The International Legal Dimension
Edited by Günther Handl and Kristoffer Svendsen
Chapter 2: Regulating the safety of offshore oil and gas operations
This chapter examines the development of international uniformity in offshore safety regulations through practice. National regulatory regimes undergo an evolutionary process triggered by catastrophic accidents that leads to increased reliance on performance-based regulations. While this is clearly the case in open-access markets, in markets dominated by state companies competing commercial and regulatory objectives tend to slow down this regulatory evolution. The increasing commonality of performance-based regulation, the practical benefits of a company applying the same management approach to all its platforms wherever located and the sharing of best industry practices have reduced regulatory differences in the safety management of offshore oil and gas operations in states with open-access market conditions. Although these countries’ general approach may be similar, their regulatory regimes continue to differ in important detail. Sharp regulatory differences still exist between open-access markets and markets controlled by state-owned companies. This chapter describes the changes made to the offshore safety regulatory regime in the US after the Macondo disaster in 2010. The changes derive solely from agency rulemaking, without new lawmaking. A new industry entity, the Center for Offshore Safety, continues to have a key role in the post-Macondo safety regime that is built on industry Recommended Practices, notably for Safety and Environment Management Systems that reduce the risks of major hazards and that are now, for the first time, required for US offshore operators.. The chapter discusses the continuing challenges facing the newly created offshore safety regulator Bureau of Safety and Environmental Enforcement (BSEE) and the need for an improved safety culture within the US industry, as documented by a major US National Academy of Sciences (NAS) report and other experts. This NAS report urges the US regulator and offshore industry to adopt many practices already in use in the North Sea and Australia under the Safety Case regimes prevailing there.
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