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Performance-Based Safety Regulation

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Peter Bjerager, DNV GL National Academy of Sciences, 15 April 2016

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DNV GL in brief

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We classify, certify, verify and test against regulatory requirements, rules, standards and recommended practices as an independent party

We develop new standards and recommended practices

We qualify new technologies and operational concepts

We give independent expert advice to enhance sustainable performance

Founded 1864, 15.000 people in 100 countries, 2.000 in USA and Canada

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DNV GL and Regulatory Regimes

Prescriptive in the sense that the regulatory standards specify how the regulated entity must act or what it must do

Performance-based in that regulatory standards require the achievement of a pre- defined outcome but leave the means of achievement to the regulated entity

Management-based, whereby the regulated entity is required to engage in certain analyses, planning, and reporting activities, such as conducting annual risk analyses, but is not assessed according to a pre-defined performance outcome or test

Self-regulation, whereby the regulated entity is expected to follow industry consensus standards and guidance, such as those of private standard-setting organizations

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Most regulatory schemes are hybrid

Performance-Based Safety Regulation

– Setting desired safety objectives

– Adaptive to specific asset and locations

Safety Management System

– Defines processes and controls

– Drives continual improvement

Prescriptive Requirements

– Where standardization is needed

– Standardization may improve reliability and reduce costs

Company Requirements

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Offshore Oil & Gas Regulation

Norway

– 1980 Alexander Kielland

– Performance-based internal control and risk-based regime

– Mandatory prescriptive elements

UK

– 1988 Piper Alpha

– 1992 Safety case regime (safety critical elements, performance standard, written schemes, external verification, safety management system)

Denmark

– 2006 Move from prescriptive to goal-based including risk reduction

Brazil

– 2007 Performance-based Operational Safety Regulation (SGSO)

Australia

– 2009 OPPGS - Safety Case Regulation

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Offshore Oil & Gas Regulation

USA

– 2010 Macondo

– SEMS (API RP75) with 3rd party certification and more

Mexico

– 2013 Energy Reform

– Regulation under development

– ASEA has declared it will be goal-based regulation

Canada

- Legacy regulation is prescriptive

- New drilling and production regulation is goal-based which is the direction

EU Directive

– Goal-based regulation in Offshore Safety Directive

– Implementation 2016 - 2018

– Applies also outside EU for EU-headquartered companies

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Occupational health & safety improved by factor of 10 in 20 years

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Major accidents 1974-2013 shows little sign of improvement

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Note API RP754 Measuring Process Safety is being adopted

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Assets in multiple regulatory regimes

Drilling (IADC)

– 2014 Model HSE Case is a goal-based safety system

– Operator driven through contracts

Shipping

– Classification

– International Safety Management (ISM)

– Risk-based approaches

Designs that cannot be handled by existing prescriptive requirements

Developing rules using Formal Safety Assessment (FSA)

Technology qualification

Cross border pipelines

– Norway – Denmark – UK – Germany – Netherlands – Belgium - France

– Russia – Finland – Estonia – Sweden – Denmark - Germany

– South East Asia

– USA - Canada

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Example of cross border pipeline: North Stream

From Russia through Baltic Sea to Germany

2x1200 km/750 miles

48“ diameter

Pass several territorial areas between Russia and Germany

All countries acknowledged the ISO compliant DNV-OS-F101 except Germany

DNV-OS-F101 is estimated to be applied to 65% of the offshore pipelines world wide

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Advantages of Performance-Based Safety Regulation

The operator acts clearly as the responsible

Operator is in the best position to assess and mitigate the risks

Specific for asset and location which vary greatly for offshore E&P

Allows for innovation and technology development

Allows for tailored solutions

Allows for cost-effective solutions

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Challenges related to Performance-Based Safety Regulation

Transition from prescriptive to performance-based regime

Competence of regulator and industry

Can become too documentation heavy

Benefits from collaborative regulative environment

Litigation based on performance based regulation

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Final remarks on Performance-Based Safety Regulation

Performance-Based Safety Regulations

– with prescriptive regulations (may be selectable by user)

Comprehensive Safety Management System

– preferably risk-based

Safety culture programs seeking to achieve both occupational and process safety

Dynamic barrier management

– underpinned by risk assessment

Independent 3rd party for verification and certification

Performance monitoring and sharing

– safety metrics including leading and lagging process safety metrics

Knowledge sharing across industry and countries

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