BHP: the big polluter

By Robert Rosen and Eve Sinton The Big Australian has been in the headlines. First, the oil-spill off Tasmania from stricken ore ship Iron Baron, and then revelations that BHP's lawyers had drafted their own legislation in Papua New Guinea. The company wants to make a criminal of anyone pursuing legal redress over the colossal pollution from its Ok Tedi mine. Although BHP claimed the Iron Baron incident was the company's worst ever oil spill, the amount lost must be seen in context with the regular smaller spills associated with the operations of BHP and its subsidiaries. And while the company has mounted a major public relations operation to counter the bad publicity from Tasmania, in PNG it has proceeded to set itself above the law — the ultimate step to subdue people whose hopelessly corrupt government has allowed them to be colonised by a multinational corporation. Our brief examination of BHP's environment record sketches the impact of the company's industrial activities.

Figures minimised

The Australian oil exploration industry, including BHP Petroleum (BHPP), claims that Australian industry has a very good record in respect of oil spills. A BHPP environment fact sheet in 1993 suggested that only 440 barrels of oil had been spilt into the sea since exploration began in Australia. However, an analysis of oil spills in Australian water prepared by oil explorer Hadson Energy Limited indicated that the figure is much higher. It would appear that BHPP has ignored small spills of less that two barrels that add up in total to a further 600 barrels up to 1989. All the major spills detailed by Hadson are in operations in which BHPP has an interest. Apart from the major spills and spills under two barrels, there have been 18 platform spills of between two and 20 barrels, for a total loss of 145 barrels. Extrapolating from past spill figures, it would be reasonable to assume that total reported intentional oil spills by the end of 1993 would be in excess of 1200 barrels. Additionally, anecdotal reports from those working on platforms and from union representatives suggest that unreported spills do occur and the reported size of spills is not always accurate.

Jabiru spill

In April 1991, oil production was brought to a halt at the Jabiru field (55.77% BHPP owned) in the Timor Sea. Premature disconnection of the floating production facility Jabiru Venturer from the field's production wells during Cyclone Marion spilled 25 barrels. The Jabiru Venturer is designed to disconnect in the event of a cyclone, but the fail-safe system aimed at preventing oil spills did not work. More than a week after the initial spill there was still potential for a major oil spill if the sea floor well-head valves were not closed off and the seals not closed on the production riser. Full production was not resumed until September, following a $30 million refit of the Venturer. Ian Howarth, oil writer for the Financial Review, noted that BHPP did not report the spill to the Australian Stock Exchange until over a week after it occurred. There have been no oil blow-outs in Australian waters, but there have been four gas blow-outs out of about 1000 wells drilled on the Australian continental shelf. There has also been one blow-out off the Papua New Guinea coast. Gas only was experienced from these blow-outs, some of which could not be controlled for some time.

Tanker oil spills

The federal government's Ships of Shame report, published in 1992, details the problem of ageing rust buckets plying Australian waters, posing serious threats of oil spillage and contamination. A BHP Oil Spill Response Group has been developed to provide the company with a capability to respond should any major oil spills occur. BHPP was one of nine companies which contributed about $10 million to a national oil spill recovery scheme. However, these preparations were unable to prevent the spillage of at least 500 tonnes of fuel and other oils from the BHP-chartered ship Iron Baron after it went aground on a reef off northern Tasmania in July. There is generally no effective and efficient means to combat oil spills, particularly in poor weather conditions. According to the Natural Resources Defence Council's Offshore Oil and Gas Activities: Environmental Concerns, 1989, on average only 5-15% of oil is recovered from offshore spills during containment and clean-up operations. The oil discharge figures ignore the fact that oil is intentionally discharged in formation water discharges during oil production. For example, Bass Strait platforms discharge about 160 barrels a year in this way and Timor Sea about 56 barrels. Thus at least several thousand barrels of oil have been discharged into Australian waters in this way.

Drilling mud

Greenpeace and BHPP appear to have widely differing views about the toxicity of drilling muds and their impact on marine life. A BHPP fact sheet on the environment claims that the company "has gone further to ensure that drilling muds are not dangerous to the environment by testing them to the most strict US Environmental Protection Agency requirements. BHP Petroleum has also pioneered environmental testing of muds in Australia to compare and confirm the US test results." It is interesting to compare these comments with comments made by BHPP in a US industry journal about problems over the classification of drilling muds by the US Environmental Protection Agency. "Of concern to BHP, however, is the statutory definition of hazardous waste, in light of the cost and legal problems in disposing of it. We certainly hope to retain the exemption made in laws classifying hazardous waste for substances such as drilling mud", Vice President Ed Jones BHP Petroleum (Americas) Inc said. "If that were classified as hazardous waste, it would be a killer for the U.S. oil industry." [Oil and Gas Journal, August 6, 1990.] In the US and UK, the existence of natural radioactive substances (e.g. radium 226) in drilling muds is considered an ecological problem when the muds are dumped into the sea.

