The Times: BP explosion: the Baker report

EXTRACT: Two men died on Shell’s Brent Bravo platform in 2003, overcome by a gas escape as they inspected a botched pipe repair. A Shell safety auditor in 1999 had recommended shutting down the platform. At the time, however, Brent Bravo was supplying a quarter of Britain’s gas.

January 17, 2007

Cutting costs for energy yields a grim catalogue
Carl Mortished: Analysis
 
Take a flammable liquid, boil it up in a tin can to extreme temperatures and add a catalyst or two to speed things up. Then step back and see what happens.

At Texas City in March 2005 an isomerisation unit was overfilled during start-up. A vapour cloud ignited and 15 names were added to the thick book of remembrance that is the history of the oil industry. It is a catalogue of explosions, fires and deaths. John D. Rockefeller named his company Standard Oil to emphasise quality control, appreciating the public concern in the 1870s over the thousands of deaths from adulterated kerosene. 
 
Standard occasionally fell below its own bar. In 1890 workers unloading a vat of crude oil from a railcar in Louisville, Kentucky, let loose a cloud of vapour. A wall of flame spread over five acres at Standard Oil’s refinery, killing three people and burning scores of others.

Why is this still happening more than a century later? The Grangemouth refinery in Scotland, formerly owned by BP, has been plagued by incidents, including a big fire in 2000 and an explosion and fire in 1987 that killed two workers. The simplistic response is that oil is, and always will be, a dangerous industry and, if we want cheap fuel for our cars and homes, people are going to die.

That is true but unsatisfactory. As technology improves, our expectation of safety rises and our tolerance of error falls. Sophisticated process control is seen to be the answer but our ability to manage human behaviour has not improved since Rockefeller’s day. The massive fire at the Buncefield oil storage depot in Hertfordshire in 2005 was caused by overfilling a tank. Miraculously, no one was hurt. A catastrophic explosion at Total’s chemical plant at Toulouse in 2001 killed 30. The cause is thought to be poor storage of ammonium nitrate.

How much risk is acceptable? The standard was set by Lord Cullen at the inquiry into the 1988 Piper Alpha disaster that killed 167 oil production platform workers. He said that risk should be as low as reasonably practicable. The legal test is a balance between effort expended to reduce risk and the amount of risk mitigated. An employer should not be expected to take safety measures that create a “gross” disproportion of effort to produce a minor improvement in safety.

Law and safety regulation can ignore business and financial cycles, but companies cannot. Must a piece of equipment be replaced immediately when it reaches the end of its projected life? What if tender loving care can extend its lifespan for a few years? In 1998 the oil price had fallen to $10 a barrel, below the cost of running a rig. For the oil majors, including BP, the mantra was “cost control”, and the objective was to raise return on average capital employed. The equation is simple: squeeze more cash out of a well or a plant by cutting running costs to the bone, and delay all but essential expenditure on kit. More cash from shrinking assets equals higher returns.

In a world of resource famine, what counts as essential? The US Chemical Safety and Hazard Investigation Board squarely blamed BP’s Texas City fire on “the drastic effects of corporate cost-cutting”. The British Health and Safety Executive has found extensive asset integrity problems, including corrosion of platforms in the North Sea caused by neglect and delayed maintenance.

Two men died on Shell’s Brent Bravo platform in 2003, overcome by a gas escape as they inspected a botched pipe repair. A Shell safety auditor in 1999 had recommended shutting down the platform. At the time, however, Brent Bravo was supplying a quarter of Britain’s gas.

BP will spend heavily over the next few years to restore its reputation as a safe pair of hands supplying energy to Americans. It can afford to do so now, but that will not always be true. Who will prise open BP’s purse in the next oil collapse? Safety is a political problem, not a regulatory or even a corporate problem. It is about what we want to pay for. Every nuclear plant in Britain is operating beyond its expected lifespan. The same is true of much of the North Sea infrastructure that was built in the 1970s. Britain’s local electricity distribution network is half a century old. Will it survive a really big freeze?

Safer energy is possible but not probable — unless we pay a whole lot more.
 
http://www.timesonline.co.uk/article/0,,630-2551372.html

 

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