Federal Register: October 14, 2010 (Volume 75, Number 198)
DOCID: fr14oc10-23 FR Doc 2010-25256
DEPARTMENT OF THE INTERIOR
Veterans Affairs Department
CFR Citation: 30 CFR Part 250
Docket ID: [Docket ID BOEM-2010-0034]
RIN ID: RIN 1010-AD68
NOTICE: Part III
DOCID: fr14oc10-23
DOCUMENT ACTION: Interim final rule with request for comments.
SUBJECT CATEGORY:
Oil and Gas and Sulphur Operations in the Outer Continental Shelf--Increased Safety Measures for Energy Development on the Outer Continental Shelf
DATES: Effective Date: This rule becomes effective on October 14, 2010. The incorporation by reference of the publication listed in the regulations is approved by the Director of the Federal Register as of October 14, 2010. Submit comments on the interim final rule by December 13, 2010. BOEMRE may not fully consider comments received after this date. Submit comments to the Office of Management and Budget on the information collection burden in this rule by December 13, 2010.
DOCUMENT SUMMARY:
This interim final rule implements certain safety measures recommended in the report entitled, ``Increased Safety Measures for Energy Development on the Outer Continental Shelf'' (Safety Measures Report), dated May 27, 2010. The President directed the Department of the Interior to develop the Safety Measures Report to identify measures necessary to improve the safety of oil and gas exploration and development on the Outer Continental Shelf in light of the Deepwater Horizon event on April 20, 2010, and resulting oil spill. To implement the practices recommended in the Safety Measures Report, the Bureau of Ocean Energy Management, Regulation and Enforcement is amending drilling regulations related to well control, including: subsea and surface blowout preventers, well casing and cementing, secondary intervention, unplanned disconnects, recordkeeping, well completion, and well plugging.
SUMMARY:
Interior Department, Bureau of Ocean Energy Management, Regulation and Enforcement
SUPPLEMENTAL INFORMATION
Table of Contents
I. Background
II. Request for Comments on Interim Final Rule and Effective Date III. Overview of Requirements in the Interim Final Rule
IV. Source of Specific Provisions Addressed in the Interim Final Rule
V. Justification for Interim Final Rulemaking
VI. SectionBySection Discussion of Requirements in the Interim Final Rule
VII. Additional Recommendations in the Safety Measures Report Not Covered in This Interim Final Rule
I. Background
This interim final rule promulgated for the prevention of waste and conservation of natural resources of the Outer Continental Shelf, establishes regulations based on certain recommendations in the May 27, 2010, report from the Secretary of the Interior to the President entitled, ``Increased Safety Measures for Energy Development on the Outer Continental Shelf'' (Safety Measures Report). The President directed that the Department of the Interior (DOI) develop this report as a result of the Deepwater Horizon event on April 20, 2010. This event, which involved a blowout of the BP Macondo well and an explosion on the Transocean Deepwater Horizon mobile offshore drilling unit (MODU), resulted in the deaths of 11 workers, an oil spill of national significance, and the sinking of the Deepwater Horizon MODU. On June 2, 2010, the Secretary of the Interior directed the Bureau of Ocean Energy Management, Regulation and Enforcement (BOEMRE) (formerly the Minerals Management Service) to adopt the recommendations contained in the Safety Measures Report and to implement them as soon as possible.
The Safety Measures Report recommended a series of steps to improve the safety of offshore oil and gas drilling operations in Federal waters. It outlined a number of specific measures designed to ensure sufficient redundancy in blowout preventers (BOPs), promote well integrity, enhance well control, and facilitate a culture of safety through operational and personnel management.
The Safety Measures Report recommended that certain measures be implemented immediately through a Notice to Lessees and Operators (NTL). It identified other measures as being appropriate to address through an emergency rulemaking process. The Safety Measures Report recognized that other recommendations would require additional review and refinement through technical reviews by the DOI, through information supplied as a result of the numerous investigations into the root causes of the Deepwater Horizon explosion, and through the longerterm recommendations of DOI strike teams and interagency work groups. The Safety Measures Report recommended that these other measures be addressed through notice and comment rulemaking, as appropriate.
On June 8, 2010, BOEMRE issued an NTL addressing those recommendations identified in the Safety Measures Report as warranting immediate implementation (NTL No. 2010N05Increased Safety Measures for Energy Development on the OCS). This interim final rule clarifies existing regulatory requirements that were addressed by certain portions of NTL No. 2010N05. This rule incorporates specific details included in 2010N05 by codifying these into regulations. The rule does not codify the onetime requirements from NTL No. 2010N05, such as the onetime requirement for recertification of all BOP equipment used in new floating operations, which will be evaluated and considered for future rulemakings as appropriate.
This interim final rule also addresses measures identified in the Safety Measures Report as appropriate for
[[Page 63347]]
implementation through emergency rulemaking, with certain exceptions
discussed later. It also includes other provisions from the Safety
Measures Report that BOEMRE considers appropriate for immediate implementation in this interim final rule.
As provided for in the Safety Measures Report, BOEMRE will continue to review other safety measures. These include items that may be appropriate for rulemaking in the near future, as well as measures that will require further study, whether through DOIled strike teams, interagency workgroups, or other means.
The following table provides a summary of the interim final rule
requirements, estimated annual costs to implement the requirements, and
the operator's ability to comply with the requirements. Additional
discussion on all the requirements follows in the remainder of the preamble.
Summary of Interim Final Rule Compliance
Operator cost to
Citation and requirement Recommendation Applies to implement per Operator ability to comply with
year * requirement
Sec. 250.198(a)(3), All documents Based on NTL No. 2010 All operators........... ................. Administrative provision that does not
incorporated by reference ``should'' N05. impose compliance times beyond the
and ``shall'' mean ``must''. substantive provisions involved.
Sec. 250.198(h)(79), Incorporation Safety Measures Report: All applications for ................. Additional information provision does not
by Reference of API RP 65Part 2 II.B.3.7: Enforce permit to drill (APDs) impose compliance times beyond the
Isolating Potential Flow Zones Tighter Primary **. substantive provisions involved.
During Well Construction. Cementing Practices.
