Litigation Over Chevron Refinery Fire Could be Massive

A reported leak at a Chevron Corp. crude oil refinery led to a massive fire last week that injured five workers, sent hundreds to the hospital, and sparked thousands of claims. The Richmond, California blaze might lead to environmental claims, in addition to the 3,750 residential claims filed so far; that impact is being evaluated by Chevron and regulatory agencies, said Law360. Meanwhile, Chevron has set up a claims process to compensate residents.

According to Reuters, the plant was the only crude oil unit at Chevron’s Richmond location and could be closed for four-to-six months because of “extensive damage” from last week’s fire, said industry intelligence group, IIR Energy, in a report issued last week. The report also suggested that the outage could end up being at least double the original estimates and indicated that investigators discovered serious damage in the plant’s cooling towers, pipe racks, and heater tower.

Chevron has not said how long it will take to be up and running again at the plant, California’s second largest, said Reuters. When fully operational, the plant is a 245,000-barrel-per-day organization. Sources there said the plant could be closed for at least three months, said Reuters. Some of the Richmond plant’s secondary units are operating on feed stock stored at the site, said IIR Energy; however, a decision has not been made regarding Chevron purchasing additional feed or shutting down operations entirely during repairs, said Reuters.

The fire erupted at a pump leaking something similar to diesel, said Reuters, citing an early report Chevron filed last week with county pollution regulators. Should the amount of regulated chemicals released by the Chevron fire exceed “applicable reportable quantity thresholds,” Chevron would be subject to reporting obligations, said Law 360. Should Chevron not comply, it could face regulatory action.

The Bay Area Air Quality Management District first said that air samples taken during the fire showed that toxic air contaminants were under levels deemed unsafe by federal health authorities; it later said this first statement was not correct, said Law 360. Since, it noted that one of the eight samples taken throughout Richmond revealed acrolein levels—acrolein is a compound similar to ethanol—exceeded the federal standard.

The air district also said that although air samples obtained near the facility revealed normal toxic air contaminant background levels, the particulate matter from the area’s smoke was most likely what caused health complaints filed by Richmond residents, said Law 360. The air district, the U.S. Chemical Safety Board, and the U.S. Environmental Protection Agency (EPA), and Chevron are investigating the incident. Chevron said it will issue a report within 30 days.

In 2003, Chevron settled a case brought by the EPA, entering a consent decree that mandated it spend $275 million to install control technologies to cut emissions at some of its refineries, including at Richmond, said Law 360. Chevron also agreed to pay a $3.5 million civil fine and spend more than $4 million on additional emission controls and environmental projects in communities near its refineries.

In 2000, the agency fined Chevron $20,000 for not notifying state officials of a 500-pound sulfur dioxide leak at the Richmond refinery in a timely manner; the leak occurred in June 1999. Chevron also paid $540,000 to resolve a 1998 EPA case, alleging the facility violated federal environmental laws by sidestepped a water treatment system from 1991 to 1995. In June 1996, the Chevron refinery and other California oil companies agreed to install pollution control equipment to reduce pollutant emissions and settle EPA complaints.

The Richmond refinery was the subject of a lawsuit brought by environmental groups challenging its expansion plans, noted Law 360. Communities for a Better Environment, the Asian Pacific Environmental Network, and the West County Toxics Coalition filed a lawsuit in 2008 over the city of Richmond’s approval of the expansion proposal, alleging the expansion would increase greenhouse gas emissions and adversely impact area minority working class communities.

Finally, in 2010, a California appeals court, for the most part, upheld a lower court ruling blocking Chevron from expanding its refinery until its environmental impact report was in compliance with state law.