May 21 (Bloomberg) -- Oil and gas companies drilling in the U.S. Gulf of Mexico may need to pay millions of dollars for improvements to safety valves on the seabed floor they hope never get used.
The U.S. Interior Department is drafting rules for modifying blowout preventers, the five-story tall devices costing as much as $45 million that are the last chance to stop an out-of-control oil well from spewing crude into the sea.
Regulators are focusing on tighter rules because a unit on BP Plc’s leased Deepwater Horizon rig failed in 2010, leading to the worst offshore oil spill in the U.S. Engineers studying the accident, which killed 11 workers and spoiled Gulf beaches, recommended a major redesign for the devices.
“This is an area that deserves a full and open discussion about what comes next,” James Watson, director of the Interior Department’s Bureau of Safety and Environmental Enforcement, said in an e-mail. The U.S. intends to prepare a draft rule this year, Watson said May 1 in a Houston speech.
The blowout preventer sits atop the wellhead to regulate the force propelling oil and gas up the pipe from underground. If the device fails to control the fluctuating pressure, a large blade is designed to sever, or shear, the pipe to choke the flow and, like a window blind blocking the light, prevent explosive gases from reaching the rig and crews on the surface.
Blind Shear Rams
The so-called blind shear rams at BP’s Macondo well in the Gulf failed to complete a seal in April 2010 because they were jammed by a portion of drill pipe knocked out of alignment in the explosion, Oslo-based Det Norske Veritas, a management-risk company, found in a report commissioned by the Interior Department and published last year.
Companies drilling in the Gulf in some cases are using gear, similar to the Macondo unit, that may be unable to compensate in an explosion, said Roger McCarthy, a participant of National Academy of Engineering’s investigation of the BP blowout.
“Some of the units on the ocean floor today have all of the drawbacks of the Deepwater Horizon blowout preventer,” McCarthy said in an interview. “Some of them have two blind shear rams and other technologies that make them less prone to have a problem,” providing a backup when one fails.
That’s why experts including McCarthy and Lois Epstein, a member of the Interior Department’s Ocean Energy Safety Advisory Committee, recommend that the federal government require all companies in the Gulf of Mexico have two sets of shear rams instead of one.
BP’s Double Rams
BP introduced double shear rams for all its Gulf of Mexico operations in the enhanced standards the London-based company adopted before resuming work in the Gulf.
McCarthy will present his recommendations to the Interior Department during a conference tomorrow the agency is holding in Washington. Executives from Chevron Corp., BP, Royal Dutch Shell Plc, Diamond Offshore Drilling Inc. and Noble Corp. have been invited, according to a draft agenda obtained by Bloomberg.
“The failure of the blowout preventer was one of the root causes of the Deepwater Horizon tragedy,” Interior’s Watson said. “We look forward to hearing from industry and others on how we can take the next step in blowout-preventer safety.”
The U.S. delayed adoption of tougher blowout-preventer standards when post-spill rules were issued in late 2010, citing the time required by drillers to comply. Under already adopted rules, drillers need independent third-party verification that their blind shear rams can cut any drill pipe under maximum pressure, and show evidence of inspections and maintenance.
Operators also must maintain safety and environmental programs, and provide management oversight of operations and contractors under the current rules.
A blowout preventer is a last resort and operators need safety procedures to ensure they never get to the point where the preventer is activated, said Tad Patzek, also a member of Interior Department’s safety advisory body and the chairman of the Department of Petroleum & Geosystems Engineering at the University of Texas at Austin.
“Yes, it’s nice to have double rams,” Patzek said in an interview. “But the key is -- you should never have to use them.”
McCarthy also recommends adding tests that would verify whether the massive valves will actually work thousands of feet under water, where they will be installed.
Blowout preventers are now tested on the sea floor and so additional requirements are unnecessary, Holly Hopkins, a senior policy adviser in Upstream and Industry Operations with the American Petroleum Institute, said in an interview.
API, the largest oil-industry trade group, will consider a requirement for double shear rams in the revision of its blowout-preventer standards that may be completed later this year, she said.
Overall, the blowout preventers now in the Gulf of Mexico are better than those before the BP spill, said Michael Bromwich, former head of the U.S. offshore safety agency and now managing principal of the Bromwich Group, a strategic consulting company.
“The newer rigs coming to the Gulf of Mexico after the spill have a newer generation of blowout preventers,” Bromwich, a partner in law firm Goodwin Procter LLP, said in an interview. “Many of them have a second blind shear ram, which is one of the things that many people think would substantially enhance the ability of blowout preventers to deal with a blowout.”
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