Regulatory Regime Oil and Gas

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UNIT-II

REGULATORY REGIME:
Introduction
After reading this unit, you will be able:

• To know the latest regulatory requirements in the area of health, safety


and environment pertaining to petroleum operations.

• To know various regulatory agencies involved in framing HSE rules and


regulations and other organizations working in HSE area
Introduction
• Since petroleum industry is hazardous industry, a number of regulations
have been framed by various statutory/regulatory authorities in the
country to safeguard the interest of workers, public and environment.

• Sustainable development and environmental safeguards are important


societal issues.

• These regulations specify minimum mandatory requirements to be


complied by the industry.

• The industry should take these regulations in the right spirit and be fully
committed in their compliance.

• These regulations should not be considered contrary to the interest of


business and hindrance to its development
REGULATORY/ STATUTORY AGENCIES
Following is the list of various regulatory/statutory agencies having jurisdiction
over the petroleum industry.

• Central Pollution Control Board ( CPCB) under the Ministry of Environment


and Forest

• Respective State Pollution Control Board under the Ministry of Environment


and Forest of The State.

• Chief Inspector of Factories Of The Respective State (CIF) Under The Ministry
Of Labor

• Chief Controller Of Explosives (CCE) , Ministry of Heavy Industry, Dept of


Explosives

• Directorate General of Civil Aviation ( DGCA) under The Ministry of Civil


Aviation, National Air Port Authority Of India
• Tariff Advisory Committee (TAC) Under the Association of Indian
Companies

• Bhaba Atomic Energy Commission (BARC) Under Ministry of Atomic


Energy

• Directorate General of Mines Safety (DGMS) under the Ministry of


Mines

• Regional Transport Authority (RTA) under the Ministry of Surface


Transport

• Director General Of Dock Safety (DGDS) under The Ministry of Shipping

• International Maritime Organization (IMO) under United Nations

• Oil industry safety directorate (OISD) under the ministry of petroleum


and natural.
VARIOUS
REGULATIONS/ REQUIREMENTS
• The different agencies listed above framed various regulations under their
purview.

• Needless to say that over the years, these agencies have played a
significant role in promoting industrial safety and environmental
protection in the hydrocarbon industry.

• Important regulations are briefly discussed below.


PETROLEUM ACT , 1934

• The statutory requirements of the petroleum are governed by petroleum


Act, 1934 and petroleum Rules 1976 under the jurisdiction of chief
controller of Explosives.

These rules deal with the safety guidelines/ regulations for

• Import,
• Transport,
• Storage,
• Refining, blending and testing of petroleum and its fractions/
hydrocarbons.
Under the Petroleum Act, the petroleum products are classified into

• Class-A having flash point below 23 degrees Celsius,


• Class-B with flash point between 23 to 65 degrees Celsius and
• Class-C having flash point between 65 to 93 degrees Celsius.

Petroleum products with flash point above 93 degrees Celsius are exempted
petroleum and do not fall under the purview of petroleum rules

The petroleum rules, 1976 detail the procedures and safety norms to be
observed for approval of
• Containers,
• Import,
• Delivery and Dispatch,
• Loading,
• Transport,
• Storage, refining and blending of petroleum and requirement for storage ,
and safety distances,
• Testing and maintenance of pipelines,
• Electrical apparatus and
• Degree of safety and license/ approval procedures,
Under these rules, license is required for.
• Import, storage and refueling
• Transport by ships/vessels in bulk
• Transport by mechanically propelled vehicles by road of class-A or B in
bulk
• Decanting from tank trucks in unlicensed premises
• Transport by pipelines
• Refining and blending
• Fabrication of tank trucks
• Manufacture of safety fittings
• Construction of tanks
• Design of containers
The Indian Explosives Act, 1884

• The compressed or liquefied gas filled in containers under pressure are


notified by the Government of India as explosives and brought under the
purview of Explosive Act,1884 in 1938.

