A study by the Rand Institute puts in perspective the need for new oil refinery regulations that the oil industry has long resisted. The Rand pegs the year-plus Exxon Torrance refinery outage as the most expensive in California history, costing consumers an extra $2.4 billion at the pump in the first 6 months alone and taking a $6.9 billion bite out of the state economy.
Overall, the cost of the Exxon outage, caused by a dangerous explosion regulators say was the fault of Exxon's failure to adequately maintain the facility, cost drivers more than $5 billion and the economy more than $14 billion, given that the refinery's been closed 15 months.
By contrast, the price tag on new regulations developed in the wake of Chevron's Richmond refinery fire in 2012, cost an average of $220 million, according to the report. That's chump change in the context of safety as well as the pain Exxon caused at the pump and to the economy.
The head of the US Chemical Safety board told the Daily Breeze's Nick Green that the regulations would have averted the Exxon Torrance disaster.
Former Chemical Safety Board Chairman Rafael Moure-Eraso, who resigned last year after allegations of mismanagement at the agency, said Thursday that if the new California regulations had been in place in 2015, the blast at the Torrance refinery would not have occurred.
Moure-Eraso championed these sorts of regulations at the federal level, too, which is why some critics believe he became an industry target. But he and Rusch believe the strength of the industry lobby, combined with a lack of political will, means that’s unlikely to happen despite a string of recent accidents at the nation’s aging refineries.
“Corporate special interests have a lot more influence in Washington than they seem to do in California,” Moure-Eraso said. “They have a more responsive political system than at the federal level.
Tell that to Sacramento legislators, who failed to pass a 50% reduction in petroleum use over 15 years last year in SB 350 despite the overwhelming Democratic makeup of the legislature.
Nonetheless, If there's any good news to come out of the Exxon Torrance refinery outage, it's that the cost of preventing the next refinery fire finally has some context. That's critical because any new state regulations have to get past an "economic benefits" test put in place at the Office of Administrative Law years ago to make it harder to regulate just about everything.
The Rand study shows the new refinery regulations pass that test with flying colors. The study is a good skim for anyone who wants to understand the major refinery disasters of the last decade, the significant costs of an outage in California, and how run-down these aging oil machines are.
California's refineries are as they look: labyrthnths of archaic decades-old machinery holding the most deadly chemicals in the state and cobbled together with defunct and deficient under-maintained equipment. They're death traps located in the densest urban areas of the state, capable of replicating a Bohpal-like disaster. Only luck at Torrance prevented a tank of hydrofloriic acid from exploding and creating a lethal ground-hugging cloud threatening millions of people
It's high time for new regulations to bring California refineries into a new century, even if it is sixteen years late. Let's just hope the regulatory compliance comes soon enough to avert the next Torrance or Richmond.
