Explosion and Fire at CAPECO: Engineering Failure or Prevention Success?

The CAPECO Site is a large scale industrial complex situated in the Luchetti Industrial Park in Bayamon, Puerto Rico. The complex currently houses a fuel tank farm, office buildings and a decommissioned refinery. Numerous surface water bodies, including wetlands and several streams, are located in the vicinity of the complex. These waters discharge into the Malaria Canal prior to entering into the San Juan Bay. The facility is located within the inland jurisdictional zone of the United States Environmental Protection Agency (EPA).

The tank farm located at CAPECO contained approximately 40 tanks that stored gasoline, bunker C fuel oil, diesel fuel, and jet fuel. In total, the facility had the capacity to hold over 90 million gallons of product. Material was received through a 2.5 mile pipeline originating from a marine transfer terminal located in the Bay of San Juan. Customers throughout the Commonwealth of Puerto Rico received material from the Bayamon location. One such customer was the Puerto Rico Electric Power Authority (PREPA), which operates two power plants within five miles of the CAPECO facility. Auxiliary fuel storage was also provided for the Luis Munoz Marin International Airport located in Carolina, PR.

Although the facility is branded with the name “Gulf Oil”, ties to the registered name are minimal. An agreement between CAPECO and Gulf authorized the use of the name solely for distribution of fuel to petrol stations located throughout Puerto Rico.

Several surface water bodies are located on and near the CAPECO property. The Las Lajas Creek feeds over 100 acres of wetlands. Waters exit the wetlands through the Malaria Creek before moving into the Bay of San Juan.

Shortly after midnight on October 23, 2009, a fuel transfer was being conducted from the marine terminal to the tank farm. Only a few employees were working at the CAPECO facility at the time, monitoring the transfer. At approximately 12:23 am (00:23 hours), a massive explosion registering 2.8 on the Richter Scale occurred, igniting multiple tanks at the same time. Fires broke out and subsequent explosions continued from other tanks igniting. It is estimated that over 60 million gallons of product was on the facility at this time, most of which became compromised.

A firm figure for the total amount of oil discharged off the facility cannot be quantified. However, thousands of gallons of oil, fire suppression foam, and oily-water mixture was discharged from the facility, with a significant amount released to downstream creeks and wetlands. To date CAPECO and EPA have collected and shipped off-site approximately 171,000 gallons of collected oil and 22,000,000 of contact water. The tanks that were destroyed either spilled their contents or the material was consumed by fire. Fifteen tanks were not directly impacted by fire. However, some of these tanks were affected by projectiles and the concussion of the initial explosion resulting in product leaking into secondary containment systems. Following an investigation by the Federal Bureau of Investigations (FBI) and Bureau of Tobacco and Firearms (ATF), and based on preliminary findings of a Chemical Safety Board (CSB) investigation, foul play was ruled out as a possible cause. Rather, it was likely that the explosion and resulting fire/petroleum spill was due to the ignition of a gasoline vapor cloud generated from an overfilled tank during the transfer operations.

During the initial stages of the incident and resultant clean-up activities, a Unified Command was stood up. Members included EPA, CAPECO, United States Coast Guard (USCG), and Puerto Rico Environmental Quality Board (EQB). Additionally, other responding agencies acted in a support role and were considered as assisting agencies. On March 25, 2010 EPA issued the facility a Notice of Federal Assumption, effectively assuming responsibility for all clean-up operations. EPA believed this action was necessary because it was apparent that CAPECO did not have the financial means to continue clean-up operations in a way that was responsive to the community and the environment. As of February 2011, EPA is continuing to perform the clean-up activities, coordinating with CAPECO's facility operations personnel, and augmenting health and safety activities. Although in the process of bankruptcy, CAPECO has remained on-site in an advisory capacity, and to conduct facility maintenance activities. The following is a partial list of activities that have been or are currently being conducted by EPA as part of this clean-up: Protection from secondary hazards for health and safety, infrastructure rehabilitation, tank demolition, air monitoring and sampling, water and sediment sampling, spilled oil collection, storage of recovered material, road construction, access control, security and recovery of products from off-site pipelines, and disposal of contaminated media.

