March 20, 2007 |

Was Cost Cutting a Root Cause of the BP Texas City Explosion? This Will Be the Major Controversy of CSB Report According UK Press

Since I’m over in the UK teaching I can’t get to the public meeting on the BP Texas City explosion being held by the CSB today. But I’m trying to keep up on the news. In the UK, the controversy seems to be over the findings of cost cutting that, according to the press reports about what the CSB has found, are root causes of the explosion at the refinery.

For a sample of a press report in the UK, see:

http://observer.guardian.co.uk/business/story/0,,2031053,00.html
Here are a few of the key quotes from the story …

The CSB says it has evidence in emails and other documents of budgetary considerations taking precedence over investment.

Merritt says that internal and external reports between 2002 and 2005 pointed to problems: ‘There was a complete failure to listen to the evidence that they were hearing: that this facility had been squeezed to the breaking point. That was received from their managers as well as from surveys by consultants.

CSB has emails indicating Texas City managers turned down requests for funding, claims Merritt. ‘We know that pleas from the plant managers were dealt with by instructions to continue cost cutting,’ she says. One such came from Walter Wundrow, a refinery investment manager, who refused an engineer’s request to install a flare, instructing him to ‘bank $150m savings’.

Merritt says there is an ‘iron-clad’ case of a causal link between cost savings and the accident. However, she emphasises that much had been done since the explosion. ‘There are huge changes going on in Texas City and a great deal of determination and effort to put things straight. But real culture change is very difficult.’

I’m sure that by the time I wake up in the UK tomorrow, there will be a report posted on the CSB web site that I will need to read to see the totality of the evidence that the CSB has been collecting.

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