CSB Investigation of BP Texas City Refinery Disaster Continues as Organizational Issues Are Probed

October 30, 2006

Washington, DC, October 30, 2006 - In preliminary findings released today, the U.S. Chemical Safety Board (CSB) stated that internal BP documents prepared between 2002 and 2005 revealed knowledge of significant safety problems at the Texas City refinery and at 34 other BP business units around the world -- months or years prior to the March 2005 explosion that killed 15 workers, injured 180 others, and was the worst U.S. industrial accident in more than a decade.

CSB Chairman Carolyn W. Merritt said, "The CSB's investigation shows that BP's global management was aware of problems with maintenance, spending, and infrastructure well before March 2005. BP did respond with a variety of measures aimed at improving safety. However, the focus of many of these initiatives was on improving procedural compliance and reducing occupational injury rates, while catastrophic safety risks remained. Unsafe and antiquated equipment designs were left in place, and unacceptable deficiencies in preventative maintenance were tolerated."

Ms. Merritt pointed to earlier CSB findings that the equipment directly involved in the flammable release on March 23 was of an obsolete design already phased out in most refineries and chemical plants, and that key pieces of instrumentation were either known to be not working or known to be unreliable by unit supervisors.

The CSB has scheduled a news conference for Tuesday, October 31, in Houston, Texas, where additional new findings and safety recommendations will be presented.

Due to the complexity of the investigation, Chairman Merritt said that a final CSB report would not likely be issued before March 2007, but it was important for the public and the rest of the industry to remain informed on what the investigation has found.

Chairman Merritt also praised BP's positive moves in the aftermath of the accident: "Since the tragedy, BP has expressed a strong desire to improve its safety performance globally, has made public its own detailed investigation report on the accident, has cooperated with federal investigators, has made organizational changes to better identify and communicate risks, and has done extensive positive outreach to the rest of the industrial community. BP has also voluntarily funded and supported the work of an independent panel recommended by the CSB to examine BP's safety culture." That 11-member expert panel, chaired by former U.S. Secretary of State James A. Baker III, is expected to report its findings on the safety of BP's five North American refineries in late November.

Today's preliminary findings were the first significant update in the Board's investigation since October 27, 2005, when preliminary findings were issued at a public meeting before Texas City employees and residents.

The March 23 accident occurred during the startup of the refinery's octane-boosting isomerization (ISOM) unit, when a distillation tower and attached blowdown drum were overfilled with highly flammable liquid hydrocarbons. Because the blowdown drum vented directly to the atmosphere, there was a geyser-like release of highly flammable liquid and vapor onto the grounds of the refinery, causing a series of explosions and fires. Fatalities and injuries occurred in and around work trailers that were placed too near the ISOM unit and were not evacuated prior to the startup. Alarms and gauges that should have warned of the overfilling equipment failed to operate properly on the day of the accident.

After the accident, BP admitted that the placement of the trailers was unsafe and supported an industry-wide move to develop safer siting guidelines, following a CSB urgent recommendation in October 2005.

Don Holmstrom, the CSB supervisory investigator who is heading the inquiry, said that since last October the Board has uncovered additional previous incidents involving the same ISOM unit blowdown drum, which was designed in the 1950's.

Mr. Holmstrom said that his team has now documented the occurrence of eight previous instances where flammable hydrocarbon vapors were discharged from the same blowdown drum between 1994 and 2004. In two of these incidents the blowdown system caught on fire. The eight incidents were not properly investigated, and appropriate corrective actions were not implemented. The investigation of a 1994 incident resulted in an action item to analyze the adequacy of the blowdown drum. The area superintendent was responsible for the completion of this item. However, the item was never finished, and management officials did not follow up to assure completion.

The explosion on March 23, 2005, was not the only major accident the Texas City refinery had experienced, CSB investigators said. The history of major accidents and fatalities at the plant was summarized in a meeting held in November 2004 by the refinery manager for 100 supervisors. He gave a sobering presentation entitled "Safety Reality" on the 23 deaths at the plant in the previous 30 years; on average, one worker had died every 16 months.

Mr. Holmstrom said, "In 2004, BP Texas City had the lowest injury rate in its history, nearly one-third the oil refinery sector average. However, the injury rate does not take account of catastrophic hazards or distinguish between injuries and fatalities. That year, the refinery experienced three major accidents that resulted in a total of three fatalities. One of these accidents was a major process-related fire. In late 2004, following these major accidents and other near misses, the Texas City leadership was attempting to improve the refinery's safety performance. Several years of audits and reports had identified serious safety system deficiencies. However, the safety initiatives that were undertaken focused largely on improving personnel safety -- such as slips, trips and falls -- rather than management systems, equipment design, and preventative maintenance programs to help prevent the growing risk of major process accidents."

"When personnel safety statistics improved, the refinery leadership believed they had turned the corner," Mr. Holmstrom said. However, existing process safety metrics and the results of a safety culture survey indicated continuing serious problems with safety systems and concerns about another major accident. A Health, Safety, and Environment Business Plan presented on March 15, 2005 -- just eight days before the ISOM unit accident -- identified as a key risk that the Texas City refinery kills someone in the next 12-18 months.

Earlier, a 2003 external BP audit referred to the Texas City refinery's infrastructure and assets as "poor" and found what it termed a "checkbook mentality." Budgets were not large enough to manage all the risks, but rather than expanding the budget, expenditures were restricted to the money on hand, in the opinion of the BP auditors.

