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Port Neches plant explosion: Cautionary tale for risk management

On Behalf of | Feb 13, 2023 | Business Law, Complex Business Issues

Managing risk effectively in business operations is vital, and the implications are vast. Risk must be identified, analyzed, handled and monitored, with related business processes and procedures modified as needed.

When risks are not mitigated

In the fourth quarter of  2022, the TPC Group announced a revised version of its initial bankruptcy plan, filed as a result of the 2019 explosion and fire at its Port Neches, Texas, chemical refinery. Now, there would be $30 million rather than $5 million for junior creditors — a class that includes some 7,000 claims for property damage, personal injury and business interruption.

The catastrophic explosion took place on November 27, 2019, followed by two more blasts, damaging nearby homes and buildings, and showering local schools with debris.

News media reported that the Port Neches explosions caused $153 million in off-site property damage.

The smoking gun

The U.S. Chemical Safety Board, a federal agency that investigates chemical incidents, determined the company was at fault by failing to adequately manage popcorn polymer, a known safety hazard. Popcorn polymer built up in a pipe, ultimately bursting it, allowing some 6,000 gallons of liquid butadiene to gush forth in less than 60 seconds, with catastrophic results.

Prior to the catastrophe, a 2016 internal hazard analysis had advised flushing the pipes to mitigate this sort of build-up, but the recommendation went unheeded.

While accidents happen, risks that are known or should be known should be managed effectively. Getting ahead of your business’s potential risk is key. Mitigating issues with the skill and guidance of effective counsel before you find yourself litigating them may prove to be a worthy investment.