This just in from Barbara Smith at Chevron:

City Council members:

Below are updates on two topics that Nigel shared with media at a press briefing this afternoon.  We will also provide these updates at the city/county public meeting this evening.  Also copied below is an August 2011 email from Mike Coyle to you which describes our settlement with the BAAQMD regarding to two flaring Notices of Violation.

1. Nigel Hearne’s statement on the investigation into the August 6 fire at the Chevron Richmond refinery

We have had numerous conversations with our neighbors over the past few weeks. What they tell us is that they have two basic questions: What happened and what we are doing about it. Today we are sharing some preliminary information that begins to answer both of those questions.
We’ve identified potential contributing factors such as the type of metal in the pipe that failed. 
Since protecting people and the environment is a core value at Chevron, we are taking appropriate action to address these issues to prevent a similar incident from happening again.
We are continuing to work cooperatively with the investigating agencies. 
Root cause of the incident, and remedy:
While our process safety management incident investigation is ongoing, we suspect that the general thinning of the piping component that failed is likely due to a damage mechanism known as high temperature sulfidation corrosion. The contributing factor to the failure may be low silicon content of the individual component in the carbon steel pipe system. Individual low silicon carbon-steel components can corrode at an accelerated rate not detected by even multiple corrosion monitoring locations on a piping system.
Some of our technical experts understood the mechanism of high temperature sulfidation corrosion and the impact of low silicon content. It does not appear, however, this information was effectively understood and acted upon. As part of our investigation, we will look for ways to enhance internal communication.
We are committed to understanding why this happened and to preventing a similar incident from happening again. At this time, we are conducting enhanced inspections of components in similar pipe systems.
Inspection of the pipe that failed:
I would like to address some misconceptions about our inspection system. The 8” diameter piping system in which the failure occurred is approximately 200 ft long. Through its life, it had been regularly inspected at several monitoring locations. In November 2011, in addition to inspecting numerous other piping systems, we inspected the 8” diameter system at 19 locations. Unfortunately we did not inspect the individual component that failed, which was less than 5 feet in length. We now are inspecting every individual component in carbon steel systems exposed to sulfidation corrosion conditions.
Our people:
Lastly, I would like to express my full confidence in the people who work at this facility. Every one of the 1,200 employees and 300 contractors, from operators and mechanics to engineers and managers plays an important role to ensure that we maintain safe and reliable operations.
For many of our workforce, Richmond is not just a place where they work but it’s also the community they call home and it’s where their family and friends live.
Our business is extremely complex, and on a daily basis each and every one of our 1,500 member workforce is involved in managing our process safety.
We had a fire. We will learn what went wrong and take corrective action.

1. Chronicle Flare Metering story

Sunday’s San Francisco Chronicle article (http://www.sfgate.com/default/article/EPA-probes-bypass-pipe-at-Chevron-Calif-refinery-3887517.php) incorrectly alleges that Chevron U.S.A. Inc. deliberately “fashioned a pipe inside its refinery that routed hydrocarbon gases around monitoring equipment” to flare hydrocarbons without reporting.
The pipe at issue is an equalization line and is part of a safety system to control pressure build-up that was in place before implementation of the 2003 Bay Area Air Quality Management District (BAAQMD) flare-monitoring regulation.  When Chevron installed six flow meters to comply with the regulation, we did not recognize the need for a meter on this line and we advised BAAQMD of this issue three years ago and remedied it then.  Additionally, we inspected all other refinery flare systems to ensure that similar situations did not exist.

Chevron has spent millions of dollars to reduce SO2 emissions caused by flaring by over 85%, and we are proud of this effort.  We estimate that unmetered emissions from 2004-2009 that your article discussed were approximately 200 pounds of SO2—approximately 0.03% of all SO2 emissions caused by flaring in these years.  This amount is so small that even if it were metered, a causal report would not be required by BAAQMD, and it presented no public health risk.  Given Chevron’s efforts to manage flaring, and that all of our flaring is videotaped and available for regulatory review, there is no reason that the company would have acted as your article suggests, and we are concerned that you ignored these facts.

We will continue to cooperate with the government’s investigation and demonstrate our commitment to protecting people and the environment. 

========================
From: Jeff Ritterman [mailto:jeffritterman@yahoo.com]
Sent: Thursday, August 04, 2011 1:16 PM
To: Coyle, Mike (MCoyle)
Subject: Re: Richmond in the News: Bay Area Air Quality Management District Settlement

Thank you

From: "Coyle, Mike (MCoyle)" <MCoyle@chevron.com>
To: Gayle_McLaughlin@officeofthemayor.net; natbates@comcast.net; jovanka_beckles@ci.richmond.ca.us; corkybooze@aol.com; tom.butt@intres.com; jeffritterman@yahoo.com; elirapty@aol.com; bill_lindsay@ci.richmond.ca.us
Sent: Thursday, August 4, 2011 1:13 PM
Subject: Richmond in the News: Bay Area Air Quality Management District Settlement
I wanted to share with you an email that I have just sent to the Richmond Refinery concerning our recent settlement with the BAAQMD with regard to two Notices of Violation with respect to flaring.  This is something I take very seriously and I wanted you have the information soonest.  I will be following up this email with a phone call to answer any questions you may have on this issue.

All the Best,
Mike

From: Coyle, Mike (MCoyle)
Sent: Thursday, August 04, 2011 1:08 PM
To: Richmond All Facilities
Subject: Richmond in the News: Bay Area Air Quality Management District Settlement

	CHEVRON RICHMOND
August 4, 2011   Dear Chevron Richmond Employees and Contractors, You may begin to hear media coverage regarding a settlement agreement between the Bay Area Air Quality Management District (BAAQMD) and the Richmond Refinery. I wanted to provide you with some additional information about the settlement, which addresses two notices of violation (NOVs) and a $170,000 payment to the BAAQMD. In August 2009, it was discovered that an intermittent amount of flow to one of our flares inadvertently bypassed a flow monitor, and the flow was not being measured as required by the BAAQMD. This portion of the system was immediately taken out of service, and a project was initiated to ensure compliance with the BAAQMD’s requirements. Additionally, we inspected all other Refinery flare systems to ensure that similar situations did not exist. We found none.  One NOV was issued because there was a flow of hydrocarbons to the flare that did not pass through a flow monitor during 19 minor flaring events between 2005 and 2009. We estimate that over the four and one half year period, the total emissions from these events was 219 lbs of SO2, which is a relatively small amount and would not be reportable quantities under current air quality regulations, even if it were a single event. The second NOV was issued because the potential to bypass the flow monitor was not identified in the Refinery’s Flare Minimization Plan.  Chevron takes this matter very seriously as demonstrated by the immediate and high level of effort and resources committed to immediately correct this situation.  This settlement should not distract us from our outstanding and ongoing efforts to reduce our flaring, which remains a key priority for the Refinery. Our flaring levels in 2010 were reduced by more than 96 percent from those levels recorded during the 2004 through 2007 time period.  According to the BAAQMD, the Richmond Refinery’s use of flares was the lowest of all Bay Area refineries in 2009 and 2010. Please direct questions or requests for more information to Mellissa Hollander at 510-242-4700. All the Best, Mike Coyle