line E, in the column labeled, "Production Operations," enter the total number of hours that operating company employees worked on production operations during each of the four quarters of the calendar year. 23. On line E, in the column labeled, "Drilling" Operations," enter the total number of hours operating company employees worked on drilling operations during each of the four quarters of the calendar year. 24. On line E, in the column labeled, "Construction Operations," enter the total number • of hours that operating company employees worked on construction operations during each of the four quarters of the calendar year. 25. On line F, in the column labeled, "Production Operations," enter the total number of hours that contract employees worked on production operations during each of the four quarters of the calendar year. 26. On line F, in the column labeled, "Drilling" Operations," enter the total number of hours contract employees worked on drilling operations during each of the four quarters of the calendar year. 27. On line F, in the column labeled, "Construction Operations," enter the total number of hours that contract employees worked on construction operations during each of the four quarters of the calendar year. 28. On line G, enter the total number of EPA NPDES non -compliances experienced by the operating company during the calendar year. 29. On line H, for oil spills of less then 1 bbl: a. Count every occurrence of such a spill individually and tally that sum. b. On line 1, enter the total number of oil spills less than 1 bbl that you have tallied. c. For each individual spill, estimate the volume of oil lost. • 69 Od. Sum the estimates for each spill and enter the final amount of oil lost (in bbls) on line 2. is O70 U.S. Department of the Interior OMB Control Number 1010-0186 Bureau of Ocean Energy Management, OMB Approval Expires 10/31/2013 Regulation and Enforcement PERFORMANCE MEASURES DATA Provide Data on an Annual Basis for the Previous Calendar Year by March 31 of Each Year Company Name(s) Operator Code(s)* Contact Name Telephone Fax SAFETY A. No. of Company Employee Recordable Injuries/Illnesses B. No. of Contract Employee Recordable Injuries/Illnesses C. No. of Company Employee DART Injuries/Illnesses*** D. No. of Contract Employee DART Injuries/Illnesses*** BOEMRE Region Calendar Year Email Addres Date PRODUCTION DRILLING** CONSTRUCTION OPERATIONS OPERATIONS OPERATIONS I" Qtr 2nd Qtr 3`d Qtr 4" Qtr 1" Qtr 2nd Qtr 3`d Qtr 4" Qtr 1" Qtr 2nd Qtr 3`d Qtr 4" Qtr Is' Qtr 2nd Qtr 3`d Qtr 4`" Qtr 0 ®OEhIMForm MMS-131 (Oct 2013 Replaces all previous editions that may not be used.) Page 1 of 2 • PRODUCTION DRILLING** CONSTRUCTION SAFETY OPERATIONS OPERATIONS OPERATIONS E. Company Employee I51 Qtr Hours Worked 2nd Qtr 3`d Qtr 4" Qtr F. Contract Employee 1 s` Qtr Hours Worked 2nd Qtr 3" i Qtr 01 Qtr G. No. of EPA NPDES Noncompliances H. For Oil Spills < I bbl • 1. No. of Spills • 2. Total Volume for Spills bbi * Please list all operator codes that these data represent. ** Drilling Operations include Drilling, Workover, and Allied Services. *** Formerly Lost Time Cases that include Days Away from work, Restricted duty, and Transfer situations. Paperwork Reduction Act of 1995 (PRA): The PRA (44 U.S.C. 3501 et s�Mc.) requires us to inform you that BOEMRE collects this information to carry out its responsibilities under the OCS Lands Act, as amended. BOEMRE will use the information to evaluate the effectiveness of industry's continued improvement of safety and environmental management in the OCS. Responses are mandatory. No proprietary data are collected. We estimate the public reporting burden, including the time for reviewing instructions, gathering and maintaining data, and completing and reviewing the information to average 10 hours per response. 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 Office of Management and Budget (OMB) control number. The OMB has approved this collection of information and assigned OMB control number 1010-0186. You may direct comments regarding the burden estimate or any other aspect of this collection of information to the Information Collection Clearance Officer, Mail Stop 5438, Bureau of Ocean Energy Management, Regulation and Enforcement, Department of the Interior, 1849 C Street, NW, Washington, DC 20240. COMPANY -SPECIFIC DATA COLLECTED UNDER THIS REQUEST IS INTENDED FOR GOVERNMENT USE ONLY 00B Form MMS-131 (Oct 2013 Replaces previous editions that may not be used.) Page 2 of 2 72 • After reviewing and discussing the comments, BOEMRE decided to require each offshore operator to develop, implement, maintain, and operate under a SEMS program composed of all elements addressed in API RP 75, Development of a Safety and Environmental Management Program for Offshore Operations and Facilities, Third Edition, May 2004, Reaffirmed May 2008. In addition to the SEMS elements, we clarified hazards analysis and expanded recordkeeping and documentation requirements. We are also requiring operators to conduct a JSA for OCS activities identified in their SEMS program. In § 250.1911, we allow the operator to perform a single hazards analysis for simple and multiple similar facilities. The hazards analysis may apply to all such facilities after verifying that site - specific deviations are addressed in each of the elements of your SEMS program. The • hazards analysis section in API RP 75 addresses the job task at the facility level. Therefore, BOEMRE is requiring JSAs as part of the SEMS program under § 250.1911. • A JSA is used to review site -specific detailed job steps and uncover hazards associated with the specific job undertaken. The JSA defines the requirements for identifying, assessing, and controlling personal risks associated with work activities. Operators must complete a JSA prior to performing any activity identified in their SEMS program. The supervisor of the person in charge of the task must approve the JSA prior to the work commencing. The JSA is performed to identify and evaluate hazards of a job/task for the purpose of hazards control or elimination that is currently not addressed in API RP 75, Section 3, Hazards Analysis element. The decision to require a SEMS program plus the JSA requirements is based on BOEMRE accident panel investigation reports, incident investigation findings, analyses 73 • of INC data, performance reviews with operators, and the fact that existing BOEMRE regulations do not address the SEMS elements as a separate and comprehensive approach. Since existing regulations (30 CFR Part 250) do not address these elements as a separate and comprehensive approach, it is appropriate to require these SEMS elements. BOEMRE's evaluation of safety information included the following: Accident Panel Investigation Reuorts BOEMRE prepares accident panel investigation reports for major accidents. An analysis of 42 accident panel reports from 2000 through 2009 revealed that many fatalities and injuries occurred while performing routine tasks such as drilling, construction, coiled tubing operations, and crane and other lifting events. In addition, most of these accident panel reports' recommendations related 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: http://www.p,omr.BOEMRE.gov/homepgJoffshore/safety/acc repo/accindex.html Contrib ing Causes BOEMRE Hazards Management Operating Mechanical Injury Fatality Report Analysis of Change Procedures Integrity # # BOEMRE 2009- 042 X X X X 1 1 BOEMRE 2009- 028 X X X 1 BOEMRE 2009- 018 X X X 1 BOEMRE 2009- 00E X 1 BOEMRE 2008- 056 X BOEMRE 2008- 054 X BOEMRE 2008- 05E X BOEMRE 2008- X X 74 • • Contrib ting Causes BOEMRE Hazards Management Operating Mechanical Injury Fatality Report Analysis of Change Procedures Integrity # # 038 BOEMRE 2008- 016 X X X 1 BOEMRE 2007- 058 X X X 1 BOEMRE 2007- 045 X X X 1 BOEMRE 2007- 037 X X 1 BOEMRE 2006- 070 X X X I BOEMRE 2006- 058 X X BOEMRE 2006- 04E X X BOEMRE 2006- 039 X BOEMRE 2006- 021 X BOEMRE 2006- 002 X X 1 BOEMRE 2005- 02E X X X BOEMRE 2005- 00E X X BOEMRE 2004- 078 X X X I BOEMRE 2004- 075 X X X BOEMRE 2004- 048 X X BOEMRE 2004- 046 X X X 3 BOEMRE 2004- 010 X BOEMRE 2004- 004 X 1 BOEMRE 2003- 06E X BOEMRE 2003- 046 X BOEMRE 2003- 023 X BOEMRE 2002- 08E X BOEMRE 2002- 07E X X X I BOEMRE 2002- 075 X 1 BOEMRE 2002- 062 X 2 1 1 75 • Contrib ting Causes BOEMRE Hazards Management Operating Mechanical Injury Fatality Report Analysis of Change Procedures Integrity # # BOEMRE 2002- 059 X X 1 1 BOEMRE 2002- 040 X BOEMRE 2001- 084 X X BOEMRE 2001- 045 X X I BOEMRE 2001- 042 X X X 1 BOEMRE 2001- 010 X X 1 BOEMRE 2001- 009 X X BOEMRE 2001- 005 X X BOEMRE 2000- 089 X X I Total 24 1 19 1 23 1 17 1 8 1 19 The table shows that the accidents covered by 20 of the 42 panel reports resulted in a • combined 27 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. a JSA was not 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 and equipment were not maintained according to recommended practices; and 6. workplace hazards were not identified or corrected. Some of these accidents could have been minimized or prevented if the operator had implemented a comprehensive SEMS. ri U 76 0 Incident Analysis BOEMRE also studied 1,930 incidents that occurred in OCS waters from 2001 through 2009 to determine if those events were associated with any of the following 4 SEMS elements: Hazards Analysis, Management of Change, Operating Procedures, and Mechanical Integrity. Although these four elements have been identified by BOEMRE as contributing causes to these events, BOEMRE recognizes the value of the remaining API RP 75 elements as a critical part of a comprehensive safety management program helping to ensure that all elements are addressed completely. The events we reviewed included 44 fatalities, 440 injuries, 19 losses of well control, 23 collisions, 597 fires, 436 pollution events, and 371 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 BOEMRE's hardware -oriented compliance inspections. Additionally, of the incidents • involving injuries, fires, and pollution on production facilities, only 25 were due to failure of a safety device. The majority of the 1,930 incidents had at least 1 of the following 4 elements as a contributing cause for the event occurring: SEMS Element Number of Incidents Hazards Analysis 412 Management of Change 203 Operating Procedures 609 Mechanical Integrity 726 Incidents of Noncompliance (INCs) BOEMRE 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), 77 • • 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). BOEMRE issued 4,284 G-INCs during 2003 - 2009 for drilling and production activities. Of these G-INCs issued, 4,116 (approximately 96 percent) were related to 1 or more of the following 4 SEMS elements: • Hazards Analysis, • Management of Change, • Operating Procedures, and • Mechanical Integrity. The following table summarizes the G—INCs written for drilling and production activities: G-INCs Issued from 2003 -2009 SEMS Elements Drilling Percentage Production Percentage Hazards Analysis 23 20 Management of Change 9 9 Operating Procedures 25 18 Mechanical Integrity 39 49 Unrelated 1 4 4 BOEMRE evaluation of accident panel investigations and reports, incident analysis, and INCs indicates that in most cases, accidents can be traced to human error and/or organizational failures. For example, not following maintenance procedures as outlined in the SEMS program, could lead to the failure of critical equipment, which could lead to an accident. For that reason, it is important for operators to ensure that safe and environmentally sound operating practices are followed. Operations are safer when • management systematically encourages individuals to be safety conscious, provides 78 • adequate resources, fosters