Major Accidents: Prime Time to Regroup

A report (1) released in December 2011 by the National Academy of Engineering notes a fundamental deficiency with the safety culture of the offshore drilling industry.  This culture, the independent Academy describes, is rooted in an attitude which does not prioritize comparing risks in business decisions. (2)  Yet as the BP Deepwater Horizon Oil Spill of April 2010 exhibited, risks always exist.  Since the BP accident, there have been three other oil leaks by major companies at drilling locations off the coasts of China, Brazil, and the North Sea. (3)  As the nuclear power industry revamped its regulatory system following the Three Mile Island accident in 1979, the oil industry could use the BP spill as an opportunity to step back and revamp its safety measures as well.

With the massive scope of operations associated with offshore drilling, oil companies and regulatory agencies involved are expected to achieve high standards of safety.  But these standards, including overall safety preparedness, the ability to handle the complexities of deep-water drilling, industry oversight of operations, and personnel competency training, have been questionable.  While reports acknowledge that some improvements have been made since the BP spill, they point out that much more should be done, and that Congress has failed to pass legislation that addresses the safety gaps.  Meanwhile House Republicans are passing bills to jump-start offshore drilling, and operations continue to expand – including by BP. (2)

In the past year BP rose by 379 spots on the Forbes Global 2000 to 11th place, primarily due to a remarkable comeback in profitability.  The company plans to bring 15 large new projects online by 2015, which is expected to help increase free cash flow by 50%. (4)  With a recent accident still underlying its public relations, international pressure to improve safety measures, and comfortable profits, there may never be a better time for BP and the industry to focus on its safety and regulatory systems.  While it may not be necessary to shut down operations (as Japan has done with nuclear power since the Fukushima accident) the industry has an opportunity now to vigorously address the safety culture rather than pursue expansion.

In a recent report (5) released by the Oil Spill Commission – part of President Obama’s response to the BP spill – “Safety and Environmental Protection” receives a grade of B in improvements across industry, the Department of the Interior, and other federal agencies since the accident.  Like others, this report acknowledges some significant improvements which have taken place since the BP accident. (5)  For example, new safety standards on everything from how wells are drilled, cemented, and tested to how risks to workers are minimized now exist, and the Interior Department has decoupled the safety oversight and revenue collection divisions. (3)  But the reforms still aren’t enough to satisfy the analysts.  The new Center for Offshore Safety, for instance, isn’t fully independent of the American Petroleum Institute (API), the industry’s primary lobbying organization.  In comparison, the Institute of Nuclear Power Operations (INPO), which was created after the Three Mile Island accident, is independent of the industry and has been notably successful in promoting improved safety and environmental protection measures. (5)

While consistent production and expanded operations are necessary to meet growing energy demands, companies and regulatory agencies should be cautious of waiting until a major accident to address safety protocols.  And when an accident does occur, they should seize the opportunity to regroup.  With the involvement of politics, stakeholders, and market competition, there may never be a better time to hone in on necessary improvements in safety protocols and technology.

 

(1)    http://www.nap.edu/catalog.php?record_id=13273#toc

(2)    http://www.huffingtonpost.com/2011/12/14/bp-oil-spill-safety-culture_n_1148412.html

(3)    Taylor, Phil. “New Rules on Way to Protect Workers, Prevent Spills – BSEE chief.” Greenwire. April 20, 2012. Accessed online April 29, 2012.

(4)    http://www.forbes.com/sites/christopherhelman/2012/04/18/bp-is-booming/

(5)    http://oscaction.org/wp-content/uploads/OSCA-Assessment-report.pdf

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1 Comment

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One response to “Major Accidents: Prime Time to Regroup

  1. michaeldrummond1

    The recent events in the Artic serve to highlight the difficulty of finding the right balance
    http://www.nytimes.com/2013/01/09/us/arctic-drilling-to-be-reviewed-in-light-of-accidents.html?_r=0

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