A $1.8 billion settlement will require Chevron, another of the big three oil companies that produced millions of gallons of gas in 2012 and 2013, to pay $1.1 billion to nearly 20,000 families who suffered from benzene exposure in their homes. The company will pay the rest in an unspecified amount of compensation for damage done to property.
The gas explosion and fire at a Chevron refinery in the Porter Ranch section of Los Angeles didn’t trigger a recall of gas, but the incident made the headlines and public pressure mounted to make sure the regulatory oversight was adequate.
“These families don’t deserve to have their lives changed forever,” Attorney General Xavier Becerra said in a statement Tuesday. “We hope that this settlement will help ease the anxieties these families still have.”
The explosion was originally believed to have been caused by faulty installation of piping, but investigators later said they found that the cause was a gas mixture that had been created unintentionally by a process called hydroderivation, where methane was being mixed with ethane. The excessive pressure from the hydroderivation ruptured a series of pipes in a boiler, causing the release of natural gas and rupturing an exchanger.
The victims sued Chevron, as well as Valero Energy, which also has a large refinery in the area, and Tesoro. The families alleged that Chevron had not provided adequate safety training for its employees. The families also claimed that testing conducted by Chevron failed to detect the presence of benzene.
The companies disagreed, saying the release was a “complete accident” caused by improper maintenance, not by any leak from the refinery. They are still fighting some of the families’ claims in court.
Decades of change
The settlement follows more than a decade of change to the laws governing the oil industry.
In 2002, California was first to enact a law that would allow municipalities to force companies to monitor their operations at polling places for methane. In 2008, Gov. Arnold Schwarzenegger signed the nation’s first law to require a “gas leak law,” which requires companies to notify the public when gas is leaking and to take precautions to cut off the flow, test for leaks and, if necessary, repair them.
Even so, that law does not address vapors or hydrocarbons at a facility. The gas explosion happened in 2014.
Proposed rule changes
Last year, California’s Air Resources Board proposed two measures aimed at reducing the risk of gas leaks. One of the proposals would implement a system for checking for oil and gas leaks at workplaces and homes. The other would require companies to provide evidence that their gas-pipe maintenance plan works, take precautions to stop the release of methane and leak logs.
It’s unclear how the legislature will respond to the proposed changes, which are open for public comment until September 5. But Becerra has been calling for fixes for decades.
In 1992, he sued the oil companies implicated in the Exxon Valdez disaster. That suit resulted in a settlement with BP, Exxon and Chevron, which paid billions to meet cleanup and compensation demands, and to pay for civil penalties, taxes and other expenses in the state’s largest settlement with an oil company.
Becerra said the settlement with Chevron represents the largest agreement ever reached by any state and federal government on a single oil company.
— Andres Torres and Tom Foreman Jr. contributed to this report.