Explosion In The British Petroleum Texas City Refinery Commerce Essay

The explosion and fires incident in the British Petroleum Texas City refinery on 23 March, 2005 has been described and reviewed in this assignment. Investigation report revealed that the incident occurred during the startup of an isomerization (ISOM) process unit. It was reported that this incident resulted in huge impact on BP Company and its stakeholders. The impact of the incident has been critically commended with the support of several data. Fatalities and injuries on nearby trailers, onsite and offsite damage, post-incident emergency response, and economic losses were the major consequences of the explosion. Causes of the incident have been also examined in order to improve BP performance. Organizational and process safety inadequate was the major blame for the incident. Recommendations which may improve BP situation and help to avoid hazardous incident have been provided throughout the assignment. The improvement on process safety culture, organizational changes such as merger and acquisition, budget cutting and employees training at all levels, as well as the enforcement of more effective safety management systems have been suggested to improve BP performance. Lastly, a safe trailer placement policy has been proposed to avoid the risk of similar incident.

British Petroleum Company and Texas City Refinery Background

The British Petroleum (BP) refinery in Texas City, Texas is the third largest oil refinery plant in the U.S. On Wednesday, 23 March 2005 at 1:20p.m, an explosion and fires happened at the BP refinery in Texas City, Texas, 30 miles southeast of Houston. The BP refinery in Texas City has the great impact on the overall gasoline supply in the U.S. This oil refinery has the capability to produce about 10 million gallons of gasoline per day. This amount of production makes up about 2.5% of the gasoline sold in the U.S. Apart from producing gasoline, this BP refinery also produces diesel fuels, jet fuels, and chemical feed stocks. There are 29 oil refinery units and 4 chemical units cover its 1,200 acre plant. In BP refinery in Texas City, BP employs about 1,800 employees. While the explosion and fires occurred, about 800 contractor workers were onsite carrying turnaround activities. The site has had several alters in management at both the corporate and refinery stages from its commissioning to the date of the explosion incident (Kaszniak & Holmstrom, 2008; U.S Chemical Safety and Hazard Investigation Board (CSB), 2005).

Incident Description

On 23 March, 2005, explosion and fires in BP Texas City refinery occurred during the startup of an isomerization (ISOM) process unit (Figure 1). On that morning, the raffinate splitter tower in the refinery’s ISOM unit was restarted after it had been shut down for maintenance. During the startup of a section of the ISOM unit, flammable liquid hydrocarbons were pumped into a distillation tower for more than 3 hours without any liquid being removed by operations worker. This action was opposing to startup procedure instructions. The false signal provided by control instrumentation and critical alarms failed to alert the operator workers of the high level in the tower. As a result, unidentified by the operations worker, the distillation tower was overfilled and flammable liquid hydrocarbons overflowed into the overhead pipe at the top of the tower (Kaszniak & Holmstrom, 2008; U.S CSB, 2005).

As the overhead pipe filled with liquid hydrocarbons, the pressure at the bottom rose rapidly and resulted in the three emergency relief valves which used to protect the tower from high pressure opened for six minutes. A large quantity of liquid hydrocarbons then flowed from the discharge of safety relief valves to a blowdown drum with a vent stack open to the atmosphere. The blowdown drum and stack speedily overfilled with flammable liquid hydrocarbons, which resulted in geyser-like release out the 113-foot tall stacks (Figure 2) (Kaszniak & Holmstrom, 2008; U.S CSB, 2005). According to CSB final report (2005), this blowdown system was a hazardous and outdated design. As the liquid hydrocarbons fell to the ground, some of the volatile liquid evaporated to form a flammable vapor cloud. The explosion and fires happened when the flammable vapor cloud was ignited most likely by an idling diesel truck positioned approximately 25 feet from the blowdown drum. The vapor cloud arrived at a wide area which is evident by the burned area as shown in Figure 3 (U.S CSB, 2005).

