2015 Offshore Technology Conference- International Energy Agency
Breakfast
Wednesday, May 6, 2015
Director Brian Salerno Prepared Remarks
Introduction
Good morning. I would
like to start by thanking
Jostein and the IEA for inviting me to participate
in this discussion today (as if you had a choice), as well as
to thank Paul Doucette for moderating the discussion.
I also want
to express our appreciation -from BSEE - to
the International
Energy Agency, for shining a spotlight on the concept of social license to operate
and for highlighting the importance
of international dialog and
cooperation.
These
are important concepts as
they are related and are
indispensable to any serious discussion
on how we approach offshore safety. In that spirit, I will
offer a few thoughts on how
these concepts resonate with BSEE, how
they have influenced our activities in the
past few years, and
how they will help focus
our future efforts.
License to operate – Public trust
Let me begin
with the term – “social license to operate.” This
is not a term in common usage
in the US. One is not likely
to hear it used much in normal
civil discourse, however the underlying concept – public trust – is very much a factor in how the U.S. population
views the industry and quite
frankly, how they view regulators.
Public trust suffered greatly
from the Deepwater Horizon
tragedy. It affected not only the companies directly involved, but the entire industry as well.
It also
affected the regulatory structure in the US. My bureau, BSEE, is a direct outgrowth of that
event, and reflects a strong public expectation that the regulator act
in the public interest, even as it works with
the industry.
Five years after the tragedy,
I would say we are all
still on probation. True, Gulf
of Mexico activity has returned to pre spill levels, in
some areas even exceeding pre-spill levels,
at least
until the recent global
energy downturn. But public unease with offshore
drilling is still there. Expectations are high that industry must
be safe and responsible. And as industry seeks to operate in new areas, these public apprehensions will need to be convincingly addressed.
The
post Deepwater Horizon emphasis
on safety culture is a positive development in this regard. We all feel
the sense of urgency to get this right,
and to drive down risk, and to
honestly provide the reassurance that things
are under control. Ultimately, we will not be judged
by
our good intentions, or the
thickness of our safety
plans – but on outcomes.
The
frequency of deaths,
injuries, and oil spills are the inevitable
indicators of how the public views the industry, and they influence
the public’s willingness to accept offshore
activity.
International cooperation
So how do we
go about achieving
positive outcomes, and thereby build public trust? I mentioned
safety culture. There
has been a lot
of scholarship
done on this and I won’t
try
to summarize it. I will simply assume you
are all acquainted with its principles. I will also add
that there are many
companies that are
very advanced in their approach to safety… companies which reward safety conscious
behavior, and which set priorities
that value decisions
placing a priority on safety.
However, we have not reached a point
where this high level of
safety performance is the expected norm. It still stands
out when you see it! So
how does a regulator contribute to the adoption of a safety culture
approach by industry?
Regulators can encourage
and incentivize safety culture. There has
certainly been a lot of
ink invested in comparisons of the relative merits
of alternative approaches to regulatory oversight - in
particular the degree to which an approach
is prescriptive or performance based,
and which is likely to yield
the best safety results.
We can spend
an
entire session debating where
different regimes fall on that scale,
and
which contribute more effectively to the
desired culture of safety.
Ultimately, though, it’s the
outcomes that matter, and in this regard, we as regulators
are well served by paying
attention to the approaches used by our
international colleagues and
learning what we can from
each other.
That is why BSEE is an
enthusiastic participant in the International
Regulators Forum, where best practices are shared,
standards are compared, and risk
information is circulated.
It is why we have entered into a new international forum among arctic nations,
for sharing perspectives on the unique
challenges inherent in
operations in that region.
It is also
why
we place a great
deal of emphasis on our involvement with Standards Development Organizations. After all, one of the
common elements in all regulatory regimes,
no matter where they fall on the spectrum between
prescriptive and performance
based, is a heavy reliance
on industry standards. These help normalize expectations globally.
Closing gaps
in expectations is a good thing. It
does require a lot of collaboration and a willingness to adjust to new information.
However, do I think we will ever have a globally
homogenous regulatory approach?
NO. There will be commonalities. We will approach the same objectives from
different angles, and ideally end
up in the same place, but building public trust sometimes requires sensitivity to
public expectations of a regulator.
The approach a
regulator takes is inevitably shaped
to some degree by societal
forces. One
must recognize that a full on performance
based regime, no matter its merits,
may look suspiciously like
self-regulation to a skeptical public. I am
not suggesting that it is so, but perceptions do matter.
The key point is that, regardless of approach, we are all interested
in driving down risk,
and that we can learn from each other’s experiences.
Fitness to
operate
One
such area of learning
for us has been in the approach taken by some of our international
colleagues in determining Fitness to Operate. Norway uses
this, as does Brazil. They look at a variety
of factors to determine who
is qualified to engage in
exploration and production
off their coasts.
In fairness, there is
precedent for this in the United
States as well. It is focused on financial fitness, and
it is administered by our
sister agency BOEM. But
what we have learned from
our international colleagues is that there may be
value for us in broadening this concept to account for operational experience and
performance history.
This is still in
the exploratory stages. A lot of work still needs
to be done should we decide
to pursue this in earnest. However,
it stands as an example of how sound
risk management concepts can be shared internationally, and
potentially adapted to local purposes,
and in so doing, serve to normalize
expectations and reduce risk.
Summary
So, just to summarize, social license is
largely dependent upon risk reduction
and demonstrated by sustained safe performance by industry.
International cooperation contributes
to the narrowing of gaps in safety expectations. Industry
standards are a common
denominator in this regard, and bridge differences in regulatory regimes.
International coordination
among regulators not only lends
itself to greater learning,
it may actually contribute to the desired system wide culture of safety within industry
by providing a consistent focus on risk reduction
and
performance measurement.
I thank you
for
your time, and look forward to the Q&A session.