OSHA Proposes Record $87 Million in Fines Against BP

Following the March 2005 explosion, OSHA and BP entered into a settlement agreement that committed BP to pay $21 million in fines and address critical safety issues. OSHA’s Oct. 30 announcement of the newest round of fines follows a 6-month inspection designed to evaluate the extent to which BP has complied with its obligations under the 2005 agreement and OSHA standards.

The $87 million in proposed fines include $56.7 million for 270 failures to comply fully with the 2005 settlement agreement and an additional $30.7 million for the 439 new willful citations for failures to follow industry-accepted controls on the pressure relief safety systems and other process safety management violations. Defective pressure release device systems caused, in part, the deadly 2005 explosion.

“These penalties are proportionate to both the nature and scale of violation on BP’s part and represent the Department of Labor’s commitment to ensuring all workers are provided with workplaces that are safe,” said Secretary of Labor Hilda L. Solis in an Oct. 30 press conference call. “Let me be clear: this administration will not tolerate disregard of our laws. Employers have a legal and moral responsibility to protect their workers who ultimately are America’s most important asset.”

Hundreds of Violations

"BP was given 4 years to correct the safety issues identified pursuant to the settlement agreement, yet OSHA has found hundreds of violations of the agreement and hundreds of new violations. BP still has a great deal of work to do to assure the safety and health of the employees who work at this refinery," stated acting Assistant Secretary of Labor for OSHA Jordan Barab.

Dean McDaniel, OSHA’s regional administrator in Dallas, explained that OSHA conducted 17 follow-up activities dating back to 2006 following the fatal explosion. “During that period of time in 2006, we did see that BP committed to do some corrective action; later, their commitment waned,” he told EHS Today during a press conference call. “We did have a number of discussions where we felt like things were off track.”

While BP did make some corrective actions identified by a third-party consultant, OSHA continued to find major deficiencies. “The underlying issues there are major and substantial hazards with potential for catastrophic results. And those are the ones that we’re focused on,” said McDaniel.

Barab added that the items OSHA is citing were linked to the March 2005 explosion. “The fact that there are so many still outstanding problems, life-threatening problems, at this plant indicates that they still have a systemic safety problem in this refinery,” Barab said.

Prior to this proposed fine, OSHA’s largest total penalty was $21 million, issued in 2005 against BP in connection with the Texas City explosion.

2007 Air Violation Fine

Two years ago, the same explosion also resulted in BP receiving the largest criminal fine ever for air violations. On Oct. 25, 2007, EPA announced that BP agreed to pay a criminal fine totaling more than $60 million for violations of federal environmental regulations in Texas and Alaska.

This was the largest criminal fine ever assessed against a corporation for Clean Air Act violations and the first criminal prosecution of the requirement that refineries and chemical plants take steps to prevent accidental releases.

BP agreed to pay $50 million for the 2005 Texas City explosion and $12 million for spilling 200,000 gallons of crude oil in Alaska in March 2006. The company pleaded guilty to a felony violation of the Clean Air Act and to serve 3 years of probation for the Texas City incident. BP also was required to complete a facility-wide study of its safety valves and renovate its flare system to prevent excess emissions at an estimated cost of $265 million.

The BP Texas City Refinery is the third largest refinery in the United States with a refining capacity of 475,000 barrels of crude per day. It is located on a 1,200-acre facility in Texas City, Texas, southeast of Houston in Galveston County.