Oil and Gas is an industry well-renowned for its proclivity to risk. The combination of high-pressure processes, powerful equipment, and the sheer flammability of extracted substances sees to that – and means that even a small incident can have irrevocable commercial, reputational, and environmental consequences.
In order to account for such threats, the industry is governed by strict regulatory legislation; the purpose of which is to maximise safety assurances for both drilling crew and the surrounding environment, and alleviate the clear majority of risks related to oil and gas extraction.
The UK is well-renowned for its Oil and Gas regulation, thanks in part to its crude oil production capacity (the second largest in the EEA after Norway) and association with high-profile crises. To provide some insight of UK legislative changes and their impact on Oil and Gas crisis management, here we present key examples of regulation and the disasters that led to their creation.
UK Oil and Gas Legislation
Crisis: Piper Alpha
The deadliest offshore oil rig accident in history, Piper Alpha, occurred in 1988 when a series of miscommunications led to the activation of a pump not-fit-for-purpose. Situated on the Piper oilfield, approximately 193 km northeast of Aberdeen, the large fixed platform was due to undergo routine maintenance of one of its two condensate pumps. However, due to a engineering mix-up, vital information pertaining to the progress of the work wasn't communicated and the faulty pump was switched on. This resulted in leakage of gas condensate, causing gas ignition and serial explosions. The platform was destroyed, killing 167 people, including two crewmen of a rescue vessel, and only 61 workers escaped and survived.
Regulation: THE OFFSHORE INSTALLATIONS (SAFETY CASE) REGULATIONS 1992
The Cullen Inquiry was set up in November 1988 to establish the cause of the Piper Alpha disaster and suggest recommendations for UK emergency planning management. The report made 106 recommendations and led to the adoption of the Offshore Installations (Safety Case) Regulations. Signed into law in 1992, this directive requires the duty holder to provide details of health and safety management and major accident hazard control systems on the installation – including identifying risks and reducing them as much as is reasonably practicable – providing a temporary safe refuge on board and making provisions for safe evacuation and rescue. It also makes certain that the safety case is updated throughout the full life cycle of the installation.
The Offshore Installations (Safety Case) Regulations 1992 was one of the largest crisis management regulatory reforms that the UK has witnessed in recent years, and much of its legislation has formed a basis for the Oil and Gas directives that are in place today. Piper Alpha remains the most deadly Oil and Gas catastrophe the world has ever seen, and is a stark reminder of the need to be prepared.
Crisis: DeepWater Horizon
The Deepwater Horizon calamity, one of the most infamous disasters of the 21st century, occurred in 2010 after a surge of natural gas blasted a hole through a concrete core. Situated in the Macondo oil prospect in the Mississippi Canyon, the BP-leased rig had contractors seal the well so it could be used for future use. However, according to BP's internal investigation, a bubble of methane gas escaped from the well and shot up the drill column, expanding quickly as it burst through the concrete core before exploding. The blowout and resultant fire claimed the lives of 11 crew and after two days the rig sank, leaving over 200 millions of gallons of oil gushing into the seabed. It later emerged there were systemic failures all across the board, particularly in regards to regulatory bodies and how they inspected well safety.
Regulation: THE EU OFFSHORE SAFETY DIRECTIVE
In the US, the Obama administration introduced the most aggressive and comprehensive reforms in U.S. history, and this step was echoed across Europe with the introduction of the European Offshore Safety Directive. The aim of this directive was to reduce as far as possible the occurrence of major accidents related to offshore Oil and Gas operations and to limit their consequences. This led to the creation of the Offshore Safety Directive Regulator (OSDR) which now implements much stricter health, safety and environmental reviews on duty holders. Operators looking to establish new production installations offshore must send a notification to the OSDR at an early design stage. This notification must be followed by submission of a safety case, for the OSDR's acceptance, before the installation can be operated. What's more, those who aren't compliant can be served with improvement and prohibition notices, withdrawal of approvals, or be prosecuted.
While the EU Offshore Safety Directive didn't come into force until April 2015, it was created in direct response to the Deepwater Horizon disaster with the view that it would reduce the risk of these factors aligning again. The catastrophe remains the single most devastating oil spill in US waters ever, and one of the biggest environmental disasters of the 21st century.
Emergency and Crisis Management
Oil and Gas legislation in the UK has been characterised by a number of high-profile disasters – two of which we've elaborated upon above – and these incidents have introduced regulations that must be reflected in an organisation’s emergency management plan. From the necessity to comply with safety directives to a pledge to practice more intense safety management – as each resolution is made, so too must these additions be reflected in an organisation's contingency plan.
Why Prioritise Crisis Management?
While a crisis management plan won't prevent disaster, it will help to control the fallout after one occurs. With a clear, coherent, and well-informed plan – where everyone who has a role in handling a crisis knows their responsibilities, tasks, and the authority they operate under – Oil and Gas companies can ensure compliance and help minimise risks to the company, its staff, and the wider environment.
To learn more about the value of emergency and crisis planning in the Oil and Gas industry, including a practical approach of how to structure and content a contingency plan – download our free ebook.