BP Sets Up New Safety and Risk Unit

photo : Wikipedia

The incoming BP Chief Executive Bob Dudley has announced that the company will set up a new Safety and Operational Risk function.

This change, implemented as a result of the Deepwater Horizon incident, creates a division reporting directly to Dudley and with responsibility "for ensuring that all operations are carried out to common standards, and for auditing compliance with those standards".

Dudley has also announced that BP will also review how it rewards its managers, with the stated aim of encoraging excellence in safety and risk management.

The blog applauds these actions, this is an appropriate response to such a catastrophic incident, putting process safety and risk management to the top of the corporate agenda. The only question is, why was this action not taken after Texas City?

CSB to Investigate Deepwater Horizon Incident

photo :Oilonline.com

I'm very pleased to hear that the US Chemical Safety Board (CSB) has been invited to investigate the causes of the explosion on the Transocean/BP oil rig, which occurred on 20th April.

The CSB takes a very holistic approach to its investigations, looking at technical factors but very importantly, the organisational, cultural and human factors which may have contributed to such an incident.

An additional benefit of a CSB investigation is the fact that CSB is capable of producing excellent material to share all of the learnings with the wider community. The video  'anatomy of a disaster' about Texas City is a must see for chemical industry professionals.

In a letter to Senator Henry Waxman, the CSB Chairman, John Bresland, has agreed that the investigation will look for similarities with the BP Texas City explosion but stressed the importance that the investigation be carried out without preconceptions and that all of the underlying causes and factors are thoroughly examined.

This point is essential. Politicians and some media outlets have been very quick to condemn BP as 'guilty'. Some of the accusations may prove to be valid but this can only be fairly determined with a thorough and proper investigation of all of the issues and all of the parties involved.

5 Years On Since Texas City - CSB Statement

photo : CSB

March 23rd marked exactly 5 years since the Texas City disaster, a tragedy that resulted in 15 deaths, 170 injuries and a huge financial cost for the owner, BP.

A lot has happened in that time; there has been much wider recognition of the need for effective Process Safety Management (PSM) and many companies have implemented or are in the process of implementing very strong PSM policies and procedures.

However, there are still many companies that are not doing as much as they should in this regard. This is clearly a major concern. As a regular reader of the trade press, I see details of incidents and fatalities on a depressingly regular basis. This really should not be the case.

The Chairman of the US Chemical Safety Board (CSB), John Bresland has issued a statement regarding the incident and its impact on the industry. His final paragraph is a very succinct reminder for all of us in the industry

"When will we know whether the tragedy of 2005 has resulted in greater safety at BP and other companies’ refineries? Only when we can look back over the passing of a significant number of years without major accidents, deaths, or injuries. In the meantime, only the highest commitment to running down the even smallest of problems and upsets will assure the prevention of so-called low probability, high-consequence events like the tragedy that took so many lives in Texas City five years ago today."

BP To Appeal New Texas City Damages Award

photo : BP

BP is set to appeal a $100M award for safety infringements at its Texas City refinery. The Texas Court made its ruling on Friday 18th December and ordered BP to make payments to ten workers after an incident in April 2007 that involved an unplanned release of toxic chemicals at the site.

The affected workers claimed that breathing in benzene and other harmful chemicals released from a sulphur recovery unit had caused dizziness, sore throats, and one worker to pass out. No long-term or permanent injuries were caused.

BP has denied that the release occurred and indeed environmental agencies could find no evidence to support the claims.

This case is one of a number of lawsuits brought against BP involving more than 140 workers and local residents in relation to alleged gas releases from the Texas City Refinery

This blog is very much an advocate of excellence in all matters relating to Process Safety Management (PSM) and believes that all organisations should have the very best policies and procedures in place.

It is also correct that transgressions, where proven, should be punished via the courts but the punishment must fit the crime. In this example, the judgement is extremely severe considering that there is uncertainty about whether a release actually occurred and, most importantly, the fact that no-one suffered any long term effects.

