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Industrial Safety

Chevron reaches $160 million settlement over refinery accidents

Agreement resolves claims that company violated risk management provisions of the Clean Air Act

by Jeff Johnson
October 26, 2018

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Credit: Chemical Safety Board
A fiery 2012 Chevron refinery accident in California led thousands of nearby residents to seek medical care.

Chevron and the U.S. Environmental Protection Agency, the U.S. Department of Justice, and the Mississippi Department of the Environment announced on Oct. 25 a settlement worth more than $160 million to resolve claims that the company violated provisions of the Clean Air Act.

The violations center on the act’s risk management plan provisions, which are triggered by accidental releases of hazardous chemicals with serious consequences for human health and the environment.

The accidental releases occurred at Chevron refineries in Richmond, Calif.; Pascagoula, Miss.; and El Segundo, Calif., in 2012 and 2013. Combined, the incidents caused the death of one worker, endangered 19 others, and induced 15,000 residents to seek medical aid.

The agreement calls for Chevron to spend $150 million to replace piping, institute new operating parameters and alarms for safer operations, improve piping inspections, and improve inspection training.

At the Richmond refinery, failure to replace a long-ignored corroded pipe led to a fire and community evacuation in 2012, according to an investigation by the U.S. Chemical Safety Board. The accident and CSB investigation led to an overhaul of California refinery regulations.

Chevron will also conduct a pilot study of safety controls and make safety improvements at all its U.S. refineries. The company will pay a $3 million civil penalty and implement supplemental environmental projects worth more than $10 million for fire and emergency response equipment in communities near Chevron refineries in California, Mississippi, and Utah, as well as a refinery formerly owned by Chevron in Hawaii.

The terms of the settlement remain subject to final court approval.

This latest agreement comes on the heels of several similar ones related to the incident in Richmond. Under a settlement reached last year with the California Occupational Safety & Health Administration, Chevron will spend $25 million to replace the refinery’s carbon steel piping and develop systems to monitor piping and warn plant operators when equipment should be replaced. Chevron also agreed to lead several emergency response workshops and pay $1 million in California civil penalties.

Under a separate agreement with the city announced in May 2018, Chevron will pay $5 million to the community to resolve legal disputes arising from the accident.

Additionally, the company has embarked on a $1 billion project to modernize the Richmond refinery and has agreed to pay some $90 million to the city for job training, scholarships, greenhouse gas reduction projects, solar power installations, and other community projects, a company spokesperson says.

Separately at the federal level, EPA is reviewing the risk management plan provisions that Chevron violated and led to the settlement. Those provisions had been updated under the Obama administration. The changes, however, were opposed by the oil and chemical industries and the Trump administration is working on revising them again.

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