ACADEMIC &

PROFESSIONAL Final Report

[Sample]

SKILLS
Analyse the causes of the disaster which is described
in the case study.

Recommend regulatory steps governments can take

to avoid similar catastrophes in future.

Word count for counted sections (not including in-text citations) = 2,058

Section word count (not including in-text citations) = 2053

Executive Summary
The Deepwater Horizon oil spill in April 2010 was ultimately termed “the worst
environmental disaster in American history” by Attorney General Loretta Lynch
(Mclean and Chapple, 2015). Lynch’s statement was made as part of the US Justice
Department’s announcement of the final settlement with the organisation widely
considered to be chiefly responsible: British Petroleum (BP). According to Lynch,
BP’s record-breaking fine of $20.8 billion represented a “fitting response”. The
corporation was said to have received “the punishment it deserves” (ibid).

However, this apparent resolution has not satisfied all commentators. There are
several contentious issues. Firstly, the technical factors which led to the tragedy
have been the subject of several studies, which tend to paint a highly complex
picture, pointing to multiple causes and responsible parties (Mullins, 2010; DHSG,
2011; BOEM, 2011). At the very least, it can be said that BP shares culpability with
Halliburton and Transocean.

Secondly, in order to understand the event and hopefully prevent similar occurrences
in future, the role of the government needs to be taken into consideration. Several
years after the oil spill, the legal system was able to identify a range of specific ways
in which the law had been broken. Ultimately, punishment for these transgressions
took the form of financial penalties. While acknowledging the historic scale of these
fines, this report questions their validity. Given BP’s history of similar behaviour
(Kirsch, 2010; DHSG, 2011), along with the financial recovery it has enjoyed recently
(Ward, 2018), there are strong grounds to wonder whether or not the corporation
(and the wider industry) will have been sufficiently deterred from taking similar risks
in future.

Moreover, a rich body of academic work contends that the failure of complex safety
systems is usually the product of fundamental flaws in organisational working
practices, rather than ignoring guidelines (Dekker, 2014; Choi, 2010). In the case of
BP, it is likely that the company’s nature as a profit-maximising institution will always
push it to take risks. The US Government’s decision to respond to this systemic
failure with economic penalties is therefore also critiqued on the grounds that it
actually re-enforces the economic-centric logic that is surely a significant underlying
cause of BP’s behaviour.

In order to better remedy the causal factors and improve the institutional responses
critiqued, this paper makes three recommendations to government regulators:

1. Stop encouraging increasingly risky and environmentally degrading extraction

of non-renewable energy sources
2. Nationalise energy production, starting with BP
3. Recognise the crime of Ecocide (destruction of the natural environment)

Section word count (not including in-text citations) = 394

1
Contents
EXECUTIVE SUMMARY 1
INTRODUCTION 3
ANALYSIS 4
CONCLUSION 7
RECOMMENDATIONS 8
REFERENCE LIST 9

2
Introduction
On April 20, 2010, an industrial incident began in the northern Gulf of Mexico, off the
coast of Louisiana, that would later come to be widely considered the most horrific
environmental disaster in American history (BBC News, 2010; Mclean and Chapple,
2015). The Macondo Well blowout – also known as the Deepwater Horizon oil spill –
began with an explosion and can be defined as a catastrophe because it caused the
deaths of 11 workers, before releasing an estimate of more than 500,000m 3 of crude
oil and nearly two million kilograms of natural gas into the surrounding environment
(United States District Court for The Eastern District of Louisiana, 2015; cited by
National Wildlife Federation, 2015). It took engineers a total of 83 days to cap the
well (National Wildlife Federation, 2015).

In the aftermath of the tragedy, public outcry towards those deemed responsible has
been substantial (Luce, 2010). As the main operator of the oil rig, BP has faced the
majority of the accusations of guilt, as evidenced by the vast array of lawsuits that
have been launched (Business and Human Rights Resource Centre, 2016).
However, blame has also been attributed to associated multinational corporations
such as Halliburton and Transocean (Mullins, 2010), along with the US Government
and various other groups (Rushe, 2013).

While the severity of the catastrophe may have been unprecedented, it is by no

means the first such event to leave a local population and environment scarred in the
USA. The most obvious American comparator was the 1989 grounding of the Exxon
Valdez oil tanker in Prince William Sound, Alaska (NOAA, 2014). Internationally, the
scale of the spill was reminiscent of those taking place as part of the Persian Gulf
War in 1991 and in the Bay of Campeche, Mexico, in 1979 (Rafferty, 2018).
Disasters of this order demand careful reflection and a determination to reform
existing industrial practices.

Section word count (not including in-text citations) = 265

3
Analysis
The following section seeks to analyse the key causes of the Macondo Well blowout
disaster. It begins by considering the technical factors leading to the catastrophe.
This leads to an analysis of the deeper, long-term organisational issues that
contextualised the event, wherein the roles and responsibilities of the international oil
and gas industry, along with the associated regulatory bodies, are evaluated in turn.

