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Wide-ranging Federal Plans to Address Chemical Process Safety and Security

Beveridge & Diamond, P.C., August 13, 2014

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Substantive changes may be coming to OSHA’s process safety management standard, EPA’s Risk Management Plan regulations, and DHS’s CFATS program.  Companies affected by these and other programs regulating process safety and security should be aware of the developments and, as appropriate, consider participating in the rulemaking process.  This alert reports on why and how multiple federal agencies are newly focused on updating and expanding their programs related to handling hazardous chemicals safely and securely.

Executive Order 13650

In April 2013, an explosion at an ammonium nitrate fertilizer facility in West, Texas killed 15 people and injured more than 200. Subsequently, on August 1, 2013, President Obama issued Executive Order 13650 (“Improving Chemical Facility Safety and Security”).[1] The Executive Order established an interagency Chemical Facility Safety and Security Working Group, co-chaired by DHS, EPA, and OSHA. It directed the Working Group and agencies to act in five areas related to process safety and security: (1) improve operational coordination with state, local, and tribal partners; (2) enhance federal coordination; (3) enhance information collection and sharing across agencies and the public; (4) modernize regulations and policies; and (5) identify best practices in chemical process safety and security.

Working Group Report

In response to the Executive Order, the Working Group issued a report in June 2014.[2] The Report reviews stakeholder input, summarizes the progress of the Working Group and agencies thus far, and sets forth a detailed federal action plan. The Report discusses efforts to modernize agencies’ regulatory programs, to strengthen community planning and preparedness, to enhance coordination between federal and state agencies, to improve data management, to solicit public feedback, and to identify chemical process safety and security best practices. Pursuant to the Report, OSHA, EPA and DHS intend to update their respective regulatory programs, OSHA and EPA plan to issue an alert on inherently safer technology, and various agencies intend to issue guidance as well as take other actions relating to chemical process safety and security.

OSHA Process Safety Management Standard

The Report discusses OSHA’s plans to update its PSM standard and associated enforcement policy. OSHA adopted the PSM standard in 1992 and has not substantively revised it in 22 years. On December 9, 2013, OSHA issued a Request for Information (RFI) as the first step of updating its PSM standard.[3] In the RFI, OSHA identified several topics as “potential candidates” for rulemaking and policy changes:

  • Eliminating exemptions for oil and gas drilling and servicing operations, including for hydraulic fracturing operations.[4]
  • Changing enforcement policies for the exemption for retail facilities, highly hazardous chemicals listed in Appendix A without specific concentrations, and oil and gas production facilities.
  • Expanding PSM coverage and requirements for reactivity hazards, updating the list of highly hazardous chemicals in Appendix A of the PSM standard, and updating the regulations addressing ammonium nitrate. Note that the concern with reactive hazards has long existed, despite continuing controversy over how they should be addressed.[5] The focus on ammonium nitrate follows in the wake of the West, Texas ammonium nitrate explosion, as well as a May 2014 U.S. Government Accountability Office report highlighting problems with federal oversight of ammonium nitrate.[6]
  • Clarifying the PSM standard, including provisions relating to atmospheric storage tanks, management of organizational changes by employers, and the term “recognized and generally accepted good engineering practices” (RAGAGEP).
  • Strengthening the PSM standard to require additional management-system elements, evaluation of updates to applicable RAGAGEP, mechanical integrity programs for safety-critical equipment, coordination of emergency planning with local emergency-response authorities, and third-party compliance audits.
  • Updating the explosives and blasting agents standard to cover dismantling and disposal of explosives, blasting agents, and pyrotechnics.
  • Updating the flammable liquids and spray finishing standards based on the latest consensus standards.

The comment period for the RFI ended on March 31, 2014. OSHA is currently analyzing comments. Prior to issuing a proposed rulemaking, it will convene a small business advocacy review panel.

