04
May

“Billions in Fines Don’t Matter” : Has BP learned its lesson?

As a follow up to my last post about the consequences of Deepwater Horizon, I am adding an especially poignant op-ed piece published in The New York Times by Abrahm Lustgarten about holding BP accountable. Since Mr. Lustgarten wrote this article, BP engineer Kurt Mix has been arrested and has plead not guilty. I believe that it should be the executives and not the engineers who are punished. Below are some excerpts from the article. You can read the complete version here.

 

A Stain That Won’t Wash Away

April 20, 2012

Two years after a series of gambles and ill-advised decisions on a BP drilling project led to the largest accidental oil spill in United States history and the death of 11 workers on the Deepwater Horizon oil rig, no one has been held accountable.

Sure, there have been about $8 billion in payouts and, in early March, the outlines of a civil agreement that will cost BP, the company ultimately responsible, another $7.8 billion in restitution to businesses and residents along the Gulf of Mexico. It’s also true the company has paid at least $14 billion more in cleanup and other costs since the accident began on April 20, 2010, bringing the expense of this fiasco to about $30 billion for BP. These are huge numbers. But this is a huge and profitable corporation.

What is missing is the accountability that comes from real consequences: a criminal prosecution that holds responsible the individuals who gambled with the lives of BP’s contractors and the ecosystem of the Gulf of Mexico. Only such an outcome can rebuild trust in an oil industry that asks for the public’s faith so that it can drill more along the nation’s coastlines. And perhaps only such an outcome can keep BP in line and can keep an accident like the Deepwater Horizon disaster from happening again.

BP has already tested the effectiveness of lesser consequences, and its track record proves that the most severe punishments the courts and the United States government have been willing to mete out amount to a slap on the wrist.

bp spill 300x201 Billions in Fines Dont Matter : Has BP learned its lesson?

Prior to the gulf blowout, which spilled 200 million gallons of oil, BP was convicted of two felony environmental crimes and a misdemeanor: after it failed to report that its contractors were dumping toxic waste in Alaska in 1995; after its refinery in Texas City, Texas, exploded, killing 15, in 2005; and after it spilled more than 200,000 gallons of crude oil from a corroded pipeline onto the Alaskan tundra in 2006. In all, more than 30 people employed directly or indirectly by BP have died in connection with these and other recent accidents.

In at least two of those cases, the company had been warned of human and environmental dangers, deliberated the consequences and then ignored them, according to my reporting.

Before the accident in Texas City, BP had declined to spend $150,000 to fix a part of the system that allowed gasoline to spew into the air and blow up. Documents show that the company had calculated the cost of a human life to be $10 million. Shortly before that disaster, a senior plant manager warned BP’s London headquarters that the plant was unsafe and a disaster was imminent. A report from early 2005 predicted that BP’s refinery would kill someone “within the next 12 to 18 months” unless it changed its practices.

After each disaster, Mr. Browne [(an upper tier executive at BP)] pledged to refresh his focus on safety, investment in maintenance and commitment to the environment. His successor, Mr. Hayward, followed suit, saying that BP’s culture had to change. But the Deepwater Horizon tragedy — which bears many of the same traits as the company’s past accidents — shows how difficult it has been for the company’s leaders to shift BP’s corporate values and live up to their promises.

Two years after analysts questioned whether the extraordinary cost and loss of confidence might drive BP out of business, it has come roaring back. It collected more than $375 billion in 2011, pocketing $26 billion in profits.

What the gulf spill has taught us is that no matter how bad the disaster (and the environmental impact), the potential consequences have never been large enough to dissuade BP from placing profits ahead of prudence. That might change if a real person was forced to take responsibility — or if the government brought down one of the biggest hammers in its arsenal and banned the company from future federal oil leases and permits altogether. Fines just don’t matter.

Abrahm Lustgarten is a former staff writer and contributor for Fortune, and has written for Salon, Esquire, the Washington Post and the New York Times.

 

 

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This entry was posted on Friday, May 4th, 2012 at 1:03 am and is filed under Climate Care. You can follow any responses to this entry through the RSS 2.0 feed.

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