On December 19, the Bureau of Safety and Environmental Enforcement (BSEE), the major safety and environmental regulator for offshore oil drilling, came out with a policy statement on “safety culture,” in an effort to build a positive safety culture among both offshore oil regulators and the industry. BSEE’s statement lists a series of “organizational characteristics” that exist in a positive safety culture, such as personal accountability, continuous learning, an environment that does not punish employees for voicing concerns, and leadership, among others. BSEE outlined these aspects in an attempt to prod the industry into improving its performance.

Regulation of offshore oil drilling has a checkered past, to say the least. The much-maligned Minerals Management Service (MMS), which is now defunct, was the regulator before the BP/Deepwater Horizon blowout in 2010.

The National Commission on the BP Deepwater Horizon Oil Spill, created by the President in the wake of the disaster, found that MMS had a cozy relationship with the oil industry, which led to safety lapses. MMS also had a conflict of interest, as it obtained revenues in the form of royalties from the very industry it was supposed to regulate.

In response to the disaster, MMS was broken up into multiple offices, separating revenue collection from environmental and safety oversight. BSEE was created to carry on the latter. The National Commission also found that the industry needed an overhaul in “culture”; that drillers needed to embed safety values in its operations. Attempting to instill this safety culture, BSEE published its latest policy statement.

It also included one interesting tidbit. BSEE intends to look to the nuclear industry for an example of safety culture, hoping to emulate the Nuclear Regulatory Commission (NRC).

The nuclear industry provides an interesting model for safety culture and regulatory oversight. After the near-meltdown at Three Mile Island in Pennsylvania in 1979, the NRC did enhance its oversight over nuclear power plants but it also worked with the industry to establish a safety culture (read more on this history in the National Commission on the BP Deepwater Horizon Oil Spill report, here).

What does the nuclear industry have in common with the offshore oil industry? Why look to them rather than any other industry where safety is important? What is different with the nuclear industry from other industries that often have an adversarial relationship between regulator and operator is the extremely sophisticated technology involved, but more importantly, the catastrophic consequences that may occur from a mishap.

The nuclear industry understood that a meltdown by a single nuclear operator, even if it was the fault of a competing company, would doom the industry as a whole. This was the lesson of Three Mile Island and Fukushima; one disaster could sink the entire industry. Therefore, it understood that it needed to work together and with the NRC to effectively enhance safety.

To that end, the nuclear industry banded together, forming the Institute of Nuclear Power Operations (INPO), a non-profit dedicated to ensuring high standards of safety. Run by the industry itself, INPO shares ideas among its members and is generally praised for improving safety since its inception.

There are some parallels with the offshore oil industry. Although to a lesser degree, huge disasters (like Deepwater Horizon) raise the fears and ire of both the public and regulators. The blowout led to a drilling moratorium, after all. In this sense, like the nuclear industry, poor safety performance can lead to disastrous consequences for the industry itself. So, maybe it is better to work with the regulators and avoid a disaster than it is to cut corners and face a backlash from a crisis.

However, as of yet, there has been little movement among oil companies to work together, share information, and collaborate with its regulator. BSEE, with its policy statement, hopes to follow the example of the NRC, set high standards, and ask the same of the industry. This is promising. On the other hand, the policy statement does not offer any new regulations in order to compel the industry to change its behavior. Instead, its statement seems to be a list of suggestions, without any teeth.

For more on offshore oil drilling, check out ASP’s paper “Offshore Oil Drilling in the Arctic,” by clicking here.

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