EPA Risk Management Plan Regulations

The Report describes EPA’s efforts to update its RMP regulations. EPA adopted its RMP rules in stages during the 1990s and, for the most part, has not substantively amended them in the last 14 years.  EPA intends to propose “any appropriate priority amendments” “to advance increased safety” in 2015, and to finalize such amendments by 2016. As an initial step, on July 31, 2014, EPA issued its own RFI[7] on the following topics:

  • Updating the list of chemicals covered by RMP, including by adding other toxic or flammable substances, high and/or low explosives, ammonium nitrate, reactive substances and reactivity hazards, other categories of substances; by raising lowering the threshold quantity for substances already on the list; and by removing certain substances from the list or raising their threshold quantity.
  • Revising the RMP regulations in a manner similar to how OSHA may revise its PSM standard, including by adding elements to the RMP program, defining and requiring evaluation of updates to applicable RAGAGEP, extending mechanical integrity requirements to cover any safety-critical equipment, requiring owners and operators to manage organizational changes, and requiring third-party compliance audits.
  • Modifying RMP eligibility criteria and RMP program categories in light of OSHA’s updates to its PSM standard.
  • Further modifying, clarifying, or strengthening the RMP regulations, including by issuing guidance and considering regulation in regard to inherently safer technology, requiring emergency drills to test a source’s emergency response program, requiring automated detection and monitoring for releases of regulated substances, providing more specific stationary source location requirements, clarifying emergency response program requirements in coordination with local responders, broadening incident investigation and history requirements, revising worst case release scenario quantity requirements for processes involving numerous small vessels stored together, enhancing public disclosure, using Acute Exposure Guideline Levels to recalculate RMP thresholds and off-site consequence analysis endpoints, reevaluating Program 3 applicability for certain North American Industry Classification System (NAICS) codes based on accident history data, adopting a safety case regulatory model, and streamlining the RMP regulations.

EPA will accept comments on the RFI through October 29, 2014.

DHS Chemical Facility Anti-Terrorism Standards and Ammonium Nitrate Regulations

The Report discusses DHS’s plans to build a stronger CFATS program and also notes DHS’s ongoing rulemaking regarding ammonium nitrate.

DHS intends to issue an advance notice of proposed rulemaking (ANPRM) relating to the CFATS program shortly. It is considering updating the list of chemicals on the CFATS Chemicals of Interest list, its general regulatory approach, treatment of non-traditional chemical facilities, and Risk-Based Performance Standards; as well as making revisions to clarify terminology.[8]

On July 30, 2014, the Senate Homeland Security and Governmental Affairs Committee approved an amended version of a bill passed by the House earlier that month to extend and improve the CFATS program.[9] The version of the bill approved by the Senate Committee would reauthorize CFATS for four years, provide an “expedited” approval procedure for some chemical facilities, and expand protections for whistleblowers. The Committee approval came after sharp criticism of CFATS by ranking member Sen. Tom Coburn (R-Okla.) alleging that CFATS “isn’t working” and suffers from “fundamental problems.”[10] 

DHS has also reported an increasing pace of security plan approvals under CFATS. As of July 2014, it had approved security plans for 900 facilities, or nearly a quarter of all facilities regulated under CFATS,[11] including nearly all of the highest-risk facilities classified as Tier 1.[12] This represents a marked improvement in CFATS implementation from a year ago, when a March 2013 DHS Office of Inspector General report criticized the program for its “inadequate tools, poorly executed processes, and insufficient feedback on facility submissions,” and its failure to have approved a single security plan despite being appropriated $443 million.[13]

Additionally, DHS looks to finalize a proposed rule on ammonium nitrate handling in December 2014.[14] It would require ammonium nitrate purchasers and sellers to register with DHS and be screened against the Terrorist Screening Database.

Inherently Safer Technology

The Report outlines a plan by EPA and OSHA to encourage inherently safer technology (IST).[15] The EPA RFI provides additional information and also seeks comments on IST.

