BP declined to comment on almost all aspects of the recent reports that ProPublica and PBS FRONTLINE did on the company’s safety and culture. Yet on Monday, in his first public address since becoming BP’s CEO, Robert Dudley said that he did not believe BP had a safety problem and warned that the ProPublica and Frontline reports would be unflattering.
Since we published our story on Tuesday, many readers have contacted us to find out exactly what we asked BP and whether our questions were fair. ProPublica and Frontline began communicating with BP’s press representatives about this story beginning in May. In numerous email exchanges and several phone conversations we requested interviews and described our work, our findings and our intentions. In the end, BP declined our requests for interviews but said the company would respond to questions submitted in writing.
“You can expect full and factual answers,” Andrew Gowers, BP’s chief spokesperson, wrote in an email on September 22.
Below is a list of the questions submitted in writing to both BP’s corporate press office in London and to BP Exploration’s press office in Alaska. The questions have been left exactly as they were sent to BP (spelling errors and all) except for deletions that were made because they concerned confidential information or matters that we have since learned to be untrue. They are followed by BP’s three paragraph response.
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Questions for BP
Abrahm Lustgarten
ProPublica/Frontline
1. A number of BP employees have described BP’s maintenance policy in Alaska, Texas City and elsewhere as “run to failure”, referring to the established operational term meaning that equipment is used to its maximum capability before it is replaced or maintained. We have been told that “run to failure” was at one time a formal policy of BP and that later the company stopped using the phrase to describe maintenance practices because of its connotations.
a. Was “run to failure” ever an articulated BP policy?
b. Regardless of its name, does or did BP pursue a policy of maximizing equipment performance and lifespan with minimal investment in maintaining it?
c. If not, what are BP employees referring to when they speak of their experience implementing a “run to failure” policy?
3. How would BP describe/name the balance it sought between cost efficiency and maintenance expenditure at its various facilities and operations, including in Alaska and in Texas City over the years?
4. When Tony Hayward became CEO he reflected on the challenges that BP faced and said that in his view the company executives were not listening to employees, had forgotten that BP is an operational company and had become out of touch with safety and performance issues and operational integrity at its facilities. He said he would “focus like a laser on safety”. What specifically did Tony Hayward do that improved operational integrity and health safety and environment concerns?
a. What specifically did the company change to do a better job of listening to people?
b. What specifically was BPXA, or refining directed to do at this time to pay more attention to its operations and maintenance?
c. How did these initiatives play out – what programs were instituted, what budget allocations were made for them, how was their success measured and was progress observed?
d. If you can provide a very specific example or two – including the goal, how it was communicated, implemented, its affect, and how much it cost -- it would be helpful.
5. Soon after Tony Hayward became CEO the company’s Alaska subsidiary moved a team for Health Safety and Environment oversight into a lower management tier and severed the group’s direct report to the president of BP Alaska. How does this decision – which has been criticized for devaluing the importance of HSE issues in Alaska -- reflect Tony Hayward’s new focus on safety?
6. BP has continued to cut operational budgets right into the 2010 budget, in some cases. Tony Hayward cut more than 4,000 jobs and boasted of billions of dollars in savings. How can the company improve its safety and maintenance record – “focus like a laser on safety” -- while simultaneously reducing these expenditures?
7. In the United States BP has been in negotiations with the Environmental Protection Agency for a number of years over a compliance settlement that would prevent the U.S. Government from debaring BP, BPXA, or other segments of the business.
a. From a corporate perspective, is discretionary debarment of some or all of BP’s operations in the United States a serious concern? Is it s realistic threat? Why or why not?
b. In the U.S. BP management has repeatedly rebuffed terms of a debarment settlement with the U.S. Environmental Protection Agency, when it would seem that the government is giving BP, with its four criminal convictions here, a second chance. Why has the company resisted the EPA’s terms?
