Loss of Control over Gas and Oil Industry - Term Paper Example

1. History of the Oil and Gas Industry Before the colonization of the New World, the Seneca Indians used to collect oily residue that they found on top of tailings in the northeast. They new that this triviality could be used to treat various ailments. The oil and gas sector of the current economy dates back to the early 19th century. Early European settlers gave little notice to oil seepages in western Pennsylvania and New York, up until the mid-1850’s. That is when scientists discovered that they could procure kerosene from the crude oil. For the most part, wells were initially hand dug, with salt producers of the time learning to drill via cable tools. Often, these salt producers found the oil and gas that erupted along with the salt brine to be a nuisance. However, some intrepid salt manufacturers sold it for medicinal purposes, or to burn as lighting fuel. Although the natural gas industry is purported to have begun in 1821, George Bissel and Edwin L. Drake created the first drilling rig that was ever used for the specific production of oil on August 28, 1859 near Titusville, Pennsylvania. This well, named the Drake, is considered the first intentional well drilled for oil, as other wells that were drilled at the time were for salt brine or water. (http://en.wikipedia.org/wiki/ History_of_the_petroleum_industry_in_the_United_States) The drilling for oil became a phenomenon that sparked many new enterprising companies to start their own oil-related ventures. This “boom” as it commonly referred to, created a need for workers on a massive scale that was not there in the past. They now needed refineries, drilling tools and most importantly, manpower. There was so much money to be made in the drilling and production of these new wells that loss of a man’s 2 life became known as acceptable risk, and simply turned a blind eye to the likelihood of being injured or killed. In the oilfield’s infancy, the most common cause of death for these men was the well caving in on them, fires, and explosions. It was not until the year 1900, when a Texas man by the name of Curt Hamill came up with the revolutionary idea of using mud in the hole to flush it out as they drilled, instead of water. This proved to be a remarkable act, as not only did it allow the cuttings to surface, it prevented the hole from caving in. mud is used in just about every drilling operation world wide since. (http://www.enpetroleum.com/texasoilboom.html) 2. Training and Impact on the Oil and Gas Industry In today’s oil and gas industry, there is no longer an acceptable risk hazard associated with the work itself. A single death is not acceptable, regardless of the circumstance. Most commonly, deaths occur from either fire or unsafe work, although there are many variables in the number of recordable deaths in the oil and gas sector each year. Given today’s higher standards, the oil and gas business have implemented a wide variety of standards, assessments, and analyses on each type of work performed. These new instructions have greatly improved the production, as well as significantly increased the health and safety of all employees involved. The training of potential employees is extensive, with much emphasis on safety procedures and equipment. They receive this training before they are allowed to enter a location where drilling or fracturing is taking place. Even with company specific training, there are still many other classes all potential and present employees must attend. These include but are not limited to fall hazards and protection, tripping hazards, pinch points, chemicals and their uses, confined space 3 training, among other certifications. Another key point in the training of new employees is the stress put on what is commonly called stop work authority. This enables any employee to stop work if any perceived or real unsafe condition exists, without repercussion. This can include shutting down a job completely, and cost the company millions of dollars. This was implemented to ensure safe procedures, and safe work habits of the employees. To the oil and gas industry today, a man’s life is more important than any job or the equipment they are using. When for any reason a worker is hurt, or fatally injured on the job, the repercussions for that specific company are catastrophic. When an accident happens in the oil industry, many factors attribute to why it happened and the outcome from it. Unfortunately, 78% of all accidents in the oilfield are caused by unsafe conditions, 20% caused by unsafe acts, and 2% being considered and act of God, 90% of all accidents are avoidable, being caused by human error rather than by mechanical failure. (http://webcache.googleusercontent.com/ search?q=cache:-VqCKagzGVYJ:www.txoga.org/articles/298/1/ OIL-FIELD-SAFETY---POWERPOINT SLIDESHOW+record+of+fatalities+oilfield&cd=7&hl=en&ct=clnk&gl=ca&source =www.google.ca). In the event of an accident, the gas company loses astronomical amounts of money in lost time, damaged or lost equipment, and injuries to personnel on site, millions in lost revenue from the product in the well, as well as a scar on the face of the company’s safety reputation. They also stand to lose an incredible amount in the scale 4 of the impact to the environment. These can include loss of habitat, public outrage, and any destruction of the surrounding ecosystem. Because of this, they spend millions annually to assess habitat impacts. They consider the ground disturbance of the processes that they use in getting the oil and gas out of the ground. They look closely at the number and quality of any given native species of animal or plants in the area, to discern what kind of impact their production is having. They set and maintain parameters for carbon and other emissions, and ensure the regrowth of native species in the areas they are working. 2.1 Various Types of Loss Given the fact that a career in the oil and gas industry has an annual occupation fatality rate that is seven times higher than any other job in the United States, (U.S. Bureau of Labor Statistics, 2009) it is imperative that these companies implement safety procedures and standards for their employees to adhere to. Among the many types of accidents that occur in the industry, the most common are transportation accidents, assaults and violent acts, contact with objects and equipment, falls, exposure to harmful substances or environments, and fires and explosions (http://www.bls.gov/iif/oshwc/cfoi/cftb0241.PDF). Transportation accidents can include a broad realm of possibilities. They can be the simple act of turning your head away from the task at hand for a brief moment, to out and out stupidity, taking foolish chances on the roadway. Transportation accidents occur on or off-highway when drivers do not take the proper precautions for road conditions, are not paying close enough attention, or, commonly, are talking on their cellular phone. 