Category: BP

The BP oil spill, also referred to as the Deepwater Horizon oil spill is the worst oil spill in history that took place in the Gulf of Mexico for about ninety days in 2010 and its effects are still being felt even after the release of oil into the environment was stopped.

Whereas there are other purportedly extensive oil leaks to the environment that have taken place in the past, such as the 1979-1980 Ixtoc I oil spill in Mexico that released about thirty thousand barrels of oil per day and lasted for nine months, the BP oil spill remains the most catastrophic in the history of the petroleum industry (National Research Council,567).

The gushing out of oil started on April 20, 2010 following an explosion and subsequent fire of the Deepwater Horizon and after trying several options, the seep out was at last ended on July 15, 2010 by capping the gushing wellhead (Corn and Copeland, 1).

The disaster led to the death of eleven workers of the oil company and injured seventeen others. Scientists approximated that over 50, 0000 barrels of oil per day were being released into the environment before the leak was successfully stopped (Robertson and Krauss, para. 6). The environment problem caused extensive damages.

The cause of the BP oil disaster has been attributed to many reasons, but chief among them is negligence. Surely, the company was not trying to blow up its own well; however, the actions it took before the disaster reveal that it was courting imminent problems (Romm, para. 4).

Since BP was trying to finish the project as per the initial plans, the company engineers opted for a series of shortcuts that went contrary to the standard practices of effectively drilling oil wells. For example, the company engineers used an inefficient casing material design and avoided intermittent testing for backpressure among other malfunctions in standard safety procedures.

These conscious judgments to undermine safety procedures and practices indicate that the negligence of the company was the prime cause of the disaster. Conversely, prior to the incident, BP had spent many dollars on improving its public image. Thus, the incident meant that the company was trying to improve its brand while neglecting to address its own intricate issues, such as fake workers policy.

Further, the report of the staff of the presidential commission investigating the BP oil spill incident released on December 2, 2010, revealed that the federal inspectors failed to act professionally in inspecting oil rig operations, the inspectors are poorly trained in effectively performing their duties, and there is inadequate availability of resources for handling such catastrophes (Mintz, para.1).

The BP oil spill had devastating effects to the environment. The incident was the worst environment catastrophe that the United States has encountered in history, nearly twenty times greater than the 1989 Exxon Valdez oil spill (Wells, 4).

The disaster led to widespread damage to marine and wildlife habitats in the area. In addition, the fishing and tourism industries in the area also recorded a decrease in earnings. Similar to the Exxon Valdez oil spill, some effects of the BP oil spill will be felt in years to come.

The consequences of the disaster are threatening the normal operations at eight national parks in the United States and more than four hundred animal species that habit the Gulf islands and marshlands, including some species in danger of extinction, are at risk. By November 2, 2010, over seven thousand dead animals had been collected.

Most of the animals died after ingesting the oil, which poisoned their systems. Other immediate consequences of the disaster were oil-coated birds feathers that hindered their ability to regulate body temperature, sea turtles were covered with oil, and dead and dying deep-sea corals were found seven miles from the deepwater horizon well.

Further, dangerous chemicals from the oil and dispersant have been reported to lead to health problems of the individuals staying near where the disaster took place. Scientists have suggested that in the long term, the disaster will lead to unbalanced food web, decreased fish and wildlife populations, and decline in recreation activities (National Wildlife Federation, para. 1-3).

To avoid such a catastrophe in the future, a number of proposals should be adopted. First, regular inspection should be done for wear and tear and leaks in equipment for the production of oil.

And, this inspection should be done by accredited individuals who will not shy away from doing a thorough inspection. Second, employees ought to be given adequate training and re-training to enable them cope well with everyday challenges in oil production and how to manage them.

Next, a well laid down plan should be established to ensure that oil leaks are handled immediately in a professional manner in case of an accident. Lastly, the government should institute effective legislations and regulations to prevent and respond to such a catastrophe instead of relying on the same-old response of looking for scapegoats.

Works Cited

Corn, Lynn, and Copeland, Claudia. Deepwater Horizon Oil Spill: Coastal Wetland and Wildlife Impacts and Response. Washington: Congressional Research Service, 2011. Print.

Mintz, Steven. Horizon Deep Water Oil Spill. Ethics Sage. 2010. Web.

National Research Council. Oil in the sea: inputs, fates, and effects. Washington, D.C.: National Academy Press, 1985. Print.

National Wildlife Association. How Does the BP Oil Spill Impact Wildlife and Habitat? Nwf. 2011. Web.

Robertson, Campbell, and Krauss, Clifford. Gulf Spill Is the Largest of Its Kind, Scientists Say. The New York Times Company, 2010. Web.

Romm, Joseph. Gulf oil spill. Salon Media Group, 2010. Web.

Wells, Peter G. Exxon Valdez oil spill: fate and effects in Alaskan waters. Philadelphia, Pa.: ASTM publication, 1996. Print.

Introduction

BP oil spill is an environment catastrophe that has affected the United States of America and the world at large (Wheat par 1). The oil spill affected the Gulf regions environment and its inhabitants and consequently affected the overall US region and the impacts are likely to persist for a long time.

The United States has to deal with the catastrophic consequences of a disaster caused by a company that supplies a commodity of vital importance in the running of the countrys economy and the global economy at large (Szabo par 1). The oil spills detrimental consequences have extended further beyond the Gulf of Mexico into the heart of the Western part of Africa affecting countries like Ghana among others (Wheat par 2).

The oil explosion occurred on April 2010 on the deep water horizon oil drilling rig in the Gulf of Mexico with 126 people on board. The oil explosion caused instant death to eleven people and fifteen were severely injured (Hailes 619). The oil spill further caused death to aquatic life. Bp was under contract with the owners of Deepwater Horizon to drill an exploratory well and during the period when the massive explosion occurred, the companies were contemplating on closing the well in order to redirect it to commercial production (Hailes 619).

A second explosion occurred few days after which caused the sinking of Deep water horizon into the Gulf of Mexico. When authorities inspected the capsized rig with remotely operated vehicles, they established that there were two oil leaks from the well pipe that were leaking at a rate of 1000 barrels per day (Hailes 619).

However, it was later established that 5000 barrels of oil had been leaking per day (Hailes 619). This led to declaration of the BP oil spill as an issue of national significance by the secretary of homeland defense leading to appointment of national incident commander to coordinate response resources at national level while President Obama stopped all drilling activities in the areas he had previously proposed pending the establishment of BP oil spill (Hailes 620).

In response to the catastrophe, the US set up a regional response team including; national oceanic and atmospheric administration, department of homeland security, the department of commerce as well as environmental agencies which set out to develop strategic plans, provide technical advice to the response team as well as overseeing the response by BP company (Hailes 619).

The oil spill cost the BP caused devastating losses that would amount to $ 1 billion. In addition, the cleaning up process will consume a considerable amount of time and resources which was approximated at about 5 years or more at a cost of $ 5 billion a year (Hailes 623).

