Three regulatory programs need work

Nine months after receiving an order from President Obama to investigate safety and security at industrial facilities with hazardous chemicals, six federal agencies comprising the Chemical Facility Safety and Security Working Group have stepped forward with a report on what they learned and what they believe should be done to reduce a range of risks associated with such facilities. 

The Working Group was formed even though there has been substantial effort at the federal level to understand and mitigate these risks.  There are three statutory programs that address different risks at facilities with hazardous chemicals.   But the Working Group confirmed what is already well-known by regulators, the regulated community, and many stakeholders—that federal programs are falling short of preventing catastrophic chemical disasters, which continue to occur with alarming frequency.

The president’s Executive Order 13650 (Improving Chemical Facility Safety and Security) directed the agencies to take four actions:

1. Improve operational coordination with state, local, and tribal partners.
2. Enhance federal agency coordination and information sharing.
3. Modernize policies, regulations, and standards.
4. Work with stakeholders to identify best practices.

Here, we summarize the Working Group’s comments and recommendations on policies, regulations, and standards.  The regulation of facility chemical risks is dominated by the Occupational Safety and Health Administrations (OSHA) Process Safety Management (PSM) standard, EPA’s Risk Management Program (RMP), and the Department of Homeland Security’s (DHS) Chemical Facility Anti-Terrorism Standards (CFATS).

While the general intent of each of these programs is to reduce risks associated with chemicals, the specific focus of each differs.  The PSM is intended to prevent chemical accidents that may endanger workers at manufacturing facilities.  EPA’s RMP addresses risks chemical facilities pose to surrounding communities.  The CFATS was written to ensure that facilities with chemicals of interest (COIs) develop site security plans (SSPs) to thwart criminal attempts to use COIs to endanger lives, the environment, or infrastructure. 

Each program has succeeded to a degree in achieving its goals.  There are also common problems.  For example, the Working Group found that the programs lack efficient methods to add or delete chemicals from the lists of those regulated.  It was also found that management of risk is hampered by differences in how the programs collect, format, and share data.

Stakeholders expressed frustration at having to report the same data to multiple federal agencies that then give different names to the data, which are then stored in different databases.  This makes sharing data an unnecessarily complex process for the federal agencies as well as the local and state authorities that also seek information to identify, mitigate, and better prepare for emergencies.

But the effectiveness of each program is also limited by its own unique circumstances.  Some of these constrictions are the result of the authorizing statutes, which would require congressional action to amend.  Others can be addressed by regulatory changes and basics of managerial improvements such as better training for inspectors and improved lines of communication. 

Following are program-specific issues identified by the Working Group and recommendations for improvement.

EPA’s RMP

The RMP covers about 12,700 facilities, and the EPA conducts approximately 450 RMP inspections per year.  RMP facilities reported, on average, about 253 incidents per year between 2000 and 2009 (latest year with most complete data), compared with an average of 420 per year for 1996 to 1999.  While the drop in incident rate after the implementation of the RMP regulation is promising, chemical incidents continue to occur at facilities both regulated and not regulated by the RMP.  These incidents have resulted in on-site and off-site deaths and injuries, significant property damage, evacuations, and environmental damage. 

The EPA says this summer it will publish a request for information (RFI) to obtain public input on process safety and risk management issues relevant to the RMP.  The Agency says the RFI will guide potential actions that may further reduce the number of chemical incidents that can adversely affect communities.  For example, the EPA is considering updating the list of RMP chemicals with additions and deletions, actions that reflect new information on existing chemicals.  Among other things, the Agency is considering adding reactives and explosives to the RMP list.

The EPA may also strengthen existing requirements and add prevention and emergency response program elements, including:

• Revising mechanical integrity requirements to ensure that critical process safety equipment and systems are in good working condition and effective
• Adding requirements for automated detection and monitoring systems or adding performance measures for facilities already using these systems to supplement existing process hazard analysis (PHA) and/or emergency response requirements
• Establishing an obligation to conduct root cause analyses of frequent process upsets and near misses that could cause a release
• Requiring employers to implement stop-work authority for employees who witness an activity that creates a threat of danger and providing clear requirements to establish an ultimate authority at the facility for operational safety and decision making
• Strengthening contractor safety requirements
• Establishing mechanisms to implement the newest available technologies and methods in chemical risk management, PHA, and emergency response
• Requiring that compliance audits be done by independent auditors
• Establishing new performance measurement and management review requirements, including a measurement and metrics requirement to track the effectiveness of the risk management system; a management review and continuous improvement requirement to focus on ongoing due-diligence reviews that fill the gap between day-to-day work activities and periodic formal audits; and a process safety competency requirement to focus on organizational learning so process knowledge can be applied to situations to effectively manage risk
• Clarifying what is required for a PHA to be updated and revalidated, requiring revalidating PHAs more than every 5 years, and requiring that certain events trigger PHA revalidations before scheduled revalidation
• Clarifying emergency planning requirements to ensure effective coordination with community responders and ensuring facility personnel have practice responding to accidental releases; identifying mechanisms to ensure facilities perform emergency response exercises or drills; and conducting these exercises in conjunction with local responders
• Enhancing facilities’ disclosure of key elements of their risk management plans, including incident history, cause of incidents, and identity of chemicals
• Examining use of safer technology and alternatives as part of the PHA
• Using the Acute Exposure Guideline Levels for Hazardous Substances developed by the National Advisory Committee for Acute Exposure Guideline Levels to recalculate RMP reporting thresholds to better reflect the potential for adverse effects of an accidental release upon a community

