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The state's investigation into last week's refinery explosion is going to take a few months.
Details on the cause of last Friday's deadly explosion at

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What Will Last Week's Deadly Explosion Cost Tesoro?

tesoro.jpg
The state's investigation into last week's refinery explosion is going to take a few months.
Details on the cause of last Friday's deadly explosion at an oil refinery in Anacortes are already leaking out. But answers as to what the financial future of the company might be following the accident are tougher to get.

As with any large scale industrial accident, the state Department of Labor & Industries and the U.S. Environmental Protection Agency have launched an investigation into the cause. Presumably, both agencies will assess a fine if investigators determine that the cause of the explosion was related to some sort of safety violation.

A number of factors are considered when assessing penalties, says L&I spokesperson Elaine Fischer, including the size of the company, the severity of the accident, and whether or not the company has made a "good faith effort" to comply with safety guidelines.

As the Seattle Times reported last week, Tesoro was fined $85,700 for 17 "serious" safety violations at its Anacortes facility last year. As defined by L&I, "serious" violations have the potential to cause death or serious injury.

Fischer cautions that a determination as to whether any of those violations are related to the explosion is a long way off. But if there is a barometer for how much the state will fine a company in these situations, it's a decade old settlement with local oil company Equilon Enterprises, a former jointly run subsidiary of Shell Oil and Texaco.

In 1998, an explosion at the Equilon's Anacortes refinery (located right next door to the Tesoro facility) killed six of the company's rank and file. The state later negotiated a $4.405 settlement, which included a $1 million penalty for safety violations, then the largest that the state had ever assessed.

That wouldn't be a disastrous blow to Tesoro's bottom line. But the potential legal fallout could cost Tesoro much more than any government fine.

Following the 2005 explosion at its facility in Texas City, TX, BP paid out around $2 billion in legal costs and fines, reports Business Week. Being one of the world's largest oil companies and worth $180 billion, BP can afford to take that kind of a financial hit. As a company that according to Business Week, has a market value of $1.9 billion, Tesoro, obviously, cannot.

 
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