IST is a philosophy and an iterative process that includes eliminating a hazard, reducing a hazard, substituting a less hazardous material, using less hazardous process conditions, and designing a process to reduce the potential for human error, equipment failure, or intentional harm.[16] A recent Chemical Safety Board report on the 2010 Tesoro petroleum refinery explosion declared IST the “most effective major accident prevention approach,” and asserted that both the Tesoro incident and an earlier incident at Chevron’s Richmond plant could have been prevented had IST been used.[17]

As part of their plan, OSHA and EPA first intend to issue an alert providing non-regulatory insights on applying safer technologies. Subsequently, they intend to issue voluntary guidance.  Finally, if prudent, they intend to consider regulatory options, including modification of RMP or PSM standards. Neither agency, however, intends to determine the specific technology or design to be used by chemical facilities.

EPA has been petitioned to require IST through its RMP regulations and, in the meantime, to enforce IST through its General Duty Clause.[18] Past Congressional efforts to reauthorize the CFATS program have stumbled several times over disagreements on whether DHS should mandate the use of IST.[19] The current House-passed legislation and the Senate Committee’s marked-up bill both omit an IST provision. 

Guidance

The Report discusses plans by a number of agencies to issue guidance on eleven topics related to process safety and security.[20] Among these, OSHA and EPA intend to issue guidance on process safety and security terminology so as to reduce confusion due to differences in terminology between their various regulatory regimes. DHS also intends to publish best practice guidance for its CFATS Risk-Based Performance Standards.

Other Actions

The Report also describes a number of other federal actions, including the following:

  • In response to the January 2014 Elk River, West Virginia, chemical spill, EPA will work with states to improve Safe Drinking Water Act measures to prevent and prepare for chemical spills.
  • OSHA intends to work with Congress to seek greater civil and criminal penalties. OSHA has previously sought increased penalties without success.[21]
  • The Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), part of the Department of Justice, plans to work with Congress to seek an amendment to the Safe Explosives Act to allow ATF to regulate workers who handle explosives but are not yet regulated under existing laws.[22]
  • ATF will also work to improve the process for notifying fire authorities of stored explosives.
  • The Working Group has created a website repository for sharing best practices on chemical process safety and security.[23]
  • EPA, DHS, and other agencies will work to strengthen state and local emergency response commissions.
  • A number of agencies will work to enhance federal collaboration and establish standard operating procedures for chemical process safety and security.

Conclusion

Rulemakings at OSHA, EPA, and DHS will take years to result in final amendments to regulatory programs addressing chemical process safety and security.  Nevertheless, key policy decisions are being made now.  The next several months provide companies with the opportunity to influence the rules that will eventually emerge.

Beveridge & Diamond's Occupational Safety and Health Practice provides strategic, business-focused advice to the global chemicals industry. Working alongside our clients’ legal, EHS and technical teams, we help resolve critical enforcement, compliance, and regulatory issues relating to their facilities and operations. For more information, please contact the author, Mark Duvall, at mduvall@bdlaw.com, (202) 789-6090, or any member of our Occupational Safety and Health Practice.

The author gratefully acknowledges the assistance of Ryland Li in the preparation of this News Alert.


[1] 78 Fed. Reg. 48029 (Aug. 7, 2013).

[2] Chemical Facility Safety and Security Working Group, Executive Order 13650 Actions to Improve Chemical Facility Safety and Security – A Shared Commitment (2014) (Report).

[3] Process Safety Management and Prevention of Major Chemical Accidents, 78 Fed. Reg. 73756 (Dec. 9, 2013).

[4] Oil and gas drilling and servicing were originally exempted from the PSM standard because OSHA had proposed another rulemaking specifically with regard to those activities. See Process Safety Management of Highly Hazardous Chemicals, 55 Fed. Reg. 29150, 29153 (proposed July 17, 1990) (citing Oil and Gas Well Drilling and Servicing, 48 Fed. Reg. 57202 (proposed Dec. 28, 1983)). The proposed rulemaking would have regulated, among other things, hydraulic fracturing. However, OSHA eventually removed the item from its regulatory agenda and never promulgated the final rulemaking.

