“The Political Science of Industrial Safety: Have the Deeper Lessons of Deepwater Horizon Been...

7/31/2019 The Political Science of Industrial Safety: Have the Deeper Lessons of Deepwater Horizon Been Learned? by Geo

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THE JOURNAL OF ENERGY

AND DEVELOPMENT

George Baker,

The Political Science of Industrial Safety:

Have the Deeper Lessons ofDeepwater Horizon

Been Learned?,

Volume 36, Number 2

Copyright 2012


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THE POLITICAL SCIENCE OF INDUSTRIAL

SAFETY: HAVE THE DEEPER LESSONS OF

DEEPWATER HORIZON BEEN LEARNED?

George Baker*

Introduction

If, during the fateful daylight hours on April 20, 2010, the members of the VIPjoint safety audit team that was visitingDeepwater Horizonthe ultra-deepwater,offshore oil righad met privately with the Transocean site manager, they would

have learned of a disagreement regarding the safety risks associated with a pro-

cedure that was then taking place. The Transocean manager regarded the BP

decision as so unreasonable that he remarked, fatefully, [decisions like that are

the reason] why we have blowout preventers.1

The audit team would have learned that in the temporary well abandonment

process, BP had ordered the displacement of heavy drilling mud in four miles of

well bore and risers with much lighter sea water in a well that had penetrated an

*George Baker is the Managing Principal of Baker & Associates, Energy Consultants. The firm,

based in Houston since 1996, provides back-office analysis through its Mexico Energy Intelligence

(MEI) reporting, along with briefings and workshops on developments in Mexican energy, law, and

contracts. The author earned a Ph.D. in history from Duke and an M.A. in social sciences formCalifornia State, Fullerton. He has held positions at several academic and commercial organizations,

among them New Mexico State University, where in the late 1980s he was executive secretary of

a bi-national consortium of public universities with academic programs on U.S.-Mexico policy

matters. In tracking Pemex, the national oil company of Mexico, and its goal to become a deepwater

producer, his concerns have come to include public oversight and industrial organization and safety.

Based on his interviews with industry and government sources from the United States, Mexico, and

Cuba, Baker concludes that the lessons of Macondo will not have been learned until they are applied

equally across the Gulf of Mexico.

The Journal of Energy and Development, Vol. 36, Nos. 1 and 2

Copyright 2012 by the International Research Center for Energy and Economic Development(ICEED). All rights reserved.

219


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over-pressured reservoir; but the rub was that the integrity of the cement plug had

not yet been unequivocally established.

During the time of the VIP visit, the Transocean staff was carrying out the

negative pressure test, by which the pressure in the well bore above the cement

barrier is reduced in order to detect if that condition produces flows of liquids orgas.2 The correct interpretation of this test is the single most important industrial

safety check associated with temporary well abandonment. Professor Andrew

Hopkins of the Australian National University writes:

[The staff] ultimately misinterpreted the results of their testing and concluded that the well

was secure when in fact it was flowing. This was a terrible mistake, calling into question the

competence and training of all those involved.3

The VIPs visited the drilling shack where rig personnel were engaged in a dis-cussion of how the test is performed and how to measure the results. A Transocean

executive, possibly smelling trouble, suggested that the on-site rig manager stay

behind in the tour to oversee the process.4 Later in the day, the executive asked the

manager if the test had gone well and was given a thumbs up. Hopkins observes

that the question, as posed, was more conversational than one of a serious inquiry.

The executive did not exercise his role as auditor of this Critical-to-Quality measure.5

Hopkins notes there was a second opportunity for the VIPs to exercise the role

of safety auditors: safety rules required that the crew monitor the volume of fluids

extracted from the well in order to make sure that they were in balance with thefluids going into the well. If more fluids were coming out than going in, it meant

that the well was flowing (which it was). Lack of attention to this process meant

that the final opportunity to prevent the blowout was missed.

Background

Anthropologists in the late 19th and early 20th centuries, studying primitive

(non-literate) societies, introduced the term culture to refer to the set of atti-tudes, behaviors, beliefs, and taboos that characterize the members of a population

that may be identified by geographical, religious, or linguistic grounds. By its

polyvalent nature, culture lacks a single metric by which to measure its presence.