In addition, various bodies and entities directly affected by the oil spill moved to courts and filed legal action against the BP Company seeking compensation. The overall process may take 10 years or more further increasing the final cost of the bill inclusive of liabilities totaling up to approximately 20 billion. In addition, BP received numerous insurance claims totaling to 30000 claims and had already made 15000 payouts which totaled to $ 45 million (Hailes 623).

Environment and Economic Impacts on the Economy

Oil spills often result to significant harm to aquatic life as well as severe costs to businesses and the entire public at large. Oil coating, ingestion and absorption of oil may cause detrimental effects to living organisms resulting to direct mortality and adverse sub lethal effects (Hagerty 28). Presence of oil in the water masses aversely affects aquatic life and prohibits the animals accessibility to the shoreline areas consequently suffocating them (Hagerty 28).

Further, uptake of dissolved components of oil may be toxic to aquatic life while birds and fur bearing animals lose protection and body heat maintained by their feathers and fur on exposure to oil (Hagerty 28).The Gulf region inhabitants may take a considerably long time to recover from the adverse negative implications of oil exposure that resulted from the BP oil spill.

Natural resources dependent sectors of the gulf coastal economy that have been affected by the oil spill include commercial and recreational fisheries as well as the tourist industry (Hagerty 30).

The environmental effects of the BP oil spill adversely affected the gulf region and the efforts to remedy the situation are likely to impact on the overall US economy (Szabo par 3) Tons of species of creatures were adversely affected by the gulf oil spill. Some of the species that were mostly affected included the North Atlantic Blue fin tuna and whales, among other aquatic creatures which heavily rely on water surfaces for survival (Szabo par 4).

Marine animals, which are fully dependent on water for survival, were also adversely affected as the spill posed danger to their lives (Szabo par 5). Further, the brown pelican whose breeding season was in spring and during the time of the spill the eggs were incubating further posed danger to the species which had recently been plucked off from the endangered species list (Szabo par 6).

The Oil spill heavily impacted on the sea food industry. Oil and toxic hydro carbons which were present in the water were toxic to oysters and remain a persistent problem as hydro carbon can be retained in the coastal sediment for a considerably long time (Szabo par 6).

A significant part of the overall American GDP can be attributed to the revenue derived from fishing along the gulf region, oil industry as well as the tourism industry (Szabo par 7). In addition the gulf region significantly contributes to the sea food industry. The occurrence of the oil spill significantly reduced the output of these industries hence affecting the overall GDP.

Cleaning up the spill is a time and resource consuming endeavor and some of the environmental and economic impacts of the spill remains irreversible despite the clean up efforts. The BP spill led to closure of a considerably large area of the Gulf of Mexico fishery. Consequently, fishermen filed economic injury against the BP Company and the claims are being paid to individuals on daily basis.

The oil has also reached the Gulf of Mexico beaches significantly decreasing tourists turn out in the area. The report of the oil spill negatively impacted on tourism perception in the region leading to decline in tourists turn affecting the areas where the spill had not affected (Hagerty 32). To counter these perceptions, BP funded tourism promotion programs in various affected regions.

Existing Provisions for Oil Spill Response

The United States oil pollution act of 1990 as well as the clean water act is the primary federal statutes designed to regulate the federal response to oil spills (Hagerty 7). The clean water act as amended by OPA creates a provision authorizing the president to establish the national oil and hazardous substances pollution contingency plan to specify the federal response actions and the authorities related to the oil spill (Hagerty 7).

OPA addresses natural resources damages and the restoration of resources that are injured and the services that are lost resulting from an oil spill. There exist other designated agencies that are charged with the responsibility of representing the interests of the public on such occurrences. OPA directs these trustees to act on behalf and return injured resources to their original condition and recover compensation for interim losses (Hagerty 29).

The NCP was the major responsive framework for oil response; other authorities played a major role in the gulf spill response. The department of home land security through the secretary was involved in the oil spill response through his lead role in the department in which the coast guard operates or as the principal federal official for domestic incidence management (Hagerty 9). The secretary of homeland security played a significant role in coordination of the federal responses activities.

The secretary spearheaded the activities of national response team and further classified the event as a spill of national significance hence facilitating the appointment of the national incident commander who coordinated strategic communication, national policy and resource support as well as facilitating collaboration with key parts of the federal state ad local governments (Hagerty 10). OPA further established a compensation and claims process covering the removal costs as well as the costs of damages. (Hagerty 12).

Claims for removal were presented to BP which agreed to take responsibility for the unfortunate occurrence and set aside &20 billion to pay economic damages to people and businesses that were affected by the oil spill (Hagerty 13). An independent claims facility had been established by authorities to foresee process, develop and publish the guidelines of the claims.

The national response frame work is the federal government broader administrative mechanism charged with the responsibility of coordinating the federal responses plans consequently the body provides the administrative policies aimed at achieving a unified system of response through out all levels of the government (Hagerty 9).

OPA creates a provision of oil spill liability that governs any oil discharge by a companys vessels and facilities that are situated navigable waters or the designated economic zones of United States of America (Hagerty 10). This provision consequently rendered BP liable for the Gulf oil spill and the company was therefore expected to take responsibility by covering the oil removal costs as well as rectifying any negative implications associated with the oil spill (Hagerty 10).

However, liabilities limits differ based on the source of the spill. In the gulf oil spill, the lessee of the area in which the offshore facility is located, BP is clearly a responsible party for the oil leak below the surface from the well while Transocean was a tank vessel responsible party for any oil discharge on or above the surface of the water hence the companies should take responsibility for their actions (Hagerty 11).

Actual Responses by BP

Bp Company utilized dispersants such as COREXIT which is a chemical agent that is composed of surfactants solvents and other compounds which reduce the interfacial tension between oil and water facilitating the break up of an oil slick into small oil droplets that mix with the water column (Hagerty 18).

The question regarding the fate of the dispersed oil particles and the toxicity of the dispersants remains an issue of great controversy. Some people have criticized dispersants claiming that they do not form a permanent solution to oil spill but rather reduces the effects of the same on the environment hence failing to offer a permanent remedy to the situation (Hagerty 18).

In addition, the company established relief wells which were drilled to intersect the blown out well. The company drilled two relief well with the aim of intersecting deep water horizon well near the bottom and plugging it with heavy mud and cement (Hagerty 22). However, this process took a long time to complete and therefore did not form an efficient response mechanism to the oil spill.

Conclusion and Recommendation

The BP oil spill is a clear evidence of negative implications of corporate actions on society. The government should set up strict guidelines to regulate the activities of oil companies to avoid such occurrences in the future. In addition, the government should establish advanced response mechanisms to deal with such occurrences in the future.

Works Cited

Hagerty, L. Curry, Deepwater horizon oil spill: selected issues for congress. New York: Diane publishing, 2010. Print.

Hailes, Andrew. Business continuity management. New York:: John Wiley and sons, 2010. Print.

Szabo, Patrick. BP gulf oil spill-impact on the Americas environment and economy, suite 101, 2010. Online publication.

Wheat, Amanda. the American BP oil spill spells disaster for West Africa, commatters Kenya ltd, 2010. Online publication.

