Comparison of Perspective and Performance-Based Regulatory Regimes in the U.S.A and the U.K.

Abstract

Every major industrial accident such as Piper Alpha disaster, Exxon Valdez Oil Spill, BP Texas City Refinery led to the development of new regulations. After the BP Deepwater Horizon accident, several investigation committees recommended to reexamine the United States’ existing regulatory approaches by integrating more sophisticated risk assessment and risk management practices. It has been observed that this type of reactive changes in regulation sometimes give more focus on the causes of a particular accident rather than considering possible future hazards unrelated to that particular accident. There are primarily two approaches of the offshore oil/gas industry’s regulatory regime; while the United States’ regulatory system is the more prescriptive-based, the United Kingdom’s approach is performance-based. The National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling Accident recommended changing U.S. regulatory regime to a proactive, risk-based approach which could be similar to the “Safety Case” approach of the North Sea. The “Safety Case” approach of the U.K. is considered successful in minimizing accidents in the North Sea region. The objective of this study is to perform an evaluation and comparison between the United States’ prescriptive- based regulatory approaches and the United Kingdom’s performance-based regulatory approaches to understand their advantages and disadvantages. Then, this study presents an analysis of major accident histories under both regulatory regimes and discusses their effectiveness in reducing accidents. The study has found that there are both advantages and disadvantages in both the regulatory regimes and with available data, it is difficult to conclude with certainty that one regulatory regime is better than the other.