Cutting Corners Triggers Vapor Explosion: CEO Headed to Jail

Environmental health and safety should never take a back seat to making a profit. The former president of an oil waste reclamation plant learned that lesson the hard way. Peter Margiotta, 64 years old, just started an 18-month sentence in a federal prison after being found guilty of multiple criminal violations of the Clean Air Act (CAA).

Profits Trumped Process Safety

Rushing to get up and running before all the T’s were crossed and I’s dotted landed three of his former employees in the hospital and blew up a sizable chunk of his plant.

Custom Carbon Processing was wrapping up construction of a disposal well and oil reclamation facility in Wibaux, WY. But there was still a lot more work to do before the plant could accept and treat shipments of highly volatile and flammable drip gas from fracking operations in the surrounding Bakken Formation.

Each day the plant sat idle meant a loss of profits to Margiotta. So he decided to open the facility before all necessary wiring and ventilation could be installed. The project manager balked at the decision in an email to Margiotta: “The control panels must be moved ASAP with the explosion-proof wiring. We also run the risk of killing someone, not only our operators but also customers.”

Prophetic Warning Went Unheeded

The foreman repeatedly warned the natural gas condensate they were using to thin slop wasn’t effective, and that flammable vapors could ignite. In addition, hydrocarbon vapors, extremely hazardous substances and air toxics would be released.

Margiotta disregarded the warnings, and during a delivery of natural gas condensate, flammable vapors from the material filled the plant and spread out through the open bay doors where the truck making the delivery was located.

An ignition source sparked and triggered an explosion. Three employees suffered injuries. Parts of the building as well as the loading dock and truck were nearly torn apart.

Luckily no one died.

The Department of Justice said Margiotta “ignored warnings and knowingly put his employees and the public at risk,” highlighting “the importance of a risk management program that protects public health and the safety of our communities,” Margiotta faced up to 15 years in prison for three CAA charges, but the judge sentenced him to 18 months.