Sec. 250.415(f), Written Safety Measures Report: Submitted with APD. ................. New engineering requirement. BOEMRE
description of how the operator II.B.3.7: Enforce Applies to all APDs. believes that most operators will be able
evaluated the best practices Tighter Primary to comply with this requirement with no
included in API RP 65Part 2. The Cementing Practices. significant delays * * * because this can
description must identify mechanical be completed concurrently with other
barriers and cementing practices to tasks. be used for each casing string.
Sec. 250.416(d), Include schematics Safety Measures Report: Submitted with APD. ................. Information is readily available. Should
of all control systems and control I.B.5: Secondary Applies to all APDs. not delay submission of the APD. pods. Control System
Requirement and
Guidelines.
Sec. 250.416(e), Independent third Safety Measures Report: Submitted with APD. $1,200,000 Because there are multiple engineering
party verification that the blind I.C.7: Develop New Applies to all APDs. firms available to do this work, and
shear rams installed are capable of Testing Requirements. because operators have had advance notice
shearing any drill pipe in the hole. Also in NTL No. N05. of this requirement in both the Safety
Measures Report and NTL No. N05, BOEMRE
believes that most operators will be able
to comply with this requirement with no
significant delay and provide information
in the APD.
Sec. 250.416(f), Independent third Safety Measures Report: Submitted with APD. All
party verification that subsea BOP I.B.2: Order BOP APDs for well with
is designed for specific equipment Equipment Compatibility subsea BOP stack.
on rig and specific well design. Verification for Each Subsea BOP stacks are
Floating Vessel and for usually employed in
Each New Well. Also in deepwater. NTL No. N05.
Sec. 250.416(g), Qualification for Based on NTL No. 2010 N All APDs................ ................. Related to requirements for independent
independent third parties. 05. third party certifications. [[Page 63348]]
Sec. 250.420(a)(6), Certification Safety Measure Report: Submitted with APD. 6,000,000 Because there are multiple engineering
by a professional engineer that II.B.1.3: New Casing Applies to all APDs. firms available to do this work and
there are two independent tested and Cement Design because operators have had advance notice
barriers and that the casing and Requirements: Two of this requirement in both the Safety
cementing design are appropriate. Independent Barriers. Measures Report and NTL No. N05, BOEMRE
This requirement was believes operators will be able to comply
also addressed in NTL with this requirement with no significant
No. N05. delays and provide information in the
APD.
Sec. 250.420(b)(3), Installation of Safety Measure Report: Completed during the 10,300,000 Completed during the casing and cementing
dual mechanical barriers in addition II.B.1.3: New Casing casing and cementing of of the well. Compliance with this
to cement for final casing string. and Cement Design the well. It applies to requirement may minimally increase the
Requirements: Two all wells drilled. time to drill each well.
Independent Barriers.
This requirement was
also addressed in NTL No. N05.
Sec. 250.423(b), The operator must Safety Measure Report: Complied with after the ................. Because operators had advance notice of
perform a pressure test on the II.B.2.5: New Casing installation of each this requirement in both the Safety
casing seal assembly to ensure Installation casing string or liner Measures Report and NTL No. N05, BOEMRE
proper installation of casing or Procedures. This for all wells drilled believes operators should be complying
liner. The operator must ensure that requirement was also with a subsea BOP with this requirement.
the latching mechanisms or lock down addressed in NTL No. stack. It is tested
mechanisms are engaged upon N05. after the installation
installation of each casing string of the casing or liner. or liner.
Sec. 250.423(c), The operator must Safety Measure Report: Tested after running the 45,100,000 Compliance with this requirement will
perform a negative pressure test to II.B.2.6: Develop casing. All wells, increase the time to drill each subsea
ensure proper casing installation. Additional Requirements involves all rigs with well resulting in additional costs.
This test must be performed for the or Guidelines for surface and subsurface BOEMRE estimates several hours of
intermediate and production casing Casing. BOPs in all water additional drilling time for each well.
strings. depths.
Sec. 250.442(c), Sec. 250.515(e), Safety Measure Report: Applies to all subsea ................. All rigs should be able to comply with
Sec. 250.615(e). Have a subsea BOP I.B.5: Secondary BOP stacks. requirement. All rigs currently have ROV
stack equipped with remotely Control System intervention capability; approximately
operated vehicle (ROV) intervention Requirements and 80% of subsea BOP stacks currently have
capability. At a minimum, the ROV Guidelines. This all the specified capabilities. Other 20%
must be capable of closing one set requirement was also are expected to be able to comply
of pipe rams, closing one set of addressed in NTL No. promptly. blindshear rams, and unlatching the N05.
lower marine riser package.
Sec. 250.442(c), Sec. 250.515(e), Safety Measure Report: Ongoing requirement. All ................. BOEMRE believes all rigs operating on OCS
Sec. 250.615(e). Maintain an ROV I.B.6: New ROV subsea BOP stacks are already in compliance.
and have a trained ROV crew on each Operating Capabilities; regardless of water
floating drilling rig on a II.A.1: Establish depth.
continuous basis. Deepwater WellControl
Procedure Guidelines.
Sec. 250.442(f), Sec. 250.515(e), Safety Measure Report: Anytime drilling occurs ................. BOEMRE believes all DP rigs operating on
Sec. 250.615(e). Provide autoshear I.B.5: Secondary with subsea BOP stacks OCS currently comply with this
and deadman systems for dynamically Control System on DP rigs. requirement. positioned (DP) rigs. Requirements and
Guidelines.
[[Page 63349]]
Sec. 250.442(e), Sec. 250.515(e), Safety Measure Report: Ongoing requirement. ................. Requires trained ROV crew; for rigs not
Sec. 250.615(e). Establish minimum II.A.1: Establish Applies to all already in compliance, additional
requirements for personnel Deepwater WellControl personnel that operate training or hiring of new crew may be
authorized to operate critical BOP Procedure Guidelines. subsea BOP stacks. necessary. Additional training could take
equipment. Majority of drilling days to weeks, depending upon how well
rigs that use subsea existing crews are trained. However,
BOP stacks operate in BOEMRE believes no rigs should be
deepwater. operating without adequately trained
personnel.
