Tag: risk management strategy

Pollution by BP Oil Spill Suggests Need for Stricter Controls

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BP’s history of environmental disasters suggests the need for stringent monitoring by government agencies.

Jad Mouawad’s article “For BP, a History of Spills and Safety Lapses”, 8 May 2010 in The New York Times highlights the negative side of a ‘well-respected’ oil giant. Mouawad exposes BP’s past, a history fraught with disasters around the world that have cost lives and caused serious damage to the planet’s ecosystem. The oil and gas industry poses significant hazards which players need to take seriously. The ongoing lack of compliance with regulation by BP suggests that extreme action needs to be taken by government agencies to protect society and the environment.

BP’s Deepwater Horizon Operations

The Deepwater Horizon rig is based in the Gulf of Mexico. A massive explosion occurred on the rig on 20 April 2010 and the rig subsequently sank. According to surviving workers, the alarm signals did not go off and 11 lives were lost in the disaster as reported on SBS news. Massive quantities of oil have since been gushing into the ocean making this a disaster far worse than the Exxon-Valdez spill in 1989. BP has clearly demonstrated that it does not preempt any malfunction to take place within its spheres of operation; no strategy was in place for quick deployment to address the problem in a timely fashion.

BP’s History of Disasters

In 2005, BP’s Texas City Refinery blew up with the tragic loss of 15 workers and BP vowed at this stage to address its appalling safety record, says Mouawad. This should have marked a turning point for BP but sadly that has not been the case. Mouawad reports that among other accidents a BP Alaskan pipeline ruptured in 2006 causing a major spill and in 2009, the central processing plant in Alaska was found to have a leak that could have caused a serious explosion and subsequent environmental pollution. The Occupational Safety and Health Administration fined BP for an excess of 700 violations at the Texas City Refinery in 2009. Most of the violations were related to the use of faulty valves, noted as being a systemic problem with BP.

BP’s Response to the Deepwater Horizon Spill

Ashley Fantz’s article “Oil Clean up technologies ‘primitive,’ experts say”, of 13 May 2010 in edition.cnn.com is critical of BP’s many responses to curb the spill. Firstly, remote-controlled submarine devices were used repeatedly to try and close the valves; all attempts failed. The second risk management strategy was to use a huge containment dome to sit over the gushing well, capture a large part of the oil and siphon it to a tanker in the vicinity. It took BP more than two weeks to get the containment dome ready and when it was finally placed over the spewing oil, it developed problems with ice crystals. The third strategy was the use of a smaller dome called a top hat which again had to be made before it could be deployed. Problems were encountered with fitting the dome; it was later found that the specifications of the rig did not match the engineering documents as reported by Frank James on 14 May 2010, in the article “BP May Highlight Role (Or Lack) Of Engineering Docs” in www.npr.org

Further, the large amounts of the chemical dispersant, Corexit which has been used to break up the oil on the surface of the ocean is known to be extremely harmful to living organisms says Fantz. This poses a huge danger to marine life and those feeding on marine life. BP is also struggling with a shortage of skimmer boats and booms to contain the oil on the surface.

BP’s Risk Analysis

The ongoing disasters and the manner in which they are addressed seem to suggest that BP does not take its responsibility to society and the environment seriously enough. It has continuously downplayed the possibility of accidents with serious consequences. Further, it seems to have convinced government agencies that there was only a 3% chance of oil coming ashore in the event of a spill. No one seems to have questioned these statements.

Government Agencies Must Take Action

BP’s track record indicates that although it admits its shortcomings and pays the fines it is not taking safety seriously enough to prevent future disasters. Its newest rig, The Atlantis is currently under investigation for breaches similar to those at the Deepwater Horizon. To prevent further disasters, government agencies will need to stringently monitor BP’s operations and if necessary refuse them future permits until they clean up their act.