BP: The Writing on the Wall and the Damage Done
By dennis  •  May 06, 2010 at 11:46 EST

In a 2009 Wall Street Journal interview, the brand new president of BP America, Lamar McKay, answered a question regarding BP’s recent “mishaps and setbacks, ranging from a lethal explosion in a Texas City refinery to a spill in Alaska” by asserting that the company had learned “that consistency, rigor and constancy of operating standards is important and that accountability must be clear.” Apparently this is what “clear accountability” means to the new and improved BP, as CEO Tony Hayward shrilly makes his media rounds incessantly insisting that “the responsibility for safety on the drilling rig is Transocean. It is their rig, their equipment, their people, their systems, their safety processes.” In case you missed it the first time Hayward re-emphasized to CNN that “the systems processes on a drilling rig are the accountability of the per — the drilling rig company” (emphasis mine). This is just the latest example of a warped, unaccountable corporate culture that has become utterly incapable of accepting responsibility for its tragic and costly mistakes.

McKay’s attempts at damage control in the wake (literally) of the Deepwater Horizon catastrophe haven’t been much better according to PolitiFact’s examination of his appearance on ABC News’ This Week, which garnered a “Barely True” rating thanks to McKay’s attempts to characterize BP’s plainly stated opposition to new safety regulations proposed by the Interior Department’s Minerals Management Service (MMS) as actually “recommending improvements and specific recommendations” to the proposed regulations.

Upon further review PolitiFact found that the letter was indeed “a plea for the company to have less regulation” including specific objections “to language that required equipment to meet manufacturer’s recommendations or specifications” among other things.

BP’s concern regarding equipment specification is telling because the Wall Street Journal reported that the Deepwater Horizon well lacked a remote control shut-off mechanism, called an acoustic switch, which could have greatly mitigated the immense ecological impact of the spill.  The acoustic switch is legally required by adequately regulated “major oil producing countries, Norway and Brazil.”  The Journal concedes that “The U.S. considered requiring a remote-controlled shut-off mechanism several years ago, but drilling companies questioned its cost and effectiveness, according to the agency overseeing offshore drilling.”  The cost of an acoustic switch is estimated to be $500,000; BP spent 32 times that amount on lobbyists in 2009.  The New Republic took a deeper look into why the U.S. doesn’t require companies to install these switches and discovered that in 2000 the MMS (more on them below) did issue a safety notice characterizing acoustic switches as “an essential component of a deep water drilling system.”

By 2003 Government regulators had changed their minds stating, in a rare bit of honesty, that “acoustic systems are not recommended because they tend to be very costly” so a legal requirement mandating their inclusion on wells like Deepwater Horizon was scrapped.  Again it must be emphasized that $500K for an important piece of safety equipment, once labeled “essential”, is deemed too expensive a luxury by the same Oil and Gas industry companies, such as BP, that collectively spent $169 Million on lobbyists in 2009, according to Open Secrets.

A few things that occurred between 2000 and 2003 that may have swayed regulators towards dumping mandated acoustic switches are the election of the Bush/Cheney ticket and the notoriously secret Energy “Policy” meeting convened by Cheney in 2001. Cheney’s ex-firm Halliburton has increasingly come under fire for their role in the Deepwater Horizon thanks to (surprise!) shoddy cement work.

Another factor was the descent of the MMS into an agency imbued with “A Culture of Ethical Failure” seemingly endemic to Regulatory Agencies during the Bush years.

Similar to Massey Energy, BP’s clamor for less regulation comes amidst the backdrop of a record $87 Million fine levied against BP by OSHA in October 2009, the largest penalty assessed in that organization’s history, for the company’s “failure to comply in hundreds of instances with a 2005 agreement to fix safety hazards” at BP’s Texas City refinery which blew up in 2005, killing 15 workers. In 2007 BP was also forced to plead guilty to criminal violations of the Clean Water Act and pay $20 Million in penalties. This cursory glance reveals just a few major blemishes on BP’s record and reputation that might lead reasonable people to believe that a more robust regulatory framework is in order.