Sec. 250.446(a), Sec. 250.516(h), Safety Measure Report: Ongoing requirement. All ................. All rigs should be able to comply with
Sec. 250.516(g), Sec. 250.617. I.B.5: Secondary BOP stacks. All water requirement.
Require documentation of BOP Control System depths. inspections and maintenance Requirements and
according to API RP 53. Guidelines.
Sec. 250.449(j), Sec. Safety Measure Report: During the stump test 118,200,000 All rigs should be able to comply with
250.516(d)(8), Sec. 250.616(h)(1). I.B.5: Secondary and initial test on the requirement. This requirement not
Test all ROV intervention functions Control System seafloor. All subsea expected to result in significant delay.
on the subsea BOP stack during the Requirements and BOP stacks. All water Compliance with this requirement will
stump test. Test at least one set of Guidelines; I.C.7: depths. slightly increase the time to drill each
rams during the initial test on the Develop New Testing deepwater well drilled with a subsea BOP,
seafloor. Requirements. resulting in additional costs.
Sec. 250.449(k), Sec. Safety Measure Report: 250.516(d)(9), Sec. 250.616(h)(2). I.B.5: Secondary
Function test autoshear and deadman Control System
systems on the subsea BOP stack Requirements and
during the stump test. Test the Guidelines; I.C.7:
deadman system during the initial Develop New Testing test on the seafloor. Requirements.
Sec. 250.451(i), If the blindshear Safety Measure Report: Emergency activation of 2,600,000 Compliance with this requirement will
or casing shear rams are activated I.C.7: Develop New blind or casing shear increase drilling costs when such an
in a well control situation, the BOP Testing Requirements. rams. emergency occurs.
must be retrieved and fully This requirement was
inspected and tested. also addressed in NTL No. N05.
Sec. 250.456(j), Before displacing Safety Measure Report: Submit with APD or ................. New requirement. Operator should be able
killweight drilling fluid from the II.A.2: New Fluid application for permit to provide this information in APD or APM
wellbore, the operator must receive Displacement Procedures. to modify (APM). All without significant delay.
approval from the District Manager. wells where the
The operator must submit the reasons operator wants to
for displacing the killweight displace killweight
drilling fluid and provide detailed fluids. This could
stepbystep procedures describing occur on all rigs that
how the operator will safely use either a surface or
displace these fluids. subsurface BOP stack.
Could occur with all
water depths.
Subpart O, Sec. Sec. 250.1500 Safety Measure Report: All wells drilled with ................. BOEMRE believes that the majority of
250.1510, Requires that rig II.A.1: Establish subsea BOP stack. operators have addressed this
personnel are trained in deepwater Deepwater WellControl requirement. There should not be any
well control and the specific Procedure Guidelines. delay for this requirement. duties, equipment, and techniques
associated with deepwater drilling.
[[Page 63350]]
Sec. 250.1712(g), Sec. Safety Measure Report: Submitted with APM. All ................. Operator should be able to comply with no
250.1721(h). Certification by a II.B.1.3: New Casing abandonment operations significant delay and provide information
professional engineer of the well and Cement Design regardless of BOP type in application for permit to modify
abandonment design and procedures; Requirements: Two or water depth. (APM). Estimate that this could take an
that there will be at least two Independent Tested operator as much as several days to
independent tested barriers, Barriers. comply with new requirement. Depends on
including one mechanical barrier, operator's internal review process. across each flow path during
abandonment activities; and that the
plug meets the requirements in the
table in Sec. 250.1715.
* Costs that were not provided did not add a meaningful value in comparison of the cost of drilling a well.
** All APDs means all wells drilled with a surface BOP and all wells drilled with a subsurface BOP. Includes all water depths.
*** Requirements noted as ``no significant delay'' are anticipated to require no more than 1 week to achieve compliance. While individually each
activity could take a day and possibly up to 5 days to complete, it is anticipated that companies will build this into their schedules with no resulting overall delay.
Total Estimates of Costs and Benefits
Total Estimated Annual Compliance $183.1 million.
Costs.
Total Estimated Annual Avoided $631.4 millionB *.
Social Costs (Benefits).
* DOI estimated the cost of a hypothetical spill in the future at $16.3
billion, and also estimated the baseline likelihood of a catastrophic
blowout event and spill occurring, based on historical trends and the
number of expected future wells, to be once every 26 years. These
estimates are necessarily uncertain, and are discussed in more detail
in the RIA. Combining the baseline likelihood of occurrence with the
cost of a hypothetical spill implies that the expected annualized
spill cost is about $631 million. This rulemaking will not reduce the
probability of a future spill to zero; therefore, ``B'' in the table
above represents the adjustment in annual avoided social costs
expected from this rulemaking based on the nonzero remaining
probability of a spill after this rule is put into place. Thus, the
difference between the avoided costs with and without their rule
represents its expected benefits. This remaining probability is
uncertain. For example, to balance the $183 million annual cost
imposed by these regulations with the expected benefits, the
reliability of the well control system needs to improve by about 29
percent ($183 million/$631 million). Although we have found no studies
that evaluate the degree of actual improvement that could be expected
from dual mechanical barriers, negative pressure tests, and a seafloor
ROV function test, we believe it reasonable to anticipate that such
measures will increase the reliability of the well control systems,
and therefore that the benefits of this rulemaking justify the costs.
II. Request for Comments on Interim Final Rule and Effective Date
This is an interim final rulemaking with request for comments; it is effective immediately upon publication. The Administrative Procedure Act (APA) requires that an agency publish a proposed rule in the Federal Register with notice and an opportunity for public comment, unless the agency, for good cause, finds that providing notice and soliciting comments in advance of promulgating the rule would be impracticable, unnecessary, or contrary to the public interest (5 U.S.C. 553(b)). BOEMRE determined that there is good cause for publishing this interim final rule without prior notice and comment based on its findings, consistent with preliminary information that is available as a result of investigations into the Deepwater Horizon event, that certain equipment, systems, and improved practices are immediately necessary for the safety of offshore oil and gas drilling operations on the Outer Continental Shelf (OCS), and that these improved drilling practices are either not addressed or not sufficiently detailed by current regulations. Immediate imposition of the requirements contained in this interim final rule is necessary because BOEMRE views strict adherence to improved safety practices set forth herein as necessary to achieving safer conditions that, together with other wild well control and oil spill response capabilities, will allow it to permit future OCS drilling operations. Following notice and comment procedures would be impracticable in these circumstances.
