From: Judd, Kory (KDJU) [mailto:KoryJudd@chevron.com]
Madame Mayor and Council Members,
I wanted to make sure you are aware that today, Chevron U.S.A. Inc. has reached a settlement agreement with the Contra Costa County District Attorney and the Attorney General of the State of California related to the August 6, 2012 incident. We plan to announce this to employees today.
The Company has pleaded no contest to six misdemeanor criminal charges. Chevron also has agreed to pay approximately $2 million in fines and reimbursements to the county and other agencies. Additionally, the settlement requires changes in our processes, which we are in the process of implementing. This settlement is separate from the City of Richmond’s legal action against Chevron, which was announced on Friday, Aug. 2.
The Company pled no contest and agreed to the terms of probation because it was the quickest way to bring closure to this issue allowing us to focus on actions that will make our refinery processes better.
Under the terms of the agreement, the Company has been placed on probation for a period of three years and six months. We have agreed to do the following as part of our probation:
- Complete a 100% component inspection of all carbon steel piping systems identified as susceptible to sulfidation corrosion by August 6, 2014;
- Identify and create a process to consider potential damage mechanisms and consequences of failure by January 1, 2014;
- The Refinery will maintain a list of fixed equipment inspection recommendations submitted for each turnaround and document all recommendations that are not accepted by September 30, 2013;
- By May 6, 2014, develop and implement new training materials concerning specific issues (i.e., leak response, emergency response, and fitness for service determinations);
- Submit reports to the Contra Costa County DA’s office, the CA Attorney General’s Office, BAAQMD and Cal/OSHA every 90 days reporting progress in implementing these conditions for the 1st year of probation and every 6 months thereafter until the period of probation ends.
- And finally, we are agreeing to pay approximately $2MM in restitution and fines to local agencies, including BAAQMD, Cal/OSHA, and the California Attorney General’s Office.
I want to assure you, we are committed to continuously improve process safety and reliability at the refinery to prevent another incident like this from happening again.