Readers of Confined Space are well aware of the explosion at BP's Texas City plant last year that took the lives of 15 workers and injured 170, resulting in a record $21.4 million OSHA fine and possible civil and criminal prosecution. And the Chemical Safety Boards findings that BP's problems go way beyond the screw-ups at the Texas City plant which resulted in an unprecedented "urgent" recommendation that the company establish an independent panel to look into the safety "culture" at all of its North American plants. And let's not forget the $2.4 million OSHA fine against BP's Ohio plant for unsafe conditions.
And last May it was revealed that
BP's Texas City refinery released three times as much pollution in 2004 as it did in 2003, according to the most recent data from the Environmental Protection Agency.Last months disaster came in the form of a little 267,000 gallon oil spill at BP's Prudhoe Bay field, the largest ever on Alaska's North Slope region. That spill may also bring criminal charges against BP.
The increase at BP was so large that it accounted for the bulk of a 15 percent increase in refinery emissions nationwide in 2004, the highest level since 2000.
Even Mother Nature seems to be angry at BP as Hurricane Dennis seriously damaged BP's new Thunder Horse offshore oil drilling platform. And after spending $250 million to repair it, there are still problems.
The latest news was that BP traders were accused of manipulating the price of propane two years ago by cornering the market, not good news to Americans who are facing record high energy costs.
Then there was this:
Earlier this month, the company said that its second-quarter production had fallen 2.5 percent from the period last year, to four million barrels a day of oil equivalent, its fourth consecutive quarterly decline. Also, BP said it would take a further $500 million charge for compensation claims for the Texas City blast, in addition to the $700 million it set aside last year.Oy. While this hasn't quite affected the income of BP's CEO Lord Browne, something needs to be done. But what?
Find someone new to run BP's US operations, in the person of Robert A. Malone, a 32-year company veteran who until recently oversaw BP’s worldwide fleet of tankers. And what a challenge he has:
While he was not responsible for the problems, Mr. Malone will have to answer criticism that BP neglected basic safety rules, fostered a culture of excessive risk-taking and failed to invest enough in critical infrastructure. He also faces the challenge of restoring BP’s credibility not just with the public but also with regulators from the Justice Department and the Labor Department, among others.Mr. Malone is known for his good safety record and we wish him good luck (and well we should considering that BP employees 40,000 American workers and produces 10% of American oil output).
The misfortunes already have led to lengthy delays in production, hundreds of millions of dollars in repairs and settlements, and civil and criminal investigations by state and federal agencies. The paradox is that BP — known for navigating successfully in much more challenging places like Siberia, the Caspian and Africa — has faltered in the most open of economic environments.
BP's spokesman Ronnie Chappel still insists that “These are unrelated incidents,” but lest anything thing BP is just having a string of bad luck, the financial analysts know better:
“It is difficult to say if this is a BP-wide issue,” said Craig Pennington, the director of the global energy group at Schroders in London. “But they appear to cut corners for the sake of short-term profit maximization. If you are a serial underspender in a refinery, it will come back to haunt you.”Indeed.