NOPSEMA's expectations of industry to improve oil spill response

Article published in the Regulator | Issue 3: 2018

Offshore petroleum exploration and production operations often consist of inherently high-risk activities with potentially catastrophic consequences for the workforce and environment in the very unlikely event of a loss of containment incident. It is therefore imperative that the regulatory regime requires that activities are appropriately managed to reduce risks to the health and safety of the workforce and environment to as low as reasonably practicable (ALARP).

To demonstrate that an activity’s risks to the environment will be reduced to ALARP, a titleholder must provide reasoned and supported arguments in their environment plan that shows no other practical measures could reasonably be taken to reduce the activity’s environmental risks unless they entail a grossly disproportionate impost in comparison to the reduction in risk. It is NOPSEMA’s view, based on observations during plan assessments, petroleum environment inspections and ongoing monitoring of changes in technology and innovation, that many titleholders can improve their oil spill response arrangements and/or strengthen their ALARP position.

When it comes to oil spill response, titleholders should focus firstly on stopping the flow of the oil (e.g. killing the well), while controlling the source of the spill (e.g. capping and/or containment of the well), before recovering and/or treating the oil (e.g. using dispersant). This prioritisation is supported by the fact that beyond stopping the flow of oil, the greatest environmental benefit from response actions is achieved through the direct recovery and treatment of the spilled oil at its source.

Historical oil spills provide some information on the prioritisation of different response actions and their varying contribution to reducing environmental impacts. Information from the Deepwater Horizon blowout shows the contribution of response actions to minimise consequences of escaping oil decreased the further away those actions got from the source of the spill, for example, direct oil recovery from the wellhead accounted for 17% of spilled oil, chemical dispersion 16%, burning 5% and skimming 3%.

Mitigation measures further from the source of the oil spill cannot, of course, be ignored. While these measures (e.g. shoreline clean-up) are often more remedial in nature they can serve to reasonably reduce the extent and duration of an oil spill’s environmental consequences. Measures must be taken, where feasible, to prevent sensitive receptors (e.g. marine parks and wildlife) from being affected from an oil spill. These situations are often in state waters and as such titleholders should ensure their arrangements can be implemented in partnership with the relevant state authorities.

Continual improvement is central tenet of the objective-based offshore petroleum regulatory regime. This means that titleholders are required to regularly examine their arrangements to identify and implement possible improvements, such as the adoption of emerging technologies and/or meeting the increasing expectations of the community. From its unique position as regulator, it is evident to NOPSEMA that while small improvements are possible at a titleholder-by-titleholder level, substantive improvement requires industry-wide or collective action. Given the rarity, but potential catastrophic consequences, of a major oil spill, it is NOPSEMA’s view that industry should seek to adopt more cooperative arrangements for oil spill response. NOPSEMA sees no significant legislative barriers prohibiting such arrangements provided legislative duties (e.g. financial assurance or ‘polluter pays’) are met. In fact, NOPSEMA recognises that such arrangements may allow improved mitigation measures to be adopted that would otherwise be out of reach for a single titleholder. Over the medium to longer term, NOPSEMA expects titleholders to evaluate additional, alternate and improved cooperative oil spill response arrangements to further reduce environmental risks and strengthen their ALARP position.

It is important that this evaluation reflects the environmental benefits of such arrangements (e.g. mitigating environmental consequences) and fairly represents the impost (cost among other factors) associated with the approach of sharing the arrangements across multiple activities and titleholders. Since 2017, NOPSEMA has been working with titleholders through its Spill Risk Cooperative Forum to assist understanding and promote awareness of continual improvement opportunities in oil spill response. Oil spill focal points within titleholder companies are encouraged to contact NOPSEMA at environment@nopsema.gov.au for more information.

The timeliness of a titleholder’s response is critical as even small reductions in the commencement of response strategies can prevent the discharge or recovery of thousands of cubic metres of oil. At times, titleholders downplay the significance of small improvements in timeliness by referring to the total volume of spilled oil. NOPSEMA discourages this approach as even a small amount of spilled oil is of great concern to the regulator and the Australian community. The adoption of enhanced cooperative oil spill response arrangements offers increased scope to improve the timeliness of response actions through improved access to and mobilisation of equipment and resources. 

Regardless of the approach the industry chooses to adopt to achieve continual improvement in oil spill response, it is imperative that the decisions made are evidence-based so they may stand up to regulatory scrutiny and address community expectations. Titleholders are strongly discouraged from trying to find new ways to justify their existing capability in their ALARP demonstrations. Rather, it is more productive and reflective of a responsible industry, to objectively examine their arguments to demonstrate ALARP alongside the oil spill arrangements that are already in place to ensure their capability to respond to a major oil spill appropriately matches to the identified environmental risks and impacts.

Titleholders may wish to refer to NOPSEMA's Oil pollution risk management guidance note for more information on good practice approaches to spill risk evaluation, response planning and preparedness. To read the guidance note visit nopsema.gov.au/environmental-management/oil-pollution-risks