safe worksite practices, promotes good housekeeping habits, and assures that workers are properly trained. This final rule will require operators to have their SEMS program audited by an independent third -party or designated and qualified personnel. All auditors must meet the qualifications as discussed in this final rule and the audit must be conducted according to the schedule in API RP 75, Section 12, and deficiencies addressed by the designated auditor. A knowledgeable and experienced independent third -party or designated and qualified personnel will audit an operator's SEMS program to determine the extent the operator is complying with their SEMS program. These audits will be conducted in an office environment and in the field, and could cover both a broad range of activities or be focused on a particular area (i.e. records, gas compressors, blowout • preventers, or documentation), as appropriate. If the auditor determines that a SEMS program does not meet the requirements in this subpart and API RP 75, the operator must submit a report to BOEMRE 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. BOEMRE will verify that corrective actions have been undertaken and that these actions effectively address the audit findings. BOEMRE may, at its discretion, evaluate independent third parties or designated and qualified personnel, meet with operators to periodically review the results of SEMS program audits, and conduct announced or unannounced evaluations to assess SEMS program compliance and effectiveness. The operators will be responsible for all costs 79 • associated with any independent third -party audit of their SEMS program. BOEMRE would be more likely to participate as an observer in the case where the third -party auditor is the same as the contractor who developed the SEMS program. This final rule requires operators to verify that their contractors can perform their assigned duties. The operator is responsible for ensuring that all contractors and subcontractors have safety policies and procedures in place that support the implementation of the SEMS program and align with the principles of managing safety set forth in API RP 75. The operator must inform contractors of any known hazards on the facility that are related to the contractor's work. This applies to contractors performing maintenance or repair, turnaround, major renovation, or specialty work on or adjacent to a covered process • In this final rule, BOEMRE will require the operator to document and keep the last two SEMS audits conducted (onshore or offshore) and make them available to BOEMRE upon request. In addition, the operator must keep documentation and records for 2 years (onshore or offshore) including the following: 1. JSAs (must be kept onsite for 30 days, electronic access onsite to the JSA would be sufficient to comply with this requirement) 2. Management of change provisions 3. Injury /illness log 4. Evaluations completed on contractors These records and documentation must be available to BOEMRE upon request. In this final rule, BOEMRE will require operators to submit Form MMS-131 on an annual basis, broken down quarterly, reporting the previous calendar year's data, by March 31 ". For example, on March 31, 2011, Form MMS-131 must be submitted with • data from calendar year 2010. On March 31, 2012, the data submitted will be from • calendar year 2011. Form MMS-131 includes the number of hours worked by company and contract employees (people on the facility) during production, drilling, pipeline, and construction activities (including adding or removing equipment and/or facility modifications). Submitting this information will allow the BOEMRE to publish incident rate information that is more useful and representative of the industry's safety record. The collected hours worked data will support BOEMRE's Government Performance and Results Act (GPRA), the Program Assessment Rating Tool (PART), and the OCS Performance Measures Program. BOEMRE does not want the SEMS program to be a paperwork exercise conducted solely to meet regulatory requirements. BOEMRE understands that the development and • implementation of this type of program may place an additional burden on some OCS operators, in the short term. A SEMS program that includes all API RP 75 elements will • benefit operators by integrating safety across all aspects of the operating environment. Procedural Matters Regulatory Planning and Review (Executive Order (E.O.) 12866) This final rule is a significant rule, as determined by the Office of Management and Budget (OMB), under Section 3(f)(4) of EO 12866 due to its novel legal and policy issues, and is therefore subject to OMB review. Regulatory Flexibility Act While the final rule will affect a substantial number of small entities, it will 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.). 81 • Small 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 the operators on the OCS are considered small. Therefore, this final rule will affect a substantial number of small entities. This rule will not have a significant economic effect on small operators. Costs related to complying with this regulation are relatively small compared to the costs associated with operating offshore on an annual basis. Assumptions BOEMRE made the following assumptions concerning the costs associated with the • requirements in the final rulemaking: • Because of the wide variation in company size, we grouped operators into three C� classes (High, Moderate, and Low Activity). • We used the results of 13 years of voluntary SEMS Performance Measures reporting by OCS operators and determined that a minimum 70 of the 130 operators are using SEMS. We believe that this number is higher based on previous Annual Performance Review Meetings conducted by the BOEMRE where voluntary SEMS was discussed. • We used actual costs from safety management system vendors for our estimated costs for industry. • We assumed no new capital costs will be incurred for the estimated 70 operators who are currently using SEMS to comply with this final rule, as their systems are already M. • developed and funds they expend to manage and implement this program should not change significantly. However, we calculated additional costs for compliance with JSAs, documentation, maintenance, and recordkeeping requirements. • 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 is the most common approach used by operators. • The cost for auditing a SEMS program is part of the entire program, per API RP 75, as audits are an integrated part of maintenance of all elements combined, and the time involved can not be easily separated out. • Many smaller operators can use a template from a safety management system vendor that will meet their needs for compliance with the final regulation. In most cases, • the operators will not need to spend additional money to customize a template for their use. is) High, Moderate, and Low Activity Definitions Oil and gas operators in the OCS vary substantially in size and the degree to which they are engaged in extracting oil from the OCS. The scale of operations for the 130 OCS oil and gas operators ranges from as little as 1 complex to nearly 500 facilities; and from as little as 15,000 barrels of oil equivalent (BOE) annual production to more than 300 Million (MM) BOE annual production. Because of this variation in activity, BOEMRE divides operators into high, moderate, and low activity for measuring performance. We used these size categories to estimate costs associated with developing, managing, and fulfilling reporting requirements for the final SEMS rule. BOEMRE uses the following criteria for categorizing operators: 83 • • Hi h Activity Moderate Activity Low Activity Annual >= 10 MMBOE 1 MMBOE < 10 MMBOE < 1 MMBOE Production In-service >= 1,000 components 100 < 1,000 components < 100 components components Development of SEMS Program After reviewing the voluntary SEMS submissions received from 1996-2009 (OCS Performance Measures Data, Form MMS-131), an average of 70 of 130 operators, or 54 percent, reported having a SEMS-type program in -place. The other 60 operators, or 46 percent, 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): Activity No. of No. of No. of Total No. of Percent of Category operators operators operators with operators by operators with without SEMS with SEMS partial SEMS activity SEMS High 0 13 0 13 100 Activity Operators Moderate 12 29 10 41 71 Activity Operators Low 48 28 12 76 37 Activity Operators Total 60 70 22 130 54 As shown in the table, 54 percent of all OCS operators have a comprehensive and/or partial SEMS program in place. A partial SEMS includes the following elements; Hazard Analysis, Management of Change, Mechanical Integrity, Operating Procedures, Training, Safe Work Practices. At a September 2009 SEMS workshop held in New Orleans, Louisiana, BOEMRE was informed that moderate and low activity operators are 0 implementing a partial SEMS consisting of six elements previously discussed. They will ME • need to address the other seven elements in order to be in compliance with the final rule. All high activity operators, over 70 percent of the moderate activity operators, and almost 40 percent of the low activity operators are using a SEMS program. Based on information received from consultants and vendors, 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 its use, the cost will be an additional $10,000. As mentioned in the assumptions, it will not be necessary for many operators to spend the additional $10,000 to customize a SEMS program. If the 60 operators without a SEMS program decide to buy a SEMS template, the cost will be $150,000 ($2,500 x 60). If all 60 operators needed to modify the generic plan templates for their specific OCS operations, which is unlikely, it will cost an additional • $600,000 ($10,000 x 60). The total cost for all 60 operators to buy a template and then modify the template to their philosophy, is estimated to be $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: Activity Category Average No. of Components per Complex Average No. of Complexes High 21 139 Moderate 15 29 Low 16 6 We describe the costs for the 60 operators in the moderate and low activity categories that will have to implement a SEMS Program, and all of the costs for the high, moderate, . and low activity categories to maintain their SEMS. 85 0 High Activity Operators • • BOEMRE determined, based on Annual Performance Reviews and voluntary submissions of Form MMS-131, that all high activity operators already have a SEMS program in place. Maintenance Costs for a High Activity Operator The estimated average cost for each high activity operator to maintain their SEMS program is approximately $1,670,000 a year. The estimated cost for all 13 high activity operators to maintain their SEMS program is $21,710,000 per year. General $ 50,000 Safety and Environmental $ 75,000 Hazards analysis $ 300,000 Management of Change $ 150,000 Operating Procedures $ 100,000 Safe Work Practices $ 125,000 Training $ 200,000 Mechanical Integrity $ 225,000 Pre -Startup $ 125,000 Emergency Response and Control $ 175,000 Investigation of Incidents $ 95,000 Audits* $ 20,000 Records and Documentation 30,000 Total $1,670,000 * audits are conducted every 3 years at an estimated cost of $60,000 per audit ($60,000 / 3 = $20,000 per year) Moderate Activity Operators BOEMRE calculated the cost for a moderate activity operator to implement and manage a SEMS program based on the 13 SEMS elements, as follows: Implementation Costs for a Moderate Activity Ouerator Element Basis Estimated cost General The General section includes $ l 8,000 per year (includes the implementation, planning and year to