Federal investigators on Monday called for a dramatic overhaul of oil refinery regulation in California and across the nation, saying the massive fire at Chevron's Richmond refinery last year is evidence that the current system does not force the state's 15 refineries to operate as safely as possible.

"We are here because we have a refinery safety problem in the United States," said the chairman of the U.S. Chemical Safety Board, Rafael Moure-Eraso, in introducing his agency's draft report on the blaze that sent clouds of smoke through the region on Aug. 6, 2012, prompting more than 15,000 people complaining of breathing problems to go to hospitals.

Speaking at a news conference in Emeryville, Moure-Eraso said his agency logged 125 refinery accidents last year, including 17 in California, a record that demonstrates the need for "sweeping change."

The board's report concluded that while California had made progress since the Chevron fire in improving oversight of the troubled oil refinery industry, much more needs to be done both locally and nationally. Moure-Eraso applauded the state's response as a first step in changing policy.

"California can serve as a model" for reform nationwide, he said.

The board's first report, issued in April, blamed Chevron for allowing unchecked sulfur-related corrosion at its refinery despite a string of warnings about the danger that higher-sulfur crude could pose to the part of the crude-processing unit that ultimately failed. The pipe that burst - which had lost 90 percent of its wall thickness - had been left in place for years despite internal recommendations to replace it, investigators said.

Chevron issued a statement Monday saying it would continue to work with state and federal authorities "to implement appropriate measures that enhance safety at our Richmond facility."

The company said it had put in 1.9 million man-hours repairing and improving the crude unit that was damaged in the fire, and had provided about $10 million to community members and government agencies for medical and response costs. Chevron is still inspecting the refinery, officials said, while expanding a system that monitors air quality along the refinery's perimeter and in nearby neighborhoods.

Looking to future

The federal report released Monday outlines a path forward for the industry, noting that there has been virtually no progress in improving safety despite a string of deadly accidents, including a 2005 fire at BP's Texas City refinery that killed 15 workers.

The board lauded California's plan to hire 15 more workplace inspectors after the Richmond fire, but it said that bringing in more staff members and issuing more citations would not be enough. The regulatory approach in California and the U.S. is too static, reactive and focused on after-the-fact fines, when it should seek to drive down accidents, investigators said.

"The regulatory system both in the U.S. and California for petroleum does not effectively prevent major accidents," said Don Holmstrom, head of the board's Western regional office. He said the U.S. is "lagging behind the rest of the world."

The board touted as an alternative the "safety case" regulatory system used in England, Norway and Australia, a prevention-based model that holds the industry accountable to demonstrate it is driving down the risk of disasters to the lowest level possible.

Holmstrom said that process could have prevented the accident last year because Chevron would have had to identify all hazards and deal with them by replacing pipe that was at risk of corrosion.

Under the system, governments hire highly qualified, well-compensated experts to ensure the industry is reducing risks. But making such a system work in the U.S. would require better pay and training for regulators, so they could be at least competitive with the refineries they oversee, the board's report found.

Lack of regulation

Currently, California regulators earn a little bit more than half of the salaries of their industry counterparts, in part because of salary caps at Cal/OSHA, the workplace safety agency. Those caps, the board found, make it "incredibly difficult" to draw the experts needed to oversee the industry.

The board noted that Cal/OSHA had a team of just seven regulators before the Richmond fire that performed cursory inspections of the state's 15 refineries as well as 1,700 other chemical plants. Just one member of the team had a degree in engineering, the board said.

That effort contributed to the Richmond fire, the board found, as Cal/OSHA had done only about 150 hours of planned inspections over the previous decade at the plant and issued no fines. State officials have acknowledged that the inspections were far from the comprehensive checks outlined in the agency's own mission statement and called for by federal regulators.

In July, a state task force appointed by the governor to review refinery safety regulatory efforts in the wake of the Richmond fire issued a report calling for reforms, including the adoption of the "safety case" approach.

The Chemical Safety Board on Monday hailed that report as "an important step forward in improving petroleum refinery safety and environmental performance both in California and nationally."

Mike Wilson, chief scientist with the state's Department of Industrial Relations, read a statement Monday that welcomed the safety board's recommendations as a "very useful foundation" for the reforms being considered in California.

Speaking after the news conference, Wilson said, "We believe that California does indeed have the opportunity to serve as a national model for refinery safety performance."