Furthermore, following notice and comment procedures would be contrary to the public interest because the delay in implementation of this interim final rule could result in harm to public safety and the environment. Failure to adhere to the safety practices required by this interim final rule increases the risk of a blowout and subsequent oil spill, with serious consequences to the health and safety of workers and the environment.
As discussed in Section 5, ``Justification for the Interim Final Rulemaking,'' while investigation and informationgathering into the Deepwater Horizon blowout and spill continues, preliminary evidence suggests problems with the Macondo well's line of defense, which could include blowout preventer (BOP) systems, casing and cementing programs, and fluid displacement procedures. Evidence further suggests that it is unlikely that these problems are unique to the Deepwater Horizon event; for example, most BOPs used in drilling on the OCS are of similar design and are produced by a limited number of manufacturers. The interim final rule's provisions thus incorporate targeted measures to promote the integrity of the well and enhance well control, including provisions specifically identified by the Safety Measures Report as warranting immediate implementation. For example, the requirement that operators have all well casing designs and cementing systems/procedures certified by a Professional Engineer.
Similarly, BOEMRE determined that the immediate necessity for
improved equipment, systems, and practices also provides good cause to
impose an immediate effective date. The APA requires an agency to publish a rule not less than 30 days before its effective
[[Page 63351]]
date, except as otherwise provided by the agency for good cause found
and published with the rule (5 U.S.C. 553(d)(3)). Just as BOEMRE found
that providing notice and an opportunity to comment is impracticable
and contrary to the public interest, BOEMRE finds that a 30day delay
after publication of this interim final rule compromises the safety of
offshore oil and gas drilling. To the extent that the 30day period is
intended to allow regulated parties to adjust to new requirements,
information gathered by BOEMRE in advance of this rulemaking indicates
that the oil and gas industry is well aware of the general provisions
in this interim final rule. Most of the provisions in the rule were
identified in the Safety Measures Report, and industry is already working to implement them.
We note that in developing the Safety Measures Report on which this interim final rule is based, the Department consulted with a wide range of experts in state and Federal governments, academic institutions, and industry and advocacy organizations. In addition, the draft recommendations of the Safety Measure Report were peer reviewed by seven experts identified by the National Academy of Engineering (NAE). Further explanation of the justification for this interim final rulemaking is provided in section V, ``Justification for Interim Final Rulemaking.''
While BOEMRE will not solicit comments before the effective date, BOEMRE will accept and consider public comments on this rule that are submitted within 60 days of its publication in the Federal Register. After reviewing the public comments, BOEMRE will publish a notice in the Federal Register that will respond to comments and will either:
1. Confirm this rule as a final rule with no additional changes, or
2. Issue a revised final rule with modifications, based on public comments.
III. Overview of Requirements in the Interim Final Rule
As recommended in the Safety Measures Report, this interim final rule imposes a number of prescriptive, nearterm requirements. Other longerterm safety measures and performancebased standards recommended in the Safety Measures Report will be analyzed for implementation in future rulemakings. Information from the many investigations and other information sources will also be analyzed and considered in future rulemakings. In developing the Safety Measures Report on which this interim final rule is based, the Department consulted with experts in state and Federal government, academic institutions, and industry and advocacy organizations. In addition, draft recommendations were peer reviewed by seven experts identified by the NAE.
The primary purpose of this interim final rule is to clarify and incorporate safeguards that will decrease the likelihood of a blowout during drilling operations on the OCS. The safeguards address well bore integrity and well control equipment, and this interim final rule focuses on those two overarching issues. This rule will therefore promulgate OCSwide provisions that will:
1. Establish new casing installation requirements,
2. Establish new cementing requirements (incorporate American Petroleum Institute (API) Recommended Practice (RP) 65Part 2, Isolating Potential Flow Zones During Well Construction),
3. Require independent third party verification of blindshear ram capability,
4. Require independent third party verification of subsea BOP stack compatibility,
5. Require new casing and cementing integrity tests,
6. Establish new requirements for subsea secondary BOP intervention,
7. Require function testing for subsea secondary BOP intervention,
8. Require documentation for BOP inspections and maintenance,
9. Require a Registered Professional Engineer to certify casing and cementing requirements, and
10. Establish new requirements for specific well control training to include deepwater operations.
As stated, the intent of this interim final rule is to improve safety related to both well bore integrity and well control equipment.
Well bore integrity provides the first line of defense against a blowout by preventing a loss of well control. Well bore integrity includes appropriate use of drilling fluids and the casing and cementing program. Drilling fluids and the casing and cementing program are used to balance the pressure in the borehole against the fluid pressure of the formation, preventing an uncontrolled influx of fluid into the wellbore. The specific provisions in this rule that address well bore integrity are:
1. Incorporating by reference API RP 65Part 2, Isolating Potential Flow Zones During Well Construction;
2. Submission of certification by a Registered Professional Engineer that the casing and cementing program is appropriate for the purpose for which it is intended under expected wellbore pressure;
3. Requirements for two independent test barriers across each flow path during well completion activities (also certified by a Registered Professional Engineer);
4. Ensuring proper installation of the casing or liner in the subsea wellhead or liner hanger;
5. Approval from the District Manager before displacing killweight drilling fluid; and
6. Deepwater well control training for rig personnel.
Well control equipment is the general term for the technologies used to control a well by mechanical means in the event that other well control mechanisms fail. Well control equipment includes control systems that activate the BOPs, either through a control panel on the drilling rig or through Remotely Operated Vehicles (ROVs) that directly interface with the subsea BOP to activate the appropriate rams. The provisions in this rule that address well control equipment include:
1. Submission of documentation and schematics for all control systems;
2. A requirement for independent third party verification that the blindshear rams are capable of cutting any drill pipe in the hole under maximum anticipated surface pressure (MASP);
3. A requirement for a subsea BOP stack equipped with ROV intervention capability. At a minimum, the ROV must be capable of closing one set of pipe rams, closing one set of blindshear rams, and unlatching the Lower Marine Riser Package (LMRP);
4. A requirement for maintaining an ROV and having a trained ROV crew on each floating drilling rig on a continuous basis;
5. A requirement for autoshear and deadman systems for dynamically positioned rigs;
6. Establishment of minimum requirements for personnel authorized to operate critical BOP equipment;
7. A requirement for documentation of subsea BOP inspections and maintenance according to API RP 53, Recommended Practices for Blowout Prevention Equipment Systems for Drilling Wells;
8. Required testing of all ROV intervention functions on the subsea BOP stack during the stump test and testing at least one set of rams during the initial test on the seafloor;
9. Required function testing of autoshear and deadman systems on the subsea BOP stack during the stump test and testing the deadman system during the initial test on the seafloor; and
[[Page 63352]]
10. Required pressure testing if any shear rams are used in an emergency.
The following table shows where recommendations from the Safety Measures Report are implemented in the interim final rule.
