Process Safety Management Small Business Regulatory Enforcement Fairness Act (SBREFA) SER Background Document (May 2016)

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The Process Safety Management (PSM) standard is intended to prevent or minimize the consequences of catastrophic releases of highly hazardous chemicals (HHCs). It requires employers to adopt a comprehensive management program that integrates technologies, procedures, and management practices to help assure safe and healthy workplaces. OSHA is considering revisions to the PSM standard, including changes to the scope and requirements of the standard.  The potential changes in the scope of the standard include:

 

  1. Clarifying the exemption for atmospheric storage tanks
  2. Expanding the scope to include Oil- and Gas-Well Drilling and Servicing
  3. Resuming Enforcement for Oil and Gas Production Facilities
  4. Expanding PSM coverage and requirements for reactivity hazards
  5. Updating and expanding the list of HHCs in Appendix A of the existing PSM standard
  6. Amending Paragraph (k) of the Explosives and Blasting Standard to cover dismantling and disposal of explosives and pyrotechnics under the requirements of PSM.

The potential changes to particular provisions of the existing PSM standard that OSHA is considering include:

  1. Expanding the scope of Paragraph (c) of the existing standard to include enhanced employee participation and stop work authority
  2. Amending Paragraph (d) of the existing PSM standard to require evaluation of updates to applicable recognized and generally accepted good engineering practices (RAGAGEP)
  3. Expanding the scope of Paragraph (e) by requiring safer technology and alternatives analysis
  4. Expanding the scope of Paragraph (j) of the existing PSM standard to cover the mechanical integrity of any critical equipment
  5. Revising Paragraph (n) of the existing PSM standard to require coordination of emergency planning with local emergency-response authorities
  6. Amending Paragraph (e) of the existing PSM standard to require formal documentation with management signature(s), approving the actions taken (or lack thereof) in order to resolve PHA team recommendations
  7. Amending Paragraph (m) of the existing PSM standard to require root cause analysis
  8. Revising Paragraph (o) of the existing PSM standard to require third-party compliance audits
  9. Revising the PSM standard to require additional management-system elements
  10. In addition, OSHA is considering a number of minor modifications which largely codify existing OSHA interpretations of the PSM standard.

This document contains a brief discussion of each topic and questions for SERs. Additional information including tables and sources can be found in the longer background document.

 

Atmospheric Tank Exemption

The PSM standard covers processes with 10,000 pounds or more of a flammable liquid or gas, but exempts those “stored in atmospheric tanks or transferred which are kept below their normal boiling point without benefit of chilling or refrigeration.” 29 CFR § 1910.119 (a)(1)(ii)(B). The atmospheric storage tank exemption was originally intended to exclude processes that only involved flammable liquid storage, such as those at a fuel depot or fuel terminal (OSHA, 1997). However, this intention is not clear in the language of the standard, and an adverse decision by an Occupational Safety and Health Review Commission ALJ suggests that atmospheric storage tanks that are connected to processing operations are exempt from PSM coverage. OSHA is considering changing the language in § 1910.119(a)(1)(ii)(B) to limit the exemption to NAICS 4247 Petroleum and Petroleum Products Merchant Wholesalers. OSHA estimates:

The costs to entities affected by this change would be similar to smaller chemical manufacturers who establish a PSM program for a single process PSM program, or adding a process to an existing program.

  • Total cost for a new program is estimated at $66,781 to $98,985.
  • Total cost for adding a process is estimated at $50,921 to $77,636.
  • Program maintenance costs are estimated to be $23,383 to $35,442. (see Tables IV-2a through IV-5).
  • 656 entities would be added, along with 38,504 employees. See Table IV-6
  • This includes 331 small entities with 19,254 employees.
  • No entities that employ fewer than 20 employees would be affected.

Questions for SERs
1. Do you store flammable liquids in atmospheric tanks?

2. Would you consider the atmospheric storage tank exemption applicable to your process? If so, why? If you have an atmospheric storage tank:

  • Is it connected to other equipment or stand alone? Please describe the connected equipment.
  • What is the quantity of flammable liquid stored in the atmospheric tank?

3. Has your facility had incidents of flammable material release from an atmospheric storage tank? If so, what were the consequences?

4. How much would it cost to bring the tank(s) into compliance with PSM?

5. If an atmospheric storage tank was not exempted, would a connected process now reach the threshold quantity (10,000) of flammables and be covered by PSM? If so, how much would it cost to bring the process in compliance with PSM?

6. Are there any special circumstances specific to small entities the Panel should consider with respect to this option?

7. Are OSHA’s cost estimates for the proposed change consistent with your industry’s experience?
In your response please elaborate as specifically as possible.

Alternatives

The Agency is considering alternatives that may minimize the economic impact on small entities. In the background document the first proposed alternative would clarify that atmospheric storage tank exemption applies to storage tanks only and further define “process” tank versus a “storage” tank. The Panel would appreciate comments and insights on this alternative or other alternatives that would
achieve OSHA’s objectives while minimizing the costs to small entities.

