LMOGA OFFSHORE ISSUES UPDATE · 2018-03-07 · 1 LMOGA OFFSHORE ISSUES UPDATE Lars Herbst, P.E....
Transcript of LMOGA OFFSHORE ISSUES UPDATE · 2018-03-07 · 1 LMOGA OFFSHORE ISSUES UPDATE Lars Herbst, P.E....
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LMOGA OFFSHORE ISSUES
UPDATE
Lars Herbst, P.E. BSEE Gulf of Mexico Regional Director 28 February 2018
“To promote safety, protect the environment and conserve resources offshore through vigorous regulatory
oversight and enforcement.” 1
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BSEE Updates
• Regulatory Reform • GOM Activity • High Pressure High Temperature
Permitting • Risk-based inspections • Decommissioning planning • Other Priorities in 2018
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EXECUTIVE ORDER IMPLEMENTING AN AMERICA-FIRST OFFSHORE ENERGY STRATEGY—
By the authority vested in me as President by the Constitution and the laws of the United States of America, including the Outer Continental Shelf Lands Act, 43 U.S.C. 1331 et seq., and in order to maintain global leadership in energy innovation, exploration, and production, it is hereby ordered as follows: …….
Sec. 2. Policy. It shall be the policy of the United States to encourage energy exploration and production, including on the Outer Continental Shelf, in order to maintain the Nation's position as a global energy leader and foster energy security and resilience for the benefit of the American people, while ensuring that any such activity is safe and environmentally responsible.
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IMPLEMENTING AN AMERICA-FIRST OFFSHORE ENERGY STRATEGY— Sec. 7. Reconsideration of Well Control Rule. The Secretary of the Interior shall review the Final Rule of the Bureau of Safety and Environmental Enforcement (BSEE) entitled "Oil and Gas and Sulfur Operations in the Outer Continental Shelf-Blowout Preventer Systems and Well Control," 81 Fed. Reg. 25888 (April 29, 2016), for consistency with the policy set forth in section 2 of this order, and shall publish for notice and comment a proposed rule revising that rule, if appropriate and as consistent with law. The Secretary of the Interior shall also take all appropriate action to lawfully revise any related rules and guidance for consistency with the policy set forth in section 2 of this order. Additionally, the Secretary of the Interior shall review BSEE's regulatory regime for offshore operators to determine the extent to which additional regulation is necessary.
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EXECUTIVE ORDER
Presidential Executive Order Implementing an America-First Offshore Energy Strategy EXECUTIVE ORDER - - - - - - - DONALD J. TRUMP THE WHITE HOUSE, April 28, 2017.
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Order 3349 – American Energy Independence Supports Executive Order signed March 28, 2017 Directs DOI to review all existing regulations, orders, guidance documents and policies that potentially burden development
Order 3350 – America-First Offshore Energy Strategy
Implements Executive Order signed April 28, 2017 Directs BSEE to reevaluate the “Well Control Rule”
Order 3351 – Strengthening the DOI Energy Portfolio
Directs BSEE to identify regulatory burdens that unnecessarily encumber energy exploration, development, production transportation; and develop strategies to eliminate or minimize the burdens.
Secretary’s Orders on Energy Free industry to discover and produce
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Well Control Rule Review
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Review of Deepwater Horizon recommendations(300+) Public Forum – May 2012 Completion of industry standards – November 2012 Publication of proposed regulations – April 2015 Final rule published – April 28, 2016 Implementation over several years
Development Process for
Current WCR
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BSEE utilized the following sources of information in reviewing its regulations for potential revision:
• Reviewed BSEE internal policies • Implementation of the original WCR • BSEE webpage Q and As • Review of permitting process • BSEE WCR public forum (September 20, 2017) • Comments submitted to BSEE
BSEE Regulatory Review
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Well Control Rule Public Forum Sept. 20, 2017, 1919 Smith Street, Houston, Texas
Goal: To ensure a complete and thorough review of the Well Control Rule with stakeholder input. Are there potential revisions to the rule that would significantly reduce regulatory burdens without significantly reducing safety and environmental protection on the OCS? • BSEE accepted both written and oral presentations
from interested parties at the forum • Two sessions were held
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Major issues raised during the WCR implementation and BSEE public forum:
• Safe drilling margin • Real-time monitoring • Accumulator systems • BSEE Approved Verification Organizations(BAVOs) • Casing and cementing
General Issues
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Concerns raised with WCR requirements:
• Not able to get pre-approval of margin at well planning stages. Concerns about getting consistent approval in APD
• If no offset well data, concerns about getting
approval for lower margin • Concerns about having to stop and remedy losses
while drilling situation – use API bulletin 92L
Major issues raised during the WCR implementation and BSEE public forum
Safe drilling margin
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Concerns raised with WCR requirements:
• The potential for an increase in rig personnel response time and a decrease in the accountability of the offshore personnel
• Concerns about the meaning of proposed requirements to “immediately transmit” these RTM data and to maintain “continuous contact” between onshore personnel and rig personnel
• Requires RTM centers
Major issues raised during the WCR implementation and BSEE public forum
Real-time Monitoring (RTM)
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Concerns raised with WCR requirements:
• The increased number and weight of accumulator bottles could cause structural concerns for the BOP frame and the rig (especially for additional dedicated subsea bottles for deadman/autoshear functions)
• Costs associated with the additional bottles would be
significant • Additional system modifications such as open function for
ROV provides additional points for potential leaks
Major issues raised during the WCR implementation and BSEE public forum
Accumulator systems
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Concerns raised with WCR requirements:
• Redundant with current independent 3rd parties • Increased compliance costs to use a BAVO • Oversight of BAVO operations • Unsure of what to expect
Major issues raised during the WCR implementation and BSEE public forum
BAVOs
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Concerns raised with WCR requirements:
• Concerns about the use of centralizers and should just reference API standard 65-2
• Concerns about indications of an inadequate cement job and taking appropriate actions to determine adequacy.
