Welch grills Tony Hayward about BP safety record
Summary
TLDRThe transcript captures a critical examination of BP's safety and operational history, focusing on incidents like the 2005 Texas City explosion, the 2006 Alaska pipeline rupture, and the Deepwater Horizon disaster. The CEO's accountability is questioned in light of these events, with emphasis on BP's repeated prioritization of cost over safety, leading to significant fines, loss of life, and environmental damage. The dialogue also touches on the systemic changes implemented by the CEO in response to the Baker report, and the ongoing investigation into the Deepwater Horizon incident.
Takeaways
- 🔥 In 2005, a BP-operated Texas City refinery explosion resulted in the death of 15 workers.
- 💧 In 2006, a BP oil pipeline in Alaska ruptured, spilling 200,000 gallons of crude oil.
- 🏛️ In 2007, BP settled criminal charges and paid $370 million in fines under the new CEO's leadership.
- 🚨 The Occupational Safety and Health Administration (OSHA) found over 700 violations at BP's Texas City refinery, resulting in a record fine of $87.4 million.
- 🛠️ A BP refinery in Toledo, Ohio was fined $3 million for willful safety violations, including the use of a valve similar to those in the Texas City incident.
- 👨💼 Former Secretary of State James Baker led the investigation into the Texas City refinery, which was considered credible by the CEO.
- 📝 The Baker report criticized BP management for allowing alterations to procedures without risk assessment.
- 🛑 The CEO acknowledged the findings and stated that systematic changes in safety management and BP's culture were implemented.
- 💭 The CEO could not confirm if the Deepwater Horizon chose a cheaper casing design based on the Baker report's recommendations.
- 🔑 The Deepwater Horizon decision to use fewer casing centralizers was a technical judgment, not necessarily indicating a cost-over-safety motivation.
- 🤔 The CEO expressed inability to make judgments on technical decisions, highlighting the need for expert advice in such matters.
- 🏆 The script raises questions about the CEO's ability to continue in his role, given the company's safety record and financial losses.
Q & A
What major incident occurred at the Texas City refinery in 2005?
-In 2005, the Texas City refinery, owned by BP, experienced a catastrophic explosion that resulted in the loss of 15 workers' lives.
What was the outcome of the 2006 BP oil pipeline rupture in Alaska?
-The 2006 BP oil pipeline rupture in Alaska led to the spill of 200,000 gallons of crude oil.
What were the consequences for BP after the company settled criminal charges in 2007?
-BP agreed to pay $370 million in fines after settling a series of criminal charges in 2007.
How many violations did OSHA find at BP's Texas City refinery in one year?
-The Occupational Safety and Health Administration (OSHA) found more than 700 violations at BP's Texas City refinery in one year.
What was the record fine imposed on BP by OSHA for the Texas City refinery violations?
-OSHA imposed a then-record fine of $87.4 million on BP for the violations found at the Texas City refinery.
What was the penalty for the willful safety violations at the BP refinery in Toledo, Ohio?
-The BP refinery in Toledo, Ohio was fined $3 million for willful safety violations, including the use of a valve similar to those that contributed to the Texas City explosion.
Who was actively involved in the investigation of the Texas City refinery by the U.S. Chemical Safety Board?
-Former Secretary of State James Baker was actively involved in the investigation of the Texas City refinery by the U.S. Chemical Safety Board.
What did the Baker panel report find regarding BP's management practices at the Texas City refinery?
-The Baker panel report found that BP management allowed operators and supervisors to alter procedural steps at the Texas City refinery without assessing risk.
What systemic changes did BP implement in response to the Baker report findings?
-BP implemented a systematic change in how they manage safety and a systemic change in the company's culture based on the findings of the Baker report.
What was the decision made by BP regarding the casing design for the Deepwater Horizon?
-BP chose a cheaper and quicker casing design for the Deepwater Horizon instead of a more expensive, safer design.
What procedure was used by BP for the Deepwater Horizon cementing process, and was it approved by the MMS?
-BP chose not to circulate drilling mud and used a lighter saltwater base for the cementing procedure, which was a common industry practice and approved by the Minerals Management Service (MMS) prior to implementation.
