HBO comedian John Oliver is expected to talk about North Dakota’s Bakken oil fields on this Sunday’s edition of his Last Week Tonight show.
Oliver is a smirking talking head in the Jon Stewart category where many poorly informed Americans get their news. You know the routine. The entertainer launches into a verbal polemic about some topic, cherry picking facts and details to fit a pre-determined narrative, while a laugh track (or is it a live audience?) screams their delight in the background.
Because it’s all just so funny, you guys.
I’m told that his “fact checker” has been contacting state and industry sources, and the focus seems to be a series of stories paid for by the Center for Investigative Reporting which focused on oil worker safety. The stories called the Bakken oil boom a “serial killer” and accused the oil industry nefarious misdeeds like paying workers bigger bonuses for speed as opposed to safety.
I actually debunked a lot of those articles in a couple of posts published earlier this year.
One claim you’ll likely hear Oliver focus on is that there has been a big spike in oil worker deaths in the state. While that’s true, the cause is less a safety issue than just the fact that there’s been a whole lot more oil development activity going on. If you put those deaths in the context of oil activity (see the graphs on the right), the rates have remained largely flat throughout the oil boom. Context you probably won’t get from Oliver.
Another focus of the CIR articles, and thus I’m assuming Oliver, is likely to be how oil companies pay performance bonuses for speed versus safety. Here’s how the CIR article describes one such situation:
Four months before Brendan Wegner died, Joseph Kronberg, a 52-year-old father of three, was electrocuted and died at another North Dakota well owned by Oasis Petroleum North America.
Oasis paid bonuses worth a combined $33,000 to 23 of Kronberg’s co-workers in part for working quickly – even after Kronberg died, internal company records show. At a well on the same site where Kronberg died and another nearby well, Oasis paid workers performance bonuses of $150 per day for drilling quickly, compared with $40 a day for drilling safely, records show.
That certainly makes it sound like Oasis has the wrong priorities. The problem is, CIR didn’t describe the bonuses accurately.
I got in touch with Brian Kennedy, a spokesman for Oasis Petroleum who was also quoted in the CIR piece, back in June and he gave me a more in-depth explanation of the bonuses and it turns out that workers do get rewarded more for safety than speed.
“While the rate for drilling safety and performance bonuses vary in daily amount, the end payout is heavily weighted to safety performance,” he told me in response to an emailed inquiry. “The safety bonus is paid for every day of incident-free drilling operations, and performance bonuses are paid if and when drilling is completed ahead of schedule. For example, workers on a drilling crew that finishes 3 days ahead of schedule and logs 27 days of safe drilling operations would receive a $450 performance bonus and a $1,080 safety bonus for a total bonus of $1,530.”
[mks_pullquote align=”left” width=”300″ size=”24″ bg_color=”#ffffff” txt_color=”#000000″]…the truth of the spike in oil field worker deaths in North Dakota is that we’ve just had more oil activity. The number of oil worker deaths has gone up, yes, but in the same way you’d expect the number of road fatalities to go up if traffic increases.[/mks_pullquote]
Kennedy said the average Bakken oil well takes about 30 days to complete, and he pointed out that even crews who don’t finish a well on schedule can still get a significant safety bonus.
“Alternatively, workers on a drilling crew that finishes 5 days behind schedule but successfully logs 35 days of safe drilling would receive zero performance bonus and $1400 in safety bonus,” Kennedy added. “In other words, safety pays every day and is critical to workers’ ability to maximize their bonus opportunities.”
As for the situation involving Brendan Wegner, another Bakken oil worker death alluded to in the CIR story, Kennedy told me that the story’s authors got that wrong too.
“It should also be noted note that this bonus structure applies to drilling crews/operations – not workover operations,” he said. “The Reveal story leads one to believe that the workover crew on the Kline well might have been prioritizing speed over safety in pursuit of a bonus when, in fact, they did not have any bonus opportunity at all.”
In other words, the CIR folks not only inaccurately described the safety/performance bonuses but they also drew a connection between a worker’s death and those bonuses when, in reality, the bonuses weren’t even a part of the situation.
So, in summary, the truth of the spike in oil field worker deaths in North Dakota is that we’ve just had more oil activity. The number of oil worker deaths has gone up, yes, but in the same way you’d expect the number of road fatalities to go up if traffic increases. And CIR got the facts about performance versus safety bonuses completely wrong.
But I’m guessing that’s not the story Oliver is going to tell.