Responding to oil industry crises: The case of Phillips Petroleum in Pasadena, Texas

Michelle M. Maresh, University of Nebraska; David E. Williams, Texas Tech University

Abstract

The oil industry is prone to high profile crises which garner wide media and public attention that renew concerns about industry safety and the image of the company most recently stricken with a disaster. Phillips Petroleum refinery explosion near Pasadena, Texas in 2000 is a prominent example of this rhetorical challenge for public relations personnel who much respond to many stakeholders following an oil site explosion. The crisis response strategies of this case will be studied in an effort to better understand how to respond to oil industry crises.

Keywords

crisis communication, oil industry

The essential role of communication

“Oh, no-not again" was the statement made by a former employee of Phillips Petroleum in Pasadena, Texas when she heard the March 27, 2000 explosion that killed one and injured over 70 people (Kenna, 2000). The explosion in Pasadena, Texas was not something new to the oil industry nor the employees and community of Pasadena whom had witnessed similar explosions at the refinery in the previous twelve months. The unique challenge of a tainted crisis history creates the need for crisis management decisions makers to consider altering their response strategies in accordance with the media coverage, public sentiment, and stakeholder perspectives that will be all to familiar with oil refinery crises.

This study will address the crisis response of Phillips Petroleum following the March 27, 2000 explosion in Pasadena. The organizational response will be viewed in terms of initial and later responses in an effort to assess changes in response strategy and consistency of the message. Following a brief review of crisis response literature, the analysis will be provided along with initial suggestions for crisis response messages following oil industry crises.

Crisis Response Strategies

Tim Coombs (1999) has created a useful classification of crisis response messages which include nonexistence, distancing, ingratiation, and mortification strategies. These strategies, in order, proceed for responses which typically suggest little or no involvement in the crisis to responses more typically of an admission of guilt.

The nonexistence strategies suggest the crisis never occurred and it may even be the creation of someone initiating a false rumor. In the most extreme cases, an organization may choose to attack the accuser of creating such rumors or making false or unfounded allegations.

If the organization believes it may have some responsibility for the crisis, a distancing strategy can be employed (Coombs, 1999). These responses will attempt to minimize the role of the organization in the crisis or lessen the perceived extent of the crisis. Again, in the most extreme sense of distancing, an organization may suggest that the victim of the crisis was deserving of what befell them.

As the organizations’ perceived guilt in the crisis increases, decision-makers are more likely to move toward ingratiation strategies. These strategies include bolstering, transcendence, and praising others. Effort here is made to alter the stakeholders’ perception of the organization by improving its image or reminding them of the good deeds they have done previously.

When guilty or history of guilt is more prevalent, an organization will move toward mortification strategies. These responses may ask for forgiveness or outright accept blame for the crisis and attempt to correct harm that was done. The distinguishing characteristic in this strategy is that the organization is taking responsibility for the crisis.

According to Benoit (1997), “[c]orporations may take both preventive and restorative approaches to cope with image problems" (p. 263). These image restoration approaches can range from denial of the crisis of guilty in the crisis to attempts to avoid responsibility for the cause or outcome of a crisis. If neither approach is appropriate or effective, an organization may also opt for the offering of compensation to victims of a crisis. Similarly, an organization may attempt to introduce corrective action in which they take responsibility for the crisis, repair damages done, and alter their own practices in an attempt to prevent future crises.

Hearit’s (1994) work represents another line of research on crisis response which invokes the rhetorical strategy of apologia. Apologia strategies will rely on the strength of the organizational or spokesperson image. The five strategies of apologia consist of denial, counterattack, differentiation, apology, and legal response.

Phillips Petroleum Pasadena, Texas History

Organizational crisis rarely happens in a vacuum. As Coombs explains, reports of a current crisis will often count instances of similar crises, especially within the same organization (Coombs, 2004). For example, reports of a coal mine collapse or explosion will usually be accompanied by retelling of other similar mine tragedies from the past. Oil industry explosions, in general, and Phillips Petroleum, specifically, was faced with the challenge of their own crisis history in March 2000 when the explosion occurred.

According to Staff and Wire Reports (2000a), the site of the March 27, 2000, explosion at Phillips Petroleum was the same unit that killed two workers and injured four others in June of 1999 (p. 11). According to White (2000), “[t]he Phillips complex also had explosions in April 1999, when a rail car containing polypropylene blew up, and in August, when there was an explosion in the polypropylene section of the plant" (n.p.). Furthermore, on October 23, 1989, 23 people were killed and 130 workers injured when a series of explosions in a polyethylene reactor occurred. Notably, as a result of an investigation of the October 1989 incident by the Occupational Safety and Health Administration, it was […] found that four highly flammable gases escaped from an open valve, forming a huge vapor cloud that traveled through the plants within seconds because of high pressure. A series of explosions occurred after something ignited the cloud" (Staff and Wire Reports, 2000a). There was no record of backup protection such as a double valve to ensure against valve failure being used in the unit.

