Tag Archives: eco

A Year After the BP Oil Spill- a Slow Recovery, Continued Risk Management Challenges

25 Apr

A year ago last week, and for months afterward, we were bombarded with horrible images of potentially catastrophic proportions.  The Gulf Coast was under siege from the Deepwater Horizon blowout and resultant spill.  Dead or dying waterfowl and sea life haunted our dreams.  Tourists scooped up tar balls from Gulf Shores, Alabama to Pensacola, Florida.  Round the clock news coverage of the economic devastation was heaped unexpectedly on the gulf coast.   Cleanup crews deployed nearly useless 20th century solutions to a 21st century problem.  Hapless oil executives spun their stories and federal government agencies did too little, too late.  And the problem kept growing while the oil kept spewing from the blown out well, miles below the surface.

Risk Control Lacking

Just after the spill occurred, I wrote a piece on the lack of risk management protocols  and oversight that matched the nature of the work and how it was inevitable that this type of event would occur.

“I have no doubt that there has been a central breakdown in process risk management, commonly used by organizations to establish procedures to safely manage the greatest of uncertainties of its daily operations.  This means that if a company is going to drill a mile under the Gulf of Mexico, they should FIRST make certain that all possible failure scenarios are identified, evaluated, tested and implemented, before that first barrel of oil is extracted…While it’s vital that 24 hour protocols be applied to day-to-day activities that may be a threat to environmental well-being, unforeseeable events involving human error or equipment failure must be managed too… inadequate steps have been put in place to 1) evaluate “worst case” impacts associated with catastrophic failures of equipment or systems; 2) establish policies and program to mitigate short and long-term environmental risk factors and 3) assure that there are financial cushions (cleanup and reclamation bonds, for instance) that continue to hold those liable before they can run or hide.”

Spring turned to summer and finally on July 15, 2010 the leak was stopped after it had released about 4,900,000 barrels of crude oil, the well was capped.  But the troubles were far from over and as I reported shortly before the well was finally capped, recovery takes time. When writing about the possibilities of a rebounding gulf coast (both ecologically and economically), I spoke of resiliency, the “structural issues” that appeared in the oil exploration, approval and development process, and the steps needed to nurture a full recovery.

The current, devastating Deepwater Horizon oil spill and ecological crisis in the Gulf of Mexico presents a great set of uncertainties and human-induced risks not realized before in terms of scope and magnitude…Ecosystems are dynamic and ever-changing.  This changing dynamic flow continues its natural cycles and fluctuations at the same time that it continues to recovery from impacts of spilled oil.  As time passes, separating natural changes from oil spill related impacts becomes harder to distinguish.  So time will tell, and after the well is finally plugged (and it will be plugged) and the last drop of oil spills, the long term ecological “rebound” will begin.

Then the fingers started pointing, lawyers got involved, congressional testimony began and yielded few results.  Few companies claimed immediate responsibility nor were they held accountable.  BP said that they would pay “all legitimate claims”.  But that promise seemed hollow to those immediately affected, and the restitution payments flowed like the oil drifting on the surface of the gulf waters.  The status of claims paid can be found in this interview with U.S. Claims Administrator Ken Feinberg, but in a nutshell roughly 25% of the $20 billion set aside by BP has been paid out.

Government Call for Better Risk Management

On January 5, 2011, White House National Commission convened to review the oil spill released a final report detailing faults by the companies that led to the spill.  The report noted that “Better management of decision-making processes” within BP, Halliburton and Transocean (the three key players in this ordeal), “better communication within and between BP and its contractors” and “effective training of key engineering and rig personnel” would have prevented the blowout.  The panel also noted a key breakdown in communicating with government agencies, which did not have “sufficient knowledge or authority to notice these cost-cutting decisions”.

