A blog post we created ended up as an article in PMSA’s  (Project Management South Africa) monthly magazine.  The posting was about BP, and their preparation for, and reaction to, the environmental project risk as a result of the so-called “Deepwater Horizon” well incident, which now seems like ancient history.  In fact, already we encounter people who forget that this happened.

Anyway, after our article was published in PMSA’s The Project Manager (an excellent journal, by the way), there was a rebuttal of sorts by a gentleman who is very experienced in the oil industry.  While we appreciated his technical expertise we felt that we deserved a chance to reply, and PMSA accommodated that recently with the following response by EarthPM:

Rejoinder from Rich Maltzman and Dave Shirley, co-authors of the award-winning book Green Project Management, to the article by Ronald Smith entitled “BP is not the enemy”, on the BP oil spill (March 2011 edition of The Project Manager)We thank Mr Smith for the explanation and expertise he provided on the process of drilling for oil. His description made the process much more accessible than most and, importantly, more relevant to us as project managers. We appreciate his acknowledgement that the consideration of sustainability early on in the project might have had an effect, although we understand his scepticism that it might not have made any notable difference.

For our part, we are increasingly convinced that sustainability thinking (and the resulting actions) could have had an effect on whether an incident happened the way it did and how it was responded to.

Since the original article was published, more facts on the story have come to light. For example, the risk register that the local BP team used was recently released by a United States government agency as part of its investigation; and it indicates that the only risk categories populated were in cost, schedule and production (see www.boemre.gov/pdfs/maps/AppendixJ_RiskRegister.pdf). You can see in the risk register that the suggested risk categories and those used by the team on the Macondo well.

Although BP, as a corporation, had admirably included environmental and safety risks in the overarching template, it incentivised all its teams with an “every dollar counts” programme, which did in fact yield significant savings for the company (see:www.bp.com/genericarticle.do?categoryId=2012968&contentId=7055139).

We would assert, however, that this incentive – and the immediate result it provided in terms of savings – drove behaviours, as illustrated by the fact that there were zero environmental and safety risks identified. Again, we know that we were not there to observe this happening so, admittedly, some of this is conjecture on our part (as we reminded readers in our original article); and no one can predict what would have happened if BP had identified these risks – but we do know as a matter of fact that unidentified risks will not have risk responses.

As far as the skimmer boats, with a $20-30 billion downside, and a need for “positive” public relations, why not have a fleet of these boats ready to deploy at key locations? It seems to us that it would have at least given the appearance that BP had been looking to prevent the spread of the oil, and at best would actually have recovered oil and helped prevent the spread of the oil. In our opinion, this is a relatively inexpensive purchase (or lease!), considering the downside risk.

Mr Smith discusses the way in which chief executive officer Tony Hayward and BP were treated by US President Barack Obama and Congress. On this note, we cannot defend politicians nor the political process and the actions of the committee that questioned Hayward.

We can acknowledge, however, that perception becomes reality; and the perception or impression that Hayward gave to many people – including some of these politicians – was that BP would sort of eventually get around to cleaning this up.

We think that part of corporate social responsibility is owning the problem and making it clear to all stakeholders that you believe the problem to be your own.

Now, let us talk to the point made about “low risk”. Let us be clear here on our terminology. Risk (in this case threat) is composed of two elements: the probability that something bad may happen; and the impact that this something may have. Multiplying the probability and impact yields the risk factor – the attribute used to judge how a risk affects a project objective.

We agree with Mr Smith that the risk event probability is low. But two similar events having occurred in 40 years is hard evidence that it is certainly not zero.

Furthermore, we think most people would agree the impact was high. Even BP would have to agree the $30bn of tangible fines and expenses and unknown intangible damage to its reputation is ‘high impact’.

When we multiply the probability (low, but not zero) and the impact (huge!), we still end up with a risk factor number that is fairly large. So – “low risk”? We disagree.

As to the analogy with plane crashes, we do not suggest clean-up crews at points all over the globe.

It should be noted that there are, in fact, emergency teams and equipment at every airport.

Furthermore, there are indeed agencies such as the Red Cross, the National Guard, the police and others who exist for the very reasons we discuss.

The analogy is not very appropriate nor relevant because the oil rigs are fixed in one place and not flying around. So it is therefore much less effort to plan and execute risk mitigations nearby at their source.

Mr Smith completes his story with this quote: “As Pogo the Possum said: ‘We have met the enemy, and he is us’.”

Well, we could not agree more, and we can do something about that.

Ensuring we include sustainability thinking in our projects, for example, including “environmental risks” in our risk analyses, goes a long way to helping us “go a long way” (i.e. being sustainable)

Here’s a link to the “rejoinder”:

Blame game
Tuesday, 17 January 2012