Violation of section 112(r)(7) of the Clean Air Act
Verdict
BP pled guilty and settled for $50million and a probation period of three years
Litigation
Approximately 4,000 claims
Costs
Approximately $2.5billion of liabilities for BP
The Texas City refinery explosion occurred on March 23, 2005, when a flammable hydrocarbon vapor cloud ignited and violently exploded at the isomerization process unit of the BP oil refinery in Texas City, Texas, killing 15 workers, injuring 180 others and severely damaging the refinery. All the fatalities were contractors working out of temporary buildings located close to the unit to support turnaround activities. Property loss was $200million ($312million in 2024). When including settlements ($2.1 billion), costs of repairs, deferred production, and fines, the explosion is the world's costliest refinery accident.
The direct cause of the accident was the ignition of a heavy hydrocarbon vapor cloud which emanated from raffinate liquids overflowing from the top of a blowdown stack. The source of ignition was probably a running vehicle engine. The release of liquid followed the automatic opening of a set of relief valves on a raffinate splitter column caused by overfilling.
Subsequent investigation reports by BP, the U.S. Chemical Safety Board (CSB), and an independent blue-ribbon panel led by James Baker identified numerous technical and organizational failings at the refinery and within corporate BP.
The accident had widespread consequences on both the company and the industry as a whole. The explosion was the first in a series of accidents (which culminated in the Deepwater Horizon oil spill) that seriously tarnished BP's reputation, especially in the U.S. The refinery was eventually sold as a result, together with other North American assets. In the meantime, the industry took action both through the issuance of new or updated standards and more radical regulatory oversight of refinery activities.
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