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SEMS Deadline Looming, Companies Need a Plan B

Ian Sutton
Manager of Safety Engineering Systems, AMEC

Although the anniversary of the Deepwater Horizon catastrophe is behind us, this event continues to shape and transform the offshore oil and gas industry, particularly in the United States. In no area are these changes more profound than that of regulations, and one of the most important of these new regulations is the safety and environmental management systems (SEMS) rule from BOEMRE.

This rule, which covers all types of operation on the OCS, became effective on November 15, 2010, and gave companies one year to attain compliance. In other words, all covered facilities must be in full compliance by November 15 of this year. After that date, the rule allows no extensions of any kind.

This one-year implementation period is in contrast to the policies that were followed when similar rules were introduced for the onshore process industries and for offshore safety cases. In both cases, regulatory agencies recognized and acknowledged the development and implementation of a full safety management system (such as SEMS) is likely to take at least five years. BOEMRE is not providing the same grace period.

One justification for the tight SEMS deadline is that many companies already have a safety and environmental management program (SEMP) in place as part of their commitment to meeting the requirements of the American Petroleum Institute’s Recommended Practice 75 (API RP 75), introduced in the early 1990s. The SEMS standard states, “BOEMRE is incorporating by reference, and making mandatory, the American Petroleum Institute’s recommended practice for development of a safety and environmental management program for offshore operations and facilities. ... This recommended practice, including its appendices, constitutes a complete safety and environmental management system program.”

Therefore, if a facility already has a complete SEMP, then meeting the SEMS requirements probably will require little effort and compliance will not be a problem. However, in many cases, the situation is not likely to be so straightforward for two reasons. First, following the above passage, BOEMRE goes on to add: “In addition, BOEMRE is highlighting certain requirements from API RP 75 and further describing those requirements in the regulatory text to clarify compliance requirements.” Use of the word “clarify” in this context is more than a little disingenuous. In fact, the agency has expanded the scope of SEMP considerably. Having a complete SEMP is no guarantee of full SEMS compliance.

The second difficulty is that, according to the agency’s own data, about half the companies operating on the OCS do not have a complete SEMP. For these reasons, the reality is that many companies are not going to be in compliance by the November deadline, so they need a plan B.

Such a plan should show a clear path to full compliance within a reasonable time frame. It should start with an audit in order to identify the areas of deficiency. It should be risk-based, i.e., the company has conducted a thorough hazards analysis and is prioritizing its investments based on the risk evaluations. Finally, it should draw on similar experience in other industries. For example, the first three actions would be to update the safety and environmental information, particularly the piping and instrumentation diagram; to ensure that the management of change program is fully functional; and to carry out hazard analyses for all parts of the facility.

Above all else, once management has developed and implemented the plan, they must demonstrate they are doing what they said they would do, and they must show that any changes from the plan are fully documented and justified. Even if they cannot meet the letter of the law, they must be able to demonstrate and document that they are meeting its spirit.

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