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Drowning in Oil: BP & the Reckless Pursuit of Profit
 
 

Drowning in Oil: BP & the Reckless Pursuit of Profit [Kindle Edition]

Loren C. Steffy
4.0 out of 5 stars  See all reviews (2 customer reviews)

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Review

A well-researched, clearly stated reminder of what actually happened. --Bloomberg BusinessWeek, January 2011

A blueprint for a better form of capitalism. --Irish Times, 17 January 2011

With colourful first-hand accounts... Steffy presents a damning picture of a corporation that compromised safety for corporate greed.
--Irish Times, November 29, 2010

Product Description

  They fumbled around the darkened room and found an instruction manual.  By flashlight, they read the starting procedures. They were doing everything right. After five or six futile tries, they gave up and headed back toward the bridge. Back on the bridge, alarms were shrieking and the captain knew they were running out of time. The subsea engineer had hit the emergency disconnect for the well, and although the control panel showed the rig should be free, it wasn't. The hydraulics were dead. Fire continued to shoot from the top of the derrick. The rig had no power,and without power, it had no pumps for the firefighting equipment, no way to shut off the flow of gas from the well, and no way to disconnect the rig from the flaming umbilical that had it tethered to the wellhead. -- From  Drowning in Oil As night settled on April 20, 2010, a series of explosions rocked Deepwater Horizon, the immense semisubmersible drilling platform leased by British Petroleum, located 40 miles off the Louisiana coast. The ensuing inferno claimed 11 lives, and it would rage uncontained for two days, until its wreckage sank to a final resting place nearly a mile beneath the waves. On the ocean floor, the unit's wellhead erupted. Over the next ten weeks, as repeated attempts to cap the geyser failed, an estimated 200 million gallons of oil--the equivalent of 20 Exxon Valdez spills--spewed into the Gulf of Mexico, eventually lapping up on beaches as far away as Florida.  Drowning in Oil, by award-winning  Houston Chronicle business reporter and columnist Loren Steffy--considered by many to be the writer with the best access to the story--is an unprecedented and gripping narrative of this catastrophe and how BP's winner-take-all business culture made it all but inevitable. Through never-before-published interviews with BP executives and employees, environmental experts, and oil industry insiders, Steffy takes us behind the scenes of 100 years of BP corporate history. Beginning with the conglomerate's early gambits in the Middle East to itsrecent ascent among energy titans, Steff unearths the roots of the Gulf oil spill in the unwritten bargain between oil producers and consumers, whose insatiable appetites drive the search for new supplies faster, farther, and deeper. Beyond this, the Deepwater Horizon disaster took place after a history of cost cutting in pursuit of profits, particularly under the guidance of its two most recent ex-CEOs, John Browne and Anthony Hayward. Exhaustively researched and documented,  Drowning in Oil is the first in-depth examination of how a lack of corporate responsibility and government oversight led to the biggest offshore oil spill in U.S. history. It is an objective, nopunches--pulled account of the energy industry: its environmental impact and the intense competition among stakeholders in today's oil markets. This book puts all the pieces together, offering a definitive account of BP's pursuit of outsized profits as the industrial world awakens to the grim realities of Peak Oil.


Product details

  • Format: Kindle Edition
  • File Size: 513 KB
  • Print Length: 305 pages
  • Page Numbers Source ISBN: 0071760814
  • Simultaneous Device Usage: Up to 4 simultaneous devices, per publisher limits
  • Publisher: McGraw-Hill; 1 edition (5 Nov 2010)
  • Sold by: Amazon Media EU S.à r.l.
  • Language: English
  • ASIN: B004BKJB7I
  • Text-to-Speech: Enabled
  • X-Ray:
  • Average Customer Review: 4.0 out of 5 stars  See all reviews (2 customer reviews)
  • Amazon Bestsellers Rank: #329,295 Paid in Kindle Store (See Top 100 Paid in Kindle Store)
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Most Helpful Customer Reviews
10 of 10 people found the following review helpful
Format:Hardcover
This detailed examinaton of the events leading up to the Macondo blowout in the Gulf of Mexico in April 2010 is extremely well structured and argued. It is written in a style that grabs the reader's attention in the first few paragraphs and holds it for the succeeding 258 pages.

