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Overview

The Comprehensive Plan for Anacortes, Washington, produced by John Graham and Company in 1961 stated of the city's economic development: "In 1890, it was generally believed that the transcontinental railroads, then building westward, would establish western terminals at Anacortes to take advantage of its natural, deep harbor. The population swelled from 500 on February 1, 1890, to 3,000 on March 15, 1890. A resolution for incorporation of the city was adopted at a mass meeting held February 8, 1890. The boom soon passed, but in the later 1890s number of fish canneries were established followed by numerous sawmills and shingle mills. In 1900, the population of the city was 1,476. The growth of Anacortes to 6,919 person in 1950 was based on the development of the same basic resources being exploited in 1900, wood products, fishing and fish processing, and the port. The population dipped 230 from 1950 to 1953, but resumed its upward course when Shell Oil Company began construction of a $75 million refinery on March's Point. It was followed in a few years by the Texas Company refinery in the same area. In 1960, the population was 8,414." (See John Graham and Company, Comprehensive Plan, Anacortes, Washington, [Seattle: John Graham and Company, Architects-Engineers, 1961], p. 2.) Shell completed this facility in 1955, followed in 1957, by the Texas Company's slightly larger refinery. The Texas Company officially changed its name in 1959 to "Texaco, Incorporated," to reinforce the brand names of its most marketed gasoline and oil products. Shell operated the facility until 1998, when it was purchased by the Tesoro Refining and Marketing Company LLC.

A 04/2010 explosion and fire killed seven people--five men and two women--at the Anacortes plant; liability litigation went on for another seven years before a final verdict was reached. This was the worst accident at a US petrochemical plant since a 2005 when an explosion at BP's Texas City, TX, caused 15 fatalities and 180 injuries.

Building History

The Shell Oil Company completed this massive refinery in 1955, making it immediately one of Skagit County's largest employers.

Tesoro Corporation bought the facility from Shell in 1998, the 59th largest in the United States in 2010. (Shell purchased the former Texaco Refinery to the south c. 1998.) In 2010, Tesoro's economically-important facility utilized Alaskan North Slope crude oil, transforming it into gasoline, diesel oil, high-octane turbine and jet fuel, liquid petroleum gas, and residual fuel oil; in 2012, it had the capacity to produce 120,000 barrels per day. Tesoro's seven refineries at Anacortes, WA, Kapolei, HI, Kenai, AK, Mandan, ND, Martinez, CA, and Salt Lake City, UT and Wilmington, Los Angeles, CA, had a total capacity of 665,000 barrels per day. The Anacortes plant produced 18% of the company's total capacity. Tankers unloaded oil at terminals operated by Tesoro at Anacortes, Port Angeles, WA, and Vancouver, WA. Due to the State of Washington's geographic distance from the main oil pipelines in the US, the refineries in Anacortes were especially important to the Pacific Northwest's economy.

An explosion on 04/02/2010 at this refinery killed four people immediately and severely burned three others who died later; a fire that began about 12:30 a.m. in the refinery's catalytic reformer naptha hydrotreater unit caused the larger explosion. A Seattle Times article noted: "The explosion and fire occurred in a bank of boilers that had been cleaned and had undergone routine maintenance and were being started up, said Michael Silverstein, assistant director of the state Department of Labor and Industries (L&I) Division of Occupational Safety and Health." (See Jack Broom and Sara Jane Green, "Five dead in Anacortes refinery explosion and fire," Seattle Times, 04/02/2010,Accessed 08/16/2012.) Firefighters controlled the fire within 90 minutes, but the plant remained closed until 10/15/2010, when it was scheduled to reopen. A blast at a neighboring refinery, originally built by the Texas Company and later bought by Shell in Anacortes, killed six workers in 1998.

