BSEE 2019 Final Revisions to the Offshore Well Control Rule
On May 2, 2019, the federal Bureau of Safety and Environmental Enforcement (“BSEE”) announced final revisions to its Well Control Rule (“WCR”). BSEE proposed the revisions last year, as discussed in our previous publication. In the final rule, BSEE modified approximately 20% of the WCR’s existing provisions, including elimination of the requirement for a BSEE-approved verification organization (“BAVO”) for third-party certifications and revision of certain well control standards to better align with applicable standards from the American Petroleum Institute (“API”). However, the overhaul left many rules untouched, notably preserving a specified default “drilling margin,” the amount of mud and fluid that must sit over a well as it is being drilled to control potential pressure surges that could lead to a blowout. The revisions to the WCR were published in the Federal Register on May 15 and become effective on July 15.
Elimination of the BAVO System
The final rule replaces references to BAVOs with references to independent third parties. While BSEE affirms the importance for independent third parties to be qualified to perform the required work, the agency highlights how the independent third party must meet a list of particular qualifications and is required to be a technical classification society, licensed professional engineering firm, or a registered professional engineer capable of providing the required certifications and verifications. As BSEE expects most approved BAVOs would be drawn from the group already used as independent third parties, the agency has determined that the BSEE-approval process would not provide significant meaningful improvements to operational safety or environmental protection.
Alignment of Standards with API
The final rule removes or modifies certain prescriptive requirements to align with specified standards from the API. These API standards — including API Standard 53, regarding the installation and testing of blowout prevention devices (BOPs), and API RP 17H, regarding remotely operated vehicle interfaces on subsea production systems — are incorporated into the final revisions; therefore, BSEE notes that removing its own regulatory requirements helps to prevent redundancy and ambiguity in the WCR.
Although BSEE did not propose changes to the WCR’s drilling margin requirements, the agency did solicit comment on the issue. Many commenters recommended replacing the requirement with a performance-based standard, with margins being established based on data and analyses specific to each well. Ultimately, BSEE decided not to revise the default drilling margin of 0.5 pounds per gallon in the final rule, while keeping in place the option for operators to seek individual approvals for lower margins in specific instances. Moreover, based on comments received, BSEE decided to revise the rule to allow operators the option of submitting the request for approval of a lower drilling margin before submitting an Application for Permit to Drill.
BSEE’s discussion of the final revisions also touches on BOP shearing and testing requirements. The shearing mechanism allows a well that has lost control to be “cut off” or sealed from continued flow. While the agency had originally proposed certain revisions to shearing requirements to increase operator flexibility, BSEE ultimately determined that some of the proposed revisions would introduce potential ambiguities into the requirements. Therefore, the only major change to shearing requirements was the removal of the requirement for a separate mechanism to center a pipe within the shearing blades. If more feasible, the positioning capability may now be accomplished by the shear ram itself.
BSEE also solicited input regarding testing frequency for BOPs. The agency received a wide array of comments, including some data that supported a 21-day testing frequency. After reviewing the rationale for a 14-day frequency, BSEE decided to permit a 21-day testing frequency with approval by the agency. This approval requires operators meet certain criteria and demonstrate that they have developed a monitoring plan.
BSEE’s revisions to the WCR targeted the removal of redundancies and ambiguities while leaving the majority of the rule intact. The changes that were made are designed to allow for greater operational agility without sacrificing safety or environmental protection.
Visit our website to learn more about V&E’s Environmental & Natural Resources practices. For more information, please contact Vinson & Elkins lawyers Larry Nettles, George Wilkinson, Larry Pechacek, or Austin Pierce.
This information is provided by Vinson & Elkins LLP for educational and informational purposes only and is not intended, nor should it be construed, as legal advice.