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BP Agrees to Record Fine for Texas City Refinery Violations

Aug 13, 2010 | Parker Waichman LLP

BP To Pay $50.6 Million For Safety Violations

BP has agreed to pay a $50.6 million fine for safety violations at its Texas City refinery, the largest ever assessed in the history of the federal Occupational Safety and Health Administration (OSHA). In 2005, an explosion at the BP Texas City refinery killed 15 workers.

According to an OSHA statement, the fine stems from a 2009 follow-up investigation that found the refinery had failed to make all the safety upgrades required under an agreement struck in the wake of the 2005 disaster. In addition to paying the record fine, BP has agreed to take immediate steps to protect those now working at the refinery, allocating a minimum of $500 million to that effort, OSHA said.

According to a report from the Associated Press, OSHA has blamed the explosion in Texas City on a piece of equipment that overfilled with highly flammable liquid hydrocarbons. Alarms and gauges that were supposed to warn of the overfill did not work properly.

“This agreement achieves our goal of protecting workers at the refinery and ensuring that critical safety upgrades are made as quickly as possible,” said Secretary of Labor Hilda L. Solis. “The size of the penalty rightly reflects BP’s disregard for workplace safety and shows that we will enforce the law so workers can return home safe at the end of their day.”

Refinery Also Sued For Noxious Emissions

According to the Houston Chronicle, the agreement does not settle all claims stemming from the 2005 explosion. BP is still disputing more than $30 million in fines for 439 other safety violations that were part of OSHA’s complaint last fall.

The refinery is also being sued by the Texas Attorney General’s Office for 500,000 pounds of noxious emissions that were released from the facility over a 40-day period earlier this year, the Chronicle said. That same incident has resulted in the filing of a $10 million class action lawsuit alleging that the chemical release, which included 17,000 pounds of benzene, jeopardized the health and property values of people who live and work in the area.

The latest problem began on April 6, when BP said a fire compromised a seal on an ultracracker’s hydrogen compressor. The malfunction forced the company to flare off gases. As it worked to fix the unit over the next 40 days, the plant released 538,000 pounds of pollutants into the air, BP told regulators.

BP reported the incident to the Texas Commission on Environmental Quality the day after it happened. But information about the release wasn’t made public until BP submitted a final incident report to regulators June 4.

The Texas Commission on Environmental Quality cited BP for an “excessive release” and referred its findings to the state attorney general.

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