is it safer to work offshore, onshore or the fracking OIL & GAS FIELDS in 2014?
We
do not know the answer to that. There is a lot of emphasis on safety,
but
this is most of the time “lip service” than real emphasis on safety.
Taking a million of safety courses will not improve the
safety habits of companies or individuals.
Looking at the number of accidents, near misses, serious accidents and
deadly accidents, we see that people are injured at a very decent rate
in 2014. We have seen lots of fires and explosions, and dropped
tools and falls and corroded pipes and electric fires and so on. But
the biggest culprit of all are all the deadly
and serious accidents caused by driving to/from work and during work (at
the job site).
Traffic accidents are true killers and we do not seem to want to stop them. We still allow drivers working over 12 hours; tired brains will do mistakes and will apply short-cuts to safety. That is a death wish, especially when handling flammable and/or explosive chemicals.
Traffic accidents are true killers and we do not seem to want to stop them. We still allow drivers working over 12 hours; tired brains will do mistakes and will apply short-cuts to safety. That is a death wish, especially when handling flammable and/or explosive chemicals.
Another problem is that most of the accidents are associated with
young and/or inexperienced workers. We
find that they are ill-prepared, ill-trained and not well-assimilated in the
drilling or production team. This has
led to many-many injuries and deaths in 2014.
Many other accidents happen during maintenance work. The over-worked and overstressed equipment are
maintained by people (contractors) unfamiliar with the condition of the
equipment and many explosions, releases and injuries have been caused as a
result.
Perhaps the upcoming slowdown in the development and exploration
of the oilfields will also slowdown the injury and property damage rate. This happened during the great recession and
should also happen now.
On the two year anniversary of the WD 32 deadly platform
explosion, we provide the BSEE report against Black Elk Energy and its
contractors. That report indicated the
numerous safety violations of Black Elk and its contractors and its numerous safety
violations over the years. They played
with "fire" and they caused explosion and death and property damage. All that because of taking short-cuts to safety.
____________________________________________________
BSEE: Black Elk ENERGY, Contractors to Blame
for WD 32 E DEADLY Platform Explosion
The Bureau of Safety
and Environmental Enforcement (BSEE) today released the panel investigation
report into the November 16, 2012 explosion and fire that occurred on a
platform operated by Black Elk Energy Offshore Operations.
The explosion and
fire resulted in the tragic deaths of Ellroy Corporal, Jerome Malagapo, and
Avelino Tajonera, serious injuries to others, and the discharge of pollutants
into the Gulf of Mexico.
The investigation
panel, comprised of professionals from BSEE and the United States Coast Guard,
found these deaths were caused by a number of decisions, actions, and failures
by Black Elk and contractors retained by Black Elk while conducting
construction operations. “These failures reflect a disregard for the safety
of workers on the platform and are the antithesis of the type of safety culture
that should guide decision-making in all offshore oil and gas operations,”
said BSEE Director Brian Salerno. The report concludes that BSEE safety
regulations were not followed, and accordingly BSEE will proceed with
appropriate enforcement actions.
Cause of Explosion/Fire
Black Elk retained a
number of contractors to complete work on the WD 32 complex, including: Compass
Engineering Consultants, L.L.C. (Compass), for management and oversight of the
construction work; Grand Isle Shipyard (GIS), for the provision of workers for
the various construction projects (GIS subcontracted with DNR Offshore and
Crewing Services, Inc. (DNR)); Wood Group Production Services Network (WGPSN),
for the management of the production equipment and performance of
production-related operations; Shamrock, for mechanical services; and
Enviro-Tech Systems, for the removal and replacement of a flotation cell (equipment
used to separate oil and water during production). Each of these contractors was also responsible
for conducting safe operations in compliance with all applicable regulations.
At the time of the explosion, no Black Elk personnel were present at the WD 32
complex. An investigation panel comprised of professionals from BSEE and the
United States Coast Guard (the Panel) conducted an extensive investigation of
the incident and identified a number of causes of the explosion and fire. The
Panel found that the explosion and fire occurred when hydrocarbon vapors
ignited while a GIS/DNR worker was welding on the incoming pipe segment to the
wet oil tank located in the Lease Automatic Custody Transfer (LACT unit) area.
