DRILLBITS – January 2017
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PGRA
Senate ENR Committee Votes to Send Two Trump Nominees to Full Senate Floor for Confirmation; IADC Applauds Advancement of Nominees
On 31 January, the U.S. Senate Committee on Energy and Natural Resources voted to advance President Trump’s nomination of Rick Perry for Secretary of the Department of Energy (DOE) and Ryan Zinke for Secretary of the Department of Interior to the full U.S. Senate for confirmation. In response, IADC President Jason McFarland issued the following statement:
“IADC looks forward to working with, and serving as an educative resource for, both nominees and their respective staffs to ensure that any regulation that targets oil and gas development and operations is transparent, fair and sensible.”
“The Department of Interior is tasked with developing the natural resources within the U.S. In his nomination hearing before the Committee, nominee Zinke reiterated his commitment to expanding responsible U.S. energy development, an ideal that IADC and its members share.”
“Similarly, in his Committee hearings, nominee Perry vowed to defend the scientists working under the DOE, who are responsible for tackling a wide array of topics. The research and technology capabilities of the Department are some of the best of what the U.S. has to offer, and we believe, based on his Committee testimony, that nominee Perry has an interest in furthering the goals of the DOE.”
“With respect to the oil and gas industry, IADC and its members hope that each of the nominees and their staffs will focus on how we can use all of our energy resources to benefit the U.S. and the world.”
IADC Comments on EIA’s Annual Energy Outlook 2017
In response to the Annual Energy Outlook 2017 released on 5 January, the U.S. Energy Information Administration (EIA), Jason McFarland, IADC President, issued the following statement:
“Today’s EIA Annual Energy Outlook 2017 Report contains promising news for the future of oil and natural gas utilization in the U.S. and around the world, as these two sources will continue to supply the overwhelming majority of U.S. energy consumption needs. IADC’s members are continuously investing in research and new technology that will support the global future energy demands, and are doing so with a concentration on the environment and sound working conditions for all personnel.”
“A key takeaway from the 2017 report is the projection that the U.S. could become a key energy exporter by 2026, largely through the continued development of the nation’s abundant natural gas resources. The report utilizes a variety of scenarios to assess the future of the nations’ energy demands and supply, and while it does not predict a total elimination of imports, the news is nevertheless positive for the U.S. oil and gas industry, as well as for the American economy.”
“The report’s baseline assumes that current laws and regulations will remain unchanged, and acknowledges that changes or new laws and regulations could have significant effects on the projections. As always, IADC will continue to strive to ensure that these changes affect member companies in a positive way.”
Railroad Commission of Texas Swears in New Commissioner
On 9 January, the Railroad Commission of Texas (RRC) swore in new Railroad Commissioner Wayne Christian. He joins Commissioners Christi Craddick and Ryan Sitton as the third member of the Texas Railroad Commission.
Wayne Christian was elected to join the RRC in November 2016. In 1996, he was elected to the Texas House of Representatives, where he served as Vice-Chair of Regulated Industries and as a multi-term member of the Energy Resource Committee. On these committees, he had direct oversight of the RRC and accumulated a strong record of standing for free markets and against burdensome regulations.
For more information about the RRC, please visit RRC Website.
U.S. Legislative Updates
House: The House of Representatives has been busy this month passing dozens of bills. Two bills of primary interest for IADC members: H.R. 21, the Midnight Rules Relief Act and H.R. 26, the Regulations From the Executive in Need of Scrutiny (REINS) Act – both bills have a focus on regulatory reform. The House is also expected to soon vote on whether to eliminate an SEC regulation requiring oil, gas and minerals companies to disclose payments they make to foreign governments. And, on Friday, 3 February, they are due to vote on whether to nullify BLM’s Venting and Flaring Rule, aimed at curbing emissions of methane that is vented or flared from oil- and gas-drilling wells on federal lands.
