Safety+Culture+of+BP


 * Factors in the Matrix that Caused the BP Gulf Disaster: Poor Safety Culture **

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=__ 1. What factor in the matrix that caused the BP disaster have you chosen to focus on? __= __ ﻿ __ I have chosen to focus on BP's performance from 1995 to 2010 and how safety within BP can be seen to be a major issue over the course of the past decade and a half.This is done by focusing on major disasters that have occurred in BP's history, looking into what were the main causes of those accidents, what the response was to those accidents, and what should have been learned by having these accidents occur.

=__ 2. What three quotes help explain the causal factor you have identified? __= __ ﻿ ﻿ __
 * "We have never seen a site where the notion 'I could die today' was so real." ([|Lyall, 2010]) A quote by the Telos Group, a consulting company hired to assess conditions at BP's Texas City Refinery. The quote, which is in reference to working conditions at the plant, was released in the companies report two months prior to the explosion which killed 15 and injured 170 others on March 23, 2005.


 * "Workers had a high incentive to find shortcuts and take risks. You only ever got questioned about why you couldn't spend less—never more." ([|Faucon, 2010]) A quote by Ross Macfarlane who is a former health and safety manager on rigs in Australia for BP but was laid off in 2008. He speaks towards the overarching company ideology towards cutting costs, and dealing with issues that get in the way of reaching a better bottom line.


 *  “Some 46 percent of crew members surveyed felt that some of the workforce feared reprisals for reporting unsafe situations, and 15 percent felt that there were not always enough people available to carry out work safely." ([|USA, 2011]) A quote from the National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling, it illustrates statistics taken from a survey of the Transocean crew members on the Deepwater Horizon rig just a few weeks before the accident.
 *  “Some 46 percent of crew members surveyed felt that some of the workforce feared reprisals for reporting unsafe situations, and 15 percent felt that there were not always enough people available to carry out work safely." ([|USA, 2011]) A quote from the National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling, it illustrates statistics taken from a survey of the Transocean crew members on the Deepwater Horizon rig just a few weeks before the accident.

=__ 3. What people and organizations were key actors? What other stakeholders should be noted? __=

The CEO's of BP over the past decade and a half are the two main key actors when considering BP's past safety culture. John Browne became the first CEO of BP when it transitioned from being a government overseen company to a private one in 1995. Browne is credited for making BP what it the global behemoth it is today. The new business plan he introduced sent BP's profits skyrocketing, effectively doubling the share price and dividends of the company stock. This business plan was to ignore small projects and instead go after the riskiest projects available which held the largest profits as potential outcomes. These projects were aptly named 'elephants' within the industry, and for the most part had been left alone because of the amount of work and capital it requires to invest on such a project for only the potential of a successful operation. At the same time as he was instituting this new business plan, Browne was restructuring the task force and infrastructure of BP which had been operating as a government company since 1908. In doing this, he slashed costs and fired tens of thousands of employees, choosing to outsource many of the companies operations. Such a high risk business strategy didn't come without setbacks and over the period of time where Browne was CEO, BP saw several disasters occur at their facilities. In November of 2003, the Forties Alpha platform in the North Sea experienced a ruptured gas line setting back BP $0.3 million in fines. In 2000, their Grangemouth Complex Refinery in Scotland was brought up for several potentially life threatening accidents. In March of 2005, the Texas City Refinery exploded, killing 15 and injuring 170. In July of 2005, Hurricane Dennis came through and sunk the Thunder Horse Platform in the Gulf, a $1 billion platform rendered useless and found to have had all the potential for a Deepwater Horizon-like event. In 2006, the Prudhoe Bay leak resulted in BP experiencing the largest oil spill to ever be seen on Alaska's northern slope, costing BP $20 million in fines.