8. In a statement shortly after the Gulf spill this spring Tony Hayward said that the U.S. “needed” BP, and that BP needed the U.S. – how did this statement pertain to the issue of debarment, and how important does BP believe its procurement contracts with the U.S. government are to both the company, and to the government?
9. How does BP respond to the view that given the company’s criminal convictions in the U.S. and the number of spills and close calls in recent years the company should be subject to discretionary debarment and limited in the business it is allowed to do with the United States?
10. There have been a number of very close calls in the past two years at several of BP’s facilities on Alaska’s North Slope. The close calls have alarmed members of the U.S. Congress and led to numerous BP workers expressing fears that their workplace is not as safe as it should be, and that a catastrophic accident in Alaska is inevitable. Many of their concerns echo those raised in Texas City in the years before the explosion there in 2005 – that workers feared reporting for duty, that not enough is being invested in maintenance of all sorts, that even with expanded maintenance investment in the last few years it has not been enough.
a. Are BP facilities on Alaska’s North Slope a safe place to work?
b. Are these facilities being adequately maintained, and kept as safe as they could be?
c. How confident is BPXA management that the next close call will not result in worker deaths?
d. According to a 2007 survey the majority of workers feel that BP is not looking out for their safety despite great attention to what they describe as “slips, trips, and falls”. Why has this perception persisted and what does it mean to BP?
11. Statistically, in the United States especially, BP has far more spills, larger quantities of oil spilled, and far more worker safety violations than its competitors and peer companies. This is the case in Alaska, in the Continental U.S., and in offshore drilling regions of the U.S., even after adjusting for the relative proportion of the operations in these places. Why is this the case? And what should we understand from these figures?
12. Each time there has been a major accident involving BP company executives have come forward and expressed remorse, contrition, and a seemingly viable plan for addressing what the company itself has described as persistent cultural and communication issues. John Browne expressed these sentiments after Texas City, Bob Malone did in the U.S. after both Texas City and the Prudhoe Bay spill, and Tony Hayward provided a lengthy analysis of what was wrong at the company in the months after he became CEO. Regarding Hayward in particular, how should we square what he said – that the company was out of touch with its workers and its operations and safety – with the problems that BP has continued to have, in both Alaska and in the Gulf of Mexico, since?
13. Mr Hayward had clearly defined an objective to reform BP’s corporate culture, like those before him. How would BP characterize his vision for what this would entail? Was it a two-year plan? Was it recognized that this would be a 24-hour-a-day effort, or one that would last 10 years? Did he do enough?
14. What does it take to reform a company’s culture?
15. Acknowledging that investigations into the Deepwater Horizon accident have to be completed before we can fully understand the technical details of what went wrong there – based on what is known now what is different in that incident from pervious accidents in which cultural issues were ultimately blamed? Is the Deepwater Horizon incident part of a broader pattern of haste, cost cutting, and disconnect from operational integrity?
16. What specifically in was done in the Gulf of Mexico to ensure that the cultural and operational problems Hayward had identified previously and in other places had NOT also infected Gulf operations, especially given that the deep drilling in the Gulf was widely known to be risky and among the most technically difficult endeavors in the world?
17. Under the leadership of John Browne the BP corporate structure was flattened. Mr Browne expressed concern that too many rules and too much hierarchy inhibited managers’ freedom to think and problem solve on their own. In our reporting we have heard from former BP management and executives who say that the flat structure led to confusion, unclear accountability, and a dissociation between upper management and operations level management. To what extent does the company today see a flat corporate structure as partly to blame for an apparent breakdown in communications and leadership?
