DRILLBITS – June 2017
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PGRA
IADC Statement on BSEE Announcement of Lease Extensions
On 9 June, BSEE announced the extension of leases doubling the amount of time offshore oil and gas operators have to coordinate development operations and retain their leases in federal waters of the U.S. Outer Continental Shelf. In a statement, BSEE Director Scott Angelle said, “This rulemaking extends the time from 180 days to one year between production, drilling or well-reworking operations on a lease. These additional months mean companies doing business on the Outer Continental Shelf will have more planning flexibility, which will help them be more cost efficient, create more jobs and maximize the economic benefit for the entire nation.”
In response, IADC President Jason McFarland stated, “IADC members support the expeditious and safe development of the U.S. OCS. Offshore drilling contractors employ thousands of rig personnel and rely on contracts with operators for business and utilization of their rigs. If operators do not have leases, drilling contractors do not work. If the extended time for lease development directed by Congress, and implemented by BSEE, has its intended effect of helping operators develop the leases they’ve obtained, and in doing so, utilize services of drilling contractors more expeditiously, then we applaud the action taken. We would not wish to see the opportunity provided by Congress for development used to simply delay lease relinquishment.”
Congress directed BSEE to make this amendment in the Consolidated Appropriations Act of 2017. A notice of the final rule, titled, Oil and Gas and Sulphur Operations on the Outer Continental Shelf – Lease Continuation Through Operations, is available in the 9 June Federal Register.
U.S. Energy Week Brings Together Industry, Government to Discuss Energy Dominance
June 26-30 marked Energy Week for the U.S. White House. During the week, the Executive Branch of the government hosted several panels and roundtable discussions to talk about how state, tribal, business and labor leaders can work toward U.S. energy dominance.
- In the U.S. Senate, Senators Lisa Murkowski (R-AK) and Maria Cantwell (D-WA) introduced a new version of their bipartisan energy and natural resources bill, S1460, the Energy and Natural Resources Act of 2017. The bill will expedite liquefied natural gas exports, boost energy trade, protect sportsmen’s access, strengthen mineral security, bolster the energy workforce, reauthorize certain conservation programs, facilitate better management of federal lands and minimize risks from natural hazards. The bill’s full text can be found on the Energy and Natural Resources Committee’s website.
- On 29 June, President Trump announced a new six-point initiative to promote U.S. energy development. IADC President Jason McFarland issued the following statement: “IADC supports this administration’s goal of promoting the development of energy in the U.S., particularly with regard to a new offshore oil and natural gas program and the approval of more LNG export permits and pipelines. IADC supports the safe and environmentally sound development of oil and gas and we look forward to drilling in the golden era of American energy.”
U.S. House Natural Resources Committee Holds Hearing on Federal Lands Access
On 29 June, the U.S. House Natural Resources Committee held a hearing to examine access to oil and gas on Federal lands.
At the conclusion of 2016, the Bureau of Land Management, which is responsible for leasing federal owned minerals for oil and gas development oversaw 40,143 onshore leases in 11 states. This is the lowest number of federal leases since the BLM began publishing records in 1985. Duplicative and costly policies have discouraged operators from leasing federal minerals. Between 2010 and 2015, federal crude production fell from 36% of total crude production to 21%, while crude production on non-federal lands more than doubled. At the federal level, the BLM currently has a backlog of 3,000 drilling permits.
Witnesses during the hearing included Katharine MacGregor, deputy assistant secretary at the Department of Interior (DOI); Ryan Flynn, executive director of the New Mexico Oil and Gas Association; Dr. Laura Nelson, Governor’s Energy Advisory, Utah Governor’s Office of Energy Development and Mark Squillance, professor of law, University of Colorado, Boulder.
The Hearing Memo and video of the hearing can be accessed via the Natural Resources Committee website.