Safety measures report
recommendation Interim final rule citation
Subpart AGeneral
II.B.3.7: Enforce Tighter Sec. 250.198 Documents incorporated by reference. Primary Cementing Practices.
Subpart DOil and Gas Drilling Operations
II.B.3.7: Enforce Tighter Sec. 250.415 What must my casing and cementing programs include? Primary Cementing Practices.
I.A.2: Order BOP Equipment Sec. 250.416 What must I include in the diverter and BOP descriptions? Compatibility Verification for
Each Floating Vessel and for
Each New Well.
I.B.5: Secondary Control System
Requirement and Guidelines
I.C.7: Develop New Testing
Requirements
II.B.1.3: New Casing and Cement Sec. 250.418 What additional information must I submit with my APD? Design Requirements: Two
Independent Barriers.
I.C.7: Develop New Testing
Requirements
II.B.1.3: New Casing and Cement Sec. 250.420 What well casing and cementing requirements must I meet? Design Requirements: Two
Independent Barriers.
II.B.1.3: New Casing and Cement Sec. 250.423 What are the requirements for pressure testing casing? Design Requirements: Two
Independent Barriers.
II.B.2.5: New Casing
Installation Procedures
II.B.2.6: Develop Additional
Requirements or Guidelines for
Casing Installation
I.B.5: Secondary Control System Sec. 250.442 What are the requirements for a subsea BOP system? Requirements and Guidelines.
I.B.6: New ROV Operating
Capabilities
II.A.1: Establish Deepwater Well
Control Procedure Guidelines
I.B.5: Secondary Control System Sec. 250.446 What are the BOP maintenance and inspection requirements? Requirements and Guidelines.
I.B.5: Secondary Control System Sec. 250.449 What additional BOP testing requirements must I meet? Requirements and Guidelines.
I.C.7: Develop New Testing
Requirements
I.C.7: Develop New Testing Sec. 250.451 What must I do in certain situations involving BOP equipment or Requirements systems?
II.A.2: New Fluid Displacement Sec. 250.456 What safe practices must the drilling fluid program follow? Procedures.
Subpart EOil and Gas WellCompletion Operations
I.B.5: Secondary Control System Sec. 250.515 Blowout prevention equipment. Requirements and Guidelines.
I.B.6: New ROV Operating
Capabilities
II.A.1: Establish Deepwater Well
Control Procedure Guidelines
I.B.5: Secondary Control System
Requirements and Guidelines and
recommendation.
I.C.7: Develop New Testing
Requirements
Subpart FOil and Gas WellWorkover Operations
I.B.5: Secondary Control System Sec. 250.615 Blowout prevention equipment. Requirements and Guidelines.
I.B.6: New ROV Operating
Capabilities
II.A.1: Establish Deepwater Well
Control Procedure Guidelines
I.B.5: Secondary Control System Sec. 250.616 Blowout preventer system testing, records, and drills. Requirements and Guidelines and
recommendation.
I.C.7: Develop New Testing
Requirements
I.B.5: Secondary Control System Sec. 250.617 What are my BOP inspection and maintenance requirements? Requirements and Guidelines and
recommendation.
I.C.7: Develop New Testing
Requirements
Subpart OWell Control and Production Safety Training
II.A.1: Establish Deepwater Well Sec. Sec. 250.1500250.1510. Control Procedure Guidelines.
Sec. 250.1503 What are my general responsibilities for training?
Subpart QDecommissioning Activities
II.B.1.3: New Casing and Cement Sec. 250.1712 What information must I submit before I permanently plug a Design Requirements: Two well or zone?
Independent Tested Barriers.
II.B.1.3: New Casing and Cement Sec. 250.1721 If I temporarily abandon a well that I plan to reenter, what Design Requirements: Two must I do?
Independent Tested Barriers.
IV. Source of Specific Provisions Addressed in the Interim Final Rule
This interim final rule clarifies existing regulatory requirements
that were addressed by certain portions of NTL No. 2010N05 by
codifying the specific details into regulations. It also addresses
items in the Safety Measures Report either identified as appropriate
for implementation through emergency rulemaking, or which BOEMRE has
determined will significantly increase OCS drilling safety and with
which operators can readily comply. The following provides an explanation of each of these sources and provisions.
Emergency Rulemaking Recommendations From Safety Measures Report
The Safety Measures Report identified four items for emergency rulemaking:
1. Develop secondary control system requirements; [[Page 63353]]
2. Establish new blindshear ram redundancy requirements;
3. Establish new deepwater well control procedure requirements; and
4. Adopt safety case requirements for floating drilling operations on the OCS.
Of these four items, this interim final rule addresses: 1. Secondary control system requirements; and 3. deepwater well control procedure requirements. This interim final rule does not include: 2. New blindshear ram redundancy requirements; and 4. safety case requirements for floating drilling operations on the OCS.
BOEMRE determined that, while new blindshear ram redundancy requirements are important to offshore drilling safety, they are not appropriate for inclusion in this interim final rule. Installation of a second set of blindshear rams will require major modifications to the BOP stack for most rigs on the OCS. Compliance with such a requirement is likely to take operators from 1 year to 18 months. Inclusion of a requirement that will necessitate a period of 1 year or more to comply is not appropriate for an interim final rule, the purpose of which is to have immediate effect. Given the necessary compliance periods, BOEMRE believes there will be sufficient opportunity to proceed through a notice and comment rulemaking. Operators should be aware, however, that BOEMRE intends to promptly initiate a notice and comment rulemaking process to address this issue. Specifically, operators should be aware that BOEMRE is considering regulations to require the installation of a second set of blindshear rams, appropriately spaced to ensure that at least one blindshear ram cuts any drill pipe in the hole and seals the wellbore at any time. Operators should also be aware that BOEMRE is likewise considering requiring, through a notice and comment rulemaking, a set of casing shear rams capable of shearing any casing in the hole.
