SEMS II: Get Ready for Son of SEMS

In a tiny corner of the White House website, there is a page that says “Regulations Under Review” and it takes you to a listing that says “Revisions to Safety and Environmental Management Systems Requirements(SEMS)” There it is – the dreaded SEMS II. The background is that the original SEMS proposal had been out for several years, but following the Macondo disaster, BOEMRE felt the need to get the final rule out quickly. So the agency planned all along to follow up the SEMS rule with another rulemaking that would add in some of the areas that didn’t really get a full public discussion under the first proposal. In some cases this included safety approaches that were not commonly in use in the 1990s when SEMS was first proposed but are now well accepted. By coming back with revisions, it gives industry and the public the chance to fully vet the new aspects before they are implemented.

So what is in it? No one outside of government knows for sure, but based on BOEMRE officials’ presentations, it is likely that it will include:

  • A requirement that operators use an independent third party to audit their SEMS plans, instead of using in house auditors.
  • Ultimate Work Authority and Stop Work Authority – common oil and gas concepts that were not so common 20 years ago when SEMP was first considered.

When does SEMS II hit the street? Hard to say. Under the federal rulemaking procedures, any proposed rule goes to the White House Office of Management and Budget for review first. That is where SEMS II is now. Once the administration is satisfied, it goes back to the agency and is published in the Federal Register. There will be a public comment period (often about 90 days) and possibly public hearings. Then it goes back to BOEMRE, which considers he comments, makes changes as warranted and sends it back to the White House for review again. Eventually it is published as a final rule. All this means that noting of SEMS II becomes final until next spring at the earliest. BOEMRE officials swear that the new rules won’t force any operator to go back to the drawing board on its SEMS plan. They say it may add to SEMS, but won’t change the overall program.

But that doesn’t mean there won’t be changes through another process. The American Petroleum Institute (API) wrote the original API RP 75, on which SEMS is based. Recently API signaled that it was time to dust off RP 75 and update it. After all, it is two decades old and a lot has changed. However, there is pushback to that idea, including from some of the large oil and gas companies. They argue that the industry is scrambling to meet the SEMS requirements and it would be incredibly disruptive to try to change the rules right now. They argue that the industry needs to implement SEMS and work out the bugs before anyone even talks about changes to the fundamental requirements. Both sides have a point.