“We have to get the priorities right,” the chief executive of BP said. “And Job 1 is to get to these things that have happened, get them fixed and get them sorted out. We don’t just sort them out on the surface, we get them fixed deeply.”
In August 2006, workers were cleaning a spill at Prudhoe Bay in Alaska, where oil had been leaking from corroded BP pipeline.
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After the Texas and Alaska accidents, John Browne pledged that the company would address safety problems.
The executive was speaking to Matthew L. Wald of The New York Times, vowing to recommit his company to a culture of safety. The oil giant was adding $1 billion to the $6 billion it had already set aside to improve safety, the executive told Mr. Wald. It was setting up a safety advisory panel to make recommendations on how the company could improve. It was bringing in a new man to head its American operations — the source of most of the company’s problems — who would make safety his top priority. And on, and on.
That interview didn’t take place this week — a week in which BP was excoriated in Congress for the extraordinary safety lapses that led to the Deepwater Horizon rig disaster, while also being strong-armed by President Obama into putting $20 billion in escrow to compensate victims.
No, the interview took place nearly four years ago, after BP’s previous disaster on American soil, when oil was discovered leaking from a 16-mile stretch of corroded BP pipeline in Prudhoe Bay in Alaska. And that was just a year after a BP refinery explosion in Texas City, Tex., killed 15 workers and injured hundreds more.
Nor was the chief executive in question Tony Hayward, who spent Thursday before a Congressional panel ducking tough questions and evading personal responsibility — while insisting, absurdly, that as head of the company he had been “laser-focused” on safety. No, the interviewee was his predecessor and mentor John Browne, who had spent nearly 10 years at the helm of BP before resigning in May 2007.
Do you remember the Prudhoe Bay leak and the Texas City explosion? They were big news at the time, though they quickly faded from the headlines. BP was fined $21 million for the numerous violations that contributed to the Texas City explosion, and it was forced to endure a phased shutdown of its Alaska operations while it repaired the corroded pipeline, which cost it additional revenue.
In retrospect, though, the two accidents represented something else as well: they were a huge gift to the company. The fact that these two accidents — thousands of miles apart, and involving very different parts of BP — took place within a year showed that something was systemically wrong with BP’s culture. Mr. Browne had built BP by taking over other oil companies, like Amoco in 1998, and then ruthlessly cutting costs, often firing the acquired company’s most experienced engineers. Taking shortcuts was ingrained in the company’s culture, and everyone in the oil business knew it.
The accidents should have been the wake-up call BP needed to change that culture. But the mistakes and negligence that took place on the Deepwater Horizon in the Gulf of Mexico — which are so profound that everyone I spoke to in the oil business found them truly inexplicable — suggest that the two men never did much more than mouth nice-sounding platitudes.
Which also makes the disaster even more unforgivable than it already is. BP executives had four years to fix the company’s problems before an accident took place that was truly catastrophic. And they blew it.
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Before the Deepwater Horizon tragedy, the greatest oil disaster in American history was the Exxon Valdez spill in 1989, which spewed 10.8 million gallons of crude into Prince William Sound in Alaska. (By comparison, the gulf blowout is pouring out that much oil every four or five days.) That experience was searing for the country — but it was also pretty searing for Exxon (now known as Exxon Mobil). “A low point in the history of the company,” Exxon Mobil’s chief executive, Rex Tillerson, called it when he testified before Congress on Tuesday.
There is a reason Exxon Mobil has not had a serious accident in the subsequent 21 years. Unlike BP, it used the accident to transform itself.
Immediately after the spill, Exxon pulled together some of its most respected executives and gave them a new assignment: figure out how to embed safety into the core of the company. The message was reiterated by the top brass, including the chief executive, whenever they visited a rig or a refinery. Processes were put in place that had to be followed at any Exxon facility anywhere in the world. Redundancies were built in. Workers were encouraged to bring safety concerns to their bosses. And the statistics bear out the genuineness of this cultural change: by every measure, Exxon Mobil has by far the best safety record in the industry. The company has become so safety-crazed that an Exxon Mobil cafeteria worker takes the temperature of the lettuce in the salad bar.
Compare that to BP’s record these last four years. On Thursday, during his day before an angry House energy subcommittee, Mr. Hayward was confronted with the fact that BP had been cited by the Occupational Safety and Health Administration for 760 “egregious willful” safety violations in its refineries. Mr. Hayward tried to slough this off by claiming that the violations had taken place in 2005 and 2006 — before, that is, he became chief executive and brought his “laser focus” on safety.
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