Petrochemical Company to Pay $30 Million for 2019 Explosions

Houston, TX-based TPC has agreed to pay more than $30 million in criminal fines and civil penalties, and spend approximately $80 million to improve its risk management program and improve safety issues at its Port Neches and Houston facilities.

The US Justice Department and Environmental Protection Agency (EPA) filed the felony criminal charge and related civil complaint and consent decree under the Clean Air Act (CAA) against petrochemical company TPC Group LLC, which pleaded guilty to violation of the Clean Air Act.

On Nov. 27, 2019, two explosions at TPC Group’s Port Neches, TX, facility resulted in evacuations of thousands of residents of Port Neches and surrounding areas, released more than 11 million pounds of extremely hazardous substances, and caused more than $130 million in offsite property damage and other impacts to human health and the environment.

Four employees and one contractor suffered injuries including concussions, burns, perforated eardrums, tinnitus, and cracked teeth.

“When a disaster happens like at Port Neches, public safety is paramount,” said Assistant Attorney General Todd Kim of the Justice Department’s Environment and Natural Resources Division. “TPC Group’s knowing failure to comply with the chemical accident prevention provisions of the Clean Air Act at its Port Neches and Houston facilities placed its workers, neighbors and the environment in danger. Community members have expressed concerns about potential explosions happening at TPC Group’s Houston facility, like what happened in 2019 at Port Neches. Importantly, today’s criminal plea and civil settlement includes safety requirements that will help prevent future incidents.”

TPC Group’s facility produced the hazardous chemical Butadiene, which is used in the production of tires, latexes, and plastics. Butadiene can form a “popcorn polymer,” which can grow at an accelerating rate and cause catastrophic events, including explosions and fires. The company was aware that this polymer was forming in some of its production lines, and the risks it posed, but failed to take necessary measures to prevent the explosion.

An initial explosion occurred at the facility’s South Unit. A secondary explosion followed, and a series of fires erupted at the facility which blew contaminants into the air. As a result of the explosions, mandatory evacuations were ordered for residents within a four-mile radius of the facility, voluntary orders to shelter in place were issued for residents in the surrounding area, and local schools were closed for multiple days to do clean up.

“The people of Port Neches had their lives disrupted because of a major disaster in their neighborhood. TPC must uphold the accident-prevention standards in the Clean Air Act to ensure families and workers are not harmed,” said EPA Regional Administrator Earthea Nance. “And when companies do not comply with these important safety regulations, EPA and our federal partners will continue to hold them accountable, in this case by requiring TPC to pay $80 million to reduce health risks at its facility and $12.1 million in civil penalties so communities like Port Neches will be protected from harm in the future.”

The company has agreed to pay $18 million in criminal fines. The plea agreement also includes a one-year term of probation and publishing of a public apology. The $12.1 million in civil penalty payments will be made through bankruptcy proceedings. TPC Group will also spend approximately $80 million to improve its risk management program and improve safety issues at both facilities.

TPC Group knowingly failing to implement its own written operating procedures, including monthly flushing of production lines, that would have prevented the explosion. Clean Air Act regulations require planning to prevent accidental releases of hazardous chemicals and makes implementation of those plans mandatory.

The civil complaint includes 27 claims and counts, some of which included numerous violations, against TPC Group for violations of the CAA at its Port Neches facility, including numerous violations that led to the 2019 explosions. The Port Neches facility is now used for storage purposes only. The civil complaint also includes 26 claims and counts against TPC Group for CAA violations at the company’s Houston facility, including failing to promptly take corrective actions for hundreds of pieces of process equipment and failing to address similar conditions that led to the Port Neches explosions.

Under the proposed civil consent decree, TPC Group is required to update safety information for equipment at its Port Neches and Houston facilities to ensure that they are designed, maintained, inspected, and operated in a safe manner. The petrochemical company must overhaul its process hazard analysis program to ensure prompt completion of all corrective actions and remedial measures to mitigate hazards at the facilities. TPC Group will also update operating procedures and training for its workers and contractors. TPC Group has agreed to audit and revise their emergency shutdown procedures and implement key performance indicators.

The company will now provide incident investigations to EPA and release incident report information to the public on a publicly available website. The consent decree requires TPC Group to conduct an audit of the relief system design at the Houston facility to ensure the system can handle all appropriate scenarios.

TPC Group will also install and continually use air monitors at the fence line of each facility and in the neighboring communities. Data from the air monitors will be available on the company's website. TPC Group agreed to conduct an inherently safer technology review to identify safer technology alternatives that minimize or eliminate the potential for accidental chemical releases.