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[Federal Register: October 15, 2010 (Volume 75, Number 199)]
[Rules and Regulations]               
[Page 63609-63654]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr15oc10-10]                         

[[Page 63609]]

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Part III

Department of the Interior

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Bureau of Ocean Energy Management, Regulation and Enforcement

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30 CFR Part 250

Oil and Gas and Sulphur Operations in the Outer Continental Shelf--
Safety and Environmental Management Systems; Final Rule

[[Page 63610]]

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DEPARTMENT OF THE INTERIOR

Bureau of Ocean Energy Management, Regulation and Enforcement

30 CFR Part 250

[Docket ID BOEM-2010-0046]
RIN 1010-AD15

 
Oil and Gas and Sulphur Operations in the Outer Continental 
Shelf--Safety and Environmental Management Systems

AGENCY: Bureau of Ocean Energy Management, Regulation and Enforcement 
(BOEMRE), Interior.

ACTION: Final rule.

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SUMMARY: This final rule establishes a new subpart under the Bureau of 
Ocean Energy Management, Regulation and Enforcement (BOEMRE) 
regulations to require operators to develop and implement Safety and 
Environmental Management Systems (SEMS) for oil and gas and sulphur 
operations in the Outer Continental Shelf (OCS). This rulemaking will 
incorporate in its entirety and make mandatory the American Petroleum 
Institute's Recommended Practice 75, Development of a Safety and 
Environmental Management Program for Offshore Operations and 
Facilities, with respect to operations and activities under the 
jurisdiction of BOEMRE. This final rule will apply to all OCS oil and 
gas and sulphur operations and the facilities under BOEMRE jurisdiction 
including drilling, production, construction, well workover, well 
completion, well servicing, and DOI pipeline activities. The importance 
of this final rule is highlighted by the Deepwater Horizon event on 
April 20, 2010. Although the cause of the event is presently under 
investigation, it further illustrates the importance of ensuring safe 
operations on the OCS. BOEMRE believes that requiring operators to 
implement SEMS will reduce the risk and number of accidents, injuries, 
and spills during OCS activities.

DATES: Effective Date: This rule becomes effective on November 15, 
2010. The incorporation by reference of the publication listed in the 
regulation is approved by the Director of the Federal Register as of 
November 15, 2010.

FOR FURTHER INFORMATION CONTACT: David Nedorostek, (703) 787-1029.

SUPPLEMENTARY INFORMATION: On May 22, 2006, the former Minerals 
Management Service published an Advance Notice of Proposed Rulemaking 
(71 FR 29277), and then on June 17, 2009, BOEMRE (formerly MMS) 
published a Notice of Proposed Rulemaking in the Federal Register 
entitled ``Safety and Environmental Management Systems for Outer 
Continental Shelf Oil and Gas Operations'' (74 FR 28639). The comment 
period for that proposed rule closed on September 15, 2009. In response 
to several requests, BOEMRE issued a National Notice to Lessees and 
Operators (NTL No. 2009-N05) on August 12, 2009, announcing a public 
meeting on September 2, 2009, in New Orleans, Louisiana, to discuss the 
proposed rule.

Summary of the Final Rule

    BOEMRE is incorporating by reference, and making mandatory, the 
American Petroleum Institute's Recommended Practice for Development of 
a Safety and Environmental Management Program for Offshore Operations 
and Facilities (API RP 75), Third Edition, May 2004, reaffirmed May 
2008. This recommended practice, including its appendices, constitutes 
a complete Safety and Environmental Management System (SEMS) program. 
On May 22, 2006, BOEMRE published an Advance Notice of Proposed 
Rulemaking (ANPR) in the Federal Register (71 FR 29277) related to 
requiring a SEMS program. This was followed on June 17, 2009, by a 
Notice of Proposed Rulemaking (NPR).
    The ANPR discussed several options for implementing a SEMS program. 
One of these options was a comprehensive safety and environmental 
management approach by addressing all elements of API RP 75. API RP 75 
consists of 13 sections, one of which is a ``General'' section. This 
relates to the 12 elements identified in the ANPR and states the 
overall principles for the SEMS program and establishes management's 
general responsibilities for its success. This General element is 
critical to the successful implementation of the SEMS program in API RP 
75, and BOEMRE is including it by incorporating by reference the 
entirety of API RP 75.
    The NPR proposed regulatory text premised on the four critical 
elements of API RP 75 (hazards analysis, management of change, 
operating procedures, and mechanical integrity). BOEMRE noted all 
elements of API RP 75 in the proposed rule, stating that a SEMS program 
should be modeled after the requirements of API RP 75, but did not 
propose to incorporate all elements of API RP 75. However, several 
comments suggested that BOEMRE should incorporate by reference and 
require implementation of all elements of API RP 75. BOEMRE has 
determined that for the SEMS program to be most effective, the entirety 
of API RP 75 needs to included in the program and has required as much 
in the final rule. BOEMRE also believes that adoption of API RP 75 in 
its entirety is consistent with the direction of the National 
Technology Transfer and Advancement Act of 1996, which directs 
agencies, wherever possible, to adopt private standards.
    This final rule will therefore require the operator (a lessee, the 
owner or holder of operating rights, or the designated operator) to 
integrate a comprehensive SEMS program into the management of their OCS 
operations, thereby providing for the prevention of waste and 
conservation of natural resources of the Outer Continental Shelf. In 
addition, BOEMRE is highlighting certain requirements from API RP 75 
and further describing those requirements in the regulatory text to 
clarify compliance requirements. It is the intent of this rule to hold 
the operator accountable for the overall safety of the offshore 
facility, including ensuring that all contractors and subcontractors 
have safety policies and procedures in place that support the 
implementation of the operator's SEMS program and align with the 
principles of managing safety set forth in API RP 75. Nothing in this 
final rule shall affect the Coast Guard's authority and jurisdiction 
over vessels and offshore facilities. This final rule will require all 
elements of API RP 75 as follows:
    (1) General, with additional clarification in Sec.  250.1909,
    (2) Safety and Environmental Information, with additional 
clarification in Sec.  250.1910,
    (3) Hazards Analysis, with additional clarification in Sec.  
250.1911,
    (4) Management of Change, with additional clarification in Sec.  
250.1912,
    (5) Operating Procedures, with additional clarification in Sec.  
250.1913,
    (6) Safe Work Practices, with additional clarification in Sec.  
250.1914,
    (7) Training, with additional clarification in Sec.  250.1915,
    (8) Assurance of Quality and Mechanical Integrity of Critical 
Equipment, (Mechanical Integrity), with additional clarification in 
Sec.  250.1916,
    (9) Pre-startup Review, with additional clarification in Sec.  
250.1917,
    (10) Emergency Response and Control, with additional clarification 
in Sec.  250.1918,
    (11) Investigation of Incidents, with additional clarification in 
Sec.  250.1919,
    (12) Audit of Safety and Environmental Management Program Elements, 
(Auditing), with additional clarification in Sec. Sec.  250.1920, 1924, 
and 1925, and

[[Page 63611]]

    (13) Records and Documentation, (Recordkeeping and Documentation), 
with additional BOEMRE requirements in Sec.  250.1928.
    BOEMRE also carried over other provisions that were contained in 
the proposed rule. Therefore, in implementing a comprehensive SEMS 
program that incorporates all of API RP 75, the operator needs to 
include the following in its SEMS program:
    (1) Recordkeeping and documentation regarding specification of the 
amount of time records are to be kept;
    (2) Clarification of the differences between hazards analysis 
(facility level) and job safety analysis (task level);
    (3) Procedures to verify that contractors are conducting their 
activities in accordance with the operator's SEMS program and an 
evaluation to ensure that contractors have the skills and knowledge to 
perform their assigned duties;
    (4) An independent third-party or your designated and qualified 
personnel must conduct all SEMS audits;
    (5) Audit documentation must be submitted to BOEMRE;
    (6) Other documentation to be made available to BOEMRE upon 
request;
    (7) OCS performance measures data (Form MMS-131).
    The following table provides a summary of the individual provisions 
and their associated cost for implementation and annual maintenance of 
a SEMS program. No costs are identified for implementation of a SEMS 
program by high activity operators because all high activity operators 
currently have a SEMS program. Implementation costs for moderate and 
low activity operators that have a partial SEMS program are lower than 
those operators without a SEMS program.

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                 Implementation        Implementation
                                                                   (moderate)               (low)           Maintenance     Maintenance     Maintenance
                          Elements                           --------------------------------------------     (high)        (moderate)         (low)
                                                               Partial      Full     Partial      Full
--------------------------------------------------------------------------------------------------------------------------------------------------------
General.....................................................    $18,000    $18,000     $5,000     $5,000         $50,000          $3,000          $2,000
Safety and Environmental Information........................          0     22,000          0      8,000          75,000          12,000           3,000
Hazards Analysis............................................          0     98,000          0     23,000         300,000          34,000          14,000
Management of Change........................................          0     29,000          0     18,000         150,000          21,000           7,000
Operating Procedures........................................          0     20,000          0     10,000         100,000          17,000           4,000
Safe Work Practices.........................................          0     28,000          0     12,000         125,000          17,000           5,000
Training....................................................          0     30,000          0     14,000         200,000          25,000           9,000
Mechanical Integrity........................................          0     38,000          0     19,000         225,000          27,000          11,000
Pre-startup Review..........................................     25,000     25,000      8,000      8,000         125,000          16,000           5,000
Emergency Response and Control..............................     28,000     28,000     14,000     14,000         175,000          24,000           7,000
Investigation of Incidents..................................     20,000     20,000     10,000     10,000          95,000          17,000           3,000
Audits......................................................      3,000      3,000      2,000      2,000          15,000           6,000           6,000
Records and Documentation...................................      6,000      6,000      4,000      4,000          30,000           6,000           4,000
                                                             -------------------------------------------------------------------------------------------
    Total...................................................    100,000    365,000     43,000    147,000       1,665,000         225,000          80,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
Total One-time Implementation: $655,000.
Total Annual Maintenance: $1,970,000.

    BOEMRE may enforce non-compliance with any of the requirements of 
30 CFR part 250 subpart S, in a variety of ways. BOEMRE may issue 
incidents of non-compliance (INCs) following an inspection where BOEMRE 
determines that a facility is conducting operations that do not comply 
with the requirements of subpart S, or after a BOEMRE directed 
independent third-party SEMS audit. If BOEMRE identifies non-compliance 
with subpart S as a result of a regularly scheduled SEMS audit and all 
deficiencies discovered during the course of the audit are sent to 
BOEMRE with a schedule for their correction, then BOEMRE will consider 
this in deciding whether to issue an INC. However, if the operator does 
not meet its schedule of corrections, BOEMRE will be more likely to 
issue an INC.
    If non-compliance resulting from an inspection or BOEMRE-directed 
audit poses actual harm or threat to the human and marine environment, 
BOEMRE will proceed with a civil penalty review of that violation(s) 
subject to 30 CFR part 250, subpart N--Outer Continental Shelf Civil 
Penalties. Should non-compliance with subpart S display serious and 
pervasive safety management concerns, BOEMRE may restrict or revoke the 
operator's privilege to operate on the OCS as a designated operator or 
lessee operator through probationary or disqualification actions as 
detailed in Sec.  250.135.

Notice of Proposed Rulemaking Comments

    In response to the proposed rule, BOEMRE received 61 sets of 
comments, of which 57 were from individual entities (companies, 
industry organizations, or private citizens). Some of the 61 comments 
were duplicates, not related to the proposed rule, or the same company 
submitting multiple comments. All of the comments received are posted 
on the BOEMRE Web site at: http://www.BOEMRE.gov/federalregister/PublicComments/AD15SafetyEnvMgmtSysforOCSOilGasOperations.htm.
    Multiple comments stated that they do not support the proposed rule 
as written because it will eliminate the flexibility needed for any 
safety management system to work effectively, including flexibility 
inherent in the API RP 75 approach.
    Five comments received recommended that BOEMRE should move forward 
to implement its plan to require a SEMS for oil and gas and sulphur 
operations on the OCS and that the proposed rule should require that 
offshore operators implement all elements of API RP 75. Other comments 
suggested various combinations of the API RP 75 elements.
    The majority of the comments received stated that SEMS should 
remain voluntary and the proposed rule, as written, would increase 
documentation and recordkeeping requirements and would not address 
human factors (i.e., errors, behavior, etc.). Several comments 
recommended that BOEMRE incorporate the JSA into current 30 CFR part 
250 regulations to address human factors as an alternative to 
incorporating the four elements.
    Numerous comments received from drilling, production, and service 
contractors stated that BOEMRE already

[[Page 63612]]

has regulations in place to address employee training and competency 
assessments in 30 CFR part 250, subpart O--Well Control and Production 
Safety Training, and recommended that BOEMRE strike the section 
relating to contractors from the rule because it is redundant with the 
existing subpart O regulations.
    A few comments received from industry trade organizations (API, 
International Association of Drilling Contractors (IADC), Offshore 
Operators Committee (OOC)) stated that the proposed rule as written 
will require lessees and operators to modify existing SEMS programs and 
that rewriting these programs would not prevent accidents or increase 
safety.
    In response to the comments we address the general comments and 
those that pertain to several sections of the rule first. Following 
that, we have a section-by-section discussion of the specific comments 
received and our response to those comments, including any changes made 
to the final rule.

General Comments

Contractor Selection Criteria

    Comment: Nearly every comment addressed contractor selection 
criteria. They stated that BOEMRE already has regulations in place (30 
CFR part 250, subpart O--Well Control and Production Safety Training) 
that address training and competency assessment for contractors. In 
addition, they stated that BOEMRE was requiring contractors to have a 
SEMS program.
    Response: We incorporated by reference API RP 75, Section 7, which 
addresses training. Subpart O addresses training and competency for 
contractors. The operator may use the training requirements in subpart 
O to meet part of the requirements of Section 7. As part of their SEMS 
program, operators must establish and implement training programs so 
that all personnel are trained to work safely and are aware of 
environmental considerations offshore, in accordance with their duties. 
The SEMS program must address contractor training to ensure and verify 
that contractors have their own written safe work practices and 
contractors may adopt appropriate sections of the operator's SEMS 
program. The operator must have a SEMS program and is responsible for 
obtaining and evaluating information regarding the contract employer's 
safety performance and safety programs to ensure that skilled, 
knowledgeable, and properly trained personnel are working on the OCS. 
In order to comply with this rule, an operator must ensure that its 
contractors are conducting their operations in accordance with the 
operator's SEMS program. The operator must work with the contractor 
regarding appropriate contractor safety and environmental policies and 
practices before a contractor begins work at the operator's facilities.

Jurisdictional Authority

    Comment: Most comments expressed concern that BOEMRE had 
overstepped its jurisdictional authority by imposing management safety 
system requirements in the proposed rule on mobile offshore drilling 
units (MODUs). Comments questioned BOEMRE's authority to require an 
operator to have a SEMS on a MODU.
    Response: BOEMRE has jurisdictional authority to adopt and 
implement this rule. The final rule will require operators to have a 
SEMS for a MODU when it is under BOEMRE's jurisdiction such as during 
drilling, well workover, well completion, and servicing operations.

The U.S. Offshore Industry Safety Record

    Comment: Most comments expressed the view that the safety and 
environmental protection record of the offshore industry is excellent, 
and that imposing these new requirements is not justified.
    Response: BOEMRE disagrees that the final SEMS regulation is not 
justified in light of the available incident data and the trends 
identified through analyzing this data as discussed in the ANPR and 
preamble of the proposed SEMS rule. This analysis covers 10 years (from 
2000 to 2009) of OCS oil and gas operations, including Incidents of 
Noncompliance (INCs), accident panel investigation reports, incident 
analysis, and OCS spill analysis. It shows that the majority of INCs 
and accidents during that period were related to human factors and not 
to equipment failure. Thus, additional regulations are needed to 
address how operators can reduce the risk of incidents during OCS 
activities.
    The ANPR and the proposed rule describe numerous incidents that 
indicate the need for a comprehensive SEMS program. The recent 
Deepwater Horizon incident is a significant reminder of the risk of 
offshore operations and the need to regularly evaluate measures that 
help ensure safe operations. A SEMS program will augment existing 
safety requirements.

Root Cause

    Comment: Most comments stated that BOEMRE's assertion that ``root 
cause analysis'' points to the need for requiring the four proposed 
SEMS elements, is not supported by the BOEMRE's incident analysis.
    Response: BOEMRE believes that the SEMS regulation is justified 
given the available incident data trends and associated analysis 
discussed in the ANPR and preamble of the proposed and final SEMS rule. 
As mentioned previously, the analysis covered over 10 years and 
demonstrates that requiring operators to implement a SEMS program is 
likely to improve OCS safety. BOEMRE incident analysis supports 
adopting all 13 elements. Voluntary data submitted by industry should 
not be construed as BOEMRE data as it is incomplete and unverified. 
BOEMRE data is the only source of industry-wide data available.

Job Safety Analysis/Job Hazards Analysis

    Comment: Most comments claimed that the job safety analysis/job 
hazards analysis is the only significant portion of the proposed rule 
that could affect the behavioral issues related to an incident.
    Response: BOEMRE agrees that a JSA/JHA does address behavioral 
change with the goal of minimizing accidents, but disagrees that it is 
the only portion of the rule that bears on behavior. In the final rule, 
BOEMRE is incorporating all elements of API RP 75, much of which 
addresses behavioral issues and additional regulatory requirements to 
clarify expectations for compliance.

Mandated SEMS Program

    Comment: Most comments strongly disagree that a mandated SEMS 
program as proposed is needed. The comments stated that a mandated 
program will not reduce OCS incidents any more than a voluntary SEMS 
program. As such, they recommend BOEMRE keep SEMS voluntary.
    Response: BOEMRE disagrees. In 1998, operators accounting for 98 
percent of OCS production reported that they were covered under a SEMS. 
By 2006, this number decreased to approximately 60 percent (see API RP 
75 implementation survey at: http://www.BOEMRE.gov/semp/Reports/survey98.htm). A voluntary SEMS program has not been adopted by all 
operators. The only way to ensure the adoption of a SEMS program by all 
operators is to require that all operators implement such a program.
    Comment: The other option proposed by some comments was to mandate 
a program for those operators who have a historical record of poor 
performance.
    Response: BOEMRE does not agree that this is the most effective 
approach.

[[Page 63613]]

The purpose of requiring a SEMS program is to reduce the risk and 
number of incidents during OCS activities, which is not solely based or 
determined by an operator's past record of poor performance.

Withdraw Proposed Rule

    Comment: Many comments stated that BOEMRE should withdraw the 
proposed rule immediately and reevaluate the cost/benefits of mandating 
a program that, as recently as 2003, was determined by the agency to be 
performing well as a voluntary program.
    Response: BOEMRE disagrees. The only way to ensure SEMS programs 
are used across the entire OCS is to require a program for all 
operators. As of 2009, only 54 percent of OCS operators had a SEMS 
program, and not all of the 54 percent include the entirety of APR RP 
75 in their SEMS program.

Underestimated Cost

    Comment: Most comments expressed that BOEMRE significantly 
underestimated the cost of developing, revising, and implementing the 
SEMS program. Comments also stated that BOEMRE dramatically 
underestimated the major new documentation and reporting burden that 
the rule will impose on offshore operators.
    Response: BOEMRE re-evaluated the cost burden on industry by 
interviewing parties experienced in the development of SEMS programs, 
vendors that submit information for operators, and operators with 
designated personnel who work on SEMS issues. Based on this 
information, we have increased the non-hour cost and hour burdens. 
Should OCS companies have documented data that shows a higher cost to 
industry, they may submit comments at any time on the paperwork burden 
as stated in Sec.  250.199(d).

New Reporting, Documentation, and Recordkeeping Requirements

    Comment: Several comments claim that this proposed rule attempts to 
prescribe new reporting, documentation, and recordkeeping requirements 
far above current levels in API RP 75, that will adversely impact OCS 
operators' businesses, both operationally and financially, while 
bringing little benefit towards improving safety of offshore 
operations.
    Response: BOEMRE changed the reporting and recordkeeping 
requirements from the proposed rule to the final rule. We are now 
incorporating all elements of API RP 75, with requirements in Sec.  
250.1928 to enhance documentation and recordkeeping. The reporting and 
recordkeeping requirements in this final rule are primarily submissions 
of documents that are directed by the adoption of API RP 75 and used to 
comply with this recommended practice. The reporting to BOEMRE is 
necessary to ensure the bureau has the appropriate documentation to 
monitor compliance with this rule.
    Comment: The operator can only supply the information on the Form 
MMS-131 by collecting and consolidating information from their 
contractors, suppliers, and vendors and, in turn, any subcontractors or 
other workers involved in OCS operations. This is not a current 
practice and it will require a significant amount of time to establish 
and maintain a reporting system. Further complications will arise since 
a significant portion of work may be contracted out as ``lump sum'' 
turnkey projects where individual worker hours are not provided to the 
operator.
    Response: Such information is critical to the effective 
implementation of a SEMS program. While operators may not currently 
require contractors, suppliers, and vendors to submit this information, 
it is not unreasonable to expect them to provide it to the operator. 
Regarding ``lump sum'' turnkey projects, individual worker hours could 
be estimated as a normal practice. For example, a contractor may have 
workers who stay offshore for 2 weeks at a time and work 12 hour 
shifts. Therefore, a crew of 20 people, could be estimated to work a 
total of 240 hours per day for 14 continuous days (240 hours x 14 days 
= 3, 360 hours).
    Comment: While most contractors on the OCS probably collect 
information regarding employee work hours and injuries/illnesses for 
their own use, they typically do so either on a quarterly or annual 
basis, not the per-contract basis which would be necessitated by the 
proposed action.
    Response: Operators will need to work with their contractors to 
establish the best approach to provide the information required by this 
rule.
    Comment: Collection and reporting of information that only becomes 
available post-contract is problematic. For example: Will the operator 
be expected to report days of continuing restricted work activity for a 
contractor's employee injured while working for the operator after the 
termination of the contract?
    Response: Once the contract has been terminated, the contractor's 
employee is no longer working for the operating company in question. 
Form MMS-131 only requests that an operating company provide 
information for contractors under their employment during the calendar 
year. Operating companies will only be required to provide information 
tallied for the portion of the year the contractor is under the 
operating company's employment, not for the entire year.
    Comment: There is no consistent industry practice of collecting 
information regarding work hours and injuries/illnesses from sub-
contractors and other (possibly occasional) workers. The proposed 
action would require the establishment of such an information 
collection and reporting system. The collection of such information 
regarding occasional workers (e.g., equipment repair specialists), 
particularly those providing services on a per-job (rather than hourly) 
basis will be particularly challenging.
    Response: In Sec.  250.1914(e)(2), BOEMRE requires the operator to 
keep an injury/illness log, retain it for 2 years, and include this 
information on Form MMS-131. The operating company is responsible for 
collecting and submitting this data and will need to work with their 
contractors to establish a process for doing so.
    Comment: BOEMRE has not, with this proposed version of Form MMS-
131, provided the necessary instructions and definitions for the user 
to understand the information collection and comply with the reporting 
requirement. The instructions and definitions should be made available, 
with the proposed form, for public comment. The information collection 
should not be authorized until clear and unambiguous instructions are 
provided.
    Response: There is no need to make proposed Form MMS-131 available 
for public comment since it was previously made available for comment 
in the proposed rule. However, in light of your comment concerning the 
instructions, the BOEMRE is providing explicit instructions to guide 
respondents on completing the form. See Appendix 1 of the final rule.
    Comment: Cost and time estimates are more in line with the printing 
of manuals and instructions and not actual or historical costs we have 
as operators experienced for the development, implementation, and long 
term support of a new program.
    Response: BOEMRE re-evaluated the cost burden on industry by 
interviewing parties experienced in the development of SEMS programs, 
vendors that submit information for operators, and operators with 
designated personnel who work on SEMS issues. Based on this 
information, we have increased the non-hour cost and hour burdens. If 
OCS companies

[[Page 63614]]

have documented data that shows a higher cost to industry, they may 
submit comments at any time on the paperwork burden as stated in Sec.  
250.199(d).
    Comment: The proposed rule does not take into consideration the 
impact that the requirements and administrative burden will force on 
small independent contractors and service suppliers who perform a large 
portion of the field work typically carried out on OCS facilities.
    Response: The operators must submit Form MMS-131 to BOEMRE, not 
small independent contractors and service suppliers. BOEMRE foresees 
that the primary impact for these groups is that they are now expected 
to provide information on the man-hours. That task may be as simple as 
taking note of the time specific employees report in and out of a 
specific work site and tracking that data. Operators will need to work 
with their contractors to establish the best approach to provide the 
information required by this rule.
    Comment: We ask that BOEMRE appropriately acknowledge the entire 
burden being imposed by this rulemaking on the industry and account for 
it within its information collection budget.
    Response: This is discussed in more detail in the Procedural 
Matters of this rulemaking under the Regulatory Flexibility Act and 
Paperwork Reduction Act section. If OCS companies have documented data 
that shows a higher paperwork burden than what BOEMRE estimates, they 
may submit comments at any time on the paperwork burden as stated in 
Sec.  250.199(d).

Unnecessary Burden on BOEMRE

    Comment: Most comments claim that implementing this proposed rule 
will create an additional burden to regional BOEMRE staff that will 
require additional inspector/auditor training and increased workloads.
    Response: While this is additional work, we consider this 
regulation critical to improve safety on the OCS. BOEMRE will adjust 
inspector training and workload as necessary to ensure effective 
implementation of the rule.

Where BOEMRE Believes the Industry Is Falling Short of Expectations

    Comment: Several comments would like to know specifically where 
BOEMRE believes the industry is falling short of BOEMRE's expectations 
regarding safety and why the BOEMRE has not shared this information in 
the rulemaking.
    Response: The proposed rule was developed based upon 33 accident 
panel investigations, 1,443 incident analyses, and 3,132 INCs issued by 
the agency. Additional information about these items is publicly 
available at: http://www.BOEMRE.gov/incidents/index.htm and http://www.gomr.BOEMRE.gov/homepg/offshore/safety/acc_repo/accindex.html.
    For the SEMS program to be most effective, the entirety of API RP 
75 needs to be part of the program, which the final rule requires.

Remove Prescriptive Language

    Comment: A few comments pointed out that if BOEMRE intends to 
require that each SEMS conform to API RP 75, then the highly 
prescriptive language should be removed and the final rule should 
simply reference the appropriate sections in API RP 75. They recommend 
that BOEMRE incorporate by reference API RP 75 into the regulations and 
require compliance with the existing recommended practice. In addition, 
the comments state that the proposed rule, as written, not only 
represents an abrupt change from past direction of the BOEMRE, but it 
also penalizes those operators that took the initiative and developed 
programs patterned after the API RP 75 model. For operators that 
implement API RP 75 and continue to evolve their systems to keep 
abreast of changing operations, having the BOEMRE implement a 4 element 
SEMS will require them to go back and modify or change those systems to 
comply with new BOEMRE prescriptive requirements. These changes to 
programs that are working effectively will add minimal if any added 
value.
    Response: The final rule incorporates, and thus prescribes, all of 
API RP 75, as well as requirements as detailed in 30 CFR 250 subpart S 
for recordkeeping and documentation, JSAs for activities identified in 
the SEMS programs, contractor selection criteria, and audit 
requirements.

Implementation

    Comment: A commenter pointed out that the rule calls for the 
program to be implemented within 1 year after the final rule becomes 
effective. For operators that do not already have a written SEMS 
program that covers all of the elements, it will be impossible to 
develop the SEMS program, conduct all of the hazards analyses 
(facility), complete job hazards analysis for every job, write complete 
operating procedures, establish a mechanical integrity program, and 
establish an audit program for everyone on their facilities. Even for 
those operators that have a SEMS in place, it is likely to take more 
than 1 year to compare their existing program to the prescriptive 
requirements in this rulemaking and make all of the required 
modifications. Therefore, if a mandatory program is adopted, the 
commenter recommends that a phased-in approach to implementation be 
adopted.
    Response: BOEMRE believes that 1 year is a sufficient amount of 
time for operators to develop their SEMS program, even if they do not 
already have a program in place. The final rule incorporates by 
reference, and thus prescribes, the entirety of API RP 75 together with 
related requirements for recordkeeping and documentation, JSAs for 
activities identified in the SEMS programs, and contractor selection 
criteria. BOEMRE believes that 1 year is a sufficient amount of time 
for operators to put these related requirements of the program in 
place.

Three Alternatives for Consideration

    Comment: A comment suggested that in lieu of pursuing the 
rulemaking in its current form, the BOEMRE should consider the 
following three alternatives:
    1. Suspend the rulemaking and continue with the voluntary program 
currently in place.
    2. Suspend the rulemaking and return to the Advance Notice of 
Proposed Rulemaking.
    3. Abandon the concept of a new prescriptive section in the 
regulation and simply include the following language in Sec.  250.107:
    (e) You must have a safety and environmental management program in 
accordance with the American Petroleum Institute's Recommended Practice 
for Development of a Safety and Environmental Management Program for 
Offshore Operations and Facilities (API RP 75), incorporated by 
reference as specified in Sec.  250.198.
    (1) At a minimum, your safety and environmental management program 
must include:
    (i) Hazards Analysis. You must perform a hazards analysis for all 
OCS facilities to identify, evaluate, and, where unacceptable, reduce 
the likelihood and minimize the consequences of uncontrolled releases 
and other safety or environmental incidents. This includes having a job 
safety analysis process. Human factors should be considered in this 
analysis,
    (ii) Management of Change. You must establish procedures to 
identify and control hazards associated with change and maintain the 
accuracy of safety information,
    (iii) Operating Procedures. You must have written facility 
operating procedures designed to enhance

[[Page 63615]]

efficient, safe, and environmentally sound operations,
    (iv) Mechanical Integrity. You must ensure that procedures are in 
place and implemented so that critical equipment for any facility 
subject to this recommended practice is designed, fabricated, 
installed, tested, inspected, monitored, and maintained in a manner 
consistent with appropriate service requirements, manufacturer's 
recommendations, BOEMRE requirements, or industry standards, and
    (v) Documentation. You must establish a documentation system to 
ensure that records and documents are maintained in a manner sufficient 
to implement your safety and environmental management program. Records 
or documentation may be in either paper or electronic form. You must 
make this documentation available for BOEMRE inspection upon request. * 
* *
    Response: BOEMRE disagrees with all three of the proposed 
alternatives. Not all operators on the OCS voluntarily submit Form MMS-
131. A comprehensive SEMS program is important. The final rule 
incorporates, and thus prescribes, API RP 75, and requirements for 
recordkeeping and documentation necessary to implement API RP 75, JSAs 
for activities identified in the SEMS programs, contractor selection 
criteria and the option of utilizing either an independent third party 
or your designated and qualified personnel to conduct audits on your 
behalf.