Those are things BP have actually gotten caught doing. There are even more frightening allegations of negligence currently under further investigation. Truthout has a lengthy and disturbing report regarding a former contractor’s attempt to notify the Federal Government, in 2008, that BP Atlantis (another of the firm’s Gulf Coast leases) “had been operating without a majority of the engineer-approved documents it needed to run safely, leaving the platform vulnerable to a catastrophic disaster that would far surpass the massive oil spill that began last week.” According to internal communications obtained by Truthout, BP officials were “made aware of the issue and feared that the document shortfalls related to Atlantis ‘could lead to catastrophic operator error’” yet despite  these credible “claims that BP did not maintain proper documentation related to Atlantis, federal regulators authorized an expansion of the drilling project.” After a dubious inspection of BP Atlantis’s documents by the MMS, the contractor and the public advocacy group Food & Water Watch successfully brought this matter to the attention of Representative Raul Grijalva (D-Arizona). Rep. Grijalva is a member of the House Committee on Natural Resources and on Feb. 18th of this year he sent a letter to MMS requesting that they look further into whether BP is “operating its Atlantis offshore oil platform … without professionally approved safety documents.”

Besides being an organization tainted by “a culture of ethical failure” another reason the Minerals Management Service might not have moved more diligently and aggressively into investigating the contractor’s allegations is the fact, as noted above, that BP spends millions of dollars on lobbying and campaign contributions, including a staggering $3, 530,000 during the first quarter of 2010. Louisiana Senator Mary Landrieu received $18,000 from “individuals and employees” associated with BP during the 2008 election cycle, the most of any candidate not running for President, including $1000 from Lamar McKay. That could be why Senator Landrieu told WWL-TV in New Orleans: “our country needs this oil, there is no question about that.” Despite the devastation creeping through the Gulf, Landrieu, flush with BP’s money which she has defiantly refused to return, urged her colleagues to “not to retreat” or “react with fear” toward plans for new drilling.

Perhaps more striking and predictable is the fact that 5 of the top 10 all-time recipients of BP money currently sit on the House Energy Committee. They are: John D. Dingell (D-Mich.) Joe Barton (R-Tex.), Ralph M. Hall (R-Tex.), Roy Blunt (R-Mo.) and Fred Upton, (R-Mich.).

And maybe those facts explain why the Washington Post is reporting that the MMS granted BP and Deepwater Horizon a “categorical exclusion” from the National Environmental Policy Act in April 2009. The Post also notes that BP engaged in lobbying efforts 11 days before the tragic explosion to expand these exemptions.

The lobbying continues full throttle as gigantic oil companies attempt public relations damage control in DC with a frantic desperation that mirrors the dire ecological damage control unfolding in the Gulf.

It’s starting to be an all-too familiar story. Whether it’s BP or Massey Energy, the zeal for profits at the expense of safety coupled with the unwillingness of sympathetic politicians showered in corporate cash to insist on stringent regulatory standards is a serious, serious problem in the United States.

16 Responses to “BP: The Writing on the Wall and the Damage Done”

  1. Behind the Curtain (the assault on reality comes in many guises) « Left Hook Says:

    [...] assault on reality comes in many guises) By djssundin I’ve been working on a post about BP for LittleSis and I wanted to do some follow-up work [...]

  2. Loyd Allbritten Says:

    Hi there could I reference some of the information here in this post if I link back to you?

  3. Dennis Says:

    Yes. By all means. I tried to source everything appropriately.

    -Dennis

  4. Rebecca Says:

    I’ve been following the news on the spill very closely. This is a great synopsis of the corruption, greed, and incompetence that has gone into making this truly devestating disaster. Thanks for what you do to expose the truth.

    Now if only they would do something NOW to stop the leak! It’s been weeks now! I couldn’t believe they went with the one device to try and stop it, and were already doubtful it would work. And it did not. Why were they not lining up a plan B, C, D, E, F…? Ready to launch 20 solutions to the problem?! I though one of the great attributes of private industry was supposed to be innovation? Could it be that as much as the public sector has been corrupted by private corp greed, the energy industry is now infected with bureaucratic inertia?

  5. Marlon Bagozzi Says:

    I am so glad that BP is now beginning to get the spill under control.

  6. Revolving Door: From the Halls of Congress to BP and back again… « Left Hook Says:

    [...] truth that BP had spent over $3.8 million on lobbying through the first quarter of 2010 alone. As I’ve noted before, that money could have bought a lot of acoustic switches. Not to mention diligent Research & [...]

  7. ryan Says:

    Good job DJ. They should make the bp people get on there knees with straws and suck the oil off the beaches.

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