The Disaster in the Gulf
By:Matthew Newcomer, Simon
Wong, and Robert Yerkov
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
The Decision
 Documents detail shortcuts BP took to save money and a
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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 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
Stakeholders
Operation of the D.H. using cheap fast methods,
manipulating MMS
Operate D.H. using best
industry practices with
effective inspection and
regulation
BP shareholders
(long-term) Profit Maximization
Deepwater Horizon
employees
Universalism (people died)
BP executives and senior
mngmt.
P.M.
BP employees at large
Universalism Utilitarianism
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Oil Industry
Universalism* Utilitarianism* P.M.
* Greater scrutiny of industry could have
benefits: improve safety, reliability
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American economy
Utilitarianism
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American Health (people)
Universalism
Gulf Coast residents
Utilitarianism Universalism
World water quality
Utilitarianism Universalism P.M.
American Govt (Political
Leaders)
Utilitarianism
Environment Gulf of Mex.
Universalism
Earth (people and nature)
Sustainable World
A lasting legacy of the oil spill may be more
incentive to achieve a sustainable world. The oil
spill could create enough political will to enact
meaningful environmental legislation and change
leading to a better World.
Universalism
Universalism
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Utilitarianism
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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.
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.
Utilitarianism
 Entire Oil Industry has been thrown into turmoil.
 Devastating Environmental Damage that will take decades
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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.
Causes and Biases Behind BP’s
Decisions
 Personal
 Situational
 Organizational
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.
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.
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.
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?
The End