Regulatory compliance is one of the most complicated aspects of oil and gas operations. There are hundreds of standards and regulations to keep track of and the rules can change with a momentโs notice. From federal oversight by agencies like the EPA and OSHA to complex permitting and reporting requirements, maintaining regulatory compliance is essentialโnot only to protect people and the planet, but also to avoid costly fines, legal action, and operational disruptions.
In this blog post, we share insights and tips, including:
- Tools for managing regulatory compliance in the oil and gas industry
- How industry standards and regulations are intertwined
- Key regulatory agencies for the U.S. oil and gas industry
Understanding regulatory compliance in the oil and gas industry
Navigating regulatory compliance in the oil and gas industry is a complex and frequently evolving task. The U.S. oil and gas sector is heavily regulated, with nine federal agencies and additional state/local authorities governing the industry. The regulations issued by these agencies change frequently, as do the standards that are referenced within them, requiring constant vigilance.
Despite the complexities, regulations exist for simple reasons: to promote safety, protect the environment and conserve natural resources. Failure to comply with regulations can have far-reaching consequences, ranging from citations to fines to legal action.
These regulations can change frequently, often in response to safety incidents, new technology or a change in political administration. Additionally, many regulations reference industry standards, like those published by the American Petroleum Institute (API). Industry standards are typically reviewed every five years, but may be updated more frequently. Any change to an industry standard referenced in a regulation could have a far-reaching impact on a project. It is critical for companies to have a robust requirements and standards management program to keep track of all the changes and stay compliant.
Key U.S. regulatory agencies for the oil and gas sector
There are several subsectors within the oil and gas industry, including leasing, onshore operations, offshore operations, petrochemicals, refining, pipelines, utilities and consumer products. Each of these subsectors is governed by a unique set of agencies.
| Agency | Role in oil and gas regulations |
|---|---|
| BLM โ Bureau of Land Management | Oversees oil and gas operations on federal onshore lands. The BLM’s oil and gas program provides resources on lease sales, required forms, statistical data, and compliance guidelines. |
| BOEM โ Bureau of Ocean Energy Management | Manages offshore energy leasing on federal waters. BOEM is organized into four regional offices and provides access to leasing regulations, legal frameworks, and mapping tools. |
| BSEE โ Bureau of Safety and Environmental Enforcement | Enforces safety and environmental standards for offshore operations. BSEE offers safety alerts, data tools, and incident tracking resources. |
| EPA โ Environmental Protection Agency | Regulates emissions and pollution from oil and gas activities. The EPA enforces sulfur standards and provides reports, FAQs, and guidance documents. |
| FERC โ Federal Energy Regulatory Commission | Regulates natural gas and electricity transmission rates and interstate pipeline operations. FERC ensures open access and efficient energy transport. |
| PHMSA โ Pipeline and Hazardous Materials Safety Administration | Regulates safe pipeline and hazardous material transport. PHMSA provides incident data, safety research, and compliance resources. |
| SEC โ Securities and Exchange Commission | Ensures financial and organizational compliance of publicly traded energy companies. The SEC oversees investor reporting and governance. |
| DOE โ U.S. Department of Energy | Manages energy policy, nuclear infrastructure, and funds research through its offices including the Office of Fossil Energy and the EIA. |
| U.S. Coast Guard | Though not a regulator, the Coast Guard plays a key role in offshore spill response and maritime safety enforcement. |
| OSHA โ Occupational Safety and Health Administration | Sets and enforces safety standards in oil and gas operations. OSHA offers training materials and tools to reduce drilling and refinery risks. |
Source: U.S. Library of Congress
In addition to these regulatory agencies, oil and gas projects are also governed by state agencies. Regulations can vary widely by state. For example, California has strict limits on greenhouse gas emissions from oil & gas production, while New York has banned high volume hydraulic fracturing (fracking). Differing state rules can vastly increase regulatory complexity for companies operating in multiple states or transporting products across state lines.
Understanding the U.S. Code of Federal Regulations (CFR)
The US Code of Federal Regulations (CFR) is the codification of the general and permanent rules published in the Federal Register by the executive departments and agencies of the US Federal Government. The Code is divided into 50 titles that represent broad areas subject to federal regulation. These areas range from energy to public health to aeronautics to labor and more. Each volume of the CFR is updated once each calendar year, on a staggered basis with revised versions of some Titles released each quarter. Between annual updates of a given title, agencies generate updates as often as every day.
Each title of the Code is divided into chapters, which often bear the name of the issuing agency. Each chapter is further subdivided into parts that cover specific regulatory areas. Large parts may be subdivided into subparts. All parts are organized into sections, and most citations in the CFR are provided at the section level.
For example, the portion of the CFR that is relevant to oil and gas and sulphur operations in the outer continental shelf is called CFR Title 30 (Mineral Resources) Chapter II (Bureau of Safety and Environmental Enforcement, Department of the Interior) Subchapter B โ Offshore Part 250 โ Oil and Gas and Sulphur Operations in the Outer Continental Shelf.
Several other titles within the CFR apply to the broader oil and gas industry, including Title 10 โ Energy, Title 30 โ Mineral Resources, Title 40 โ Protection of Environment and Title 43 โ Public Lands, Interior.
Accuris’ Engineering Workbench now provides access to US CFR titles, with daily updates, change alerts, automatic comparisons of revised regulations, and linking between regulations and referenced standards.
Access Regulations in Engineering Workbench
The risks of noncompliance
Failing to meet regulatory compliance standards in the oil and gas industry can have dire consequences. Agencies including EPA, OSHA, PHMSA and BSEE can issue fines, citations and stop-work orders for environmental noncompliance or workplace safety violations. In serious cases, the EPA can mandate costly remediation efforts, like cleaning up oil spills, or even pursue legal action against companies or individuals.
The financial burden of penalties, legal fees and environmental cleanups can be significant, threatening the viability of an entire organization. Beyond legal and financial repercussions, noncompliance can also damage a companyโs reputation, diminishing trust with regulators, investors and the general public. Multiple violations can lead to permit suspension or full shutdown of operations, essentially driving a company out of business.
For natural gas and oil companies, maintaining a strong compliance program and prioritizing health and safety standards is not only a regulatory obligation, but a strategic imperative. Regulatory compliance enables business continuity, environmental sustainability and long-term success in a heavily regulated industry.
Compliance challenges in the oil and gas industry
Regulatory compliance is one of the biggest challenges oil and gas companies face today. The sheer volume of laws governing health and safety standards, environmental protection and operational practices requires careful management and monitoring from the entire organization. In addition to managing the maze of regulations, oil and gas companies must also manage evolving requirements around environmental sustainability and greenhouse gas emissions.
Common compliance challenges include:
- Navigating the web of state, local and federal agencies that oversee your operations
- Understanding which regulations and standards apply to your project
- Interpreting the complex language and identifying requirements within regulations and standards
- Manually searching for references between regulations and standards
- Managing frequent updates to standards and regulatory documents
- Maintaining traceability across the project lifecycle
- Communicating requirements with project stakeholders and external contractors
- Ensuring employees are properly trained in safety processes
Implementing an effective compliance program with digital tools
Staying informed and proactive is critical for regulatory compliance โ and engineers donโt have to do it alone. AI tools, data analytics and advanced software solutions can be a tremendous help with compliance workflows.
Tools like Micro-Alerts and Watchlists in Engineering Workbench Professional make it easy for engineers to keep track of updates to standards and regulations. When you add a document to a Watchlist, you get an automatic notification if the document is updated. Similarly, you can create a Micro-Alert for a specific section of a regulation or standard and get a notification if anything in the highlighted section was updated. With these tools, you no longer need to rely on communication from SDOs/regulatory agencies about updated documents or proactively monitor for updates.
To understand the intent of cross-references between regulations and standards, engineers can followย Dynamic Links – hyperlinks between standards and regulations that reference one another – for seamless interoperability between critical engineering content.
If a standard or regulation is updated, Smart Compare Premium in Engineering Workbench Professional highlights exactly what was changed. You can compare the new version of a document side-by-side with the old version and filter changes based on type. This eliminates the need to manually sort through documents or physically highlight changes.
Accuris Threadโข optimizes the identification, extraction, and integration of requirements from regulations and standards with automation and purpose-built AI for engineers. Automating this process saves considerable time and reduces the risk of errors. Discrepancies often occur during the invitation-to-bid process for oil and gas projects, especially when multiple stakeholders and external vendors are involved. Using an automated requirements extraction tool can help prevent miscommunications and discrepancies early in the planning phase, reducing the risk for delays later in the project lifecycle.
Enhancing workplace safety through compliance
Oil and gas industry projects are inherently dangerous. From caustic chemicals and dangerous emissions to high-pressure drilling equipment, stepping foot on location can put oilfield workersโ lives in danger.
Adhering to health and safety standards and regulations is one of the best ways companies can ensure workplace safety. For example, Title 29 of the US CFR contains several OSHA standards that apply to oilfield safety. These standards include guidance for noise exposure, fall protection, storage and handling of liquefied petroleum gases, and fire protection, among many others. Following these standards, along with all other applicable safety standards and regulations, sets the stage for safe operations. A rigorous standards management and documentation program enables traceability, preparing companies for potential audits.
Safety training is another way to reduce the risk of dangerous incidents. All workers should be properly trained for the work theyโre doing and the locations where they are working. State and federal regulations, as well as individual company policy, can provide guidance on the safety trainings required for employees.
Protecting the environment through compliance
The oil and gas industry can have significant impacts on the environment. Incidents like oil spills, water contamination and excessive emissions can have wide-reaching consequences. Environmental protection policies go beyond public responsibility โ they are a smart business strategy. Adhering to environmental protection standards helps oil and gas companies avoid costly fines, legal action and potential shutdowns while building trust and supporting sustainability goals.
Regulations like the EPAโs Clean Air Act, Clean Water Act and Spill Prevention, Control and Countermeasure (SPCC) Rule are designed to limit pollution and promote safe practices. Companies can follow these regulations by maintaining up-to-date permits, investing in leak detection systems, conducting regular inspections and training employees on compliance procedures. Proactive compliance programs not only reduce environmental harm but also help ensure long-term operational stability.
Stay compliant with Accuris solutions
Navigating the complex world of oil and gas regulatory compliance is no easy task. With the right tools, compliance can become a competitive advantage. Accuris helps oil and gas companies simplify compliance, stay ahead of changing regulations and reduce operational risk through intelligent, connected solutions.
Ready to strengthen your compliance program and make more informed decisions? Book a demo today to see how Accuris can support your organizationโs compliance and efficiency goals.