BP Texas City Refinery Problems Result in $50M Fine Over Fatal Blast

The federal government has issued a record fine against BP for failing to properly upgrade its Texas City oil refinery after a fatal 2005 explosion. 

The $50.6 million fine was announced by the Occupational Safety and Health Administration (OSHA) on Thursday. The agency says that BP failed to live up to promises it made in the wake of the explosion to bring safety at the refinery up to industry standards.

The March 23, 2005 explosion killed 15 workers and injured more than 170 others. OSHA issued several fines totaling $87.4 million against BP, formerly known as British Petroleum, last September over its failure to upgrade the plant. OSHA accused the company of 439 safety violations at the refinery. BP is contesting about $30 million of the OSHA fines.

The latest fine, the largest in OSHA’s history, tops the previous record of $21 million, which was also issued against BP over safety conditions at the plant. In addition to the fines, BP also faces wrongful death and personal injury lawsuits stemming from the deadly accident.

“This agreement achieves our goal of protecting workers at the refinery and ensuring that critical safety upgrades are made as quickly as possible,” Secretary of Labor Hilda L. Solis said in the press release. “The size of the penalty rightly reflects BP’s disregard for workplace safety and shows that we will enforce the law so workers can return home safe at the end of their day.”

The Texas City refinery, the third-largest of its kind in the U.S., also faces a number of lawsuits filed by workers and nearby residents who say that the facility illegally emits noxious and toxic fumes. About 100 toxic tort lawsuits have been filed on behalf of 143 people who worked at the facility or lived nearby. In December, a federal jury awarded 10 workers more than $100 million in the first of those cases to go to trial.

In February 2009, BP Products North America agreed to pay $180 million to resolve a separate environmental lawsuit over benzene emissions at the oil refinery. That case involved violations of a 2001 consent decree and Clean Air regulations which were identified during inspections by the U.S. Environmental Protection Agency (EPA) following the March 2005 blast.

Under the terms of that settlement, BP agreed to spend $161 million to address their Clean Air Act violations by setting up better pollution controls, enhanced maintenance and monitoring devices and improving their internal management practices. Another $6 million was designated to fund a project to reduce air pollution in Texas City and $12 million was paid as a penalty.

Most recently, this month a $10 billion BP class action lawsuit was filed on behalf of more than 2,200 works and residents from the surrounding area over the release of benzene and other chemicals since April 2010. Plaintiffs allege that the company has been releasing benzene into the atmosphere at the plant due to a hydrogen compressor that broke down on April 6, which was not properly repaired.

BP is also continuing to face allegations of safety problems that led to the April 20 fire and explosion that sank the Deepwater Horizon oil platform in the Gulf of Mexico. The company has faced a monumental cleanup effort, and could face tens of billions in clean costs and liability through Gulf oil spill lawsuits.