BP well disaster stuns hardened oil men
Steve Farris, Chairman and Chief Executive Officer of Apache Corporation, addresses the Reuters Energy Summit in Houston June 4, 2009.
Credit: Reuters/Richard Carson
HOUSTON |
HOUSTON (Reuters) - Hardened U.S. oil men might be able to do deals in dangerous parts of the world and stay cool under perennial political fire, but the gravity of the Gulf of Mexico disaster has left some of them feeling shell-shocked.
Apache Corp (APA.N) CEO Steve Farris, a senior executive at the company for two decades, said he does his best to remain calm and keep the gushing well in perspective. But the first thing he does when he wakes at 5 a.m. is seek out the latest news developments.
"It has a psychological effect not only on America, but our industry, and you try to overcome that," Farris told the Reuters Global Energy Summit in Houston this week.
On top of the environmental catastrophe, the loss of 11 lives in last month's Deepwater Horizon explosion has left a deep emotional impact on the close-knit drilling community.
Apart from the possibility that it could happen to one of their own rigs, executives worry about the pall BP Plc's (BP.L) blown-out well has cast over a deepwater drilling sector that once had a persistently sunny outlook.
Black & Veatch Chief Executive Len Rodman, whose company does engineering for energy projects, said huge tragedies have changed the trajectory of the energy business before, such as the partial core meltdown in a unit at Pennsylvania's Three Mile Island nuclear power plant in 1979.
"That disaster literally put a stop to nuclear power in the U.S.," Rodman said at the summit. "I'm not sure Three Mile Island was as big as what has happened (in the Gulf)."
"What I worry about as an energy CEO is what effect this will have on energy policy," he said, noting it may lead people to look more seriously at electric cars, or complicate plans to pump carbon underground. "This BP thing has tentacles."
Along with the public at large, industry players were crossing their fingers on Thursday in hopes the latest attempt to plug the well would be successful.
Dave Roberts, head of worldwide upstream operations at Marathon Oil Corp (MRO.N), spoke frankly about everything that went wrong and the looming political fallout.
"These things just shouldn't happen," Roberts said, citing the industry's obligation to keep equipment working and its people safe. "On this particular incident, the industry has failed that obligation, and we're obviously very concerned about it."
Even energy lobbyists are changing their tack. Catherine Reheis-Boyd, president of the Western States Petroleum Association, readily conceded at a debate in San Francisco last week that what happened with the Horizon was a "game-changer."
(Reporting by Braden Reddall; editing by Gunna Dickson)
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It must also be pointed out that not all of the blame lies with management. Big corporations don’t get big without support from customers. There are no record profits unless the companies can sell their products. So much of the blame for many of the incidents should be shouldered by the consumers.
Constructive criticism should always be welcomed and considered, but pointing fingers and expecting large corporations or the government to always fix things is to deny personal responsibility each of us holds during these events. While we, as consumers complain about the high price of goods and services, in this case petroleum products, we need to ask ourselves what we are actually doing to help.
It is certainly hypocritical for us to pass all of the blame, when part of it is ours. So, what can we do? We can take baby steps and use a little less product. It was the constant use by many people that drove prices up according to basic laws of economics. Shortage of products creates demand. Shortage is the mechanism of supply and demand. So drive a little less by combining trips; use reusable bags during shopping trips; use a bicycle to commute occasionally; put trash where it belongs instead of using the ground as a dump which requires more labor and fuel to collect. These actions are small, but multiplied by the population of the US or the world makes a difference.
As for me, I just bought a bicycle to make short trips to the store, library, etc. Many people have bikes, but it becomes a status symbol where the clothes are the prettiest, and the act becomes snob appeal. It’s time we put that natural energy source to work.
Once we have cleaned up our own act by getting up off our butts and doing something to help, then the complaining carries more weight.
A CEO doesn’t know what’s going on every second in terms of the workers and bad judgement calls further down the chain of command that aren’t relayed back up every second.
There is some blame to put here of course. Within the BP structure as well, but sadly the more I read and learn about what most likely happened, the CEO wasn’t/couldn’t be aware of the bungle of the day to day operation.
I think what will become more of a focus down the road will be the workers whom had knowledge in the weeks leading up to this event – about the shredded rubber from the seal that an operator had caused by negligence.
CBS news had an interview with one of the survivors and he hand recounted before the explosion – that an operator had through human error, caused mechanics to basically shred a rubber seal.
This was most likely hid from the higher ups including the CEO to save jobs within the company from the company, which makes this all the more depressing when it comes to the industry.
Some basic questions will have to be asked.
Did we stop flying all planes when one pilot was found to be drunk?
Does any airline condone that ethical practice?
Does any employee that engages in that act, after the fact inform his higher ups out of moral obligation if not caught?
If that kind of act kills people or causes a lot of damage, do we scrap airplanes?
That kind of relation to put this in perspective shows how one person can damage an entire process/industry.
Sometimes in “a domino effect” the first domino isn’t always the one on top, but one that was over looked.
What a mess.
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