implement SEMS). This management review and approval of the also includes data collection, SEMS Program. analysis, report development, and cost of meetings. Safety and This section outlines the minimum safety $22,000 per year (includes the I Environmental and environmental information needed year to implement SEMS). This :• O Element Basis Estimated cost Information for any facility, such as design data on also includes data collection, facility process (e.g., flow diagrams) and evaluation, and documentation mechanical components (e.g., piping and update of the design data on the instrument diagrams). The information facility process and mechanical is used to perform a hazards analysis. components. Hazards Analysis Operators will need a facility risk $102,000 per year (includes the assessment for each facility. After the year to implement SEMS). This initial facility risk assessments are also includes annual updates. prepared, the cost will be less because a hazards analysis is required only for changes in the process or the equipment on a facility. The JSA at the task level includes data collection, analysis, and report development. This cost is included in the hazards analysis. Management of The cost is based on one change request $30,000 per year (includes the Change (MOC) per month, but it is also dependent on the year to implement SEMS). This complexity of the change — something also includes MOC data minor will not cost as much as collection, evaluation, and something more complex. The MOC documentation update. cost is determined by the physical state of the facilities, the status of technology, and the turnover of personnel. Operating An operator will need to evaluate the $20,000 per year (includes the Procedures operating procedures of its facility each year to implement SEMS). This year. The operating procedure cost is also includes data collection, determined by the maintenance of such evaluation, documentation update, procedures. For most operators, no and recordkeeping. formal evaluation is necessary since changes will be identified through the JSA process and managed through the MOC process. Safe Work Practices An operator will need to evaluate its safe $28,000 per year (includes the work practices each year to minimize year to implement SEMS). This safety and environmental risks also includes data collection, associated with operations. Safe work evaluation, inspection report practices should address all personnel. development, and inspection plan update. Training An operator will need to develop $30,000 per year (includes the provisions for ensuring that its year to implement SEMS). This employees and their supervisors are also includes job description taught how to conduct operations safely, review, training program to recognize unsafe methods of development, and tracking of operations, and to identify potential training and maintenance of environmental and safety hazards. training records. The cost of training is not included in this assessment, only the cost of managing the program. Well control and production safety training is implemented following the enforcement of subpart O. Mechanical Integrity Based on the assumption that mechanical $40,000 per year (includes the integrity is achieved through preventive year to implement SEMS). This maintenance. The preventive includes the qualityassurance 0 • 0 Element Basis Estimated cost maintenance program is defined prior to inspection plan, evaluation of the commissioning of the facility. We schedule appropriateness, did not include the cost of maintenance communication of maintenance in this assessment, only the cost of program, salaries, maintenance managing the program. and inspection reports, and Pre -startup Review An operator will need to include provisions to verify that the facility will function according to design, that personnel have been properly trained, and that safe work practices are in place. Emergency Response and Control Investigation of Incidents Audits Records and Documentation An operator will need to include provisions to require that all emergency response and control plans be in place and ready for immediate implementation. Specific types of plans include, but are not limited to, emergency evacuation and oil spill contingency plans. An operator will need to include procedures for investigating all incidents with serious or potentially serious safety and environmental consequences. The operators are required to have an independent third -party or designated and qualified personnel audit of their SEMS program to determine if the program elements were properly implemented and maintained. The operators are required to have documentation that describes the 13 elements of their SEMS program and the interaction between the elements. $25,000 per year (includes the year to implement SEMS). This includes the pre -startup risk register per facility, pre -startup review checklists per facility, records of pre -startup reviews conducted, and evaluation of pre- $30,000 per year (includes the year to implement SEMS). This includes initial identification of risks and possible emergencies, development of response requirements and comparison to existing plans, ensuring that drills are performed as planned, and manually tracking and evaluating risk changes. Costs of emergency response and drills are not included in the assessment, only the cost of managing the $20,000 per year (includes the year to implement SEMS). This includes incident and near miss registers, collecting data, analyzing, developing, and presentation of reports. Only the cost of preventative measures such as near miss tracking is included in the evaluation. $12,000 every 3 years or $4,000 per year $6,000 per year, based on the requirements of § 250.1928 and API RP 75, Section 13. The estimated cost for one moderate activity operator to implement SEMS is $375,000. The estimated cost for the 12 moderate activity operators to implement SEMS is $4,500,000 ($375,000 x 12 operators). The itemized cost is: • Implementation Costs for a Moderate Activity Operator General $ 18,000 Safety and Environmental $ 22,000 Hazards analysis $102,000 Management of Change $ 30,000 Operating Procedures $ 20,000 Safe Work Practices $ 28,000 Training $ 30,000 Mechanical Integrity $ 40,000 Pre -Startup $ 25,000 Emergency Response and Control $ 30,000 Investigation of Incidents $ 20,000 Audits $ 4,000 Records and Documentation $ 6,000 Total $375,000 Implementation Costs for a Moderate Activity Operator (Partial SEMS) The estimated cost for one moderate activity operator with a partial SEMS to implement • a comprehensive SEMS is $124,000. The estimated cost for the 10 moderate activity operators to implement SEMS is $1,240,000 ($124,000 x 10 operators). The itemized cost is: General $ 18,000 Safety and Environmental $ 22,000 Hazards analysis $ 0 Management of Change $ 0 Operating Procedures $ 0 Safe Work Practices $ 0 Training $ 0 Mechanical Integrity $ 0 Pre -Startup $ 25,000 Emergency Response and Control $ 30,000 Investigation of Incidents $ 20,000 Audits $ 3,000 Records and Documentation $ 6,000 Total $124,000 is Maintenance Costs for a Moderate Activity Operator NZ • The estimated average cost for each moderate activity operator to maintain their • • SEMS program is approximately $223,000 a year. The estimated cost for the 41 moderate activity operators to maintain their SEMS program is $9,143,000 ($223,000 x 41). General $ 3,000 Safety and Environmental $ 12,000 Hazards analysis $ 34,000 Management of Change $ 21,000 Operating Procedures $ 17,000 Safe Work Practices $ 17,000 Training $ 25,000 Mechanical Integrity $ 27,000 Pre -Startup $ 16,000 Emergency Response and Control $ 24,000 Investigation of Incidents $ 17,000 Audits* $ 4,000 Records and Documentation $ 6,000 Total $223,000 *Audits are conducted every 3 years at an estimated cost of $12,000 per audit ($12,000 / 3 years = $4,000 per year). Low Activity Operators BOEMRE calculated the cost for a low activity operator to implement and manage a SEMS program based on the 13 SEMS elements, as follows: Implementation Costs for a Low Activity Operator Element Basis Estimated cost General The General section entails $5,000 per year (includes the year implementation, planning and to implement SEMS). This also management review and approval of the includes data collection, analysis, SEMS. report development, and cost of meetings. Safety and This section outlines the minimum safety $8,000 per year (includes the year Environmental and environmental information needed to implement SEMS). This also Information for any facility, such as design data on includes data collection, facility process (e.g., flow diagrams) and evaluation, and documentation mechanical components (e.g., piping and update of the design data on the instrument diagrams). The information facility process and mechanical is used to perform a hazards anal sis. com onents. Hazards Analysis Operators will need to do a facility risk $25,000 per year (includes the assessment for each facility when the year to implement SEMS). This rule is implemented. After the initial also includes annual updates. •ll C� Management of Change (MOC) Operating Procedures Safe Work Practices • Training Mechanical Integrity Pre -startup Review • facility risk assessments are prepared, the cost will be less because a hazards analysis is required only for changes in the process or the equipment on a facility. The job safety analysis at the task level includes data collection, analysis, and report development. This cost is included in the hazards analysis. Based on one change request per month but the cost is dependent on the complexity of the change. The MOC cost is determined by the physical state of the facilities, the status of technology, and the turnover of personnel. An operator will need to evaluate the operating procedures of their facility each year. The operating procedure cost is determined by the maintenance of such procedures. For most operators, no formal evaluation is necessary since changes will be identified through the JSA process and managed through the MOC process. An operator will need to evaluate the safe work practices each year to minimize safety and environmental risks associated with operations. Safe work practices should address all personnel. An operator will need to develop provisions for ensuring that their employees and their supervisors be taught how to conduct operations safely, to recognize unsafe methods of operations, and to identify potential environmental and safety hazards. This 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. We did not include the cost of maintenance in this assessment, only the cost of managing the program. An operator will need to include provisions to verify that the facility will function according to design, that personnel have been properly trained and that safe work practices are in place. 