Senate: Earlier this month, the Senate passed a budget with the primary focus on ending Obamacare. Now the Senate is focused on processing Cabinet nominations. The three Cabinet nominees of major interest to energy and environment interests are slated to get votes in committee this week. On Tuesday, 31 January, the Senate Energy and Natural Resources Committee voted positively on the nominations of Rep. Ryan Zinke to run the Interior Department and former Texas Gov. Rick Perry to lead DOE. The most contentious will be the Wednesday, 1 February, vote in the Environment and Public Works Committee on Scott Pruitt’s nomination to head EPA. After Committee passage, these nominees will go before the full U.S. Senate for approval.
White House: The President has signed several executive orders since his swearing in on 20 January. The executive orders most notable for the oil and gas industry include:
- Regulatory freeze pending review by incoming Administration;
- Hiring Freeze and plan to reduce federal workforce;
- Directing withdrawal of US as a signatory to Trans-Pacific Partnership (TPP);
- Directing Commerce Secretary to develop plan for all new pipelines, as well as retrofits, use materials and equipment produced in U.S.;
- Expedite review of review and approval of Keystone and Dakota Access;
- Directing Commerce Secretary to streamline permitting and other regulatory burdens for domestic manufacturers.
INDUSTRY NEWS
Development of USCG/NIST Cybersecurity Framework “MODU Profile” launched at IADC
IADC helped the U.S. Coast Guard (USCG) and the National Institute of Standards and Technology (NIST) National Cybersecurity Center of Excellence (NCCoE) launch development of a new Cybersecurity Framework Profile for MODUs in a two-day joint meeting held during January that also included API. The Profile is designed to assist MODU operators in using NIST’s voluntary 2014 guidelines “Framework for Improving Critical Infrastructure Cybersecurity” (the “Cybersecurity Framework”).
As envisioned, the Profile will help offshore stakeholders assess and mitigate cybersecurity risks in the mission areas they share with the USCG. The MODU Profile follows development by USCG and NCCoE of a similar Profile for maritime bulk-liquid transfers (http://mariners.coastguard.dodlive.mil/2016/11/10/release-maritime-bulk-liquids-transfer-cybersecurity-framework-profile/).
NIST developed the Cybersecurity Framework in response to President Obama’s Executive Order 13636, “Improving Critical Infrastructure Cybersecurity”. The voluntary framework, the result of industry-government collaboration, addresses “cybersecurity in a cost-effective way based on business needs”, according to NIST.
Proposed updates for version 1.1 of the Framework are available for review and comment. The deadline for comments is 10 April. The draft v1.1 is available for review at https://www.nist.gov/cyberframework.
For more information contact Melissa Meijas, melissa.meijas@iadc.org, or Mike Killalea, mike.killalea@iadc.org.
US Coast Guard Issues Policy Letter on Reporting of Suspicious Activity and Security Breaches
The U.S. Coast Guard recently issued a new policy letter, which provides guidance on the criteria and process for reporting suspicious activity and breach of security, including cyber security events.
Owners and operators of a vessel or facility (including MODU) are required to maintain an approved security plan and required to report, without delay, activities that may result in a transportation security incident to the National Response Center. The policy letter also covers reporting requirements and guidance on reporting cybersecurity-related events to Department of Homeland Security National Cyber Security and Communications Integration Center.
The policy letter is available electronically by accessing the USCG website, and then first selecting the “maritime security” link and then finding the “policy” section.
U.S. District Court Rules that BSEE Cannot Issue a Notice of Incident of Noncompliance to a Contractor
In Island Operating v. Jewell, the U.S. District Court for the Western District of Louisiana has ruled that the Bureau of Safety & Environmental Enforcement (BSEE) cannot issue a Notice of Incident of Noncompliance (“INC”) to a contractor. Acknowledging that Section 1350 of the OCSLA provides that “any person” who violates the provisions of the OCSLA may be liable for a penalty, the Court found that only those “persons” against whom a duty has been imposed can violate that duty, and duties under Section 1348(b) apply to “any holder of a lease or permit.” The Court also found that BSEE’s broader regulatory language cannot expand the scope of the OSCLA. This follows a ruling similarly in favor of the contractor in U.S. v. Black Elk Energy. It now remains to be seen whether BSEE, under the new Administration, will appeal these rulings.
