Explosion at Exxon Mobil’s Torrance Refinery (2015-2016)

Company Background

Exxon Mobil traces its origin to over one hundred and thirty-five years ago. In 1859, Edwin Drake and Billy Smith successfully drilled the first oil well in Pennsylvania, precisely at Titusville (“Our History”). The discovery led to the increased interest in oil exploration, and it is in this spirit that the Standard Oil Company was founded. The company grew large after it purchased the Vacuum Oil Company in 1879 (“Our History”). However, in 1911, a ruling by the US Supreme Court led to the breakup of the company into 34 independent entities, with Vacuum Oil and Jersey Standard being the most outstanding of the new businesses (“Our History”). In 1966, Vacuum Oil changed its name to Mobil Oil Corporation while Jersey Standard changed its name to Exxon Corporation six years later, in 1972 (“Our History”). In the year 1999, the two companies merged into Exxon Mobil Corporation.

Ethics Case

On the morning of February 18, 2015, an explosion in one of Exxon Mobil refinery in Torrance, California lead to a chemical ash rain that covered the surrounding community and lead to eight workers being decontaminated and four works to be sent to the near by hospital with minor injuries. The explosion was so massive it registered as a magnitude 1.7 tremor and propelled equipment into the air, as well as releasing a tank containing tens of thousands of pounds of (HF) “Hydrofluoric Acid” according to the LA Times. HF is a chemical used to make high-octane gasoline and the (CDC) calls HF as “one of the most hazardous and potentially deadly chemicals used in the oil refining process.” As a matter of fact, it can corrode bones and the skin, which can cause death. 

They are alternative to this chemical but Exxon Mobil explain, “it would cost $100's of million to upgrade those systems” and it's also legal to use in the United States. As result to the explosion the California OSHA issued 19 citations for workplace safety and health violations of $566,600 dollars. They have been other similar incidents at Torrance refinery examples “ a blast that injured two workers in 1988, as well as a chemical blast at the refinery in 1995”. A week before the explosion, the plant had experienced a problem in its fluid catalytic cracking (FCC), which led to the shutdown of the affected unit. Therefore, the shutdown of the FCC unit led to changes in the plant’s normal functioning, which involved redirecting the steam into a reactor to prevent it from entering the plant’s distillation column (CBS; Penn). Following the investigations, it was established that ExxonMobil’s management had relied on a procedure that had been applied in 2012 to rectify problems, which were very different from those in 2015.

Stakeholders

  Typically, an organization’s success is determined by the type of relationship it has with its stakeholders. Generally, a strained relationship with the interested parties can ruin an organization’s fortunes while one that works closely and collaboratively with its stakeholders has the potential to thrive in its operations. In this context, the success of Exxon Mobil is dependent on its relation with the stakeholders following the deadly explosion. Undoubtedly, the explosion led to the discomfort of the company’s stakeholders. For instance, since it supplied 10% of all the refined gasoline in California, the closure of the Torrance refinery led to a shortage of gasoline. Consequently, fuel prices increased by 1.50% (Penn). Therefore, the company’s stakeholders need assurance that the operations will not be disrupted in future. Other stakeholders would include the works at the Torrance refinery, without them the refinery wouldn't resume operation, and the biggest stakeholder would include the environment around the Torrance area and it's residents, for they are the one that would have to deal with the damages left by the explosion ash rain.  

Individualism

   From an individualistic perspective, the management of Exxon Mobil did what was required by the prevailing circumstances. Typically, an individualistic seeks to advance personal welfare with little or no focus on the society’s well-being. Quite often, this characteristic is usually exhibited even where an individual takes part in collective activities as an individualist may tend to act independently, with the aim of achieving selfish interests without being mindful of the society’s welfare. With this understanding, it is evident that an individualist cannot see any ethical malpractices on the part of Exxon Mobil’s management since its continued operations with faulty equipment maintained its profit-making activities.

A typical individualist is likely to view and understand the actions and behavior portrayed by Exxon Mobil’s management as not unethical, but as actions aimed at increasing the company’s profits. An individualist interests come first. Therefore, since the management had got wind of problems with the plant’s FCC unit, a sensible manager, from an individualist perspective, would have to find ways and means of fixing the problem without halting the company’s operations. Therefore, the company would remain profitable with continued operations even in the midst of the weakness of the FCC unit. Thus, from this perspective, the management did its duty in ensuring uninterrupted operations at the company.