91 $20,000 per year (includes the year to implement SEMS). This also includes MOC data collection, evaluation, and documentation update. $10,000 per year (includes the year to implement SEMS). This also includes data collection, evaluation, documentation update, and recordkeeping. $12,000 per year (includes the year to implement SEMS). This also includes data collection, evaluation, and an inspection report development and $14,000 per year (includes the year to implement SEMS). This also includes job description review, training program development, and tracking of training and maintenance of training records. The cost of training is not included in this assessment only the cost of managing the program. Training is well implemented following the enforcement of subpart O. $20,000 per year (includes the year to implement SEMS). This includes the quality assurance inspection plan, evaluation of schedule appropriateness, communication of maintenance program, salaries, maintenance and inspection reports, and $8,000 per year (includes the year to implement SEMS). This includes the pre -startup risk register per facility, pre -startup review checklists per facility, records of pre -startup reviews • �1 I conducted and evaluation of pre - startup procedures Emergency Response An operator will need to include S 15,000 per year (includes the and Control provisions to require that all emergency year to implement SEMS). This response and control plans be in place includes initial identification of and ready for immediate risks and possible emergencies, implementation. development of response Specific types of plan include, but are requirements and comparison to not limited to, emergency evacuation existing plans, ensuring that drills and oil spill contingency plans. are performed as planned, and tracking and evaluating risk changes. Costs of emergency response and drills are not included in the assessment, only the cost of managing the procedures Investigation of An operator will need to include $10,000 per year (includes the Incidents procedures for investigating all incidents year to implement SEMS). This with serious or potentially serious safety includes incident and near miss and environmental consequences. registers, collecting data, analyzing, and developing and presentation of reports. Only the cost of preventative measures such as near miss tracking is included in the evaluation. Audits The operators are required to have an $9,000 every 3 years or $3,000 independent third -party audit or their per year. designated and qualified personnel of their SEMS program to determine if the program elements were properly implemented and maintained. Records and The operators are required to have $4,000 per year, based on the Documentation documentation that describes the 13 requirements of § 250.1928 and elements of their SEMS program and the API RP 75, Section 13. interaction between the elements. The estimated cost for a low activity operator to implement SEMS is $154,000. The cost for the 48 low activity operators to implement SEMS is $7,392,000 ($154,000 x 48 operators). The itemized cost to implement SEMS for a low activity operator is: Implementation Costs for a Low Activity Operator General $ 5,000 Safety and Environmental $ 8,000 Hazards analysis $ 25,000 Management of Change $ 20,000 Operating Procedures $ 10,000 Safe Work Practices $ 12,000 Training $ 14,000 Mechanical Integrity $ 20,000 92 • • • Pre -Startup $ 8,000 Emergency Response and Control $ 15,000 Investigation of Incidents $ 10,000 Audits $ 3,000 Records and Documentation $ 4,000 Total $ 154,000 Implementation Costs for a Low Activity Operator (Partial SEMS) The estimated cost for one low activity operator with a partial SEMS to implement a comprehensive SEMS is $636,000. The estimated cost for the 12 low activity operators to implement SEMS is $636,000 ($53,000 x 12 operators). The itemized cost is: General $ 5,000 Safety and Environmental $ 8,000 Hazards analysis $ 0 Management of Change $ 0 Operating Procedures $ 0 Safe Work Practices $ 0 Training $ 0 Mechanical Integrity $ 0 Pre -Startup $ 8,000 Emergency Response and Control $ 15,000 Investigation of Incidents $ 10,000 Audits $ 3,000 Records and Documentation $ 4,000 Total $ 53,000 Maintenance Cost for a Low Activity Operator The estimated cost for each low activity operator to maintain their SEMS program is approximately $77,000 a year. The cost for the 76 low activity operators to maintain SEMS is $5,852,000. General $ 2,000 Safety and Environmental $ 3,000 Hazards analysis $14,000 Management of Change $ 7,000 Operating Procedures $ 4,000 93 • Safe Work Practices $ 5,000 Training $ 9,000 Mechanical Integrity $11,000 Pre -Startup $ 5,000 Emergency Response and Control $ 7,000 Investigation of Incidents $ 3,000 Audits* $ 3,000 Records and Documentation 4,000 Total $77,000 *Audits are conducted every 3 years at an estimated cost of $9.000 per audit ($9,000 / 3 years = $3,000 per year). Burden Cost to Submit to BOEMRE The following are the estimated costs for complying with the submissions to BOEMRE and associated recordkeeping. The burden hours that these costs are based on are addressed in the Paperwork Reduction Act section. • All JSAs conducted will require a supervisor and/or third -party approval, which will cost $4,233,050 each year. • • Operators must demonstrate and explain, if required, the policies and procedures included in your SEMS, which will cost $4,272 each year. • Make available to BOEMRE evaluations documentation and supporting information, which will cost $23,140 each year. • On an annual basis, operators must submit Form MMS-131 (Performance Measures Data) to BOEMRE and maintain a contractor employee injury/illness log in the operation area, which will cost approximately $115,700. • Operators must notify the BOEMRE when an operator plans to conduct an audit of its SEMS program in order for BOEMRE to have the opportunity to participate or observe, must submit plans, submit audit reports documenting all findings/conclusions/deficiencies, which will cost approximately $19,135 each year. 94 • • Recordkeeping and documentation requirements will cost $57,850 each year. The total cost for required paperwork being submitted to BOEMRE will be approximately $4,443,147. Summary of Annual Costs to Implement and Maintain SEMS The total cost to implement and maintain SEMS is approximately $92,910,811. A summary of all the costs are shown in the following table: SEMS Implementation Costs IMPLEMENTATION of your SEMS Cost* Buy/develop and implement SEMS Plan for operators without a SEMS (60 $ 750,000 operators) _ Implementation cost High activity operator cost (already implemented) $ - 0 - Moderate activity operator cost ($375,000 x 12) $ 4,500,000 Moderate activity operator cost ($124,000 x 10 operators) (Partial SEMS) $ 1,243,000 Low activity operator cost ($154,000 x 48) $ 7,392,000 Low activity operator cost ($53,000 x 12) (Partial SEMS) $ 636,000 TOTAL FIRST YEAR COST $14,521,000 • MAINTENANCE of your SEMS Maintain SEMS (Annual Cost after Implementation) High activity operator cost ($1,670,000 x 13) $21,710,000 Moderate activity operator cost ($223,000 x 41) $ 9,143,000 Low activity operator cost ($77,000 x 76) $ 5,852,000 **Conduct required independent third -party audits $ 291,000 Paperwork Burden required by BOEMRE (annual cost) $41,393,811 TOTAL ANNUAL COSTS AFTER IMPLEMENTATION $78,389,811 *rounded to the nearest $1,000 **Required independent audits — approximately 20 percent per operator per category: 3 required audits for high operator ($20,000 per audit x 3 audits = $60,000); 8 required audits for moderate operator ($12,000 per audit x 8 audits = $96,000; and 15 required audits for low operator ($9,000 per audit per 15 audits = $135,000) = 26 required audits per year at a total yearly combined cost of $291,000. Benefits of SEMS The ultimate goal of SEMS is to promote safety and environmental protection during OCS activities. The protection of human life and the environment are the top priorities and objectives of this rule. While it is difficult to provide absolute quantification of the • benefits of the lives saved and risks avoided due to this regulation, the BOEMRE 95 Sbelieves that implementation of a comprehensive SEMS program will avoid accidents that could result in injuries, fatalities, and serious environmental damage based upon BOEMRE's incident analysis. In addition, an increase in a system's level of safety leads to reduced material losses and enhanced productivity. Some additional benefits include: • 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. Repair costs, damage claims, increased insurance premiums, and civil penalties are a few of the potential economic consequences of an accidental mishap. • Establishing a marketable safety record. A record of consistently safe operations • can attract new business and investment. • Improved employee morale and productivity. Promoting communication between management and the rest of the organization prevents disenfranchisement and lifts morale. Again, while it is difficult to quantify with any degree of certainty the human safety and environmental benefits of a comprehensive SEMS program, 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 0 • 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 BOEMRE believes that requiring a comprehensive SEMS program, that includes all 13 elements, will reduce the likelihood of the types of accidents and incidents discussed in the preamble and will raise the safety awareness of all personnel in the office and field. The requirement for SEMS will not have a significant economic effect on a substantial number of small entities. Based on voluntary participation in the SEMS program and annual performance reviews, the BOEMRE estimates that over 40 percent of the small entities currently operating on the OCS have implemented some form of a SEMS program. These small entities (28 low activity and 29 moderate activity operators) • implemented SEMS because it improved the efficiency and safety of their OCS operations. The cost for each of the remaining small entities to implement C, (approximately $154,000) and maintain (approximately $77,000) SEMS is very small compared to the average annual revenues these entities will generate ($28,000,000) from the production of oil and gas. BOEMRE 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 ($40). These costs should be less for operators that have already addressed this type of information. Therefore, this rulemaking will 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 97 • Ombudsman will annually evaluate the enforcement activities and rate each agency's responsiveness to small businesses. If you wish to comment on the actions of BOEMRE, call 1-888-734-3247. You may comment to the Small Business Administration without fear of retaliation. Allegations of discrimination/retaliation filed with the Small Business Administration will be investigated for appropriate action. Small Business Regulatory Enforcement Fairness Act Subtitle E — Congressional Review This final rule is not a major rule under the Small Business Regulatory Enforcement Fairness Act (5 U.S.C. 801 et seq., also known as the Congressional Review Act). This final rule: a. Will not have an annual effect on the economy of $100 million or more. • b. Will not cause a major increase in costs or prices for consumers, individual industries, Federal, State, or local government agencies, or geographic regions. c. Will 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. The requirements will apply to all entities operating on the OCS. Unfunded Mandates Reform Act of 1995 This final rule will not impose an unfunded mandate on State, local, or tribal governments or the private sector of more than $100 million per year, adjusted for inflation. This final rule will 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 final rule does not have significant takings implications. The final 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 final rule does not have federalism implications. This final rule will 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 final rule will 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 final rule and determined that it has no substantial effects on federally recognized Indian tribes. Paperwork Reduction Act (PRA) This rule contains a collection of information that was submitted to the OMB for review and approval under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 et sec..). The title of the information collection (IC) for this rule is 30 CFR Part 250, 1�1 • Subpart S, Safety and Environmental Management Systems for Outer Continental Shelf Oil and Gas and Sulphur Operations. The OMB approved the collection under Control Number 1010-0186, expiration date 10/31/2013, 465,099 hours, $12,933,000 non -hour cost burdens. Respondents primarily are an estimated 130 Federal OCS oil, gas, and sulphur lessees and/or operators or other independent third parties. The frequency of response varies, but is primarily annual. Responses to this IC are mandatory. This rulemaking adds a new subpart to the 30 CFR Part 250 regulations. BOEMRE 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. is BOEMRE 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. Section 250.198 lists all of the 30 CFR Part 250 incorporated documents. The section is revised to include the new 30 CFR Part 250, subpart S, incorporated document added under this regulation. As stated in the preamble, we received 61 comments, of which 99 percent made some mention of the IC burden. Generally, these commenters said that the IC requirements were too burdensome and that the rule was too prescriptive and should follow API RP 75. BOEMRE is incorporating by reference API RP 75 to replace virtually all of the requirements in the proposed rule. The incorporation of this document allows the • • operators to address the diversity of operations while developing their SEMS program. Also, all the commenter's remarked that the burden hour estimates were too low; therefore, we increased the burdens to reflect this concern. In response to the comments, BOEMRE has included new a IC requirement in the final rule, adjusted hour burdens, and non -hour cost burdens as follows: a. In §§ 250.1900-250.1929 under Operator Activity in the proposed rule, the burden hours were increased. 1. High Activity operator burden is increased from the proposed rule due to incorporating API RP 75 in its entirety, which will increase the hour burden (+217,204 hours). 2. Moderate Activity operator burden is increased from the proposed rule due to • incorporating API RP 75 in its entirety, which will increase the hour burden and non -hour costs (+64,042 hours; $2,580,000). .3. Low Activity operator burden is increased from the proposed rule due to incorporating API RP 75 in its entirety, which will increase the hour burden and non -hour costs (+44,384 hours; $5,472,000). b. In § 250.1911(b), the designated person in charge of the activity, must have approval to conduct a JSA. This requirement will help determine that all physical requirements, environmental conditions, personal protective equipment, and safety factors relating to a specific job or task have been identified properly (+47,450 hours). c. In § 250.1914(d), a contractor employee injury/illness log must be kept in the operation area. This requirement is needed to assist in filling out Form MMS-131; therefore, we consider this burden as part of the form burden. (Current OMB approved 101 • burden per form is 8 hours; this rulemaking increases the burden per form by an • • additional 2 hours per form (+260 hours) d. In § 250.1924(b), BOEMRE has added necessary requirements pertaining to verification of the accuracy of industry's SEMS documentation (+260 burden hours). e. In § 250.1925(a) there is a new non -hour cost burden that will require an operator to pay for all costs associated with an BOEMRE directed audit. This cost is based on a potential of 26 BOEMRE directed audits a year (+$291,000). f. For clarity purposes, we placed the majority of all the recordkeeping and documentation requirements in one regulatory requirement, § 250.1928. This will help respondents determine their requirements at a glance (+650 hours). The following table provides a breakdown of the burdens. Citation Average Annual 30 CFR Hour No. of Burden 250 Reporting and Recordkeeping Burden Annual Hours subpart Requirement Responses Non -Hour Cost Burdens S 1900-1929 High Activity Operator: Have a SEMS program, 18,708 13 243,204 and maintain all documentation and records operators. pertaining to your SEMS program, according to API RP 75 in its entirety. Make your SEMS available to BOEMRE upon request. As part of your SEMS, you must also develop and implement written JSAs for each OCS activity identified or discussed in your SEMS. NOTE: Based on previous information, High Activity Operators already have a SEMS in place. 1900-1929 Moderate Activity Operator: Have a SEMS 2,528 41 103,648 program, and maintain all documentation and operators. records pertaining to your SEMS program, according to API RP 75 in its entirety. Make your SEMS available to BOEMRE upon request. As part of your SEMS, you must also develop and implement written JSAs for each OCS activity identified or discussed in your SEMS. Moderate Activity Operator Implementation. $375,000 per moderate activity (One time cost to implement SEMS). implementation x 12 operators = $4,500,000. 1900-1929 Low Activity Operator: Have a SEMS program, 899 76 68,324 and maintain all documentation and records operators. 102 • • Citation Average Annual 30 CFR Hour No. of Burden 250 Reporting and Recordkeeping Burden Annual Hours subpart Requirement Responses Non -Hour Cost Burdens S pertaining to your SEMS program, according to API RP 75 in its entirety. Make your SEMS available to BOEMRE upon request. As part of 11 your SEMS, you must also develop and implement written JSAs for each OCS activity identified or discussed in your SEMS. Low Activity Operator Implementation. (One $154,000 per low activity time cost to implement SEMS). implementation x 48 operators = $7,392,000. 1900 Develop and implement a SEMS program (One $2,500 per implementation x 60 time implementation cost of SEMS template). operators = $150,000. 1900 In-house modification (one time implementation $10,000 per implementation x 60 cost) of the generic SEMS program to meet needs operators = $600,000. of specific company. 191 l(b) Supervisor approval to conduct a JSA. 10 mins. 130 47,450 operators x 365 days x 6=284,700* 1900(b); Submit Form MMS-131. Maintain a contractor 10 130 1,300 1914(d); employee injury/illness log in the operation area, operators. 1928(d), retain for 2 years, and make available to (e); 1929 BOEMRE upon request (this requirement is included in the form burden). Inform contractors of hazards. 1920 Notify BOEMRE with audit schedule 30 days 1 130 43 prior to conducting your audit. operators (rounded) /once every 3 years = 43 1920(c); Submit to BOEMRE after completed audit, report 3 44 operators 132 1925(a), of findings and conclusions, including deficiencies (c) and required supporting information/documentation. 1920(d) Submit a copy of your plan that will address 4 10 40 deficiencies identified in audit, including a submissions. correction schedule with appropriate supporting information. 1924(b); Make available to BOEMRE upon request, 2 130 260 evaluation documentation and supporting operators information relating to your SEMS. 1924(c) Explain and demonstrate your SEMS during site 8 6 48 visit if required; provide evidence supporting your explanations SEMS implementation. 1925(a) Pay for all costs associated with BOEMRE 26 BOEMRE directed audits — for a directed audit approximately 20 percent per total of = $291,000 operator per category: 3 required audits for high operator ($20,000 per audit x 3 audits = $60,000); 8 required audits for moderate operator ($12,000 per audit x 8 audits = $96,000; and 15 required audits for low operator ($9,000 per audit per 15 audits = $135,000) = 26 required audits per year at 103 • Citation Average Annual 30 CFR Hour No. of Burden 250 Reporting and Recordkeeping Burden Annual Hours subpart Requirement Responses Non -Hour Cost Burdens S a total yearly combined cost of $291,000. 1928 (1) Document and keep all SEMS audits for 6 5 130 650 years (at least 2 full audit cycles) at an onshore operators. location, and make available to BOEMRE upon request. (2) JSAs must have documented results in writing and kept onsite for 30 days; retain records for 2 years and make available upon request to BOEMRE. (3) All MOC records (API RP Sec 4) must be documented, dated, and retained for 2 years and make available to BOEMRE upon request. 285,469 465,099 Responses Hours TOTAL BURDEN $12,933,000 Non - Hour Cost Burdens * We calculated operators conducting six JSAs a day (3 JSAs for each 12 hour shift). Some contractors may perform none for a particular day, whereas others may conduct more than six per day. This estimate is an average. An agency may not conduct or sponsor, and you are not required to respond to, a • collection of information unless it displays a currently valid OMB control number. The public may comment, at any time, on the accuracy of the IC burden in this rule and may submit any comments to the Department of the Interior; Bureau of Ocean Energy Management, Regulation and Enforcement; Attention: Regulations and Standards Branch; Mail Stop 4024; 381 Elden Street; Herndon, Virginia 20170-4817. National Environmental Policy Act of 1969 This rule does not constitute a major Federal action significantly affecting the quality of the human environment. BOEMRE has analyzed this final rule under the criteria of the National Environmental Policy Act and 516 Departmental Manual 15. This final rule meets the criteria set forth in 43 CFR 46.210 for a Departmental "Categorical Exclusion" in that this rule is "... of an administrative, financial, legal, technical, or procedural • nature..." This rule also meets the criteria set forth in 516 Departmental Manual M • 15.4(C)(1) for a BOEMRE "Categorical Exclusion" in that its impacts are limited to administrative, economic or technological effects. Further, the BOEMRE has analyzed this rule to determine if it meets any of the extraordinary circumstances that will require an environmental assessment or an environmental impact statement as set forth in 43 CFR 46.215. Each section and subsection has also been reviewed to ensure that no potentially relevant extraordinary circumstances apply to the proposed action that would warrant the preparation of an environmental assessment or environmental impact statement. All extraordinary circumstances were considered in accordance with 43 CFR 46.215, but only the following ones are potentially applicable: a. Have significant impacts on public health or safety. e. Establish a precedent for future action or represent a decision in principle about • future actions with potentially significant environmental effects. P Y Tm • f. Have a direct relationship to other actions with individually insignificant but cumulatively significant environmental effects. The first extraordinary circumstance does not apply since rule promulgation will not contribute to any significant and adverse impacts on public health and safety. The SEMS program is likely to improve OCS safety, given the available incident data trends and associated 10 years of analysis. The second extraordinary circumstance does not apply since the promulgation of the rule or the eventual implementation of SEMS by operators does not set precedent for future actions or decisions by BOEMRE. The last extraordinary circumstance does not apply since there is no direct relationship between 105 this rulemaking and other actions that could together contribute to cumulatively significant effects. Most subsections of the rule address strictly administrative, technical, and/or procedural matters. Specific examples include definitions of terminology, scope and timing of documentation, recordkeeping, and transfer of information, and general descriptions of what is to be included in written procedures. The rule does not create the potential for environmental effects as a result of new technologies, technology configurations, or technological procedures as such measures are not part of the rule. For aspects of the rule dealing with mechanical integrity and inspections, the requirements are procedural and technical as the rule covers the content of the written procedures. While the rule identifies the requirement, it allows the operator to choose the means to • accomplish the end as long as it is consistent with the SEMS requirements. Other subsections require activities in addition to administrative tasks, advance planning and procedural documentation, such as training and emergency response drills and corrective procedural actions that address human errors identified in investigations. These requirements are also considered procedural in nature since the subsections describe general and ordered steps that operators must undertake to have and maintain a compliant SEMS program. Subsections that require training or drilling of personnel are procedural in that they target the cognitive skills and knowledge of personnel (e.g., 250.1915(b)) and/or clarify the purpose and/or scope of training (e.g., 250.1918(c)). For example, in 30 CFR 250.1918, BOEMRE requires training and drills for personnel to exercise elements in the Emergency Action Plan that focus on response, control, and 106 0 evacuation procedures and reporting. The principal purpose of this is to ensure retention of and refine the skills, knowledge, and abilities of personnel. BOEMRE concluded that this rule does not meet any of the criteria for extraordinary circumstances as set forth in 43 CFR 46.215. 