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NEWS | Vol. 29, No. 5, June 3, 2010
(2010 Power List)

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BP & The Three Little Pigs

by Rick Outzen

IN Uncovers Damning Memo From BP

Did BP do everything it could to prevent the explosion at Deepwater Horizon that killed 11 men on April 20 and created leaks that have been spewing millions of gallons of crude oil into the Gulf of Mexico for the past six weeks?

Maybe not.

Take the story of BP and the "Three Little Pigs." In March 2005, BP's Texas City Refinery caught fire. The explosion killed 15 workers, injured 170 plant employees and residents of nearby neighborhoods, and rocked buildings 10 miles away. Most of those who died were in trailers next to the isomerization unit, which boosts octane in gasoline, when it blew up.

Attorney Brent Coon represented families of the workers killed and discovered internal BP documents that showed the oil giant had chosen to use trailers rather than brick or more blast resistant structures and thereby saved money at the refinery.

"We found internal BP memos where officials argued that the trailers were safer because they said the trailers would roll over during a blast," Coon told the IN.


To help illustrate the cost/benefit analysis that he believes BP used to choose the less expensive buildings, Coon developed the "Three Little Pigs" analogy.

"We would ask the witnesses during depositions about the trailers. Whenever we used The Three Little Pigs' tale to describe the risks associated with the trailers versus brick and other structures, BP's attorneys objected."

Then Coon received another set of documents through discovery.

"Right there we found a presentation on the decision to buy the trailers that showed BP using The Three Pigs' fairy tale to describe the costs associated with the four options," Coon said. "I thought, You've got to be f_____g kidding me.' They even had drawings of three pigs on the report."

BP had analyzed four structures determining the cost of the buildings and the cost of lives that could be lost. The trailers were at the bottom, costing 100 times less than the safer blast resistant buildings that are typically all-welded steel structures that can be ordered online and delivered pre-fabricated to a site.

At Texas City, all of the fatalities and many of the serious injuries occurred in or around the nine contractor trailers that were sited near process areas and as close as 40 yards from the isom unit, which contained large quantities of flammable hydrocarbons and had a history of releases, fires and other safety incidents.

Workers in adjacent units were injured in trailers as far as 480 feet from the isom  blowdown drum. A number of trailers as far as two football fields away from the blowdown drum were heavily damaged.

"BP set the cost of claim for a lost life at $10 million," said Coon, "and determined it would be more cost effective to use the least expensive trailers and possibly lose a few workers than spend more money on the blast resistant structures."

The IN asked BP about the document. After several phone calls, Scott Dean, BP spokesman, responded. Dean said he was aware of the "Three Little Pigs" documents.

"Those documents are several years old," Dean said. "We have fundamentally changed the culture of BP since the Texas City Refinery accident. We have invested $1 billion into upgrading that refinery and continue to improve our safety worldwide."

The Texas City Refinery explosion resulted in more than 3,000 lawsuits, including Coon's, and out-of-court settlements totaling $1.6 billion. BP was also convicted of a felony violation of the Clean Air Act, fined $50 million and sentenced to three years probation.

Last year, the Occupational Safety and Health Administration levied the largest monetary penalty in its history -- $87 million -- for "failing to correct safety problems identified after a 2005 explosion that killed 15 workers at its Texas City, Tex. refinery."


Does "The Three Little Pigs" decision matrix apply to the Deepwater Horizon tragedy?  

We know that the well lacked the remote controlled, acoustical valve that experts believe would have shut off the well when the blowout protector failed. The acoustic trigger costs about $500,000.

Officials along the Gulf Coast have questioned whether BP has tried to cut corners on the containment of the oil.

At a council meeting on May 24, Pensacola Councilman Larry Johnson grilled BP Civic Affairs Director Liz Castro about why her company didn't use Super Tankers to assist with oil recovery.

Johnson talked about how Super Tankers were used to successfully clean similarly sized spills of crude in the Arabian Gulf off of Saudi Arabia in the 1990s.

"These tankers saved the environment and recovered approximately 85 percent of the crude oil," Johnson said. "I think BP didn't bring the tankers in here because it was more profitable to use them to transport oil."

Eventually, Johnson and his fellow councilmembers refused to listen to any more of Castro's presentation until she came back with people who could answer the technical questions.

While BP has repeatedly stated that it takes responsibility for responding to the spill and will pay all necessary and appropriate cleanup costs, BP has yet to fork over sufficient funds to deal with this disaster.

The Florida Congressional delegation has repeatedly asked BP to place $1 billion in an escrow account to reimburse states and counties for their cleanup costs. Instead, the states initially received $25 million in block grants. Later, an additional $70 million was forked over to help with advertising campaigns.

On Monday, May 24, BP announced that $500 million over the course of 10 years would be given to fund a research project analyzing the impact of the oil disaster on marine life. One would think the Exxon Valdez incident would have provided sufficient information over the past 20 years.

While BP continues to tell the public it is delivering the "brick house" plan to stop the leak, contain the spill and clean up the shore, what we receive repeatedly are empty promises and plans made of straw.