Guidance Document for the Development of a Safety and Environmental Management System for Onshore Oil and Natural Gas Production Operations and Associated Activities API BULLETIN 75L FIRST EDITION, NOVEMBER 2007
Guidance Document for the Development of a Safety and Environmental Management System for Onshore Oil and Natural Gas Production Operations and Associated Activities Upstream Segment API BULLETIN 75L FIRST EDITION, NOVEMBER 2007
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Foreword This publication is under the jurisdiction of the American Petroleum Institute Upstream Department’s Executive Committee on Drilling and Production Operations. It was developed with assistance from the International Association of Drilling Contractors (IADC), the Independent Petroleum Association of America (IPAA), and the Association of Energy Service Companies (AESC). The Good Neighbor Guidelines (Annex B) were derived from material provided by the New Mexico Oil and Gas Association. API expresses its appreciation to these associations for their contributions to the development of this publication. API publications may be used by anyone desiring to do so. Every effort has been made by the Institute to assure the accuracy and reliability of the data contained in them; however, the Institute makes no representation, warranty, or guarantee in connection with this publication and hereby expressly disclaims any liability or responsibility for loss or damage resulting from its use or for the violation of any federal, state, or municipal regulation with which this publication may conflict. Suggested revisions are invited and should be submitted to the Director of the Upstream Department, American Petroleum Institute, 1220 L Street, N.W., Washington, D.C. 20005. .
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Contents Page
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Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
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Objective and Scope . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
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Purpose. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
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Benefits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
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Implementation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
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SEMS Elements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
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References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Annex A SEMS System Elements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Annex B Good Neighbor Guidelines . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
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Guidance Document for the Development of a Safety and Environmental Management System for Onshore Oil and Natural Gas Production Operations and Associated Activities 1 Background This publication was written to provide general information and guidance for the development of a safety and environmental management system (SEMS) for onshore oil and natural gas operations, including drilling, production, and well servicing activities. Although there is an extensive amount of information that has been developed on the topic of safety and environmental management systems, this document focuses on this industry sector to help foster continuous improvement of our industry’s safety and environmental performance. It is recognized that many onshore oil and natural gas companies have an effective SEMS in place; however, the intent of this document is to provide an additional tool that can assist these and especially other operators in taking the next step to improve their system, program, or plan. For some, it may be the first step toward implementing a complete system at a pace that complements their business plan. For those who already have a mature SEMS in place, this document can be used for continuous improvement of the system.
2 Objective and Scope An effective SEMS will have a fundamental objective of promoting continuous progress towards making safety and environmental protection an integral part of the company’s culture. A SEMS should address facilities, engineering design, major equipment, and work processes relevant to the appropriate owners, contractors, or suppliers. This publication provides guidance for any company in the business of onshore oil and natural gas production, including drilling, construction, well servicing, and maintenance activities. In addition to having an effective SEMS, responsible development includes being a good neighbor and being committed to environmental protection and compliance with all applicable federal, state, and local regulations. Annex B provides guidance for a company to consider as a “good neighbor.”
3 Purpose This publication is designed to aid companies in initiating the development of a SEMS. The intent is to identify a series of tools to assist in the development and implementation, or improvement, of the system. The design of each company’s system will be unique and its implementation schedule tailored to leverage the existing system at a pace realistic to the company and its business plan. For those beginning the process of implementing a SEMS, it is recommended that the process be implemented over time on a risk basis, evolving into a complete system that addresses appropriate SEMS elements specific to a company’s operations. Both design and schedule should initially address higher risk facilities, equipment, and processes; following that, the system should continue to expand to address risk in phases, addressing the more important elements at first and expanding to the full system over time. Simply stated, the SEMS can be implemented in several phases on various levels (i.e. geographically, functional areas, system elements). This phase-in schedule should be documented in the planning of the system.