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 § 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. • List of Subjects in 30 CFR Part 250 Administrative practice and procedure, Continental shelf, Environmental protection, LJ Incorporation by reference, Public Lands --mineral resources, Reporting and recordkeeping requirements. Dated: October 1, 2010. Wilma A. Lewis, Assistant Secretary — Land and Minerals Management. 11112A ® For the reasons stated in the preamble, Bureau of Ocean Energy Management, Regulation and Enforcement (BOEMRE) is amending 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. Amend § 250.198 by adding new paragraph (h)(80) to read as follows: § 250.198 Documents Incorporated by Reference. (h) * * * (80) API RP 75, Recommended Practice for Development of a Safety and • Environmental Management Program for Offshore Operations and Facilities, Third Edition, May 2004, Reaffirmed May 2008, Product No. G07503; incorporated by reference at § 250.1900, § 250.1900(c), § 250.1902(c), § 250.1903, § 250.1909, • § 250.1920(a) and (b). * * * * * 3. Revise § 250.199(e)(17) to read as follows: § 250.199 Paperwork Reduction Act statements —information collection. (e) * 30 CFR subpart, title and/or BOEMRE Reasons for collecting information and Form OMB Control No.) how used (17) Subpart S, Safety and The SEMS program will describe Environmental Management Systems management commitment to safety and the (1010-0186), including Form MMS-131, environment, as well as policies and 1S • C7 rI Performance Measures Data. procedures to assure safety and environmental protection while conducting OCS operations (including those operations conducted by contractor and subcontractor personnel). The information collected is the form to gathers the raw Performance Measures Data relating to risk and number of accidents, injuries, and oils ills during OCS activities. 4. Add new subpart S to read as follows: Subpart S—Safety and Environmental Management Systems (SEMS) Sec. 250.1900 Must I have a SEMS program? 250.1901 What is the goal of my SEMS program? 250.1902 What must I include in my SEMS program? 250.1903 Definitions. 250.1904 Documents incorporated by reference 250.1905 through 250.1908 [RESERVED] 250.1909 What is management's general responsibilities for the SEMS program? 250.1910 What safety and environmental information is required? 250.1911 What criteria for hazards analyses must my SEMS program meet? 250.1912 What criteria for management of change must my SEMS program meet? 250.1913 What criteria for operating procedures must my SEMS program meet? 250.1914 What criteria must be documented in my SEMS program for safe work practices and contractor selection? 250.1915 What criteria for training must be in my SEMS program? 250.1916 What criteria for mechanical integrity must my SEMS program meet? 250.1917 What criteria for pre -startup review must be in my SEMS program? 250.1918 What criteria for emergency response and control must be in my SEMS program? 250.1919 What criteria for investigation of incidents must be in my SEMS program? 250.1920 What are the auditing requirements for my SEMS program? 250.1921 through 250.1923 [RESERVED] 250.1924 How will BOEMRE determine if my SEMS program is effective? 250.1925 May BOEMRE direct me to conduct additional audits? 250.1926 What qualifications must an independent third party or my designated and qualified personnel meet? 250.1927 What happens if BOEMRE finds shortcomings in my SEMS program? 250.1928 What are my recordkeeping and documentation requirements? 250.1929 What are my responsibilities for submitting OCS performance measure data? • § 250.1900 Must I have a SEMS program? You must develop, implement, and maintain a safety and environmental management system (SEMS) program. Your SEMS program must address the elements described in § 250.1902, American Petroleum Institute's Recommended Practice for Development of a Safety and Environmental Management Program for Offshore Operations and Facilities (API RP 75) (incorporated by reference as specified in § 250.198), and other requirements as identified in this subpart. (a) You must comply with the provisions of this subpart and have your SEMS program in effect on or before November 15, 2011, except for the submission of Form MMS-131 as required in § 250.1929. (b) You must submit Form MMS-131 on an annual basis beginning March 31, 2011. • (c) If there are any conflicts between the requirements of this subpart and API RP 75 (incorporated by reference as specified in § 250.198), you must follow the requirements O of this subpart. (d) Nothing in this subpart affects safety or other matters under the jurisdiction of the Coast Guard. § 250.1901 What is the goal of my SEMS program? The goal of your SEMS program is to promote safety and environmental protection by ensuring all personnel aboard a facility are complying with the policies and procedures identified in your SEMS. (a) To accomplish this goal, you must ensure that your SEMS program identifies, addresses, and manages safety, environmental hazards, and impacts during the design, construction, start-up, operation, inspection, and maintenance of all new and existing 110 • facilities, including mobile offshore drilling units (MODU) while under BOEMRE jurisdiction and Department of Interior (DOI) regulated pipelines. (b) All personnel involved with your SEMS program must be trained to have the skills and knowledge to perform their assigned duties. § 250.1902 What must I include in my SEMS program? You must have a properly documented SEMS program in place and make it available to BOEMRE upon request as required by § 250.1924(b). (a) Your SEMS program must meet the minimum criteria outlined in this subpart, including the following SEMS program elements: (1) General (see § 250.1909) (2) Safety and Environmental Information (see § 250.1910) • (3) Hazards Analysis (see § 250.1911) (4) Management of Change (see § 250.1912) (5) Operating Procedures (see § 250.1913) (6) Safe Work Practices (see § 250.1914) (7) Training (see § 250.1915) (8) Mechanical Integrity (Assurance of Quality and Mechanical Integrity of Critical Equipment) (see § 250.1916) (9) Pre -startup Review (see § 250.1917) (10) Emergency Response and Control (see § 250.1918) (11) Investigation of Incidents (see § 250.1919) (12) Auditing (Audit of Safety and Environmental Management Program Elements) (see §§ 250.1920) • III • (13) Recordkeeping (Records and Documentation) and additional BOEMRE requirements (see § 250.1928). (b) You must also include a job safety analysis (JSA) for OCS activities identified or discussed in your SEMS program (see § 250.1911(b)). (c) Your SEMS program must meet or exceed the standards of safety and environmental protection of API RP 75 (incorporated by reference as specified in § 250.198). § 250.1903 Definitions. Definitions listed in this section apply to this subpart and supersede definitions in API RP 75, Appendices D and E (incorporated by reference as specified in § 250.198). Designated and qualified personnel means employees (not contractors) that are • knowledgeable of your program, and have actual work experience and training in implementing and auditing a SEMS or a similar program in an offshore oil and gas environment. Personnel means direct employee(s) of the operator and contracted workers who are involved with or affected by specific jobs or tasks. § 250.1904 Documents Incorporated by Reference. The effect of incorporation by reference of a document into the regulations in this part is that the incorporated document is a requirement. When a section in this part incorporates all of a document, you are responsible for complying with the provisions of that entire document, except to the extent that section provides otherwise. If any incorporated document uses the word "should", it means must for purposes of these regulations. • 112 a§§ 250.1905 through 250.1908 [RESERVED] § 250.1909 What are management's general responsibilities for the SEMS Program? You, through your management, must require that the program elements discussed in API RP 75 (incorporated by reference as specified in § 250.198) and in this subpart are properly documented and are available at field and office locations, as appropriate for each program element. You, through your management, are responsible for the development, support, continued improvement, and overall success of your SEMS program. Specifically you, through your management, must: (a) Establish goals and performance measures, demand accountability for implementation, and provide necessary resources for carrying out an effective SEMS • program. (b) Appoint management representatives who are responsible for establishing, • implementing and maintaining an effective SEMS program. (c) Designate specific management representatives who are responsible for reporting to management on the performance of the SEMS program. (d) At intervals specified in the SEMS program and at least annually, review the SEMS program to determine if it continues to be suitable, adequate and effective (by addressing the possible need for changes to policy, objectives, and other elements of the program in light of program audit results, changing circumstances and the commitment to continual improvement) and document the observations, conclusions and recommendations of that review. (e) Develop and endorse a written description of your safety and environmental 113 • policies and organizational structure that define responsibilities, authorities, and lines of communication required to implement the SEMS program. (f) Utilize personnel with expertise in identifying safety hazards, environmental impacts, optimizing operations, developing safe work practices, developing training programs and investigating incidents. (g) Ensure that facilities are designed, constructed, maintained, monitored, and operated in a manner compatible with applicable industry codes, consensus standards, and generally accepted practice as well as in compliance with all applicable governmental regulations (h) Ensure that management of safety hazards and environmental impacts is an integral part of the design, construction, maintenance, operation, and monitoring of each • facility. (i) Ensure that suitably trained and qualified personnel are employed to carry out all • aspects of the SEMS program. 