Regulatory Impact Analysis for 

RIN 1014 AD04, Final Rule

Oil and Gas and Sulphur Operations in the Outer Continental Shelf -

Revisions to Safety and Environmental Management Systems

Bureau of Safety and Environmental Enforcement (BSEE), Department 

of the Interior

August 10, 2012
2

Table of Contents

Executive Summary.......................................................................................................... 3

Need for Regulatory Action and the Reasons that Action is being Considered.......... 4

How this rule will meet the need for regulatory action............................................................... 5

Baseline: the world without the regulation ................................................................................ 6

New Regulatory Provisions and Alternatives................................................................. 6

Additional requirements for conducting a Job Safety Analysis (JSA) (§ 250.1911).................. 7

SEMS Training (§ 250.1915)...................................................................................................... 8

Auditing Requirments (§§ 250.1920, 250.1921, 250.1922)........................................................ 9

Stop Work Authority (§ 250.1930)........................................................................................... 10

Ultimate Work Authority (§250.1931) ..................................................................................... 10

 Employee Participation Plan (§ 250.1932)...................................................... ......11

Reporting Unsafe Working Conditions (§§ 250.1933. 250.193).............................................. 12

Regulation’s Compliance Costs..................................................................................... 13

Recordkeeping, Implementation, and Auditing Costs .............................................................. 13

Executive Order 13563 Analysis – Total Ongoing Estimated SEMS Recordkeeping and 

Implementation Costs ............................................................................................................... 16

Benefits of a SEMS Program and this Regulation....................................................... 16

Benefits of the Regulation......................................................................................................... 17

Measuring the Future Benefits of SEMS .................................................................................. 18

Net Benefits...................................................................................................................... 18

Analysis Specific to the Regulatory Flexibility Act...................................................... 19

Small Entities Estimated to be Impacted by this Rulemaking .................................................. 19

The Estimated Breakdown of Large and Small Company Compliance Costs.......................... 21

Identification, to the extent practicable, of all relevant Federal rules that may duplicate, 

overlap, or conflict with the rule............................................................................................... 23

Small Business Alternatives...................................................................................................... 23
3

SEMS-II Regulatory Impact Analysis1

Executive Summary

This rule is a significant rule, as determined by the Office of Management and Budget 

(OMB), which might raise novel legal or policy issues arising out of legal mandates, the 

President’s priorities, or the principles set forth in Executive Order 12866. It is not a 

significant rule due to its annual economic impact.

The Safety and Environmental Management Systems (SEMS) program is a risk-based 

performance safety management system. The existing SEMS regulations were effective

on November 15, 2010, and Outer Continental Shelf (OCS) operators were required to 

implement a SEMS program by November 15, 2011. The provisions in this final 

rulemaking are designed to fill the gaps in the existing SEMS regulations and are 

consistent with the recommendations of work groups, panels, or commissions established 

following the Deepwater Horizon (DWH) explosion and oil spill. The proposed rule was 

published on September 14, 2011 (76 FR 56683) with the comment period closing on 

November 14, 2011. The BSEE (Bureau of Safety and Environmental Enforcement) 

considered comments that were received during the proposed rule comment period. The 

final rulemaking preamble includes explanations of changes from the proposed rule, and 

responses to comments.

The BSEE estimates the average annual cost of complying with this rulemaking is $17

million, spread across all OCS oil and gas operators with active operations. The benefits 

of the SEMS provisions in this rulemaking will come from enhanced safety for offshore 

workers and greater protection of the marine environment. These benefits will be 

realized through additional employee participation in safety procedures, training 

programs, notification obligations as well as strengthened safety and SEMS auditing 

procedures. 

Approximately 43 percent of the costs for this rulemaking will fall on small entities. 

Small entities are represented in all activity levels of OCS operations (high, moderate,

and low based on the number of offshore complexes the entity operates). The operating 

risk for these small entities of experiencing safety or environmental accidents is not lower 

than it is for larger-sized companies. Offshore operations are highly technical and can be 

hazardous. The risk level along with the adverse consequences in the event of incidents 

is the same regardless of the operator’s size. We have evaluated a number of alternatives

including those provided through comments, but were unable to identify provisions that 

will achieve the same safety objectives.

 

1 This Regulatory Impact Analysis (RIA) includes both the economic analysis under Executive Orders

12866, 13563, and the small business analysis under the Regulatory Flexibly Act. 
4

Need for Regulatory Action and the Reasons that Action is being 

Considered 

The importance of this rule is highlighted by the DWH explosion and oil spill on April 

20, 2010. The blowout of the BP Macondo well, and the resulting explosion on the 

Deepwater Horizon, resulted in the deaths of 11 workers, an oil spill of national 

significance, and the loss of the Deepwater Horizon Mobile Offshore Drilling Unit 

(MODU). The grave consequences of this catastrophe underline the importance of 

additional measures to ensure safe operations on the OCS. In consideration of issues 

raised by the testimony, hearings, and reports being released about the DWH explosion 

and oil spill, BSEE is expanding, revising, and adding new requirements necessary for an 

improved SEMS program

The role of SEMS was specifically mentioned by the Presidential Oil Spill Commission. 

The commission recommended the existing SEMS regulations be updated. This rule 

includes those provisions that BSEE believes are most necessary, at reasonable cost, to 

improve the existing SEMS program for OCS operators. The commission 

recommendation related to SEMS is found in the following summary:

The Safety and Environmental Management Program Recommended 

Practice 75 (API RP 75) developed in 1993 by the API and 

incorporated by reference in the Department of the Interior’s new 

workplace safety rules, adopted in October 2010, is a reasonable 

starting point. Updates to those safety rules are needed immediately, 

but a new industry safety institution could make a credible start by 

requiring members to adopt all safety standards promptly—and 

mandating that the companies, in turn, require that their contractors 

and service providers comply with the new safety rules.2

The commission also specifically recommended that BSEE provide protection for 

“whistleblowers” that notify authorities about lapses in safety

3

and expand SEMS

requirements to include regular third-party audits at 3- to 5- year intervals and 

certifications.

4

 Rulemaking provisions include contact information for people to inform 

BSEE of safety or other lapses, and independent audits conducted by an audit service 

provider (ASP) will be required every 3 years. 

 

2 Report of the National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling, Part 

III, Lessons Learned: Industry, Government, Energy Policy 

http://www.oilspillcommission.gov/sites/default/files/documents/FinalReportPartIII.pdf, page 242.

3

Ibid, page 254.

4

Ibid, page 253
5

The USCG joint investigation report emphasized the importance of exercising stop work 

authority (SWA) when an unsafe condition is identified.

