The history of British Petroleum (BP) is inextricably linked to innovative environmental projects aimed at changing the activities of the entire global industry. Back at the end of the 20th century, the corporation announced a program to transform the production of petroleum products in accordance with the principles of environmental protection. The campaign was called “More Than Oil” and implied the expansion of alternative energy production facilities, including the expansion of solar energy production (Geyer, 2021). This policy cost the management team a large investment of over a hundred million dollars and, by the beginning of the 21st century, brought significant reputational benefits. British Petroleum became the most popular and respected supplier of petroleum products to various countries around the world. However, while actively expanding its oil fields, management encountered the first global problems, which served as the starting point for many environmental catastrophic events in the history of British Petroleum.
In 2002, during the discovery of a well in Alaska, there was a massive explosion that led to severe air pollution. The case gained quite a bit of publicity, and the corporation’s management paid the state administration more than $300 million in compensation for environmental damage. Nevertheless, this event did not become a reason to revise safety practices in the operation of wells and oil production facilities in general. In 2010, another large-scale explosion and subsequent fire destroyed about 70 square kilometers of forested area and caused inestimable damage to the environment (Wills, 2020). The company has issued a public apology and promises that it will compensate for the $500 million in environmental damage. However, investigations into the disaster have uncovered many other irregularities at British Petroleum, including elevated annual spills of oil into the world’s oceans. It was found that in the reports, the company underreported the true volume of pollutants.
In their attempts to explain the reasons for the incident, the company’s managers referred to the dishonesty of the company’s partners, absolving themselves of a large share of responsibility. Moreover, further measures to change the situation were limited to another attempt at financial compensation. The public did not follow any organizational conclusions on the part of management, which manifested itself in several episodes of explosions at production facilities, leading not only to the degradation of the biosphere, but also to numerous casualties. This chain of events clearly demonstrates the company’s significant shortcomings in terms of production and oil production safety. Over the years, management has paid out more than $500 million in compensation, but the public gets the consistent impression that no internal changes have occurred during the environmental disasters. Moreover, by 2012, it was revealed that representatives of the company had made repeated attempts to bribe environmental organizations in order to restore their reputation and conceal information about environmental levels.
The oil spill in the Gulf of Mexico was the most high-profile case in the company’s history, revealing fundamental problems in the company’s operations. As a result, the Clean Water Act (CWA), which regulates interventions of various companies in the life of the world’s oceans, was violated. The main tenet of this regulation is the idea that any outpouring of production substances can only be done with prior approval from administrative resources. This was fundamental violation on the part of British Petroleum. The explosion on the Deepwater Horizon platform led to an accident that released about 5 million barrels of oil into the water and killed 11 people (Wills, 2020). The phenomenon of drilling wells in the Gulf of Mexico itself is normal, as many oil developments have been built in the area since the 1970s. The developers used the same technology as their predecessors and followed established guidelines and techniques.
Therefore, it can be argued that this incident was part of a verboten systematic flaw. Management decided to organize oil prospecting at greater depths without fear of the risk of a leak, because safety techniques had worked successfully in the past. Management’s peace of mind during development was significantly related to the fact that releases had not occurred before this episode in deep water. It is important to note that no insurance programs were in place in this case, and this corporation’s competitors also did not have any algorithms in place to deal with accidents. Hence, British Petroleum has already established itself as a center of innovative and safe oil production. The levity combined with excessive ambition led the executives to an irrational and unconscionable decision. The latter was based, as the investigation later revealed, on legalizing safety violations within the company. In the pursuit of novelty and competitive advantage, executives made it a normal practice to act on the edge of tolerance and did not consider that such actions undermined environmental safety and, in the case of oil production in the Gulf of Mexico, violated the Clean Water Act.