Introduction

The event is about an explosion that occurred on 20^th April 2011 at the Gulf of Mexico in the US. A rig that was being operated by BP was submerged into the waters in order to dig a well for pumping oil from the sea ground. All constructional activities had been completed apart from the final cementing that was to be done after which the well had to be left dormant for sometime before being activated as an oil producer.

After the negative and positive test pumping were done, the project was promising but at the final cementing stage, methane gas escaped through the pipes and finally exploded. This environmental disaster can be termed as the worst that has ever been experienced considering all the submarine projects for oil production more so, those run by BP.

In this accident, 11 workers perished and 17 of them were seriously injured. The oil continued to spill into the surrounding for a period of two to three months even after capping of the well bore was done. Millions of gallons of crude oil spill were experienced and this was expected to continue even in the future (Metapower 2).

With the experience BP had on such projects and its success in exploitation of renewable energy sources, the company did not put into place the right measures in order to take care of any disaster that could have been expected to take place during both the constructional and operational phases of the project.

This was a big project that was expected to have adverse effects on the environment and thus required an Environmental impact assessment process which could have issued a plan with the mitigative measures in order to reduce or cater for any environmental accident that could have been experienced.

Ignorance of the leakage from the rig reported earlier by an engineer also contributed to the failure. The project was autonomous and it required a lot of money which made BP to use shortcuts not considering the effects that this could cost (Pride and Ferrell 35).

Environmental studies concerns all the negative and positive impacts a project can have on its surrounding. Measures are often provided for all projects in order to reduce or completely curb the negative impacts.

Considering the fact that the rig was a submersible one and that a well was to be drilled in the waters, a lot of disturbance in the aquatic ecosystem was to be experienced causing either death or migration of the organisms eventually leading to an alteration in the ecosystem. Both noise pollution by the operating rig and air pollution from the smoke produced by the machine was guaranteed.

Apart from these, spilled oil had lots of negative impacts on the wildlife and the neighboring ecosystems, a number of natural processes such as breeding and mating was affected by the construction activities and even by the fast spreading oil. Water was also polluted by the oils and the dead organisms resulting from explosion thus rendering it unsafe for consumption and other production activities (National Parks Conservation Association 10).

Different publications exist with information concerning this event. Sources used in this work have almost the same information relating to this event apart from the duration of the oil spill, amount of oil spilt and the exact time for explosion. The sources have 2 to 3 days of spill with 200, 201 and 206 gallons of spilt crude oil after the explosion.

Conclusion

The disaster had a lot of negative impacts on the environment which could have been contained if the right measures and procedures were put in place. Simplified design for the well due to the high cost of construction for the right type of well was also a contributing factor. It is therefore, important to consider all these factors in the future when dealing with such a risk project.

Works Cited

Metapowe. Safety at new depths-is Gulf protected against the next oil spill? N.d. Web.

National Parks Conservation Association. National parks. National Parks, 84.4 (2010).

Pride, William and Ferrell, Chris. Marketing. Wodsworth: Cengage Learning, 2011. Print.

Introduction

Most organizations follow similar set of rudiments when approaching management; hence, BP is of no exception. The core rudiments of management principles are; leading, organizing, planning and controlling. BP management, overtime, has continuously embraced planning, as one function of management in its core business activities. To understand the management planning better, this presentation illustrates how BP utilizes the management planning functions to gain competitive advantage.

BP Oil Company

BP is one of the largest oil suppliers in the world. The company had been enjoying steady operations until 2010, when it experienced the worst loss due to the oil spill that occurred in the Gulf of Mexico. It is reported that around 174 million gallons spilled over an area of 25, 000 square miles (Amadeo, 2010). The sustained loss has adversely affected the companys performance since over $ 6 billion was immediately allocated to clean the spill while the whole process was estimated to be around $ 40 billion (Hayward, 2010).

Planning Functions, as it Relates to Goals and Strategies at BP

BP has embraced the planning concepts of management. First, the Company has utilized its time and resources to gather information relevant to planning through the situational analysis. Situational analysis, is a system that managers embrace with resources and time, to collect, evaluate and summarize pertinent information relating to planning issue under investigation (Bateman & Snell, 2011).

Although BP faces a stiff competition from other global oil distributors such as, Chevron, Corp, Exxon Mobil Corporation, Total SA, Conoco Phillips among, and Oil Libya among others, situational analysis has enabled it to have first- hand knowledge (Gardner, 2010). The situation analysis has enabled it to gather vital information to boost its strategic planning process.

The short-term strategy is a growth oriented, and it constitutes increasing energy mix that integrates all available sources, i.e. wind, oil and solar. The strategy also seeks to enhance the companys efficiency in order to reduce an emission and, therefore, curb environmental pollution (Hayward, 2010).

The organization has a strategy to increase its portfolio balance, which currently stands at 60 per cent oil and 40 per cent gas. Long-term strategy aims at strengthening the organization expansion both in geographical and geographical frontiers (Hayward, 2010).

BP has continuously evaluated its plans to ensure it meets the organizations strategy. This has been through establishing strategic planning benchmarks. Hence, over the last few years, BP has recorded improved performance both in profitability and in volume of business participation through effective planning strategy.

The strategy improvement has been credited to quality management planning and the ever-increasing demand for the petroleum products. Selecting a plan in line with organizational objectives is indispensable for prompt organization management. BP has different strategic plans about its marketing; however, to ensure the right strategy was in place, it assessed various strategies employed by its competitors.

After situational analysis, it streamlined its marketing department by designating five principles. The principles were in charge of; increasing safety performance among its products across the world, and improving on portfolio quality. The marketing team also endeavors to augment margin share growth and secure net investment are greater than depreciation level.

Corporate Social Responsibility, Legal and Ethical Issues affecting Management Planning at BP

Corporate Social Responsibility

BP has faced numerous critics from the society hence distorting its corporate social responsibility. This has affected the management of the organization. The fundamental issue has revolved around the environment and climate change. The issue of Oil spill in the Gulf of Mexico, which happened in 2010, created an environmental and economic issue such; water pollution, damage to aquatic life, breakdown of businesses among other problems.

It is reported that around 174 million gallons spilled over an area of 25, 000 square miles (Amadeo, 2010). The BP recognizes the importance of environmental and social challenges facing the present world. Hence, the management has played a decisive role in resolving challenges connected with sustainable development through its planning strategy.

The organization also sees that, while the firm can be a solution to environmental problem, it should not be a solution to the whole problem. The civil society, governments and other companies must create a collaborative working plan. Moreover, the company management has a plan policy statement, which commits it to critical and far-ranging business ethics.

The firms plan seeks to point out how it is meeting its commitment to a process that supports the growth and profitability of the organization. Thus, the predominant management plan includes; improving personal safety and continuous improvement on environmental impact through a sequence of actions (Bateman & Snell, 2011).

Ethical Issues

Ethical issues have revolved around the wildlife and the environment, because of the 2010 oil spill in the Gulf of Mexico. The magnitude of the damage has been felt in the ecosystem and the wildlife. This predicts future damage. However, the BP has outlined various plans to avert this issue. The plan includes; adhering to environmental ethics, abiding to laws of the land and having a contingency plan in place.

