The Disaster in the Gulf By:Matthew Newcomer, Simon Wong, and Robert Yerkov

1. The Disaster in the Gulf • By:Matthew Newcomer, Simon Wong, and Robert Yerkov

2. Background • April 20, 2010 - Explosion on The Deepwater Horizon (mobile oil drilling platform) • 11 Workers Killed and 17 Injured • April 22, 2010 - Sinking of the Deepwater Horizon • Ironically happened on Earth Day • The pipe connecting from the platform to the ocean floor sheared off when the rig sank. • Initiated the Largest Oil Spill in the U.S. History • To date over 100 million gallons of crude and counting has flowed into the Gulf of Mexico

3. Documents detail shortcuts BP took to save money and a few hours of time. BP did not follow standard Industry practices and ignored recommendations from their construction contractor, Halliburton, on installing necessary safety features BP’s reckless shortcuts nullified specific built in safety features, existing for the express purpose of preventing Natural Gas from leaking up from the well construction which could cause an explosion on the rig. BP’s actions also prevented automatic systems from sealing the ruptured oil well stopping a potential oil spill. BP had no plan or realistic belief that a major oil spill could occur. BP’s spill response plan’s top wildlife expert died in 2005 even though the plan wasn’t published until 2009 The BP response plan contained 40 pages explaining how to deal with the media, but only 9 pages detailing oil spill containment and cleanup procedures. The Decision

4. The Decision cont. • BP made conscious decisions that caused the Deepwater Horizon oil rig explosion and resulting oil spill. • In our opinion, these decisions and actions are unethical, negligent and probably criminal. • We analyzed why this decision is unethical using the ethical decision making processes which we learned about in class. • Profit Maximization, Utilitarianism, and Universalism

6. Profit Maximization • In our opinion, the decision base that BP violated when deciding what to do. • Did not take other factors into account and only looked at profit of the company. • How much money would be saved by NOT repairing the platform. • Not an unethical action, but an unethical lack of action. • Principal promotes long term value over short term value, BP was only concerned about the short term while ignoring the immanent future problems.

7. Universalism • BP went against the key principals of universalism. • States that you should only take action if you would get what you want under equivalent circumstances if EVERYONE did it. • If every oil company in the world followed BP’s example and lack of action on its part, there would be chaos. • Also, BP used people inappropriately as a means to an end. • The inspectors were used as the means and the end would be passing an inspection, even a satisfactory evaluation was unfounded.

8. Utilitarianism • Entire Oil Industry has been thrown into turmoil. • Devastating Environmental Damage that will take decades to stabilize and may never fully heal. • Gulf coast economy wrecked. Oil industry, tourism and fishing were the 3 major coastal industries. • Oil Spill will enter the Gulf Current and spread up the East Coast and throughout the Atlantic. • Oil contamination will risk human health and limit food supply. • US economy and Govt. will divert massive resources to Oil spill aftermath, from other investment opportunities. • For only a little more time, effort and money from BP could have easily prevented the entire Disaster.

9. Causes and Biases Behind BP’s Decisions • Personal • Situational • Organizational

10. Personal Factors • Goal-Oriented Leaders: Focused on getting the job done without regard for the outcomes. • Performance Based Compensation: Managers are paid by how well they perform, issues with an oil rig would look bad for them. • Superiority Complex: Managers felt like they knew more than the inspectors, not due to knowledge or expertise, but rather pride and ego.

11. Situational Factors • Poor Company Leadership: John “Guide” objected to certain safety tests and procedures on the Deepwater Horizon. • Direct Email Quote: “Who cares, it's done, end of story, it will probably be fine.” --John Guide-- • Example of engaging in risky behavior for the sake of time and money.

12. Organizational Factors • High demand for profit throughout the entire oil industry: very competitive. • Lack of Government Regulation: BP was not mandated to follow increased or standard safety protocols as suggested in reports from their inspectors. • Lack of Government Regulation: BP is heavily invested in lobbying activities in Washington.

13. Business as Usual • This example ties nicely into the Anand article. • BP is a display of the acceptance of corruption throughout not only a company, but an entire industry. • Four Rationalization Strategies - Denial of Responsibility - Denial of Victim - Social Weighting - Appeal to Higher Authorities • BP continuing unethical behavior during Oil spill response?

14. The End