Mokhiber and Weissman (2001) of CorpWatch list Phillips Petroleum as one of the ten worst corporations of 2000, specifically citing that the March 27th Phillips Petroleum explosion was “[…] the third fatal accident at the sprawling petrochemical complex in the last 11 years" and “[…] the fourth within the last year at the facility" (n.p.).

Phillips Petroleum’s operations in Pasadena, Texas clearly have a significant rhetorical obstacle when addressing crises involving worker safety, community safety, and explosions. Being in an industry that is prone to allegations of poor safety records and high profile crises and having had such crises occur frequently at their location, the public relations personnel must factor this challenging history into their crisis response strategies.

The Explosion

The March 27, 2000 explosion occurred at approximately 1:22 p.m. at Phillips Petroleum’s K-Resin unit. According to Rendon (2000d), “[t]he tank was one of four 10,000-gallon-capacity dry butadiene tanks clustered in the center of the K-Resin unit, on the north side of the 640-acre Phillips complex on Texas 225" (p. A1). Rendon, Bryant, Hopper, and Antosh (2000) report that huge flames erupted after the blast, “[…] sending a massive column of black smoke upward and spurring area school officials to seal their buildings and keep children inside as a precaution against the possibility of toxic fumes" (p. A1).

Plant alarms sounded but, due to repairs being made to the local siren system, the city of Pasadena’s siren system did not alert residents until 1:45 p.m. A total of 23 campuses in the Pasadena school district and eight schools in the Galena Park district followed shelter in place procedures until the all-clear was given for area schools and homes at 3:25 p.m. According to Rendon et al. (2000), “Pasadena school buses, meanwhile, were used to help evacuate employees and take them to the credit union, where supervisors conducted a head count. They were taken back to the plant about 4 p.m. to get their vehicles" (p. A1). The fire was finally extinguished shortly before 5 p.m. Additionally, the body of a missing employee was discovered five hours after the accident occurred (Nichols, 2000a).

According to Stack (2000), Phillips Petroleum Spokesperson Norm Berkley stated that the Pasadena plant employs about 850 people, 600 of which would have been on duty at the time of the explosion (n.p.). Of the 600 workers, one was killed and 71 were injured due to burns, smoke inhalation, cuts from flying debris, and other injuries and were sent to area hospitals for treatment and evaluation. According to White (2000), of the 71 injured, 32 were employees of Phillips Petroleum, while 39 were employees of the H.B. Zachry contracting firm.

On April 14, 2000, District Judge Harvey Brown Jr. issued a two-week long restraining order to ensure that evidence from the explosion is preserved. According to Rendon (2000b):

Brown ordered that no evidence or documents concerning the explosion be altered, destroyed or disrupted […]. The restraining order also bars Phillips from destroying, altering or moving any equipment damaged in the blast without giving 48 hours’ notice to the plaintiff’s attorneys or their agents and giving them an opportunity to inspect and photograph the equipment. (p. A35)

The restraining order was sought in response to allegations that a Phillips supervisor and engineer tampered with a lockbox in a secured area of the plant. It is possible that this lockbox would contain data that may help explain the cause of the explosion.

Rendon (2000c) states that, as of April 14, 2000, prosecutors argued that it would be premature to begin their investigation of the explosion until the Occupational Safety and Health Administration and the FBI have completed their investigation (p. A36). However, on April 15, 2000, Phillips Petroleum officials argued that “[a] chemical reaction created by residue at the bottom of a storage tank is the ‘most plausible’ cause" for the deadly explosion (Asher, 2000). According to Esposito and Ledson (2000), “[t]he tank in question had been shut down for routine maintenance. Workers had thought the tank was empty" (p. 6). The K-Resin unit was closed pending further investigation.

On September 21, 2000, the Occupational Safety and Health Administration proposed fining Phillips Chemical Co. $2.5 million for the explosion, although the company said it would vigorously appeal the citations. According to Rendon, Sixel, and Moreno (2000), “OSHA’s proposed fine included $2.1 million for 30 alleged willful violations for failure to train plant operators and $280,000 for four willful violations of process safety management and lockout/tagout standards" (p. A1).