The negligence of the managers subsequently led to a number of important factors not taken into account, including the hurricane, which significantly loosened the oil production platform, as well as a large shortened time frame. Moreover, the fact that the well had cracked significantly during drilling was ignored in the organization of the work. The reason for this event is that the pipes normally used in shallow water were first placed much deeper, leading to an unpredictable result. Before the final stage of drilling, a computer program was simulated, which showed that the risk of leakage with this type of pipe was moderate (Wills, 2020). It was this technical flaw that was the root cause of what happened. It was subsequently learned that some electronic systems and sensors had not been sufficiently tested. Some control panels turned out to be discharged and did not bring important parts of the design to work.
Not to be overlooked is the fact that some minor leaks had been discovered a week before the disaster. These were reported to the Houston administration, but contrary to instructions, drilling was not suspended to arrange for repairs (Geyer, 2021). Finally, among the causes of the disaster was a conflict of economic interests between British Petroleum and its lessor Transocean. Hence the corporation’s management was largely interested in ensuring that construction was completed as quickly as possible.
Experts argue that this disaster is not a classic disaster, as it is not entirely due to unpredictability. This event could have been completely prevented with proper supervision and safety arrangements. It cannot be said that only British Petroleum is to blame for what happened. There was negligence on the part of the cooperating companies, contractors, suppliers, and the authorities, who failed to respond to complaints of leaks during construction. The event in the Gulf of Mexico is neither local nor regional but truly international (Wills, 2020). It is taking on a universal dimension. It is an alarming signal to all mankind that the selfish interests of transnational corporations must be restrained by the international community, that their responsibility for the negative consequences of their activities must be increased, that the environmental risks are very great, that ill-considered actions can cause enormous damage to nature and humanity.
The accident on the Deepwater Horizon oil platform proves once again that there is no one hundred percent insurance or guarantee against disasters, even with the latest technology. In reply to the question of the editor-in-chief of Drilling and Oil about the impact of the accident on future projects. Perhaps, the disaster in the Gulf of Mexico will be a powerful incentive to reduce the share of oil and gas in the energy balance of developed countries. It is likely that the authorities of such countries will increasingly pay attention to the development of nuclear, hydro, wind and solar energy. This may have a significant impact on the global energy situation. In any case, what happened made the world community, the governments of many countries and the management of oil and gas companies wake up. The question arises as to what legislative measures can be taken to prevent such systemic mistakes from becoming a breeding ground for such mistakes. An important preventive step is to increase control by local administrations over all stages of oil production (Geyer, 2021). It is necessary to check each decision made by the manager of different departments concerning oil refining. Moreover, the state must see to it that there are no conditions for large companies that provoke large-scale haste and disregard for safety.
From the technical point of view, it is necessary to develop a system of algorithms for working in an experimental environment, when new materials are used, or old technologies are applied in new, poorly understood conditions. Finally, an important action is the organization of maximum publicity and popularization of environmental legislation (Geyer, 2021). Hence, the postulates of such laws as the Clean Air Act or Clean Water Act and others like it will be assimilated by the managers of corporations whose activities pose a risk to the environment.
The precedent in the Gulf of Mexico should be disseminated to educational institutions associated with petroleum development. This event and its causes can be incorporated into the training programs of petrochemical students. Future professionals need to understand the consequences that can result from the unrealistic pursuit of profit and disregard for safety engineering. It is necessary to detail what specific damage was done to nature, with publication of all statistical data. For example, information that the oil spill reached the coast of Florida and Louisiana, destroying the flora and fauna of coastal areas.
The territories of many reserves near the ocean were polluted to such an extent that hunting and fishing on them are still forbidden. The beaches of the other states have not been closed to vacationers for several months. In addition, almost 600 sea turtles, 100 dolphins, more than 6,000 birds were found dead, and for the next few years, there was a continued high mortality rate among whales and dolphins (Wills, 2020). However, the greatest fear among scientists was the impact of the accident’s consequences on the climate-forming Gulf Stream. According to some estimates, the temperature of the current dropped by 10 degrees (Wills, 2020). The current began to break up into separate underwater currents. Some weather anomalies have been noticed. And all of this just as the oil spill was occurring after the sinking of the Deepwater Horizon. Of course, this can only be a coincidence, and experts have not come to a consensus on this issue. However, this fact still worries some scientists.