5 There are many other instances in which traffic accidents occur, however these are the most commonplace. They can result in loss of property, loss of life, and in the case of transporting hazardous materials, environmental damage as well as damage to life and limb. Assaults and violent acts are extremely rare, but do happen. These are generally caused when two or more workers have a heated disagreement and it turns to fisticuffs. Another very common accident that takes place is the contact of an object or surrounding equipment. There is a multitude of hazards in the workplace, but the hazards are higher in number and severity in the oil and gas industry. There have been many incidents in the oil industry that have resulted in injuries and deaths. Commonly, these are loss of fingers or limbs, via pinch points that were not considered while doing the job. Improper usage of the equipment, such as riding on an industrial construction machine, falling off, and being either severely injured or killed. Falls are more frequent in the case of the worker not liking a particular piece of safety equipment. This is generally fall protection, in the form of a belt or body harness. Many have failed to wear this protective equipment, and have fallen to their death. The exposure to harmful substances and environments is a very normal occurrence in the oilfield, as there are many chemicals used in the process of fracturing and drilling. These only result in injury or death when the worker fails to follow proper handling procedure of the chemical, or fails to wear the proper protective equipment recommended for the usage of that product. Fires and explosions are not as common an occurrence as they once were, but they still do happen. The causes of these fires can range from improper pipefittings on 6 separators, to the wellhead catching fire or exploding. Often, these are not as catastrophic as they once were, due to the advance of technology in the oil and gas industry. Wellhead Fires are often put out by the use of high explosives, which utilize the oxygen in the air to snuff the flame, so that the wellhead can be capped off to prevent any more oil or gas from excreting through it. 2.2 Effects of Loss Although the oil and gas industry has made marked improvements since its inception in the 1800’s, there are still an alarming number of people killed each year in the oil and gas sector. Many experts claim the reason for this death toll is due to a variety of new factors that the oil sector has been struggling to deal with. According to the “United States Bureau of Labor and Statistics, (2009)”, the death toll of workers between 2002 and 2007 was 598. The causes of these deaths are disturbing. From the year 2000 to present, there has been an enormous increase in the number of people working in the oil and gas sector of the economy, due to a huge increase in oil and gas prices. This, in turn caused many people to be drawn into this field, often young, inexperienced, and do not speak English well. Their lack of experience in this field leads to preventable accidents, because these newcomers do not understand the surrounding threats. Rig hands are surrounded by machinery that can injure or kill someone instantly. Most people that are involved in these types of accidents are killed by falling off a catwalk, are squashed by falling pipe or tongs, or get wrapped up in the cables or chains used on the site. The cycle continues, however. This influx has caused more people to use and abuse alcohol and other substances, 7 which studies have shown innumerable times to impair judgment. This in turn causes more people to react more slowly, accidentally trigger machinery that was left on stand-by, thus causing more injuries and raising the death toll in an already tumultuous line of work. 3. Loss of Control Example In 2007, on Easter Sunday, a young Texas man died in a gruesome accident on a drilling rig. He decided to join the oil and gas industry because of the prospect of making more money, as most career changers do. He was helping his crew to fix a plugged drill bit, when his foreman told him and the other men to break up into two groups, to get the rig back up faster. This young man was standing atop a motorized spool of steel cable when one of his coworkers accidentally turned it on. The young man was pulled into the machine, and he was torn in half. This horrific accident was due to lack of experience on the part of the employee, as well as lack of diligence on the part of the foreman. The company was cited for four separate violations of safety, and fined for the incident. The company was ordered to pay over $22,000 for those violations in relation to this death, but after negotiating, it was dropped by nearly half. This company, “Patterson-UTI”, has since spent nearly $1.5 billion to implement newer safety standards, as well as to replace their antiquated equipment. (http://www.oaoa.com/articles/nation-20833-number-oil.html). 3.1 Conclusion As unfortunate as it is, injuries and death are very common in the oil and gas industry. Since the first drilling rig stood up in Titusville, Pennsylvania, to today, 8 companies and workers are still affected by the shortcomings that are difficult to overcome. The oil industry leaders are setting the bar higher and higher, to allow for safer, more environmentally friendly procedures. Each year, they consider the impact of their safety precautions and procedures, based on the data that they have in regards to any and all reportable accidents. They have specialized teams that investigate these accidents, and brainstorm to come up with new, better ways to keep their workers safe. They also consider the impacts on the natural environment that the rigs cause. Although the hazards are many, with due diligence and hard work on all parts of the people involved, the world’s hunger for oil will be satiated. 9 Works Cited: Eno Petroleum Corporation, 2011. Web. 28 Feb. 2011. Odessa American Online, 2010. Web. 28 Feb. 2011. Oil Field Safety, Luther, Bill. Web. 28 Feb. 2011. United States Department of Labor, Bureau of Labor Statistics, in Cooperation with State and Federal Agencies, Census of Fatal Occupational Injuries, 2009, P. 2. Web. 28 Feb. 2011. Wikipedia, History of the Petroleum Industry in the United States, 2011. Web. 28 Feb. 2011. Read More