Legal Issues

BP has faced legal challenges with various governments. For example, in the US, BP oil spill brought a terrible brand to the environment and economic activities of the Gulf region. Weiss (2010) asserts that, the compensation evaluation in physical damages in contrast to actual claims is estimated $20-50 billion.

This is believed as one of the grant judgments ever made to the one in which more than $5 billion was awarded to plaintiff of Alaska oil spill in American history (Weiss, 2010). However, BP in recent reports has shown plans of waiving $75 million on environmental harm and to foot costs in any weight they may occur.

The management realizes the necessity of having an elaborate legal framework plan in place. The firm has lived to respect the law relating to the environment, wildlife and property. In addition, the firm is working with the government and the civil society to ensure environmental system is not altered. Additionally, a compensation fund has been set aside for emergencies.

Factors that influence BPs; Strategic, Tactical, Operational and Contingency Planning

Economic Factors

Undoubtedly, every firm is manipulated by the political environment in which it operates (Bateman & Snell, 2011). Despite BP being a world leader in petroleum products, the firm has faced a devastating economic financial crisis.

As a business cycle, condenses economic agility, the BP has not been spared as it has received reduced sales and sustained substantial losses; this has been a result of legal issues because of BP Oil in the Gulf, dwindling oil prices, inflation and changes in the foreign exchange rates. This in turn, has affected rapid implementation of; BP strategic, tactical, operational and contingency plans.

Environmental Factors

Another factor, which has hindered appropriate implementation of the aforementioned plans at BP, is the environmental factors. Each firms operations are governed by the environmental factors, and the law set by the government. BP being a producing firm is exposed to excessive taxation to compensate for heavy pollutants it emits (Amadeo, 2010).

Apart from the local environmental issues, the firm has to comply with global environmental factors pertaining to environmental preservation and protection such as the Kyoto Protocol. The Corporations renewable fuels sub-sector has been adversely affected by the environmental issues; rendering to its reduced output. Failure of any firm to comply with the set environmental law may force the government to issue operation prohibition accompanied by substantial fines.

Legal factors

According to Bateman & Snell (2011), Inclination to profit maximization principle may lead a company to violate the workers right and the rule of law.

To preserve and govern the firms operations governments set the minimum wage limits, under-age employment policy, working time and the general laws to regulate firms (Gardner, 2010). The BP can only operate in whatever it is mandated to do. Failure to comply, the company is likely to attract government restrictions. Hence, this has restricted apt implementation of the aforementioned plans.

Conclusion

Management planning is critical for modern businesses, Apart from increasing efficiency; management planning has helped BP to leverage its strategic functions. BP, in determining planning strategy, it has embraced situational analysis in gathering pertinent information vital for planning, continual evaluation of existing and plans of competitors and control among other planning strategies to ensure the right plan meets the firms strategic needs.

Moreover, the corporate social responsibility, ethical business operations and legal have affected its business operations. The issues cited relate to the environment and wildlife because of Oil spill at the Gulf of Mexico. Further, the economic, legal and environmental factors have hindered its vision of formulating strategic, tactical, operations and contingency plans.

References List

Amadeo, K. (2010). Gulf Oil Spill.US Economy.Retrieved from https://www.thebalance.com/bp-gulf-oil-spill-facts-economic-impact-3306212

Bateman, T.S., and Snell, S.A., (2011), Management: Leading and Collaborating in a competitive World. New York: MacGraw-Hill Irwin.

Gardner, D. (2010). Bp Market Plunge Wipes Billions Off UK Pension Funds as Shares In Oil Giant Suffer Fresh Falls. Retrieved from https://www.dailymail.co.uk/news/article-1282870/BP-shares-plunge-15-oil-giant-admits-oil-spill-August.html#ixzz1IqpQPk00

Hayward, T. (2010). BP 2010;Strategy Presentation. New York, NY: BP Corp.

Aspects of BPs ethical culture that contributed to the Gulf Coast oil spill disaster

There are some ethical and cultural aspects with BP which could contribute to the Gulf Coast oil spill. BP used to pay fines as a result of operating against rules and regulations of handling petroleum products in several countries. The company used drilling designs that were cheaper and easier to implement. The top management of the multinational company did not adopt internationally accepted measures for detecting and preventing oil spills. These aspects could have greatly contributed to the Gulf Coast oil spill. Business ethics requires that businesses adopt recommended measures to prevent disasters that could destroy human and animal lives. If a business has a culture of observing the ethics of conducting its business operations, then it has minimal chances of causing disasters due to faulty operations (Ferrell et al., 2013).

Purposeful avoidance of risk management

BP did not engage in purposeful avoidance of risks associated with oil spills. Although BP had encountered many oil spills, it did not implement measures that could prevent the occurrence of the Gulf Coast oil spill. It was reported that BP did not use a control shut-off switch which could have prevented the oil spill. BP was also accused of negligence because leakage was noticed a few weeks before the Gulf Coast oil spill, but no action was taken. It was asserted that BP was using inadequate disaster management systems (Ferrell et al., 2013).

Future actions to rebuild the reputation and manage the risks associated with offshore drilling activities

For BP to avoid risks associated with drilling in the future, it should adopt risk detecting systems within its drilling locations. The systems should be well maintained and monitored. BP should change its culture of negligence, and this will ensure that it would act to minimize the events that could result in loss of lives and property in advance. In conclusion, BP should follow the law to ensure that it conducts legal operations across the world. This would go a long way in ensuring that it does not pay fines as a result of illegal practices.

Reference

Ferrell, O. C., Fraedrich, J., & Ferrell, L. (2013). Business ethics: Ethical decision making and cases. (9^th ed.). Stamford, CT: Cengage Learning.

Summary

A study of the failure in BPs safety program identified a number of failures to meet standards that led to the disaster. In particular, incorrect sizes of blowdown drums and incorrect stacks were used contrary to OSHA recommendations, which led to the formation of vapor that ignited (US Chemical Safety & Hazard Investigation Board, 2007). The company ignored safety standards in favor of reduced production costs.

Plan

In order to correct the results identified in the CSB investigation, BP needs to review safety standards regarding blowdown drums and stacks. First of all, the company needs to review the procedures in accordance with OSHA requirements. Additionally, BP needs to develop adequate protocols for selecting suitable disposal drums, as well as prioritizing safety over cost. The main objective is to develop and maintain safety procedures.

Do

In order to correct the failure, the main objectives at BP America Refinery, which will be required, are establishing adequate procedures and ensuring compliance. In particular, the company will be required to process the revision of existing procedures and the creation of new ones in accordance with OSHA requirements. BP will require ongoing oversight of the implementation of new procedures to correct the failure.

Check

In order to monitor and measure new BP processes, it is necessary to measure the size of blowdown drums and stacks. In addition, it is necessary to constantly monitor the pressure in explosive connections in order to select the most appropriate size of blowdown drums. The company also needs to monitor compliance with the new security procedures and reporting system to ensure maintaining of new safety standards.

