July 27, 2005

BP's Damage Control

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.

| 4 Comments

4 Comments

This is a well reasoned analysis -- that in the WSJ article and on your blog. What is important to keep in mind is that single causation explanations are almost always -- well, always -- wrong. This is why deterioration in safety practices is so hard to correct. You don't just do one thing. You have to do many things.

Don't you think BP's quick reaction is stimulated substantially by the probable fact they have indemnity agreements with the sub-contractors and will subrogate to their(the subs) liability insurance carriers?

After reading your article to the explosion and aftermath plus the "quick-response" BP is rendering to their inept management of the situation, perhaps another viewpoint from someone who does this work for a living, and to clarify my position, I was called to be on that job, and just simply due to the fact I could not make it there in time is why I am alive today. In the world of road-warriors who travel and do this dangerous work, the fact will always remain that procedures are not safe with BP at the helm will be remembered and by word of mouth, the grapevine, the better experienced personel to do the actual work in the field will avoid the BP management for all times. That dark cloud will always be connected to that carelessness and stupidity of ever risking the lives of the small group of people who are trained to get the job done. I personally will never forget the impact on my life because I know it should have/could have been averted. The safety issues surrounding that incident have not been thouroughly made available and it is most probable the type of incident will happen again under the management of BP. The people in the know will avoid working for BP as the proof that people in the field attempted to use their field training and were ignored for their efforts. Rarely does something like this incident occur by a combination of circumstances that are not foreseeable and preventable: mother nature is the only exception. The only reason safety practises deteriorates is terrible decisions at upper level management who do have to be at risk on a personal level. The many I have worked under and with and have earned my respect"never let that happen" . The aspect of implicating the responsibility falls to the sub-contractors in any manner is not possible.Fail-safes could have been installed and implimented but BP decided not to allow for this in their budget, that is a fact of life no lawyer can realistically deny. I can appreciate the analysis you presented and figure you did so from the point of view most others will be able to understand. I haven't thought about this incident in a long while and while I know more than most, the settlements being offered, in my opinion, are less than adequate.

Robert - sorry to be slow in thanking you for taking the time to share your experience and your comment. Your close brush with the possibility of having been at the scene of this event must indeed be chilling.

There are no permissable shortcuts with safety, and if indeed BP was trying to save a few dollars, that is hugely ironic. You are right that a company must live with its reputation, but there will always be workers who need the money and will put themselves in harm's way to feed their families.

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This page contains a single entry by Jon Coppelman published on July 27, 2005 3:19 PM.

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