Figure 1. Raffinate section of isomerization ISOM process unit (U.S CSB, 2005)

Figure 2. Raffinate splitter tower overfills and blowdown drum releases flammable liquid hydrocarbons to the atmosphere (U.S CSB, 2005)

Figure 3. A post-explosion photo shows the burned area in and around the ISOM unit had the most severe fire damage while the red arrow points to the top of the blowdown stack (U.S CSB, 2005).

Causes of Incident

There are several key findings as the causes of this incident occurred in BP Texas City refinery after an investigation was conducted by BP’s investigation team which coordinated with CSB, the U.S Environmental Protection Agency (EPA), Occupational Safety and Health Administration (OSHA), and the Texas Commission of Environmental Quality (TCEQ). The causes of the incidents are summarized as below,

The BP board of Directors did not propose effective safety culture and major accident prevention programs. There were no member in charge of measuring and verifying the performance of BP’s major accident hazard preventive programs (U.S CSB, 2005).

Risk blindness (The Economists, 2006). For instance, BP did not take effective actions to halt the growing risk of a catastrophic event although several fatalities occurred in BP Texas City refinery prior to this incident (U.S CSB, 2005).

BP was too much focused on the low personal injury rate at Texas City while the process safety management and safety culture had severe insufficiency (U.S CSB, 2005)

Inadequate in BP’s mechanical integrity program. This led to the failure of the process unit in BP Texas City refinery (U.S CSB, 2005).

Overzealous cost-cutting strategies (Economist, 2006; Marketline, 2007a; U.S CSB, 2005). According to CSB final report (2005), BP Group executive managers had expenses cuts in the 6 years resulting in the Texas City disaster without measuring their impact on safety of the site (Economist, 2007; Process Engineering, 2007).

The blowdown drum and the relief valve disposal piping were undersized and the relief valve system safety study was 13 years overdue (Process Engineering, 2007; US CSB, 2005).

ISOM operators had been overstretched (Economist, 2007; US CSB, 2005).

Insufficient in BP’s operator training program (US. CSB, 2005).

Impact of Incident on BP Company and its Stakeholders

Explosion and fires in BP Texas City refinery resulted in several negative effects on BP Company and its stakeholders. Those effects include casualties and injuries, facility and equipment damage, offsite damage, post-incident emergency response and economic losses (US CSB, 2005). Stakeholders of BP who had been affected by this incident were as below,

BP Company and its employees

Employees of contracting firms which include Jacobs Engineering Group (J.E. Merit), Fluor Corp. and General Electric Co.

Families of dead victims and injured workers in this incident

Texas community

Texas City

BP stockholders

The U.S citizens who use crude oil

Casualties and injuries

In the incident, it was reported that 15 contract employees of J.E. Merit, Fluor Corp. and General Electric Co. were killed and a total of 180 employees in the refinery were injured (U.S CSB, 2005). Investigation report revealed that those 15 casualties were due to the explosion’s impact on the nearby temporary office trailers where employees were having meetings. Of the 15 casualties, 11 of them were employees of Jacobs, Pasadena, Calif, which was contractor in BP’s Texas City refinery. The 11 dead Jacobs workers include several managers, administrators and 4 female craft workers. 3 of the victims were employees of Fluor, Aliso Viejo, Calif, was contractor provided maintenance management services at the plant since 2001. The remaining contractor victim was employee of General Electric Co. whereas no BP employee was killed in the incident. Blunt force trauma, which most likely resulting from being hit by structural components of the trailers was the cause of the all 15 casualties. During the incident, there were approximately 2,200 contract employees and 1,100 BP employees working at the refinery plant. Table 1 shows the details of the 15 dead contractor employees (Powers & Rubin, 2005; US CSB, 2005).

