The simple and short answer is YES. In fact, OSHA covers “dispersal of inventory” in their 1994 Compliance Directive: 29 CFR 1910.119, Process Safety Management of Highly Hazardous Chemicals — Compliance Guidelines and Enforcement Procedures. In this directive OSHA asks and answers the following questions regarding “dispersal of inventory”:
- Can an employer who keeps threshold quantities of highly hazardous chemicals listed in Appendix A to 29 CFR 1910.119, such as ammonia, separated into smaller lots and used and stored in separate systems or locations, be exempt from the requirements of the PSM standard?
- The PSM standard’s non-mandatory Appendix C suggests that, if reduced inventory of highly hazardous chemicals is not feasible, an employer might consider dispersing inventory to several locations on-site. When are such materials to be considered part of a single process?
- What evaluation techniques are appropriate to determine adequate separation distances?
(emphasis by me)
Can an employer who keeps threshold quantities of highly hazardous chemicals listed in Appendix A to 29 CFR 1910.119, such as ammonia, separated into smaller lots and used and stored in separate systems or locations, be exempt from the requirements of the PSM standard?
From a storage standpoint, the 1910.119 standard would NOT apply to an employer who segregates his inventory by dispersing storage of highly hazardous chemicals, such as ammonia, in amounts which do NOT exceed the threshold quantity so that a release from one storage area would NOT contribute to or cause a release from others around the workplace. Additionally, an employer could reduce his on-site inventory of highly hazardous chemicals by ordering more frequent, smaller shipments so that they do NOT exceed the threshold quantities set forth in the PSM Standard.
The PSM standard’s non-mandatory Appendix C suggests that, if reduced inventory of highly hazardous chemicals is not feasible, an employer might consider dispersing inventory to several locations on-site. When are such materials to be considered part of a single process?
Under the definition of “process” provided at 29 CFR 1910.119(b), any group of vessels which are interconnected and separate vessels which are located such that a highly hazardous chemical could be involved in a potential release shall be considered a SINGLE PROCESS. Inventories of highly hazardous chemicals would NOT be considered to be adequately dispersed IF the storage vessels are connected with OR in proximity to a covered process such that they could be involved in a potential release.
Appendix C… While OSHA believes process safety management will have a positive effect on the safety of employees in workplaces and also offers other potential benefits to employers (increased productivity), smaller businesses which may have limited resources available to them at this time, might consider alternative avenues of decreasing the risks associated with highly hazardous chemicals at their workplaces. One method which might be considered is the reduction in the inventory of the highly hazardous chemical. This reduction in inventory will result in a reduction of the risk or potential for a catastrophic incident. Also, employers including small employers may be able to establish more efficient inventory control by reducing the quantities of highly hazardous chemicals on the site below the established threshold quantities. This reduction can be accomplished by ordering smaller shipments and maintaining the minimum inventory necessary for efficient and safe operation. When reduced inventory is not feasible, then the employer might consider dispersing inventory to several locations on the site. Dispersing storage into locations where a release in one location will not cause a release in another location is a practical method to also reduce the risk or potential for catastrophic incidents.
What evaluation techniques are appropriate to determine adequate separation distances?
OSHA has not developed, nor is it aware of, any standard evaluation technique to determine adequate distances to separate chemical inventories. If an employer chooses to disperse highly hazardous chemicals on-site, the separation distances would have to be determined on a case-by-case basis, considering such factors as the nature of the chemicals and covered processes, total inventories, threshold quantities of pertinent chemicals, and facility layout.
Bottom line, “dispersal of inventory” is an OSHA ACCEPTED METHOD to maintain inventories BELOW PSM/RMP Thresholds. Don’t take my word for it, take OSHA’s. In fact “dispersal of inventory” is an INHERENTLY SAFE by DESIGN concept that should be seriously considered by those businesses that do not have the resources or expertise to FULLY and SAFELY develop, implement, and manage a Process Safety Management system on a daily basis.