The CAPECO incident highlights that inattention to basic preventative measures can have tremendous impacts to a facility, the environment, and surrounding communities. Because of the volume of oil stored at the CAPECO facility at the time of the incident, they were subject to several regulations that require prevention measures to be in place that could prevent a spill and/or reduce the impact of a spill. EPA's Spill Prevention Control and Countermeasure (SPCC) regulation codified in 40 CFR §112 applies to facilities that store in excess of 1,320 gallons of oil and due to its location, could reasonably be expected to discharge oil in harmful quantities to navigable waters of the United States. Requirements of the SPCC regulation include secondary containment for storage containers that are impervious to spilled oil, and large enough to hold the entire contents of the largest container in a containment structure with a sufficient allowance for precipitation. The regulation also has requirements for over-fill protection, regular inspection of oil storage containers, monitoring of piping and appurtenances, and training of oil handling personnel. The facility is required to discuss its compliance with all parts of the SPCC regulation in a written Professional Engineer (PE) certified SPCC Plan.

The CAPECO facility is also regulated by both the EPA and USCG Facility Response Plan (FRP) regulations. Both of these regulations require that a facility have adequate resources in place to respond to a worst case discharge. Both agencies have a responsibility to conduct inspections at the facility to ensure compliance of the regulations. It should be noted that the regulatory community had conducted numerous inspections and facilitated drills with the facility prior to the incident.

At the time of the October 23, 2009 incident CAPECO's adherence to the requirements of the SPCC and FRP regulations proved to be critical in preventing a more catastrophic event. Compliance with parts of the regulation also allowed responders to conduct a more efficient and effective clean-up. Based on the preliminary findings of the on-going CSB investigations, it is believed that the incident was caused by the overfilling of Tank 409 (a 2,268,000 gallon tank). The tank was being filled with gasoline via pipeline from a barge in San Juan Bay, a normal operational event for the facility. During the fuel transfer process, the tank's electronic gauging system was inoperable, thus preventing overfill protection measures from operating. However, a physical gauge located on the side of the tank, was in proper working order. The SPCC regulation at citing 40 CFR Part 112.8(c)(8)(i–iv) provides facilities with several options for compliance with overfill protection requirements, including:

• High liquid level alarms with an audible or visual signal at a constantly attended operation or surveillance station. In smaller facilities an audible air vent may suffice.

• High liquid level pump cutoff devices set to stop flow at a predetermined container content level.

• Direct audible or code signal communication between the container gauger and the pumping station.

• A fast response system for determining the liquid level of each bulk storage container such as digital computers, telepulse, or direct vision gauges. If you use this alternative, a person must be present to monitor gauges and the overall filling of bulk storage containers.

Facilities are given the option of using one or more of these techniques for meeting the overfill requirement. Since CAPECO's electronic gauge was apparently not operating at the time of the incident, using a direct audible or code signal communication between the tank gauger and the pumping station should have been used to satisfy this regulatory requirement. This option was outlined as such in their PE certified SPCC Plan. Proper adherence to this procedure may have prevented this incident altogether.

While there are costs associated with the installation and maintenance of these types of systems, they are relatively small in comparison to the potential costs associated with a clean-up following equipment failure. In the case of CAPECO the cost difference could be as high as four orders of magnitude. Based on the “Regulatory Impact Analysis for the 2008 and 2009 Final Amendments to the Oil Pollution Prevention Regulations (40 CFR PART 112)” (RIA) prepared for EPA's Office of Solid Waste and Emergency Response, the installation of a liquid level sensing device could be as high as $36,000 per tank. If a tank already had the sensor installed but only required repair, the cost would have been significantly less. As previously stated, CAPECO's SPCC Plan stated that there was an alternative measure in place for monitoring the gauge in case of sensing device failure. Had such measures been implemented, or maintenance of the sensing device conducted properly, the facility's costs for clean-up actions would have been significantly lower or eliminated altogether.

Properly constructed and maintained secondary containment structures are the single most important prevention measure for limiting the extent of an oil spill from a bulk storage facility. In the case of CAPECO, all of the bulk storage tanks had earthen containment structures that limited the spread of spilled oil during the October 23, 2009 incident. Facilities that are regulated by both the SPCC and FRP regulation are required to have secondary containment for their bulk storage tanks. 40 CFR Part 112.8(c)(2) of the SPCC regulation requires facilities to “construct all bulk storage containers installation so that you provide a secondary means of containment for the entire capacity of the largest single container and sufficient freeboard to contain precipitation. You must ensure that diked areas are sufficiently impervious to contain discharged oil. Dikes, containment curbs, and pits are commonly employed for this purpose. You may also use an alternative system consisting of a drainage trench enclosure that must be arranged so that any discharge will terminate and be safely confined in a facility catchment basin or holding pond.”

