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Cost-cutting led to BP Refinery Fire, Report Concludes

The U.S. Chemical Safety and Hazard Investigation Board said British Petroleum's cost-cutting at its Texas refinery led to a fatal explosion in March 2005. The head of the board discusses the findings.

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    It was the worst industrial accident in this country in 15 years. The March 2005 explosion at BP's Texas City refinery killed 15 workers and injured 180 others. At least three investigations have been launched into the blast, which was triggered by a geyser-like release of flammable vapors onto refinery grounds.

    In a report released Monday, the U.S. Chemical Safety Board, or CSB, said that cost-cutting at BP, the world's third-largest oil company, was a major factor in the deadly blast. "What BP experienced," Board Chairman Carolyn Merritt concluded, "was a perfect storm, where aging infrastructure, overzealous cost-cutting, inadequate design and risk-blindness, all converged."

    In a written response, BP officials told the NewsHour it accepts responsibility for what the company says was a "preventable tragedy." BP, however, took issue with some of the board's conclusions, saying that its own investigation "did not identify previous budget decisions or lack of expenditure as a critical factor or immediate cause of the accident."

    In the statement, BP said it had been trying to fix the problems it discovered "through increased spending on operations, maintenance and plant integrity."

    In addition to its internal investigation, BP, a NewsHour underwriter, said former Secretary of State James Baker will lead a separate probe, as well. The company, which has settled claims with all but one of the families of those killed in the blast, has set aside $1.6 billion to pay for compensation claims.

    And joining me now is Carolyn Merritt, the chairman of the U.S. Chemical Safety and Hazard Investigation Board. We also invited representatives from BP and the Oil Industry Association to appear; both declined.

    Chairman Merritt, let's talk first about the question which everybody wants to know, which is: How could this have happened? What were your answers?