• The Chief Controller of Explosives administers the statutory provisions of


this Act.
Various rules framed under the Act are contained in:

Indian Explosives Rules, 1981

• These Rules regulate the manufacture, possession, use, sale,


transport and export/import of all types of explosives used for
various purposes like mines/rock blasting, crackers, etc

THE STATIC AND MOBILE PRESSURE VESSELES, SMPV (UNFIRED)


RULES, 1981

• These rules stipulate various safety guidelines for the storage and
transport of compressed and liquefied gases filled in pressure
vessels (exceeding 1000 liters capacity) at a pressure exceeding 1.5
kg/cm2 at 15 degrees Celsius.
• Under these rules the storage and transport vessel should be designed for
the specific gas, maximum operating temperature and working pressure,
proper material of construction, capacity shape, sizes etc. according to IS
2825 or any other approved code.

• The chief controller of explosives should approve its design /drawings.

• The vessel should be fabricated by an approved fabricator and installed as


per the safety distances stipulated in the rules.

• The rules call for periodic re-examination/testing of the pressure vessel and
its fittings.
The Gas Cylinder Rules, 1981

• The provisions of these Rules pertain to the filling, storage, handling and
transportation of gases in gas cylinders exceeding pressures of 1.5 kg/cm2
at 15 degrees Celsius or 2.5 kg/cm2 at 50 degrees Celsius.
• The rules regulate the
 manufacture of cylinders, valves and regulators;
 marking, stamping and colour coding of cylinders;
 import of gas cylinders;
 storage, handling, transportation and use of gas cylinders;
 testing of cylinders and
 the procedure for appointing the competent person authorized to
undertake the testing and inspection of gas cylinders.
THE FACTORIES ACT, 1948
• The provisions of this act contained in different chapters on health, safety
and welfare are administered by the chief inspector of the factories in the
respective state.
• Each state has its own factories rules.
• The act was revised in 1987 to include hazardous chemical factories and
some other amendments brought in the factories rules of many states in
1995
• The factories act make the occupier of a factory fully responsible for
providing and maintaining the plant and the systems of work that are safe
and without any risks to the health and safety of the workers and general
public.
• General responsibilities of occupier are listed below
• Declaring safety policy of the organization
• Providing the material safety data sheet (MSDS) of each hazardous chemicals
• Every factory should have a well written on-site emergency plan, clearly
defining the role of different persons in case of an emergency. The plan should
be rehearsed every year and updated from time to time.
• Disclosures of information to workers, public and authorities. This should
include declaration of dangers/ health hazards and measures to overcome
such hazards.
• A safety committee having equal representation of workers and management
should be in place. The meeting of this committee should be held at least
every quarter.
• To maintain the limits of exposure of chemicals and toxic substances below
the limit prescribed under the rules.
• Medical checkup of the workers once before the employment and once every
six months for health status in case of specific health hazards.
• Setting up of medical/ occupational health center suitably equipped with
equipment and qualified medical personnel
• Inspection , testing, examination and certification of equipment and vessels
etc. by competent persons approved by Chief Inspector of Factory (CIF).
• Permit to work system should be in place with approved safety and rescue
equipment.
• All work associated with entry or work in confined spaces, working at heights,
hot works, cutting and welding excavation and other dangerous work should
have predetermined safe work procedure and should be undertaken under a
written work permit signed by a qualified supervisor.
• Provide adequate fire protection system as per rules.
• An emergency communication system alarm siren etc. should be in place and
everybody should know what to do in case of an alarm.
• Safety manual containing the different safety procedures applicable to the
installation should be available to the workers.
• Providing PPE to workers depending on the nature of hazard involved
• Appointing a qualified safety officer in the premises as per rules.

• Providing welfare amenities like drinking water facilities, washing


facilities, mess room, toilets etc.

• Sending any accidental report and notice of any poisoning or


occupational diseases
ENVIRONMENTAL LEGISLATION

• Sustainable development and environmental legislation are important


issues for the development of the society.
• Keeping this in view, government of India enacted the various
environmental legislations related to industrial projects activities.
• These include:
 The water (Prevention and Control of Pollution) Act, 1974
 The water (Prevention and Control of Pollution) Cess Act, 1977
 The air (Prevention and Control of Pollution) Act, 1981
 The Environment ( protection) Act, 1986
 The Environment (protection) Rules , 1986
 Manufacture, storage, and import of hazardous chemicals Rules, 1989
 Hazardous waste management ( management and handling) rules, 1989
 Environmental clearance of project notification,1994
 Chemical accidents (emergency planning, preparedness and
response) rules, 1996
 Biomedical waste (management and handling) rules, 1998
 The public liability insurance act, 1991 and the public liability
insurance rules, 1991
THE INDIAN BOILERS ACT, 1923

• The current government and the state government independently, except Jammu
and Kashmir where this act does not apply, frame the act .