The ignition started
a chain reaction that caused the wet oil tank and two connected dry oil tanks
to explode. These explosions caused the three tanks to separate at their bases,
launching the wet oil tank and the first dry oil tank into the Gulf of Mexico
and blowing the second dry oil tank into the air. The second dry oil tank then
struck the platform crane and landed back on the WD 32 E platform. The
hydrocarbons in all three of the tanks were released onto the platform and into
the Gulf of Mexico. The hydrocarbons on the platform subsequently ignited,
starting a fire on the platform.
The failure to
properly secure the oil tanks, purge their pipelines, and follow established
hot work procedures allowed the flammable vapors to reach a hot work area. The
flammable vapors originating from these oil tanks reached the area where the
GIS/DNR workers were tack welding a flange. Once the vapors were ignited by the
welding work, the flame traveled from tank to tank due to the tanks’ piping
configuration. Due to the headspace in each tank, a combustible atmosphere
inside each tank was created. Once this
combustible atmosphere ignited, the increased pressures created inside each of
the tanks could not be released fast enough through the vent system. These
increased pressure levels exceeded the structural strength of the tanks and
caused the tanks to fail at their base welds. This increased pressure and failure
at the base welds resulted in two of the
tanks breaking away from their base and launching off of the WD 32 E platform, eventually landing in the GOM. The third tank also broke away at its base weld and launched from the platform, however this tank struck the platform crane and landed back on the WD 32 E platform. The liquid contents of all three tanks were released from the bottom of each tank onto the platform and into the GOM. The flames that traveled through the tanks also ignited these hydrocarbons as they were released onto the platform and into the GOM.
Safety stand down
Based on the
findings and recommendations of the panel that operators conduct a “safety
stand down,” Director Salerno strongly requests that all operators with
personnel at manned offshore facilities take this opportunity before the end of
the year to discuss the events that led to this explosion and to ensure their
operations are safe. A safety stand down uses real world examples to illustrate
the potentially tragic consequences that can result from the failure to
consider safety.
In addition to the
safety stand down, Director Salerno has requested that the American Petroleum
Institute assist BSEE in improving safety by issuing standards for “hot work”
that are consistent with the industry’s best practices. This would help to
ensure that there is consistency across the offshore community while increasing
communication within industry on this important topic.
Houston’s
Black Elk Energy had history of violations before fatal fire
Before last week’s
fatal fire at one of Black Elk Energy’s oil production platforms, the
five-year-old firm had racked up more than 300 documented mistakes and
violations offshore, according to federal regulators who cracked down on the
Houston-based company Wednesday.
Federal regulators
threatened to bar Black Elk from working in the Gulf of Mexico if it doesn’t
take immediate steps to improve safety.
The Bureau of Safety
and Environmental Enforcement ordered Black Elk Energy to develop a plan for
boosting the safety of its operations by Dec. 15 and told it to immediately
halt burning, welding and other activities that could ignite fires at its 98 production
facilities in the Gulf of Mexico. Regulators also are barring the firm from
launching operations at facilities that are currently offline.
“Black Elk has
repeatedly failed to operate in a manner that is consistent with federal
regulations,” said James Watson, director of the Bureau of Safety and
Environmental Enforcement that oversees offshore oil operations.
“BSEE has taken a
number of enforcement actions, including issuing numerous incidents of non
compliance, levying civil penalties and calling in the company’s senior
leadership to review their performance and the ramifications of failing to
improve,” Watson added. Wednesday’s action “is an appropriate and necessary
step as we continue to investigate the explosion and fire that resulted in the tragic
loss of life and injuries last week.”
The Nov. 16 explosion
on board Black Elk’s platform roughly 18 miles off the Louisiana coast killed
one worker, critically injured others and left one still missing.
In a statement, Black
Elk spokesman Leslie Hoffman stressed the company’s commitment to safety.
“We appreciate the
perspective of the Bureau of Safety and Environmental Enforcement,” Hoffman
said. “Safety is a high priority for Black Elk Energy, and we will continue to
work cooperatively with local and national federal agencies to understand
exactly what happened with the incident at our rig in the Gulf of Mexico.”
Black Elk’s long
history of violations offshore has been documented in 315 “incidents of
non-compliance” issued by the safety bureau since 2010. On 12 separate
occasions, the agency ordered the company to shut in its facilities because the
violations were considered so severe or life threatening that work could not
safely continue.
During that same
two-year time frame, the safety bureau ordered Black Elk to shut off specific
equipment 145 times because it was too risky to continue operating. The agency
also issued 158 warnings to the company, ordering it to correct violations
identified during inspections of Black Elk’s facilities.
