A Short History Of Tesoro’s Anacortes Refinery

January 8th, 2014 | by JRO
A Short History Of Tesoro’s Anacortes Refinery
Business
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Tesoro Corporation is a Fortune 100 company that refines and markets petroleum products. Headquartered in San Antonio, Texas, the company was founded in 1968 for petroleum exploration and production. It currently operates six refineries in the western United States. Tesoro’s Anacortes refinery, located about 70 miles north of Seattle, has 360 employees and a production capacity of 120,000 barrels per day. Crude oil is shipped to the Anacortes refinery from Canada by pipeline, from North Dakota and other central states by train, and from Alaska and foreign locations by ship. Gasoline, jet fuel and diesel are then shipped from the refinery to markets in Washington and Oregon.

Acquisitions

In 1998, Tesoro Petroleum Corporation bought the Shell Anacortes Refining Company from the Shell Oil Company for $237 million (a unit of the Royal Dutch / Shell Group). The refinery’s capacity at the time was 108,000 barrels per day. With its recently-acquired refinery in Hawaii and its first refinery near Kenai, Alaska, Tesoro then had three refineries on the West Coast with a combined output of 280,000 barrels a day. In 2001, Tesoro purchased refineries in North Dakota and Utah from Amoco. The following year, it purchased its sixth refinery in Martinez, California from Ultramar. Today, Tesoro’s refineries have a combined output of 850,000 barrels per day.

Safety Record and Accident

In 2002, a boilermaker was killed at Tesoro’s Anacortes refinery while doing maintenance work. Four years later, three contract workers were exposed to Naphtha (a flammable liquid produced during refining) and were subsequently hospitalized. In 2009, the refinery was cited by Washington State Labor and Industries for 17 serious health and safety violations with penalties totaling $85,700. The citation was later reduced to three violations and a $12,250 settlement. In 2010, a violent explosion in a bank of boilers at the refinery started a major blaze that took 90 minutes to extinguish. The blast was so powerful that it shook houses a mile away. Three workers died at the scene and four others died after being airlifted to a hospital. The blast was the largest refinery accident since 2005, when an explosion in a BP American refinery in Texas killed 15 and injured 170.

Consequences of the Accident

The Washington Department of Labor and Industries determined that the accident was preventable. It cited Tesoro for 39 willful violations and five serious violations of state workplace health and safety regulations. Tesoro was fined $2.39 million–the largest workplace safety penalty in the history of Washington State. It was discovered that the heat exchanger, which had caused the accident, was 38 years old and had been last inspected in 1998. Families of the workers filed lawsuits, citing unsafe equipment and working conditions. Tesoro denied the allegations and emphasized the company’s history of safety improvements. The Federal U.S. Chemical Safety Board also launched an investigation. The federal investigation remains open today, causing critics to accuse the board of sluggishness and incompetence. The board claims that lack of funding is the main reason why its investigative work has stalled.

Despite the ongoing investigation and criticism following the catastrophic accident, Tesoro’s Anacortes refinery continues to operate. In addition, Tesoro Corporation continues to receive allegations of large-scale environmental pollution from the Environmental Protection Agency and the Political Economy Research Institute.

In addition to oil refineries in the U.S., Matt Xavier writes on oilfield equipment, natural resources, coal power, solar power, alternative fuel possibilities and other related matters.

Image credit goes to nick_gattuso1.