Among the lessons to be learned from a recent study of the BP Deepwater Horizon rig disaster is that risk management systems and technology need to be studied and updated, said Christopher Smith, the Department of Energy's assistant secretary for oil and natural gas.

"It wasn't one person, it wasn't one company, it was an entire system and how all of the pieces fit together," Smith told the Natural Gas Roundtable in Washington, DC, Tuesday. "Within all of these companies there are excellent engineers, there are excellent scientists and there is an intent to do things well. But there is concern about the way these systems fit together."

Some of the technology used to monitor rigs and react to early indications of trouble is 40-50 years old, according to Smith.

"I think that's something we do need to be concerned about," he said.

According to the report of the presidential commission on the BP Deepwater Horizon rig disaster, "the immediate cause of the Macondo well blowout can be traced to a series of identifiable mistakes that reveal such systematic failures of risk management that they place in doubt the safety culture of the entire industry" (see Daily GPI, Jan. 12). The commission called for major safety reforms in the offshore oil and natural gas industry, such as the creation of an industry-run offshore safety institute. Producers were divided on some of the report's conclusions and recommendations, and congressional lawmakers were far from united in their reaction to the report (see Daily GPI, Jan. 13).

"Thinking through how we conceptualize risk and how we manage it in complex situations is something that we collectively need to think about," Smith said. "The tools are there; the skills are there. This industry is obviously extremely large, extremely well funded and has some very, very smart scientists and engineers. The industry has the ability on individual tasks to tackle whatever happens to come up, but the intersection of those systems is something that should give us pause. I think that's one of the big areas of doubt.

"There's a role for government there and there's a role for industry...the job on the government side is to make sure we are doing the right research to quantify these risks so we end up understanding them."

Within the Obama administration, "there's an acknowledgment, there's a realization, that gas is important, and that we need to be doing some things...to do everything we can to make sure that we do develop these resources in ways that are prudent and expeditious."

Smith, who is responsible for administering domestic and international oil and gas programs, was appointed in October 2009. He previously worked for Chevron and Texaco, where he focused primarily on upstream business development and LNG trading, including three years negotiating production and transportation agreements in Bogota, Colombia.

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