The oil spill: Nuclear, take note

By Margaret Harding

A few months ago, I had the honor of leading a class of future engineering leaders at Iowa State University. The dean, Dr. Jonathan Wickert, occasionally asks alums and others who have done interesting things with their engineering degrees to come in and lead the class in a case study. Events in the Gulf of Mexico that started in April 2010 with the Macondo oil spill provided an excellent opportunity to talk about crisis management and communications, with the added benefit of current technology relevance. This is an area that the nuclear industry also needs to study and understand.

The Deepwater Horizon offshore drilling unit on fire after the explosion

Some bounds: We ignored anything that happened BEFORE the Deepwater Horizon explosion. The fact that BP, the company that was drilling in the Gulf’s Macondo oil field, may or may not have had adequate preventive measures is out of scope for this assessment.

An oil containment dome under construction

The class and I first looked at the actions of BP, separating its actions from the comments and media frenzy. The Wikipedia entry for the event forms a good, neutral review of the events. Once we got away from the natural bias the students had formed and looked at BP’s actions, we saw a pretty good response to the crisis. BP had multiple teams working in parallel on a variety of solutions to cap the gushing well—some solutions were dubbed Top Hat, Top Kill, and Bottom Kill. Each effort was carefully attempted with due caution to ensure that it didn’t make things worse. Each action that didn’t work resulted in lessons learned. BP avoided extreme responses— “Nuke the well?”—and came up with temporary options to mitigate the impact as quickly as it could. In addition, BP engaged quickly in cleanup and mitigation actions for the oil that had already spilled.

So why did Tony Hayward lose his job?

We examined a number of news clips, commentaries, and some pretty funny riffs on BP’s response. Just Google “BP” and “oil spill” and you will come up with more than enough reference material to fill the space. The fundamentals we came up with were:

Hayward

  1. The fact that Tony Hayward, who is now the former chief executive officer of BP, was not an American, but was born in the United Kingdom. We Americans have a love/hate relationship with the British, and his accent constantly reminded us of that. In fact, the chairman of BP, a Swede named Carl-Henric Svanberg, later made some similar faux pas when he talked about “small people.” Hayward didn’t fully appreciate some of the nuances of American culture, and he made several remarks that did not play well in the United States.
  2. “I want my life back too,” said Hayward. This was an attempt to show empathy with the people who were affected, but delivered in a British accent with the knowledge that he probably wouldn’t go bankrupt or lose his livelihood did not play well.
  3. BP attempted to downplay the significance of the spill before it had a grip on the real magnitude and a real plan to cap the flow and mitigate the effects. By significantly underestimating the flow rate and overestimating the company’s ability to cap the flow, BP undermined its own credibility and contributed to the sentiment that the company didn’t care and wasn’t doing enough.
  4. BP was not prepared for 24/7 media coverage, nor did it understand the ubiquitous nature of the Internet. When Hayward took a weekend off to be with his family, he went yachting off the coast of England. Someone snapped his photo and it was splashed across United States. The same weekend, in the midst of an environmental crisis, President Obama played golf with some friends. No pictures and no bad press ensued there.
  5. BP was slow to understand the power of social media. A phony BP Twitter account was online far too long without a response from BP, nor did the company manage the ensuing parodies and other easily managed pot-shots. When finally the new chief executive officer, Bob Dudley,  stepped up and talked about how much some of the parodies hurt the employees of BP, who had finally been in the media and were made human, much of the negative press was halted.

The list of things one can learn from the event in terms of crisis response and communication can go on and on. What did you (or your company) learn from the event? What can the nuclear industry learn?

Harding

Margaret Harding has almost 30 years of experience in the nuclear industry in technical design, licensing, and quality issues.  She worked for GE-Hitachi for 27 years with positions of increasing responsibility, leading to vice president of Engineering Quality. Two years ago, she left GE-Hitachi to start her own consulting business to help companies with business ventures in the nuclear industry. She is a guest contributor to the ANS Nuclear Cafe.