Company

Name

Age

Position

J.E Merit

Glenn V. Bolton

50

Planner-scheduler

J.E Merit

Lorena “Lori” G. Cruz

32

Instrument fitter-helper

J.E Merit

Morris R. King

57

Construction manager

J.E Merit

Arthur G. Ramos

59

Quality control technician

J.E Merit

Ryan Rodriquez

28

Craft superintendent

J.E Merit

James W. Rowe

48

Civil superintendent

J.E Merit

Linda M. Rowe

47

Tool room assistant

J.E Merit

Kimberly A. Smith

43

Field administrator

J.E Merit

Susan D. Taylor

33

Pipe fitter helper

J.E Merit

Larry S. Thomas

63

Project superintendent

J.E Merit

Eugene White

53

Safety supervisor

Fluor Corp.

Rafael Herrera

27

Quality control inspector

Fluor Corp.

Daniel Hogan

58

Quality control inspector

Fluor Corp.

Jimmy Hunnings

58

Quality control inspector

General Electric Co.

Larry Linsenbardt

58

Title not disclosed

Table 1. Contractor employees who died in the incident (Powers & Rubin, 2005)

Additionally, 180 employees at the plant were injured, 66 of the victims had serious injuries and most of them were suffered multiple injuries. It was reported that lacerations, fractures, sprains, strains, punctures and second-and third degree burns were the typical combination of injuries occurred on victims. Those seriously injured had leave for works, medical treatment or constrained work activity. Of the 66 workers with serious injuries, 14 were BP employees while the others were contractor workers from 13 different firms. Moreover, report revealed that 114 employees were given first aid during the incident. Of those who were given first aid, 35 were BP employees while the rest were contract employees from 14 different contracting firms (U.S. CSB, 2005).

Facility and equipment damage

According to CSB final report (2005), the place within the ISOM unit which caused explosion, nearby trailer area, the adjacent catalyst warehouse as shown in Figure 4 and the adjacent parking areas suffered the most severe blast damage. The nearby metal warehouse which used to store catalyst and the satellite control room were heavily damaged (Powers & Rubin, 2005; U.S CSB, 2005).

Figure 4. Nearby trailers that sited west of the blowdown drum (pointed by red arrow) were destroyed (U.S CSB, 2005).

Furthermore, it was found that about 70 vehicles surrounding the ISOM unit were damaged and numerous vehicles were destroyed (U.S CSB, 2005). Moreover, a total of 44 trailers sustained heavy damaged (Figure 5) and 13 trailers were totally destroyed by the blast pressure wave that propagated through the plant when the explosion and fires happened. Report also disclosed that a number of workers were injured in trailers as far as 479-foot away from the explosion (Kaszniak & Holmstrom, 2008; U.S CSB, 2005).

Additionally, adjacent buildings also were damaged by the blast pressure. The damage level on building was not as severe as those occurred on trailers. The damage on surrounding buildings included damaged doors, cracked walls, and broken windows, scattering of interior contents, damaged roofs and bent metal panels. Also, the explosion also damaged a total of 50 storage tanks although most tank farm was located more than 250-foot away from the ISOM unit. The damage on tanks included distorted tank shells, both the shell sides and the roofs. A number of tanks utilized to hold hazardous substances like benzene were found being damaged as well and this resulted in the hazardous substances vapors escaped to atmosphere (U.S. CSB, 2005).

Offsite Damage

CSB report disclosed that not only the buildings in the refinery were damaged but windows of some houses and business buildings which situated north of the refinery were broken as well. These damaged offsite buildings were located up to 3 quarters of mile away from the explosion (U.S CSB, 2005).

Figure 5. Trailers in the vicinity of the ISOM unit were heavily damaged (Occupational Hazards, 2005).

