For BP, Failure Was the Only Option


Published July 28, 2010


On Day 100 of the Gulf catastrophe — and one day after a rig accident caused yet another oil leak in Gulf waters —it’s worth recalling that memorable line from “Spiderman: The Movie”:“With great power comes great responsibility.” As one of the world’s largest companies, BP wields awesome power, which it uses to find and exploit reservoirs of crude oil thousands of feet below the ocean floor. Such power put BP in a position to risk not only the destruction of a rig and the deaths of workers, but also incalculable harm to the Gulf’s environment and local economies. Ethical reflection on BP’s actions leading up to the oil spill holds a lesson for other powerful firms involved in perilous enterprises.

The Deepwater Horizon was a machine of immense size and complexity, with employees of various companies carrying out a host of often difficult and complicated tasks. And certainly the challenges of risk management would have been daunting when safe operation of the rig relied on so many variables relating to equipment, personnel, weather, deepwater conditions and subterranean geology. Precisely because the risks were so great and so numerous, BP’s prime responsibility of minimizing catastrophic risk would have required having an official, with the requisite skills and authority, in charge of safety on the rig.

This supervisor, dedicated solely to safety oversight, would have coordinated the constant monitoring of risk factors and made sure that risks related to proposed deviations from standard practice were duly evaluated and authorized. This official would have assured that emergency response plans were current and that all workers were trained to implement them. Emergency equipment and procedures would have been regularly and rigorously tested, using established, data-based criteria.

Top managers would have made sure that every rig had a strong safety culture, such that an overriding concern for safety would have been built in to management practices. Sadly, this seems not to have been the case.

BP has declared that its “absolute No. 1 priority” is safety. But evidence to the contrary, at least on the Deepwater Horizon, appeared in a recent New York Times story about the now-famous “blowout preventer.” It turns out that there are hundreds of ways this “ultimate fail-safe device” can fail. Indeed, a study commissioned by Transocean, the Deepwater Horizon’s owner, concluded that, historically, blowout preventers on deepwater rigs had a failure rate of 45%.

Equally astonishing is that their key component, the “blind shear ram,” is vulnerable to catastrophic failure through the breakdown of just a single part. In a blowout, this apparatus — whose powerful blades are pushed together by hydraulic fluid — is designed to sever and seal the drill pipe. However, one of the ram’s shuttle valves is such that, if it sticks or leaks, the blades can’t be activated. Incredibly, this valve has no backup. (There are indications that the calamitous failure of the Deepwater Horizon’s blind shear ram was due to leaks in one or more shuttle valves.)

Moreover, a blind shear ram’s effectiveness is diminished by the extreme pressure and cold of deep water, the fact that modern drill pipe is twice as strong as older pipe, and the impossibility of slicing through the joint-sections that make up nearly 10 percent of a drill pipe.

BP and the rest of the oil industry were well aware of the weaknesses of blowout preventers, particularly since the failure of blind shear rams had been implicated in several major oil spills. Drillers had begun to address the problems by installing two blind shear rams in their blowout preventers. In fact, on the day of the Gulf oil spill, every other BP rig under contract from Transocean was equipped with dual blind shear rams.

The last thorough maintenance review of the Deepwater Horizon, in 2005, revealed serious problems with the blowout preventer, including faulty controls and a badly leaking line connecting the rig to the blowout preventer. Despite such well-documented vulnerabilities, BP decided not to reconfigure the Deepwater Horizon’s blowout preventer with a second blind shear ram. In the days preceding the April 20 explosion, against the advice of contractors and over the protests of workers, BP skipped several crucial safety steps needed to make sure gas wouldn’t escape from the well and ignite. Such actions cast doubt on any suggestion that a “safety culture” existed on the rig.

Thus, it comes as no surprise that, as The Times also reported, no BP official had overall responsibility for safety on the Deepwater Horizon. This points to the main lesson of this case: In hazardous operations — such as the search for energy sources in increasingly dangerous environments — minimizing catastrophic risk demands strong, accountable safety supervisors and workable, realistic planning for emergencies. Otherwise, companies conducting such operations — in oil exploration, coal mining, nuclear power generation, or any other high-risk business — are following BP’s path to disaster.

Dana M. Radcliffe is the Day Family Senior Lecturer of Business Ethics at Cornell University’s Johnson Graduate School of Management.

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