BP's Disaster: No Surprise to Folks in the Know

BP CEO Tony Hayward testifies before a congressional committee June 17, 2010, as Dodie Vegas, owner of Bridge Side Marina in Grand Isle, La., looks on.
Andrew B. Wilson is a writer and business consultant.

Shortly after lunch on November 27, 2003, Oberon Houston was in his office beneath the helideck of BP's Forties Alpha oil platform in the North Sea, off the coast of Scotland. One of a select group (1 percent of BP's staff) of young engineers and managers targeted by the company for rapid advancement, Houston, 34, was working out maintenance plans for the coming week when he heard what he thought was a deafening explosion.

Only it wasn't an explosion. A gas line had ruptured-allowing thousands of pounds of pressurized gas to escape at supersonic velocity. That caused a thunderous sonic boom. Debris from the burst pipe and its cladding rained down, adding to the impression that "an artillery shell had just hit the platform." The escaping gas quickly formed a huge and potentially lethal cloud around the rig. Now the threat of an actual explosion was very real. The smallest spark would detonate more than a ton of methane gas.

No one died or was even hurt that day on Forties Alpha, thanks in part to high winds that helped to disperse the gas after about 20 minutes of extreme danger to the platform and its crew of 180 people. But Houston, the number two in command aboard Forties Alpha, knew full well what could have happened. "Unlike a similar incident on the ill-fated Piper Alpha platform," he observes, referring to an earlier accident in the North Sea, "the gas did not ignite, so what could have been a major disaster for myself and everyone else on board was averted by sheer luck."

The Piper Alpha disaster took place on July 6, 1988. One hundred and sixty-seven people perished in a giant fireball on the rig operated by Occidental Petroleum. Only 62 crew members survived. In immediate loss of human life, Piper Alpha stands to this day as the worst disaster ever in offshore drilling and production-far exceeding the 11 killed in the massive explosion that destroyed the Deepwater Horizon platform on April 20.

Though Forties Alpha could have produced a similar conflagration, it was nothing more than a near miss which was soon forgotten. BP admitted breaking health and safety laws by failing to guard against corrosion on the ruptured pipe that allowed the gas to escape. It was fined $290,000. The bigger loss came in early 2004. Houston resigned, and BP lost one of its best young engineers.

This was not a snap decision for Houston. It came out of a growing disillusionment with the company. In looking back over the last few years at BP, Houston was distressed at the way that corporate downsizing exercises seemed to target the best and most seasoned engineers. He was further distressed that BP had slashed the maintenance budget for the vast and aged Forties Alpha platform to a dangerous, even reckless extent, providing the platform's operating engineers with less than 80 percent of the money they considered necessary to ensure the rig's safety. He regarded the fine as risible and worried that it would only reinforce the prevailing complacency within the company. And finally, he told me over the course of several interviews, he was distressed by an abundance of rhetoric-coming from the CEO-about BP going "beyond petroleum" and joining the environmental activists in campaigning for reduced carbon emissions. "To me and everyone I knew, it didn't make any sense. We were a petroleum company. That wasn't going to change any time soon, and it wasn't anything to be ashamed of, either. All the talk about windmills and solar power was just PR and a lot of nonsense."

Erosion of Trust

In short, Houston no longer trusted the company to do the right thing. As someone who grew up idolizing the company, he came to the reluctant conclusion that BP itself was an accident waiting to happen: It was taking on increasingly ambitious exploration and production challenges, while demonstrating an increasingly indifferent or cavalier attitude toward engineering discipline and excellence. On top of all that, senior management seemed less than fully engaged in the difficult task of extracting and producing petroleum.

"For some time," Houston writes in an article on -conservativehome.blogs.com, " I had been dissatisfied with the way senior BP management focused so heavily on the easy part of safety, holding the hand rails, spending hours discussing the merits of reverse parking and the dangers of not having a lid on a coffee cup-but were less enthusiastic about the hard stuff, investing in and maintaining their complex facilities."
To put it even more bluntly, BP was taking a don't-sweat-the-big-stuff attitude toward safety. Others noticed the same thing. Robert Bea, a professor of engineering at the University of California, Berkeley, and a well-known expert on catastrophes involving complex systems, reached the same conclusion based on his own association with BP in 2002 and 2003. At the company's request, Bea studied BP's approach to catastrophic risk management at its U.S. facilities in Texas City, Prudhoe Bay, and Cherry Point, Washington, and made recommendations directly to John Browne, then CEO of BP, and other members of top management.

Hearing of his work and knowing that he had launched an independent study (separate from ongoing government studies and investigations) of the disaster in the Gulf, I sent an email to Bea in early June, showing him Houston's critique of the prevailing attitude toward safety inside BP and asking if he agreed. He immediately replied:

"You are spot on. BP worried a lot about personal safety-slips, trips, and falls-high frequency, low consequence accidents. They did not worry as much (at all) about the low frequency, high consequence accidents-the real disasters. Different categories of accidents require different approaches."
In subsequent interviews, Bea told me that BP had paid promptly and well for his report, but he saw no sign that they were prepared to act any differently than before. About two years later, on March 23, 2005, BP had a major explosion at its Texas City refinery that left 15 people dead and more than 170 injured. Again, BP admitted breaking rules. This time it did not get off so lightly: It was hit with $137 million in fines-the heaviest workplace safety fines in U.S. history.

Following the Texas City accident, an independent report on safety at the five BP refineries in the United States, known as the Baker Panel Report, came to pretty much the same conclusion that Bea had reached before the accident. As Browne, who retired as CEO in 2007, states in his memoir, published early this year, the Baker Panel found that "we had not done enough to make process safety a core value. We had emphasized that individuals had to be safe when they went about their daily work-'personal safety.' .  .  . But we had not emphasized that processes and equipment had to be safe under all circumstances and operated in a safe way at all times-'process safety.' "