“When he abruptly resigned as chief executive of BP PLC [he] left
the company in disarray. The giant energy producer was struggling with
a legacy of accidents and spills in the U.S.” Nope, that’s not about
the swift booting of Tony Hayward by the BP board on Tuesday. It’s from
a 2007 Bloomberg story on the last crisis change in leadership at BP.
Then-CEO John Browne had presided over the Texas City refinery disaster that killed 15 workers in 2005 and a large Arctic pipeline oil spil in 2006–both
blamed on BP’s safety cutbacks and poor maintenance. He had been
replaced by Hayward, who of course promised to put safety first.
Lord
Browne had taken the office in 1989 amid another crisis, a financial
one. He rebranded BP as “Beyond Petroleum” and gave it a green and
yellow flower logo, but cut safety budgets to a degree that investigators later found “terrifying.”
Yet he also bought up Amoco and Atlantic Richfield (ARCO) in the 1990s,
leading the buyout spree that left a highly consolidated oil industry
with little need to compete.
At Amoco, BP dismantled a lauded companywide worker safety system, part of a 25% cut in Amoco’s operating budget.
When Hayward took the CEO job, he promised to fix that terrifying culture of no-safety:
“There can be no
compromise [on safety],” Hayward said in [a] May 1 memo. “We must pay
particular attention during this time of change.”
Then
again, Hayward also promised to focus on opening two major oilfields in
the Gulf of Mexico, including the Macondo field that brought us BP’s
world-record oil spill from the exploded Deepwater Horizen drilling
platform.
At Texas City, refinery workers soon complained about renewed safety cutbacks and; accidents after 2005 killed four more workers, and large chemical vapor releases hospitalized at least 130 people.
So what is Hayward’s successor, Bob Dudley, promising? His first statement vowed to “[R]espond and really change the culture of the company and make sure all
the checks and balances are there, just to make sure this does not
happen again.”
The
Gulf spill would “clearly continue to change the rate of accelerations
that we have on safe and reliable operations,” Dudley added.
Do
we hear an echo? Given the track record of Browne and
Hayward, you have to wonder if something odd is being served
in the corporate cafeteria in London. Or whether BP does what all the
oil companies do to cut corners, but has less luck.
But no matter
what Dudley says he wants, his top order will be persuading Congress
that this time, BP can be trusted. Congress ought to at least make him
prove it.
Federal inspections of U.S. refineries, revealed by
the Center for Public Integrity, show that two BP facilities, including
the infamous one at Texas City, accounted for 97% of all “egregious willful” safety violations at
U.S. refineries in the Hayward years. Lawmakers and the White House
should give Dudley an ultimatum: Clean up your rigs and refineries and
achieve two years of zero serious violations, then come back and we’ll
discuss drilling in the Gulf of Mexico.