BSEE Issues Well Control Rule Clarifications and Interpretations
The U.S. Bureau of Environmental Enforcement (BSEE) recently updated its website to provide additional clarifications and interpretations of its Well Control Rule
The new information addresses: 250.735(a) – Accumulator systems; 1250.737(c) – Chart range; 250.737(d)(9) and 250.737(d)(5) – Function tests; 250.737 – Pressure testing valves; 250.730(a)(1) – ROV function timing; 250.737(d)(5)(ii) – Control panel testing; 250.421(f) – Liners; 250.739(c) – Visual Inspections; 250.421(f) – Liner Cementing requirements; and 250.737(d)(5)(ii) – BOP function definition for remote panels.
The joint-industry trades continue to work to resolve issues associated with the rule and its implementation.
For more information, please visit BSEE’s website.
Bureau of Labor Statistics Releases 2015 Census of Fatal Occupational Injuries
In late December, the Bureau of Labor Statistics Injuries, Illnesses and Fatalities program released the final 2015 Census of Fatal Occupational Injuries data. According to BLS, there were 89 deaths attributed to oil and gas extraction workers in 2015, down from 144 in 2014. To access the full report, please visit the BLS website.
It is important to note that the BLS data derives from a survey that is designed to provide an estimate of the number of work-related injuries and illnesses, and a measure of the frequency at which they occur. You can learn more about the survey, and how the information is gathered by visiting the BLS website.
NOPSEMA Issues Several New Guidance Notes
NOPSEMA, the Australian regulator, recently issued several new guidance notes. These include:
- ALARP (well integrity). NOPSEMA issued Guidance note N-04600-GN1616 on ALARP in the context of well integrity. The note addreses how the ALARP concept can be addressed in the context of the Well Operations Management Plan. (N-04600-GN1616, Rev. 0)
- Hazard Identification and Risk Assessment. Guidance note N-04600-GN1613 focuses on well integrity hazards and events types. (N-04600-GN1613, Rev. 0)
- Well Integrity Control Measures and Performance Standards. Guidance N-04600-GN1617 assists titleholders through the process of identifying, assessing and selecting control measures. It also assists in identifying, assessing and selecting relevant performance standards for those control measures in the context of preventing a potential loss of well integrity and to support the evidence that risks are reduced to a level that is as low as reasonably practicable. (N-04600-GN1617, Rev. 0)
Department of Energy to Begin Sales of Crude Oil from Strategic Petroleum Reserve
On 26 January, the U.S. Department of Energy’s Office of Fossil Energy awarded contracts for the first of several planned sales of crude oil from the Strategic Petroleum Reserve. In 2016, DOE was approved to sell up to $375.4 million in crude oil from the strategic petroleum reserve. Several sales are planned from 2017 through 2025, with more than 190 million barrels ultimately expected to be sold.
ACCREDITATION
IADC Launches Accreditation Program for Rigger and Crane Operator Training
IADC recently launched the Crane-Rigger Training and Assessment accreditation program, which offers a training standard that aligns with similar international standards while offering the support and credibility of accreditation. Included in the new program are curricula for basic rigging and crane operation.
The program was developed by members of IADC’s Workforce Development Committee, comprising representatives from drilling contractors, operators, training providers and other stakeholder companies.
The goal of IADC’s Crane-Rigger Training and Assessment is to provide a robust program through which training providers can be accredited and audited, which will lead to safer operations. The program is a globally-minded, affordable accreditation which aligns with, and surpasses, the API RP 2D standard.
Crane and rigging experts worked collaboratively with IADC to develop curricula and delivery requirements for the new program, which includes the following:
- Requirements for practical exercises, hardware, and equipment
- Resources to facilitate the standardization of content delivery
- Instructor qualification and assessment requirements
- Standardized skills assessments
- Criteria for content and delivery of knowledge assessments
- Content applicable to both onshore and offshore operations
- A framework for offering consistent, verifiable quality of training
- Crane operations coursework that can be customized by crane type (i.e., mechanical and non-mechanical crane types)
“Development of this program was a long process involving dozens of stakeholders who each brought to the table a unique perspective in rigging and crane operations, both onshore and offshore,” said Patty Tydings, IADC’s Competence and Workforce Development Specialist. “Members of IADC’s Workforce Development Committee serve as the program’s ultimate decision-makers to ensure that the training modules and performance objectives are appropriate and comprehensive and that the accreditation criteria promote quality and consistency.”