4 Benefits An effective SEMS will provide numerous benefits to companies that implement a system. Many of these benefits are intangible, but among the more widely recognized benefits is the ability to apply a systematic approach to continually check and correct the elements of their safety and environmental system. Although systematic, the design allows for great flexibility to enable it to fit the size of the company and focus on the higher risk issues, making their efforts both easier and more effective. The strong foundation from the SEMS provides a tool to capture knowledge as companies continue to improve the elements of the system. This will enable the industry to systematically pass on experience within the workforce. Some of the early tasks in the process (gap analysis and risk assessments) will enable the company to work out the best way to handle each key activity, and make sure that everyone uses the same approach, every time. This consistent approach can reduce mistakes and avoid the associated cost. Although the SEMS does 1
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not guarantee compliance, the system will compliment the company’s current program and reduce the likelihood of non-compliances by providing tools to help manage it. To summarize, benefits include (paraphrasing from the EPA’s website): — improved safety and environmental performance; — enhanced compliance; — pollution prevention and resource conservation; — reduce/mitigate risks; — attract and retain access to customers and markets with SEMS requirements; — increased efficiency; — reduced cost; — enhance employee morale and possibly enhance recruitment of new employees; — enhance image with public, regulators, lenders, investors; — achieve/improve employee awareness of safety and environmental issues and responsibilities; and — qualify for recognitions/incentive programs.
5 Implementation There are many models for an effective Safety and Environmental Management System and several blueprints for the successful implementation of that system. So while the details of a specific SEMS may vary greatly, and may ultimately include a wide variety of system elements, the keys steps for implementation generally include three or four crucial components. These key components may be represented in the final SEMS by one or several system elements; but when completely implemented, these components form a cycle for continuously improving all safety and environmental systems and continue to assist in minimizing risk. 5.1 Initially, the most important of these key components (and indeed absolutely essential to the success of SEMS) is the support and commitment of senior management. In the short term, developing a new management system involves the investment of extra work and resources, an investment for which only senior management can commit. This investment, or cost, includes: — an investment of internal resources, including staff/employee time; — costs of training of personnel; — costs associated with hiring consulting assistance, as needed; and — costs for technical resources to analyze environmental impacts and improvement options, as needed. In addition to their commitment (of these required resources) it is also critical to communicate that commitment. Employees will be involved in the development and implementation of this system and some may find it difficult to see what's in it for them even to the point of resisting the change. But if top-level management’s commitment and expectations are effectively communicated to the employees from the start, they will understand the importance of developing this system and the resulting benefits. Additionally, implementing a management system involves the
GUIDANCE FOR DEVELOPMENT OF SAFETY AND ENVIRONMENTAL MANAGEMENT SYSTEM FOR ONSHORE OIL AND NATURAL GAS PRODUCTION
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long-term commitment (a continuing investment of time and resources) to conduct business in alignment with this system, a system that in turn will provide opportunities for continual improvement. 5.2 Once a strong management commitment (to develop and implement a SEMS) has been fashioned and communicated, the next important component is design. Design is crucial, remembering that the most effective system for a company is one that is customized and tailored to mesh with the company’s risk and business plan. The design will use a high level risk analysis to identify needed elements of the system, specific risk assessment methods, a schedule for full implementation, and other aspects. As this design is put into action it will roll right into the continuous cycle that will evaluate risk on an ongoing basis and adjust the system as needed to address those risks. 5.3 Once leadership has made the commitment (and communicated such), the design of most management systems will generally follow a “plan-do-check-act” model: 5.3.1 Plan—Identify the key risk (which include legal requirements) and establish your overall policy. Develop priorities, objectives and action items with a realistic schedule. 5.3.2 Do—This stage begins the step-by-step action plan for conducting activities (e.g. hazard analysis, document preparation) and developing and implementing standards and procedures identified in the plan. This includes training and operational control and the documentation of the activities, procedures, and standards. 5.3.3 Check—Using the targets and objectives set above assess whether they are being achieved. Other tools can be used such as audits and incident data to determine the effectiveness of the SEMS. 5.3.4 Act—With the knowledge gained above, take steps to continuously improve the system. For example, weaknesses exposed in the check component should be considered when determining the next round of priorities, objectives and action items. 5.4 As noted, implementation will take resources, but it should be noted that many of the pieces are already in place, at least to some degree, and can be leveraged in building the complete system. One example may be employee environmental and safety training. Most of the current training will fit into the system; in fact, the systematic approach to training needs can help focus the system making it more efficient and effective.
