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.

Contact Nick Snow at nsnow@cox.net.

Related Articles

Goodlatte reintroduces bills to repeal, reform RFS

02/05/2015 Calling it “a true ‘kitchen table’ issue,” US Rep. Bob Goodlatte (R-Va.) reintroduced a pair of bills to address problems in the federal Renewable ...

Regulators approve Phillips 66’s California refinery improvement project

02/04/2015 The governing board of California’s Contra Costa County has approved a permit for Phillips 66 to move forward with a proposed project that would en...

CNOOC lets contract for Huizhou refinery expansion

02/03/2015 CNOOC Oil & Petrochemicals Co. Ltd., a subsidiary of China National Offshore Oil Corp. (CNOOC), has let a contract to Porvair Filtration Group ...

CNOOC subsidiary inks deal for grassroots refinery

02/02/2015 Hebei Zhongjie Petrochemical Group Co. Ltd., a subsidiary of China National Offshore Oil Corp. (CNOOC), has entered into a $700 million agreement w...

Union strike under way at US refineries, petchem plants

02/02/2015 The United Steelworkers Union (USW) has instituted a strike at nine US refining and petrochemical production plants following a breakdown in negoti...

Novel upgrading technology cuts diluent use, capital costs

02/02/2015 A novel bitumen upgrading process that decreases the amount of diluent required for pipeline transportation and reduces overall operating costs has...

E&Y: Oil-price collapse to boost global M&A activity in 2015

02/02/2015 The oil-price collapse will facilitate increased global transaction activity in 2015 as companies revise and implement new strategies, according to...

Trinidad ULSD plant won’t be built in 2015, Petrotrin executive says

01/28/2015 Trinidad and Tobago’s state-owned Petrotrin has announced that its $500 million ultralow-sulfur diesel (ULSD) plant cannot be commissioned because ...

Vietnam advances Dung Quat refinery expansion plans

01/26/2015 Binh Son Refining & Petrochemical Co. Ltd. (BSR), a subsidiary of state-owned Vietnam National Oil & Gas Group (PetroVietnam), has unveiled...
White Papers

Pipeline Integrity: Best Practices to Prevent, Detect, and Mitigate Commodity Releases

Commodity releases can have catastrophic consequences, so ensuring pipeline integrity is crucial for p...
Sponsored by

AVEVA’s Digital Asset Approach - Defining a new era of collaboration in capital projects and asset operations

There is constant, intensive change in the capital projects and asset life cycle management. New chall...
Sponsored by

Transforming the Oil and Gas Industry with EPPM

With budgets in the billions, timelines spanning years, and life cycles extending over decades, oil an...
Sponsored by

Asset Decommissioning in Oil & Gas: Transforming Business

Asset intensive organizations like Oil and Gas have their own industry specific challenges when it com...
Sponsored by

Squeezing the Green: How to Cut Petroleum Downstream Costs and Optimize Processing Efficiencies with Enterprise Project Portfolio Management Solutions

As the downstream petroleum industry grapples with change in every sector and at every level, includin...
Sponsored by

7 Steps to Improve Oil & Gas Asset Decommissioning

Global competition and volatile markets are creating a challenging business climate for project based ...
Sponsored by

The impact of aging infrastructure in process manufacturing industries

Process manufacturing companies in the oil and gas, utilities, chemicals and natural resource industri...
Sponsored by

What is System Level Thermo-Fluid Analysis?

This paper will explain some of the fundamentals of System Level Thermo-Fluid Analysis and demonstrate...
Available Webcasts

The Alternative Fuel Movement: Four Need-to-Know Excise Tax Complexities

When Thu, Jun 4, 2015

Discussion on how to approach, and ultimately embrace, the alternative fuel market by pulling back the veil on excise tax complexities. Taxes may be an aggravating part of daily operations, but their accuracy is crucial in your path towards business success.


On Demand

Prevention, Detection and Mitigation of pipeline leaks in the modern world

Thu, Apr 30, 2015

Preventing, detecting and mitigating leaks or commodity releases from pipelines are a top priority for all pipeline companies. This presentation will look at various aspects related to preventing, detecting and mitigating pipeline commodity releases from a generic and conceptual point of view, while at the same time look at the variety of offerings available from Schneider Electric to meet some of the requirements associated with pipeline integrity management. 


Global LNG: Adjusting to New Realities

Fri, Mar 20, 2015

Oil & Gas Journal’s March 20, 2015, webcast will look at how global LNG trade will be affected over the next 12-24 months by falling crude oil prices and changing patterns and pressures of demand. Will US LNG production play a role in balancing markets? Or will it add to a growing global oversupply of LNG for markets remote from easier natural gas supply? Will new buyers with marginal credit, smaller requirements, or great need for flexibility begin to look attractive to suppliers? How will high-cost, mega-projects in Australia respond to new construction cost trends?


US Midstream at a Crossroads

Fri, Mar 6, 2015

Oil & Gas Journal’s Mar. 6, 2015, webcast will focus on US midstream companies at an inflection point in their development in response to more than 6 years shale oil and gas production growth. Major infrastructure—gas plants, gathering systems, and takeaway pipelines—have been built. Major fractionation hubs have expanded. Given the radically changed pricing environment since mid-2014, where do processors go from here? What is the fate of large projects caught in mid-development? How to producers and processors cooperate to ensure a sustainable and profitable future? This event will serve to set the discussion table for the annual GPA Convention in San Antonio, Apr. 13-16, 2015.

This event is sponsored by Leidos Engineering.


Emerson Micro Motion Videos

Careers at TOTAL

Careers at TOTAL - Videos

More than 600 job openings are now online, watch videos and learn more!


Click Here to Watch

Other Oil & Gas Industry Jobs

Search More Job Listings >>
Stay Connected