[Federal Register Volume 62, Number 156 (Wednesday, August 13, 1997)]
[Notices]
[Pages 43345-43347]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-21346]


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DEPARTMENT OF THE INTERIOR

Minerals Management Service


Safety and Environmental Management Program (SEMP) on the Outer 
Continental Shelf (OCS)

AGENCY: Minerals Management Service (MMS), Interior.

ACTION: Notice.

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SUMMARY: MMS has decided to continue its collaborative efforts with 
representatives of OCS oil and gas operating companies to voluntarily 
implement its SEMP initiative. We will continue to work with OCS 
operators to enhance their performance in safety and environmental 
protection through a variety of cooperative actions and agency 
initiatives. The Agency will, however, increase its focus on the 
performance records of companies, and will take increasingly firm 
actions against poor performers.

DATES: MMS will consider all comments received by November 12, 1997. 
Any comments received after November 12, 1997 may not be fully 
considered.

ADDRESSES: Mail or hand-carry comments to the Department of the 
Interior; Minerals Management Service; Mail Stop 4020; 381 Elden 
Street; Herndon, Virginia 20170-4817; Attention: Rules Processing Team 
(Comments).

FOR FURTHER INFORMATION CONTACT:
Jeff Wiese, Performance and Safety Branch at (703) 787-1591 or e-mail 
to <a href="/cdn-cgi/l/email-protection" class="__cf_email__" data-cfemail="642e0102024a330d011701242929374a232b32">[email protected]</a>.

SUPPLEMENTARY INFORMATION:

What is SEMP?

    SEMP is a safety systems management model designed around offshore 
oil and gas exploration and development activities. This concept is 
currently embodied in a publication of the American Petroleum Institute 
(API) known as Recommended Practice 75 (RP75). This document is 
available from the API; they can be reached by phone at (202) 682-8375.

Why is the MMS Promoting SEMP?

    MMS has developed a sound regulatory program to protect the 
public's interests in the exploration and development of OCS oil and 
gas over the course of more than a quarter century. This program is 
based, in large measure, on standards and recommended practices 
developed in association with OCS stakeholders that delimit how a 
``safe and prudent'' operator would conduct its business. This 
regulatory program has historically focused on hardware and engineering 
approaches to resolve offshore safety and operating issues. It has 
been, as well, fairly prescriptive.
    The SEMP concept was created to address the role of human and 
organizational error to accidents. By some estimates, human and 
organizational factors lie at the root cause of up to 80 percent of all 
accidents.
    Through SEMP, MMS is seeking alternative ways to complement our 
current regulatory efforts to protect people and the environment during 
oil and gas exploration and production activities taking place on the 
U.S. OCS. MMS undertook this initiative following two separate, but 
related, studies which indicated that many OCS operators were led by 
the traditional, prescriptive regulatory approach of MMS to focus more 
on compliance with existing rules than in systematically identifying 
and mitigating all risks posed by their operations. Implementation of 
SEMP squarely places the responsibility for protection of people, 
facilities, and the environment on the shoulders of OCS operators.

What Related Past Actions Has MMS Taken?

    MMS introduced its SEMP concept in the Federal Register on July 2, 
1991 (56 FR 30400). In response, OCS operators requested that they be 
given an opportunity to further develop SEMP and a chance to 
demonstrate that they could voluntarily adopt it on a widespread basis. 
MMS joined with a broad-based industry committee to refine the SEMP 
concept under the aegis of the API. In May 1993, the API published RP75 
as its response to SEMP. This document clearly reflects a consensus 
both within MMS and the offshore industry on what course a safe and 
prudent operator would steer--at a minimum. On June 30, 1994, MMS 
published a notice in the Federal

[[Page 43346]]

Register (59 FR 33779) in which it said that RP75 generally captured 
the agency's perception of what a SEMP should contain. At that time, 
MMS committed to a 2-year moratorium on regulatory activity related to 
SEMP during which it would closely monitor the voluntary adoption of 
RP75 by OCS operators. MMS extended for one year its observation of 
this experiment in a Federal Register notice published on July 18, 1996 
(61 FR 37493).

Why Is This Action Being Taken by MMS?

    MMS and representatives of the offshore oil and gas industry 
previously agreed (see above) to allow industry to voluntarily 
implement SEMP on a widespread basis. MMS originally established a two-
year window for this experiment and then later extended the window for 
an additional year. This extension was announced even though MMS has 
seen substantial progress across the board in program development. 
There was not, however, sufficient evidence of field-level 
implementation of SEMP at that time for the Agency to judge the results 
of this experiment. The additional year has provided MMS with the 
information needed to make its decision whether or not to require SEMP 
at this time.

What Information Was Used to Make This Decision?

    MMS has used a number of means to determine how well and how 
widespread voluntary implementation of its SEMP initiative has been 
undertaken by OCS operators. Among these means we have: (1) 
collaborated with the major industry trade associations to conduct 
year-end SEMP implementation surveys of all OCS operators over the past 
three years (1994, 1995, and 1996); (2) cosponsored several SEMP 
implementation workshops focused on challenges identified by operators 
who responded to these surveys in which volunteers were recruited to 
share best practices; (3) conducted twenty MMS-company SEMP 
implementation interviews with a cross-section of operators (both major 
and independent); and (4) probed whether and how well SEMP had been 
implemented during routine inspections made by MMS at the operators's 
offshore installations.

