Even after BP’s refinery in Texas City exploded in 2005 killing 15 workers and injuring hundreds, the company continues to break the safety standards it promised to meet as part of a settlement agreement. Four workers have died in separate occasions since.
Yet documents obtained by the FT’s Sheila McNulty show that the company continues to cut corners in terms of essential anti-corrosion and safety maintenance. This follows a recent story on BP’s abuse of the oil derivatives markets in the US.
BP fails to comply with safety standards
By Sheila McNulty in Houston
Published: September 28 2009 21:42 | Last updated: September 28 2009 21:42
It has been four years since BP’s biggest refinery exploded in Texas, killing 15 people and injuring hundreds in the worst US industrial accident in more than a decade. Yet US authorities have not yet succeeded in getting the UK oil major to bring the facility into compliance with safety standards required by its settlement agreement.
The lapses have caused even the unit in charge of enforcing compliance – the labour department’s Occupational Safety & Health Administration (Osha) – to be
The Financial Times has seen copies of documents showing that, as late as August, safety authorities in the department notified BP it was late in checking thickness on 143 pipes at the Texas City refinery, which could uncover corrosion, as well as visual inspections and maintenance on three internal tanks and seven internal vessels.
The company also was overdue to perform inspections and preventative maintenance on 77 critical instruments, and two equipment tests were overdue.
Yet, even after four separate deaths at the facility following the fatal 2005 blast, Osha let the deadline for BP to come into compliance pass on September 23. It says it is considering BP’s request for yet another delay to meet safety standards before being deemed non-compliant with a settlement agreement with Osha set following the 2005 blast.
Osha found more than 300 “egregious, wilful violations” in Texas City after the 2005 explosion. While BP did not admit guilt, it agreed in a settlement with Osha to a maximum allowable $21m fine and to spend $1bn on the refinery over the next five years.
BP told the FT last week it believed it was in “full compliance’’ with its commitments noting that, since 2005, the company had made substantial investments at Texas City, in its people, work processes and in upgrading its facilities.
“BP Products has completed more than 550 Osha citation abatement requirements and process safety related recommendations and has significantly reduced hazards on-site and off-site,’’ said Daren Beaudo, BP spokesman.
“We continue to work with Osha through the appropriate processes to resolve any expressed concerns,’’ he said. “BP Products remains committed to building upon the safety investments and improvements at its Texas City Refinery.’’
But Osha has come under fire too. It was censured by the US Department of Labor’s Office of Inspector General-Office of Audit for not increasing oversight of the facility under provisions aimed at “indifferent employers’’ with repeat offences.
The audit noted the death in 2008 of William Joseph Gracia, a veteran BP operations supervisor, from head injuries after a 500lb lid blew off a water-filtration unit that was being restarted, should have led Osha to apply its “enhanced enforcement provisions”. That would have resulted in additional enforcement efforts, such as enhanced follow-up inspections, inspections of other workplaces of the employer and more stringent settlement terms.
Instead Osha fined BP just $28,000, set firm deadlines by which BP had to improve its processes and then agreed to delay them into this year.
Osha hired a third party to do its auditing of the site after the 2008 incident, despite this being contrary to best practice because of the potential for conflict if auditors look for work from the companies they are investigating.
“You’re getting into the neighbourhood of 40 people killed in the facility over the last 35-40 years,’’ said one industry investigator who has been to the facility. “I don’t know of another industrial site in America at which 40 people have been killed over the last 35 years.’’
Many of the problems at the 70-year-old plant had, no doubt, been inherited by BP when it acquired the refinery in 1998 as part of its purchase of Amoco. Before the blast, the Texas City site had in 30 years suffered 23 fatalities – four since BP took over. But instead of making the investments needed to improve safety, BP in 1999 ordered a 25 per cent cut in fixed costs. Osha notified BP in August 2009 of several continued lapses at the site, noting that its settlement agreement with the government required the company to retain an expert to conduct a process safety audit, with special emphasis on several items, including the “adequacy of pressure relief for individual pieces of equipment’’.
In addition, CSB, which conducted an exhaustive two-year probe into the 2005 blast, has opened a second full investigation of the refinery in February 2008, following Mr Gracia’s death.
The probe, which is to run into next year, is focusing on whether safety system issues were put in place before or after 2005. At that time, the CSB concluded, budget cuts had progressively deteriorated safety, resulting in all the symptoms of a “failed safety culture,” but BP pledged to get the refinery in order.
Regulator’s list of concerns
The US labour departments Occupational Safety and Health Administration gave BP until September 23 2009 to address continued failings at its Texas City refinery or be considered non-compliant with its settlement agreement with US authoritieswrites Sheila McNulty.
Yet the deadline came and went, with Osha saying it was considering BP’s request for more time to comply with a string of problems outlined in a letter to the company in August.
For example, it said regulations recommended refineries established a maximum default rule of 3 per cent inlet pressure loss on spring-loaded pressure relief valves, yet BP had allowed a maximum pressure drop of 7 per cent.
Osha said: “We have found a significant number of valves with inlet pressure drops above 3 per cent and, disturbingly, several valves with inlet pressure drops above 7 per cent, with some as high as 27 per cent” .
In addition, Osha said BP had not completed a determination of which interlock, trip and alarm functions in each unit were critical to process safety.
It wrote that BP had identified a large number of uncontrolled or unmitigated hazards involving instrumentation that had resulted in substantial “residual risk” in affected systems throughout the refinery.
“There still exist a large number of identified unmitigated risk scenarios,’’ Osha said. For some of the identified hazards, BP had either not specified or allocated the specific layers of protection needed. For others, where BP had specified layers of protection to control hazards, the instrument controls had not been installed or were not operational.
The documents paint a picture remarkably similar to what the authorities found on investigating the 2005 explosion.
Among the citations for the death of William Joseph Gracia, a veteran BP operations supervisor, at the refinery in 2008, Osha noted that some of the problems identified after the 2005 refinery explosion had yet to be corrected, in that BP had still not implemented sufficient operating procedures.
BP said that since 2005 it had increased staffing in the area of health, safety and the environment; increased safety and operations training levels, and upgraded the Texas City refinery’s infrastructure, refurbishing and rebuilding key gasoline production units, updating control systems, moving to a more powerful maintenance management system, improving training and implementing other recommendations.
The company also eliminated the use of blowdown stacks, such as that which exploded, and established new guidelines governing the placement of trailers and temporary structures, which did not offer enough protection to staff during the accident.