British Petroleum America, Inc - Case Study Example

According to the research findings BP had a clean history until the oil spill. A look into its history proves that at least in principle, the company gave attention to health, safety, and environmental standards. For example, in the year 2005 alone, the company invested nearly $ 8 million on promoting the production and marketing of low carbon power from alternative energy sources like solar, wind, and natural gas. Moreover, the company took initiatives to provide low cost liquefied petroleum gas to low income customers.

In addition, the company claims that the company prepared new principles in the year 2005 in order to address the increased demand for environmental vigilance. Thus, it becomes evident that the company was very careful to create an environmentally ethical image as it had to access environmentally sensitive areas like Alaska. It was in March 2006 that the worst oil spill in the history of the company took place in the North Slope of Alaska’s tundra. It took five days to discover the oil leak, and by that time, nearly 200000 to 270000 gallons of crude oil spilled into the area.

Though the exact reason of the spill is still unknown, the company has been criticized by many for its improper maintenance of pipelines. In fact, the responsibility to maintain and operate the Trans-Alaska Pipeline System where the leak took place is with the Alyeska Pipeline Service Company. But BP cannot evade from its responsibility to oversee that proper maintenance takes place. Though the primary reason, according to many, is the aging and deterioration of the pipelines in the supply system, there are various factors that are believed to be the cause of early deterioration and leakage.

The first such factor is the diminishing quality of the crude oil that passes through the pipeline (p. 12). It is pointed out that as more and more oil exploration takes place, the quality of crude oil has declined substantially. The company spokesperson opines that the reason behind corrosion can be the presence of water and sediment in the oil (p. 12). On the other hand, the opinion of Steve Marshall, the president of BP Exploration, is that the reason lies in the presence of an emulsion-breaking additive in the oil.

The ultrasonic tests conducted in the year 2005 identified increasing corrosion in the pipeline, and as a result, the company increased the budget for pipeline maintenance, and increased the frequency of pipeline inspections. Despite all these efforts, the leak took place at a place where the pipe was buried underground. Anyway, the company and its environmental policies have become a center of media attention. In addition, the Office of Pipeline Safety has directed BP to conduct thorough repairs and investigations and to report the same to the office.

The company can use the pipeline only after it receives permission from the federal agency. In addition, the company is likely to face a fine that can go up to $ 2.1 million (p. 10). Lastly, the efforts of the company to present itself as a ‘green’ one has faced a serious set back due to the incident. 1. From the very beginning