6 SEMS Elements There are many models for creating a SEMS and they contain a wide variety of system elements. This should be part of the considerations when designing your SEMS. No combination is wrong, remembering that it must be tailored to your needs. Many systems can be accessed via the web, but for the purposes of developing an API SEMS, the following are 12 suggested system elements: — Safety and Environmental Information; — Hazards Analysis; — Procedures to Manage Change; — Operating Procedures; — Safe Work Practices; — Training; — Assurance of Quality and Mechanical Integrity of Critical Equipment; — Pre-startup Review;
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— Emergency Response and Control; — Investigation of Incidents; — Audit of Safety and Environmental Management System Elements; and — Records and Documentation. For an explanation of each system element, see Annex A. NOTE Annex A provides general information on the twelve system elements. API RP 75, although it is intended for offshore operations, provides more detailed information that may be useful for developing a company SEMS.
7 References The following publications provide information and guidance that may be useful in the development of a company SEMS. API Bull E2, Bulletin on Management of Naturally Occurring Radioactive Materials (NORM) in Oil and Gas Production API Spec 4F, Specification for Drilling and Well Servicing Structures API RP 4G, Recommended Practice for Use and Procedures for Inspection, Maintenance, and Repair of Drilling and Well Servicing Structures API RP 49, Recommended Practice for Drilling and Well Servicing Operations Involving Hydrogen Sulfide API RP 53, Recommended Practices for Blowout Prevention Equipment Systems for Drilling Wells API RP 54, Recommended Practice for Occupational Safety for Oil and Gas Well Drilling and Servicing Operations API RP 55, Recommended Practice for Oil and Gas Producing and Gas Processing Plant Operations Involving Hydrogen Sulfide API RP 59, Recommended Practice for Well Control Operations API RP 64, Recommended Practice for Diverter Systems Equipment and Operations API RP 74, Recommended Practice for Occupational Safety for Onshore Oil and Gas Production Operations API RP 75, Recommended Practice for Development of a Safety and Environmental Management Program for Offshore Operations and Facilities API RP 76, Contractor Safety Management for Oil and Gas Drilling and Production Operations API RP 500, Recommended Practice for Classification of Locations for Electrical Installations at Petroleum Facilities Classified as Class I, Division 1 and Division 2 API Publ 510, Pressure Vessel Inspection Code: In-service Inspection, Rating, Repair, and Alteration API Std 521, Pressure-relieving and Depressuring Systems API Std 1104, Welding of Pipelines and Related Facilities
GUIDANCE FOR DEVELOPMENT OF SAFETY AND ENVIRONMENTAL MANAGEMENT SYSTEM FOR ONSHORE OIL AND NATURAL GAS PRODUCTION
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API RP 1107, Pipeline Maintenance Welding Practices API Publ 2004, Inspection for Fire Protection API Publ 2007, Safe Maintenance Practices in Refineries API Std 2015, Requirements for Safe Entry and Cleaning of Petroleum Storage Tanks API Publ 2201, Safe Hot Tapping Practices in the Petroleum & Petrochemical Industries API Publ 2207, Preparing Tank Bottoms for Hot Work API Publ 2217A, Guidelines for Work in Inert Confined Spaces in the Petroleum and Petrochemical Industries API Std 2510, Design and Construction of LPG Installations API Publ 2510A, Fire Protection Considerations for the Design and Operation of Liquefied Petroleum Gas (LPG) Storage Facilities ASME1, Boiler and Pressure Vessel Code
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Annex A API SEMS System Elements (For the purposes of developing an API SEMS, the following are 12 suggested system elements.)
A.1 Safety and Environmental Information The management system may consider that a compilation of safety and environmental information be developed and maintained for any facility subject to this recommended practice. This information may provide the basis for implementing succeeding system elements. Management should consider any potential hazards and high risk activities, if applicable, in determining the extent and detail of required information. The information may include documentation on process and mechanical design. The individual elements of the information may exist in various forms and locations and may be referenced in the compilation. Process, mechanical, and facilities design information may be retained for the life of the facility. For simple and nearly identical facilities within the same area, a common compliance documentation package may be compiled, except that documentation should reflect site-specific deviations from the norm for facilities within the area.
