Mr. Hayward Goes To Washington

By Sheril Kirshenbaum | June 14, 2010 10:28 pm

220px-Tony_Hayward_-_World_Economic_Forum_on_the_Middle_East_2008The Oil Drum has posted and linked (pdf) to the letter sent by the Energy and Commerce Committee to BP CEO Tony Hayward in preparation for his upcoming testimony regarding concerns over risky practices related to the oil spill. It begins:

Dear Mr. Hayward:

We are looking forward to your testimony before the Subcommittee on Oversight and Investigations on Thursday, June 17, 2010, about the causes of the blowout ofthe Macondo well and the ongoing oil spill disaster in the Gulf of Mexico. As you prepare for this testimony, we want to share with you some of the results of the Committee’s investigation and advise you of issues you should be prepared to address.

The Committee’s investigation is raising serious questions about the decisions made by BP in the days and hours before the explosion on the Deepwater Horizon. On April 15, five days before the explosion, BP’s drilling engineer called Macondo a “nightmare well.” In spite of the well’s difficulties, BP appears to have made multiple decisions for economic reasons that increased the danger of a catastrophic well failure. In several instances, these decisions appear to violate industry guidelines and were made despite warnings from BP’s own personnel and its contractors. In effect, it appears that BP repeatedly chose risky procedures in order to reduce costs and save time and made minimal efforts to contain the added risk.

The full letter is here.

CATEGORIZED UNDER: Energy, Marine Science

Comments (7)

  1. There’s a lesson in risk management to be learned here; too much cost-cutting increases the risk of a major financial loss. Think about it; if airlines did too much cost-cutting on maintenance, they raise the risk of a crash, loss of revenue, lawsuits, etc. If doctors do too much cost-cutting in terms of testing, they risk missing an important diagnosis, which could lead to malpractice — (and apparently they overcompensate by overtesting). Conservatives advocate cost-cutting and reduced road and bridge maintenance, and then they evince surprise and bridge when a bridge collapses. Systematic reduction of risk requires identification of high/medium/low likelihood risk scenarios and their associated costs in terms of loss, and directed investment proportional to both likelihood and potential losses.

    It’s not easy. BP clearly didn’t even come close to getting it right, and now they’re paying, and will keep paying.

  2. It’s not going to be a major finanacial loss for a company that makes billions of dollars a day until we hold them responsible not just for cleanup, but also for subsidizing the fishing industry that they put out of business indefinitely with their illegal and risky procedures.

  3. SLC

    Although it is clear that BP was totally irresponsible in their actions that led to the blowout in the Gulf, it is also clear that the Interior Department that approved their procedures must also be held accountable. The lax oversight, which is a product of the Rethuglican bias against regulation and which infested the Interior Department, has great responsibility here. In addition, the current Democratic administration also bears some responsibility for not recognizing the laxness of their predecessors and taking corrective action (the drill approval was actually given by the current administration).

    As usual, the barn door will be shut after the horses have escaped; hopefully, this catastrophe will lead to corrective action at the Interior D
    Department and proposals for deep water drilling will be far more carefully scrutinized in the future. Of course, if the Rethuglicans return to power in 2012, such corrective action will go by the boards until the next disaster.

  4. There’s a lesson in risk management to be learned here…

    …and it isn’t – or shouldn’t be – that disasters cost money (though they do). It is that disasters are more likely to happen PERIOD, thus causing harm to everyone and everything within the scope of the disaster, when risk management is ignored or poorly implemented; a truism that seems to be lost behind a haze of $$ signs.

    If airlines cut costs, lives are put in increased danger. When a doctor makes a mistake in diagnosis is not cause for concern because there might be a malpractice suit, but that a wrong diagnosis causes harm to the victim(s) of that diagnosis.

    Counting costs involves a helluva lot more than money.

  5. Nullius in Verba

    J C Samuelson,

    Risk management badly done can make errors in both directions. Ignoring it can thus make disasters either more or less likely.

  6. Nullius,

    I’m confused. Are you responding to my post? Because I did mention “risk management…poorly implemented.”

    Are you saying that “risk management badly done” can lead to less risk? That doesn’t even make sense to me. Sorry. “Risk management badly done” succeeds mostly by luck (and conscientious people at the worker level who implement their own risk management & safety measures), not because it actually leads to less risk.

