Sunday, September 17, 2006

Safety standards at BP

BP likes to brand itself as the greenest oil major of the lot, as witnessed by corporate advertising that implies the company is basically a windfarming outfit with a small-ish sideline pumping crude, and therefore somehow ‘Beyond Petroleum’. Don’t you just love the sunflower logo, pictured left?

But whichever way you want to slice it, there is no disputing that the company has raked in about $70bn in profits since 2000. Chief executive Lord Browne of Madingly trousers the rewards accordingly. He was paid £5.35m last year, which works out at something like £15,000 a day.

Yet two recent incidents underline that a whole chunk of BP’s cash was accrued by cutting back on maintenance for years on end, sometimes with fatal results.

BP was not alone in such practices, it has to be said. During the extended period of low oil prices seen in the eighties and nineties, most oil majors cut corners on safety. Now the environment - and the working class - is picking up the tab for Big Oil’s superprofits.

Earlier this year, BP was forced to shut down Prudhoe Bay in Alaska - the largest oilfield in the US - after a number of oil spills that resulted directly from its failure to carry out anti-corrosion work known as ‘pigging’ on key pipelines. Whistle-blowing employees had been warning of problems in the offing for years.

BP America chairman Bob Malone openly accepts the rap, recently telling a committee of the US House of Representatives:

‘BP's operating failures are unacceptable … They have fallen short of what the American people expect of BP and they have fallen short of what we expect of ourselves.’

Much more serious than what happened in Alaska was the explosion in one of BP’s refineries in Texas last year, which killed 15 people and injured around 500. Especially given that safety standards were not what they seemed, according to this report in yesterday’s Financial Times:

‘BP mistakenly told state regulators in a 2003 application for an emissions permit that it had installed the updated equipment which investigators said would have prevented last year's fatal explosion at its Texas City refinery, the Financial Times has learned …

‘But BP only applied to replace the outdated blowdown stack on the refinery's isom [isomerisation - DO ] unit with a flare after the refinery exploded …’

As a British weblog, it is beholden on Dave’s Part fully to comply with British libel laws. So all I can say here is … gosh, guys, that was an unfortunate slip of the pen, wasn’t it?

But a US blog devoted to compensation for industrial accidents - I kid you not - is more forthcoming on claims that yours truly could not possibly substantiate:

‘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.’

I hope you enjoyed spending your £5.35m, Lord Browne.

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