Cuts made BP "vulnerable to a catastrophe"

News | HSW
01.05.2007

BP is facing its harshest criticism yet over the Texas City explosion after the US Chemical Safety Board (CSB) accused it of cutting costs, under-investing and failing to respond effectively to warning signs of a "possible disaster".

The accusations come in the federal agency's final report on the explosion at the group's Texas City refinery. The March 2005 blast, the worst US industrial accident since 1990, killed 15 workers and injured 180.

The CSB echoes many of the conclusions in January's Baker Panel review of BP's corporate safety culture (HSW March, page 10). But the CSB goes a step further in singling out the company's "cost cutting, production pressures and failure to invest", which left Texas City "vulnerable to a catastrophe". It also blames BP officials at all levels for responding to evidence of safety problems by doing "too little, too late".

BP ordered a 25% cut in fixed spending shortly after acquiring Texas City from Amoco in 1999; it ordered another 25% reduction in 2005, despite the fact that the refinery's process equipment was in disrepair. As far back as 2002, a senior BP executive in Houston warned that the site's ageing infrastructure was "in complete decline".

The report argues that, among other things, cost considerations discouraged refinery officials from replacing the blowdown drum involved in the accident with a flare system. Had they done this, the CSB says, it would have "prevented or greatly minimised" the severity of the accident. The board  highlights evidence that operators' fatigue degraded their judgement, that training and supervision was inadequate, and procedures were outdated and ineffective. 

Among the report's recommendations are that BP should set up an improved incident reporting system and appoint a non-executive director with direct experience of process safety. It also calls on the US safety administration to strengthen its planned enforcement of its process safety management (PSM) standard.

BP strongly disagrees with some of the CSB's findings and conclusions, but has promised to consider its recommendations.