The 1989 Exxon Valdez Oil Spill in Alaska - Dissertation Example

Taken together, oil and natural gas pipeline accidents have also been recurrent for decades, often resulting in a significant number of fatalities.  In 2011, a pipeline fire killed 100 people and seriously injured 120 in Nairobi.  In 2010, a Pemex (Petroleos Mexicanos) pumping station in Central Mexico exploded, killing 27 and injuring 50 (Ellingwood, 2010). In 2006, a pipeline explosion in Nigeria killed up to 500 people (BBC News, 2006), but the fatalities in this incident are only second to the Ufa train disaster in Russia in 1989, where train sparks set off a gas leak from an LPG pipeline and killed 645 people (Observer-Reporter, 1989).

Clearly, the likelihood of accidents in oil and gas mishaps can have catastrophic results, all the more underscoring the importance of assessing the crisis management systems in this industry, and ascertaining whether or not these are within acceptable standards to ensure the protection of the public.

1.1 Background of the Study

One of the more comprehensive and meticulous definitions of “crisis” as it is conceived in business crisis management, is that of Fink (1986, quoted in Reid, 2000, p. 2), who states that “A crisis is any situation that runs the risk of:

1. Escalating in intensity.
2. Falling under close media or government scrutiny.
3. Interfering with the normal operations of the business.
4. Jeopardizing with the positive public image presently enjoyed by a company or its officers.
5. Damaging a company’s bottom line in any way.”

Fink’s well-crafted enumeration of the attributes of a crisis situation is noticeably lacking in one trait:  that of being “unforeseen” or “unexpected”. This is a defining trait of a crisis for other authors (Hoff, 2001; Boi, 2005; Laws, Prideaux & Chon, 2007), but apparently not for Fink, whose definition focuses on the impacts rather than the causes of the crisis situation. In many instances, crises are so characterized not because they are unforeseen, but that they are foreseen (or at least foreseeable) and are historically and statistically deemed so unlikely to happen that precautionary and preventive measures against them are overlooked (Loveridge, 2009; Daft & Marcic, 2011).

In the course of the literature review, the necessity for the enhancement of crisis planning, prevention, assessment, and mitigation for the oil and gas industry has been warranted, particularly by the deleterious effects of the 2010 BP oil spill in the Gulf of Mexico (Casale, 2010). Despite the serious harm to the environment and people in the affected area, the potential closure of large oil and gas companies or the shutdown of their pipelines is a risk that could not be taken because of their critical role in the world economy (Omolara & Olayide,2011; Kamal, 2012).  The matter of oil and gas crisis management to ensure continuity, therefore, becomes an important area of study.

Unfortunately, there are few academic studies that have addressed this area.  Lee Clarke of Rutgers University underscored the fact that what most oil and gas companies have currently are what he calls “symbolic planning” and “fantasy documents” upon which crisis strategies are built, and which is partially to blame for the Exxon Valdez oil spill (Morse, 2004).