5

 While most, if not all operators 

and contractors provide their workers SWA, The BSEE believes SWA needs to be

formally integrated to the SEMS program.

The effectiveness of SEMS was analyzed in the June 2012 report by the Committee on 

the Effectiveness of Safety and Environmental Management Systems for the Outer 

Continental Shelf Oil and Gas Operations from the Transportation Research Board of the 

National Academies - National Research Council6. The Transportation Research Board 

endorsed the SEMS framework and the components added to the OCS SEMS program in 

this rulemaking.

How this rule will meet the need for regulatory action

Under OCSLA, BSEE has the responsibility to assure that operations on the OCS are 

conducted in the following manner:

 Safely by well-trained personnel;

 Using appropriate technology, precautions, and techniques sufficient to prevent or

minimize the likelihood of:

 loss of well control, fires, or spillage; 

 occurrences that cause or threaten to cause damage to the environment or 

to property; or

 occurrences that endanger life or health.

A SEMS program is a comprehensive system to reduce human error and organizational

failures. The 30 CFR 250, subpart S, revisions will strengthen the existing SEMS 

framework built around API RP 75. Many of the provisions in this rulemaking are 

already being implemented by safety conscious OCS operating companies. However, as 

the safety regulator for OCS operations, BSEE needs to ensure that all companies are 

implementing best practices and this regulation will help achieve that outcome. In

addition to those in API RP 75, these additional provisions are necessary for a wellfunctioning SEMS program: 

1. Job Safety Analysis (JSA) – Provides additional requirements for conducting a 

JSA.

2. Auditing - Requires ASPs to conduct all SEMS audits. The ASP must be 

accredited by a BSEE-approved accreditation body (AB).

3. Stop Work Authority (SWA) - Procedures that establish SWA and make 

responsible any and all personnel who witness an activity that is creating imminent risk 

or danger to stop work.

 

5USCG Report of Investigation into the Circumstances Surrounding the Explosion, Fire, Sinking, and Loss 

of Eleven Crew Members Aboard the Mobile Offshore Drilling Unit Deepwater Horizon, Appendix M, 

April 22, 2011.

6Effectiveness of Safety and Environmental Management Systems for Outer Continental Shelf Oil and Gas 

Operations, Committee on Offshore Oil and Gas Facility Inspection Program of the Minerals Management 

Service: A Review, TRB-SSP-09-03 http://www8.nationalacademies.org/cp/projectview.aspx?key=49165
6

4. Ultimate Work Authority (UWA) - Clearly defines requirements establishing 

who has the UWA on the facility for operational safety and decision-making at any given 

time.

5. Employee Participation Plan (EPP) - Provides a participatory environment 

between employees and management in order to eliminate or mitigate hazards on the 

OCS.

6. Reporting Unsafe Working Conditions - Empowers all personnel to report to 

BSEE all possible safety or environmental violation(s), threats of danger, as well as 

possible violations of any other regulation. 

The BSEE believes that integrating these additional provisions into existing operators’

SEMS programs will facilitate a positive safety culture and provide greater protection to 

OCS workers and the environment. This belief is based largely on the DWH explosion 

and oil spill. The investigations into that event resulted in recommendations to include

several elements that are not included in the existing SEMS regulations. Additionally, 

BSEE, with the consultation of outside experts, has determined that these additional 

provisions are important for a well-functioning SEMS program. The Regulatory 

Alternatives section reviews how each of the provisions would improve OCS safety.

Baseline: the world without the regulation

Many companies have used a safety management system such as SEMP (Safety and 

Environmental Management Program) or SEMS for many years. However, SEMS only

became mandatory for OCS operating companies with the publication of the final rule 

Safety and Environmental Management Systems. Per 30 CFR 250.1900(a), full 

implementation of all 13 elements of the SEMS program and compliance with the 

requirements of 30 CFR 250, subpart S, and API RP 75 was required before November 

15, 2011. The regulatory provisions in this rulemaking enhance existing provisions or 

strengthen the existing SEMS program. The mandatory SEMS program is too new to 

compile needed data. Therefore, BSEE is unable to establish a regulatory baseline to 

analyze this rulemaking enhancement to Subpart S.

New Regulatory Provisions and Alternatives

The BSEE has determined that six additional regulatory provisions are necessary for a 

comprehensive SEMS program. These provisions are consistent with the 

recommendations of work groups, panels, or commissions established following the 

Deepwater Horizon event. The regulatory requirements should easily fit into existing or 

developing SEMS programs. They are designed to fill the gaps in the existing SEMS 

regulations in ways that independent experts agree will promote worker safety and 

environmental protection. For example, many companies already include employees in 

SEMS program development, hazards analysis, and JSA development. The SWA and 

reporting unsafe working conditions are also components of safety and SEMS programs 

at many OCS companies. While the UWA and ASP audits of companies’ SEMS 

programs will be new to most operators, these requirements should not be difficult to 

implement for companies committed to a robust SEMS program. 
7

Operators retain flexibility to implement these requirements in a manner that fits with the 

operational culture in their individual companies. For example, the rule allows the 

operator to designate the individual on the facility with UWA rather than prescribing to 

the operator who the individual should be or the position title. The following sections 

outline how the new requirements contribute to the safety of OCS workers and 

summarize BSEE’s evaluation of alternatives for the new regulatory provisions in 30 

CFR 250, subpart S.

Additional requirements for conducting a Job Safety Analysis (JSA) 

(§ 250.1911)

The rule requires the operator to prepare, conduct, and approve JSAs for OCS activities 

identified or discussed in their SEMS program. The JSA is a technique used to identify

risks to personnel associated with their job activities. The JSAs are also used to 

determine the appropriate mitigation measures needed to reduce personnel job risks. The 

revisions made in this final rule make the JSA requirement more performance-based by

allowing the operator to apply the JSA to recurring events, provided that no changes were 

made to the personnel, procedures, equipment, or environmental conditions associated 

with the job. The rule requires JSAs to include all personnel involved with conducting 

the applicable activity. In accordance with § 250.1915, all personnel must be trained in 

how to recognize and identify hazards and how to develop and implement JSAs prior to 

performing a job on the facility. The operator must document this training for 

contractors. 

The training focused on JSA development and implementation should improve an 

operator’s and contractor’s ability to perform an activity in a safe manner. In addition, 

training will provide personnel a better understanding of how a SEMS program addresses 

particular hazards. 

The final rule requires the JSA to include all personnel involved with the applicable job 

activity. The personnel performing the job must be aware of the hazards and sign the 

JSA. The immediate supervisor of the crew actually performing the job needs to conduct 

the JSA, sign the JSA, and make sure all personnel participating in the job sign the JSA. 