BP Texas City - Strongly Worded Statement From CSB

photo : CSB

Following the recent OSHA announcement alleging 'extensive and serious violations by BP at Texas City, John Bresland, Chairman of US Chemical Safety Board (CSB) has issued a strongly worded statement in which he expresses concerns about BP's safety culture.

In the statement Bresland states "Whilst these OSHA citations are not yet final, they are of great concern to me because they strongly suggest that BP has yet to achieve an effective safety culture with regard to process safety management.

Bresland also expresses concern about on-going problems across the U.S. Refinery Industry "Whilst OSHA reported that a potential for another catastrophic accident remains at B.P. Texas City, the CSB has found that safety problems continue across the U.S. Refinery Industry".

Whilst the CSB is focused on the industry in the U.S. it is fair to say that process safety management concerns exist across the industry and across the globe. Some organisations are doing excellent work in this area, whilst others still need to improve.

Most importantly, organisations need to have clearly defined accountabilities for process safety at board level. This means having someone with real professional expertise in operations and process safety, with the authority and capability to drive an effective PSM programme. Accidents such as Texas City must not be allowed to happen again but as things stand, the risk remains very real.

Record Fine For BP

Following on from my previous comment on BP Texas City, the  BBC has now reported that BP has been fined a record $87m (£53m) for failing to correct safety hazards at the site.

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As noted previously, the Occupational Safety and Health Administration (OSHA) cited 270 violations at the oil refinery. BP said it believed it was in "full compliance" with a 2005 settlement agreement with OSHA and would work with the agency to resolve the issue.

The $87m fine is the largest in OSHA's history.

Mixed News as Companies Report on Q3

Mixed news for the chemical and process industries as companies reported Q3 results

• BASF reported third quarter profits down 69% year on year to €237M. BASF expects a long slow climb out of recession. BASF expects some employees will remain on short-time working into 2010. Whilst business has stabilised the climb out from the trough will be slow.
• Shell reported a collapse in Q3 profits from $10.9 billion in 2008 last year down to $3 billion. As a result of this poor performance, Shell will axe some 5000 jobs worldwide in its 'Transition 2009' programme
• BP's results were some 50% better than city analyst's expectations, with replacement cost profit of $4.98 billion. BP has already cut costs following reorganisation and efficiency improvements and aims to do even more this year. BP noted that they had achieved a 7% increase in production as well as a number of new developments in the Gulf of Mexico, Iraq and China, amongst others.
• GSK showed that the pharma sector is still reasonably strong. Profits were up 12% at $2.4 billion. Demand for the H1N1 vaccine has help bolster GSK

Overall, things remain tough for commodity sector, and particularly for those who rely on housing starts and the automotive sector for a major proportion of their demand. The end to the various stimulus packages will also create issues as volumes drop back to the 'new normal'.

Some sectors are clearly much less affected, such as pharma, although cost cutting and a move to generics will make things tougher.

For manufacturers, we can anticipate another tough year, chartacterised by reorganisations, reduced capital expenditure and some site closures as we slowly start to pull out of recession.

OSHA Rejects BP's Request For More Time In Texas City Follow-Up

photo : ABC

In a letter seen by Reuters, OSHA has rejected BP's request for more time to fix safety problems at its Texas City Refinery.

OSHA has forwarded the dispute to a review commission and objected to BP's appeal, arguing that BP had failed to show how it would fix safety problems found after the deadly 2005 explosion at the refinery. OSHA has also said that BP could not ask for more time whilst simultaneously claiming that the refinery had met the terms of a four-year agreement to fix the safety issues which led to the explosion in March 2005 which killed 15 people and injured 180 other workers.

BP has said the commission would find the company has lived up to its agreement to comply with federal safety regulations at Texas City.

Without the detail, it is impossible comment on specifics. In broad terms however, it is fair to say that questions of interpretation can be argued and debated but questions of fundamental process safety must be fully addressed.