Act

In order to improve performance regarding the failure, BP requires a number of internal changes. First of all, the company needs to ensure that the standards are met by employees through training. Additionally, appropriate protocols and a reporting system should be developed to monitor the requirements. Finally, BP needs to ensure compliance with all OSHA standards for other production components to avoid other possible failures.

BP had a number of technical and organizational failures to meet standards, which together led to disaster. The company had imperfect procedures for monitoring safety requirements, which resulted in unidentified technical threats. BP had no oversight and disaster prevention programs, which led to the events described in the report. The company also failed to meet various safety standards prescribed by OSHA, which was a crucial factor.

Reference

US Chemical Safety & Hazard Investigation Board (2007). Investigation report: Refinery explosion and fire. 

Introduction

Oil spillage refers to the release of hydrocarbon petroleum liquid in the environment. This is mainly a result of human activities. It is one of the greatest forms and causes of pollution. It involves crude oil spillage from tankers, platforms, wells, and drilling rigs. Spillage could also be from petroleum products that are already refined, leakages from large ships, and waste oils directed to the waters. It should be noted that oil that seeps in its natural form can enter the marine and cause pollution to the marine environment. Most of the human-oriented spillages originate from activities that are undertaken on the land. Oil spillage is very dangerous because it takes a lot of time to clean it up which could range from months to years depending on the source of the spill. As a result of the difficulties involved in controlling an already occurring oil spillage as well as the environmental damage it causes, oil spillage should be prevented at all costs (Burger, p. 56).

The BP Oil Spill Disaster in the Gulf

One of the greatest environmental disasters that have ever hit the United States of America is the oil spillage in the Gulf region which originated from the British Petroleum Company. According to the reports that were given, the spillage occurred a month after another spillage which was caused by an explosion of a ship carrying coal near Australia. This particular spillage at the Gulf of Mexico occurred as a result of an explosion of an oil rig from BP Company. It is an explosion that took place at around 11 pm on Tuesday, the 20th of April 2010. It was estimated to have caused the deaths of approximately 200 people. The particular rig was said to be drilling at the time of the explosion. However, it was never on production at that particular time of the day. The deepwater horizon exposition of the oil rig caused a lot of oil spillage to the environment. The oil was in its crude form and it has caused a lot of environmental threats. In addition, many people who depend on the water from the wetland especially for their livelihood were seriously affected. Apart from the environmental pollution that has severely threatened the ecosystem around the gulf, there has also been a significant loss of revenue by the industries whose employees were affected. This has made the oil spill a national disaster for the North American continent.

Was the BP Oil Spill Disaster in the Gulf Avoidable?

Due to the known adverse effects of the oil spillage on the ecosystem and human beings, several measures must be put in place to prevent a similar spillage from occurring. Nevertheless, it should be noted that oil transportation cannot be done away with. This is because apart from being a very important commodity in the lives of human beings, oil is also an income-generating commodity for the countries that are involved in its production. This, therefore, has called for the need to implement effective measures to avoid future oil spillage. Following several comments and questions that have been put forth by so many people including scholars and policymakers who are following up on the event, one cannot help but ask whether the disaster was avoidable. This is a misery that only serious research can solve.

One of the interviewees interviewed by Waichman claimed that the disaster is in violation of several environmental acts, including the Clean Water Act and the Oil Pollution Act and is among the worst offshore drilling disasters in recent U.S. history, and could be the deadliest (1). This statement shows that the disaster could have been avoided if the company had fully complied with the environmental laws laid down by the country. It means that several measures were not implemented or taken into consideration by the company. It should be noted that any law that has been passed concerning a certain issue is based on very intense research to ensure it is applicable. Laws are also tested to ensure that all ways in which such laws are likely to be violated are identified. This means that oil spillage in the ocean in whatever means can be avoided and so the BP Company had a way in which they could have avoided it.

According to the news broadcast on the website by Waichman, it was stated that the deepwater horizon oil rig that exploded last week was not outfitted with a safety device that might have prevented the massive oil spill now nearing the U.S. Gulf Coast known as an acoustic switch, a last-resort protection against underwater spills (1). This statement is very important in showing the world that the disaster was preventable. This is because if the device spoken about was fitted on the rig, then it means that the disaster would not have occurred that day. It is a gesture that shows that such a big and advanced nation is lacking such an important device or that the company responsible was ignorant about implementing the protective device. Most importantly, the fact that the regulation on having such a safety device is not included anywhere in the laws is despicable. This shows a lack of responsibility on the part of the relevant organizations and agencies.

On the Waichman web page, it was stated that speculation is that the explosion was the result of a blowout. Such an event occurs when a combination of well control systems  primarily drilling mud hydrostatics and blow-out preventers (BOPs)  fail (1). This statement means that if the explosion was caused by a blow out then it is likely that the problem would have been detected during the servicing of the equipment before operation. This consequently implies that probably much attention was not paid to the equipment during the servicing process hence the failure of the systems. Another explanation could be that the device was not serviced for quite a long period and thus if such measures were taken, then the inevitable explosion would have been detected before it ever occurred.

Some of the preventive measures of oil spillage that have been in implementation at the Gulf are only meant to take care of the health and life of the people rather than to avoid spillage. A very good example is the training of the inspectors on seafood sensory. This is very important in that it helps the regulators and the inspectors to sense any seafood that has been tainted in the Gulf region. This is to ensure that the products that are reaching the customers are safe for consumption. Such a measure is only to ensure that the spillage does not hurt the health of the people rather than the spillage occurrence. In addition, the preventive measures do not cater to the ecosystem that includes marine life. The oil spillage at the Gulf of Mexico could therefore have been prevented if the same significance was attached to its prevention rather than its consequence. For instance, sea vessels carrying oil are supposed to have a double hulling to reduce any possible risk of spilling the oil product on transit.

Rogoff (6) states that:

The disaster, however, poses a much deeper challenge to how modern societies deal with regulating complex technologies. The accelerating speed of innovation seems to be outstripping government regulators capacity to deal with risks, much less anticipate them. It is a huge embarrassment for US President Barrack Obama that he proposed  admittedly under pressure from the Republican opposition  to expand offshore oil drilling greatly just before the BP catastrophe struck.

According to the above statement, there were other cases of oil spillage in the Gulf region before the recent one occurred. This means that the region is prone to oil spillage cases. With that in mind, the government of the United States should have taken a keener interest in putting into place some mechanisms to prevent such an occurrence. However, it could be that the government was occupied in trying to come up with some strategies of counteracting the effects of the economic crisis in the country hence could not pay much attention to the issue of disaster management. There was a need to research what takes place in the ocean to be able to come up with ways of dealing with any future oil disaster in the region. Before the government considered expanding the oil drilling at the sea, it should have properly researched the issues of any disasters that could have taken place. Although an environmental impact assessment was done before the project was launched, the credibility of the research findings remains questionable.

Rogoff also stated that financial crises are almost comforting by comparison. Speculative bubbles and banking crises have been a regular feature of the economic landscape for centuries. Awful as they are, societies survive them, (12). According to this statement, the financial crisis that hit the U.S. should not be used as an excuse to escape the responsibility of what happened and cover up its failure. The fact that the government and BP took a risky and adventurous step to increase the oil drilling activities from the sea means that they should also have thought of the detrimental consequences which might have come up in the event of an explosion. By doing that, the oil spillage would have been prevented.

