BP Fined for Safety Violations in January Texas Refinery Death

By Laurel Brubaker Calkins and Margaret Cronin Fisk

Sept. 15 (Bloomberg) -- BP Plc has been fined $28,000 by the U.S. Occupational Safety and Health Administration for ``serious'' safety violations in January at a Texas refinery where an explosion in 2005 killed 15 people.

The fine hasn't been publicly announced. BP agreed not to contest the findings or penalty and didn't admit wrongdoing, according to a copy of the settlement.

London-based BP, Europe's largest oil company, has been making improvements at the Texas City refinery as part of an OSHA settlement that included a $21 million fine for 300 safety violations related to the 2005 blast.

In the January violations, OSHA cited BP for failing to document safe operating limits and procedures and for using inadequate bolts on a water-filtration unit that blew its lid, killing one worker. OSHA issued the citations July 11, and BP signed an informal settlement Aug. 1.

``We have expended considerable energy and resources in the last few years to improve process and personal safety resulting in a significant reduction in potential risks,'' BP spokesman Daren Beaudo said in an e-mailed response to questions about the violations. ``We believe we have come a long way, but are aware of the work that remains.''

OSHA categorized the new violations as ``serious.'' Three involved failing to have written procedures covering safe operating limits and correct start-up and operating procedures for the filtration unit that blew its 500-pound lid on Jan. 14.

Two more violations concerned failure to insure that correct bolts were used to secure the lid. A final violation dealt with BP's failure to properly assess the ramifications of disconnecting one of the unit's alarms from a control panel.

Agreed to Correct

BP agreed to correct three of the violations, including the bolt citations, by Aug. 27 and the rest by May 2009. The agency posted notice of the violations and fines on its Web site without making a formal announcement. Beaudo said notices have also been posted at ``appropriate locations'' inside the Texas City facility, BP's largest refinery.

The new citations aren't violations of BP's 2005 settlement agreement with OSHA, the agency said in an e-mailed message. OSHA continues to monitor BP's compliance, the agency said. OSHA didn't publicly announce the fines because the ``amount was below the threshold'' for issuing a press release, the agency said.

BP has spent more than $1 billion and 55 million man-hours repairing and upgrading its Texas refinery during the past three years, according to Beaudo. The company said the refinery is safe and in compliance with the regulatory accord that resolved OSHA's 2005 investigation.

Death Sparks Probe

The new OSHA citations resulted from an investigation into the death of veteran BP supervisor William Joseph Gracia, 56, who died from head trauma when the water-filtration unit's lid blew off. Beaudo confirmed the OSHA investigation involved the same incident.

The 2005 blast occurred when an octane-boosting unit overflowed as it was being restarted after repairs. Gasoline spewed into an inadequate vent system and ignited in a vapor- cloud explosion that shattered windows five miles away. The filtration unit that blew its lid in January is located across a side street from the unit that exploded in 2005.

The U.S. Chemical Safety Board, a federal agency that investigates serious accidents at chemical facilities, is looking into whether the bolt failures played a role in Gracia's death, said CSB investigator Don Holmstrom.

``We believe this incident to be process-safety related,'' Holmstrom said of Gracia's death. ``We're looking to see if there's any connection between 2005 and this,'' he said.

Admitted Responsibility

BP admitted responsibility for the 2005 blast while denying it ever intentionally endangered workers. The company has resolved all but one federal claim of the more than 4,000 civil damage claims generated by the explosion from a $2.1 billion settlement fund.

BP pleaded guilty last year to a violation of the U.S. Clean Air Act, agreeing to a fine of $50 million and three years probation linked to safety and environmental compliance. Blast victims asked the federal judge overseeing the criminal case to reject the fine as too lenient and order court supervision of plant safety.

BP and federal prosecutors say a larger fine isn't necessary.

Last month, prosecutors told U.S. District Judge Lee Rosenthal, who is weighing BP's plea, about the 2008 OSHA violations without mentioning the fines. They said OSHA monitoring will insure sufficient safe operations at the site.

The criminal case is U.S. v. BP Products North America Inc., 07-cr-434, U.S. District Court for the Southern District of Texas (Houston).

The 2008 claim is Gracia v. BP Products North America, 08cv0038, District Court, Galveston County, Texas.

The civil cases are consolidated in Arenazas v. BP Products North America, 05CV0337, 212 District Court, Galveston County, Texas (Galveston).

To contact the reporters on this story: Laurel Brubaker Calkins in Houston at laurel@calkins.us.com; Margaret Cronin Fisk in Southfield, Michigan, at mcfisk@bloomberg.net.