What is the responsibility of the CEO in the context of the safety and technical decisions made by BP?
-While the CEO is in charge of the company, they may not be a technical expert in all matters. The CEO's role is to oversee the company's operations, including safety measures, but the technical judgment for specific decisions may be made by qualified engineers within the company.
In light of the numerous incidents and fines, what is the implication for the CEO's position and confidence in their leadership?
-The implication for the CEO's position is significant, as they have presided over a company incurring large fines, loss of shareholder value, and a damaged reputation. This raises questions about their ability to continue leading the company effectively.
Outlines
🔥 BP's Safety and Environmental Violations
This paragraph discusses a series of safety and environmental incidents involving BP, including the 2005 Texas City explosion that resulted in 15 fatalities, the 2006 Alaskan oil pipeline rupture, and the 2007 criminal charges and fines totaling $370 million. It also mentions the Occupational Safety and Health Administration (OSHA) finding over 700 violations at BP's Texas City refinery and imposing a record fine of $87.4 million. Additionally, there's reference to a BP refinery in Toledo, Ohio fined for willful safety violations. The U.S. Chemical Safety Board's investigation, with the involvement of former Secretary of State James Baker, criticized BP's management practices, leading to systemic changes in safety culture at BP.
🤔 Accountability and the Future of BP's Leadership
The second paragraph focuses on the accountability of BP's CEO in light of the company's history of safety and environmental violations. It raises the question of whether the CEO, who has overseen significant fines and loss of shareholder value, should continue in his role. The discussion points to the Baker report that indicated a pattern of prioritizing cost savings over safety, leading to tragic consequences. The conversation also touches on the Deepwater Horizon incident, where choices were made that may have compromised safety for the sake of cost efficiency. The CEO emphasizes his focus on the immediate response to the crisis rather than addressing the question of his resignation.
Mindmap
Keywords
💡Texas City
💡BP
💡CEO
💡OSHA
💡James Baker
💡Deepwater Horizon
💡Casing Design
💡Casing Centralizers
💡Drilling Mud
💡MMS
💡Systemic Change
Highlights
2005 Texas City BP operation explosion resulted in the loss of 15 workers' lives.
2006 BP oil pipeline in Alaska ruptured, spilling 200,000 gallons of crude oil.
BP settled criminal charges in 2007 and agreed to pay $370 million in fines.
OSHA found over 700 violations at BP's Texas City refinery in one year, resulting in a record $87.4 million fine.
BP refinery in Toledo, Ohio fined $3 million for willful safety violations in 2010.
U.S. Chemical Safety Board investigation into Texas City refinery was headed with active participation of former Secretary of State James Baker.
Baker report found BP management allowed altering of procedures without risk assessment at Texas City refinery.
Baker panel examined all BP's US refineries and found toleration of deviations from safe operating practices.
CEO Tony Hayward implemented systematic change in safety management and culture of BP based on Baker report findings.
Deepwater Horizon chose cheaper, quicker casing design over safer one, raising concerns about cost over safety.
Deepwater Horizon decision to use fewer casing centralizers was a technical judgment, not always more is better.
Deepwater Horizon procedure to displace mud with lighter saltwater base for cementing was approved by MMS.
CEO Tony Hayward unable to make judgment on right choices made in Deepwater Horizon incident.
Baker report indicated BP made systematic choices prioritizing cost over safety, leading to loss of life and pollution.
CEO Tony Hayward focused on response, leak elimination, oil containment, beach defense, and spill cleanup.
Congressman questions CEO's confidence to continue as CEO after incurring $370 million fines and losing shareholder confidence.