Technical Factors

After the spill, numerous studies were commissioned to determine the relevant
causes and associated responsibilities. BP’s own investigation identified eight safety
system failures that, together, led to the accident (Mullins, 2010); of these, five were
technological. Firstly, the cement that was intended to create a seal at the bottom of
the borehole, to prevent oil and gas leaks, failed to do so. This critical failing was
compounded by the consecutive malfunctioning of two separate valve systems.
Initially, one that was designed to control the flow of oil and gas from the pipe to the
surface was rendered useless. Then, eight minutes before the explosion, a
combination of oil and gas began to spew out onto the surface of the rig. When the
crew attempted to close the valve that was part of the blowout preventer (BOP),
which sits on the seabed, it too malfunctioned. The failure of the manual valve on the
BOP should have been mitigated by its own automatic failsafe mechanism, designed
to shut all valves once communication with the surface was lost. Unfortunately, BP’s
review concluded that the mechanism failed due to the combination of a flat battery
and faulty switch. Lastly, the alarm system designed to notify crew of gas leaks and
activate fans to avert the combustion of gas upon contact with the rig’s engines also
failed.

Citing the report, BP sought to spread responsibility among its collaborators, but
faced strong resistance. Chief executive Tony Hayward asserted that “Multiple
parties, including BP, [oil field services company] Halliburton and [offshore drilling
company] Transocean, were involved” (ibid). However, this prompted attempts from
their partners to absolve themselves from such charges. A Transocean spokesman
publicly highlighted [Halliburton’s] cement failure as the primary cause, adding: “We
take strong exceptions to criticisms of the [Transocean] drill crew” (Broder, 2011).
Halliburton released an official statement seeking to downplay their liability: “Every
contributing cause where Halliburton is named, the operational responsibility lies
solely with BP” (ibid). Given the potentially vast costs associated with any attribution
of corporate responsibility, it is perhaps not surprising that each of the three
multinationals involved have embarked upon campaigns to shift blame onto one
another. The validity of their claims is therefore questionable.

Corporate Culpability

2011 saw the release of three major independent studies, which have clarified the
picture somewhat. They largely corroborate BP’s technical analysis, while also going

4
further in their critiques of organisational factors. Each of these reports concluded
firstly, that the Macondo Well blowout was preventable and moreover, that all three
of the relevant corporate actors bore some share of the culpability, although BP has
consistently faced the majority of the charges. In general, they also determined that
significant changes were required across the oil and gas industry. Likewise, urgent
reforms of the regulatory system were deemed necessary (National Commission on
the BP Deepwater Horizon Oil Spill and Offshore Drilling, 2011; DHSG, 2011;
BOEM, 2011). The remainder of the analysis section focuses on the evident failings
of the relevant corporate and governmental organisations.

One crucial difference between the final report and the others was its citation of
several violations of federal regulations (Broder, 2011). Chief among these were the
transgressions of laws that should have forced BP and the associated contractors to:

▪ operate safely
▪ put in place systems to prevent the outflow of oil and gas into the wider
environment
▪ regularly enact effective testing of well pressures
▪ inform government regulators of any changes to drill plans (ibid)
In light of such findings, hundreds of court cases have been launched.

The first headline lawsuits to be concluded were cases initiated by the US Justice
Department. The first resolution occurred in January 2013, with the Justice
Department’s announcement that BP had pled guilty to 14 criminal charges for its
conduct before and after the disaster (FBI, 2013). The costs associated with this
initial settlement were substantial: $4.5 billion (Business and Human Rights
Resource Centre, 2016). Furthermore, in September 2014, the judge presiding over
a separate set of claims ruled that BP had been “grossly negligent and guilty of wilful
misconduct”, with Halliburton and Transocean also found guilty of negligence (ibid).
However, the scale of BP’s final settlement with the Justice Department dwarfed all
those preceding it. In October 2015, BP settled to pay the historic sum of $20.8
billion to a variety of public bodies (Mclean and Chapple, 2015).

Regulatory Issues

Attorney General Loretta Lynch declared the final settlement a “fitting response to
the worst environmental disaster in American history”, before noting that BP was
receiving “the punishment it deserves” (ibid). However, there may be significant
grounds to criticise the public authorities. Fundamentally, it seems dubious as to
whether any series of financial penalties can adequately address the human and
environmental costs associated with such an enormous disaster, particularly when
the apparent perpetrator is a multinational corporation that earned $17 billion in profit
the year prior to the event (Kirsch, 2010). A report from the National Wildlife
Federation (2015) listed some of the impacts on nature, which included historic
depletions of dolphin, sea turtle, sea bird, fish and coral populations. In light of these

5
catastrophic effects, BP was forced to admit culpability and suffered massive
reputational damage, along with unprecedented fines. Yet, by the end of 2017, the
corporation’s profits had “more than quadrupled from the year before… [having]
benefited from higher crude prices and a surge in production from new projects”
(Ward, 2018).

