Disaster Preparedness and Risk Management

This is the latest news regarding the disaster unfolding in Louisiana. Excerpted from Foxnews.com. "British Petroleum downplayed the possibility of a catastrophic accident at an offshore rig that exploded, causing the worst U.S. spill in decades along the Gulf coast and endangering shoreline habitat.

In its 52-page exploration plan and environmental impact analysis for the well, BP suggested it was unlikely, or virtually impossible, for an accident to occur that would lead to a giant crude oil spill and serious damage to beaches, fish, mammals and fisheries.

BP's plan filed with the federal Minerals Management Service for the Deepwater Horizon well, dated February 2009, says repeatedly that it was "unlikely that an accidental surface or subsurface oil spill would occur from the proposed activities."

And while the company conceded that a spill would impact beaches, wildlife refuges and wilderness areas, it argued that "due to the distance to shore (48 miles) and the response capabilities that would be implemented, no significant adverse impacts are expected."

There will be more questions about risk projection, risk assessment, risk assessment, risk analysis, and finally--the person who signed off on the Risk Assessment Report. I am not surprised there wasn't a disaster preparedness plan. There wasn't any probability of a disaster occurring in the first place.

Oil Spill from offshore rig off Louisiana

This week, the news on explosion, sinking of an oil rig off the cost of Louisiana, loss of lives, an unfolding environmental disaster--has been at the forefront of network news. MSNBC reported on 4/29th: "The oil leak triggered by a deadly rig blast off the coast of Louisiana has the potential to cause more environmental damage than the 1989 Exxon Valdez spill, one of the largest ecological disasters ever recorded, some observers say." Beyond the ecological impact, the total economic impact needs to be considered as well. "Experts said the spill could also destroy the livelihood of commercial fishermen and shrimp catchers and impact recreational fishermen. According to the Louisiana Department of Wildlife and Fisheries, the state’s fishing industry is worth $265 billion at dockside and has a total economic impact of $2.3 trillion."

BP was operating the Deepwater Horizon, which was drilling in 5,000 feet of water about 40 miles offshore when it exploded last week. Eleven crew members are missing and presumed dead, and the government says 5,000 barrels of oil a day are spewing from the well underneath it. Right now, the focus has been on capping the oil head, prevention of oil slick or oil from reaching shoreline--the blame game has not begun. I can just imagine what is going through BP's Risk Managers' mind, as they conduct meetings and come up with quick resolutions on how to mitigate this unfolding disasters. It is easy to pose the following questions, 1) how did this happen? 2) was this human error or was this equipment failure? 3) where in the mitigation plan did we fail? 4) how many back up or redundant systems do we currently have, both human and automated processes? 5) at the government policy level, does this change our policy to continue and open offshore drilling within US territory, knowing the risks to wildlife and ecology, at what cost? 6) to the BP Risk Managers and US COO, can we statistically predict offshore drilling disasters given past historical data? Beyond these questions, what do you tell the surviving family members for BP employees and contractors who lost loved ones.

Easy questions to pose. Harder to answer these questions.