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Energy workers' strike over staffing and pay puts spotlight on safety issues

Union battles with employers over staffing levels, pay

Energy workers' strike over staffing and pay puts spotlight on safety issues

A strike by nearly 7,000 workers at 15 petroleum refineries coupled with a recent explosion at a Torrance, California, plant that injured four workers highlight safety issues inherent to the industry.

In the aftermath of the Feb. 18 explosion, many noted that Irving, Texas-based Exxon Mobil Corp., the owner and operator of the 730-acre Torrance facility, was cited for eight serious and 17 general safety violations at the refinery in November 2014 by the California Division of Occupational Safety and Health.

Kenneth McKey, Houston-based associate director and casualty loss control consultant at Wortham Insurance & Risk Management, noted the refining industry's recordable rate of nonfatal occupational injuries and illnesses is low compared with other manufacturing sectors and noteworthy considering the inherent dangers of processing petroleum.

“Refineries have some of the finest and most experienced safety professionals in the world,” he said. “They have to because they face a lot of safety challenges, everything from high pressures to high temperatures.”

Yet, Kim Nibarger Pittsburgh-based health, safety and environment specialist at the United Steelworkers, which represents the striking workers, said official safety statistics such as those from Occupational Safety & Health Administration fail to convey the complete picture.

“When the industry talks about safety, they usually refer to the personal safety numbers that OSHA tracks, and those look pretty good,” Mr. Nibarger said. “However, the real concern in the petrochemical industry is process safety events such as leaks and equipment failures that are really causing the problem, and those numbers are not tracked.”

Accordingly, the USW says that safety issues are the primary grievance in talks with the owners of the refineries, though salaries, working conditions and other issues also are on the table.

The strike affects Findlay, Ohio-based Marathon Petroleum Corp.; Houston- and London-based LyondellBasell Industries N.V.; Houston-based Shell Oil Co.; San Antonio-based Tesoro Corp.; and Houston-based Motiva Enterprises L.L.C., a joint venture of Shell and Saudi Refining Inc., a unit of Saudi Arabian Oil Co.

Michael J. Wright, Pittsburgh-based director of health, safety and environment for the United Steelworkers, said working hours and excessive use of inexperienced outside contractors for critical tasks are top union concerns.

“Excessive overtime and fatigue are still rampant in the industry,” Mr. Wright said, noting that the U.S. Chemical Safety Board's examination of the deadly 2005 explosion at a Texas City, Texas, refinery owned by BP P.L.C. found that three key operators had worked 12-hour shifts for 29 to 37 consecutive days.

Nonetheless, a spokesman for Marathon Petroleum denied that safety issues are the “primary area of disagreement” in the walkout. “The union's concerns are not about safe staffing levels, but about shifting the staffing levels to increase the dues-paying members of the international union by forcing the company to replace contractors with USW-represented employees,” he said.

Conversely, the USW said in a statement that it “does not and will not seek to bar the subcontracting of such work to contractors whose employees are represented by North America's Building Trades Unions.”

While the labor-related issues have yet to be settled, experts say there are steps that refiners can take to make facilities safer.

Paul Garrot, Houston-based vice president and product line manager of energy at Ironshore Inc.'s specialty casualty business, said a good example of refiners achieving better safety through design is increasing the spacing between crude oil distillation units. That reduces the possibility of one distillation unit affecting the rest of the units at a particular facility should there be a breach or worse.

“Before, we used to see the process units being grouped tightly together to cut back on the cost of laying pipe,” Mr. Garrot said. “Now they are spread out as far as possible for safety.”

However, expecting oil companies to make wholesale retrofits of existing infrastructure is unlikely, since a firm may need to run a refinery 60 or 70 years to recoup upfront investment costs; the price of a single catalytic fluid cracking unit, used to convert oil into high octane gasoline, can top $1 billion.

“Boiling oil is a pretty set science,” Mr. Garrot said. “That's why you have a lot of old equipment in this industry. You can still use it” if properly maintained.

Stewart Hostetter, Houston-based managing director of loss control at Wortham, said refineries looking to improve their safety need to focus on processes and people as much as infrastructure.

“In the hazard analysis phase, we look at things like equipment spacing, drainage and the pressure ratings of vessels,” he said. “But we then look at whether maintenance and inspections are up to date, and we really want know what kind of emergency action plans are in place.”

Mr. Garrot agreed that emergency planning is vital for safety, noting that the U.S. Occupational Safety and Health Administration mandates that refineries adhere to a process safety management program to minimize catastrophic releases of toxic, reactive, flammable or explosive chemicals.

“From an underwriting perspective, the first thing we look at is their (process safety management) program,” he said. “The second thing we look at is their in-house emergency response team.” He said training to properly handle hazardous materials in difficult, confined spaces is essential.

Refineries also can improve safety by establishing clear procedures and unambiguous chains of command, Mr. Nibarger said.

Entrusting frontline workers with “stop work” authority to shut down equipment regarded as a safety threat would go a long way to allaying worker concerns about safety, Mr. Nibarger said.