Tom von Aschwege has provided SafetyAtWorkBlog with a long article that was intended as a comment on recent articles concerning the safety culture of BP. The comment deserved to be an article in order to provide more prominence to von Aschwege’s views. Links, where appropriate, have been added and format has been tweaked.
“I came by Ross Macfarlane’s article totally by accident. I regret to say that I completely agree with him, because I have made some of the same, or very similar observations. I too am an ex-BP employee, and I too have a strong sense of dismay at what is occurring in the Gulf of Mexico.
Prior to retiring from BP in 2009, I worked in Integrity Management roles for 6 years in the BP deepwater Gulf of Mexico (GoM) organization. In those 6 years we put massive amounts of time and effort into improving Integrity Management (IM) processes and practices for GoM operations – even more so after the 2005 Texas City accident, Thunder Horse listing incident, and Alaska pipeline failure. I am thoroughly convinced that BP has done more and accomplished more in this area overall than any other GoM operator. Yet somehow these things still happen in BP operations, and I wonder how that can be. How can BP be so unlucky, and other GoM operators, with far fewer technical resources and knowledge, not have this happen to them?
After this latest incident, my opinion – which I freely admit is pure speculation on my part – is that it has something to do with BP’s so-called “performance-driven” culture, as Mr. Macfarlane mentions. Annual perfomance goals focused on oil and gas production, operating costs, project costs and schedules, PLUS ensuring safety and environmental protection are part of this, and included for both the organization and for individuals. However, the safety components tend to be related to individual personnel safety – so-called “slips, trips, and falls” – as opposed to integrity management of complex systems, which is more difficult to quantify. This isn’t necessarily some evil plot, but more a symptom of having to come up with performance measures that are easily tabulated and tracked.
There are tremendous pressures – often self-imposed by employees – to meet performance goals, because the personal financial rewards may be very high if they do. Very significant bonuses are possible for large numbers of employees if both (1) the organizational performance goals are met, and (2) an individual’s performance goals are met. There is also tremendous pressure to be ranked higher than your peers because of significant differences in pay increases and bonuses for those ranked in the top, say, 15% or so. With this kind of reward environment, there is tremendous pressure to “go with the flow” of budget cuts, to “be a team player,” even when reducing IM-related activities. (I like to say that you can hire a chimpanzee to make budget cuts, but it takes some brains and courage to fight with your boss for needed IM work while avoiding career suicide.) There is tremendous pressure to get a project started on schedule, regardless if everything is not quite complete. I can impress my boss with my cost-cutting prowess, or with my ability to manage a project “on time and on budget,” and I can help the overall company goals simultaneously. And there’s a pretty good chance that whatever budgetary corner I cut, or whatever project schedule milestone I trim back on, won’t come back to bite me personally this year – and probably never. In the mean time, that new BMW I get with my big bonus will really impress the neighbors, the guys at the office, and will look great in the company parking garage!
I certainly hope that the outcome of the investigations into the current GoM accident do not show that any individuals intentionally took shortcuts to save on costs, or save on time in their schedule (which also translates to costs). I truly believe that no one in the BP organization would consiously make such a decision if they really thought about, or understood, what the potential outcome could be. However, I do have a very uncomfortable feeling that there will be something come to light regarding a series of seemingly low-risk and unrelated decisions that were made, by different people and organizations (including the regulators), over a longer period of time, which resulted in a totally unexpected compromise in well control capability. The holes in James Reason’s “Swiss Cheese” failure model will have most unfortunately aligned once again.
I have some further thoughts on both (a) organizational challenges to effective Integrity Management, and (b) things to think about in terms of assessing the value of IM, which I think many people either now with BP, or formerly employed by BP, might be able to relate to. These are included in a 2010 Offshore Technology Conference paper I co-authored and presented (which probably was mostly successful in putting a lot of people to sleep), and are based on my personal experience and observations. I am including them here because there may be some ideas which people who read this blog can use to help prevent disasters like the one presently occurring in the GoM. Along with Mr. Macfarlane, I too believe all accidents are preventable.