Potential Adverse Impacts to Drilling Contractors

    Comment: A commenter expressed concerned that any prescriptive 
imposition of mandatory SEMS elements upon operators has the potential 
to adversely impact drilling contractors' SEMS, if a careful balance 
between the operators' perceived need to impose those SEMS elements 
against the contractors' need to manage their own SEMS is not achieved. 
Clearly the goal should be that a drilling contractor should move 
between operators with little, if any, modification to the contractor's 
SEMS.
    Response: The final rule does not require that a contractor have a 
SEMS program. The final rule requires operators to ensure that 
contractors have their own written safe work practices and provides 
that they may adopt appropriate sections of the operator's SEMS 
program. The operator must have a SEMS program and is responsible for 
obtaining and evaluating information regarding the contractor's safety 
performance and programs. An operator and contractor should agree on 
appropriate contractor's safety and environmental policies and 
practices before the contractor begins work at the operator's 
facilities.

BOEMRE Meetings With Industry

    Comment: Several comments state that BOEMRE should have held 
meetings with industry so that industry comments and views could have 
been placed on the record. An informal ``workshop'' without public 
recording of industry views is insufficient to reflect the depth of 
concern held by exploration and production companies operating on the 
OCS and the numerous other companies that support their activities. 
Even though BOEMRE held a public meeting in September 2009, it did not 
have official recording of comments.
    Response: BOEMRE disagrees. BOEMRE has publicized its views that a 
SEMS rule is needed since 1993 at a variety of industry conferences and 
meetings. At these meetings, BOEMRE explained that the agency supported 
implementation of a comprehensive SEMS program. These meetings 
presented the industry with numerous opportunities for dialog with 
BOEMRE regarding this type of program. In 1994, API RP 75 was developed 
with input from industry. In addition, the BOEMRE published its views 
in an ANPR in 2006, which discussed BOEMRE's consideration of a 
comprehensive API RP 75-based program, and an NPR in 2009. At the 
September 2009 meeting, attendees were encouraged to submit written 
comments.

Rule Lacks Specifics

    Comment: Several comments stated that the proposed rule lacks 
specificity in some areas, as well as in the discussion on hazard/
safety analyses. It is the commenters' concern that without specifics, 
there will be inconsistency with regard to interpretation, which will 
be difficult on the industry, as well as BOEMRE, to implement and 
enforce.
    Response: The final rule incorporates, at an appropriate level of 
detail, requirements necessary for recordkeeping and documentation to 
implement API RP 75, JSAs for activities identified in the SEMS 
programs, contractor selection criteria and the option of utilizing 
either an independent third party or your designated and qualified 
personnel to conduct audits on your behalf.

Agency Jurisdiction

    Comment: Several comments stated that it is not clear that BOEMRE 
is expanding its reach into other agencies' jurisdiction, and do not 
understand how this will help safety. BOEMRE's proposal to handle 
enforcement issues on MODUs, where the USCG has jurisdiction and has 
done a very good job over the years with their limited resources, is a 
duplication of efforts and a power grab by BOEMRE. Requiring mandatory 
reporting to BOEMRE when Occupational Safety and Health Administration 
(OSHA) is the appropriate agency is another area of duplication and 
another power grab by BOEMRE. The comments stated that they may be 
misreading the information, but it also appeared that BOEMRE is 
attempting to take over jurisdiction of Department of Transportation 
(DOT) regulated pipelines. If this is the case, here is another attempt 
at duplication or a power grab by BOEMRE.
    Response: BOEMRE disagrees. A SEMS will and should apply to MODUs 
when they are under BOEMRE's jurisdiction (i.e., drilling, well 
workover, well completion, servicing operations). The final rule 
clarifies that the SEMS program must address DOI regulated pipelines 
only. BOEMRE, DOT, and USCG establish the requirements for workplace 
safety on the OCS with requirements that pertain to personal protection 
equipment, tripping and slipping hazards, deck openings, means of 
escape, fire extinguishers, and other workplace safety items. The OSHA 
requirements do not apply to OCS operations.

Support for the Proposed Rule

    Comment: Some comments supported BOEMRE in requiring OCS oil and 
gas operators to implement SEMS rules, which are intended to reduce 
human error and organizational failures. The analysis summarized in the 
proposed rule indicates that the elements are associated with 
contributing causes of most incidents, hence the rationale for focusing 
on them. Comments requested that this regulation require, rather than 
simply encourage, that offshore operators implement all elements of the 
API RP 75, as identified in the rulemaking notice.
    Response: Upon review of all the comments and the requirements of 
API RP 75, BOEMRE agrees that a SEMS program should be comprehensive to 
reduce human error and organizational failures. Therefore, BOEMRE 
incorporated all elements of API RP 75 with requirements necessary to 
implement API RP 75 and regulatory language to clarify expectations for 
compliance.

[[Page 63616]]

Comment Period

    Comment: The comment period to such a significant, formal rule, was 
not long enough and it is recommended that further discussions with 
industry be carried out prior to any final rulemaking.
    Response: BOEMRE disagrees. BOEMRE published an ANPR in 2006 
notifying industry that we were considering requiring a comprehensive 
SEMS program and seeking comment. The proposed rule was published on 
June 17, 2009, with a 90-day comment period. BOEMRE also held a 
workshop on September 2, 2009 at which attendees were encouraged to 
submit written comments on the proposed rule. This comment period is 
consistent with comment periods for other rules of this magnitude. 
Thus, sufficient response time was afforded for interested parties to 
submit comments.

General Comments

    Comment: A SEMS approach is more applicable to production 
facilities; MODU, liftboat, and coiled tubing operations are inherently 
more hazardous than production facility operations, and lead to more 
well control incidents.
    Response: BOEMRE believes that SEMS has merit for all OCS 
operations including, but not limited to, production, drilling, well 
completion, well workover, well servicing, and coiled tubing. For SEMS 
to be properly implemented, it needs to address all OCS operations. 
Liftboats are under the jurisdiction of the USCG and are not covered by 
this regulation.
    Comment: Support a more focused SEMS program for production 
facility management (excluding MODU operations), preferably one that is 
voluntary. Such a program, with elements of hazards analysis and 
management of change, probably could be helpful especially for smaller 
operators.
    Response: BOEMRE disagrees. A SEMS should apply to MODUs and all 
other facilities under BOEMRE's jurisdiction. The final rule will 
require operators to have a SEMS for operations and activities onboard 
a MODU when it is under BOEMRE's jurisdiction such as drilling, well 
workover, well completion, and servicing operations.
    Comment: Does the definition of facility in this section apply to 
all the sections in subpart S?
    Response: BOEMRE is incorporating by reference API RP 75, including 
the definitions from Appendix D of API RP 75, except as revised in the 
final rule.
    Comment: How does BOEMRE perceive the difference between a Job 
Hazards Analysis (JHA) and a Job Safety Analysis (JSA)?
    Response: A JSA is one form of hazards analysis. Hazards analysis 
is performed to identify and evaluate hazards for the purpose of their 
elimination or control. A JSA is a process used to review site-specific 
detailed job steps and uncover hazards associated with the specific job 
undertaken. To alleviate any confusion, BOEMRE replaced the term JHA 
with JSA in the final rule.
    Comment: Is the JHA for each general operation or for the immediate 
task at hand?
    Response: BOEMRE removed the term JHA from the final rule. In the 
final rulemaking, JSAs are required for the immediate tasks at hand and 
are not required for general operations.
    Comment: What is BOEMRE's expectation for what triggers an internal 
audit and updating a facility hazards analysis?
    Response: The final rule requires operators to have their SEMS 
program audited by either an independent third party or your designated 
and qualified personnel, according to the requirements of this subpart 
and API RP 75, Section 12. The first audit must be within 2 years of 
the initial implementation of the SEMS program and at least once every 
3 years thereafter. However, BOEMRE may issue additional guidance on 
this after the final rule is implemented. BOEMRE may direct specific 
operators to conduct additional independent third-party audits or 
BOEMRE may conduct an audit, if we identify safety or non-compliance 
concerns based on the results of inspections and evaluations, or as a 
result of an event.
    The operator must update the appropriate elements of their SEMS 
program, if there are deficiencies identified in the audit. For 
updating a hazards analysis for a facility, we incorporated by 
reference the requirements of API RP 75, Section 4.4, which requires 
that if a management of change is conducted due to changes in 
personnel, facility and operating conditions, then the operator must 
conduct a hazard analysis on those changes. For simple and nearly 
identical facilities, such as well jackets and single well caissons, 
the operator may use the same single hazards analysis after verifying 
that any site-specific deviations have been identified and addressed 
(see Sec.  250.1911).
    Comment: Recommend in proposed section Sec.  250.1907 ``What 
criteria for Mechanical Integrity must my SEMS program meet?'' that 
``manufacturer's recommended limits'' should be changed to 
manufacturers and/or engineering design limits.
    Response: We disagree; we believe that the manufactures recommended 
limits are the most appropriate guidance to use.
    Comment: What are BOEMRE's definitions of temporary operations, 
personnel change, and facility?
    Response: See the scope of ``facilities'' addressed in Sec.  
250.1911 and Appendix D of API RP 75, incorporated by reference, which 
includes a definition of ``facility.'' As to personnel change, we are 
now incorporating by reference API RP 75, Section 4, which defines 
``personnel change'' in Section 4.3. The term ``temporary operations'' 
was removed from the final rule. It is the operator's responsibility to 
ensure all contractors subscribe to basic safety workplace principles 
that meet the spirit and intent of the operator's SEMS program.
    Comment: Does BOEMRE support API RP 75 guidance on MOC as being 
sufficient to direct operators in developing an effective MOC process?
    Response: The guidance provided in API RP 75, Section 4, which we 
incorporated by reference in the final rule, along with the requirement 
in Sec.  250.1912 of the final rule provides sufficient guidelines and 
procedures on when and how to develop a MOC process.
    Comment: How does BOEMRE perceive the difference between 
documenting the inspection and tests that have been performed, and 
verification that inspections and tests are being performed?
    Response: BOEMRE will evaluate all of the documentation provided to 
verify that the inspections and tests were performed and that the 
operator continues to perform the inspections and tests, as described 
in their SEMS. BOEMRE is vigilant about operator documentation and may 
use a variety of tools to determine the validity of operator records 
and that the operator is conducting all prescribed and appropriate 
tests, as identified in their SEMS.
    Comment: Are there contractor groups that BOEMRE believes are not 
being addressed by existing subpart O requirements--identify. We 
believe this is redundant with the existing subpart O program.
    Response: BOEMRE does not regulate contractors; we regulate 
operators. Subpart O applies to well control and production safety, 
whereas this SEMS final rule applies to operators who are performing or 
who have contractors performing maintenance or repair, turnaround, 
major renovation, or

[[Page 63617]]

specialty work on or adjacent to a covered process. The training 
requirements of subpart O may be used to partially meet the SEMS 
requirements.
    Comment: Can you provide detailed instructions and examples for 
filling out Form MMS-131?
    Response: The form and instructions are in Appendix 1 which is 
incorporated by reference into the rule and is also set forth in the 
preamble of the final rule.
    Comment: BOEMRE fails to recognize that our voluntary safety and 
environmental programs are effective.
    Response: The voluntary programs may be effective for those who 
follow the guidance completely. However, more needs to be done to 
promote safety of the environment and the personnel working on the OCS 
by ensuring that everyone complies with API RP 75 and the requirements 
of this final rule.
    Comment: BOEMRE fails to understand that our safety record is good 
and is only getting better.
    Response: The record of incidents that cause injuries, fatalities, 
fires, collisions, loss of well control, or explosions demonstrates the 
need for regular evaluation and improvement of safety standards.
    Comment: BOEMRE fails to understand that the prescriptive SEMS 
program will not address many of the incidents/accidents that the 
regulation is based on.
    Response: BOEMRE does not agree that the voluntary program has been 
as effective as it could be. Industry wide adoption of SEMS is crucial 
to enhancing safety in the OCS.
    Comment: BOEMRE wrote prescriptive requirements for all or part of 
8 of the 12 SEMS elements in lieu of just following API RP 75.
    Response: BOEMRE is incorporating all elements of API RP 75 in the 
final rule, with clarification of the proposed rule's requirements for 
JSA, recordkeeping and documentation requirements, contractor selection 
criteria, and the option of utilizing either an independent third party 
or your designated and qualified personnel to conduct audits on your 
behalf.
    Comment: The proposed rule changes the wording and expands on API 
RP 75, Section 5, dealing with environmental and occupation safety and 
health considerations. These requirements overlap with hazardous 
materials regulations, OPA 90, RCRA, NPDES, etc. How does BOEMRE think 
the addition of these requirements will impact safety performance more 
than the existing regulations of other agencies?
    Response: SEMS is a safety management system that will enhance the 
effectiveness of other laws and regulations.
    Comment: BOEMRE should use an alternative compliance approach, 
i.e., those operator/lessees that have established Safety and 
Environmental Management Program (SEMP) (identified by BOEMRE as 56 
percent or 73 of the 130 operators) and are within the BOEMRE standard 
of compliance as recognized in the annual Safe Award program that would 
be exempt from the proposed rule.
    Response: We believe that there are varying degrees of commitment 
and compliance with the voluntary SEMP program and that a mandatory 
program is the best way to ensure that operators implement a 
comprehensive approach to safety. Operators that have a comprehensive 
SEMS program in place addressing all of API RP 75 are already 
addressing many of the requirements in this final rule.
    Comment: Some operators have existing processes that address 
changes. Consideration should be given to these existing processes and 
not develop a prescribed MOC process for changes that are already 
covered.
    Response: BOEMRE changed the final rule by incorporating by 
reference API RP 75, Section 4, to address MOCs. You may use your 
existing MOC process if it meets the requirements of API RP 75 and 
Sec.  250.1912.
    Comment: We believe that the one size fits all approach to this 
rule does not take into account the diversity of operations that exists 
in the OCS.
    Response: SEMS is not a one size fits all program. In fact, SEMS 
encourages operators to consider unique circumstances and conditions. 
BOEMRE changed the final rule by incorporating all elements of API RP 
75 and requirements for recordkeeping and documentation necessary to 
implement API RP 75, JSAs for activities identified in the SEMS 
programs, contractor selection criteria, and the option of utilizing 
either an independent third party or your designated and qualified 
personnel to conduct audits on your behalf to allow for the diversity 
of operations that exists on the OCS and within the company/operation.
    Comment: Please clarify if the parts of the proposed elements can 
be accomplished through other management systems; in other words, a 
comprehensive SEMS program can cover each of the proposed items without 
these necessarily being part of a single system.
    Response: In the final rule, we are requiring all operators to 
follow the elements of API RP 75 and requirements for recordkeeping and 
documentation, JSAs for activities identified in the SEMS programs, 
contractor selection criteria, and the option of utilizing either an 
independent third party or your designated and qualified personnel to 
conduct audits on your behalf. As recognized in API RP 75, Section 
1.3.1.1, some systems may have been developed using other guidelines. 
If a system was developed using other guidelines, when that system is 
assessed, the operator should focus on assuring that all the program 
elements from API RP 75 and this final rule are addressed.
    Comment: What data will be made available to the public? What 
measures will be in place to protect sensitive company data from being 
made public?
    Response: BOEMRE requires a copy of Form MMS-131 from an operator. 
The information on the Form MMS-131 is not protected from disclosure 
and is subject to the Freedom of Information Act (FOIA), should a 
member of the public request this information. BOEMRE may request a 
copy of the operator's SEMS and audits. BOEMRE will protect proprietary 
information under the Freedom of Information Act (5 U.S.C. 522) and its 
implementing regulations (43 CFR part 2); and 30 CFR 250.197.
    Comment: We further believe that the record retention requirements 
for the JSA and related index are unduly burdensome and contrary to 
BOEMRE's stated intent that the programs not become a paperwork 
exercise. The proposed rule also creates concern regarding 
``ownership'' of the JSA/index once a MODU is no longer under contract 
for the operator under whose contract they were developed.
    Response: The retention in the final rule for the JSAs is now 30 
days on-site and up to 2 years at a location of the operator's 
discretion. The JSA/index has been removed.
    Comment: A commenter believes that BOEMRE should have a separate 
section in the rulemaking that pertains only to hazards analysis for 
MODUs.
    Response: BOEMRE disagrees; the final rulemaking does not need a 
separate section for hazards analysis for MODUs. We incorporated by 
reference API RP 75, Section 3, for hazards analysis requirements, with 
requirements necessary to implement API RP 75 in Sec.  250.1901 and 
Sec.  250.1911.
    Comment: How do we overcome human error?
    Response: The intent of this rule is to reduce human error by 
focusing on a comprehensive SEMS program and JSAs. One result of an 
effectively

[[Page 63618]]

implemented SEMS will be to reduce human error.
    Comment: If BOEMRE intends to require that each SEMS conform to API 
RP 75, then the highly prescriptive language should be removed and the 
final rule should simply reference the appropriate sections in API RP 
75. Any exception or additions could be listed, similar to the approach 
taken in Sec.  250.804.
    Response: BOEMRE is incorporating by reference API RP 75 and 
requirements for recordkeeping and documentation necessary to implement 
API RP 75, JSAs for activities identified in the SEMS programs, 
contractor selection criteria and the option of utilizing either an 
independent third party or your designated and qualified personnel to 
conduct audits on your behalf.
    Comment: The rulemaking is confusing with respect to the 4 types of 
contractor requirements, e.g., MODUs; contractors brought onto 
platforms for painting/cleaning, etc.; contract operating companies; 
individuals working side by side with employees under head company 
rules. The word ``employee'' needs to be clarified--just the operator's 
actual employees or whom?
    Response: We are replacing ``employees'' with ``personnel'' and 
defining ``personnel'' in Sec.  250.1903 in the final rule. The term 
``Personnel'' means direct employee(s) of the operator and contracted 
workers who are involved with or affected by specific jobs or tasks. 
All personnel involved with or affected by a SEMS specific task must be 
trained by skilled and knowledgeable personnel to perform their 
assigned duties.
    Comment: A comment expressed the concern that we are accepting 
duplicated work that is already required by DOT, OSHA, and USCG--
killing trees with all the paperwork submissions.
    Response: A number of federal agencies, including DOT, USCG, and 
BOEMRE have various responsibilities and authorities under a variety of 
statutes related to OCS matters. BOEMRE is not asking for duplication 
of paperwork that is already submitted to another government agency. 
Most of the information may be submitted electronically.

Section-by-Section Discussion

    The industry trade organizations (Offshore Operators Committee, 
American Petroleum Institute, International Association of Drilling 
Contractors) and OCS operators submitted extensive lists of specific 
comments for most sections of the proposed rule. We responded to those 
comments in the ``General Comments'' section. The following table 
addresses more specific comments not already addressed.

------------------------------------------------------------------------
                                Comment received on   BOEMRE response to
    Proposed rule citation         proposed rule           comment
------------------------------------------------------------------------
250.1903(b)...................  Note that, at Sec.   As recognized in
                                  250.1903(b),        API RP 75, Section
                                 BOEMRE holds up      1.3.1.1, some
                                 ISO 14001 as an      systems may have
                                 example of other     been developed
                                 standards or         using other
                                 guidelines that      guidelines. If an
                                 meet or exceed API   operator has
                                 RP 75, seemingly     already developed
                                 encouraging such     a system using
                                 an approach as       other guidelines,
                                 ours. However, a     when the system is
                                 certified, active    assessed, the
                                 ISO 14001 program    focus should be on
                                 will not comply      assuring that the
                                 with the proposed    necessary program
                                 regulation.          elements from API
                                                      RP 75 and the
                                                      requirements
                                                      necessary to
                                                      implement API RP
                                                      75 in this final
                                                      rule are
                                                      addressed.
250.1905......................  Do DOI pipelines     It is up to the
                                 require separate     operator to decide
                                 hazards analyses,    to combine or do a
                                 or is it             separate hazard
                                 acceptable to        analysis for the
                                 combine with the     DOI pipelines and
                                 facility with        associated
                                 which it is          facility. However,
                                 associated?          the analysis must
                                                      comply with the
                                                      API RP 75 and the
                                                      requirements
                                                      necessary to
                                                      implement API RP
                                                      75 in this final
                                                      rule.
250.1905......................  The regulated        The terms JSA and
                                 community has        JHA are different;
                                 varying degrees of   therefore, in this
                                 understanding of     final rulemaking
                                 the terms JHA and    we will require
                                 JSA. The JSAs are    only JSAs. We have
                                 typically viewed     defined JSA in the
                                 as a tool to         general comments
                                 perform the OSHA     section of the
                                 required JHA. Does   preamble.
                                 BOEMRE consider
                                 these terms the
                                 same? If not,
                                 please explain the
                                 difference from
                                 your
                                 understanding. The
                                 regulated
                                 community commonly
                                 understands JHA to
                                 be a broad
                                 analysis of the
                                 hazards for an
                                 overall operating
                                 procedure. A JSA
                                 is a review of a
                                 specific task at
                                 hand where the
                                 steps and hazards
                                 associated with a
                                 specific task are
                                 reviewed. To
                                 effect behavior
                                 change, we believe
                                 that a JSA is the
                                 more effective
                                 methodology than a
                                 JHA. However, it
                                 is not clear in
                                 the rulemaking
                                 which methodology
                                 BOEMRE is
                                 mandating. We note
                                 that BOEMRE Safety
                                 Alerts 276 and 282
                                 have good
                                 descriptions of
                                 the difference
                                 between JHA and
                                 JSA.
                                Recommendation:
                                 Please state the
                                 correlation to the
                                 appropriate
                                 section within API
                                 RP 75 such as
                                 ``You must develop
                                 and implement a
                                 hazards analysis
                                 (facility level)
                                 as described in
                                 Section 3 of API
                                 RP 75.'' For
                                 clarity, we
                                 recommend that job
                                 hazards analysis
                                 be changed to job
                                 safety analysis in
                                 all places in the
                                 regulation.
250.1905......................  MODU, coiled         BOEMRE agrees with
                                 tubing, and          this comment
                                 liftboat             pertaining to the
                                 operations are       current Subpart O
                                 contracted.          regulation, in
                                 Subpart O already    part. The operator
                                 requires operators   is the responsible
                                 to verify well-      party for all well
                                 control              control activities
                                 certification of     and operations,
                                 contractor           whether or not
                                 employees. Few       using contract
                                 operators possess    personnel. If
                                 specialized          contractors are
                                 knowledge that       used, the operator
                                 would trump the      is responsible for
                                 certification of     verifying that its
                                 contractor           contractors have
                                 employees.           the skills and
                                                      knowledge to
                                                      perform these
                                                      operations in a
                                                      safe manner.

[[Page 63619]]

250.1905......................  If a company         BOEMRE disagrees.
                                 contracts a MODU,    The operator must
                                 the contractor       have a SEMS
                                 would have to        program. BOEMRE's
                                 provide and          intent is to have
                                 support its own      a hazards analysis
                                 hazards analyses     as detailed in API
                                 (and SEMS program)   RP 75, Section 3
                                 vs. the operator     and the
                                 for which it is      requirements in
                                 working. The MODUs   Sec.   205.1911 of
                                 should not be        this final rule,
                                 included in the      of any MODU under
                                 list of facilities   BOEMRE's
                                 covered by this      jurisdiction. The
                                 rule. The MODU       MODUs are
                                 operator should      considered
                                 have a mechanical    facilities when
                                 integrity and JSA    they are used for
                                 program to cover     exploration,
                                 operations on the    development,
                                 rig.                 production, and
                                                      transportation
                                                      activities for oil
                                                      and gas and
                                                      sulphur from areas
                                                      leased in the OCS.
250.1905......................  We do not            We are
                                 understand the       incorporating by
                                 reference to         reference API RP
                                 internal audit and   75, Section 3,
                                 know of no           which includes
                                 facility specific    periodic analysis,
                                 audits that are      to update the
                                 required. We noted   hazards analysis
                                 that proposed Sec.   for compliance.
                                   250.1910 refers    You must update
                                 to a SEMS audit,     your hazards
                                 but that is on the   analysis as
                                 overall program.     appropriate with
                                 Periodic analyses    typical review
                                 should be            periods. The final
                                 conducted as         rule requires the
                                 described in         first audit within
                                 Section 3.4 of API   2 years of
                                 RP 75. Does this     implementation of
                                 mean hazards         the SEMS program
                                 analyses must be     and every 3 years
                                 updated (or          thereafter,
                                 revalidated) every   however, BOEMRE
                                 3 years in           may require
                                 conjunction with     additional
                                 the SEMS Audit?      independent third
                                 API RP 75 allows     party audits or
                                 hazards analysis     BOEMRE may conduct
                                 updates to be made   our own audits
                                 at 5-10 year         based on poor
                                 intervals based on   operator
                                 risk.                performance or
                                                      accidents.
                                Recommendation:
                                 Change the last
                                 sentence to: The
                                 hazards analyses
                                 (facility level)
                                 must be reviewed
                                 periodically and
                                 updated as
                                 appropriate when
                                 changes are
                                 warranted to
                                 verify that it is
                                 consistent with
                                 the current
                                 operations on the
                                 facility,
                                 consistent with
                                 the requirements
                                 in Section 3.4 of
                                 API RP 75.
250.1905......................  We see no purpose    The operator is
                                 in maintaining the   responsible for
                                 hazards analysis     deciding where to
                                 on the facility.     keep the hazards
                                 In many cases, the   analysis for the
                                 facility may be an   life of the
                                 unmanned facility    facility. BOEMRE
                                 with no storage      is removing the
                                 capability. Does     requirement to
                                 BOEMRE really        maintain a hazards
                                 expect a MODU to     analysis on a
                                 store a hazards      facility. The JHAs
                                 analysis onboard     were removed from
                                 the MODU from each   the final rule and
                                 and every operator   replaced with
                                 who has performed    JSAs. The JSAs
                                 such an analysis?    must be retained
                                 As in API RP 75,     for 30 days on the
                                 the hazard report    facility for
                                 (facility level)     BOEMRE inspection
                                 should be kept on    and must be made
                                 file for the life    available to
                                 of the facility.     BOEMRE upon
                                 It is most           request for 2
                                 appropriate that     years. You must
                                 this file be kept    maintain a copy of
                                 in the operator's    all SEMS program
                                 office where         documents at an
                                 design and other     onshore location
                                 facility related     for 6 years.
                                 information is
                                 kept since this
                                 data will need to
                                 be referred to in
                                 conjunction with
                                 the hazards
                                 analysis. For job
                                 hazards analysis
                                 (commonly referred
                                 to as Job Safety
                                 Analysis-JSA),
                                 this should be
                                 kept where it is
                                 readily accessible
                                 to the personnel
                                 actually reviewing
                                 the analysis prior
                                 to performing the
                                 job it covers.
                                Recommendation: The  BOEMRE disagrees
                                 requirement for      with the
                                 documentation        recommendation.
                                 should be changed    Please see
                                 to the following:    previous response.
                                 You must document
                                 and maintain
                                 current analyses
                                 for each operation
                                 covered by this
                                 section for the
                                 life of the
                                 operation. Hazards
                                 analysis (facility
                                 level) should be
                                 retained in the
                                 operator's records
                                 where the facility
                                 design information
                                 is located. The
                                 JHA (operations/
                                 task level) should
                                 be kept in a
                                 location where it
                                 is readily
                                 accessible to
                                 personnel for
                                 review prior to
                                 conducting the
                                 operation or task
                                 the analysis
                                 covers.
250.1905......................  We suggest deleting  This specific
                                 ``property           reference to
                                 damage'' from the    ``property
                                 potential            damage'' is not in
                                 consequences         the final rule.
                                 included in the      BOEMRE is
                                 purpose of the       incorporating by
                                 facility level       reference API RP
                                 hazards analysis     75, which speaks
                                 in Sec.              to this issue.
                                 250.1905. The
                                 philosophy adopted
                                 with respect to
                                 property damage,
                                 also referred to
                                 as ``asset
                                 protection''
                                 should be at the
                                 operator's
                                 discretion,
                                 provided that the
                                 property damage
                                 does not
                                 subsequently lead
                                 to worker
                                 injuries,
                                 fatalities, or
                                 coastal or marine
                                 environmental
                                 impacts.
250.1905......................  We recommend the     The final rule
                                 language in Sec.     requires the
                                 250.1905 be          operator to ensure
                                 modified to state    the development
                                 ``You must ensure    and implementation
                                 a hazards analysis   of a hazards
                                 (facility level)     analysis in
                                 and a JHA            accordance with
                                 (operations/task     API RP 75 and to
                                 level) is            perform a JSA at
                                 developed and        the task level in
                                 implemented for      accordance with
                                 all your             Sec.   250.1911.
                                 facilities''         These must be
                                 rather than ``You    included in the
                                 must develop.''      SEMS program. In
                                 The reason for       order to comply
                                 this                 with this rule, an
                                 recommendation is    operator and its
                                 that since MODUs     contractors need
                                 are included as      to agree on
                                 facilities in this   appropriate
                                 subpart, it will     contractor safety
                                 then be clear that   and environmental
                                 operators are only   policies and
                                 responsible to       practices before a
                                 ensure the third-    contractor begins
                                 party contractors    work at the
                                 have performed a     operator's
                                 hazards analysis     facilities.
                                 prior to
                                 conducting
                                 operations on the
                                 operator's lease.

