RICHMOND, Calif. - Chevron Corp. on Monday agreed to pay $2 million in fines and restitution and pleaded no contest to six counts in a fire last summer at its refinery in the area of San Francisco Bay City of Richmond that sent thousands of residents of the hospitals, many complaining of respiratory problems.
San Ramon-based oil giant entered the plea to charges brought by the Attorney General of California and the coast against, District Prosecutor's Office including failing to correct the deficiencies in equipment and failing that require the use of certain equipment to protect employees from potential damage.
Chevron and the Government investigations determined that a pipeline corrosion caused a leak that caused the 06 August 2012, fire, sending a cloud of black smoke over nearby residential areas. Investigations found that Chevron has been able to replace tube at the time of the 1970s despite numerous warnings from its own inspectors.
"This criminal case achieves our objectives blaming Chevron for its conduct, protect the public and ensure a work environment more secure at the refinery", against Costa attorney Mark Peterson said in a statement.
In January, the company said in a report to the health authorities of the County that had already paid about $10 million in connection with almost 24,000 residents claims and compensation to hospitals and the local government in Richmond and Contra Costa County agencies.
Company officials said more than $10 million went to hospitals for checkups and treatment immediately after the incident.
Chevron also still faces nearly $1 million in summonses issued by Cal-OSHA, State, Department of industrial relations Director Christine Baker said in a statement. Chevron has appealed that fine.
As part of the agreement on Monday, Chevron will inspect all pipes subject to the type of corrosion that caused the tube at the Richmond refinery to failure and update its training program for emergency response, according to prosecutors.
Chevron spokeswoman Melissa Ritchie confirmed the agreement with prosecutors and said that the company is committed to improving the safety at the refinery.
Ritchie said that Chevron is carrying out a thorough inspection of its refinery and also implement a multi-million dollar expansion of its system of air monitoring to include several sites in the surrounding communities.
A metallurgical report showed a 40-year-old pipe that failed, causing the leak, was initially weakened by the sulphur content of heavy crude oil pumped through it. After a hydrocarbons small leak sent in the air, a small fire was switched off. But a larger tube wound launches a large more flammable, leading to a larger fire gas cloud.
A video released by the United States Chemical Safety Board in April showed how Chevron decision not to close the production once detected small leak pipe led to a series of bad decisions that worsened the leak. In one scene, a fireman's company hit the pipe with a Pike pole while trying to help colleagues to locate the leak.
A cloud of steam eventually engulfed 19 employees before on the fire. Workers escaped with serious injuries.
The sum of $2 million, Chevron has agreed to pay includes $1.28 million in fines, $575,000 in reimbursements to the Security Division of the State, the Bay Area Air Quality Management District and the Attorney general of the nation. Chevron will also contribute $145,000 for a public-private partnership focused on people in training for work in the fields of construction and energy renewable.
Chevron still faces a lawsuit from the city of Richmond. The city filed the lawsuit on Friday, claiming the leak in the pipe which led to the fire was the result of "years of neglect, lax oversight and corporate indifference to the safety inspection required and repairs".
Chevron has said that demand lacks merit.
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