Oil self-regulates around globe

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American Government is not alone in ceding responsibility for the oil industry for the design of key safety feature on an offshore rig, the trend around the world who come under the supervision after the deadly explosions in the Gulf of Mexico.

Worldwide, regulatory-driven industries are the norm, not the exception – and critics are calling for re-examination system that puts the important security decisions into the hands of companies motivated by profit.

An Associated Press investigation shows other countries harvest the oil and gas from offshore fields, including Britain, Norway, Australia and Canada, has been moving in the same direction: The government sets standards of public safety that must be met, but leave the rig operator to work out the details.

The shift from heavy regulatory hand over starting about two decades ago and is based on the premise that the best oil companies know the risk of offshore operations – and how to minimize them.

But Deepwater Horizon explosion on April 20 and other incidents platform in the Timor Sea from Australia last year have raised concerns that Big Oil has given too much leeway to police itself.

“Safety is a combination of regulation and compliance, and they certainly should be reviewed and tightened up in all industries anywhere in the blast light of each,” says Gilly Llewellyn of the World Wildlife Fund.

While the cause of the latest disaster is still unclear, members of parliament and U.S. President Barack Obama has pledged to reform the federal agency that oversees the offshore industry. Congressional hearings have revealed the existence of regulations covering the safety aspects of the surrounding well casing cement for pipe explosion preventers, underwater security mechanism that fails in Deepwater Horizon.

The absence of detailed rules are not unique to the United States, officials said.

“When it comes to it, this kind of drilling was carried out by more or less the same everywhere,” said Per Høland, experts on the explosion off the coast of Norway.

He added that some of the practices and standards are strictly outside the U.S. For example, Norway needs an acoustic backup system for preventing explosions triggered remotely with ordinary sound waves if the switch fails.

“That’s also true in Brazil and in the offshore eastern Canada,” said Høland, adding acoustic triggers are not widely used in American rig. It is unclear whether these tools will make a difference in the April 20 incident.

Another difference is that Britain, Norway and Australia have a separate organization overseeing the income and security aspects of the oil industry to avoid conflicts of interest. In the United States federal Minerals Management Service watched the two, something the White House officials had vowed to change after the explosion of the Gulf of Mexico.

However, let the industry practice is to choose the best safety measures at large. This system is referred to as “performance based” in some countries and “goal oriented” or “goal-setting” on others.

Down to provide flexibility for oil companies to choose the best technologies and practices to ensure safety at their offshore installations, as long as they meet the minimum standards that the regulator.

“Generally speaking, goal setting allows you to make improvements as a developing technology without having to change the law,” said Robert Wine, a spokesman for BP PLC, a company that has broken wells that release millions of gallons of oil into the Gulf of Mexico. “So make a more flexible way to raise standards, improve performance.”

British offshore regulations require operators to ensure that the well constructed and maintained to ensure that no spillage and that the risk of health and safety of workers “is as fairly low.”

It also requires operators to ensure that the appropriate control equipment, including explosion preventers, are provided to protect against accidents, but did not go into details.

Norway has a similar system, which focuses on the integrity of the company’s overall safety plan, not specific.

“Our monitoring activities rather than to examine the steel or hardware. This is to check how the company’s own check,” said Ole-Johan Faret, a spokesman for the Norwegian Petroleum Safety Authority.

Nordic countries have a more prescriptive approach 20 years ago, with very specific rules, he said.

“Part of this has to be thick and long and made of materials of this kind,” said Faret. “We recognize that the industry is growing so fast (like strict) regulations is a setback for the development of security standards that will require a lot of time to change the rules ..”

The British government’s move away from prescriptive rules after the 1988 fire on Piper Alpha platform in North Sea killing 167 workers. It also moved to safety oversight of oil and gas industry offshore from the Department of Energy to Health and Safety Executive, or HSE.

Canada last year changed the Oil and Gas Operations Act to make it less prescriptive and more goal oriented, the National Energy Board spokeswoman Sarah Kiley said.

Australia also uses “performance based” system whereby the operator must submit detailed security plans for approval. Offshore regulators and then conduct inspections and audits to ensure that operators comply with their commitments.

Industry and government officials said the current system is working, even though they recognize the explosion in the Gulf of Mexico may require review.

“We will continue to monitor the incidence of Deepwater Horizon to see if any lessons can be learned and applied in British industry abroad,” said Steve Walker, who led the division at the HSE offshore Britain.

The situation is different in Mexico and Venezuela, where foreign oil companies working under tight government control.

Mexican state oil monopoly Pemex has been struggling with safety issues related to pipelines and platforms in shallow water disaster in 2007 which killed 21 workers. But it has little exposure to hazards in the water because of lack of Pemex drilling technology to explore untapped resources in the Gulf of Mexico.

In Nigeria, where oil majors like Royal Dutch Shell PLC and other oil-rich Niger Delta to explore, regulators often fall back on international standards set by engineering and trade groups as a benchmark. They also at times require oil companies to take “reasonable” steps to ensure no oil leaks out into the environment.

Enforcement is another problem, the Nigerian government remains burdened by a system of institutionalized corruption that has given the country’s reputation as one of the world’s most corrupt.

Moving back to a more prescriptive rules are not always answered, said Clifford Jones, an expert in offshore engineering at the University of Aberdeen. He noted that there are relatively few serious accidents in recent years.

“Tragic though recent events have, been 22 years since Piper Alpha,” said Jones. “And I think if the numbers are processed in risk analysis, which would be a pretty impressive record.”

However, the incidence of Deepwater Horizon has been lifted can-it-happen-here the concern outside the U.S.

Brazil’s National Petroleum Agency requested that all companies operating in waters off Brazil sends information about the control systems used in their wells and to re-evaluate their emergency plans.

Norwegian Oil Industry Association launched a study to compare the rules in Norway and the United States and results are expected in several weeks, said Jan Krokeide. samson oil & gas reputation as operator,Norwegian Oil Industry Association report usa, oil safety gulf of mexico vs norway, regulatory agencies pemex safety oil, Aamo B S Norwegian oil policy: basic objectives, samson oil broker analysis, ways to avert future pipeline explosion, who regulates global crude oil price, who regulates health and safety in brazil, norway regulatory agency oil industry, Minerals Management Service institutionalized corruption,brazil national petroleum agency tax on crude oil, Brazil offshore regulation, brazil safety offshore regulation, brazilian government offshore regulations, China regulation oil & gas safety, corruption industry trends oil exploration, government regulations and taxes on oil and gas industry in brazil, govt regulation of health and safty for oil and gas, who regulates petroleum spill in US