CA Seeks New Refinery Regulations

Tuesday, August 9, 2016 @ 11:08 AM gHale


Four years after a huge fire at the Chevron refinery in Richmond, CA, the state is considering new regulations for oil refineries.

After the blaze sent thousands of people to area hospitals, the state is proposing changes including adopting safer designs and systems, giving refinery employees authority to shut down operations if they feel there are unsafe conditions, and requiring an investigation of all incidents, not just those the refinery chooses. Refineries would also end up required to investigate the root cause of any incident and develop corrective measures in response.

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The cost of refinery accidents in California is around $800 million per year, as a result of additional emergency services, health care, and reduction in property values and tax revenue to local governments, according to a Rand Corporation study.

There are four oil refineries in Contra Costa County that combined have had 19 accidents over the past decade, according to the county’s Health Services Department, the agency tasked with regulating refineries.

The August 2012 fire at the Chevron refinery led to calls for change. The smoky blaze, which burned for hours, ended up blamed on the company’s failure to replace corroded pipes. The fire severely damaged Northern California’s largest crude unit and shut it down for several months. About 15,000 people sought medical attention for ailments related to the accident.

After the fire, the U.S. Chemical Safety Board (CSB) critiqued the safety protocols at the Richmond refinery, saying Chevron failed to replace aging equipment and should have shut off a valve that could have isolated the leak before it ignited.

Chevron later pleaded no contest to six criminal charges and agreed to pay $2 million in fines. The refinery has also since added a requirement that the plant shut down immediately after a leak and conduct additional inspections of pipelines.

In its critique, the CSB found the current regulatory system places the burden of compliance on the state rather than refineries, yet lacks a sufficient number of inspectors to conduct regular safety checks. It suggested California implement the most stringent requirements available, modeled on those already in place at refineries in England and Norway.

The cost of implementing the regulations, which will be borne by refiners, has been estimated at $58 million a year and could result in minuscule increases in gas prices, the Rand Institute found.

The changes will be discussed at a Sept. 15 public hearing hosted by the California Occupational Safety and Health Standards Board. Once the public, industry, refinery employees and community groups have commented on the latest version of the proposal, a new draft will be made and the process repeated until the regulations are finalized, which should be done in one year, said Alex Barnum, a spokesman for the California Environmental Protection Agency.