Corporate Responsibility-- the tale of BP #pauto #bp

In Monday's NPR interview, BP CEO and Chairman Tony Hayward did what a responsible corporate citizen should do. He stepped up.

It should be clearly understood that by several independent PFA (Probability of Failure Analysis) studies, including one by the US Government, the probability of this accident occurring was vanishingly small. This was the reason that the permits to drill were granted.

Obviously, since there is a bell-curve with accident analysis, this accident is far on the right edge of the bell curve, but it happened. In my view, scapegoating BP or TransOcean (which also appears to be ready to do the right thing) is counterproductive, just as using this incredibly low probability accident to defend cessation of drilling off the Gulf, East and California coasts is really pretty silly.

Yes, this could turn into the biggest mega-disaster in history. And BP's efforts to plug the leak may also work, which would make it not so big a disaster.

There have been accusations by people who should know better that somehow BP paid off the people who did those PFAs and that the regulators were "in BP's pocket." What's really happening is that BP is showing that it is a worldclass corporate citizen. After Tony Hayward announced in the NPR interview,

“Absolutely, it is our responsibility. We will absolutely be paying for the cleanup operation. That’s our responsibility and we accept it fully.”

Yesterday, and again today, BP COO Doug Suttles put BP's money where Hayward's mouth is. BP, Suttles said, is spending several million dollars a day, already, to fix the leak and repair the damage. In addition, he said they have given a block grant of $25 million to the affected states for use in paying expenses for the cleanup.

Accidents happen...that's why they call them that. As long as we need oil, and we do, like it or not, need oil, the possibility of this kind of accident will continue to be there. But it won't happen like this again. We'll use this accident to make drilling rigs, blowout preventers, and pressure reducing valves faster, safer and less likely to fail...even in a concatenative event like this one. For anybody who doesn't know, a concatenative event is summed up in the folk saying, "It started going south and it just picked up speed no matter what we did."

Instead of worrying about the ethics of "big oil" it might be wise for us to look at ourselves. We need oil to live, we're feeling guilty about it, and so we need a scapegoat. And BP and TransOcean look like really good scapegoats.

But are they? Or are they good corporate citizens?

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  • <p> Until someone comes forward with solid evidence of why the Blow Out Preventer system failed to trip properly, I recommend withholding judgement on BP's post accident behavior. I'll concede that at the moment, they appear to be doing many of the correct things.  </p> <p> Right now, there hasn't been much news from anyone who might know what the condition the well is in under 5000 feet of water. For all we know, they could have stumbled upon extreme conditions that nobody could have predicted would cause a blowout like this.   </p> <p> Ultimately, the drilling rig risks are entirely BP's. On the other hand, this caliber of oil spill risk was not theirs to take.  If evidence suggests they cut corners on the BOP maintenance, it could be the end of the company. <br /><br /> Until we hear or see evidence of what went wrong, I recommend suspending judgment of BP's culpability.  <br /><br /> Jake Brodsky </p>


  • <p>I agree with you, Jake. The Coast Guard has declared BP "the responsible party" so BP appears to be stepping up.</p> <p>One of the potential scenarios I am interested in following is that this well tapped into a pocket with very high pressure in it, and the high pressure oil stream may have overcome all the safety devices including the preventer. </p> <p>Of course, we won't know until we recover the preventer and the riser...and that will take about a year, probably.</p> <p>The problem is that many people, including smart people who should know better, are ready to lynch Tony Hayward and his management team. "What proof? We don't need proof. They're guilty!" is an actual quote from a Facebook post I received a couple of days ago.</p> <p>Based on Hayward's serious commitment to increased safety from the time he took over as BP CEO, I find it difficult (but not impossible) to believe they were cutting corners on the BOP maintenance. It could happen, but Hayward has been such a safety hawk his whole tenure, it seems unlikely.</p> <p>In the absence of evidence, we ought to suspend judgement, as you say. What we need now is good engineering, cooperative weather and tides, and maybe a little luck or a helpful hand from the Almighty.</p>


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