Tony Hayward took John Browne's place as CEO in May of 2007 after Browne was pressured to resign from the position. Hayward stated upon taking the position that he would focus "like a laser" on safety and improve operations at BP. ([|Faucon, 2010]) However, Hayward has retained Browne's business strategy, continuing to go after "the tough stuff that others cannot or choose not to do," as he said himself. ([|Lyall, 2010]). In the three years he's held the position of CEO, he's cut 7,500 jobs and shaved costs of the company, making record profits of $25.6 billion in 2008 and cutting $4 billion of costs in 2009 alone. Hayward had also initiated the process of paying off the fines the company had accrued for past industry failures and infringements, agreeing to pay the $373 million towards settling for Texas City, Prudhoe Bay, and Forties Alpha. He also invested $1 billion in improving Texas City refinery. However, BP was still being accruing fines for their practices. In 2008, two years after BP's Toledo, Ohio refinery had been inspected and identified as having problem areas within the plant, OSHA ordered a $3 million fine for not fixing identical problems in other portions of the plant and choosing only to address the specific cases that were pointed out in the prior inspection. In 2009, OSHA inspected the Texas City Refinery and fined BP $87 million for "failure to abate" the hazards similar to those that had caused the explosion in 2005. By the end of 2008, Hayward had invested $500 million in replacing miles and miles of pipeline at Prudhoe but the pipelines were still experiencing extensive leaks such as a 1000 barrel leak of crude oil in November of 2009.

The stakeholders present in considering the safety culture of BP are those that are affected adversely by the risks that BP willingly takes upon themselves. These include the workers that are put in dangerous working environments, the emergency response workers that are exposed to harsh conditions in addressing industrial accidents, and finally the general population which is affected based off of their proximity to the site. It is arguable whether or not BP workers can be considered stakeholders rather than actors, considering that how they perform in their jobs does affect the safety of their work environment. Beyond that though, the culture that has been 'encouraged' at BP is one where workers are encouraged to find short-cuts, and avoid costs. There are instances where the working atmosphere has been described as being discouraging of reporting incidents or potential warning signs, due to the break in production that such a report would demand.

=__ 4. What further details from your sources convey the significance of the problem you have identified? Provide at least five details, with references. __=


 * Carolyn Merrit, CEO of the Chemistry Safety Board in 2007, testified in court before the US Senate Subcommittee about the Texas City Refinery incident of March 2005. She said that the equipment of the plant was dated to the 50's and could not be considered safe, and that other companies had long since replaced similar equipment with more modern counterparts. She also added that, "In 2002, BP considered eliminating the equipment but chose not to due to cost pressures and BP's ability to take advantage of an exemption under US EPA air regulations." ([|USA, 2011]) Despite numerous fatalities (23 over the 30 years prior to 2005) and releases, BP did not take steps to prevent a growing risk of catastrophe at Texas City. If anything, they actually encouraged the risk. In 1999, the budget of the plant was cut by 25% and then by an additional 25% in 2005 though the refinery was in disrepair and desperately in need of restoration. Along with cutting budgets to the plant, the operator training and staffing was also downsized.


 * The Prudhoe Bay pipeline leak of 2006 was the worst spill ever to be seen on the North Slope of Alaska, releasing 200,000 gallons of oil onto the tundra. Investigations showed that several miles of pipeline were corroded in under-maintained areas and that the areas hadn't been properly inspected for some time. ([|Lyall, 2010]) The leak went undetected for a total of five days, and BP ended up being fined $20 million in retribution for the event. BP is the second largest oil producer on Alaska's North Slope, but in 2009 had the largest number of spills over the past decade. ConocoPhillips, Unocal, Pioneer, and XTO have all had less than half of the spills BP has had combined, and the sheer amount of oil that BP has spilled exceeds the sum of the four other companies by a factor of four. (Chazan, 2011)


 * BP's Thunder Horse platform ought to have been producing 20% of the Gulf's oil ([|Lyall, 2010]) but it was made clear that a valve had been installed backwards on the platform when Hurricane Dennis came through the Gulf, leaving Thunder Horse sunk in its path. Instead of pumping water off of the platform, which it was supposed to do during a hurricane, the direction of the valve actually caused water to be pooled onto the rig and weight down the rig until it's structural integrity gave out. Following the incident, a full scale assessment of the rig found shoddy welding jobs done on the pipes and cracks that had already formed on them. Had the platform actually been put in use, there would have been a spill just like that which is seen now with Deepwater Horizon.


 * In November of 2003, BP's Forties Alpha platform experienced a gas leak after a gas line ruptured and the rig was flooded with methane. Luckily for the crew it was a particularly windy day without sparks, so the platform was aired out with incident. However, the potential was there for an event to happen similar to that of Piper Alpha where a ruptured gas line led to an explosion that killed 165 crew members and 2 rescuers. Forties Alpha was a depleted field looking to be sold, and BP was intentionally running it at minimum cost and allowing pipes to corrode. ([|USA, 2011])


 * At the time of it's operation, Horizon was the least efficient operating in the Gulf for BP. 44% of the rigs days were nonproductive the project was $29 million over budget for the year 2010. ([|Faucon, 2011]) With BP's past record for discouraging reporting bad news and that their managers are notorious for failing to effectively address or investigate incidents in the past, it's easy to see how a poorly performing platform may receive additional pressure to become lest costly. Though BP claims that the performance of Deepwater Horizon didn't affect the total spending being done on the site, it's a difficult coincidence to overlook.