For more information about the IADC Crane-Rigger Training and Assessment accreditation program, please email crane-rigger@iadc.org.
IADC WellSharp Now Available in Spanish
The online exam for IADC’s well control training and assessment program, WellSharp, is now available in Spanish. The Spanish translation is now available to all training providers. The exam was previously translated into Portuguese, and it will also be available in Arabic and Mandarin later this year.
WellSharp, introduced in 2015, is a rigorous well control training and assessment program that offers content on prevention, situational awareness, barriers, barrier management, and risk awareness and management. It encourages blended learning to enhance the quality and value of the training, with required independently proctored electronic knowledge assessments and enhanced simulator exercises.
For more information about WellSharp, please visit the IADC Website.
IADC COMMITTEES
IADC Drilling Control System Alarm Management Guidelines Now Available
The IADC Alarm Management Work Group, under the auspices of the IADC Advanced Rig Technology Committee, recently produced the IADC Drilling Control System Alarm Management Guidelines, which are available for purchase through the IADC Bookstore.
The Guidelines cover philosophy, documentation, master list of alarms, management of change and rationalization for drilling control system alarming. It is intended to assist system suppliers and drilling contractors improve alarm treatment, as defined by job responsibility.
The guidelines do not cover control system design. Instead, they focus on understanding applicable standards, alarm philosophy, personnel responsibilities regarding DCS alarms, types of alarms, real-time use of alarms, management of change and more.
To access the Guidelines, please visit the IADC Bookstore. For more information on the IADC Advanced Rig Technology Committee, please visit the IADC Website.
Call for Abstracts for IADC Spark Tank on 5 April
The IADC Future Technology Subcommittee has issued a call for abstracts for the FT Spark Tank, scheduled for 0900-1130 on Wednesday, 5 April. The deadline for abstracts is Friday, 24 February. To submit an abstract, click HERE.
The IADC Future Tech Spark Tank is a strong opportunity to provide technology entrepreneurs a new opportunity to pitch their products and ideas to a panel of drilling contractors and operators. The Future Technology Subcommittee is part of the Advanced Rig Technology Committee.
IADC Future Tech welcomes abstracts on any new technology that will improve efficiency or safety in well construction. The purpose is to provide insights (“sparks”) to technology developers into what matters to those they are innovating for. There is sometimes a vast disconnect between a good idea and a great product, and this series will attempt to close that gap in a good-natured, productive manner. Caveat: This forum is not designed to generate investments in the product or service.
Each Spark Tank presentation should last no more than 15 minutes, which will allow the panel to ask questions.
Similar to the television show “Shark Tank”, the panel will ask questions and give feedback on the presenters on just how great (or not!) they think the product is.
Rules of engagement:
The IADC Spark Tank is designed to allow technology entrepreneurs the opportunity to pitch products or ideas to a panel of experts comprising both drilling contractors and operators. The Spark Tank is envisioned as a forum to “spark” new thinking. The Spark Tank will be moderated by officers of the Future Technology SC and the Advanced Rig Technology Committee.
Format:
Thirty minutes are allotted for each topic. Each presenter will have 15 minutes to speak. Please be as brief and concise as possible.
Panelists will then use the remaining 15 minutes for questions and comments. Questions and comments will be candid.
Please be polite and allow others to complete their thoughts before speaking.
Investment:
The Spark Tank is not a vehicle to seek investment for an idea or products, though “order of magnitude” estimate of development cost is acceptable.
For more information about the IADC Future Tech Spark Tank, contact Mike Killalea, 713-292-1945, mike.killalea@iadc.org.