The author builds up a convincing picture of a major company, one of the fabled "Seven Sisters", which following privatisation by Mrs Thatcher acquired an ambitious and energetic CEO John Browne. Mr (now Lord) Browne expanded BP and its reserves by buying Amoco and Arco, two mid-level US companies, and embarking on ever more ambitious offshore exploration targets. Meanwhile, he improved profitability by instigating a massive, relentless and never-ending cost-reduction drive.

His mistake, however, was to make it clear - though without actually saying so - that cost-cutting trumped everything else including safety. As a result maintenance was slashed, skilled and experienced older engineers were fired, key technical expertise and activities were outsourced, safety issues were neglected - especially if money was involved. These were all steps for which the negative effects do not become fully apparent for some years, whereas the dollar savings are immediate.

Moreover, Browne's practice of grooming and broadening his bright young protégés by shifting them from job to job with only a few months or years in each meant that not only did they fail to pick up the necessary technical skills normally obtained through long hard grafting, but they didn't stick around long enough to suffer the problems their inexperience and incompetence often engendered.
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1 of 1 people found the following review helpful
5.0 out of 5 stars Investigative journalism at its finest 12 Mar 2011
By Dilbert
Format:Hardcover
I never thought that I was interested in the oil industry until I picked up this book. In telling the story of the events leading up to and following the Deepwater Horizon oil spill tragedy n April 2010, it steers a fine course between polemic and education, and is written in a journalistic style which ensures that the reader sticks with it to the end. Whilst there's no pretence of being a balanced and unbiased account, neither is the author blind to the political and commercial realities facing the partipipants. If you've any curiosity about how such an accident could have happened, and would like to be educated without being patronised or bored, buy this book now!
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Amazon.com: 4.4 out of 5 stars  19 reviews
14 of 15 people found the following review helpful
5.0 out of 5 stars Excellent background on the "Deepwater Horizon" blowout and a lot of the how and why 18 Dec 2010
By Charles Ashbacher - Published on Amazon.com
Format:Hardcover
When the British Petroleum (BP) drilling rig in the Gulf of Mexico exploded and spewed millions of gallons of oil into the ocean, I was with the majority of Americans in being angry with BP. The arrogance of the CEO and the recounting of the poor safety record of the company was retold many times and the sight of the oil washing up on the beaches and the animals coated with it were sickening. I was happy when the Obama administration reached an agreement with BP whereby the company would put $20 billion into a fund to compensate the victims at all levels. Finally, I was disgusted when a member of the U. S. House (Joe Barton) felt the need to publicly apologize to BP for what he described as a $20 billion shakedown.
All those emotions were revisited when I read this book and another was added, depression at the realization of how callous BP is in their cost cutting measures with little regard for safety. Steffy does a superb job in revisiting the history of BP and how for decades it was effectively controlled and owned by the British government. I was puzzled by the British reaction to the disaster and how BP was defended in the British press, but after reading the history of the company I understood it. Still hated it, but at least I understood why BP is so dear to the British public heart.
I also learned why it was absurd for congressman Barton to apologize for the Obama administration's treatment of BP. The company was happy to set aside $20 billion into a fund administered by the federal government, this program deflected a lot of criticism from BP to the government and helped insulate the company against what could have been much higher costs.
Finally, it was fascinating to learn how BP is regarded by the other major oil companies, in a word "despised." Their attitude is one of thinly disguised contempt for BP's ruthless cutting of costs, poor safety record, record fines for noncompliance and the universal company policy of blaming the victims. It is a commonly held belief among the other oil companies that BP's failures has created problems for the rest of the industry as well, which has a much better safety record.
While most of the events reported in this book have been published or reported before, this collection has been superbly done. Facts presented as part of a short story don't hit as hard or as deep as when they are all collected together and reinforce each other. This is an excellent background description of why this disaster was so likely to happen.
2 of 2 people found the following review helpful
4.0 out of 5 stars A Leadership Primer: What Happens When We ... 13 Mar 2011
By Ted Middelberg - Published on Amazon.com
Format:Kindle Edition
I was driving into the parking lot of a major oil company building west of Houston last week and looked up at the BP tower. Above it, lazily circling on the updrafts, were dozens of buzzards. What a symbolic image. At the fast-read level, this book provides a semi-objective look at the rise of BP under John Browne, how the seeds for the most recent safety catastrophe were sown in the culture and how his replacement, Tony Hayward, was not able to overcome that "Reckless Pursuit of Profit" culture.

