SEVERAL REGULATIONS AFFECTINGoffshore operations are expected tocome to fruition during the next severalyears. These include the re-issue by theU.S. Coast Guard of Subchapter N activ-ity regulations; Annexes 4 and 6 to theMARPOL regulations dealing withsewage and treatment devices on rigsand platforms; ballast water manage-ment; and engine emissions, respective-

ly, among oth-ers.

Alan Spack-man, IADC’sD i r e c t o r- O f f -shore Technicaland RegulatoryAffairs, isIADC’s princi-pal representa-tive to the Inter-national Mar-itime Organiza-tion (IMO), a

specialized agency of the UnitedNations dealing with maritime safetyand environmental protection. MrSpackman discusses several of thesepending changes and new regulationsthat could affect offshore oil and gasoperations, from exploration to produc-tion.

S U B C H A P T E R N R E G U L A T I O N S

The greatest potential for change in theway the offshore industry operates inthe U.S. is the Coast Guard’s revisionand re-issue of Subchapter N regula-tions. However, these revisions havebeen delayed numerous times and, withthe Coast Guard’s emphasis now onmaritime security matters instead of itstraditional roles, it is difficult to saywhen their attention will return to theseregulations.

Even before the events of September 11,2001, the Coast Guard and its proposedrulemaking were affected by budgetcuts that in turn resulted in personnelreductions. Additionally, revising therules was not high on its priority listbecause there had been no major acci-dents offshore.

“Also,” Mr Spackman notes, “the CoastGuard knew it was going to become con-troversial as far as the platform opera-tors and owners becoming upset by

more stringent requirements for lifesav-ing and firefighting equipment.”

Subchapter N regulations were issuedin 1982 and have not been substantiallyrevised since. About seven or eightyears ago the Coast Guard came outwith a proposed rule that resulted in sig-nificant opposition from the industry.

“The opposition was not so much fromdrilling contractors as oil and gas pro-ducers,” Mr Spackman said, “becausethe proposed rule would have chal-lenged the thinking of the operators offixed platforms with respect to the ade-quacy of minimum standards for lifesav-ing and firefighting equipment on plat-forms in the Gulf of Mexico.”

E&P companies have been against thenew proposed rules because, amongother things, they could result in highercosts. For example, present regulationsrequire mobile offshore drilling units(MODUs), including floating productionunits, to have at least 100% crew cover-age in regards to lifeboats. Fixed struc-tures, on the other hand, are onlyrequired to have 100% coverage of buoy-ancy apparatus, which could be nothingmore than a large life buoy.

However, the present status is that theproposed rule is in limbo. “We know it isthere,” Mr Spackman explained, “but

the Coast Guard has only one personworking on it, and he is not doing it veryquickly.”

Because Subchapter N regulations wereissued 20 years ago, they are mostlyinadequate in today’s technology.“Everybody who looks at them willadmit that,” Mr Spackman said, “but thechallenge is where to set the new andhigher minimum threshold.”

S E W A G E T R E A T M E N T

Annex 4 to the MARPOL Conventionbecomes effective this September anddeals with sewage and sewage treat-ment devices. It will require certificationof sewage treatment devices by the ves-sel’s flag state.

“In theory,” Mr Spackman notes, “theywill require some action from fixed andfloating platform owners as well to showthat they are properly treating sewage.”

The sewage is required to be flocculat-ed, broken up and treated with sufficientchlorine to reduce the potential forpathogens to spread.

Traditionally, the flag state would beresponsible for sending inspectors tothe MODU or platforms to ensure thatthe sewage is being treated properly fordisposal. However, in this case the

18 D R I L L I N G C O N T R A C T O R May/June 2003

Upcoming regulations affect offshore operations

Alan Spackman

Diamond Offshore’s semisubmersible Ocean Confidence is operating in the Gulf of Mexico for BP.

coastal state in which the MODU or plat-form is operating can inspect the vessel.A problem is that many coastal states,unless they are also a flag state, do nothave programs in place nor funds forenforcing regulations. Those that dooften have standards that aren’t basedon the IMO requirements.

“However,” explains Mr Spackman, “it isa flag state responsibility for the shipsirrespective of whether the coastalstates perform an inspection. The flagstates generally put more pressure onrig owners than do the coastal states.”

U.S. flag MODUs should not have a prob-lem regarding inspections and certifica-tion.

“It is routine for our members becausethey have, by and large, Coast Guardcertified marine sanitation devices thatwill meet the IMO requirements,” MrSpackman explained.

The Coast Guard is in the process ofdeveloping guidance on implementationof the IMO requirements.

Internationally, inspection of sewagetreatment devices will become part ofthe package of statutory inspectionsthat are typically performed twice in afive-year cycle.

