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BP blast report says OSHA was lax

HOUSTON — The U.S. agency responsible for worker safety failed to inspect plants with enough care and frequency to prevent an accident like the 2005 explosion at BP's Texas City refinery that killed 15 people and injured 170, the worst U.S. industrial accident since 1990, a government report said Tuesday. Companies have plenty of safeguards for individual workers' safety, but have a potentially deadly lack of sound procedures to measure process safety, according to the U.S. Chemical Safety and Hazard Investigation Board, which released the report.

"Process safety programs to protect the lives of workers and the public deserve the same level of attention, investment and scrutiny as companies now dedicate to managing their financial controls," CSB Chairwoman Carolyn W. Merritt said at a news conference on the agency's final report into the March 23, 2005, explosion in Texas City. The 335-page report also blamed BP, the London-based oil giant, for cost-cutting that left the plant vulnerable to catastrophe.

CSB said that although the Texas City plant had several fatal accidents over the last 30 years, the federal Occupational Safety and Health Administration had done only one process safety management inspection at the refinery — in 1998.

The report said OSHA made other, unplanned inspections after accidents, complaints or referrals — it didn't say how many — but that those visits were typically narrower and shorter than planned inspections. The CSB recommends OSHA increase both the number of comprehensive safety inspections and the number of people to do them.

"OSHA's national focus on inspecting facilities with high injury rates, while important, has resulted in reduced attention to preventing less frequent, but catastrophic, process safety incidents such as the one at Texas City," the report said.

Nationally, the CSB found OSHA had done few inspections between 1995 and 2005 that are supposed to ensure compliance with OSHA's process safety management standard — the type of inspections designed to prevent disasters such as explosions.

Don Holmstrom, the CSB's lead investigator of the Texas City blast, said the investigation showed OSHA did only nine such inspections in targeted industries over the 10-year period — and none in the refining sector.

Holmstrom said the two agencies worked well together in the immediate days after the accident. But after the CSB learned of other major accidents and fatalities at the Texas City site and began to request material on specific incidents, OSHA didn't always comply, he said.

Still, Holmstrom said, "available evidence indicates that OSHA has an insufficient number of qualified inspectors to enforce the (process safety management) standard at oil and chemical facilities."

OSHA representatives did not immediately respond to messages seeking comment.

Holmstrom said agency officials met with those from OSHA recently to discuss the report's findings, and he noted "the meeting went well."

"They indicated they are certainly training a number of people in process safety management and indicated a willingness to work with the CSB in resolving the issues contained in our recommendations," he said.

Holmstrom was to present the report's findings and recommendations at a public hearing Tuesday evening in Texas City. The CSB does not issue citations or fines but makes safety recommendations to plants, industry organizations and regulatory agencies such as OSHA and the U.S. Environmental Protection Agency.

Najmedin Meshkati, a professor of industrial and systems engineering at the University of Southern California, said "safety culture" is one of the most ignored factors in the industrial world.

"Those industries that are under cost-cutting and competitive pressures need to be very cognizant of the issues" in the CSB report, he said.

BP said Tuesday it has accepted responsibility for the accident, worked diligently to provide fair compensation to those injured and to families of those who died, and cooperated fully with the CSB.

"Notwithstanding the company's strong disagreement with some of the content of the CSB report, particularly many of the findings and conclusions, BP will give full and careful consideration to CSB's recommendations, in conjunction with the many activities already under way to improve process safety management," the statement said.

In trading Tuesday on the New York Stock Exchange, BP PLC shares rose 18 cents to $60.28. They've traded in a 52-week range of $58.62 to $76.85.

BP acquired the refinery when it merged with Amoco in 1998. Soon after, the report said, BP ordered a 25 percent, across-the-budget cut in fixed spending at its refineries. In a preliminary investigation of the accident released in October 2005, CSB said the Texas City plant fostered a culture of bad management and failed to recognize and correct problems.

Beginning in 2002, Merritt said, BP commissioned a series of audits and studies that revealed serious safety problems at the Texas City refinery, including a lack of preventative maintenance and training. The reports were shared with BP executives in London and provided to at least one member of the executive board, she said. "BP's response was too little and too late," Merritt said.

The Texas City explosion occurred when part of the plant's isomerization unit, which boosts the level of octane in gasoline, overfilled with highly flammable liquid hydrocarbons. A geyser of flammable liquid and vapor ignited as the unit started up. Alarms and gauges that should have warned of the overfilling equipment failed to work at the plant, about 40 miles southeast of Houston.

The unit had a history of problems and was not hooked up to a flare system that burns off vapor and could have prevented or minimized the accident, the CSB has said.

Merritt noted the investigation was the CSB's largest and most complex since its formation nine years ago. A team of investigators interviewed 370 witnesses, reviewed more than 30,000 documents and tested equipment, instruments and chemicals.

The new report recommends BP appoint a board member with expertise in process safety and for BP senior executives to establish an improved incident-reporting program and use new indicators to measure safety performance.

It also calls on OSHA to "identify those facilities at the greatest risk of a catastrophic accident" and then conduct comprehensive inspections of those facilities. The CSB also recommends OSHA hire or develop new, specialized inspectors and expand its process safety management training.

The report notes that proposed OSHA fines during the 20 years preceding the March 2005 explosion — a period in which 10 people were killed at the refinery — totaled $270,255. But net fines collected after negotiations came to $77,860. Six months after the blast, in September 2005, OSHA found BP committed more than 300 willful violations of its rules and fined the company $21.3 million.

Paul Secunda, assistant professor of law at the University of Mississippi who specializes in employment issues, said the law doesn't give OSHA and other workforce-focused agencies enough teeth.

"On another level, the law is inept for the current workplace environment," and it's difficult to get effective standards enacted because of a lengthy notice and rule-making process, Secunda said.

OSHA adds only about one specific standard per year when thousands are needed for everything from chemical exposures to scaffolding requirements, he said.

In January, after an independent review by a panel led by former Secretary of State James A. Baker III, BP said it planned to increase spending on improvements at U.S. refineries from $1.2 billion in 2005 to an average of $1.7 billion a year from 2007 to 2010. BP's net profit for 2005 amounted to $22 billion.

The January report found poor safety oversight, deficient leadership and short-term focus at BP's five U.S. refineries. That investigation was commissioned by BP at the CSB's suggestion.

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AP Business Writer Dan Caterinicchia in Washington, D.C., contributed to this report.