Oil and gas production going hard, employees paying the price

At a glance: workplace safety in the oil and gas industry

  • Worker populations, OSHA inspections, injuries and fatalities all increased
  • Lost-time injuries cost the industry $303 million and 50,000 work days
  • Contractor non-fatal injury rates are down, while non-contractor rates are up
  • 138 fatalities represent “a new high” for the industry

The Bureau of Labor Statistics (BLS) includes the production of oil and gas as part of the Mining sector (NAICS 21). Extraction activities conducted entirely by a producer using their own people (not contractors) come under Oil and Gas Extraction (NAICS 211). Support Activities conducted by contractors fall into two groups: Drilling Oil and Gas Wells (NAICS 213111) and Support Activities for Oil and Gas Operations (NAICS 213112), which includes all support activities other than well drilling.

While 2012 injury rates in the sector are relatively low compared to U.S. averages, fatality rates were five times the U.S. average for all workers. Both were skewed against contracted support services, which accounted for approximately 67% of the sector workforce (562,790) that year.

The non-contract Extraction group experienced a 2012 total case rate of 1.5 (up from 0.9 in 2011), while contracted Drilling and Support services experienced rates of 2.1 and 1.9, respectively – both down from 2011. For DART rates, against the 2012 U.S. average of 1.8, Extraction came in at 0.8 (up from 0.5 in 2011), while contracted Drilling and Support recorded 1.4 and 1.1, respectively — both down from 2011.

Even with relatively low rates, the industry is paying dearly for lost-time (days away) injuries. Considering direct and indirect costs, Extraction spent $88.2 million (more than double their 2011 loss of $42.5 million) while Drilling Support gave up $65.6 million (flat from $65.5 million in 2011) and Other Support spent $149.5 million (down from $163 million in 2011) for a total 2012 loss to the sector of $303.3 million (up from $271 million in 2011). At nearly $76,000 each those 4,010 lost-time injuries cost the industry $539 per employee across the entire workforce.

The typical injured worker in this sector in 2012 was male, age 25-34 and on the job one to five years when injured. Employees on the job for less than three months and those between three and 11 months were the second and third most injured groups. Injuries in oil and gas resulted in more time off than average, with 35% (Other Support) to 41% (Extraction) out for 31 days or more for a lost-time incident.

Fatalities continue to plague the industry. Mining posted a 2012 fatality rate of 15.6 per 100,000 workers, down slightly from 2011 and again second only to Agriculture, Forestry, Fishing and Hunting (21.2). Oil and Gas Extraction accounted for 78% of those, recording 138 fatalities (up 23% from 2011) and “reaching a new high for the series” according to the BLS. Contractors led the way in gross numbers, but not in terms of percentage increases. Drilling decreased 5% while Other Support and Extraction experienced fatality increases of 28% and 92% respectively.

Extraction, with 33% of the workforce, accounted for 18% (25) of fatal 2012 injuries. Other Support, with 50% of the sector workforce, recorded 53% (74) of the fatalities, while Drilling suffered 28% (39) of those losses from only 16% of the workforce.

How were oil and gas workers killed in 2012? For Extraction the leading source was transportation followed by fire and explosion, falls and contact with objects. Drilling was led by transportation and contact with objects (10 each) followed by falls, fire and explosion and harmful exposure (i.e., toxic substance). Other Support contractors by far lost the most employees to transportation fatalities (44), followed by fire and explosion, contact with objects, falls and harmful exposures.

Compared to the U.S. average of $1,527 in 2013, penalties for OSHA citations are sharply higher for the oil and gas group. Extraction averaged the highest penalties at $2,850 per citation, led by Process Safety Management (PSM), General Duty and guarding. Drilling averaged $2,504 per citation, led by guarding, electrical and General Duty while Other Support averaged $2,225 per citation, led by General Duty, Hazard Communication, guarding and respiratory protection.

Contrary to a steady decline in the overall number of inspections nationally, OSHA oil and gas inspections are up over the last five years, and for all three groups inspections by fed-OSHA continue to far exceed the numbers of state inspections. This appears to be largely a function of the geography of intense production. For example, 205 of 357 fed-OSHA inspections of Support firms in 2013 were in Texas (127) and North Dakota (78), currently the two leading “boom” areas. All state programs combined conducted only 48 inspections of the same group that year.

Perhaps the good news is that despite rapid growth of the oil and gas workforce and the unforgiving and demanding nature of the work, injury and fatality rates are flat or down with the exception of the non-contractor Extraction group. Even so, high numbers of fatalities and hundreds of millions of dollars lost to injuries are not going away without a fundamental shift in how the industry manages safety. The sustainable solution is developing a culture of safety. It’s a lifestyle change for the organization that starts with an absolute commitment to safety. Then go after the data.

Use Job Hazard Analysis (JHA) to analyze jobs that are causing losses. Measure everything you can through a formal incident management system (IMS) that promotes early reporting and intervention. Be proactive and use the IMS to capture and investigate observations and near misses with the same resolve as if they were injuries. These “leading indicators” are warning signs and are your best chance to improve the process and stop the next injury or illness before it happens. Commit to continual improvement and use these data to get there. No retaliation for reporting, especially for things you did not like. Asking everyone on the team to step up and help improve workplace safety will not succeed unless the process is credible, transparent and positive.

UL gives oil and gas safety professionals the tools they need to proactively address risks, reduce costs and keep people safe, healthy and on the job.