Posted January 18, 2011
The National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling released its findings last week and one portion is getting a large amount of attention:
"The United States has the highest reported rate of fatalities in offshore oil and gas drilling among its international peers, but it has the lowest reporting of injuries. This striking contrast suggests a significant underreporting of injuries in the US and highlights the need for better data collection to ensure needed attention to worker safety."
While every fatality is a tragedy, the Commission is incorrect here in their use of statistics, as our Fact Sheet explains:
"Historically, the U.S. government has attempted to estimate Occupational Injuries, Illnesses, and Fatalities using survey sampling and estimation methodologies. While estimates for Injuries and Illnesses were considered accurate, Fatality estimates varied wildly depending on the source. In 1990, for example, estimates ranged from about 3,000 to as high as 11,000. The BLS stated that 'Occupational Fatalities are too rare to be sampled effectively' and started to collect a census of Occupational Fatalities instead of relying on statistical sampling techniques...
The National Commission on the BP Deepwater Horizon Oil Spill And Offshore Drilling's Final Report compared an unsound statistical indicator (Fatality Rates) to a sound one (Injury and Illness Rates), and inevitably reached an incorrect conclusion. Fatalities are rare events. They are so random that statistically they are not capable of being used as indicators of performance. The U.S. accounts for roughly 50 to 60 percent of the total offshore E&P hours among industrial countries. Statistically, that means that the U.S. has a 50 to 60 percent chance of experiencing this event. Other countries are much less likely to experience a fatality simply because they do not work enough E&P offshore hours. When another country does experience a fatality (e.g. Australia in 2008), their rate instantly becomes higher than that of the United States."
As API's Erik Milito explained in a letter to the St. Petersburg Times:
"We agree with a number of the commission's recommendations, chief among them its call for adequate funding for the agencies that are charged with inspecting and monitoring offshore equipment and operations. A robust and well-funded regulatory mechanism that allows expanded exploration and production will, in the long run, more than pay for itself in the form of additional royalty payments and other fees paid to the federal government by a thriving offshore oil and natural gas industry. However, the presidential commission's findings fail to acknowledge the numerous concrete actions that industry has taken both before and since the accident to identify and implement additional safeguards, as well as the many recommendations made by our industry that have already been adopted by the government and industry.
We have deep concerns that the commission's report casts doubt on an entire industry based on its study of a single incident. This does a great disservice to the millions of men and women who work in the industry and have the highest personal and professional commitment to safety."
Dave Mica from the Florida Petroleum Council continued the conversation in the Tallahassee Democrat:
"...what should not be lost in the discussion is the role the oil and natural gas industry played in helping the commission and others looking at the accident to find out what went wrong and ways to fix it. From the beginning, the American Petroleum Institute and its member companies sought to work with the commission to arrive at answers as to how best to proceed in a post-Macondo environment. These efforts were not isolated or unusual...Too few Americans are aware that the industry's commitment to safety in its operations, onshore and offshore, has a long and successful history, dating back almost 90 years. Or that API has been recognized around the globe as the leader in developing and promoting offshore safety standards.
Florida relies on 25 million gallons of transportation fuel each day and generates about half its electricity from natural gas. Florida's agriculture industry, tourism, and citizens depend on affordable and reliable sources of energy. The April 20 incident was a tragic accident. However, we cannot use that as a pretext to end the flow of the oil and natural gas from the Gulf of Mexico that is vital to our nation's economic recovery, job creation and energy security."
ABOUT THE AUTHOR
John Felmy is API’s Chief Economist. He is responsible for overseeing economic, statistical and policy analysis and has over twenty-five years experience in energy, economic and environmental analysis. John is a Pennsylvania native and received Bachelors and Masters in Economics from Pennsylvania State University and a Ph.D. in Economics from the University of Maryland. He is a member of several professional associations including the American Economic Association and the International Association for Energy Economics.