18. Did that structure or something else in the corporate structure inhibit communication about serious operational issues to top management? (After the Gulf spill Mr. Hayward professed he was not informed about major decisions about how to drill the Deepwater Well. After the Prudhoe Bay pipeline spill in 2006 Bob Malone told Congress he was not aware of the cost cutting pressures that had affected the corrosion maintenance program there. After the Texas City refinery blast John Manzoni said in a deposition that he was unaware of the severity of the needs at the refinery. )
19. Exxon officers describe a famously regimented corporate structure in which operational efficiency and stability is gained through an acute focus on safety and operations. They say the company learned and progressed measurably as a result of the mistakes around the Valdez disaster and other problems in that period, and that they have never looked back. How does BP compare to Exxon in this sense? In terms of its approach to operational integrity and its success in implementing cultural reforms?
20. Regarding Texas City; it was well known in the industry that the Texas City refinery had serious problems for many years before BP’s acquisition of Amoco. Even under the old owners equipment needed to be replaced desperately, and the risks were widely known. So when BP purchased the facility, did it have a specific plan identified at that time for how it would manage the well-known concerns about Texas City’s safety and operations? What was it? If there was not a plan why not?
21. Specifically, why did BP not replace the blowdown drums that are now known to have been outdated and identified for replacement years before the refinery explosion?
22. Did BP management review the Telos report produced by Don Parus regarding safety issues at the Texas City Refinery in 2004 and early 2005, as Mr. Parus has repeatedly said?
23. If not – does BP dispute Mr. Parus’ explanation that he shared the serious concerns in that report with both John Manzoni and Mike Hoffman?
24. If yes, does BP stand by John Manzoni’s deposition that he knew nothing of the serious problems with the blowdown drums or any other equipment at the Texas City refinery, as recorded in the Eva Rowe lawsuit?
25. Regarding the Deepwater Horizon incident, and BP’s preliminary investigation report: Specifically and technically, how does the company explain the conclusion that the flow came up the center of the well and not through the annulus?
26. Was it standard BP practice to use a single casing string for an exploratory well?
27. Did BP identify the Macondo well as one in which there were unknown risks and unpredictable aspects characteristic of an exploratory well, as opposed to the somewhat known entity of a production well? Why or why not?
28. Other Gulf operators say that while they may use a single string in some cases in production wells in the Gulf, it is not industry best practice, or normal, to employ a single casing string in an exploratory well. Can BP explain and justify its earliest design decisions and strategy regarding the decision to use a single casing string: Why? Did it consider the unknown pressure levels? Was it aware of industry standard practice in the Gulf and the belief that a single casing string was not appropriate?
29. Understanding there are different solutions to the same challenge, can BP specifically articulate the benefits or gains it believed it would get from the use of a single string design as opposed to the standard exploratory well practice in the Gulf?
30. An indemnity clause is a standard component in most industry contractor agreements and partnerships: did BP NOT have an indemnity clause in both its contractor contracts (with Halliburton, Transocean, et al) and its partnership contracts?
Abrahm Lustgarten
Reporter, Propublica
Questions for BP Alaska:
31. How would BP describe/name the balance it sought between cost efficiency and maintenance expenditure in Alaska over the years?
32. In 2001 BPXA conducted an Operational Integrity Review which articulated workers’ concerns about maintenance of facilities and infrastructure on the North Slope and about their ability to safely and effectively voice these concerns to the company. In 2007 a follow-up survey was undertaken that found that after six years workers did not experience a significant change in either the company’s commitment to maintenance – in particular the fire and gas detection systems -- but also a number of other concerns. What specifically has BPXA accomplished since 2001 to address the issues listed in the 2001 ORT, and why aren’t those actions reflected or recognized by workers surveyed about the company’s progress so many years later?
33. When Tony Hayward became CEO he reflected on the challenges that BP faced and said that in his view the company executives were not listening to employees, had forgotten that BP is an operational company and had become out of touch with safety and performance issues and operational integrity at its facilities. He said he would “focus like a laser on safety”. Given that so many of these specific concerns had been raised over several years in Alaska, what specifically did Tony Hayward do or direct Alaska management to do that improved operational integrity and health safety and environment concerns?
a. What specifically did the company change to do a better job of listening to people?
b. What specifically was BPXA directed to do or chose to do at this time to pay more attention to its operations and maintenance?
c. How did these initiatives play out – what programs were instituted, what budget allocations were made for them, how was their success measured and was progress observed?
d. If you can provide a very specific example or two – including the goal, how it was communicated, implemented, its affect, and how much it cost -- it would be helpful.