All tanks located at the CAPECO facility had secondary containment available. Unfortunately, according to CSB's preliminary findings, on the morning of October 23, 2009, the dike drain that supplies the shared containment for tanks 409 and 410 was in the open position. This allowed product, water, and fire suppression foam to leave the containment system. Once out, material and product made its way to streams and wetlands located on the property and eventually off-site. In days following the explosion, aerial surveillance and ground reconnaissance missions showed that the facility's secondary containment structures held a vast majority of spilled oil within the facility. The facility also had additional containment measures in place including API separators, containment weirs and a waste water treatment plant (WWTP). Had these containment structures not been in place the consequences of this spill would have been far greater from both an environmental and financial standpoint. While the construction and maintenance of adequately designed containment structures involved a significant capital expenditure, the cost for these structures is far less than costs incurred as the result of an environmental clean-up post oil spill.

Development of SPCC and FRP plans are a key component for facilities to adequately describe how they comply with respective regulations. The plans not only describe how the facility implements the regulatory requirements, such as maintenance of containment structures, inspections, and effectiveness of preventative measures including overfill protection, but they also outline the proposed actions taken by the facility in the event of a spill. The cost for the development of SPCC and FRP plans vary greatly depending on the complexity of the facility. Costs associated with generating plans using in-house professional engineers versus third party companies also has a significant influence on the final cost of the plan. The actual cost for the preparation and maintenance of CAPECO's SPCC and FRP plans is not known. The Professional Engineer Certification was performed in-house, and the majority of the maintenance activities were also conducted by facility personnel. Based on EPA's Regulatory Impact Analysis it is estimated that a facility of CAPECO's size and complexity the preparation and maintenance of a SPCC plan could be approximately $20,000. Costs associated with the preparation of a FRP plan would be similar to that of the SPCC Plan; however, FRP regulations require the facility to have contracts in place with an Oil Spill Removal Organization (OSRO). This contract also has a cost associated with it and varies greatly depending on services specified.

The costs of this event would have been considerably higher if spill control measures had not been in place. Berms and dikes contained oil that could have discharged from the site with even greater catastrophic consequences to nearby creeks and marshlands. In addition, quick response actions, such as boom deployments in strategic locations, and construction of underflow dams prevented material from flowing into adjacent bodies of water.

In addition to the above referenced prevention and infrastructure costs associated with operating a bulk storage facility, one must consider the social and economic costs that are incurred in the wake of a major incident of this kind. Located less than one mile to the north of the facility, Puente Blanco is a small economically disadvantaged community. Most of the structures are built of concrete and corrugated metal, sitting on concrete slabs. When the explosion at CAPECO occurred, a shockwave registering 2.8 on the Richter scale shook the community. Residents awoke to falling objects, broken windows, and thick smoke hanging in the air. Several homes in Puente Blanco were moved off their foundations. Following several hours of panic and uncertainty, the government of Puerto Rico called for evacuations of all residents living in the small community. Buses were chartered and residents were placed in shelters located away from the area. The American Red Cross and other assisting agencies provided shelter and support, such as food, water, sleeping arrangements, and other necessities. Such activities resulting from the incident have major economic consequences including building repairs, structural integrity testing, damage to private and personal property, and psychological impact. Unfortunately, a cost estimate of damage to private property and personal belongings is currently not available. A number of claims and class action lawsuits associated with these issues are being processed in the judicial system.

Interstate PR-22 is located on the northern boundary of the CAPECO facility. This road is one of two major highways located on the Island of Puerto Rico. It is the main land-based source of commerce between eastern and western portions of the Island, and is the most utilized commuter corridor in the capital city, San Juan. PR-22 provides access to two of the largest shopping complexes in the Caribbean territory. It also provides access to the Bacardi Rum factory, one of the largest rum distilleries in the world. The explosion at CAPECO caused Interstate PR-22 to close for nearly 3 days, choking access to area businesses over a weekend, the main shopping time for locals. Shops that would have normally been filled with money spending customers saw less than average clientele. Businesses that would normally be open in the adjacent industrial park were forced to remain closed, causing a loss of potential revenues. International commerce, including the transportation of rum from the distillery to the main port for export, was also disrupted. The closure of the main transportation artery in Puerto Rico had disastrous economic impacts to not just local businesses, but also to those frequented throughout the Commonwealth of Puerto Rico.

Luis Munoz Marin International Airport is located approximately 8 miles to the east of the CAPECO facility. It is one of the busiest airports in the Caribbean, welcoming passengers from a host of international locations. Initial rumor to the cause of the explosion was a plane coming from Florida and crashing into the facility. That notion was quickly dismissed; however fear was already planted into those traveling via air. The smoke plume caused by fires at the facility, also disrupted the air space of the airport. Normal approach for landing was blocked by smoke and debris causing planes to land and take off from alternative angles. Although airline delays were minimal due to the change in landing patterns, airport adaptations do not come without financial burden.