• Each state has its own boilers regulations.

• It is an obligatory for an owner to get his boiler registered under this act.

• Chief inspector of steam boilers in the state is the registering authority.

• For the purpose of the act, a boiler means any closed vessel exceeding 22.75 liters
in capacity which is used exclusively for generating steam under pressure and
include any mounting or other fittings attached to such vessel which is wholly or
partially under pressure when steam is shut off.
•A steam pipe under the act means any pipe through which a steam passes from a
boiler to a prime mover or other user if the pressure at which steam passes
through such pipe exceeds 3.5 kg/cm2 above atmosphere or such pipes exceeds
254 mm in diameter

•These regulations covers the design, construction and workmanship of boilers


and connected mountings, fittings and pipings.

•The regulations specify the stages and procedures for inspection of new boilers
and inspection frequency of boilers in operation.

• The regulations also lay down procedure for testing and qualifying welders who
are to work on boilers.

•A registered boiler is permitted for use for a maximum period of one year.
•A working certificate showing validity period, maximum allowable pressure etc.
is issued after every annual inspection by the boiler inspector.

•The boiler owner is required to display the certificate so the boiler attendants
and other employees associated with boiler operation and maintenance get
familiar with the certificate.

•As per the act the owner should provide a qualified person to take charge of
boiler.
•A second class boiler attendant can take charge of a single boiler or battery of
three boilers, the total heating surface of which does not exceeded 150 sq.
meters.

• A first class boiler attendant can take charge of a battery of boilers, the total
surface area of which does not exceed 700 square meters.

• A proficient engineer should be appointed for boilers larger than the above
sizes.
The following acts/ omissions are treated as cognizable offence under the
act.

• Failure to report any accident to boiler or steam pipe to inspector within


24 hrs.

• Tampering with safety valves.

• Allowing a person to get inside the boiler without affecting disconnection

• Fraudulent engraving of registry on a boiler.

• Absence of duly qualified boiler attendant

• Operating the boiler at pressure higher than that allowed in the certificate
.
• If it is not registered or not having valid certificate .
• Carrying out structural alteration ,addition or renewal in or to a boiler
without prior sanction of Chief Inspector .
DOCK WORKERES (SAFETY, HEALTH AND WELFARE) ACT, 1986

The dock workers (safety, health and welfare) regulations were framed in
1990 under the above mentioned act.

Factory inspectorate does not have any jurisdiction on the ports and docs.

Director general of Dock safety enforces, safety requirements at port/docks


where crude and petroleum products moving through ships and barges are
handled.
MOTOR VEHICLES ACT, 1988
The transportation of hazardous products by road is governed by central motor vehicles
act, 1988.

Salient features of the rules include:

•Educational qualifications of the drivers of the goods carriages carrying dangerous or


hazardous goods.

•Every drivers of such vehicles must have passed mandatory three days training course
from a recognized school in addition to having his heavy vehicle driving license.

•Every vehicle carrying hazardous goods must display mark of the class label
appropriate to the type of dangerous goods.

•The vehicle should be marked emergency information panel at three places on the
vehicle.

•His panel contains products technical name, UN identification number, HAZCHEM code,
Emergency phone number etc.
• The vehicle must have TREM card( transport emergency) available in the drivers
cabin.

• Every vehicle carrying hazardous goods must be equipped with the prescribed
safety equipment for the preventing fire, explosion or escape of hazardous
goods.

• The vehicle should be fitted with a spark arrester and a tech graph ( an
instrument to record the lapse of running of the vehicle, time, speed
maintained, acceleration/ declaration etc.)

• Responsibilities of consignee, transporter and driver


OIL INDUSTRY SAFETY DIRECTORATE:

• Oil industry safety directorate , OISD is an advisory body under the ministry of
petroleum and natural gas.