Bass Strait

BHP has a 50% interest in Bass Strait, and although Esso is the manager of the operation, BHP must take joint responsibility for environmental and safety aspects. Income from Bass Strait oil has given the company cash flow to move from a relatively sleepy steel company to a major international resources group. Discoveries from 1965 to the early 1970s came relatively easily, and each major find meant an impressive increase in BHP's share price. The Marlin gas blow-out referred to earlier also resulted in escaping gas bursting into flames, although the fire was fortunately extinguished in a little under four hours. In November 1986 there was an explosion on the West Kingfish platform during testing that resulted in two engineers being engulfed in flames. Mark Crossley was killed when he jumped from the platform to the sea 20 metres below. His colleague, Jacqueline James, survived with severe burns after, really only by luck (according to the coroner), reaching a safety shower. The coroner was critical of Esso on a number of safety and operational grounds issues. Victorian government officials recommended that Esso and BHP be prosecuted over the fire (BHP is joint licensee of the Bass Strait permits). In 1990 BHP and Esso were charged with breaches under Petroleum Laws and also under the Crimes Act. In April 1989 a fire on the Tuna oil-production platform extensively damaged the platform, requiring $10 million of repairs and raising questions about the adequacy of the fire-fighting system. The fire resulted in three Esso Australia employees being admitted to hospital. It is understood the "deluge" fire-fighting system, which dumps huge amounts of water onto the platform in an emergency, did not operate properly. It took 30 minutes to put the fire out. The fire started during maintenance when leaking gas and oil struck a hot engine part. The fire led to a protracted industrial dispute. According to reports in the Financial Review of April 26, June 15 and June 19, 1989, Esso has the worst safety record of all Exxon affiliates. An internal Esso report found that Tuna platform workers were unable to reach escape capsules, equipment failure hampered fire-fighting operations, and maintenance work was carried out without necessary work permits. In July 1988 the Australian supply vessel Lady Penelope barely missed crashing into the Halibut platform after an equipment failure.

Staffing levels

In 1990, with the profitability of Bass Strait oil production declining as reserves were depleted, Esso seriously contemplated significantly reducing production platform staffing levels as a means of reducing its costs. Esso considered reducing staffing levels from 12 to 15 down to six and later possibly even four. A confidential leaked document written by an Esso platform supervisor was highly critical of the plan. The supervisor said that with reduction in staffing levels on the platforms: "The ability of this small group to control any serious conflagration or hydrocarbon leak shall be seriously compromised" and "would place the company seriously at odds with its responsibility to its investment, its people and the environment". He also said: "There is still today no satisfactory answer to the consequences, if major accidents like blow-outs, major gas explosions or extensive oil releases should take place on a single structure" and "as we are well aware many of our installations are reaching the end of their economic life, whilst much equipment has been replaced and constant checks are being made the risk of further failures is high". He pointed out, quoting other authorities, that small leakages in process trains must be expected due to wear and tear in the numerous valves, flanges, gaskets and similar components. These comments are in marked contrast to the normal soothing tones of the oil industry, including BHPP, about safety and spillage issues. Before the Iron Baron accident, BHPP claimed in its Fact Sheet No 2 that "in the 30 years since we started operations, we have not been involved in any serious incidents". This statement would appear to be misleading. BHPP as joint licensee and 50% partner in Bass was most certainly "involved" in all the gas blow-outs and fires in Bass Strait. The Jabiru spill in April 1991 must also be classed as a "serious incident", given that a week after the incident there was still a possibility of a major oil spill.

Environmental conflict

BHP and its subsidiaries have probably been involved in more environmental disputes than any other Australian company. Below is a list of some of these conflicts.

BHP

• Made claims to the House of Representatives Standing Committee on the Environment that national parks should be made available for mining.

• Opposed the Endangered Species Protection Bill.

BHP Gold (now sold)

• Party to an application to mine Coronation Hill in Kakadu National Park, a World Heritage area.

BHP Minerals

• Considering drilling for diamonds at the Point Lake deposits in environmentally sensitive area of North West Territories, Canada.

• Accused of manganese poisoning of workers and local Aboriginal community at Groote Eyland.

• Granted mineral exploration rights to 236 sq km of the South West Wilderness Area of Tasmania.

BHP Petroleum

• Has applied for an exploration drilling permit in the Exmouth-Onslow area, near Ningaloo Marine Park, in Western Australia. Greenpeace alleges there are significant failures to address environmental risk in BHPP's consultative environment review.

• Greenpeace is seeking to halt BHP Petroleum's seismic testing for oil and gas in the Otway Basin of the Southern Ocean.

• Encountered strong opposition to laying of an ethane pipeline by Esso/BHP in Port Phillip Bay.

Mineral Deposits

• Mined for mineral sands in proposed nature reserve at Khappinghat on mid-north coast of NSW against strong local opposition.

Ok Tedi

• Ok Tedi Mining Limited in PNG (52% owned) is polluting the Fly River with tailings from the OK Tedi gold mine at the rate of 100,000 tonnes per day.

• In 1984 the mine operators dropped 2400 drums of cyanide into Fly River, of which less than 5% were recovered.

Port Kembla steelworks

• Greenpeace divers blocked off a waste outlet, claiming the company was dumping cyanide, zinc, ammonia, chromium and phenols into water.

• In 1977 the Allens Creek outfall was found to be devoid of marine life; significant improvements in the operation have restored over 100 marine species to the area.

• The company has been convicted of 24 environmental offences over the last 19 years.

TEMCO

• Criticised for major pollution from its ferro-manganese smelter in Tasmania.

• Benefited from the flooding of Lake Pedder.

• Campaigned strongly for flooding of Franklin River in Tasmania.

BHP Petroleum (Americas)

• US EPA seeking to impose penalties of US$621,000 over waste management problems at oil refinery.

• Hawaii Department of Health seeking to impose penalties of US$320,000 over problems with fuel operations at Honolulu Airport.

Hamilton Oil

• Carried out oil exploration in environmentally sensitive Cardigan Bay area off Wales.
  [We thank Greenpeace for allowing us to use a report commissioned from Robert Rosen in 1993 as a major source for this article.]