  7. Nullius in Verba

    “Are you saying that “risk management badly done” can lead to less risk?”

    Less risk of disaster, yes. Whether that counts as less risk depends on your definitions.

    Risk management is commonly done by a branch of mathematics known as Decision Theory. That can get quite complicated, but this particular point is fairly simple.

    The problem is that you usually have competing dangers such that decreasing the probability of one of them increases the risk of another.

    You have to consider the costs of each plan of action (“cost” doesn’t mean money, it means anything you do or do not want to happen), and each possible outcome from each of them, consider the probabilities of those outcomes, and then find some property (usually the average, but it can be other things) of the probability distribution of costs that you want to minimise.

    I emphasise – “cost” doesn’t mean money. Money is sometimes used as a unit of conversion between different sorts of danger, to make it easier to compare, but it isn’t really what it is about. Simple example – I have $10,000 which I can spend on drugs for one cancer patient, or insulin for a hundred diabetics. It looks at first like you’re setting a dollar price on somebody’s life, but actually you’re balancing one life against a hundred lives.

    A disaster is just an outcome that has a very high cost. But it has to be offset against all the other outcomes, and it is rare for the optimum to be such that any of the risks are reduced to zero. The optimum point generally tolerates some non-zero probability of disaster, and trying to reduce it only increases all the other risks more.

    It’s not uncommon for “risk management badly done” to only consider one side of the balance. One particular high impact outcome becomes the focus of attention, and all the others are ignored. The action taken reduces the risk of that particular disaster, but increases the overall risk, and cost to society. In saving one life, you blight a hundred others. With competing risks, there is no risk-free option open to you.


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About Sheril Kirshenbaum

Sheril Kirshenbaum is a research scientist with the Webber Energy Group at the University of Texas at Austin's Center for International Energy and Environmental Policy where she works on projects to enhance public understanding of energy issues as they relate to food, oceans, and culture. She is involved in conservation initiatives across levels of government, working to improve communication between scientists, policymakers, and the public. Sheril is the author of The Science of Kissing, which explores one of humanity's fondest pastimes. She also co-authored Unscientific America: How Scientific Illiteracy Threatens Our Future with Chris Mooney, chosen by Library Journal as one of the Best Sci-Tech Books of 2009 and named by President Obama's science advisor John Holdren as his top recommended read. Sheril contributes to popular publications including Newsweek, The Washington Post, Discover Magazine, and The Nation, frequently covering topics that bridge science and society from climate change to genetically modified foods. Her writing is featured in the anthology The Best American Science Writing 2010. In 2006 Sheril served as a legislative Knauss science fellow on Capitol Hill with Senator Bill Nelson (D-FL) where she was involved in energy, climate, and ocean policy. She also has experience working on pop radio and her work has been published in Science, Fisheries Bulletin, Oecologia, and Issues in Science and Technology. In 2007, she helped to found Science Debate; an initiative encouraging candidates to debate science research and innovation issues on the campaign trail. Previously, Sheril was a research associate at Duke University's Nicholas School of the Environment and has served as a Fellow with the Center for Biodiversity and Conservation at the American Museum of Natural History and as a Howard Hughes Research Fellow. She has contributed reports to The Nature Conservancy and provided assistance on international protected area projects. Sheril serves as a science advisor to NPR's Science Friday and its nonprofit partner, Science Friday Initiative. She also serves on the program committee for the annual meeting of the American Association for the Advancement of Science (AAAS). She speaks regularly around the country to audiences at universities, federal agencies, and museums and has been a guest on such programs as The Today Show and The Daily Rundown on MSNBC. Sheril is a graduate of Tufts University and holds two masters of science degrees in marine biology and marine policy from the University of Maine. She co-hosts The Intersection on Discover blogs with Chris Mooney and has contributed to DeSmogBlog, Talking Science, Wired Science and Seed. She was born in Suffern, New York and is also a musician. Sheril lives in Austin, Texas with her husband David Lowry. Interested in booking Sheril Kirshenbaum to speak at your next event? Contact Hachette Speakers Bureau 866.376.6591 For more information, visit her website or email Sheril at


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