This interim final rule addresses both new well bore integrity requirements and well control equipment requirements. The well bore integrity provisions impose requirements for casing and cementing design and installation, tighter cementing practices, the displacement of killweight fluids, and testing of independent well barriers. These new requirements ensure that there are additional physical barriers in the well to prevent oil and gas from escaping into the environment. These new requirements related to well bore integrity will considerably decrease the likelihood of a loss of well control. The well control equipment requirements in this interim final rule will help ensure the BOPs will operate in the event of an emergency and that the ROVs are capable of activating the BOPs. Together, these new requirements will help decrease the urgency of immediately requiring blindshear ram redundancy on BOPs, and have factored into BOEMRE's decision to address such requirements through a standard rulemaking process.
BOEMRE also determined not to include safety case requirements for floating drilling operations in this interim final rule. A safety case is a comprehensive, structured documentation system to reduce operating risks for offshore drilling. A drilling safety case would establish risk assessment and mitigation processes to manage a drilling contractor's controls related to health, safety, and environmental aspects of operations. BOEMRE is evaluating how a drilling safety case should be most appropriately integrated with an overall Safety and Environmental Management System (SEMS) approach, which BOEMRE may implement through a separate rulemaking process. As directed in the Safety Measures Report, BOEMRE will work with offshore operators and drilling contractors, appropriate government agencies, and other appropriate stakeholders to consider the type of well construction interfacing document that will best connect the requirements of a safety case to existing well design and construction documents. BOEMRE therefore intends to pursue adoption of appropriate safety case requirements through a separate rulemaking process once the necessary analyses have been completed.
Requirements From NTL No. 2010N05
Of the requirements in this interim final rule, the following table
clarifies existing regulations by codifying provisions of NTL No. 2010 N05:
NTL No. 2010N05 provision Interim final rule citations
Documentation that the BOP has Sec. 250.446 What are the BOP maintenance and inspection requirements?
been maintained according to Sec. 250.516 Blowout preventer system tests, inspections, and maintenance.
the regulations at Sec. Sec. 250.617 What are my BOP inspection and maintenance requirements? 250.446(a), maintain these
records and make them available
upon request (safety report
rec. I.A.1).
Independent third party Sec. 250.416 What must I include in the diverter and BOP descriptions? verification that the BOP stack
is designed for the specific
equipment on the rig and
compatible with the specific
well location, well design, and
well execution plan; that the
BOP stack has not been
compromised or damaged from
previous service; and that the
BOP stack will operate in the
conditions in which it will be
used (safety report rec. I.A.2).
Secondary control system with Sec. 250.442 What are the requirements for a subsea BOP system?
ROV intervention capabilities, Sec. 250.515 Blowout prevention equipment.
including the ability to close Sec. 250.615 Blowout prevention equipment. one set of blindshear rams and
one set of pipe rams and
unlatch the LMRP (safety report
rec. I.B.5).
Emergency shutin system in the Sec. 250.442 What are the requirements for a subsea BOP system?
event that you lose power to Sec. 250.515 Blowout prevention equipment.
the BOP stack, have an Sec. 250.615 Blowout prevention equipment. unplanned disconnection of the
riser from the BOP stack, or
experience another emergency
situation (safety report rec.
I.B.5).
Function test the hot stabs that Sec. 250.449 What additional BOP testing requirements must I meet?
would be used to interface with Sec. 250.516 Blowout preventer system tests, inspections, and maintenance.
the ROV intervention panel Sec. 250.616 Blowout preventer system testing, records, and drills. during the stump test (safety
report rec. I.B.6).
Independent third party Sec. 250.416 What must I include in the diverter and BOP descriptions? verification that provides
sufficient information showing
that the blindshear rams
installed in the BOP stack are
capable of shearing the drill
pipe in the hole under maximum
anticipated surface pressures
(safety report rec. I.C.7).
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If the blindshear rams or Sec. 250.451 What must I do in certain situations involving BOP equipment or casing shear rams are activated systems?
in a well control situation in
which pipe or casing was
sheared, operators must inspect
and test the BOP stack and its
components, after the situation
is fully controlled (safety
report rec. I.C.7).
Have all well casing designs and Sec. 250.420 What well casing and cementing requirements must I meet?
cementing program/procedures Sec. 250.1712 What information must I submit before I permanently plug a certified by a Registered well or zone?
Professional Engineer, Sec. 250.1721 If I temporarily abandon a well that I plan to reenter, what verifying the casing design is must I do?
appropriate for the purpose for
which it is intended under
expected wellbore conditions
(safety report rec. II.B.3).
Certain measures in NTL No. 2010N05 are not included in this interim final rule. These are:
1. Verify compliance with existing BOEMRE regulations and with the BOEMRE/U.S. Coast Guard National Safety Alert (safety report rec. III.A.1).
2. Submit BOP and well control system configuration information for a drilling rig that was being used on May 27, 2010 (safety report rec. I.C.8).
3. Operator must submit the relevant information required in NTL
No. 2010N05 prior to commencing operations if the operator had an
Application for Permit to Drill (APD) or Application for Permit to
Modify (APM) that was previously approved but drilling had not
commenced as of May 27, 2010, and operator may not commence drilling
without BOEMRE approval (general requirement for NTL not specified in Safety Measures Report).
Other Provisions From the Safety Measures Report in This Interim Final Rule
The following provisions in this interim final rule are not covered
in existing NTL No. 2010N05 but are identified in the Safety Measures
Report as being appropriate to implement either immediately or through an emergency rulemaking:
Safety measures report provision Interim final rule citations
Establish deepwater well control Sec. 250.442 What are the requirements for a subsea BOP system?
procedure guidelines (safety Sec. 250.515 Blowout prevention equipment.
report rec. II.A.1). Sec. 250.615 Blowout prevention equipment.