The individual designated as being in charge of the facility by the operator must approve 

and sign all JSAs. Having dual levels of involvement/approval in the JSA process 

provides an extra level of safety.

Requiring signatures is an indication by the individuals signing the JSA that they are 

aware of the hazards and will adhere to the recommended mitigations while performing 

and/or supervising the job. This will help minimize the possibility of safety or 

environmental issues. Requiring signatures from all parties is appropriate. The bureau 

has found that not performing a JSA, conducting an incomplete JSA, or not having all 

parties involved in the task participate in the JSA process, have all contributed to 

accidents or Incidents of Noncompliance (INCs). There is no guarantee that requiring 

signatures on the JSA will ensure a better understanding of the proper way to perform the 
8

operation. However, we believe that this process clearly articulates that all personnel 

involved in the job must fully understand the risks, procedures, and expectations of the 

task at hand before initiating work.

These additional requirements for conducting JSAs will emphasize the hazard and risk 

factors identified for a pending operation. The review and sign-off by employees 

performing the operations will also facilitate communication about the risks for a pending 

action among its participants and contribute to a positive safety culture.

Less Stringent Alternative: A less comprehensive alternative is to continue with the 

existing Subpart S requirements in § 250.1911. This approach does not require 

mandatory training. While many companies routinely train their employees on hazards

analysis, hazards analysis training is not currently a SEMS training requirement in BSEE 

regulations.

More Stringent Alternative: A stricter alternative would be for BSEE to require all 

workers to use a standard JSA template and to sign the JSA. The JSA template would 

cover all of the basic areas of concern. This alternative would eliminate important 

regulatory flexibility and prevent operators from designing their JSA in the manner most 

appropriate for the job and their SEMS program.

SEMS Training (§ 250.1915)

The BSEE is specifying additional training requirements so that all OCS personnel are 

trained in accordance with their duties and responsibilities to work safely and are aware 

of environmental impacts. The training requirements included in this rulemaking are:

 How to recognize and identify hazards and the creation and implementation of 

JSAs (§250.1911)

 SWA (§ 250.1930)

 UWA (§ 250.1931)

 EPP (§ 250.1932)

 Reporting unsafe working conditions (§ 250.1933)

The final rule removes the annual frequency requirement from the regulation and only

specifies that personnel must be trained in accordance with § 250.1915. This less 

prescriptive approach allows companies to determine the specific training and frequency

needed for their operations. To estimate the cost compliance, BSEE is estimating that

refresher training on these elements will take about 1 hour and be conducted every 3 

years for OCS employees working over the water. 

The proposed rule only estimated these training costs in the RIA; the compliance costs 

were not included in the PRA analysis. In the final rule, the training costs are included in 

the burden table as part of the PRA analysis and not calculated separately. The BSEE

opted for a less stringent approach in the final rule by not specifying the training 

frequency.
9

Auditing Requirements (§§ 250.1920, 250.1921, 250.1922)

The rulemaking removes the proposed rule option for the operator to use designated and 

qualified operator personnel to perform an audit of the SEMS program. The BSEE has 

removed the definition of designated and qualified personnel from § 250.1903, its 

reference from § 250.1920, and any other location within Subpart S. Operators are now 

required to have their SEMS program audited by an accredited audit service provider 

(ASP). These ASPs, and their personnel, must meet requirements issued by the Center 

for Offshore Safety (COS-02-01 and COS-02-03). We must approve the accreditation 

board (AB) that accredits the ASP. These ABs must meet requirements set forth in 

ISO/IEC 17011 and COS-02-04.

The regulation requires that audits be conducted by an accredited ASP rather than 

providing operators the option of conducting an audit in-house. The BSEE requires that 

the audit team lead be an employee, representative, or agent of the ASP, and must not 

have any affiliation with the operator. This step provides greater assurance that the audit 

results are objective.

No longer allowing a company to lead the audit themselves helps ensure audit objectivity. 

Some companies, through their culture and systems of internal controls, may provide a 

truly independent assessment of their own company’s SEMS program. However, BSEE 

has not identified any obvious metrics to validate that independence.

The BSEE reserves the right to audit an operator’s SEMS program at any time. The 

BSEE will make staff available to initiate audits when a potential weakness in an 

operator’s SEMS program is identified. Weakness identification could occur either 

through an incident or other information received. Additionally, BSEE will be reviewing 

the ASP audits to confirm and learn from SEMS program assessments.

The biggest change between the proposed and final rule concerns the qualification and 

certification of independent third parties performing SEMS audits or serving as audit 

leads. The BSEE eliminated the independent third party process and implemented a new 

process to handle approving auditor teams. We will now approve accreditation bodies 

(ABs) which will accredit ASPs that have the necessary expertise and training to perform 

SEMS audits. Accreditation bodies and ASPs are both required to satisfy various

industry and internationally recognized standards. 

Less Stringent Alternative: Several comments favored allowing companies to 

conduct in-house audits at their discretion. However, this approach creates a potential 

conflict of interest within the company and is not a feature that is conducive to the longterm health and objectivity of SEMS programs.

More Stringent Alternative: A more restrictive approach is to have the Federal 

government conduct all audits. The government is already authorized to conduct audits, 

reviews or visits when it deems they are necessary. We do this in order to determine 

whether a SEMS program addresses all required elements and is effective in protecting 
10

the safety and health of workers, the environment, and preventing incidents. Evaluations 

or visits may be random, or based upon the OCS lease operator’s or contractor’s 

performance. However, having an ASP conduct the audit with periodic BSEE reviews or 

visits will allow a larger number of SEMS audits to be conducted than would be possible 

with the limited resources available for government only audits.

Stop Work Authority (§ 250.1930)

The rule adds a new section requiring operators to create and implement SWA

procedures. Incorporating SWA into a SEMS program will contribute to a positive safety

culture because all employees will have both the responsibility and authority to halt work 

when unsafe conditions are identified. 

This provision ensures that all personnel are given the responsibility and authority to stop 

work when they witness an activity that creates an imminent risk or danger to the health 

or safety of an individual, to the public, or to the environment. When a SWA occurs, the 

rule stipulates that the person in charge of the conducted activity is responsible for 

ensuring the work is stopped in an orderly and safe manner. The rule provides that work 

may be resumed when the individual on the facility with UWA determines that the 

imminent danger or risk does not exist or no longer exists. The decision to resume 

activities would have to be documented in writing as soon as practicable.

A Less Stringent Alternative: A more lenient option is to continue the current 

situation where SWA, even if it is company policy, may not always be clearly and 

repeatedly communicated and implemented by all OCS workers. Many accident reports 

over the years show that injuries, deaths, and pollution events could have been avoided if 

someone at the scene had called for a work stoppage. The BSEE believes that experience 

warrants a universal SEMS SWA component.

