May 27, 2010 -- As the nation comes to grips with the worst oil disaster in its history, there is evidence BP has one of the worst safety track records of any major oil company operating in the United States.
In the last five years, investigators found, BP has admitted to breaking U.S. environmental and safety laws and committing outright fraud. BP paid $373 million in fines to avoid prosecution.
BP's safety violations far outstrip its fellow oil companies. According to the Center for Public Integrity, in the last three years, BP refineries in Ohio and Texas have accounted for 97 percent of the "egregious, willful" violations handed out by the Occupational Safety and Health Administration (OSHA).
The violations are determined when an employer demonstrated either an "intentional disregard for the requirements of the [law], or showed plain indifference to employee safety and health."
OSHA statistics show BP ran up 760 "egregious, willful" safety violations, while Sunoco and Conoco-Phillips each had eight, Citgo had two and Exxon had one comparable citation.
Failure to Act
After a 2005 BP refinery explosion in Texas City, Texas that killed 15 people and injured 180, a Justice Department investigation found that the explosion was caused by "improperly released vapor and liquid." Several procedures required by the Clean Air Act to reduce the possibility of just such an explosion either were not followed, or had not been established in the first place.
BP admitted that its written procedures to ensure its equipment's safety were inadequate, and that it had failed to inform employees of known fire and explosion risks. The company paid $50 million in criminal fines in connection with that disaster, and acknowledged violating the Clean Air Act.
Jordan Barab, the deputy assistant secretary of Labor for OSHA, said BP refineries have a "systemic safety problem," and that the tragedy in BP-Texas City "revealed serious process safety and workplace culture problems at the facility."
Yet BP never fixed the problems in Texas City. Just last October, OSHA fined the company $87 million because it has failed to correct the safety problems at the rebuilt Texas City plant. That represented the largest fine in OSHA history.
In 2007, a BP pipeline spill poured 200,000 gallons of crude oil into the pristine Alaskan wilderness. In researching the environmental hazard, investigators discovered BP was aware of corrosion along the pipeline where the leak occurred but did not respond appropriately. The company was forced to pay $12 million more in criminal fines for the spill, in addition to another $4 million to the state of Alaska.
Manipulating The Market
BP's infractions were more than environmental. The Justice Department required the company to pay approximately $353 million as part of an agreement to defer prosecution on charges that the company conspired to manipulate the propane gas market.
Investigators from the Justice Department found that some BP traders were stockpiling propane, which forced the market prices to skyrocket. After their incriminating conversations about controlling the market were caught on tape, three BP traders were indicted.
The alleged price gouging affected as many as 7 million propane customers who depended on propane to heat their homes and cost the consumers $53 million. But for a company that reported profits of $14 billion in 2009, the fines represent a small fraction of the cost of doing business.
Additional reporting by Jack Cloherty and Jason Ryan.