BP’s Damage Control

July 27th, 2005 by

In the aftermath of the March explosion at BP’s Texas City refinery that killed 15 people and injured 170, we are beginning to understand the roots of the problems that led to the explosion. We are also seeing BP’s damage control in action — a far more impressive operation than the safety program that preceeded the disaster.
In a detailed and compelling article by Chip Cummins and Thaddeus Herrick in the Wall Street Journal (available to subscribers only), we see the elements of a classic invitation to disaster. BP bought the facility from Amoco in 1998. Prior to that, Amoco apparently had cut back on staffing and deferred routine plant maintenance. By the time BP took over, there were deeply rooted problems in the plant’s infrastructure that were, in effect, an invitation to disaster. Workers reported problems with severe corrosion throughout the plant. The place was literally falling apart.
As part of its cost control measures, BP cut staff in the newly purchased refinery. As we saw in our previous blog, they relied more and more upon contractors for the routine day-to-day operations that were formerly the responsibility of regular employees. These contractors were less likely to understand the critical procedural issues that led to the explosion. In addition, we learn that the isom unit where the explosion took place was an inherently dangerous part of the operation. The unit’s daytime supervisor arrived late the morning of March 23. Then, just before 11 a.m., he left the plant for personal reasons. (BP fired him after the accident.)
That supervisor is a co-plaintiff in a defamation suit against BP. His attorney said that his client left to attend emergency surgery for his son, who had broken his arm the day before. The supervisor claims that he lined up a replacement to supervise the start-up and shouldn’t have been fired. The bottom line, of course, is that the supervision was inadequate. By 12:40 p.m., pressure and heat had climbed above normal levels in the isom unit’s processing tower, where gasoline components are separated. A worker outside the unit called the control room to report steam-like vapor coming from the unit’s smoke stack, an indication that something might have been going wrong. Unfortunately, nothing was done about it.
At about 1:20, a small explosion occurred, followed by a much louder one. People working on the isom unit, along with people in trailers (placed too close to the isom unit), were killed and injured in the disaster that followed.
Talk without Walk
Here is BP’s classic description of their safety program, which shares a fatal flaw with many such programs in thousands of workplaces: “I think the culture of safety, in terms of policies and procedures, was there,” said Ross Pillari, president of BP Products North America. “But the implementation of these policies and procedures was clearly not there, because if it was, the accidents wouldn’t have happened.” In other words, we had a written safety program, but people were not following it. I imagine that there was an explicit drill for shutting down and re-opening the isom unit. But it’s all too clear that these procedures were simply not followed.
In addition to the March incident where 15 people died, there were five additional fatalities in BP facilities in the US, compared to a single fatality in facilities operated by two larger refiners, ConocoPhillips and Exxon Mobil. Draw your own conclusions.
Damage Control
BP is walking an interesting line in its response to the accident. While it has denied any negligence and is cooperating with federal investigators, it has also apologized and has moved aggressively to settle out the claims of victims and survivers. At the heart of their strategy is a $700 million kitty to pay settlements (a raw average of $3.8 million). A number of employees injured in the blast have raised serious safety issues; the company responds not through denial or acceptance — they simply seek to settle with these employees (which puts an immediate end to the employees’ public statements).
Doing the Right Thing
You can find a lot of fault in BP’s procedures prior to the accident. You can and should raise questions about cutbacks in staffing levels, over-reliance on contractors, inadequate plant maintenance, lack of safety training for staff and contractors. But now that the dust has literally settled, BP management deserves credit for taking responsibility and for moving aggressively to take care of the victims. They are not in denial about management’s responsibility for what happened. It’s hard to deliver credible damage control when you refuse to acknowledge the mistakes that have been made and when you put your energies into blaming others. I am impressed with BP’s approach and would encourage other entities — both private and public — to do the same when confronted with disasters of their own making.