More Stringent Alternative: In the case of SWA, in addition to existing 

requirements, BSEE could propose very rigid standards that include redundant reminders 

about workers’ SWA responsibility to stop work if there is any imminent safety risk or 

danger. However, there is no basis for expecting this alternative to meaningfully improve 

awareness over that achieved during routine training and safety meetings.

Ultimate Work Authority (§ 250.1931)

With this rule, BSEE requires that the operators’ SEMS specify who has the UWA on 

their facilities. The individual with UWA will be the individual on the facility with the 

final responsibility for making decisions. Further, the operator needs to ensure that all 

personnel know who is in charge at all times, including when that responsibility shifts to 

a different individual. This could be done, for instance, by posting a notice in a public 

and easily accessible location. 

Section 250.1931(c) requires the SEMS to provide that if an emergency occurs that 

creates an imminent risk or danger to the health or safety of an individual, the public, or 
11

to the environment (as specified in proposed § 250.1930(a)), the individual with the 

UWA is authorized to pursue the most effective action necessary in that individual’s 

judgment for mitigating and abating the conditions or practices causing the emergency. 

This grant of authority assures that necessary actions can and will be taken to deal with a 

serious emergency.

Clarifying UWA on OCS facilities contributes to a positive safety culture by ensuring 

that all employees know and understand the decision-making chain, both during routine 

operations and in the case of an emergency. The UWA requirement also ensures that all 

OCS facilities have a designated individual that has the ultimate authority to make safety

or other critical operational decisions. The operator has discretion to identify an 

individual.

A Less Stringent Alternative: Again, the less stringent alternative is to continue the 

current situation where the lines of authority may not always be clearly communicated to 

all OCS workers. During normal routine operations, this may not be a significant 

problem, but during emergency operations such as the DWH explosion and oil spill, 

confusion about lines of authority can cause inappropriate responses and contribute to 

delays in decision-making. This risk is no longer acceptable.

More Stringent Alternative: A more rigorous approach is to require that the operator 

or “company man” always be onsite and be designated as the ultimate work authority. 

The BSEE believes that this prescriptive requirement is overly intrusive because among 

other things, it would prevent operators from making contractual arrangements with their 

service providers in which a representative of the service provider is assigned ultimate

work authority. We do not believe that requiring redundant oversight in this manner is 

necessary to ensure safety, and it could cause confusion, inadvertently compromising

safety and operating efficiency.

Employee Participation Plan (§ 250.1932)

The EPP provides a participatory environment between employees and management in 

order to eliminate or mitigate hazards on the OCS. This rule requires the operator to 

consult with its employees on the development, implementation, and modification of its 

SEMS program. The SEMS is a dynamic program. Requiring the operator to have an 

EPP will ensure that all employees are involved in updating the SEMS program on an 

ongoing basis. Management must develop a written plan of action regarding how 

appropriate employees, in both an operator’s office and those working on offshore 

facilities, will participate in the SEMS program development and implementation. The 

operator would have to provide personnel access to relevant sections of its SEMS 

program. Management must provide BSEE a copy of the EPP upon request and make it 

available during an audit. The intent of this plan is to foster broad and active employee

cooperation and participation in order to make the workplace safer. 

The EPP adds value to the overall safety of OCS operations because this plan provides 

employees a stake in the development and implementation of an operator’s SEMS 
12

program. This plan engages employees in the field and in the office, bridging a 

significant gap between personnel actually performing OCS operations and those 

planning, managing, and/or monitoring these operations in an onshore office. The EPP 

requirements provide the operator with a significant amount of flexibility to tailor this 

plan to their specific needs. The final rule grants operators 1 year after the effective date

to modify their recordkeeping policies to capture EPP information and have such 

information available to BSEE upon request or in response to an audit.

Less Stringent Alternative: A less burdensome alternative is to allow companies to 

outsource SEMS development or develop it in-house without employee participation. 

Most companies would not implement SEMS in this manner. However, it is possible that 

some companies would seek out this alternative in an effort to only minimally support the 

spirit of SEMS. This alternative is unlikely to be effective since it would not allow the 

employees who are actively engaged in OCS activities to identify workplace issues that 

directly impact them.

More Stringent Alternative: A stricter alternative is to require operators to document 

how each element of their SEMS program (including hazards analysis and JSAs)

incorporates their employees’ input. The BSEE does not believe that this very

prescriptive approach would improve employee acceptance and adoption of a positive 

safety culture.

Reporting Unsafe Working Conditions (§§ 250.1933 and 250.193)

The rule has a reporting unsafe working conditions provision which requires that the 

operator’s SEMS program must include procedures for all personnel to report unsafe 

working conditions in accordance with § 250.193. Any person may report to BSEE any

possible violations of an order, regulation, or any other provision of Federal law relating 

to offshore safety.

 A person is not required to know whether a specific order or regulation has been 

violated.

 All operators must post a notice at the place of employment in a visible location 

frequently visited by personnel that contains the reporting information in 

§ 250.193.

This provision will contribute to a positive safety culture by providing OCS workers an 

avenue outside their company to report unsafe working conditions if they do not feel 

comfortable reporting the situation to authorities in their own operational chain.

A Less Stringent Alternative: A more flexible approach is to continue the current 

situation where the option of reporting unsafe working conditions to BSEE exists, but 

relevant information about filing a report is not required to be routinely communicated to 

employees working offshore. Many companies have their own ombudsman to act as a 

trusted intermediary within the company for safety or other grievances. While this 

practice may work for some operators, we believe that advertising the option to report to 
13

BSEE is necessary so that every offshore worker is reminded they have the ability to 

report unsafe working conditions to the regulator. 

More Stringent Alternative: In the case of reporting unsafe working conditions, we

could propose very dogmatic standards, including repeated reminders and redundant 

postings about the workers’ opportunity to report unsafe working conditions to BSEE. 

We do not believe such overload would provide a meaningful improvement in awareness, 

and therefore conclude that these more stringent requirements are not reasonable.

Regulation’s Compliance Costs

The BSEE determined the annual compliance costs of this regulation by summing the 

Paperwork Reduction Act (PRA) burden estimate of 186,629 hours at $86/hour

($16,050,094) and charges of $1,250,000 for audits for a total of $17.3 million for 

recordkeeping, administration, training, auditing, and related costs. This is a decrease of 

$9.6 million from the $26.9 million estimated in the proposed rule. This reduction in 

compliance costs is primarily due to the removal of the ‘annual’ training requirement for 

JSA’s and the other SEMS provisions.

