ExxonMobil Refinery Explosion in Torrance CA 2015

Subtitle:  Increased Fines For Violations Is A Better Solution

The basic facts:  the 155,000 BPD oil refinery owned by ExxonMobil and located in Torrance, California (suburb of Los Angeles) had a large but non-fatal explosion in February, 2015 when hydrocarbon vapors that had flowed into an electrostatic precipitator system ignited and exploded.  Four workers were injured.   The refinery has been operating at reduced-capacity ever since, with the fluid catalytic cracker (FCC) unit shut down until adequate repairs are made and government regulatory agencies are satisfied that the refinery can operate safely again. 

Just two days ago (13 January, 2015), a public meeting was held in Torrance at which the Chemical Safety Board presented its findings on the explosion.  A newspaper account of that meeting can be read here (see link). 

As a former practicing, and consulting refinery process engineer for many years, and much experience in dozens of similar refineries world-wide, I take keyboard under fingers here to offer some insights.   First, a word of my background and qualifications that I have never before shared in public. 

Many years ago, in approximately 1994 or '95, 1990 (verified) the People's Republic of China's national oil company, refining division, surveyed and analyzed all of the country's refineries to determine what could be done to modernize, improve, and make the refineries more efficient.   First, the effort was internal, using the best Chinese engineers and professors.   Following that effort, the Chinese government wanted an outside expert opinion on the matter.   They solicited bids for the work from consultants around the world, including (as I recall) from Japan, the UK, the US, and other nations.  Within the US, the little consulting company where I worked (20 engineers), received an invitation to bid.  To make a long story short, my company won the award and my boss and I were soon on a plane to Beijing for a three-week consulting trip. 

We had (and still have, in my case  (note: sadly, Dick Moriarty passed away)  ) extensive knowledge of oil refineries, and had performed many such operating and profit improvement studies on refineries world-wide.  We looked at refineries from start to finish, crude storage and distillation, to products blending and all off-sites units.   What we did not know was that the Chinese national television station brought a full crew with cameras, lights, and microphones to record our introductions on our first morning of the Chinese refinery improvement consulting project.   The head Chinese dignitary made a speech on camera, and a few others made speeches, then a translator told my boss that he was next.   Just before my boss spoke, the last speaker spoke Chinese first, then English for our benefit. He described the process just above of the Chinese effort to improve their refineries and their need for an outside opinion.   He ended by saying, "And now our distinguished foreign consultants will make their comments."   (I will never forget that phrase, Distinguished Foreign Consultants.)

My boss looked at me, and said to the camera something very short, thanked our hosts for selecting us, and ended by saying, "and now my associate Roger Sowell will describe the approach we take in our refinery profit improvement studies."   I was caught with no time to prepare, or think of what to say.   The lights were bright, the microphone was now in front of me, and the camera lens was aimed right at me. 

Richard "Dick" Moriarty and Roger Sowell
with Chinese refinery management
at Yanshan Refinery
Beijing, People's Republic of China, 1990

So, I echoed my boss' sentiments on how happy I was to be in China, for our company to be selected after a world-wide bidding process, and delighted to have the opportunity to work with the wonderful Chinese engineers and managers to study their petroleum refineries.   I described briefly the process we used, first to go over each process unit with the management to gain an understanding, then take the operating data back to the States for analysis using our proprietary computer software and our engineering experience.   

I seldom relate this story of the Chinese refinery consulting at Yanshan Petrochemical Corporation near Beijing. My point in relating this now is that I have the background to offer a considered opinion on events such as refinery explosions like the one at Torrance in February 2015.   (The Chinese company was not the only major international oil company that hired us, as we also consulted for PetroCanada, AGIP in Italy, Total in France, and many others).  

There are calls presently in California to tighten the regulatory scheme on safety in oil refineries.   As can be seen on the Chemical Safety Board's web pages, the CSB is comparing the Torrance refinery explosion to the earlier Chevron refinery fire and explosion in Richmond, California.   There is a concerted effort to have oil refineries redesigned and built in what is referred to as an inherently safe manner, or to use "inherently safer design."   One example of inherently safer design is to use non-corrodible materials of construction so that piping and vessel wall thickness does not decrease over time, leading to a rupture, leak, fire, or explosion.  Another example is to provide safety interlocks so that a fluid cannot flow because a valve cannot be opened when it is unsafe.    There is a great body of literature on inherently safer design.    It should be noted, and I make this point in my speeches on the matter, that requiring non-corrodible materials is extremely costly, as for example using titanium for all wetted piping and vessels instead of carbon steel or stainless steel.  

