GO
Loading...

Probe of Texas City Refinery Explosion Finds Weak Oversight

The federal government's final report on the fatal 2005 explosion at BP's Texas City refinery criticized a key worker-safety agency for lax oversight and reiterated claims that organizational and safety deficiencies at the British energy company led to the blast.

The March 23, 2005, accident killed 15 people and injured another 170, the nation's worst industrial accident since 1990.

In a 335-page report, the U.S. Chemical Safety and Hazard Investigation Board said although the Texas City plant had had several fatal accidents over the last 30 years, the federal Occupational Safety and Health Administration had done only one process safety management inspection at the refinery -- in 1998.

The report said the agency made other, unplanned inspections after accidents, complaints or referrals -- it didn't say how many -- but that those visits were typically narrower and shorter than planned inspections.

"OSHA's national focus on inspecting facilities with high injury rates, while important, has resulted in reduced attention to preventing less frequent, but catastrophic, process safety incidents such as the one at Texas City," the report said.

Richard Fairfax, OSHA's enforcement director, told the Houston Chronicle this week that the agency "has gone to great effort to direct our resources to where we think we need to be."

But CSB clearly pointed a finger at London-based BP for causing the explosion, noting in particular that "cost-cutting in the 1990s by Amoco and then BP left the Texas City refinery vulnerable to a catastrophe."

BP acquired the refinery when it merged with Amoco in 1998. Soon after, the report said, BP ordered a 25%, across-the-budget cut in fixed spending at its refineries. In a preliminary investigation of the accident released in October 2005, CSB said the Texas City plant fostered a culture of bad management and failed to recognize and correct problems.

"The combination of cost-cutting, production pressures and failure to invest caused a progressive deterioration of safety at the refinery," CSB Chairwoman Carolyn W. Merritt said of the latest findings.

Beginning in 2002, Merritt said, BP commissioned a series of audits and studies that revealed serious safety problems at the Texas City refinery, including a lack of preventative maintenance and training.

The reports were shared with BP executives in London and provided to at least one member of the executive board, she said. "BP's response was too little and too late," Merritt said.

The Texas City explosion occurred when part of the plant's isomerization unit, which boosts the level of octane in gasoline, overfilled with highly flammable liquid hydrocarbons. A geyser of flammable liquid and vapor ignited as the unit started up. Alarms and gauges that should have warned of the overfilling equipment failed to work at the plant, about 40 miles southeast of Houston.

The unit had a history of problems and was not hooked up to a flare system that burns off vapor and could have prevented or minimized the accident, the CSB has said.

Merritt noted the investigation was the CSB's largest and most complex since its formation nine years ago. A team of investigators interviewed 370 witnesses, reviewed more than 30,000 documents and tested equipment, instruments and chemicals.

Lead investigator Don Holmstrom was to present the report's findings and recommendations at a public hearing this evening in Texas City. The CSB does not issue citations or fines but makes safety recommendations to plants, industry organizations and regulatory agencies such as OSHA and the U.S. Environmental Protection Agency.

The new report recommends BP appoint a board member with expertise in process safety and for BP senior executives to establish an improved incident-reporting program and use new indicators to measure safety performance.

It also calls on OSHA to "identify those facilities at the greatest risk of a catastrophic accident" and then conduct comprehensive inspections of those facilities. The CSB also recommends OSHA hire or develop new, specialized inspectors and expand its process safety management training.

The report notes that proposed OSHA fines during the 20 years preceding the March 2005 explosion -- a period in which 10 people were killed at the refinery -- totaled $270,255. But net fines collected after negotiations came to $77,860. Six months after the blast, in September 2005, OSHA found BP committed more than 300 willful violations of its rules and fined the company $21.3 million.

The CSB said BP cooperated with the investigation and had committed to widespread safety improvements and investments since the accident.

In January, after an independent review by a panel led by former Secretary of State James A. Baker III, BP said it planned to increase spending on improvements at U.S. refineries from $1.2 billion in 2005 to an average of $1.7 billion a year from 2007 to 2010. BP's net profit for 2005 amounted to $22 billion.

At the time, BP chief executive John Browne defended the company's overall safety record but said its oversight of the kind of safety measures that prevent huge mishaps "wasn't excellent enough."

Browne denied charges that BP placed profits above safety and said the company had never foregone spending on safety when necessary. But some BP workers have said safety wasn't a spending priority and recommendations for repairs were often met with resistance.

The January report found poor safety oversight, deficient leadership and short-term focus at BP's five U.S. refineries. That investigation was commissioned by BP at the CSB's suggestion.

Symbol
Price
 
Change
%Change
BP.
---

Featured

Contact U.S. News

  • CNBC NEWSLETTERS

    Get the best of CNBC in your inbox

    › Learn More

Don't Miss

U.S. Video