 
DHS’s CFATS

According to the Working Group, progress made in the CFATS program over the past 2 years has enhanced the security of the nation’s chemical infrastructure.  For example, the CFATS has played a significant role in more than 3,000 facilities eliminating, reducing, or modifying their holdings of COIs.  The DHS says that work that remains to be done includes reducing the backlog of SSP approvals, improving the risk assessment process, and ensuring that all potentially high-risk facilities are identified and meeting their CFATS obligations.

To initiate these improvements, the DHS says it plans to issue an advance notice of proposed rulemaking seeking public input on ways to improve the CFATS program.  Issues for which comment will be solicited include identification of chemicals that should be considered for addition to the CFATS COI list.  In recent months, the DHS has analyzed a number of chemical families and specific chemicals for potential inclusion on the list.

Nonregulatory changes the DHS is considering include improving the methodology used to identify and provide risk tiers to high-risk chemical facilities.  The DHS also continues to work with federal partners such as the Coast Guard and the Nuclear Regulatory Commission to coordinate chemical facility security activities and explore ways to increase harmonization among chemical facility security regulatory programs.  Additionally, the DHS is trying to develop a better approach to identifying facilities that should have submitted a CFATS Top-Screen—the first step in development of a SSP—but have not done so.

The DHS is also pushing Congress to authorize the CFATS for the long term, streamline the CFATS enforcement process, and end the exemption from the CFATS for water and wastewater treatment facilities.

OSHA’s PSM

The PSM standard is over 20 years old.  According to the Working Group, 27 significant incidents in the past 5 years that have resulted in over 75 fatalities could have been avoided or their effects ameliorated under an updated program.  OSHA says that its enforcement experience over the past 2 decades suggests that a number of regulatory and policy improvements would improve PSM compliance as well as enforcement and oversight of PSM facilities.  Modifications to the PSM would also address the failure of some chemical facilities and local emergency responders to plan and prepare adequately for accidental releases.  To begin modernization, OSHA issued an RFI in December 2013, which OSHA says is the first step of a rulemaking process that will include multiple additional opportunities for public input.

Over the coming year, OSHA says it intends to:

• Clarify confusing and misunderstood PSM policies.
• Revise the current interpretation of retail facilities to more accurately reflect the original intent of the exemption for such facilities.
• Revise the current interpretation of chemical concentrations to more clearly describe what is covered and align with better established practices.
• Initiate the Small Business Regulatory Enforcement Fairness Act (SBREFA) review to solicit small business views on modernizing the PSM standard.
• Incorporate into the PSM standard lessons learned from enforcement, incident investigation, advances in industry practices, root cause analyses, enhanced employee involvement, third-party audits, and emergency response practices.
• Address ammonium nitrate hazards by including reactive chemical hazards in the PSM and/or adding ammonium nitrate to the PSM Appendix A list of highly hazardous chemicals.
• Add substances or classes of substances to PSM Appendix A and provide more expedient methods for future updates.
• Expand coverage and requirements for reactive chemical hazards.
• Cover oil and gas (O&G) drilling and servicing operations currently exempt from PSM coverage.
• Continue harmonization with EPA’s RMP.
• Require analysis of safer technology and alternatives.
• Require coordination, possibly including exercises and drills, between chemical facilities and emergency responders to ensure that responders know how to use chemical information to safely respond to accidental releases.

The report includes a discussion of inherently safer technologies (ISTs) that can be adopted to reduce risks at facilities.  The Working Group notes that industry stakeholders were receptive to considering ISTs but were adamantly opposed to any regulatory action that would impose IST requirements.  Based on input from stakeholders, the EPA and OSHA are considering modifications to RMP and/or PSM standards to require safer technology analysis and documentation of actions taken to implement feasible alternatives.  The EPA and OSHA would not, however, determine specific technology, design, or process selection by chemical facility owners and operators, states the Working Group.

The Working Group report

William C. Schillaci
BSchillaci@blr.com