Arkema's Texas smoke signals a wider chemical threat

Texas-sized damage followed Harvey's flood: Hundreds of thousands of homes stinking; a million cars wrecked; more than a million pounds of benzene and other dangerous material escaped from factories and refineries.

But it was King of Prussia-based Arkema Americas' accurate warning that, after days without refrigeration, chemicals stored at its Crosby, Texas, plant would unavoidably bang open and ignite that made the fire at Arkema the video face of the storm.

You knew professionals had tactically weighed costs, benefits and good advice before isolating explosive organic peroxides from more-lethal sulfur dioxide, evacuating employees and leaving these plastics-process chemicals to burn, instead of trucking them through crowds of storm refugees. Of course, Harris County plants hosted many more flares and burn-offs as the power came back.

But this looked bad. The building-high flames and towering black smoke had "a significant impact" on the reputation of the $9 billion (yearly global sales), French-owned, publicly traded company, wrote Kevin McManus, director at Egan-Jones Proxy Services, a Haverford firm that advises institutional shareholders, in a report to clients.

Arkema officials kept apologizing to evacuated neighbors. They promised to help cart away starved livestock and pets. But they went on to blame forces beyond the scope of risk management — a storm that was bigger, drowned the plant (built in the 1960s) under more water, and knocked power down days longer than anyone sensibly expected.

No, said McManus: This wasn't data failure, it was "failure of imagination," or else "plain unwillingness to spend a little extra to ensure safety during emergency situations." Explosive chemicals ought to be in a "flood- and wind-resistant secure storage facility under 24-hour guard," he told investors. "We'll assume a reinforced two-story structure with generators and fuel storage on the second level may have cost a few hundred thousand dollars" — cheap compared with unwanted attention, or the monetary loss, that Arkema says it hasn't counted yet.

McManus told me his firm expects to see significant changes at Arkema — shareholders will demand it. "Though prevention would have been better," he added. "We are also left to wonder if this would have ever been allowed to happen if the plant was located in Arkema's home country of France."

Of course, when chemical plants blow up, it's what you don't see that worries. The year before, Texas A&M chemical-engineering professor Sam Mannan named the Arkema Crosby works one of the most dangerous in the Houston area in case of accident. The U.S. Occupational Safety and Health Administration last winter slapped the company with 10 "serious" violations, eight of them for hazardous-chemical storage violations.

Company officials compared the smoke that rose from the plant to a house or car fire, with burned insulation and plastics creating soot you don't want to breathe. Just in case, they asked people who found soot on their property to call them so they could take it away and check it for additional toxins. Arkema explained why it wouldn't say how much or where it kept dangerous chemicals on site: Could attract terrorists.

Four other Arkema plants in Texas were flooded, none as badly. (The company, descended from the old Pennsylvania Salt Manufacturing Co., also has facilities in Exton, West Chester, and Bristol.)

Asked about lessons learned, Arkema Americas president Richard Rennard said, "We're going to work with the Chemical Safety Board," an independent U.S. government agency, "who's going to come into Crosby and look at this specific situation and try and assess what went well and what didn't. And, frankly speaking, we welcome that. If that sort of review can help make us stronger, can help us ensure that going forward, we don't face a similar situation like this, then we are absolutely open to that. I think it will, it could, help us and it could help the entire industry."

It is a reactive, limited, damage-control approach to chemical safety, argued MIT technology and policy professor Nicholas Ashford in an essay for Fortune. The Environmental Protection Agency, in the last days of the Obama administration, attempted stricter, preventive chemical safety standards, which the Trump administration suspended in a move cheered by the same chemical companies that rushed around Houston last week apologizing for damage caused by a storm that, they were careful to add, wasn't their fault, nor was the failure to plan for it.

When is public burning of potentially dangerous chemicals good practice? How much help do these companies need from government to protect their workers, neighbors and shareholders from a competitive efficiency that goes to extremes?