The author, Loren Steffy, does a nice job of tapping into the multiple facets that, in combination, help us make sense of organizational behaviors. You will find wonderful anecdotes that link to each of the five core frames for gaining a comprehensive understanding of organizational actions: culture, politics, human resources, structure and systems.

At another level, this is a book about how the new CEO and the new head of the US operations of BP could not change the embedded culture because they did not understand all the elements of the system that supported their culture. I was reminded of a colleague, one with an extensive career in the petrochemical industry, who would say, "Culture eats change for lunch."

I found "Drowning in Oil" much more interesting when read as a primer on leadership-in-action. The scale of the events at BP make is all too easy to overlook the relevance for our own organizations, divisions, departments and teams. This book is not about one person making one bad decision. Rather, it is about the collective "What happens when we ..."
... measure results against singular and narrowly focused goals?
... deny or dismiss cause-effect relationships?
... dismiss inconvenient feedback from lower levels?
... get exactly what we design into our reward systems?
... place personal gain over the general interest?
... minimize downside risk?
... do not anticipate or scan for unintended consequences?
... employ fuzzy decision making criteria and create fuzzy lines of accountability?
... elect to scape-goat individuals rather than address the systemic issues?
... do not develop and promote leaders who are able to see the whole system?
2 of 2 people found the following review helpful
5.0 out of 5 stars An "Accident Waiting to Happen" 18 Feb 2011
By Loyd E. Eskildson - Published on Amazon.com
Format:Hardcover
Drowning in Oil" provides excellent background on the 2010 Deepwater Horizon disaster in the Gulf of Mexico, aka the Macondo well blowout. Author Loren Steffey's (Houston Chronicle business writer) most important contribution in this book is demonstrating that the tragedy was not the result of a single error or sloppiness by front-line personnel, but rather the accumulation of a series of top-level errors that took place over a period of years creating a corporate culture that had little concern for safety. The 'Deepwater Horizon' incident literally was a disaster waiting to happen.

The Deepwater Horizon floating drilling platform was a portable town for 126 people, suspended ten stories above the water's surface and a mile over the underwater well. The platform was also a ship capable of moving about 5 m.p.h. and also staying stably positioned over a wellhead. Its drilling derrick was 20 stories tall over the main deck; the entire apparatus cost about a half-billion dollars to have built (in Korea - but that's another story, about our on-going economic disaster) in 2001, and about half a million dollars/day to operate. Offshore wells cost about 5X that of land wells; BP had spent about $150 million up to that point on the well.

Steffey provides a good detailing of the chaos and terror of those first moments after the explosion - two massive explosions that immediately ended lighting and power, the roar of the escaping gas, destruction/debris everywhere and impeding walking, shrieking alarms, a hot, noisy and angry fire engulfing the derrick, and thick oil/sludge covering the water below that also began burning. The human toll (11 died) would have been higher but for numerous acts of heroism and personal strength (eg. getting up after being blown across a room and covered with debris, jumping into water 70' below, carrying others unable to get up) among those on the platform. Fortunately, safety drills had been regularly practiced, the emergency equipment mostly worked, a supply boat was nearby and able to pick up survivors from the water, and Coast Guard helicopters arrived soon after to take the worst injured to expert medical facilities on shore.

