Lessons from the policy initiatives on offshore safety

Increasing Energy Security through safe exploitation of oil and gas in sensitive environments

Marcelo Masera, Michalis ChristouInstitute for Energy and Transport

Joint Research Centre

Oil and gas dominant primary energy sources65% total, 95% in transport

IEA prospect: 40% increase in primary energy demand 2009-2035

Oil & gas 60% of demandLong-term demand needs stable provision

Fossil fuels in primary energy demand

Source: World Energy Outlook 2011

IEA New policies scenario (baseline)

• Offshore oil & gas most important European indigenous source of HC• EU + Norway: 30% demand

• Depletion of reserves• offshore exploration

• Deep waters, frontier conditions, harsh environments

• Global trend: • deep water offshore oil production from

2% (2001) to 12% (2015)

Offshore oil and gas

Arctic oil and gas

Arctic: Area above lat. 67o N• About the size of Africa• 1/3 land; 1/3 water < 500m;1/3 water deeper

than 500m

US Geological Survey study:• Arctic 22 % of the world’s undiscovered,

technically recoverable conventional oil & natural gas resources:

• 90 billion bl oil &1670 trillion cf gas

Countries: Canada, Greenland, Norway, Russia, Iceland, USA

Offshore incidents pose severe risks to oil and gas energy supply (Macondo, Montara, …, Gullfaks C)

BP Deepwater Horizon accident (Macondo) Gulf of Mexico, 20 April 2010

• Blowout and explosion, high-tech platform, top engineering companies

• 11 dead; 17 injured • Release of 5 million barrels of crude oil in 84 days• Environmental contamination and ecological disaster• Total cost: ca. €30 billions

Socioeconomic consequences • Huge sea area contaminated by oil• 800 km of coastline contaminated • Fishing prohibited in an area of 230.000 km2 (1/3

of US GoM waters)• Disaster to coastal economies and tourism• Moratorium in all deepwater offshore drilling

delayed US hydrocarbon exploitation program

Major accidents can happen

Consequences of potential oil spills in the Arctic

Particular conditions Particular conditions increased level of risk and unexpected consequences

• Environment• Harsh and sensitive• Ice (different formations during seasons of the year)• Very low temperatures (-45oC to +10oC)

• Oil traits• Fate and behavior of crude oil (air and water temperatures often at

or below oil pour points; increased oil viscosity)• Different behavior if spill occurs in sea water, pack ice, melting ice • Reduced spreading rates and reduced evaporation• Reduced natural degradation of oil• Absorption of oil by ice and snow

• Operations• Oil trapped below thick layer of ice; difficult response and cleanup

operations• Unmanned operations – Difficulties of approach & intervention

• Impact• Delicate ecosystem.• Importance for global climate changePhoto: A.Allen

Perception of risk

Precaution is justified• Uniqueness of the arctic environment• Difficulties of response and clean-up operations

Huge experience Huge experience in the offshore oil and gas sector • Both industry and regulators

Need for appropriate risks assessment and management•• TransparencyTransparency• Involvement of all stakeholders• Safe operations, perceived to be safeperceived to be safe.

Robust offshore safety policy

EU offshore safety policy initiative:• DG ENER proposed offshore safety legislation• EU ordinary legislative process (co-decision EP-Council)• Proposed legislation in line with Norwegian standards on offshore safety

Objectives:• To secure best industry practices in all European offshore operations

• Prevention, mitigation and response to major accidents• To line-up offshore regulatory practices to the best available standards

• Goal-oriented approach• Especially relevant for MS with shorter/no offshore regulatory experience

• To promote the implementation of highest safety standards across the world

Main requirements:• Licensing requirements, inspections and emergency response• Risk assessment, independently verified • Transparency, with comparable information on industry/authorities performance• Liability for environmental damage and financial security of operators

Sharing Best Practices: EUOAG & Role of JRC

EU Offshore Authorities Group (EUOAG):• COM Decision 18 2012; 1st meeting: 14 Sept. 2012• Purpose:

• Ensure effective sharing of best practices• Assist MS with implementation of legislation• Develop/improve safety standards

Role of the JRC: • Scientific Secretariat of EUOAG• Support the identification and dissemination of best industry best industry and best regulatory best regulatory

practicespractices• Development of Guidelines • Development of an Offshore Safety Knowledge CentreOffshore Safety Knowledge Centre

• Transparency and sharing of lessons learned sharing of lessons learned from accident analysisaccident analysis• Development of safety performance indicators

• Mapping of post-Macondo developments in safety measures / safety systems

HAZARD IDENTIFICATION

ACCIDENTCONSEQUENCE

ANALYSIS

ACCIDENTFREQUENCYANALYSIS

RISK CALCULATION ANDREPRESENTATION

PLANT SAFETYIMPROVEMENT

EMERGENCYMANAGEMENTEMERGENCY

MANAGEMENT

Extreme conditions; weather; Depth; icebergs

Accident databaseHazard identification models

MLD

Mapping & presentation of overall risk

Ability to present the contribution of each scenario (prioritization)

RISKMANAGEMENT

Understand & ModelBehavior & Fate of oil

under different conditions (summer, winter, pack ice,…)

Accident databaseUncertainty analysis models

Understand & ModelBehavior & Fate of oil

under different conditions (summer, winter, pack ice,…)

Accident databaseUncertainty analysis models

Appropriate Reliability dataHuman factor database

Reliability modelsAccident/Reliability database

ASTRA-PLUS(complex FTs)

Appropriate Reliability dataHuman factor database

Reliability modelsAccident/Reliability database

ASTRA-PLUS(complex FTs)

Innovative techniques for response/cleanupEvacuation plans

(under the failure conditionsEmergency resources

Innovative techniques for response/cleanupEvacuation plans

(under the failure conditionsEmergency resources

Which are appropriate risk acceptability

criteria?Involvement of the public.

Decision Aid tools

Which are appropriate risk acceptability

criteria?Involvement of the public.

Decision Aid tools

Assessment and management of risks

Risk challenges for Arctic offshore operations

High-reliability design and operations – practically ‘zero’ risk • “AppropriateAppropriate” reliability/safety level? • Behavior of oil under the extreme conditions: reduce epistemic uncertaintyreduce epistemic uncertainty•• Innovative safety systemsInnovative safety systems•• ExhaustiveExhaustive list of incident triggering events• Modelling natural hazardsnatural hazards

Best risk management & regulatory practices• Authoritative (peer) assessment of the reliability of safety systems & installations• Information & participation of stakeholders

Topics of potential interest for JRC• Accident database• Dedicated reliability and risk assessment tools• Partnership of R&D centers for “Safe and reliable exploitation of offshore oil and gas”

incl. Arctic

Concluding remarks

Potential significant oil and gas reserves in the Arctic

Safe and reliable exploitation is a must

Policies for offshore safety in the European agenda

Need to it overcome challenges, reduce uncertainties and involve stakeholders

The role of science and technology is crucial

Thank you for your attention!