Sunday, August 15, 2010

BP's Texas City Refinery - Still in the news five years later

BP's Texas City refinery once again made the news last week. The refinery, BP's largest and the third largest in the United States, is capable of processing 455,790 barrels of oil per day into gasoline, heavy oil products, distillates and other products. The Texas City refinery was acquired by BP in 1999 as part of their acquisition of Amoco. Last week, the United States Occupational Safety and Health Administration (OSHA) and BP announced that a settlement had been reached regarding BP's failure to meet abatement obligations that had been issued by OSHA in October 2009 which resulted in the assessment of a $50.6 million fine. In this installment of a two part story, I'll take a look at the devastating fire and explosion at the Texas City refinery that took place in 2005 followed by a look at some of the current issues facing BP and the refinery that have made the news in the past couple of months.

BP's Texas City refinery made the news back on March 23rd, 2005 when an explosion at the refinery killed 15 employees and injured 180 additional plant personnel. The explosion took place when a isomerization unit was being started up. The raffinate splitter tower was overfilled which resulted in the release of flammable liquid which vaporized and ignited, resulting in an explosion. Prior to the explosion, operations personnel noted that a pressure control valve was inoperable despite several attempts to correct the problem. The malfunctioning control valve was reported to a frontline supervisor however, no repairs were made and the same supervisor later signed off that all control valves had been tested and were operational prior to starting up the raffinate splitter tower. As well, a required check of all alarms and other instruments were not completed and when an attempt was made to check critical alarms, technicians were told that there was insufficient time to complete the check prior to start up. When the explosion took place, 15 contract employees that were working in or near office trailers close to the isomerization unit in question were killed as a result of blunt force trauma. Of the 180 injured employees, 66 were seriously injured resulting in multiple days off work; of the 66, 14 were BP employees with the remainder being contract employees.

The damage to the refinery is estimated to have led to financial losses exceeding $1.5 billion.

In 2007, a report compiled by the U.S. Chemical Safety and Hazard Investigation Board concluded the following about the explosion:

"The Texas City disaster was caused by organizational and safety deficiencies at all levels of the BP Corporation. Warning signs of a possible disaster were present for several years, but company officials did not intervene effectively to prevent it. The extent of the serious safety culture deficiencies was further revealed when the refinery experienced two additional serious incidents just a few months after the March 2005 disaster. In one, a pipe failure caused a reported $30 million in damage; the other resulted in a $2 million property loss."

From the same report, here are their conclusions as to where the fault for the accident should lie:

12.1 Root Causes

"BP Group Board did not provide effective oversight of the company’s safety culture and major accident prevention programs.

Senior executives:

inadequately addressed controlling major hazard risk. Personal safety was measured, rewarded, and the primary focus, but the same emphasis was not put on improving process safety performance;

did not provide effective safety culture leadership and oversight to prevent catastrophic accidents;

ineffectively ensured that the safety implications of major organizational, personnel, and policy changes were evaluated;

did not provide adequate resources to prevent major accidents; budget cuts impaired process safety performance at the Texas City refinery.

BP Texas City Managers did not:

create an effective reporting and learning culture; reporting bad news was not encouraged. Incidents were often ineffectively investigated and appropriate corrective actions not taken.

ensure that supervisors and management modeled and enforced use of up-to-date plant policies and procedures.

incorporate good practice design in the operation of the ISOM unit. Examples of these failures include: no flare to safely combust flammables entering the blowdown system;

lack of automated controls in the splitter tower triggered by high-level, which would have prevented the unsafe level; and inadequate instrumentation to warn of overfilling in the splitter tower.

ensure that operators were supervised and supported by experienced, technically trained personnel during unit startup, an especially hazardous phase of operation; or that

effectively incorporated human factor considerations in its training, staffing, and work schedule for operations personnel.

12.2 Contributing Causes

BP Texas City managers:

lacked an effective mechanical integrity program to maintain instruments and process equipment. For example, malfunctioning instruments and equipment were not repaired prior to startup.

did not have an effective vehicle traffic policy to control vehicle traffic into hazardous process areas or to establish safe distances from process unit boundaries.

ineffectively implemented their PSSR policy; nonessential personnel were not removed from areas in and around process units during the hazardous unit startup.

lacked a policy for siting trailers that was sufficiently protective of trailer occupants."

At the time of the 2005 explosion, the OSHA stepped in to ensure that BP upgraded its facility to ensure improvement in plant safety to protect workers. Apparently, according to BP, they have spent more than $1 billion between 2005 and 2009 to improve safety and infrastructure at the refinery. Despite the huge amount spent on the refinery, the OSHA was not happy with the results and in an October 2009 follow-up investigation, issued 439 new willful violations alleging that BP had failed to meet the obligations to improve safety set forth in the 2005 agreement. BP and OSHA have elected to focus on 270 "Failure to Abate" citations and as a result, BP is obligated to fund a program that will implement and conform with OSHA standards to the tune of $500 million between now and 2016. In addition, as mentioned above, BP has agreed to pay a $50.6 million fine to OSHA as part of the settlement. This is the largest penalty imposed in the history of the OSHA.

Here's a quote from the August 12th, 2010 BP press release about the settlement:

"Steve Cornell, head of BP's US Refining business, said, "This agreement demonstrates BP's commitment to work with OSHA and the USW (United Steelworkers union) in order to enhance safety performance at Texas City. We have significantly improved the safety of our operations at Texas City over the last five years and are determined to carry this effort forward effectively in the future. Our commitments with OSHA and to the USW's Triangle of Prevention (TOP) program are consistent with how we intend to deliver further safety improvements going forward."

Here's a quote from the OSHA press release from last week:

"This agreement achieves our goal of protecting workers at the refinery and ensuring that critical safety upgrades are made as quickly as possible," said Secretary of Labor Hilda L. Solis. "The size of the penalty rightly reflects BP's disregard for workplace safety and shows that we will enforce the law so workers can return home safe at the end of their day."

Can we believe what BP says or are some companies just slow to learn from their own mistakes?

Because BP did not make the required improvements under the 2005 agreement, they will now be subjected to unprecedented oversight. BP must allow regular site inspections and submit quarterly reports detailing progress in correcting the plant's pressure release mechanism deficiencies. What complicates the matter even further is that the OSHA still have 439 outstanding violations that were discovered during the 2009 follow-up investigation. As a result of the outstanding issues, the OSHA has assessed an additional $30 million in penalties to BP again, for failing to correct deficiencies in their safety valve systems; last week's $50.6 million settlement has no impact on the additional proposed fines.

Interestingly enough, the largest fine that the OSHA had ever assessed prior to last week's $50.6 million record was $21 million fine back in September 2005, coincidentally (or not) against BP in connection with the same refinery accident.

In part two of this look at BP and the Texas City refinery, I'll look at another issue that BP is facing at this facility.

As an aside, I had wondered if BP was being picked on unfairly by the mainstream media for its safety practices. Here's a screen cap from the Center for Public Integrity website showing the number of OSHA Citations given to United States refineries:

BP is a standout!


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