British Petroleum’s sorry safety record
Typically, when something goes as seriously wrong as what is being experienced in the Gulf of Mexico, one has only to turn to history to find the warning signs that tell us that we could have seen it coming.
This certainly appears to be the case with British Petroleum, PLC (‘BP’).
Just one year ago, a Federal Court Judge in Houston, Texas accepted a criminal plea entered by BP requiring the oil company to pay $50 million for its role in a deadly explosion at the company’s Texas City refining facility that killed 15 people and injured 170. The company had attempted to plead guilty a few years earlier, however the families of the victims appealed the fine on the grounds that the penalty was nowhere near stiff enough for the crime BP had committed.
The explosion, which took place in 2005, was one of the worst refinery accidents ever to take place on American soil and, according to the company’s own investigation – led by former Sec. of State James Baker – the direct result of maintenance and safety cuts at the plant put in place as a cost savings measure.
Worse still, the evidence reveals that the company was aware of the problems before the accident took place and could have taken steps to avoid the horrible result.
Not only did nobody go to jail, the case failed to teach BP much of a lesson.
After another death at the same Texas City facility in 2006, the U.S. Occupational Safety and Health Administration (OSHA) determined that BP failed to go forward with repairs that the government ordered them to make after the 2005 disaster. This resulted in an $85 million fine being levied against BP just six months ago, the largest ever issued by the government agency.
And still, nobody went to jail.
Sadly, there’s more.
In August 2006, BP was forced to shut down their oil operations at Prudhoe Bay, Alaska when corrosion in the company’s pipelines caused one million liters of oil to spill all over Alaska’s North Slope. The problem?
The very same company ordered cut backs in maintenance and safety costs that caused the disaster in Texas City.
And if we’re looking for more recent indications of trouble, check out BP’s record elsewhere in the world –
British newspaper The Guardian reports:
BP and other oil companies operating in the North Sea have been warned by the Health and Safety Executive (HSE) that they are failing to operate rigs and other offshore equipment to appropriate standards, documents show.
The “improvement notices” from the offshore regulator come amid speculation that accident statistics covering the past 12 months show a marked increase in problems over a year earlier.
While BP faces a political and environmental storm in the US after the Deepwater Horizon rig explosion, documents deep inside the HSE website show difficulties closer to home.
In the latest “improvement notice” to BP, which had to be acted on earlier this year, the HSE said that on the Schiehallion field the oil group “failed to ensure the safety of your employees and others not in your employment by not providing and maintaining a system of work for the control of that operation that was, so far as reasonably practicable, safe”.
Another notice that required action by March last year said BP “failed to ensure so far as it reasonably practicable the health and safety of your employees and others not in your employment by failing to maintain the fabric components on the Magnus offshore installation such as walkways, gratings, stairways and walkways”.
Via The Guardian
While we do not yet know the actual cause of the oil blowout in the Gulf of Mexico, a reasonable person is left to wonder if BP is employing safety techniques that rise to the level of the damage they can cause when things go seriously wrong.

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Why would they do more? When you give corporate officers duties to maximize shareholder value, there is little incentive to really care about the environment in a country with a track record like ours. $15 million dollars for a refinery accident? That is child’s play. We even reduced the fine in the Exxon Valdez case to something roughly equivalent to 3 days of exxon’s profits. If the worst evironmental catastrophy in the country costs you 3 days profits, where is the incentive to blow any money on R and D for safety, or to implement previously developed safety technology.
It is the flaw in our system. For too long we have heard that regulation kills business. We failed to regulate banks, and everybody took it in the pants. We fail to regulate energy, and a whole lot of Gulf Coast industries are taking it in the pants.
My real questions about the situation are twofold.
First, could Maryland’s new benefit corporate structure do anything to remedy these problems by allowing corporations to care about more than just the traditional fiduciary duties,and secondly, would Ioffa’s blog about nuking it actually work? Could you plant it deep enough to avoid significant radioactivity from leaking into the Gulf?
Your on to something here, fines are not changing the corporate culture so maybe jail will.
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