Old San Juan is the tourist hub of Puerto Rico, hosting as many as five large cruise ships at one time. Thousands of people pass through the scenic and historical area daily, purchasing local crafts and goods. Many restaurants play homage to the local cuisine and pride themselves on serving locals and tourists alike. At the time of the explosion, Old San Juan's nightlife was in full swing, with bars and clubs packed with people. Located across the Bay of San Juan, flames from the fires at the CAPECO facility could be seen from Old San Juan. Panic surged throughout the crowds gathering to witness the flames dance across the sky as mushroom clouds of smoke filled the air with each exploding tank. Although a cost estimate could be generated on revenue lost from fleeing patrons, costs cannot be placed on the stress to those seeing destruction of their homeland. Psychological effects can have negative impacts on the health and quality of life on a person after witnessing such events. A cost estimate cannot be calculated on the trauma of those affected psychologically from the CAPECO explosion.

The Metropolitan Detention Center (MDC) Guaynabo is operated by the Federal Bureau of Prisons, an agency of the Department of Justice, and holds all security categories of inmates. A decision was made by prison officials to evacuate all prisoners housed in the MDC. Buses were chartered, additional correctional officers were brought in, and inmates were relocated to other prisons located throughout Puerto Rico. This influx of prisoners at the other correctional facilities placed an economic burden on the host facility. However, the greatest costs came from the MDC for providing all necessary services to move and detain prisoners.

The actual clean-up costs that have been incurred during the clean-up phase at the CAPECO site since the October 23, 2009 incident have been significant. Because it is unknown what CAPECO's actual clean-up cost are to date, we will only offer what EPA's actual costs are to date. However, based on observations from EPA On-Scene Coordinator's on-site during the entire emergency response and clean-up operation, it is expected that CAPECO's costs for clean-up are considerably higher than costs incurred by EPA. The difference could be considerably higher due to the large amount of response and recovery contractors engaged at CAPECO's expense. Unfortunately, this amount is unknown due to on-going bankruptcy proceedings and non-payment for goods and services.

The following cost figures are as of February 11, 2010. EPA is engaged in clean-up activities using two different funding streams: 1) An Oil Pollution Act (OPA) clean-up is being conducted using funds received from Oil Spill Liability Trust Fund (OSLTF) administered by the USCG and 2) a clean-up of hazardous substances using the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA).

The totals for the OPA clean-up are as follows: Total costs for EPA contractors including indirect costs is $7,102,752, total USCG costs $150,332, total costs for EPA personnel and travel is $978,000. Additionally, EPA expedited funds through the use of Pollution Removal Funding Authorizations (PRFA) to several other agencies. A (PRFA) is a tool available to OSCs conducting a clean-up using OPA funds to quickly obtain needed services and assistance from other government agencies: federal, state, or local, as well as recognized Indian Tribes in oil spill and hazardous materials response actions. Totals costs given for PRFA's is $337,356. The total to date for the EPA lead portion of the OPA clean-up is $8,568,440. An additional $447,962 is budgeted for the EPA lead clean-up. It is expected that the total EPA costs through March 2011 will be approximately $9,500,000. During the initial phase of the site clean-up EPA costs were incurred for responsible party oversight, and direct clean-up costs associated with augmenting clean-up activities. On March 25, 2010 EPA assumed the primary clean-up role at the facility, and was conducting all clean-up activities.

In conducting the OPA clean-up there were several areas in the CAPECO facility that contained hazardous substances that were removed using EPA CERCLA authorities. These activities were undertaken to mitigate potential threats to the environment and to personnel conducting the OPA clean-up. The totals for the CERCLA clean-up as of February 11, 2010 are as follows: Total costs for EPA contractors are $1,727,885, and the total costs for EPA personnel and travel is $259,000. There is currently an additional $3,088.328 budgeted for this clean-up.

The total costs as of February 11, 2010 for both the OPA and CERCLA clean-up are $10,555,325 with an additional $3,536,290 budgeted to both clean-ups.

Much work remains to be completed at the CAPECO facility. Although firm numbers are not available for all costs associated with the clean-up and response activities, it is clear that strict adherence to basic spill prevention measures could have reduced or avoided such costs. The monetary impact that this incident has had and continues to have on Puerto Rico may never be fully realized. However, the real impact this incident has had on tourism, commerce, and island infrastructure could be in excess of 100 million dollars. The final result of this incident has necessitated CAPECO to enter into bankruptcy proceedings, and to sell all its interests in the oil business in the Commonwealth of Puerto Rico. This is clearly a high price for a potentially preventable incident.