In 09/2017, the Washington department of Labor nad Industries requested that the State of Washington Board of Industrial Insurance Appeals review a Judge Mark Jaffe's 06/08/2017 verdict overturning a $2.39 million fine against Tesoro Corporation for its alleged negligence in the 2010 blast. Jaffee contended that the state failed to prove Tesoro's culpability in the blast's causes. The Seattle Times wrote on 09/02/2017: "Regulators said their six-month investigation determined the incident was preventable. Investigators found that a device called a heat exchanger blew apart along cracks in welded areas, the agency said. It said the company did not properly inspect or test equipment in the refinery. Tesoro appealed the finding to a state insurance board in 2010. Tesoro had disputed the state's characterization of its safety procedures and inspections, and contends the conclusions of the state's investigation were mistaken. Jaffee said in his June 8 ruling that after hearing testimony, reviewing the record and exhibits, he did not find that the department, which has the burden of proof, showed that Tesoro is responsible based on the rules cited in the citation. The state's petition filed Thursday [08/31/2017] contends that from early discovery to rulings on evidence at hearings to his proposed decision and order, the judge didn't allow the department to present its case to the board. It says evidence supports the department's citations. The industrial appeals judge issued a proposed decision and order, but the state Board of Industrial Insurance Appeals reviews that decision and issues a final order." (See Phuong Le, "State regulators say judge erred in dismissing Tesoro refinery fines," Seattle Times, 09/02/2017, p. B2.)

According to the US Chemical Board: "An explosion and fire led to the fatal injury of seven employees when a nearly forty-year-old heat exchanger catastrophically failed during a maintenance operation to switch a process stream between two parallel banks of exchangers at the Tesoro refinery in Anacortes, Washington." (SeeU.S. chemical Safety Board, "Tesoro Refinery Fatal Explosion and Fire," published 05/01/2014, accessed 10/24/2017.)The report highlighted a range of newoversight, safe operation and maintenance proceduresthat should be followed by the many parties relevant to the case. These parties included theUnited Steelworkers Local 12-591 (representing Tesoro workers), Tesoro and its refinery, the industry trade group, the American Petroleum Institute (API), the Washington State Department of Labor and Industries, Division of Occupational Safety and Health, the Washington State Legislature, the Governor of Washington, and the US Environmental Protection Agency (EPA).

The Chemical Safety Board (CSB) report concluded that "...Tesoro...emphasized inspection strategies rather than the use of inherently safer design to control the damage mechanisms that ultimately caused the major process safety incidents." In addition, Tesoro was '...ineffective in identifying the significant hazards of HTHA [High Temperature Hydrogen Attack] and sulfidation corrosion, respectively. Rather than performing rigorous analyses of damage mechanisms during the Process Hazard Analysis [PHA] process, ...[Tesoro] simply cited non-specific, judgment-based qualitative safeguards to reduce the risk of damage mechanisms."The CSB report found that theWashington State Department of Labor and Industries, Division of Occupational Safety and Healthdid not have adequate resources to supervise the state's industrial facilities: "The State of Washington did not have sufficient personnel resources with the required technical knowledge and experience to seek out and oversee the highly technical area of failure mechanisms. The state of Washington has only four PSM [process safety management] specialists in its compliance section to regulate nearly 270 PSM-covered facilities, including five petroleum refineries." (See U.S. Chemical Safety Board, "Tesoro Refinery Fatal Explosion and Fire," published 05/01/2014, accessed 10/24/2017.)

Building Notes

In 2016, the Tesoro Corporation web site said of the Anacortes plant: "Located about 70 miles north of Seattle on the picturesque Puget Sound, our Anacortes Refinery has a total crude-oil capacity of 120,000 barrels per day (bpd). The refinery primarily supplies gasoline, jet fuel and diesel fuel to markets in Washington and Oregon, and manufactures heavy fuel oils, liquefied petroleum gas and asphalt. It receives crude feedstock via pipeline from Canada, by rail from North Dakota and the central U.S. and by tanker from Alaska and foreign sources. The Anacortes Refinery ships gasoline, jet fuel and diesel fuel through a third-party pipeline system that serves western Washington and Oregon. The facility delivers refined products, including CARB gasoline and components for it, through our marine terminal, to ships and barges. Additionally, Tesoro operates refined products terminals at Anacortes, Port Angeles and Vancouver, Wash." (See Tesoro Corporation, "Anacortes Refinery," accessed 12/01/2016.) Shell's neighboring facility at 8505 South Texas Road also tried to obtain a rail spur so that it could begin processing oil train supplies of 60,000 barrels a day from North Dakota, but gave up on this effort in 10/2016 due to resistance from environmental groups and local American Indian tribes.

PCAD id: 15554