Bankrupt Philadelphia Energy Solutions blames ‘mislabeled’ pipe for big blast that led to refinery’s closure

The bankrupt former operator of a South Philadelphia refinery has blamed the supplier of an allegedly mislabeled elbow section of pipe for the 2019 leak and explosion that led to the permanent closure of the plant.

Philadelphia Energy Solutions Refining and Marketing LLC, along with the trust that is liquidating the company’s remaining assets, has sued Babcock & Wilcox Co. for allegedly mislabeling the pipe, whose failure authorities say led to the catastrophic accident. The pipe was installed 46 years before the explosion when the refinery was owned by Gulf Oil.

“B&W inadequately and defectively marketed the failed elbow joint by mislabeling the failed elbow joint and misleading the purchaser,” according to the complaint, filed Friday in Philadelphia Common Pleas Court. The suit was first reported by Law360.com.

The refinery property was sold last year in bankruptcy court for $225.5 million to Hilco Redevelopment Partners, which promised to demolish and clean up the 1,300-acre site and rebuild it as a mixed-use industrial park. PES was the East Coast’s largest refinery until the June 21, 2019 accident damaged the plant and tipped public sentiment against its continued operation.

Though the 150-year-old refinery is closed for good, PES continues to sort out the settlement of millions of dollars in liabilities owed to creditors. The lawsuit filed Friday in Philadelphia Common Pleas Court seeks damages from Babcock & Wilcox for allegedly mislabeling the failed pipe joint, and makes claims for negligence, product liability, and breach of warranty.

A preliminary 2019 report by the U.S. Chemical Safety and Hazard Investigation Board identified the 8-inch diameter section of pipe in the refinery’s alkylation unit as the source of the leak of flammable liquids and hydrofluoric acid (HF), which formed a vapor cloud that exploded. The alkylation unit produces a chemical that boosts octane level of gasoline.

A series of explosions released 5,239 pounds of deadly HF and launched pieces of shrapnel as large as 19 tons across the refinery. Despite the release of hydrofluoric acid, only five refinery workers experienced minor injuries that required first aid treatment.

The piping circuit in the alkylation unit that contained the ruptured elbow was installed in about 1973, when a previous owner, Gulf Oil, had installed the unit. CSB said the piping appeared to be original.

The CSB report said that a section of pipe that leaked had corroded to about half the thickness of a credit card, or a mere 0.012 inches thick, 7% of the minimum thickness allowed. It said the faulty section of steel pipe contained a high amount of copper and nickel, whose presence in a steel alloy can cause greater corrosion when it comes in contact with HF.

The lawsuit alleges the faulty piping section was stamped to indicate that it was carbon steel, but it also had a fainter mark showing it was a nickel- and copper-containing alloy called Yoloy. By labeling the elbow with “misleading and inaccurate markings,” Babcock & Wilcox mislead the refinery’s owner “into using what it thought was a carbon steel elbow joint when in fact it was not,” according to the suit.

Babcock & Wilcox, a manufacturer of large power systems including nuclear reactors based in Akron, declined to comment on the suit.

PES is represented by James F. Marrion and Kevin E. Raphael of Pietragallo Gordon Alfano Bosick & Raspanti LLP law firm. It also declined to comment.

ne complication that will no doubt be sorted out in litigation is that the piping was installed before new standards were adopted in 1995 that set maximum levels of metals such as nickel, chromium, and copper. At the time the parts were installed, the Chemical Safety Board said there were no standards for the added metals, which weaken the steel in the presence of a corrosive acid like HF.

But the CSB said the faulty piping was clearly a different metallic composition than other sections of pipe, even one less than two feet away in the same circuit, although all appeared to be installed at the same time. The sections of pipe that did not contain large amounts of copper and nickel had not corroded.

“This was just kind of a rogue piece because of its metallurgical composition that corroded faster,” Lauren Grim, the CSB’s supervisory investigator, said at the time of the preliminary report’s release.