One response to “The oil spill: Nuclear, take note

  1. BP’s Gulf Catastrophe is Big Oil’s Three Mile Island: Will They Learn from the Nuclear Industry how to Achieve Environmental Safety and Operational Surety?
    Mark Miller and Jim Hylko
    Today, all of Big Oil (ExxonMobil, Royal Dutch Shell, Chevron Corporation, ConocoPhillips) should be equally concerned with the crisis being faced by BP. This is because precisely the same thing could happen to any one of them in the future. Competing energy companies must share with one another (and enforce upon one another) the “best management practices” which enabled the commercial nuclear industry to achieve its very impressive accomplishments since the TMI Accident.
    The public cry for more and stronger regulatory oversight will never result in as effective improvements as peer-imposed requirements. This is because the regulatory process is, of necessity, long, drawn out, deliberative and one-size-fits-all. As a result, many of the resultant regulations are less effective than they were initially intended to be. Furthermore, their development is necessarily and heavily influenced (political, lobbyist and public hearing influences) by the industry that they are designed to regulate. Rather than rhetoric and “camera dressing” that is part of the regulatory development process, peer-imposed requirements go directly to a clear objective and are not subject to the inevitable distortions that may be the final product of even the best-intended regulatory development.
    Make no mistake that unambiguous, fair, consistent, enforceable regulations are an absolute necessity. However, their effectiveness can only be expected to go so far. Beyond that, aggressive proven-to-be-effective “best management practices” developed by peer-competitors and imposed with an unwavering focus on both public safety and the industry’s survival is essential.
    The idea of removing liability limits for companies that cause environmental harm that is being considered may be a good idea. It will properly re-focus risk/cost/profit evaluations, rather than encouraging profit-motivated safety shortcuts that are more likely to occur if a commercial entity knows that taxpayers (or ratepayers) will “pick up the tab” for anything in excess of published liability limits.
    Following the tragic accident at Three Mile Island (TMI) Unit #2 in 1979, executives from all of the U.S utilities who operated nuclear power plants convened a meeting at which they resolved “Never Again”. Their concern was real, not just for the public and environment’s well being, but for the very survival of commercial nuclear power generation. They recognized, that in spite of the fact that no actual environmental harm resulted from the TMI accident, the public would call for an immediate shutdown of all remaining power plants in this country if another significant accident occurred at any of the remaining operating nuclear power plants. The utility consortium’s objective was to establish a program that specified appropriate safety standards including those for management, quality assurance, operation procedures and practices, and independent evaluations. Also, it was clear that there must be systematic gathering, review, and analysis of operating experience at all nuclear power plants, coupled with an industry wide communications network to facilitate the speedy flow of this information to affected parties. From that meeting came the Institute for Nuclear Power Operations (INPO). Their mission: to promote the highest levels of safety and reliability – to promote excellence – in the operation of commercial nuclear power. They go about achieving this mission by a very aggressive and transparent , straightforward process which includes:
    • establishing performance objectives, criteria and guidelines for the nuclear power industry
    • conducting regular detailed evaluations of nuclear power plants, and
    • providing assistance to help nuclear power plants continually improve their performance.
    INPO’s primary objectives were focused on public safety and operational assurance, not profitability. However, a pleasant surprise occurred when the INPO recommendations became the operational standard that all commercial utilities lived by. Availability factors and profits skyrocketed! As is often the case, safety professionals strive incessantly to convince management that safety doesn’t cost money; it actually makes money! INPO’s beneficial impact on the nuclear utilities is dramatic, undeniable proof of those arguments.
    Commercial nuclear power went from availability factors of around 70% in the 1980’s to consistently above 91% in 2010. This is due, in part, to the INPO-inspired “best management practices” that were imposed by peer utility operators rather than any “regulatory requirements” enforced by the Nuclear Regulatory Commission (that were necessarily less ambitious than peer-imposed objectives). Big Oil would do well to consider this success in light of the enormous stakes involved in continuing to provide oil to the market with reasonable assurance that they can do it without a repeat of the BP Gulf Disaster.
    Now, 30 years after TMI, Big Oil is facing the same crisis that faced the nuclear industry in 1979. Will Big Oil recognize the opportunity to adopt a proven, successful model that the INPO experience provides to rescue their industry from a painful demise or a new profusion of costly any marginally effective regulations for which the public is clamoring? What they (and the public) needs is assurance that things will operate as designed, not insurance to pay for accidents when they don’t.
    End note: The world will continue to demand oil to satisfy its insatiable need for energy. World economies are directly tied to the availability of energy, and oil plays a prominent role in this reality. It is in the interest of the world’s consumers of oil that Big Oil achieves the highest possible operational safety assurances in addition to continuing as a viable and profitable industry. This will enable them to provide their valuable commodity at the lowest prices to consumers with the assurance that this success is being achieved with the highest possible assurance of being achieved safely. Punitive damages and compensation for accidents may look and feel good for a short while, but they pale in comparison to doing the right things the first time. Ask any resident of the Gulf Coast who is affected by the BP spill: “Would you rather have your livelihood back, or would you like a compensation check from BP?”

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