LOON

Five Years before the Deepwater Horizon Blow-out

Although BP has touted itself as a responsible U.S. corporate citizen and an environmentally sensitive and conscientious oil company, the death toll at BP’s industrial operations tells a different story.

The number of people killed in the April 20th, 2010  Deepwater Horizon oil disaster in the Gulf of Mexico brings the running total of those killed in relation to BP-supervised industrial operations to 26.

The deceased Deepwater Horizon victims (missing and presumed dead) have been identified as Gordon Jones, 28, Aaron Dale Burkeen, 37, Adam Weise, 24,  Jason Anderson, 35, Karl Kleppinger Jr., 38,  Dewey Revette, 48, Shane Roshto, 22,  Donald Clark, 49, Stephen Curtis, 40, Blair Manuel, 56, and Roy Wyatt Kemp, 27.  They join the posthumous ranks of victims of BP’s other lethal industrial catastrophes and notably the fifteen who perished in the March 23rd, 2005 explosion at BP’s refinery in Texas City, Texas.

The fifteen victims of the BP Texas City refinery explosion just over five years ago were: Glenn Bolton, 50, Lorena Cruz‐Alexander, 32, Rafael “Ralph” Herrera, Jr.,  Daniel J. Hogan III, 58, Jimmy Ray Hunnings, 58, Morris “Monk” King, 57, Larry Wayne Linsenbardt, 58,  Arthur Galvan Ramos, Ryan Rodriguez, 28,  James Warren Rowe, 48, Linda Marie Hammer Rowe, 47, Kimberly Smith, 43, Susan Duhan Taylor, 33, Larry Sheldon Thomas, 63, and Franklin Eugene White, 58.

While the two events occurred five years apart, there are eerie resemblances.

CSI: Texas City

Just after midday on March 23, 2005 a cloud of hydrocarbon vapour at BP’s oil refinery in Texas City, Texas exploded.

During the startup of the plant’s isomerization unit, and in violation of proper procedure, flammable liquid hydrocarbon was pumped into the pipes at the top of a raffinate splitter tower without first allowing any liquid to drain out.

Liquid overflowed, causing the unit’s drum to overflow and liquid hydrocarbon to escape from an eleven storey high “blowdown stack” like an oil geyser. As the chemical spilled to the ground and evaporated, it formed a huge cloud of hydrocarbon gas.

Then at around 1:20 p.m., the vapour was ignited by the idling engine of a pickup truck parked nearby.

The ensuing massive explosion killed fifteen BP contract employees who had been working in or around trailers in the immediate vicinity of the “blowdown drum”.  The blast also caused severe damage to the plant, a neighbouring warehouse, and decimated several vehicles and portables along with at least fifty chemical storage tanks.

Heard and felt in homes neighbouring the BP installation, it was hardly an incident that could be covered up.  Instead BP conducted an internal investigation and its initial findings pointed the finger of blame at front-line plant workers and their supervisors for “deviating from procedures.”

Chemical Safety Board implicates BP managers

The federal Chemical Safety Board (CSB) was among several federal regulatory agencies that conducted an official inquiry into the explosion.  The CSB report reached conclusions that identified BP’s management and corporate safety practices, along with a “work environment” at the Texas City plant that motivated workers to depart from health and safety procedures on a regular basis, and design problems in the plant’s computerized “control system,” and poor and inadequately funded training of operators, among other factors.

Characteristically, BP  had one of its media-talking guys grab some face-time with the national media  to show appropriate contrition and promise to redouble efforts to… [yadda, yadda, yadda]…and promise it won’t happen again.

“This is an event that has changed the company, and the commitment to safety has been reinvigorated,” said BP’s Texas City spokesman Neil Chapman.

Despite that underwhelming and litigation-sensitive public statement, BP execs wasted no time issuing an “interim report” within days of the catastrophe in which, according to the employees’ union reps, the United Steelworkers of America (USWA), “tried to shift the blame to low- and mid-level workers instead of focusing on process safety issues that are the company’s responsibility.”

The USWA‘s regional director Gary Beevers didn’t mince words: “Blaming workers doesn’t solve the problem of unsafe conditions in that refinery…If the company had taken the union’s advice to pipe the atmospheric vent–where the hydrocarbons were released–to the flare system, and if the company had not violated its own policy and issued itself a variance in order to place the trailer in the middle of a dangerous unit, there would have been no fire, and there would have been no deaths.”