Phillips’ Crisis Response

Phillips Petroleum was consistent in the crisis response strategies they employed throughout the duration of the March 27, 2000 crisis. From the initial response given by Phillips officials several hours after the explosion occurred to the early stages of crisis communication, defined as the statements made before the preliminary findings of the Phillips investigation, Phillips Petroleum used ingratiation and excuse, as well as corrective action and bolstering. However, following the release of the preliminary results of Phillips investigation, defined as being in the later stages of crisis communication, Phillips Petroleum claimed the crisis was an accident and employed a full-on corrective action and compensation strategy.

The Initial Response

The initial response to the public given by unnamed Phillips officials merely stated that there were injuries from the blast, but that Phillips had no further details concerning the situation (Staff and Wire Reports, 2000a). However, the next set of responses was more detailed, explaining the number of employees employed by Phillips petroleum and giving an approximate number of employees from Phillips and other contracting firms that were taken to hospitals with injuries. According to Stack (2000), plant general manager Jim Ross stated, “[…] 32 employees and 39 contract employees were taken to hospitals with injuries that included burns, smoke inhalation and anxiety-related disorders" (n.p.). Ross added, “[i]t’s a very sad day for us and our facility" (Nichols, 2000a). Additionally, Stack (2000) reported that “Spokesman Norm Berkley said the plant employs about 850 people, and said about 600 would have been there at the time of the blast" (n.p.).

Also in this response, Berkley provided commentary showing that the efforts of the Pasadena plant have been stunted, as the plant has been taking measures to ensure that a crisis of this type would not occur. Berkley is quoted by Stack (2000), as stating that “[w]e have worked tremendously hard to make sure a situation like that never, ever occurred again. […] Obviously, it has" (n.p.). The initial responses follow Coombs’ guidelines in that they are quick and informative; however, the first response mostly used silence and only the response made by Ross was sympathetic.

Ingratiation and Excuse

On the day following the deadly explosion, spokesperson Kevin Collins released a statement concerning the cause of the blast being unknown. In this statement, excuse is used as Collins attempted to argue that he did not understand why the plant recently had many serious accidents. According to Rendon, Bryant, Hopper, and Antosh (2000), Collins stated that the cause of the blast was unknown and being looked into, as “[o]ur efforts right now are focused on making the remainder of the plant safe and ensuring that the other employees and other operating units are in safe condition" (p. A1). He continued by saying that all of the plants in the Phillips complex are believed to be safe, but were shut down as a precaution and will not be restarted until it is proven to be safe. Finally, he added that he had “[…] no idea why the facility has had so many serious accidents in the past year" (Rendon, et al., 2000). Collins attempted to employ the excuse tactic by placing fault in the area of the unknown. If successful, the strategy would remove Phillips from blame.

On the same day, Phillips Petroleum spokesperson Norm Berkley issued a statement, in which he claimed:

I don’t know what has happened in this case. The only similarity (to the fatal 1989 explosion) is that we had a tragic, tragic day. We’ve had an explosion. We’ve had a fire. We’ve got injured employees. I couldn’t feel worse about that. We have worked tremendously hard to make sure that a situation like that never, ever occurred again. Obviously, it has. (Rendon, et al., 2000)

In this statement, excuse was combined with ingratiation in this expression of sorrow for the loss and injury of workers. This statement served as ingratiation as Berkley reminded the public of the work they have done to try to prevent a crisis like this from occurring again; however, it is also considered an excuse as he argues that these improvements could not stop the present crisis from occurring. In this sense, he also made the excuse that Phillips Petroleum could not plan for this crisis to occur, as the only thing it has in common with the 1989 explosion was that there was a fire and people have died and are injured. Through this use of ingratiation and excuse, Berkley defends Phillips Petroleum by illustrating their inability to control the occurrence of this tragic event.

Corrective Action and Bolstering

As early as the day after the fatal explosion, Phillips Petroleum began employing strategies of corrective action. Officials set up a phone number for anyone with questions about the explosion or seeking information concerning employees to call to obtain this information (Rendon, Bryant, Hopper, & Antosh, 2000). This phone number allowed Phillips Petroleum to be more available to stakeholders, as inquiries concerning specific information regarding the explosion could be handled by one of Phillips’ own representatives.

As the Occupational Safety and Health Administration began conducting its own investigation, Phillips Petroleum used their media statements to show that they are fully cooperating with the investigation. According to Nichols (2000a), “James J. Mulva, chairman and chief executive officer of Phillips Petroleum Co. arrived at the site during the afternoon to express concern and promise support for injured workers and their families" (n.p.). Additionally, Norm Berkley said that Phillips will “[…] cooperate…fully, whatever it takes to learn what’s happened so we can keep it from happening again. It’s a terrible day for us in the plant, a terrible day" (Nichols, 2000a). By showing that Phillips Petroleum was willing to cooperate in a major investigation, Berkley helped Phillips begin their journey into correcting the problems within their organization. Similarly, Mulva’s visit to the site of the explosion promised help for the injured workers and their families, showing Phillips Petroleum’s promise to attempt to make up for the damage that the crisis caused.