[5] A 2002 federal Chemical Safety Board (CSB) report on “Improving Reactive Hazard Management” found that there existed a “general consensus that there are concerns” with how reactive hazards are covered under OSHA PSM and EPA RMP rules, but “no consensus on how the problems should be addressed.” U.S. Chemical Safety and Hazard Investigation Board, Report No. 2001-01-H, Hazard Investigation: Improving Reactive Hazard Management 81 (2002). The CSB report recommended, among other things, that reactive substances be covered under OSHA’s PSM standard. Additionally, OSHA had added an advance notice of proposed rulemaking to its agenda regarding reactive chemicals in 2000 (RIN 1218-AB63), but the item was eventually withdrawn from the regulatory agenda in 2002.

[6] U.S. Government Accountability Office, Report GAO-14-274, Actions Needed to Improve Federal Oversight of Facilities with Ammonium Nitrate (2014). Ammonium nitrate was the primary explosive used in the Oklahoma City bombing.

[7] Accidental Release Prevention Requirements: Risk Management Programs Under the Clean Air Act, Section 112(r)(7), 79 Fed. Reg. 44604 (July 31, 2014).

[8] See Chemical Sector Security Summit 2014 Agenda, DHS (June 17, 2014); Anthony Adragna, Homeland Security to Begin Push to Reform Chemical Security Program, 142 Daily Env’t Rep. A-2 (July 23, 2014).

[9] Homeland Security and Governmental Affairs Committee Approves Measure to Improve Safety and Security of Nation’s Chemical Facilities, U.S. Senate Committee on Homeland Security & Governmental Affairs (July 31, 2014). The bill that passed the House was the Chemical Facility Anti-Terrorism Standards Program Authorization and Accountability Act of 2014, H.R. 4007, 113th Congress (2014).

[10] Sen. Tom Coburn, Chemical Insecurity: An Assessment of Efforts to Secure the Nation’s Chemical Facilities from Terrorist Threats ii-iii (2014).

[11] DHS, Chemical Facility Anti-Terrorism Standards (July 2014).

[12] Anthony Adragna, Pace of Security Plan Reviews Improved; Most Chemical Plants Still Await Approval, 140 Daily Env’t Rep. A-1 (July 21, 2014).

[13] DHS Office of Inspector Gen., Effectiveness of the Infrastructure Security Compliance Division's Management Practices to Implement the Chemical Facility Anti-Terrorism Standards Program, OIG-13-55 1, 13 (Mar. 2013).

[14] Ammonium Nitrate Security Program, 76 Fed. Reg. 46907 (proposed Aug. 3, 2011).

[15] Report, at 43-45.

[16] Ctr. for Chem. Process Safety & Am. Inst. of Chem. Eng’rs, Final Report: Definition for Inherently Safer Technology in Production, Transportation, Storage, and Use, at Exec-1 (2010).

[17] U.S. Chemical Safety and Hazard Investigation Board, Investigation Report: Catastrophic Rupture of Heat Exchanger (Seven Fatalities), Report 2010-08-I-WA, 12 (2014).

[18] 79 Fed. Reg. at 44620.

[19] See Mark N. Duvall & Russell N. Fraker, Chemical Plant Security Returns to the Congressional Agenda, Beveridge & Diamond (June 10, 2011); Mark N. Duvall & Russell N. Fraker, Chemical Plant and Water Facility Security Legislation in the Senate, Beveridge & Diamond (Aug. 18, 2010).

[20] Report, at 47-48.

[21] See, e.g., Protecting America’s Workers Act, H.R. 1648, 113th Cong. (2013); Protecting America’s Workers Act, S. 665, 113th Cong. (2013). Bills with the same name and similar content were also introduced in the House and Senate during the 111th, 110th, and 109th Congresses, and in the Senate during the 108th Congress.

[22] In another action related to explosives, in July 2014, the Pipeline and Hazardous Materials Safety Administration (PHMSA), part of the Department of Transportation, proposed a rule regulating transportation of ammonium nitrate and other bulk explosives under industry standards, rather than under the special permits used in the current regime. Hazardous Materials: Requirements for the Safe Transportation of Bulk Explosives (RRR), 79 Fed. Reg. 41185 (July 15, 2014).

[23] DHS, Lessons Learned Information Sharing: Chemical Facility Safety and Security

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