IADC Supports SEA Act to Streamline Offshore Seismic Permit Process
On 29 June, Louisiana Congressman Mike Johnson introduced the Streamlining Environmental Approvals Act of 2017 (SEA ACT of 2017). In response, IADC President Jason McFarland issued the following statement:
“IADC partnered with IAGC, API and NOIA to sponsor this bill because we believe it provides a common-sense fix to the Marine Mammal Protection Act to address excessively lengthy permitting delays. Today’s bill clarifies the Incidental Harassment Authorizations permitting process, which will ultimately increase regulatory efficiency, decrease permitting delays and undo unnecessary duplication. The result of these actions will allow industry to move forward with offshore energy exploration while also protecting marine life populations and habitats.”
“We thank Congressman Johnson for his leadership, along with Congressmen Abraham (R-LA), Higgins (R-LA), Graves (R-LA), Hice (R-GA) and Duncan (R-SC) for their co-sponsorship of the bill.
Washington D.C. Updates
Administration:
In early June, the Department of Interior announced the addition of key senior staff members including Chief of Staff to the Secretary, Associate Deputy Secretary, Principal Deputy Solicitor and two Principal Deputy Assistant Secretaries.
Senate:
The U.S. Senate has been busy at the Committee level and on the Senate Floor. The Senate Appropriations Subcommittees and Senate authorizing committees have held hearings to review the President’s FY18 Budget Request. The Senate Intelligence Committee held several hearings on Russia’s interference in various elections, as well as received testimony from former FBI Director James Comey and Attorney General Sessions. The Judiciary Committee held a hearing on the Foreign Intelligence Surveillance Act Amendments with a focus on how to balance gathering intel for national security with protecting privacy and civil liberties.
In the full Senate, Mitch McConnell put forth the Senate’s healthcare bill but did not have the votes to pass it in July. In addition, the Senate continued to process various nominations, as well as passed S. 722, an Act to provide Congressional Review and to counter both the Iranian and Russian government aggressions.
House:
The House of Representatives, the greater WDC community and the country were in shock at the shooting of GOP Congressmen at their practice for the Congressional baseball game. Fortunately, Louisiana Congressman Steve Scalise continues to recover at a steady pace. House Committees have also been busy holding hearings on the President’s FY18 Budget Requests. The House also began work on the National Defense Authorization Act. The House passed nearly two-dozen bills in June, most notably the Veterans Affairs Accountability and Whistleblower Protection Act.
INDUSTRY NEWS
U.S. EIA Reports U.S. Exports Have Doubled Since 2010
On 27 June, the U.S. Energy Information Administration (EIA) announced that crude oil and petroleum product exports have more than doubled over the last six years, increasing from 2.4 million barrels per day in 2010 to 5.2 million barrels per day in 2016. Exports of distillate, gasoline, propane and crude oil have all increased, but at difference paces and for different reasons.
To access the full EIA report, along with supporting graphics, please visit the EIA website
IADC Australasia Chapter Presents 2016 Safety Awards
On 16 May, the IADC Australasia Chapter hosted its Annual General Meeting in Perth. During the meeting, the chapter presented Safety Awards, recognizing safety excellence for 2016. Winner of the 2016 Onshore Safety Award was Schlumberger Land Rigs and the 2016 Offshore Safety Award was Noblecorp.
The award program is open to all onshore and offshore chapter members, with a winner designated in both areas. In 2016, nine of thirteen IADC Australasia Chapter member companies participated in the program. The safety statistics for the participating companies were supplied quarterly in compliance with the 2016 IADC Incident Statistics Program (ISP) guidelines.
The combined onshore and offshore key statistics include:
- 3,035,015 man hours of operation
- 3 medical treatment cases
- 0 lost time incidents
- 5 restricted work/transfer cases
- LTIFR = 0
- DARTFR = 1.647
- TRIFR = 2.6359
- 0 fatalities
For more information about the IADC Australasia Chapter please visit the IADC website.