Sec. Sec. 250.1500 through 250.1510 Subpart OWell Control and Production Safety Training.
Establish new fluid displacement Sec. 250.456 What safe practices must the drilling fluid program follow? procedures (safety report rec.
II.A.2).
Develop additional requirements Sec. 250.423 What are the requirements for pressure testing casing? or guidelines for casing
installation (safety report
rec. II.B.2.6).
BOEMRE has also included the following provision in this interim final rule from the Safety Measures Report:
Safety measures report provision Interim final rule
Enforce tighter primary Sec. 250.415 What must my casing and cementing programs include? cementing practices (safety
report rec. II.B.3.7).
This provision is recommended in the Safety Measures Report, although it is not specifically identified as requiring implementation immediately or through emergency rulemaking (this provision was also not addressed in NTL No. 2010N05). BOEMRE has nonetheless determined that it is appropriate for inclusion in this interim final rule because it is consistent with the intent of the recommendations in the Safety Measures Report. Tighter cementing practices will increase the safety of offshore oil and gas drilling operations by improving cementing practices; they also will support the other requirements in this interim final rule.
V. Justification for Interim Final Rulemaking
Pursuant to the Outer Continental Shelf Lands Act (OCSLA), the Secretary has an affirmative obligation to ensure that drilling operations undertaken on the OCS are conducted in a manner that is safe for the human, marine, and coastal environment (43 U.S.C. 1332(6), 1334(a), 1347, and 1348; and 30 CFR 250.106). The April 20, 2010, blowout of the BP Macondo well and the explosion on the Deepwater Horizon killed 11 workers and resulted in the Nation's largest oil spill ever, with substantial environmental and economic impacts.
On May 28, 2010, the Secretary ordered the suspension of certain oil and gas drilling operations in deepwater (greater than 500 feet). On July 12, 2010, the Secretary rescinded that order and replaced it with a new decision ordering the suspension in the Gulf of Mexico (GOM) and Pacific regions of the drilling of wells using subsea BOPs or surface BOPs on a floating facility, with certain exceptions for intervention wells, injection and disposal wells, abandonments, completions, and workovers. This suspension order applies by its terms until November 30, 2010, although the order notes that it could be lifted earlier than that date.
As mentioned previously, on April 30, 2010, the President also
directed the Secretary to conduct a thorough review of the Deepwater Horizon event and to report within 30 days on additional
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measures needed to improve the safety of oil and gas operations on the
OCS. On May 27, 2010, the Secretary delivered the Safety Measures
Report to the President. This Safety Measures Report incorporated
recommendations from BOEMRE, as well as from a wide range of experts
from government, academia, and industry. In developing the Safety
Measures Report on which this interim final rule is based, the
Department consulted with a wide range of experts in state and Federal
government, academic institutions, and industry and advocacy
organizations. In addition, draft recommendations were peer reviewed by seven experts identified by the NAE.
Numerous investigations are ongoing, and the precise causes of the well blowout and explosion are not fully known; however, the fact that a blowout occurred clearly indicates problems with the well's line of defense, which could include BOP systems, casing and cementing programs, and fluid displacement procedures. Accordingly, it is not necessary to await certainty regarding the cause of the blowout before promulgating this interim final rule.
Circumstances suggest that, while a blowout and spill of this magnitude have not occurred before on the OCS, it is unlikely that the problems are unique to the Deepwater Horizon and BP's Macondo well. As noted in the July 12, 2010, decision of the Secretary to suspend certain offshore permitting and drilling activities, most BOPs used in drilling on the OCS are of similar design and are produced by a limited number of manufacturers. Furthermore, the BOPs for the relief wells drilled to intercept the Macondo well encountered unexpected performance problems, initially failing to pass new testing procedures developed in response to the Safety Measures Report, including failure of the deadman and autoshear functions. These multiple failures raise red flags as to the reliability of BOPs to adequately safeguard the lives of workers and protect the environment from oil spills in response to a large blowout. They also suggest the need to review regulations pertaining to well casing and design, the other area of likely failure in the Deepwater Horizon event.
Even without the full results of the pending investigations, the obvious failures of well intervention and blowout containment systems demonstrate that previous regulatory assumptions concerning their reliability are inaccurate. The importance of these systems in preventing catastrophic blowouts and oil spills indicate that genuine harm could result from delay and lead BOEMRE to conclude that immediate regulations are needed to better ensure the reliability of these systems, and to protect the lives of workers, human health, and the environment.
This interim final rule therefore, specifically addresses measures that will increase the safety of these systems. It imposes requirements to give greater certainty that casing and cement design and fluid displacement are adequate for well bore integrity, and to enhance the reliability of well control equipment.
The casing and cementing program and fluid displacement procedures are the first line of defense in preventing a loss of well control that could lead to a blowout. Casing and cement and drilling fluids are used to ensure the fluids in a formation do not enter the wellbore during drilling and completion operations. When a well is completed and production begins, the casing and cement continue to prevent uncontrolled flow of fluids into the wellbore. The integrity of the casing and cement are critical to proper well control. While the extent to which cementing and casing failures contributed to the Macondo blowout is not yet fully known, preliminary information suggests that the operator may have failed to follow best industry cementing and casing installation practices. The current regulations contain general cementing and casing requirements, but they do not specifically address best cementing and casing installation practices. This rulemaking will provide greater assurance that all operators will follow these safer practices, reducing the risk of a loss of well control.
This interim final rule also strengthens requirements for BOPs. In the event of a loss of well control, rig operators use the BOPs to regain control of the well. This is done by closing the various rams on the BOP stack, which shut off the flow of formation fluids to the surface. Secondary well control system requirements (i.e., ROV intervention capabilities and emergency backup BOP control systems) ensure that rig operators are able to activate various BOP rams in the event the control system on the rig fails (e.g., loss of power). Requirements in this interim final rule impose new standards to enhance BOP reliability, thereby lessening the possibility of failures that could lead to an uncontrolled blowout and spill with potentially catastrophic consequences for workers and the environment.
