Agenda

Return

C. 44

To:	Board of Supervisors
From:	LEGISLATION COMMITTEE
Date:	April 22, 2014

Contra

Costa

County

Subject:

Support Position on SB 1300 (Hancock): Refineries: turnarounds

APPROVE	OTHER
RECOMMENDATION OF CNTY ADMINISTRATOR	RECOMMENDATION OF BOARD COMMITTEE

Action of Board On: 04/22/2014

APPROVED AS RECOMMENDED

OTHER

Clerks Notes:

VOTE OF SUPERVISORS

AYE:

John Gioia, District I Supervisor
Candace Andersen, District II Supervisor
Mary N. Piepho, District III Supervisor
Karen Mitchoff, District IV Supervisor
Federal D. Glover, District V Supervisor

Contact:

L. DeLaney, 925-335-1097

I hereby certify that this is a true and correct copy of an action taken and entered on the minutes of the Board of Supervisors on the date shown.
ATTESTED: April 22, 2014
David Twa,

BY:	, Deputy

RECOMMENDATION(S):

ADOPT a position of "Support" on SB 1300, as introduced (Hancock): Refineries: turnarounds, a bill that would require every petroleum refinery to submit to the Division of Occupational Safety and Health, a full schedule of planned turnarounds, meaning a planned, periodic shutdown of a refinery process unit or plant to perform maintenance, overhaul, and repair operations and to inspect, test, and replace process materials and equipment for the following calendar year; provide any information provided that is a trade secret is confidential; and authorize the charging of fees for actions regarding refineries, as recommended by the Legislation Committee.

FISCAL IMPACT:

With regards to the fees collected from owners for refinery safety, SB 1300 would:

FISCAL IMPACT: (CONT'D)

1) Authorize the Department of Industrial Relations (instead of the division within the department) to fix and collect reasonable fees to cover all necessary expenses, including administrative and indirect costs, for the existing consultation, inspection, adoption of standards and other duties required under the Refinery and Chemical Plant Safety Act.

2) Additionally, authorize the fees to be used to fund participation in interagency efforts to improve safety in refineries and chemical plants.

3) Delete the requirement in law that the fees must be sufficient to cover 15 staff positions.

4) Require the director of DIR to adopt rules and regulations governing the criteria and procedures to fix and collect the fees, including emergency regulations as necessary.

5) Require the director of DIR to recoup from the owner of a refinery (by adding the amount expended to next year's assessment), the full costs of extraordinary expenditures resulting from the division's response to a hazardous material release or similar occurrence. The director shall document expenses for which reimbursement is sought.

6) Authorize the department to credit against the owner's subsequent year's assessment, any unexpended funds or hold them in reserve as a contingency fund for expenditures required by an emergency response to a hazardous material release or other situation.

No direct fiscal impact on Contra Costa County. The refineries in the county, however, would be required to pay the fees.

BACKGROUND:

Purpose of SB 1300

Currently, there is no requirement for oil refineries to report their schedule of “turnarounds,” or other related information, to the Division of Occupational Safety and Health (Cal/OSHA). This bill would require petroleum refineries to annually report their schedule for “turnarounds” to Cal/OSHA on September 15. It would also require them to provide Cal/OSHA with documentation on refinery safety and infrastructure.

Under existing law, there is no requirement for an oil refinery to inform Cal/OSHA when it is going to perform a “turnaround.” A “turnaround” is a planned partial or total shutdown of any unit of an oil refinery for certain purposes including maintenance, overhaul, or repair, and to inspect, test, and replace process materials and equipment. According to the American Petroleum Institute (API), “turnarounds” are a necessary part of refinery operations. They can last anywhere from one to four weeks. They are usually scheduled at least one or two years in advance. The API admits that “refinery incidents are more likely to occur” during turnarounds than during normal operations.” Despite the obvious importance of “turnarounds,” Cal/OSHA is often unaware of when one will occur at an oil refinery. This prevents Cal/OSHA from preparing for a possible incident during a scheduled refinery “turnaround.” It also means that Cal/OSHA inspectors are left unaware when the last “turnaround” was done while performing inspections of refinery facilities.

This is not an abstract concern. Chevron Corp. did not inspect several sections of piping of its Richmond refinery during a November 2011 “turnaround.” One of the sections of had thinned in thickness by 80 percent, which contributed to the August 6 fire at the facility, one of the worst incidents in recent years. The fire caused 15,000 Richmond residents to seek medical attention.

During its inspection of the Chevron refinery after the August 6 fire, Cal/OSHA found that several refinery parts were in place at least 30 months past their last “turnaround.” Cal/OSHA found that the failure to replace the parts sooner to be a “willful” violation of state law. Had Cal/OSHA known about Chevron’s failure to inspect or replace those parts during recent “turnarounds,” it is possible that Cal/OSHA inspectors could have done their own targeted inspection. Doing so could have prevented an incident that threatened the public health, affected the environment, and imposed severe financial costs upon Chevron. Additionally, in its investigation of the August 6 fire at the Chevron refinery, the federal Chemical Safety Board advocated for targeted inspections.

What SB 1300 Would Do

SB 1300 would require oil refineries to do three things with reference to “turnarounds.” First, it would require refineries to submit a full schedule of planned “turnarounds” to Cal/OSHA annually on September 15^th.

Second, upon Cal/OSHA request, refineries would be required to provide access on site and submit certain documentation at least 60 days before a planned “turnaround.” This required documentation would include corrosion reports, unfulfilled work orders, risk-based inspection reports, Process Hazard Analyses, and all management of change records related to repairs, design modifications, and process changes.

Third, at least 30 days submit a planned “turnaround,” refineries would have to supplemental documents to Cal/OSHA explaining any changes since their previous, 60-day report.

This bill would prohibit any information identified as a trade secret that is submitted to Cal/OSHA to be released to the public.

This bill would instead authorize the Department of Industrial Relations (DIR) rather than Cal/OSHA under existing law, to fix and collect fees to cover necessary expenses including fees for consultation, inspection, adoption of standards, and participation in interagency efforts to improve safety in refineries and chemical plants. DIR will be authorized to hold any unexpended funds as a contingency fund for expenses in emergency situations at a petroleum refinery.

Current Status: 03/26/2014: From SENATE Committee on LABOR AND INDUSTRIAL RELATIONS: Do pass to Committee on JUDICIARY.

The Legislation Committee at its April 3, 2014 meeting voted unanimously to recommend a position of "support" on SB 1300 to the Board of Supervisors.