http://industry.bnet.com/energy/10004340/bps-history-of-oil-spills-and-accidents-same-strategy-different-day/BP's History of Oil Spills and Accidents: Same Strategy, Different Day
By Kirsten Korosec | May 7, 2010
An Alaskan pipeline burst, a fatal refinery explosion and now a 210,000-gallon-a-day oil leak in the Gulf of Mexico. And there’s BP, right smack dab in the middle of all three. This isn’t a case of bad luck. The only surprising conclusion — based on reports of other near misses — is that BP hasn’t had more accidents.
A better BP?
At first glance, the BP of today looks like a safer and more efficient company than the one responsible for the fatal Texas City refinery fire in 2005 and the Prudhoe Bay pipeline burst in 2006. CEO Tony Hayward went on a management overhaul and efficiency spree after his appointment in 2007. He’s slashed overhead by one-third and cut 7,500 jobs to date, and last year kept up the momentum and squeezed $4 billion in cost savings out of the company. Hayward also honed in on one of BP’s biggest problems: project management, an area where the company regularly overspent by about 20 percent. All the while, Hayward worked hard to improve BP’s shoddy image as an irresponsible oil and gas company.
BP became more profitable, but it failed to fix the one problem that continues to get it into trouble: a reactionary management culture that puts an emphasis on cutting costs and efficiency while neglecting preventative maintenance. Companies of every ilk can fall into this trap, and if nothing bad happens, management can be lulled into a false sense of security. BP just can’t seem to figure this one out.
Texas City and Prudhoe Bay
Both the Texas City refinery and Prudhoe Bay accidents have a similar M.O. Investigations that followed the 2005 Texas City refinery explosion found management focused on cutting maintenance and capital spending costs, and managers’ performance was measured in part by their ability to meet these goals, NPR noted recently.
A year later more than 200,000 gallons of oil were discharged during two different spills when BP’s transit pipe in Prudhoe Bay burst. The leak, which was caused by corrosion in the pipeline, wasn’t discovered for five days and became the worst spill in Alaska’s North slope. An investigation found BP had stopped sending probes to clean and inspect the pipeline for corrosion in an effort to curb costs.
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