At the same time that BP was neglecting corrosion, Hamel, the Virginia-based watchdog, brought new complaints that workers on a BP-contracted rig on the North Slope were faking tests of blowout prevention devices. The allegations prompted a 2005 investigation by the Alaska Oil and Gas Conservation Commission, a state agency that regulates drilling.
The agency didn't find the widespread violations Hamel alleged, but substantiated two instances of "chart spinning" by employees of Nabors Alaska Drilling. The agency said Nabors workers cheated on the five-minute test of how well the blowout prevention equipment retains pressure, running it for two minutes or less. But they made it appear like the full five minutes by manually moving the paper chart that records the results.
Nabors was assessed $10,000 but not further penalized because the commission said no environmental harm was caused and the violations were "isolated." A spokeswoman for the agency said earlier this week that BP was not implicated in the investigation of its contractor.
Failure of the blowout protection system is suspected in the Deepwater Horizon disaster.
PROFITS, BUT INVESTERS CAUTIOUS
In its report on the 2005 refinery explosion in Texas, the U.S. Chemical Safety and Hazard Investigation Board criticized "organizational and safety deficiencies at all levels of the BP Corporation," and said management failures could be traced from Texas to London.
The first explosion occurred when a geyser of flammable liquid erupted from a blowdown stack, a kind of chimney. The board described the blowdown stack as antiquated equipment of unsafe design originally installed in the 1950s.
"Warning signs of a possible disaster were present for several years, but company officials did not intervene effectively to prevent it," the board said. Echoing the problems found in Alaska by other agencies and Congress, the board wrote, "Cost-cutting, failure to invest, and production pressures from BP Group executive managers impaired process safety performance at Texas City."
BP pleaded guilty to a felony violation of the Clean Air Act on March 12, 2009, was fined $50 million and sentenced to three years probation. Seven months later, a reinspection by the Occupational Health and Safety Administration found 270 previous violations had not been fixed and 439 new violations. It assessed the largest fine in OSHA history, $87 million. BP is appealing that assessment.
After the 2005 explosion, BP officials said they created a panel to study safety practices at its site, increased staff responsible for safety and environmental issues and spent more than $1 billion on upgrades and repairs.
"They have worked hard to get themselves in a better position in all the refineries," Lynne Baker, a spokeswoman for United Steelworkers Union, has told the media.
A new chief executive, Tony Hayward, came on board in 2007 and made even more changes, hiring a management consulting firm and an analyst, among others, to identify needed changes. The company has spent millions of dollars on TV ads talking about how the company is a pioneer for efforts to move "beyond petroleum."
"BP made improvements, but has also run afoul of (OSHA) repeatedly in the time after the explosion," said Ed Sills, a spokesman for the Austin-based Texas AFL-CIO.
In Alaska, Kevin Banks, the head of state's oil and gas division, said BP is also making improvements on the North Slope as a result of more intense government regulation but still has to prove the fixes aren't temporary.
"It gives us reasons to say that BP has improved to a certain extent in the last three years, and it has some ways to go yet," he said.
Brent Coon, a Beaumont, Tex., attorney who represented workers and residents in the 2005 refinery explosion and is already getting clients over the Gulf spill, said BP's profit-driven culture will make it difficult to change.
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