The Edge of Oil
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|Jim Morris and M.B. Pell||May 17th 2010|
Center for Public Integrity
|BP's Renegade Refinery after Explosion|
Two refineries owned by oil giant BP account for 97 percent of all flagrant violations found in the refining industry by government safety inspectors over the past three years, a Center for Public Integrity analysis shows. Most of BP’s citations were classified as “egregious willful” by the Occupational Safety and Health Administration and reflect alleged violations of a rule designed to prevent catastrophic events at refineries.
BP is battling a massive oil well spill in the Gulf of Mexico after an April 20 platform blast that killed 11 workers. But the firm has been under intense OSHA scrutiny since its refinery in Texas City, Texas, exploded in March 2005, killing 15 workers. While continuing its probe in Texas City, OSHA launched a nationwide refinery inspection program in June 2007 in response to a series of fires, explosions, and chemical releases throughout the industry.
Refinery inspection data obtained by the Center under the Freedom of Information Act for OSHA’s nationwide program and for the parallel Texas City inspection show that BP received a total of 862 citations between June 2007 and February 2010 for alleged violations at its refineries in Texas City and Toledo, Ohio. Of those, 760 were classified as “egregious willful” and 69 were classified as “willful.” Thirty of the BP citations were deemed “serious” and three were unclassified. Virtually all of the citations were for alleged violations of OSHA’s process safety management standard, a sweeping rule governing everything from storage of flammable liquids to emergency shutdown systems. BP accounted for 829 of the 851 willful violations among all refiners cited by OSHA during the period analyzed by the Center.
Top OSHA officials told the Center in an interview that BP was cited for more egregious willful violations than other refiners because it failed to correct the types of problems that led to the 2005 Texas City accident even after OSHA pointed them out. In Toledo, problems were corrected in one part of the refinery but went unaddressed in another. Jordan Barab, deputy assistant secretary of labor for occupational safety and health, said it was clear that BP “didn’t go nearly far enough” to correct deficiencies after the 2005 blast. “The only thing you can conclude is that BP has a serious, systemic safety problem in their company,” Barab said.
The head of OSHA, David Michaels, said the safety problems aren’t limited to BP. “We are very concerned about the commitment of the refining industry to worker health and safety,” he said.
BP officials did not respond to requests for comment about the OSHA data. According to the company’s website, “BP’s commitment to safety begins at the most senior levels of our organization—with robust systems to implement, audit, report on and improve our performance … Creating a safe and healthy working environment is essential for our success. Since 1999, injury rates and spills have reduced by approximately 75 percent.”
BP Faces $90 Million in Fines
BP, which calls itself the country’s largest oil and gas producer, operates five U.S. refineries that collectively process about 1.5 million barrels of crude oil per day. Last October, OSHA proposed a record $87 million fine against the Texas City refinery. The agency proposed a fine of $3 million against the Toledo refinery in March. BP is contesting both penalties.
Separately, BP’s Cherry Point refinery in Blaine, Wash., was cited by state regulators for 13 serious violations earlier this month. Penalties totaling $69,200 have been proposed. These citations are not included in data analyzed by the Center.
No other oil company inspected by OSHA since June 2007 was even close to BP in the number of citations issued. Sunoco Inc. was cited for 127 alleged violations, eight of which were willful. ConocoPhillips Co. was cited for 119, four of which were willful, and Citgo Petroleum Corp. for 101, two of which were willful.
OSHA defines a willful violation as one “committed with plain indifference to or intentional disregard for employee safety and health.” An egregious willful violation is considered so severe that it can result in a penalty each time a violation occurs, rather than a single penalty for all violations of a regulation. A serious violation is described as one creating a “substantial probability” of death or serious injury. OSHA can refer cases involving worker deaths and wanton disregard for safety rules to the Justice Department for criminal prosecution.