Post-Incident Emergency Response

The emergency response teams in Texas City were one of the BP stakeholders affected by this BP refinery explosion. These emergency teams provided effective and rapid assistance for the injured people and recovered the fatalities. Texas City Industrial Mutual Aid System (IMAS) member companies helped with search and rescue and fire hose lines (U.S CSB, 2005)

Economic Losses

BP has set aside approximately $2 billion in compensation repairs, payouts and lost profit for settlement of the incident (Marketline, 2007a). According to The Justice Department and US Environment Protection Agency (EPA), in order to resolve Clean Air Act violations in Texas City refinery, BP Products North America has spent over $161 million after the explosion to control pollution in Texas City, improved monitoring and maintenance and enhanced its internal management practices in Texas City refinery. EPA also reported that $12 million was paid by BP on civil penalty and $6 million was spent on a supplemental project to decrease air pollution in Texas. For settlement issues, BP also converted 100 diesel public vehicles to vehicles that operate using liquefied or compressed natural gas in order to reduce the hazardous emissions like hydrocarbons, nitrogen oxides and particulate matter. Besides that, BP agreed to build 4 refueling stations for those converted public vehicles (Marketline, 2009). It was also reported that BP faced penalties with $92,000 from The US Occupational Safety and Health Administration (OSHA) for violations in the Texas City refinery (Marketline, 2007b). Moreover, to compensate the victims in the explosion, BP has incurred $1.6 billion (Economist, 2007). Likewise, BP faced reduction in its fourth quarter profit in 2006 due to the huge expenses on safety and integrity investments after the incident. It was reported that BP’s fourth quarter profit fell 12% when compared to the last 3 quarters of 2005. Although BP achieved record profit for 2006; BP lagged behind that of its UK competitor Shell (Marketline, 2007c). BP’s share price also trailed its rivals like American’s Exxon Mobil in 2006 (Economist, 2007).

Recommendations

Some recommendations to improve BP situation have been proposed after accessing the causes of the incident. Safety culture recommendation and trailer siting recommendation have been suggested to BP Company as follow,

Safety culture recommendation

Improve and emphasis more on process safety culture and performance through:

Increase spending on safety assessment and maintenance

Appoint an expert on safety management systems for at least 5 years to examine the safety progress in BP refineries.

Incorporate process safety into management decision making at all levels

Promote improved process safety through education and training employees at all levels

Construct organizational changes that may improve process safety which include:

Main organizational changes in refinery, for instance through mergers and acquisitions

Policies changes like cost cutting and ensure consistency of policies

Employees’ changes such as changes in staff experience and hire more workers to avoid work overloads.

Reinforce safety management systems through enforcement of more valuable and effective programs, for instance:

Mechanical integrity programs

Risk management and analysis programs and

Errors reporting and investigation programs

Trailers siting recommendation

Develop a novel trailers placement policy which contains practices to ensure the safe siting of trailers as below,

Protect occupied trailers from accident exposure, for example, explosion pressure and heat

Set up minimum safe distance requirements for trailer siting where is away from dangerous zones of process plants

Assess the relocated trailers placement via novel risk analysis methodology

Conclusion

The explosion and fires occurred in BP Texas City refinery in 2005 resulted in huge impact on BP Company and its stakeholders. The effects of the incident included casualties and injuries which 15 contract employees were killed and 180 employees in the plant were injured, facility and equipment in the plant were damaged or destroyed, offsite houses and business buildings were damaged, assistance from emergency response teams in Texas City and economic losses. BP had has paid about $2 billion to compensate the repairs, payouts and lost profits and about $1.6 billion to compensate the victims. Moreover, BP was fined by EPA and OSHA for violations in Texas City refinery. BP’s Q4 profit in 2006 also faced declination due to the explosion in Texas City refinery. The profit reduction not only affected BP Company but also BP stockholders. The incident also resulted in the financial performance of BP lagged behind its competitors. As part of settlement, BP also agreed to convert 100 diesel public vehicles to vehicles that operate using liquefied or compressed natural gas. Furthermore, the incident has vast impact on the overall gasoline supply in the U.S as the gasoline production of this oil refinery makes up about 2.5% of the gasoline sold in the U.S. Safety culture recommendation and trailer siting recommendation have been given to improve BP situation. Even though compliance with practices in policies does not guarantee on avoidance of hazardous incident, non-compliance undoubtedly increases the risks. Also, enforcement of effective safety management systems is essential in all companies. Last but not least, employees safety training at all levels are very important to prevent the major incidents.