• Concerns about applying API spec 11D1 to all packers or
bridge plugs
Major issues raised during the WCR implementation and BSEE public forum
Casing and Cementing
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Production Safety Systems Rule
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• Media reports have confused the Production Safety System Rule (PSSR) with other oil and gas regulations
• The PSSR was not updated due the Deepwater Horizon incident, requirements updated due to that event are outside of the scope of the PSSR
• The opening of new federal leases in the Atlantic, Pacific, and Alaskan waters are not within the scope of the PSSR
Subpart H – Scope Clarification
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• Industry needed more time to comply with certain regulations contained within the 2016 update to Subpart H
• Departures were given to certain regulations to allow production operations to continue in the Gulf of Mexico
Subpart H – Departures
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• 5 current regulations have active departures • 250.842 – PE Stamping of Drawings • 250.872(a) – Chemical tanks with Class 1 liquids
must comply with API 14C • 250.872(b) – Level Safety High (LSH) must be
installed to sense the level in the oil bucket • 250.880(c)(2)(i) – PSVs must be tested annually.
The piston must lift during this test • 250.880(c)(3)(iii) – Flame arrestors must be visually
inspected annually
Subpart H – Departures Granted
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Subpart H – Departures Granted
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Chart1
250.842 Drawings
250.872(a) Chemical Tanks
250.872(b) LSH in Oil Bucket
880(c)(2)(i) PSVs
880(c)(3)(iii) Flame Arrestors
Series 1
Number of Operators with a departure
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Sheet1
Series 1
250.842 Drawings14
250.872(a) Chemical Tanks4
250.872(b) LSH in Oil Bucket6
880(c)(2)(i) PSVs14
880(c)(3)(iii) Flame Arrestors12
To resize chart data range, drag lower right corner of range.
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Subpart H – Departures Granted
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Chart1
250.842 Drawings
250.872(a) Chemical Tanks
250.872(b) LSH in Oil Bucket
880(c)(2)(i) PSVs
880(c)(3)(iii) Flame Arrestors
Series 1
Number of Platforms with a departure
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133
643
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Sheet1
Series 1
250.842 Drawings919
250.872(a) Chemical Tanks283
250.872(b) LSH in Oil Bucket133
880(c)(2)(i) PSVs643
880(c)(3)(iii) Flame Arrestors551
To resize chart data range, drag lower right corner of range.
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• Currently 2 of the 5 regulations that departures have been granted for have proposed changes • 250.842 is proposed to be changed to reduce the
amount of drawings that require a PE stamp • 250.872(b) is proposed to grandfather in existing
vessels • The other 3 regulations were only a problem
because operators needed appropriate time to comply
Subpart H – Departures
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Proposed changes to regulations with departures
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Gulf of Mexico Activity
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Drilling Rigs in US Gulf of Mexico
Platform Rig = 12
Semi-submersible = 5
Drillship = 19
Jack-up rig = 7
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Production Facilities
Shallow Water Production Facilities
(less than 500 ft)
1951 Fixed
Single Caisson 4 Pile
Caisson
Deepwater Production Facilities (greater than 500 ft)
76 SPAR
TLP FPSO
Fixed
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Projects with Final Investment Decisions (FID)
Deepwater GOM Operator Area Type Water First Gas
Capacity Oil
Capacity
New Projects Block Depth (ft.) Prod. (MMscfpd) (Mbopd)
Big Foot Chevron WR029 TLP 5,200 2018 25.0 75.0 Stampede Hess GC468 TLP 3,500 2018 60.0 80.0 Appomattox Shell MC392 Semi 7,200 2020 100.0 150.0 Mad Dog Phase 2 BP GC825 Semi 5,000 2021 25.0 110.0
Subsea Tiebacks 2018 – 6, 2019 - 12 300 240 Potential Activity
Potential Floating Platforms 4-9 yrs out 400 500 Subsea Tiebacks to existing platforms 2-5 yrs out 480 400
Timeline from Lease Date to First Production: Lease date to Initial Discovery Date – 5 year average Discovery date to Final Investment Decision – 5 year average FID to First Production (construction & installation) – 3 year average * For larger and more complex projects, the timeline can be longer
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Chart1
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Installations
Removals
Federal OCS Production FacilitiesInstallations and Removals, 1956-2016
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Sheet1
YEARInstallationsRemovals
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1993122172
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1995131118
1996152120
1997146178
199814876
1999104143
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2002100122
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2005110123
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201029218
201119295
201210286
201317223
