Learning from Major Incidents: Maximizing Human and Organizational Factors in Safety

1. Learning from major incidents…… Maximizing the Human and Organizational Factors in Keeping People Safe Kevin Lacy Evangeline Section - Society Petroleum Engineers April 22, 2019 – Lafayette

2. Kevin Lacy – professional background Thirty nine years in the international upstream oil and gas industry Currently CEO of Proactive Real Time Systems Previously 15 months with PetroSkills as EVP Technical Training Staff Four years with Talisman Energy - SVP Global Drilling and Completions Three and a half years with BP as VP – HSE and Drilling & Completions – Gulf of Mexico and Head Of Discipline – Drilling Western Hemisphere Twenty six years with Chevron – Global VP of Drilling and Completions, GM Operations - Europe, Production Operations Manager – Angola Traveled to 61 countries, worked in 15 basins, resident in 4 countries BS Petroleum Engineering University of Tulsa MBA University of California Berkeley

4. Kevin Lacy – personal background - my core values My family Keeping people safe Developing people to reach their full potential My reputation and integrity The quality of my effort and results As a leader people need to know what you value and visibly see examples.

5. Discussion Outline My goal is to provide a perspective on the role of human and organizational factors, negative and positive, in major incidents. Understanding both the limitations and the positive contributions that humans make in managing complex / high consequence operations enables us to assure the lowest possible risk of a major incident. Human and Organization Factors – “Simple”, critical, and predictable HOF role in major catastrophes – focus on Macondo Considering the realities of the oil industry – what are our best options?

6. Eight Barriers Breached Good leaders seek to find what to blame not who to blame. • Well integrity not established or failed • Annulus Cement • Mechanical Barrier • Hydrocarbons entered wellbore undetected and well control lost • 3. Pressure Integrity Testing • 4. Well Monitoring • 5. Well Control Response • Hydrocarbons ignited • 6. Hydrocarbon Surface Containment • 7. Fire and Gas System • BOP did not seal the well • 8. BOP Emergency Operations BP Deepwater Horizon Accident Investigation September 2011 A barrier model was used in BP's internal report to argue that they were not accountable for the accident: they listed eight failed barriers, all of which were the responsibility of other participants.

7. “In several instances, these decisions appear to violate industry guidelines and were made despite warnings from BP's own personnel and its contractors. In effect, it appears that BP engineers, supervisors, and managers repeatedly chose risky procedures in order to reduce costs and save time and made minimal efforts to contain the added risk.” “At the time of the blowout, the Macondo well was significantly behind schedule. This appears to have created pressure to take shortcuts to finish the well.” “The common feature of these decisions is that they posed a trade-off between cost and well safety.” Preliminary Congressional Comments about BP’s Actions BP Found Grossly Negligent In Deepwater Horizon Disaster When cost pressures are routine how do we ensure our workforce feels and acts empowered so they speak up, slow down, pause, or stop the job?

8. Macondo – many HOF issues led to errors ……. While handling a difficult but not necessarily unique DW well By an above average crew On an above average rig Working for several reputable and capable companies familiar with DW While coming under “intense” pressure regarding schedule and costs Working under standards and procedures that were common within the industry – but choosing to accept conflicting info and inadequate barriers Overseen by ___________ supervisors and managers “BP’s Macondo blowout is a textbook case of an organizational accident.” Sidney Dekker

9. Key Components in Understanding Outcomes“Expected and Unexpected” “Context and the situation” L E A D E R S H I P PROCESS O U T C O M E S CULTURE Outcomes based safety management system model – K. Lacy 2002

10. Human Factors – simply defined, easily recognizable. Human factors can be defined as the linkage or interaction between knowledge, the working environment, personal circumstances, and communication between team members. Organizational factors – simply defined, indirect, often inconsistent. Organizational factors can be defined as the formal and informal policies, decisions, managerial and supervisory actions or inactions, and communication that provides guidance, priorities, or mixed messages to the individual and their team. Factors that heavily determine workplace culture. 12 most common causes of error in the aviation industry are: Complacency Lack of Communication Distraction Lack of Resources Fatigue Lack of Knowledge Pressure Lack of Teamwork Norms Lack of Assertiveness Stress Lack of Awareness

11. Key insights regarding HOF from major incidents All humans make mistakes or are subject to error and poor decisions. Even highly trained individuals make mistakes in routine situations. In major incidents 80% are due to human error, 20% due to equipment failure. Of the 80% - 70% is from system weaknesses, 30% are human issues. Team / organizational dynamics can play a significant role in individual decisions. Fear / worry can be debilitating and has significant negative impact on decisions.

12. Why don’t people speak up, follow the rules or just use “common sense”? Human and Organizational Factor “Algebra” 70% -Process effective and organizational resources supportive? Do or Don’t Do 30% - Human Capabilities (not to scale) Perceived Rewards Perceived Penalties Can or Can’t Do- Skill Individual Capabilities Individual Tendencies Will or Won’t Do “Motivation” Human Tendencies

13. The Most Critical Roles in Process Safety . Effective leadership creates and sustains a safety culture, stimulates vigilance, constantly scans for and avoids “harms way” for the crews.

14. The five C’s of highly effective leaders Competency Clarity Consistency Courage Compassion / Conscience Does senior management handicap supervisor consistency and / or create a hostile environment to speak up?

15. Leadership is always a root cause…. • Key responsibilities • Establish and maintain effective standards • Establish and utilize risk assessments • Ensure positive and effective collaboration and communication • Recruit, retain, and develop qualified and motivated staff • Key accountabilities • Clarify, simplify, and consistently reinforce the expected values and priorities • Role model the same values and behaviors expected of the work force • Look constantly for changes in situational context and anticipate the impact • Invite challenge, listen before giving directives, probe silence, see for yourself. Employees are accountable for safe behaviors and following procedures - leaders are accountable for not placing employees in “harms way”

16. When process fails or the unexpected happens….what prevents catastrophe? Major incidents do not occur solely due to lack of process. That processes fail or fail to address all situations or conditions or are ineffective should be no surprise. Therefore good risk management will not rely entirely on process for mitigation. In fact we should “expect” failures and human errors. Process is essential but it is more essential that it is designed to be clear, and as simple and robust as possible. When process fails leadership, culture, and training are the only remaining barriers left.

17. Our best and most effective opportunity….. Senior leadership? Regulations? Common Standards? Technology? Training? First line supervision?