• Set up in the 1986 after Bhopal disaster, the directorate advises the oil and gas
industry in India on all matters of health , safety and environment.

• All public sector ( PSU) oil companies are members of OISD.

• Private oil companies can also become members in case they desire.

• Unlike other regulatory agencies, OISD helps the member oil and gas companies to
enhance the level of safety through self regulation.

• OISD has published a number of standard/ recommendations practice in sitting of


petroleum operation , philosophies, inspection, maintenance, fire protection etc.
• it is obligatory for the member companies to use these standard and recommended
practices for new installations and installation in operations.

• Many other statuary agencies, CCE and others cite OISD standards/recommended
practices in their procedure and requirements.

• OISD has also published guidelines for internal and external safety audits.

• Based on these guidelines, formal safety audits of oil/gas installations of various


PSUs under Ministry of P & NG are conducted periodically by an external team
under the leadership of OISD.

• Petroleum organizations can use these guidelines for their own internal audits.

• OISD has also made a model disaster management plan that can be used by an
installation as guidelines for developing its own disaster/ emergency management
plan.
REGULATORY COMPLIANCE:

No doubt, as various regulations discussed above go in a long way to increase the


industrial safety standards, which is very important for hazardous industry like
petroleum operations.

But the regulations will be useful and bring results only when they are
implemented in the right spirit.

It is the responsibility of the owner/ occupier of an installation and their


authorized officials to ensure that the requirements of various regulations are fully
complied with.

Besides taking the necessary approvals, permission, consents and clearances from
the concerned authorities and maintaining the conditions specified therein, it is
also required by some of these agencies to send them regular reports of
compliance.
In the recent past, the law has put lot of accountability and liability on the part of
senior management of an organization in the compliance of various regulations,
and closure of installations.

The owner/occupier and other officials may even be put behind the bars in serious
violations.

Even the public awareness about the safety hazards and environmental pollution
from industrial activities has increased significantly over time.

It is very easy these days for any person to file a PIL ( public interest litigation)
suing an organization for violation of any regulatory requirement.

The affected organization may get involved in lengthy litigation casting lot of
money harassment and loss of image and reputation.

The management of every installation therefore should ensue that the required
regulations are fully complied with.
LIMITATIONS OF REGULATORY AGENCIES:

Needless to say that over the years the regulatory agencies have played a
significant contribution in the promotion of industrial safety in the petroleum
industry in India.

With due respects to their role, it may be worthwhile to look into some of the
inherent limitations of these agencies. and this is the most important reasons
why organizations should have voluntary own self discipline and regulation to
have a high level of safety standard.

Some limitations are:

MINIMUM REQUIREMENTS:

Most of the regulatory agencies lay down rules/regulations which are the
minimum basic requirements that are very important in the safe design and
operations of industrial units.
They do not go into details of so many other requirements pertaining to safe
management of an installation.

For example, sound and safe engineering practices are equally important but are
not addressed in these requirements.

CHANGE IS SLOW:

Technological developments and social awareness bring in new problems and


challenges to the industry.

Adequate protection of society against new technological hazards would depend


upon the speed with which these regulatory agencies can identify the new
problems and change the rules.

Since the provisions of these agencies cover a wide spectrum of industry and any
amendments has to go through a lengthy legislative procedure, the statuary and law
enforcing agencies are generally slow in updating their rules and requirements to
keep pace with technological and social changes.
Some of the requirements set forth in the regulations long ago may not be relevant
in the present context. For example, Factory Act, since its inception in 1948,
underwent amendments only in 1954,1976 and 1987.

Petroleum rules were last revised in 1976. Environment protection act came into
being only in 1986.

The Indian electricity rules and Indian Boiler Regulations have not seen any revision
for more than 15 years.

INADEQUATE INFRASTRUCTURE:

Many regulatory agencies do not have and adequate facilities and manpower to
monitor and control the safety performance of the industry on a continuous basis.

For example, the number of boiler inspectors in most states is far less than required
to undertake and meaningful inspection visits to a large number of industrial units
under their jurisdiction.

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