The record shows that without effective government oversight, the offshore oil and gas industry will not adequately reduce the risk of accidents, nor prepare effectively to respond in emergencies. However, government oversight, alone, cannot reduce those risks to the full extent possible. Government oversight … must be accompanied by the oil and gas industry’s internal reinvention: sweeping reforms that accomplish no less than a fundamental transformation of its safety culture. Only through such a demonstrated transformation will industry—in the aftermath of the Deepwater Horizon disaster—truly earn the privilege of access to the nation’s energy resources located on federal properties.

Economy and Ecology- Rebounding…Slowly

Flashing forward to this last week, on the economic side, only seven of the 34 deep water rigs operating at the time of the explosion are in operation (due to the moratorium that was put in place by the Obama Administration last year).  Following the sunset of that moratorium last fall, it’s been reported that off shore production may ramp up to about 15 or 20 by the end of the year, meaning the addition of the thousands of oil industry and related service jobs that have been lost since the spill.  A Wall Street Journal article last week highlighted the struggles that small businesses (small marinas, seafood restaurants, commercial fish operations etc) have had in the past year.

A BBC report last week noted that “scientists have warned that it is too soon to attempt to offer a considered assessment on what impact the Deepwater Horizon oil spill, the largest of its kind, has had on the Gulf of Mexico’s wildlife.   In short, they said, nature did not work in such a way that the full picture will present itself within just one year.  It’s clear that given the rate of recovery from the Exxon Valdez spill over 20 years ago that more data will be needed in the years ahead to assess the full extent of the ecological damage done.

But Dr. Jane Lubchenco (Administrator at the National Oceanic and Atmospheric) believed that reports of systems recovery suggest that the health of the Gulf is “much better than people feared”, but the jury was out about what the end result would be.  According to some reports, signs 60 pounds of tar balls still wash ashore daily along the 33-mile stretch of beach that runs near the Interstate 65 corridor near Orange Beach, Ala..  Meantime, one thing I can tell you is that Louisiana Governor Bobby Jindal was plugging gulf coast seafood big time last week on National Public Radio and elsewhere.

Not Out of the Woods, More Work Needed

Progress toward requiring safer drilling, protecting natural resources and compensating victims has been uneven at best.  As reported in an Op-Ed last week, “Without the reforms fully in place, the administration is plunging ahead despite the well-documented inability of industry and government to prevent accidents in deep water. For starters, the federal government needs a better understanding of how operating rigs under the intense pressure of deep water can cause blowout preventers — the so-called last lines of defense — and other critical equipment to fail…. There also should be a more complete picture of whether rig operators have the assets — people, vessels, know-how, and money— to respond to a spill.”

The Op-ed also stated “The Federal government needs a better sense of the risks of offshore drilling and a better process for sharing that analysis with other agencies — the Coast Guard, the National Oceanic and Atmospheric Administration, the Environmental Protection Agency — that play a key role in any emergency response.”  For instance,  the newly created Bureau of Ocean Energy Management has added only 4 new inspectors (now at 60) to cover more than 3,500 drill rigs and platforms in the Gulf.  New monies allocated by Congress may alleviate that serious oversight deficiency, but it will take time, training and education to get new inspectors up to speed.  Meanwhile, inspection and oversight is spread too thin and the oil industry appears to be in no rush to help fund additional inspectors (especially at the same pace they are lobbying at to get more drill rigs operating again in the Gulf).

Photo by alancleaver_2000. (via Creative Commons license)

In the second post on risk that I published last year after the gulf spill, I noted that a continuous risk management process helps organizations understand, manage, and communicate risk and avoid potential catastrophic conditions that can lead to loss of life, property and the environment.  I laid out a typical six-step process to achieve effective risk management and failure mode control.  I also noted ”What will be … fascinating will be the lessons learned and if businesses truly embrace risk management planning and implementation as a central function of business, take it seriously and hold themselves accountable.”