A.2 Hazards Analysis The management system may require that a hazards analysis be performed for any facility where potential hazards may exist. The purpose of this analysis is to identify, evaluate, and, where unacceptable, reduce the likelihood and/or minimize the consequences of safety or environmental incidents including uncontrolled releases. Human factors may be considered in this analysis.
A.3 Procedures to Manage Change The management system may establish procedures to identify and control hazards associated with change and maintain the accuracy of safety information. A facility is subject to continual change to increase efficiency, improve operability and safety, accommodate technical innovation, and implement mechanical improvements. On occasion, temporary repairs, connections, bypasses, or other modifications may be made out of operating necessity. Any of these changes can introduce new hazards or compromise the safeguards built into the original design. Care should be taken to understand the process, facility, and personnel safety and environmental implications of any changes. Although certain changes may be minor with little likelihood of compromising safety or environmental protection, all changes may have the potential for disruption, injury, or business loss.
A.4 Operating Procedures The management system may include requirements for written facility operating procedures designed to enhance efficient, safe, and environmentally sound operations. Within a given company the designs of several onshore facilities may differ only in the size and/or number of equipment items present. Consequently, standard operating procedures may apply to multiple facilities. By their very nature, operating procedures directly address human factors issues associated with the interaction between facilities and personnel. These procedures should be kept current, relevant, and accessible.
A.5 Safe Work Practices The management system should establish and implement safe work practices. These practices should be designed to minimize the risks associated with operating, maintenance, and modification activities and the handling of materials and substances that could affect health, safety or the environment. Human factors and the consequences of human error should be considered in the development of safe work practices. These safe work practices will normally apply to multiple locations and will normally be in written form (safety manual, safety standards, work rules, etc.). For some 7
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locations, site-specific work practices may be appropriate. The system should provide guidelines for selection and performance evaluation of contractors. API RP 76, Contractor Safety Management for Oil and Gas Drilling and Production Operations, may be helpful in developing guidelines for contractor selection. Operators and contractors should have their own written safe work practices and environmental policies. Contractors may adopt appropriate sections of the operator’s safety and environmental management system. Regardless, an operator and contractor should agree on appropriate contractor’s safety and environmental policies and practices before the contractor begins work at the operator’s facility. As an example, for routine contractor services, agreement could be reached at the operator’s on-site safety meeting. For non-routine and complex contractor services a more rigorous operator’s review of the contractor’s safety and environmental policies and practices may be warranted. Additionally, where a contractor works at several operator’s facilities, a single safety and environmental policies and practices review by that operator may be acceptable instead of a review at each facility where the contractor performs work.
A.6 Training The management system may establish and implement training programs so that all personnel are trained to work safely and are aware of safety and environmental considerations onshore, in accordance with their duties and responsibilities. Training should address operating procedures, safe work practices, and emergency response and control measures. Any change in facilities that requires new or modification of existing operating procedures may require training for the safe implementation of those procedures. Training should be provided by qualified instructors or by employees with relevant years of experience and documented as appropriate.
A.7 Assurance of Quality and Mechanical Integrity of Critical Equipment The management system should establish that procedures are in place and implemented so that critical equipment for any facility is designed, fabricated, installed, tested, inspected, monitored, and maintained in a manner consistent with appropriate service requirements, manufacturer's recommendations, or industry standards. Contractors should have systems in place to address their own critical equipment.
A.8 Pre-startup Review The management system may require that the commissioning process include a pre-startup safety and environmental review for new and significantly modified facilities, wells, or operations to confirm that the following criteria are met: a) construction and equipment are in accordance with specifications; b) safety, environmental, operating, maintenance, and emergency procedures are in place and are adequate; c) safety and environmental information is current; d) hazards analysis recommendations have been considered- addressed, and implemented as appropriate; e) training of operating personnel has been completed; f) systems to address procedures to manage changes and other elements of this publication are in place; and g) safe work practices are in place. Refer to API RP 54 and API RP 74 for additional information.
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A.9 Emergency Response and Control The management system should require that emergency information is available and appropriate response and control plans are in place and are ready for immediate implementation. Drills may be carried out, if applicable, to address the readiness of personnel and their interaction with equipment.
