In June 2009, the Minerals Management Service (MMS) proposed a new rule that would require offshore operators to develop and implement safety and environmental management systems (SEMS) for their oil and gas operations on the US outer continental shelf (OCS). The rule is expected to be finalized and promulgated in June 2010. If the final version resembles what is currently proposed, offshore operators will be required to implement compliance programs for hazards analysis, management of change, operating procedures, and mechanical integrity.

Making the change

The MMS does not provide guidance about how the SEMS program should be implemented, but companies can meet requirements by following a general process for implementing a risk management program including SEMS. (Sutton 2010)

There is considerable similarity between the proposed SEMS rule and the well-established safety and environmental management programs (SEMP) that operators have had in place for many years (API 2004). However, there are two key differences: SEMS — if implemented in its current form — is a rule, not just guidance and SEMS requires the implementation of four management elements, while the SEMP standard contains 12 elements.

Most companies that will be covered by the new rule have had SEMP in place for many years and will use these existing SEMP as a foundation for SEMS compliance. These programs are based upon Recommended Practice 75 of the American Petroleum Institute (API), supplemented by other API and ISO standards.

Additional guidance for meeting SEMS compliance also can be gained from the experience onshore process industries (refineries and chemical plants) have gained during the last 15 years as they have complied with their own safety and environmental regulations.

With a few minor exceptions, the proposed SEMS rule does not change or add to the technical requirements that are included in the existing API and ISO standards. The biggest change is that their implementation will now be a legal requirement.

From a technical standpoint, the biggest difference between SEMS and SEMP in its current form is that SEMS incorporates four of the 12 elements that comprise SEMP.

The MMS justifies the selection of these four elements by stating, “The research consistently points to the disproportionate contribution of human and organizational errors to accidents and oil spills.”

Meeting expectations

In practice, facilities will find that the successful implementation of the four elements selected by the MMS requires that all of the SEMP elements must be in place.

For example, operating procedures are of no value unless operators are trained in their use (training), management of change requires knowledge of safe limits (safety and environmental information), and mechanical integrity requires good documentation and record keeping. The fact is that SEMP is a system, not a set of isolated topics.

In its preamble to the proposed rule, the MMS states, “Each SEMS program would be tailored to the scale and complexity of the company’s operation.” The MMS also requires that the SEMS be structured to include accountability for contractors and subcontractors.

This flexibility is very much in the spirit of SEMP, which, like SEMS, does not provide detailed guidance. A detailed, prescriptive, one-size-fits-all rule does not exist. Instead, each company will develop SEMS to address its own circumstances.

Hazards analysis

The proposed rule calls upon operators to conduct two types of hazards analysis: one at the facility level and the other at the operations/task level (a job hazards analysis). At the facility level, the MMS incorporates the use of API RP 14C (API 2001a), API 14J (API 2001b), and other accepted documents and practices to provide guidance. Six analysis techniques are listed in RP 14J. They are:

• Checklist;

• “What If” Analysis;

• Hazard and Operability (HAZOP) Analysis;

• Failure Modes and Effects (FMEA) Analysis;

• Fault Tree Analysis; and

• Other methods.

Neither RP 14C nor RP 14J make specific reference to Job Hazards Analysis (JHA). However, the Occupational Safety & Health Administration has defined JHA as a technique that focuses on tasks as a way to identify hazards before they occur and focuses on the relationships among the worker, the task, the tools, and the work environment.

MOC, operating procedures

An entire section of RP 75 is devoted to the topic of Management of Change (MOC), a part of which divides MOC into three principal areas:

• Change in Facilities;

• Change in Personnel; and

• Managing the Changes.

As with process hazards analysis, MOC has received significant attention for many years, and there is considerable literature on the topic, such as the recent publication from the Center for Chemical Process Safety (CCPS 2008).

To properly manage change, it is vital that safe limits are provided for all operating parameters, particularly maximum allowable working pressure for vessels and maximum and minimum temperatures for all types of equipment. Therefore, although the topic of safety and environmental information is not in the proposed rule, it is critical for the facility to have a complete and accurate database for all operating parameters.

RP 75 (which, in turn, refers to RP 14J) also provides guidance for developing operating procedures. Procedures are needed for all activities including startup, normal operations, shutdown, and emergency response.

The same document addresses mechanical integrity, the fourth management element identified by the MMS. RP 75 makes reference to API 510, Pressure Vessel Inspection Code: Maintenance Inspection, Rating, Repair, and Alteration.

Audits

Audits are an integral part of SEMP. Although audits are not listed as part of the core SEMS program, the proposed rule discusses the need for audits and how they can be managed. Specifically, the SEMS program must be audited at least once every three years by either an independent third party or by qualified personnel designated within the company. The audits are to be conducted both in an office environment and in the field. Companies with a poor performance record are more likely to be audited than those with good records.

Audit protocols are provided for each of the elements discussed in RP 75 and can be used for SEMS work also.

Implementation

The MMS does not provide guidance about how the SEMS program should be implemented, so each company must determine this for itself.

The process starts with the introduction of an external standard — in this case, the new rule from MMS. Generally, standards and regulations do not provide enough detail for a facility to develop a compliance plan, largely because operating conditions vary from location to location. Therefore, facility management needs to develop more detailed guidance for addressing the SEMS requirements. For example, regarding operating procedures, management has to decide the level of detail required for high, moderate, and low activity. A detailed inspection program will be required to assess mechanical integrity.

Once the plan has been implemented, an auditor evaluates what has been done and generates a gap analysis. The facility management then takes corrective action based on those findings. Even if the audit does not generate any significant findings, management can still use the insights and lessons generated by the audit to improve the risk management plan.

Most companies already have an SEMP in place, so it is tempting for them to jump straight to the audit step. This probably is not a wise decision. The facility’s management team should work with the auditor through each of the steps shown in Figure 1 to make sure the requirements of the SEMS program have been addressed properly.