BP Explosion in 2005 [Type

BP Explosion in 2005

[Type the document title]

SWOTs that were Compromised in Comparison with the Strategic Plan

The Parts of the Strategic Plan that would have made the Operating Environment Safer

The Role that U.S. Chemical Safety & Hazard Investigation Board would play in the Accident

The Barriers that Prevented the Strategic Plan from being Implemented

BP Explosion in 2005

During the last decade, BP has consistently tried to make themselves standout as a new generation of oil companies. Where, they are focused on addressing the needs of consumers and being a responsible member of the business community. The accident that occurred at the Texas City refinery would challenge this idea. As it would highlight the company's attempts to cut costs and maximize profits. Below we will examine the role that BP would knowingly play, in the events that lead to the explosion and their initial attempts to cover up what had taken place.

Introduction (Text)

In March 2005, a major explosion would occur at the BP refinery in Texas City, Texas. At first the company would attribute the main causes of the accident to error by plant operators. As they would claim that front line workers and supervisors were "deviating from proper procedures." However, after an investigation by the Chemical Safety Board (CSB) and other regulators, they found that the company was knowingly violating a number of different safety standards. Where, there were routine violations of various health and safety practices on a regular basis. At the same time, there were problems with the training and operation of the plant's safety control systems. ("Its Deja Vu All Over Again," 2010) This is important, because it shows how the management of BP, would play a direct role in the causes surrounding the accident. To fully understand this role requires conducting an examination as to what elements of the Strategic Plan were compromised by the company. This will be accomplished by examining: SWOTs that were compromised in comparison with the Strategic Plan, the parts of the Strategic Plan that would have made the operating environment safer, the role that U.S. Chemical Safety & Hazard Investigation Board would play in the accident and the barriers that prevented the Strategic Plan from being implemented. Together, these different elements will provide the greatest insights as to how management knowingly violated the law on numerous occasions (which contributed directly to the accident).

SWOTs that were Compromised in Comparison with the Strategic Plan

The accident that took place in Texas City, occurred because of a culture of mismanagement and neglect that had been taking place for decades (as the refinery would fall into a state of disrepair). The best way to fully understand this is through conducting a SWOT analysis of these events. As far as strengths are concerned, BP was well aware that the plant was facing many problems when they purchased it from Amoco in 2002. Where, it was known that the refinery was in desperate need of having significant infrastructure reinvestment. At the same time, BP had a reputation for being the one of the strongest players in the energy sector, due to their ability to maximize profits. When you combine these two elements, it shows how they were a strength (for the company), prior to the accident. As BP could have easily made the necessary investments to upgrade the plant and were well aware of the operational as well safety issues (due to a lack of reinvestment in the refinery). (Blumenthal, 2007) This is important, because it shows how the company did understand the problems that were being experienced at Texas City. As a result, this information is a strength because the company is sturdy enough, financially speaking, to rectify the situation. All they have to do is take the necessary actions to achieve this objective.

As far as weaknesses are concerned BP knowingly violated various safety procedures on a regular basis. This is problematic, because it would create a culture of mismanagement and disregard for various safety regulations. A good example of this can be seen with a health and safety inspection that was conducted at the refinery 18 months before the explosion. Where, they found a number of significant violations to include: alarms that did not work corroded pipes that were about to burst and outdated equipment. (Schorn, 2006) This is important, because it shows how the lack of focusing on safety, would help to create a culture of sloppiness and inefficiency. As result, one can easily draw a connection between these issues and various weaknesses, which helped contribute to the accident.

The opportunities are: that the company can learn from the events surrounding the disaster at Texas City, to prevent them from occurring in the future. This is important, because the company has been struggling, with its public image problem since the disaster. As series of different events would underscore the lack of focus they would have in areas of safety. If BP can begin investing in the different plants / equipment, they could be able to turn the situation in their favor. As they could highlight how they learned from the mistakes at Texas City and begun to implemented new safety protocols company wide. This would be accomplished by addressing various safety issues and investing in the infrastructure (to ensure that they are in compliance with federal regulations).

The possible threats that the company faces is a string of law suits related to the accident. This is problematic, because the settling of various lawsuits with the families of the deceased could expose BP to future ligation. (Schorn, 2006) for example, the explosion would have an impact upon the entire community. Given the fact that large amounts of petrochemicals were dispersed over vast areas, means that there could be lingering health effects later on. Once this takes place, it means that it is only a matter of time until the company will find itself, as the defendant in host of new legal cases surrounding the accident. This could cause the total amounts of compensation and expenses associated with the incident to increase.

The Parts of the Strategic Plan that would have made the Operating Environment Safer

The most obvious part of the Strategic Plan that BP overlooked was goal number three. This states that the CSB wants to have an industry wide implementation of safety procedures across the sector. ("Strategic Plan FY 2004 -- 2008," 2004) at the Texas City refinery, the company would knowingly violate this safety standard on a regular basis. A good example of this can be seen, by looking no further than eight major incidents involving the release of gasoline vapor since 1996. Where, any one of these incidents could have led to a major catastrophe at the refinery. This is troubling, because most refineries will install what is known as flares. These are safety devices that are designed to burn off excess gas overruns. The fact that this continued to occur during the ten years before the accident, highlights the lack of safety standards at the Texas City plant. Part of the reason for this, is because BP had been known for increasing their overall bottom line through cost cutting. As a result, the various cost cutting efforts would have a major impact upon the different safety procedures that were in place. Commenting about what has taken place Carolynn Merritt (the former Chairperson of the U.S. Chemical and Safety Board) said, "Twenty-five percent of their (BP's) fixed costs were cut. And when you cut that much out of a budget in a facility, you lose people, you lose equipment, you lose maintenance, you lose trainers. Our investigation has shown that this was a drastic mistake." This is significant, because it highlights how efforts to cut costs would have a dramatic impact upon the company following the Strategic Plan. As a result, one could argue that the desire of BP to cut costs in any way would make them unable to follow goal number three. As the reduced costs, would slowly have an impact on safety standards at the refinery in Texas City (helping contribute to the accident).

The Role that U.S. Chemical Safety & Hazard Investigation Board would play in the Accident

The CAB would play a role in the investigation after the incident. What happened was the Occupational Health and Safety Administration (OSHA) was negligent, in that they overlooked the obvious safety violations on regular basis at the plant. This is problematic, because when you have a regulatory agency that is unable to effectively shut down locations that are unsafe; it only encourages the company to engage in such behavior. The reason why, is because there is no consequences for BP and their disregard for obvious safety violations. A classic example of this can be found with the eight gas spills that occurred since 1996. Where, the company could continually engage in the pattern of disregard, for the safety of their employees and the general public. This is because OSHA would not take any kind of aggressive enforcement action. In the case of the different gas spills, OSHA could have easily shut down the plant until changes were made in safe regulations. However, the fact that the OSHA continued to overlook what was taking place, meant that they would allow an unsafe work environment to exist. (Blumenthal, 2007) This is important, because it shows how the lack of follow up and the ability to enforce existing environmental / work safety laws, would help to make the situation worse at the Texas City refinery.

After the accident occurred, the CAB would investigate all of the various reports that were received from employees and their families about conditions at the facility. This was in contradiction with the investigation undertaken by BP, which found that employee error was the cause of the accident (not a lack of safety procedures). The results of the investigation by the CAB; would identify significant lapses in the lack of: oversight from OSHA and the cost cutting strategy that BP was utilizing. (Blumenthal, 2007) This is important, because the findings from the investigation would force the industry to reexamine various safety procedures. At the same time, it would push BP to pay $1 billion in making the necessary upgrades to the Texas City facility.