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06-07-2010, 09:11 AM
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"BP, the global oil giant responsible for the fast-spreading spill in the Gulf of Mexico that will soon make landfall, is no stranger to major accidents. In fact, the company has found itself at the center of several of the nation's worst oil and gas–related disasters in the last five years.

In March 2005, a massive explosion ripped through a tower at BP's refinery in Texas City, Texas, killing 15 workers and injuring 170 others. Investigators later determined that the company had ignored its own protocols on operating the tower, which was filled with gasoline, and that a warning system had been disabled.

The company pleaded guilty to federal felony charges and was fined more than $50 million by the U.S. Environmental Protection Agency.

Almost a year after the refinery explosion, technicians discovered that some 4,800 barrels of oil had spread into the Alaskan snow through a tiny hole in the company's pipeline in Prudhoe Bay. BP had been warned [1] to check the pipeline in 2002, but hadn't, according to a report in Fortune. When it did inspect it, four years later, it found that a six-mile length of pipeline was corroded. The company temporarily shut down its operations in Prudhoe Bay, causing one of the largest disruptions in U.S. oil supply in recent history.

BP faced $12 million in fines for a misdemeanor violation of the federal Water Pollution Control Act. A congressional committee determined that BP had ignored opportunities to prevent the spill and that "draconian" cost-saving measures had led to shortcuts in its operation.

Other problems followed. There were more spills in Alaska. And BP was charged with manipulating the market price of propane. In that case, it settled with the U.S. Department of Justice and agreed to pay more than $300 million in fines.

At each step along the way, the company's executives were contrite.


There are also indications that BP and Transocean, the owner of the Deepwater Horizon rig that burned and sank, could have used backup safety gear [4] -- a remote acoustic switch that would stanch the flow of oil from a leaking well 5,000 feet underwater -- to prevent the massive spill now floating like a slow-motion train wreck toward the Mississippi and Louisiana coastline. The switch isn't required under U.S. law, but is well-known in the industry and mandated in other parts of the world where BP operates.

In the year before the accident, BP once again aggressively cut costs. A reorganization stripped 5,000 jobs from its payroll, saving BP more than $4 billion in operating costs, according to a report sent to ProPublica by Fadel Gheit, an investment analyst for Oppenheimer.

On April 27, as the U.S. Coast Guard worked with BP engineers to guide remote control submarines nearly a mile underwater in a futile effort to close a shut-off valve, BP told investors that its quarterly earnings were up more than 100 percent over the last year, beating expectations by a large margin. After underperforming its competition throughout the last decade, Gheit wrote, BP was the only major oil company to perform better than the S&P 500 last year."

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