=__ 5. What could have offset the problems you have identified? Provide at least one reference in responding. __=

Had BP been given a considerable amount of attention the the multitude of suggestions that were being made to them by the companies performing assessments of their facilities, it's quite possible that this event may have been avoided. Over the many instances where BP was fined for malpractice, they often failed to apply the lesson learned from the event to other aspects of the industry. Common themes are seen throughout the catastrophes that occur at BP, and had the company applied the lessons to their overarching business strategy rather than just the plant in question, many accidents may have been avoided.

Additionally, a better policing force or establishment may have been able to ensure that BP actually addresses the issues it's made aware of by the assessments. Similar to what is done by the INPO in the way they regulate the Nuclear Power Industry within the US, BP could have been forced to apply the lessons learned from fines to all of their plants across the industry, and several issues could have been avoided. ([|USA, 2011])

=__ 6. How has this analysis advanced your understanding of the 2010 BP disaster, and of oil politics more broadly? __=

In performing the research for this analysis, I've come to understand better the many different individuals, companies, and organizations that interacted to result in the 2010 BP Gulf Disaster. I was never aware before of the extreme freedom that companies such as BP had to take on risk at the cost of others' well being. It astounds me that companies are allowed to publicly state that they go after the riskiest and most dangerous operations, and then not be forced to internalize the potential consequences that may result from such high risk ventures. Risk and safety are something that every single industry has to deal with in their operations, and it has surprised me how BP has been able to take advantage of a clerical error in the way that companies are rated on their safety standards. Worker safety and operational safety are two entirely different things, and that a company can hide behind one of them as justification for the other is entirely inappropriate.

=__ 7. What lessons can be drawn for disaster prevention in the future? __=

Many lessons can be drawn from the 2010 BP disaster. Clearly companies aren't being held accountable enough for their actions, as evidenced by BP's continued infringement on the rules and subsequent fining thereof. A better policing organization could improve on this situaiton, and one that follows the makings of the INPO could potentially have a very successful effect. Because there are clear cut differences between the industries of gas and oil energy and nuclear energy, certain changes would have to be made to the operation of the INPO model in applying it to oil and gas. Overall, the accident has brought to the forefront many issues concerning the safety culture of all oil and gas companies, and process safety needs to be taken more seriously, and held in higher regard. Disasters in some sense may be considered random, chance occurrences but that doesn't give any company the right to not try their absolute best in preventing them from happening, and being prepared for them when they do occur.

=__ Work Cited __=


 * ====== Chazan, Guy. BP's Safety Drive Faces Rough Road." The Wall Street Journal. 1 Feb. 2011. Newspaper. 25 Feb 2011. ======
 * Faucon, Benoit, Guy Chazan, and Ben Casselman. "As CEO Hayward Remade BP, Safety, Cost Drives Clashed." The Wall Street Journal. 29 June 2010. Web. 22 Feb. 2011. <[]>.
 * Lyall, Sarah. "In BP’s Record, a History of Boldness and Costly Blunders." The New York Times. 12 July 2010. Web. 21 Feb. 2011. <[]>.
 * USA. National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling. Deep Water The Gulf Oil Disaster and the Future of Offshore Drillin. By Bob Graham, William K. Reilly, Frances Beinecke, Donald F. Boesch, Terry D. Garcia, Cherry A. Murray, and Fran Ulmer. Jan. 2011. Web. 25 Feb. 2011. <[]>
 * Associated Press. “Review: Oil rig inspections fell short of guidelines.” Timesnews.net. 16 May 2010. Web. 11 February 2010. <[]>
 * “Salazar Swears-In Michael R. Bromwich to Lead Bureau of Ocean Energy Management, Regulation and Enforcement.” BOEMRE Press Release. The Bureau of Ocean Energy Management, Regulation and Enforcement, 21 June 2010. Web. 16 Feb. 2011. <[]>
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