1. Mid Continent Exploration and Production Safety Network (MCEPS) & FRC Update

2. MCEPS  Alliance between the oil and gas industry and OSHA  Formed in 2008  Purpose is to promote safety, health and environmental improvement in the exploration and production of oil and gas in Oklahoma, Kansas, and the Texas Panhandle.

3. MCEPS  The alliance with OSHA has the goal of reducing fatalities and serious injuries in the energy industry  A significant decline has been documented in Oklahoma’s injuries and fatalities in the oil and gas industry  Alliance has been renewed and will be signed next week

4. OSHA Inspection Activity  Oklahoma Area Office conducted 70 inspections in the oil and gas industry through October 1, 2009 to August 19, 2010.  The MCEPS meetings are one of the formats used by OSHA to share the information with industry to prevent recurring citation within the industry.

5. OSHA Inspection Activity  Most frequently cited standard by OKC’s Area Office: 5(a)(1) General Duty Clause of the OSHAct Operation of a drilling rig with derrick of unknown manufacturer and load rating capacity. Operation of a drilling rig without developing an inspection and repair procedures program.

6. OSHA Inspection Activity 5(a)(1) General Duty Clause of the OSHAct Absence of emergency escape device (Geronimo) Access to Geronimo blocked by wind tarp. Unsafe/Improper rigging: ○ Missing structural pin keepers ○ Improperly rigged guy wires ○ Living quarters located within the fall radius of rig mast.

7. OSHA Inspection Activity 5(a)(1) General Duty Clause of the OSHAct Emergency escape device not installed according to manufacturer instructions Improper use of fall protection Notification of crane operator of rig component weights and attachment points prior to lifting operation

8. OSHA Inspection Activity 1910.305 Electrical: Wiring methods, components and equipment for general use 305(g) Flexible cords and cables 305(a) Temporary wiring 305(d) Switchboards and panelboards 305(e) Cabinets or cutout boxes in wet locations 305(b) Protection of conductors entering boxes

9. OSHA Inspection Activity 1910.184 Material Handling and Storage: Slings 184(e) Sling Identification: alloy steel chain slings 184(f) Wire rope slings: load rating 1910.23 Waling and Working Surfaces 23(a) Protection for floor openings 23(c) Protection for open sided floors 23(e) Railing and toe boards

10. OSHA Inspection Activity 1910.1200 Hazard Communication 1200(f) Labeling of containers of hazardous chemicals 1200(g) Material Safety Data Sheet preparation 1910.307 Electrical: Hazardous locations 307(b) Equipment & wiring requirements 307(c) Conduit requirements

11. OSHA Inspection Activity 1910.181 Material Handling & Storage: Derricks 181(c) Load ratings and markings 181(d) Derrick inspection 181(g) Rope inspection 181(j) Load handling: size of load 1910.178 Powered Industrial Trucks 178(a) General requirements 178(j) Operator training

12. OSHA Inspection Activity Since the issuance of the FRC Memorandum, there have been no citations for violations of 1910.132 related to FRC during this time period. There may be pending citations yet to be issued.

13. Fatality/Catastrophic Investigations Total15 SIC 07 Agriculture01 SIC 13 Oil & Gas03 SIC 15 & 16 Construction04 SIC 20-39Manufacturing04 SIC 42Transportation01 SIC 50Wholesale trade01 SIC 73Services01

14. Fatality/Catastrophic Investigations  1389 Oil & Gas Struck by rear dome lid from exploding tank truck (propane torch used to heat butterfly valve on back of tank truck) Cigarette lit while employee was draining a tank resulting in an explosion  1611 Highway Construction Struck by exploding tire debris Struck by car in work zone

15. Fatality/Catastrophic Investigations  1771 Concrete Work Fall from silo after stepping on a loose section of form  1791 Structural Steel Erection Struck by piece of steel  1381 Drilling Oil & Gas Wells Struck by load from crane  2499 Wood Products Fall through skylight on roof

16. Fatality/Catastrophic Investigations  0782 Lawn & Garden Services Worker found near tank batteries with mower at bottom of tank (Cause unknown)  3569 Aircraft Parts While working on airbrakes of tractor trailer, truck became engaged dragging the employee under the truck and pinning him between front tire and engine of moving truck

17. Fatality/Catastrophic Investigations  3321 Gray and Ductile Iron Foundries Electrical shock resulting in fall from heights  4213 Trucking Fall from truck while unstrapping cargo  5093 Scrap & Waste Materials Crushed by falling section when working inside boiler  7389 Business Ser vices Fall through roof

18. Program Plan-Inspection Activity Program20102011 Total Inspections791858 Oil & Gas 45 50 Heat Stress --- 05 Construction405435

19. Points of Interest  OSHA has initiated early stages of rulemaking for Injury & Illness Prevention Program Rule  OSHA revised the Outreach training program requirements- 10 hour course over 2 days and 30 hour course over 4 days

20. Points of Interest  OSHA’s Crane & Derricks in Construction Final Rule was published August 9, 2010 with effective date of November 8, 2010. Some provisions have delayed effective dates.  April 28, 2010- Memorandum: OSHA training standards to the field requiring safety training in language workers understand.

21. Points of Interest  April 22, 2010- Memorandum: Administrative Enhancements to OSHA’s Penalty Policy Addressed changes expected in OSHA’s penalty structure and calculation procedures A general increase of overall amount for all penalties

22. MCEPS Direct Impact to Industry  Frac Tank explosions  Crane standard as applicable to winch trucks  Roundtable discussions  FRC Issue

23. Flame Resistant Clothing  FRC issue began 2 years ago with citations issued in North Dakota region  OSHA citation issued to drilling company including operator  Meeting held in Denver with OSHA and industry representatives

24. Flame Resistant Clothing  FRC Survey from MCEPS, IADC, IPAA, and AESC  Industry discussion groups  Request to OSHA: Industry input to regulation guidance Update the injury and fatality study

25. Flame Resistant Clothing  FRC Memorandum issued March 19, 2010.  Culminated in meeting with OSHA in Washington DC on August 16, 2010.  Those included were OSHA, IADC, IPAA, AESC, API, and STEPS groups including the Permian Basin, National STEPS and MCEPS.

26. DC Memorandum Meeting  The FRC Memorandum will not be recalled.  OSHA took the concerns of industry seriously and was surprised by the number of responses.  Flash fires in upstream are a low probability but high consequence.  Memorandum is not an official letter of interpretation but a guidance document.

27. DC Memorandum Meeting  Formal rulemaking is a long process.  OSHA was not aware of the proactive organizational approach to working with OSHA and felt that industry was not willing to work with OSHA.  FRC Memorandum can be revised.  Perception that hazard assessment done by industry is inconsistent and inadequate.

28. DC Memorandum Meeting  No phase in period for implementation was included although is will take considerable time to comply.  Statistics quoted were inaccurate and not applicable.

29. FRC: Moving Forward  Information presented will be shared with the Assistant Secretary and industry respectfully asked for a timely response.  Industry associations will educate members on hazard assessment and OSHA will provide guidance.  Task force was suggested.

30. Improving Safety in the Industry  SafeLandUSA  Shared Audit  OSHA/Industry Alliances Working together- industry, including operators and contractors, to improve communication and safety procedures.

31. Thank you! Any Questions?