NEW INDUSTRY RESOURCES
IADC Bookstore Offers Discounts on Premier Industry Books and Manuals
“Upturn” is in the air, as the US rig count just enjoyed the largest two-week gain since August 2011, increasing by 19 rigs in the last 2 weeks.
In order to help companies prepare their personnel, IADC is offering an unprecedented 50% member discount on several of its best technical resources. The books being offered on promotion include:
- IADC Drilling Manual, 12th
- Well Cementing Operations
- Driller’s Knowledge Book
- Coiled Tubing Operations
- IADC Deepwater Well Control Guidelines
To obtain the discount, please use promo code IADCDB.
To view more information about each of these publications, please visit the IADC Bookstore.
Marine Technology Society Issues Dynamic Positioning Committee Draft Guidance
In order to provide guidance on Position Reference Systems (PRS) and the use of PRS by dynamic positioning control systems, the Dynamic Positioning Committee (DPCS) has issued a draft Technical and Operational Guidance – PRS and DPCS Handling of PRS. Comments will be accepted through 15 April, 2017. For more information, please visit http://www.dynamic-positioning.com
Atlantic Canada Offshore Petroleum Training and Qualifications Committee Issues Standard Practice
The Atlantic Canada Offshore Petroleum Training and Qualifications Committee recently issued the Atlantic Canada Offshore Petroleum Standard Practice for the Training and Qualifications of Offshore Personnel. The document, which is a culmination of a joint effort among the offshore petroleum industry, drilling contractors and regulatory authorities, contains a concise description of the minimum qualifications and certified safety training required of those working in Atlantic Canada’s offshore industry.
The Standard Practice provides the mandatory safety training requirements for all offshore personnel; the technical training required for specific roles; emergency team composition, training and offshore drills/exercises; and the qualifications for offshore positions for producing installations, drilling installations and marine vessels.
The Standard Practice can be accessed at http://www.cnlopb.ca/pdfs/cop/atlcan.pdf?lbisphpreq=1
Offshore Energy Safety Institute Announces Availability of New Report
The Offshore Energy Safety Institute (OESI) recently announced the availability of a new report, Human Factors and Ergonomics in Offshore Drilling and Production: The Implications for Drilling Safety.
The report was prepared by OESI under a contract from the US Bureau of Safety and Environmental Enforcement (BSEE), and is organized in two parts. The first presents a summary of the current literature on the status of the oil and gas industry with regard to the adoption and integration of hydraulic fracturing methods, principles, and processes. The second assesses gaps in current research efforts and identifies topics believed to be candidates for further study including perceptual vs. cognitive based-decision making; instantiating super workers’ wisdom; vigilance; and stressed performance testing.
The report also offers suggestions regarding return on investment and key performance indicators. OESI has accepted an invitation from the Human Factors and Ergonomics Society (HFES) to co-host a Forum in 2017. The exact date has not yet been set but should be announced soon.
To access the report, please visit the OESI website.
API Publishes API RP 5C8, Care, Maintenance and Inspection of Coiled Tubing, 1st Edition
API recently published Recommended Practice 5C8, which covers the care, maintenance, and inspection of used low alloy carbon steel coiled tubing. For more information and to purchase, please visit www.api.org/pubs.
Accreditation Updates
RigPASS
DIT
Competence
WellSharp
Safety Alerts
For the latest safety alerts, visit www.iadc.org/safety-alerts
Alert 15-08: Disabled and non-functional safety devices leads to destruction of derrick board
Alert 15-09: Near miss – dropped six pound sledge hammer
Alert 15-10: Fatality on drill floor
Upcoming Events
Rigs Receive ISP Certificates
For certificates received since last LTI (in years):
New IADC Members
IADC welcomes 17 new members:
DRILLBITS Volume 27, Number 1
Andy Hendricks, Chairman • Jason McFarland, President • Amy Rose, Editor
All listed phone extensions are for IADC’s Houston headquarters,
+1/713-292-1945. Fax +1/713-292-1946.
Send comments/questions to Amy Rose at amy.rose@iadc.org.
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IADC Director – Membership Sharon Thorpe at sharon.thorpe@iadc.org.