05/14/2020 - Regulatory Rollback

BSEE Offshore Production Safety Systems Rule Update

by EELP Staff

Why it Matters

Following the Deepwater Horizon explosion and oil spill, the Department of the Interior (DOI) underwent a significant reorganization and issued rules and guidance to fill regulatory gaps in emergency response and operational oversight (for more on these changes, see our post on the 10 year anniversary here). President Obama also removed certain areas of the outer continental shelf from oil and gas development. (The outer continental shelf or OCS consists of “all submerged lands lying seaward of state coastal waters…under U.S. jurisdiction.”) Rolling back these rules and designations increases risks to offshore oil worker safety and, the non-oil and gas related economic value of oceans and coastal areas, and the ecological well-being of those areas.

After an operator drills a well, it must get BSEE’s approval before beginning production of that well. Part of that approval process involves review of a production safety system application and a preproduction inspection.

On September 7, 2016 BSEE updated its requirements for production safety equipment used “to ensure safety and the protection of the human, marine, and coastal environments.” Most significantly, the rule updated safety and pollution prevention equipment (SPPE) design, maintenance, and repair requirements to reflect a lifecycle approach that raises the importance of vigilance throughout the life of the equipment. These requirements included that independent third-parties review and certify that SPPE devices are designed to and will function in the most extreme conditions they are exposed to.

BSEE also revised the regulations to specify different requirements for production platforms with surface (or dry tree) completions and subsea tree completions. Deepwater production often relies on subsea completions. The revisions incorporated newer industry standards, giving them the force of law, and added requirements for firefighting systems, shutdown valves and systems, valve closure and leakage, and high pressure/high temperature (HPHT) well equipment.

Click here to view our page on the EO 13795: Implementing an America-First Offshore Energy Strategy and the other changes that have followed the EO. For more information on the reforms that followed the Deepwater Horizon disaster, view our 10-year anniversary post here.

Current Status

Sep. 28, 2018 BSEE issued its final rule revising the Obama-era Offshore Production Safety Systems Rule, rolling back a number of safety requirements for offshore equipment. The revised rule became effective Dec. 27, 2018.

The new rule revised or removed 2016 provisions it determined were “unduly burdensome” on the industry. Of particular importance, BSEE removed the requirement for an independent third-party certification that equipment will function in extreme conditions.

History

Sep, 7, 2016 BSEE issues a final rule amending and updating offshore oil and gas production safety regulations. The final rule reflects comments made on the 2013 proposed rule from industry and stakeholders.

Trump Era

April 28, 2017 Executive Order 13795 directed the Department of Interior to reconsider efforts to limit or regulate offshore oil and gas development. Interior Secretary Zinke’s May 1, 2017 Secretarial Order 3350 instructed its sub-agencies on how to implement the Executive Order.

June 22, 2017 BOEM / DOI publish notice of the start of a public comment period with no deadline for a host of regulatory reform effortsClick here to submit comments on the regulatory reform notice. This comment period is indefinite. The notice is in response to Trump’s Executive Order 13777, “Enforcing the Regulatory Reform Agenda.”

Dec. 21, 2017 The Department of Interior (DOI) halted an independent study examining the efficacy of the Bureau of Safety and Environmental Enforcement’s offshore drilling inspections.

Dec. 29, 2017 The Bureau of Safety and Environmental Enforcement (BSEE) publishes a proposal to revise or rescind the offshore drilling safety requirements issued on Sep. 7, 2016. The proposal takes aim at rules that were crafted to prevent disasters like the Deepwater Horizon explosion. In its proposal, BSEE says it “reassessed” the original provisions in the process of implementing them and “determined that some provisions could be revised to reduce or eliminate some of the concerns expressed by the operators.” The comment period closes on Jan. 29, 2018.

Sep. 28, 2018 BSEE issues its final rule revising the Obama-era Offshore Production Safety Systems Rule, rolling back a number of safety requirements for offshore equipment. The revised rule will become effective Dec. 27, 2018. The new rule revised or removed 2016 provisions it determined were “unduly burdensome” on the industry. Of particular importance, BSEE removed the requirement for an independent third-party certification that equipment will function in extreme conditions.