Incredibly, however, remaining survivors reaching shore 28 hours later were greeted by BP bureaucrats demanding that they immediately undertake drug and alcohol tests to assess possible personal blame, and then sign papers declaring that they were not witnesses to the incident. About ten days later they were also requested to sign waivers stating that they had not been injured, in return for $5,000 payment for their possessions lost on the rig.

BP CEO Tony Hayward had been chosen to reverse BP's accident record - about 10X the rate of the next highest oil firm. Steffey makes clear that while Hayward had succeeded in lowering costs, he hadn't succeeded in improving safety. The bulk of "Drowning in Oil" consists of Steffey's review of recent prior major BP accidents, the most serious of which was the 2005 Texas City refinery plant explosion - 15 died at the site near I-10 which I've passed by numerous times. Just months prior to that explosion a consulting report had concluded "We have never seen a site where the notion 'I could die today' was so real." Later, an impartial commission led by former Treasury Secretary James Baker cited numerous issues and concluded in its 2007 report that BP had not distinguished between occupational safety (eg. preventing slips and falls, driving while using cell phones) and process safety (design, hazard analysis, equipment maintenance, follow-up on incidents, etc.). Government action in that instance was limited to imposing a $50 million fine for environmental violations; BP has also paid more than $1.6 billion to compensate victims. Incredibly, OSHA then cited over 700 safety violations and imposed an additional $87 million fine in 2009 for BP's failing to correct safety hazards at Texas City revealed in the 2005 explosion. (BP has paid $50.6 million, and is contesting the remaining $30.7 million; the fine was also reduced by $6.1 million.) BP recently sold the refinery (Houston Chronicle, 2/1/2011).

Steffey also castigates the government's Minerals Management Service (MMS) responsible for ensuring operational safety on Gulf oil rigs. It had 55 inspectors for about 3,000 offshore facilities requiring monthly inspections. Its last inspection of Deepwater Horizon was four months prior to the explosion, and conducted by a new employee making his first inspection. Steffey also reports on the numerous allegations of improper relationships between MMS and BP staffers, and the MMS strategy of coping with understaffing through stressing voluntary compliance.

It is still unclear why the Macondo well blowout occurred. Once that happened, however, a 'blowout preventer' was supposed to prevent massive spills and fires. Steffey and others believe that the blowout preventer failed because three pieces of pipe were caught inside instead of the one it was designed for. However, even the rationale for that occurring is not certain.

Finally, Steffey addresses BP's gross underestimating of the spill's size - about 1,000 barrels/day, vs. a reality of 70,000/day. As for BP's willingness to waive the $75 million liability cap, seen by some as indicative of BP's willingness to assume liability, Steffey sees this as more likely BPs way to avoid being banned from future drilling in the Gulf. (The ability to drill in deep water was seen by BP as its competitive advantage.) Regardless, after incurring costs and liabilities exceeding $40 billion, as well as a black eye for the deaths of 11 workers and creating an oil spill that dwarfed that of the Exxon Valdez, Tony Hayward was forcibly retired and 'got his life back.'

