The Human Cost of BP's Rise To Power
New York: St. Martin's Press, June 2011
The company arose in Persia on 28 May 1901, when the Shah granted an exclusive concession of mineral rights to a British gentleman named Willliam Knox D'Arcy. D'Arcy's undertaking, aptly named the First Exploitation Company, nearly went broke. But in 1908 it opened the huge oil field at Masjid-i-Suleiman. And the rest, as they say, is history. Persia became Iran, D'Arcy became wealthy, and the First Exploitation Company eventually became British Petroleum and then BP. Today it has a track record of remarkable profitability, willful pollution, and consistent neglect of maintenance. The profits are not caused by the latter two practices.
"They say the industry damages environments and communities and that it generates pollution and waste. They say those involved in the industry are secretive, arrogant, and driven solely by profit."
– John Browne, shortly after becoming CEO, at a Houston oil-industry conference (Page 49)
In expressing these concerns, Browne meant to convey the message that BP would rise above that perception. Its new moniker, its yellow and green logo, and its "Beyond Petroleum" slogan heralded a new era of corporate responsibility and environmental awareness. Its pursuit of ever-greater profit, however, assured that the resources to make that era a reality were never available.
Magner covers the history of BP through its expansion into the United States and its acquisitions there. He shows us the neglect of maintenance at its refinery in Texas City which led to a disastrous explosion in 2005 — for which, after various investigations, the company received an unprecedented fine. There were also civil suits for the 15 wrongful deaths, most of which BP managed to settle out of court.
That pattern was seen in Alaska, where the Trans-Alaska Pipeline, and smaller feeder pipes at Prudoe Bay, were poorly maintained and began leaking. And it quickly became apparent after the Macondo Prospect well in the Gulf of Mexico blew out, sending the Deepwater Horizon drilling rig to the bottom and killing 11 of its workers. Critical equipment was faulty. Important tests were skipped. BP managers on site had dismissed safety concerns raised by underlings and pushed to bring the well in rapidly. It was a mistake that led to tragedy, but not one that is likely to bring about catharsis at BP.
"What was troubling to investigators and overseers of the oil industry was that in virtually every instance where BP had a decision to make about the Macondo well, it chose the option that presented the lowest cost or saved the most time. There appeared to be a pattern deeply ingrained in BP's corporate culture where the costs and benefits of each option were weighed in isolation, without considering the bigger picture. The cascade of problems that led to the blowout in the Gulf seemed tragically similar to the series of actions and events that caused the refinery explosion in Texas and the pipeline problems in Alaska, both of which were blamed on a flawed 'safety culture' at BP."
– Page 203
The first oil well west of the Mississippi was sunk in 1892 in this town in southeastern Kansas. Standard Oil built a refinery there in 1897, ushering in an era of prosperity that lasted a long time. That era has now passed. The refinery, now owned by BP, is closed. It sits atop a toxic stew of oil and chemicals that pollutes the air and groundwater of the town.
Largely through the efforts of a determined woman named Lucille Campbell, the town filed a lawsuit. Neodesha v. British Petroleum came to trial on 23 August 2007, three years and five months after the lawsuit was filed. The jury deliberated for three days — and found BP not guilty on all counts. Judge Creitz reversed that decision, the company appealed of course, the case went to the state appeals court, and then to the Kansas Supreme Court. Their decision on whether to grant BP's plea to void Judge Creitz's ruling is due Real Soon Now.
Chapter 9 examines the Macondo tragedy in detail.1 Chapter 10 takes a long, hard look at the human cost of the spill: the losses of lives and livelihoods. An underappreciated aspect is the spill's effect on people of Vietnamese extraction living in the Gulf. Thousands of these "boat people" came over during the 1970s and 1980s and, by invitation and inclination, settled in the southeastern states. Many of them are fishermen,2 and their pride at being able to support themselves runs deep. A typical example was provided by Tuan Nguyen, Deputy Director of the Community Development Corporation for New Orleans [Parish?]. He quotes his uncle:
"One of my wife's uncles is a very proud man," he said. "He's a deckhand. I told him to come in and talk about services. He said, 'I can't stand in line. What if someone sees me?'"
– Pages 295-6
It's not a sentiment unique to the Vietnamese. Most men feel shame at being unemployed. Tom Paxton put it well in one of his early songs.
The next chapter covers the harm to animal and plant life in the Gulf. This was severe, but perhaps less widespread than expected in the early days of the spill. As is usual in such cases, assessments from BP and the government were more sanguine than those of tour-boat owners and fishermen on the scene. In any case, it is too soon to rule out potential problems, as the impact of submerged oil and dispersants on spawning of marine life may take years to become apparent.
The final chapter examines the impact on BP of its deficient safety culture and the resulting penalties. This looks to be immense, with legal challenges coming at the company on every level. But again, it is too soon to decide whether BP is doomed as these challenges wend their way through our judicial system, or whether they will bring it to reform. BP, like the rest of Big Oil, continues to profit at historically high levels. Such resources have traditionally provided good insulation against pressure to reform industry practices. I would bet that will be true for BP in the future.
Dudley acknowledged in his October 25 speech in Houston that BP had a long way to go to rebuild trust with the public. "When people look at a BP logo on a gas station today they probably associate it with the accident and the spill," he said. "But our actions can help inform perceptions. And I would hope that people are starting to think about the magnitude and intensity of our response to that spill and the way we are doing as much as we can to restore livelihoods, look after the environment, and rebuild relationships.
"I would hope they will also see a company that has suffered a terrible accident but has the humility and courage to learn from that incident and prevent such a thing happening again. I'd hope they will also see a company that is determined to do the right thing by the people of the Gulf region and across the United States. I prefer to look our customers in the eye and say to them, 'We're sorry about what happened, but we're not running away and we're going to make it right.'"
Two days after its CEO spoke these words, BP was doing all it could to run away from a toxic waste site in the heart of America that was the legacy of the very "heritage companies" Dudley had proclaimed as his own.3
– Page 372
The book ends with the outcome of that dispute hanging in the air as, at the end of 2010, the Kansas Supreme Court deliberates on the case. Like so many in a society where the guiding principle is not responsibility but self-preservation or tribal solidarity, the case does not bolster my hopes for justice. But Mike Magner4 has done an excellent job, and a just one, of describing BP's performance over the years. Publishers Weekly calls it lucid and hard-hitting. That it is. He states facts clearly and accurately, very seldom letting his outrage show through the words. The book is, of course, carefully researched and thoroughly end-noted, with a list of souces and a good index. I recommend it and rate it a keeper.