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safety inspections at refineries had become woefully inadequate, as regulators lacked the staff to carry them out with any frequency Meanwhile, BP s offshore rigs were monitored by the Minerals Management Service (MMS), which was more a promoter of new drilling than a watchdog If lessons were learned at Grangemouth, they weren t shared with BP s American refineries, which seemed to operate in a different world Despite Browne s global accolades, few BP workers in the United States knew who he was They might be working for BP, but many still thought of themselves as working for Amoco or Arco Browne had integrated the companies financially, but he d failed to integrate the cultures a classic pitfall of big mergers One of the assets that BP acquired in its purchase of Amoco was a refinery in Texas City, Texas, about 40 miles south of Houston The refinery, which sits on the edge of the Houston Ship Channel in Galveston Bay, was originally built in 1934 and is the third-largest in the country It can produce 10 million gallons of gasoline a day, or about 3 percent of all the gasoline sold in the United States However, Amoco had let maintenance of the refinery slip in the years before the sale, and upgrades had been deferred That wasn t uncommon in the oil business After all, BP would do much the same thing with its Forties Alpha platform When companies bought these complex, industrialized assets, they typically set out a budget for beefing up the maintenance and factored that into the cost analysis for the deal BP, though, never put money into the refineries it bought from Amoco Rather than investing in new equipment, it continued to cut costs, further stretching the already overstressed equipment Covering more than 1,200 acres, the refinery is like a small city, with an intricate system of pipes and containment tanks, all of which are subject to deterioration as a result of age and corrosion
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Once again, the markets uctuations came into play By 2004, oil prices were averaging more than $37 a barrel, having risen 65 percent in two years For BP s exploration division, that was good news Higher prices meant more revenue For the re ning operation, though, it had the opposite effect Re neries buy crude oil to process into gasoline and other fuels A buyer the size of BP wasn t paying full market price, but the cost of raw materials for its re neries soared To maintain its pro t margin, it had to slash costs The order came down to the re nery of ces to cut expenses 25 percent across the board
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The cuts came just as deadly accidents at the re nery seemed to be rising In March 2004, a ruptured pipe in an ultraformer unit, which provides blending components used to boost the octane of gasoline, triggered a series of explosions and res The Occupational Safety and Health Administration (OSHA), the government agency that polices workplace safety, cited the BP subsidiary that ran the re nery for 14 serious violations and ned it $63,0004 No one died in the blasts, but two months later a worker, Israel Trevino, fell to his death inside a storage tank In September, a seal ruptured on a water pump, spraying 500-degree water and steam on three longtime re nery workers Robert Kemp, who received burns to 70 percent of his body, was the only survivor A day after the accident, Maurice Moore Jr died from his injuries Ray Gonzalez, a pipe tter who had worked at the re nery for 33 years, lingered in the hospital for more than two months He endured daily, painful skin cleanings and numerous skin graft surgeries to repair the burns that covered 80 percent of his body He died after spending his thirty- fth wedding anniversary in the burn unit of a local hospital Re neries are, as many people in the industry point out, inherently
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