Chevron agrees to pay $2 million for refinery fire

RICHMOND, Calif. -- Chevron on Monday agreed to pay $2 million in fines and restitution and pleaded no contest to six charges in connection with a fire at its refinery in the San Francisco Bay Area city of Richmond.

Chevron entered the plea to charges filed by the California Attorney General's Office and the Contra Costa District Attorney's Office, including failing to correct deficiencies in equipment and failing to require the use of certain equipment to protect employees from potential harm.

The Aug. 6, 2012, fire sent thousands of people to the hospital, many complaining of respiratory problems. Both Chevron and government investigations have determined that corrosion in a pipe caused a leak that sparked the fire, sending a plume of black smoke over nearby residential areas.

Chevron spokeswoman Melissa Ritchie confirmed the agreement with prosecutors. She said the company is committed to improving safety at the refinery.

In April, Chevron resumed operations at the crude oil unit of the refinery that was shut down after the massive blaze. Chevron's chief financial officer, Patricia Yarrington, said at the time that the unit was expected to be fully operational during the second quarter.

After the fire, the refinery operated at about 60 percent capacity for several months. The factory wasn't processing crude oil and instead was being used to blend gasoline.

A metallurgical report showed the 40-year-old pipe that failed, causing the leak, initially was weakened by the heavy sulfur content of the crude oil being pumped through it. After a small leak sent hydrocarbons into the air, a small flash fire was put out. But a larger gash in the pipe released a bigger cloud of flammable gas, leading to a larger fire.

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