Report: Little progress in refinery safety since deadly Texas City explosion

By Jaxon Van Derbeken
San Francisco Chronicle

SAN FRANCISCO — Federal investigators on Monday called for an overhaul of the way oil refineries are regulated in California and across the nation, saying the smoky fire at Chevron’s Richmond refinery last year exposed weaknesses in systems that do not force companies to demonstrate they are operating as safely as possible.

The U.S. Chemical Safety Board issued a draft report on the blaze that sent clouds of smoke through the region on Aug. 6, 2012, prompting more than 15,000 people to go to hospitals to complain of breathing problems.

The board said California had made progress since that day in improving oversight of the troubled oil refinery industry, but concluded that much more needs to be done both locally and nationally.

“The positive and productive developments that have taken place in the wake of the Chevron incident strongly suggest that California has a unique opportunity to implement changes to improve safety and health in the refining industry that can serve as a model to the rest of the country,” the report said.

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The board’s first report, issued earlier this year, blamed Chevron for allowing unchecked sulfur-related corrosion at its refinery, despite a string of warnings about the danger that higher sulfur crude could pose to the part of the crude processing unit that ultimately failed.

The pipe that burst — which had lost 90 percent of its wall thickness — had been left in place for years despite internal recommendations to replace it, investigators said.

The report released Monday outlines a path forward for the industry, noting that there has been virtually no progress in improving safety despite a string of deadly accidents, including a 2005 fire at BP’s Texas City refinery that killed 15 workers.

The board lauded California’s plan to hire 15 more workplace inspectors following the Richmond fire, but said that bringing in more staff and issuing more citations would not be enough. The regulatory approach in California and the U.S. is too static, reactive and focused after-the-fact fines, when it should seek to drive down accidents, investigators said.

The board touted as an alternative the “safety case” regulatory system used in Europe and elsewhere, a prevention-based model that holds the industry accountable to demonstrate it is driving down the risk of disasters to the lowest level possible.

In that system, the government hires highly qualified, well-compensated experts to assure the industry is reducing risks. But making such a system work in the U.S. would require better pay and training for regulators, so they could be at least competitive with the refineries they oversee, the board’s report found.

Currently, California regulators earn a little bit more than half of the salaries of their industry counterparts, in part because of salary caps at Cal/OSHA, the workplace safety agency. Those caps, the board found, make it “incredibly difficult’’ to draw the experts needed to oversee the industry.

The report highlighted the need for reform. While the nation’s 150 oil refineries make up “only a small fraction’’ of the thousands of chemical industry plants in the U.S., the board said they account for “a great number of serious and deadly incidents’’ in the last decade.

The board noted that Cal/OSHA had a team of just seven regulators before the Richmond fire that performed cursory inspections of the state’s 15 refineries as well as 1,700 other chemical plants. Just one member of the team had a degree in engineering, the board said.

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That effort contributed to the Richmond fire, the board found, as Cal/OSHA had done only about 150 hours of planned inspections over the previous decade at the plant and issued no fines. State officials have acknowledged that the inspections were far from the comprehensive checks outlined in the agency’s own mission statement and called for by federal regulators.

In contrast, federal officials oversaw an effort elsewhere that took 1,000 hours per refinery averaged nearly $77,000 in fines per inspection by 2011.

The board concluded that the accident in Richmond might have been avoided altogether had the state been more rigorous in its oversight, because Chevron may not have been able to repeatedly ignore warnings that sulfur-caused corrosion could attack its refinery.

In July, a state task force appointed by the governor to review refinery safety regulatory efforts in the wake of the Richmond fire issued a report calling for reforms, including the adoption of the “safety case” approach.

The Chemical Safety Board on Monday hailed that report as “an important step forward in improving petroleum refinery safety and environmental performance both in California and nationally.”

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