• Awaiting the Arrival of Proposed Revisions to OSHA PSM and EPA’s RMP Rules: Atmospheric Storage Tanks
  • March 17, 2015 | Author: R. Lee Vail
  • Law Firm: Kean Miller LLP - New Orleans Office
  • The Occupational Safety and Health Administration (“OSHA”) published a Request for Information (“RFI”) on December 9, 2013 concerning possible changes to the Process Safety Management (“PSM”) program codified at 29 C.F.R. 1910.119. See 78 Fed. Reg. 73756 (Dec. 9, 2013). Likewise, the Environmental Protection Agency (“EPA”) published an RFI on July 31, 2014 relating to possible changes to the similar Risk Management Program (“RMP”) rules codified at 40 C.F.R. Part 68. See 79 Fed. Reg. 44604 (July 31, 2014). At the time of this writing, the respective comment periods have closed and we are waiting to see new proposed regulations.

    Perhaps one of the more interesting issues is the atmospheric storage tank exemption from the PSM rules. In a prior administrative decision, Secretary of Labor v. Meer Corporation (1997) (OSHRC Docket No. 95-0341), an administrative law judge ruled that PSM coverage does not extend to flammables stored in atmospheric tanks, even if the tanks are connected to a process. OSHA, in its RFI, requested information to support a decision to clarify the rule to include atmospheric storage tanks connected to a process. Although many comments concerning the subject were submitted to OSHA, comments from two organizations were particularly interesting and make for an interesting contrasting exercise: the Chemical Safety Board (“CSB”) and the National Fire Protection Association (“NFPA”).

    The RMP rule does not have the same atmospheric storage tank exemption, per se. Applicability of RMP is based on having a threshold quantity of a specific substance (e.g., butane and pentane)[1] or a mixture of materials of regulated substances, if that mixture has a NFPA rating of 4. See 40 CFR 68.115(b)(2). An NFPA 4 rating is given to any liquid or gaseous material that is liquid while under pressure and a flash point below 73 °F and a boiling point below 100 °F.[2] RMP also excludes naturally occurring hydrocarbons which includes condensates and crude oil. 40 C.F.R. 68.115(b)(2)(iii). Thus many materials that are exempt under OSHA based on the atmospheric storage tank exemption are also exempt under RMP, albeit on a different basis. Generally, flammable liquids that are stored in atmospheric storage tanks are not regulated substances under RMP.

    In developing its comments, the CSB provided three brief examples of incidents involving atmospheric storage tanks: one involved an incident during maintenance of the vessel, a second involved an incident at a tank attached to a process, and the third involved an incident involving a tank connected to a ship. Taking the “facts” as presented, the first incident appears to have involved poor maintenance practices of an out-of-service tank (disconnected from the process). As such, neither the first or third examples involve tanks connected to or in the proximity of a process.

    The second incident, as described, involved the overpressure of a tank that was connected to a process. According to the CSB, the petroleum refinery made changes in the process without going through management of change (and therefore failed to consider the impact of the change). Indeed, OSHA issued four “serious” citations for the PSM violations, including one concerning management of change. Unfortunately, CSB does not explain why the addition of atmospheric tanks would have created a greater duty to comply than regulations that already existed.

    When its comments are viewed in total, it is apparent that the Chemical Safety Board (“CSB”) advocates a position that goes well beyond the removal of the exemption. The crux of the CSB comments is that atmospheric storage tanks need greater regulation whether or not they are connected to or in close proximity to a process. This conclusion can be gleaned from their examples, two of which appear to be unrelated to processes and a third in which the incident occurred in violation of existing regulations. To wit, the CSB suggest the regulation of atmospheric tanks that are not connected to processes, such as those found in terminals and tank farms. To emphasize this opinion, the CSB offers an alternative to the elimination of the atmospheric storage tank exemption at §1910.119(a)(1)(ii)(B): revision of the Flammable Liquids standard (§1910.106) to include PSM type elements.[3]

    The CSB cites the preamble of the 1992 rule as suggesting “that the rationale for exempting [atmospheric storage tanks] described in paragraph (a)(1)(ii)(B) was that they were already regulated by OSHA’s Flammable Liquids standards (at 29 CFR §1910.106).” CSB Comments, Docket No. OSHA-2013-0020, Mar. 31, 2014, page 1. Although the CSB noted that the OSHA Flammable Liquid Standard was based on NFPA 30, they also state that it has been significantly revised since used as a basis for the OSHA standard. Perhaps foremost, the CSB states that the standard was never intended to prevent or minimize consequences of catastrophic release.

