Although most of us are focusing on BP because of the oil rig explosion and gushing well in the Gulf, it's also important to consider the company's safety record at its refineries. Because I keep track of workplace disasters, I knew that BP had earned the distinction of having the worst refinery death toll in the industry. Until I read the results of a new Center for Public Integrity investigation, though, I had no idea just how much worse BP's refineries are compared to their industry peers.
Jim Morris and MB Pell report that when the worst safety violations identified by inspectors over the past three years are tallied up, just two BP facilities account for a whopping 97% of those violations.
Because oil refineries deal with flammable and toxic materials under high temperatures and pressures, the facilities must carefully control hazards in order to prevent explosions and fires. When explosions occur, they're often deadly, like the 2005 explosion at BP's Texas City plant that killed 15 workers, or last month's explosion and fire at Tesoro Corp's Anacortes, Washington facility that left seven workers dead.
When the Occupational Safety and Health Administration (OSHA) sees that injury, illness, or fatality rates are high in a particular industry, it can launch a National Emphasis Program (NEP) to increase the number of inspections at those workplaces. In 2007, OSHA launched a refinery NEP to verify that refineries were complying with the Process Safety Management Standard, which "requires employers to develop and incorporate comprehensive, site-specific safety management systems to reduce the risks of fatal or catastrophic incidents."
As Celeste pointed out earlier this month, calling these programs "national" emphasis programs is misleading, because federal OSHA only has authority to conduct inspections in 29 states. Other states run their own state OSHA plans, and were encouraged but not required to participate in this NEP. In addition, federal inspectors were told not to inspect refineries that participate in the agency's Voluntary Protection Program.
Morris and Pell summarize the number of refineries inspected and exempted under this NEP, and give some background on the definitions of the violations inspectors found:
OSHA defines a willful violation as one "committed with plain indifference to or intentional disregard for employee safety and health." An egregious willful violation is considered so severe that it can result in a penalty each time a violation occurs, rather than a single penalty for all violations of a regulation. A serious violation is described as one creating a "substantial probability" of death or serious injury. OSHA can refer cases involving worker deaths and wanton disregard for safety rules to the Justice Department for criminal prosecution.
Under the nationwide program, OSHA has finished inspecting, or is in the process of inspecting, 55 refineries under federal OSHA jurisdiction, with 12 left to inspect. Another 23 U.S. refineries are exempted because they participate in a voluntary program for employers that have agreed to adopt safety rules stricter than what OSHA requires. Some inspections were performed by regulators in states such as Washington and California, which have their own worker safety programs. There are 55 refineries in these states.
Through Freedom of Information Act requests, the Center for Public Integrity obtained refinery inspection data for the refinery NEP and the Texas City inspection. Their analysis of the records found:
BP received a total of 862 citations between June 2007 and February 2010 for alleged violations at its refineries in Texas City and Toledo, Ohio.
Of those, 760 were classified as "egregious willful" and 69 were classified as "willful." Thirty of the BP citations were deemed "serious" and three were unclassified. Virtually all of the citations were for alleged violations of OSHA's process safety management standard, a sweeping rule governing everything from storage of flammable liquids to emergency shutdown systems. BP accounted for 829 of the 851 willful violations among all refiners cited by OSHA during the period analyzed by the Center.
Top OSHA officials told the Center in an interview that BP was cited for more egregious willful violations than other refiners because it failed to correct the types of problems that led to the 2005 Texas City accident even after OSHA pointed them out. In Toledo, problems were corrected in one part of the refinery but went unaddressed in another. Jordan Barab, deputy assistant secretary of labor for occupational safety and health, said it was clear that BP "didn't go nearly far enough" to correct deficiencies after the 2005 blast.
"The only thing you can conclude is that BP has a serious, systemic safety problem in their company," Barab said.
The CPI analysis shows that between June 2007 and February 2010, only one other refinery has received an egregious willful citation - and that was a single citation, compared to the 760 BP racked up during the same time period. Compared to BP's total of 862 citations, the next highest totals were Sunoco with 127 and ConocoPhillips with 119. Read the whole article, including a handy chart listing citation tallies, here.
Sounds like a "serious, systemic safety problem," indeed.
Safety in companies starts with the CEO and the board saying safety is Job 1. The CEO needs to impress this on his direct reports and so on. I worked for Chevron for a while and safety is embedded in the culture where every meeting at least has a safety moment. The CEO praised the safety folks when he was caught not using both rails on a staircase on a platform. Every message he sent included something on safety. BP clearly needs to establish a board committee on safety where all reports of accidents and safety failures detected by others are brought. Make the top 3 people in the reporting chain where the incident/accident occurred appear before the board and explain how it happened.
The fact that the violations happened both in the downstream (refineries) as well as upstream, gulf spill, Alaska spill, near loss of thunderhorse rig etc, suggests a systemic culture problem where other objectives override safety. Hayward needs to make safety his number 1 long term objective, overriding all others.
This is well known in the industry, both by executives and engineers and also by workers and the communities around BP's facilities. BP is notorious for its terrible safety record, its idiotic false cost savings, and its obsessive hatred of Unions.
The petroleum industry is very capital intensive, very few workers with huge amounts of very complicated, very expensove equipment. In refinery operations almost any screw up can, but usually does not, result in the sort of disaster that will be remembered for generations. Even the lowliest positions, the equivalents of janitors can do terrible harm if they are not very well trained. This of course results in workers, even "unskilled" workers, who are hard to replace and the work can be very dangerous. Industries with these conditions usually have very strong unions, but luckily for the Oil Companies they really don't need to employ that many. The result is that they usually find it easier to compensate well than fight it. It took them a long time, and a lot of really unpleasant labor actions, to understand this but they figured it out.
BP is the big exception here, they love to do critical maintenance work with non union workers, they are always trying to scrimp on wages, training, and most importantly hours. If it can be done on the cheap BP will do it that way.
There is a universe of difference between the other majors and BP, and it is good that maybe some people are starting to realize this. However, too many people want to condemn the oil industry as a whole, so this distinction may not be pleasant to many.
As a final note, I am a 4th generation Republican, from a long line of businessmen. We are no friends of Labor and I usually find most union rules to be the obstructionist and destructive to both companies and their employees. I can give you chapter and verse on union corruption. But my experience in the industry is that when a company scrimps on safety, on wages, and maintenance the price to pay can be horrible in this industry.
"Hayward needs to make safety his number 1 long term objective, overriding all others."
That would be my preference. Unfortunately, American court decisions have declared that a company's first priority MUST be to make money for its shareholders. This suggests that placing anything else first, such as safety, quality, or customer satisfaction, is not entirely legal. BP is the epitome of consequence deriving from such legal foolishness.
What happens if they can't stop it? Is anyone looking at the worst case scenario - 20,000 to 50,000 barrels of oil per day for the next few years?
As far as the argument that a company is obligated to make money for its shareholders - this disaster is guaranteed to do the opposite. This is why the best companies spend money on disaster planning and mitigation.
You mean the refineries weren't warned about the inspections? Years ago when i worked driving a forklift in a warehouse, the managers were always warned of an upcoming OSHA inspection and would break out the safety belts that were normally kept in a locked storage room.