Federal probe cites budget cuts for BP plant blast

Nick Snow
Washington Correspondent

WASHINGTON, DC, Oct. 31 -- Years of budget reductions contributed to conditions leading up to the Mar. 23, 2005, explosion at BP America Inc.'s 460,000-b/d Texas City, Tex., refinery, which killed 15 workers and injured 180 others, the US Chemical Safety Board said Oct. 30.

Investigators also found that BP was aware of problems at the facility but implemented reforms aimed at improving compliance with procedures and reducing occupational injuries while ignoring potentially catastrophic safety risks, the CSB said as it released preliminary findings of its investigation.

It was the first significant update of the board's investigation since Oct. 27, 2005, when the first set of findings was released at a public meeting of Texas City residents and refinery employees. The CSB scheduled an additional news conference for Oct. 31 in Houston but said it probably would not issue a final report before March 2007 because the investigation is so complex.

"Unsafe and antiquated equipment designs were left in place, and unacceptable deficiencies in preventive maintenance were tolerated," CSB Chairman Carolyn W. Merritt said.

Previously, the board indicated that the equipment involved in the explosion of an isomerization unit was of an obsolete design that had been phased out at most other refineries and that supervisors at the Texas City plant knew key instruments did not work or were unreliable (OGJ, Nov. 21, 2005, p. 32).

BP spokesman Ronnie Chappell said the company agrees with the CSB's conclusions that the accident could have been prevented. He said the findings of its own investigation are generally consistent with those of the CSB's inquiry (OGJ, Jan. 23, 2006, p. 51).

"We do not understand the basis for some of the comments made by the CSB," he said by e-mail on Oct. 31. "We have and will continue to discuss our concerns with the board. We are not going to comment publicly on the statement of the CSB until the board issues a final written report that we hope will explain in more detail the basis for some of their preliminary findings."

Budget cuts
Stringent budget cuts across BP PLC's worldwide operations caused safety at the Texas City refinery to deteriorate, Merritt said. "BP implemented a 25% cut on fixed costs from 1998 to 2000 that adversely impacted maintenance expenditures and infrastructure at the refinery," she said.

Maintenance spending had fallen through the 1990s when Amoco Corp. owned the refinery, according to Merritt. Additional cuts were imposed after BP acquired Amoco, she said.

"Every successful corporation must contain its costs. But at an aging facility like Texas City, it is not responsible to cut budgets related to safety and maintenance without thoroughly examining the impact on the risk of a catastrophic accident," she maintained.

CSB found that, by 2002, an internal BP report had identified cost reductions as a contributor to eroding infrastructure at the refinery that would take a large investment to correct.

These findings were corroborated in a 2005 survey of the refinery's safety culture known as the Telos study just prior to the accident, the federal investigators found. They said the survey's interview with the refinery's manager identified a history of reduced budgets and a culture of "things not getting fixed."

Merritt said: "The refinery manager was not alone in this candid assessment. Large majorities of the survey respondents reported significant maintenance backlogs that were harming safety. Disturbingly, most employees agreed that 'production and budget compliance gets recognized before anything else at Texas City.'"

Economic pressures were apparent in many decisions that contributed to the explosion, the CSB said. In 2002, the refinery undertook an environmental initiative known as Clean Streams, which led to plans to eliminate the isomerization unit blowdown drum involved in the March 2005 explosion.

"To economize, a decision was made not to replace the blowdown drum with a flare system," said Don Holmstrom, CSB lead investigator. "The refinery did not conduct federally required safety reviews that likely would have taken into account BP's own existing policy recommending the elimination of blowdown drums."

A required study of the isomerization unit's relief valve system was never completed, although the need was first identified in 1993, the CSB added.

It also found that the refinery's central training staff was reduced from 30 employees in 1997 to 8 in 2004, and the training department budget was cut in half from 1998 to 2004. Trainers also were given other duties so that some spent little time actually training other employees, it said. The isomerization trainer spent only 5% of his time on training, the CSB said.

The control board operations staff also was shrunk, and workloads were increased, the investigators found. Four open-process safety coordinator positions for the isomerization and other area units were not filled prior to the explosion, the CSB said. Its earlier preliminary findings cited operator fatigue and a lack of effective training and supervision.

Culture problems
Chappell said BP's own investigation, which acknowledges the company was aware of infrastructure and safety culture problems at the refinery before the explosion and fire, found that the problems were "many years in the making."

It also notes that BP was working to address the problems before the accident by spending more money on operations, maintenance, and plant integrity and through efforts to reduce the number of workplace accidents and injuries, Chappell said.

The company held discussions of previous fatal accidents at the refinery and put in place a new "control of work" audit team to ensure compliance with safety rules during maintenance and other activities at the plant, he added.

Chappell said that while BP achieved a 70% reduction in workplace injury rates at Texas City, the CSB's investigators "determined these efforts were not sufficient because they focused on personal safety rather than process safety." He said the lower workplace injury rates led the company "to believe that conditions at the refinery were improving."

He also said BP's own investigation did not identify previous budget decisions or lack of expenditures as a critical factor or immediate cause of the accident.

"Indeed, the [BP] report points out that maintenance and turnaround spending in the years prior to the incident had increased as Texas City staff addressed the safety and plant integrity issues of greatest concern. Maintenance spending had increased 40% over the previous 5 years and was higher than the industry average per barrel of throughput," Chappell said.

He said BP is eliminating the use of blowdown stacks in heavier-than-air light hydrocarbon service and will eliminate their use at Texas City when it recommissions the refinery and at other BP facilities in the US by 2008.

The company also has adopted a new engineering technical practice governing the use of temporary buildings in refineries and other plants and has moved more than 200 such buildings out of the Texas City refinery or emptied and locked them, he said.

"At Texas City, the new management team has simplified the organization, clarified accountabilities, and removed hundreds of workers from process areas," Chappell said. "BP will spend more than $1 billion at Texas City over the next 5 years to refurbish and rebuild key gasoline production units, install modern process control systems, transition to a more powerful maintenance management system, improve worker training and implement the other recommendations contained in our final report."

Merritt also praised BP's actions following the accident. The company "has expressed a strong desire to improve its safety performance globally, has made organizational changes to better identify and communicate risks, and has done extensive positive outreach to the rest of the industrial community," she said.

She noted that BP also followed the CSB's recommendation that it voluntarily fund and support the work of an independent panel examining the company's safety culture. The panel, chaired by former US Sec. of State James A. Baker III, is expected to report its findings on the safety of BP's five North American refineries in late November.

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