In one case two years
ago, regulators ordered Black Elk to pay a $307,000 fine after the safety
bureau determined the company had not tested a safety valve every six months as
mandated. When it finally was tested, the valve was found to be leaking
excessively — and then it took another 117 days to be repaired or replaced.
In a letter to the
company Wednesday, BSEE said it had documented “numerous troubling safety
incidents involving Black Elk facilities,” including last week’s fatal platform
fire. According to the safety bureau, Black Elk also:
·
was
hit with 45 incidents of non-compliance for violations at nine of its
facilities in the South Marsh Island area of the Gulf of Mexico in October.
·
showed
“disregard for the safety of personnel” in a series of incidents, including an
Oct. 20 accident that sent six workers to the hospital because improper
precautions were taken while an acid-based chemical was used to treat one of
Black Elk’s wells.
Wednesday’s move was
decried by some as too little, too late, and it raised fresh questions about
the effectiveness of safety changes imposed after the 2010 Gulf oil spill.
Bob Dean, an
associate director at the Natural Resources Defense Council, likened the
government’s approach to “locking the gate after the horse has bolted the
barn.”
“This is the right
thing to do,” Dean said. “Unfortunately it comes too late for the killed or
injured workers and their families.”
Marilyn Heimann, with
the Pew Environment Group, said Wednesday’s disclosures show “there is still
more to do on prevention and safety,” two years after the explosion of the
Deepwater Horizon rig claimed 11 lives and launched the nation’s worst oil
spill. “We commend BSEE for their strong response to this incident, but they
still need more resources and support to prevent these problems.”
Dean stressed that
robust inspections and “decisive action” are needed to discourage companies
from cutting corners.
“There’s a difference
between issuing citations and protecting our workers, waters and wildlife,” he
said. In the case of Black Elk, he said, “that’s 300 warnings, 300 red flags,
300 opportunities for authorities to step in and demand better. Why did it take
a tragic disaster for enforcers to step in and connect the dots?”
Although Black Elk
was first formed in 2007, it has only been operating facilities in the Gulf of
Mexico since 2010. In the past year, safety bureau officials have inspected
Black Elk platforms 214 times and well operations on two dozen occasions. The
agency appeared to step up those inspections in recent months.
Some lawmakers on
Capitol Hill have unsuccessfully pushed legislation that would make it easier
to block companies with repeated violations from buying offshore drilling
leases or working on the outer continental shelf altogether.
While federal
regulators already have some latitude, current law limits their powers.
The Interior Department can disapprove or revoke a company’s status as an
operator, but only after determining that the firm’s “operating performance is
unacceptable.” The safety bureau stopped short of issuing a notice of
unacceptable performance on Wednesday.
And while incidents
of non-compliance can kick off a lengthy civil penalty process, fines are
capped at $40,000 per incident per day. Any significant hike in the maximum
fine would be up to Congress; otherwise, current law limits the safety bureau
to making periodic adjustments for inflation.
After the Deepwater
Horizon disaster, the Bureau of Safety and Environmental Enforcement issued
incidents of non-compliance to BP, the London-based company that operated the
failed Macondo well in the Gulf. But the safety bureau did not deem BP’s
overall performance “unacceptable” or move to bar the company from operating
offshore.
BSEE does not
routinely disclose the number of violations logged by oil and gas companies
working offshore or the fines imposed on those firms.
That can foster a
false sense of security about what’s happening offshore, said Jacqueline
Savitz, a senior campaigns director with Oceana.
“You want to think
everything is going smoothly, but the fact of the matter is, when you scratch
the surface, you see there are a lot of problems,” Savitz said.
Following last week’s
platform fire, a Coast Guard search was suspended late Sunday. Black Elk called
off additional searches Tuesday evening, after one body was found.
Inspectors with the
safety bureau have been at the platform securing potential evidence, ensuring
the site is safe and overseeing a cleanup of residual oil that could spill into
the Gulf of Mexico. The Chemical Safety Board, an independent federal agency
that has investigated more than 50 industrial accidents, also has subpoenaed
Black Elk Energy and Grand Isle Shipyard, the contractor working on the
platform at the time of the fire, seeking combustible gas testing results, hot
work permits, safety assessments and other documents.
Scrutiny has focused
on the possibility that a torch ignited flammable materials on the site. Black
Elk CEO John Hoffman said the explosion occurred during maintenance work at the
site, when workers were cutting a water line. He said workers may have used a
cutting torch instead of a saw, igniting flammable vapors in the line and
subsequently triggering an explosion in connected oil tanks.
