Supply, demand, inspection and safety

Supply, demand, inspection and safety are the forces controlling production, safety and inspection of the refineries, the function of which is to meet the ever-growing demand for gasoline (aka petrol) in the State of California.

As of January 2014, there were more than 26 million vehicles registered in California. This number includes cars, trucks and buses owned by businesses, individuals and the state. There are slightly more trucks in the state than cars, with 13.2 million cars and 13.6 million trucks. Currently, 17 refineries are operational in California to meet the cavernous demand for gasoline.

California regulators recently approved new safety rules for oil refineries, nearly five years after a major fire at Chevron’s Richmond facility sent thousands of East Bay residents to hospitals. The regulations are designed to anticipate potential problems and prevent accidents that could harm refinery workers and surrounding communities. Christine Baker, Director of the California Department of Industrial Relations, called the rules the ‘most protective’ in the country.

The new regulations require refinery owners to study how staffing levels and worker fatigue affect safety. They must also review the processes that can lead to equipment corrosion or mechanical wear. The rules encourage refinery owners to pick the most effective safety measures when fixing hazards, even if those measures increase costs.

Many refineries in California already use some of the practices the new regulations require, according to the department. However, the Western States Petroleum Association, the oil industry’s main lobbying organisation at the State Government in Sacramento, called the new package of rules an overreach by the state government and an unnecessary burden on refineries.

California has 19 oil refineries, 14 of which make gasoline. Most are concentrated in the densely-populated Los Angeles area or the East Bay area near San Francisco. They have a long history of mechanical glitches, fires and explosions.

The Chevron Richmond fire, caused by a crack in a corroded pipe that drew diesel away from the refinery’s crude oil processing unit, led Governor Jerry Brown to convene a task force on refinery safety.

It also prompted the California Occupational Safety and Health Administration (Cal/OSHA) to increase its inspections of refineries. Before the accident, the division inspected two or three refineries per year, sending a single inspector to each facility. It now conducts four inspections per year, with four or five people assigned to each, according to the Department of Industrial Relations.

Owner operators, ie the refinery owners, contract with service providers, ie the non-destructive testing contractor, to supply trained and certificated technicians to provide the day-to-day collection of corrosion-related data and the extended workforce to provide inspection and examination of refinery assets, which can only be conducted during maintenance shutdown.

In spite of the additional inspection requirements mandated by Cal/OSHA and the existing collection of corrosion data, the number of NDT technicians is being reduced based on the economics of low-price oil.

This reduction in NDT manpower affects the economics of the service providers and drives more efficient use of technology to priorities governed by production, safety, efficiency and advanced non-destructive technology. Identification of damage mechanisms and the continuous research required to effectively detect them are partners in the ongoing process for safe and effective gasoline production.

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