B A L L A S T W A T E R M A N A G E M E N T

A ballast water management code underdevelopment by the IMO will requirecompanies to develop and implementballast water management plans to pre-vent the spread of non-indigenous newspecies, such as zebra muscles.

Zebra muscles are small shellfish thatwere transported in water from a for-eign port have gotten into the freshwater systems in North America. Theyclog water intakes because they growprolifically without predators, and theyhave become a major problem for powerand water treatment plants in the GreatLakes area.

“There are numerous other nuisancespecies that have been transmitted fromone location to another because of boat

management practices,” Mr Spackmansaid.

Part of what the IMO is developing withthe code is whether water has to berecirculated through ballast tanks dur-ing the voyage from one port to another,eventually replacing all the ballastwater with fresh ocean salt water, whichis unlikely to be harboring anything thatmight be a problem.

Treatment alternatives the IMO is con-sidering include use of chemicals; shearstress (cyclone) treatment; and filtering.

There is pending legislation in the U.S.Congress in addition to internationallegislation. There has been legislationintroduced in virtually all Congressionalsessions during the past 12 years,according to Mr Spackman, and theyhave become incrementally more strin-gent as the awareness of the potentialproblems become more acute.

“The IMO is still working on how toincorporate advanced treatment meth-ods,” Mr Spackman said.

May/June 2003 D R I L L I N G C O N T R A C T O R 19

MODUs would be affected if they movebetween different geographical areas.The owners would have to manage itsballast water by acceptable means whileen route to its destination.

A jackup on dry tow isn’t a problembecause there is no ballast water, how-ever, for most of the other rigs theexchange of ballast water is time con-suming, perhaps requiring that themobilization slow and wait for someperiod of time, or a particular routing beused, in order to meet certain criteria.

“For example,” Mr Spackman explains,“there are few places between the coastof Brazil and the Gulf of Mexico where aballast water exchange can occur in themode that the IMO envisions withoutgoing out of the way to accomplish it.”

“That’s because the IMO has waterdepth criteria, among others, that thereis just no place to make the exchange inthis example.”

E M I S S I O N S F R O M E N G I N E S

MARPOL Annex 6, addressing air emis-sions from new engines, is likely to beimplemented within the next 1 ½ to 2years. This is not a surprise to offshorecontractors as the standards have been

around for some time. Most rig ownershave made sure that they have gottenengines that conform to the standardwhen building new rigs or replacingengines.

“The regulation deals only with newengines, and they were made retroac-tive to engines installed after 1997,” MrSpackman said.

“It should be a non-event when it hap-pens for drilling contractors other thanthey will have to pay for another piece ofpaper to say that they conform with therequirements.”

EPA will be issuing another set of pro-posed rules on engine standards in addi-tion to IMO and MARPOL on U.S. flagvessels. The EPA has indicated they arealso considering applying their stan-dards to foreign vessels entering U.S.waters.

“Standards that are agreed to interna-tionally are not as stringent as EPAbelieves the standards should be,” MrSpackman explained.

“The EPA has also very clearly beenpushing engine manufactures to developnew technology where the IMO stan-dards are based on existing technology.”

The next set of EPA rules will be com-pleted no later than April of 2007.

M A R I T I M E S E C U R I T Y

The coast guard is charged under theMaritime Transportation Safety Act(MTSA) of 2002 of setting up a systemfor security planning for facilities andvessels which, if attacked, could causeeither serious economic disruption in alocal area, significant marine pollution,significant loss of life or transportationsystem disruption.

The Coast Guard is developing a priori-tized list of vessels and facilities thatwarrant particular attention. Toppingthat list, obviously, are major bridges,hazardous chemical processing facili-ties and ships whose cargo, or passen-gers pose an attractive target.

The Coast Guard has to develop a sys-tem of plans at the national and region-al level. The language and statute isessentially similar to that which theCongress charged the Coast Guard toplan for pollution response, however,this is response to terrorists.

The Coast Guard has to develop andprocess the plans and then developmandatory rules by November. The Con-gress has provided a waiver of theAdministrative Procedures Act so theycan go directly into a final rule.

“The Coast Guard is moving very quick-ly to develop the rules,” Mr Spackmansaid.

“We have tried to do our best to informthe Coast Guard that we do not envisionany MODU being a type of facility or ves-sel that could pass the threshold of seri-ousness the Transportation SecurityAct envisions.”

“This is because there is not going to beany potential for significant pollutionfrom the rig,” Mr Spackman continued.“That is not necessarily the case for theproducing wells.”

While there is a potential for loss of life,there are other more attractive targetsfor terrorists. As for transportation dis-ruption, according to Mr Spackman, therigs coming to port already require spe-cial plans from the Coast Guard, so ifthere were any known terrorist threatsthey simply would not be allowed tomove. �

20 D R I L L I N G C O N T R A C T O R May/June 2003

The drillship Noble Leo Segerius is working offshore Brazil for Petrobras.