Eyeing BP oil spill, British question if North Sea oil firms also push bounds of safety

The BP oil spill has drawn attention to companies' safety records in the North Sea, where an oil rig explosion killed 167 men three decades ago. A coauthor of a report on that catastrophe says that practices have changed little since then.

By , Correspondent

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    Workers remove containment boom from water contaminated by oil from the Deepwater Horizon oil spill, Friday, near Venice, La.
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As British Petroleum and the US try to rein in the BP oil spill sparked by explosions on the Deepwater Horizon rig, some in Britain allege that lax safety practices in its North Sea oil fields could lead to a similar catastrophe there.

Britain tightened rules on its oil industry, which is centered in the unforgiving waters of Europe’s North Sea, after 167 men were killed in a series of explosions almost exactly 32 years ago on the Piper Alpha oil platform. The platform was run by Occidental Petroleum Caledonia off Scotland's northeast coast.

But as Britain looks for increasingly rare drilling opportunities to ease an economic crunch, oil companies have come under fire for pushing the bounds of environmental responsibility and employee safety standards. Indeed, some oil industry experts say energy companies have largely failed to improve their safety record in the North Sea since the Piper Alpha disaster.

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“There seems to be little evidence of improvements in practices or outcomes,” says Professor Matthias Beck, coauthor of a major study of the Piper Alpha disaster.

Two probes into BP's environmental record arose from chemical spills at facilities operated for BP by Transocean, the same contractor that operated Deepwater Horizon.

Why subcontractors may under-report accidents

North Sea oil reserves powered Britain toward prosperity in the 1980s. But British production of North Sea oil has halved in the past decade, while the country has gone from being comfortably self-sufficient in oil and gas to being a net importer, making it vulnerable to the interruption of energy supplies from abroad.

Against this backdrop, the oil and gas industry insists that Britain's offshore fields could still be delivering 1.5 million barrels a day by 2020. That would be enough to satisfy 35 percent of the country's energy demand, but only if high fuel prices and tax breaks combine to allow backlogged exploration and development projects in the North Sea to move forward again.

Working on tight margins in the North Sea, which is less lucrative than the Gulf of Mexico, oil companies have come to rely heavily on subcontractors. They pay bonuses to subcontractors that demonstrate a low rate of accidents and injuries. But Professor Beck says that such bonuses have become an incentive for subcontractors to hide safety problems.

“The real main issue is under-reporting of accidents and safety issues,” he says. “Conditions in the North Sea are very rough, the natural hazards are much greater than in the Gulf of Mexico and the oil is also expensive, so in a sense it’s one of the less profitable oil provinces.”

Jake Molloy, a trade union representative for oil industry workers, says that “real improvements” in safety culture have been made over recent decades. But he expresses concern about the role played by safety performance related bonuses on drilling operations.

“Just on Wednesday, a lad suffered a serious injury when a piece of equipment hit him in the face and had to go onshore for medical treatment,” he says. “The company then asked him if, on completion of the treatment, he would come into the office – the objective being to disguise the lost time from injury being recorded and ensure that the performance-related bonus was paid.”

BP performed better than Maersk on safety

Over the past five years, British health and safety watchdogs have taken legal action against oil giants including BP, Shell, Total, Chevron, and Maersk, forcing them to fix flaws in their crucial safety and maintenance systems.

The latest reprimand of BP, in 2009, said the multinational had “failed to ensure the safety” of its own employees and others during a mooring operation involving a tanker. The company met a deadline this year to address the technical problem.

BP, which says it has a good overall health and safety record in the North Sea, has received six such warnings since 2007, in contrast with the 24 issued to the Danish conglomerate Maersk. Subcontractor underreporting may be hiding further safety issues, however.

Britain pushes ahead with drilling, despite environmental concerns

Aside from worker safety, wider environmental worries in the North Sea have also come under the spotlight in the wake of Deepwater Horizon's disaster.

Britain’s North Sea neighbor, Norway, this week said it had sufficient concerns to halt all new drilling until a full inquiry is conducted into the cause of BP’s leak.

By comparison, Britain's new coalition government ruled out "for the moment” a moratorium on deep-water exploration – exploration that is part of broader plans to open up new areas of the North Sea for drilling. It did, however, order a doubling of inspections of North Sea drilling rigs.

BP was targeted in two of 10 investigations launched last year following environmental concerns voiced by government inspectors, both of which involved BP subcontractor Transocean.

The British government department behind the inspections says that despite the concern, no actual environmental damage was detected as a result of any of the incidents that have sparked 32 investigations since the beginning of 2007.

“It’s clear that our safety and environmental regulatory regime is fit for purpose,” said the new energy minister, Chris Huhne, in a statement this week. “It is already among the most robust in the world and the industry’s record in the North Sea is strong but the Deepwater Horizon gives us pause for thought and, given the beginning of exploration in deeper waters west of Shetland, there is every reason to increase our vigilance.”

Oil & Gas UK tries to prepare for a North Sea oil spill

Separately, the industry body Oil and Gas UK has established a working group to examine how companies could best prepare for an oil spill in the North Sea.

It remains to be seen whether this, or the government’s doubling of inspections from eight to 16 annually, is enough to satisfy environmentalists who warn that a spill like that of Deepwater Horizon would devastate the entire North Sea.

Ben Ayliffe of Greenpeace expresses particular concern over plans by the coalition’s dominant partner, the Conservative Party, to explore and drill off the Shetland Islands in an area important for whale and dolphin populations. The zone includes a number of conservation areas such as Darwin Mounds, designated for its cold water corals.

Citing some of the language used in Conservative policy documents, he says: “It is hard to see how they could ‘streamline and simplify’ licensing arrangements in such an area, without weakening environmental protection yet further.”

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