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In the aftermath of the Chevron refinery fire in Richmond, CA, in 2012, there should be substantial changes to the way the state regulates refineries, a federal chemical safety board said.

The U.S. Chemical Safety Board (CSB) issued a report in December and proposed recommendations to how the state regulates refineries. Entitled “Regulatory Report: Chevron Richmond Refinery Pipe Rupture and Fire,” the CSB draft calls on California to replace the current patchwork of largely reactive and activity-based regulations with a more rigorous, performance-based regulatory regime – similar to those successfully adopted overseas in regions such as the United Kingdom, Norway, and Australia.

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The draft report is the second part of three in the CSB’s investigation of the August 2012 process fire in the crude unit at the Chevron refinery in Richmond, California. That fire endangered 19 workers and sent more than 15,000 residents to the hospital for medical attention. The CSB will hold a public hearing on the report Jan. 15 in Richmond, CA.

“After exhaustively analyzing the facts, the CSB investigation team found many ways that major refinery accidents like the Chevron fire could be made less likely by improving regulations,” said CSB Chairperson Dr. Rafael Moure-Eraso. “Refinery safety rules need to focus on driving down risk to the lowest practicable level, rather than completing required paperwork. I believe California could serve as a model for the nation by adopting this system.”

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Earlier in December, calling Chevron Corp.’s risk management at the refinery a “pervasive failure” the Environmental Protection Agency (EPA) said it could pursue criminal charges or fines if the company fails to address violations.

The EPA filed a formal notice against Chevron Tuesday finding 62 violations of federal environmental laws after an investigation spurred by the Aug. 6, 2012, fire.

As detailed in the CSB draft report, the safety case regime requires companies to demonstrate to refinery industry regulators – through a written “safety case report” – how major hazards can end up controlled and risks reduced to “as low as reasonably practicable.” The CSB report notes the safety case is more than a written document. It represents a fundamental change by shifting the responsibility for continuous reductions in major accident risks from regulators to the company.

To ensure a company accomplishes its facility’s safety goals and programs, a safety case report generated by the company ends up rigorously reviewed, audited, and enforced by highly trained regulatory inspectors, whose technical training and experience are on par with the personnel employed by the companies they oversee, the draft report said.

The draft report – which the board will consider for formal adoption at a public meeting at 6:30 p.m. on January 15, 2014, at Richmond City Hall – follows the CSB’s first, interim report on the accident, which the board approved and released in April 2013. That report found Chevron repeatedly failed over a ten-year period to apply inherently safer design principles and upgrade piping in its crude oil processing unit, which was suffering from extreme corrosion and which ultimately ruptured August 6, 2012. The interim report identified missed opportunities on the part of Chevron to apply inherently safer piping design through the use of more corrosion-resistant metal alloys. The interim report also found a failure by Chevron to identify and evaluate damage mechanism hazards, which if acted upon, would likely have identified the possibility of a catastrophic sulfidation corrosion-related piping failure. There are currently no federal or state regulatory requirements to apply these important preventative measures. The investigation team concluded enhanced regulatory oversight with greater worker involvement and public participation would improve petroleum refinery safety.

The draft CSB Chevron Regulatory report released in early December found there is “a considerable problem with significant and deadly incidents at petroleum refineries over the last decade. In 2012 alone, the CSB tracked 125 significant process safety incidents at U.S. petroleum refineries. Seventeen of these took place in California.” The draft report also notes the U.S. has experienced financial losses from refinery incidents that are at least three times that of industry counterparts in other countries, citing insurance industry statistics.

“In contrast to the safety case, the current regulatory system for process safety is largely reactive, at both the state and federal level; companies have a default right to operate, and are subject to penalties when accidents occur or their activities otherwise draw negative attention from regulators,” Rafael Moure-Eraso said. “In the case of the Chevron refinery fire, the reactive system of regulation simply did not work to prevent what was ultimately a preventable accident.”

The current Process Safety Management (PSM) standard requires companies to implement 14 elements to control the hazards from processing chemicals – such as hazard analysis, management of change, and worker training programs.

Only two of these 14 elements contain goal-based requirements – Process Hazard Analysis and Mechanical Integrity. Companies are able to comply with the other twelve elements by simply conducting highly specified activities, such as a “management of change” review. The current PSM standard does not require refineries to reduce their risks to a specific level, and companies do not have to submit their safety programs to regulators for review.

A 2007 CSB report on an explosion at a BP refinery in Texas found only a handful of comprehensive process safety compliance inspections were occurring at thousands of refineries and chemical plants covered by the PSM standard across the U.S.

Federal OSHA instituted an expanded refinery inspection National Emphasis Program following the explosion in Texas City, but that program subsequently ended up dropped due to lack of resources.

The CSB draft regulatory report contains an extensive analysis comparing actions required by Chevron under the OSHA PSM standard over the years and actions that Chevron would had to make if it operated under a safety case regulatory regime. For example, Chevron employees recommended implementing the inherently safer approach of upgrading piping materials to prevent sulfidation corrosion through PSM activities. However, the CSB draft report found the California process safety regulations do not require that these preventative measures. Prior to the fire, Chevron had repeatedly failed to implement the proposed recommendations; using inherently safer approaches, on the other hand, is a must under the safety case. The CSB found had Chevron implemented these recommendations, the company could have prevented the incident.

Other examples in the report detail how a safety case would have required Chevron to conduct root-cause investigations, including an evaluation and incorporation of inherent safety and implementation of safety recommendations that more broadly address safety system performance. Effective implementation of the safety case requires strong workforce involvement, proactive inspections and enforcement by a well-resourced regulator, as well as incorporation of best practice performance standard requirements.

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