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Chevron to pay $2 million in fines, restitution for Richmond refinery fire

08.06.2013  | 

Chevron agreed to pay nearly $2 million in fines and restitution stemming from the August 2012 fire at its refinery in Richmond, California, which sent hundreds of nearby residents to emergency rooms with breathing problems. The company pled no contest with a state court.

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By BEN LEFEBVRE

Chevron agreed to pay nearly $2 million in fines and restitution stemming from the August 2012 fire at its refinery in Richmond, California, which sent hundreds of nearby residents to emergency rooms with breathing problems.

Chevron's no contest plea agreement comes after the Contra Costa District Attorney's Office and the California Department of Justice charged the company with six criminal violations of the state's labor and health and safety codes.

The fire occurred after a corroded pipe burst in the 245,000 bpd refinery's crude distillation unit, a major piece of equipment that heats oil to extreme temperatures before sending it to other machines for processing. The resulting fire emitted black smoke over the San Francisco Bay that could be seen for miles.

The fire had already hit Chevron's bottom line, as repair work forced the company to run the refinery at reduced rates for the better part of the year. The suspension of operations at the refinery, the largest in the San Francisco area that accounts for 10% of the fuel refining capacity on the West Coast, also raised gasoline prices in the region.

California's state Occupational Safety and Health division also fined Chevron $1 million in January, a citation Chevron is appealing. The blaze increased community opposition to the refinery; last weekend, police arrested hundreds of people who had gathered at the site to protest the one year anniversary of the fire.

In all, Chevron will pay nearly $1.3 million in fines and penalties, $575,000 to local government agencies for costs related to the fire response and $145,000 into a fund for training skilled workers in the construction and renewable energy industries, the district attorney's office said.

Chevron will also be on probation for three and a half years, during which the company must inspect every piece of pipe identified as being susceptible to certain types of corrosion, the District Attorney's office said.

Chevron said it reimbursed residents and local government agencies in Richmond and west Contra Costa County for medical and response costs. "We are committed to continuous improvement in process safety and reliability at the refinery," Chevron spokeswoman Melissa Ritchie said. Chevron said in a statement that it is also installing what it described as a "multi million dollar" air monitoring system at the refinery.

Dow Jones Newswires



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Hirak Dutta
08.10.2013

Had that portion of the pipeline changed at appropriate time suffering of people and hefty penalty could have been easily avoided. It may be mentioned that perhaps Inspection team had recommended replacement of the corroded line during turn around. Under the insulation corrosion and its danger is well illustrated in the above case. Good learning for all of us although bit costly.

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