[[Page 63620]]

250.1905......................  Production           The operator must
                                 contractor can       develop and
                                 have a Lockout/      implement a
                                 Tagout (LOTO)        hazards analysis
                                 Standard that        for all of their
                                 outlines the         operations in
                                 general guidelines   accordance with
                                 on how to perform    the Section 3,
                                 proper LOTO; but     Hazards Analysis
                                 to generate a        and Sec.
                                 Hazard Assessment    250.1911. In order
                                 of a facility, the   to comply with
                                 contractor would     this rule, an
                                 need to have         operator and its
                                 access to the        contractors need
                                 drawings and/or      to agree on
                                 facility to          appropriate
                                 address site         contractor safety
                                 specific equipment   and environmental
                                 and issues. In       policies and
                                 some cases,          practices before a
                                 contractors merely   contractor begins
                                 provide a            work at the
                                 resource. This       operator's
                                 resource is          facilities.
                                 supervised by the
                                 client onsite.
250.1905......................  We urge BOEMRE to    BOEMRE disagrees.
                                 revise Sec.          When a drilling
                                 250.1905 to make     vessel is under
                                 clear that           BOEMRE's
                                 drilling vessels     jurisdiction, it
                                 or utility vessels   is the operator's
                                 are not required     responsibility to
                                 to be managed        have a SEMS
                                 under our SEMS.      program. In order
                                                      to comply with
                                                      this rule, an
                                                      operator and its
                                                      contractors need
                                                      to agree on
                                                      appropriate
                                                      contractor safety
                                                      and environmental
                                                      policies and
                                                      practices before a
                                                      contractor begins
                                                      work at the
                                                      operator's
                                                      facilities.
250.1905(a)...................  Language in Sec.     Proposed Sec.
                                 250.1905(a) should   250.1905 is
                                 be revised to        reflected in the
                                 state: ``You must    final rule at Sec.
                                 ensure an initial      250.1911. The
                                 hazards analysis     requirement to
                                 (facility level)     perform a hazards
                                 is or has been       analysis for each
                                 performed on each    facility within 1
                                 facility on or       year of the
                                 before (THE DATE 1   effective date of
                                 YEAR AFTER THE       the final rule was
                                 EFFECTIVE DATE OF    retained. A
                                 THE FINAL RULE)''.   previous hazards
                                                      analysis may be
                                                      used as long as it
                                                      meets the
                                                      requirements of
                                                      API RP 75 and Sec.
                                                        250.1911 in the
                                                      final rule.
250.1905(a)...................  If an operator has   BOEMRE disagrees.
                                 not previously       The final rule
                                 conducted a          requires the
                                 hazards analysis     operator to have
                                 on all of his        its SEMS program
                                 platforms, it may    in place within 1
                                 be impossible to     year of the
                                 complete a hazards   effective date of
                                 analysis of all of   the rule. The
                                 his platforms        hazards analysis
                                 within 1 year of     requirement must
                                 the effective date   be in accordance
                                 of the final rule.   with the
                                 A provision should   provisions of API
                                 be included for      RP 75, Section 3
                                 providing a          and the
                                 prioritized list     requirements in
                                 of facilities to     this final rule
                                 the Regional         under Sec.
                                 Supervisor along     250.1911, and
                                 with the date that   included in the
                                 each hazards         SEMS program.
                                 analysis will be
                                 completed. This
                                 could be either in
                                 the rulemaking or
                                 a companion NTL.
250.1905(a)...................  According to Sec.    There is nothing in
                                 250.1905(a), we      the rule that
                                 must do a separate   prevents an
                                 Hazards Analysis     operator from
                                 for every platform   using the same
                                 that we operate.     hazards analysis
                                 Under our IMS, we    for similar
                                 get to the same      platforms.
                                 place by doing a     However, if one or
                                 comprehensive        more facilities
                                 hazards analysis     are similar but
                                 (actually a more     have distinct
                                 rigorous ``risk      differences that
                                 assessment'') of     require discrete
                                 all of our           policies and
                                 operations, with     procedures for
                                 evaluation and       safe operations
                                 ranking of risks     meeting the SEMS
                                 and planned          elements, then you
                                 mitigations.         must develop a
                                                      separate SEMS for
                                                      each of those
                                                      facilities.
250.1905(a)...................  Element 1,           BOEMRE agrees. The
                                 ``Hazards Analysis   API RP 14C is a
                                 at the facility      good guideline for
                                 level'' is already   conducting a
                                 being achieved by    hazards analysis
                                 following API RP     for a production
                                 14C as a guideline   facility and it is
                                 for Analysis,        referenced in API
                                 Design,              RP 75. However,
                                 Installation, and    the hazards
                                 Testing of Surface   analyses must
                                 Safety Systems.      follow API RP 75,
                                 The JSA/JHA along    Section 3, with
                                 with the ``Stop      clarification in
                                 Work Authority''     Sec.   250.1911.
                                 is already being
                                 utilized Gulf-
                                 wide. Furthermore,
                                 egress is
                                 identified in the
                                 platform
                                 submission
                                 process; chemicals
                                 and flammables
                                 kept on the
                                 facility are
                                 identified as part
                                 of the MSDS
                                 requirements; and
                                 mitigation of
                                 possible safety
                                 and health effects
                                 on employees are
                                 also already being
                                 performed.
250.1905(a)(1)(ii)............  We do not            BOEMRE is
                                 understand the       incorporating by
                                 requirement that     reference API RP
                                 special attention    75. The operator
                                 should be given to   must follow the
                                 any incident in      guidelines under
                                 which you were       API RP 75, Section
                                 issued an INC,       3, as clarified in
                                 civil or criminal    Sec.   250.1911.
                                 penalty; nor do we   If BOEMRE
                                 understand what      evaluates a SEMS
                                 ``special            program, the
                                 attention'' should   operator must
                                 cover; nor do we     submit to BOEMRE a
                                 understand what      revised SEMS
                                 length of time we    program that
                                 should consider.     addresses any
                                 Further, we have     identified
                                 no idea how the      deficiencies.
                                 enforcement action
                                 of a regulatory
                                 agency relates to
                                 hazards analysis.
                                 We agree that
                                 previous incidents
                                 related to the
                                 operation, to the
                                 extent known by
                                 the operator,
                                 should be
                                 evaluated
                                 regardless of
                                 whether or not
                                 they resulted in
                                 an enforcement
                                 action. It should
                                 be noted that in
                                 many cases, a
                                 facility may have
                                 had multiple
                                 previous operators
                                 and a complete
                                 history of
                                 previous incidents
                                 may not have been
                                 provided to the
                                 current operator.
                                Recommendation:      This provision was
                                 Strike the           amended, striking
                                 sentence ``Special   ``special
                                 * * * penalty''.     attention'' while
                                                      requiring the
                                                      hazard analysis to
                                                      address previous
                                                      incidents.

[[Page 63621]]

250.1905(a)(1)(iv)............  It is not clear      The requirements
                                 what BOEMRE's        for a hazards
                                 expectations are     analysis are in
                                 for a hazard         API RP 75, Section
                                 review to cover      3 with
                                 coastal and marine   clarification in
                                 environmental        Sec.   250.1911.
                                 impact. These
                                 potential impacts
                                 are already
                                 covered in the
                                 environmental
                                 analysis conducted
                                 by BOEMRE for
                                 lease sales and
                                 exploration and
                                 development plans.
                                 The operator
                                 addresses these
                                 impacts in their
                                 EP, DOCD, and
                                 OSRPs. This
                                 requirement is
                                 duplicative of
                                 analysis already
                                 conducted in
                                 accordance with
                                 the BOEMRE
                                 regulations in 30
                                 CFR Part 250,
                                 subpart B, and 30
                                 CFR Part 254.
                                Recommendation:      The rule was
                                 Strike coastal and   changed to say
                                 marine               ``human and marine
                                 environmental        environment.''
                                 impacts from the
                                 accident scenarios
                                 list.
250.1905(a)(2)................  Based on             The hazards
                                 experience, a        analysis team must
                                 hazards analysis     meet the
                                 team is composed     requirements
                                 of (at least)        included in API RP
                                 individual(s) with   75, Section 3 and
                                 experience in the    requirements
                                 operations being     necessary to
                                 evaluated, and       implement API RP
                                 individual(s) who    75 in the final
                                 are experienced in   rule under Sec.
                                 the hazards          250.1911.
                                 analysis
                                 methodology. The
                                 rule states that
                                 these individuals
                                 need to have
                                 experience with
                                 both. That may be
                                 an impractical
                                 requirement.
                                Recommendation:      BOEMRE agrees and
                                 Change the second    has made the
                                 sentence to: ``at    change to the
                                 least one person     final rule.
                                 needs to be
                                 experienced''.
250.1905(b)...................  There should be      BOEMRE agrees that
                                 some                 an operator can
                                 prioritization in    prioritize its JSA
                                 jobs/tasks to be     to maximize safety
                                 evaluated.           as long as it
                                 Everything an        meets the
                                 operator does is     provisions of the
                                 primarily a job/     final rule. BOEMRE
                                 task. Routine jobs/  removed JHA from
                                 tasks may be         the final rule. In
                                 covered under        the final
                                 operating            rulemaking, JSAs
                                 procedures and the   are done for the
                                 hazards analysis     immediate tasks at
                                 may be included in   hand (not used for
                                 those procedures;    administrative or
                                 therefore, a JSA     domestic
                                 may not be           services). If the
                                 necessary. Jobs/     particular
                                 tasks that are not   activity is
                                 routinely done and   conducted on a
                                 not covered by       recurring basis,
                                 operating            and the parameters
                                 procedures should    do not change, the
                                 have a JSA. Jobs/    person in charge
                                 tasks should be      of the activity
                                 selected for         may decide that a
                                 analysis in          JSA for each
                                 priority order. We   individual
                                 suggest the          activity is not
                                 following            required.
                                 prioritization:

1. Jobs with highest rate of
 accidents or greatest
 potential for injuries
2. New jobs or non-routine
 jobs
3. Changes in process and
 procedures
                                Recommendation:      The requirement for
                                 Remove section       an index was
                                 (b)(2).              removed.
250.1905(b)...................  The rulemaking also  We removed the
                                 seems to envision    requirement to
                                 that a ``book'' of   maintain a book/
                                 JHAs/JSAs is         index, but we
                                 maintained at the    require operators
                                 job site. While      to keep a copy of
                                 this may be true     the JSA for 30
                                 for jobs/tasks       days onsite and
                                 that are routinely   for 2 years at a
                                 performed, in many   location of the
                                 cases a JSA is       operator
                                 completed for a      discretion and
                                 non-routine task     make them
                                 (e.g., an unusual    available to
                                 lifting              BOEMRE upon
                                 operation). The      request.
                                 best JSAs are       The requirements
                                 prepared by the      for JSAs are in
                                 workers on           the final rule,
                                 location and are     Sec.   250.1911.
                                 handwritten. They   Recordkeeping and
                                 should be kept in    Documentation
                                 a manner that the    requirements are
                                 workers can easily   in Sec.
                                 access them. The     250.1928.
                                 real value in the
                                 JSA is the
                                 ``process'' of the
                                 workers involved
                                 in the specific
                                 task actually
                                 discussing the
                                 hazards, agreeing
                                 on the individual
                                 roles and
                                 responsibilities
                                 and completing the
                                 JSA document.
                                 While it is
                                 important that
                                 JSAs for both
                                 routine and non-
                                 routine tasks be
                                 available for
                                 review by the
                                 workers until the
                                 job is completed,
                                 they may not be in
                                 a nice, neat,
                                 properly indexed
                                 book. We have no
                                 idea how the
                                 prescriptive
                                 documentation
                                 details in (b)(2)
                                 relate to keeping
                                 workers safe. They
                                 should be allowed
                                 to use whatever
                                 documentation
                                 technique works
                                 for them.

[[Page 63622]]

250.1905(b)...................  The only element in  The final rule
                                 the proposed         distinguishes
                                 regulation that      between a broad
                                 attempts to          facility-based
                                 address worker       hazards analysis
                                 behavior is the      conducted in
                                 task-specific        accordance with
                                 ``hazards            API RP 75, Section
                                 analysis.''          3 and a task level
                                 However, there is    JSA, Sec.
                                 a lot of confusion   250.1911, as
                                 throughout the       required in the
                                 regulated            final rule.
                                 community about
                                 the terms ``JHA''
                                 and ``JSA.'' We
                                 typically use the
                                 term ``JHA'' to
                                 mean a broad
                                 analysis of the
                                 hazards associated
                                 with a job or
                                 process. Such
                                 analysis is
                                 typically done by
                                 a diverse team and
                                 may be done in an
                                 office setting or
                                 at the job site.
                                 Many times, this
                                 analysis is
                                 included with a
                                 facility-level
                                 hazards analysis
                                 or operating
                                 procedures and in
                                 many cases covers
                                 routine tasks. We
                                 typically use the
                                 term ``JSA'' to be
                                 the analysis done
                                 by onsite workers
                                 immediately prior
                                 to performing a
                                 task, many times a
                                 non-routine task.
                                 Some workers start
                                 with a ``go-by''
                                 and mark it up for
                                 the specific task
                                 at hand and others
                                 start with a blank
                                 piece of paper or
                                 form. We believe
                                 that the
                                 application of JSA
                                 has the best
                                 opportunity to
                                 impact worker
                                 behavior since it
                                 is the workers
                                 themselves that
                                 are identifying
                                 the hazards and
                                 developing plans,
                                 procedures,
                                 safeguards, etc.,
                                 to avoid an
                                 incident.
250.1905(b)...................  Specific examples    The operator is
                                 of practices         required to follow
                                 within our IMS       API RP 75 as
                                 would be             incorporated by
                                 unacceptable under   reference and
                                 the proposed SEMS    perform JSA's for
                                 regulations: We      those activities
                                 presently conduct    identified in it's
                                 JSAs for work with   SEMS program, as
                                 at least some        addressed in Sec.
                                 level of risk, but    250.1911. There
                                 not for every work   are routine tasks
                                 project and          performed in the
                                 activity.            offshore
                                                      environment that
                                                      may meet the
                                                      requirements of
                                                      SEMS under the
                                                      Safe Work
                                                      Practices and
                                                      Operating
                                                      Procedures
                                                      elements. However,
                                                      for such
                                                      activities that
                                                      deviate from their
                                                      norm due to a
                                                      change in
                                                      environment,
                                                      personnel, or
                                                      equipment-related
                                                      factors, or other
                                                      activities that
                                                      are non-routine
                                                      procedures, a JSA
                                                      must be conducted
                                                      that identifies
                                                      and accounts for
                                                      routine variations
                                                      or the uniqueness
                                                      of the activity.
250.1905(b)...................  A commenter is       BOEMRE replaced the
                                 concerned by the     term JHA with JSA
                                 proposed             in the final rule.
                                 requirement for a    In the final
                                 task-level JHA.      rulemaking, JSAs
                                 While we             are done for the
                                 understand that      immediate tasks at
                                 this may be more     hand (not used for
                                 correctly            administrative or
                                 described as a       domestic
                                 JSA, we believe      services).
                                 that there needs
                                 to be a better
                                 understanding of
                                 both what
                                 constitutes a JSA,
                                 and for what tasks
                                 a JSA should be
                                 developed. Does
                                 BOEMRE expect a
                                 JSA for operation
                                 of a copy machine?
250.1905(b)...................  Section 250.1905(b)  There is nothing in
                                 states that a JHA    the rule that
                                 must be performed    prevents an
                                 for ``each'' work    operator from
                                 project and          using the same JSA
                                 activity. BOEMRE     for a particular
                                 must clarify this    activity that is
                                 paragraph. There     conducted on a
                                 are many projects    recurring basis as
                                 and activities       long as the
                                 that are             parameters of the
                                 considered           activity do not
                                 ``routine.'' Our     change.
                                 company
                                 wholeheartedly
                                 agrees that a
                                 thorough analysis
                                 should always be
                                 performed on all
                                 ``non-routine''
                                 projects and
                                 activities. Our
                                 only concern is
                                 that a requirement
                                 for a JHA on all
                                 projects and
                                 activities would
                                 be overwhelming.
                                 The way the rule
                                 is written an
                                 operator would be
                                 required to
                                 perform a JHA for
                                 a simple activity
                                 such as obtaining
                                 tubing pressures
                                 or adjusting a
                                 level in a vessel.
250.1905(b)(2)................  We further believe   The operator may
                                 that the record      use programs
                                 retention            already in
                                 requirements for     existence to
                                 the JSA and          comply with
                                 related index are    provisions of this
                                 unduly burdensome    final rule, as
                                 and contrary to      long as your SEMS
                                 BOEMRE's stated      program addresses
                                 intent that the      all the elements
                                 programs not         in API RP 75 and
                                 become a paperwork   the requirements
                                 exercise. The        in the final rule.
                                 proposal also
                                 creates concern
                                 regarding
                                 ``ownership'' of
                                 the JSAs/index
                                 once a MODU is no
                                 longer under
                                 contract for the
                                 operator under
                                 whose contract
                                 they were
                                 developed
                                Recommended: Strike
                                 this section..
250.1906(a)...................  We assume that the   The operator may
                                 13 requirements      use programs
                                 for procedures can   already in
                                 be covered           existence to
                                 collectively by      comply with
                                 other management     provisions of this
                                 systems,             final rule. BOEMRE
                                 especially with      is incorporating
                                 regards to           by reference API
                                 chemicals and        RP 75, Section 5
                                 materials. The       with requirements
                                 scope of these       necessary to
                                 requirements (7, 9-  implement API RP
                                 13) goes beyond      75 in Sec.
                                 API RP 75, as well   250.1913 to
                                 as OSHA PSM and      address operating
                                 EPA RMP.             procedures.

[[Page 63623]]

250.1906(a)...................  Coupled with the     BOEMRE requires
                                 requirement in       operating
                                 Sec.   250.1905 to   procedures for a
                                 develop a SEMS for   MODU under
                                 MODUs, Sec.          BOEMRE's
                                 250.1906(a)(1) and   jurisdiction. The
                                 (a)(5) would now     operator's
                                 require the          operating
                                 operator to          procedures need to
                                 develop procedures   include provisions
                                 for some drilling    for evaluating
                                 facilities that we   operating
                                 neither own nor      procedures in
                                 operate. This        their contractor
                                 would                plans. Under Sec.
                                 significantly add     250.1914 of the
                                 to the               final rule
                                 documentation        operators must
                                 burden on the        ensure that
                                 operators. We do     contractors have
                                 not believe this     their own written
                                 would benefit the    safe work
                                 operator, the        practices.
                                 owner of the         Contractors may
                                 facility, or the     adopt appropriate
                                 personnel on the     sections of the
                                 rig. Operators       operator's SEMS
                                 hire contractors     program. Operator
                                 that have safety     and contractor
                                 programs in place    must document
                                 and are in           their agreement on
                                 compliance with      appropriate
                                 applicable laws,     contractor safety
                                 but do not dictate   and environmental
                                 to them how to       policies and
                                 achieve that. The    practices before
                                 MODUs already have   the contractor
                                 operations manuals   begins work at the
                                 developed in         operator's
                                 conformance with     facilities.
                                 flag State
                                 requirements and/
                                 or IMO MODU Code
                                 and fall under the
                                 jurisdiction of
                                 the USCG. The
                                 proposed rule
                                 duplicates these
                                 requirements. Most
                                 operators do not
                                 have the resources
                                 or the expertise
                                 to develop
                                 operational
                                 procedures for
                                 drilling
                                 operations and
                                 depend on the
                                 contracted company
                                 who are the
                                 experts to develop
                                 their own
                                 procedures and
                                 safety systems.
                                Recommendation:
                                 Change to
                                 ``implement
                                 written production
                                 facility operating
                                 procedures''.
250.1906(a)...................  It is easier to      The operator is
                                 have site specific   responsible for
                                 procedures that      developing and
                                 the operator can     implementing all
                                 provide training     operating
                                 to the contractor    procedures.
                                 (preferably before   Procedures should
                                 the contractor       be site-specific
                                 employees begin      for the task at
                                 work), and verify    hand e.g.,
                                 competency so that   drilling,
                                 once the             cementing, coiled
                                 contractor's         tubing. How
                                 employees reach      operators decide
                                 the facility,        to implement such
                                 there exists a       operating
                                 clear                procedures is up
                                 understanding of     to them, as long
                                 what is to be        as they are in
                                 done, and how to     compliance with
                                 do it.               API RP 75, Section
                                                      5, and the
                                                      requirements in
                                                      Sec.   250.1913 of
                                                      the final rule.
250.1906(a)...................  Our company agrees   BOEMRE understands
                                 that operating       that standardizing
                                 procedures are a     procedures with
                                 valuable tool in     respect to safe
                                 regards to           operations makes
                                 paragraphs (1)       good sense where
                                 through (13). Our    appropriate. An
                                 only concern is      operator may do so
                                 that a written       regarding like
                                 procedure for        facilities but it
                                 paragraphs (1)       is the operator's
                                 through (13) must    responsibility to
                                 be site specific.    identify any
                                 For example, a       differences
                                 written procedure    existing among
                                 for paragraph (1)    similar facilities
                                 (initial startup)    and identify those
                                 could only be        differences within
                                 followed for the     their SEMS
                                 facility that it     program. BOEMRE
                                 was written for.     may require the
                                                      operator to submit
                                                      a complete SEMS
                                                      for a particular
                                                      facility should it
                                                      deem the impact of
                                                      the differences
                                                      outweighs the
                                                      similarities of
                                                      the facilities.
250.1906(a)(1)................  Initial startup,     BOEMRE disagrees
                                 startup following    and retained this
                                 a turnaround, or     paragraph in the
                                 startup after an     final rule. We
                                 emergency shutdown   incorporated by
                                 are redundant and    reference API RP
                                 encompass the same   75, Section 5 to
                                 elements. We         address these
                                 suggest they be      terms.
                                 combined.
250.1906(a)(3)................  What does BOEMRE     This paragraph was
                                 envision as          deleted from the
                                 ``temporary          final rule.
                                 operations?''        Section 5 of API
                                 Please define or     RP 75 does not
                                 explain.             define ``temporary
                                                      operations.''
250.1906(a)(4)................  Does the BOEMRE      BOEMRE agrees that
                                 mean Emergency       it should be
                                 Shutdown             addressed as
                                 Operations in (4)?   ``emergency
                                 If not, then         shutdown
                                 please define        operations''.
                                 ``emergency
                                 operations''.
250.1906(a)(7)................  Bypassing and        BOEMRE disagrees
                                 flagging should be   that ``bypassing
                                 included in the      and flagging out
                                 individual           of service''
                                 operating            should be a
                                 procedure; it is     separate operating
                                 not a separate       procedure in and
                                 operating            of itself.
                                 procedure in and
                                 of itself.
250.1906(a)(7)................  We recommend the     BOEMRE agrees that
                                 wording in Sec.      it should be
                                 250.1906(a)(7) be    addressed as
                                 changed from         ``bypassing and
                                 ``bypassing and      flagging out of
                                 flagging'' to        service.''
                                 ``bypassing and
                                 flagging out of
                                 service''.
250.1906(a)(8)................  ``Safety and         BOEMRE disagrees
                                 environmental        with this comment
                                 consequences of      and the operator
                                 deviating from       must comply with
                                 your equipment       the provisions of
                                 operating limits     operating
                                 and steps required   procedures listed
                                 to correct or        in Sec.
                                 avoid this           250.1913(a)(8) and
                                 deviation;'' is      API RP 75, Section
                                 already covered by   5.
                                 API RP 14C and is
                                 included in the
                                 individual
                                 operating
                                 procedures and is
                                 not a separate
                                 operating
                                 procedure in and
                                 of itself.
                                Recommendation:      BOEMRE disagrees
                                 Strike (a)(8).       with this comment
                                                      and the operator
                                                      must comply with
                                                      the provisions of
                                                      operating
                                                      procedures listed
                                                      in Sec.
                                                      250.1913(a)(8) and
                                                      API RP 75, Section
                                                      5.
250.1906(a)(8-12).............  The intent of API    BOEMRE is
                                 RP 75 is to take     incorporating by
                                 environmental        reference API RP
                                 factors into         75. However,
                                 consideration        operators still
                                 during startup,      must comply with
                                 normal operations,   other Federal laws
                                 temporary            and regulations.
                                 operations * * *
                                 not developing
                                 procedures
                                 specific to these
                                 issues. Specific
                                 environmental
                                 issues are covered
                                 under and or
                                 overlap with
                                 Hazardous Material
                                 Regulations,
                                 CERCLA, RCRA, H2S
                                 regulations, and
                                 NPDES. These
                                 sections should be
                                 removed.

[[Page 63624]]

250.1906(a)(13)...............  ``Coastal and        The overriding goal
                                 marine               of SEMS is to
                                 environmental        protect the human
                                 impacts identified   and marine
                                 through your         environment.
                                 hazards analysis''
                                 is taken into
                                 account in the
                                 operating
                                 procedures
                                 themselves, they
                                 are not a separate
                                 operating
                                 procedure.
                                 Environmental
                                 impact
                                 identification is
                                 also covered in
                                 NPDES, air permit,
                                 and oil spill
                                 regulations and
                                 response plans.
                                 This section
                                 should be removed.
250.1906(b)...................  Reword Sec.          BOEMRE disagrees
                                 250.1906(b) to       and is keeping
                                 read, ``Employees    this and is
                                 will have access     incorporating by
                                 to the appropriate   reference API RP
                                 procedures for       75, Section 5.
                                 their specific job/
                                 role in the
                                 operations.'' This
                                 is subtle, but
                                 procedures for
                                 specific roles
                                 should be
                                 available to those
                                 specific
                                 employees, rather
                                 than all employees
                                 having access to
                                 all procedures.
250.1906(b)...................  We assume that       See API RP 75,
                                 procedures           Section 13 and
                                 maintained           Sec.   250.1928.
                                 electronically are
                                 considered
                                 accessible.
250.1906(b)...................  Please state what    The API RP 75 does
                                 you mean as          not address this
                                 ``accessible.''      issue and the
                                 The facility where   operator should
                                 the work is          define, in their
                                 conducted may be     SEMS, where
                                 manned or            operating
                                 unmanned. We         procedures are to
                                 suggest that the     be kept. However,
                                 operating            you must be able
                                 procedures be kept   to provide your
                                 at the nearest       SEMS to BOEMRE
                                 manned facility.     upon request in a
                                                      timely fashion.
250.1906(d)...................  What specifically    The intent of the
                                 is meant by,         SEMS rule is to
                                 ``develop and        ensure safe work
                                 implement safe and   practices for all
                                 environmentally      operations on an
                                 sound work           OCS facility.
                                 practices for
                                 identified hazards
                                 during
                                 operations?'' Is
                                 this meant to be
                                 Safe Work
                                 Practices (e.g.,
                                 Hot Work, Confined
                                 Space, SIMOPS,
                                 etc.), or some
                                 other processes?
                                 This seems to be
                                 the intent of this
                                 whole element, if
                                 not all of the
                                 SEMS rule.
250.1907......................  Is the intent of     The final rule
                                 the mechanical       incorporates by
                                 integrity element    reference API RP
                                 to cover critical    75, Section 8 that
                                 equipment as         addresses critical
                                 referred to in API   equipment and
                                 RP 75? The way it    includes
                                 is worded this       requirements
                                 element may cover    necessary to
                                 more: ``Your         implement API RP
                                 mechanical           75 in Sec.
                                 integrity program    250.1916. It is
                                 must encompass all   the operator's
                                 equipment and        responsibility to
                                 systems used to      meet the intent of
                                 prevent or           SEMS as well as
                                 mitigate             its requirements.
                                 uncontrolled         The overriding
                                 releases of          goal of SEMS is to
                                 hydrocarbons,        protect the human
                                 toxic substances,    and marine
                                 or other materials   environment. The
                                 that may cause       inventory of
                                 environmental or     harmful substances
                                 safety               on offshore
                                 consequences.''      facilities is well
                                 What are the types   known but will
                                 or severity of       also evolve over
                                 such consequences?   time so it is
                                                      incumbent upon the
                                                      operator to keep
                                                      all harmful
                                                      substances
                                                      controlled and
                                                      contained.
250.1907......................  Does BOEMRE expect   BOEMRE requires
                                 each operator to     operating
                                 implement a          procedures for a
                                 mechanical           MODU under
                                 integrity program    BOEMRE's
                                 for each MODU that   jurisdiction. The
                                 we contract to       operator's
                                 work on our lease    operating
                                 that we neither      procedures need to
                                 own nor operate?     include provisions
                                 The MODU operator    for evaluating
                                 should have a        operating
                                 mechanical           procedures in
                                 integrity program    their contractor
                                 for his equipment.   plans. Under Sec.
                                 The operator          250.1914 of the
                                 should verify that   final rule
                                 the MODU operator    operators must
                                 has such a program.  ensure that
                                Recommendation: You   contractors have
                                 must develop and     their own written
                                 implement written    safe work
                                 procedures that      practices.
                                 provide              Contractors may
                                 instructions to      adopt appropriate
                                 ensure the           sections of the
                                 mechanical           operator's SEMS
                                 integrity and safe   program. Operator
                                 operation of         and contractor
                                 equipment through    must document
                                 inspection,          their agreement on
                                 testing, and         appropriate
                                 quality assurance    contractor safety
                                 for equipment on     and environmental
                                 your facility used   policies and
                                 to prevent or        practices before
                                 mitigate             the contractor
                                 uncontrolled         begins work at the
                                 releases of          operator's
                                 hydrocarbons,        facilities.
                                 toxic substances,
                                 or other materials
                                 that may cause
                                 environmental or
                                 safety
                                 consequences. For
                                 MODUs operating on
                                 your lease, you
                                 must verify that
                                 the MODU operator
                                 has a mechanical
                                 integrity program
                                 that meets the
                                 requirement in
                                 this subpart.
                                 These procedures
                                 must address the
                                 following:.
250.1907......................  Include the          BOEMRE disagrees
                                 requirements in      and in the final
                                 Sec.   250.1907(i)   rule will keep
                                 in Sec.              both sets of
                                 250.1907(a).         requirements
                                                      separate.
250.1907......................  A contractor can     BOEMRE agrees. The
                                 have a mechanical    operator must have
                                 integrity program    a mechanical
                                 for contractor       integrity program
                                 owned equipment      in accordance with
                                 (tools, vehicles,    the requirements
                                 etc.), but to        of API RP 75,
                                 address the          Section 8 and Sec.
                                 operator's             250.1916.
                                 equipment, again,
                                 it is more
                                 practical for the
                                 operator to
                                 develop this
                                 program, then
                                 train the
                                 contractor in
                                 implementation.
250.1907......................  This entire element  BOEMRE disagrees.
                                 is already being     Subpart O
                                 addressed.           addresses training
                                 Paragraph (a) is     related to well
                                 already addressed    control and
                                 by API RP 14C.       production safety.
                                 Paragraph (b)        We incorporated by
                                 (training) is        reference API RP
                                 already being        75, Section 8 and
                                 addressed as part    Sec.   250.1916 to
                                 of the subpart O     address mechanical
                                 requirement.         integrity.
                                 Paragraphs (c)
                                 through (i) is
                                 being addressed
                                 through the
                                 requirements of
                                 API RP 14C along
                                 with the monthly,
                                 quarterly, semi-
                                 annual, and annual
                                 testing of the
                                 surface and sub-
                                 surface safety
                                 system.