    The NFPA offered an interesting contrast to the comments from the CSB. The NFPA is a nonprofit organization committed to the development of consensus standards recognized by CSB, OSHA, EPA and others. These standards are considered recognized and generally accepted good engineering practices (“RAGAGEP”). According to the NFPA, “the provisions for atmospheric aboveground storage tanks in NFPA 30 have not changed appreciably since the standard was issued in 1969.” NFPA Comments, Docket No. OSHA-2013-0020, page 2. The NFPA further concludes “that an atmospheric above ground storage tank that complies with NFPA 30 presents minimal risk of fire exposure to adjacent process, regardless of absence or presence of interconnection” and that there is no value to eliminating the atmospheric storage exemption for tanks that comply with NFPA 30. Id. at 3.

    This creates an interesting question: what compels a facility to comply with NFPA 30? This interesting question relates to another request posed by OSHA in the RFI: should OSHA clarify the PSM standard by adding a definition of RAGAGEP? If acted upon, OSHA may end up defining NFPA 30 as a RAGAGEP. Either way, OSHA could sustain or eliminate the above ground storage tank exemption; narrow it, as suggested by the NFPA, by exempting tanks complying with NFPA 30; or update the Flammable Liquids standard to reflect the current NFPA 30, coupled with additional PSM type analysis.

    There is one final consideration not brought up in these two comments. OSHA PSM applicability is based on having a threshold of a flammable gas or a flammable liquid in a quantity of 10,000 pounds or more at any time within a process. See 29 C.F.R. 1910.119(a)(ii). Although the language in the rule could be clearer, subsequent OSHA guidance clarifies that one does not aggregate the weight of flammable liquid to flammable gas to make a PSM applicability determination.[4] Many facilities exist where the only flammable liquids on site are contained in atmospheric storage tanks. These facilities may process a lot of flammable gas, but never have a significant inventory (i.e., 10,000 pounds of flammable gas). If the atmospheric storage exemption is removed, many facilities will become subject to PSM, not because the risk associated with a process, but because there is an atmospheric storage tank attached to the process. If the OSHA Flammable Liquids standard and NFPA 30 address the risk associated with such storage, some, including the NFPA, would question the added benefit of removing the exemption (as the otherwise “attached” process does not constitute a risk per OSHA’s criteria for applicability).

    In conclusion, whereas some commenters believed that regulation of atmospheric tanks should be expanded and updated, most believe that an update of NFPA 30 would be beneficial. Disagreement exists as to whether atmospheric storage tanks should be regulated under OSHA Flammable Liquid standard or PSM. Given that atmospheric storage tanks are already regulated (under OSHA’s Flammable Liquids standard), the primary effect of removing the exemption would be to capture connected processes that would otherwise not be covered.



    [1] It should be noted that hexane (C6H14) is not a RMP regulated material as a flammable liquid. Whereas pentane has a vapor pressure of 15.57 psia (i.e., above atmospheric pressure), hexane has a vapor pressure of 4.956 psia (i.e., below atmospheric pressure) and is otherwise liquid at atmospheric pressure. Normal-hexane has a boiling point of 155.7 °F and a flash of -7 °F. Whereas normal hexane is not a flammable mixture under RMP, it is a flammable liquid under OSHA PSM (due to the flash point being less than 100 °F).

    [2] NFPA 704, Chapter 6, Table 6.2, found at https://law.resource.org/pub/us/cfr/ibr/004/nfpa.704.2007.pdf (last visited March 10, 2015).

    [3] Interestingly, the American Petroleum Institute (“API”) agrees with updating 29 C.F.R 1910.106 to be consistent with NFPA 30, so long as “proposed changes undergo the typical notice and comment rulemaking process.” See API comments, March 31, 2015, p. 13.

    [4] OSHA Standard Interpretation; letter from H. Berrien Zettler, Deputy Director, Directorate of Compliance Programs, to John Anicello, Airco Gases, Interpretation number 21406, dated Feb. 15, 1994, found at https://www.osha.gov/pls/oshaweb/owadisp.show&under;document?p&under;table=INTERPRETATIONS&p&under;id=21406 (last visited Mar. 2, 2015).