Utilitarianism

A utilitarian would view the ExxonMobil case as unethical. Typically, this kind of thought envisages a situation where all actions are performed to achieve utilitarianism for all. In this context, any action that results in undesirable consequences to the majority is considered unethical by a utilitarian. Therefore, with this understanding, a utilitarian would view an activity as unethical if its result is not pleasant to the society.

Generally, a utilitarian would view the case involving the ExxonMobil as unethical due to the following reasons. First of all, the management of the company had a moral responsibility to do repairs before the plant resumed operations since it had prior information about the defects in the FCC unit. In doing so, the plant would be in a position to continue with the production process without major interruptions. Largely, solving the problem would have required an extensive evaluation of the whole plant to identify all the weaknesses before commencing on repair works. However, instead of conducting a thorough analysis of the problem, the firm’s management chose to employ methods used to solve an entirely different problem in the past. Therefore, the administration failed to promote utility for all as the plant was bound to fail once more since the problem had not been solved properly. Not only risking the company profit for it's shareholder but also risking the live of it employees that were operating the refinery knowing their was a serious problem. 

Kantianism

 A Kantian seeks to understand the whole process that resulted in particular issues. Here, the rationale or the will behind the doer of the action takes precedence. Largely, this approach holds the view that human beings are rational beings, and as such, their actions should be good for all. Indeed, being motivated by “good will” seeking to do what is right because it is right (Kant). Therefore, in this understanding, a Kantian would find all actions that do not necessarily demonstrate that the doer had good intentions as being unethical.

A Kantian would view the ExxonMobil case as unethical. The following actions by the company’s management go against the beliefs of the Kantian. First and foremost, the management of ExxonMobil had prior knowledge that their equipment was faulty. Despite the fact that some measures were taken to restore normalcy at the plant, they did not promote the goodwill of all. As such, the weaknesses at the FCC unit needed to be addressed adequately before the plant resumed normal operations. By using a procedure that had been used to solve a different problem in 2012, the management failed to promote the interests for all as the problem would reoccur since it was inadequately solved. Therefore, the ExxonMobil case demonstrates unethical practices.

Virtue Theory

In analyzing the Exxon Mobil’s case, a virtue theorist would be interested in the character of the personnel managing the company. The virtue theory holds that people should act in a manner that encourages good character and avoid any behavior that may portray improper behavior or bad habits. To a large extent, the management of ExxonMobil Corporation acted in a manner that demonstrated the bad character that would undoubtedly be denounced as unethical by a virtue theorist.

As investigations on the explosion were underway, the management of ExxonMobil was somewhat reluctant to cooperate with investigators. Indeed, as reported by the CSB, several of the investigators’ questions were not unanswered due to the management’s failure to cooperate. Generally, this could have, possibly, presented challenges in the process of identifying the real cause of the explosion. Predictably, the management thought that cooperating with the investigators would lead to the discovery of more information about their weaknesses. Therefore, the failure to cooperate in a crucial process that would unearth the challenges and weaknesses affecting the firm points out to lack of ethics by the company’s management.

Justified Virtue Ethics

The explosion at ExxonMobil Torrance refinery portrayed unethical behavior on the part of the company’s management. The fact that the officials knew about the problems at the FCC unit and did not take the necessary steps to rectify the situation demonstrates a violation of ethical practices by the company’s executive. While certain measures were taken to remedy the situation, the scope of the problem required a comprehensive solution. Additionally, considering the delicate nature of the FCC unit, and the equally delicate equipment adjacent to it, it was overly critical that the company needed to ensure effective repairs of every faulty part. Evidently, the failure to ensure that everything was okay at the plant demonstrates that the company did not prioritize the safety of the plant operators as well as that of the people living near the refinery.

Furthermore, the failure by the company to cooperate with investigators demonstrates a gross violation of ethics. Perhaps, the weaknesses at the FCC unit could have been a result of mishandling of the equipment by the plant operators. In essence, by helping the investigators, the company would have benefited from their expertise and knowledge, particularly in areas where its personnel had limited understanding. Therefore, the firm could have benefited as the workers would get expertise guidance to build their capacity to diagnose and repair any fault in the running of the refinery’s operations.