But the USWA reps pointed out that the guidelines of the Center for Chemical Process Safety–”a not-for-profit, corporate membership organization within [the Association of International Chemical Engineers] that identifies and addresses process safety needs within the chemical, pharmaceutical, and petroleum industries”–stipulated that “placing the blame on personnel is not a valid ‘root cause’ of an accident…[but]…an indication of another, underlying problem at the facility.”

So BP was forced to later ‘clarify’ its first report by allowing that the actual causes of the March 23rd, 2005 Texas City explosion had not been pinpointed.  BP then announced that it would create and implement a “policy” forbidding the parking of work trailers within 500 feet of the “blowdown stack” that was instrumental in the explosion.

BP promises “fair compensation…without lawsuits or lengthy court proceedings”

One remarkable aspect of the initial BP response to the Texas City refinery disaster was the tenor of reassurance in statements to the media made by BP’s North American products president, Ross Pillari:

“We can assure that those who were injured and the families of those who died receive financial support and compensation…We regret that our mistakes have caused so much suffering. We apologise to those who were harmed and to the Texas City community. Our goal is to provide fair compensation without the need for lawsuits or lengthy court proceedings.”

Unfortunately for the victims, the bloom was off the (yellow) rose of Texas very quickly.

In late August 2006, despite the earlier promise of its North American products president not to use the courts to thwart fair compensation to the victims of the Texas City blast,  BP forced the plaintiffs to take the company to court over whether or not senior BP executives could be compelled to give evidence in the depositions that would precede the civil trial.  When a U.S. district court judge ruled that killed and injured workers’ families could subpoena the BP execs, BP announced almost immediately it would appeal.

OSHA fines BP $21 million

Citing BP for substandard safety practices, the federal Occupational Safety and Health Administration (OSHA) then got into the act.  OSHA levied a corporate fine against BP of U.S. $21.3 million before referring the case onto the U.S. Department of Justice to determine if criminal charges should be laid.

BP chartered its own blue-ribbon panel (including corporate-government heavyweight James Baker) to demonstrate the seriousness with which it was treating its own (careful) involvement in the incident.  In its final report on the explosion, the company held to its earlier position that company employees (not management, that is) had failed to follow procedures when they “allowed” the hydrocarbon explosion to happen on March 23rd, 2005.

It also listed six “underlying causes” for the explosion: a workplace environment that “eroded to one characterized by resistance to change, and lacking of trust, motivation; and a sense of purpose, the failure to set “process safety, operations performance, and systematic risk reduction priorities…[to be] consistently reinforced by management,” and other factors, including lack of clarity in defining roles and responsibilities, poor “hazard awareness” levels, poor communication and performance management, including “neither adequate early warning system, nor any independent means of understanding the deteriorating standards in the plant.”

BP gets it in the end from Chemical Safety Board

In 2006 the Chemical Safety Board (CSB) released a report which found “systemic lapses” in BP’s organizational decision-making and safety supervision had contributed to the Texas City blowout.  CSB’s tough-talking chair, Carolyn Merritt, said that the BP refinery represented “an imminent hazard” with “the potential to cause serious harm unless rectified in a short time frame.”  The CSB report also cited imprudent cost-cutting by BP as a significant contributing factor.

According to Merritt, the CSB report painted a “troubling picture of a corporation that did not always invest sufficiently in safety,” noting also that “the Texas City refinery had an extremely high rate of fatal accidents before BP merged with Amoco and acquired the site.”

See? It wasn’t all BP’s fault. (see No. 3 of Homer Simpson‘s three life lessons to Bart: “It was like that when I got here.”)

No shocker this, the CSB investigation also happened to stumbleupon (no product endorsements, please) a work order dated thirteen days before the Texas City explosion which adverted to the fact that the BP plant’s monitoring system was in “disrepair”.  It had been duly signed by numerous plant managers at the BP Texas City products site so there was no issue that BP was not aware of the defects that led to the fatal explosion.

All of that prompted the CSB to issue one of its rare, reserved-only-for-impolite-company “urgent” safety orders directing BP’s international corporate brass to “commission an independent panel to review a range of safety management and culture issues in the wake of accidents at BP’s south Texas refineries.”

