Has the Safety Case Failed?

SPE-134059-PP

Below is an article written for the SPE Asia Pacific Oil & Gas Conference and Exhibition in 2010. The full article can be found below:

https://www.researchgate.net/publication/254532424_Has_the_Safety_Case_Failed

Brendan Fitzgerald and Paul Breen, Vanguard Solutions Pty Ltd, and Joe Patrick, SPE, Hunter Oil Pty Ltd

Copyright 2010, Society of Petroleum Engineers

This paper was prepared for presentation at the SPE Asia Pacific Oil & Gas Conference and Exhibition held in Brisbane, Queensland, Australia, 18–20 October 2010.

This paper was selected for presentation by an SPE program committee following review of information contained in an abstract submitted by the author(s). Contents of the paper have not been reviewed by the Society of Petroleum Engineers and are subject to correction by the author(s). The material does not necessarily reflect any position of the Society of Petroleum Engineers, its officers, or members. Electronic reproduction, distribution, or storage of any part of this paper without the written consent of the Society of Petroleum Engineers is prohibited. Permission to reproduce in print is restricted to an abstract of not more than 300 words; illustrations may not be copied. The abstract must contain conspicuous acknowledgment of SPE copyright.

Abstract

The paper examines the performance of the oil and gas industry, in particular in Australia and New Zealand, since the introduction of the Safety Case regime. Emphasis is placed on identified project issues and conclusions are drawn related to the current status of the industry, its maturity and its ability to apply the Safety Case regime in the manner required to achieve anticipated results. The paper examines whether issues that have led to project failings in recent years are inherent in the way the industry operates.

The paper discusses the experience of the offshore oil and gas industry in Australasia, in comparison with other parts of the world. The experience of other industries that apply the Safety Case approach is also discussed.

The core issue that is highlighted relates to the manner in which the Safety Case is applied, including issues of lack of understanding of the Safety Case process by management, the effect of contracting strategy on the effectiveness of the Safety Case and the lack of a common understanding of the role of the Safety Case. The paper is based on cumulative experience since the beginning of the Safety Case in the oil and gas industry, drawing in particular from experience on major projects within the last few years.

The paper highlights the manner in which the industry undertakes development projects, in particular, with some observations about the legacy that this leaves for the operating company and its personnel. More than 20 years after Piper Alpha, the industry has moved on and this paper seeks to provide a re-appraisal of the effectiveness with which major accident hazards and risks are managed.

The paper also seeks to draw conclusions that illustrate a way forward for the oil and gas industry.

Observations

Following the Piper Alpha disaster of 1988, Safety Case legislation was introduced into the offshore oil and gas industry. There has been an ongoing and interactive process since then in developing the Safety Case process and the way that industry manages the methodology, preparation and implementation of this critical safety management tool.

However, in recent times the author has observed a number of areas for improvement substantially related to the overall management, leadership and resourcing of the Safety Case:

• Overall management and accountability
  Organisational accountability for preparation of the Safety Case has been delegated to lower levels within industry organizations inconsistent with the potential legal, contractual, resource and reputation risk exposures.
• Roles and responsibilities are not well understood
  Application of Safety Case principles throughout the lifecycle of a development is substantially limited in the early phases of a project; organisational responsibility and accountability are generally not well understood, or adequately defined.
• Use of the “safety and risk engineer”
  Responsibility and accountability for Safety Case preparation and production, and often a number of other health and safety activities, are delegated to the “safety and risk engineer” without due consideration and definition of the required competencies, scope of work, cost, schedule and quality impacts.
• Safety Case contracting strategy
  Generally the Safety Case is managed as a project document, tendered and awarded from bids based on a lowest cost lump sum strategy, inconsistent with the safety critical priority of this activity and the potential risk impact on the overall project.
• Late application of the Safety Case process into the project
  The “Safety Case” team are often deployed after detailed design has commenced and sometimes late in the detailed design phase resulting in the potential to significantly impact project cost and schedule.
• Resources applied are inadequate in terms of scope, content, budget and schedule
  The “Safety Case” teams tend to be populated by specialist external specialist contractors not fully integrated into the project management team and subsequently resourced challenged.
• Residual risk is being carried forward
  Late implementation within the project and incomplete assessment of hazards and risks leads to an increased level of risk being deferred into later phases of the project, increasing overall risk profiles and incurring additional cost and schedule
• Management of residual risk in operations
  The effectiveness of managing residual risk in the production operations phase via the application of safety management system has deteriorated over time.
• Performance standards
  Performance standards are an apparently simple concept that has the devil in the detail. Even recent regulator guidance does not provide sufficient detail to assist industry in producing consistent, high quality and effective documents.

The occurrence, severity and impact of these observations vary from project to project and whilst the individual impacts can indeed be managed, the overall cumulative effect is to denigrate the efficiency of the Safety Case as an effective tool for managing operational safety.