Activities that
involve burning, welding or other operations capable of starting fires or
explosions — called “hot work” in industry parlance — have been blamed for more
than 60 deaths in the United States over the past two decades. Hot work has
been a major factor in so many industrial accidents that the federal Chemical
Safety Board has warned companies to monitor the amount of flammable gas in the
atmosphere constantly before using burning, welding or other sparking tools.
Founded in 2007 by
Hoffman, a former BP and Amoco executive, Black Elk holds interests in 854
wells connected to 155 platforms spanning the Gulf of Mexico. It is the main
operator on 98 platforms, according to federal records.
The company has
adopted an aggressive acquisition plan that is focused on buying older wells
and facilities. The wells linked to the platform involved in Friday’s accident
date back decades to the 1950s and 1960s.
Those decades-old
facilities come with big maintenance needs, increasing the need for
construction work on the sites and possibly boosting the chance of accidents.
Black Elk’s
acquisition strategy _ along with the platform fire _ appears to have driven
rating agency Standard & Poor’s decision Wednesday to warn investors about
the company’s credit risk.
“The ratings on Black
Elk reflect our view of its ‘vulnerable’ business risk and ‘highly-leveraged’
financial risk, incorporating the company’s small reserve and production base,
high operating costs, and acquisitive growth strategy,” the agency said
Wednesday. “While we do not expect (Friday’s accident) to materially affect oil and gas production or
cash flow, Black Elk has very limited liquidity and we believe little capacity
to absorb unexpected expenses or incurred liabilities.”
The Bureau of Safety and Environmental Enforcement (BSEE)
Issues Report and Enforcement Actions Concerning November 16, 2012 West Delta
Block 32 Fire
Just under a year after the November 16, 2012 rig fire that left
three workers dead, a joint investigative panel of BSEE and the United States
Coast Guard has issued a report regarding the causes of the incident and
recommending various enforcement actions/regulatory responses in the wake of
the incident (“the Report”).
http://www.bsee.gov/uploadedFiles/BSEE/Enforcement/
Accidents_and_Incidents/Panel_Investigation_Reports/Final%20BSEE%20Black%20Elk%20report.pdf.
This Report and the ensuing Incidents of Non-Compliance (INCs) issued by BSEE
are yet another reinforcement of BSEE’s controversial, unprecedented, and
arguably ultra vires extension of its regulatory enforcement jurisdiction to
offshore contractors in addition to its historic and statutorily supported
jurisdiction over OCS operators and lessees.
The explosion and fire occurred around 9:00 AM on November 16,
2012 during welding operations on piping connecting two dry oil tanks and one
wet oil tank on Black Elk’s West Delta Block 32 complex, which included three
platforms (A, D, and E). Platform D consisted of crew quarters; Platform A had
previously handled production from 9 wells that had been plugged and abandoned;
and Platform E, where the explosion and fire occurred, handled production from
6 other producing wells. At the time of the incident, however, the Platform E
wells had been shut in since August of 2012 due to hurricane damage at a nearby
Energy XXI platform, which received all production from Platform E. Black Elk
decided to perform certain upgrade/ maintenance construction work during the
shut-in period, and the welding that led to the incident was part of this work.
The Report concludes that the explosion was caused by sparks
from the welding work igniting residual hydrocarbon vapors in the wet oil tank,
which started a chain reaction explosion in the other two dry tanks and
likewise causes ignition of hydrocarbons elsewhere on the platform. The Report
likewise notes the following violations/safety breakdowns that led to the
explosion and fire:
·
improper issuance of/adherence to hot work
permits;
·
failure to use gas detection equipment prior to
hot work;
·
failure to have properly functioning/maintained
gas detection equipment available;
·
failure to inspect work area prior to hot work;
·
lack of proper project supervision by Black Elk
over its contractors/subcontractors;
·
inadequate project planning/coordination among
Black Elk and its contractors, including inadequate training and communication,
and failure by Black Elk as operator to enforce its Safety and Environmental
Management System(SEMS) during the project, and/or to ensure its contractors’
compliance with its SEMS program;
·
failure of personnel to invoke “stop work”
authority.