BP back in front of OSHA for more fines in October 2007

By October 2007, eighteen months after the gas cloud erupted in its Texas City plant, BP was back in trouble of the green kind with OSHA enforcers.

This time (uh, I’ve lost count) the safety agency levied a further monetary penalty of $87.4 million because of BP’s failure to make good on its 2005 promises to fix up the safety problems at its Texas City location.

But far from being self-conscious or contrite, BP was obstreperously indignant about this latest assault on its deep pockets.

Said Texas City refinery manager Keith Casey about the latest OSHA fine against his company: “While we strongly disagree with OSHA’s conclusions, we will continue to work with the agency to resolve our differences.”

Referring to a continuing breach of an outstanding federal regulatory order as “differences” was typical of BP management’s lack of concern if not its profound arrogance.  In the business lexicon, this type of public oversight was tarred as “bureaucratic interference”.

As a corporate citizen BP was demonstrating itself to be a health and safety scofflaw.  Worse, BP’s corporate officers ignored OSHA orders and continued to blithely whistle past the graveyards of the fifteen victims of the Texas City explosion.

BP plea bargain with the EPA

For those of you with other commitments, let us cut to the chase here.

BP was eventually compelled to settle its monetary “differences” with the federal regulators and their enforcement agencies but not on terms that would cause them any loss of sleep (or long-term profitability).

In November 2007 the Environmental Protection Agency (EPA) reached a plea resolution (don’t call it a bargain, it sounds so, er, commercial) with BP over then still outstanding charges laid under the federal Clean Air Act arising from the 2005 Texas City explosion.

The terms of the settlement were that BP would plead guilty to one felony count and be put on probation for three years. The company would then cough up a mere $50 million for its environmental breaches (which killed 15 people and sent 170 more to the nearest hospital), and carry out a “study” of its safety valves as well as upgrading its emissions prevention systems to the tune of $265 million.

Understandably, the aggrieved plaintiffs in the civil lawsuit–the families of the 15 victims–went somewhat red in the face over that development.  They brought a motion to toss out the plea bargain between BP and the EPA and replace it with a hefty one billion dollar fine, commensurate with BP’s profits for the four and one-half business quarters preceding the March 2005 explosion.

The lawyer representing some of the plaintiffs, David Perry, expressed his client’s outrage this way: “Letting BP keep a billion in profits makes a mockery of the notion crime does not pay.”

It also seemed a bit of a mockery that the judge who was picked to hear the plaintiffs’ motion to toss the plea bargain had formerly acted as BP’s counsel in the earlier proceedings in the same case.

BP president Bob Malone was more than a little understated in characterizing the plea bargain as a less odious document than what the plaintiffs alleged:

“These agreements are an admission that, in these instances, our operations failed to meet our own requirements and the requirements of the law. For that, we apologize. If our approach to process safety and risk management had been more disciplined and comprehensive, [the Texas City] tragedy could have been prevented.”

Congress throws in its 131 billion cents

But the congressional Energy and Commerce committee had already picked up the scent of political blood in the water.

Just before St. Patrick’s Day of 2007, the committee issued a formal request to the then U.S. Attorney General Michael Mukasey asking him to “personally assess whether this plea agreement with BP has inherent weaknesses that leave both workers and the public inadequately protected, whether there is individual culpability and whether DOJ has struck a deal that, given BP’s long history of noncompliance, will be an ineffectual deterrent to future violations.”

Mukasey, it may be recalled, was the replacement and successor to Alberto Gonzales who had to resign as President George W. Bush’s attorney general over the dismissal of U.S. attorneys based on their political affiliations.  He would further distinguish himself by refusing to denounce the use of water-boarding and other torture techniques in the interrogation of suspected terrorists by the U.S. government.

With their smartphone calculators working overtime, the congressional overseers did some quick double-nought figuring and determined that if the EPA had instead settled with BP for the maximum $500K fine for each of the “2,639 days of violation, this would produce a potential maximum fine of $1.31 billion,” whereas by the existing plea bargain “the $50 million fine is 4% of the maximum potential fine.”

