Risk Management Practices: Cross-Agency Comparisons with Minerals Management Service

Abstract

This paper reviews implementation of the risk management frameworks used by eight federal and foreign agencies—including the Minerals Management Service (MMS, now the Bureau of Ocean Energy Management, Regulation, and Enforcement, or BOEMRE)—and summarizes the features of a robust tolerable risk (TR) framework. A TR framework conceptually breaks risk into three categories— acceptable, unacceptable, and tolerable—separated by numerical boundaries. Most of the agencies surveyed in this review have adopted a TR or modified TR framework, but MMS (BOEMRE) generally has not (although the agency does use an Oil Spill Risk Model to assess spill probabilities and possible trajectories). The study argues that while numerical thresholds are not essential to risk management, they provide a transparent goal against which to benchmark practices, equipment, standards, and facilities, and would be a valuable tool for BOEMRE. We also recommend that BOEMRE develop better risk assessment and management guidance; identify and more systematically collect information for understanding and evaluating risks and safety performance; and strengthen performance-based risk management by adopting proven approaches, such as those used in Norway and the United Kingdom for offshore oil and gas development.