Tuesday, January 16, 2007

BP refineries have serious safety deficiencies: panel

BP is the most environmentally conscious of all the oil majors. It was the first to admit the threat of global warming. I personally heard their current CEO, Lord John Browne, make an address at the University of Michigan, where he outlined where and how business could align its interests with the environment. I was impressed. BP is also one of the only oil companies that is commonly held by socially-responsible mutual funds.

However, many of you have heard of the problems that BP has had with refineries and pipelines. CNN Money has just posted a story about a panel that was put together in response to a refinery explosion in Texas that killed 15 people in 2005.

'All of BP's U.S. refineries had "material deficiencies" in their approach to safety issues, an independent panel said in a report Tuesday.

The panel, headed by the former Secretary of State James Baker III, focused on conditions that led to explosions at a BP refinery in Texas City, Texas, on March 23, 2005, killing 15 workers and injuring more than 170.

The 300-plus page report criticized BP in several areas, including its leadership and safety procedures.

"Based on its review, the panel believes that BP has not provided effective process safety leadership and has not adequately established process safety as a core value across all its five U.S. refineries," the panel wrote in its report.'

Lord Browne has promised to implement the panel's recommendations, and to continue to improve safety.

'As part of the review process, the 11-member panel traveled to each of BP's five U.S. refineries, conducting safety reviews and interviewing hundreds of employees.'

If we judge them in relation to Exxon Mobil, which is still fighting the damages from the Exxon Valdez spill in the 80s, BP still comes out looking like a bunch of saints. And yet, their errors are inexcusable. Impressed as I am with Lord Browne's commitment to the environment, and his courage in leading his company down that road, he may deserve to fall on his sword for this. True, BP is a huge company, and it is hard to blame maintenance failures on any one person. But maintenance failures have killed workers and caused environmental damage, and the buck stops with the CEO. Indeed, Lord Browne is taking a slightly early retirement, next year. Public pressure will be required to ensure that the company conducts adequate maintenance at its facilities.

Perhaps their incoming CEO should go to each family, personally apologize, and swear on whatever holy book he wants that this won't happen again on his watch.

Another story on BP, this one about Lord Browne's "downfall": http://money.cnn.com/2007/01/16/news/companies/browne_downfall.fortune/index.htm?section=money_latest

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