Cal/OSHA Fines Chevron $1M, Highest in History

By Lisa Fernandez
|  Thursday, Jan 31, 2013  |  Updated 10:51 AM PDT
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The California Division of Occupational Safety announced on Wednesday that it is fining Chevron with a nearly $1-million fine - the highest allowed by state law and in agency history - following a Richmond refinery fire more than five months ago. Chevron plans to appeal. Terry McSweeney reports.

The California Division of Occupational Safety announced on Wednesday that it is fining Chevron with a nearly $1-million fine - the highest allowed by state law and in agency history - following a Richmond refinery fire more than five months ago. Chevron plans to appeal. Terry McSweeney reports.

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RAW VIDEO: Chevron Refinery Erupts in Fire

A fire was reported around 6:30 p.m. Monday night.at one of the processing units at the Chevron refinery in Richmond.
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The California Division of Occupational Safety announced on Wednesday that it is fining Chevron with a nearly $1-million fine - the highest allowed by state law and in agency history - following a Richmond refinery fire more than five months ago.

There were a total of 25 citations totaling exactly $963,200, an amount that Chevron vowed to appeal.
 

"They didn't follow their own procedures...or state law," said Cal-OSHA's chief Ellen Widess.

That fine follows on the heels of another financial hit to Chevron this week. The company announced it has paid about $10 million in claims to the 24,000 plaintiffs who complained of breathing problems and other ailments following the Aug. 6 fire.

The second highest Cal-OSHA fine was to Tosco in Concord, when four people died in a fire in 1999, according to Cal-OSHA spokesman Peter Melton. That proposed fine was nearly $800,000, an amount that was knocked down to about half after a settlement. 

Chevron reported $26.9 billion in profits in 2011, according to its investor report.

At least one Richmond resident thought the fine was a drop in the bucket.

"I don't think the fine was enough," Michael Bracy told NBC Bay Area on Wednesday.

On its website, OSHA said that Chevron did not follow the recommendations of its own inspectors and metallurgical scientists to replace the corroded pipe that ultimately ruptured and caused the fire; did not follow its own emergency shutdown procedures when the leak was identified; and did not protect its employees working at the leak site.

 Chevron spokesman Sean Comey said the company plans to appeal.

 "We are in the process of reviewing the citations issued by Cal/OSHA. Chevron takes our commitment to safe operations seriously. Although we acknowledge that we failed to live up to our own expectations in this incident, we do not agree with several of the Cal/OSHA findings and its characterization of some of the alleged violations as 'willful,' ” Chevron said in a statement. 

Immediately following the announcement, Rep. George Miller (D-Calif.), whose district includes the refinery, said in a statement: "Citations released today by Cal/OSHA show that Richmond’s Chevron refinery operated outside the margins of safety, putting the life and health of workers and nearby residents at risk. While this fine is the largest in Cal/OSHA’s history, I believe it alone is an insufficient assurance to the West County residents and the refinery’s workers that they will receive the necessary safety protections they deserve." 

Miller added: “Given Chevron’s pervasive failure to comply with process safety requirements, the city, county and state officials need to examine all of their tools to assure that West County residents and refinery workers are protected in the future. Our community needs more than just promises that safety will improve. We need to see actual changes at this facility implemented and verified.”

The Cal/OSHA investigation found that Chevron willfully violated longstanding industry practices needed to prevent the pipe failure that caused the fire at the Richmond refinery. Investigators also found that the refinery had a pervasive practice of operating outside the margins of safety by failing to properly repair leaking pipes carrying flammable materials.

However, Chevron tried to highlight the positive things the company has done in the wake of the fire. Comey said that this week, Chevron submitted an update the company's corrective actions.

Specifically, Chevron said the company is:

•Enhancing inspections of piping components potentially susceptible to sulfidation corrosion since carbon steel components with low-silicon content can corrode at an accelerated rate. This inspection program is being applied throughout our refinery system worldwide.

•Strengthening reliability programs for piping and equipment, and enhancing competency requirements for leaders, inspectors and engineers.

•Strengthening leak response protocols and reinforcing the authority that everyone has to shut down equipment.

•Creating more management oversight and accountability for process safety and re-emphasizing focus on process safety.

Cal/OSHA has ongoing investigations for Chevron at its El Segundo refinery in the Los Angeles area and its oilfield in Lost Hills near Bakersfield. 

Separately, law firms in Texas and in Oakland are representing about 10,000 plaintiffs suing Chevron as a result of their medical claims following the fire.

NBC Bay Area's Terry McSweeney contributed to this report.

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