According to the article written by Rogoff, it is stated that the advanced countries, which can best afford to restrain long-term growth, must lead by example. The balance of technology, complexity, and regulation is without doubt one of the greatest challenges that the world must face in the twenty-first century, (p. 14). This statement is true in that the United States, being one of the most developed countries in the world, should be in a position to financially invest in disaster prevention mechanisms because it is economically stable to do so. By this, it means that there should have been better disaster mechanisms put in place to prevent the occurrence of oil spillage in the Gulf region. Technology advancement in the current industrial revolution era should consecutively be introduced together with a disaster prevention mechanism (Walker, p. 180).

Murphy argues that the only even vaguely anti-US takeaway from his comment is that we, as a people, remain willfully ignorant to all these problems as long as we get out consumer fix (p. 12). This statement means that the issue of economic gains earned from the oil drilling activities was more important than even the danger the activity was causing to the life of the people and the environment. In any case, according to the environmental laws, before the establishment of any project in the environment a very intensive and detailed environmental impact assessment must be carried out. This means that the findings or the process of the impact assessment was doubtful in the first place and hence the environmental disaster that occurred later on.

As it was stated by Graham fossil fuels and the industry behind them, while certainly being responsible for advancing our civilization, have now become more of a liability than benefit (p. 10). It is possible that the process of putting in place preventive measures at the oil drilling site was very expensive and so, as a way of avoiding such expenses, no good measures were implemented by the government. Instead, cheaper preventive systems could have been installed at the site to minimize costs and reap higher benefits. Graham also claims that the rig was drilling, but not in production. It was under contract with BP. As of now, the cause of the blast is unknown. The priority is of course to make sure everybody is safe. Once that is done, the investigation will begin, (p. 10). This means that since the cause was unknown it is impossible to tell whether the explosion was avoidable. This calls for in-depth research to be undertaken so that the real cause of the explosion can be determined. By doing this, it would be easy to know what preventive measures would have been put in place to avoid the explosion.

Graham (12) also stated that:

Sensitive ecosystems at risk include the Delta National Wildlife Refuge and parts of eastern Louisiana. According to a statement from BP, more than 1,000 people are taking part in the oil spill response. However, it could be two weeks or more before the spill is contained. For now, the well is leaking as much as 42,000 gallons of oil every day.

The above statement gives insight into the extent of the damage caused by the explosion. This shows that the rig and the systems at the oil drilling site were undergoing damages over the years which could have been rectified through regular maintenance by the BP Company. If such measures had been taken, the explosion and oil spill would have been prevented.

Conclusion

A lot has been written about the issue of oil spillage in the Gulf of Mexico. Most of the people feel that the government would have done something to avoid the disaster from happening. This calls for more research to find out what should have been done to prevent the occurrence of the spillage. The research would also help prevent similar occurrences from taking place in the future. Nevertheless, the Gulf oil disaster serves as an example to other oil-producing countries to implement preventive measures to avoid similar occurrences. In conclusion, the facts presented show that the Gulf oil spillage was indeed avoidable.

Works Cited

1. Burger, Joanna. Before and after an oil spill: the Arthur Kill. New York: Rutgers University Press, 1994.
2. Graham, Michael. Big oil explosion off Louisiana. 2010.
3. Murphy, David. The oil drum. Energy Journal Round Up 1.4 (2009): 12-15.
4. Rogoff, Kenneth. The BP oil spills lessons for regulation. Project Syndicate Journal 160.2 (2010): 5-20.
5. Waichman, Parker. Oil rig explosions. 2010.
6. Walker, Jane. Oil spills. Chicago: Stargazer Books, 2004.

Described as one of the greatest environmental challenges in current generation, the British Petroleum oil spill has come not only at the wrong time for the Obama Administration, but has also severely impacted negatively on the economies of states around the Gulf of Mexico. Critics point out that it could take years to ascertain the exact estimate of damage this environmental disaster has inflicted on the economy and the ecosystem around the Gulf of Mexico. Louisiana, which is the closest state to the Gulf of Mexico, has its 400 mile coats line severely polluted by floating oil. This essay seeks to specifically analyze the impact of BP oil spill that was triggered explosion of Deepwater Horizon rig on April 20^th, 2010. Towards this, the BP oil impact will be analyzed in regards to its impact on fisheries, wildlife, tourism and shipping.

The impacts of oil spill have always been catastrophic (ASTM Committee, 1984)¹. Fisheries, tourism and shipping are some of the economic activities along the Gulf of Mexico that have been hardest hit by the environmental disaster caused by BP oil spill. This has necessitated the United States government to declare a fishery disaster in the surrounding waters. According to Venice, Gorman and Pascal (2010)², the U.S. government has declared a fishery disaster in the seafood-producing states of Louisiana, Mississippi and Alabama due to the oil spill which makes them eligible for federal funds to offset the impact on fisherman and their communities of the oil pollution in their fishing grounds. This means that the fisheries department has been negatively affected by the oil spill to a very large extent. This is more worrying because the affected state of Louisiana is responsible for more than a third of the United States seafood supply. In addition to the above, it employs thousands of US citizens either directly or indirectly. This issue is buttressed by Venice, Gorman and Pascal (2010)³ in stating that Louisianas $2.4 billion seafood industry supplies up to 40 percent of U.S. seafood supply, employs over 27,000 people and is the second-biggest U.S. seafood harvester and the top provider of shrimp, oysters, crab and crawfish. This demonstrates that the effect of BP oil spill has denied the United States its primary source of sea food, led to massive loss of employment opportunities and has finally led to massive losses of revenue that is estimated to be in the range of billions of dollars.

One aspect of the ecosystem that has been greatly affected by the BP oil spill is wildlife. The BP oil spill has not only triggered an imbalance in the existing ecosystem but has also made the affected regions completely inhabitable to a sizable percentage of wildlife. Some of the wildlife reserve areas that that have been affected include the Breton National Wildlife Refuge in the offshore Breton, Chandeleur Islands, and the Pass-a-Loutre refuge further to the south (Smith, 2010)⁴. In addition to the above, the states have lost a large number of wildlife due to the environmental pollution precipitated by the oil spill. This estimate is perhaps presented best by Venice, Gorman and Pascal (2010)⁵ in stating that over the 40 days since the spill started, wildlife officials report that 491 birds, 227 turtles and 27 mammals, including dolphins, have been collected dead along the U.S. Gulf Coast, according to an update released on Sunday by the oil response unified command. Sharks as well as eels and turtles have been reported to have been sported dead and floating on water surface (Weise and Rice, 2010)⁶. This environmental disaster has therefore robbed us a good percentage of some of our prized wildlife species. The extent of the damage to the existing wildlife cannot be estimated but is ultimately expected to rise in the coming future. The greatest concern to scientists remains the unknown and unseen effects of the oil spill to the underwater marine life and environment.

