Posted: May 25th, 2022
This post-mortem report is directed to the British Petroleum (BP) board of directors concerning the BP Texas City refinery explosion incident that took place on March 23, 2005. A series of explosions occurred during the restarting of the hydrocarbon isomerization unit in the Texas City refinery. The main technical reason behind the initial explosion was the flooding of the over-pressurized distillation column, which ended up in a geyser of combustible vapor release in the vent stack. A car engine near the tower then ignited the vapor, causing ghastly explosions that resulted in 15 deaths and 170 injuries. This post-mortem report is especially relevant given that the very same Texas City refinery had a fire on October 30, 2012 at its Resid Hyrdotreating Unit. The fire was extinguished with no major injury or damage occurring, but it was officially rated as a Level 2 emergency within the refinery and for the city. A Level 2 designation suggests “it was not having an effect on the community but it had the potential to,” (Pulsinelli, 2012). The Texas City situation reveals some deeper ethical issues that need to be addressed by the company.
This post-mortem report is also timely because as of November 15, 2012, BP settled with the United States Department of Justice on both civil and criminal charges related to the 2010 Deepwater Horizon explosion incident. In the past several years, BP has had many other work incidents that call attention to what can be called a deplorable, nearly comedic, safety record. It is believed that the safety hazards like the 2005 Texas City disaster are caused by BP’s inability to implement a code of ethics. In particular, BP has made disastrous decisions to put profit ahead of social, environmental, and moral responsibility.
By only concentrating on money, BP failed to apply a simple utilitarianism ethical framework where a right decision is made according to one basic principle, which is: to what causes the greatest good for the greatest number of beings. Therefore, the recommended action for BP is to apply a new process of safety regulation. Using this new safety regulation process, workers can report any work hazards they observe without fear of retaliation, reprimand, or ridicule. With a procedural solution like the one suggested, BP will be taking an important first step toward making decisions in accordance with utilitarian ethics.
Description of Engineering Failure
On the morning of March 23, 2005, BP employees and contract workers at the Texas City Refinery “began an especially dangerous procedure: re-starting a unit that had been down for repairs,” (Schorn, 2009). As part of the repair procedure, the workers began filling an isomerization unit tower with gasoline but an overflow alarm failed to trigger. Compounding the failure of the alarm was yet another problem: the shift changed and a new operator was unaware of the state of the isomerization unit. The former operator had failed to keep a detailed record of events in the logbook.
Moreover, a senior supervisor had come late, and left early. The new operator kept the feed running, and had no experienced personnel with him for guidance. When the problem with the alarm was detected, it was too late. As a result, the distillation column overflowed with liquid gasoline. It flowed to the vent stack, where it released itself in a geyser of fumes and liquid that was visible from afar. What happened next is not surprising. “The plume of gas had formed a massive vapor cloud on the ground, and an idling truck likely had ignited the fumes,” (Schorn, 2009, p. 1). The resulting explosion had devastating consequences.
For one, BP had allowed the construction of trailers for overflow workers to be built close to the isomerization unit. As Schorn (2009) points out, “the blast pulverized several office trailers full of workers parked nearby,” (p. 1)
Analysis of ethical lapses
The ethical lapses are relatively clear in hindsight, and there are several specifics. First, BP ignored the poor safety standards and conditions at the Texas City refinery. Reports released after the event reveal the extent to which BP knew about the poor safety standards at the Texas City refinery and did nothing about it. For one, equipment was known to be sorely outdated and dangerous. “Unsafe and antiquated equipment designs were left in place, and unacceptable deficiencies in preventative maintenance were tolerated,” (“CSB Investigation of BP Texas City Refinery Disaster Continues as Organizational Issues Are Probed” 2006). Schorn (2009) notes, “investigators found problems at Texas City just about everywhere they looked: antiquated equipment, corroded pipes about to burst, and safety alarms that didn’t work,” (p. 2). In fact, the very same vapor release unit that caused the explosion was known to be faulty for as long as ten years (Schorn, 2009). “In the ten years leading up to the disaster, there had been eight major gasoline vapor releases on that unit — any one of which could have been catastrophic,” (Shorn, 2009). The “culture of safety” the company claims to have was only based on the minute details of daily work, such as OSHA standards, rather than on the large, important issues like the ones that caused the 2005 explosion.
Likewise, internal documents that were on file in the years prior to the 2005 explosion show that there was “knowledge of significant safety problems at the Texas City refinery and at 34 other BP business units around the world — months or years prior to the March 2005 explosion (“CSB Investigation of BP Texas City Refinery Disaster Continues as Organizational Issues Are Probed” 2006). Budgets had been cut prior to the explosion, and the refinery had an inadequate team of workers, especially those who were qualified to handle emergency situations. Even though BP failed to create a viable work staff that could prevent or mitigate emergencies, the company actually “blamed the disaster mostly on operator error and fired six employees,” rather than look to the upper level management level responsibilities (Schorn, 2009, p. 2).
Putting profit first has proved to be a problematic ethical doctrine, if it can be called an ethical doctrine at all. Immediately after the 2005 explosion, BP was forced to implement some changes, but the company did so on the basis of the explosion being a public relations disaster. After all, if it were implementing these changes for the correct ethical reasons (to do the greatest good for the greatest number of people), the disaster never would have happened in the first place. What’s clear is that BP was offering bonuses to employees who helped to cut costs, rather than bonuses to those who promote the greatest good. After, not before, the explosion, BP said it “will install modern process control systems on major units, transition to a more powerful maintenance management system, improve worker training, remove blow down stacks and implement the other recommendations,” (British Petroleum, 2005). All those things should have been in place prior to the explosion.