Bottom-Line: Steffey's accounting is incomplete - many questions remain, which he admits. Coming out as it did only two months prior to the Deepwater Commission's final 346-page report means it probably contributed little; however, it did at least help prevent a 'whitewash' by that group. Nonetheless, "Drowning in Oil" clearly chronicles the 'real' cause of the Gulfwater Horizon disaster - a company oblivious over the years to responsibilities for employees, the environment, and the general populace. However, BP is not the only party guilty of this - federal government regulators in the undermanned and poorly managed MMS unit (aka the SEC), legislators that set funding levels for those regulators, and the general public are also. The latter because despite still unanswered questions of how to prevent a recurrence, much of the area's population, the judiciary, and numerous political leaders immediately decried the temporary ban on Gulf drilling that followed. It seems that other industries' 'success' building profits through offshoring jobs has also made us overly biased towards fixing the resulting jobs shortage.
10 of 14 people found the following review helpful
3.0 out of 5 stars An Interesting Read but Heavy Handed 21 Jan 2011
By CKE - Published on Amazon.com
Format:Hardcover
There are few people in the United States who did not watch in amazement as oil spewed from the Macondo well into the Gulf of Mexico. However, prior to Macondo blowout BP had other, less covered disasters - the explosion of the refinery in Texas City and a leak in the Alaskan pipeline. "Drowning in Oil" attempts to roll each of these events as a result of a deeper rooted issue within BP.

Loren Steffy paints a tale of a corporate culture that gives lip-service to safety while bowing down to the all-mighty dollar. While BP reminded employees the need to back into parking spaces and the importance of holding safety rails they were also making separate decisions that saved money but put lives in jeopardy. Loren Steffy does a nice job of inciting outrage making BP a giant corporate villain, but is unable to show us that BP was truly criminally negligent and not just the victim of having employees that repeatedly made bad decisions. I will admit that there is a very fine line between the two, and in the case of Texas City it is clear that the plant's safety record was atrocious and required a serious intervention.... However in the case of the Alaskan Pipeline (thinning pipes that needed to be monitored) and the Deepwater Horizon (the use of fewer centralizers and a single-pipe system) it is not as apparent.

This is especially true for the Deepwater Horizon/Macondo disaster - while there is an email record showing that BP wanted to hurry and that they were tens-of-millions of dollars over budget - my thoughts, what company would not be concerned with these types of cost over runs? Do you think Google would be *happy* or embrace a $40M overage? This does mean that their culture completely disregards safety?

My issue is that Steffy paints BP with a very broad brush in terms of the corporate culture. Clearly mistakes were made, and BP needed to be held accountable - but Steffy never offers any counter-arguments or even attempts to show the saga through a BP perspective. Never does Steffy mention the BP engineers that worked 90-straight days without a day off. Cleary that was there responsibility... but put yourself in their shoes.... Think of the weight on their shoulders. Steffy never shows the heroes within BP that helped to cap the well. Trust me - there were heroes, but their stories never makes it to the surface.

Final Verdict - "Drowning in Oil" is a very worthwhile read. It will bring (much deserved) outrage on the shear scale of the disasters (especially Texas City). However, I felt that the Steffy had too much of an agenda - I kept thinking that he was trying to write "The Jungle" of the oil industry and while I certainly feel that BP deserves to be held accountable for their actions - they do not need to be painted by a broad brush stating that they are completely callous to anything other than corporate profits.

3 Stars

---Please note - I reviewed a promotional copy of "Drowing in Oil" --------------------------
1 of 1 people found the following review helpful
5.0 out of 5 stars Well written and very informative. Bought 5 copies for friends after reading it. 20 Jan 2013
By Marian Marti - Published on Amazon.com
Format:Hardcover|Verified Purchase
Enjoyed this book thoroughly. It was well written and very informative. It was such that I purchased five
additional copies to give to friends to read and this is the only book where I have ever done that.
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Errant employees aren’t the root cause of an accident but rather a symptom of the cause, &quote;
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The company and its executives were “focused so heavily on the easy part of safety, holding the hand rails, spending hours discussing the merits of reverse parking and the dangers of not having a lid on a coffee cup, but were less enthusiastic about the hard stuff, investing in and maintaining their complex facilities.” &quote;
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He would cut additional costs by firing thousands of workers, including many of the company’s engineers.14 Blind to the technical challenges of pushing the frontiers of energy exploration, Browne saw the engineers as cost centers. &quote;
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