Engineering News

Former Refinery Official: Budget Cuts Had Role In Blast
Thursday, July 03, 2008

The BP Texas City refinery manager overseeing engineering testified Wednesday that budget cuts played a part in the deadly 2005 explosion at the plant.

Saying he was speaking for himself and not for the company, Walt Wundrow, a manager at the refinery since 1990 and formerly in charge of capital spending there, told jurors budget cuts "contributed to the incident."

BP's official position has been that it takes responsibility for the disaster but there there was no link between the blast and cutbacks that put off maintenance and upgrades at the aging refinery.

"Our own very thorough investigation did not identify previous budget decisions or lack of expenditure as a critical factor or immediate cause of the accident," BP spokesman Daren Beaudo said.

Asked why the company has stopped short of blaming budget cuts, Wundrow responded, "I don't know why they won't say that."

Lawyers for the 10 workers suing the oil giant for injuries allegedly suffered in the blast have presented documents showing BP declined to spend a few million dollars to upgrade or replace outmoded equipment. The plaintiffs also have blamed a 25 percent companywide budget cut in the year before the blast for taking away money that could have been used for improvements.

BP has spent $2.1 billion to settle nearly all of the 4,000 claims for deaths, injuries and property damage resulting from the explosion. Just 28 claims remain, including the ones now at trial. The company also says it has spent $1 billion on improvements at the plant since the blast.

The U.S. Chemical Safety and Hazard Investigation Board found after a two-year investigation that budget cuts paved the way to the tragedy by deferring maintenance and upgrades and cutting staff and training.

A panel led by former Secretary of State James A. Baker III said that even though BP increased funding for its U.S. refineries after 2002, those increases weren't enough to overcome effects of previous cuts.

The Baker panel found no evidence that BP intentionally underfunded safety improvements, but the panel said BP failed to earmark enough money for safety. BP has embraced the report and recommendations.

In the current trial, 10 people who worked at or near the refinery are seeking compensation for back and leg injuries and emotional suffering. BP is challenging the extent of their injuries and their demand for $950 million in punitive damages, an amount equal to about one year's profit at the refinery.

Source: Houston Chronicle

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