A 2004 BP Group internal audit of 35 business units including Texas City found significant common gaps, including a lack of leadership competence which pointed to "systematic underlying issues," widespread tolerance of noncompliance with basic safety rules, and poor implementation and monitoring of safety management systems and processes.

Chairman Merritt stated that stringent budget cuts throughout the BP system caused a progressive deterioration of safety at the Texas City refinery. "BP implemented a 25% cut on fixed costs from 1998 to 2000 that adversely impacted maintenance expenditures and infrastructure at the refinery," she said. Maintenance spending fell throughout the 1990's at the then-Amoco refinery, and following the merger with BP further cuts were imposed. "Every successful corporation must contain its costs. But at an aging facility like Texas City, it is not responsible to cut budgets related to safety and maintenance without thoroughly examining the impact on the risk of a catastrophic accident."

By 2002, an internal BP report had identified the cost reductions as contributing to a decline of infrastructure in Texas City that would require significant investment to correct. These findings were corroborated in a survey of the refinery's safety culture in 2005 just prior to the accident, known as the Telos study. The survey interview with the Texas City refinery manager identified a history of decapitalization and a culture of "things not getting fixed."

"The refinery manager was not alone in this candid assessment," Chairman Merritt said. "Large majorities of the survey respondents reported significant maintenance backlogs that were harming safety. Disturbingly, most employees agreed that 'production and budget compliance gets recognized and rewarded before anything else at Texas City.'"

Economic pressures were evident in numerous decisions that were causally related to the March 23, 2005, accident.

For example, in 2002, the refinery undertook an environmental initiative known as Clean Streams, during which plans were made for the elimination of the ISOM unit blowdown drum. Lead Investigator Holmstrom said, "To economize, a decision was made not to replace the blowdown drum with a flare system. The refinery did not conduct federally required safety reviews that likely would have taken into account BP's own existing policy recommending the elimination of blowdown drums." The required study of the ISOM unit relief valve system was never completed, though the need was first identified in 1993.

In addition, Texas City's central training staff was reduced from 30 staff in 1997 to eight in 2004, and the training department budget was cut in half from 1998 to 2004. Trainers were given other duties, so that some spent little time on actual training. For example, the ISOM trainer spent only 5% of his time on training. Control board operator positions were downsized, and workloads were increased. Four open process safety coordinator positions for the ISOM and other area process units were not filled prior to the incident.

Operator fatigue and a lack of effective training and supervision were all cited in earlier CSB preliminary findings describing the causes of the unsafe startup on March 23.

The CSB is an independent federal agency charged with investigating industrial chemical accidents. The agency's board members are appointed by the president and confirmed by the Senate. CSB investigations look into all aspects of chemical accidents, including physical causes such as equipment failure as well as inadequacies in safety management systems. The Board does not issue citations or fines but does make safety recommendations to plants, industry organizations, labor groups, and regulatory agencies such as OSHA and EPA. Please visit our website, www.CSB.gov.

For more information, contact Daniel Horowitz at (202) 441-6074 cell (Houston) or Sandy Gilmour at (202) 261-7613 / (202) 251-5496 cell.

A Chronology of the CSB Investigation

March 24, 2005 - CSB investigators arrive at the BP Texas City refinery

March 26, 2005 - The CSB team points out the hazard of placing trailers so close to operating refinery units

April 1, 2005 - CSB investigators make initial entry into the damaged ISOM unit and identify the atmospheric blowdown drum as the likely source of the release

April 28, 2005 - CSB investigators say diminished outflow from an ISOM unit distillation tower resulted in overpressurization and flooding and led to the flammable release during startup

June 28, 2005 - CSB lead investigator Don Holmstrom announces that a review of computer records shows that two alarms and a level transmitter, which could have warned operators of the flooded condition of ISOM unit equipment, failed to operate properly in the hours leading to the explosion

July 28, 2005 - The Texas City refinery experiences a serious hydrogen fire in the Resid Hydrotreater Unit that causes $30 million in property damage and forces residents to take shelter

August 10, 2005 - Another incident related to mechanical integrity in the refinery's Gas Oil Hydrotreater forces another community shelter-in-place alert

August 17, 2005 - The Chemical Safety Board issues its first-ever urgent safety recommendation, calling on BP to convene an independent panel to assess safety culture and oversight at all five of its North American refineries

October 24, 2005 - BP announces formation of the 11-member panel of experts, chaired by former U.S. Secretary of State James A. Baker III

October 25, 2005 - The Chemical Safety Board issues new urgent safety recommendations calling on the American Petroleum Institute to develop new safety guidance for the placement of trailers away from hazardous process areas

October 27, 2005 - In preliminary findings released at a public meeting in Texas City, CSB investigators describe a history of abnormal startups in the ISOM unit, previous vapor releases, and mechanical failures; they refer to the unit's blowdown system as "outdated and unsafe"

November 10, 2005 - CSB Chairman Merritt testifies before the newly established Baker panel, notes the role of worker fatigue and operator downsizing in the accident

December 22, 2005 -The CSB releases a narrated computer animation of the events leading the accident; the video is viewed in refineries and chemical plants worldwide

June 30, 2006 - The CSB releases blast damage information for 44 trailers located near the ISOM unit; notes serious damage to a distance of almost 600 feet from the center of the explosions

October 15, 2006 - The CSB issues a safety bulletin based on the July 28, 2005, hydrogen fire, calling for expanded use of positive material verification to prevent accidental releases

The CSB investigation of the accident at BP Texas City is the largest, costliest, and most complex in the nine-year history of the agency. To date, more than $2 million has been spent conducting this independent federal investigation.


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