OSHA Considering Significant Changes to Its Process Safety Management Standard

The Occupational Safety and Health Administration (OSHA) announced on December 9 that it is considering significant revisions to its Process Safety Management (PSM) standard (codified at 29 C.F.R. § 1910.119). Chief among the affected employers would be those doing upstream work in the oil and gas industry. OSHA's announcement came in the form of a request for information (RFI) published in the Federal Register, entitled "Process Safety Management and Prevention of Major Chemical Accidents." An RFI is frequently a federal agency's first public acknowledgment that it intends to pursue rulemaking.

OSHA's RFI, which the agency telegraphed in a press release a week earlier, was precipitated by Executive Order 13650, issued by President Obama on August 1 in response to an April 2013 explosion at a fertilizer facility in West, Texas, that killed 15 people and injured many others. The Executive Order directed OSHA and other federal agencies with related chemical facility safety programs to review their respective regulatory authorities to determine whether to revise them to help prevent similar accidents from occurring. As a result, OSHA, the Environmental Protection Agency, and the Department of Homeland Security are leading a Working Group established by EO 13650 to identify areas for regulatory reform. Consistent with the EO's directives, the Working Group has engaged the public in an ongoing series of "listening sessions," both in-person and by webinar. The next listening session is scheduled for December 16, 2013.

The December 9 RFI represents OSHA's preliminary view of those aspects of its PSM standard that need to be revised and identifies 17 specific topics as potential targets for regulatory overhaul (see below for the full list). Two of the topics (items 2 and 3 in the list below) are specific to upstream work in the oil and gas industry: one would remove the existing PSM exemption for well drilling and servicing; the other would have OSHA resume PSM enforcement at well production facilities. The latter is interesting because, while not exempt under the current PSM standard, oil and gas production facilities have, for more than a decade, enjoyed a reprieve from PSM enforcement because of OSHA's admitted failure to undertake an economic analysis of the impact of such enforcement. In its RFI, OSHA states that it is considering completing that long-overdue analysis in order to resume enforcement.

Other potential regulatory changes signaled by the RFI, not limited to the oil and gas industry, include the following:

• eliminating the exemption for flammables stored in atmospheric tanks connected or in close proximity to a covered process;
• expanding PSM coverage and requirements for reactivity hazards;
• updating the list of 137 highly hazardous chemicals to which the PSM standard currently applies;
• defining the term "recognized and generally accepted good engineering practices," or RAGAGEP, and requiring employers to stay up-to-date in their evaluation and application of RAGAGEP;
• narrowing the PSM exemption for retail facilities; and
• updating various other related regulations, including those for (i) explosives, blasting agents, and pyrotechnics, and (ii) the storage, handling, and management of ammonium nitrate.

The deadline for submitting comments and additional information in response to the RFI is March 10, 2014. Given the broad applicability of the PSM standard across many industrial sectors, a future rulemaking of the sort contemplated by the RFI could have significant operational and economic effects. Accordingly, affected companies and trade associations should give this RFI their serious attention and consider submitting comments and other information to OSHA now to get in on the ground floor of any such rulemaking.

The RFI identifies these 17 topics for potential further rulemaking:

1. Clarifying the PSM exemption for atmospheric storage tanks.
2. Subjecting oil- and gas-well drilling and servicing to PSM requirements.
3. Enforcing PSM requirements at oil- and gas-well production facilities.
4. Expanding PSM coverage and requirements for reactive hazards.
5. Updating the list of highly hazardous chemicals in Appendix A of the PSM standard.
6. Revising the PSM standard to require additional management-system elements.
7. Amending paragraph (d) of the PSM standard to require evaluation of updates to applicable recognized and generally accepted good engineering practices (RAGAGEP).
8. Clarifying the PSM standard by adding a definition for RAGAGEP.
9. Expanding the scope of paragraph (j) of the PSM standard to cover the mechanical integrity of any safety-critical element.
10. Clarifying paragraph (l) of the PSM standard with an explicit requirement that employers manage organization changes.
11. Revising paragraph (n) of the PSM standard to require coordination of emergency planning with local emergency response authorities.
12. Revising paragraph (o) of the PSM standard to require third-party compliance audits.
13. Expanding the requirements of § 1910.109 to cover dismantling and disposal of explosives, blasting agents, and pyrotechnics.
14. Updating §§ 1910.106 and 1910.107 based on the latest applicable consensus standards.
15. Updating the regulations addressing storage, handling, and management of ammonium nitrate.
16. Changing enforcement policy of PSM exemption for retail facilities.
17. Changing enforcement policy for highly hazardous chemicals listed in Appendix A of the PSM standard without specific concentrations.