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BP North America Settlement

(Washington, DC - Sept. 30, 2010) The U.S. Environmental Protection Agency (EPA) and the U.S. Justice Department announced today that BP Products North America Inc. has agreed to pay a $15 million penalty to resolve federal Clean Air Act violations at its Texas City, Texas petroleum refinery. The penalty is both the largest ever assessed for civil violations of the Clean Air Act's chemical accident prevention regulations, also known as the risk management program regulations, and the largest civil penalty recovered for Clean Air Act violations at an individual facility.

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Overview of Companies and Location of Facilities

BP Products North America, Inc. engages in the exploration, development, production, refining, and marketing of oil and natural gas. BP Products North America, Inc., which operates as a subsidiary of BP plc., is based in Warrenville, Ill. with additional offices in Chicago and Houston. With annual revenues of $239 billion and operations in more than 30 countries, BP employs approximately 2,000 employees at the Texas City, Texas facility, which is the third largest refinery in the United States.

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  • On March 23, 2005, a series of fires and explosions at the refinery claimed the lives of 15 workers and injured more than 170 people. The cause of the explosion was traced to the startup of an "isomerization unit" (which increases the octane rating of gasoline). During the startup, the unit's associated "raffinate splitter tower" (which separates light from heavy gasoline components) was overfilled with flammable hydrocarbon liquids. This tower exploded when ignited by a spark from an idling nearby truck.
  • The incident was investigated by the United States Chemical Safety Board and EPA. These investigations resulted in enforcement actions by the Occupational Safety and Health Administration (OSHA), and by EPA for civil and criminal violations of the Clean Air Act (see "Related Actions," below).
  • EPA's inspections following the 2005 incident for compliance with the Clean Air Act identified numerous violations of the CAA Section 112(r) General Duty Clause, 42 U.S.C. § 7412(r), and the Risk Management Program (RMP) Regulations at 40 C.F.R Part 68. The most significant violations include:
    • An inadequate pressure relief system
    • Failure to adequately supervise and follow correct startup procedures
    • Failure to address hazards associated with prior releases from the blowdown drum
    • Failure to address hazards associated with the raffinate splitter due to a history of abnormal startups
    • Starting up the raffinate splitter with known equipment malfunctions
  • The specific events at BP's Texas City refinery covered by the settlement include the following:
    • In August 2005, a stream of highly pressurized liquid and gaseous hydrocarbons leaked from a corroded valve within the refinery's "Cat Feed Hydrotreater" Unit, which reduces the sulfur content in gasoline feedstock. Since 1983, BP repeatedly increased the velocity of fluid flowing through the valve without adequately evaluating the effects of the increased flow on the unit's maintenance needs.
    • In July 2005, a carbon-steel piping elbow in the refinery's "Resid Hydrotreater" Unit - which upgrades heavy, high-sulfur oil to remove the sulfur - ruptured and caused a major fire. The carbon-steel piping elbow had been incorrectly installed by a maintenance contractor in a location that required a stronger metal in order to withstand the operating temperatures and pressures.
    • In March 2004 a corroded 20-inch diameter pipe at the refinery's "Ultraformer No. 4 process unit" - which produces high octane gasoline from naphtha - ruptured and caused a major fire that burned for several hours.

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Injunctive Relief

In 2005, BP agreed to implement significant operational changes in a settlement with OSHA for violations of the Process Safety Management (PSM) regulations. BP's settlement with EPA for CAA Section 112(r) General Duty Clause violations complements this earlier OSHA agreement and requires additional process and safety changes including increased reporting on incidents which resulted, or could have resulted, in catastrophic releases of regulated substances. The Consent Decree requires BP to regularly prepare and submit the following to EPA:

  • Incident investigation reports
  • Overdue mechanical integrity reports
  • Personnel training reports

These reporting requirements were selected for EPA review due to their relationship to the past incidents and a review of a third-party PSM audit conducted as a result of the OSHA settlement.

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Health and Environmental Effects

BP's enhanced 112(r)/RMP compliance activities in regard to managing risk at its facility will reduce the likelihood that a catastrophic release will occur. If one should occur, these compliance activities will minimize the consequences of such a release.

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Civil Penalty

BP will pay a $15 million penalty to the United States.

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Comment Period

The proposed settlement, lodged in the U.S. District Court for the Southern District of Texas, is subject to a 30-day public comment period and final court approval. Information on submitting comments is available at the Department of Justice website.

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For more information, contact:

Dean Ziegel
Waste and Chemical Enforcement Division
1200 Pennsylvania Ave., NW
Washington DC 20460
(202) 564-4038

Evan Pearson
U.S. EPA Region 6 (Mail Code: 6RC)
1445 Ross Avenue, Suite 1200
Dallas, TX 75202-2733
(214) 665-8074

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Related Actions

EPA Clean Air Act Settlement Information (2009)

EPA criminal enforcement action (2007)

U.S. Chemical Safety Board Investigation Report (2007) Exit

Occupational Health and Safety Administration Settlement Agreements (OSHA)

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