March 27, 2019 / 6:18 PM / 4 months ago

UPDATE 2-Texas sues fuel tank company over Houston chemical fire, aftermath

(Updates shipping situation, adds oil tanker allowed to Shell refinery, paragraphs 8, 9)

By Erwin Seba and Collin Eaton

HOUSTON, March 27 (Reuters) - Texas officials on Tuesday sued owners of a Houston area petrochemical storage facility over a fire last week, alleging violations of environmental laws and seeking damages to cover response costs for the disaster that burned for days, releasing chemicals into the air and waterways.

The county and state jointly filed suit in a county court against Mitsui & Co’s Intercontinental Terminals Co (ITC). The suit seeks reimbursement for emergency responders, temporary air and water monitoring systems, and health care workers. An auditor will determine costs, officials said.

“We have been working with state and federal partners to hold ITC responsible for the damages,” Harris County Chief Executive Lina Hidalgo said on Tuesday at a hearing where local residents pushed for a response to the disaster that sent tons of carbon monoxide into the air and chemicals into waterways. Schools were closed and visits to area hospitals and clinics spiked.

Federal and state officials were already investigating the company as emergency workers pumped fuels from 11 damaged or destroyed tanks that spilled fuels out of the site. The fire began March 17 and spread among rows of giant tanks that can hold up to 80,000 barrels of fuel.

An ITC executive declined to comment on the lawsuit, and defended the company’s handling of the disaster.

“ITC and our ERT (emergency response team) responded immediately and we called both CIMA (an industry mutual aid group) and surrounding municipalities for additional firefighting resources,” said ITC Senior Vice President Brent Weber. “Right now, we’re just focused on the recovery effort.”

SHIP TRAFFIC DISRUPTED

The spill of fuels, water and fire suppressant foam from the site halted traffic on a stretch of the Houston Ship Channel connecting Houston to the Gulf of Mexico. Restrictions on travel near the ITC site forced at least two refineries to curb production this week. The disruptions sent U.S. fuel prices higher and cut crude exports.

A tanker containing oil was inbound Wednesday to Royal Dutch Shell Plc’s Deer Park refinery adjacent to the ITC terminal, according to the Houston Pilots, whose members guide ships in and out of the channel. Shell faced a potential shutdown if it did not get crude by the weekend, people familiar with operations said.

Three tankers also were moving to other plants along the channel, said JJ Plunkett, port agent. The U.S. Coast Guard on Wednesday lessened travel restrictions on a portion of the channel nearest the ITC terminal, but there were still dozens of ships waiting for permission to pass either way.

Last week, schools in Houston suburbs were closed for several days after air quality monitors detected elevated levels of benzene, a cancer-causing chemical that was contained in ITC tanks that burned.

More than 1,100 local, state and federal workers and contractors working at the site and waterways have removed 16,000 barrels of a fuel-and-water mix from the ship channel and another 33,000 barrels from ITCs grounds, said Adam Adams of the U.S. Environmental Protection Agency (EPA).

“Until these people find themselves placed in jail, you’re not going to see what needs to be done to keep these communities protected,” said County Commissioner Steve Radack at a hearing where officials approved the lawsuit.

HEALTH PROBLEMS, MARKET IMPACT

More than 1,000 people visited a county health clinic last week, many with symptoms related to “respiratory issues, headaches, skin irritation and nausea,” Dr. Umair Shah, executive director of the county’s public health department, said in an interview.

Air monitors in the area detected a spike in benzene levels last week, but they were “were not high enough, long enough” to cause long-term health effects, he said. The county is continuing to monitor air quality levels, he said.

U.S. conventional gasoline in the Gulf Coast on Tuesday rose to 1.75 cents per gallon above futures, the highest since Feb. 15. U.S. crude exports last week fell 506,000 bpd, government figures showed, a decline blamed in part on shipping curbs. (Reporting by Collin Eaton and Erwin Seba; writing by Gary McWilliams; editing by David Gregorio)

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