The Lapidary Revelations of BP

BP is a slippery organization. As Robert X. Cringely points out:

BP — the company accepting responsiblity for the current environmental disaster in the Gulf of Mexico began as Imperial Oil, became Anglo-Persian Oil with its discovery of vast reserves in present-day Iran, then Anglo-Iranian, then British Petroleum, and now just BP — a huge multinational company that includes two of John D. Rockefeller’s original Standard Oil companies — Amoco and Sohio. BP has a lot of America in it but remains in many ways a very British concern, which is to say plodding and bound by bureaucracy.

This history of naming and renaming reminds me of the slippery BP history of sizing and resizing the Gulf oil leak: 1000 barrels a day, no... make that 5000, but experts said 20,000 and a Purdue expert said 70,000 a day.

Cringely is as much of an expert as I need on the oil spill. In this short bit he hits the nail on the head:

Remember at Three Mile Island the reactor operators were taught how to pass the license test, not how the reactor actually worked, so when they were faced with unknown conditions they made uninformed — and bad — choices. The same sort of behavior seems to be happening in the current oil spill. We have already in this accident a record of people guessing too often when they should have known. Much of this is an artifact of bureaucracy.

Cringely teaches by anecdote. Here's the bit where he skewer's the idiotic bureaucracy of BP:

Did you know that oil was discovered in 1943 in Sherwood Forest? The prospect of even a small domestic source of oil was a big deal in wartime England so drilling crews from Anglo-Persian were quickly set to work. But the drilling itself was slow — so slow that replacement drillers were eventually brought in from Oklahoma. The Americans quickly finished the wells while apparently also making quite an impression on the local girls.

There’s a lesson here, so stick with me.

The British drillers followed company rules that said a drill bit was good for a certain number of feet then needed to be replaced. Each drill bit replacement required pulling hundreds — later thousands — of feet of drilling pipe out of the well then replacing it along with the new drill bit. Drilling went slowly because most of the time was spent not drilling but pulling or pushing pipe.

The drillers from Oklahoma, in contrast, used one drill bit until it stopped being effective no matter how many feet that took. In Sherwood Forest they could go 15-20 times as far with each bit as the British crews had, which means the well was finished 15-20 times faster. There’s more to this story than just nationalism; it shows a generally poor approach to both resource utilization and problem solving on the part of BP.

What I like about Cringely is that he doesn't play favourites. He is more than willing to discover that both the pot and kettle are black. He doesn't need the pot the call the kettle black to make this deduction:

Remember BP had a catastrophic Texas refinery accident back in 2005 that led then to a change in company leadership. The old CEO was lax on safety to the point of embarrassing the company so he was let go a year before his normal retirement. The new guy, Tony Hayward, whom we keep seeing on the TV news, took over at the start of 2007 but not enough at BP appears to have changed. Three years isn’t much in the oil business and this new accident proves it. There were plenty of warning signs about this well and BP ignored them all. You would think BP had learned their lesson after Texas City, but apparently not.

There is plenty of bad behavior in this current crisis to go around, not all of it coming from BP. Right from the start, for example, the Obama administration took an optimistic approach. Why? BP was downplaying the problems to save its share value, but why was the White House doing so, too? Among the coverups were the underwater oil plumes which BP still denies exist. Evidence says they are massive yet the head of NOAA said initially that they were very low in concentration. Why?

My guess it is because Obama thinks it is more important to appear cool than to be correct. We can hope he’s unlearning that lesson now, though there is as yet little proof of that.

Cringely has the cojones to tell the truth. Here's the bit where he wants the reader's attention. He even uses bold to catch your attention:

We all — BP, the government, and the American people — are looking at this accident far too narrowly. Looking at the number of failed attempts to cap or slow this well hardly inspires confidence. Yet at heart we’re always told those two safety wells being drilled will save the day, though they will take two months to do so. Eventually plugging the well with concrete is a sure theng, we’re told.

Or is it? What about the safety wells and their drilling platforms? Are they in better shape than the platform that exploded and sank?

No.

According to people who should know what they are talking about, BP’s rig currently drilling the first relief well has worse safety violations than did the BP rig that exploded killing 11, creating this enormous mess. Why aren’t we reading or hearing about this? I mean anywhere other than here? (If you are a reporter, this paragraph contains the real news. Yes, I am telling you how to do your job.)

How could BP ignore all the warning signs before the blowout? They simply didn’t expect it to happen. Thirty years had passed since the Ixtoc-I accident that was the last to happen in the Gulf. Good luck and several changes of BP management bred complacence and ignorance. I suspect the people involved with the well did not even realize how close they were to losing it since they had personally never lost one before.

Today I saw Robert Reich call for BP to be put into receivership to ensure that all the bills of the cleanup are paid. As Reich pointed out, BP is a corporation whose purpose is to provide profit to shareholders. They are in the business of minimizing costs. The only way to ensure that the costs are covered is for Obama to take over the company and ensure that the costs to the American people come first until this disaster is stopped and cleaned up.

Cringely puts his own twist to this point:

The offshore oil industry will never be the same again, which is probably good. As the oil slick grows, this could be the end of the deepwater industry in the US. Or maybe this will be the straw that finally gets us an energy policy. I’m hoping for that at the least.

For now BP is trying to cope, doing whatever they can think to do, but no real lessons will be learned until this is all over… if then. The CEO of BP, Tony Hayward — he’s history. He was promoted specifically to create a safer corporate culture and couldn’t do it in three years. Maybe nobody could. But certainly BP wasn’t — and probably isn’t — prepared for tomorrow.

The one good thing that comes out of a real disaster: a new mindset. I like the call for a new energy policy. I like the call for a new orientation of the industry toward safety. Something good will come out of this mess.