Monday, June 7, 2010

Oil on Animals In the Gulf ... A Risk Management Debacle

I rarely speak out on topics which could be construed as political, but today is an exception.  I am absolutely abhorred by what I see in these pictures!

Animals Affected By the Gulf Oil Spill

Because I follow a wide range of stories impacting the financial markets, I have read numerous articles on the impact of the Gulf oil spill.  Let's cast aside politics here.  It's not Sarah Palin's fault, it's not Barack Obama's fault, it's not the government's fault.  Getting down to root cause, this situation was caused by a lack of prudent risk management by a huge company which had the means and resources to do better.

Even though I am not employed in the oil exploration and drilling industry, as a former risk manager I clearly understand that it is a company's responsibility to assess, monitor and control for risks, especially the big ones.  Government regulation is relevant, too, but let's not blame the government when the primary accountability rests with the company.

BP should have been voluntarily assessing and monitoring its key risk indicators, among them that the Deepwater Horizon drilling rig in the Gulf of Mexico could have a blowout and a massive explosion.  A team at least should have been testing and controlling for such risks, as well as others, on a regular basis.  And controls should have included remedies to resolve rapidly a situation such as this.  Didn't someone at BP bother to assess the environmental, financial, and reputational risks for a disaster like this and decide it was a high priority to put some controls in place??

What I wish I had is a link to a slide show on the business impact of this disaster, and yes, it is one.  The millions of dollars in lost revenues, personal income, and other fallout will be felt in the Gulf for months and possibly years to come.  Rig contractors, hotel operators, restaurants, fishing operations, and tour boats and those people they would hire are a few of those impacted.

Finally, to BP, all the heartwarming and genuine "We're sorry" commercials online and on television don't make me feel any better when I see the pictures of those animals.  And these newly crafted BP logos are at best, soberingly funny.  Even the articles forecasting a bankruptcy filing in BP's future provide little solace for my righteous indignation.  I just wish I had a gigantic rewind button to make it all go away.


  1. Susan, this is a very clear explanation of the situation and where the fault lies. I was especially shocked when the head of BP said he just wanted his life back. I imagine the eleven people who died as well as the lost wildlife and the countless thousands of people who have had their livelihoods taken away would like to have their lives back too.

  2. Yes - it is very sad to have to do a post on a topic like this tragedy that could have been prevented!