What occurred in Torrance at the refinery was a combination of bad human judgement and equipment failure.   Essentially, the FCC has three sections, a reactor section, a main column, and a vapor recovery unit.   The reactor section itself has two sections, the reactor and regenerator.  All of these are connected by various pipes.  In normal operation, feed oil enters the reactor, contacts catalyst and reacts, the products are separated from the spent catalyst, and the products flow into the main column for separation into various streams.  Vapor products from the main column are routed to the vapor recovery unit, where valuable products are separated from light gases.  The light gases are generally burned in the refinery as fuel. Spent catalyst from the reactor is sent to the regenerator, where the catalyst is contacted with hot air that burns carbon off of the catalyst.  The regenerated catalyst is recycled back to the reactor.  Combustion gases from the regenerator are sent to a power recovery turbine and from there to an air pollution control system, the electrostatic precipitator that exploded in Torrance.   This description is necessarily simplified, as there are many more items of equipment in an FCC unit.  

I worked in and with dozens of FCC units in my operating and consulting career.   They are fascinating units with many challenges and great opportunities for profit.  

The problem in Torrance occurred when part of the FCC unit was shut down for repairs, the reactor section.  However, and this is crucial, the main column was not shut down.   It is always required that flammable hydrocarbons be kept away from any work area, and the ExxonMobil team tried to do that.  They closed the correct valves, and injected steam into the reactor to form a barrier or seal against the hydrocarbons in the main column.   However, according to the CSB report released on 14 January 2016, (yesterday as this is written), steam leaked out of the power recovery turbine, or expander as it is also known, into the work area.  This interfered with the workers and may have been unsafe in itself, since a cloud of steam in a refinery obscures visibility and may make it difficult to breathe.   The steam rate was reduced so the workers could perform their tasks.  see link to CSB report. 

Meanwhile, and unknown to the personnel, a critical valve leaked and allowed hydrocarbon vapors to pass from the main column, through the reactor, pass the leaking valve (spent catalyst slide valve), through the regenerator and power recovery system and into the electrostatic precipitator.   A spark ignited the vapors, and an explosion resulted.    All of this is explained in great detail in the CSB report. 

For further context, there are more than 100 FCC units in the US today, with many more world-wide.  Almost every modern refinery has an electrostatic precipitator to meet the stringent air pollution requirements.   These FCC units operate approximately 3 years before being shut down for planned maintenance.   There are of course many other unplanned shutdowns, also.   But, using just 100 FCC units, and 3 years between shutdowns, there are approximately 33 units shut down each year, or roughly 3 every month.  Yet, there are very few explosions that result from these shutdowns, and subsequent startups.   One could argue that most planned shutdowns do not leave the main column full of hydrocarbons, so there is no need to insert a steam blanket to keep the hydrocarbons away from the workers.  Yet, there have been other occasions during which the procedure was performed with no harm or damage.   Clearly, then, the procedures are acceptable but something was different in this case.  

It appears, based on the CSB description of events, that the problem would not have occurred if the spent catalyst slide valve had not leaked, or if the steam had not leaked out of the expander, or a combination of both.   

It would be an over-reaction for regulating agencies to enact new, burdensome rules on the entire industry in an attempt to prevent an accident that almost never occurs.  Yet, there are calls for exactly that, to make the refining industry be subjected to inherently safer design.  

A better approach is to increase the penalties and fines for those who violate the existing safety regulations, so that a violation will be so costly that the workers, and managers, exercise extreme caution.    One example, was a refinery management that was interested in the impact on their US refinery of an explosion similar in scope and damage to the one in March, 2005 at BP's Texas City Refinery.   That explosion killed 17 people and hospitalized more than 100 others.   The injuries, deaths, and damage occurred after human error caused flammable liquids to overflow a vent pipe, vaporize, reach an ignition source and explode.   In that case, the equipment was fine but the humans made errors.   That explosion cost BP several billion dollars in fines, repairs, and legal settlements.   Such a sum would bankrupt many smaller companies.  That sobering fact was what was brought home to a different company.  Safety is vital, not only for the safety and lives of the employees, but surrounding communities, and also the ongoing viability of the company in many cases.  see link to BP Texas City Explosion of 2005. 

In the Torrance explosion, a combination of human decisions and equipment malfunction were at fault.  In retrospect, it would have been better to shut down the main column, and insert a blind flange in the line at the spent catalyst slide valve.  In short, make it almost impossible for any hydrocarbons to leak into an area where an ignition source could create a fire or explosion.  

