This case is about the safety problems faced by BP, the third-largest oil and gas producer in the world. On March 23, 2005, an explosion at BP’s Texas City refinery resulted in one of the most serious workplace accidents in the US. An investigation by The US Chemical Safety and Hazard Investigation Board (CSB) uncovered many safety lapses at the Texas City refinery. BP was accused of endangering its workers by compromising on process safety due to its high emphasis on cost cutting.
The Texas accident was not the only safety lapse at BP. In March 2006, a large oil spill was discovered due to a corroded pipeline at BP’s Prudhoe Bay refinery in Alaska, USA. Critics alleged that BP had put profits before safety. BP was also criticized for spending millions of dollars to project a ‘green’ and ‘environment-friendly’ image, while failing to take care of basic operational safety issues. BP surprised many when it announced that its CEO, Lord Robert Browne would step down by end of July 2007, which was earlier than scheduled retirement in 2008. It also announced that Tony Hayward, the head of BP’s exploration and production, would succeed Browne.
On January 16, 2007, the BP US Refineries Independent Safety Review Panel issued its report on its review of safety issues in BP Plc.’s (BP) refineries in the US. BP, the world’s third-largest oil and gas producer after Exxon Mobil Corp. ExxonMobil and Shell, had been plagued by safety lapses in its facilities in the last couple of years.
The panel was formed in October 2005, after The US Chemical Safety and Hazard Investigation Board (CSB) had uncovered many safety lapses at BP’s Texas City refinery during the investigation of an explosion that occurred on March 23, 2005, which had resulted in 15 deaths and 170 people being injured. CSB said that BP might have endangered its workers by compromising on process safety and because of its emphasis on cost cutting. The Texas accident was not the only safety lapse at BP. In March 2006, a huge oil spill was discovered in BP’s pipeline at Prudhoe Bay, Alaska, USA. The spillage was due to a corroded transit pipeline. Investigations found that BP had not been maintaining the pipeline properly.
The Pipeline and Hazardous Materials Safety Administration ordered BP to review the leak detection system on the affected line as well as two other crude transit pipelines in Prudhoe. Critics were angry by the fact that BP had last used a pipeline inspection gauge on the pipeline in 1998. This led to a criminal investigation by the US Attorney’s Office in Anchorage, Alaska into the leaks. On August 6, 2006, BP announced that it had discovered severe corrosion in its pipe and had decided to shut down the oil field indefinitely.
This led to an outcry against BP by the public and some policy makers in the US. Safety measures at this oilfield had been neglected despite it accounting for 8 percent of the oil produced by BP. Critics alleged that BP had put profits before safety.
The ethical and environmental hazards BP has been practicing over the years is astonishing. The top executives sitting in their offices collecting huge paychecks every year were totally disregarding the welfare of its workers and environment so they can cut costs and make even larger profits. These decisions by greedy individuals has cost many men their lives. This case focused on events prior to the disaster that occurred in the Gulf. That spill also claimed many lives and created the largest oil spill our country has ever experienced