Thursday, August 12, 2010

UK Guardian-BP To Pay $50 Million Fine for 2005 TX Refinery Explosion

2005 Texas City, TX Oil Refinery Explosion: Brett Coomer/AP
(Story reported by David Batty for the UK Guardian)

Beleaguered oil giant BP has agreed to pay a record $50.6m (£32.5m) fine for failing to fix hazards at its Texas City oil refinery in the wake of a disastrous explosion that killed 15 people five years ago.

The fine imposed by the US Occupational Safety and Health Administration (OSHA) is the largest penalty ever issued by the watchdog, although it is dwarfed by the billions that BP is set to pay out for the massive oil spill in the Gulf of Mexico.

The Texas City disaster was the worst industrial accident in the US for a generation. It happened in March 2005 when workers overfilled a container with volatile chemicals, sparking an explosion that sent a geyser of burning liquid cascading over nearby accommodation trailers. In addition to claiming 15 lives, the resulting chaos at the refinery, about 40 miles southeast of Houston, Texas, left more than 170 people injured.

An official investigation into the causes of the Texas City explosion concluded in 2007 that senior BP executives, under the company's former chief executive, Lord Browne, had failed to act on red flags over safety at Texas City. Fatigue was a factor as one of the employees involved had worked 12-hour shifts for 33 consecutive days, and living quarters were positioned too close to safety-critical machinery.

After the disaster, BP paid a $21.3m (£13.7m) fine to OSHA – until now the largest payout the agency had imposed. The oil company also undertook a long list of improvements under the supervision of an independent safety auditor. But OSHA said BP had failed to make the improvements quickly enough and had committed hundreds of new violations at the plant since the blast occurred.

Last October the watchdog proposed that BP pay $87m (£55.9m) in penalties but later reduced the fine to $80m (£51.4m). BP initially contested paying the entire amount until today when it agreed to the $50.6m payout.

(click here to read the full story on the UK Guardian website)

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