The June 3 Apache Energy gas facility explosion on Veranus Island, 100 kilometres west of the port of Dampier in WA, is the latest in a long history of social irresponsibility in the global oil and gas industry.
The June 3 Apache Energy gas facility explosion on Veranus Island, 100 kilometres west of the port of Dampier in WA, is the latest in a long history of social irresponsibility in the global oil and gas industry.
Leaked photos show the facility was hopelessly rusted.
WA Premier Alan Carpenter has kept the public in the dark about the causes of the accident, and not revealed the full extent of the crisis, arguing that it is a federal responsibility.
As the energy crisis caused by Apache's failure to maintain its plant leads to lay offs and summer blackouts, West Australians can contemplate the neoliberal "safety case" methodology by which the energy industry and other dangerous operators avoid proper regulation.
The federal National Offshore Pipeline Safety Authority (NOPSA) regulates the offshore oil and gas industry, but WA regulators use the same lax methods for controlling their on-shore counterparts.
"Safety case" — the systematic review of potential hazards — is an engineering technique from the nuclear industry that entered the oil industry after the horrific Piper Alpha drilling rig catastrophe in the North Sea. July 6 marks the disaster's 20th anniversary.
The Piper Alpha, owned by Occidental Petroleum, went up in flames because the British Department of Energy was effectively "captured" by the industry. There were only five inspectors for the entire North Sea: any installation was visited once in two years. Occidental happily cut maintenance to a minimum: 167 men died horribly as a result.
What was worse is that the platform was the centre of a network of rigs pumping oil to the shore. None of the managers on the other rigs wanted to take responsibility for cutting the flow. So they literally pumped oil onto the fire as the workers died. "The Piper didn't burn us", one survivor said, "It was the other rigs that burnt us".
Afterwards the industry, through its organisation the UK Offshore Operators Association (UKOOA), made a public display of "proactively" reforming itself, as described in Charles Woolfson and Matthias Beck's Corporate Social Responsibility Failures in the Oil Industry.
UKOOA adopted the slogans "Safety is our Number 1 Priority" and "A Safe Platform is a Profitable One" while ensuring that the government regulator "does not dictate to the operator how safety should be achieved". Above all, they wanted the regulator to be "flexible", and they succeeded.
The UKOOA ensured that the workers' chosen union, the Offshore Industry Liaison Committee, was excluded from the rigs. The government was put in its place when the chairman of Esso (now ExxonMobil) said that if regulations were not to the industry's liking then "energy-intensive industries ... will simply migrate to other, less foolish parts of the world".
The final result of these manoeuvres was a self-regulatory framework. Essentially, the industry provides the regulator with a huge paper assessment of its risk management plans. The regulator reviews the "case" and accepts or rejects it, in theory.
The reality is that government regulators, especially in Australia, after years of economic rationalism, have been deliberately stripped of resources and expertise. WA has hardly any inspectors for all of its hazardous facilities, and NOPSA is the same.
Corporations know that there is not enough staff to read all the documents. Their "safety cases" are simply rubber-stamped.
The Australian experience mirrors that described by Woolfson and Beck following the Cullen Inquiry into the Piper Alpha tragedy: the industry achieved "a containment of regulatory interference ... despite an outward emphasis on regulatory renewal."
When it comes to social responsibility for the oil industry, Woolfson and Beck quote Groucho Marx: "Integrity and honesty are the foundations of success ... If you can fake those, you've got it made."