Deepwater Horizon Oil Spill

Deepwater Horizon Oil Spill

For some years BP tried to change its image. After a series of major scandals, including a Texas refinery explosion that killed 15 employees, the firm expressed a renewed commitment to make safety and sustainability top priorities. For instance, the company changed its name to BP and then tried to rebrand itself as Beyond Petroleum. This rebranding signaled to stakeholders that it was focused on sustainability and the need to move beyond nonrenewable energy sources. It adopted an extensive code of conduct and invested heavily in alternative energy sources. BP was the first oil company to acknowledge global warming. But when a company tries to reposition itself as socially responsible and sustainable, it has an obligation to live up to its promises. BP’s failures to do so became tragically clear when the Deepwater Horizon oil rig, operated under the oversight of BP, exploded in the Gulf of Mexico.

BP had subcontracted an oil rig from Transocean, Ltd. to tap into a new, highly profitable oil reservoir in the Gulf of Mexico. On April 20, 2010, an explosion rocked the rig, killing 11 employees. The burning rig sank two days later. A damaged oil well was leaking thousands of gallons of crude oil into the Gulf of Mexico, quickly creating an environmental catastrophe.

BP immediately started drilling other holes in the hopes they would relieve pressure on the damaged well, but these and other efforts proved unsuccessful. Soon as much as 2.5 million gallons of oil was pouring into the Gulf of Mexico daily. Oil washed up on the coasts of Louisiana, Texas, Alabama, Mississippi, and Florida, wreaking havoc on the livelihoods of fishermen and others dependent on the Gulf for income.

What Caused the Explosion?

The explosion was likely caused by a number of events. Investigations suggest that actions on BP’s part made the well more vulnerable. One investigation implies BP cut short procedures and quality testing of the pipe—tests meant to detect gas in the well. Some experts hypothesize that one of the final steps in installing the pipe, which involved cementing the steel pipe in place, could have been the catalyst for the explosion. The cement was not able to hold back the surging oil and gas that led to the explosion. In addition, BP decided to use a less costly well design that some Congressional investigators deemed “risky.” Installation of this design is easier and costs are lower. However, it provides a better