In the later stages of the investigation being conducted by the Occupational Safety and Health Administration, a Phillips Petroleum supervisor and engineer allegedly entered a control room and may have tampered with a lock box containing data that could have led to answers concerning the cause of the explosion. As the possibility of these allegations reached the media, the Phillips Petroleum safety record was released to the public and Phillips had to conduct its crisis response while, at the same time, defending their organization against these claims. At this point, Phillips Petroleum began coupling corrective action with bolstering to defend its organization against claims of being at fault for the occurrence of the explosion and the possibility of tampering with important evidence proving these claims.

Corrective action was employed as spokesperson Jere Smith stated that “Phillips is cooperating fully in their investigation" (Rendon, 2000e). However, at this point, Phillips Petroleum decided to use bolstering as a strategy to bring to light their policy that allows employees to file their safety concerns with the plant. According to Rendon (2000e):

Smith, the company spokesman, said Phillips management provides a number of ways to deal with employees’ safety concerns. He said Phillips has an employee safety committee, area safety representatives and an open-door policy with any company official, as well as daily, weekly, and monthly safety meetings. (p. A1)

Additionally, corrective action was used in conjunction with bolstering as a spokesperson said that Phillips began working with the Paper, Allied-Industrial, Chemical and Energy union to place the Pasadena plant in a voluntary protection participation program. This program allows companies to work together to reduce accidents in their plants and exceed OSHA’s standards (Nichols, 2000b). Phillips joining this program implied that corrective action was taken. However, Jere Smith used this opportunity again to utilize the bolstering strategy, stating that “Phillips takes great pride in its safety record. We thought we were at the point where we could avoid these incidents. We’re still working on it. We’re going to continue. We’d like to have it at zero" (Nichols, 2000b). This statement implies to stakeholders that Phillips has a positive safety record with few incidents occurring.

Later Stages of Crisis Communication Accident

Following release of preliminary investigation results conducted by Phillips Petroleum, company officials cited a chemical reaction caused by residue at the bottom of the storage tank as the likely cause of the explosion. In this sense, spokespersons for Phillips Petroleum used the accident strategy, citing that the incident was the result of an unintentional mistake in judgment by workers. According to Asher (2000), Jim Ross said:

[w]e thought it was empty. In fact, it had been checked, and all measures showed it was empty. But apparently it had some residue material in the bottom, and over time it reacted and gave of enough hate to overpressure the vessel. Under certain conditions, this chemical will slowly react with itself. When it does, it gives off heat. That then pressures up the vessel. As the vessel pressured up, it failed, it blew apart. That is the most plausible scenario. (p. A37)

Although Ross did not assign blame as to who thought the vessel was empty, this statement implies that Phillips Petroleum is taking responsibility as a whole for an accident. It is further considered an accident as Ross justifies that the storage tank was checked and all measures showed that it was empty.

In more technical jargon, Ross stated:

[t]he most plausible scenario at this point is that a dry butadiene tank – taken off line, believed to be empty and in a purge mode – had sufficient ‘popcorn’ polymer and butadiene in the tank to react. We also believe the popcorn polymer plugged the purge lines so that an effective purge was not taking place. Under those circumstances, it appears that a reaction of residual popcorn polymer and butadiene could provide enough heat to overpressure the vessel, resulting in vessel failure. (AcuSafe, 2000)

Ross also employed the accident strategy as he included the idea that Phillips Petroleum workers believed this tank was empty and in a purge mode. This statement allows Phillips Petroleum to take responsibility for the tragedy, while reinforcing the idea that the explosion was unintentional and could not be foreseen.

Corrective Action and Compensation

The final strategy employed by Phillips Petroleum following the release of the preliminary investigation report was corrective action coupled with compensation. General manager Jim Ross argued that the company’s investigation was not complete. He stated that, “[w]e’ve actually brought in some outside experts and analytical people. We are not going to stop the investigation until we know absolutely for sure what happened" (Asher, 2000). Furthermore, he said, “[w]e are working closely with the investigating agencies, local officials, union leadership and our employees to fully understand exactly what has happened and take corrective actions" (Asher, 2000). By showing that Phillips Petroleum is cooperating with and contributing to ongoing investigations, Ross is showing that Phillips is committed to taking corrective action for this case.