Table 1 AD73 Compliance Cost Summary (million$)

Recordkeeping, Training,

and Implementation

$16.05

Audit Service Provider (ASP) $1.25

TOTAL: $17.30

The BSEE received comments claiming the estimated compliance costs for the regulation

are underestimated including the following comment from industry trade groups:

“BOEMRE/BSEE has significantly underestimated the cost impacts 

and available resources to implement this proposed rule and the 

initial SEMS rule. Further, operators with existing SEMS in place 

and proven effective have had to make significant modifications to 

meet the new prescriptive requirements of SEMS.”

The BSEE acknowledges that some of the required provisions are prescriptive and will 

cost companies additional resources, but commenters did not provide any specific 

examples of underestimates of the implementation costs for this rulemaking. Absent 

improved information, we have not materially adjusted the compliance cost estimates for 

this rulemaking. 

Recordkeeping, Implementation, and Auditing Costs

The burden table below portrays the expanded, revised, and new requirements added to 

those already approved by OMB. Italics show expansion or revision of existing 

requirements; bold indicates new requirements. 
14

The BSEE is not estimating costs for actual work stoppages if an SWA is employed. 

Most operators already have SWA procedures in place, and prudent operators will stop 

work in the event of an actual hazardous situation with or without the regulatory

requirement. While BSEE added this requirement to the rule to ensure that all operators 

adopt SWA procedures, we expect that the cost of this requirement will be minimal. We 

acknowledge, however, that SWA may be employed by a worker and the resulting work 

stoppage could be a “false alarm.” The BSEE has no method to estimate the cost or 

frequency of an occasional “false alarm” work stoppage. Nevertheless, repeated false 

alarms signal operating or management problems that SEMS is intended to reveal. 

Therefore, any associated understatement of compliance costs should be minor.

Please see either Table 2 for the PRA burden breakout, the rule preamble, or the 

Supporting Statement for a more in-depth discussion about the PRA costs. 

Table 2 Burden Table from AA04 Final Rule, PRA Section

[Expanded/revised in Italics; New in BOLD; and current in normal font]

Citation

30 CFR 

250 

Subpart 

A

Reporting and Recordkeeping Requirement

Hour 

Burden

Average 

No. of 

Annual 

Responses

Additional 

Annual 

Burden 

Hours

193 Report possible hazardous, unsafe working 

conditions, violations, or non-compliance issues; if 

possible submit information/supporting 

documentation.

Burden included 

under 30 CFR 250, 

Subpart A – 1010-

0114.

0

Citation

30 CFR 

250 

Subpart 

S

Reporting and Recordkeeping Requirement Hour 

Burden

Average 

No. of 

Annual 

Responses

Additional 

Annual 

Burden 

Hours

1900-

1933

Expanded

High Activity Operator: Have a SEMS program, and 

maintain all documentation and records pertaining to 

your SEMS program, according to API RP 75, ISO 

17011 in their entirety, the COS-2-01, 03, and 04 

documents as listed in § 250.198, and all the 

requirements as detailed in 30 CFR 250, Subpart S. 

Make your SEMS available to BSEE upon request.

18,708

13 

operators

243,204

3,656 47,528

1900-

1933

Expanded

Moderate Activity Operator: Have a SEMS program, 

and maintain all documentation and records pertaining 

to your SEMS program, according to API RP 75, the 

three COS documents in their entirety, and all the 

requirements as detailed in 30 CFR 250, Subpart S. 

Make your SEMS available to BSEE upon request. 

2,528

41 

operators

103,648

2,393 98,113

1900-

1933

Expanded

Low Activity Operator: Have a SEMS program, and 

maintain all documentation and records pertaining to 

your SEMS program, according to API RP 75, the 

three COS documents in their entirety, and all the 

requirements as detailed in 30 CFR 250, Subpart S. 

Make your SEMS available to BSEE upon request. 

899

76 

operators

68,324

128 9,728

1928(d), 

(e); 1929

Submit Form BSEE-0131. Maintain a contractor 

employee injury/illness log in the operation area, 

10 130 

operators

1,300
15

retain for 2 years, and make available to BSEE upon 

request (this requirement is included in the form 

burden). Inform contractors of hazards.

1911(b)

Expanded

Immediate supervisor must conduct a JSA, sign the 

JSA, and ensure all personnel participating sign the 

JSA. The individual designated as being in charge of 

facility approves and signs all JSAs before job starts.

NOTE: If activity is repeated, the 1stsigned JSA is 

allowed.

10 

mins.

130 

operators x 

365 days x 

6= 

284,700*

47,450

1 min. 4,745

1920(a), 

(b); 1921

Revised

ASP audit for High Activity Operator

ASP audit for Moderate Activity Operator

ASP audit for Low Activity Operator

NOTE: An audit once every 3 years.

13 operators x $60,000 audit = 

$780,000 / 3 = $260,000

4l operators x $30,000 audit = 

$1,230,000 / 3 = $410,000

76 operators x $12,000 audit = 

$912,000 / 3 = $304,000

1920 Notify BSEE with audit schedule 30 days prior to 

conducting your audit.

1 130 

operators 

/once every 

3 years=43 

43 

(rounded)

1920(c); 

1925(a), 

(c);

Submit to BSEE after completed audit, an audit report 

of findings and conclusions, including deficiencies 

and required supporting information/documentation. 

3 44 

operators

132

1920(d); 

1925(c);

Submit/resubmit a copy of your CAP that will address 

deficiencies identified in audit. 

4 10 

submissions

40

1922

NEW

Organization requests approval for AB; submits 

documentation for assessing, approving, 

maintaining, and withdrawing accreditation of 

ASP.

16 3 48

1922

NEW

Make available to BSEE upon request, conflict of 

interest procedures.

15 

mins.

12 

requests

3

1924(b) Make available to BSEE upon request, evaluation 

documentation and supporting information relating to 

your SEMS.

2 130 

operators

260

1924(c) Explain and demonstrate your SEMS during site visit 

if required; provide evidence supporting your SEMS 

implementation.

8 6 

explanation

s

48

1925(a); Pay for all costs associated with BSEE directed ASP

audit approximately 10 percent per operator per 

category: 1 required audit for high operator ($60,000 

per audit x 1 audit = $60,000); 4 required audits for 

moderate operator ($30,000 per audit x 4 audits = 

$120,000; and 8 required audits for low operator 

($12,000 per audit per 8 audits = $96,000) = 13 

required audits per year.

13 BSEE directed ASP audits – for 

a total of $276,000.

1928 

Expanded

(1) Document and keep all SEMS audits for 6 years 

(at least 2 full audit cycles) at an onshore location. 