As a result of these findings, the BSEE-USCG panel recommended
issuance of multiple BSEE INCs to both Black Elk and three of its contractors (Wood
Group Production Service Network, a production services contractor; Grand Isle
Shipyard, which provided the welders for the work; and Compass Engineering
Consultants, which provided project management services for the construction
work). These INCs include violation of broad based general safety regulations
(i.e. failure to conduct operations in a safe and workmanlike manner and to
adequately protect personnel, 30 C.F.R. §250.1070, as well as task-specific
regulations (i.e. failure to ensure removal of hydrocarbons prior to welding
work, 30 C.F.R. §250.113). In total, the Report recommended 11 INCs each
against Black Elk and Wood Group, and 9 each against Grand Isle and Compass,
but also notes that “[f]urther evidence may reveal additional violations. Under
BSEE regulations, the maximum civil penalty of $40,000.00 per violation per
day. 30 C.F.R. §250.1403. It also bears noting that Black Elk previously issued
its own expert report, which placed blame for the incident squarely on Grand
Isle. http://www.blackelkenergy.com/news/67-explosion-and-fire-on-gulf-platform-occurred-during-welding-contractors-failed-to-follow-standard-safety-practices.html
Following the Report, on November 13, BSEE formally issued 41
INCs to/among Black Elk, Grand Isle, Wood Group and Compass. http://www.bsee.gov/Inspection-and-Enforcement/Enforcement-Programs/Incidents-of-Non-Compliance.aspx
\The Report and the resulting slew of INCs is thus another
emphatic wake-up call that BSEE’s self-proclaimed jurisdiction over offshore
contractors – whether legally valid or not – is a stark reality. That said,
BSEE’s intent to issue INCs to Black Elk’s contractors – in addition to
perpetuating the fundamental question of whether BSEE even has jurisdiction to
do so – raises additional problems.
First, the Report’s discussion of Black Elk’s SEMS breakdowns –
with specific reference to how its contractors’ failed to follow the SEMS
program – begs the question of whether BSEE’s SEMS regulations (including the
time-consuming and expensive process of creating of comprehensive SEMS program
subject to periodic audit) may apply directly to offshore contractors. This
currently unanswered question may soon be emphatically resolved: in its Final
Rule promulgating the SEMS regulations, BSEE stated (in response to a comment)
that it “is evaluating the possibility of requiring contractors to have a SEMS
program while performing operations on the OCS,” and “may address this concept
through future rulemaking.” 78 Fed. Reg. 20423, 20426 (Apr. 5, 2013). In other
words, contractors may soon be directly required by BSEE to have their own
comprehensive SEMS programs. This, in turn, begs the question of whether and to
what extent multiple contractors’ independent SEMS programs may have to be
coordinated, along with the SEMS program of the operator/lessee, to ensure
consistency. The potential for confusion in this area is enormous.
Second, there is a question of whether any BSEE INCs may be
appropriate for the West Delta Block 32 incident because no well operations
were taking place when the incident occurred. By way of precedent, BSEE
previously issued an INC to a lessee on June 22, 2012 related to a
trip-and-fall incident in which a third-party contractor fell aboard a jackup
rig; however, BSEE later rescinded the INC (on written request of the lessee)
on the basis that the rig “was jacked-up on [the lessee’s] lease performing
only construction and maintenance activities,” not well operations. BSEE
Accident Investigation Report Re: June 22, 2012 INC issued to Tarpon Operating
and Development, L.L.C. (Aug. 9, 20122) available at http://www.bsee.gov/uploadedFiles/BSEE/Enforcement/Accidents_and_Incidents/20Jun2012TarponSM50.pdf.
Based on the Report, it appears that the work being performed at the time of
the West Delta Block 32 incident – which the Report itself describes as
“welding work that was being conducted as part of construction operations”
during a long shut-in period – was similarly “only construction and maintenance
activities” just as in the prior case in which the INC was rescinded.
The Report thus highlights the bewildering – not to mention
frustratingly inefficient and expensive – state of regulatory enforcement on
the OCS in the wake of BSEE’s self-ordained jurisdiction over OCS contractors.
Moreover, the apparent discrepancy between the result in the
Tarpon INC – which involved a relatively minor incident – and the result in the
West Delta Block 32 INC – which involved three fatalities – underscores the
inherent vagueness and subjectivity with which BSEE is applying its newly
minted jurisdiction over offshore contractors. Specifically, BSEE has stated
that it will consider four factors in determining whether a contractor’s
conduct was so “egregious” as to merit BSEE enforcement action: (1) whether the
violation implicated health, safety, or environmental concerns; (2) resulting
harm or potential harm from violation with respect to health, safety, and the
environment; (3) foreseeability of such harm; and (4) extent of the
contractor’s involvement in the violation. http://www.bsee.gov/uploadedFiles/Issuance
%20of%20an%20Incident%20of%20Non%20Compliance%20to%20Contractors.pdf.
