Later On

A blog written for those whose interests more or less match mine.

BP Had Other Problems in Years Leading to Gulf Spill

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Abraham Lustgarten at ProPublica:

BP, the global oil giant responsible for the fast-spreading spill in the Gulf of Mexico that will soon make landfall, is no stranger to major accidents.

In fact, the company has found itself at the center of several of the nation’s worst oil and gas–related disasters in the last five years.

In March 2005, a massive explosion ripped through a tower at BP’s refinery in Texas City, Texas, killing 15 workers and injuring 170 others. Investigators later determined that the company had ignored its own protocols on operating the tower, which was filled with gasoline, and that a warning system had been disabled.

The company pleaded guilty to federal felony charges and was fined more than $50 million by the U.S. Environmental Protection Agency.

Almost a year after the refinery explosion, technicians discovered that some 4,800 barrels of oil had spread into the Alaskan snow through a tiny hole in the company’s pipeline in Prudhoe Bay. BP had been warned to check the pipeline in 2002, but hadn’t, according to a report in Fortune. When it did inspect it, four years later, it found that a six-mile length of pipeline was corroded. The company temporarily shut down its operations in Prudhoe Bay, causing one of the largest disruptions in U.S. oil supply in recent history.

BP faced $12 million in fines for a misdemeanor violation of the federal Water Pollution Control Act. A congressional committee determined that BP had ignored opportunities to prevent the spill and that "draconian" cost-saving measures had led to shortcuts in its operation.

Other problems followed. There were more spills in Alaska. And BP was charged with manipulating the market price of propane. In that case, it settled with the U.S. Department of Justice and agreed to pay more than $300 million in fines.

At each step along the way, the company’s executives were contrite.

"This was a preventable incident. … It should be seen as a process failure, a cultural failure and a management failure," John Mogford, then BP’s senior group vice president for safety and operations, said in an April 2006 speech about the lessons learned in Texas City. "It’s not an easy story to tell. BP doesn’t come out of it well."

In a 2006 interview with this reporter after the Prudhoe Bay spill, published in Fortune, BP’s chief executive of American operations, Robert Malone, said, "There is no doubt in my mind, what happened may not have broken the law, but it broke our values."

Malone insisted at the time that there was no pattern of mismanagement that increased environmental risk…

Continue reading. They’re always contrite: that doesn’t affect profits.

Written by LeisureGuy

30 April 2010 at 1:22 pm

Posted in Business, Government, Law

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