Ethics and Oil Spills

The Urgency for Stewardship in the Business World

An environmental leadership guide to “what not to do” was composed by BP across a decade where the priority of short-term financial gain outweighed the need for adequate safety measures to ensure environmental and human protections. BP touted environmental responsibility, but shortcuts created disasters not only for their bottom line but for their reputation as purported environmental stewards. To understand how organisations can create long-term value for all stakeholders is to investigate the safety failures and catastrophic disasters that created the dire need to ensure sustainability is not only built into policy but actioned.

In 2000, BP sought to establish itself as the environmentally friendly oil company, launching a $200 million (USD) campaign under the slogan “Beyond Petroleum” and branching out into the manufacture of solar cells and wind farms (Greenpeace, 2010). These initiatives were put into action; however, ethical concerns regarding human and environmental safety were largely ignored. While renewable energy was an excellent marketing strategy for BP, stewardship of human life and environmental safeguarding fell to the wayside in the oil sector of the company.

In 2005, at the Texas City Refinery, 15 lives were lost and 180 people were injured in a disastrous explosion. The United States Chemical Safety Board attributed the explosion not to operator error but to organisational and safety deficiencies at all levels of BP (U.S. Chemical Safety and Hazard Investigation Board, 2007). BP set aside $1.6 billion (USD) to settle claims brought by victims and their families (Greenpeace, 2010). The initiatives to create a green BP did not extend to safety measures for employees.  In terms of an ethical consequentialist model, this was a disaster as the greatest good for the majority of stakeholders was ignored. Despite this event, initiatives remained initiatives without decisive implementation, resulting in the Alaska Prudhoe Bay disaster in 2006 where approximately 757,000 litres of oil from a corroded pipeline oozed into the Bay (Greenpeace, 2010).

It was in 2010 that BP’s negligence led to disaster on a catastrophic scale of human loss and environmental destruction. Six weeks behind schedule and millions over budget, BP proceeded with a single “long string” casing rather than the more protective two-pipe design and installed six centring devices instead of the 21 recommended by its cementing contractor, Halliburton (Wang, 2010). Repeated negative pressure tests indicated that the cement had failed to seal the well (National Research Council, 2012). 11 lives were lost in the resulting gas explosion and the well leaked for 87 days, releasing an estimated 4.9 million barrels of oil and polluting some 1,770 kilometres of shoreline (National Oceanic and Atmospheric Administration, 2017).

Sustainability announced as an initiative was a marketing exercise. In reality BP viewed sustainability as a constraint on decisions otherwise made for speed and cost. Long-term value is created when people and planet take priority over the schedule, however, at BP, the schedule was the priority.

The loss of human life and the destruction of ecosystems should not be the catalyst for the appropriate actioning of lip-service initiatives; rather, initiatives need to drive actions that ensure sustainability.

References

Greenpeace. (2010, May 21). Recapping on BP’s long history of greenwashing. https://www.greenpeace.org/usa/recapping-on-bps-long-history-of-greenwashing/

National Oceanic and Atmospheric Administration. (2017). Deepwater Horizon oil spill settlements: Where the money went. https://www.noaa.gov/explainers/deepwater-horizon-oil-spill-settlements-where-money-went

National Research Council. (2012). Macondo well Deepwater Horizon blowout: Lessons for improving offshore drilling safety. National Academies Press. https://doi.org/10.17226/13273

The Maritime Executive. (2018, January 16). BP’s Deepwater Horizon costs reach $65 billion. https://maritime-executive.com/article/bp-s-deepwater-horizon-costs-reach-65-billion

U.S. Chemical Safety and Hazard Investigation Board. (2007). Investigation report: Refinery explosion and fire, BP Texas City, Texas, March 23, 2005 (Report No. 2005-04-I-TX). https://www.csb.gov/assets/1/20/csbfinalreportbp.pdf

Wang, M. (2010, May 28). Did BP’s acts to save time and money set the stage for the Gulf disaster? ProPublica. https://www.propublica.org/article/did-bps-cost-cutting-time-saving-decisions-set-the-stage-for-gulf-disaster

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