This amorphous and subjective “egregiousness” standard actually creates even
more confusion than would a simple blanket assertion of contractor
jurisdiction. As is apparent from the Tarpon/West Delta Block 32 INCs, the same
type of activity may or may not give rise to an INC depending on the outcome of
an incident. In other words, BSEE’s jurisdiction over contractors appears to be
result-driven; a violation that results in a minor incident may be ignored
while the same violation resulting in a major incident may lead to a myriad of
INCs. This 20/20 hindsight, result-driven approach leaves industry with no
practical, commercial means of predicting if, how, and by whom they will be
regulated.
It remains to be seen whether and how any of the three
contractors in this case will challenge the INCs issued against them by BSEE.
______________________________________________________________
Black
Elk Energy had more than 300 violations before fatal fire
Before
last week's fatal fire at one of Black Elk Energy's oil production platforms,
the five-year-old firm had racked up more than 300 documented mistakes and
violations offshore, according to federal regulators who cracked down on the
Houston-based firm Wednesday.
The
federal government ordered the company to immediately cease burning, welding
and other activities that could ignite fires at all of its 98 oil and gas
production facilities in the Gulf of Mexico. Regulators also are insisting on a
third-party audit of Black Elk's safety management systems and are barring the
company from launching work at facilities that are currently offline.
"Black
Elk has repeatedly failed to operate in a manner that is consistent with
federal regulations," said James Watson, director of the Bureau of Safety
and Environmental Enforcement that oversees offshore oil operations.
The
move came as federal investigators deepened their probe of what caused an
explosion on Black Elk's West Delta 32 production platform last Friday, killing
a worker, critically injuring others and leaving one still missing.
Black
Elk's long history of violations offshore has been documented in 315 of what
regulators call "incidents of non-compliance" issued by the safety
bureau since 2010. On 12 separate occasions, it ordered the company to shut in
its facilities because the violations were considered so severe or life
threatening that work could not safely continue.
During
that same two-year time frame, the safety bureau ordered Black Elk to shut off
specific equipment 145 times because it was too risky to continue operating.
The agency also issued 158 warnings to the company, ordering it to correct
violations identified during inspections of Black Elk's facilities.
In one
case two years ago, regulators ordered Black Elk to pay a $307,000 fine for
violating testing requirements after the safety bureau determined the company
had not tested a safety valve every six months as mandated. When it finally was
tested, the valve was found to be leaking excessively - and then it took
another 117 days to be repaired or replaced.
Although
Black Elk was first formed in 2007, it has only been operating facilities in
the Gulf of Mexico since 2010. In the past year, safety bureau officials have
inspected Black Elk platforms 214 times and well operations on two dozen
occasions.
"BSEE
has taken a number of enforcement actions, including issuing numerous incidents
of non compliance, levying civil penalties and calling in the company's senior
leadership to review their performance and the ramifications of failing to
improve," BSEE's Watson said. Wednesday's action "is an appropriate
and necessary step as we continue to investigate the explosion and fire that
resulted in the tragic loss of life and injuries last week."
Incidents
of non-compliance can kick off a lengthy civil penalty process that can result
in fines of up to $40,000 per incident per day.
BSEE
detailed its requirements to Black Elk in a letter to the company Wednesday. It
ordered the firm to submit a performance improvement plan detailing the steps
it will take to ensure compliance in its operations. The agency threatened that
if it doesn't see evidence of improved performance, the company could be barred
from operating facilities on the outer continental shelf.
The
safety bureau also asked Black Elk to prove how it had changed procedures and
equipment in response to previous violations to prevent similar incidents on
other facilities.
Black
Elk's history of repeated violations - coming after the 2010 Deepwater Horizon
disaster sparked major changes in the government's regulation of offshore
drilling - raises fresh questions about the adequacy of the federal oversight.
Some lawmakers on Capitol Hill have unsuccessfully pushed legislation that
would bar companies with repeated violations from buying offshore drilling
leases or working on the outer continental shelf altogether.
Federal
regulators have some discretion to take action against companies operating
offshore already, under the terms of the leases they hold with the government.
Black
Elk's history and the platform fire appear certain to revive calls for stiffer
punishments, but any big hike in the maximum fine or other new penalties would
be up to Congress; otherwise, regulators can only raise the fine periodically
to adjust for inflation.
