Precursor Analysis for Offshore Oil and Gas Drilling: From Prescriptive to Risk-Informed Regulation

The Oil Spill Commission’s chartered mission—to “develop options to guard against … any oil spills associated with offshore drilling in the future” (National Commission 2010)—presents a major challenge: how to reduce the risk of low-frequency oil spill events, and especially high-consequence events like the Deepwater Horizon accident, when historical experience contains few oil spills of material scale and none approaching the significance of the Deepwater Horizon. In this paper, we consider precursor analysis as an answer to this challenge, addressing first its development and use in nuclear reactor regulation and then its applicability to offshore oil and gas drilling. We find that the nature of offshore drilling risks, the operating information obtainable by the regulator, and the learning curve provided by 30 years of nuclear experience make precursor analysis a promising option available to theU.S. Bureau of Ocean Energy Management, Regulation and Enforcement (BOEMRE) to bring costeffective, risk-informed oversight to bear on the threat of catastrophic oil spills.

After the accident at Three Mile Island on March 28, 1979, the U.S. Nuclear Regulatory Commission embarked on a shift in regulation. Regulation moved from a traditional regime based on command, control, and compliance to a risk-informed structure with both industry and government responsible for clear safety goals. The Three Mile Island accident instigated a long trajectory of innovation and refinement that continues to this day. A major element of these efforts is the Accident Sequence Precursor (ASP) program, initiated in response to recommendations from the Lewis Committee review of the first comprehensive probabilistic risk analysis.

The Deepwater Horizon spill bears a striking resemblance. After the spill, there has been substantial review of federally regulated offshore oil and gas activity that is questioning government oversight approaches and capabilities. Consensus is emerging to shift regulation by the U.S. Bureau of Ocean Energy Management, Regulation and Enforcement (BOEMRE) away from the traditional regime to a modern, risk-informed regime.

Both the Deepwater Horizon spill and the Three Mile Island disaster included an unprecedented catastrophic system failure resulting from a sequence of individual failures, not one of which was by itself unprecedented or catastrophic. By consolidating into a few events the performance of this often complex sequence of “down-hole” steps, one can draw a very simple event tree. If not recognized through integrity testing and rectified, a failure of one or more down-hole barriers—mud, casing, cement, plugs—in combination with a blowout preventer failure, results in complete system failure, as occurred in the Deepwater Horizon accident sequence. After Three Mile Island, the U.S. Nuclear Regulatory Commission, recognizing the stepwise path to disaster, developed the ASP program to identify and guard against the opening steps of a potential disaster sequence. Risk-informed regulation is indicated for sectors where industry is technology driven, with a high rate of innovation and the potential for occasional events causing substantial harm to the public and the environment. The regulator cannot remain on the sidelines of technological innovation but must engage industry as a full partner in the achievement of safety goals. This partnership is not achieved by regulatory fiat. Rather, it emerges from an evolutionary process. It needs to grow the analytic skills for risk quantification within industry, then generate a data flow to support risk quantification, and finally foster a safety culture based on quantitative risk analysis.

RFF researchers Roger M. Cooke, Heather L. Ross, and Adam Stern, authors of “Precursor Analysis for Offshore Oil and Gas Drilling,” conclude that a precursor analysis methodology, similar to the ASP program in the nuclear sector, is worth exploring for BOEMRE oversight of offshore drilling. They also note the desirability of adding to BOEMRE a risk-informed oversight capability focused on preventing catastrophic oil spills, based on data from ongoing operating experience on the Outer Continental Shelf.

Find more oil and gas, risk, and governance research and analysis from RFF here.