201421203
20154128
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Sheet1
Installations
Removals
Federal OCS Production FacilitiesInstallations and Removals, 1956-2016
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Gulf of Mexico OCS Region Total Well Drilled and PA'd & TA'd by Year
Wells Drilled
Wells PA'd & TA'd
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Risk Based Inspections
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Risk Based Inspections
Facility Based Risk
Inspections- Based on analysis
of low probability, high consequence areas of a
specific facility
Performance Based Risk Inspections-
Based on Analysis of Key Performance Indicators and utilizing Trend Analysis to focus on reducing likelihood of events and compliance issues Gulf
wide
Annual Production Facility Inspections and Monthly Well Operation Inspections-
Based on OCS mandate for inspections, Regional policy. Includes Follow-up on specific facility based on Increased
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Performance Based Risk Inspection Gas Releases
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Gas Release PBRI – Findings
Seventeen (17) percent of the facilities involved in the PBRI had documented oil or gas accumulation. Eight (8) of the thirty six (36) PBRI facilities, or 22-percent, had a non-operable gas detector, no process implemented for calibrating devices, failed a bump test, or had no documentation on the frequency / results of inspections. The facilities associated with the Gas Release PBRI had no issues identified by BSEE staff on excessive temperatures. In fact, most observations made by inspectors indicated high temperature areas were well insulated and out of human reach.
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High Pressure High Temperature
(HPHT) Prospects
or The Next Frontier
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BSEE believes that the deployment of high pressure and high temperature (HPHT) equipment is a high risk activity with high consequences for failure. These activities require a higher level of scrutiny to insure that BSEE accomplishes their primary responsibility of protecting people and the environment and to conserve resources on the Outer Continental Shelf.
HPHT Projects
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• 30 CFR 250.807 - Additional requirements for subsurface safety valves and related equipment installed in high pressure high temperature (HPHT) environments
• (a)(1) Design Verification Analysis
• (a)(2) Design Validation Testing
• (b) HPHT is greater than 15,000 psi or 350°F
Code of Federal Regulations for HPHT Projects
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Decommissioning Planning
Rigs to Reefs Program o FY17 - 27 permits approved that proposed converting decommissioned
structures into artificial reefs; 16 have been reefed o Fieldwood – 9 o W&T - 5
o Last 5 years-128 platforms have been approved for the program in the
Gulf of Mexico
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Decommissioning Planning
Areas of Concern o Backlog of facilities and wells that need to be removed on expired
and active leases(idle iron) still needs to be addressed. o Bankruptcies have caused some decommissioning liabilities
[facilities and wells] to become uncovered (no financial assurance in place and/or no co lessee or prior lessee).
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Other BSEE 2018 Focus Areas
• Well intervention • Subsea leak detection • Royalty policy • Support to BOEM leasing draft proposed
program
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BSEE Website: www.bsee.gov
@ BSEEgov BSEEgov
Bureau of Safety and Environmental Enforcement
BSEEgov
https://www.facebook.com/BSEEgov/ “To promote safety, protect the environment and
conserve resources offshore through vigorous regulatory oversight and enforcement.”
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http://www.bsee.gov/http://www.facebook.com/
LMOGA�OFFSHORE ISSUES�UPDATEBSEE UpdatesSlide Number 3Slide Number 4 EXECUTIVE ORDERSecretary’s Orders on EnergyWell Control Rule ReviewDevelopment Process �for �Current WCR BSEE Regulatory ReviewWell Control Rule Public Forum General Issues Major issues raised during the WCR � implementation and BSEE public forum Major issues raised during the WCR � implementation and BSEE public forum Major issues raised during the WCR � implementation and BSEE public forum Major issues raised during the WCR� implementation and BSEE public forum Major issues raised during the WCR � implementation and BSEE public forumProduction Safety Systems RuleSubpart H – Scope ClarificationSubpart H – Departures Subpart H – Departures GrantedSubpart H – Departures GrantedSubpart H – Departures GrantedSubpart H – DeparturesSlide Number 24Drilling Rigs in US Gulf of MexicoProduction FacilitiesSlide Number 27Slide Number 28Slide Number 29Slide Number 30Slide Number 31Risk Based InspectionsRisk Based InspectionsPerformance Based Risk Inspection Gas Release PBRI – FindingsHigh Pressure �High Temperature�(HPHT)�Prospects�or �The Next FrontierHPHT ProjectsCode of Federal Regulations �for HPHT ProjectsDecommissioning PlanningDecommissioning PlanningOther BSEE 2018 Focus AreasBSEE Website: www.bsee.gov