The Importance of Addressing Safety in the Battery Industry
I’m going to say something honest. Sometimes the truth hurts, but I’m trying to be helpful. When it comes to safety, nobody is special. The battery industry has suffered by using safety as a marketing tool, and it has become a bad habit.
Paul O’Neill, former CEO of Alcoa and Secretary of the Treasury under George W. Bush, marked his tenure at Alcoa with an unexpected primary focus on worker safety. He said, “Our safety record is better than the general American workforce…But it’s not good enough.” Initially, his safety focus hurt Alcoa’s stock price because the topic was uncomfortable and appeared to be a distraction from the (perceived) greater importance of profits. And the perception remained until O’Neill demonstrated that lost work days were reduced by a factor of 10 and profits were soaring. By focusing on safety, O’Neill improved efficiency, reduced downtime and—perhaps most importantly—empowered everyone in the company to have a voice, and to acknowledge risk and do something about it. The priority on safety empowered factory floor workers, increased accountability across the organization, and made Alcoa more efficient compared to its competitors.
Forging and casting aluminium is dangerous work. To deny this would be foolish. Other companies with similar processes have created similar safety cultures, including Owens Corning, Shell, DuPont, and others. The way to do this is to institute a safety policy that extends down to every single employee, encouraging all to use stair handrails, wear a helmet while riding a bike, and begin every meeting with a safety moment. Safety is, and should be, a part of daily discussion.
I once had a meeting at Shell’s offices in Houston, and as I walked up the stairs to my meeting, the receptionist reminded me to use the handrail on the stairs. I was shocked. On another occasion, I was at a National Academy of Engineers meeting at DuPont, and many of the attendees were admonished by the meeting host for not using the handrail on the large and expansive stairs in the reception lobby. In a separate project meeting with another oil and gas company the host spent twenty minutes discussing safe practices while driving on the highway before the actual meeting started. And in DNV’s own oil and gas laboratories, we have put up signs stating that safety is everyone’s job. We also begin meetings with safety moments.
Member companies in the oil and gas industry have a safety mandate that affects their share prices. Spills, fire, explosions, and environmental disasters are all events that have a finite probability of happening. The industry has accepted this as reality, addressed it directly, and responded to it openly. They could fear the perception of these safety risks and deny their occurrence, until the day that a disaster occurs—at which point they would be ridiculed by investors for being irresponsible. Industries with inherently dangerous processes and products have assumed a logical and prudent policy to address safety risk with the knowledge that it will occur.
The battery industry has a lot to learn from the oil and gas industry. Rather than being in denial of fire or toxicity risk and using safety features as marketing material, battery companies and system integrators should instead demonstrate their openness to the topic. Their openness would be the differentiator, such that anyone who is not open could be looked at with scrutiny. Imagine if a petrochemical company building a plant outside of a town told the residents there is zero fire risk. They’d be laughed out of the state.
Addressing safety would greatly aid in discussions with sensitive safety officials who distrust claims from manufacturers because they are self-serving and are delivered in the context of a sales pitch. Selling safety feels a bit like bragging about good morals; and some things are just better demonstrated than boasted.
Similarly, for regulatory officials, it is also time to address safety head on. DNV wrote a fire testing report on the main findings and recommendations from an extensive fire and extinguisher testing program that evaluated a broad range of battery chemistries. There is nothing in the report that downplays safety. In fact, it discusses deadly gases, explosion risk, and heat released in ugly detail. In the technical guidance, we demonstrate how to design around ventilation and extinguishing and how much conservatism there are in the estimations. Outlining and addressing safety can be an opportunity to proactively address it directly. Talk about water. Talk about cascading. Talk about HCl and CO. If the oil and gas industry is brave enough to do this, then the battery industry can too. Don’t fear the data. Challenge it. Doubt it. Replicate the test and see what you get.
Safety officials in New York are hesitant to commit to hard numbers on ventilation, extinguishing or setbacks—perhaps because no one wants to be wrong or the first to commit. Meanwhile, has anyone wondered why there isn’t a peep on this topic from California? And did anyone notice that Massachusetts is deploying storage while addressing safety directly? The rest of the nation is moving on.
Project developers who just want to get their projects built are being caught in the middle of this safety debate. They’ve done a lot of work getting the site, finances, and the business case finalized. And they have suppliers waiting with them. On one side, the system integrators haven’t done themselves any favors by overselling safety. And on the other side, regulators have sent an uncertain message to the market, which will eventually scare away the lenders, and, in turn, push away the developers.
If everyone would take a page out of Paul O’Neill’s book, we may come to understand that safety discussions are necessary. Safety is now out in the open and people can discuss how to address it, rather than what to fear. I’ll leave you with a friendly reminder. When O’Neill retired at Alcoa in 2000 the net income was five times higher than when he started—and this was all due to changing one simple thing: safety habits.