US OSHA fines BP record $87m on failed Texas City safety goals

30 October 2009 15:22  [Source: ICIS news]

HOUSTON (ICIS news)--The US Occupational Safety and Health Administration (OSHA) on Friday fined the US operations of BP a record $87.4m (€58.6m), alleging it had not carried out promised safety improvements stemming from a fatal 2005 explosion at a BP refinery in Texas City, Texas.

The fine is more than four times greater than any other penalty given by OSHA, according to Labor Secretary Hilda Solis. It includes $56.7m for failing to correct hazards identified after the explosion, and $30.7m from 439 additional “wilful and egregious” violations of industry-accepted safety standards at the refinery.

The promised improvements were part of a $21.4m settlement reached when OSHA found safety rule violations at the refinery after the March 2005 explosion, which killed 15 people and injured 170.

“BP was given four years to correct the safety issues identified pursuant to the settlement agreement, yet OSHA has found hundreds of violations of the agreement and hundreds of new violations,” said assistant Labor Secretary for OSHA Jordan Barab.

OSHA said it had visited the Texas City refinery at least 17 times in the four years since the blast, and in a 3 August letter, listed 23 September as the deadline for improvements.

When that deadline passed, BP requested more time to meet OSHA goals. But the OSHA denied that request in a letter sent to BP two weeks ago.

“Instead of living up to that commitment, BP has allowed hundreds of potential hazards to continue unabated,” Solis said.

BP said in a statement that it believed it was, in fact, in compliance with safety goals, and would appeal the fines to OSHA’s review commission.

“We strongly disagree with OSHA’s conclusions,” said BP Texas City refinery manager Keith Casey. “We continue to believe we are in full compliance with the settlement agreement, and we look forward to demonstrating that before the review commission.”

Safety issues cited have included inadequate pressure relief for certain pieces of equipment, as well as a large number of identified unmitigated risk scenarios for hazards at the refinery.

Adhering to OSHA’s safety goals was also a part of BP’s $50m settlement earlier this year with the US Justice Department for criminal charges related to the blast.

In sum, BP has already paid more than $2bn to settle lawsuits and criminal charges related to the blast, according to news reports.

“We believe our efforts at the Texas City refinery to improve process safety performance have been among the most strenuous and comprehensive that the refining industry has ever seen,” Casey said.

BP’s Texas City refinery is the third largest in the US, with a capacity of 455,790 bbl/day, according to US Energy Information Administration (EIA) figures.

($1 = €0.67)

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By: Ben DuBose
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