Disaster forces hike in safety measures

Why does it always seem like it takes a disaster for a company to beef up safety in a plant?
BP unveiled the other day it was going to add an addition $1 billion to the $6 billion it allotted over the next four years to “upgrade all aspects of safety at its U.S. refineries and to repair and replace infield pipelines in Alaska.” Let’s face it, $6 billion is not a bad number to begin with and $1 billion is a nice addition. My question is how much would it have been if Texas City and the other BP developments never really hit the public’s radar screen?
Be that as it may, the company said this latest move is a part of a wide-ranging package of measures aimed at improving confidence in the integrity of BP's U.S. operations following a series of incidents over the past 18 months, including last year's explosion at the Texas City refinery, and the oil spill in Alaska.
Taking short cuts, cutting costs, closing your eyes to preventative measures that may cost the company money in the short term, and not having effective training is always a recipe for disaster. Surely BP is not guilty of all of those infractions, but they are guilty of some and they are now paying the price monetarily and through the public’s perception of the company.
Don’t feel sorry for BP coughing up an extra billion. They had a second quarter net profit of $7.27 billion, which included a $500 million charge related to the Texas City blast that killed 15 in March 2005.
Part of the expenditure will go toward systems to manage process safety at the refineries. They will undergo a major upgrade, with $200 million earmarked to pay for 300 external experts who will conduct comprehensive audits, and re-designs where necessary, of all safety process systems. The new systems should be up and running by the end of 2007. Let’s hope it is money well spent.
Talk to me.