Industrial serial killer BP knows well the benefits of lax regulation and laughable penalties for breaking the law. Yesterday, they received another wag of the finger for repeatedly endangering the health of thousands of Americans.
The crimes:
... two fires that occurred at the refinery on March 30, 2004 and July 28, 2005, and a leak that occurred on August 10, 2005. During the three incidents, each of which resulted in the surrounding Texas City community to shelter-in-place, thousands of pounds of flammable and toxic air pollutants were released. The settlement also resolves allegations that BP failed to identify all regulated hazardous air pollutants used at the refinery in plans submitted to EPA.
The punishment:
The U.S. Environmental Protection Agency (EPA) and the U.S. Justice Department announced today that BP Products North America Inc. has agreed to pay a $15 million penalty to resolve federal Clean Air Act violations at its Texas City, Texas petroleum refinery.
BP had four significant operating failures at the Texas City refinery within 18 months, the most serious of which caused a massive explosion that killed 15 workers and injured 180 (see video below). For this accident, BP was fined 50 million dollars and put on a three-year probation to correct all operations, training, and equipment citations. The settlement announced yesterday covered fines for the other three events, which resulted in the release of toxic gases from the plant and minor injuries to plant workers.
What BP lacks in corporate responsibility it more than makes up for in spin control mastery. Here is a sample of BP's well-oiled public relations machine in action as they reacted to the announcement of the latest plea bargain with the government.
BP said in a statement that there were no injuries or impact on health outside of the refinery from the incidents.
"BP Products has incorporated lessons from these events into its current work processes and training," the company said. "BP Products will expand its reporting to the EPA regarding equipment inspection, personnel training and incident investigations."
Reuters, Sept 30
Interesting choice of words. "No injuries or impact on health outside of the refinery" means that the only people injured during these three events were workers at the refinery. As for the lessons learned, it means doing a better job of not getting caught.
Here is an example of BP's commitment to expanded reporting to the EPA of incidents. From April 6 to May 16 as the Gulf of Mexico filled with BP crude, the Texas City refinery released 500,000 pounds of toxic chemicals, including 17,000 pounds of benzene into the air in violation of state and federal laws. The release happened because BP continued to operate an 'ultracracker' unit after it was damaged in a fire, causing toxic gases to be flared instead of being captured. The Texas Attorney General accused BP of putting profits before public safety during the event.
The Texas Commission on Environmental Quality declined to comment, citing a lawsuit filed against the company last week by the state's attorney general. The lawsuit alleges a pattern of poor operational and maintenance practices led to BP's "excessive emissions event."
It also accuses the company of putting profits over environmental compliance when it chose to keep running its ultracracker at reduced capacity after a fire damaged a hydrogen compressor. Continuing to run the ultracracker, which uses pressurized hydrogen to make gasoline and diesel fuel, required the company to flare gases.
Houston Chronicle, Aug 18, article by Monica Hatcher
Did BP notify the EPA of the "excessive emissions event" as part of the lessons learned from accidents in 2004 and 2005? Of course not.
In addition to such questions about the adequacy of state reporting requirements, the release has prompted the U.S. Environmental Protection Agency to investigate whether the emissions should have triggered reports to federal regulators.
Michael Marr, a BP spokesman, said the company did not notify federal regulators because it didn't think the event required reporting.
Houston Chronicle, Aug 18, article by Monica Hatcher
The BP spokesperson is a lousy liar. Release of benzene was one of key components identified in EPA complaints for the events in 2004 and 2005. Note this line in the EPA press release.
In addition to the Clean Air Act General Duty Clause and risk management program violations resolved by today’s settlement, EPA also identified violations of other Clean Air Act requirements at the refinery relating to the control of benzene, ozone-depleting substances, and asbestos.
The 40-day release of toxic gases at BP's Texas City refinery earlier this year is just the latest in a long line of reckless acts by BP at the facility. The refinery is still on probation for violations related to the 2005 explosion that killed 15 workers and injured hundreds. This facility had over 700 "egregious, willful" violations of worker safety in the past three years alone while their competitors combined had less than 20. It even comes after the Justice Department warned BP in January that it might revoke or extend that probation if the environmental and worker safety violations continued. For most citizens, criminal violations while on probation usually result in serious consequences such as the reinstatement of criminal charges and penalties. For BP, it is just business as usual.
On September 8, the Justice Department decided against revoking probation against the BP refinery, which would have opened the company to additional criminal and civil charges.
After consulting with BP, regulators and blast victims, prosecutors said they would give the company 18 more months to complete required safety reviews and upgrades at the Texas refinery, according to documents filed in federal court in Houston.
“The Department of Justice is not seeking a revocation or extension of probation at this time,” Daniel Dooher, a senior trial attorney in the U.S. environmental crimes division, said in a Sept. 8 letter to U.S. District Judge Lee Rosenthal. Dooher said safety regulators and “BP have executed a stipulation and agreement resolving the allegations of non-compliance,” which includes an extension of BP’s deadline to complete the work until March 12, 2012, the date its probation will expire.
BusinessWeek, Sept 28, article by Laurel Brubaker Calkins
According to the government, the $15 million in fines for the three nonfatal accidents and toxic releases is a very big deal.
The penalty is both the largest ever assessed for civil violations of the Clean Air Act’s chemical accident prevention regulations, also known as the risk management program regulations, and the largest civil penalty recovered for Clean Air Act violations at an individual facility.
“BP’s actions at the Texas City refinery have had terrible consequences for the people who work there and for those in nearby communities,” said Cynthia Giles, assistant administrator for EPA’s Office of Enforcement and Compliance Assurance. “Today's settlement, in conjunction with other actions already taken by EPA and other federal agencies at Texas City, demonstrates the agency's continuing commitment to actively and vigorously working to hold BP accountable and to make them comply with our nation’s environmental protection laws wherever the company operates.”
The September 30 press release by the government contains this bit of self-congratulatory posturing.
With today’s settlement, the federal government will have recovered approximately $137 million in criminal, civil, and administrative fines related to process safety violations at the Texas City refinery. In addition, BP Products has performed approximately $1.4 billion in corrective actions and the company will spend an estimated additional $500 million, to improve safety at the refinery as required by settlements entered into with the Occupational Safety and Health Administration (OSHA) and the criminal Clean Air Act plea agreement following the fatal March 23, 2005 explosion.
Let's put those numbers into perspective. Lawyers for blast victims claimed that the $87 million in OSHA fines were less than one day's worth of profit from operations of the Texas City refinery. The settlement documents list the annual revenues for BP North America at $239 billion. For a company with annual revenues in excess of $200 billion, fines of $137 million can be paid from petty cash. If a private citizen making $239,000 a year were fined $137 for four acts of criminal endangerment, including one that cost 15 people their lives, most would call the fines laughable, even absurd. The fines also pale in comparison to what BP paid former CEO Tony Hayward in salary, bonuses, and stock during his three year reign of error. And how much did BP spend on advertising while the Gulf of Mexico was filling with oil from a BP well?
According to a letter released today, from committee chairman Henry Waxman to member Kathy Castor of Florida, at whose suggestion the inquiry was made, between April 2010 and July 2010, BP spent over $93 million on corporate advertising, which is three times the amount that the company spent on ads during the same period last year.
CNN
Fear not. BP's new CEO Dudley Do-Right promises a new day is dawning at BP that will banish Snidely Whiplash, rescue dear sweet Nell from the clutches of the EPA, and shower shareholders with gold. (The obscure cultural reference is to a cartoon from the 1960s that aired as part of the Rocky and Bullwinkle show. See video below.)