Mark Denkowski, IADC Executive Vice President, Operational Integrity presents the offshore safety award plaque to Sebastian Van Diemen, Noblecorp Drilling Superintendent and Yoga Rajan, Noblecorp Regional HSE Supervisor.
Mark Denkowski, IADC Executive Vice President, Operational Integrity, presents the onshore safety award plaque to Leigh Foreman, SLB Operations Manager.
U.S. Secretary of Labor Withdraws Joint Employment, Independent Contractor Informal Guidance
On 7 June, U.S. Secretary of Labor Alexander Acosta announced the withdrawal of the U.S. Department of Labor’s (DOL) 2015 and 2016 informal guidance on joint employment and independent contractors. Removal of the administrator interpretations does not change the legal responsibilities of employers under the Fair Labor Standards Act and the Migrant and Seasonal Agricultural Worker Protection Act, as reflected in the department’s long-standing regulations and case law. The department will continue to fully and fairly enforce all laws within its jurisdiction, including the Fair Labor Standards Act and the Seasonal Agricultural Worker Protection Act.
OSHA to Hold Public Meeting to Solicit Suggestions for Strengthening the Voluntary Protection Programs
On 17 July, the U.S. Occupational Safety and Health Administration (OSHA) will hold a stakeholder meeting in Washington, D.C. to discuss the future direction of the agency’s Voluntary Protection Programs (VPP). The discussion will include comments and suggestions from the public on potential avenues for action.
OSHA is seeking to reshape VPP so that it continues to represent safety and health excellence, leverages partner resources, further recognizes the successes of long-term participants and supports smart program growth.
The meeting will be held on 17 July from 9 a.m. to 5 p.m. in Washington, D.C. Those wishing to attend must register by 10 July, and attendees can choose from several levels of participation in the discussion. To register, please visit VPP Stakeholder Meeting Registration.
For those unable to attend in person, a docket has been opened to receive comments. You can provide input and/or read others’ comments. The docket closes on 15 September.
This represents an opportunity to voice improvements IADC members companies may have to the OSHA Protection Programs; therefore, if you would like IADC to submit comments on your behalf, please contact Rhett Winter at Rhett.Winter@iadc.org
U.S. Department of Interior Requesting Comments for Implementing Regulatory Reform
The U.S. Department of Interior recently published a Request for Comments on how the Department can improve implementation of regulatory reform initiatives and policies and identify regulations for repeal, replacement, or modification.
The document also provides an overview of Interior’s approach for implementing the regulatory reform initiative to alleviate unnecessary burdens placed on the American people, which was established by President Trump in Executive Order 13777, “Enforcing the Regulatory Reform Agenda”. No deadline for the receipt of comments on this effort has been established at this time, and Interior will review comments on an ongoing basis.
IADC is soliciting input from members for submission by IADC. Comments may be submitted to John Pertgen at John.Pertgen@iadc.org.
IMO’s Maritime Safety Committee Adopts MODU Code and Dynamic Positioning Amendments
Two provisions of particular interest to the offshore drilling industry were adopted at the International Maritime Organization’s (IMO) 98thth session of the Maritime Safety Committee (MSC 98) meeting that was held on 7-16 June.
The Committee approved amendments to the IMO’s Dynamic Positioning (DP) Guidelines (MSC.1/Circ.645). This first revision of the guidelines since their introduction in 1994 will better align expected functional performance criteria with technologies that have evolved since. In particular, the updates will place additional focus on the importance of formulating DP system integrity based on Failure Mode Effects and Analysis (FMEA) evaluation. This additional focus is designed to further increase DP system reliability and enhance recognition of DP operating parameters. Having been approved by the Committee, this revised guidance will generally apply to vessels on or after 16 June 2017.