 

Expanding the Existing PSM Standard to Include Oil and Gas Well Drilling, and Servicing Operations, and Enforcing the Existing PSM Standard in Oil and Gas

Production

The PSM standard exempts oil and gas drilling and servicing (§ 1910.119(a)(2)(ii)). At the time the existing PSM standard was promulgated, OSHA planned to adopt a separate rule to address the process safety hazards at oil and gas drilling facilities. However, that standard was never promulgated, and currently OSHA has no standard that covers the process safety hazards at these facilities. OSHA is now considering removing the exemption for oil and gas drilling and servicing in order to provide protection to workers in these facilities. By contrast, the PSM standard has always included covered oil and gas production facilities. However, in a 1999 Memorandum1 , OSHA agreed not to enforce the standard in oil and gas production facilities until the Agency completed an economic feasibility analysis. Upon the completion of an economic feasibility analysis, OSHA intends to resume enforcement of the PSM standard in oil and gas production. For further explanation of the terms “drilling and servicing” and “production”, please see the background document.

Drilling Entities Affected by the Change

For NAICS 213111,2 Drilling Oil and Gas Wells, see Table IV-7, OSHA estimates:

  • 2,144 total entities and 106,368 employees would be newly covered
  • 2,085 small entities with 42,555 employees will be newly covered, this includes:
    • 1,674 entities with less than 20 employees and a total of 6,729 employees.

In OSHAs estimate of costs, the Agency concluded the category with the closest fit is the category “Other Manufacturers,”3 cost estimates are provided in Tables IV-2a through IV-5 of the background document.

1December 20, 1999 memorandum from Compliance Programs director Richard Fairfax to OSHA regional administrators, entitled PSM Applicability to Oil/Gas Production Facilities, explains that “production facilities… were always intended to be covered under PSM.”
2Based on NAICS code descriptions, OSHA has assigned NAICS 213111 to drilling establishments and NAICS 21111 to production. The Panel welcomes comments on all NAICS codes issues in this sector.
3These are firms in NAICS codes 20-39 other than Chemical Manufacturing.

  • Total estimated costs for a new PSM program with a single process range from $26,468 to $184,482
  • Total cost for adding a processes are estimated to be $15,746 to $35,193.
  • Program maintenance costs are estimated to be $8,470 to $53,308.

Employers with multiple sites may find that they are able to use the same or a similar PSM program for each site with some specifics added for each location. For example, employers may be able use the same training program for multiple sites, but activities (such as facility siting requirements) would need to be redone for each site (process). OSHA has estimated the cost of using the same training program at an added site would be ten percent of the cost of the original program.

Questions for SERs
1. What PSM-related fatalities or injuries have occurred in your oil and gas well drilling and servicing processes? Would following PSM requirements for those processes have prevented those injuries and fatalities?

2. Would expanding the existing PSM standard to include oil and gas well drilling and servicing address safety gaps at your facility?

3. Are there any special circumstances specific to small entities the Panel should consider with respect to this option?

4. Are OSHA’s cost estimates for a new PSM program with a single process, additional process estimates, and maintenance costs consistent with observations in your industry?

5. The Panel welcomes comments on all aspects of unit costs for the oil and gas drilling and servicing sector, and suggestions of other alternatives that would achieve OSHA’s objectives while minimizing the costs to small entities.

Oil and Gas Production Entities Affected by the Change

OSHA estimates for NAICS 21111 Oil and Gas Extraction, see Table IV-8, are:

  • 6,194 production entities and 116,500 employees would be added to PSM coverage, including
  • 6,101 small entities with 45,883 employees, and
  • 5,620 entities with fewer than 20 employees with a total of 18,962 employees.

As above for Oil/Gas Drilling, OSHA has concluded that the complexities of most oil/gas processes are closest to the category of “Other Manufacturers” cost estimates from the RMP EA, presented in Tables IV-2a through IV-5.

  • Total costs for a new PSM program with a single process range from $26,468 to $184,482,
  • Adding a process is estimated to cost $15,746 to $35,193.
  • Program maintenance costs are estimated to be $8,470 to $53,308.

Questions for SERs
1. Does your facility conduct oil and gas production operations for which OSHA is not currently enforcing PSM requirements? If so, do you follow PSM requirements for these operations for safety or other reasons? Are the activities covered under other federal or state regulation? Please explain.

2. What PSM-related fatalities or injuries have occurred in your oil/gas production processes? Would following PSM requirements for those processes have prevented those worker injuries and fatalities?

3. Would expanding the existing PSM standard to include oil/gas production address safety gaps at your facility?

4. What would be the economic impact of resuming enforcement of the PSM standard for oil- and gas-production facilities? Are there any special circumstances specific to small entities the Panel should consider with respect to this option?

5. The Panel seeks comments on the classification for cost purposes of oil/gas production facilities as “Other Manufacturers.” Are OSHA’s cost estimates for a new PSM program with a single process, additional process estimates, and maintenance costs consistent with observations in your industry?

