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Feds Let BP Off Probation Despite Pending Safety Violations

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The move closes a controversial chapter for the company, but it leaves an array of worker-safety issues unresolved.

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Editor's Note: This article was originally published on March 12.

BP's (BP) refining subsidiary was released today from criminal probation related to a 2005 explosion in Texas City that killed 15 workers.

The company has addressed the most serious safety deficiencies exposed by the accident and satisfied the terms of a felony plea agreement to settle charges that it failed to protect workers from known risks, a US Justice Department spokesman said.

The move closes a controversial chapter for the company, but it leaves an array of worker-safety issues unresolved. BP is still negotiating over more than 400 additional violations brought against its Texas City refinery separately from the criminal case.

Following the explosion, the US Occupational Safety and Health Administration and BP reached a settlement requiring the company to address safety issues at the refinery. Fixing those problems became one of the Justice Department's conditions for settling felony charges relating to the explosion and for ending the three-year probation period.

In late 2009, however, after a series of inspections, OSHA determined that BP had not addressed many of its safety lapses and levied 270 additional violations and a $87.4 million fine. It also hit the company with another 439 additional "egregious and willful" safety violations at the refinery that were not a component of the criminal case.

At issue then was whether the company had violated some of the most important terms of its probation even after it was given a second chance. In 2010, BP settled with OSHA, paying the agency $50.6 million and committing to making substantive safety changes by the court-set sunset of its probation period today (March 12).

A Justice Department spokesman said BP has met its obligations for probation, including addressing the 270 violations. The remaining 400 or so OSHA violations, however, were not specific to the Texas City agreement.

"These violations were unrelated to the 2005 settlement agreement and did not in the Department's view rise to criminal conduct," said Wyn Hornbuckle, an agency spokesman, in a statement to ProPublica. "The Department did not seek any extension or revocation of BP's criminal probation."

The resolution of those remaining violations will be dealt with administratively, by OSHA, Hornbuckle said, and not by the courts.

As the probation expired, confusion remained about exactly what improvements BP had made at its refineries. According to the 2010 agreement with OSHA, BP pledged to address the risk of catastrophic chemical releases and to install new protective equipment and instrument systems across the sprawling refinery's 28 units.

It was not clear how much progress the company had made, however, and BP spokesman Daren Beaudo characterized the OSHA issues as Unresolved.

"We continue to work with OSHA to resolve these issues," Beaudo wrote in an email. BP declined to say whether it had made any of the specific improvements listed in its 2010 settlement agreement, or to say how much money it had invested at the Texas City plant to meet the terms of its agreement with OSHA.

A spokeswoman for OSHA said the agency remained in negotiations with the company.

In an email exchange, OSHA told ProPublica that the agency could not provide copies of any of the quarterly progress reports that BP had agreed to submit, and that it was "unable" to specify how many of its outstanding violations BP had addressed.

On March 23, 2005, a facility used to distill gasoline and boost its octane content was overfilled by BP workers, spewing a geyser of flammable liquid into the air. The subsequent explosion destroyed an office trailer nearby, killed 15 workers, and sent nearly 200 more to area hospitals.

Like the investigations into BP's Deepwater Horizon accident in the Gulf of Mexico in 2010, a series of reports analyzing the refinery disaster found that the company had failed to follow basic steps to avert a disaster, had not installed or maintained equipment that would have helped prevent the leak and the explosion, and generally had a poor safety approach.

A 2010 investigation by ProPublica found that in the years before the explosion, BP had been repeatedly warned that its facilities were in need of repair, and the company had declined to replace ailing equipment - including the unit that failed the day of the explosion - in order to cut costs.

Documents obtained by ProPublica showed that an internal BP report shortly before the disaster said that employees at the plant worked with "an exceptional degree of fear." The report warned that the plant might "kills (sic) someone in the next 12-18 months."

The Texas refinery, which produces about 3 percent of the country's gasoline, continued to have problems after the explosion. Several more workers died in accidents, and in 2010, the plant was found emitting a huge cloud of unpermitted toxic emissions.

After the toxic release, the Texas Commission on Environmental Quality (TCEQ), Texas's chief environmental regulator, charged the company with emissions reporting violations and alleged it had violated the terms of its probation with the federal government. BP settled that case, as well as an another similar emissions violation, with Texas in late 2011.

That left the criminal probation period and the outstanding OSHA violations as the final chapters in the Texas City saga.

BP has endeavored to keep the Texas City accident separate from claims and ongoing investigations into its 2010 oil spill in the Gulf of Mexico. As recently as two weeks ago, the company's lawyers argued in court that past accidents should have no bearing on a trial to decide liability for the Deepwater Horizon explosion that killed 11 workers.

BP sought to strike portions of testimony about Texas City and other past incidents from its former CEO, Tony Hayward, in depositions that would be admitted to the court.

BP announced last year that it would sell its Texas City refinery along with another facility outside Los Angeles. The company said this week it has suitors and expects to complete a sale by year's end.

Editor's Note: This article by Abrahm Lustgarten was originally published on ProPublica.org.
No positions in stocks mentioned.
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