why bp failed to learn the lessons the texas city …
TRANSCRIPT
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WHY BP FAILED TO LEARN THE LESSONS
The Texas City Refinery Explosion
Andrew HopkinsAustralian National University
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Financial cost
• Compensation $2 billion (set aside)• Texas City overhaul $1 billion• (BP profit in 2005 $19 billion)
• From start 05 to mid 07, BP shares underperformed European oil and gas sector by 16%
• From March 05 to Dec 07, BP shares rose 15% Amex oil index rose 72%
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www.futuremedia.com.au [email protected]
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6.5 ft Desired level (50% of range)
9 ft Maximum
170 ft
158 ft Actual level
Heavy liquid
Gas
4ft Minimum
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IgnitionRelease to air
Overfill Trailer siting
THINKING ABOUT THE TEXAS CITY REFINERY ACCIDENT
Death
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6.5 ft Desired level (50% of range)
9 ft Maximum
170 ft
158 ft Actual level
Heavy liquid
Gas
4ft Minimum
Level measuringinstrument
Inflow mixture
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Types of hazard• Major and other
• Major: low frequency, high consequence events Other: high frequency, low consequence events
• In process industries: major hazards - loss of containment
loss of control of process other hazards –
heights, confined spaces, vehicles
• Process safety versus personal safety.
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IgnitionRelease to air
Overfill Trailer siting
Lack of focus on process safety
THINKING ABOUT THE TEXAS CITY REFINERY ACCIDENT
Death
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BP’s learning disability
• TC failed to learn from elsewhere
• TC failed to learn from own incidents
• TC failed to learn from audits
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IgnitionRelease to air
Overfill Trailer siting
Lack of focus on process safety
Inability to learn
THINKING ABOUT THE TEXAS CITY REFINERY ACCIDENT
Death
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IgnitionRelease to air
Overfill Trailer siting
Lack of focus on process safety
Inability to learn
THINKING ABOUT THE TEXAS CITY REFINERY ACCIDENT
Reward structure
Organis -ational design
Death
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Group Chief Exec
CE Refining and Marketing
Other CEs
VP world refining
VP USRefining Other regional VPs Refining
Business Unit LeaderTexas City Refinery
4 other US refineriesLine managersHSSE Mgr
Process safety mgr
CE for functions
BU 2
VP HSSE VP Tech.
BP ORGANISATIONAL CHART, SIMPLIFIED
BU 3
BU 4
BU 5
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Group Chief Exec
CE Refining and Marketing
Other CEs
VP world refining
VP USRefining Other regional VPs Refining
Business Unit LeaderTexas City Refinery
4 other US refineriesLine managersHSSE Mgr
Process safety mgr
CE for functions
BU 2
VP HSSE VP Tech.
BP ORGANISATIONAL CHART, SIMPLIFIED
BU 3
BU 4
BU 5
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Group Chief Exec
CE Refining and Marketing
Other CEs
VP world refining
VP USRefining Other regional VPs Refining
Business Unit LeaderTexas City Refinery
4 other US refineriesLine managersHSSE Mgr
Process safety mgr
CE for functions
BU 2
VP HSSE VP Tech.
BP ORGANISATIONAL CHART, SIMPLIFIED
BU 3
BU 4
BU 5
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IgnitionRelease to air
Overfill Trailer siting
Lack of focus on process safety
Inability to learn
THINKING ABOUT THE TEXAS CITY REFINERY ACCIDENT
Reward structure
Organis -ational design
Risk mgt v. rules
Death
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Process safety often involves risk management, not rule compliance.
• We should convert risk management into rule compliance (where possible )
• The need to comply with rules is stronger driver than need to reduce risk.
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BP budget priorities
• 1 Spending to ensure compliance – “License to operate”
• Spending to ensure current production can be maintained – sustainability
• 3. Spending to boost production - new commercial opportunities.
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IgnitionRelease to air
Overfill Trailer siting
Lack of focus on process safety
Inability to learn
THINKING ABOUT THE TEXAS CITY REFINERY ACCIDENT
Reward structure
Organis -ational design
Risk mgt v. rules
Death
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IgnitionRelease to air
Overfill Trailer siting
Lack of focus on process safety
Inability to learn
THINKING ABOUT THE TEXAS CITY REFINERY ACCIDENT
Reward structure
Organis -ational design
Risk mgt v. rules
Cost cutting
Death
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Lessons on cost cutting
Funding should be on the basis of needs analysis not competitive comparisons
Those who order funding cuts should take responsibility for risk assessing them
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IgnitionRelease to air
Overfill Trailer siting
Lack of focus on process safety
Inability to learn
THINKING ABOUT THE TEXAS CITY REFINERY ACCIDENT
Reward structure
Organis -ational design
Risk mgt v. rules
Cost cutting
Leadership focus
Death