TEXAS CITY — Texas City’s mayor, Matt Doyle, lashed out at the Occupational Safety and Health Administration for its $87 million fine against BP’s Texas City refinery, calling the federal government’s actions “one of the biggest affronts to the working men and women of this country.”
On Friday, OSHA proposed the fine — the largest ever for the agency — for a lack of compliance with safety regulations and agreed-upon improvements at its Texas City refinery after the March 23, 2005, explosions that killed 15 people. The agency said it found hundreds of new safety violations at the nation’s third-largest refinery.
U.S. Labor Secretary Hilda Solis said that, during 17 inspections since the explosions four years ago, OSHA found 270 cases in which BP failed to comply with changes to systems at the Texas City refinery as required in its agreement with the government when BP was fined $21 million, which until this week was the largest fine ever issued by the agency.
In addition, OSHA found 439 new “willful” violations involving pressure release systems on units at the refinery.
A willful violation exists when an employer has knowledge of a violation and demonstrates an intentional disregard for the requirements, OSHA said.
BP immediately announced it was contesting all of OSHA’s findings.
Threats To Business
Doyle accused OSHA of “piling on” and said the fine was too severe. He said the agency’s actions and those earlier this year by the Texas attorney general in which the state threatened to sue BP for environmental violations related to the 2005 blasts are threats to the nation’s business climate.
“This should worry all the business owners in this country,” Doyle, who is CEO of Texas First Bank, said.
BP officials have “never denied they had a problem,” Doyle said. “They have worked diligently for almost five years to correct those problems.”
While Doyle has extolled the importance of BP to the city’s economy, as well as its contributions to the county, his comments about OSHA’s actions were the strongest he has made publicly since the explosions four years ago.
“One of these days, BP is going to say enough is enough and shut down and leave,” Doyle said. “Three or four years ago, I would have said that would never happen, but now I would say it’s a keen possibility. Sooner or later, it’s cheaper to shut down than keep the plant open.”
Jordan Barab, acting assistant secretary of labor for OSHA, defended his agency’s actions.
“Our job is to protect the men and women of the United States, and that’s exactly what we are doing here,” he said. “This was totally justified to send a message to BP and others.”
He argued the company has “not shown good faith in complying with the agreement it made four years ago to address the many problems at the refinery, particularly when it comes to pressure relief and automatic shutdown controls.”
BP maintains that it not only has addressed those problems but also has gone beyond what the agreement calls for.
“Our experts say BP is 10 years behind where a lot of the leading refineries are when it comes to process safety,” Barab said. “This is a company that should have known better.”
Barab and OSHA have the support of Eva Rowe, whose parents, James and Linda Rowe, were among the 15 contract workers killed in the 2005 blasts.
“I think it’s fantastic that OSHA is standing up to BP and making (BP officials) hold up their end of the agreement,” Rowe said.
“Hopefully, this will convince the Department of Justice to revoke BP’s probation and prosecute the executives.”
Last year, BP reached a plea bargain with the U.S. Justice Department and paid a $50 million fine to avoid criminal charges for violations of the Clean Air Act related to the fatal explosions. That plea deal was contingent on BP fulfilling its settlement agreement with OSHA.
Rowe is among a group of blast victims who argued the agreement was too lenient.
Doyle said OSHA’s actions were an example of intrusion into private business by government.
“There is a ‘pile on’ syndrome that takes place like magpies on an open sore — they just attack,” Doyle said. “This is one thing government really needs to work on. Business and government need to work together for the economy of this country.”
Doyle’s frustration wasn’t reserved for OSHA.
He also questioned President Barack Obama’s administration’s attitude toward the oil industry.
“I think the administration would have a lot more thought process of how important these refineries are to our country,” Doyle said. “These kinds of fines say we don’t want you here anymore.”
In addition to promised increased regulation on refiners, the White House is backing energy legislation that increases taxes on oil production companies.
Doyle isn’t the only one to notice that OSHA is taking a more aggressive stance.
The national business community, including the U.S. Chamber of Commerce, has taken notice.
Kent Hoover, the Washington Bureau Chief for bizjournals.com, a part of the same company that operates the Houston Business Journal, wrote in his blog that OSHA’s fine against BP signaled “there’s a new sheriff in town when it comes to workplace safety.”
“The huge fine against BP is another sign that OSHA is beefing up its enforcement efforts under President Obama,” Hoover wrote in his posting on Portfolio.com.
Doyle said the federal government is not considering how important BP’s Texas City refinery is for the regional and national economy, noting that the refinery accounts for about 3 percent of the nation’s fuel supply.
A study commissioned by the company shows that the refinery has a $22 billion economic impact annually on the Texas economy, including payrolls for employees and contractors, as well as business the refinery does with other companies.
Most of the money is spent in Galveston County, BP spokesman Michael Marr said.
The refinery employs 2,000 workers and between 2,500 and 3,000 contract workers and is the county’s largest private employer, Marr said.
In addition, the refinery is responsible for $48.4 million in property tax revenue for county taxing authorities and $15.7 million in Texas City sales tax revenue, according to tax records.
Doyle said in Texas City, 83 cents of every tax dollar comes from the industry and business sectors. BP, as the largest industrial facility in the city, accounts for the bulk of that.
Its charitable contributions, including recent donations for park space in the city, also total more than $5 million in the last four years.
Some of those donations, however, were part of settlement agreements BP reached with regulatory authorities.
Are Things Better?
BP insists it has fixed most of the problems found by OSHA and other investigations and points to a $1 billion overhaul of the refinery, the adoption of the United Steelworkers Triangle of Prevention process safety program and new procedures as evidence the safety culture of the refinery is much improved.
Barab acknowledged that improvements at the refinery have been made.
“They did a lot of things on the settlement — unfortunately not the most important things,” he said.
OSHA did not outline how many of the fixes it required of BP in the 2005 settlement agreement had been accomplished and outlined only those areas the agency contend had not been achieved.
“I worry we focus too much on one event, and we can’t see the forest through the trees,” Doyle said. “I bet you if you look at all the activity that has taken place at that plant since the explosion, they are being held to a standard that no one else has been.”
Find documents related to the latest fine and citations against BP issued by OSHA and listen to Friday’s news conference in the Between the Lines blog at galvnews.com. Kent Hoover’s blog is at Portfolio.com.