The Washington state Department of Labor & Industries on Monday fined Tesoro a record $2.39 million after a deadly explosion in April at the oil refinery in Anacortes.

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MOUNT VERNON — As the state Monday assessed a record $2.39 million fine against Tesoro for last spring’s deadly explosion at its Anacortes refinery, safety regulators said that government oversight of the nation’s oil and gas refineries is broken.

After a six-month investigation, the Washington Department of Labor & Industries (L&I) announced Monday that the April 2 explosion that killed seven workers had been entirely preventable. The agency cited Tesoro for 44 workplace violations, ranging from willful disregard of safety regulations to failing to inspect and maintain decaying 40-year-old equipment.

But the agency and others charged with keeping workers safe said it is only a matter of time before the next U.S. refinery tragedy.

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“I can’t say that we have this situation under control,” said Michael Silverstein, assistant director of L&I’s division of occupational safety and health. “I don’t think anybody could say that with a straight face.”

The head of the federal agency that investigates refinery accidents agreed.

“We are very concerned about this particular industry,” said Rafael Moure-Eraso, chairman of the U.S. Chemical Safety Board. “We are continuing to see fires, explosions and people killed. We feel there has to be a better way to systematically approach the safety issues in this industry.”

Lynn Westfall, a spokesman for San Antonio-based Tesoro, declined to comment on the investigation or fine. The company has 15 days to appeal.

The refinery, about 70 miles north of Seattle, is restarting operations this week and expects to be at capacity by Oct. 15. Tesoro officials met Monday with regulators to discuss the fine and citations.

“We’re going to review the citation very thoroughly and continue to have a dialogue with L&I on areas where we might disagree,” Westfall told The Associated Press.

Labor and Industries is just the first of several agencies investigating what went wrong. The federal Chemical Safety Board’s own review isn’t expected until early next year. The federal Environmental Protection Agency, according to Tesoro’s Securities and Exchange Commission filings, is also investigating.

On Monday, Silverstein said his inspectors determined the Anacortes accident was caused when a 40-year-old steel heat exchanger ruptured and spewed vapor and liquid that immediately exploded. Tests showed welds in the exchanger had developed cracks over the years. The rupture occurred along those weak points as the equipment was coming back online after maintenance.

Tesoro hadn’t properly inspected the exchangers since 1998, and even then didn’t test the most vulnerable areas, Silverstein said. Tesoro had planned to test them in 2008, but never did.

“If they had, we believe, they would have found the cracks that caused this explosion,” Silverstein said. “They would have prevented this horrible incident from ever happening.”

All seven workers who died had been standing near the exchangers. They were there in part, Silverstein said, because Tesoro had been unable in recent years to stop the equipment from leaking volatile, flammable gases.

So employees were positioned around the machinery in hard hats, gloves and goggles with “steam lances” — long tubes — they used to disperse the vapors. They also had to manually adjust valves during startup to make sure leaks didn’t get out of control.

Killed were Daniel Aldridge, 50, of Anacortes; Matthew Bowen, 31, of Arlington; Darrin Hoines, 43, of Ferndale; Lew Janz, 41, of Anacortes; Kathryn Powell, 29, of Burlington; Donna Van Dreumel, 36, of Oak Harbor; and Matt Gumbel, 34, of Oak Harbor.

The money from fines levied by L&I does not go into the general fund and it does not pay for L&I investigations.
It goes into the workers’ compensation supplemental pension fund for injured workers and for surviving family members of workers killed on the job.

L&I director Judy Schurke said the accident wouldn’t have happened if Tesoro had followed state regulations, standard industry practices and its own internal policies.

Sherry Van Dreumel, Donna Van Dreumel’s mother-in-law, said the investigation “won’t change what happened or bring anybody back. But I hope refineries learn from what (investigators) found out so it doesn’t have to happen to anybody else.”

That’s what still concerns safety experts. Such accidents were supposed to end after the 2005 explosion at the BP refinery in Texas City, Texas, killed 15 people and injured 180.

A panel co-chaired by former U.S. Sen. Slade Gorton and former Secretary of State James Baker urged an overhaul of safety rules, noting refinery accidents, while all different, usually involve similar patterns: Companies are slow to replace equipment and don’t keep machinery in top order; workers are fatigued or poorly trained; and accidents happen during or shortly after offline systems are restarted.

But since the Texas accident, refinery incidents and near misses remain the most common industrial accident investigated by the Chemical Safety Board.

In fact, Silverstein said, it’s unlikely labor investigators would ever have known about the wear and tear on Tesoro’s exchangers had there not been a deadly accident to investigate.

Previous inspections had revealed similar types of problems at Tesoro — the company was cited in April 2009 (and initially fined $85,700) for 17 serious safety violations. But the violations involved different parts of the refinery and different operations from those in the April 2 explosion. And refineries are too huge for regulators to inspect in that kind of detail every year.

“I’m not alone in being concerned about safety and health in the refinery industry,” Silverstein said. “We’ve all got to do some deep soul searching here because what we’ve got now is just not, I think, what Congress intended when they provided some assurance that all work places would be safe and healthy.”

Moure-Eraso said his agency has urged the federal government to put together a team of investigators to more rigorously inspect refineries. So far, little has come from the suggestion, he said.

Material from The Associated Press was included in this report.

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