Chevron to pay $2 million fine for SF Bay refinery fire: official

HOUSTON (Reuters) - Chevron Corp agreed to pay $2 million in fines and restitution after pleading no contest to six misdemeanor charges on Monday stemming from the August 6, 2012 explosion and fire at its San Francisco Bay refinery, according to the local district attorney

A lit sign at Chevron's oil refinery in Richmond, California is seen through a window after a large fire erupted earlier in the evening on August 6, 2012. REUTERS/Susana Bates

In a plea agreement worked out before Monday with the California attorney general’s office and the Contra Costa County district attorney, Chevron will also spend 3-1/2 years on probation.

“We are committed to continuous improvement in process safety and reliability at the refinery,” Chevron said in a statement.

Contra Costa County District Attorney Mark Peterson said Chevron’s cooperation was key to Monday’s agreement.

“The criminal case achieves our goals of holding Chevron accountable for their conduct, protecting the public, and ensuring a safer work environment at the refinery,” Peterson said in statement.

“This historic resolution is also possible due to Chevron’s commitment to do more than what is required by law in order to help ensure nothing like this ever happens again,” he said.

At an arraignment Monday in the California Superior Court in Martinez, California, Chevron pleaded no contest to charges of failing to maintain equipment in safe working order in addition to labor codes and environmental violations.

The company is continuing an inspection of 16,000 individual piping components, Chevron spokeswoman Melissa Ritchie said.

“We are also implementing a multimillion-dollar expansion of our air monitoring system to include several sites in the surrounding communities,” Ritchie said.

The city of Richmond, where the 245,000 barrel per day (bpd) refinery is located, is suing Chevron over the fire as are hundreds of Bay-area residents.

On Saturday, 1,000 people protested outside the refinery in Richmond and 200 were arrested by police for trespassing on Chevron property.

The August 6, 2012 fire began as firefighters at the Richmond refinery were attempting to find the source of a leak in piping on the refinery’s crude distillation unit, which does most of the refining of crude oil at the plant.

No workers were killed and a few minor injuries were reported among Chevron employees, but the resulting blaze sent a gigantic plume of black smoke over the Bay area. In the following days, over 15,000 area residents appeared at local hospitals complaining of respiratory distress.

The crude distillation unit was shut for nine months of repairs and gasoline production was cut by at least 50 percent during that time, the company has said.

Chevron reported $26.2 billion in earnings for 2012, down 3 percent from $26.9 billion in 2011. Last week the company reported second-quarter net income of $5.4 billion, down from $7.2 billion a year ago.

In addition to the $2 million in fines and restitution, Chevron has paid more than $10 million to affected community members and local government agencies for incident response and medical-related costs.

Additional reporting by Kristen Hays; Editing by David Gregorio