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Archive for Tuesday, June 8, 2010

BP has history of problems, internal investigations show

June 8, 2010

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A series of internal investigations over the past decade warned senior BP managers that the oil company repeatedly disregarded safety and environmental rules and risked a serious accident if it did not change its ways.

The confidential inquiries, which have not previously been made public, focused on a rash of problems at BP’s Alaska oil-drilling operations. They described instances in which management flouted safety by neglecting aging equipment, pressured employees not to report problems and cut short or delayed inspections to reduce production costs.

Similar themes about BP operations elsewhere were sounded in interviews with former employees, in lawsuits and little-noticed state inquiries, and in e-mails obtained by ProPublica. Taken together, these documents portray a company that systemically ignored its own safety policies across its North American operations — from Alaska to the Gulf of Mexico to California and Texas. Executives were not held accountable for the failures, and some were promoted despite them.

Tony Hayward has committed himself to reform since becoming BP’s chief executive in 2007. Under him, the company has worked to implement an operating safety system to create “responsible operations at every BP operation,” said Toby Odone, a company spokesman. BP has used the system at 80 percent of its operations and expects to bring it to the rest by the end of the year, he said.

Odone said the notion that BP has ongoing problems addressing worker concerns is “essentially groundless.”

Because of its string of accidents before the April 20 blowout in the Gulf of Mexico, BP faced a possible ban on its federal contracting and on new U.S. drilling leases, several senior former Environmental Protection Agency department officials told ProPublica. That inquiry has taken on new significance in light of the oil spill in the gulf. One key question the EPA will consider is whether the company’s leadership can be trusted and whether BP’s culture can change.

The reports detailing the firm’s Alaska investigations — conducted by outside lawyers and an internal BP committee in 2001, 2004 and 2007 — were provided to ProPublica by a person close to the company who thinks it has not done enough to fix its shortcomings.

A 2001 report noted that BP had neglected key equipment needed for an emergency shutdown, including safety shutoff valves and gas and fire detectors similar to those that could have helped prevent the fire and explosion on the Deepwater Horizon rig in the gulf.

A 2004 inquiry found a pattern of the company intimidating workers who raised safety or environmental concerns. It said managers shaved maintenance costs by using aging equipment for as long as possible. Accidents resulted, including the 200,000-gallon Prudhoe Bay pipeline spill in 2006 — the largest spill on Alaska’s North Slope — which was blamed on a corroded pipeline.

Similar problems surfaced at BP facilities in California and Texas. California officials alleged in 2002 that the company had falsified inspections of fuel tanks at a Los Angeles area refinery and that more than 80 percent of the facilities didn’t meet requirements to maintain storage tanks without leaks or damage. Inspectors had to get a warrant before BP allowed them to check the tanks. The company eventually settled a lawsuit brought by the South Coast Air Quality Management District for more than $100 million.

Three years later, a Texas City refinery exploded, killing 15 people. An investigation found that a warning system failed, and independent experts found that “significant process safety issues exist at all five U.S. refineries, not just Texas City.”

BP spokesman Odone said that after the accident, the company adopted a plan to update its safety systems worldwide. But last year, the Occupational Safety and Health Administration fined the firm $87 million for not improving safety at that same Texas plant.

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BP has had more high-profile accidents than any other company in recent years. And now, with the disaster in the Gulf, independent experts say the pervasiveness of the company’s problems, in multiple locales and different types of facilities, is striking.

“They are a recurring environmental criminal and they do not follow U.S. health safety and environmental policy,” said Jeanne Pascal, a former EPA lawyer who led its BP investigations. Since the late 1960s, the company has pulled oil from under Alaska, usually without problems. But when it pleaded guilty in 1999 to illegal dumping at an offshore drilling field there, it drew fresh scrutiny and set off a cycle of attempted — and seemingly failed — reforms that continued over the next decade.

To avoid having its Alaska division debarred — the official term for a contract cancellation with the federal government — the firm agreed to a five-year probationary plan with the EPA. BP would reorganize its environmental management, establish protections for employees who speak out about safety issues, and change its approach to risk and regulatory compliance.

Less than a year later, employees complained to an independent arbitrator that the company was letting equipment and critical safety systems languish at its Greater Prudhoe Bay drilling field.

Comments

just_another_bozo_on_this_bus 3 years, 10 months ago

Bush/Cheney policy towards oil companies was to give them a free pass on about everything.

Obama has continued way too many of his predecessor's policies. Let's hope that this isn't one of them.

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