Transcripts
is it true that in 2005 the Texas City
operation owned by BP blew up resulting
in the loss of lives of 15 workers that
is true and is it true that in 2006 a BP
oil pipeline in Alaska ruptured and
spilled two hundred thousand gallons of
crude oil that is true and is it true
that in 2007 when you took over as CEO
of BP the corporation settled a series
of criminal not civil criminal charges
and agreed to pay 370 million dollars in
fines that is correct and is it also
true that in one year the Occupational
Safety and Health Administration OSHA
found more than 700 violations at bp's
Texas City refinery and fined BP what
was then a record fine of eighty-seven
point four million dollars is that true
that's correct it is it true that
earlier this year a BP refinery in
Toledo Ohio was fined three million
dollars for willful and I emphasized the
term and the finding willful safety
violations including the use of valve
similar to those that contributed to the
Texas City Blast
that is correct
it is it true as well that the u.s.
Chemical Safety Board which did
investigation into the Texas City
refinery was headed with the active
participation of former Secretary of
State James Baker you're familiar with
that report I'm very familiar with that
report and in that report would you I
take it we regard as credible I believe
it's very credible and it's been the
basis on which we move forward in 2007
in that report and I quote found that BP
management allowed operators and
supervisors to alter to edit
to add and to remove procedural steps at
the Texas City refinery without
assessing risk and the Baker panel
examined all of BP's US refineries and
found a toleration of CBS Pasillas
deviations from safe operating practices
is that an accurate statement of the
findings of mr. Baker's report it is an
accurate findings and based on the
findings of that report and they're the
instances of 2005 and 2006 in Anarchy
implemented a systematic change in how
we manage safety and a systemic change
in the culture of BP I mean it's
something we have done consistently over
the last three years well did that
systemic change that you say you
implemented as a result of the Baker
report account for the reason that a
Deepwater Horizon when faced with the
choice of a cheaper and quicker casing
design or a safer design BP chose the
cheaper in quicker casing design did you
do that on the basis of the
recommendations of the Baker report as
I've said we need to wait for the
results of the investigation to conclude
if there is any evidence whatsoever the
people put costs ahead of safety in this
incident
what their reason was but I'm gonna ask
you in fact it's not in dispute that the
choice was made to use a cheaper and
quicker casing designed rather than a
more expensive design and I will ask you
again there were fewer casing
centralizers than some folks were
recommending is that a leave out
motivation but there was a choice of
more casing centralizers or fewer casing
centralizers more cost more fewer cost
less which choice did BP make of
Deepwater Horizon the decision taken by
the engineering team at the time which
was a technical judgment was to use
fewer centralizers rather than more it
is not always true that more is better
and BP chose the Deepwater Horizon not
to circulate drilling mud that would
have cleaned out the
well it chose a lighter saltwater base
for the cementing procedure is that
correct the procedure to displace the
mud was a procedure that is not uncommon
in the industry it was a procedure that
was approved by the MMS prior to
implementing it are you saying you made
the right choice in this case I'm not
able to make a judgment as to whether
the right choices were made well you're
the CEO but I'm not with respect
congressman a drilling engineer or a
technically qualified engineer in these
matters but you're in charge of them the
that doesn't mean to say I'm an expert
well I mean you know one of the
frustrations that I think folks have is
who is in charge and there was a baker
report that said that there was a
systematic choice being made
consistently by BP that led to the loss
of life that led to pollution that could
be attributed to a decision based on
saving money increasing profits at the
expense of safety and as it turns out
unfortunately human lives you know I'm
going to get back to what I asked you
earlier there is a I think all of us
live in a world where we'd prefer to
have fewer regulations rather than more
we'd like to rely on trust in faith and
our word rather than regulations and
checking over your shoulder and all
those things that I think both sides
find annoying but I'm going to ask you
the question does a CEO who has presided
over a company that's incurred 370
million dollars in fines whose company
was subject to this report by mr. Baker
indicating a choice for first safety the
choice at the expense of safety does
that person who's presiding over over
almost a hundred billion dollars in loss
of shareholder value in the suspension
of a ten billion dollar annual dividend
who's lost the confidence of
shareholders and regulators and most
importantly the families instead
since of the golf does that person enjoy
the confidence necessary to continue
acting a CEO or is it time for that CEO
to resign I'm focused on the response
I'm focused on trying to eliminate the
leak trying to contain the oil on the
surface and defender beaches and to
clean up the spill and to restore the
lives of the people on the Gulf Coast
guilt what I intend to do
yeah yield back
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