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CSB wants big changes in California’s refinery industry regulations

Wants to lessen chances of another Chevron Richmond refinery fire

bully pulpitIn a recently released draft report,, the U.S. Chemical Safety Board (CSB) proposes recommendations for substantial changes to the way refineries are regulated in California. 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 – known as the “safety case” system.

The document 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.

Companies should focus on risk, not paperwork

CSB Chairperson Dr. Rafael Moure-Eraso said, “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. Refinery safety rules need to focus on driving down risk to the lowest practicable level, rather than completing required paperwork. Companies, workers, and communities will all benefit from a rigorous system like the safety case. I believe California could serve as a model for the nation by adopting this system. We applaud the work of the Governor’s Interagency Task Force for their proactive approach and highly positive recommendations to protect worker and public safety in California. I have great confidence that California will embrace the recommendations in our draft report and carry them forward to implement policy change.”

The report is available at www.csb.gov for public comment until Friday, January 3, 2014. Comments should be sent to chevroncomments@csb.gov. All comments received will be reviewed and published on the CSB website.

Shifting responsibility from regulatory to the company

The safety case regime requires companies to demonstrate to refinery industry regulators – through a written “safety case report” – how major hazards are to be controlled and risks reduced to “as low as reasonably practicable,” or ALARP. The CSB report notes that the safety case is more than a written document; rather, it represents a fundamental change by shifting the responsibility for continuous reductions in major accident risks from regulators to the company.

To ensure that a facility’s safety goals and programs are accomplished, a safety case report generated by the company is 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 says.

Chevron repeatedly failed to improve safety

The report follows the CSB’s first, interim report on the accident, which found that 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 extremely corroded and ultimately ruptured on 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 that enhanced regulatory oversight with greater worker involvement and public participation are needed to improve petroleum refinery safety.

Financial losses triple those in other countries

The report states 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 that 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.

Since 2010, the CSB has examined the extent to which a safety case regime would improve regulatory compliance and better prevent major accidents, both onshore and offshore. The safety case regime, which originated in Europe, requires highhazard facilities to demonstrate, to the satisfaction of a competent regulator, that they are able to operate safely, in conformance with the latest safety standards, and at the lowest practicable risk levels. The report illustrates that under a safety case approach, demonstrating control of major hazards is a pre-condition for a refinery to operate.

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