0) Ensure that the SEMS program is maintained and kept up to date by means of periodic audits to ensure effective performance. § 250.1910 What safety and environmental information is required? (a) You must require that SEMS program safety and environmental information be developed and maintained for any facility that is subject to the SEMS program. (b) SEMS program safety and environmental information must include: (1) information that provides the basis for implementing all SEMS program elements, including the requirements of hazard analysis (§ 250.1911); (2) process design information including, as appropriate, a simplified process flow 114 • diagram and acceptable upper and lower limits, where applicable, for items such as temperature, pressure, flow and composition; and (3) mechanical design information including, as appropriate, piping and instrument diagrams; electrical area classifications; equipment arrangement drawings; design basis of the relief system; description of alarm, shutdown, and interlock systems; description of well control systems; and design basis for passive and active fire protection features and systems and emergency evacuation procedures. § 250.1911 What criteria for hazards analyses must my SEMS program meet? You must ensure the development and implementation of a hazards analysis (facility level) and a job safety 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. 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 ensure that it is consistent with the current operations on your facility. Hazards analysis requirements for simple and nearly identical facilities, such as well jackets and single well caissons, may be fulfilled by performing a single hazards analysis which you can apply to all such facilities after you verify that any site specific deviations are addressed in each of the elements of your SEMS program. (a) Hazards Analysis (facility level). For a hazards analysis (facility level), you must 115 • perform an initial hazards analysis on each facility on or before November 15, 2011. 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, including any incident in which you were issued an Incident of Noncompliance or a civil or criminal penalty; (iii) Control technology applicable to the operation your hazards analysis is evaluating; and (iv) A qualitative evaluation of the possible safety and health effects on employees, • and potential impacts to the human and marine environments, which may result if the control technology fails. 0 (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 Safety Analysis (JSA). You must develop and implement a JSA for OCS activities identified or discussed in your SEMS program. (1) You must keep a copy of the most recent JSA (operations/task level) at the job site and it must be readily accessible to employees. (2) Your JSA must identify, analyze, and record; 116 • (i) the steps involved in performing a specific job; (ii) the existing or potential safety and health hazards associated with each step; and (iii) the recommended action(s)/procedure(s) that will eliminate or reduce these hazards and the risk of a workplace injury or illness. (3) The supervisor of the person in charge of the task must approve the JSA prior to the commencement of the work. § 250.1912 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 117 • (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. § 250.1913 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 include the job title • and reporting relationship of the person or persons responsible for each of the facility's operating areas and address the following: (1) Initial startup; (2) Normal operations; (3) All emergency operations (including but not limited to medical evacuations, weather -related evacuations and emergency shutdown operations); (4) Normal shutdown; (5) Startup following a turnaround, or after an emergency shutdown; (6) Bypassing and flagging out -of -service equipment; (7) Safety and environmental consequences of deviating from your equipment operating limits and steps required to correct or avoid this deviation; (8) Properties of, and hazards presented by, the chemicals used in the operations; 0 • (9) 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; (10) Raw materials used in your operations and the quality control procedures you used in purchasing these raw materials; (11) Control of hazardous chemical inventory; and (12) Impacts to the human and marine environment identified through your hazards analysis. (b) Operating procedures must be accessible to all employees involved in the operations. (c) Operating procedures must be reviewed at the conclusion of specified periods and • as often as necessary to assure they reflect current and actual operating practices, • including any changes made to your operations. (d) You must develop and implement safe and environmentally sound work practices for identified hazards during operations and the degree of hazard presented. (e) Review of and changes to the procedures must be documented and communicated to responsible personnel. § 250.1914 What criteria must be documented in my SEMS program for safe work practices and contractor selection? Your SEMS program must establish and implement safe work practices designed to minimize the risks associated with operating, maintenance, and modification activities and the handling of materials and substances that could affect safety or the environment. 119 • Your SEMS program must also document contractor selection criteria. When selecting a contractor, you must obtain and evaluate information regarding the contractor's safety and environmental performance. Operators must ensure that contractors have their own written safe work practices. Contractors may adopt appropriate sections of the operator's SEMS program. Operator and contractor must document their agreement on appropriate contractor safety and environmental policies and practices before the contractor begins work at the operator's facilities. (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 knowledgeable and experienced in the work practices necessary to perform their job in a safe and environmentally sound manner. Documentation of each contracted employee's expertise to perform his/her job and a copy of the contractor's safety policies and procedures must be made available to the operator and BOEMRE upon request. (c) Your SEMS program must include procedures and verification for selecting a contractor as follows: (1) Your SEMS program must have procedures that verify that contractors -are conducting their activities in accordance with your SEMS program. (2) You are responsible for making certain that contractors have the skills and knowledge to perform their assigned duties and are conducting these activities in accordance with the requirements in your SEMS program. 120 • (3) You must make the results of your verification for selecting contractors available to BOEMRE upon request. (d) Your SEMS program must include procedures and verification that contractor personnel understand and can perform their assigned duties for activities such as, but not limited to: (1) installation, maintenance, or repair of equipment; (2) construction, startup, and operation of your facilities; (3) turnaround operations; (4) major renovation; or (5) specialty work. (e) You must: (1) perform periodic evaluations of the performance of contract employees that • verifies they are fulfilling their obligations, and • (2) maintain a contractor employee injury and illness log for 2 years related to the contractor's work in the operation area, and include this information on Form MMS-131. (f) You must inform your contractors of any known hazards at the facility they are working on including, but not limited to fires, explosions, slips, trips, falls, other injuries, and hazards associated with lifting operations. (g) You must develop and implement safe work practices to control the presence, entrance, and exit of contract employees in operation areas. § 250.1915 What criteria for training must be in my SEMS program? Your SEMS program must establish and implement a training program so that all personnel are trained to work safely and are aware of environmental considerations 121 • offshore, in accordance with their duties and responsibilities. Training must address the operating procedures (§ 250.1913), the safe work practices (§ 250.1914), and the emergency response and control measures (§ 250.1918). You must document the qualifications of your instructors. Your SEMS program must address: (a) Initial training for the basic well-being of personnel and protection of the environment, and ensure that persons assigned to operate and maintain the facility possess the required knowledge and skills to carry out their duties and responsibilities, including startup and shutdown. (b) Periodic training to maintain understanding of, and adherence to, the current operating procedures, using periodic drills, to verify adequate retention of the required knowledge and skills. (c) Communication requirements to ensure that whenever a change is made to • operating procedures (§ 250.1913), the safe work practices ( 250.1914), or the p gp P § emergency response and control measures (§ 250.1918), personnel will be trained in or otherwise informed of the change before they are expected to operate the facility. (d) How you will verify that the contractors are trained in the work practices necessary to perform their jobs in a safe and environmentally sound manner, including training on operating procedures (§ 250.1913), the safe work practices (§ 250.1914), or the emergency response and control measures (§ 250.1918). § 250.1916 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, 122 • 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. The frequency of inspections and tests must be in accordance with BOEMRE 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; include the name and position, and the signature of the person who performed the inspection or test; include the serial number or other identifier of the equipment on which the inspection or test was performed; include 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. Such corrections must be made before further use of the equipment and system. • 123 • (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 ensure that they are modified for the application for which they will be used. (h) The verification that inspections and tests are being performed. The procedures must be appropriate to ensure 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. § 250.1917 What criteria for pre -startup review must be in my SEMS program? Your SEMS program must require that the commissioning process include a pre - startup safety and environmental review for new and significantly modified facilities that are subject to this subpart to confirm that the following criteria are met: (a) Construction and equipment are in accordance with applicable specifications. (b) Safety, environmental, operating, maintenance, and emergency procedures are in place and are adequate. (c) Safety and environmental information is current. (d) Hazards analysis recommendations have been implemented as appropriate. (e) Training of operating personnel has been completed. (f) Programs to address management of change and other elements of this subpart are in place. (g) Safe work practices are in place. • 124 • § 250.1918 What criteria for emergency response and control must be in my SEMS program? Your