The Committee also adopted amendments to the IMO’s 2009 MODU Code with an “entry into force date” of 1 January 2020. A result of recommendations drawn from investigations of the Deepwater Horizon incident, these amendments will further improve provisions for addressing person in charge considerations, installation and operation of equipment in hazardous zones, providing for more robust structural fire protection design elements, and lifesaving appliance considerations unique to MODUs.
The Committee decisions mark the successful completion of efforts undertaken by key flag states representing a majority of the global Mobile Offshore Drilling Unit (MODU) fleet. Actively collaborating with these countries over the span of several years, IADC is pleased to see these new DP and MODU Code provisions adopted in a manner that will enhance operational safety while not forgetting the practical considerations for implementing these improvements.
U.S. DOE Announces Oil & Gas Funding Availability
The U.S. Department of Energy’s (DOE) Office of Fossil Energy recently announced the availability of $20 million for cost-shared oil and gas research project to increase recovery efficiency from unconventional oil and gas wells and prevent offshore spills and leaks. The funding opportunity seeks projects that will advance DOE’s objective to support a more environmentally responsible, secure and resilient U.S. energy infrastructure, while enhancing competitiveness and national security.
The three topic areas for this funding opportunity include:
- Technology validation using field laboratories: $15 million
- Advancement in subsurface diagnostics: up to $3 million
- Offshore spill and leak prevention: $2 million
The first two topics areas address critical gaps in the understanding of reservoir behavior and optimal completion, stimulation and recovery strategies for unconventional oil and gas. The aim of these topic areas is to increase and enable more cost-efficient and environmentally sound recovery from shale gas, tight gas oil and tight gas reservoirs. The third topic area focuses on offshore oil and gas spill and leak prevention. The aim of this topic is to develop innovative solutions that predict geologic hazards, and prepare for and prevent offshore incidents through risk reduction and mitigation technologies.
To learn more about this funding opportunity, please visit the Department of Energy website.
US Labor Department’s OSHA Proposes to Delay Compliance Date for Electronically Submitting Injury, Illness Reports
On 27 June, the U.S. Department of Labor’s Occupational Safety and Health Administration (OSHA) proposed a delay in the electronic reporting compliance date of the rule, Improve Tracking of Workplace Injuries and Illnesses, from July 1, 2017 to Dec. 1, 2017. The proposed delay will allow OSHA an opportunity to further review and consider the rule.
The agency published the final rule on 12 May 2016, and has determined that a further delay of the compliance date is appropriate for the purpose of additional review into questions of law and policy. The delay will also allow OSHA to provide employers the same four-month window for submitting data that the original rule would have provided.
OSHA invites the public to comment on the proposed deadline extension. Comments may be submitted electronically via the Federal e-Rulemaking Portal. The deadline for submitting comments is 13 July 2017. See the Federal Register notice for details.
API Announces BOP Shear Ram Performance Ballot
API recently announced a ballot for API 16TR1, BOP Shear Ram Performance Test Protocol, 1st Edition. This document was previously promoted as API 16TR2, but has been re-designated as 16TR1. This is a new document and the ballot results will be the basis for publication. The ballot closes on 24 July 2017. The API ballot system permits nonvoting individuals (guests) to submit comments by entering the ballot ID number, ID #4141, on the login page and then entering the required contact information.
More information can be found on API’s website.
ACCREDITATION
IADC WellSharp Now Available in Arabic
The online exam for IADC’s well control training and assessment program, WellSharp, is now available in Arabic. The Arabic translation is now available to all training providers. The exam was previously translated into Portuguese and Spanish, and it will also be available in 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 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 COMMITTEES
IADC Cybersecurity Subcommittee Drafting Guidelines
The IADC ART Cybersecurity Subcommittee is in full swing drafting five additional guidelines following the guidelines published last year on Assessing and Managing Cybersecurity Risk for Drilling Assets. The five additional guidelines under development are as follows and due to be completed by the end of 2017.