Tourism operators as well as restaurants and hotel owners have all reported sharp decline in business due to the effects of the oil spill. This has been precipitated by the scare of tar balls spotted along the Florida key beaches. The tourism industry has thus lost millions of dollars due to the decline in business. The loss to the state of Florida due to decline in tourism is illustrated by Venice, Gorman and Pascal (2010)⁷ in stating that Tourism is its economic lifeblood, its largest industry, generating $60 billion in spending from more than 80 million visitors a year, bringing in 21 percent of all state sales taxes and employing nearly 1 million Floridians.

Last, the impact of BP oil spill has dealt a big blow to the shipping industry. This is because very critical shipping routes have been closed and the numbers of delays caused by the oil slick are on the rise. These shipping lanes are the lifeline of the United States export and imports. In addition to the above, the cost of shipping has escalated by the mandatory inspections and decontaminations before entering ports. In conclusion, the impacts of BP oil spill have been demonstrated to affect the environment the economy and have led to losses of thousands of employment opportunities.

Bibliography

ASTM Committee. Oil spill chemical dispersants: research, experience, and recommendations: a symposium. New York: ASTM International, 1984.

Smith, Dee. The Impact of BPs Oil Spill on Travel to Florida. 2010.

Venice, Biggin, Gorman, Steve and Fletcher, Pascal. Factbox: Gulf oil spill impacts fisheries, wildlife, tourism. Reuters. 2010. Factbox: Gulf oil spill impacts fisheries, wildlife, and tourism.

Weise, Elizabeth and Rice, Doyle. How bad could BP oil spill get for the Gulf and the nation? USA Today. 

Footnotes

1. ASTM Committee. Oil spill chemical dispersants: research, experience, and recommendations: a symposium. New York: ASTM International, 1984.
2. Venice, Biggin, Gorman, Steve and Fletcher, Pascal. Factbox: Gulf oil spill impacts fisheries, wildlife, tourism. Reuters. 2010. Factbox: Gulf oil spill impacts fisheries, wildlife, and tourism.
3. Venice, Biggin, Gorman, Steve and Fletcher, Pascal. Factbox: Gulf oil spill impacts fisheries, wildlife, tourism. Reuters. 2010. Factbox: Gulf oil spill impacts fisheries, wildlife, and tourism.
4. Smith, Dee. The Impact of BPs Oil Spill on Travel to Florida. 2010.
5. Venice, Biggin, Gorman, Steve and Fletcher, Pascal. Factbox: Gulf oil spill impacts fisheries, wildlife, tourism. Reuters. 2010. Factbox: Gulf oil spill impacts fisheries, wildlife, and tourism.
6. Weise, Elizabeth and Rice, Doyle. How bad could BP oil spill get for the Gulf and the nation? USA Today.
7. Venice, Biggin, Gorman, Steve and Fletcher

Introduction

It entirely went awry for British Petroleum in the Gulf of Mexico on the late afternoon of 20^Th April this year when its service provider Transocean was making a hole on a new rig on the Mississippi Canyon Block 252 in which BP had a controlling stake. In the beginning there was a fire which then paved way for an enormous blast. On the third day, the rig went under the surface spurring a series of leak reaction procedures that have so far involved an excess of 3000 people, a navy of ships airplanes, solvents and shots. At least a dozen of workers were pronounced dead while seventeen others were wounded. Politics have also found its way to this issue.

It is now apparent that the ultimate solution lies in capping the opening which is 5000 Feet beneath the surface. So far three intercessions have been made but unsuccessful due to the fact that the depths of water involved have never been experienced before. It has been noted that the equipment used for preventing such a leak, known as Blow Out Preventor (BOP), failed and the whole oil engineering sector is unable to mitigate at deep sea surroundings¹.

Thesis Statement

There are several measures that have so far been taken to mitigate the effects of the BP oil spill in the Gulf of Mexico as well as the on going efforts to cap the well oozing the oil.

Topic sentence

Capping the well that is spilling oil is the most difficult and challenging measurement to completely stop the disaster since it involves a series of complex technological stages.

Discussion

The petroleum commerce has been expediting discoveries in subterranean surfaces for close to two decades and episode of this kind has never been experienced before. The foremost expedition that has been employed before was 10000 Feet of below the water surface and 35000 Feet below the seabed. This particular incident is 5000 Feet below the water surface and 18000 below the seabed. That notwithstanding, the attempts to cap the seep out has seen the petroleum engineering expertise pressed over the edge.

So far, each and every one of the procedures to stem the spill on the sea bed as well as the American shores is being administered from the command hub situated at Mobile in the state of Alabama. Currently there are more than sixteen leak ships and planes which are deploying compounds to scatter the oil that has reached the surface. Meanwhile other efforts are being employed below the water surface. Therefore there are two approaches to solve the problem namely the use of dispersants, also known as boom, and the efforts to cap the fissure, also known as the subsea method².

Under the subsea method, there are only two procedures that have been used. First is to decrease and control the oil leaking from the fissure and secondly to completely shut it. When the incident was first reported, the first procedure was to maneuver the Blowout Preventor to shut the fissure by means of eight distantly-controlled vehicles, also called ROVs (Remotely Operated Vehicles). However, this intervention was failed.

Concurrently, BP was infusing dispersants straight to the oil spill on the seabed, propelled from the ships and disseminated by the distantly controlled vehicles with rods. This basically means that the dispersants is being forced downwards through a conduit and infusing it with a rod leading the outpouring of oil from the conduit. The chemical process involves the oil assimilating with the dispersant and being crashed into lesser globules³.

Furthermore, BP also practiced the subsea gathering and seeping of the spilled oil. This effort proved even more testing. In the beginning, it meant putting down a big auditorium shaped equipment called a cofferdam over the spilled oil and to suck the oil through a conduit on top of it to dais called an Enterprise. Simply put, the cofferdam covered the spill oil just above the fissure from where it could be pumped out through a pipe to a reservoir on the surface. Again, this effort proved futile due to the development of vast quantity of hydrates which were unexpected. The oil was never let to go through the conduit and steam was used on the outside to make it balmy but the hydrates were too much⁴.

With the disappointment that followed this method, the next logical step is to ensnare the spilling oil on a really lesser and convenient degree. This means that the big cofferdam is be replaced with a miniature one which is quite easy to control and productive as well given that the quantity of water that had to be reduced. The argument is that if the water was set aside from the oil then automatically the hydrates would not develop. Alternatively, ethanol would be used to ensure that water is completely kept out. But before the miniature cofferdam is given a try, a riser implement slot in was put in the riser conduit. This was hugely effective. So far the implement has been re-slotted in making the seeping and pumping processes faster.

