US Chevron to pay $2m to settle refinery fire criminal charges

05 August 2013 22:34  [Source: ICIS news]

HOUSTON (ICIS)--Chevron has agreed to pay $2m (€1.5m) in fines, restitution and costs after pleading no contest on Monday in a California court to six criminal misdemeanour charges stemming from a fire nearly one year ago at a refinery in Richmond.

The charges were filed on Monday in Contra Costa County Superior Court in Martinez, and Chevron issued its plea after the filing. Prosecutors with the county and state had reached an agreement with the US-based oil giant prior to Monday’s proceedings.

Investigations by Chevron on the US Chemical Safety Board (CSB) concluded that a five-foot carbon steel pipe component failed because of sulphidation corrosion, leading to a leak and then a fire at the refinery on 6 August 2012.

The sulphidation was accelerated by the low-silicon content of the failed component, Chevron said, adding that such low-silicon components can – and did in this instance – corrode at an accelerated rate not easily detectable by multiple corrosion monitoring locations.

Under the settlement, Chevron will inspect each piece of pipe identified as subject to sulphidation corrosion to ensure that every pipe is safe for operation. Also, the company must make “substantial changes to its business practices” in order to protect the health and safety of workers and the community, the Contra Costa District Attorney’s Office said in a news release.

“This criminal case achieves our goals of holding Chevron accountable for their conduct, protecting the public and ensuring a safer work environment at the refinery,” said district attorney Mark Peterson. “This historic resolution is also possible due to Chevron’s commitment to do more than what is required by law in order to help ensure nothing like this ever happens again.”

Chevron spokesperson Melissa Ritchie outlined efforts undertaken by the company since the fire in which six people were injured and thousands more area residents sought medical treatment.

Ritchie pointed to the company working more than 1.9m hours over 259 days to repair and improve the refinery’s crude unit, its reimbursement of community members and local government agencies for medical and response-related costs.

The company currently so far has examined more than 16,000 individual piping components and is implementing a multi-million dollar expansion of the site’s air monitoring system to include several areas in the surrounding communities, she said.

“We are committed to continuous improvement in process safety and reliability at the refinery,” Ritchie said.

As part of the agreement, Chevron has been placed on probation for three years and six months, during which it must inspect all carbon steel piping systems identified as susceptible to sulphidation corrosion. Oversight of decisions related to the repair or replacement of the pipes will be handled by the California Division of Occupational Safety and Health (Cal/OSHA).

Of the $2m Chevron must pay, $1.28m is for fines and penalties, and $575,000 in costs will be paid to Cal/OSHA, the Bay Area Air Quality Management District and the California Department of Justice. The company also must contribute $175,000 to Richmond BUILD, a public-private partnership focused on training workers in high-growth, high-wage construction and renewable energy fields.

Last week, the city of Richmond filed a civil lawsuit against Chevron, accusing the company of “willful and conscious disregard of public safety” in regard to the 2012 fire. Chevron disputes the allegations.

($1 = €0.75)

By: Jeremy Pafford
+1 713 525 2653

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