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Worker Safety Remains the First Priority for Oil, Gas Companies

On 30 Jun, 2014

Safety is first among every oil and gas company. Regardless of whether an employee works in the field, on a rig, or in a high-rise office, they will be reminded time and time again just how important the safety of every employee is to the company, and to the industry. But as more young workers are hired into the industry, the issue has taken on an increased importance.

Younger workers differ from older ones by having fewer fatalities, but more total injuries and more serious injuries, according to safety and injury incident research from the Center for Disease Control and Prevention, the Human Resources Department Canada, and the National Institute of Occupational Safety and Health.

Non-fatal injuries in the oil and gas industry are far lower than average for all private injuries, according to the U.S. Department of Labor and Statistics. That is a remarkable tribute to the emphasis that the energy industry places on safety and safety awareness. A large part of the training that all workers in the oil and gas industry receive is devoted to safety practices and to making employees more safety conscious. 

However, the other side of the coin is that fatalities within the industry at the end of 2013 were at the highest level seen since 1992, when the U.S. Bureau of Labor and Statistics first began tracking the data, according to the Pittsburgh Post-Gazette. While it is important to note that the rise was due to the increase in workers in the field and on public roadways, and not to a rise in the rate per worker hour, it is still a troubling reminder of how important safety awareness is, both on and off the job.

If there is a bright spot in the data, it is that many of the fatalities and injuries are preventable. For example, vehicle crashes are the single largest cause of fatalities to workers in the oil and gas industry, according to a May 2014 Associated Press story, making up four out of every ten fatalities in the industry. And in about half of the cases, the victims were not wearing seatbelts. So, something as simple as ensuring that all occupants buckle up when traveling in vehicles could significantly lower injury and fatality statistics.

Other driving-related factors, such as drivers working longer shifts and increased traffic congestion in the areas near fracking sites, also played a role in the rise in traffic accidents. Traffic deaths in West Virginia fell 8 percent in 2013 from the previous year, but rose 42 percent in the two most heavily drilled counties of the state amid increased traffic congestion, the Associated Press said. While the figures were different, a similar pattern was seen in North Dakota and in Texas. 

Energy companies are aware of the data.

Vehicular accidents “are one of the key risk areas of the business,” Shell Oil Co. Marvin Odum acknowledged in an Associated Press article. 

While transportation accidents are a chief cause of concern for the industry, there are other safety-related areas that energy companies focus on, as well. Rig workers routinely work long hours in inclement conditions, while using large, heavy equipment. Because the actions of a single employee on a rig can have an effect on the safety of every other rig worker present, it is important for oil and gas companies to ensure that all workers maintain a high level of safety awareness at all times. 

USING THE EMR BASELINE TO RATE COMPANIES

Beyond the obvious losses when a company suffers a worker injury or fatality, there are myriad issues that must be considered and costs that must be absorbed by companies when safety issues are a factor.

One area that is directly affected by an on-the-job safety incident is the cost of insurance compensation premiums passed on to a company’s workers. Safety experts working for insurance companies use a term called the experience modification rate (EMR). The EMR is a number that helps determine the cost of previous injuries at a company, and the future chances of risk at that company. A baseline number of 1.0 is used as the average for the industry, with insurance premiums for compensation falling as the number drops under the average, and rising when the number moves above the average.

Although insurance compensation premiums can climb rapidly as the EMR rises following a spate of worker injuries, the premiums do not fall back to previous levels as soon as a company’s safety record improves. The reason is that a rise in a company’s EMR number remains with a company for three years. So, worker compensation premiums from insurers remain elevated for that three-year period. A high EMR puts a company at a competitive disadvantage, so every company seeks to lower its EMR number as much as possible.

DIRECT, INDIRECT COSTS ASSOCIATED WITH WORKER INJURIES

Besides the very real and direct costs of an injury claim, companies are affected in other ways. These indirect costs can be from four to ten times as much as the direct costs attributed with the injury.

While an injured employee is recovering, the company incurs the loss of that company’s productivity. Depending on how serious the injury is, and how critical the job is, an employee from another area may have to temporarily replace the injured employee, costing the company both time and money. There is also administration time as the company fills out the necessary paperwork. And at times, the Occupational Safety and Health Administration (OSHA) will investigate the circumstances of the accident, which can cost the company a significant loss of productivity over time.

