RICHMOND (CBS SF) — The city of Richmond and Chevron Corp. have jointly announced a $5 million settlement of a lawsuit over a fire and huge plume of polluted black smoke at the company’s Richmond refinery in 2012.
The giant plume of hydrocarbon vapor, particulates and smoke from the explosion and fire on Aug. 6, 2012, caused 15,000 people in the area to seek medical treatment for respiratory problems and other illnesses.
The agreement ends the lawsuit the city filed against Chevron in Contra Costa County Superior Court in 2013 with several legal claims, including negligence, maintenance of an ultrahazardous activity and trespass of pollutants, ash and soot on city property.
The Richmond City Council approved the agreement by a 5-0 vote Tuesday night, with one member absent and another abstaining.
It was signed by representatives of Richmond and San Ramon-based Chevron on Wednesday and Thursday.
The pact provides that the city will use the money “to fund public safety, education, parks and recreation, and/or community and economic development.”
It states the agreement is not an admission of wrongdoing and says both sides acknowledge the oil company’s efforts to make the refinery safer, cleaner and more reliable.
City Manager Bill Lindsay said in a statement that Richmond “is pleased that cooperation between the city and Chevron made this settlement possible.”
Refinery General Manager Kory Judd said, “We pride ourselves on reliable and safe operations for the thousands of people who work here every day and for the community.”
The fire in the refinery’s crude oil unit resulted from a leak in a distillation pipe that was corroded by sulfur compounds in the oil.
Operators noticed drips from the leak at 3:50 p.m. on Aug. 6, 2012, and began working to locate and repair the leak, but kept the pipe in operation and did not begin the process of shutting it down until 6:29 p.m., according to a 2015 report by the U.S. Chemical Safety Board.
Two minutes later, the pipe ruptured and released a hot cloud of oil vapor, which ignited and exploded into a large fireball in another two minutes, at 6:33 p.m.
As the fire burned, a shelter-in-place warning was put into effect for Richmond, San Pablo and North Richmond residents for nearly five hours, until the fire was brought under control at 11:12 p.m.
In February of this year, as a trial on the lawsuit approached, Superior Court Judge Barry Goode narrowed the case by dismissing the city’s claims of an ultrahazardous activity and loss of property tax revenue resulting from a decline in the assessed value of the refinery.
Richmond Mayor Tom Butt said he believes the lawsuit could have settled for a larger amount, as much as $75 million, in 2013.
“The case just got whittled away by legal technicalities,” he said.