[[Page 63625]]

250.1907(a)...................  We suggest           We disagree; we
                                 replacing            believe that the
                                 ``manufacturers      manufacturer's
                                 design and           design and
                                 material             material
                                 specifications''     specifications are
                                 with ``applicable    the most
                                 design and           appropriate
                                 material             guidance to use.
                                 specifications.''
                                 The design,
                                 procurement,
                                 fabrication, etc.,
                                 of equipment are
                                 not necessarily
                                 just based on
                                 manufacturers'
                                 specifications but
                                 could be based on
                                 API, company, or
                                 other applicable
                                 design and
                                 material
                                 specifications.
250.1907(b)...................  Please note that     BOEMRE is
                                 there are            incorporating by
                                 typically no         reference API RP
                                 manufacturers        75, Section 8 and
                                 recommended          Sec.   250.1916 to
                                 inspection           address mechanical
                                 intervals for        integrity. The
                                 fixed equipment      operator's
                                 (pressure vessels,   maintenance
                                 piping, pipelines).  program must be
                                Maintenance           structured to
                                 intervals should     enhance safety and
                                 be allowed to be     protect the
                                 extended based on    environment and
                                 component history,   must sustain
                                 operating            ongoing mechanical
                                 experience, and      integrity. Testing
                                 risk-based           and inspection
                                 decision making.     procedures must
                                                      follow commonly
                                                      accepted standards
                                                      and codes, such as
                                                      API 510 and the
                                                      manufacture's
                                                      recommendations.
250.1907(b)...................  Equipment may be     The operator must
                                 maintained by        have mechanical
                                 employees,           integrity in
                                 contractors, or a    accordance with
                                 mix. Some            API RP 75, Section
                                 specialized          8 and Sec.
                                 equipment is         250.1916, in their
                                 actually             SEMS program. Your
                                 maintained by the    contractors must
                                 manufacturer's       conduct operations
                                 representatives      in accordance with
                                 who periodically     your SEMS program.
                                 travel to offshore
                                 facilities to
                                 perform required
                                 maintenance.
                                 Therefore, our
                                 employees do not
                                 need to be trained
                                 to do the actual
                                 maintenance work
                                 for all equipment
                                 in the mechanical
                                 integrity program.
                                Recommended:
                                 Replace (b) with
                                 the following: The
                                 training of
                                 maintenance
                                 workers in the
                                 application of the
                                 procedures,
                                 relevant hazards,
                                 and safe work
                                 practices.
250.1907(c)...................  We recommend         We disagree, we
                                 deleting the         believe that the
                                 language ``meet      manufacture's
                                 the manufacturer's   recommendations
                                 recommendations''    are appropriate to
                                 in Sec.              use.
                                 250.1907(c). Many
                                 of our inspection
                                 and testing
                                 requirements,
                                 while meeting
                                 regulations, are
                                 risk-based in
                                 approach.
250.1907(c)...................  Specific examples    The operator is
                                 of practices         required to meet
                                 within our IMS       or exceed the
                                 would be             inspection
                                 unacceptable under   frequencies in 30
                                 the proposed SEMS    CFR part 250.
                                 regulations: We
                                 presently feel
                                 free to inspect or
                                 test some
                                 equipment more
                                 frequently than
                                 necessary to gain
                                 some extra level
                                 of comfort, but we
                                 do not expect to
                                 be locked into a
                                 greater frequency.
250.1907(d)...................  Is electronic        To address
                                 documentation of     recordkeeping and
                                 the person           documentation, we
                                 performing the       incorporated by
                                 inspection or test   reference API RP
                                 acceptable?          75, Section 13,
                                 Electronic work      and additional
                                 order systems are    reporting and
                                 often used to        documentation
                                 schedule and         requirements in
                                 document             Sec.   250.1928.
                                 inspections and      Electronic records
                                 tests.               are acceptable to
                                                      BOEMRE for most
                                                      records.
250.1907(d)...................  We recommend         BOEMRE kept this
                                 adding,              paragraph in the
                                 ``Electronic         final rule. The
                                 documentation of     final rule will
                                 the same             also address
                                 information will     mechanical
                                 suffice to meet      integrity
                                 this requirement''   documentation as
                                 to Sec.              described in API
                                 250.1907(d). The     RP 75, Section 8.
                                 requirement for      Electronic records
                                 ``signature'' on     are acceptable to
                                 inspection or test   BOEMRE for most
                                 documentation        records, including
                                 should be modified   electronic
                                 to encompass         signatures.
                                 operators' use of
                                 electronic work
                                 management
                                 systems. Work
                                 orders, assigned
                                 to and completed
                                 by individuals
                                 within the
                                 software should be
                                 acceptable.
250.1907(d)...................  The last sentence    BOEMRE agrees with
                                 in Sec.              this comment and
                                 250.1907(d) should   made the text
                                 be modified to       change in new Sec.
                                 place an ``or''        250.1916(d).
                                 between inspection
                                 and test,
                                 therefore changing
                                 the language to
                                 read ``and the
                                 results of the
                                 inspection or
                                 test''.
250.1907(e)...................  Correction of        Deficiencies are
                                 deficiencies         addressed in API
                                 before further use   RP 75, Section 8
                                 will prevent use     and Sec.
                                 of risk-based        250.1916(e). Under
                                 decision making,     the final rule,
                                 and the subsequent   the procedures for
                                 shut-in of           Mechanical
                                 operations may       Integrity must
                                 present additional   address the
                                 hazards. Would       correction of
                                 this apply in the    deficiencies
                                 case of waiting on   associated with
                                 parts and while      equipment and
                                 mitigation           systems that are
                                 measures are put     outside the
                                 in place? Does it    manufacturer's
                                 cover deficiencies   recommended limits
                                 that may not         before further
                                 affect operations    use.
                                 integrity? Run to
                                 failure should be
                                 a viable option
                                 for some
                                 components.
                                 Suggest this
                                 requirement be
                                 based on risk.
                                 This is not a
                                 requirement in API
                                 RP 75.

[[Page 63626]]

250.1907(e)...................  Specific examples    Under Sec.
                                 of practices         250.1916(e) of the
                                 within our IMS       final rule the
                                 that would be        operator must
                                 unacceptable under   document the
                                 the proposed SEMS    procedures to
                                 regulations: We      correct critical
                                 presently decide     equipment
                                 whether to take a    deficiencies or
                                 piece of equipment   operations. The
                                 out of service       operator may
                                 based upon our       continue to use an
                                 judgment of actual   IMS, if it meets
                                 risk (likelihood     the requirements
                                 and consequence of   of API RP 75 and
                                 failure).            the final rule and
                                                      the operator
                                                      addresses any
                                                      deficiencies. We
                                                      cannot accept only
                                                      ``judgment'' as a
                                                      means of the
                                                      operator
                                                      determining risk.
                                                      The operator must
                                                      account for what
                                                      factors were
                                                      considered in
                                                      taking equipment
                                                      out of service.
                                                      This does not have
                                                      to be an
                                                      exhaustive
                                                      analysis but it
                                                      does need to
                                                      reflect that all
                                                      relevant SEMS
                                                      elements were
                                                      considered.
                                                      Documenting the
                                                      ``likelihood and
                                                      consequence of
                                                      failure'' comports
                                                      with the intent of
                                                      SEMS.
250.1907(f)-(i)...............  How is this          BOEMRE disagrees
                                 requirement          with this comment
                                 different from       and is
                                 (a), nor how it is   incorporating by
                                 to be implemented.   reference API RP
                                Recommendation:       75 and
                                 Strike (f)..         requirements
                                How is this           necessary to
                                 requirement          implement API RP
                                 different from       75 in the final
                                 (a), nor how it is   rule. The operator
                                 to be implemented.   must follow the
                                Recommendation:       requirements of
                                 Strike (g). Since    API RP 75, Section
                                 BOEMRE has           8 and the
                                 outlined             requirements in
                                 prescriptive         Sec.   250.1916
                                 requirements for     for mechanical
                                 the inspection and   integrity.
                                 testing and the      Paragraph (a) of
                                 documentation of     Sec.   250.1916
                                 those inspections    provides an
                                 and tests, we do     overview of the
                                 not understand       requirements,
                                 what the             while the
                                 requirement in (h)   subsequent
                                 is and how it is     paragraphs provide
                                 different from (c)   more details.
                                 and (d) above or
                                 how to implement
                                 it..
                                Recommendation:
                                 Strike (h)..
                                We suggest this be
                                 included under
                                 (a).
                                Recommendation:
                                 Strike (i) and
                                 include under (a)..
250.1908......................  There is no mention  The operator must
                                 if the MOC is for    follow the
                                 either permanent     requirements of
                                 and temporary        API RP 75, Section
                                 changes or just      4 and Sec.
                                 permanent changes.   250.1912 of the
                                 Please clarify.      final rule for
                                                      MOC, which
                                                      requires
                                                      procedures for any
                                                      changes related to
                                                      equipment,
                                                      operating
                                                      procedures,
                                                      personnel changes,
                                                      materials, and
                                                      operating
                                                      conditions, except
                                                      for replacement in
                                                      kind. This applies
                                                      to permanent and
                                                      temporary changes.
250.1908......................  A production         The operator is
                                 contractor can       responsible for
                                 have a MOC           developing and
                                 process, but in      implementing a MOC
                                 order for the        in accordance with
                                 process to work,     API RP 75, Section
                                 the operator         4 and Sec.
                                 (client) must be     250.1912 of the
                                 part of the          final rule. The
                                 process. The         operator is
                                 scenario of the      responsible for
                                 lessee/operator      coordinating with
                                 having a MOC         the contractor
                                 process that the     regarding MOC. The
                                 contractor can be    operator must
                                 a part of is a       ensure that their
                                 better model.        contractor
                                                      embraces safety
                                                      principles that
                                                      support their SEMS
                                                      program. The MOC
                                                      is a cooperative
                                                      activity that
                                                      makes all parties
                                                      responsible for
                                                      its success.
250.1908(a)(2)................  A process for        BOEMRE is
                                 changing operating   incorporating by
                                 procedures has       reference API RP
                                 already been         75, Section 4 for
                                 established in       MOCs and Section 5
                                 Sec.                 for Operating
                                 250.1906(c). The     Procedures and
                                 MOC process should   requirements under
                                 simply identify      Sec.  Sec.
                                 that operating       250.1912 and
                                 procedures either    250.1913 of the
                                 need to be changed   final rule. Under
                                 (or don't) as a      Sec.  Sec.
                                 result of changes    250.1912 and
                                 to the facility.     250.1913, the
                                 The actual change    operator must
                                 to the operating     address MOC for
                                 procedures should    operating
                                 not have to go       procedures.
                                 through the MOC
                                 process.
250.1908(a)(3)................  Section 250.1908     BOEMRE disagrees
                                 proposes issuing     with this comment
                                 MOCs for personnel   and it is the
                                 changes, but does    operator's
                                 not define which     responsibility to
                                 personnel that       address personal
                                 encompasses. It      changes. BOEMRE is
                                 would be quite       incorporating by
                                 onerous if a MOC     reference API RP
                                 was required for     75, Section 4 and
                                 every single         requirements under
                                 individual that      Sec.   250.1912,
                                 was changed out on   to address MOCs
                                 a facility. To       for changes in
                                 provide clarity as   personnel. API RP
                                 to those personnel   75, Section 4
                                 changes that would   includes the
                                 require a MOC, we    suggested
                                 propose adding the   language. The
                                 following language   definition of
                                 to Sec.              contractors in
                                 250.1908(3):         Sec.   250.1914(a)
                                 ``Personnel with     does not include
                                 specific knowledge   those providing
                                 or experience who    domestic services.
                                 supervise or
                                 operate, or
                                 support operations
                                 of a facility
                                 which would lead
                                 to a loss of
                                 knowledge or
                                 experience''.
250.1908(a)(4)................  What does BOEMRE     BOEMRE is
                                 envision as a        incorporating by
                                 change in material   reference API RP
                                 that requires a      75, Section 4 and
                                 MOC that is not      requirements under
                                 already covered      Sec.   250.1912 to
                                 under equipment?     address MOCs. The
                                                      operator must
                                                      adopt these
                                                      requirements in
                                                      the SEMS.
                                                      Materials that are
                                                      not covered under
                                                      equipment could
                                                      include process
                                                      chemicals and
                                                      maintenance
                                                      materials; these
                                                      are mentioned in
                                                      API RP 75.
250.1908(a)(5)................  We assume that       BOEMRE is
                                 changes in           incorporating by
                                 operating            reference API RP
                                 conditions include   75, Section 4 and
                                 such things as       requirements under
                                 changes to the       Sec.   250.1912 to
                                 operating envelope   address MOCs. API
                                 (pressure,           RP 4.2e addresses
                                 temperature, flow    changes in
                                 rates, material      operating
                                 chemistry, etc.)     conditions. The
                                 as described in      operator must
                                 the facility         adopt these
                                 design basis or a    requirements in
                                 change in the        the SEMS.
                                 chemistry of the
                                 product that was
                                 not considered in
                                 the equipment
                                 specification. If
                                 our assumption is
                                 not correct,
                                 please clarify.

[[Page 63627]]

250.1908(c)...................  What does BOEMRE     BOEMRE is
                                 envision by the      incorporating by
                                 following            reference API RP
                                 requirement: ``You   75, Section 4, and
                                 must review all      requirements under
                                 changes prior to     Sec.   250.1912 to
                                 their                address MOCs.
                                 implementation?''    Section
                                                      250.1912(c)
                                                      requires the
                                                      operator to review
                                                      all changes prior
                                                      to their
                                                      implementation and
                                                      API RP 75 section
                                                      4.3 addresses this
                                                      review related to
                                                      changes in
                                                      personnel. This
                                                      review is required
                                                      to ensure the
                                                      safety of
                                                      personnel.
250.1908(c)...................  Specific examples    BOEMRE is
                                 of practices         incorporating by
                                 within our IMS       reference API RP
                                 that would be        75, Section 4 and
                                 unacceptable under   requirements under
                                 the proposed SEMS    Sec.   250.1912 to
                                 regulations: We      address MOCs. The
                                 presently allow      operator may
                                 immediate approval   continue to use an
                                 of work considered   IMS, if it meets
                                 to be for            the requirements
                                 emergency            of API RP 75 and
                                 situations without   the final
                                 prior MOC review     regulation.
                                 and approval,        Emergency
                                 subsequently         situations are
                                 working through      addressed in the
                                 MOC as a follow-up.  final rule under
                                                      Sec.   250.1918
                                                      and requires the
                                                      operator to have
                                                      emergency response
                                                      and control plans
                                                      in place and ready
                                                      for immediate
                                                      implementation.
250.1908(f)...................  We assume that the   If the management
                                 documentation for    of change results
                                 this step will be    in change in the
                                 under Sec.           operating
                                 250.1906(c).         procedure, this
                                                      change must be
                                                      documented as
                                                      provide in Sec.
                                                      250.1912(f) in the
                                                      final rule.
250.1909......................  The final rule must  While BOEMRE does
                                 distinguish          not directly
                                 between              regulate the
                                 ``contractor         operator/contactor
                                 employees'' and      relationship, it
                                 ``contracted         is the
                                 employees''.         responsibility of
                                                      both the operator
                                                      and contractor to
                                                      conduct activities
                                                      so that they
                                                      comport with the
                                                      operator's SEMS.
250.1909......................  1. How does this     1. Subpart O
                                 part relate to       specifically
                                 subpart O?           applies to
                                                      personnel involved
                                                      in well control
                                                      and production
                                                      safety system
                                                      operations, while
                                                      subpart S applies
                                                      to all aspects of
                                                      OCS operations
                                                      under BOEMRE
                                                      jurisdiction.
                                2. This section      2. BOEMRE
                                 could conflict       disagrees. Subpart
                                 with subpart O and   O complements a
                                 become detrimental   SEMS program. The
                                 to operators.        operator may use
                                                      the training
                                                      requirements of
                                                      subpart O to meet
                                                      the SEMS
                                                      requirements in
                                                      API RP 75 Section
                                                      7 as incorporated
                                                      by reference and
                                                      the requirements
                                                      in Sec.
                                                      250.1915.
250.1909......................  BOEMRE already has   BOEMRE disagrees.
                                 regulations in       The SEMS rule
                                 place to address     applies to
                                 training and         contractors
                                 competency           performing
                                 assessments for      maintenance or
                                 both operator        repair,
                                 employees and        turnaround, major
                                 contractors. 30      renovation, or
                                 CFR Part 250,        specialty work on
                                 subpart O, Well      or adjacent to a
                                 Control and          covered process.
                                 Production Safety    This section was
                                 Training, clearly    renumbered as Sec.
                                 states that            250.1914 in the
                                 operators must       final rule. The
                                 ensure that both     operator is
                                 employees and        responsible for
                                 contract personnel   obtaining and
                                 understand and can   evaluating
                                 properly perform     information
                                 their duties; Sec.   regarding the
                                   250.1503(b)(3)     contract
                                 requires operators   employer's safety
                                 to have procedures   performance and
                                 ``for verifying      programs and
                                 that all employees   informs contract
                                 and contractor       employers of the
                                 personnel engaged    known potential
                                 in well control or   fire, explosion,
                                 production safety    or toxic release
                                 operations can       hazards related to
                                 perform their        the contractor's
                                 assigned duties.''   work and the
                                 In fact, BOEMRE      process. The
                                 periodically         operator may use
                                 assesses the         the training
                                 Subpart O program    requirements of
                                 by auditing and      subpart O to meet
                                 testing as           the SEMS
                                 described in Sec.    requirements in
                                  250.1507(d),        API RP 75, Section
                                 which states         7, as incorporated
                                 ``BOEMRE or its      by reference and
                                 authorized           Sec.   250.1915.
                                 representative may
                                 conduct testing at
                                 either onshore or
                                 offshore
                                 locations. Tests
                                 will be designed
                                 to evaluate the
                                 competency of your
                                 employees or
                                 contract personnel
                                 in performing
                                 their assigned
                                 well control and
                                 production safety
                                 duties. You are
                                 responsible for
                                 the costs
                                 associated with
                                 this testing,
                                 excluding salary
                                 and travel costs
                                 for BOEMRE
                                 personnel''.
                                We find that the     BOEMRE disagrees.
                                 proposed language    Subpart O
                                 in Sec.   250.1909   complements a SEMS
                                 is redundant with    program. All
                                 existing             personnel with the
                                 regulations under    operator's SEMS
                                 30 CFR Part 250,     program need to be
                                 subpart O, and       trained to
                                 therefore, should    competently
                                 be eliminated from   perform their
                                 the proposed rule.   assigned duties.
                                 If you do not        The operator may
                                 agree, then please   use the training
                                 clarify the          requirements of
                                 relationship         subpart O to meet
                                 between this         the SEMS
                                 proposed rule and    requirements in
                                 the requirements     API RP 75, Section
                                 in subpart O and     7, as incorporated
                                 identify what        by reference and
                                 contractor groups    Sec.   250.1915 in
                                 have otherwise not   the final rule.
                                 been addressed by
                                 the existing
                                 subpart O
                                 requirements. If
                                 BOEMRE has
                                 concerns regarding
                                 contractor
                                 selection or
                                 competency, then
                                 the appropriate
                                 regulation to
                                 address such
                                 concerns is within
                                 the subpart O
                                 program.
                                Recommendation:
                                 Strike Sec.
                                 250.1909 in its
                                 entirety..

[[Page 63628]]

250.1909......................  The current BOEMRE   Subpart O
                                 regulations under    specifically
                                 subpart O at Sec.    applies to
                                  250.1500 require    personnel involved
                                 operators to         in well control
                                 ensure and           and production
                                 document that        safety system
                                 their company and    operations The
                                 contract employees   SEMS rule applies
                                 are competent to     to contractors
                                 perform their        performing
                                 assigned jobs.       maintenance or
                                 Therefore, the       repair,
                                 section on           turnaround, major
                                 contractor           renovation, or
                                 selection and        specialty work on,
                                 competency in the    or adjacent to, a
                                 proposed rule is     covered process.
                                 redundant and not    This section was
                                 needed. If BOEMRE    renumbered as Sec.
                                 felt it necessary,     250.1914 in the
                                 subpart O could be   final rule. The
                                 expanded to          operator is
                                 include any worker   responsible for
                                 groups not already   obtaining and
                                 covered in the       evaluating
                                 current rule. In     information
                                 the event BOEMRE     regarding the
                                 proceeds with an     contract
                                 entirely new         employer's safety
                                 rulemaking, we       performance and
                                 recommend a          programs and
                                 performance-based    informing contract
                                 rule be written      employers of the
                                 (like subpart O)     known potential
                                 to allow operators   fire, explosion,
                                 to utilize their     or toxic release
                                 existing safety      hazards related to
                                 and environmental    the contractor's
                                 management           work and the
                                 programs instead     process. The
                                 of a detailed,       operator may use
                                 prescriptive         the training
                                 program as           requirements of
                                 proposed in this     subpart O to
                                 rulemaking.          substantially meet
                                 Companies could      the SEMS
                                 then certify to      requirements in
                                 BOEMRE that their    API RP 75, Section
                                 programs include     7, as incorporated
                                 the required         by reference and
                                 elements and use     the requirements
                                 their                necessary to
                                 documentation and    implement API RP
                                 audit systems that   75 in Sec.
                                 are already in       250.1915. The
                                 place and working.   contactor must
                                                      ensure that all
                                                      personnel not
                                                      mentioned in
                                                      subpart O are also
                                                      competent in
                                                      conducting their
                                                      job and subscribe
                                                      to safe work
                                                      practices as
                                                      identified in the
                                                      operator's SEMS
                                                      program.
250.1909......................  While the proposed   BOEMRE disagrees;
                                 rule states the      SEMS must include
                                 required SEMS        everyone working
                                 program must         on a facility;
                                 include each of      criteria for
                                 the 4 elements       contractor
                                 described, we        selection are an
                                 believe the Sec.     important part of
                                 250.1909 ``What      that. Contractor
                                 criteria must be     criteria are
                                 documented in my     addressed in
                                 SEMS program for     Section 6.4 and
                                 contractor           Appendix A of API
                                 selection?'' is      RP 75 as
                                 actually a 5th       incorporated by
                                 element that has     reference. We
                                 been added without   included this in
                                 the justification    the final rule
                                 and rationale used   with requirements
                                 to validate          necessary to
                                 inclusion of the     implement API RP
                                 other 4 elements.    75 in Sec.
                                                      250.1914.
250.1909......................  If contractors are   The operator is
                                 to be                responsible for
                                 ``accountable''      having a SEMS
                                 for SEMS             program in place.
                                 activities, their    The operator is
                                 scale, complexity    responsible for
                                 and scope of work    coordinating with
                                 should also be       the contractor
                                 taken into           regarding their
                                 account. Example:    SEMS program. The
                                 Contractor           operator must
                                 services vary from   ensure that their
                                 ``Labor'' (i.e.,     contractor
                                 production           embraces safety
                                 operators),          principles that
                                 ``Equipment''        support their SEMS
                                 (i.e., Generators,   program.
                                 machinery rentals)
                                 or both ``Labor
                                 and Equipment''
                                 (i.e., drilling
                                 rig, welding
                                 machine, and
                                 welder), etc. A
                                 contractor
                                 supplying
                                 ``Labor'' services
                                 should not be
                                 required to have a
                                 SEMS program, but
                                 the competency to
                                 work within the
                                 clients program
                                 (i.e., perform
                                 JSAs, initiate MOC
                                 process, utilize
                                 Operating
                                 Procedures in
                                 performance of
                                 duties, perform
                                 level one visual
                                 Mechanical
                                 Integrity
                                 inspections in
                                 accordance with a
                                 lessee's SEMS
                                 program). A
                                 contractor only
                                 supplying
                                 ``Equipment''
                                 should have a
                                 Mechanical
                                 Integrity Plan and
                                 Operating
                                 Procedures that
                                 accompany the
                                 equipment and
                                 limited hazards
                                 analysis
                                 pertaining to his
                                 equipment. A
                                 contractor
                                 supplying ``Labor
                                 and Equipment''
                                 should have a SEMS
                                 program that
                                 covers his
                                 equipment and the
                                 operation thereof.
250.1909......................  There is no          Contractors perform
                                 indication in the    a majority of the
                                 data used for the    work on the OCS
                                 proposed rule that   and the selection
                                 ``Contractor         of skilled,
                                 Selection''          knowledgeable, and
                                 contributed to the   trained contractor
                                 incidents analyzed   personnel by the
                                 by the BOEMRE.       operator is an
                                                      important part of
                                                      ensuring that the
                                                      SEMS program
                                                      works.
250.1909......................  The proposed rule    The operator is
                                 would require the    responsible for
                                 lessee/operator to   having a SEMS
                                 develop a SEMS.      program in place.
                                 However, Sec.        The operator is
                                 250.1909 states      responsible for
                                 that the lessee      coordinating with
                                 must document that   the contractor
                                 their contractors    regarding their
                                 have policies and    SEMS program. The
                                 practices that are   operator must
                                 consistent with      ensure that their
                                 the lessee's plan.   contractor
                                 Furthermore, it      embraces safety
                                 states that a copy   principles that
                                 of the               support their SEMS
                                 contractor's SEMS    program.
                                 program must be     Under Sec.
                                 kept by the          250.1914 in the
                                 operator and the     final rule the
                                 contractor at each   operators must
                                 facility where       obtain and
                                 contract             evaluate
                                 operations are       information
                                 being performed.     regarding the
                                 Our company has 50   contractor's
                                 to 60 customers.     safety and
                                 To strive for        environmental
                                 consistency with     performance when
                                 50 to 60             selecting a
                                 individual           contractor.
                                 programs is          Operators must
                                 unrealistic and      ensure that
                                 places an            contractors have
                                 unnecessary burden   their own written
                                 on all contract      safe work
                                 operators. Our       practices.
                                 company either       Contractors may
                                 manages or           adopt appropriate
                                 operates over 600    sections of the
                                 platforms in the     operator's SEMS
                                 GOM. The paperwork   program. Operator
                                 burden of            and contractor
                                 supplying and        must document
                                 maintaining a SEMS   their agreement on
                                 program for each     appropriate
                                 facility (again,     contractor safety
                                 consistent with      and environmental
                                 that individual      policies and
                                 customer) could      practices before
                                 only be done at a    the contractor
                                 tremendous cost of   begins work at the
                                 not only man hours   operator's
                                 but monetary         facilities.
                                 investment that
                                 may not be
                                 recoverable.

[[Page 63629]]

250.1909......................  There is absolutely  Subpart O applies
                                 no need for          to personnel
                                 further expansion    involved in well
                                 of contractor        control and
                                 selection and        production safety
                                 contractor           system operations.
                                 documentation in     Section 250.1914
                                 any SEMS program.    of the final rule
                                 Subpart O already    applies to
                                 addresses            contractors
                                 contractor           performing
                                 evaluations and      maintenance or
                                 contractor           repair,
                                 selection. This      turnaround, major
                                 portion of the       renovation, or
                                 proposed rule is     specialty work on,
                                 redundant and        or adjacent to, a
                                 attempts to expand   covered process,
                                 once again on the    as well as
                                 definition of        Appendix A of API
                                 ``Production         RP 75. The
                                 Operations''.        operator is
                                                      responsible for
                                                      verifying that
                                                      contractor
                                                      personnel can
                                                      perform their
                                                      assigned duties
                                                      and informs
                                                      contract employers
                                                      of all hazards
                                                      related to the
                                                      contractor's work
                                                      and the process.
                                                      The operator may
                                                      use the training
                                                      requirements of
                                                      Subpart O to meet
                                                      the SEMS
                                                      requirements in
                                                      API RP 75 Section
                                                      7 as incorporated
                                                      by reference and
                                                      Sec.   250.1915 of
                                                      the final rule.
250.1909......................  BOEMRE cannot        BOEMRE disagrees.
                                 expect the           The operator is
                                 operator or lessee   accountable for
                                 to evaluate, test,   contractor
                                 and document the     personnel
                                 competency of        activities and
                                 these hired          equipment. BOEMRE
                                 professionals as     does not expect
                                 they are by name     the operator to
                                 certified to         test their
                                 perform their        contractors.
                                 tasks and possess    BOEMRE does expect
                                 unique knowledge.    the operator to
                                 Additionally,        evaluate their
                                 contractor           contractor's
                                 selection does not   ability to perform
                                 affect human         the job that they
                                 factors.             are hired to do
                                                      and to document
                                                      that they have
                                                      done so.
                                                     Under Sec.
                                                      250.1914 in the
                                                      final rule the
                                                      operators must
                                                      obtain and
                                                      evaluate
                                                      information
                                                      regarding the
                                                      contractor's
                                                      safety and
                                                      environmental
                                                      performance when
                                                      selecting a
                                                      contractor.
                                                      Operators must
                                                      ensure that
                                                      contractors have
                                                      their own written
                                                      safe work
                                                      practices.
                                                      Contractors may
                                                      adopt appropriate
                                                      sections of the
                                                      operator's SEMS
                                                      program. Operator
                                                      and contractor
                                                      must document
                                                      their agreement on
                                                      appropriate
                                                      contractor safety
                                                      and environmental
                                                      policies and
                                                      practices before
                                                      the contractor
                                                      begins work at the
                                                      operator's
                                                      facilities.
250.1909......................  We are concerned     BOEMRE disagrees.
                                 with the ambiguous   Subpart O applies
                                 language related     to personnel
                                 to contractors and   involved in well
                                 contracted           control and
                                 personnel. BOEMRE    production safety
                                 fails to clearly     system operations.
                                 distinguish          Section 250.1914
                                 between contracted   of the final rule
                                 individuals acting   applies to
                                 in the same          contractors
                                 capacity as an       performing
                                 employee, and        maintenance or
                                 companies            repair,
                                 contracted to        turnaround, major
                                 perform              renovation, or
                                 specialized          specialty work on,
                                 services for a       or adjacent to, a
                                 lessee, leading to   covered process
                                 perhaps unintended   and Appendix A of
                                 applications. For    API RP 75. The
                                 example, Sec.        operator is
                                 250.1909(a) of the   responsible for
                                 proposed rule        obtaining and
                                 states, ``A          evaluating
                                 contractor is        information
                                 anyone performing    regarding the
                                 work for the         contract
                                 lessee.'' This       employer's safety
                                 could be construed   performance and
                                 as including         safety programs
                                 emergency response   and informs
                                 operations even      contract employers
                                 though these are     of the known
                                 not integral to      potential fire,
                                 oil and gas          explosion, or
                                 exploration and      toxic release
                                 production           hazards related to
                                 operations. We       the contractor's
                                 support the OOC      work and the
                                 comment that the     process. The
                                 section relating     operator may use
                                 to contractors be    the training
                                 stricken from the    requirements of
                                 rule, as redundant   subpart O to meet
                                 with existing        the SEMS
                                 subpart O            requirements in
                                 regulations. In      API RP 75, Section
                                 the alternative,     7 as incorporated
                                 we request that      by reference. The
                                 the currently        API RP 75 defines
                                 overbroad language   contractor as
                                 be clarified to      ``The individual,
                                 define               partnership, firm,
                                 contractors, and     or corporation
                                 contracted           retained by the
                                 personnel, and to    owner or operator
                                 confirm that the     to perform work or
                                 rule does not        provide supplies
                                 apply to emergency   or equipment. The
                                 response             term contractor
                                 contractors even     must also include
                                 though they are      subcontractors''.
                                 contracted to
                                 perform work for a
                                 lessee in the OCS.
250.1909......................  The data used in     Contractors perform
                                 the proposed rule    the majority of
                                 makes no mention     the work on the
                                 of problems          OCS and as such,
                                 regarding            selecting skilled,
                                 contractor           knowledgeable, and
                                 competency,          trained contractor
                                 training, MOC,       personnel by the
                                 mechanical           operator will help
                                 integrity, etc.      achieve safe OCS
                                                      operations.
                                                     Under Sec.
                                                      250.1914 in the
                                                      final rule the
                                                      operators must
                                                      obtain and
                                                      evaluate
                                                      information
                                                      regarding the
                                                      contractor's
                                                      safety and
                                                      environmental
                                                      performance when
                                                      selecting a
                                                      contractor.
                                                      Operators must
                                                      ensure that
                                                      contractors have
                                                      their own written
                                                      safe work
                                                      practices.
                                                      Contractors may
                                                      adopt appropriate
                                                      sections of the
                                                      operator's SEMS
                                                      program. Operator
                                                      and contractor
                                                      must document
                                                      their agreement on
                                                      appropriate
                                                      contractor safety
                                                      and environmental
                                                      policies and
                                                      practices before
                                                      the contractor
                                                      begins work at the
                                                      operator's
                                                      facilities.
250.1909(b)...................  1. Are electronic    1. Electronic
                                 copies of            copies of
                                 contractor's         contractor's
                                 competencies and     competencies and
                                 SEMS programs        SEMS programs are
                                 acceptable?          acceptable. See
                                                      API RP 75, Section
                                                      13 and Sec.
                                                      250.1928.

