19 May 2007 - 10:42
  • News Code: 104950

Cost-cutting efforts created a culture at BP America Inc. that led to compromises of systems integrity at its Alaska North Slope oil-gathering pipelines and of workplace safety at its Texas City, Tex., refinery, witnesses and federal lawmakers agreed on May 16.

"Virtually all of the seven root causes identified for the Prudhoe Bay incidents have strong echoes in Texas City," said US Chemical Safety Board Chairwoman Carolyn W. Merritt. She had been asked by the House Energy and Commerce Committee"s Oversight and Investigations Subcommittee to compare Booz Allen Hamilton"s analysis of the oil line leaks for BP with CSB"s investigation of the Mar. 23, 2005, explosion and fire at the refinery.


"Both reports point to the significant role of budget and production pressures in driving BP"s decision-making—and ultimately harming safety.... Both investigations found deficiencies in how BP managed the safety of process changes.... Other common findings included flawed communication of lessons learned, excessive decentralization of safety functions, and high management turnover," Merritt told the subcommittee during a hearing on causes of the oil leaks.


Rep. Bart Stupak (D-Mich.), the subcommittee"s chairman, also found similarities. "One of the primary findings in the CSB report was that "cost-cutting and budget pressures from BP group executive managers impaired process safety at Texas City".... Similarly, documents made available to this subcommittee suggest that BP field managers were under extreme pressure to cut costs in Alaska," he said in his opening statement.


Leak causes revisited

Stupak said the hearing originally was intended to update corrective actions that BP, as well as state and federal agencies, were taking at Prudhoe Bay. Documents that BP recently supplied to the full committee made it necessary to revisit the issue of what caused the leaks, he said.


"Some of these documents were actually available to BP officials before the Sept. 6 hearing, yet BP failed to disclose this information. These documents show that cost-cutting pressures on Prudhoe Bay operations were severe enough that some BP field managers were considering reducing or halting a range of actions related to preventing or reducing corrosion," Stupak said.


BP America Chairman Robert A. Malone said cost-cutting pressures helped create problems at Texas City and Prudhoe Bay. But he also suggested that the ANS oil-gathering line leaks may have been caused more by employees placing too much confidence in corrosion inhibitors" effectiveness.


"Booz Allen Hamilton concluded that in the absence of better risk assessment processes, budget increases alone would not have prevented the leaks. Our own work has revealed that the workforce did not have an adequate process to challenge their own assumptions," he said in his written statement.


In questioning Malone, Stupak noted that the BAH report concluded that because BP Alaska"s health, safety, and environment program focused exclusively on workplace safety, its major accident risk and hazard assessments did not consider corrosion risk on the oil transit lines (OTL).


"These risk assessment approaches might have identified the changing profile of the OTL created by the changing operating conditions," the report says. Stupak said falling production at Prudhoe Bay reduced pressure and added produced water to what was going through the gathering lines, making corrosion inhibitors much less effective.


Malone said the BAH report concluded that the leak occurred because there was no formal risk-assessment process that considered the oil field"s changing operations and conditions. "It suggests that if we had given them more money, they wouldn"t necessarily have used it because they were confident the system they were using was working," he told Stupak.



News Code 104950

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