Comments: Damage Assessment
Authors: Donnelly John 
Published: February 2015

Editor's column

The Deepwater Horizon oil spill in the US Gulf of Mexico calls to mind other industry accidents that brought intense public and political scrutiny. Oil and gas industry experts see a general pattern that these incidents follow, with the end result often being that industry procedures and safety measures are improved.

Some of the most visible industry accidents over the past several decades—including the Piper Alpha explosion, Santa Barbara oil spill, and the Exxon Valdez spill—followed a process of litigation, regulation, a tightening of safety standards, and opportunities for the development of new technology. Industry- and government-led inquiries soon follow, even as the discovery process in litigation brings facts to light.

In January 1969, a blowout off the coast of Santa Barbara, California led to a spill of more than 3 million gallons of crude, harming wildlife and miles of beach, and led to a moratorium on offshore drilling. The disaster was considered a major contributor to the growth of the environmental movement in the US. Momentum for major environmental legislation had already been building and, over the next several years, the US Congress passed the National Environmental Policy Act, which required environmental-impact studies, and the clean air and water acts. The effect on the oil and gas industry in adapting to these new regulations was enormous.

In July 1988, an explosion and fire on the Piper Alpha production platform in the North Sea about 120 miles off of Aberdeen killed 167 people in one of the industry’s worst disasters. The UK government-led Cullen Enquiry followed, which made more than 100 recommendations for changes in North Sea safety procedures, all of which were adopted by the industry. The Piper Alpha incident led the industry to adopt a comprehensive risk-analysis system for offshore operations (the Offshore Installations Safety Case Regulations), which remains an important part of North Sea operations.

The 1989 spill of 11 million gallons of oil from the Valdez tanker along Alaska’s southern coast was the largest spill in US history, although just the 40th largest spill worldwide. It caused the industry to mass resources to establish a comprehensive oil-spill response system and led to the use of double-hulled tankers.

Industry observers believe the current incident may lead to sharing of information to determine exactly what happens in these situations and the development of technologies that offer a last line of defense beyond blowout preventers. Already, the industry has formed two task forces, bringing together industry experts to identify best practices in offshore drilling equipment and operations, which will make recommendations to the US Department of the Interior. There is also hope that, as with past incidents, the entire safety culture of the industry is improved, from the large operators down to the smallest of contractors. As one former executive of a major operator commented, “The future of the oil and gas industry will depend on how well we demonstrate a deep-seated safety culture within operating excellence and high quality.”