In the aftermath of the event, considerable effort was devoted to dealing with the aftermath of the explosion. First, a large number of resources were devoted to extinguishing the spreading fire on the platform. Then the services focused on the oil spill. The challenge was to seal the pipes as quickly as possible and to reduce the oil spill in the ocean. A few weeks after the disaster, British Petroleum management sponsored the construction of a large steel dome to stop the oil leak (Wills, 2020). Engineers estimated that much of the spill could have been contained by this structure. However, time later, it became clear that installing such a global dome was not feasible due to the limited functionality of robotic installers working at depth. As a result, a smaller structure was installed, the efficiency of which in stopping the flow of spilled oil was significantly reduced. The sealing was also done by constructing several valves, but less than a month later, management received news of more ruptures and increased leakage.
It was not until three months after the disaster that it was possible to say that the release of oil into the ocean had been completely stopped by the hydraulic injection of concrete into the well. During this time, the substance continued to pour into the waters of the gulf, destroying flora and fauna for thousands of kilometers around. During the fight against the leak, British Petroleum invested hundreds of millions of dollars and suffered huge reputational losses. The case was the reason for several criminal cases due to the negligence of some specialists, which resulted in the death of 11 people.
No less significant were the company’s losses at further stages of elimination of the consequences of the catastrophe. Thus, during the attempts to reduce the radius of the oil slick formed in the ocean a few months after the explosion, the management of the corporation bought and sent more than 50 barges. Sources say the entire BP flotilla was involved in the operation. It is impossible not to mention the important role played by the activity of the US Navy and Air Force, which sent 6000 servicemen and many units of military equipment (Wills, 2020). The main mechanisms of combating the oil slick were booms, mass burning of the substance, and collection of the latter by various mechanical means. Active oil slick burning activities were carried out on the Louisiana coast, where more than 400 salvos of various scales were carried out. Such activities have greatly degraded the biological balance of the coastal zone, causing irreparable ecological damage to flora and fauna.
Unfortunately, this sacrifice had to be made to prevent a more global catastrophe from destroying much of the underwater world of the Atlantic Ocean. It was not until a year later that it was announced that much of the land had been cleared of residual oil, which had been found not only on beaches no longer suitable for human and animal habitation, but also in marshy areas. Contamination of the latter has put many amphibian species at risk of extinction. The underwater methane plume, which has become one of the main consequences for the planet’s hydrosphere, was mostly eliminated only by 2012 (Wills, 2020). This was largely due to the active activity of bacteria capable of converting some oil-containing products into substances that are safe for the environment.
In spite of the fact that the management of the company admitted all the reputational losses after the disaster and paid a huge amount of compensation, British Petroleum did not manage to avoid long-term negative consequences. There was a strong public opinion that the corporation had chosen the policy of paying off violations of the Clean Water Act and Clean Air Act. At the same time, no trace of reflection on large-scale organizational changes was noticed either immediately after the disaster, or several years afterwards. This phenomenon caused BP’s attractiveness to partners and investors to decline. Moreover, over the next 5 years there was a diminished return on the corporation’s business and a decline in share price. Considering how systematic and profound the causes of the catastrophe were, such consequences may be considered logical.
The Gulf of Mexico incident should have been the starting point for a major and public restructuring, but it did not happen. Although now we can talk about the improvement of the company’s reputation due to the absence of major scandals and accidents, large-scale growth of the corporation is not expected in the medium and long term. This is due to the size of the disaster, which took place in the Gulf more than 10 years ago, but caused environmental damage that cannot be compensated for even in the long term.
References
Geyer, R. (2021). The business of less. Routledge.
Wills, I. (2020). Economics and the environment. Routledge.