What Conclusions Has MMS Made?

    The SEMP initiative has served as a catalyst to refocus the 
attention of both the offshore industry and MMS on bottom-line 
performance and not solely on regulatory compliance. We have seen 
strong evidence that adoption of SEMP cannot only accomplish public 
objectives in the areas of promoting safety and environmental 
protection, but it can also make good business sense by avoiding or 
containing accident and pollution costs.
    The vast majority of OCS operators have undertaken, in earnest, to 
develop and implement SEMP plans. Many of these operators now have 
plans generally in place, and they are beginning the continuous 
improvement phase marked by the conduct of internal audits. Some 
companies have even requested MMS participation in cooperative reviews 
of their SEMP plans.
    MMS takes notice that many operators have voluntarily embraced 
safety systems management and SEMP. As with any voluntary effort, some 
operators will choose not to participate. We believe that their safety 
and environmental performance will suffer relative to their peers. 
Accordingly, their opportunities to explain their poor performance to 
MMS will increase.
    The largest challenges that MMS sees in areas covered by SEMP are 
how to better integrate the safety and environmental programs and 
principles of OCS operators with those of their many contractors and 
how to develop a common vocabulary upon which performance reviews will 
be conducted.

What Decision Has MMS Reached?

    We have decided to continue the non-regulatory, voluntary option 
for SEMP as long as we continue to observe satisfactory implementation 
efforts on an industry-wide basis. The Agency reserves the right, of 
course, to incorporate all or any part of SEMP into its regulatory 
program if we determine that such action would better serve the public 
interest. Specific areas of RP75 will continue to be examined by MMS 
for incorporation into its regulatory framework. The SEMP concept has 
always been envisioned by both MMS and the offshore industry as a 
strong tool to enhance safety and environmental performance. Given that 
so many companies have now embraced the safety systems management 
concepts embodied within SEMP, the Agency will now increasingly focus 
and act on their related performance records.

What's Next?

    Though we have decided to continue the non-regulatory approach to 
implementing the SEMP initiative by OCS operators, MMS plans to stay 
actively involved by promoting the concept and its adoption both 
through collaborative activities and new Agency projects. As 
appropriate, certain facets of SEMP may be reflected in our regulatory 
program where they help both us and the offshore industry better focus 
on performance. An immediate example would be our current performance-
based training project.
    We plan to collaborate with representatives of the offshore 
industry to track and improve the SEMP concept by: (1) making minor 
improvements to RP75 through the committee process under the guidance 
of the API; (2) conducting the fourth annual SEMP implementation survey 
at the beginning of 1998; (3) continuing our efforts to develop and 
implement commonly-defined measures of performance; (4) continuing to 
work with volunteer companies to conduct cooperative, in-depth reviews 
of their SEMP plans; (5) cosponsoring workshops, or research, that are 
designed to develop or share best practices in the areas of safety and 
environmental protection; and (6) working to identify specific MMS 
regulations for which OCS operators, who can demonstrate solid 
performance and a fully implemented SEMP, could individually request 
approval for using alternative means of compliance.
    For our part, MMS will be refocusing its attention on the bottom-
line performance of OCS operators by: (1) preparing internal analyses 
that rank the performance of all OCS operators on a company-wide basis; 
(2) conducting annual performance reviews with all OCS operators during 
which both these performance analyses and those of the company, 
together with related information, will be compared and discussed; (3) 
increasingly risk-basing our inspection program--past safety and 
environmental performance will play an important part in determining 
the risk posed by an operator or their specific operations; and (4) 
increasing the costs of poor performance by spending much more time 
with poor performers, by factoring past performance into civil penalty 
assessments, and by publishing a notice of all settled civil penalty 
cases.

What More Can Companies Do?

    One of SEMP's underlying principles is that management in the OCS 
oil and gas companies must provide leadership and take responsibility 
for ensuring that SEMP is properly implemented and that it is 
effective. In that regard, we would appreciate being notified by a top 
executive or operating official from each company as soon as that 
company has fully implemented their SEMP plans at the field level. This 
voluntary notification can be made by writing to the address listed at 
the beginning of this notice; a copy to the appropriate MMS Regional 
Director would also be

[[Page 43347]]

appreciated. Additionally, companies could request that MMS participate 
in cooperative performance review activities.
    Two, one-day workshops have been scheduled (September 9, 1997 in 
New Orleans and September 23, 1997 in Houston) to discuss 
implementation of performance measures developed by a joint industry-
MMS work group. MMS will be sending notice of this workshop to all our 
lessees and operators, as will all the major trade associations. Please 
call the contact identified in the FOR FURTHER INFORMATION section at 
the beginning of this notice if would like to discuss the workshops 
further.

    Dated: July 31, 1997.
Cynthia Quarterman,
Director, Minerals Management Service.
[FR Doc. 97-21346 Filed 8-12-97; 8:45 am]
BILLING CODE 4310-MR-M


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