- Guidelines for Minimum Cybersecurity Requirements for Drilling Assets
- Guidelines for Network Segmentation
- Cybersecurity training v1.0
- Guidelines for hardening of control systems focusing on existing drilling assets (to include patching)
- Guidelines for security monitoring and audit
Please join the Subcommittee at the next meeting to participate in or learn more about the progress of the guidelines. The focus of the next subcommittee meeting is to review the guidelines for Minimum Cybersecurity Requirements for Drilling Assets. The next IADC ART Cybersecurity Subcommittee meeting will be at 9 am on 13 July 2017 at IADC, 10370 Richmond Ave, Suite 760, Houston, TX 77042. If you plan to attend, please register online at the IADC website.
IADC ART Drilling Control Systems Subcommittee Names Co-Chair
Robert Vankuilenburg of Noble was recently named co-chair of the IADC ART Drilling Control Systems Subcommittee. The subcommittee will next meet on 27 July at IADC Headquarters in Houston. For more information please visit the IADC website.
INDUSTRY RESOURCES
Drilling Matters Details the Myriad Products Made From Oil & Gas
IADC Drilling Matters is pleased to announce the addition of two new modules to DrillingMatters.org. Drilling Matters is a web-based, modular and interactive website designed to dispel myths and correct misconceptions about the petroleum industry.
The first new module, “More That a Fuel” discusses the myriad products, both mundane and highly specialized, that would not exist without use of oil and gas. The 9-minute video discusses everything from lipstick and balloons to pacemakers and Xray machines, as well as sweaters, balloons, golf balls and thousands of other items we take for granted.
The second new module is a wholly revised interactive rig tour. Click on one of the enumerated components and a video plays discussing the component.
In all, DrillingMatters.org comprises 15 modules, from basic introductions to drilling equipment, the value of hydrocarbons, and more. Drilling Matters: Spread the Word.
For more information, contact Mike Killalea (713-292-1956, mike.killalea@iadc.org).
IADC Incident Statistics Program 2017 Q1 Data Available
The 2017 IADC Incident Statistics Program Q1 Year to Date Summary Report is now available via the IADC website. The 5 year LTI/RCRD Frequency rate has also been updated and published.
Participation in the IADC ISP is voluntary and open to all drilling contractors and well servicing companies engaged in oil and gas and well drilling. However, a company must participate in the IADC ISP program and be a member of IADC in order to qualify for rig/unit recognition. The ISP has tracked safety and accident information for the drilling industry since 1962. Data are compiled separately for land and offshore operations and for seven geographic regions – U.S., Europe, Canada, Central and South America, Africa, the Middle East and Asia Pacific.
To learn how your company can participate in the ISP, please visit the Incident Statistics Report page on the IADC website. Questions can be emailed to isp@iadc.org.
IADC Lexicon Featured Term for June 2017
Last month, we launched the IADC Lexicon “Featured Term”. The IADC Lexicon (IADCLexicon.org) is a compendium of upstream-related terms, which, unlike conventional glossaries, are official definitions drawn from legislation, regulation and regulatory guidance, standards (global, national and regional), and IADC guidelines. Terms often have multiple definitions from different sources.
This month’s Featured Term is:
“Vulnerability Assessment” (Source: DHS Risk Lexicon, U.S. Department of Homeland Security, 2010 Edition. September 2010):
Product or process of identifying physical features or operational attributes that render an entity, asset, system, network, or geographic area … (click to read full definition and those from other sources at http://www.iadclexicon.org/vulnerability-assessment/).
Accreditation Updates
RigPASS
WellSharp
DIT
Safety Alerts
For the latest safety alerts, visit www.iadc.org/safety-alerts
Alert 17-3: LTI – Hot Water Scald
Alert 15-4: Drill Pipe Screen Lodging in Top Drive Results in Near Hit
Upcoming Events
Rigs Receive ISP Certificates
For certificates received since last LTI (in years):
New IADC Members
IADC welcomes 18 new members:
DRILLBITS Volume 27, Number 6
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.