On April 20th, 2010, BP’s Deepwater Horizon rig burst into flames in the Gulf of Mexico, killing 11 and setting off the biggest spill in U.S. history.
May 21st, the President announced the creation of an oil spill commission to investigate exactly what went wrong on the doomed well. This week, the commission will report its findings at a hearing in Washington D.C., with early speculation pointing to problems with the cement job among other factors.
But as the narrative following the spill has been closely followed by the media and is familiar to many American’s, a much darker tale of a rogue company precedes the rig explosion of late April. The blowout of the Macondo well was simply the latest tragedy in a long history of gross neglect and costly oversight by BP.
Rewind five years to January 2005. A consulting firm was hired to assess BP’s Texas City, Texas refinery which had an input capacity of 437,000 barrels of oil per day. In the final report, the contractors reflected, “We have never seen a site where the notion ‘I could die today’ was so real.” It seems they were on to something. A little over a month later, a vapor cloud created by an overflowing stack ignited when a contractor attempted to start his car -- killing 15 workers and injuring an additional 170 people. The ensuing investigation discovered BP had failed to heed warnings, implement safety recommendations, or respond with changes following previous similar incidents that did not end in tragedy.
A year later, it appears nothing had changed. Despite recurring concerns being expressed by employees from as early as 1992 regarding its Prudhoe Bay pipeline, BP ignored the continuing deterioration until 2006. At this point, the company was forced to address the issue when it was discovered that 212,252 gallons of oil leaked from the aging pipeline through a hole smaller than a dime. A later inquiry showed that it would have cost approximately $100 million to replace the entire 16 miles of aging pipeline, which generated approximately a million dollars a day for the company. BP later pleaded guilty to negligent discharge of oil, and was fined $20 million for their careless behavior.
These events are the culmination of a company that appeared to be impervious to safety concerns, fines, and deadly incidents in the run up to the Deepwater Horizon. Consider this. The Occupational Safety and Health Association (OSHA) cited BP for 800 egregious, willful safety violations in the period from 2007 to 2010. That number is 97% of the total violations handed out during that time period, and this is after the Texas refinery explosion and Prudhoe Bay spill. While BP was establishing what OSHA would describe as a systematic safety problem, consider the rest of the industry.
Since 1947 when offshore Gulf operations first commenced, more than 50,000 oil wells have been successfully drilled. In 2009, 1.6 million barrels of oil were taken out of the Gulf without incident, directly providing over 150,000 needed jobs to help push through the recession. The drillers who made this possible adhered to strict industry safety procedures which, despite not being coded in law, were followed to the ‘T’ by companies trying concerned for employee and environmental safety. Now, as a result of this one bad actors reckless approach to a very serious business, Gulf oil production will be down 2% next year. While this may not sound like a huge deal, consider the ramifications of the moratorium and the reduced production: 20,000 lost jobs, $5 billion in lost economic output (GDP), and $1.2 billion in lost wages.
The oil spill commission will be releasing their findings this week, and legislators, regulators, and the public alike will be calling for an assurance that this cannot happen again. While they look to future rules, safety protocols, and rigorous standards to be enacted as law, they also must remember to look back. Look back at an industry which has successfully drilled tens of thousands of wells, has employed upwards of nine million Americans directly and indirectly throughout the recession, and has provided a steady flow of cheap, domestic energy. Then look back at this rogue safety outlier which has demonstrated time and again it is unwilling to play by the rules. Future legislation ought to be based on all the knowledge we can gather from the past.