Friday, March 18, 2011

Offshore Safety: Repackaging RP75

Although most Americans don't know it, Macondo is nothing new and neither is the importance of safety as a driving force in offshore operations. A defining event for offshore safety management was the Piper Alpha incident that occurred in the North Sea in 1988. The loss of 147 lives and the destruction of the platform unequivocally demonstrated that the offshore industry needed to improve its safety management practices. The industry has been focused on improving safety ever since.

Yesterday the American Petroleum Institute (API) announced it is establishing a "Center for Offshore Safety" (to be based in Houston) upon the recommendation of the Presidential Oil Spill Commission.

The Center's purpose is to promote the implementation of "Recommended Practice for Development of a Safety and Environmental Management Program (SEMP) for Offshore Operations and Facilities" or "RP75".

RP75 was first issued in the year 1993 and the latest update was published in May 2004. RP75 is a recommended practice, not a regulatory requirement. It describes how offshore operators can create a Safety, Environmental Management Program. RP 75 incorporates input from many organzations including BOEMRE, the Coast Guard, the Offshore Operators Committee, the National Ocean Industries Association, the Independent Petroleum Association of America, and the International Association of Drilling Contractors.

RP75 was recently incorporated into federal regulations by BOEMRE.

To the public, the Center appears to be a hallmark of good government regulating an industry gone bad. In fact, the BOEMRE regulations adopt what has largely already been developed by industry in the form of RP75. The difference is that the elements of RP75 incorporated into the new regulations are no longer mere recommendations.

New regulations mean new compliance costs. The question is how much those costs will be and how will companies monitor and report on compliance? Will the Center step in to assist companies in doing so? That remains to be seen. It is still unclear what form the Center will take, how it will operate, and how it will be funded.

Does your company envision participation in or providing funding assistance to the Center? If so, what are your company's plans? Tell us what you think about the Center and the implementation of RP75 in the new regulations.

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