Given the Deepwater Horizon blowout and resulting spill, and because of the potential for grave harm to workers and the human, marine, and coastal environment from any additional events, BOEMRE concludes that existing regulations must be strengthened to more fully protect offshore workers, the environment, and the public, and that this situation justifies immediate imposition of the requirements of this interim final rule.
This interim final rule applies to ongoing operations not covered by the Secretary's July 12, 2010, suspension decision in addition to those operations that were suspended by that decision. Immediate imposition of the requirements of this rule is necessary for both ongoing and suspended operations to ensure that all operations proceed in a more safe and reliable fashion in protection of human health and the environment. The July 12, 2010, suspension expires by its terms on November 30, 2010, and it could be lifted earlier. A standard APA notice and comment rulemaking process would place the effective date of these measures beyond the expiration date of the suspension, which would mean that these operations could resume without the benefit of the new safety measures being in place. Therefore, BOEMRE believes that the delay associated with notice and comment has the potential to harm worker and public health and safety and the environment, and further justifies the immediate implementation of this interim final rule to all OCS drilling operations. To act otherwise has the potential to risk worker and environmental protection with inadequate regulatory coverage.
BOEMRE is cognizant of the fact that the Secretary has the ability to extend the suspension of operations covered by his July 12, 2010, decision, or to apply the suspension to additional operations on the OCS. Immediate application of the safety measures in this interim final rule, however, will improve the reliability of well control systems, thereby allowing all oil and gas operations on the OCS to proceed in a more safe and environmentally sound manner.
BOEMRE believes that much of the oil and gas industry is already
well informed of the general provisions in this interim final rule,
most of which were identified in the Safety Measures Report.
Information gathered by BOEMRE in advance of this rulemaking indicates
that BOP equipment manufacturers, drilling contractors, and operators
are already working to address the recommendations. Establishing these
requirements via an interim final rule will allow these entities to make
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informed financial and operational decisions earlier.
As previously noted, these regulations were developed without the
benefit of the conclusive findings from the ongoing investigations into
the root causes of the explosions and fire on the Deepwater Horizon. In
the future, based on the comments we receive on this rule and the
additional findings of ongoing investigations, BOEMRE may issue
additional regulations or amendments to these regulations that will be
intended to further increase the safety of offshore oil and gas operations.
VI. SectionBySection Discussion of Requirements in the Interim Final Rule
Documents Incorporated by Reference (Sec. 250.198)
Code of Federal Regulations, Title 30MINERAL RESOURCES
BOEMRE is revising the title of Chapter II to, ``CHAPTER IIBUREAU OF OCEAN ENERGY MANAGEMENT, REGULATION AND ENFORCEMENT, DEPARTMENT OF THE INTERIOR.'' On June 18, 2010, the Secretary of the Interior changed the name of the Minerals Management Service (MMS) to the Bureau of Ocean Energy Management, Regulation and Enforcement (BOEMRE). This rule updates the heading of Chapter II in Title 30, Volume 2, of the Code of Federal Regulations to reflect this change.
Paragraph (a)(3) was added to clarify that the documents incorporated by reference into the regulations are requirements. In the National Technology Transfer and Advancement Act of 1995, Congress directed Federal agencies to use technical standards that are developed or adopted by voluntary consensus standards bodies. In Sec. 250.198, BOEMRE incorporates by reference many consensus technical standards including recommended practices, code requirements, and specifications. The effect of incorporating these standards into Federal regulations is confirmed in regulations issued by the Office of the Federal Register (1 CFR 51.9(b)), which requires agencies to inform the user that an incorporated publication is a requirement.
When BOEMRE incorporates a document by reference, any recommendations in the document will be interpreted as requirements, unless otherwise specified. For example, this section incorporates API documents that recommend certain actions using the word should. In the Foreword to its recommended practices, API explains that the word shall indicates that the recommended practice has universal applicability to the specific activity, while the word should denotes a recommended practice where a safe comparable alternative practice is available. Despite this explanation, for API documents incorporated by reference into this part, the terms should and shall mean must. For example, API RP 53, sections 17.10, 17.11, 17.12, 18.10, 18.11, and 18.12, are currently incorporated by reference in Sec. 250.446(a). By adding paragraph (a)(3) to this interim final rule, which explains that the words should and shall both mean must, BOEMRE clarifies to the operators that they must follow all of the provisions of these API RP 53 sections.
Paragraph (h)(79) was added to this section and incorporates by reference API RP 65Part 2, Isolating Potential Flow Zones During Well Construction, First Edition, May 2010. This document contains best practices for zone isolation in wells to prevent annular pressure and/ or flow through or past pressurecontainment barriers that are installed and verified during well construction. Barriers that seal wellbore and formation pressures or flows may include temporary pressure containment barriers like hydrostatic head pressure during cement curing, and permanent ones such as mechanical seals, shoe formations, and cement. Other well construction (well design, drilling, leakoff tests, etc.,) practices that may affect barrier sealing performance are addressed along with methods to help ensure positive effects or to minimize any negative ones. The incorporation by reference of API RP 65Part 2 addresses the Safety Measures Report recommendation II.B.3.7: Enforce Tighter Primary Cementing Practices.
The citations for API RP 53 in Sec. 250.198(h)(63) were updated to include the requirements in Sec. 250.516 and new Sec. 250.617.
A consensus standard indicates acceptance and recognition across the industry that this technology is feasible. For example, in its recommended practice publications, including API RP 65Part 2 and API RP 53, API explains that its publications are intended to facilitate the broad availability of proven, sound engineering, and operating practices. The recommended practices are created with input from oil and gas operators, drilling contractors, service companies, consultants, and regulators; therefore, the recommended practices reflect an agreement that the specified practices and technologies are available and appropriate. Even though the development of a standard does not represent a 100% agreement by the task group members, the process provides a means for industry and regulatory bodies to develop protocols for the highly specialized equipment and procedures used in offshore oil and gas work. BOEMRE would not have the proper resources to develop information included in standards on its own (e.g. deepwater, High Pressure, High Temperature). BOE
FOR FURTHER INFORMATION CONTACT
Amy C. White, Office of Offshore Regulatory Programs, Regulations and Standards Branch, Bureau of Ocean Energy Management, Regulation and Enforcement, 7037871665, amy.white@boemre.gov.