BP hit with $100 million jury award for 2007  ‘incident’

Just over a year later, BP’s shareholders felt another tremor in their collective nether regions when a civil jury in Galveston, Texas awarded $100 million in punitive damages to more than 100 victims of yet another toxic gas cloud released at the BP Texas City plant on April 19, 2007.

In that case the plaintiffs’ lawyer Tony Buzbee credited their success with telling the jurors that “BP has a history as a serial polluter and a convicted felon, and the jury agreed they need to change.”

In addition to the punitive damages awarded against BP, the jury also gave individual actual damages of between $6,000 and $244, 000 each to the individual victims making it the 17th largest award of 2009.

For its part, BP immediately announced it would appeal the jury’s verdict.   Company spokesguy Ron Chappell told the media in an e-mail that BP was “shocked and outraged by today’s verdict [and] we believe the evidence showed that BP did not cause harm to anyone…”

In January 2010, BP formally pursued its appeal, saying again how “shocked and outraged” it was by the verdict, calling the quantum of damages “unjustified, improper and unsupportable.”

BP denies jury-tampering in Texas blast trial

Fans of John Grisham novels –or anyone who has ever been within a mile of a corporate tort case–know that folks in smaller locales don’t take always kindly to big city lawyers or the corporations they front.  As Marshall McLuhan famously said of TV audiences’ perceptions of Richard Nixon in the 1960 presidential debates with Jack Kennedy, BP’s public persona resembled that of “the railway lawyer who signs leases that are not in the interests of the folks in the little town.” 

That would account not only for BP’s morbid fear of jury verdicts but also why in 2006 they resorted to other less orthodox techniques of persuasion to win a Texas jury’s hearts and minds.  Within days of the scheduled commencement of the Texas City civil suit brought against the company by the families of the deceased victims, BP sent out a mass mailing to 900 members of the local chamber of commerce extolling the corporation’s track record as a caring and responsible corporate citizen of Texas City.

The judge presiding at the trial was not shy about warning BP’s lawyers that she would fine the company (not again? do they think oil profits grow on trees?) if this “publicity stunt” tainted persons already summoned for jury selection pool.

The letter had been written by BP’s Texas City government and public affairs representative Neil Geary.  It reminded recipients of BP’s “improved” safety and compliance record since the plant explosion on March 23rd, 2005 and advertised the company’s plan to lay out a further $1 billion (why that number?) to upgrade the faulty plant over the next five years.

Judge Susan Criss was restrained when she admonished BP’s trial lawyers that potential jurors would have to be screened to determine if they had received the mail-out and warned BP that she would stick the defendant corp with the costs of scheduling a new trial.  While the BP’s attorneys steadfastly denied any attempt to “jury tamper” and reiterated earlier statements that BP took “full responsibility for the accident and its victims”, they stopped purposely short of admitting negligence.

…and using private investigators to spy on the plaintiffs

With no apparent subterranean barrier to how low they would stoop, in December 2006 BP’s legal team  also had to come clean about retaining private investigators to spy on Eva Rowe, the then  22-year-old daughter of Linda and James Rowe, who were both killed in the March 23rd, 2005 explosion at Texas City.

Turns out that BP hired the gumshoes to “surveil” Ms. Rowe, her lawyers, and even the girlfriends of some of the other plaintiff’s lawyers.  BP’s counsel also got their mitts on so-called “party photos” of Ms. Rowe’s attorney, Brent Coon, who was the lead counsel on the multi-plaintiff negligence action.

Caught with their hands in the proverbial cookie jar, BP corporate execs admitted to hiring the PIs  only “to gather information that could be relevant at trial” and not for any improper purpose.

However, BP’s blanket denial of any illegal activity was qualified by the statement that its private investigators had only “gathered information — documents and photographs already in the public domain.”  The company also rationalized, with some basis in fact, that this type of pre-trial intelligence gathering was “legal and a common and longstanding practice in civil litigation.”

BP eventually settled with Rowe in an agreement that resulted in $30 million being paid by the corporation to charities and educational institutions, and which included a requirement that BP disclose documents pertaining to its occupational health and safety practices in its U.S. plants.

A website has been set up by Ms. Rowe and others to commemorate her parents and the thirteen other victims of the BP Texas City explosion.  Notably, in her emotional testimony before the U.S. congress, she also chose to use the word “murdered” to describe the deaths of her mother and father and the others on March 23, 2005 in Texas.