It should also be noted that this tragedy was not BP’s first. In 2006, the company’s oil
pipeline in Prudhoe Bay, Alaska started to leak, with BP ultimately fined a then-
record US civil settlement of $25 million (Associated Press, 2011). As Kirsch (2010,
p. 296) observed of the earlier case, “their short-sighted economic calculus resulted
in oil spills along the pipeline”. Many similarities have also been cited with respect to
the BP Texas City refinery disaster of 2005 (DHSG, 2011). With BP already hugely
profitable once-more, one may question whether the intermittent potential costs of
corporate malfeasance, in terms of public relations and legal fees, tend to outweigh
the long-term financial benefits of risky extraction. Ominously, several of the
aforementioned reports note that newer oil and gas extraction projects tend to entail
greater risks, as the ongoing depletion of shallow deposits of fossil fuels leads to
deeper drilling (ibid).

Moreover, aside from the probable ineffectiveness of the Government’s chosen

punishment as a counter to the economic benefits of risky projects at the
organisational level, it can also be argued that the decision to fine the corporation
was an inappropriate remedy for the type of disaster that occurred. In his critique of
bureaucratized safety systems, Dekker contends that when highly complex and
dynamic systems fail, catastrophe actually tends to be preceded by “normal work”,
rather than “incidents or breaches” (2014, p. 351). Such “daily frustrations” and
“workarounds” rarely feature in operational reports, but this is generally because they
take place too frequently and fixes have been developed (ibid), rather than out of any
amoral calculation, as implied by Lynch’s invocation of ‘deserving punishment’.

This kind of incremental “organizational deviance” was first theorized in Vaughan’s

study into the failure of NASA’s space shuttle Challenger (Choi, 2010). Reflecting on
the concept’s relevance to the case of the Deepwater Horizon, Patzek has argued:

“If you feel safety is number one, then you cannot say that safety is number
one and that the job should be done at the lowest cost and that the
turnaround time should be as short as possible” (ibid).

The imposition of multiple engineering goals on workers that are geared towards
achieving economic gains, in competition with safety, appears to be fundamental to
the modus operandi of corporations such as BP. It can therefore be argued that the
Government’s decision to respond to a systemic failure with economic penalties,
actually serves to re-enforce the problematic paradigm wherein all organisational
decisions are deemed subordinate to financial considerations.

Section word count (not including in-text citations) = 1314

6
Conclusion
The preceding analysis has sought to elucidate the primary causes of the Macondo
Well blowout of 2010. Firstly, key literature considering the immediate technical
factors contributing to the disaster has been reviewed. Having considered the
evidence, it has been ascertained that a broad consensus exists among independent
investigators, legal authorities and to some extent even subjects involved, that – to
varying degrees – the three major corporate actors of relevance were guilty of
significant “negligence” and even – in the case of BP – “wilful misconduct” (Business
and Human Rights Resource Centre, 2016). The section has also attempted to
evaluate the regulatory response from the public sector. Although the US Justice
Department levied record settlement fees from BP, in the determination of the
author, the scale of this historic tragedy has not been properly reckoned with, nor
have the systemic root causes been adequately addressed. The following section
aims to outline proposals toward the attainment of these ends.

Section word count (not including in-text citations) = 147

7
Recommendations
In consideration of the preceding analysis, this report makes three
recommendations:

1. Stop encouraging increasingly environmentally-degrading extraction of

non-renewable energy sources
▪ In January 2018, the US Department of Interior announced plans to
consider “nearly the entire US Outer Continental Shelf [OCS] for
potential oil and gas lease sales” (Department of the Interior, 2018).
▪ In contrast, “the current program puts 94% of the OCS off limits” (ibid).
▪ Furthermore, the government has announced plans for further
exploration of the Gulf of Mexico and Alaska, as part of “the largest
number of lease sales in US history” (ibid).
▪ It is well understood that an oil spill in Arctic conditions would be
virtually impossible to clean up with current methods (Waldman, 2017).
▪ Governments should follow the example of Ireland, which recently
announced plans to divest from fossil fuels (McKenna, 2018).

2. Nationalise energy production, starting with BP

▪ Patzek’s contention that safety must not be compromised due to profit-
seeking considerations (Choi, 2010) should be acted on.
▪ One possible method to significantly reduce the impact of the profit
motive on energy extraction projects, would be for governments such
as the US to nationalise the domestic energy production operations of
corporations such as BP, which have repeatedly been subject to civil
and criminal investigations in recent years (Freeman, 2010).

3. Recognise the crime of Ecocide

▪ As has been argued, BP’s recent record of corporate malfeasance
suggests that even record-breaking financial settlements are limited
disincentives for major multinational corporations, due to the vast
wealth of such organisations.
▪ At present, it is difficult for public authorities to bring criminal charges
against organisations that grossly pollute the natural environment
(rather than civil charges).
▪ Governments such as Ecuador and Bolivia have taken pioneering
steps aiming to better facilitate such prosecutions of major polluters by
recognising a new concept in international criminal law: the crime of
Ecocide; meaning destruction of the environment (Wijdekop, 2016).
▪ Ecocide could become the fifth prosecutable crime at the International
Criminal Court, alongside genocide, war crimes, aggression and crimes
against humanity (ibid).
Section word count (not including in-text citations) = 327

8
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