[[Page 63630]]

                                2. Do we need to     2. In Sec.
                                 keep competencies    250.1914 of the
                                 for each             final rule, the
                                 individual           SEMS must include
                                 contractor?          procedures and
                                                      verification that
                                                      the operator's
                                                      contractor and
                                                      employees
                                                      understand and can
                                                      perform their
                                                      assigned duties,
                                                      as well as
                                                      Appendix A of API
                                                      RP 75, which
                                                      addresses
                                                      contractor
                                                      selection
                                                      criteria. The
                                                      operator is
                                                      responsible for
                                                      ensuring and
                                                      validating the
                                                      competency of
                                                      their contractors;
                                                      the method for
                                                      doing so must be
                                                      detailed in their
                                                      SEMS program. The
                                                      operator may
                                                      request specific
                                                      performance
                                                      information from
                                                      contractors.
250.1910......................  We recommend that    BOEMRE incorporated
                                 the prescriptive     by reference API
                                 language be          RP 75, Section 12
                                 replaced with the    and requirements
                                 following: ``You     necessary to
                                 must audit your      implement API RP
                                 SEMS program in      75 in the final
                                 accordance with      rule under Sec.
                                 API RP 75, Section   250.1920 to
                                 12, Audit of         address audits and
                                 Safety and           documentation. The
                                 Environmental        final rule gives
                                 Management Program   the option of
                                 Elements''.          utilizing either
                                                      an independent
                                                      third party or
                                                      your designated
                                                      and qualified
                                                      personnel to
                                                      conduct audits on
                                                      your behalf.
250.1910(a)...................  We believe timing    BOEMRE incorporated
                                 for audits should    by reference API
                                 be based on          RP 75. Audit
                                 performance and      frequency is
                                 risk rather than a   addressed in Sec.
                                 prescribed            250.1920 of the
                                 schedule as          final rule. The
                                 described in Sec.    operators must
                                  250.1910(a).        have their SEMS
                                                      programs audited
                                                      by either an
                                                      independent third
                                                      party or your
                                                      designated and
                                                      qualified
                                                      personnel to
                                                      conduct audits on
                                                      your behalf
                                                      according to the
                                                      requirements of
                                                      this subpart and
                                                      API RP 75, Section
                                                      12 within 2 years
                                                      of the initial
                                                      implementation of
                                                      the SEMS program
                                                      and at least once
                                                      every 3 years
                                                      thereafter.
250.1910(b)...................  As part of our SEMS  Audit frequency is
                                 program, we audit    addressed in Sec.
                                 all facilities        250.1920 of the
                                 (offshore and on)    final rule. The
                                 on a 3-5 year        operators must
                                 basis and roll up    have their SEMS
                                 results of audits    programs audited
                                 from each year to    by either an
                                 evaluate our         independent third
                                 program as a         party or your
                                 whole. We assume     designated and
                                 this is acceptable   qualified
                                 in accordance with   personnel to
                                 this section.        conduct audits on
                                                      your behalf
                                                      according to the
                                                      requirements of
                                                      this subpart and
                                                      API RP 75, Section
                                                      12 within 2 years
                                                      of the initial
                                                      implementation of
                                                      the SEMS program
                                                      and at least once
                                                      every 3 years
                                                      thereafter.
                                Which part of this   In Sec.
                                 audit process        250.1920(b), the
                                 would the BOEMRE     operator must
                                 want to be invited   notify the BOEMRE
                                 to participate/      30 days in advance
                                 observe?             to allow BOEMRE to
                                                      participate in/
                                                      observe the
                                                      operators SEMS
                                                      audit. BOEMRE may
                                                      participate or
                                                      observe the audit
                                                      of any of the
                                                      elements in the
                                                      final rule.
250.1910(b)...................  We recommend         BOEMRE disagrees;
                                 deleting language    we maintained this
                                 at Sec.              requirement in the
                                 250.1910(b)          final rule, so
                                 requiring            that BOEMRE may
                                 notification to      observe SEMS
                                 BOEMRE prior to      audits under Sec.
                                 conducting an         250.1924(c).
                                 audit.
250.1910(b)...................  How does BOEMRE      If BOEMRE decides
                                 envision             to participate in
                                 participating in     a SEMS audit, our
                                 an audit as just     activities may
                                 as an observer?      include one or
                                 These seem to be     more of the
                                 contradictory        following:
                                 terms. If BOEMRE    
                                 is merely going to   Observation.
                                 observe and not do   Requesting
                                 or say anything,     documentation.
                                 then perhaps         Revising
                                 better wording       SEMS program.
                                 would be             Other
                                 ``Representatives    duties as needed.
                                 from BOEMRE may     BOEMRE may
                                 observe your SEMS    participate as
                                 audit.'' Further,    observers to
                                 if BOEMRE is going   verify compliance.
                                 to simply observe,   BOEMRE may issue
                                 what is the          warnings, PINCs,
                                 purpose of           or INCs, under
                                 observing the        Sec.   250.1927.
                                 audit?
250.1910(b)...................  The wording in this  BOEMRE disagrees.
                                 section also seems   In the final rule
                                 to indicate that     BOEMRE may
                                 the SEMS audit       participate in the
                                 will be conducted    audit in the field
                                 in a meeting         and office
                                 style; otherwise,    locations as
                                 how will BOEMRE      needed. How BOEMRE
                                 observe the audit?   participates in
                                                      the audit will be
                                                      based on how the
                                                      operator conducts
                                                      its audit.
250.1910(b) and (c)...........  Will the BOEMRE      BOEMRE may write
                                 write INCs on the    INCs based on the
                                 issues self-         severity of the
                                 discovered on        issues discovered
                                 audits (either as    during an audit
                                 a participant or     (either as a
                                 following review     participant or
                                 of the audit         following the
                                 report)?             review of the
                                                      audit report). If
                                                      the BOEMRE
                                                      discovers an issue
                                                      when reviewing the
                                                      audit report, we
                                                      will consider
                                                      whether the extent
                                                      to which the
                                                      operator has
                                                      addressed the
                                                      issue when
                                                      deciding if we
                                                      should write an
                                                      INC. BOEMRE will
                                                      consider all
                                                      relevant factors
                                                      when considering
                                                      issuing an INC,
                                                      including the fact
                                                      that the operator
                                                      self-discovered
                                                      the deficiency.
                                                      BOEMRE encourages
                                                      operators to
                                                      identify
                                                      deficiencies
                                                      during their
                                                      audits and looks
                                                      favorably on
                                                      audits detailing
                                                      such, before
                                                      deciding if a self-
                                                      discovered
                                                      deficiency
                                                      warrants receiving
                                                      an INC. BOEMRE
                                                      recognizes the
                                                      intent of the
                                                      operator's audit
                                                      is to find
                                                      deficiencies and
                                                      make the necessary
                                                      corrections to
                                                      enhance safety and
                                                      BOEMRE does not
                                                      intend for audits
                                                      to be used as a
                                                      punitive exercise.

[[Page 63631]]

250.1910(c)...................  When does BOEMRE     The audit is
                                 consider the audit   complete when any
                                 to be completed?     deficiencies in a
                                 We consider the      SEMS program are
                                 audit to be          corrected and
                                 completed when the   documented. If
                                 final audit report   there are no
                                 is issued.           deficiencies, the
                                                      audit is complete
                                                      when the final
                                                      audit report is
                                                      issued and
                                                      submitted to
                                                      BOEMRE.
250.1910(c)...................  Given the language   In Sec.   250.1920
                                 in Sec.              of the final rule,
                                 250.1910(d), it      the operator must
                                 appears that         require the
                                 BOEMRE does not      Independent Third
                                 envision receiving   Party to submit an
                                 the actual SEMS      audit report of
                                 audit report.        the findings and
                                Recommendation: You   conclusions of the
                                 must submit a        audit to BOEMRE
                                 report to the        within 30 days of
                                 BOEMRE within 30     the audit
                                 days after the       completion date.
                                 issuance of the      The report must
                                 final SEMS report    outline the
                                 by your designated   results of the
                                 and qualified        audit, including
                                 personnel or your    deficiencies
                                 independent third-   identified.
                                 party. The report
                                 need not be the
                                 full SEMS report
                                 but must outline *
                                 * *.
250.1910(c)...................  We agree with the    The audit reports
                                 BOEMRE proposal to   are critical
                                 periodically         documents that
                                 review the results   BOEMRE needs to
                                 of SEMS audits       ensure that your
                                 based on operator    audit protocols
                                 performance          are true to the
                                 through              intent of this
                                 unannounced or       subpart and that
                                 announced            any deficiencies
                                 inspections.         have been
                                 However, we are      addressed
                                 not supportive of    appropriately and
                                 the language at      in a timely
                                 Sec.   250.1910(c)   manner. In Sec.
                                 that requires        250.1920 of the
                                 producing a          final rule, the
                                 separate report      operator must
                                 solely for BOEMRE    require the
                                 purposes within 30   Independent Third
                                 days of the          Party or your
                                 completion of an     designated and
                                 audit. This is an    qualified
                                 administrative       personnel to
                                 burden and does      submit an audit
                                 not meet the         report of the
                                 intent of the        findings and
                                 proposed             conclusions of the
                                 regulation that      audit to BOEMRE
                                 the rule not be a    within 30 days of
                                 paperwork            the audit
                                 exercise. We         completion date.
                                 suggest adding       The report must
                                 language to Sec.     outline the
                                 250.1910(c) that     results of the
                                 BOEMRE could         audit, including
                                 review audit         deficiencies
                                 reports during       identified.
                                 inspections or
                                 upon request that
                                 would provide
                                 BOEMRE unimpeded
                                 access to any
                                 audit findings at
                                 their discretion.
250.1910(d)...................  What does BOEMRE     There is not a
                                 envision as the      significant
                                 difference between   difference between
                                 verifying            the two sections
                                 corrective actions   in regards to
                                 from an audit in     verifying
                                 Sec.   250.1910(d)   corrective
                                 and Sec.             actions.
                                 250.1913?
250.1910(e)...................  What is the purpose  BOEMRE is
                                 of retaining         incorporating by
                                 copies of the        reference API RP
                                 audit for 5 years,   75, Section 12 and
                                 when the program     Sec.   250.1920 of
                                 has to be audited    the final rule
                                 every 3 years?       will require
                                Recommendation: You   independent Third
                                 must retain copies   Party or your
                                 of either the        designated and
                                 independent third-   qualified
                                 party's SEMS         personnel to
                                 records or self      conduct audits on
                                 audit for a          your behalf. The
                                 minimum period of    final rule has
                                 3 years or until     additional
                                 the completion of    recordkeeping
                                 the next audit.      requirements that
                                                      are not in API RP
                                                      75. In Sec.
                                                      250.1920 of the
                                                      final rule, the
                                                      operator must
                                                      require the
                                                      Independent Third
                                                      Party or your
                                                      designated and
                                                      qualified
                                                      personnel to
                                                      submit an audit
                                                      report of the
                                                      findings and
                                                      conclusions of the
                                                      audit to BOEMRE
                                                      within 30 days of
                                                      the audit
                                                      completion date
                                                      and to keep copies
                                                      of the audits for
                                                      6 years. Requiring
                                                      the operators to
                                                      keep the audits
                                                      for 6 years
                                                      ensures that they
                                                      have copies of
                                                      audits for at
                                                      least 2 audit
                                                      cycles for
                                                      reference.
250.1911......................  We recommend that    BOEMRE incorporated
                                 the prescriptive     by reference API
                                 language be          RP 75, Section 13,
                                 replaced with the    and additional
                                 following: ``Your    recordkeeping and
                                 SEMS program         documentation
                                 procedures and       requirements in
                                 documents must be    Sec.   250.1928.
                                 maintained in
                                 accordance with
                                 API RP 75, Section
                                 13, Records and
                                 Documentation''.
250.1911......................  Which records need   The response to
                                 to be kept to        these questions
                                 comply with this     are addressed in
                                 part? Which          API RP 75, which
                                 records need to be   BOEMRE
                                 signed and dated?    incorporated by
                                 Only those records   reference, and
                                 specifically         additional
                                 referred to in       recordkeeping and
                                 this proposed        documentation
                                 rule? API RP 75      requirements in
                                 provides guidance    Sec.   250.1928.
                                 and examples for
                                 this section.
250.1911......................  The proposed         BOEMRE incorporated
                                 regulation has       by reference API
                                 exhaustive           RP 75, Section 13,
                                 prescriptive         and additional
                                 documentation and    recordkeeping and
                                 recordkeeping        documentation
                                 requirements         requirements in
                                 imbedded             Sec.   250.1928.
                                 throughout the
                                 rule. Existing
                                 programs will have
                                 to be rewritten by
                                 all operators to
                                 incorporate these
                                 prescriptive
                                 requirements. We
                                 do not believe
                                 that this level of
                                 prescriptive
                                 documentation and
                                 recordkeeping will
                                 increase safety.
                                 The API RP 75 has
                                 a records and
                                 documentation
                                 section. If BOEMRE
                                 is going to
                                 require
                                 documentation and
                                 recordkeeping,
                                 then again, we
                                 strongly recommend
                                 that Section 13 of
                                 API RP 75 be
                                 adopted in the
                                 final rulemaking.
250.1912(c)...................  When will BOEMRE     The operator must
                                 evaluate the         use an independent
                                 independent third-   third-party or
                                 party? Before or     your designated
                                 after they are       and qualified
                                 used for a SEMS      personnel
                                 audit? What is the   performing
                                 evaluation           independent third
                                 criterion?           party functions.
                                If BOEMRE finds       BOEMRE will not
                                 deficiencies in      approve, but will
                                 the third-party      evaluate, the
                                 and they have        independent third-
                                 already performed    party or your
                                 a SEMS audit, does   designated and
                                 that put the audit   qualified
                                 results in           personnel;
                                 jeopardy or          however, if there
                                 require a new        are deficiencies
                                 audit be             in the audit, we
                                 performed?.          will take
                                                      appropriate
                                                      action. The
                                                      independent third-
                                                      party or your
                                                      designated and
                                                      qualified
                                                      personnel must
                                                      meet the
                                                      requirements of
                                                      Sec.   250.1926.

[[Page 63632]]

250.1913(a)...................  ``Adequate'' and     In the final rule,
                                 ``effective'' are    BOEMRE removed the
                                 very subjective      term ``adequate''
                                 terms. What          and adopted most
                                 criteria will        of the recommended
                                 BOEMRE utilize to    language. This is
                                 determine if a       now in Sec.
                                 program is           250.1924.
                                 adequate and/or
                                 effective? Many
                                 operators
                                 currently have
                                 well-developed
                                 programs, but may
                                 still have
                                 injuries and
                                 incidents. Would
                                 these programs be
                                 deemed adequate
                                 and effective?
                                Recommendation: (a)
                                 BOEMRE or its
                                 authorized
                                 representative may
                                 evaluate or visit
                                 your facility to
                                 determine whether
                                 your SEMS program
                                 is in place and
                                 being followed.
                                 These evaluations
                                 or visits may be
                                 random or based
                                 upon the OCS lease
                                 operator's or
                                 contractor's
                                 performance.
250.1913(a)...................  BOEMRE is in a much  The final rule will
                                 better position,     require operators
                                 than a third-party   to use an
                                 company to approve   independent third-
                                 the lessee's SEMS    party or
                                 Programs for the     designated and
                                 following reasons:   qualified
                                1. BOEMRE is a        personnel
                                 government agency    performing
                                 and therefore does   independent third
                                 not have a           party functions to
                                 conflict of          audit a SEMS
                                 interest. Whereas    program. BOEMRE
                                 a third-party        will not approve
                                 company is a for-    SEMS programs
                                 profit entity and    because the intent
                                 would be subject     is to have a
                                 to the pressures     program that
                                 of financial         evolves and
                                 interest.            adapts, as needed.
                                 Additionally,        This allows
                                 third- party         operators to
                                 companies could be   tailor the program
                                 approving programs   to their
                                 that they have       individual needs
                                 produced.            and corporate
                                                      cultures on an
                                                      ongoing basis.
                                2. BOEMRE has ready  Under Sec.
                                 access to all        250.1925 of the
                                 offshore leases.     final rule, BOEMRE
                                                      may conduct an
                                                      audit if BOEMRE
                                                      identifies safety
                                                      or non-compliance
                                                      concerns based on
                                                      the results of our
                                                      inspections and
                                                      evaluations, or as
                                                      a result of an
                                                      event.
250.1913(b)...................  What are the         BOEMRE will use
                                 qualifications of    appropriate BOEMRE
                                 the BOEMRE           personnel with the
                                 representatives      proper credentials
                                 conducting these     and training to
                                 evaluations? Are     ensure
                                 they familiar with   consistency.
                                 management systems
                                 and auditing
                                 protocols?
250.1914......................  We have serious      BOEMRE continually
                                 concerns about the   works to address
                                 consistency of       inconsistency. We
                                 enforcement          have demonstrated
                                 actions. How will    improvements in
                                 BOEMRE ensure the    this area for the
                                 consistency of       last 10 years.
                                 evaluation?          BOEMRE has
                                                      established
                                                      internal processes
                                                      to help ensure
                                                      consistency in
                                                      enforcement.
250.1915......................  1. Please provide    1. See Appendix I
                                 detailed             in preamble of the
                                 instructions and     final rule.
                                 examples for
                                 filling out MMS-
                                 131.
                                2. Who within        2. The form may be
                                 BOEMRE is the form   sent to the Safety
                                 to be sent to and    and Enforcement
                                 by what method * *   Branch by fax to
                                 * paper,             (703) 787-1575, by
                                 electronic, etc.?    e-mail to
                                                      semp@BOEMRE.gov,
                                                      or by mail to 381
                                                      Elden St., MS-
                                                      4023, Herndon, VA
                                                      20170.
                                3. By calendar       3. For this
                                 year, we assume      application, the
                                 that you mean Jan    BOEMRE considers a
                                 1 to Dec 31. If      calendar year to
                                 not, please          cover the time
                                 clarify.             from January 1st
                                                      to December 31st.
                                4. Please state how  4. BOEMRE uses the
                                 BOEMRE will          data collected in
                                 utilize the data.    Form MMS-131 to
                                                      calculate 20
                                                      annual, OCS-wide,
                                                      performance
                                                      indices. The
                                                      indices provide
                                                      information about
                                                      performance and
                                                      safety trends;
                                                      they also allow
                                                      OCS operators to
                                                      compare their
                                                      performance with
                                                      industry averages.
                                5. Please include    5. The information
                                 provisions for       on Form MMS-131 is
                                 holding the          not protected from
                                 individual company   disclosure and is
                                 data confidential.   subject to FOIA
                                                      should a member of
                                                      the public request
                                                      this information.
                                6. We also point     6. BOEMRE
                                 out the authority    disagrees. The
                                 to require           OSHA does not have
                                 employers to         authority for OCS
                                 collect and report   oil and gas and
                                 work-hours and       sulphur
                                 injury/incident      activities.
                                 data of this type
                                 actually rests
                                 with the USCG
                                 based on the MOU
                                 between USCG and
                                 OSHA dated 19
                                 December 1979.
                                 Furthermore, the
                                 collection and
                                 reporting of
                                 injuries and
                                 illnesses on the
                                 OCS falls under
                                 the currently
                                 pending USCG
                                 rulemaking (RIN
                                 1625-AA18) issued
                                 on 27 June 1995,
                                 and entitled Outer
                                 Continental Shelf
                                 Activities.
                                 Coordination by
                                 BOEMRE with the
                                 USCG is
                                 recommended to
                                 consolidate and
                                 coordinate their
                                 efforts and avoid
                                 any duplication of
                                 requirements and
                                 unnecessary
                                 burdens.
------------------------------------------------------------------------

    The following lists the citation for the proposed rulemaking and 
what the current citation is in the final rulemaking.

------------------------------------------------------------------------
    Proposed rulemaking citation          Final rulemaking citation
------------------------------------------------------------------------
Sec.   250.1900 Must I have a SEMS   Sec.   250.1900 Must I have a SEMS
 program?                             program?
Sec.   250.1901 What is the goal of  Sec.   250.1901 What is the goal of
 my SEMS program?                     my SEMS program?
Sec.   250.1902 When must I comply   Sec.   250.1900(a). Must I have a
 with the regulations in this         SEMS program?
 subpart?

[[Page 63633]]

Sec.   250.1903 May I use an         Removed.
 industry standard to develop my
 SEMS program?
Sec.   250.1904 What are my general  Sec.   250.1909 What is
 responsibilities for SEMS?           management's general
                                      responsibilities for the SEMS
                                      program?
Sec.   250.1905 What criteria for    Sec.   250.1911
 Hazards Analyses must my SEMS
 program meet?
Sec.   250.1906 What criteria for    Sec.   250.1913
 Operating Procedures must my SEMS
 program meet?
Sec.   250.1907 What criteria for    Sec.   250.1916
 Mechanical Integrity must my SEMS
 program meet?
Sec.   250.1908 What criteria for    Sec.   250.1912
 Management of Change must my SEMS
 program meet?
Sec.   250.1909 What criteria must   Sec.   250.1914 What criteria must
 be documented in my SEMS program     be documented in my SEMS program
 for contractor selection?            for safe work practices and
                                      contractor selection?
Sec.   250.1910 What are my          Sec.   250.1920
 responsibilities when conducting a
 SEMS audit?
Sec.   250.1911 What are my          Sec.   250.1928
 documentation and recordkeeping
 requirements?
Sec.   250.1912 What qualifications  Sec.   250.1926
 must an independent third-party or
 my designated and qualified
 personnel meet?
Sec.   250.1913 How will BOEMRE      Sec.   250.1924
 determine if my SEMS program is
 effective?
Sec.   250.1914 What happens if      Sec.   250.1927
 BOEMRE finds shortcomings in my
 SEMS program?
Sec.   250.1915 What are my          Sec.   250.1929
 responsibilities for submitting
 OCS performance measure data?
                                     [NEW SECTION] Sec.   250.1903
                                      Definitions.
                                     [NEW SECTION] Sec.   250.1904
                                      Documents incorporated by
                                      reference.
                                     [NEW SECTION] Sec.   250.1910 What
                                      safety and environmental
                                      information is required?
                                     [NEW SECTION] Sec.   250.1914 What
                                      criteria must be documented in my
                                      SEMS program for safe work
                                      practices and contractor
                                      selection?
                                     [NEW SECTION] Sec.   250.1915 What
                                      criteria for training must be in
                                      my SEMS program?
                                     [NEW SECTION] Sec.   250.1917 What
                                      criteria for pre-start up review
                                      must be in my SEMS program?
                                     [NEW SECTION] Sec.   250.1918 What
                                      criteria for emergency response
                                      and control must be in my SEMS?
                                     [NEW SECTION] Sec.   250.1919 What
                                      criteria for investigation of
                                      incidents must be in my SEMS
                                      program?
                                     [NEW SECTION] Sec.   250.1925 May
                                      BOEMRE direct me to conduct
                                      additional audits?
------------------------------------------------------------------------

Appendix 1

Instructions on How To Fill Out Form MMS-131--Performance Measures Data

    1. On the line titled, ``Company Name(s),'' enter the name(s) of 
the operating company(ies) that are the owners of the data that need 
to be entered on the remainder of this form.
    2. Directly across from your entry on ``Company Names,'' please 
enter the name of the Bureau of Ocean Energy Management, Regulation 
and Enforcement (BOEMRE) Region where your operating company(ies) 
have worked and generated the data to be entered on the remainder of 
this form.
    3. On the line titled, ``Operator Code(s),*'' please enter all 
the known operator codes for the company name or names that you have 
entered above.
    4. Directly across from your entry on ``Operator Codes,'' please 
enter the Calendar Year the data to be entered on the remainder of 
the form was generated.
    5. On the line titled, ``Contact Name,'' please enter the name 
of your chosen contact person. This person should be knowledgeable 
about the data your company has submitted on this form as they will 
be the first person the BOEMRE contacts should the bureau have any 
questions about the data you have provided.
    6. Directly across from your entry on ``Contact Name,'' please 
input an active, valid e-mail address for your ``Contact Name.''
    7. Enter an active and valid telephone number on the line 
titled, ``Telephone.'' This telephone number should belong to your 
``Contact Name.''
    8. Enter an active and valid fax number on the line titled, 
``Fax.'' This fax number should be accessible to your ``Contact 
Name.''
    9. Enter the date this form was submitted to the BOEMRE on the 
line titled, ``Date Submitted.''
    10. On line A, in the column labeled, ``Production Operations,'' 
enter the total number of company employee recordable injuries and 
illnesses accrued in each of the four quarters of the calendar year. 
Only the total number of recordable injuries and illnesses suffered 
by operating company employees while they were in engaged in 
production operations may be entered here.
    11. On line A, in the column labeled, ``Drilling** Operations,'' 
enter the total number of company employee recordable injuries and 
illnesses accrued in each of the four quarters of the calendar year. 
Only the total number of recordable injuries and illnesses suffered 
by operating company employees while they were engaged in drilling 
operations may be entered here.
    12. On line A, in the column labeled, ``Construction 
Operations,'' enter the total number of company employee recordable 
injuries and illnesses accrued in each of the four quarters of the 
calendar year. Only the total number of recordable injuries and 
illnesses suffered by operating company employees while they were 
engaged in construction operations may be entered here.
    13. On line B, in the column labeled, ``Production Operations,'' 
enter the total number of contract employee recordable injuries and 
illnesses accrued in each of the four quarters of the calendar year. 
Only the total number of recordable injuries and illnesses suffered 
by contract employees while they were engaged in production 
operations may be entered here.
    14. On line B, in the column labeled, ``Drilling** Operations,'' 
enter the total number of contract employee recordable injuries and 
illnesses accrued in each of the four quarters of the calendar year. 
Only the total number of recordable injuries and

[[Page 63634]]

illnesses suffered by contract employees while they were engaged in 
drilling operations may be entered here.
    15. On line B, in the column labeled, ``Construction 
Operations,'' enter the total number of contract employee recordable 
injuries and illnesses accrued in each of the four quarters of the 
calendar year. Only the total number of recordable injuries and 
illnesses suffered by contract employees while they were engaged in 
construction operations may be entered here.
    16. On line C, in the column labeled, ``Production Operations,'' 
enter the total number of company employee DART recordable injuries 
and illnesses accrued in each of the four quarters of the calendar 
year. Only the total number of DART recordable injuries and 
illnesses suffered by operating company employees while they were 
engaged in production operations may be entered here.
    17. On line C, in the column labeled, ``Drilling** Operations,'' 
enter the total number of company employee DART recordable injuries 
and illnesses accrued in each of the four quarters of the calendar 
year. Only the total number of DART recordable injuries and 
illnesses suffered by operating company employees while they were 
engaged in drilling operations may be entered here.
    18. On line C, in the column labeled, ``Construction 
Operations,'' enter the total number of company employee DART 
recordable injuries and illnesses accrued in each of the four 
quarters of the calendar year. Only the total number of DART 
recordable injuries and illnesses suffered by operating company 
employees while they were engaged in construction operations may be 
entered here.
    19. On line D, in the column labeled, ``Production Operations,'' 
enter the total number of contract employee DART recordable injuries 
and illnesses accrued in each of the four quarters of the calendar 
year. Only the total number of DART recordable injuries and 
illnesses suffered by contract employees while they were engaged in 
production operations may be entered here.
    20. On line D, in the column labeled, ``Drilling** Operations,'' 
enter the total number of contract employee DART recordable injuries 
and illnesses accrued in each of the four quarters of the calendar 
year. Only the total number of DART recordable injuries and 
illnesses suffered by contract employees while they were engaged in 
drilling operations may be entered here.
    21. On line D, in the column labeled, ``Construction 
Operations,'' enter the total number of contract employee DART 
recordable injuries and illnesses accrued in each of the four 
quarters of the calendar year. Only the total number of DART 
recordable injuries and illnesses suffered by contract employees 
while they were engaged in construction operations may be entered 
here.
    22. On line E, in the column labeled, ``Production Operations,'' 
enter the total number of hours that operating company employees 
worked on production operations during each of the four quarters of 
the calendar year.
    23. On line E, in the column labeled, ``Drilling** Operations,'' 
enter the total number of hours operating company employees worked 
on drilling operations during each of the four quarters of the 
calendar year.
    24. On line E, in the column labeled, ``Construction 
Operations,'' enter the total number of hours that operating company 
employees worked on construction operations during each of the four 
quarters of the calendar year.
    25. On line F, in the column labeled, ``Production Operations,'' 
enter the total number of hours that contract employees worked on 
production operations during each of the four quarters of the 
calendar year.
    26. On line F, in the column labeled, ``Drilling** Operations,'' 
enter the total number of hours contract employees worked on 
drilling operations during each of the four quarters of the calendar 
year.
    27. On line F, in the column labeled, ``Construction 
Operations,'' enter the total number of hours that contract 
employees worked on construction operations during each of the four 
quarters of the calendar year.
    28. On line G, enter the total number of EPA NPDES non-
compliances experienced by the operating company during the calendar 
year.
    29. On line H, for oil spills of less than 1 bbl:
    a. Count every occurrence of such a spill individually and tally 
that sum.
    b. On line 1, enter the total number of oil spills less than 1 
bbl that you have tallied.
    c. For each individual spill, estimate the volume of oil lost.
    d. Sum the estimates for each spill and enter the final amount 
of oil lost (in bbls) on line 2.
BILLING CODE 4310-MR-P

[[Page 63635]]

[GRAPHIC] [TIFF OMITTED] TR15OC10.000

[[Page 63636]]

[GRAPHIC] [TIFF OMITTED] TR15OC10.001

BILLING CODE 4310-MR-C
    After reviewing and discussing the comments, BOEMRE decided to 
require each offshore operator to develop, implement, maintain, and 
operate under a SEMS program composed of all elements addressed in API 
RP 75, Development of a Safety and Environmental Management Program for 
Offshore Operations and Facilities, Third Edition, May 2004, Reaffirmed 
May 2008.
    In addition to the SEMS elements, we clarified hazards analysis and 
expanded recordkeeping and documentation requirements. We are also 
requiring operators to conduct a JSA for OCS activities identified in 
their SEMS program. In Sec.  250.1911, we allow the operator to perform 
a single hazards analysis for simple and multiple similar facilities. 
The hazards analysis may apply to all such facilities after verifying 
that site-specific deviations are addressed in each of the elements of 
your SEMS program. The hazards analysis section in API RP 75 addresses 
the job task at the facility level.

