Friday, March 12, 2010

More Drips on the BP Front

In an article dated March 9, 2010 (“BP Faces Fine Over Safety at Ohio Refinery”) the Wall Street Journal reports on more heavy fines of oil giant BP for safety issues at its refineries. OSHA has levied fines of $3 million for violations at the BP refinery in Toledo, Ohio. This follows record monetary penalties for its Texas refinery last year.

What is significant about this particular enforcement action? Principally the context of the penalties - the Obama administration is taking a tougher regulatory line and its impact may extend more broadly, say to the nuclear industry. The White House clearly "wants some of the regulatory bodies to be stronger than they have been in the past," accordingly to the article. It is hard to predict what this portends for nuclear operations, but in an environment where safety lapses are piling up (Toyota et al) the NRC may feel impelled to take aggressive actions. The initial steps being taken with regard to Vermont Yankee would be consistent with such a posture.


The other noteworthy item was the observation that BP’s refining business “is already under pressure from plummeting profit margins and weak demand for petroleum products...” Sometimes the presence of significant economic pressures is the elephant in the room that is not talked about explicitly. Companies assert that safety is the highest priority yet safety problems occur that fundamentally challenge that assertion. Why? Are business pressures trumping the safety priority? Do we need to be more open about the reality of competing priorities that a business must address at the same time it meets high safety standards? Stay tuned.

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