34. BPXA has continued to face budget cuts and constraints, right into the 2010 budget. How can the company improve its safety and maintenance record in Alaska while simultaneously reducing expenditures?
35. BP has been in negotiations with the Environmental Protection Agency for a number of years over a compliance settlement that would prevent the U.S. Government from debaring BP, BPXA, or other segments of the business. Why has so much time passed – more than 6 years – without reaching a debarment agreement?
a. Is discretionary debarment a threat to BPXA’s business?
b. For many years Jeanne Pascal represented the EPA side of these negotiations: was Pascal fair, reasonable, and informed in her negotiations with the company?
c. What specific objections did BPXA/BP have to Pascal’s proposed settlement terms that kept an agreement from being reached?
d. Why did BPXA management refuse Pascal’s request that Bob Batch or Paul Flaherty be responsible for overseeing BP compliance with a settlement agreement?
e. Was BP informed that the Department of Defense supported the EPA in its consideration of debarment and said that BP’s procurement contracts with the government would not stand in the way of debarment? How did this affect BP’s consideration of this process?
f. Why did BP/BPXA back out of the settlement agreement it had ultimately reached with Pascal and the EPA last January?
36. Over the years several former employees of BP and its contractors in Alaska have been compensated by BP following an accident or injury or a human resources dispute. In many of these cases the settlement agreement included a non-disclosure clause that prohibits these people from discussing their jobs on the North Slope, their accidents, or the circumstances of their employment. Former management and outside legal analysts have told me that BPXA seeks such confidentiality clauses far more aggressively than other corporations. Has BPXA sought to buy the silence workers who have raised legitimate concerns about BP’s operations in Alaska? If not, what is the purpose of such agreements that extend beyond coverage of confidential business information?
37. In 2006 BP’s contractor, Acuren, conducted a quality assurance audit of its pipeline inspection program for BP facilities on Alaska’s North Slope. The audit found numerous deficiencies with, among other things, inspector’s certifications and company record-keeping, and it was known to the company by the spring of 2007. Were every single one of the pipeline inspectors working for BP/Acuren competent to perform their duties and assess the condition of BP’s pipelines?
a. Why were both BP and Acuren slow to respond to the circumstances and data presented to them by the auditor, Marty Anderson?
b. Did BPXA view the concerns raised as serious or material operational issues?
c. A letter from Billie Garde characterizes the situation as a complete breakdown of the QA/QC process and warns that its seriousness may be downplayed. How would BPXA characterize the findings of this QA/QC assessment?
d. Was Congress informed about the inspection concerns during its 2007 hearings? If no, why not, and when did communications with members of Congress on this issue commence?
e. BPXA undertook a three-part response to investigating the circumstances aroud the QA/QC audit issues and addressing them. What specifically did BP find and conclude at each of these stages and what specifically has the company done – and precisely when – to resolve the issues?
f. How many pipeline inspection points did BP or its contractors re-inspect after concerns were raised about the program?
g. How many of those inspection points were found to be troublesome after initial inspections had shown they were not?
h. Is it possible that unqualified inspectors/faulty inspections contributed to the two pipeline leaks in 2006 and/or other weaknesses in the pipeline system? If not, how can we be sure?
i. Why did BP negotiate a settlement with Marty Anderson directly if he was employed by a contractor, Acuren?
j. According to letters from Billie Garde, Marty Anderson has had difficulty finding employment on the North Slope – either with BP or its contractors. Has BP discouraged its contractors from employing Marty Anderson? Why did Marty Anderson perform less work for BP in the years after his QA assessment than he did before?
k. Does BP management have concerns about Marty Anderson’s qualifications or the quality of his work?