[[Page 63637]]

Therefore, BOEMRE is requiring JSAs as part of the SEMS program under 
Sec.  250.1911. A JSA is used to review site-specific detailed job 
steps and uncover hazards associated with the specific job undertaken. 
The JSA defines the requirements for identifying, assessing, and 
controlling personal risks associated with work activities. Operators 
must complete a JSA prior to performing any activity identified in 
their SEMS program. The supervisor of the person in charge of the task 
must approve the JSA prior to the work commencing. The JSA is performed 
to identify and evaluate hazards of a job/task for the purpose of 
hazards control or elimination that is currently not addressed in API 
RP 75, Section 3, Hazards Analysis element.
    The decision to require a SEMS program plus the JSA requirements is 
based on BOEMRE accident panel investigation reports, incident 
investigation findings, analyses of INC data, performance reviews with 
operators, and the fact that existing BOEMRE regulations do not address 
the SEMS elements as a separate and comprehensive approach. Since 
existing regulations (30 CFR part 250) do not address these elements as 
a separate and comprehensive approach, it is appropriate to require 
these SEMS elements. BOEMRE's evaluation of safety information included 
the following:

Accident Panel Investigation Reports

    BOEMRE prepares accident panel investigation reports for major 
accidents. An analysis of 42 accident panel reports from 2000 through 
2009 revealed that many fatalities and injuries occurred while 
performing routine tasks such as drilling, construction, coiled tubing 
operations, and crane and other lifting events. In addition, most of 
these accident panel reports' recommendations related to one of the 
following four SEMS elements: Hazards Analysis, Management of Change, 
Operating Procedures, and Mechanical Integrity.
    The accident panel reports can be viewed at the following Web site: 
http://www.gomr.BOEMRE.gov/homepg/offshore/safety/acc_repo/accindex.html.

                                               Contributing Causes
----------------------------------------------------------------------------------------------------------------
                                 Hazards     Management     Operating    Mechanical      Injury       Fatality
        BOEMRE report           analysis      of change    procedures     integrity     
----------------------------------------------------------------------------------------------------------------
BOEMRE 2009-042.............            X             X             X             X             1             1
BOEMRE 2009-028.............            X   ............            X             X   ............            1
BOEMRE 2009-018.............            X   ............            X             X   ............            1
BOEMRE 2009-008.............            X   ............  ............  ............  ............            1
BOEMRE 2008-056.............  ............  ............  ............            X   ............  ............
BOEMRE 2008-054.............  ............  ............  ............            X   ............  ............
BOEMRE 2008-053.............  ............            X   ............  ............  ............  ............
BOEMRE 2008-038.............  ............            X             X   ............  ............  ............
BOEMRE 2008-016.............            X             X             X   ............  ............            1
BOEMRE 2007-058.............            X             X             X   ............  ............            1
BOEMRE 2007-045.............            X             X             X   ............  ............            1
BOEMRE 2007-037.............            X   ............            X   ............  ............            1
BOEMRE 2006-070.............            X   ............            X             X   ............            1
BOEMRE 2006-058.............            X   ............            X   ............  ............  ............
BOEMRE 2006-047.............            X   ............            X   ............  ............  ............
BOEMRE 2006-039.............  ............  ............            X   ............  ............  ............
BOEMRE 2006-021.............  ............  ............            X   ............  ............  ............
BOEMRE 2006-002.............            X   ............            X   ............  ............            1
BOEMRE 2005-027.............  ............            X             X             X   ............  ............
BOEMRE 2005-007.............  ............  ............            X             X   ............  ............
BOEMRE 2004-078.............            X             X             X   ............  ............            1
BOEMRE 2004-075.............            X   ............            X             X   ............  ............
BOEMRE 2004-048.............  ............  ............            X             X   ............  ............
BOEMRE 2004-046.............            X             X             X   ............            3   ............
BOEMRE 2004-010.............            X   ............  ............  ............  ............  ............
BOEMRE 2004-004.............            X   ............  ............  ............  ............            1
BOEMRE 2003-068.............  ............  ............            X   ............  ............  ............
BOEMRE 2003-046.............  ............  ............            X   ............  ............  ............
BOEMRE 2003-023.............  ............            X   ............  ............  ............  ............
BOEMRE 2002-080.............  ............            X   ............  ............  ............  ............
BOEMRE 2002-076.............            X             X   ............            X   ............            1
BOEMRE 2002-075.............            X   ............  ............  ............  ............            1
BOEMRE 2002-062.............  ............            X   ............  ............            2             1
BOEMRE 2002-059.............            X   ............  ............            X             1             1
BOEMRE 2002-040.............  ............  ............  ............            X   ............  ............
BOEMRE 2001-084.............  ............            X   ............            X   ............  ............
BOEMRE 2001-045.............  ............            X   ............            X   ............            1
BOEMRE 2001-042.............            X             X   ............            X   ............            1
BOEMRE 2001-010.............            X             X   ............  ............            1   ............
BOEMRE 2001-009.............  ............            X             X   ............  ............  ............
BOEMRE 2001-005.............            X             X   ............  ............  ............  ............
BOEMRE 2000-089.............            X   ............  ............            X   ............            1
                             -----------------------------------------------------------------------------------
    Total...................           24            19            23            17             8            19
----------------------------------------------------------------------------------------------------------------

[[Page 63638]]

    The table shows that the accidents covered by 20 of the 42 panel 
reports resulted in a combined 27 fatalities and injuries. The analysis 
done on the accidents identified six contributing causes that are 
related to the four elements:
    1. A lack of communication between the operator and contractor(s);
    2. A JSA was not conducted prior to beginning work, or there was a 
lack of written procedures;
    3. An onsite supervisor failed to enforce existing procedures or 
practices;
    4. A lack of written safe work procedural guidelines;
    5. Integrity of the facilities and equipment were not maintained 
according to recommended practices; and
    6. Workplace hazards were not identified or corrected.
    Some of these accidents could have been minimized or prevented if 
the operator had implemented a comprehensive SEMS.

Incident Analysis

    BOEMRE also studied 1,930 incidents that occurred in OCS waters 
from 2001 through 2009 to determine if those events were associated 
with any of the following 4 SEMS elements: Hazards Analysis, Management 
of Change, Operating Procedures, and Mechanical Integrity. Although 
these four elements have been identified by BOEMRE as contributing 
causes to these events, BOEMRE recognizes the value of the remaining 
API RP 75 elements as a critical part of a comprehensive safety 
management program helping to ensure that all elements are addressed 
completely. The events we reviewed included 44 fatalities, 440 
injuries, 19 losses of well control, 23 collisions, 597 fires, 436 
pollution events, and 371 crane and other lifting events (e.g., hoists, 
winches, etc.).
    The majority of incidents occurring in the OCS were related to 
operational and maintenance procedures or human error. These incidents 
are not addressed by BOEMRE's hardware-oriented compliance inspections. 
Additionally, of the incidents involving injuries, fires, and pollution 
on production facilities, only 25 were due to failure of a safety 
device. The majority of the 1,930 incidents had at least 1 of the 
following 4 elements as a contributing cause for the event occurring:

------------------------------------------------------------------------
                                                              Number of
                        SEMS element                          incidents
------------------------------------------------------------------------
Hazards Analysis...........................................          412
Management of Change.......................................          203
Operating Procedures.......................................          609
Mechanical Integrity.......................................          726
------------------------------------------------------------------------

Incidents of Noncompliance (INCs)

    BOEMRE inspectors issue three General INCs (G-INCs) that 
potentially relate to elements within a SEMS. The following summarizes 
these INCs:
     G-110 (Operations conducted in a safe and workmanlike 
manner),
     G-111 (Equipment maintained in a safe condition), and
     G-112 (Safety of personnel and all necessary precautions 
taken to correct and remove any hazards).
    BOEMRE issued 4,284 G-INCs during 2003-2009 for drilling and 
production activities. Of these G-INCs issued, 4,116 (approximately 96 
percent) were related to 1 or more of the following 4 SEMS elements:
     Hazards Analysis,
     Management of Change,
     Operating Procedures, and
     Mechanical Integrity.
    The following table summarizes the G-INCs written for drilling and 
production activities:

------------------------------------------------------------------------
                                          SEMS       Drilling   Production
    G-INCs Issued from 2003-2009        elements    percentage  percentage
-------------------------------------------------------------- ------------
Hazards Analysis....................           23           20
Management of Change................            9            9
Operating Procedures................           25           18
Mechanical Integrity................           39           49
Unrelated...........................            4            4
------------------------------------------------------------------------

    BOEMRE evaluation of accident panel investigations and reports, 
incident analysis, and INCs indicates that in most cases, accidents can 
be traced to human error and/or organizational failures. For example, 
not following maintenance procedures as outlined in the SEMS program, 
could lead to the failure of critical equipment, which could lead to an 
accident. For that reason, it is important for operators to ensure that 
safe and environmentally sound operating practices are followed. 
Operations are safer when management systematically encourages 
individuals to be safety conscious, provides adequate resources, 
fosters safe worksite practices, promotes good housekeeping habits, and 
assures that workers are properly trained.
    This final rule will require operators to have their SEMS program 
audited by an independent third-party or designated and qualified 
personnel. All auditors must meet the qualifications as discussed in 
this final rule and the audit must be conducted according to the 
schedule in API RP 75, Section 12, and deficiencies addressed by the 
designated auditor. A knowledgeable and experienced independent third-
party or designated and qualified personnel will audit an operator's 
SEMS program to determine the extent the operator is complying with 
their SEMS program. These audits will be conducted in an office 
environment and in the field, and could cover both a broad range of 
activities or be focused on a particular area (i.e. records, gas 
compressors, blowout preventers, or documentation), as appropriate. If 
the auditor determines that a SEMS program does not meet the 
requirements in this subpart and API RP 75, the operator must submit a 
report to BOEMRE within 30 days of the audit completion date. The 
report must outline the results of the audit including deficiencies 
identified, a timetable or schedule for implementing corrections to 
deficiencies, and the person responsible for correcting each identified 
deficiency including their job title. BOEMRE will verify that 
corrective actions have been undertaken and that these actions 
effectively address the audit findings.
    BOEMRE may, at its discretion, evaluate independent third parties 
or designated and qualified personnel, meet with operators to 
periodically review the results of SEMS program audits, and conduct 
announced or unannounced evaluations to assess SEMS program compliance 
and effectiveness. The operators will be responsible for all costs 
associated with any independent third-party audit of their SEMS 
program. BOEMRE would be more likely to participate as an observer in 
the case where the third-party auditor is the same as the contractor 
who developed the SEMS program.

[[Page 63639]]

    This final rule requires operators to verify that their contractors 
can perform their assigned duties. The operator is responsible for 
ensuring that all contractors and subcontractors have safety policies 
and procedures in place that support the implementation of the SEMS 
program and align with the principles of managing safety set forth in 
API RP 75. The operator must inform contractors of any known hazards on 
the facility that are related to the contractor's work. This applies to 
contractors performing maintenance or repair, turnaround, major 
renovation, or specialty work on or adjacent to a covered process
    In this final rule, BOEMRE will require the operator to document 
and keep the last two SEMS audits conducted (onshore or offshore) and 
make them available to BOEMRE upon request. In addition, the operator 
must keep documentation and records for 2 years (onshore or offshore) 
including the following:
    1. JSAs (must be kept onsite for 30 days, electronic access onsite 
to the JSA would be sufficient to comply with this requirement).
    2. Management of change provisions.
    3. Injury/illness log.
    4. Evaluations completed on contractors.
    These records and documentation must be available to BOEMRE upon 
request.
    In this final rule, BOEMRE will require operators to submit Form 
MMS-131 on an annual basis, broken down quarterly, reporting the 
previous calendar year's data, by March 31st. For example, on March 31, 
2011, Form MMS-131 must be submitted with data from calendar year 2010. 
On March 31, 2012, the data submitted will be from calendar year 2011.
    Form MMS-131 includes the number of hours worked by company and 
contract employees (people on the facility) during production, 
drilling, pipeline, and construction activities (including adding or 
removing equipment and/or facility modifications). Submitting this 
information will allow the BOEMRE to publish incident rate information 
that is more useful and representative of the industry's safety record. 
The collected hours worked data will support BOEMRE's Government 
Performance and Results Act (GPRA), the Program Assessment Rating Tool 
(PART), and the OCS Performance Measures Program.
    BOEMRE does not want the SEMS program to be a paperwork exercise 
conducted solely to meet regulatory requirements. BOEMRE understands 
that the development and implementation of this type of program may 
place an additional burden on some OCS operators, in the short term. A 
SEMS program that includes all API RP 75 elements will benefit 
operators by integrating safety across all aspects of the operating 
environment.

Procedural Matters

Regulatory Planning and Review (Executive Order (E.O.) 12866)

    This final rule is a significant rule, as determined by the Office 
of Management and Budget (OMB), under Section 3(f)(4) of EO 12866 due 
to its novel legal and policy issues, and is therefore subject to OMB 
review.

Regulatory Flexibility Act

    While the final rule will affect a substantial number of small 
entities, it will not have a significant economic effect on a 
substantial number of small entities under the Regulatory Flexibility 
Act (5 U.S.C. 601 et seq.).
    Small operators that operate under this rule fall under the Small 
Business Administration's (SBA) North American Industry Classification 
System (NAICS) codes 211111, Crude Petroleum and Natural Gas 
Extraction, and 213111, Drilling Oil and Gas Wells. For these NAICS 
code classifications, a small company is one with fewer than 500 
employees. Based on these criteria, an estimated 70 percent (91 
operators) of the operators on the OCS are considered small. Therefore, 
this final rule will affect a substantial number of small entities. 
This rule will not have a significant economic effect on small 
operators. Costs related to complying with this regulation are 
relatively small compared to the costs associated with operating 
offshore on an annual basis.

Assumptions

    BOEMRE made the following assumptions concerning the costs 
associated with the requirements in the final rulemaking:
     Because of the wide variation in company size, we grouped 
operators into three classes (High, Moderate, and Low Activity).
     We used the results of 13 years of voluntary SEMS 
Performance Measures reporting by OCS operators and determined that a 
minimum 70 of the 130 operators are using SEMS. We believe that this 
number is higher based on previous Annual Performance Review Meetings 
conducted by the BOEMRE where voluntary SEMS was discussed.
     We used actual costs from safety management system vendors 
for our estimated costs for industry.
     We assumed no new capital costs will be incurred for the 
estimated 70 operators who are currently using SEMS to comply with this 
final rule, as their systems are already developed and funds they 
expend to manage and implement this program should not change 
significantly. However, we calculated additional costs for compliance 
with JSAs, documentation, maintenance, and recordkeeping requirements.
     The estimated cost for the 60 remaining operators to 
implement, develop, and manage the SEMS program is based on the 
operator having an Internet-based system, which is the most common 
approach used by operators.
     The cost for auditing a SEMS program is part of the entire 
program, per API RP 75, as audits are an integrated part of maintenance 
of all elements combined, and the time involved cannot be easily 
separated out.
     Many smaller operators can use a template from a safety 
management system vendor that will meet their needs for compliance with 
the final regulation. In most cases, the operators will not need to 
spend additional money to customize a template for their use.

High, Moderate, and Low Activity Definitions

    Oil and gas operators in the OCS vary substantially in size and the 
degree to which they are engaged in extracting oil from the OCS. The 
scale of operations for the 130 OCS oil and gas operators ranges from 
as little as 1 complex to nearly 500 facilities; and from as little as 
15,000 barrels of oil equivalent (BOE) annual production to more than 
300 Million (MM) BOE annual production. Because of this variation in 
activity, BOEMRE divides operators into high, moderate, and low 
activity for measuring performance. We used these size categories to 
estimate costs associated with developing, managing, and fulfilling 
reporting requirements for the final SEMS rule. BOEMRE uses the 
following criteria for categorizing operators:

----------------------------------------------------------------------------------------------------------------
                                        High activity        Moderate activity             Low activity
----------------------------------------------------------------------------------------------------------------
Annual Production.................  >= 10 MMBOE..........  1 MMBOE = 1,000 components..  100 or partial SEMS program in place. A partial SEMS 
includes the following elements; Hazard Analysis, Management of Change, 
Mechanical Integrity, Operating Procedures, Training, Safe Work 
Practices. At a September 2009 SEMS workshop held in New Orleans, 
Louisiana, BOEMRE was informed that moderate and low activity operators 
are implementing a partial SEMS consisting of six elements previously 
discussed. They will need to address the other seven elements in order 
to be in compliance with the final rule. All high activity operators, 
over 70 percent of the moderate activity operators, and almost 40 
percent of the low activity operators are using a SEMS program.
    Based on information received from consultants and vendors, the 
cost for an operator to buy a generic SEMS template is approximately 
$2,500. If an operator decided to modify the generic SEMS template to 
make it specific to its use, the cost will be an additional $10,000. As 
mentioned in the assumptions, it will not be necessary for many 
operators to spend the additional $10,000 to customize a SEMS program.
    If the 60 operators without a SEMS program decide to buy a SEMS 
template, the cost will be $150,000 ($2,500 x 60). If all 60 operators 
needed to modify the generic plan templates for their specific OCS 
operations, which is unlikely, it will cost an additional $600,000 
($10,000 x 60). The total cost for all 60 operators to buy a template 
and then modify the template to their philosophy is estimated to be 
$750,000 ($150,000 + $600,000).

SEMS Implementation

    This section provides the estimated cost for industry to implement 
a SEMS. The following table shows a breakdown of the average number of 
facilities and components for the 3 operator activity levels:

------------------------------------------------------------------------
                                              Average
                                             number of        Average
           Activity  category               Components       number of
                                            per Complex      Complexes
------------------------------------------------------------------------
High....................................              21             139
Moderate................................              15              29
Low.....................................              16               6
------------------------------------------------------------------------

    We describe the costs for the 60 operators in the moderate and low 
activity categories that will have to implement a SEMS Program, and all 
of the costs for the high, moderate, and low activity categories to 
maintain their SEMS.

High Activity Operators

    BOEMRE determined, based on Annual Performance Reviews and 
voluntary submissions of Form MMS-131, that all high activity operators 
already have a SEMS program in place.

Maintenance Costs for a High Activity Operator

    The estimated average cost for each high activity operator to 
maintain their SEMS program is approximately $1,670,000 a year. The 
estimated cost for all 13 high activity operators to maintain their 
SEMS program is $21,710,000 per year.

General....................................................     $ 50,000
Safety and Environmental...................................       75,000
Hazards analysis...........................................      300,000
Management of Change.......................................      150,000
Operating Procedures.......................................      100,000
Safe Work Practices........................................      125,000
Training...................................................      200,000
Mechanical Integrity.......................................      225,000
Pre-Startup................................................      125,000
Emergency Response and Control.............................      175,000
Investigation of Incidents.................................       95,000
Audits*....................................................       20,000
Records and Documentation..................................       30,000
                                                            ------------
Total......................................................   $1,670,000

* audits are conducted every 3 years at an estimated cost of $60,000 per
  audit ($60,000/3 = $20,000 per year).

Moderate Activity Operators

    BOEMRE calculated the cost for a moderate activity operator to 
implement and manage a SEMS program based on the 13 SEMS elements, as 
follows:

          Implementation Costs for a Moderate Activity Operator
------------------------------------------------------------------------
           Element                    Basis            Estimated cost
------------------------------------------------------------------------
General.....................  The General section   $18,000 per year
                               includes              (includes the year
                               implementation,       to implement SEMS).
                               planning and          This also includes
                               management review     data collection,
                               and approval of the   analysis, report
                               SEMS Program.         development, and
                                                     cost of meetings.

[[Page 63641]]

Safety and Environmental      This section          $22,000 per year
 Information.                  outlines the          (includes the year
                               minimum safety and    to implement SEMS).
                               environmental         This also includes
                               information needed    data collection,
                               for any facility,     evaluation, and
                               such as design data   documentation
                               on facility process   update of the
                               (e.g., flow           design data on the
                               diagrams) and         facility process
                               mechanical            and mechanical
                               components (e.g.,     components.
                               piping and
                               instrument
                               diagrams). The
                               information is used
                               to perform a
                               hazards analysis.
Hazards Analysis............  Operators will need   $102,000 per year
                               a facility risk       (includes the year
                               assessment for each   to implement SEMS).
                               facility. After the   This also includes
                               initial facility      annual updates.
                               risk assessments
                               are prepared, the
                               cost will be less
                               because a hazards
                               analysis is
                               required only for
                               changes in the
                               process or the
                               equipment on a
                               facility. The JSA
                               at the task level
                               includes data
                               collection,
                               analysis, and
                               report development.
                               This cost is
                               included in the
                               hazards analysis.
Management of Change (MOC)..  The cost is based on  $30,000 per year
                               one change request    (includes the year
                               per month, but it     to implement SEMS).
                               is also dependent     This also includes
                               on the complexity     MOC data
                               of the change--       collection,
                               something minor       evaluation, and
                               will not cost as      documentation
                               much as something     update.
                               more complex. The
                               MOC cost is
                               determined by the
                               physical state of
                               the facilities, the
                               status of
                               technology, and the
                               turnover of
                               personnel.
Operating Procedures........  An operator will      $20,000 per year
                               need to evaluate      (includes the year
                               the operating         to implement SEMS).
                               procedures of its     This also includes
                               facility each year.   data collection,
                               The operating         evaluation,
                               procedure cost is     documentation
                               determined by the     update, and
                               maintenance of such   recordkeeping.
                               procedures. For
                               most operators, no
                               formal evaluation
                               is necessary since
                               changes will be
                               identified through
                               the JSA process and
                               managed through the
                               MOC process.
Safe Work Practices.........  An operator will      $28,000 per year
                               need to evaluate      (includes the year
                               its safe work         to implement SEMS).
                               practices each year   This also includes
                               to minimize safety    data collection,
                               and environmental     evaluation,
                               risks associated      inspection report
                               with operations.      development, and
                               Safe work practices   inspection plan
                               should address all    update.
                               personnel.
Training....................  An operator will      $30,000 per year
                               need to develop       (includes the year
                               provisions for        to implement SEMS).
                               ensuring that its     This also includes
                               employees and their   job description
                               supervisors are       review, training
                               taught how to         program
                               conduct operations    development, and
                               safely, to            tracking of
                               recognize unsafe      training and
                               methods of            maintenance of
                               operations, and to    training records.
                               identify potential    The cost of
                               environmental and     training is not
                               safety hazards.       included in this
                                                     assessment, only
                                                     the cost of
                                                     managing the
                                                     program. Well
                                                     control and
                                                     production safety
                                                     training is
                                                     implemented
                                                     following the
                                                     enforcement of
                                                     subpart O.
Mechanical Integrity........  Based on the          $40,000 per year
                               assumption that       (includes the year
                               mechanical            to implement SEMS).
                               integrity is          This includes the
                               achieved through      quality assurance
                               preventive            inspection plan,
                               maintenance. The      evaluation of
                               preventive            schedule
                               maintenance program   appropriateness,
                               is defined prior to   communication of
                               the commissioning     maintenance
                               of the facility. We   program, salaries,
                               did not include the   maintenance and
                               cost of maintenance   inspection reports,
                               in this assessment,   and recordkeeping.
                               only the cost of
                               managing the
                               program.
Pre-startup Review..........  An operator will      $25,000 per year
                               need to include       (includes the year
                               provisions to         to implement SEMS).
                               verify that the       This includes the
                               facility will         pre-startup risk
                               function according    register per
                               to design, that       facility, pre-
                               personnel have been   startup review
                               properly trained,     checklists per
                               and that safe work    facility, records
                               practices are in      of pre-startup
                               place.                reviews conducted,
                                                     and evaluation of
                                                     pre-startup
                                                     procedures.
Emergency Response and        An operator will      $30,000 per year
 Control.                      need to include       (includes the year
                               provisions to         to implement SEMS).
                               require that all      This includes
                               emergency response    initial
                               and control plans     identification of
                               be in place and       risks and possible
                               ready for immediate   emergencies,
                               implementation.       development of
                               Specific types of     response
                               plans include, but    requirements and
                               are not limited to,   comparison to
                               emergency             existing plans,
                               evacuation and oil    ensuring that
                               spill contingency     drills are
                               plans.                performed as
                                                     planned, and
                                                     manually tracking
                                                     and evaluating risk
                                                     changes. Costs of
                                                     emergency response
                                                     and drills are not
                                                     included in the
                                                     assessment, only
                                                     the cost of
                                                     managing the
                                                     procedures.
Investigation of Incidents..  An operator will      $20,000 per year
                               need to include       (includes the year
                               procedures for        to implement SEMS).
                               investigating all     This includes
                               incidents with        incident and near
                               serious or            miss registers,
                               potentially serious   collecting data,
                               safety and            analyzing,
                               environmental         developing, and
                               consequences.         presentation of
                                                     reports. Only the
                                                     cost of
                                                     preventative
                                                     measures such as
                                                     near miss tracking
                                                     is included in the
                                                     evaluation.
Audits......................  The operators are     $12,000 every 3
                               required to have an   years or $4,000 per
                               independent third-    year.
                               party or designated
                               and qualified
                               personnel audit of
                               their SEMS program
                               to determine if the
                               program elements
                               were properly
                               implemented and
                               maintained.

[[Page 63642]]

Records and Documentation...  The operators are     $6,000 per year,
                               required to have      based on the
                               documentation that    requirements of
                               describes the 13      Sec.   250.1928 and
                               elements of their     API RP 75, Section
                               SEMS program and      13.
                               the interaction
                               between the
                               elements.
------------------------------------------------------------------------

    The estimated cost for one moderate activity operator to implement 
SEMS is $375,000. The estimated cost for the 12 moderate activity 
operators to implement SEMS is $4,500,000 ($375,000 x 12 operators). 
The itemized cost is:

Implementation Costs for a Moderate Activity Operator

General....................................................      $18,000
Safety and Environmental...................................       22,000
Hazards analysis...........................................      102,000
Management of Change.......................................       30,000
Operating Procedures.......................................       20,000
Safe Work Practices........................................       28,000
Training...................................................       30,000
Mechanical Integrity.......................................       40,000
Pre-Startup................................................       25,000
Emergency Response and Control.............................       30,000
Investigation of Incidents.................................       20,000
Audits.....................................................        4,000
Records and Documentation..................................        6,000
                                                            ------------
    Total..................................................      375,000

Implementation Costs for a Moderate Activity Operator (Partial SEMS)

    The estimated cost for one moderate activity operator with a 
partial SEMS to implement a comprehensive SEMS is $124,000. The 
estimated cost for the 10 moderate activity operators to implement SEMS 
is $1,240,000 ($124,000 x 10 operators). The itemized cost is:

General....................................................      $18,000
Safety and Environmental...................................       22,000
Hazards analysis...........................................            0
Management of Change.......................................            0
Operating Procedures.......................................            0
Safe Work Practices........................................            0
Training...................................................            0
Mechanical Integrity.......................................            0
Pre-Startup................................................       25,000
Emergency Response and Control.............................       30,000
Investigation of Incidents.................................       20,000
Audits.....................................................        3,000
Records and Documentation..................................        6,000
                                                            ------------
    Total..................................................      124,000

Maintenance Costs for a Moderate Activity Operator

    The estimated average cost for each moderate activity operator to 
maintain their SEMS program is approximately $223,000 a year. The 
estimated cost for the 41 moderate activity operators to maintain their 
SEMS program is $9,143,000 ($223,000 x 41).

General....................................................       $3,000
Safety and Environmental...................................       12,000
Hazards analysis...........................................       34,000
Management of Change.......................................       21,000
Operating Procedures.......................................       17,000
Safe Work Practices........................................       17,000
Training...................................................       25,000
Mechanical Integrity.......................................       27,000
Pre-Startup................................................       16,000
Emergency Response and Control.............................       24,000
Investigation of Incidents.................................       17,000
Audits *...................................................        4,000
Records and Documentation..................................        6,000
                                                            ------------
    Total..................................................      223,000

* Audits are conducted every 3 years at an estimated cost of $12,000 per
  audit ($12,000/3 years = $4,000 per year).

Low Activity Operators

    BOEMRE calculated the cost for a low activity operator to implement 
and manage a SEMS program based on the 13 SEMS elements, as follows:

            Implementation Costs for a Low Activity Operator
------------------------------------------------------------------------
           Element                    Basis            Estimated cost
------------------------------------------------------------------------
General.....................  The General section   $5,000 per year
                               entails               (includes the year
                               implementation,       to implement SEMS).
                               planning and          This also includes
                               management review     data collection,
                               and approval of the   analysis, report
                               SEMS.                 development, and
                                                     cost of meetings.
Safety and Environmental      This section          $8,000 per year
 Information.                  outlines the          (includes the year
                               minimum safety and    to implement SEMS).
                               environmental         This also includes
                               information needed    data collection,
                               for any facility,     evaluation, and
                               such as design data   documentation
                               on facility process   update of the
                               (e.g., flow           design data on the
                               diagrams) and         facility process
                               mechanical            and mechanical
                               components (e.g.,     components.
                               piping and
                               instrument
                               diagrams). The
                               information is used
                               to perform a
                               hazards analysis.
Hazards Analysis............  Operators will need   $25,000 per year
                               to do a facility      (includes the year
                               risk assessment for   to implement SEMS).
                               each facility when    This also includes
                               the rule is           annual updates.
                               implemented. After
                               the initial
                               facility risk
                               assessments are
                               prepared, the cost
                               will be less
                               because a hazards
                               analysis is
                               required only for
                               changes in the
                               process or the
                               equipment on a
                               facility. The job
                               safety analysis at
                               the task level
                               includes data
                               collection,
                               analysis, and
                               report development.
                               This cost is
                               included in the
                               hazards analysis.
Management of Change (MOC)..  Based on one change   $20,000 per year
                               request per month     (includes the year
                               but the cost is       to implement SEMS).
                               dependent on the      This also includes
                               complexity of the     MOC data
                               change. The MOC       collection,
                               cost is determined    evaluation, and
                               by the physical       documentation
                               state of the          update.
                               facilities, the
                               status of
                               technology, and the
                               turnover of
                               personnel.