Additionally, in regard to the alleged criminal trespassing of Phillips Petroleum employees, Ross released a statement saying:

[o]ur investigation did not lead us to that conclusion. To date, we feel that our employees acted responsibly. Shortly after the incident, three people went into a building in the general area. There has been some alleged wrongdoing. When we heard of it, we took immediate action and contacted our own criminal investigators. We cooperated fully with the FBI. I do know that when they left, they seemed to be satisfied that there was no wrongdoing. (n.p.)

In this statement, Ross attempted to illustrate Phillips Petroleum’s cooperation to take corrective action for the possibility of a tampered investigation by showing that Phillips Petroleum contacted criminal investigators and cooperated with investigators concerning allegations against their own employees.

Compensation was the primary strategy employed by Phillips Petroleum in response to the explosion. The first instance of this strategy was in a statement made by Jim Ross in which he states that “[o]ur people are improving. We’ve been working with the families and support them with any needs that they may have" (Asher, 2000). Later, compensation is shown as a means of bringing relatives closer to their injured family members, as well as ensuring available jobs for the injured once they have recovered. According to Rendon (2000d), Phillips spokesperson Mike Catt said:

[w]hile the injured workers are recovering, they continue to receive full pay and benefits […]. He said the company also is providing counseling for the victims and family members, lodging so that relatives can stay near hospitals, travel expenses and the use of mobile phones and computers. (p. A1)

By providing such services to family members, Phillips Petroleum is providing compensation for the unexpected financial expense that the families of the injured and deceased must incur.

Finally, in January 2002, Phillips Petroleum combined both corrective action and compensation as they agreed to pay more than $2.1 million in penalties, as well as hire safety and health consultants. According to Antosh (2002), Phillips spokesperson Kristi DesJarlais said, “[t]he current plant owner is committed to safe operations and has initiated several steps to further improve safety there" (n.p.). According to Wright (2002):

Chevron Phillips has agreed to retain the services of both a process safety management training and operating procedures consultant. Each consultant will conduct comprehensive reviews of the training program and standard operating procedures at the K-Resin facility. The company has agreed to implement all feasible recommendations of the consultants by July 31, 2002. (n.p.)

By taking part in safety management training and allowing a consultant to evaluate their operating procedures, Phillips Petroleum shows that they are taking action against the possibility for a similar occurrence in the future.

Suggestions for Oil Industry Crisis Response

Phillips Petroleum made use of ingratiation and excuse, and corrective action and bolstering, skipping the apology/regret strategy in the latter stages of crisis response. Given the history of crises both in the industry and at the Pasadena plant, this is surprising and somewhat contrary to what crisis response literature would suggest. It would be more typical for an organization with a history of high-profile crises to lean more toward strategies which acknowledge at least some role in the crisis and apologize for effects of the crisis. In the later stages of crisis communication, however, Phillips used accident, corrective action and compensation. Compensation appeared to be held as a last resort strategy when other explanations were proven inadequate according to the facts of the accident.

In the early stages of crisis communication, the use of ingratiation and excuse enabled Phillips to remind stakeholders of the positive accomplishments belonging to their company, while arguing that they were not able to prevent or foresee the crisis’ occurrence. Corrective action and bolstering showed willingness to identify and correct the malfunctions in their individual systems and, once again, remind the stakeholders of how well they managed the crisis. However, these attempts are competing with messages from the media, public, and other stakeholders which remind everyone of the negative crisis history. The effectiveness of the organizational response is limited by the competing, and often contradicting messages, sent from other sources.

Phillips pairing of corrective action and compensation made their attempt to correct what the crisis had damaged seem to be forced. Because they did not attempt to enact the corrective action as they promised in the early stages of crisis communication until the accident report placed them at fault for the crisis, it appeared that this was a last resort attempt at crisis response.

Finally, the use of the accident strategy was ineffective for Phillips Petroleum. However, had Phillips taken responsibility for the explosions as an organization, rather than placing full blame on its employees, their relationship with stakeholders would not have been strained. In regards to this contention, Tara Hart, chief executive of the Compliance Alliance, a Houston, Texas based workplace consulting firm is quoted by Aulds (2005) as saying “[i]f you only fire people after an explosion you are not following safety. Accountability, responsibility, begins before the explosion, not after" (p. 4).

References

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About the Author

Michelle M. Maresh is a doctoral student at the University of Nebraska, Lincoln and David E. Williams is a professor at Texas Tech University. Correspondence: Department of Communication Studies 
Texas Tech University, Lubbock, TX 79409-3080. Email: doc.williams@ttu.edu.