Industry uses the term safety culture as a metaphor in a vaguely quantitative

way to refer to attitudes and practices that, in principle, could be scored higher or

lower in terms of an awareness of, and attention to, risk. A safety culture also may

be regarded as positive or negative. In relation to the Deepwater Horizon

drilling rig, the U.S. Coast Guard in its report determined that the safety culture

was lax.6

Since the 1980s there has been extensive research into the nature of safety culture,

but the concept itself remains ill-defined. Consider two characterizations:

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What is Being Audited in Safety Audits? All safety audits have common con-

cerns: not only the condition of safety equipment but the condition of safety alarm

systems, such as hydrogen sulfate alarms on rig platforms and safety alerts in crew

quarters. Beyond matters of the material conditions, a safety audit should evaluate

the quality of training, supervision, and performance.Occupational Safety: The safety audits regarding occupational safety are well

known, perhaps to a fault; the protocols for inspecting conditions where injury to

head, limbs, and organs have been well established in most industries.

Process Safety: The auditing of process safety at an industrial facility requires

a breadth and depth of industry background as the audit may entail making judg-

ments about a dozen or more independent systems, any one of which, if it should

fail, would put in jeopardy the crew and the facility.Quality of Technical Supervision: Technical supervision requires constant

training and verification. On the Deepwater Horizon it would soon become

apparentbut only after the auditors left the rigthat the training and supervision

of the crew regarding the critical test of well integrity were inadequate.

Rogue Behavior: The banking industry has seen disastrous outcomes of the

speculative behavior of traders who were acting on their own impulses and agendas

outside of companynorms andrules. There is no reason to suppose that such rogues,

as they have been termed in the media, exist only in the banking industry.8 Auditors,

personnel managers, and line managers need to be alert for signs of rogue behavior.

Safety Politics and Appearances: The evidence and personal anecdotes as pre-

sented by Professor Hopkins indicate that the notions of Time Out for Safety and

Stop-Work Authority are far from being tools that enhance safety; he suggests that

they serve mainly as slogans in corporate safety advertising. While a manager may

stop a production line if there is risk to an employee, it is unlikely that either one

would risk asking for the suspension of all production owing to a risk to the facility.

The question has been raised as to why the Transocean manager, who, by press

accounts, strongly disagreed with the well abandonment procedures that the BP site

manager had requested, did not order a suspension of all work pending a review byonshore authority.Why, in other words,didhe notexercise his Stop-Work Authority?9

The answers to these questions are probably found in the money on the table: the

fully loaded, daily cost of operating the rig was in the neighborhood of $1 million.

For Transocean to have ordered the abandonment process be suspended, it likely

would have been liable by contract to BP for that amount. In addition, there may

have been bonuses and penalties at stake both for the site and onshore managers that

motivated them to get the rig off the Macondo well site without further delay.

Features of the Next Safety Accountability Regime: This discussion suggests thatchanges in the legal, regulatory, and contractual frameworks governing industrial

accidents are ahead. In response to the Macondo accident, and to others like



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itoffshore or otherwisesooner or later the law in the United States and in most

other countries around the world will be changed.

1. Contractors and owners will be jointly and severally liable for accidents at

industrial facilities, offshore and otherwise, but not in equal proportion.

Perhaps the well owner would be liable for 70 percent of costs, with keycontractors collectively being responsible for the remainder. The goal here is to

break through the mindset of complacency of contractors who tell themselves

that it is the operator, not the contractor, who is on the hook for liabilities.

2. The joint-liability model will entail new insurance requirements to reflect

risk exposure. A system of differentiated liability caps may be needed for

distinct classes of contractors.

3. There will be incentives and sanctions for agencies and public servants re-

sponsible for permitting and regulatory enforcement.

Observations

In his analysis of testimony after the Macondo accident, Professor Hopkins

concluded that auditors chose not to inquire into the state of training and supervision

of personnel in the mud shack, even though the entire integrity of the rig depended

upon the accuracy and thoroughness with which crew and supervisors did their jobs.

Hopkins speculates that, in turning away from an obvious danger zone, the

auditors reasoned that they did not want to insinuate, by their inquiries, that therewas any lack of confidence in the professionalism of the crew and its supervisor.

He observes that the purpose of an audit is not to be polite but to verify that training

and performance standards are being met.

The term management walk-around (as used in the title of his report) has the

ring of an audit of matters of occupational safety; it suggests an easy conversa-

tional tone without a clipboard in hand. An industrial safety audit, in contrast,

requires a clipboard if not an iPad in order that the condition and integrity of key

components (including data sets) may be verified.