UPDATE 1:  16 January 2016 - The Chair of the Chemical Safety Board wrote a letter to the editor opining that California refineries need more regulations to force them to operate safely (my paraphrase).  see link to the letter to editor. 

Chairperson Sutherland wrote:  

"If finalized as currently written, California’s new safeguards (i.e. regulations) for oil refineries would strengthen the state’s oversight by requiring management to take steps to reduce risks to the greatest extent feasible. And the draft regulations include some important safeguards on the forefront of refinery safety, such as requiring incident monitoring and tracking data.

I eagerly support Gov. Brown and the state Department of Industrial Relations (DIR) for initiating these changes. I believe the actions being taken here in California are some of the most substantial positive safety changes happening right now."    

Chairperson Sutherland added that "California can lead the nation in refinery safety," an indication that the new California regulations would, or should, be extended to all US refineries.   

I note in passing that Chairperson Sutherland has zero technical education, as her biographical sketch available online states she holds a BA in Political Science/Art History, as well as an MBA (in Information Technology) and a JD.  She is an attorney licensed in Maryland.  Her only brush with non-computer technology appears to be a brief stint at Department of Transportation's Pipeline and Hazardous Materials Safety Administration.  She has been Chair of CSB since August, 2015, a total of six months as of this date.  

 -- (end update 1)

Here ends this article for today.   There may be additional updates.  

Roger E. Sowell, Esq.
Marina del Rey, California
copyright (c) 2016 by Roger Sowell, all rights reserved. 

New Refinery On Schedule and Budget

Marathon's refinery in Garyville, Louisiana is undergoing a multi-billion dollar, major project that some refer to as an expansion, but in reality it is the equivalent of building an entire second refinery. The finished project will double the throughput of the current refinery, plus upgrade the processing capabilities.

The remarkable thing is that the $3.2 billion project is being executed on schedule, and with a very modest cost overrun of approximately 25 percent. Such is the experience in an industry that has a learning curve, and actually learns from experience. In fact, no refinery project of this scale has been attempted in the U.S. for more than 30 years. Other new refineries have been built around the world in the intervening period, and some refinery expansion projects have been built in the U.S. I was personally involved many years ago with a major refinery expansion on the Texas coast, which at the time cost approximately $200 million, if memory serves. That project did not expand the crude capacity, but added downstream processing capability.

The same cannot be said for nuclear power plants, of course. The new-generation French nuclear reactor under construction in Finland is a prime example, as it is many years behind schedule and already is experiencing substantial cost overruns measured in the billions of Euros.

The Marathon refinery project was originally expected to cost $2.7 billion in 2006, and that was increased by $500 million to $3.2 billion prior to construction due to escalating costs of materials. There was a world-wide building boom at that time, and costs of cement, steel, and other materials was increasing. The original scheduled completion time was fourth quarter of 2009, just a few weeks from this writing. Recent publications and interviews with the refinery manager indicate that the project is on schedule and will start up later this year. A final cost estimate was reported as $3.4 billion, for a cost over-run of only 7 out of 27, or 25 percent. However, using a more realistic measure, where materials cost escalation are uncontrollable, the cost over-run was 2 out of 32, or approximately 7 percent. Having a major project finish with less than a 10 percent cost overrun is good, and something nuclear power plant builders can only dream of.

In contrast, the last round of nuclear power plants built in the U.S. were many years late in startup, and had cost over-runs measured as multiples of the original estimate. In fact, the notorious South Texas Nuclear Project had a final cost of SIX times the original estimate, $5.5 billion final compared to $900 million initial.

One must wonder what is the reason (or reasons) for one industry having great success at building multi-billion dollar and multi-year projects with a modest cost overrun (25 percent is well within expectations), while another having demonstrated zero ability to control costs (indeed, even to estimate them in the ballpark) or to construct on schedule.

One reason for the nuclear power industry's poor performance given by its apologists are that few nuclear power plants exist, and there is not much experience. But is this a valid reason? There are approximately 436 nuclear power plants operating at this time, with 48 more under construction worldwide. In contrast, there are 676 oil refineries operating worldwide, with a handful under construction. One would think that, after building 436 nuclear plants, some learning would have occurred. But then, apparently not.

One reason could be that nuclear reactor technology changes, and that must be taken into account, as the nuclear apologists are quick to point out. Indeed, the nuclear reactors' design are changing over time. But then, so does the technology for oil refineries. A Hydrocracker has at least six or seven different possible configurations, and Fluid Catalytic Crackers have at least four. Catalytic Reformers also have three or four different designs. Crude Units also have widely different designs, and are almost unique as to each. These are the most expensive process units in a refinery, so these changes matter. These different technologies or designs evolved over the years, just as nuclear reactors evolved. Therefore, changes in design are not the reason.