The next stage is to completely shut the fissure given that the oil spill is now pretty much under control. A surest method of shutting it out is in the offing. It involves disengaging the manipulating shells outside the Blowout Protector and bringing them to the surface for renovation and repair of the mechanical parts that are vital. They are then reinserted back when their control and manipulation is simple and straightforward. Fluid sealants would be injected down there and with time if other effective compound are discovered and used, then there would be a victorious capping. From there BP can sanitize the affected areas and move on

Bibliography

1. National Research Council (U.S.) Ocean Studies Board (2005). Oil spill dispersants: efficacy and effects. Michigan: The National Academies Press University of Michigan
2. National Research Council (U.S.). (1998). Committee on Oil Spill Risks from Tank Vessel Lightering Oil: spill risks from tank vessel lightering. Michigan: National Academies Press.
3. Payne, R. & Farlow, J.S. (2003). Oil spill dispersants: mechanisms of action and laboratory test. Boca Raton: CRC Press
4. Tunnell, W.T. Darryl, F. L., Earle, S. (2009). Gulf of Mexico Origin, Waters, and Biota: Biodiversity. Texas A&M University Press: CRC Press

Footnotes

1. National Research Council (U.S.) Ocean Studies Board (2005). Oil spill dispersants: efficacy and effects. Michigan: The National Academies Press University of Michigan
2. National Research Council (U.S.). (1998). Committee on Oil Spill Risks from Tank Vessel Lightering Oil: spill risks from tank vessel lightering. Michigan: National Academies Press.
3. Payne R., Farlow John S.(2003)Oil spill dispersants: mechanisms of action and laboratory test. CRC Press: Boca Raton
4. Tunnell, W.T. Darryl, F. L., Earle, S. (2009). Gulf of Mexico Origin, Waters, and Biota: Biodiversity. Texas A&M University Press: CRC Press

Tony Hayward of BP

Situation at the Time

BP Oil Company is a British owned company and it initiated the deepwater rig to exploit the oil resources at the deep-sea in Texas. However, the company did not do the job directly but sub contracted other companies to help in the extraction of oil.

The then company CEO, Tony Hayward, chose to outsource the services to other firms (Kalantarnia, et al 2010, p. 191). The Swiss firm Transocean was hired to drill the oil, while it subcontracted the well construction to Halliburton Company. Cameron international was on the other hand given the responsibility of making the blowout preventer (Steffy, 2010, p. 103). However, things did not turn out well, since the rig ended in a blast that killed 15 people and injured many more. Hayward was then accused for having failed in his duties. Transocean accused him of having chosen a cheap well design that was not of the required standard.

Motivation of the decisions

Before Tony Hayward took over, Browne seemed to be leading the company on a success trail through several mergers and acquisitions, and the firm was performing very well. When Hayward took over its leadership he made some critical mistakes that triggered the explosion accident. This was because he was under pressure to continue to maintain the good performance of BP. His strategy of cost-cutting made him outsource most services through subcontracting them to external companies. In addition, he laid down many of the company engineers in an effort to cut down expenses (Steffy, 2010, p. 106).

This mistake was one grave thing to do because the company had to give up its effective authority to control and provide safety and other services to its workers. The consequences were dire as it resulted in an explosion that caused a great damage to human life and the environment. Hay later started accusing Halliburton contractors for using substandard construction means, although BP was the one that designed the cheap well. They used a single layer of cement rather than the normal two layers (Kalantarnia, et al 2010, p. 193). Moreover the blowout preventer designed by Cameron international used sea water instead of the recommended fluid resulting in failure.

The Impact

Having developed a culture of risk-taking to maximise company profits, Hayward failed to take action against the warning signs that were reported by the workers. Instead he postponed the responsibilities to the following years budget. The result of such irresponsible decisions ended in a blast in Texas City and the Transocean workers who were at the site died, while others were injured. Records report that 15 workers died and 170 people suffered injuries from the blast (Steffy, 2010, p. 102). The then US secretary of state took the responsibility of investigating the accident and he published a report explaining what took place and the reasons behind it. The report basically revealed that there was a problem with the management where bad decision had been made regarding safety on several occasions.

In an interview, Tony Hayward said that he blamed his contractors Halliburton for the shoddy job at the well. However during the case hearing, evidences showed that there were very high chances that BP Oil Company could have opted for a cheaper design of the well to use a single layer of cement so as to save about $ 7 million. An experts engineer in oil well construction commented that the only possible reason why BP had done that was to save money (Kalantarnia, et al 2010, p. 193).

Bernard Ebbers of WorldCom

Situation at the Moment

WorldCom developed to become a big company by making long-term deal with other telecommunication companies so that it could get into the networks business. The company was then required to pay some fixed amount to the carriers referred to as line costs. These agreements had started in 1990s and even by 2000s the growth of the company had not materialized and the money that WorldCom was making could not meet the companys expenses.

Basically, if the decline in the WorldComs dealings could have been exposed very early, then its share prices could have dropped dramatically from $64 in 1999 to a very smaller figure (Kaplan & Kiron, 2007, 106). Bernard Ebbers did not want to admit that the company was on the verge of collapsing and that the once bigger company could face such serious financial problems.

Motivation for the MoveS

A the company expanded, the operations became complicated especially the accounting systems and customer services and according to investigators, WorldCom was struggling very hard to keep up the pace (Albrecht et al, 2008, 186). Ebbers discouraged employees from bringing matters to his attention and he stated openly that he only wanted to hear good news. This decision to avoid integration of suggestions from employees in decision making showed that he was set to see the company succeed at all costs even when it meant falsifying the financial records (Sidak, 2003, p. 207). As such, his employees admitted than there was inflation of earning, double record of single sales and so on.

The Impact

Dspite the attempts to inflate the financial position of the company, Ebbers could not prevent the stock prices from dropping and in the year 2002, the prices were very low and Ebbers was forced to quit by the board (Kaplan & Kiron, 2007, 107). After he had left, evidence revealed that, the CEO had failed to confront some crucial problems where Ebbers denial of handling the economic situation honestly was the cause of the companys financial problems. In July, 2002, WorldCom was forced to file for bankruptcy protection and by 2004 the company was still having a debt of $5.7 billion (Albrecht et al, 2008, 186).

In 2005, Ebbers faced charges of fraud, documenting false information and conspiracy and was convicted of which he was found guilty of all of them (Sidak, 2003, p. 207). He was consequently sentenced to incarceration for 25 years. WorldCom was purchased by Verizon for $ 7.6 billion and incorporated as part of it.

Reference List

Albrecht, W.S., Stice, J.D & Stice, E.K. (2008). Financial Accounting, Cengage Learning, p. 186.

Kalantarnia, M., Khan, F., & Hawboldt, K. (2010). Modelling Of BP Texas City Refinery Accident Using Dynamic Risk Assessment Approach, Process Safety and Environmental Protection, Vol. 88, Issue 3, Pp. 191-199.

Kaplan, R. & Kiron, D., (2007). Accounting Fraud at WorldCom, Harvard Business School, p. 104  171.

Sidak, J. G. (2003). The Failure of Good Intentions: The WorldCom Fraud and the Collapse of American Telecommunications After Deregulation, Yale Journal on Regulation, Vol. 20, No. 2, pp. 207-267.

Steffy, LS. (2010). Drowning In Oil: BP & the Reckless Pursuit of Profit, New York, Mcgraw-Hill Professional, Pp. 102- 186.

Schnoor, J. (2010). The Gulf Oil Spill, Environ. Sci. Technol., 2010, 44 (13), P 4833.

Deepwater Horizon Oil Spill: Selected Issues for Congress By Curry L. Hagerty.