The oil industry has yet to learn lessons of Piper Alpha

The offshore industry need not be so dangerous if safety is put first. PA

The explosions and fire that completely destroyed the North Sea oil rig Piper Alpha and cost 167 workers their lives remains the world’s worst offshore oil disaster. Saturday, July 6, marks 25 years since the disaster in 1988.

The resulting public inquiry under judge Lord Cullen was to be the bible for renovating offshore safety worldwide, yet there have been many subsequent accidents since. The recent review into the Deepwater Horizon oil rig fire in 2010 which killed eleven offshore workers and spilt nearly five million barrels of oil into the Gulf of Mexico conjures an overpowering sense of déjà vu. There is a feeling that, once more, the loss of life was preventable.

Again, there is the same lethal cocktail of contingent circumstances and systemic underlying causes; multiple safety systems that did not function at the crucial moments, managerial failures immediately before and during the unfolding disaster, organisational failures embedded in distorted information flows and a lack of coherent safety management, defective regulatory authorities with contradictory responsibilities for both production and safety, and even the outright “capture” of regulatory processes by the industry itself.

Yesterday the North Sea, today the Gulf of Mexico, tomorrow some remote province in a compliant developing state? The same common thread continues seemingly unchecked. It is as if the “offshore” in offshore oil is emblematic of more than simply spatial separation, but instead represents something akin to a zone of exclusion, beyond the horizon of effective oversight that we rely on government to exercise on our behalf as citizens.

Business schools now incorporate the Deepwater Horizon disaster into their classic case studies of corporate responsibility failures and, in BP’s case, of belated corporate contrition. The US Justice Department meanwhile has indicted BP for its “culture of corporate recklessness” amounting to “gross negligence and wilful misconduct”. It levied the largest fine in US criminal history and company personnel continue to face serious criminal charges including manslaughter. Regrettably, the owner of Piper Alpha, Occidental Petroleum, was not held accountable. One hopes that such impunity is no longer the norm.

However, the focus on BP and/or its partners Halliburton and Transocean obscures a more fundamental question. How could the safety regime in the US offshore oil industry have remained apparently impervious to the lessons of previous disasters? Were the safety standards on this rig so far below the prevailing norms in the industry? One suspects that many operators and contractors, as at the time of Piper Alpha, are today thankfully whispering in private “there but for fortune…”

That each disaster was avoidable is, in retrospect, a truism. That each was foreseeable is equally so, but we repeatedly find that workers in the industry had fears for their safety but lacked confidence to express their concerns without fear of retribution. Why has safety remained an intractable issue in the offshore oil industry? Even as Piper visibly burned, the failure of the linked Tartan platform to shut down its flow of oil and gas was illustrative of the paralysing effect of an industry mind-set that could not contemplate shutting down production, since the enormous losses entailed would surely bring career-ending consequences to the individual who took such a momentous decision. Today the talk is of safety first, production second, but it would need to be a brave person to hit that button.

The pioneering scholar of offshore safety, Professor WG Carson, spoke tellingly in his book “The Other Price of Britain’s Oil” of a “political economy of speed” that prioritised profits over safety. The same attitude – production first - is just as evident today. Seven out of nine key decisions adopted in the drilling operation that led inexorably to the Deepwater catastrophe were identified by the Presidential Commission report as dictated by the desire to “save time”. The Commission identified “elevating the goal of expeditious… development above the requirements of safety and environmental protection”. But there is also the broader imperative driven by governments’ desire for lucrative oil revenues and the rapid exploitation of safe offshore oilfields.

Professor Carson identified what he called “institutionally tolerated non-compliance” of regulatory requirements. Weak regulators either turned a blind eye to violations, or simply shared the opinion that production trumps all other considerations. Carson predicted this would inevitably lead to a major safety failure in the North Sea - a decade before Piper Alpha was destroyed.

It seems that in key respects not much has changed. In the memorable, damning words of the Presidential Commission: “efforts to expand regulatory oversight, tighten safety requirements, and provide funding to equip regulators with the resources, personnel, and training needed to be effective were either overtly resisted or not supported by industry, members of Congress, and several administrations”.

Today, the lethal legacy of a long era of deregulation in the US that was exported worldwide continues to take its toll on workers’ lives, the environment and communities. Whether this unpalatable truth will ever be accepted among those with the power to enforce corporate accountability that would protect people first and profits second remains to be seen.

In the North Sea, regulatory reconstruction has produced a new safety regime. Its robustness has been constantly scrutinised and remains contested. There have been a number of near-Piper Alphas which only luck prevented from becoming full-scale disasters. The hope is that the post-disaster reconstruction of the US regulatory regime will produce effective root-and-branch reform. Close observers remain less than sanguine. Appalling though it may be to contemplate, until public policy-makers and governments show sufficient resolve in confronting the power of the multinationals which dominate the industry, and until the lessons of previous preventable disasters are learned, there will be the potential for many more human tragedies.

While nothing in this industry may ever match the enormity of Piper Alpha and the legacy of suffering it bestowed, each and every life lost in the course of daily work is unacceptable. Accidents don’t just happen, even in a dangerous and risk-laden industry. Accidents are the outcome of a pattern of corporate managerial mis-behaviours which in principle need not have occurred had the proper incentives and procedures been in place.

Ultimately, the lesson of corporate failure is that management must bear the responsibility for managing in a safe and environmentally appropriate manner. This did not happen in the case of Piper Alpha and it would appear from Deepwater Horizon that some industry management is still reluctant to live up to its obligations.

This is an edited version of an article that first appeared in the July edition of Safety Management magazine