Under the nationwide program, OSHA has finished inspecting, or is in the process of inspecting, 55 refineries under federal OSHA jurisdiction, with 12 left to inspect. Another 23 U.S. refineries are exempted because they participate in a voluntary program for employers that have agreed to adopt safety rules stricter than what OSHA requires. Some inspections were performed by regulators in states such as Washington and California, which have their own worker safety programs. There are 55 refineries in these states.
In a letter to refinery managers last year, OSHA’s enforcement director, Richard Fairfax, wrote that in the previous 15 years, the refining industry had recorded “more fatal or catastrophic incidents related to the release of highly hazardous chemicals … than any other industry sector covered by the [process safety management] standard.” OSHA inspectors, Fairfax wrote, were finding “many of the same problems repeatedly.”
A Troubled Industry
After the BP refinery in Texas City blew up on March 23, 2005, the U.S. Chemical Safety Board, an independent federal agency, concluded that the 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.”
Several other major incidents—including a pipe failure that caused $30 million in damage—occurred at the same BP refinery just months after the explosion, the safety board found. An investigative panel chaired by former Secretary of State James Baker also documented management lapses and questionable cost-cutting at BP. But the Baker panel’s report added: “We are under no illusion that deficiencies in process safety culture, management, or corporate oversight are limited to BP.”
Indeed, on April 2 of this year, a fire at the Tesoro Corp. refinery in Anacortes, Washington, killed seven workers. The cause of that accident has not been determined.
But Bill Hoyle, former manager of investigations for the safety board and chief investigator of the 2005 BP disaster, said it provides further evidence that the industry is cutting corners.“The industry across the board has process safety problems. Fires and explosions and fatalities are continuing unabated. Texas City should have served as a wake-up call, but they didn’t wake up,” Hoyle told the Center.
Now a safety consultant for the United Steelworkers, which represents about 30,000 refinery employees, Hoyle said the OSHA inspection program is “a flash in the pan which looks at only a tiny percentage of each refinery—one or two process units.” He questioned its effectiveness, noting that the Tesoro refinery in Anacortes was cited in October 2008 for 17 serious process safety management violations, 14 of which were dropped after the company negotiated with the Washington State Department of Labor & Industries. A proposed penalty of $85,700 was reduced to $12,250.
Refineries are inherently dangerous places. In the course of turning crude oil into gasoline, diesel, propane and other products, workers come in close contact with extremely flammable and toxic materials. These materials are under high temperatures and pressures, creating fire and explosion hazards. OSHA’s process safety management standard requires refinery and chemical plant operators to have systems in place to identify and mitigate these hazards.
Kim Nibarger, a health and safety specialist with the Steelworkers, happened to be in Anacortes when the Tesoro refinery caught fire last month. Six of the seven workers killed belonged to the union. “I was almost sick to my stomach,” Nibarger said. “I thought, ‘When is it going to stop? What’s it going to take for this industry to wake up?’”
In his view, many of the problems in the industry can be traced to growing intervals between refinery “turnarounds,” when equipment is taken offline for cleaning, repair or replacement. Not long ago, Nibarger said, turnarounds were scheduled every two to three years. Now, as oil companies try to cut costs, it’s every three to five years.
Gregory Scott, executive vice president of the National Petrochemical & Refiners Association, defended the industry. “Safety is the highest priority at our member plants,” he told the Center. Scott said the industry is developing uniform standards to improve process safety management at refineries. “Clearly, we’re taking the steps to implement process safety metrics,” he said. “Chastising the industry for not doing it earlier may or may not be accurate.”
But OSHA’s Barab said the refining industry group continues to treat calamities like those in Texas City and Anacortes as isolated incidents. Refiners also point misleadingly to their industry’s relatively low “recordable” illness and injury rates, which he says are not reliable predictors of catastrophic incidents. Federal law requires employers to record and report all occupational deaths, injuries, and illnesses.
“BP had a very low recordable injury and illness rate before they blew up the [Texas City] plant,” Barab said. If the industry persists in using such rates as a measure of overall safety, he said, “It’s hard to take their commitment seriously.”
Jim Morris and M.B. Pell are correspondents for the Center for Public Integrity, from where this article is adapted.