Black
Elk officials did not immediately respond to a request for comment.
According
to safety bureau records, Black Elk was cited for an incident last Aug. 5 that
sent two workers plunging 60 feet into the Gulf of Mexico while a crane was
attempting to lower them in a personnel basket onto a boat. They weren't
injured.
Regulators
also investigated a fire on a Black Elk platform in February 2011 that was
later traced to an improperly enclosed rechargeable battery.
Following
last week's platform fire, a Coast Guard search was suspended late Sunday.
Black Elk called off additional searches Tuesday evening, after one body was
found.
Inspectors
with the Bureau of Safety and Environmental Enforcement have been at the
platform securing potential evidence, ensuring the site is safe and overseeing
a cleanup of residual oil that could spill into the Gulf of Mexico.
The
Chemical Safety Board, an independent federal agency that has investigated more
than 50 industrial accidents, also has subpoenaed Black Elk Energy and Grand Isle
Shipyard, the contractor working on the platform at the time of the fire,
seeking combustible gas testing results, hot work permits, safety assessments
and other documents.
Scrutiny
has focused on the possibility that a torch ignited flammable materials on the
site. Black Elk CEO John Hoffman said the explosion occurred during maintenance
work at the site, when workers were cutting a water line. He said workers may
have used a cutting torch instead of a saw, igniting flammable vapors in the
line and subsequently triggering an explosion in connected oil tanks.
Activities
that involve burning, welding or other operations capable of starting fires or
explosions - called "hot work" in industry parlance - have been
blamed for more than 60 deaths in the United States over the past two decades.
Hot work has been a major factor in so many industrial accidents that the
federal Chemical Safety Board has warned companies to monitor the amount of
flammable gas in the atmosphere constantly before using burning, welding or
other sparking tools.
Founded
in 2007 by Hoffman, a former BP and Amoco executive, Black Elk holds interests
in 854 wells connected to 155 platforms spanning the Gulf of Mexico. It is the
main operator on 98 platforms, according to federal records.
As of
2011, Black Elk recorded estimated total proved oil and natural gas reserves of
45.2 million barrels of oil equivalent, mostly concentrated in the shallow
waters of the Gulf.
Although
the platform where the blaze ignited last week was not producing at the time,
the company has estimated it is capable of producing about 600,000 barrels of
oil equivalent per day.
The
wells linked to the platform involved in Friday's accident date back decades to
the 1950s and 1960s. Federal records indicate the company took over as operator
at the offshore oil lease from Energy XXI GOM in 2011.
______________________________________________________
PRESS RELEASES FROM BLACK ELK
Explosion and fire on Gulf platform occurred during welding;
Contractors failed to follow standard safety practices
Created: 21 August 2013
FOR IMMEDIATE RELEASE
Media Contact:
Dan McGinn
703-312-0140 dan@mcginnandcompany.com
Media Contact:
Dan McGinn
703-312-0140 dan@mcginnandcompany.com
Leslie Hoffman - Black Elk Energy Offshore Operations, LLC
281-598-8660 lhoffman@blackelkenergy.com
281-598-8660 lhoffman@blackelkenergy.com
Houston, TX - 21 August 2013 - An explosion and fire during a
construction project last November on a Gulf of Mexico oil production platform
operated by Black Elk Energy Offshore Operations, LLC occurred after
contractors failed to follow standard safety practices, a third-party
investigator has concluded. The platform is located at West Delta 32 Block in
the Gulf of Mexico, 17 miles south east of Grand Isle, La.
After a thorough eight-month investigation, ABSG Consulting
found that, while production was shut in, workers welded on piping that was
connected to a tank containing crude oil and flammable oil vapors without
following Black Elk Energy's safety practices.
A global leader in safety and risk management, ABSG was
retained by Black Elk Energy to investigate the November 16, 2012 incident that
resulted in the deaths of three workers and injuries to others. ABSG performed
an extensive investigation to determine the causes of the accident, coordinated
its investigation with the U.S. Bureau of Safety and Environmental Enforcement
(BSEE), and provided recommendations to prevent a similar incident in the
future.
"The victims of this tragic accident last November are
always in our thoughts and prayers," said John Hoffman, Black Elk's
President and CEO. "We owe it to them and their families to understand how
this accident happened. With this ABSG report, I am confident we now know the
causes of this tragedy and how to prevent such an accident from ever happening
again."