Company Action Plan

Following the explosion at the Torrance refinery, the ExxonMobil Corporation is facing serious problems that need to be addressed adequately if the company is to realize a full resumption of its activities and fortunes. Without a doubt, the environmental challenges caused by the ash rain that resulted from the explosion are so severe, and as such, the dangers need to be addressed by the relevant environmental agencies. However, since the company’s plant explosion led to the environmental pollution, it needs to play an active role in the improving the state of the environment. In doing so, ExxonMobil can demonstrate that it prioritizes the welfare of the neighboring community. To a large extent, a show of concern with its neighbors and the environment in the wake of the explosion can help to enhance its image.

Furthermore, the company’s closure led to the increase in fuel prices in California as its supplies account for 10% of all the refined gasoline in the state. Since motorists and other consumers of the firm’s products had to dig deeper into their pockets, the company might lose some of its loyal customers if problems at the refinery persist. Therefore, Exxon Mobil needs to put in place contingency measures that can mitigate the outcomes of future disruptions at its refineries. In this way, it can cushion its consumers from the inconveniences arising from unexpected increases in fuel prices.

On another front, the company’s failure to cooperate with the investigators led to a strained relationship with regulators such as the chemical safety board (CSB). Undoubtedly, having a bad relationship with other industrial players paints the firm badly. Some of the consequences of lack of cooperation with other players in the industry can be the lack of partners in the main ventures, which can scuttle a firm’s development effort. Moreover, it was unethical for the company to hesitate to help with investigations. In fact, its actions violated its guiding principle of becoming the best in the petroleum industry while observing ethical standards (“Guiding Principles”). Therefore, to ensure that the company cultivates a good relationship with other players, the management needs to establish proper channels of engaging external bodies such as investigators and regulators.

Conclusion
ExxonMobil Corporation is a clear violation of ethical practices. Basically, the firm focused on advancing its individual goals while ignoring the potential risks that were likely to occur due to the faulty equipment. Moreover, this case profoundly demonstrates the challenges that malpractice can cause a company. After the explosion, the refinery was shut down to pave the way for investigations, and as a result, there was a shortage of fuel. In this respect, motorists suffered increased fuel prices. Evidently, unethical practices result in serious ramifications, particularly if a major market player is involved as the workers, the society, and the environment suffer the resulting effects of malpractice. Therefore, the company would of need to put in place measures that can mitigate the outcome of such accidents in case they occur in the future. Basically, this requires prioritization of the societal good and implementation of responsive actions whenever a potential risk is identified. But on July 1, 2016 ExxonMobil sold it torrance refinery to a PBF energy a New Jersey based company, shortly after fixing the damage and  safe problems it went through in 2015.

Works Cited

Buhl, Larry. “Why There Could be More Blasts Like 2015 ExxonMobil Torrance Oil Refinery Explosion, Putting Millions at Risk.” DESMOG. 1 June 2016. WEB. 27 March 2017.

Chemical Safety Board (CSB). “U.S. Chemical Safety Board Finds Multiple Safety Deficiencies Led to February 2015 Explosion and Serious Near Miss at the Exxon Mobil Refinery in Torrance, California.” 13 Jan. 2016, WEB. 27 March 2017.

Guiding Principles. n.d. corporate.exxonmobil.com/en/company/about-us/guiding-principles. WEB. 27 March 2017.

Our History. Exxon Mobil. n.d. corporate.exxonmobil.com/en/company/about-us/history/overview. WEB. 27 March 2017.

Penn, Ivan. “Exxon Mobil's Torrance Refinery Restart is Delayed Until Monday Night.” Los Angeles Times. 7 May 2016, WEB. 27 March 2017.

Penn, Ivan and Tony Barboza. “Fires, Explosions at Torrance Refinery Have Neighborhood on Edge.” Los Angeles Times. 17 Nov. 2016. WEB. 27 March 2017.

Zou, Jie Jenny “ExxonMobil Narrowly Avoided Catastrophe Two Years Ago, and you Never Heard About It.” GRIST. 11 Feb. 2017. WEB. 27 March 2017.