(2) JSAs must have documented results in writing 

and kept onsite for 30 days, or until release of the 

MODU, retain records for 2 years. (3) All MOC 

records (API RP Sec 4) must be documented, dated, 

and retained for 2 years. (4) SWA documentation 

must be kept onsite for 30 days; retain records for 2 

years. (5) Documentation of employee participation 

must be retained for 2 years. (6) All documentation 

included in this requirement must be made available 

to BSEE upon request.

5 130 

operators

650

2hrs/mo 

x 12 

mos/ yr 

= 24 

hrs

1,007 

manned 

facilities 

24,168 

30 mins. 2,447 

unmanned 

facilities

1,224 

(rounded)
16

1930(c)

NEW

Document decision to resume SWA activities. 8 Once every 

2 wks = 26

208

1933(a)

NEW

Procedures for personnel reports unsafe practices 

and/or possible violations.

Burden covered 

under 30 CFR 250, 

Subpart A 1010-

0114.

0

1933(b)

NEW

Post notice where personnel can view reporting 

information pertaining to possible violations.

15 

mins.

3,454 

facilities

864

CURRENT SUBPART S BURDEN

285,469 

Responses

465,099 

Hours

$12,933,000 Non-Hour 

Cost Burdens [removed]

NEW and EXPANDED BURDEN added to 30 CFR 250, Subpart S

6,946 

responses

186,629

hours

$1,250,000 non-hour 

cost burdens

COMBINED [current, new, and expanded] TOTAL SUBPART S

292,415

Responses

651,728

Hours

$1,250,000 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. 

Executive Order 13563 Analysis – Total Ongoing Estimated SEMS 

Recordkeeping and Implementation Costs

Executive Order 13563 requires each agency to account for “among other things, and to 

the extent practicable, the costs of cumulative regulations.” The BSEE is using the PRA 

burden table for Subpart S to estimate the cumulative cost of SEMS regulations. Due to 

this rulemaking, BSEE estimates a program increase of 186,629 burden hours imposed on 

private sector operators and a non-hour cost burden of $1,250,000. The total PRA hour 

burden inventory for the SEMS program required in 30 CFR 250, subpart S, is estimated 

to be 651,728 hours inclusive of this rulemaking. The total non-hour burden is estimated 

to be $1,250,000 for the cost of paying ASPs to audit SEMS.

The full annual Executive Order 13563 analysis costs of the SEMS requirements in 

Subpart S (this rulemaking and existing requirements) is summarized in Table 3.

 

Table 3 E.O. 13563 Summary Cost

Burden 

Hours

Est. Annual 

Cost

PRA @ $86/hr. 651,728 $56,048,608

Non-Hour Cost Burden $1,250,000 

TOTAL:

 

$57,298,608

Benefits of a SEMS Program and this Regulation
17

The goal of SEMS and this rule is to promote safety and environmental protection during 

OCS activities. The SEMS program was implemented on November 15, 2011, to 

accomplish this goal and to reduce the likelihood of another incident like the DWH 

explosion and oil spill. The BSEE believes this program will reduce the risk and number 

of accidents, injuries, and spills during OCS activities. It is difficult to quantify the 

benefits of lives saved and risks avoided due to this regulation. However, implementing

these requirements will further the goal of avoiding accidents that may result in injuries, 

fatalities, or serious environmental damage. Additional discussion about the benefits of 

SEMS can be found in the final rule for Safety and Environmental Management Systems.

The Transportation Research Board of the National Academies’ study generally concurs 

with our methods and conclusions for this rulemaking.

Benefits of the Regulation 

A review of the most recent BSEE incident data for calendar year 2010 and 2011 in Table 

4 suggests that SEMS is designed to address many of the incidents and contributing 

causes observed across all aspects of OCS operations. 

The data in Table 4 are updated from the results that appeared in the preamble to the final 

SEMS rule (RIN 1010–AD15, 75 FR 63610). Two new categories, “other” and “SWA,” 

were added for the updated analysis.

Table 4 OCS Incidents and Contributing Causes

SEMS 

Element

Number of 

Incidents*

CY 2010 

Incident 

Contributing 

Causes 

CY 2011 

Incident 

Contributing 

Causes 

Hazards 

Analysis

456 18 26

Management 

of Change

217 4 10

Operating 

Procedures

631 5 17

Mechanical 

Integrity

763 15 22

Other 5 9

SWA 

identified

3 5

*Incident totals include past BSEE completed investigations inclusive of 

calendar year (CY) 2010 and 2011.

The largest incident category for both 2010 and 2011 is hazards analysis. This regulation 

addresses one of the root causes of OCS incidents by enhancing JSA as part of the 

hazards analysis requirements. Hazards analysis training will periodically reinforce the 

value and methods for hazards analysis and safe operations. The BSEE has determined,
18

based on the analysis of historical incident data, that this regulatory emphasis should 

substantially enhance OCS safety practices and culture.

Measuring the Future Benefits of SEMS

The BSEE will use two primary methods to assess the effectiveness of SEMS and other 

OCS safety improvements. The first is through SEMS audits and reviews, and the second 

is through analysis of OCS incident data. The BSEE will use audit results to assess 

individual operator performance and the effectiveness of overall efforts to implement the 

SEMS program and culture.

At this point in time, it is premature to report back on any changes in incident trends that 

reflect improvements in the level of safety on the OCS as a result of requiring SEMS. In 

the future, BSEE intends to post non-proprietary audit and enforcement results associated 

with SEMS on our website and share the information through other avenues. 

Net Benefits

The SEMS program revisions in this rulemaking address safety concerns that were not 

covered in the existing SEMS regulation. These revisions are intended to enhance safety 

for offshore workers and provide greater protection of the marine environment through 

additional employee participation in safety procedures, training programs, notification 

obligations, and strengthened safety and SEMS auditing procedures.

It is difficult to absolutely quantify the benefits of the lives saved and risks avoided due 

to this regulation. However, BSEE believes that implementing a comprehensive SEMS 

program will reduce the risk of accidents that could result in injuries, fatalities, and 

serious environmental damage. In addition, increasing a system’s level of safety may 

lead to reduced material losses and enhanced productivity. Some additional benefits 

include:

• 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.

Table 5 Estimated Net Benefits

Item Estimated Cost

The total estimated compliance 

cost for this rule is:

$17.3 million

The total estimated benefits for 

this rule is:

Undetermined

Net Benefit: undetermined
19

The BSEE believes that the additional safety requirements will provide net benefits 

through improved safety and environmental protection; however, for the reasons 

discussed above, we have not monetized or calculated the net benefits of this rulemaking.