ABSG found that:
On the day of the incident, workers were welding a flange on
open piping leading to an oil tank that contained flammable vapors. The piping
leading to the tank had not been isolated and made safe for welding activities
as required by Black Elk Energy safe work practices.
Flammable vapors in the piping ignited and within seconds
reached the first oil tank and then two connected tanks.
Black Elk Energy contracted with Grand Isle Shipyard to perform
the construction work. Although Grand Isle committed in its contract to not use
subcontractors on Black Elk Energy projects, all of the workers performing the
welding involved in the incident were employed by DNR Offshore and Crewing
Services, a subcontractor of Grand Isle. ABSG determined that use of the DNR
Offshore subcontractor without notifying Black Elk Energy was one of several
causes of the incident. ABSG also determined other causes were that Grand Isle
and DNR Offshore employees failed to adequately follow safe work practices for
performing welding and failed to stop work when unsafe conditions existed. The
workers involved in the incident were from the Philippines. "Filipino
offshore oil workers have a deserved reputation for competence and
professionalism," Hoffman said. "A serious issue in this case was
Grand Isle's apparent failure to provide proper safety training and appropriate
supervision."
In conducting its investigation, ABSG reviewed thousands of
pages of documents and records; collected and preserved physical evidence from
the platform; performed fire and explosion modeling of the incident; and
utilized industry-accepted causal analysis methodologies to determine the
causes of the incident.
"Over the past eight months we have worked to provide
support for the victims and their families and cooperated with government
officials to analyze the causes of the incident and to implement policy and
procedural improvements to minimize the risk of similar incidents in the
future," Hoffman said.
ABSG Consulting issued its report to BSEE and Black Elk Energy;
it is available here.
About Black Elk Energy Offshore Operations, LLC
Black Elk Energy Offshore Operations, LLC (www.blackelkenergy.com) is an independent
oil and gas company headquartered in Houston, Texas. Our team of professionals
is dedicated to performing to the highest industry safety standards, operating
within and beyond the requirements of the regulations, and maintaining its
stance as a good corporate citizen. The Company's seasoned industry executives
have extensive oil exploitation experience and knowledge with a unique
demonstrated track record of increasing reserves and production.
Safe Harbor Statement
This press release may contain certain "forward-looking
statements" relating to the business of Black Elk Energy Offshore
Operations, LLC ("Black Elk Energy") and its subsidiary companies.
All statements, other than statements of historical fact included herein are
"forward-looking statements." These forward-looking statements are
often identified by the use of forward-looking terminology such as
"believes," "expects" or similar expressions, and involve
known and unknown risks and uncertainties. Although Black Elk Energy believes
that the expectations reflected in these forward-looking statements are
reasonable, they do involve assumptions, risks and uncertainties, and these
expectations may prove to be incorrect. Investors should not place undue
reliance on these forward-looking statements, which speak only as of the date
of this press release. Black Elk Energy's actual results could differ
materially from those anticipated in these forward-looking statements as a
result of a variety of factors, including those discussed in Black Elk Energy's
periodic reports that are filed with the Securities and Exchange Commission and
available on its website at www.sec.gov. All forward-looking statements
attributable to Black Elk Energy or persons acting on its behalf are expressly
qualified in their entirety by these factors. Other than as required under the
securities laws, Black Elk Energy does not assume a duty to update these
forward-looking statements.
Fact Sheet
In response to BSEE's directive by letter of November 21, 2012,
Black Elk Energy:
Implemented a Performance Improvement Plan,
Retained a third party to audit its SEMS, and
Periodically updates BSEE on its progress.
Black Elk Energy's Performance Improvement Plan consists of the
following:
Enhanced work oversight
Staff all drilling, major well work and construction projects
with Onsite Safety Coordinators.
Specific, trained personnel must be present at any work area.
Project Execution Plans are required prior to mobilization.
Refresher training on hazard recognition, job safety analysis
and hot work
Improved contractor management
Measures to reduce the number of INCs
An incentive program for use of Stop Work Authority
Monetary incentives for improved production operations
performance
Black Elk Energy's SEMS audit:
Resulted in BSEE finding that Black Elk's SEMS meets intent of
BSEE regulations and policies, provided Black Elk implements its corrective
action plan
Black Elk Energy has achieved 60% implementation of its plan
Black Elk Energy updates BSEE monthly on implementation
ABSG Consulting issued its report to BSEE and Black Elk Energy;
it is available here.