November 2, 2006 | Mark Paradies

Maintenance at Texas City

I know Mark has already made his stance known on the BP refinery disaster (I refuse to call it an “accident”). As I read the report, one thing came through loud and clear:

Costs were cut in maintenance and infrastructure upgrades to save money at the expense of all else:
“BP implemented a 25% cut on fixed costs from 1998 to 2000 that adversely impacted maintenance expenditures and infrastructure at the refinery,” (the CSB Chairman) said. Maintenance spending fell throughout the 1990’s at the then-Amoco refinery, and following the merger with BP further cuts were imposed…“Large majorities of the survey respondents reported significant maintenance backlogs that were harming safety. Disturbingly, most employees agreed that production and budget compliance gets recognized and rewarded before anything else at Texas City.’”

These costs were cut by the original owners (they were getting ready to sell, why put money into maintenance and upgrades?), and then continued by the new management (even though they must have known what was going on). I don’t know their rationalization at this point, but you don’t need 20/20 hindsight or sophisticated root cause analysis to see what the results of this kind of budget control will do to an older facility.

Unfortunately, many of us face these same decisions every day. Many of us work at aging facilities, with older and outdated equipment. Do I let the old gear operate poorly, do I conduct extensive repairs to the equipment, or do I decide to invest in new, modern, up-to-date technology? This is not always an easy call. How do I make this decision?

First of all, you must be able to make a business case for whichever decision you make. You must compare the cost of maintaining the status quo to the costs and savings possible with the anticipated upgrade. The costs include unanticipated downtime, spare parts that may no longer be available, maintenance department salaries and overtime, excessive power usage, etc. The benefits can be ease of operation, safer equipment, less required preventive and corrective maintenance, energy efficiency, fewer environmental concerns, etc.

But this business case must include more than just dollars. Safety and risk mitigation must be included in the decision. No matter how much money you think you will save, if you are putting your workers at risk, that is the new bottom line.

And it is not just upper management who has the responsibility here. Although they may have the ultimate responsibility on paper, it is the front-line supervisors that can and must make the difference. Being told to just suck it up is NOT acceptable when equipment has deteriorated to the point that safe operation is a roll of the dice. You must stand up and be heard, more than once if that’s what it takes. You guys know the real conditions at your facilities, and you cannot accept dangerous conditions.

I am not so naive that I think this is easy. But I am enough of a realist to know that it CAN AND MUST BE DONE.

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