BP’s Texas Refinery Fires, Leak Draw $15 Million Fine

WASHINGTON, DC, October 1, 2010 (ENS) – Even as oil giant BP today pledged royalties from future oil and gas production in the Gulf of Mexico as collateral for the $20 billion Deepwater Horizon Oil Spill Trust to pay claims from the April 20 incident, the company was hit with another big fine.

BP Products North America Inc. today agreed to pay a $15 million penalty for violations of the federal Clean Air Act at its Texas City petroleum refinery in Texas. The penalty resolves federal civil claims stemming from two fires, a leak, and reporting violations at refinery.

The penalty is the largest ever assessed for civil violations of the Clean Air Act’s chemical accident prevention regulations and also the largest civil penalty recovered for Clean Air Act violations at a single facility, the U.S. Environmental Protection Agency and the U.S. Justice Department said today.

The settlement, which is subject to court approval, addresses violations stemming from two fires that occurred at the refinery on March 30, 2004 and July 28, 2005, and a leak that occurred on August 10, 2005.

During the three incidents, each of which required the surrounding Texas City community to shelter-in-place, thousands of pounds of flammable and toxic air pollutants were released.

BP’s Texas City refinery is the third largest in the United States, with a production capacity of more than 460,000 barrels of oil per day.

EPA identified the Clean Air Act violations resolved today during a series of inspections of the Texas City refinery begun after a catastrophic explosion and fire on March 23, 2005 that killed 15 people and injured more than 170 others.

Fire at BP’s Texas City refinery, March 23, 2005 (Photo courtesy U.S. Chemical Safety Board)

“BP’s actions at the Texas City refinery have had terrible consequences for the people who work there and for those in nearby communities,” said Cynthia Giles, assistant administrator for EPA’s Office of Enforcement and Compliance Assurance.

The U.S. Chemical Safety Board determined that the 2005 explosion happened when a 170-foot tower at the refinery was being filled with liquid hydrocarbons. Because of missed communication among exhausted workers, no one saw that the tower was filled too full.

A fountain of chemicals burst from the tower, and the vapors were ignited when a fleeing contractor tried to start his balky pickup.

The Chemical Safety Board concluded that the explosion was “caused by organizational and safety deficiencies at all levels of BP.”

On October 30, 2009, the Labor Department’s Occupational Safety and Health Administration imposed an $87 million fine on the company for failing to correct safety hazards revealed in the 2005 explosion. In its report, OSHA cited over 700 safety violations. The fine was the largest in OSHA’s history, and BP announced that it would challenge the penalty.

On August 12, 2010, BP announced that it would pay $50.6 million of the October 30 fine, while continuing to contest the remaining $30.7 million. The fine had been reduced by $6.1 million between when it was imposed and when BP paid the first part.

OSHA is still working to collect another $30 million from the company for other penalties that BP is contesting.

EPA also identified violations of other Clean Air Act requirements at the refinery relating to the control of benzene, ozone-depleting substances, and asbestos. Exposure to benzene can harm human health and exposure to asbestos, a known human carcinogen, can cause two types of cancer.

These other violations were resolved in a February 2009 settlement that required BP to spend more than $161 million on pollution controls, enhanced maintenance and monitoring, and improved internal management practices at the refinery. The company also paid a $12 million civil penalty and performed a $6 million supplemental project to reduce air pollution in Texas City and vicinity.

With today’s settlement, the federal government will have recovered $137 million in criminal, civil, and administrative fines related to process safety violations at the Texas City refinery.

In addition, BP Products has performed $1.4 billion in corrective actions and the company will spend an estimated additional $500 million, to improve safety at the refinery as required by settlements entered into with the Occupational Safety and Health Administration (OSHA) and the criminal Clean Air Act plea agreement following the fatal March 23, 2005 explosion.

“Today’s settlement, in conjunction with other actions already taken by EPA and other federal agencies at Texas City, demonstrates the agency’s continuing commitment to actively and vigorously working to hold BP accountable and to make them comply with our nation’s environmental protection laws wherever the company operates,” said Giles.

“The Clean Air Act is intended to prevent not only accidents like the fatal March 2005 accident, it also penalizes accidents like these three that result from poor practices and cause air pollution,” said Ignacia Moreno, assistant attorney general for the Justice Department’s Environment and Natural Resources Division.

“This settlement emphasizes the serious nature of the fires and releases of hazardous air pollutants that occurred at BP’s Texas City Refinery and puts industry on notice that the Department of Justice and the EPA will aggressively pursue those who fail to comply with the laws that protect our environment.”

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