Some organizational challenges to effective Integrity Management are summarized here:
Role of Management: Continual strong leadership and commitment by senior management is critical. Without it, an IM program will flounder or fail.
Corporate Memory Loss: High rates of personnel transfer, retirements of experienced personnel, and failure to reward good IM behaviors will result in a repetition of past failures, which are entirely avoidable.
Reorganization: Reorganization also disrupts corporate memory, especially if it occurs frequently. People who have experienced incidents, and dealt with them, are moved elsewhere and replaced by others without this experience.
Short -Term Budgetary Pressures: Aggressive cost controls and budget reductions may change organizational focus to reducing short-term IM costs, versus preserving long-term IM value, with the resulting negative long-term consequences.
It Won’t Happen on My Watch: This is the scenario in which as an IM engineer, I can become a budgetary “hero” this calendar year. This will certainly impress my boss and maybe get me a better pay raise or bonus this year. I achieve this by delaying any regular inspection or maintenance activities which are not regulatory requirements. After all, the odds are in my favor that nothing bad will happen before I’m transferred into my next job.
Careers: A career in Integrity Management is not as glamorous or as visible up the management chain of command as other careers. For example, how many senior managers do you know in oil and gas companies who got there through a career in Integrity Management?
Low Profits or No Bad Accidents: It is much easier to implement an effective IM program when profits are high, or when there has just been a serious accident. Everyone vows to fix the problem and spend whatever it takes. Money flows freely. But when the opposite occurs – that is, low profits along with the good fortune of no recent accidents – then watch out, because the stage is set for future problems.
Beyond issues related to organizational challenges, the value of Integrity Management (IM) is always a question that is asked by people who haven’t really bought into the idea. The value of IM is extremely easy to assess after your company has experienced a major disaster. It doesn’t take long to discover that if you had an IM program in place before the disaster, and if it had been rigorously implemented, then that last disaster would not have occurred. The value of IM for your company at that point is equal to the cost of the disaster that you did not avoid. That cost would often pay for implementing a comprehensive IM program throughout your company for many years.
It is regrettable that a major disaster is often required to motivate individuals, organizations, and regulators to do something different to prevent a similar occurrence in the future. That’s what happened after Piper Alpha, and unfortunately, it is a recurring scenario in all types of activities. A much more challenging goal is to assess the value of IM before your company experiences a major accident or disaster, and then convince decision-makers that it makes sense to implement it. Here are some ideas to consider to assess the value of IM—the value of what could be avoided:
Loss of Life: The human cost associated with those people who lost their lives, their families (including long-term impacts on life prospects for their children), and their friends.
Environmental Damage: The actual, often undeterminable (other than in court) cost of damage to the environment, or as a minimum, the cost of cleaning it up.
Cost of Litigation: The cost of litigating damages, and paying for awards, particularly if there is loss of life or serious environmental damage.
Social Reputation: The indirect cost of having your company’s name, and possibly yours, plastered in the headlines continually, with the potential for being excluded from doing future business in some communities.
Business Reputation: The indirect cost of being excessively scrutinized by regulators and citizen groups, of being excluded from joint ventures with other companies, and of potentially losing your “license to operate” in some areas.
Cost of Repairing or Replacing a Facility: The cost of repairing or replacing a facility, or its components, to return it to production; replacement cost can often be significantly higher that the original cost.
Cost of Disruption to Business Activities: The cost of employees’ time and efforts to restore an existing facility to an acceptable operating condition, which simply returns it to a previous status and does not grow the company; the value of new projects that must be deferred because the resources – people and money – are diverted into restoration work.
Employee Morale: The indirect and immeasurable cost of decreased employee morale, resulting in decreased productivity, and potentially increased attrition. Depending on the probability of a bad consequence occurring and the cost of the bad consequence (incidents, accidents, or serious disasters), the ultimate value of an IM program can theoretically be calculated.
For deepwater developments, because of their extremely high costs and requirement for extremely high revenues for economic justification, the cost consequences of failure are tremendous. Multiply these cost consequences by the improvement, or decrease, in probabilities of failure resulting from a well-implemented IM program, and you have calculated the value.”