In a draft report released to the public today, the U.S. Chemical Safety Board is urging an overhaul of the way refineries are regulated in California, calling on officials to replace the current patchwork of rules with a more rigorous, performance-based regulatory regime. The proposal, similar to those successfully adopted in the United Kingdom, Norway and Australia, is known as the “safety case” system and could serve as a model for U.S.-wide safety reforms.
The draft report is the second part of three in the CSB’s investigation of the August 2012 process fire in the crude unit at the Chevron refinery in Richmond, California. That fire endangered 19 workers and sent more than 15,000 residents to the hospital for medical attention. CSB Chairman Rafael Moure-Eraso said:
After exhaustively analyzing the facts, the CSB investigation team found many ways that major refinery accidents like the Chevron fire could be made less likely by improving regulations.
Refinery safety rules need to focus on driving down risk to the lowest practicable level, rather than completing required paperwork. Companies, workers, and communities will all benefit from a rigorous system like the safety case.
I believe California could serve as a model for the nation by adopting this system. We applaud the work of the Governor’s Interagency Task Force for their proactive approach and highly positive recommendations to protect worker and public safety in California. I have great confidence that California will embrace the recommendations in our draft report and carry them forward to implement policy change.
The CSB’s press release explains:
As detailed in the CSB draft report, the safety case regime requires companies to demonstrate to refinery industry regulators – through a written “safety case report” – how major hazards are to be controlled and risks reduced to “as low as reasonably practicable,” or ALARP. The CSB report notes that the safety case is more than a written document; rather, it represents a fundamental change by shifting the responsibility for continuous reductions in major accident risks from regulators to the company.
To ensure that a facility’s safety goals and programs are accomplished, a safety case report generated by the company is rigorously reviewed, audited, and enforced by highly trained regulatory inspectors, whose technical training and experience are on par with the personnel employed by the companies they oversee, the draft report says.
The draft report comes about four months after the CSB released an “interim report” that found Chevron repeatedly failed over a ten-year period to apply inherently safer design principles and upgrade piping in its crude oil processing unit, which was extremely corroded and ultimately ruptured on August 6, 2012.
The interim report identified missed opportunities on the part of Chevron to apply inherently safer piping design through the use of more corrosion-resistant metal alloys. The interim report also found a failure by Chevron to identify and evaluate damage mechanism hazards, which if acted upon, would likely have identified the possibility of a catastrophic sulfidation corrosion-related piping failure. There are currently no federal or state regulatory requirements to apply these important preventative measures. The investigation team concluded that enhanced regulatory oversight with greater worker involvement and public participation are needed to improve petroleum refinery safety.
In a press release, the CSB discussed the broad applicability of its recommendations to the state of California:
The draft CSB Chevron Regulatory report released today states there is “a considerable problem with significant and deadly incidents at petroleum refineries over the last decade. In 2012 alone, the CSB tracked 125 significant process safety incidents at U.S. petroleum refineries. Seventeen of these took place in California.” The draft report also notes that the U.S. has experienced financial losses from refinery incidents that are at
least three times that of industry counterparts in other countries, citing insurance industry statistics.
The existing California system of regulation can be significantly improved, the report concludes. Since 2010, the CSB has examined the extent to which a safety case regime would improve regulatory compliance and better prevent major accidents, both onshore and offshore. The safety case regime, which originated in Europe, requires highhazard facilities to demonstrate, to the satisfaction of a competent regulator, that they are able to operate safely, in conformance with the latest safety standards, and at the lowest practicable risk levels. The report illustrates that under a safety case approach, demonstrating control of major hazards is a pre-condition for a refinery to operate.
Dr. Rafael Moure-Eraso said, “In contrast to the safety case, the current regulatory system for process safety is largely reactive, at both the state and federal level; companies have a default right to operate, and are subject to penalties when accidents occur or their activities otherwise draw negative attention from regulators. In the case of the Chevron refinery fire, the reactive system of regulation simply did not work to prevent what was ultimately a preventable accident.”
Don Holmstrom, director of the CSB’s Western Regional Office, which is conducting the Chevron investigation, said, “OSHA’s Process Safety Management [PSM] standard, the EPA’s Risk Management Program, and California’s system do not work consistently to prevent industrial process accidents. What is lacking, and what the safety case regime requires, is an adaptable, rigorously inspected, goal-setting approach, aimed at continuously reducing risks to ‘as low as reasonably practicable’ – known in the industry as ALARP.”
Chairperson Moure-Eraso said, “The safety case is being increasingly adopted around the world, and the U.S. safety system has fallen behind. Workers, the public and the industry itself would benefit greatly from the enhanced advantages of this more adaptable and effective approach to regulation. Other regimes have long since recognized the need for increased participation by workers and their representatives, transparency of information and the use of key process safety indicators to ensure the system works to prevent major accidents.”
CSB Investigator Amanda Johnson said, “We believe our draft report provides a definitive examination of the advantages of the safety case system, one that would not only benefit California but the U.S. as well.”