Wednesday, August 09, 2006

Morons On Top

I’ve been noticing the BP ads on TV but I haven’t seen one that explains how morons came to be in charge of the company.  The idea that Prudhoe Bay oilfield can be shut down for any length of time is ludicrous.  I guess all the black belt 6 Sigma gurus were out to lunch.  Surely there had to be some awareness of the fact that metal tubes will corrode.

The design of a pipeline system must consider maintenance, so presumably there would be built in some kind of secondary system so that the piped products could be diverted to allow inspection and repair to take place.  Are we to believe that until someone noticed a spot of oil in the snow and that the company was blissfully ignorant of not only the possibility of leaks but the existence of one or more? Now BP is going to replace 70% of the transport tubes, how can this be?

Any manager knows that good quality systems increase profit by reducing cost. Maybe BP is making so much money that quality was not considered a very high priority; in fact that is obvious. There is a saying that high revenues hides a lot of problems and that is certainly true in this case. The Board of Directors must demand the resignation and replacement, over time of course, of the current management team. The superintendent of Prudhoe Bay must be terminated immediately.

Congress has to defy the environmentalist nut cases and get some new oil flowing and new refineries built and online. The fake outrage over large profits can be muted by making reinvestment possible. More capital expenditure will strengthen our chances for energy independence and boost our economy if only slightly. We can certainly use an economic boost about now.

The situation at Prudhoe Bay is almost criminal and certainly demands scrutiny. I cannot agree with those commentators who say “Let’s stop the blame game and get on with developing our resources.” The latter part of the statement is correct, but the former is not. There must be blame assessed and punishment, in the form of sending the boss home, so that future managers will hesitate to save money by deferring maintenance. The practice of maintenance deferral is a time honored way of beating the budget. Airlines use it and are courting disaster when they do. BP is simply reaping the results of deferring just a little too long.

No comments: