Independent Report: Inadequate Monitoring, Control of Work Led to Massive Feb. 1 Refinery Fire After Workers Opened Wrong Flange

Investigation by JEM Advisors also cites regulatory restrictions on hiring and supervising contract workers during "turnarounds"; also, budget workshop details financial challenges facing city

An independent “root cause” investigation into the massive Feb. 1 fire at PBF Energy’s Martinez refinery found that inadequate operations monitoring and control of the work being performed during the refinery’s “turnaround” project allowed two contract workers to mistakenly open the wrong flange and release flammable hydrocarbon material.

JEM Advisors also cited four contributing causes to the disaster that prompted a shelter-in-place advisory for surrounding neighborhoods and shut down refinery operations for months. Those causes include regulatory rules that restrict who can work on such refinery projects and limit coordination between refinery personnel and contractors. In particular, the investigators called out SB-54, a 2013 bill that requires contractor manpower to be sourced solely from local union halls.

“As a result, past resources that included 'professional shutdown execution' personnel from other locations are no longer available for PBF to use on turnarounds,” the report reads. “Contracted experienced turnaround craftspeople are now more difficult to find and staff using the local union halls.”

The bill, introduced by then-state Sen. Loni Hanock, D-Berkeley, was designed to enhance the use of skilled and trained workers on refinery projects, but JEM concluded it has had the opposite effect because of a requirement that contract workers be enrolled in or graduates of one of the apprenticeship programs that have been approved by the California Department of Apprenticeship Standards. The vast majority of these programs, according to the report, are controlled by the California State Building Construction and Trades Council (SBCTC), a powerful trades union lobbying group in Sacramento that donates heavily to Democratic Party politicians and whose affiliates have spent heavily on local elections, including City Council and school board races. As a result of this requirement, JEM concludes, “a contractor that wishes to enter into new construction contracts with refineries must have an affiliation with the SBCTC. This excludes many highly experienced turnaround professionals who have worked on California turnarounds prior to 2014.”

The final bill passed the state Senate in 2013 largely along party lines, with all but one of the 27 yes votes coming from Democrats, including Mark DeSaulnier, now a U.S. Congressman representing most of Contra Costa County. All 11 no votes were Republicans.

At the time the bill was passed, questions were raised by the U.S. Steelworkers union about whether it would limit the pool of qualified workers for refinery projects such as the one going on at PBF’s refinery when the fire broke out. The USW lobbied then-Gov. Jerry Brown to veto the bill, to no avail.

“SB 54 is essentially handing over a pink slip to 5,000 union workers who have spent years working at refineries,” said Robert LaVenture, District 12 director for the United Steelworkers, in a 2013 post on the website Patch. “The same legislation has been attempted in other venues and has been continually rejected, as it does not improve safety — it ousts known, skilled, qualified workers who need a steady paycheck to provide for their families and put a roof over their heads.”

The JEM report of the Feb. 1 fire also extensively called out “co-employment” rules that restrict communication and contact between refinery officials and contract workers as contributing to the events that caused the fire.

Despite these limitations, investigators made clear that the onus remains on refinery operators to ensure such work is conducted safely. Facility owners “cannot allow the poor performance of others to impact the safety and performance of the refinery,” they wrote, calling for increased refinery oversight to address the “declining contractor organizational capability.”

JEM’s report lists the following as the root cause of the Feb. 1 fire:

Operations Monitoring and Control of Work was inadequate for current Maintenance Contractor Organizational Capability.

The draft report will be presented to the county’s Martinez Refining Co. Oversight Committee at a public meeting Tuesday, June 3 on Zoom from 3 to 5 p.m. The meeting agenda and link to join can be found here.

One of the two contract workers involved in opening the wrong flange in the cat feed hydrotreater process unit was an apprentice, according to the investigation, which noted failures by both the workers and their supervisors during the refinery’s large-scale maintenance project that was ongoing at the time.

The workers were supposed to open a flange within an “isolation valve” that had been closed off to flammable hydrocarbon material (referred to in refinery parlance as “zero energy.”) Instead, they opened a flange on the outside of the valve, missing clear signs along the way that they were working on a piece of equipment in which hydrocarbon material was still flowing.

A drawing showing the piping arrangement, including the planned blind installation location at Flange #3. Flange #4 which was incorrectly opened, causing the initial leak.

For instance, JEM Advisors said, insulation had been previously removed from the correct flange, which should have allowed the workers from contractor TIMEC to use power-operated wrenches to remove the bolts. The wrenches, however, did not work on the flange outside the isolation valve because it was still insulated.

“It appears that neither of the TIMEC Steamfitters recognized this as an issue and proceeded to remove the flange bolts with hand tools,” the investigators wrote in their report.

The work on the unit that day originally was supposed to be performed by a different contractor, Global Scaffold and Construction Services (GSCS), which had already tested the valve in question to ensure that it was safe to install a “blind,” or metal plate, between two flanges in the piping system as part of the maintenance work.

However, on the day of the scheduled blind installation, TIMEC advised the refinery’s operations turnaround coordinator that it had extra manpower and was available to do additional work. Prior to lunch, the operations turnaround coordinator reassigned the blind installation from GSCS to TIMEC.

What followed was a series of oversights and lapses that led to the wrong flange being removed and the release of the hydrocarbon fluid that sparked the massive fire, which raged out of control for hours.

• The Job Safety Analysis (JSA) — which is intended to identify hazards — that was completed by the steamfitters failed to note the greatest hazard, working on the wrong flange.

• The JSA was not reviewed for completeness or accuracy because neither the TIMEC foreman nor the unit operator was in the area.

• The workers did not notify the TIMEC foreman or unit operator that they were starting work, despite such notification being required.

• MRC requires a unit operator to be present for “first break” of flanges for the turnaround blinding process, but neither the TIMEC foreman nor the unit operator was in the area.

Once the workers removed bolts from the wrong flange, hydrocarbon liquid leaked, sparking the fire. As the report explains:

This ‘incorrect’ set of flanges was part of the active piping system that was moving hot hydrocarbon from the CCU (Cat Cracker Unit) to the Alky (Alkylation Unit) at the time of the incident. Unable to stop the leak, the TIMEC steamfitters evacuated the area. The leak prevented them from leaving the scaffolding via the ladder. The journeyman was able to disconnect his breathing air supply hose and climb down from the short scaffolding using his five-minute escape pack. The apprentice was unable to disconnect his breathing air hose due to oil making the connector slippery, so he climbed down from the scaffold pulling air hose along with him. The apprentice then removed his harness, escape bottle and mask, and evacuated the area with the journeyman.

In addition to citing the union hall hiring requirement as a contributing cause to the disaster, the investigators also called out “co-employment” restrictions on coordinating safety between refinery personnel and contractors. “Co-employment restrictions now prevent approving contractor safety plans and providing safety training to contractor craftspeople directly by knowledgeable MRC company resources,” the report states. “Current requirements include sharing safety policies and procedures with contractor company leaders, with the expectation that contractor employees are fully trained in these (procedures) prior to working on the refinery site.

“As a result of these two regulations, there is now a higher likelihood for human errors entering into maintenance work performed by contractor resources.”

JEM said that because of the regulatory nature of these restrictions, it could not identify options for addressing them.

Inadequate training of contractors, stemming largely from the “co-employment” regulatory issues, was also cited in the report as a contributing cause of the fire.

Other contributing causes identified in the report were:

Work processes and procedures

• “Permits to work” are difficult to read because of the small font of text and do not contain reference to “first break” work requirements or process service.

• MRC procedures require revalidating “permits to work” if the work is not started within 90 minutes to ensure that conditions for safe work execution have not changed. Work on this blind installation was started approximately 115 minutes after permit approval, without revalidation approval.

• For potentially hazardous work such as what was being performed on the flange, the presence of a unit operator from the start of job until work is in a safe state is required but not always enforced, and was not in place when the incorrect flange was opened.

Inadequate contractor supervision

• Investigators found that contract supervisors may not be knowledgeable of various PBF processes and hazards

• Contract supervisors are not always on job sites during potentially hazardous maintenance steps

JEM concluded that there are “few options to address the gaps brought about by the regulatory policies” that it noted in the report regarding use and supervision of contract workers.

Among the corrective steps JEM recommended in the report were things as simple as increasing the font size on “permits to work” to make them more readable; enforcing current regulations to revalidate permits if work is not started within 90 minutes of permit approval; ensuring that contract workers verify “zero energy” (i.e. no hydrocarbon material) on equipment before starting work; and increasing operator presence during contractor maintenance work to verify that the work is being done on the proper equipment and to the appropriate standards.

The JEM investigators were Rex Kenyon, a former Chevron executive who has “over 50 years of experience in over 100 oil industry facilities across the world,” and Tom Hanson, another former Chevron official with 44 years of oil and gas facility experience.

The refinery had already implemented some changes that align with JEM’s recommendations even before the completion of its investigation, according to the report. They include:

• Increasing MRC company presence during contractor maintenance work

• Reinforcing adherence to existing MRC processes for use of “blind tags” to positively identify blind locations

• Reinforcing adherence to existing MRC processes for testing for “zero energy” just before work begins and witnessed by those performing the work

As was the case with the independent root cause investigation into the 2022 spent catalyst release at the refinery, the report did not address questions about community notification of the fire through the Contra Costa County Community Warning System (CWS). In 2022, the CWS was never activated to alert the public and county health officials that a major accident had occurred; on Feb. 1, the initial alert activated by the refinery, and maintained by county hazardous materials officials for several hours, only advised people with respiratory sensitivity to remain indoors, despite the fact that the fire was raging out of control and blanketing the surrounding community with dark smoke. Contra Costa Health later in the day elevated the alert to a shelter-in-place advisory for all residents of affected neighborhoods.

The full report, including all recommendations for corrective action, can be read here.

The following item by freelance writer Tom Lochner is made possible through the financial support of paid subscribers to the newsletter. Please consider becoming a paid subscriber for $5 a month or $50 annually, if not already, to help fund more local news coverage of Martinez.

Council wrestles with fiscal strains at budget workshop

By Tom Lochner

Faced with fiscal pressures and economic uncertainty in the immediate future, and long-range challenges over the next decade, the city has opted to prepare a single-year operating budget for the coming fiscal year beginning July 1, in departure from its previous practice of producing two-year budgets biennially.

Budgetary pressures facing the city are addressed in a 10-page staff report by Finance Director June Du and Assistant City Manager Lauren Sugayan that accompanied a Fiscal Year 2025-26 Budget Workshop held by the City Council on May 28.

A follow-up report summarizing the May 28 workshop findings and revisions to the proposed budget will be delivered at the June 4 City Council meeting. The budget is expected to go before the Council for adoption on June 25.

The Council also will conduct a Strategic Plan Workshop from 9 a.m. to 3 p.m. Saturday, June 7, in the cafeteria room at John Muir Elementary School, 205 Vista Way.

A first draft of the next fiscal year's General Fund budget showed a $1.2 million deficit, prompting the various city departments to review their budgets using a "zero-based budgeting approach" focused on funding only essential needs, according to Du's and Sugayan's report. Further reductions were achieved by deferring, reducing or eliminating some projects and programs.

City Manager Michael Chandler opened the budget discussion, noting that the city has strong financial reserves for now, but is challenged by lagging revenues. It has been harder the past few years to try to present a balanced budget, he said, in light of structural deficits and rising costs.

Chandler then introduced consultant Steve Toler of the firm Baker Tilly, who delivered a PowerPoint presentation of what Chandler said is the first long-range financial forecast for the city, one that extends over 10 years, rather than the customary five-year span. Among the reasons for a 10-year forecast, Toler said, is that many of the issues that affect city finances, among them labor contracts, pensions and capital needs, often stretch beyond five years.

Toler touted a fiscal model featuring "Realistically Conservative Assumptions, Recessions, Alternate Scenarios and Flexible Planning periods," focusing on the General Fund, which primarily funds most critical services, including law enforcement and community development as well as some public works and parks. Pie charts showed General Fund revenues of $37.7 million and expenditures of $38.5 million for the coming fiscal year, with 73% of revenues coming from property taxes, vehicle license fees and sales taxes, and 76% of expenditures consisting of salaries and benefits.

Toler warned of possible "mild recessionary impacts" in 2027, and again seven years later. Long-range forecasts reflecting current trends foresee annual fiscal gaps averaging $1.2 million through FY 2030, with corresponding pressure on reserves. Eliminating operational subsidies at the Martinez Marina would relieve some of that pressure. Toler's forecast assumes a long-term inflation rate in the Bay Area "no greater than average of 3.5% per year."

Councilmember Satinder S. Malhi, commenting on Toler's presentation, suggested taking steps to make Martinez "a destination for retail," and also promoting construction of a hotel to bring in more Transient Occupancy Tax income.

Toler's PowerPoint was followed by another PowerPoint on the proposed FY 2025-26 General Fund Budget as well as the Water, Parking and Marina funds, conducted by Chandler, Du and Sugayan.

Addressing what drives costs, Chandler noted that insurance, including liability and workers compensation among others, has gone from $1.2 million in 2020 to almost $4 million today, including $2.5 million for liability alone, with most of the impact on the General Fund. Other cost drivers are labor, with cost of living (COLA) increases and step and merit increases; and pension and retiree health costs. On the revenue side, sales tax growth has slowed, as have permit and inspection revenues, interest income and franchise fees.

The PowerPoint followed with three pages of suggested deficit-reducing actions running through a gamut of city services, totaling $882,000.

On a positive note, the city's Water Enterprise Fund and Parking Enterprise Fund project surpluses for the coming fiscal year. The Marina Enterprise Fund, however, projects an operating deficit of $560,000 for the coming fiscal year, on top of city subsidies over the past three years in the form of loans. The FY 2025-26 projection would bring the total of loans from the General Fund to the Marina to $1.05 million, according to the PowerPoint. Many city officials have said the Marina problem should be addressed by establishing some kind of public-private partnership.

The May 28 staff report is at Staff_Report_-_FY_2025-26_Proposed_Budget.pdf

The PowerPoints presentations from the May 28 Council meeting are at https://www.cityofmartinez.org/home/showpublisheddocument/5087 . The link opens to the Council agenda; the PowerPoints are on the following 54 pages. Note: Toler's PowerPoint is dated May 29 in error; the correct date is May 28.

The agenda for the June 7 Strategic Plan Workshop is at City Council Regular Meeting Agenda.

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