[[Page 63643]]

Operating Procedures........  An operator will      $10,000 per year
                               need to evaluate      (includes the year
                               the operating         to implement SEMS).
                               procedures of their   This also includes
                               facility each year.   data collection,
                               The operating         evaluation,
                               procedure cost is     documentation
                               determined by the     update, and
                               maintenance of such   recordkeeping.
                               procedures. For
                               most operators, no
                               formal evaluation
                               is necessary since
                               changes will be
                               identified through
                               the JSA process and
                               managed through the
                               MOC process.
Safe Work Practices.........  An operator will      $12,000 per year
                               need to evaluate      (includes the year
                               the safe work         to implement SEMS).
                               practices each year   This also includes
                               to minimize safety    data collection,
                               and environmental     evaluation, and an
                               risks associated      inspection report
                               with operations.      development and
                               Safe work practices   inspection plan
                               should address all    update.
                               personnel.
Training....................  An operator will      $14,000 per year
                               need to develop       (includes the year
                               provisions for        to implement SEMS).
                               ensuring that their   This also includes
                               employees and their   job description
                               supervisors be        review, training
                               taught how to         program
                               conduct operations    development, and
                               safely, to            tracking of
                               recognize unsafe      training and
                               methods of            maintenance of
                               operations, and to    training records.
                               identify potential    The cost of
                               environmental and     training is not
                               safety hazards.       included in this
                                                     assessment, only
                                                     the cost of
                                                     managing the
                                                     program. Training
                                                     is well implemented
                                                     following the
                                                     enforcement of
                                                     subpart O.
Mechanical Integrity........  This is based on the  $20,000 per year
                               assumption that       (includes the year
                               mechanical            to implement SEMS).
                               integrity is          This includes the
                               achieved through      quality assurance
                               preventive            inspection plan,
                               maintenance. The      evaluation of
                               preventive            schedule
                               maintenance program   appropriateness,
                               is defined prior to   communication of
                               the commissioning     maintenance
                               of the facility. We   program, salaries,
                               did not include the   maintenance and
                               cost of maintenance   inspection reports,
                               in this assessment,   and recordkeeping.
                               only the cost of
                               managing the
                               program.
Pre-startup Review..........  An operator will      $8,000 per year
                               need to include       (includes the year
                               provisions to         to implement SEMS).
                               verify that the       This includes the
                               facility will         pre-startup risk
                               function according    register per
                               to design, that       facility, pre-
                               personnel have been   startup review
                               properly trained      checklists per
                               and that safe work    facility, records
                               practices are in      of pre-startup
                               place.                reviews conducted
                                                     and evaluation of
                                                     pre-startup
                                                     procedures.
Emergency Response and        An operator will      $15,000 per year
 Control.                      need to include       (includes the year
                               provisions to         to implement SEMS).
                               require that all      This includes
                               emergency response    initial
                               and control plans     identification of
                               be in place and       risks and possible
                               ready for immediate   emergencies,
                               implementation.       development of
                               Specific types of     response
                               plan include, but     requirements and
                               are not limited to,   comparison to
                               emergency             existing plans,
                               evacuation and oil    ensuring that
                               spill contingency     drills are
                               plans.                performed as
                                                     planned, and
                                                     tracking and
                                                     evaluating risk
                                                     changes. Costs of
                                                     emergency response
                                                     and drills are not
                                                     included in the
                                                     assessment, only
                                                     the cost of
                                                     managing the
                                                     procedures
Investigation of Incidents..  An operator will      $10,000 per year
                               need to include       (includes the year
                               procedures for        to implement SEMS).
                               investigating all     This includes
                               incidents with        incident and near
                               serious or            miss registers,
                               potentially serious   collecting data,
                               safety and            analyzing, and
                               environmental         developing and
                               consequences.         presentation of
                                                     reports. Only the
                                                     cost of
                                                     preventative
                                                     measures such as
                                                     near miss tracking
                                                     is included in the
                                                     evaluation.
Audits......................  The operators are     $9,000 every 3 years
                               required to have an   or $3,000 per year.
                               independent third-
                               party audit or
                               their designated
                               and qualified
                               personnel of their
                               SEMS program to
                               determine if the
                               program elements
                               were properly
                               implemented and
                               maintained.
Records and Documentation...  The operators are     $4,000 per year,
                               required to have      based on the
                               documentation that    requirements of
                               describes the 13      Sec.   250.1928 and
                               elements of their     API RP 75, Section
                               SEMS program and      13.
                               the interaction
                               between the
                               elements.
------------------------------------------------------------------------

    The estimated cost for a low activity operator to implement SEMS is 
$154,000. The cost for the 48 low activity operators to implement SEMS 
is $7,392,000 ($154,000 x 48 operators). The itemized cost to implement 
SEMS for a low activity operator is:

Implementation Costs for a Low Activity Operator

General....................................................       $5,000
Safety and Environmental...................................        8,000
Hazards analysis...........................................       25,000
Management of Change.......................................       20,000
Operating Procedures.......................................       10,000
Safe Work Practices........................................       12,000
Training...................................................       14,000
Mechanical Integrity.......................................       20,000
Pre-Startup................................................        8,000
Emergency Response and Control.............................       15,000
Investigation of Incidents.................................       10,000
Audits.....................................................        3,000
Records and Documentation..................................        4,000
                                                            ------------
    Total..................................................      154,000

[[Page 63644]]

Implementation Costs for a Low Activity Operator (Partial SEMS)

    The estimated cost for one low activity operator with a partial 
SEMS to implement a comprehensive SEMS is $636,000. The estimated cost 
for the 12 low activity operators to implement SEMS is $636,000 
($53,000 x 12 operators). The itemized cost is:

General....................................................       $5,000
Safety and Environmental...................................        8,000
Hazards analysis...........................................            0
Management of Change.......................................            0
Operating Procedures.......................................            0
Safe Work Practices........................................            0
Training...................................................            0
Mechanical Integrity.......................................            0
Pre-Startup................................................        8,000
Emergency Response and Control.............................       15,000
Investigation of Incidents.................................       10,000
Audits.....................................................        3,000
Records and Documentation..................................        4,000
                                                            ------------
    Total..................................................       53,000

Maintenance Cost for a Low Activity Operator

    The estimated cost for each low activity operator to maintain their 
SEMS program is approximately $77,000 a year. The cost for the 76 low 
activity operators to maintain SEMS is $5,852,000.

General....................................................       $2,000
Safety and Environmental...................................        3,000
Hazards analysis...........................................       14,000
Management of Change.......................................        7,000
Operating Procedures.......................................        4,000
Safe Work Practices........................................        5,000
Training...................................................        9,000
Mechanical Integrity.......................................       11,000
Pre-Startup................................................        5,000
Emergency Response and Control.............................        7,000
Investigation of Incidents.................................        3,000
Audits *...................................................        3,000
Records and Documentation..................................        4,000
                                                            ------------
    Total..................................................       77,000

* Audits are conducted every 3 years at an estimated cost of $9,000 per
  audit ($9,000/3 years = $3,000 per year).

.Burden Cost to Submit to BOEMRE

    The following are the estimated costs for complying with the 
submissions to BOEMRE and associated recordkeeping. The burden hours 
that these costs are based on are addressed in the Paperwork Reduction 
Act section.
     All JSAs conducted will require a supervisor and/or third-
party approval, which will cost $4,233,050 each year.
     Operators must demonstrate and explain, if required, the 
policies and procedures included in your SEMS, which will cost $4,272 
each year.
     Make available to BOEMRE evaluations documentation and 
supporting information, which will cost $23,140 each year.
     On an annual basis, operators must submit Form MMS-131 
(Performance Measures Data) to BOEMRE and maintain a contractor 
employee injury/illness log in the operation area, which will cost 
approximately $115,700.
     Operators must notify the BOEMRE when an operator plans to 
conduct an audit of its SEMS program in order for BOEMRE to have the 
opportunity to participate or observe, must submit plans, submit audit 
reports documenting all findings/conclusions/deficiencies, which will 
cost approximately $19,135 each year.
     Recordkeeping and documentation requirements will cost 
$57,850 each year.
    The total cost for required paperwork being submitted to BOEMRE 
will be approximately $4,443,147.

Summary of Annual Costs To Implement and Maintain SEMS

    The total cost to implement and maintain SEMS is approximately 
$92,910,811. A summary of all the costs are shown in the following 
table:

                        SEMS Implementation Costs
------------------------------------------------------------------------
                                                              Cost *
------------------------------------------------------------------------
IMPLEMENTATION of your SEMS:
    Buy/develop and implement SEMS Plan for operators           $750,000
     without a SEMS (60 operators)......................
    Implementation cost.................................  ..............
    High activity operator cost (already implemented)...               0
    Moderate activity operator cost ($375,000 x 12).....       4,500,000
    Moderate activity operator cost ($124,000 x 10             1,243,000
     operators) (Partial SEMS)..........................
    Low activity operator cost ($154,000 x 48)..........       7,392,000
    Low activity operator cost ($53,000 x 12) (Partial           636,000
     SEMS)..............................................
                                                         ---------------
        TOTAL FIRST YEAR COST...........................      14,521,000

MAINTENANCE of your SEMS:
    Maintain SEMS (Annual Cost after Implementation)....  ..............
    High activity operator cost ($1,670,000 x 13).......      21,710,000
    Moderate activity operator cost ($223,000 x 41).....       9,143,000
    Low activity operator cost ($77,000 x 76)...........       5,852,000
    ** Conduct required independent third-party audits..         291,000
    Paperwork Burden required by BOEMRE (annual cost)...      41,393,811
                                                         ---------------
        TOTAL ANNUAL COSTS AFTER IMPLEMENTATION.........      78,389,811
------------------------------------------------------------------------
* Rounded to the nearest $1,000.
** Required independent audits--approximately 20 percent per operator
  per category: 3 required audits for high operator ($20,000 per audit x
  3 audits = $60,000); 8 required audits for moderate operator ($12,000
  per audit x 8 audits = $96,000); and 15 required audits for low
  operator ($9,000 per audit per 15 audits = $135,000) = 26 required
  audits per year at a total yearly combined cost of $291,000.

Benefits of SEMS

    The ultimate goal of SEMS is to promote safety and environmental 
protection during OCS activities. The protection of human life and the 
environment are the top priorities and objectives of this rule. While 
it is difficult to provide absolute quantification of the benefits of 
the lives saved and risks avoided due to this regulation, the BOEMRE 
believes that implementation of a comprehensive SEMS program will avoid 
accidents that could result in injuries, fatalities, and serious 
environmental damage based upon BOEMRE's incident analysis. In 
addition, an increase in a system's level of safety leads to reduced 
material losses and enhanced productivity.
    Some additional benefits include:
     Avoiding incident investigation costs and operational 
disruptions.

[[Page 63645]]

Improved communication and risk mitigation will prevent many accidents 
from occurring.
     Reduction of the direct and indirect costs of accidents. 
Repair costs, damage claims, increased insurance premiums, and civil 
penalties are a few of the potential economic consequences of an 
accidental mishap.
     Establishing a marketable safety record. A record of 
consistently safe operations can attract new business and investment.
     Improved employee morale and productivity. Promoting 
communication between management and the rest of the organization 
prevents disenfranchisement and lifts morale.
    Again, while it is difficult to quantify with any degree of 
certainty the human safety and environmental benefits of a 
comprehensive SEMS program, the financial burden estimated for 
developing and managing a SEMS program is minor compared to the costs 
associated with major accidents. For example, in 1987, prior to 
industry having developed a safety management template for offshore 
operations, the Mississippi Canyon 311, A (Bourbon), platform in the 
Gulf of Mexico was tilted to one side by an extensive underground 
blowout. The cost associated with this incident alone was $274,000,000. 
In 1989, a fire associated with a pipeline repair killed 7 people and 
destroyed a major production facility. A SEMS plan would have 
implemented several procedures and evaluations that may have prevented 
these accidents. A SEMS plan is not a guarantee of avoiding all 
accidents, but BOEMRE believes that requiring a comprehensive SEMS 
program, that includes all 13 elements, will reduce the likelihood of 
the types of accidents and incidents discussed in the preamble and will 
raise the safety awareness of all personnel in the office and field.
    The requirement for SEMS will not have a significant economic 
effect on a substantial number of small entities. Based on voluntary 
participation in the SEMS program and annual performance reviews, the 
BOEMRE estimates that over 40 percent of the small entities currently 
operating on the OCS have implemented some form of a SEMS program. 
These small entities (28 low activity and 29 moderate activity 
operators) implemented SEMS because it improved the efficiency and 
safety of their OCS operations. The cost for each of the remaining 
small entities to implement (approximately $154,000) and maintain 
(approximately $77,000) SEMS is very small compared to the average 
annual revenues these entities will generate ($28,000,000) from the 
production of oil and gas. BOEMRE estimated the annual revenue by 
multiplying the average production for a small entity (700,000 BOE) 
times a conservative price for a barrel of oil ($40). These costs 
should be less for operators that have already addressed this type of 
information. Therefore, this rulemaking will not have a significant 
economic effect on a substantial number of small entities.
    Your comments are important. The Small Business and Agriculture 
Regulatory Enforcement Ombudsman and 10 Regional Fairness Boards were 
established to receive comments from small businesses about Federal 
agency enforcement actions. The Ombudsman will annually evaluate the 
enforcement activities and rate each agency's responsiveness to small 
businesses. If you wish to comment on the actions of BOEMRE, call 1-
888-734-3247. You may comment to the Small Business Administration 
without fear of retaliation. Allegations of discrimination/retaliation 
filed with the Small Business Administration will be investigated for 
appropriate action.

Small Business Regulatory Enforcement Fairness Act Subtitle E--
Congressional Review

    This final rule is not a major rule under the Small Business 
Regulatory Enforcement Fairness Act (5 U.S.C. 801 et seq., also known 
as the Congressional Review Act). This final rule:
    a. Will not have an annual effect on the economy of $100 million or 
more.
    b. Will not cause a major increase in costs or prices for 
consumers, individual industries, Federal, State, or local government 
agencies, or geographic regions.
    c. Will not have significant adverse effects on competition, 
employment, investment, productivity, innovation, or the ability of 
U.S.-based enterprises to compete with foreign-based enterprises. The 
requirements will apply to all entities operating on the OCS.

Unfunded Mandates Reform Act of 1995

    This final rule will not impose an unfunded mandate on State, 
local, or tribal governments or the private sector of more than $100 
million per year, adjusted for inflation. This final rule will not have 
a significant or unique effect on State, local, or tribal governments 
or the private sector. A statement containing the information required 
by the Unfunded Mandates Reform Act (2 U.S.C. 1501 et seq.) is not 
required.

Takings Implication Assessment (E.O. 12630)

    Under the criteria in E.O. 12630, this final rule does not have 
significant takings implications. The final rule is not a governmental 
action capable of interference with constitutionally protected property 
rights. A Takings Implication Assessment is not required.

Federalism (E.O. 13132)

    Under the criteria in E.O. 13132, this final rule does not have 
federalism implications. This final rule will not substantially and 
directly affect the relationship between the Federal and State 
governments. To the extent that State and local governments have a role 
in OCS activities, this final rule will not affect that role. A 
Federalism Assessment is not required.

Civil Justice Reform (E.O. 12988)

    This rule complies with the requirements of E.O. 12988. 
Specifically, this rule:
    (a) Meets the criteria of section 3(a) requiring that all 
regulations be reviewed to eliminate errors and ambiguity and be 
written to minimize litigation; and
    (b) Meets the criteria of section 3(b)(2) requiring that all 
regulations be written in clear language and contain clear legal 
standards.

Consultation With Indian Tribes (E.O. 13175)

    Under the criteria in E.O. 13175, we have evaluated this final rule 
and determined that it has no substantial effects on federally 
recognized Indian tribes.

Paperwork Reduction Act (PRA)

    This rule contains a collection of information that was submitted 
to the OMB for review and approval under the Paperwork Reduction Act of 
1995 (44 U.S.C. 3501 et seq.). The title of the information collection 
(IC) for this rule is 30 CFR Part 250, Subpart S, Safety and 
Environmental Management Systems for Outer Continental Shelf Oil and 
Gas and Sulphur Operations. The OMB approved the collection under 
Control Number 1010-0186, expiration date 10/31/2013, 465,099 hours, 
$12,933,000 non-hour cost burdens. Respondents primarily are an 
estimated 130 Federal OCS oil, gas, and sulphur lessees and/or 
operators or other independent third parties. The frequency of response 
varies, but is primarily annual. Responses to this IC are mandatory. 
This rulemaking adds a new subpart to the 30 CFR Part 250 regulations. 
BOEMRE will use the information to: Evaluate the effect of

[[Page 63646]]

industry's continued improvement of safety and environmental management 
of the OCS; develop an industry average that helps to describe how well 
the offshore oil and gas industry is performing; and judge the 
reasonableness of company requests for any specific regulatory relief.
    BOEMRE will protect proprietary information according to the 
Freedom of Information Act (5 U.S.C. 522) and its implementing 
regulations (43 CFR Part 2), and 30 CFR 250.197, Data and information 
to be made available to the public or for limited inspection.
    Section 250.198 lists all of the 30 CFR Part 250 incorporated 
documents. The section is revised to include the new 30 CFR Part 250, 
Subpart S, incorporated document added under this regulation.
    As stated in the preamble, we received 61 comments, of which 99 
percent made some mention of the IC burden. Generally, these commenters 
said that the IC requirements were too burdensome and that the rule was 
too prescriptive and should follow API RP 75. BOEMRE is incorporating 
by reference API RP 75 to replace virtually all of the requirements in 
the proposed rule. The incorporation of this document allows the 
operators to address the diversity of operations while developing their 
SEMS program. Also, all the commenters remarked that the burden hour 
estimates were too low; therefore, we increased the burdens to reflect 
this concern. In response to the comments, BOEMRE has included a new IC 
requirement in the final rule, adjusted hour burdens, and non-hour cost 
burdens as follows:
    a. In Sec. Sec.  250.1900-250.1929 under Operator Activity in the 
proposed rule, the burden hours were increased.
    1. High Activity operator burden is increased from the proposed 
rule due to incorporating API RP 75 in its entirety, which will 
increase the hour burden (+217,204 hours).
    2. Moderate Activity operator burden is increased from the proposed 
rule due to incorporating API RP 75 in its entirety, which will 
increase the hour burden and non-hour costs (+64,042 hours; 
$2,580,000).
    3. Low Activity operator burden is increased from the proposed rule 
due to incorporating API RP 75 in its entirety, which will increase the 
hour burden and non-hour costs (+44,384 hours; $5,472,000).
    b. In Sec.  250.1911(b), the designated person in charge of the 
activity must have approval to conduct a JSA. This requirement will 
help determine that all physical requirements, environmental 
conditions, personal protective equipment, and safety factors relating 
to a specific job or task have been identified properly (+47,450 
hours).
    c. In Sec.  250.1914(d), a contractor employee injury/illness log 
must be kept in the operation area. This requirement is needed to 
assist in filling out Form MMS-131; therefore, we consider this burden 
as part of the form burden. (Current OMB approved burden per form is 8 
hours; this rulemaking increases the burden per form by an additional 2 
hours per form (+260 hours).
    d. In Sec.  250.1924(b), BOEMRE has added necessary requirements 
pertaining to verification of the accuracy of industry's SEMS 
documentation (+260 burden hours)).
    e. In Sec.  250.1925(a) there is a new non-hour cost burden that 
will require an operator to pay for all costs associated with an BOEMRE 
directed audit. This cost is based on a potential of 26 BOEMRE directed 
audits a year (+$291,000).
    f. For clarity purposes, we placed the majority of all the 
recordkeeping and documentation requirements in one regulatory 
requirement, Sec.  250.1928. This will help respondents determine their 
requirements at a glance (+650 hours).
    The following table provides a breakdown of the burdens.

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                      Non-hour cost burdens
                                          Reporting and recordkeeping  ---------------------------------------------------------------------------------
     Citation 30 CFR 250 subpart S                requirement                                              Average number of annual      Annual burden
                                                                                  Hour burden                     responses                  hours
--------------------------------------------------------------------------------------------------------------------------------------------------------
1900-1929.............................  High Activity Operator: Have a  18,708........................  13 operators.................            243,204
                                         SEMS program, and maintain
                                         all documentation and records
                                         pertaining to your SEMS
                                         program, according to API RP
                                         75 in its entirety. Make your
                                         SEMS available to BOEMRE upon
                                         request. As part of your
                                         SEMS, you must also develop
                                         and implement written JSAs
                                         for each OCS activity
                                         identified or discussed in
                                         your SEMS. NOTE: Based on
                                         previous information, High
                                         Activity Operators already
                                         have a SEMS in place.
--------------------------------------------------------------------------------------------------------------------------------------------------------
1900-1929.............................  Moderate Activity Operator:     2,528.........................  41 operators.................            103,648
                                         Have a SEMS program, and
                                         maintain all documentation
                                         and records pertaining to
                                         your SEMS program, according
                                         to API RP 75 in its entirety.
                                         Make your SEMS available to
                                         BOEMRE upon request. As part
                                         of your SEMS, you must also
                                         develop and implement written
                                         JSAs for each OCS activity
                                         identified or discussed in
                                         your SEMS.
                                       -----------------------------------------------------------------------------------------------------------------
                                        Moderate Activity Operator      $375,000 per moderate activity
                                         Implementation. (One time       implementation x 12 operators
                                         cost to implement SEMS).        = $4,500,000
--------------------------------------------------------------------------------------------------------------------------------------------------------

[[Page 63647]]

1900-1929.............................  Low Activity Operator: Have a   899...........................  76 operators.................             68,324
                                         SEMS program, and maintain
                                         all documentation and records
                                         pertaining to your SEMS
                                         program, according to API RP
                                         75 in its entirety. Make your
                                         SEMS available to BOEMRE upon
                                         request. As part of your
                                         SEMS, you must also develop
                                         and implement written JSAs
                                         for each OCS activity
                                         identified or discussed in
                                         your SEMS.
                                       -----------------------------------------------------------------------------------------------------------------
                                        Low Activity Operator           $154,000 per low activity
                                         Implementation. (One time       implementation x 48 operators
                                         cost to implement SEMS).        = $7,392,000.
--------------------------------------------------------------------------------------------------------------------------------------------------------
1900..................................  Develop and implement a SEMS    $2,500 per implementation x 60
                                         program (One time               operators = $150,000.
                                         implementation cost of SEMS
                                         template).
--------------------------------------------------------------------------------------------------------------------------------------------------------
1900..................................  In-house modification (one      $10,000 per implementation x
                                         time implementation cost) of    60 operators = $600,000.
                                         the generic SEMS program to
                                         meet needs of specific
                                         company.
--------------------------------------------------------------------------------------------------------------------------------------------------------
1911(b)...............................  Supervisor approval to conduct  10 mins.......................  130 operators x 365 days x 6              47,450
                                         a JSA.                                                          = 284,700 *.
--------------------------------------------------------------------------------------------------------------------------------------------------------
1900(b); 1914(d); 1928(d), (e); 1929..  Submit Form MMS-131. Maintain   10............................  130 operators................              1,300
                                         a contractor employee injury/
                                         illness log in the operation
                                         area, retain for 2 years, and
                                         make available to BOEMRE upon
                                         request (this requirement is
                                         included in the form burden).
                                         Inform contractors of hazards.
--------------------------------------------------------------------------------------------------------------------------------------------------------
1920..................................  Notify BOEMRE with audit        1.............................  130 operators/once every 3          43 (rounded)
                                         schedule 30 days prior to                                       years = 43.
                                         conducting your audit.
--------------------------------------------------------------------------------------------------------------------------------------------------------
1920(c); 1925(a), (c).................  Submit to BOEMRE after          3.............................  44 operators.................                132
                                         completed audit, report of
                                         findings and conclusions,
                                         including deficiencies and
                                         required supporting
                                         information/documentation.
--------------------------------------------------------------------------------------------------------------------------------------------------------
1920(d)...............................  Submit a copy of your plan      4.............................  10 submissions...............                 40
                                         that will address
                                         deficiencies identified in
                                         audit, including a correction
                                         schedule with appropriate
                                         supporting information.
--------------------------------------------------------------------------------------------------------------------------------------------------------
1924(b);..............................  Make available to BOEMRE upon   2.............................  130 operators................                260
                                         request, evaluation
                                         documentation and supporting
                                         information relating to your
                                         SEMS.
--------------------------------------------------------------------------------------------------------------------------------------------------------
1924(c)...............................  Explain and demonstrate your    8.............................  6 explanations...............                 48
                                         SEMS during site visit if
                                         required; provide evidence
                                         supporting your SEMS
                                         implementation.
--------------------------------------------------------------------------------------------------------------------------------------------------------
1925(a)...............................  Pay for all costs associated    26 BOEMRE directed audits--for
                                         with BOEMRE directed audit      a total of = $291,000.
                                         approximately 20 percent per
                                         operator per category: 3
                                         required audits for high
                                         operator ($20,000 per audit x
                                         3 audits = $60,000); 8
                                         required audits for moderate
                                         operator ($12,000 per audit x
                                         8 audits = $96,000; and 15
                                         required audits for low
                                         operator ($9,000 per audit
                                         per 15 audits = $135,000) =
                                         26 required audits per year
                                         at a total yearly combined
                                         cost of $291,000.
--------------------------------------------------------------------------------------------------------------------------------------------------------

[[Page 63648]]

1928..................................  (1) Document and keep all SEMS  5.............................  130 operators................                650
                                         audits for 6 years (at least
                                         2 full audit cycles) at an
                                         onshore location, and make
                                         available to BOEMRE upon
                                         request. (2) JSAs must have
                                         documented results in writing
                                         and kept onsite for 30 days;
                                         retain records for 2 years
                                         and make available upon
                                         request to BOEMRE. (3) All
                                         MOC records (API RP Sec 4)
                                         must be documented, dated,
                                         and retained for 2 years and
                                         make available to BOEMRE upon
                                         request.
                                       -----------------------------------------------------------------------------------------------------------------
    TOTAL BURDEN......................  ..............................  ..............................  285,469......................            465,099
                                                                                                       -------------------------------------------------
                                                                                                                $12,933,000 Non-Hour Cost Burdens
--------------------------------------------------------------------------------------------------------------------------------------------------------
* We calculated operators conducting six JSAs a day (3 JSAs for each 12 hour shift). Some contractors may perform none for a particular day, whereas
  others may conduct more than six per day. This estimate is an average.

    An agency may not conduct or sponsor, and you are not required to 
respond to, a collection of information unless it displays a currently 
valid OMB control number. The public may comment, at any time, on the 
accuracy of the IC burden in this rule and may submit any comments to 
the Department of the Interior; Bureau of Ocean Energy Management, 
Regulation and Enforcement; Attention: Regulations and Standards 
Branch; Mail Stop 4024; 381 Elden Street; Herndon, Virginia 20170-4817.

National Environmental Policy Act of 1969

    This rule does not constitute a major Federal action significantly 
affecting the quality of the human environment. BOEMRE has analyzed 
this final rule under the criteria of the National Environmental Policy 
Act and 516 Departmental Manual 15. This final rule meets the criteria 
set forth in 43 CFR 46.210 for a Departmental ``Categorical Exclusion'' 
in that this rule is ``* * * of an administrative, financial, legal, 
technical, or procedural nature * * *'' This rule also meets the 
criteria set forth in 516 Departmental Manual 15.4(C)(1) for a BOEMRE 
``Categorical Exclusion'' in that its impacts are limited to 
administrative, economic or technological effects. Further, the BOEMRE 
has analyzed this rule to determine if it meets any of the 
extraordinary circumstances that will require an environmental 
assessment or an environmental impact statement as set forth in 43 CFR 
46.215.
    Each section and subsection has also been reviewed to ensure that 
no potentially relevant extraordinary circumstances apply to the 
proposed action that would warrant the preparation of an environmental 
assessment or environmental impact statement. All extraordinary 
circumstances were considered in accordance with 43 CFR 46.215, but 
only the following ones are potentially applicable:
    a. Have significant impacts on public health or safety.
    e. Establish a precedent for future action or represent a decision 
in principle about future actions with potentially significant 
environmental effects.
    f. Have a direct relationship to other actions with individually 
insignificant but cumulatively significant environmental effects.
    The first extraordinary circumstance does not apply since rule 
promulgation will not contribute to any significant and adverse impacts 
on public health and safety. The SEMS program is likely to improve OCS 
safety, given the available incident data trends and associated 10 
years of analysis. The second extraordinary circumstance does not apply 
since the promulgation of the rule or the eventual implementation of 
SEMS by operators does not set precedent for future actions or 
decisions by BOEMRE. The last extraordinary circumstance does not apply 
since there is no direct relationship between this rulemaking and other 
actions that could together contribute to cumulatively significant 
effects.
    Most subsections of the rule address strictly administrative, 
technical, and/or procedural matters. Specific examples include 
definitions of terminology, scope and timing of documentation, 
recordkeeping, and transfer of information, and general descriptions of 
what is to be included in written procedures. The rule does not create 
the potential for environmental effects as a result of new 
technologies, technology configurations, or technological procedures as 
such measures are not part of the rule. For aspects of the rule dealing 
with mechanical integrity and inspections, the requirements are 
procedural and technical as the rule covers the content of the written 
procedures. While the rule identifies the requirement, it allows the 
operator to choose the means to accomplish the end as long as it is 
consistent with the SEMS requirements.
    Other subsections require activities in addition to administrative 
tasks, advance planning and procedural documentation, such as training 
and emergency response drills and corrective procedural actions that 
address human errors identified in investigations. These requirements 
are also considered procedural in nature since the subsections describe 
general and ordered steps that operators must undertake to have and 
maintain a compliant SEMS program. Subsections that require training or 
drilling of personnel are procedural in that they target the cognitive 
skills and knowledge of personnel (e.g., 250.1915(b)) and/or clarify 
the purpose and/or scope of training (e.g., 250.1918(c)). For example, 
in 30 CFR 250.1918, BOEMRE requires training and drills for personnel 
to exercise elements in the Emergency Action Plan that focus on 
response, control, and evacuation procedures and reporting. The 
principal purpose of this is to ensure retention of and refine the 
skills, knowledge, and abilities of personnel.
    BOEMRE concluded that this rule does not meet any of the criteria 
for extraordinary circumstances as set forth in 43 CFR 46.215.

Data Quality Act

    In developing this rule, we did not conduct or use a study, 
experiment, or survey requiring peer review under the Data Quality Act 
(Pub. L. 106-554, app.

[[Page 63649]]

C Sec.  515, 114 Stat. 2763, 2763A-153-154).

Effects on the Energy Supply (E.O. 13211)

    This rule is not a significant energy action under the definition 
in E.O. 13211. A Statement of Energy Effects is not required.

List of Subjects in 30 CFR Part 250

    Administrative practice and procedure, Continental shelf, 
Environmental protection, Incorporation by reference, Public Lands--
mineral resources, Reporting and recordkeeping requirements.

    Dated: October 1, 2010.
Wilma A. Lewis,
Assistant Secretary--Land and Minerals Management.

0
For the reasons stated in the preamble, Bureau of Ocean Energy 
Management, Regulation and Enforcement (BOEMRE) is amending 30 CFR part 
250 as follows:

PART 250--OIL AND GAS AND SULPHUR OPERATIONS IN THE OUTER 
CONTINENTAL SHELF

0
1. The authority citation for 30 CFR part 250 continues to read as 
follows:

    Authority: 31 U.S.C. 9701, 43 U.S.C. 1334.

0
2. Amend Sec.  250.198 by adding new paragraph (h)(80) to read as 
follows:

Sec.  250.198  Documents Incorporated by Reference.

* * * * *
    (h) * * *
    (80) API RP 75, Recommended Practice for Development of a Safety 
and Environmental Management Program for Offshore Operations and 
Facilities, Third Edition, May 2004, Reaffirmed May 2008, Product No. 
G07503; incorporated by reference at Sec.  250.1900, Sec.  250.1900(c), 
Sec.  250.1902(c), Sec.  250.1903, Sec.  250.1909, Sec.  250.1920(a) 
and (b).
* * * * *

0
3. Revise Sec.  250.199(e)(17) to read as follows:

Sec.  250.199  Paperwork Reduction Act statements--information 
collection.

