BP Not Green in Louisiana

The tragedy of the oil spill in Louisiana highlights the shortcomings of a company hailed just a few years ago as the greenest in the oil industry. From mid-1990 to the mid-2000s, BP hoped to turn the world oil industry upside down. Renamed “Beyond Petroleum” after its merger with Amoco in 1998, the company wanted to make the exploitation of hydrocarbons into a clean industry. Under John Brown’s direction, the London-based company spearheaded what we now call corporate social responsibility. BP was working with the World Bank, the European Bank for Reconstruction and Development and various nongovernmental organizations like Amnesty International and the Turkish World Wide Fund for Nature to implement the greenest pipeline possible. The British company seemed to be the model to follow.

However, Brown’s departure in 2007 sounded the death knell for this policy. Tony Hayward, the company’s former financial director, succeeded Brown. One of Hayward’s first decisions was to focus on BP’s primary business, namely the production of oil and gas, and to put aside the company’s social and environmental commitment.

Noting that the company—after being hot on ExxonMobil’s heels as the industry’s major player—had been demoted to fourth place, he demanded a massive reduction in costs. Hoping to maximize profits and catch up with the other major players, BP sacrificed what should have been its number one concern: safety.

The Deepwater Horizon project in the Gulf of Mexico should have epitomized the British company’s comeback: from this oil rig, BP carried out the deepest drilling in the history of oil—more than 10,000 meters (about six miles) deep. Now, this will be the symbol of the new strategy’s failure. According to the first accounts from technicians working on this platform, BP had, for several weeks, asked for an acceleration of production even as Transocean—the owner of the infrastructure—suggested a halt in production.