Analysis Specific to the Regulatory Flexibility Act

The BSEE is proposing this rulemaking for reasons summarized in the earlier sections,

covering the need for regulatory action and how this rule will meet that need. The 

summary of compliance costs and benefits is provided in the E.O. 12866 analysis. This 

section only includes a summary of the compliance costs that we estimate would impact 

small entities. All components of an Initial Regulatory Flexibility Analysis (IRFA) are 

contained within this RIA.

Small Entities Estimated to be Impacted by this Rulemaking

The provisions in this rulemaking will affect lessees and operators of leases and pipeline 

right-of-way holders in the OCS. This group includes about 130 active Federal oil and 

gas lessees. Small lessees that operate under this rule fall under the Small Business 

Administration's 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, we estimate 65 percent of these companies are small 

entities. This final rule, therefore would affect a substantial number of small entities. 

This rule applies to all OCS operators and oil and gas operations including drilling 

(MODUs), production, construction, well-workover, well-completion, well-servicing, and 

DOI pipeline activities. Based upon BSEE data for OCS lease operators, we estimate that 

approximately 105 out of 130 OCS lease operators currently have active OCS operations. 

The remaining approximately 25 operators do not have ongoing operations (i.e. they are 

operators on recently acquired leases that do not yet have operations). These companies 

would be required to have a SEMS program if the company initiated OCS operations. 

More than 80 percent of these approximately 25 operators operate less than 10 leases and 

almost half of these inactive operators are designated operators on a single lease. We 

have categorized these 25 companies as “low activity” operators for this analysis.

There are many arrangements for sharing project risks and expenses for OCS exploration 

and development projects. These include original and revised ownership agreements 

where the risk, equity, and other operating interest arrangements may be complex. When 

there is an assignment of lease rights among different parties, the Bureau of Ocean 

Energy Management records the OCS lease assignments in a manner similar to county 

court property records. However, for the small entity analysis for this rulemaking, we are 

only looking at the designated operator or operator of record since that is the entity that 

BSEE will hold responsible for all SEMS related compliance.
20

High Activity Operators

The BSEE considers 13 of the 105 active lease operators, high activity operators that 

produce more than 10 million BOE and operate more than 1,000 components. Nine of 

these companies are large entities and 4 are small companies. The average number of 

complexes managed by a high activity operator is 118, and high activity operators 

manage approximately half of all OCS complexes. We estimate the total number of 

employees on complexes of high activity operators is 31,500, compared to 63,000 

employees on all complexes. Therefore, we can conclude that a majority of OCS 

production originates from these high activity operators. Because the drivers for SEMS 

compliance actions and costs are generally the number of complexes and personnel 

working on these complexes, we infer that the high activity operators would bear about 

half of the cost of this rulemaking.

Moderate Activity Operators

The BSEE deems another 41 companies to be moderate activity operators that produce 

more than 1 million BOE and operate more than 100 components. Of these, 20 are large 

companies and 21 are small companies. The average number of complexes managed by 

moderate activity operators is 30. Moderate activity operators operate approximately 40 

percent of OCS complexes. We estimate the total number of employees on complexes 

run by moderate activity operators to be 25,000, compared to 63,000 employees on all 

complexes. Consistent with the above approach, the moderate activity operators thus 

would bear about 40 percent of the cost of this rulemaking.

Low Activity Operators

The BSEE considers the remaining 76 companies low activity operators that did not meet 

the activity level thresholds for high or moderate activity operators. Of these, 18 are 

large companies and 58 are small entities. Only 51 of the 76 have conducted active OCS 

operations within the last 3 years. The remaining 25 hold leases but have not conducted 

active OCS operations within the last 3 years. Consistent with OMB guidance, the PRA 

analysis applies to these 25 inactive operators. While inactive operators may incur an 

information collection burden because they are active leaseholders, they only face the full 

requirements of this rulemaking if they undertake OCS operations. Accordingly, 

compliance costs for meeting training requirements are computed based only on the 

active operator employee count.

Low activity operators have an average of 6 OCS complexes. Low activity operators 

represent almost half of all active operators, but they only operate about10 percent of 

OCS complexes. We estimate that the total number of employees on complexes run by

low activity operators is 6,500. Therefore, the low activity operators would bear about 10 

percent of the cost of this rulemaking.
21

The Estimated Breakdown of Large and Small Company Compliance Costs

Table 6 details BSEE’s estimate of this rulemaking’s impact across operations on leases 

held by high, moderate, and low activity operators for each of the regulatory provisions. 

The estimated costs other than training are the PRA costs obtained from the burden 

summarized in Table 2. The cost estimates are further split between small (less than 500 

employees) and large operators. Factors used to allocate costs include estimated number 

of facilities, estimated number of employees, and number of operators in each activity

category.

Table 6 Calculations: This section describes the cost estimation and allocation 

methodology for a single cell in Table 6. The example explained is for the low activity

small company operator for 30 CFR 250.1933(b) with an estimated cost of $5,058

(reporting unsafe working conditions and posting employees rights for reporting unsafe 

working conditions on OCS facilities). The $5,058 is the estimated cost allocated to low 

activity small companies from the total of $74,390. The cost calculation from the burden 

table for 1933(b) in Table 2 is repeated below.

1933(b) Reporting unsafe 

conditions; Post notice 

where personnel can view 

reporting information in

§ 250.193.

15

mins.

3,454 

facilities

864 hrs. $74,304 = (3,454 facs * 

0.25 hr * $86/hr)

The cost for § 250.1933(b), unsafe working conditions reporting and notice posting is 

determined by using the estimated number of facilities operated by low activity small 

company operators. The BSEE estimates that 235/3,454 complexes are operated by 

companies in this category. This equates to 6.8 percent of the total OCS complexes. 

This yields $5,052 (0.068 * $74,304). Each of the PRA and training costs are allocated to 

the six operator categories using the categories’ estimated share of employees, complexes 

or total active operators.

Table 6 Estimated Compliance Cost by Company Size and Level of Activity ($)

High 

LgCo.

High 

SmCo.

Mod. 

LgCo.

Mod. 

SmCo.

High 

LgCo.

Low 

SmCo.

Totals

1900-1933 

High Activity 

Operator

3,269,926 817,482 4,087,408 

1900-1933

Moderate Activity 

Operator

4,118,304 4,319,414 8,437,718 

1900-1933

Low Activity 

Operator

278,869 557,739 836,608 

1911(b) Supervisor & 

Empl. JSA.

163,228 40,807 79,669 83,559 13,602 27,205 408,070 

1920 Audit for High 

Activity Operator (ea 

3 yrs)

180,000 80,000 260,000 

1920 Audit for 

Moderate Activity 

Operator (ea 3 yrs)

200,000 210,000 410,000 
22

1920 Audit for Low 

Activity Operator (ea 

3 yrs)

72,000 232,000 304,000 

1922 Accreditation 

Board Apprvl.