SEMS program must require that emergency response and control plans are in place and are ready for immediate implementation. These plans must be validated by drills carried out in accordance with a schedule defined by the SEMS training program (§ 250.1915). The SEMS emergency response and control plans must include: (a) Emergency Action Plan that assigns authority and responsibility to the appropriate qualified person(s) at a facility for initiating effective emergency response and control, addressing emergency reporting and response requirements, and complying with all applicable governmental regulations; (b) Emergency Control Center(s) designated for each facility with access to the Emergency Action Plans, oil spill contingency plan, and other safety and environmental • information (§ 250.1910); and • (c) Training and Drills incorporating emergency response and evacuation procedures conducted periodically for all personnel (including contractor's personnel), as required by the SEMS training program (§ 250.1915). Drills must be based on realistic scenarios conducted periodically to exercise elements contained in the facility or area emergency action plan. An analysis and critique of each drill must be conducted to identify and correct weaknesses. § 250.1919 What criteria for investigation of incidents must be in my SEMIS program? To learn from incidents and help prevent similar incidents, your SEMS program must establish procedures for investigation of all incidents with serious safety or 125 • environmental consequences and require investigation of incidents that are determined by facility management or BOEMRE to have possessed the potential for serious safety or environmental consequences. Incident investigations must be initiated as promptly as possible, with due regard for the necessity of securing the incident scene and protecting people and the environment. Incident investigations must be conducted by personnel knowledgeable in the process involved, investigation techniques, and other specialties that are relevant or necessary. (a) The investigation of an incident must address the following: (1) the nature of the incident; (2) the factors (human or other) that contributed to the initiation of the incident and its escalation/control; and (3) recommended changes identified as a result of the investigation. • (b) A corrective action program must be established based on the findings of the .7 investigation in order to analyze incidents for common root causes. The corrective action program must: (1) retain the findings of investigations for use in the next hazard analysis update or audit; (2) determine and document the response to each finding to ensure that corrective actions are completed; and (3) implement a system whereby conclusions of investigations are distributed to similar facilities and appropriate personnel within their organization. § 250.1920 What are the auditing requirements for my SEMS program? (a) You must have your SEMS program audited by either an independent third -party 126 • or your designated and qualified personnel according to the requirements of this subpart and API RP 75, Section 12 (incorporated by reference as specified in § 250.198) within 2 years of the initial implementation of the SEMS program and at least once every 3 years thereafter. The audit must be a comprehensive audit of all thirteen elements of your SEMS program to evaluate compliance with the requirements of this subpart and API RP 75 to identify areas in which safety and environmental performance needs to be improved. (b) Your audit plan and procedures must meet or exceed all of the recommendations included in API RP 75 section 12 (incorporated by reference as specified in § 250.198) and include information on how you addressed those recommendations. You must specifically address the following items: • (1) Section 12.1 General (2) Section 12.2 Scope (3) Section 12.3 Audit Coverage. (4) Section 12.4 Audit Plan. You must submit your written Audit Plan to BOEMRE at least 30 days before the audit. BOEMRE reserves the right to modify the list of facilities that you propose to audit. (5) Section 12.5 Audit Frequency, except your audit interval must not exceed 3 years after the 2 year time period for the first audit. (6) Section 12.6 Audit Team. The audit that you submit to BOEMRE must be conducted by either an independent third party or your designated and qualified personnel. The independent third party or your designated and qualified personnel must meet the requirements in § 250.1926. • 127 • (c) You must require your auditor (independent third party or your designated and qualified personnel) to submit an audit report of the findings and conclusions of the audit to BOEMRE within 30 days of the audit completion date. The report must outline the results of the audit, including deficiencies identified. (d) You must provide the BOEMRE a copy of your plan for addressing the deficiencies identified in your audit within 30 days of completion of the audit. Your plan must address the following: (1) A proposed schedule to correct the deficiencies identified in the audit. BOEMRE will notify you within 14 days of receipt of your plan if your proposed schedule is not acceptable. (2) The person responsible for correcting each identified deficiency, including their job title. • (e) BOEMRE may verify that you undertook the corrective actions and that these actions effectively address the audit findings. §§ 250.1921 through 250.1923 [RESERVED] § 250.1924 How will BOEMRE determine if my SEMS program is effective? (a) BOEMRE or its authorized representative may evaluate or visit your facility to determine whether your SEMS program is in place, addresses all required elements, and is effective in protecting the safety and health of workers, the environment, and preventing incidents. BOEMRE or its authorized representative may evaluate your SEMS program, including documentation of contractors, independent third parties, your designated and qualified personnel, and audit reports, to assess your SEMS program. These evaluations or visits may be random or based upon the OCS lease 128 • operator's or contractor's performance. (b) For the evaluations, you must make the following available to BOEMRE upon request: (1) your SEMS program; (2) the qualifications of your independent third -party or your designated and qualified personnel; (3) the SEMS audits conducted of your program; (4) documents or information relevant to whether you have addressed and corrected the deficiencies of your audit; and (5) other relevant documents or information. (c) During the site visit BOEMRE may verify that: (1) personnel are following your SEMS program, • (2) you can explain and demonstrate the procedures and policies included in • your SEMS program; and (3) you can produce evidence to support the implementation of your SEMS program. (d) Representatives from BOEMRE may observe or participate in your SEMS audit. You must notify the BOEMRE at least 30 days prior to conducting your audit as required in § 250.1920, so that BOEMRE may make arrangements to observe or participate in the audit. § 250.1925 May BOEMRE direct me to conduct additional audits? (a) If BOEMRE identifies safety or non-compliance concerns based on the results of our inspections and evaluations, or as a result of an event, BOEMRE may direct you to 129 • have an independent third -party audit of your SEMS program, in addition to the regular audit required by § 250.1920, or BOEMRE may conduct an audit. (1) If BOEMRE direct you to have an independent third -party audit, (i) You are responsible for all of the costs associated with the audit, and (ii) The independent third -party audit must meet the requirements of § 250.1920 of this part and you must ensure that the independent third party submits the findings and conclusions of a BOEMRE-directed audit according to the requirements in § 250.1920 to BOEMRE within 30 days after the audit is completed. (2) If BOEMRE conducts the audit, BOEMRE will provide a report of the findings and conclusions within 30 days of the audit. (b) Findings from these audits may result in enforcement actions as identified in § 250.1927. • (c) You must provide the BOEMRE a copy of your plan for addressing the deficiencies identified in the BOEMRE-directed audit within 30 days of completion of the audit as required in § 250.1920. § 250.1926 What qualifications must an independent third party or my designated and qualified personnel meet? (a) You must either choose an independent third -party or your designated and qualified personnel to audit your SEMS program. You must take into account the following qualifications when selecting the third -party or your designated and qualified personnel: (1) Previous education and experience with SEMS, or similar management related programs. • 130 • (2) Technical capabilities of the individual or organization for the specific project. (3) Ability to perform the independent third -party functions for the specific project considering current commitments. (4) Previous experience with BOEMRE regulatory requirements and procedures. (5) Previous education and experience to comprehend and evaluate how the company's offshore activities, raw materials, production methods and equipment, products, byproducts, and business management systems may impact health and safety performance in the workplace. (b) You must have procedures to avoid conflicts of interest related to the development of your SEMS program and the independent third party auditor and your designated and qualified personnel. (c) BOEMRE may evaluate the qualifications of the independent third parties or your • designated and qualified personnel. This may include an audit of documents and procedures or interviews. BOEMRE may disallow audits by a specific independent third - party or your designated and qualified personnel if they do not meet the criteria of this section. § 250.1927 What happens if BOEMRE finds shortcomings in my SEMS program? If BOEMRE 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) Assess civil penalties; or (c) Initiate probationary or disqualification procedures from serving as an OCS 131 • operator. § 250.1928 What are my recordkeeping and documentation requirements? (a) Your SEMS program procedures must ensure that records and documents are maintained for a period of 6 years, except as provided below. You must document and keep all SEMS audits for 6 years and make them available to BOEMRE upon request. You must maintain a copy of all SEMS program documents at an onshore location. (b) For JSAs, the person in charge of the activity must document the results of the JSA in writing and must ensure that records are kept onsite for 30 days. You must retain these records for 2 years and make them available to BOEMRE upon request. (c) You must document and date all management of change provisions as specified in § 250.1912. You must retain these records for 2 years and make them available to • BOEMRE upon request. • (d) You must keep your injury/illness log for 2 years and make them available to BOEMRE upon request. (e) You must keep all evaluations completed on contractor's safety policies and procedures for 2 years and make them available to BOEMRE upon request. (f) You must keep all records in an orderly manner, readily identifiable, retrievable and legible, and include the date of any and all revisions. § 250.1929 What are my responsibilities for submitting OCS performance measure data? You must submit Form MMS-131 on an annual basis by March 31st. The form must be broken down quarterly, reporting the previous calendar year's data. 132 • 0 [FR Doc. 2010-25665 Filed 10/07/2010 at 4:15 pm; Publication Date: 10/15/2010] 133