The notion of Stop-Work Authority should be dropped, as it is seldom if

ever employed; further, in many cases, stopping a production line needlessly could

create other safety hazards as well as entail economic losses.

Conclusion

Had a regulatory framework been in place on April 20, 2010, that required that

industrial safety audits be carried out independently from occupational safety audits,then it is reasonable to suppose an audit of the first kind on Deepwater Horizon that

day would have spotted and corrected the problems that led to the blowout.

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Regardless of the reasons, the turning away by the safety auditors from the

likely trouble spots where improper execution of well abandonment procedures

could put at risk the lives of the crew and the physical integrity of the rig meant

that the auditors chose not to audit. The auditors turned their visit into a social one,

giving the appearance of management interest in, and concern about, the workingconditions of crews on an important asset. In this light, the accident was caused by

the failure of the rig governance model and the inadequacies and blind spots of the

safety audit protocols.

The story of such failures and inadequacies is doubtlessly replicated in in-

dustrial accidents around the globe. Often, blame is put on outside parties or

contractors. In April of 1992, when a kilometer or more of sewage pipeline ex-

ploded in a poor neighborhood of Guadalajara, Pemexthe national oil company

of Mexicoat first put the blame on a private chemical plant. In July of 1996, two-

thirds of Pemexs gas processing capability for the country was taken off-line

when an explosion destroyed the 2 billion-cubic-feet-per-day plant at Ciudad

Pemex. The eventual cause was said to have been that of a contractor who was

welding with an acetylene torch in an improper manner.

Such accidents will continue to occur until contractors, as well as facility

owners, are responsible for the costs of such accidents. Only then will contractors

feel co-responsible for lapses in training, supervision, and safety audits.10

In relation to industrial infrastructure, offshore or otherwise, the political sci-

ence of safety is an area begging for more management and sociological research.What is the right mix of incentives and sanctions that would motivate all actors

involved in regulation, enforcement, and operations to insist on training and

protocols of industrial safety in ways such that Critical-to-Quality hot spots will

not be overlooked elsewhere as they were on the Deepwater Horizon in 2010?

This is an open question for further research. It is a scientific question as well as

one for regulators and industry executives and their lawyers.

NOTES

1As events turned out, the blowout preventer would be needed; however, in this case it failed to

cancel out the original bad decision to proceed with the well abandonment process absent an un-

mistakable test of well integrity.

2Terry Barr, The Oil Disaster Is About Human, Not System, Failure, Wall Street Journal,

June 11, 2010.

3Andrew Hopkins, Management Walk-Arounds: Lessons from the Gulf of Mexico Well

Blowout, National Research Centre for Occupational Health and Safety Regulation, Working

Paper no. 79, Australian National University, Canberra, Australia, February 2011. Citations to

Professor Hopkins refer to this report.

4Russell Gold and Ben Casselman, On Doomed Rigs Last Day, a Divisive Change of Plan,

Wall Street Journal, August 26, 2010.



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5Critical-to-Quality is a concept taken from the quality-control system known as Six Sigma,

famously practiced by General Electric:

To achieve Six Sigma Quality, a process must produce no more than 3.4 defects per million

opportunities. An opportunity is defined as a chance for nonconformance, or not meeting

the required specifications. This means we need to be nearly flawless in executing our key

processes.

See General Electrics website, available at http://www.ge.com/en/company/companyinfo/

quality/whatis.htm.

6Critics in U.S. Congressional hearings and in the media criticized BPs long history of safety

violations as evidence of a lax safety culture.

7The first heading in Wikipedias entry on Safety Culture is Defining Safety Culture.

References to the cited text are provided in this article, available at http://en.wikipedia.org/wiki/Safety_culture.

8Dr. Bruce Ivins was the anthrax killer who, according to findings by the U.S. Justice De-

partment, escaped detection for most of a decade, all the while performing his duties at a secret

biodefense research lab.

9It is even more perplexing why the Transocean manager did not voice his concerns and ob-

jections to the safety audit team. It would appear that only a whistle-blower onboard the rig could

have saved the ship. BPs post-accident report focused almost exclusively on matters of remediation

and ignored the causes and preventative measures that could be implemented to help prevent the

recurrence of a future Macondo.

10In some contexts, as in Pemex, the oil union also should be included in the accountability

model.

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