In a draft report released to the public today, the U.S. Chemical Safety Board (CSB) proposes recommendations for substantial changes to the way refineries are regulated in California. Entitled “Regulatory Report: Chevron Richmond Refinery Pipe Rupture and Fire,” the CSB draft calls on California to replace the current patchwork of largely reactive and activity-based regulations with a more rigorous, performance-based regulatory regime – similar to those successfully adopted overseas in regions such as the United Kingdom, Norway, and Australia – known as the “safety case” system. 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 a refinery in Richmond, California. That fire endangered 19 workers and sent more than 15,000 residents to the hospital for medical attention.
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 follows the CSB’s first, interim report on the accident, which was approved by the Board and released in April 2013. That report found that the business 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 the business to apply inherently safer piping design through the use of more corrosion-resistant metal alloys. The interim report also found a failure by the business 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.
The draft CSB 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 high hazard 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.
The OSHA PSM standard is a set of requirements for facilities to identify, prevent or mitigate major chemical releases and catastrophic accidents. The current PSM standard requires companies to implement 14 elements to control the hazards from processing chemicals – such as hazard analysis, management of change, and worker training programs. Only two of these 14 elements contain goal-based requirements – Process Hazard Analysis and Mechanical Integrity. Companies are able to comply with the other twelve elements by simply conducting highly specified activities, such as a “management of change” review. The current PSM standard does not require refineries to reduce their risks to a specific level, and companies are not required to submit their safety programs to regulators for review.
A 2007 CSB report on an explosion at a refinery in Texas found that only a handful of comprehensive process safety compliance inspections were occurring at thousands of refineries and chemical plants covered by the PSM standard across the U.S. Federal OSHA instituted an expanded refinery inspection National Emphasis Program following the explosion in Texas City, but that program was subsequently dropped due to lack of resources.
The CSB draft regulatory report contains an extensive analysis comparing actions required by the refinery under the OSHA PSM standard over the years and actions that would have been required had the refinery operated under a safety case regulatory regime. For example, the refinery employees recommended implementing the inherently safer approach of upgrading piping materials to prevent sulfidation corrosion through PSM activities. However, the CSB draft report found that the California process safety regulations do not require that these preventative measures be implemented. Prior to the fire, the refinery had repeatedly failed to implement the proposed recommendations; using inherently safer approaches, on the other hand, is required under the safety case. The CSB found that had the refinery implemented these recommendations, the incident could have been prevented.
Other examples in the report detail how a safety case would have required the refinery to conduct root-cause investigations, including an evaluation and incorporation of inherent safety and implementation of safety recommendations that more broadly address safety system performance. Effective implementation of the safety case requires strong workforce involvement, proactive inspections and enforcement by a well-resourced regulator, as well as the incorporation of best practice performance standard requirements.
The draft report notes that promulgation of new standards by OSHA requires about seven years, and that process has made few – if any – changes to its process safety rules in more than two decades. The report contrasts this ineffectual system for updating federal safety regulations through rulemaking with the greater adaptability of the safety case regime. Under a safety case system, changing safety standards, new technologies, and findings from accident investigations are required to be incorporated by facilities. “In the last decade,” the draft report states, “the CSB has made a number of process safety related recommendations to OSHA and the EPA in its investigation reports and studies. However, none of these important regulatory recommendations have been implemented, and there have been no substantive changes made to the PSM or RMP regulations to improve the prevention of major accidents.”
In contrast, regulators in countries such as the UK and Norway are able to more quickly implement appropriate safety improvements. Available studies summarized in the report illustrate that the safety case continues to be effective. For example, data from Norway and the UK show a reduction in hydrocarbon releases offshore under the safety case regime. The draft report concludes that “Independent studies of the safety case in the UK have identified improvements to safety performance from the safety case regulatory regime and support of the safety case by major oil companies.”