Perhaps the reason is the regulatory agencies are more strict with nuclear power plants and more lenient with oil refineries. One could make an argument that nuclear power plants have less of a regulatory burden in the area of air and water pollution, as their advocates insist at every opportunity that they do not emit anything into the air except water vapor from the cooling towers, and nothing into the water. Except of course, when they spring a leak and emit radioactive tritium into the groundwater supply. The nuclear apologists do not like to talk about that. Refineries, on the other hand, must obtain air pollution permits for NOx, SOx, and install particulate recovery systems for catalyst particles, to name only a few of the air permits. Water permits are also required for several components in the water streams that exit the refinery. The environmental permitting process is not easy, nor cheap, nor quick for a refinery. Nuclear plants must, however, satisfy the requirements of the Nuclear Regulatory Commission, whose job it is to ensure the plant will not explode, or melt down, or otherwise poison the local and greater community with deadly radioactive particles. Each has its own problems obtaining permits to build, neither are easy. The very near-miss at Three Mile Island had much to do with the NRC's regulations, as that power plant experienced a reactor core meltdown, and very nearly poisoned the Atlantic seaboard. All the while up to that time, nuclear plant designers had insisted that nuclear plants were safe and should be built by the thousands. One shudders to think what would have happened without the vigilance of the NRC.

Perhaps, as some suggest, the issue is that nuclear power plants cost so very much more than does a refinery, and this leads to problems associated with mega-projects. As the Marathon refinery project shows, however, the project average expenditures was $1.7 billion per year ($3.4 over two years). The latest cost and schedule estimate for the South Texas Nuclear Project expansion is a cost of $13 billion and completion in only six years. Leaving aside the fact that both of those figures are wildly optimistic, and the final cost will be on the order of $25 billion and the duration will be 10 to 12 years, the result is just over $2 billion per year ($13 over six years). There is very little difference between $1.7 billion and $2 billion per year in a major project. Thus, it cannot be the money spent per year as a factor.

What it really comes down to, and properly in my view, is that refineries provide a much-needed and clean-burning suite of products, from propane, gasoline, jet fuel, diesel fuel, home heating oil, lubricating oil, greases, waxes, and petrochemical feedstocks that do not get burned but are converted instead into highly valuable chemicals that produce an incredible number of essential products in the modern world. Plastics and pharmaceuticals are just two of the thousands of products. Refineries are viewed by the courts as ordinarily hazardous, but nuclear power plants are viewed as ultrahazardous. (I plan to have much more to write on this distinction very soon). This results in more lawsuits from anti-nuclear groups, however, refineries also experience lawsuits for their construction projects from anti-refinery groups.

Also, for whatever reason, it appears that nuclear power plant construction teams cut corners with the result that the work is shoddy and must be torn out and rebuilt according to appropriate codes and design specifications. One wonders why the construction teams do not simply do the job correctly the first time, demonstrate that their work meets the inspectors' requirements, and move on smoothly to the next item on the schedule. This is how refineries are built, and this is no secret.

The ultimate test is building a modern, new-generation nuclear power plant in the U.S. under the auspices of the NRC, and not compare the activities overseas such as South Korea, China, or France. One would expect that, with 48 nuclear plants under construction world-wide at this time, and some only recently started up, that the cost estimating and construction scheduling would be honed to a fine science. All the rest is just talk.

The first such nuclear power plant in the U.S. may actually be the expansion of South Texas Nuclear Project, which is planned to have reactors 3 and 4 added to the existing 1 and 2. The project proponents claim they can build the expansion for $13 billion, as stated above, which I do not in any way believe. The actual cost will be approximately $25 billion, and its owners will have serious problems selling the power from the plant. The reactors are to be 1,350 MW each in size, for a total of 2,700 MW. Per solid and reliable cost estimating methodology presented by Craig A. Severance, CPA, the STNP expansion will cost $10,000 per kW, or $27 billion. Of course, as the project experiences delays in construction, interest costs will mount and the cost could easily exceed $30 billion. Also, Mr. Severance's cost estimate did not include (because the new requirement was not yet law) the design to withstand the impact from a large commercial aircraft, for the reactor dome, the cooling system, and spent fuel storage areas. As I wrote elsewhere on this blog, that is a tall order (and very expensive) if the cooling towers must withstand a large aircraft impact. By large, the regulation refers to a fully loaded Boeing 747 or an Airbus 380.