38. Last November there was a spill at the Lisburn production facility after a pipeline had become clogged with ice.
a. Before that spill did BP management receive a letter from an employee at that facility detailing 14 specific concerns about maintenance and the risk of an accident there?
b. If yes, how did the company immediately respond to those issues, and how did they affect or not affect the spill that took place?
c. Would resolution of the issues raised have prevented the spill?
d. According to BP managers we have spoken with, the Lisburn facility was not given the budget and resources to maintain the facility to an acceptable and safe standard in their view. How do you explain/respond to that concern?
39. Regarding fire and gas detection equipment upgrades, I understand that BP invests roughly $50 million a year in improvements to this system. How long will it take to complete all of the upgrades?
a. Why have these upgrades not been made faster, and sooner, given their critical safety function?
b. One analyst estimates it will cost BP $1 billion and take 10 more years to complete the system upgrades – if that is the case, will the upgrades ever be completed?
40. Are maintenance issues on the North Slope in general outpacing the company’s ability to attend to them and pay for them?
a. If not, why should it take nearly 20 years to upgrade systems like fire and gas detection systems that were identified as critical in 2001?
41. Did BPXA ever expect its Prudhoe Bay facilities to still be operating in 2010? What were the company’s initial expectations for the life of the field and How did the company’s initial planning for the lifespan of the facilities there affect their condition and the extensive maintenance backlogs today?
42. In general there have been a number of very close calls in the past two years – at Lisburn, on the high pressure gas lines, at the compressor stations. The close calls have alarmed members of Congress and led to numerous BP workers expressing fears that their workplace is not as safe as it should be, and that a catastrophic accident in Alaska is inevitable. Many of their concerns echo those raised in Texas City in the years before the explosion there in 2005 – that workers feared reporting for duty, that not enough is being invested in maintenance of all sorts, that even with expanded maintenance investment in the last few years it has not been enough.
a. Are BP facilities on Alaska’s North Slope a safe place to work?
b. Are these facilities being adequately maintained, and kept as safe as they could be?
c. How confident is BPXA management that the next close call will not result in worker deaths?
d. According to a 2007 survey the majority of workers feel that BP is not looking out for their safety despite great attention to what they describe as “slips, trips, and falls”. Why has this perception persisted and what does it mean to BP?
43. How has investment in maintenance changed in recent years – in terms of specific amounts, budgets and programs?
a. Understanding that generally investment in maintenance has increased, has it been enough to outpace the rate of decline of the old facilities there?
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BP’s Response:
Please use this statement. You can attribute it to BP or a BP spokesperson.
Do you still plan to broadcast on the 26th?
STATEMENT
Bob Dudley, BP's new Group Chief Executive Officer, recently announced significant changes designed to strengthen safety and risk management at BP. These changes include the creation of a new safety division, reporting directly to the CEO, with sweeping powers to oversee and audit the company's operations around the world. The new Safety and Operational Risk function will have the authority to intervene in all aspects of BP's technical activities, will have its own expert staff embedded in BP's operating units, and will be responsible for ensuring that all operations are carried out in accordance with common standards.
The changes announced also include a substantial restructuring of BP's upstream business segment from a single business into three functional divisions -- Exploration, Development, and Production -- each of which will report directly to the CEO. With this restructuring, Mr. Dudley made significant leadership changes, including appointing new leaders for each of the Upstream divisions. Finally, Mr. Dudley announced that BP will review and reform key aspects of its business operations, including its compensation structure and oversight over third-party contractors, with the aim of encouraging excellence in safety and risk management.
The tragedy of the Deepwater Horizon should not obscure the substantial progress BP has made in recent years to improve safety and operational integrity within the company. At the same time, however, we are not content with this progress. BP and its new leadership are looking carefully at all aspects of BP's business to identify ways to improve further, including through a reorganization that will alter the manner in which rigorous safety standards are applied within the company.