Last week, Bob Dudley the Chief Executive of BP, wrote an opinion letter in the Wall Street Journal.  In the piece, Mr. Dudley indicated that the company was “creating a central safety and operational-risk organization reporting directly to me. This organization has the mandate and resources to drive safe, reliable operations that comply with regulations, and it has the authority to intervene in our operations anywhere in the world. We are also linking the management of employees’ performance and reward directly to safety and to compliance with BP’s standards….We will not use rigs on our projects that do not conform to our standards. We have either turned away rigs or are negotiating for modifications to particular rigs that will bring them up to our standards.”  Dudley also noted that “… around 7% of the world’s oil supplies are coming from the deep water, a total we expect will rise to nearly 10% by the end of this decade. That means we must have better safety technology, more effective equipment and the capability to deal with a blowout in the deep water.”

Summary

The National Commission on the spill and members of industry, academia and Congress have made solid “suggestions” for beefing up the regulatory framework for oil exploration and drilling, including: tougher inspections; higher fees from industry to self-fund more policing programs; greater financial liability for companies that spill into waterways as a means to encourage responsible behavior and to cover accident cleanup and recovery costs.

It appears, looking back, that industry and government have moved in the right direction to address the systemic problems that emerged from the Deepwater Horizon spill and follow-up investigations.  But as the current status clearly shows, I’ve grave concerns about on-going performance and genuine progress in adopting genuine, effective risk management tools, oversight and governance. Until there is 100% assurance that such a system is fully in place, fully staffed, fully operational and with full oversight assurance, I am fearful of a repeat…whether it’s in deep water or in other harsh environments, such as the Arctic.

Meanwhile it’s vital that the U.S. continue expanding the search for alternative forms of land-based fuel and energy and support the funding of alternative, cleaner fuels and greener technologies.

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Observations about the Environment, Sustainability & Rosh Hashanah (the Jewish New Year)

8 Sep

Recently, after 53 years on this planet, I chose to officially sanctify my Jewish journey by becoming a Bar Mitzvah.  I had to this point been what I have called a “gastronomic Jew”.  While I have been deeply committed to my Jewish heritage, culture and culinary virtues all these years, I have been largely devoid of religious “calories”.  This path that I chose this year is unique for me as it is for all Jews.  As a scientist, I have had to face the many conflicts between the real and the imagined, the science and the mystical nature of religion and have yet to reach any final conclusions.

But what I have been able to reconcile through this process is a deeper appreciation of the interconnectedness between what I do professionally (as an environmental management consultant and trainer) and with what the Torah and Jewish scholars teach us about environmentalism.  Many Talmudic themes center around the concept of “sustainability”.  For instance, calls to manage resources wisely, to limit conspicuous consumption, provide for and between generations, are common threads weaved throughout Jewish thought.   For 5771 years, Jews have heeded the biblical call “to till and to tend” the earth.  Here in the U.S., the Coalition on the Environment and Jewish Life (COEJL) has helped tens of thousands of Jews make a connection between Judaism and the environment.  There are even green tips to have an ‘eco-kosher’ New Year.

Just as John Muir did when he walked the floor of Yosemite Valley, perhaps I too have discovered that “finding God in nature” can be a deeply Jewish experience.  My mission then, is to bring the concept of tikkun olam (repairing the world) by helping to foster the ancient tradition of respecting (and repairing) the environment in which we live- not only in my neighborhood, but in the business community.  I  continue to hope that you will all join me on that quest.

Thanks and deep love to my wife (who encouraged and continues to inspire me), my children (who motivate me, support my work and cheer me on), and to my close family, friends and business colleagues that have carried and shared this merging of sustainability and religious choice, on both a personal and professional scale.   As in life and professionally, it takes many wings to fly- so, why should religion and sustainable living be any different?  It DOES take a community. 

L’Shana Tova Umetukah ([a] good and sweet year)!