The people of San Antonio, who are supposed to own a large portion of the STNP expansion, will pay very high power costs, perhaps the highest in the nation, if the expansion is built. This does provide a silver lining, as the high power costs will give great incentives for electric customers to install self-generation systems, such as cogeneration, combined heat and power systems, solar panels, and wind-generators where appropriate.

It is also quite instructive that the STNP is located only a few miles from Corpus Christi, and that offshore Corpus Christi for 50 miles out into the Gulf, and 75 miles south, lies one of the U.S.' greatest and consistent wind resources. The wind there averages a Class 5, or 20 miles per hour. The U.S. MMS is preparing to lease that offshore area to wind-power developers.

It is also quite instructive that the leading competitor to nuclear power, natural gas-fired plants, are having a banner time due to the very low prices of natural gas. The current economic recession is only a small part of that, what is a major reason for low gas prices is the discovery and production of huge amounts of gas from shale formations, and the LNG plants that are now online and producing around the world. Natural gas is easily capable of base-load power generation, and more importantly, in load-following.

These are interesting times, and if indeed the STNP expansion obtains its financing, and construction permits, it will be fascinating to see who remains as a customer 10 years later. And, when STNP fails, other utilities around the nation will take note. This could be the last nuclear plant built in the U.S., ever.

UPDATE 1, August 3, 2009: Today Marathon announced the project will cost $3.7 billion and is 91 percent complete with startup scheduled as planned for 4Q 2009. Therefore, cost overrun is 10 out of 27, or 37 percent. The additional costs ($300 million) are for materials price escalation. Link is here.

UPDATE 2, October 30, 2009: The Marathon Garyville refinery is in the startup phase, indicating on-schedule completion. Good job, guys. Now, if only nuclear power plant builders (a far simpler, less complex process) could learn a few lessons from the oil refining industry. Apparently not.

At latest press, STNP expansion is now projected (by Toshiba, the reactor vendor) to cost $17 billion - not $13 billion as previously stated by them - representing almost a 33 percent increase. This expansion project has yet to turn one shovel of dirt. One would think that Toshiba would know the cost, as their technology is loudly touted as "proven." Again, apparently not.

Roger E. Sowell, Esq.

Energy and Climate Change Attorney

Speech to AIChE in Houston TX Sept 4 2008

Roger Sowell presented the keynote address at the September 4, 2008 dinner meeting of the South Texas Section of American Institute of Chemical Engineers (AIChE) in Houston, Texas. The meeting was in the Aramco Services building on Loop 610.




ABSTRACT

Legal Aspects of the March 23, 2005 Explosion at BP's Texas City Refinery
by Roger E. Sowell, Esq.

The deadly explosion and fire of March 23, 2005 killed 15 and injured 170 others. This explosion has reportedly cost BP more than $2.1 billion in legal settlements. Additional millions will be or have been spent to repair the damaged refinery units.

The explosion was caused by a series of errors while starting up a distillation tower at the C5/C6 Isomerization Unit following a scheduled shutdown for maintenance. The presentation briefly reviews the events of the startup, and other factors that contributed to the deaths and injuries.

Next, the legal setting at this refinery is outlined, including some of the legal theories of liability. These include criminal violations of the Clean Air Act, the torts of negligence and wrongful death, engineering professional malpractice, and violations of other regulations.

The presentation then discusses important actions taken by Federal agencies as a result of this explosion, and that impact refineries. The agencies include the Chemical Safety Board, OSHA, and the U.S. Department of Justice.

To conclude, several do's and don'ts are given. Designers and operators of refineries and chemical plants should be aware of these, to enhance process safety.

(Most information presented is taken from public domain sources. Any copyrighted material is used under a fair use exemption to the copyright laws).

Post-presentation update: The South Texas Section meeting of AIChE included approximately 100 people, ranging from retired engineers to those just out of college. I was particularly pleased to have classmates, family, and many friends in the audience.

The audience was very knowledgeable about the explosion, as might be expected in Houston very near the refinery in Texas City. The questions during and after the speech were excellent. This topic, legal aspects of refinery explosions, continues to generate keen interest among the engineering and legal communities.

Houston is Mr. Sowell's hometown, where he grew up and started his engineering career.

He is a California attorney and represents oil refining companies, among other clients. For more information on the legal services Mr. Sowell provides to clients, or to have Mr. Sowell speak on energy and legal topics to your organization, see his website at www.resowell-law.com.