The Deer Park petrochemical blaze prompted school closures, shelter-in-place orders, spikes in benzene levels and ship channel closures. It also cast a shadow over a petrochemical sector that has struggled to counter negative stereotypes that present the industry as dirty and dangerous.
Petrochemical professionals, in interviews at two industry conferences in San Antonio last week, said that major incidents like fire at International Terminals Co. undermines much of the work that companies have done to reshape the image of their industry by emphasizing its culture of safety and environmental responsibility, as well as its role as an economic engine that attracts billions of dollars in investment, generates tens of thousands of jobs and provides the materials that make modern life possible.
But one disaster, industry professionals acknowledged, can bruise the entire industry’s reputation, potentially sparking public blowback, new regulations or increased scrutiny at a time when the industry is in the middle of boom. The Deer Park fire started March 17, damaging 11 storage tanks in a blaze that burned for days. Although there were no injuries, elevated benzene readings around the plant Thursday forced shelter-in-place orders and school closures, while toxic runoff from the site closed a seven mile seven-mile stretch of the Houston Ship Channel for three days before it was partially reopened Monday afternoon.
“I think any time there is an incident of this magnitude, it’s a blemish for the industry,” said Rachel Meidl, an energy and environment fellow at Rice University’s Baker Institute.
Dark cloud over industry
Beyond the Deer Park fire, the issue of image has become growing concern not only for petrochemical companies but also for the broader energy industry as a new generation of workers want to work for companies perceived as having strong corporate responsibility and environmental records. Only 9 percent of college graduates surveyed said they want to work for energy companies, according to he global consulting firm Accenture Strategy.
Refining and petrochemical industry executives from Chevron, Motiva Enterprises, Valero Corp., Exxon Mobil and Chevron Phillips Chemical spoke at the American Fuel and Petrochemical Manufacturers conference in San Antonio last week about the need to “reshape the narrative” about their industries and counter the demonization of fossil fuels and the chemicals made from them, including plastics.
“We know what we do is good. We’re just miserable at communicating it to anyone else,” said Joe Garder, CEO of Valero Energy Corp. “And we’re communicating it now better than we have.”
But disasters such as the Deer Park fire or the Arkema plant explosion in Crosby after Hurricane Harvey or the Deepwater Horizon tragedy in the Gulf of Mexico make it all the more difficult to improve the energy industry’s image. Even in Houston, where petrochemical companies are major employers and residents tend to be more sympathetic, major disruptive accidents still stoke worry, fear and negative attitudes about the industry, analysts said.
“This is a well-educated community (familiar with the oil and gas industry) but it doesn’t mean they aren’t going to have concerns,”said Pedro Caruso, global downstream lead at the consulting, research and strategy firm Accenture. “The industry still has room for improvement in how to build trust with a society that has lost trust in them to an extent.”
Research suggests that overall public trust in the petrochemical industry and the government agencies that regulate them already is low, said Meidl of Rice University.
Meidl has spent her career working as a hazardous materials safety management administrator for the federal government and working on policy for chemical industry’s trade group, the American Chemistry Council. Regardless of whether individual companies have compiled strong safety and environmental records, well-publicized accidents, spills and other problems damage these companies’ are “painted with the same broad brush” Meidl said.
“It does raise the scrutiny for everybody and it’s difficult for the industry to regain public trust,” she said. “But I think there is so much to be said for transparency and being honest about what you know, what you don’t know, all of that enables companies to achieve social legitimacy and public trust.”
Improving safety record
Talk to anyone in the petrochemical industry and they’ll tell you safety is their license to operate. Workers start their shifts every day with safety meetings; every site has an active emergency response plan; and larger facilities have emergency personnel including professional fire and medical response personnel on site at all times.
In 2017, the incidence rate for non-fatal injuries in the petrochemical sector was less than one per 100 workers, about four times lower than the overall manufacturing industry, according to the U.S. Labor Department. Overall, the American Chemistry Council said chemical companies have reduced the number of safety incidents that result in product spills, fires, explosions or injuries by 60 percent since 1995.
“At the end of the day these companies measure their success by going 24 hours with no accidents,” Michael Kehs, managing director of the energy and industrial practice at Hill+Knowlton Strategies, a global public relations consulting firm. “The important thing to remember is that in this industry, safety standards, requirements from the government and regulatory agencies – they are all stringent and extraordinarily protective given the vast majority of these volatile compounds that are handled safely every day.”
In the wake of the ITC disaster, Kehs suggested that other petrochemical companies in the area should double down on engaging with public officials, first responders, community members and even critics to and “to share their best practices they’ve implemented and any learnings (from the ITC fire).”
The ITC fire in Deer Park will undoubtedly spur other companies too look inward at their own safety processes, petrochemical industry professionals said, especially once the results of a federal investigation into the fire’s causes are released, analysts and petrochemical professionals said. Both the American Chemistry Council and the state trade group Texas Chemistry Council said they would review the findings of federal investigators to see if there are broader lessons for the rest of the industry.
Emissions still widespread
Environmentalists, however, say the public still has reason for skepticism. Major incidents may be rare, but according to a 2016 Houston Chronicle investigation, a chemical accident, spill or unauthorized release happened about every six weeks in the Houston area. While emissions of the carcinogenic chemical benzene associated with the Deer Park fire raised alarms in recent days, just 10 Texas chemical plants, storage terminals and other energy facilities poured 47,200 pounds of benzene beyond what their permits allowed in 2017, according to Texas Commission on Environmental Quality data.
In 2017, unauthorized emissions from industrial facilities, including and gas and chemical operations, grew by 27 percent to 63 million pounds of illegal air pollution, according to state data analyzed by the advocacy group Environment Texas. But despite the increased emissions, Texas Commission on Environmental Quality only fined companies 2 cents per every pound of air pollution emissions, Environment Texas found.
“That creates a culture where companies will avoid taking measures to prevent pollution and major accidents because it’s just cheaper to pay the fines if there are any fines at all,” Metzger said. “The truth is that most of these accidents are preventable or controllable if the companies made the investments in better equipment and training. Unfortunately the state, environmental agencies and the EPA aren’t creating regulatory regimes that forces that force companies to put health and safety ahead of profit.”
This article first appeared on the Houston Chronicle – an Energy Voice content partner. For more from the Houston Chronicle click here.
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