A.10 Investigation of Incidents The management system may establish procedures for investigation of all incidents with serious safety or environmental consequences. The system may also require investigation of incidents that are determined by facility management to have possessed the potential for serious safety or environmental consequences. Incident investigations should be initiated as promptly as possible, considering the necessity of securing the incident scene and protecting people and the environment. The intent of the investigation should be to learn from the incident and help prevent similar incidents. A corrective action system may be established based on the findings of the investigation in order to analyze incidents (e.g. uncontrolled release or non-compliant pollution incident) for common root causes. The corrective action system is a follow-up system to the incident analysis procedures. The investigation should be expedited and findings and recommendations resolved in a timely manner. The incident investigation should be conducted by personnel designated by the operator and/or contractor. An incident investigation should be conducted by personnel knowledgeable in the process involved, investigation techniques, and other specialties that are viewed as relevant or necessary. In appropriate circumstances, consideration should be given to establishing a “work-in-progress privilege” covering any documents generated during the course of an incident investigation or to conducting the entire investigation under attorney-client privilege.
A.11 Audit of Safety and Environmental Management System Elements The operators (and contractors with SEMS) may establish and maintain an audit system and procedures for the periodic audit of the safety and environmental management system in order to determine if the system elements have been properly implemented and maintained and to provide information on the results of the audit to management. The audit system and procedures may cover: a) the activities and areas to be considered in audits, b) the frequency of audits, c) the audit team, d) how audits will be conducted, and e) audit reporting. Management should commit sufficient resources to the audit in order to meet its intended scope.
A.12 Records and Documentation A documentation system for the safety and environmental management system may be established to ensure that records and documents are maintained in a manner sufficient to implement the management system. Records or documentation may be in either paper or electronic form. The safety and environmental management system documentation does not have to be retained in a separate file or binder, but can be integrated into the operator’s filing
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or document control system. All records and documentation should be dated (with dates of revision) and readily identifiable. Audit requirements should be considered when formatting, distributing and filing the records and documentation related to the safety and environmental management plan.
Annex B Good Neighbor Guidelines (This annex provides guidance for a company to consider as it manages its relationships with surface users, communities and others in areas where it operates.) The oil and natural gas industry is dedicated to responsible development of oil and natural gas resources. Responsible development includes good relationships with our neighbors and a commitment to environmental protection and compliance with all applicable federal, state, and local regulations. To be a “Good Neighbor” in the areas where industry operates, we have three objectives: — protection of public safety; — protection of the environment; and — respect for the property rights of others. These objectives are achieved through use of sound management processes as part of the responsibility to act as a “good neighbor.” As our industry pursues responsible development of energy resources to meet the nation’s energy needs, we should strive for better communication and understanding with the land owners, lessees, permittees and/or residents (“land owner or surface users”) impacted by our operations.
Good Neighbor Practices Listen to the land owner or surface user concerns and respond appropriately: — Respect rights-of-way; — Take precautions to protect livestock; — Take precautions not to harm wildlife with our operations; — Drive safely; — Report damages to public or private property to the appropriate parties; — Maintain production equipment and systems; and — Train personnel on the rules and regulations applicable to our operations. Communicate with land owners and surface users: — Be willing to discuss with the land owner or surface user of industry property use rights (including mineral rights) and surface use rights; — Designating a company contact person who is responsible for responding to community questions; — Listen to and discuss the concerns of the land owner or surface user affected by our operations; and — Attempt to notify the landowner or surface user when commencing significant activity that will impact their land. 11
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Respect the property and the rights of others: — Minimizing surface disturbances; — Take precautions to protect livestock with appropriate measures; — Practicing good housekeeping; — Remediation and restoring the site in a timely manner in compliance with applicable regulations; and — Driving responsibly on public and private roads. Promote safely of the general public: — Training personnel in safe operating practices; — Conducting emergency planning where applicable; and — Posting signage and warnings in accordance with regulations. Protect the environment: — Train personnel on environmental protection in compliance with applicable regulations; and — Maintain equipment and utilize good work practices. — Seek to understand the land owner, and surface user concerns and possible questions regarding: — groundwater aquifers and surface water, — air quality, — wildlife and livestock protection, — housekeeping, — noise, — surface disturbance, and — noxious weeds and brush. — Follow regulations for waste management and environmental protection.
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