304 135 675 709 607 1,957 4,386 

1925(a) Directed 

Audit

19,108 8,492 42,462 44,585 38,215 123,138 276,000 

1928 Recordkeeping 

for proposed 

requirements 

(manned facilities)

831,107 207,777 403,925 423,650 70,663 141,326 2,078,448 

1928 Recordkeeping 

for proposed 

requirements 

(unmanned facilities)

42,092 10,523 20,457 21,456 3,579 7,158 105,264 

1930(c) Document 

resumption of SWA 

activities

7,155 1,789 3,492 3,663 596 1,193 17,888 

1933 (c) Post unsafe 

practices contact 

information

29,712 7,428 14,440 15,145 2,526 5,052 74,304 

Total: 4,542,632 1,174,432 4,883,423 5,122,180 480,659 1,096,767 17,300,094 

Table 7 provides the estimated split between small and large entities for this rulemaking. 

This compliance cost summary indicates that small companies would bear approximately

43 percent of the costs of this rulemaking. While this is greater than their share of OCS 

leases, small entities hold 45 percent of leases in the shallow water depths where most 

production facilities are located (98 percent of active platforms are in shallow water); see 

Table 8 and Table 9.

Table 7 Small Company Compliance Cost Summary ($)

Estimated Large Company Cost: 9,906,714 

Estimated Small Company Cost: 7,393,380 

$Total: 17,300,094

Table 8 Lease Ownership among Small and Large Companies (11/1/2010)

Leases 11/01/2010 

(percentage)

Shallow Water 

Leases

Deepwater 

Leases

All 

Leases

Large Co. 55% 92% 80%

Small Co. 45% 8% 20%

100% 100% 100%

Table 9 Gulf of Mexico Active Platforms (02/22/2011)

Water Depth 

in Meters

Active 

Platforms

0 to 200 3,244

201 to 400 20

401 to 800 10

801 to 1000 7
23

1000 and 

Above 26

Identification, to the extent practicable, of all relevant Federal rules that 

may duplicate, overlap, or conflict with the rule.

In response to comments regarding jurisdiction, BSEE has removed the phrase “activities 

that are regulated under BSEE jurisdiction” from the final rule. We have authority under 

the OCSLA to regulate safety and environmental matters associated with oil and gas 

development. This includes, but is not limited to, safety, conducting inspections, and 

assuring that personnel working on the OCS are adequately trained. Nothing in OCSLA 

prohibits us from regulating these areas, even if there is coinciding jurisdiction with

another government entity.

The BSEE has determined that this rule does not create overlap with other Federal agency

regulations. We use MOUs and MOAs with other agencies to coordinate the regulatory

activities for specific types of equipment and processes. These interagency agreements 

do not limit the scope of the SEMS program that must be maintained by the operator 

under these regulations. An operator’s SEMS program should address all oil, gas, and 

sulphur activities arising under the lease and should not be limited to the components 

listed in the interagency agreements. This rule applies to all OCS oil, gas, and sulphur 

facilities.

Small Business Alternatives

This section describes BSEE’s evaluation of any significant alternatives to the rule that 

accomplish the stated objectives of applicable statutes and that minimize any significant 

economic impact of the rule on small entities. This includes alternatives considered, such 

as: 

(1) establishment of differing compliance or reporting requirements or timetables 

that take into account the resources available to small entities; 

(2) clarification, consolidation, or simplification of compliance and reporting 

requirements under the rule for such small entities; 

(3) use of performance rather than design standards; 

(4) any exemption from coverage of the rule, or any part thereof, for such small 

entities.

Alternative compliance or implementation timelines for small entities

The BSEE has determined that the provisions in this rulemaking can easily be integrated 

into OCS operators’ existing SEMS programs. No new capital equipment is required. 

Most of this rulemaking’s compliance cost is for training and to develop and implement 

written procedures for the revisions. For small entities with only a few facilities (low 

activity operators), these new provisions involve minimal cost. For small entities that are 

high and moderate activity operators, the cost would be correspondingly greater. The 
24

BSEE has determined that the extra training and documentation requirements are 

essential for a reliable safety program and delaying implementation is not a viable option.

Consolidation of reporting requirements under the rule for small entities

The SEMS records are normally kept by the operator or their SEMS contractor and not 

routinely provided to BSEE unless there is a specific request. The BSEE may request 

records during a routine or directed audit of an operator’s SEMS program. Records kept 

by the operator are integral to the audit trail for SEMS compliance. The SEMS 

recordkeeping requirements in this rulemaking clarify some of what would be necessary

to ensure compliance with the underlying audit requirement. The amount of reporting 

required for this rule would generally reflect the size of the company.

Use of performance rather than design standards

The SEMS is a performance-based approach. The overarching mechanism used by an 

operator to develop and implement its SEMS program provides avenues of flexibility

including the following: 

1. The operator may apply the JSA to recurring events;

2. The operator has the freedom to select the individual with UWA; and

3. The operator can determine training frequency, training methodology, and the 

training vendor, except in specific cases where certain training requirements are 

specified in Section 7 of API RP 75.

However, the training, notification, and documentation requirements in this rulemaking 

are intentionally prescriptive. The main element of prescription that was added to 

Subpart S was the requirement to conduct a JSA for all tasks addressed in a SEMS. 

While many operators have or would implement the safety provisions in this rulemaking 

or similar procedures, we cannot be certain that all operators would implement 

appropriate measures without prescriptive regulations. This has been demonstrated over 

the past decade where not all OCS operating companies have voluntarily implemented a 

SEMS program. We have not identified alternatives that would provide the same 

assurance across all operators as the requirements under this rule. The BSEE requests 

your comments for any alternative safety measures or programs for OCS operations that 

would confirm universal achievement of the SEMS goal.

Exemption from parts the rule for such small entities

A standard alternative under the RFA is to exempt small businesses from the 

requirements of this rule. The “exemption” or “no action” alternative is not adopted by 

BSEE for this rulemaking. The DWH explosion and oil spill demonstrates that it is 

imperative for BSEE to require that all OCS operators adopt the best safety practices and 

requirements. Offshore operations are highly technical and can be hazardous. Allowing 

entities to delay or be exempt from the provisions in this rulemaking may increase the 

risk from OCS oil and gas operations. The risks are not lower for small entities and 
25

BSEE cannot compromise the safety of offshore personnel and the environment for any

entity including small businesses.

The BSEE may approve the use of alternative procedures to existing regulations under 

provisions found in 30 CFR 250.141. The operator must demonstrate to BSEE that the 

alternative procedure provides an equal or greater level of safety and environmental 

protection as required in the regulations.