However, perhaps the most important costs for a company are those associated with employee morale, the company’s reputation and media attention. Regardless of how lacking in culpability a company is, and how thorough and well-intended a company’s safety program is, the court of public opinion following negative media attention can be unforgiving.

Estimates regarding the cost of direct and indirect costs on all companies in the United States are upwards of $170 billion a year, according to EHS Today, an occupational safety and health, regulatory, environmental management and risk management website.

With so much at stake regarding direct and indirect losses from safety incidents, there is little wonder that all companies seek to prevent worker injuries and fatalities. It has also prompted various groups to study the psychology of workplace safety. Organizations such as EHS Today have raised questions such as whether safety leadership is innate or whether it is something that can be developed, and whether the concept of safety is something that can be led.

The goal in safety is not to seek to fail less, but to not fail at all. Reducing safety-related injuries and deaths is tantamount to failing less. Eliminating safety-related injuries and deaths must be the goal, according to Terry L. Mathis, founder and CEO of ProAct Safety – a company that was created to help organizations achieve and sustain safety excellence – in EHS Today.

As for the question of whether safety is learned or innate, some people seem to be more safety-conscious than most, just as some people seem more accident-prone. However, true safety leaders appear to be developed, not born, Joe Wheatley, corporate director of risk management and EHS Affairs for EnPro Industries Inc, told EHS Today.

Regardless of the amount of media attention generated by a company’s performance in other areas, leaders in the safety arena see the issue as being the most important of any company’s challenges, ranking “equally as important as quality and production,” Wheatley said.

ASSESSING RISKS OF POTENTIAL EMPLOYEES

As a response to the need for greater safety awareness among oil and gas workers, a pre-employment assessment company has recently added a new competency cluster to its assessments for oil and gas companies.

SkillSurvey, the company that invented a confidential reference checking assessment, Pre-Hire 360, to help companies evaluate and screen the relevant skill levels and experience of prospective employees early in the hiring process, has added a new “Commitment to Workplace Health and Safety” cluster for its oil and gas company customers. The new safety cluster helps these companies identify the candidates that have demonstrated a commitment to workplace safety in the past, that past on-the-job behavior is the most accurate predictor of future behavior.

“This new safety cluster will help hiring managers identify whether a candidate cares about safety on the job, based on assessments from prior co-workers and managers – the most important indicator there is,” Ray Bixler, president and CEO of SkillSurvey, Inc., told PRWeb.

Energy companies are competing for the best new workers, and they have to move quickly. However, hiring a worker who has a questionable safety record can be a very expensive proposition. SkillSurvey’s report with feedback on a prospective employee is often provided to the client company within a day or two, allowing the company to evaluate the safety record before an offer is made, thus helping the hiring company to minimize its risks.

“Safety should be a key focus even before a candidate is hired. Companies spend large sums on training and recovery efforts and can significantly reduce these costs by hiring candidates with a zero-tolerance mindset,” Marzena Quinn, product director for the energy market at SkillSurvey, told Rigzone.

IMPROVING SAFETY STATISTICS WITH LEADERSHIP

While having employees with an awareness of safety is a necessary first step in reducing accidents, it is important to have an effective strategy and an effective leader. The findings of research into safety show that an uninvolved and passive safety leadership style has negative impacts “on employee safety compliance and safety participation behavior,” according to Routledge, an academic publisher in the humanities and social sciences.

Being an active and effective safety leader means that those assigned with promoting safety must do so constantly, not occasionally or periodically. When safety leaders are consistent and predictable in their approach to safety, and have an active engagement with other employees about safety and always make it a priority, they are more effective in developing the safety awareness of other employees, Routledge said.

Effective safety leadership is made possible by taking four steps, Mathis said. Developing the proper strategy is necessary. A strategy should focus safety efforts on particular risks or precautions, rather than simply declaring a goal of reducing accident rates. Expectations must be set, and there must be consistency and follow-up regarding the expectations. Safety leaders must visibly care about creating the teamwork necessary to instill a culture of safety awareness in order to prompt other employees to “buy into” the idea of safety. And finally, Mathis said, the message of safety must be strengthened by personal example.

According to Rigzone

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