The BP Oil Spill is regarded as the biggest oil spill in the records of the United States. The discharge came from a blast on the oil rig in the Gulf of Mexico. The blast, which took place on April 20, 2010, resulted in the loss of 11 lives, injuring 17 people, and the discharge of millions of crude oil barrels into the Gulf. The incident caused one of the worst environmental disasters in America. For the 87 days that the incident occurred, it is reported that the nation watched as several approaches to cover the flowing Macondo well collapsed (Barron 317).
According to BBC News (2011), the outcome of this catastrophe comprise of the terrible loss of employees’ lives, damage to several residents of the Gulf Coast, and an economic and ecological calamity that is still revealing even today. It should be noted that the full extent of the damage caused by the oil spill cannot be gaged right now because the impact will last for several generations. Aside from the loss of lives, another significant impact of the oil spill incident was from environmental damage. The BP oil spill placed a lot of pressure on the firm to mitigate its impacts in the drilling process. At the same time, the company had to deal with the substantial negative publicity for several years and months following the spill. The company was forced made settlements that are considered the most prominent environmental settlement in US history. Osofsky (2015, p. 1077) states that the ruined the tourism and fishing industries of the Gulf Coast regions and led to the death of a large number of marine creatures and seabirds which were considered an endangered species. The oil spill severely disrupted the financial performance of BP, and it’s stock prices as the news regarding the extent of the disaster continued to spread.
It is argued that some of the causes of the BP oil spill include defective cement on the borehole, and malfunction of the two valves, and battery back-up systems as well as a failure of the gas alarm (de Wolf, 2014, p. 71). The author also argues that the BP oil spill might have been caused misinterpretation of the pressure, and poor management, industry oversight, and lack of effective communication.
It is believed that bad management and a failure in communication by BP and the Macondo well associates resulted in the oil spill disaster. From a theoretical perspective, the safety lapses were a habit at the company. The various decisions that ruined the oil drill proved a failure in management. Effective management approach could have prevented the disaster. The three companies that were involved in the oil drill were guilty of poor management (de Wolf, 2014. 84). Many of the mistakes and oversights that led to the oil spill resulted from failures in management. The BP mess was a major failure in management. At the same time, there was also a lapse in communication. Important information seemed to get between the companies involved. It should be noted that BP instigated adjustments to the rig and its safety procedures with no better understanding of their impact on the rig and its employees. Halliburton did not share information, and BP also failed to appropriately interpret the data on the cement seals that was being generated (Osofsky 2015, p. 1077). The three companies involved in the oil drill failed to share information that they would have used to assess the level of the risk accurately.
From the crisis, some incidents indicated a failure in leadership. Some of the management failures were the poor leadership at critical moments, poor communication and not sharing information, failure to offer well-timed procedures during a crisis, inadequate training and organization of the workers, poor management and supervision of the contractors, poor application of technology, and failure to adequately evaluate the potential risks the organization may face and develop mitigation measures. Lam (2014) stipulates that management is the aspect of doing things the right way while leadership is associated with doing the right things. When these aspects are missing or poorly implemented in an organization, there is a lack of direction and the desire to do things the appropriate way. Crisis management is considered as a vital responsibility of an organization since failure in crisis management can lead to significant damages to the organization and its stakeholders.
The failures that led to the BP oil spill could have been avoided. It is noted that BP failed to adequately identify or address the risks that were generated by the last-ditch changes to the procedures and design of the well. BP changed repeatedly changed its plans even up to the very last minute, and this caused a lot of confusion and frustration among the employees and rigs the personnel, yet they provided little guidance and details. As an offshore oil industry, it was essential for them to emphasize on improving efficiency to save the rig time and the associated cost (de Wolf, 2014, p. 83). However, the management processes ought to have ensured that actions are taken to save time and the cost reduction does adversely affect the overall risk. It is also noted that Halliburton seemed to have not focused on supervising the works of its key cementing workers and they also failed to significantly review the data that could have made them remodel the Macondo cement slurry. The company also ought to have adequately trained its employees in emergency actions and kick detection and tell about the key lessons learned from related or latest near-miss drilling event. This statement is also supported by Hoyt & Andre (2015, p. 798) who states that poor communication and excess classification of information led to the Macondo explosion. The people on the helm of decision making regarding some aspects of the well like the onshore engineers failed to communicate critical information to the rest of the group like the site leaders who were also making similar decisions on a different aspect. When they were faced with inconsistent data, they failed to ask for guidance from those with the required expertise and instead made decisions founded on incomplete data. BP and Transocean ought to have communicated the experiences of other wells to help in the decision making process at Macondo. The information about drilling at the Macondo site was classified both between and within the firms. In most cases, the engineering staff at the BP onshore had an idea of risks with the Macondo drill; therefore, they ought to have communicated the risks to help mitigate the risks.
The organization can learn so many things from the incident. Effective communication and proper leadership are critical for risk management. The communication failure is a perfect example of the significance of concise workplace communication. When it becomes to large organizations, it is essential to know how to effectively communicate, confirm the reception of your messages, and understand and interpret the information received comprehensively. Different companies can use this disaster and its causes as a preventive lesson and develop a corporate culture where communication skills are taught, practiced and valued (Falkenheimer & Heide, 2014, p. 186). At the same time, leadership approaches should be effective to understand the possible risks the organization can face and make develop an enterprise risk management program for the organization. What the employees were doing at Macondo and what each drilling process required lacked a culture of leadership responsibility. What this perspective portrays is that in such offshore environments, people must take personal accountability for their safety with a focused approach to ask questions and get advice to ensure that they do the right thing.
To help them recover from the situation, the company requires effective procedures to accurately account for the potential risk the company can face and assess the overall impact of decisions made for the company’s operations. It is noted that normal cost pressures led the decision making and enabled certain operations dismissals to be removed as inefficiencies. I, therefore, recommend the company to adequately analyze the risk that critical decisions can create and develop plans to help mitigate such risks. This would help prevent any risk that can occur or minimize their impacts (Hoyt & Andre, 2015, p. 819).
From the crisis, we can learn certain lessons as leaders. It presents the significance of best planning practices and response that entails situational awareness in an organization and ensuring clarity as well as accountability of roles and process. At the same time, we learn the significance of working as a team through effective communication to avoid errors that can cause risks. In case of a crisis, clear communication should be enhanced to act quickly to prevent the compounding effects of several mistakes. Generally, we learn the value of a robust crisis planning process and the managers’ and leaders’ understanding of risks and the associated consequences.
Barron, Mace G. “Ecological impacts of the Deepwater Horizon oil spill: implications for immunotoxicity.” Toxicologic pathology 40.2 (2014): 315-320.
BBC News. US oil spill: ‘Bad management’ led to the BP disaster. Retrieved from https://www.bbc.com/news/world-us-canada-12124830, 2011.
De Wolf, Daniel. “Crisis management: Lessons learned from BP Deepwater Horizon Spill Oil.” Business Management and Strategy 4.1 (2014): 69-90.
Falkenheimer, J. & Heide, M. Multicultural crisis communication: Towards a social constructionist perspective. J. Contingencies and Crisis Management, 14(4):180 – 89, 2014).
Hoyt, Robert E., and Andre P. Liebenberg. “The value of enterprise risk management.” Journal of risk and insurance 78.4 (2015): 795-822.
Lam, James. Enterprise risk management: from incentives to controls. John Wiley & Sons, 2014.
Osofsky, Hari M. “Multidimensional Governance and the BP Deepwater Horizon oil spill.” Fla. L. Rev. 63 (2015): 1077.