* * * * *
    (e) * * *

------------------------------------------------------------------------
  30 CFR subpart, title and/or BOEMRE         Reasons for collecting
         form (OMB Control No.)              information and how used
------------------------------------------------------------------------

                              * * * * * * *
(17) Subpart S, Safety and               The SEMS program will describe
 Environmental Management Systems (1010-  management commitment to
 0186), including Form MMS-131,           safety and the environment, as
 Performance Measures Data.               well as policies and
                                          procedures to assure safety
                                          and environmental protection
                                          while conducting OCS
                                          operations (including those
                                          operations conducted by
                                          contractor and subcontractor
                                          personnel). The information
                                          collected is the form to
                                          gather the raw Performance
                                          Measures Data relating to risk
                                          and number of accidents,
                                          injuries, and oil spills
                                          during OCS activities.

                              * * * * * * *
------------------------------------------------------------------------

0
4. Add new subpart S to read as follows:

Subpart S--Safety and Environmental Management Systems (SEMS)

Sec.
250.1900 Must I have a SEMS program?
250.1901 What is the goal of my SEMS program?
250.1902 What must I include in my SEMS program?
250.1903 Definitions.
250.1904 Documents incorporated by reference
250.1905 through 250.1908 [Reserved]
250.1909 What is management's general responsibilities for the SEMS 
program?
250.1910 What safety and environmental information is required?
250.1911 What criteria for hazards analyses must my SEMS program 
meet?
250.1912 What criteria for management of change must my SEMS program 
meet?
250.1913 What criteria for operating procedures must my SEMS program 
meet?
250.1914 What criteria must be documented in my SEMS program for 
safe work practices and contractor selection?
250.1915 What criteria for training must be in my SEMS program?
250.1916 What criteria for mechanical integrity must my SEMS program 
meet?
250.1917 What criteria for pre-startup review must be in my SEMS 
program?
250.1918 What criteria for emergency response and control must be in 
my SEMS program?
250.1919 What criteria for investigation of incidents must be in my 
SEMS program?
250.1920 What are the auditing requirements for my SEMS program?
250.1921 through 250.1923 [RESERVED]
250.1924 How will BOEMRE determine if my SEMS program is effective?
250.1925 May BOEMRE direct me to conduct additional audits?
250.1926 What qualifications must an independent third party or my 
designated and qualified personnel meet?
250.1927 What happens if BOEMRE finds shortcomings in my SEMS 
program?
250.1928 What are my recordkeeping and documentation requirements?
250.1929 What are my responsibilities for submitting OCS performance 
measure data?

Sec.  250.1900  Must I have a SEMS program?

    You must develop, implement, and maintain a safety and 
environmental management system (SEMS) program. Your SEMS program must 
address the elements described in Sec.  250.1902, American Petroleum 
Institute's Recommended Practice for Development of a Safety and 
Environmental Management Program for Offshore Operations and Facilities 
(API RP 75) (incorporated by reference as specified in Sec.  250.198), 
and other requirements as identified in this subpart.
    (a) You must comply with the provisions of this subpart and have 
your SEMS program in effect on or before November 15, 2011, except for 
the submission of Form MMS-131 as required in Sec.  250.1929.
    (b) You must submit Form MMS-131 on an annual basis beginning March 
31, 2011.
    (c) If there are any conflicts between the requirements of this 
subpart and API RP 75 (incorporated by reference as specified in Sec.  
250.198), you must follow the requirements of this subpart.
    (d) Nothing in this subpart affects safety or other matters under 
the jurisdiction of the Coast Guard.

Sec.  250.1901  What is the goal of my SEMS program?

    The goal of your SEMS program is to promote safety and 
environmental protection by ensuring all personnel aboard a facility 
are complying with the policies and procedures identified in your SEMS.

[[Page 63650]]

    (a) To accomplish this goal, you must ensure that your SEMS program 
identifies, addresses, and manages safety, environmental hazards, and 
impacts during the design, construction, start-up, operation, 
inspection, and maintenance of all new and existing facilities, 
including mobile offshore drilling units (MODU) while under BOEMRE 
jurisdiction and Department of Interior (DOI) regulated pipelines.
    (b) All personnel involved with your SEMS program must be trained 
to have the skills and knowledge to perform their assigned duties.

Sec.  250.1902  What must I include in my SEMS program?

    You must have a properly documented SEMS program in place and make 
it available to BOEMRE upon request as required by Sec.  250.1924(b).
    (a) Your SEMS program must meet the minimum criteria outlined in 
this subpart, including the following SEMS program elements:
    (1) General (see Sec.  250.1909)
    (2) Safety and Environmental Information (see Sec.  250.1910)
    (3) Hazards Analysis (see Sec.  250.1911)
    (4) Management of Change (see Sec.  250.1912)
    (5) Operating Procedures (see Sec.  250.1913)
    (6) Safe Work Practices (see Sec.  250.1914)
    (7) Training (see Sec.  250.1915)
    (8) Mechanical Integrity (Assurance of Quality and Mechanical 
Integrity of Critical Equipment) (see Sec.  250.1916)
    (9) Pre-startup Review (see Sec.  250.1917)
    (10) Emergency Response and Control (see Sec.  250.1918)
    (11) Investigation of Incidents (see Sec.  250.1919)
    (12) Auditing (Audit of Safety and Environmental Management Program 
Elements) (see Sec. Sec.  250.1920)
    (13) Recordkeeping (Records and Documentation) and additional 
BOEMRE requirements (see Sec.  250.1928).
    (b) You must also include a job safety analysis (JSA) for OCS 
activities identified or discussed in your SEMS program (see Sec.  
250.1911(b)).
    (c) Your SEMS program must meet or exceed the standards of safety 
and environmental protection of API RP 75 (incorporated by reference as 
specified in Sec.  250.198).

Sec.  250.1903  Definitions.

    Definitions listed in this section apply to this subpart and 
supersede definitions in API RP 75, Appendices D and E (incorporated by 
reference as specified in Sec.  250.198).
    Designated and qualified personnel means employees (not 
contractors) that are knowledgeable of your program, and have actual 
work experience and training in implementing and auditing a SEMS or a 
similar program in an offshore oil and gas environment.
    Personnel means direct employee(s) of the operator and contracted 
workers who are involved with or affected by specific jobs or tasks.

Sec.  250.1904  Documents Incorporated by Reference.

    The effect of incorporation by reference of a document into the 
regulations in this part is that the incorporated document is a 
requirement. When a section in this part incorporates all of a 
document, you are responsible for complying with the provisions of that 
entire document, except to the extent that section provides otherwise. 
If any incorporated document uses the word ``should'', it means must 
for purposes of these regulations.

Sec. Sec.  250.1905 through 250.1908  [Reserved]

Sec.  250.1909  What are management's general responsibilities for the 
SEMS Program?

    You, through your management, must require that the program 
elements discussed in API RP 75 (incorporated by reference as specified 
in Sec.  250.198) and in this subpart are properly documented and are 
available at field and office locations, as appropriate for each 
program element. You, through your management, are responsible for the 
development, support, continued improvement, and overall success of 
your SEMS program. Specifically you, through your management, must:
    (a) Establish goals and performance measures, demand accountability 
for implementation, and provide necessary resources for carrying out an 
effective SEMS program.
    (b) Appoint management representatives who are responsible for 
establishing, implementing and maintaining an effective SEMS program.
    (c) Designate specific management representatives who are 
responsible for reporting to management on the performance of the SEMS 
program.
    (d) At intervals specified in the SEMS program and at least 
annually, review the SEMS program to determine if it continues to be 
suitable, adequate and effective (by addressing the possible need for 
changes to policy, objectives, and other elements of the program in 
light of program audit results, changing circumstances and the 
commitment to continual improvement) and document the observations, 
conclusions and recommendations of that review.
    (e) Develop and endorse a written description of your safety and 
environmental policies and organizational structure that define 
responsibilities, authorities, and lines of communication required to 
implement the SEMS program.
    (f) Utilize personnel with expertise in identifying safety hazards, 
environmental impacts, optimizing operations, developing safe work 
practices, developing training programs and investigating incidents.
    (g) Ensure that facilities are designed, constructed, maintained, 
monitored, and operated in a manner compatible with applicable industry 
codes, consensus standards, and generally accepted practice as well as 
in compliance with all applicable governmental regulations.
    (h) Ensure that management of safety hazards and environmental 
impacts is an integral part of the design, construction, maintenance, 
operation, and monitoring of each facility.
    (i) Ensure that suitably trained and qualified personnel are 
employed to carry out all aspects of the SEMS program.
    (j) Ensure that the SEMS program is maintained and kept up to date 
by means of periodic audits to ensure effective performance.

Sec.  250.1910  What safety and environmental information is required?

    (a) You must require that SEMS program safety and environmental 
information be developed and maintained for any facility that is 
subject to the SEMS program.
    (b) SEMS program safety and environmental information must include:
    (1) Information that provides the basis for implementing all SEMS 
program elements, including the requirements of hazard analysis (Sec.  
250.1911);
    (2) process design information including, as appropriate, a 
simplified process flow diagram and acceptable upper and lower limits, 
where applicable, for items such as temperature, pressure, flow and 
composition; and
    (3) mechanical design information including, as appropriate, piping 
and instrument diagrams; electrical area classifications; equipment 
arrangement drawings; design basis of the relief system; description of 
alarm, shutdown, and interlock systems; description of well control 
systems; and design basis for passive and active fire protection 
features and systems and emergency evacuation procedures.

[[Page 63651]]

Sec.  250.1911  What criteria for hazards analyses must my SEMS program 
meet?

    You must ensure the development and implementation of a hazards 
analysis (facility level) and a job safety analysis (operations/task 
level) for all of your facilities. For this subpart, facilities include 
all types of offshore structures permanently or temporarily attached to 
the seabed (i.e., mobile offshore drilling units; floating production 
systems; floating production, storage and offloading facilities; 
tension-leg platforms; and spars) used for exploration, development, 
production, and transportation activities for oil, gas, or sulphur from 
areas leased in the OCS. Facilities also include DOI regulated 
pipelines. You must document and maintain current analyses for each 
operation covered by this section for the life of the operation at the 
facility. The analyses must be updated when an internal audit is 
conducted to ensure that it is consistent with the current operations 
on your facility. Hazards analysis requirements for simple and nearly 
identical facilities, such as well jackets and single well caissons, 
may be fulfilled by performing a single hazards analysis which you can 
apply to all such facilities after you verify that any site specific 
deviations are addressed in each of the elements of your SEMS program.
    (a) Hazards Analysis (facility level). For a hazards analysis 
(facility level), you must perform an initial hazards analysis on each 
facility on or before November 15, 2011. The hazards analysis must be 
appropriate to the complexity of the operation and must identify, 
evaluate, and manage the hazards involved in the operation.
    (1) The hazards analysis must address the following:
    (i) Hazards of the operation;
    (ii) Previous incidents related to the operation you are 
evaluating, including any incident in which you were issued an Incident 
of Noncompliance or a civil or criminal penalty;
    (iii) Control technology applicable to the operation your hazards 
analysis is evaluating; and
    (iv) A qualitative evaluation of the possible safety and health 
effects on employees, and potential impacts to the human and marine 
environments, which may result if the control technology fails.
    (2) The hazards analysis must be performed by a person(s) with 
experience in the operations being evaluated. These individuals also 
need to be experienced in the hazards analysis methodologies being 
employed.
    (3) You should assure that the recommendations in the hazards 
analysis are resolved and that the resolution is documented.
    (b) Job Safety Analysis (JSA). You must develop and implement a JSA 
for OCS activities identified or discussed in your SEMS program.
    (1) You must keep a copy of the most recent JSA (operations/task 
level) at the job site and it must be readily accessible to employees.
    (2) Your JSA must identify, analyze, and record:
    (i) The steps involved in performing a specific job;
    (ii) the existing or potential safety and health hazards associated 
with each step; and
    (iii) the recommended action(s)/procedure(s) that will eliminate or 
reduce these hazards and the risk of a workplace injury or illness.
    (3) The supervisor of the person in charge of the task must approve 
the JSA prior to the commencement of the work.

Sec.  250.1912  What criteria for management of change must my SEMS 
program meet?

    (a) You must develop and implement written management of change 
procedures for modifications associated with the following:
    (1) Equipment,
    (2) Operating procedures,
    (3) Personnel changes (including contractors),
    (4) Materials, and
    (5) Operating conditions.
    (b) Management of change procedures do not apply to situations 
involving replacement in kind (such as, replacement of one component by 
another component with the same performance capabilities).
    (c) You must review all changes prior to their implementation.
    (d) The following items must be included in your management of 
change procedures:
    (1) The technical basis for the change;
    (2) Impact of the change on safety, health, and the coastal and 
marine environments;
    (3) Necessary time period to implement the change; and
    (4) Management approval procedures for the change.
    (e) Employees, including contractors whose job tasks will be 
affected by a change in the operation, must be informed of, and trained 
in, the change prior to startup of the process or affected part of the 
operation; and
    (f) If a management of change results in a change in the operating 
procedures of your SEMS program, such changes must be documented and 
dated.

Sec.  250.1913  What criteria for operating procedures must my SEMS 
program meet?

    (a) You must develop and implement written operating procedures 
that provide instructions for conducting safe and environmentally sound 
activities involved in each operation addressed in your SEMS program. 
These procedures must include the job title and reporting relationship 
of the person or persons responsible for each of the facility's 
operating areas and address the following:
    (1) Initial startup;
    (2) Normal operations;
    (3) All emergency operations (including but not limited to medical 
evacuations, weather-related evacuations and emergency shutdown 
operations);
    (4) Normal shutdown;
    (5) Startup following a turnaround, or after an emergency shutdown;
    (6) Bypassing and flagging out-of-service equipment;
    (7) Safety and environmental consequences of deviating from your 
equipment operating limits and steps required to correct or avoid this 
deviation;
    (8) Properties of, and hazards presented by, the chemicals used in 
the operations;
    (9) Precautions you will take to prevent the exposure of chemicals 
used in your operations to personnel and the environment. The 
precautions must include control technology, personal protective 
equipment, and measures to be taken if physical contact or airborne 
exposure occurs;
    (10) Raw materials used in your operations and the quality control 
procedures you used in purchasing these raw materials;
    (11) Control of hazardous chemical inventory; and
    (12) Impacts to the human and marine environment identified through 
your hazards analysis.
    (b) Operating procedures must be accessible to all employees 
involved in the operations.
    (c) Operating procedures must be reviewed at the conclusion of 
specified periods and as often as necessary to assure they reflect 
current and actual operating practices, including any changes made to 
your operations.
    (d) You must develop and implement safe and environmentally sound 
work practices for identified hazards during operations and the degree 
of hazard presented.
    (e) Review of and changes to the procedures must be documented and 
communicated to responsible personnel.

Sec.  250.1914  What criteria must be documented in my SEMS program for 
safe work practices and contractor selection?

    Your SEMS program must establish and implement safe work practices

[[Page 63652]]

designed to minimize the risks associated with operating, maintenance, 
and modification activities and the handling of materials and 
substances that could affect safety or the environment. Your SEMS 
program must also document contractor selection criteria. When 
selecting a contractor, you must obtain and evaluate information 
regarding the contractor's safety and environmental performance. 
Operators must ensure that contractors have their own written safe work 
practices. Contractors may adopt appropriate sections of the operator's 
SEMS program. Operator and contractor must document their agreement on 
appropriate contractor safety and environmental policies and practices 
before the contractor begins work at the operator's facilities.
    (a) A contractor is anyone performing work for the lessee. However, 
these requirements do not apply to contractors providing domestic 
services to the lessee or other contractors. Domestic services include 
janitorial work, food and beverage service, laundry service, 
housekeeping, and similar activities.
    (b) You must document that your contracted employees are 
knowledgeable and experienced in the work practices necessary to 
perform their job in a safe and environmentally sound manner. 
Documentation of each contracted employee's expertise to perform his/
her job and a copy of the contractor's safety policies and procedures 
must be made available to the operator and BOEMRE upon request.
    (c) Your SEMS program must include procedures and verification for 
selecting a contractor as follows:
    (1) Your SEMS program must have procedures that verify that 
contractors are conducting their activities in accordance with your 
SEMS program.
    (2) You are responsible for making certain that contractors have 
the skills and knowledge to perform their assigned duties and are 
conducting these activities in accordance with the requirements in your 
SEMS program.
    (3) You must make the results of your verification for selecting 
contractors available to BOEMRE upon request.
    (d) Your SEMS program must include procedures and verification that 
contractor personnel understand and can perform their assigned duties 
for activities such as, but not limited to:
    (1) Installation, maintenance, or repair of equipment;
    (2) construction, startup, and operation of your facilities;
    (3) turnaround operations;
    (4) major renovation; or
    (5) specialty work.
    (e) You must:
    (1) Perform periodic evaluations of the performance of contract 
employees that verifies they are fulfilling their obligations, and
    (2) maintain a contractor employee injury and illness log for 2 
years related to the contractor's work in the operation area, and 
include this information on Form MMS-131.
    (f) You must inform your contractors of any known hazards at the 
facility they are working on including, but not limited to fires, 
explosions, slips, trips, falls, other injuries, and hazards associated 
with lifting operations.
    (g) You must develop and implement safe work practices to control 
the presence, entrance, and exit of contract employees in operation 
areas.

Sec.  250.1915  What criteria for training must be in my SEMS program?

    Your SEMS program must establish and implement a training program 
so that all personnel are trained to work safely and are aware of 
environmental considerations offshore, in accordance with their duties 
and responsibilities. Training must address the operating procedures 
(Sec.  250.1913), the safe work practices (Sec.  250.1914), and the 
emergency response and control measures (Sec.  250.1918). You must 
document the qualifications of your instructors. Your SEMS program must 
address:
    (a) Initial training for the basic well-being of personnel and 
protection of the environment, and ensure that persons assigned to 
operate and maintain the facility possess the required knowledge and 
skills to carry out their duties and responsibilities, including 
startup and shutdown.
    (b) Periodic training to maintain understanding of, and adherence 
to, the current operating procedures, using periodic drills, to verify 
adequate retention of the required knowledge and skills.
    (c) Communication requirements to ensure that whenever a change is 
made to operating procedures (Sec.  250.1913), the safe work practices 
(Sec.  250.1914), or the emergency response and control measures (Sec.  
250.1918), personnel will be trained in or otherwise informed of the 
change before they are expected to operate the facility.
    (d) How you will verify that the contractors are trained in the 
work practices necessary to perform their jobs in a safe and 
environmentally sound manner, including training on operating 
procedures (Sec.  250.1913), the safe work practices (Sec.  250.1914), 
or the emergency response and control measures (Sec.  250.1918).

Sec.  250.1916  What criteria for mechanical integrity must my SEMS 
program meet?

    You must develop and implement written procedures that provide 
instructions to ensure the mechanical integrity and safe operation of 
equipment through inspection, testing, and quality assurance. The 
purpose of mechanical integrity is to ensure that equipment is fit for 
service. Your mechanical integrity program must encompass all equipment 
and systems used to prevent or mitigate uncontrolled releases of 
hydrocarbons, toxic substances, or other materials that may cause 
environmental or safety consequences. These procedures must address the 
following:
    (a) The design, procurement, fabrication, installation, 
calibration, and maintenance of your equipment and systems in 
accordance with the manufacturer's design and material specifications.
    (b) The training of each employee involved in maintaining your 
equipment and systems so that your employees can implement your 
mechanical integrity program.
    (c) The frequency of inspections and tests of your equipment and 
systems. The frequency of inspections and tests must be in accordance 
with BOEMRE regulations and meet the manufacturer's recommendations. 
Inspections and tests can be performed more frequently if determined to 
be necessary by prior operating experience.
    (d) The documentation of each inspection and test that has been 
performed on your equipment and systems. This documentation must 
identify the date of the inspection or test; include the name and 
position, and the signature of the person who performed the inspection 
or test; include the serial number or other identifier of the equipment 
on which the inspection or test was performed; include a description of 
the inspection or test performed; and the results of the inspection 
test.
    (e) The correction of deficiencies associated with equipment and 
systems that are outside the manufacturer's recommended limits. Such 
corrections must be made before further use of the equipment and 
system.
    (f) The installation of new equipment and constructing systems. The 
procedures must address the application for which they will be used.
    (g) The modification of existing equipment and systems. The 
procedures must ensure that they are modified for the application for 
which they will be used.
    (h) The verification that inspections and tests are being 
performed. The

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procedures must be appropriate to ensure that equipment and systems are 
installed consistent with design specifications and the manufacturer's 
instructions.
    (i) The assurance that maintenance materials, spare parts, and 
equipment are suitable for the applications for which they will be 
used.

Sec.  250.1917  What criteria for pre-startup review must be in my SEMS 
program?

    Your SEMS program must require that the commissioning process 
include a pre-startup safety and environmental review for new and 
significantly modified facilities that are subject to this subpart to 
confirm that the following criteria are met:
    (a) Construction and equipment are in accordance with applicable 
specifications.
    (b) Safety, environmental, operating, maintenance, and emergency 
procedures are in place and are adequate.
    (c) Safety and environmental information is current.
    (d) Hazards analysis recommendations have been implemented as 
appropriate.
    (e) Training of operating personnel has been completed.
    (f) Programs to address management of change and other elements of 
this subpart are in place.
    (g) Safe work practices are in place.

Sec.  250.1918  What criteria for emergency response and control must 
be in my SEMS program?

    Your SEMS program must require that emergency response and control 
plans are in place and are ready for immediate implementation. These 
plans must be validated by drills carried out in accordance with a 
schedule defined by the SEMS training program (Sec.  250.1915). The 
SEMS emergency response and control plans must include:
    (a) Emergency Action Plan that assigns authority and responsibility 
to the appropriate qualified person(s) at a facility for initiating 
effective emergency response and control, addressing emergency 
reporting and response requirements, and complying with all applicable 
governmental regulations;
    (b) Emergency Control Center(s) designated for each facility with 
access to the Emergency Action Plans, oil spill contingency plan, and 
other safety and environmental information (Sec.  250.1910); and
    (c) Training and Drills incorporating emergency response and 
evacuation procedures conducted periodically for all personnel 
(including contractor's personnel), as required by the SEMS training 
program (Sec.  250.1915). Drills must be based on realistic scenarios 
conducted periodically to exercise elements contained in the facility 
or area emergency action plan. An analysis and critique of each drill 
must be conducted to identify and correct weaknesses.

Sec.  250.1919  What criteria for investigation of incidents must be in 
my SEMS program?

    To learn from incidents and help prevent similar incidents, your 
SEMS program must establish procedures for investigation of all 
incidents with serious safety or environmental consequences and require 
investigation of incidents that are determined by facility management 
or BOEMRE to have possessed the potential for serious safety or 
environmental consequences. Incident investigations must be initiated 
as promptly as possible, with due regard for the necessity of securing 
the incident scene and protecting people and the environment. Incident 
investigations must be conducted by personnel knowledgeable in the 
process involved, investigation techniques, and other specialties that 
are relevant or necessary.
    (a) The investigation of an incident must address the following:
    (1) The nature of the incident;
    (2) The factors (human or other) that contributed to the initiation 
of the incident and its escalation/control; and
    (3) Recommended changes identified as a result of the 
investigation.
    (b) A corrective action program must be established based on the 
findings of the investigation in order to analyze incidents for common 
root causes. The corrective action program must:
    (1) Retain the findings of investigations for use in the next 
hazard analysis update or audit;
    (2) Determine and document the response to each finding to ensure 
that corrective actions are completed; and
    (3) Implement a system whereby conclusions of investigations are 
distributed to similar facilities and appropriate personnel within 
their organization.

Sec.  250.1920  What are the auditing requirements for my SEMS program?

    (a) You must have your SEMS program audited by either an 
independent third-party or your designated and qualified personnel 
according to the requirements of this subpart and API RP 75, Section 12 
(incorporated by reference as specified in Sec.  250.198) within 2 
years of the initial implementation of the SEMS program and at least 
once every 3 years thereafter. The audit must be a comprehensive audit 
of all thirteen elements of your SEMS program to evaluate compliance 
with the requirements of this subpart and API RP 75 to identify areas 
in which safety and environmental performance needs to be improved.
    (b) Your audit plan and procedures must meet or exceed all of the 
recommendations included in API RP 75 section 12 (incorporated by 
reference as specified in Sec.  250.198) and include information on how 
you addressed those recommendations. You must specifically address the 
following items:
    (1) Section 12.1 General.
    (2) Section 12.2 Scope.
    (3) Section 12.3 Audit Coverage.
    (4) Section 12.4 Audit Plan. You must submit your written Audit 
Plan to BOEMRE at least 30 days before the audit. BOEMRE reserves the 
right to modify the list of facilities that you propose to audit.
    (5) Section 12.5 Audit Frequency, except your audit interval must 
not exceed 3 years after the 2 year time period for the first audit.
    (6) Section 12.6 Audit Team. The audit that you submit to BOEMRE 
must be conducted by either an independent third party or your 
designated and qualified personnel. The independent third party or your 
designated and qualified personnel must meet the requirements in Sec.  
250.1926.
    (c) You must require your auditor (independent third party or your 
designated and qualified personnel) to submit an audit report of the 
findings and conclusions of the audit to BOEMRE within 30 days of the 
audit completion date. The report must outline the results of the 
audit, including deficiencies identified.
    (d) You must provide the BOEMRE a copy of your plan for addressing 
the deficiencies identified in your audit within 30 days of completion 
of the audit. Your plan must address the following:
    (1) A proposed schedule to correct the deficiencies identified in 
the audit. BOEMRE will notify you within 14 days of receipt of your 
plan if your proposed schedule is not acceptable.
    (2) The person responsible for correcting each identified 
deficiency, including their job title.
    (e) BOEMRE may verify that you undertook the corrective actions and 
that these actions effectively address the audit findings.
    Sec. Sec.  250.1921 through 250.1923 [Reserved]

Sec.  250.1924  How will BOEMRE determine if my SEMS program is 
effective?

    (a) BOEMRE or its authorized representative may evaluate or visit

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your facility to determine whether your SEMS program is in place, 
addresses all required elements, and is effective in protecting the 
safety and health of workers, the environment, and preventing 
incidents. BOEMRE or its authorized representative may evaluate your 
SEMS program, including documentation of contractors, independent third 
parties, your designated and qualified personnel, and audit reports, to 
assess your SEMS program. These evaluations or visits may be random or 
based upon the OCS lease operator's or contractor's performance.
    (b) For the evaluations, you must make the following available to 
BOEMRE upon request:
    (1) Your SEMS program;
    (2) The qualifications of your independent third-party or your 
designated and qualified personnel;
    (3) The SEMS audits conducted of your program;
    (4) Documents or information relevant to whether you have addressed 
and corrected the deficiencies of your audit; and
    (5) Other relevant documents or information.
    (c) During the site visit BOEMRE may verify that:
    (1) Personnel are following your SEMS program,
    (2) You can explain and demonstrate the procedures and policies 
included in your SEMS program; and
    (3) You can produce evidence to support the implementation of your 
SEMS program.
    (d) Representatives from BOEMRE may observe or participate in your 
SEMS audit. You must notify the BOEMRE at least 30-days prior to 
conducting your audit as required in Sec.  250.1920, so that BOEMRE may 
make arrangements to observe or participate in the audit.

Sec.  250.1925  May BOEMRE direct me to conduct additional audits?

    (a) If BOEMRE identifies safety or non-compliance concerns based on 
the results of our inspections and evaluations, or as a result of an 
event, BOEMRE may direct you to have an independent third-party audit 
of your SEMS program, in addition to the regular audit required by 
Sec.  250.1920, or BOEMRE may conduct an audit.
    (1) If BOEMRE direct you to have an independent third-party audit,
    (i) You are responsible for all of the costs associated with the 
audit, and
    (ii) The independent third-party audit must meet the requirements 
of Sec.  250.1920 of this part and you must ensure that the independent 
third party submits the findings and conclusions of a BOEMRE-directed 
audit according to the requirements in Sec.  250.1920 to BOEMRE within 
30 days after the audit is completed.
    (2) If BOEMRE conducts the audit, BOEMRE will provide a report of 
the findings and conclusions within 30 days of the audit.
    (b) Findings from these audits may result in enforcement actions as 
identified in Sec.  250.1927.
    (c) You must provide the BOEMRE a copy of your plan for addressing 
the deficiencies identified in the BOEMRE-directed audit within 30 days 
of completion of the audit as required in Sec.  250.1920.

Sec.  250.1926  What qualifications must an independent third party or 
my designated and qualified personnel meet?

    (a) You must either choose an independent third-party or your 
designated and qualified personnel to audit your SEMS program. You must 
take into account the following qualifications when selecting the 
third-party or your designated and qualified personnel:
    (1) Previous education and experience with SEMS, or similar 
management related programs.
    (2) Technical capabilities of the individual or organization for 
the specific project.
    (3) Ability to perform the independent third-party functions for 
the specific project considering current commitments.
    (4) Previous experience with BOEMRE regulatory requirements and 
procedures.
    (5) Previous education and experience to comprehend and evaluate 
how the company's offshore activities, raw materials, production 
methods and equipment, products, byproducts, and business management 
systems may impact health and safety performance in the workplace.
    (b) You must have procedures to avoid conflicts of interest related 
to the development of your SEMS program and the independent third party 
auditor and your designated and qualified personnel.
    (c) BOEMRE may evaluate the qualifications of the independent third 
parties or your designated and qualified personnel. This may include an 
audit of documents and procedures or interviews. BOEMRE may disallow 
audits by a specific independent third-party or your designated and 
qualified personnel if they do not meet the criteria of this section.

Sec.  250.1927  What happens if BOEMRE finds shortcomings in my SEMS 
program?

    If BOEMRE determines that your SEMS program is not in compliance 
with this subpart we may initiate one or more of the following 
enforcement actions:
    (a) Issue an Incident(s) of Noncompliance;
    (b) Assess civil penalties; or
    (c) Initiate probationary or disqualification procedures from 
serving as an OCS operator.

Sec.  250.1928  What are my recordkeeping and documentation 
requirements?

    (a) Your SEMS program procedures must ensure that records and 
documents are maintained for a period of 6 years, except as provided 
below. You must document and keep all SEMS audits for 6 years and make 
them available to BOEMRE upon request. You must maintain a copy of all 
SEMS program documents at an onshore location.
    (b) For JSAs, the person in charge of the activity must document 
the results of the JSA in writing and must ensure that records are kept 
onsite for 30 days. You must retain these records for 2 years and make 
them available to BOEMRE upon request.
    (c) You must document and date all management of change provisions 
as specified in Sec.  250.1912. You must retain these records for 2 
years and make them available to BOEMRE upon request.
    (d) You must keep your injury/illness log for 2 years and make them 
available to BOEMRE upon request.
    (e) You must keep all evaluations completed on contractor's safety 
policies and procedures for 2 years and make them available to BOEMRE 
upon request.
    (f) You must keep all records in an orderly manner, readily 
identifiable, retrievable and legible, and include the date of any and 
all revisions.

Sec.  250.1929  What are my responsibilities for submitting OCS 
performance measure data?

    You must submit Form MMS-131 on an annual basis by March 31st. The 
form must be broken down quarterly, reporting the previous calendar 
year's data.

[FR Doc. 2010-25665 Filed 10-7-10; 4:15 pm]
BILLING CODE 4310-MR-P
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