As Ohreen (2010) puts it, “BP’s failureis indicative of a much larger problem with companies that have embraced one of the central ideas in management today: stakeholder theory. The idea that companies can meet the needs of ‘stakeholders’ leaves them open to moral abuse without normative principles at its core.” Stakeholder theory places ethical value on shareholder wealth and profit. Instead, BP needs to place ethical value on people within a utilitarian framework.
Recommendation of Actions
It is believed that BP can easily transition from a “stakeholder theory” to a utilitarian theory for its ethical framework. A switch to a utilitarian ethical framework will help BP avoid future disasters, because the company will see that appropriate safety procedures maximize the greatest good for the greatest number of people. This understanding means that cutting costs can never take place in a reckless way that endangers lives or the environment. In fact, cutting costs is a sound ethical practice when it is done in accordance with utilitarian ethics. Cutting costs sometimes leads to the greatest good for the greatest number of people, but this strategy does not always fit into the utilitarian framework.
It is suggested that the BP board of directors appoint an additional non-executive member with professional expertise in refinery operations and process safety. The post will ensure a culture of safety, as there will always be a senior manager directly responsible for internal and public safety issues. A refinery business impacts the entire community, and in some cases, an entire geographic region. Therefore, BP needs to take responsibility for its actions unlike what it did in 2005.
Furthermore, a structural change to BP management will help create a genuine culture of safety, rather than the superficial one based on the maximization of profit. The new culture of safety that BP creates should be done in accordance with utilitarian ethics, supporting all personnel to call out errors when they see them, report safety hazards when they arise, and reward such behaviors with financial or other incentives.
On the plant level, BP needs to remain committed to a utilitarian culture of safety by hiring team leaders who understand safety procedures, and receive regular maintenance updates from equipment managers. The equipment at the facilities must be kept safe and up-to-date, regardless of the costs of maintenance. With a new ethical framework, BP will avoid the types of costly legal settlements that currently plague the company. Therefore, the profit motive can remain within the utilitarian framework. What the utilitarian framework provides is a way to balance the need for business profit with the need for business ethics. The company cannot survive without an ethical framework, which it completely lacks no matter what the Website says. Especially after the Deepwater Horizon incident, no one believes BP when it claims to operate for any other reason than maximizing profit. By maximizing the public good, BP can still make profit and avoid disaster at the same time.
The Texas City disaster “that killed 15 workers, injured 180 others, and was the worst U.S. industrial accident in more than a decade,” (“CSB Investigation of BP Texas City Refinery Disaster Continues as Organizational Issues Are Probed” 2006). The BP board of directors should muse on a new public relations strategy that proves that the company is truly committed to change. Since the 2010 Gulf oil spill, which has recently resurfaced in the news due to the record breaking $4.5 billion settlement with the Department of Justice and the charging of two BP personnel with manslaughter. BP lied to Congress after the Gulf disaster, and handled the 2005 Texas City disaster with dishonesty, too. Therefore, it is strongly recommended that BP alter its entire organizational culture. A period of introspection is required and recommended for a company in crisis.
British Petroleum (2005). BP Issues Final Report on Fatal Explosion, Announces $1 billion Investment at Texas City. Retrieved online: http://www.bp.com/genericarticle.do?categoryId=2012968&contentId=7012963
“CSB Investigation of BP Texas City Refinery Disaster Continues as Organizational Issues Are Probed,” (2006). United States Chemical Safety Board. 30 Oct 2006. Retrieved online: http://www.csb.gov/newsroom/detail.aspx?nid=215
Galveston County Health District, June 2, 2010, Blast Rips Texas City. [http://www.gchd.org/press/2005/03BPFire.htm, Accessed May 9, 2012]
Mauer, R., Tinsley, A.M., May 8, 2010, Gulf Oil Spill: BP Has a Long Record of Legal, Ethical Violations: McClatchy Newspaper. [http://www.mcclatchydc.com/2010/05/08/93779/bp-has-a-long-record-of-legal.html, Accessed May 9, 2012]
Nocera, J., June 18, 2010, BP Ignored the Omens of Disaster: The New York Times. [http://www.nytimes.com/2010/06/19/business/19nocera.html?pagewanted=all, Accessed May 9, 2012]
Ohreen, D. (2010). Opinion: BP puts costs ahead of environment. Are we surprised? Business Ethics: The Magazine of Corporate Responsibility. Retrieved online: http://business-ethics.com/2010/07/05/1432-opinion-bp-puts-well-costs-ahead-of-environment-are-we-really-surprised/
Pulsinelli, O. (2012). Fire breaks out at BP’s Texas City refinery. Houston Business Journal. Retrieved online: http://www.bizjournals.com/houston/news/2012/10/30/fire-breaks-out-at-bps-texas-city.html
Schorn, D. (2009). The explosion at Texas City. CBS News/60 Minutes. Retrieved online: http://www.cbsnews.com/8301-18560_162-2126509.html
U.S. Chemical Safety and Hazard Investigation Board, 2007, Investigation Report Refinery Explosion and Fire: Texas City, Texas, U.S. Chemical Safety and Hazard Investigation Board, 341 p. [http://www.csb.gov/assets/document/CSBFinalReportBP.pdf]
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