Risky Business: Why Better Risk Management Can Protect Lives & the Environment- Part 1

3 May

As noted by Jonathan Hiskes from Grist.org the other day, in the aftermath of the 40th anniversary of Earth Day, it was a hard week and month for the planet.  Hiskes remarked that there was a “confluence of terrible, horrible, no-good, very-bad events, rounding up what has to be the most disheartening “Earth Month” ever, “brought to you by the fossil-fuel industry” (http://bit.ly/dgFrBa).  There is no doubt that mining of coal, deep water extraction of oil reserves in the Gulf, and even off-shore wind development have had their dark days or have met with stiff resistance.  Risky operations can have “unintended consequences”, and that is just fine so long as adequate protective measures are in place…and followed.

There are plenty of places to read more about these unfortunate and potentially devastating events.  Blame has been thrown in all directions.  I myself have been quite vocal in recent weeks about the potentially complicit nature of Massey Coals (mis) management which may have led to the unnecessary deaths of the two dozen West Virginia miners last month.  Each safety or environmental accident may in its own right be a “game changer”.  The great political sage, Daniel Schoor ( National Public Radio), in discussing the wealth of political issues facing Washington politicians this year, asked earlier in the week, “What price energy? “(On Hill, Toughest Debate Is Often What to Do First  http://n.pr/aqNR2g)   Is it forty miners and roughnecks dead, or countless soldiers protecting oil “interests” in far away wars?

There are more examples.    A slower “unintended consequence” of the housing boom (and bust) is the unchecked soil erosion from abandoned construction sites and impacted water quality.  Pick any corner of the country and there are mini-Grand Canyons popping up from on-going runoff problems at construction sites that are in foreclosure or bankruptcy. In California, where I advised on construction site soil and storm-water management, laws and protections were put in place to address these issues.  Yet enforcement and cost recovery continues to be weak and require constant vigilance and draining of already thin public resources.  States or local jurisdictions, or the banks holding the properties in foreclosure have been left to take care of these orphaned properties.

Who Loses When Risk is Not Managed?

I have no doubt that there has been a central breakdown in process risk management, commonly used by organizations to establish procedures to safely manage the greatest of uncertainties of its daily operations.  This means that if a company is going to drill a mile under the Gulf of Mexico, they should FIRST make certain that all possible failure scenarios are identified, evaluated, tested and implemented, before that first barrel of oil is extracted (see a recent guest post on Solve Climate entitled“ A Dangerous Life Miles from Land and Focused on One Thing: Black Gold”  at http://bit.ly/aC1TkK and 2003 oil industry report that warned blowout preventer problems weren’t being fixed  http://bit.ly/bEBI05). While it’s vital that 24 hour protocols be applied to day-to-day activities that may be a threat to environmental well-being, unforeseeable events involving human error or equipment failure must be managed too.

In each of the recent events, inadequate steps have been put in place to 1) evaluate “worst case” impacts associated with catastrophic failures of equipment or systems; 2) establish policies and program to mitigate short and long term environmental risk factors and 3) assure that there are financial cushions (cleanup and reclamation bonds, for instance) that continue to hold those liable before they can run or hide.

My experience with risk management suggests that organizations take four approaches for “handling” a risk:

  • Control – lower the probability of the risk event occurrence.
  • Avoid – eliminate the opportunity for the risk to occur.
  • Assume – acknowledge a future risk event & accept the potential consequences without efforts to control it.
  • Transfer – reduce the risk exposure by reallocating the risk from one part of the system to another part.

It would seem that despite BP’s, Massey’s or other company’s claims to know their own business, they employed short-sighted risk management, ignoring possible “unintended consequences”, dropping their eyes on the ball and leading to the resultant safety and environmental impacts.  I would not say this if this was a one-time situation.  But in both  company’s cases, repeated safety and environmental violations over the years (and many deadly and environmentally catastrophic  accidents) suggest just this.

Non-routine accidents or incidents in dangerous working conditions (whether a mile under a mountain or under the sea) must be thoroughly re-evaluated. Risk management processes must revisited now to further lower or eliminate worker safety and environment damages.  Anything less creates unacceptable risk.

In my next post I will describe what process risk management is all about (see below) and what organizations can do to analyze, assess and plan for that “unintended consequence”.