6. The Panel would appreciate comments and insights to other alternatives that would achieve OSHA’s objectives while minimizing the costs to small entities.

 

Adding Reactive Chemical Hazards – Coverage and Requirements Questions

The PSM standard covers certain chemicals considered to be reactive due to instability. The standard does not address chemicals which pose other sorts of reactivity hazards, such as those associated with the generation of heat or toxic products when combined with other chemicals. OSHA is interested in expanding PSM to cover these additional reactivity hazards. OSHA is considering the addition of language to § 1901.119(a) that would extend coverage to processes that mix substances with a listed functional group, when the heat of reaction is above 100 kcal/mol or if the reaction generates a toxic product and the substance is at the threshold quantity. The list of functional groups and threshold quantities would be included in an appendix to the standard. OSHA is considering adopting this list from New Jersey Toxic Catastrophe Prevention Act (TCPA) Guidance.

Costs of Testing for Reactivity Hazards and Toxic Products

Under this modification, facilities may need to conduct a heat of reaction analysis and calculate the maximum attainable temperature (MAT) for each reaction vessel for all reactive hazard substance (RHS) mixtures. They would also be required to document all calculations.

OSHA estimates the burden associated with a literature review and calculation of heat of reaction is similar to the burden of conducting the risk assessment.

  • The Agency estimates six hours of technical time, with three of those hours attributed to research and the remaining three hours attributed to the calculation.
  • The cost of the laboratory testing necessary to conduct calorimetric testing is taken from (NJ TCPA, 2003) which estimates calorimetric testing to cost between $500 and $1,000 per chemical.
  • OSHA expects the costs associated with identifying any optional toxic products to be the same as conducting a heat of reaction analysis.

For more information on impacted industries and cost go to the background document table IV-9 and table IV-10.

OSHA estimates for adding a reactives provision are:

  • 310 production entities and 21,337 employees would be added to PSM coverage, including
    • 249 small entities with 8,094 employees, and
    • 178 entities with fewer than 20 employees with a total of 852 employees.

OSHA has concluded that the entities most likely to be brought in under this provision are closest to the category of “Chemical Manufacturers” cost estimates from the RMP EA, presented in Tables IV-2a through IV-5.

  • Total costs for a new PSM program with a single process range from $66,781 to $386,931,
  • Adding a process is estimated to cost $50,921 to $116,926.
  • Program maintenance costs are estimated to be $23,383 to $150,843.

Questions for SERs
1. What fatalities or injuries have occurred in your non-PSM covered processes involving reactivity hazards and toxic products? Would following PSM requirements for those processes have prevented those worker injuries and fatalities?

2. Would expanding the existing PSM standard to include reactives and toxic products address safety gaps at your facility?

3. Has your facility implemented a reactive-hazards management program other than a program specified by the TCPA and NFPA 400? If so, please describe your facility’s program, whether it protects worker more or less than the TCPA and NFPA 400, any economic impacts associated with the program, and any special circumstances specific to small entities.

4. If your facility is in New Jersey and covered by the New Jersey TCPA, has the TCPA been effective in protecting New Jersey workers from reactivity hazards? Please describe any economic impacts associated with TCPA coverage (e.g., costs and benefits, cost savings, shifts in usage of reactive chemicals, special circumstances specific to small entities, etc.)

5. Does your facility follow NFPA 400 for reactivity hazards? If so, please describe the economic impacts associated with following NFPA 400 (e.g., cost of additional equipment, cost of additional training, benefits of quality management, special circumstances specific to small entities, etc.) Is following NFPA 400 an effective way of protecting workers from reactivity hazards?

6. Please explain. What specific regulatory approach, if any, should OSHA use to comprehensively address reactivity hazards, what would be the economic impacts of this approach, and would there be any special circumstances specific to small entities? Are there specific requirements that OSHA should add to the PSM standard to ensure that employers adequately manage reactivity hazards?

7. Are OSHA’s estimates of burden hours (based on the TCPA) to conduct the risk assessments consistent with your own industry observations?

The Panel welcomes comments on all aspects of unit cost for the affected industries.

 

Alternatives

The Agency is considering several alternatives to address reactivity hazards under PSM that may minimize the economic impact on small entities. First, Alternative 2 would adopt the exact TCPA language as a model for expanding the PSM standard’s coverage of reactivity hazards and disregard any toxic product generation in the scope of reactive chemicals. This alternative would cause a smaller increase in the scope of the rule than the proposed option.

A second alternative for addressing reactivity hazards is Alternative 3. Instead of adding a general classification for reactive chemicals to the PSM standard, under this alternative OSHA would add certain known reactive chemicals to the list of covered chemicals under Appendix A of the PSM standard. This alternative would include the same list of chemicals OSHA is currently considering as an update to Appendix A under the next potential change to the standard discussed below.

The Panel would appreciate comments and insights on this alternative or other industry proposed alternatives that would achieve OSHA’s objectives while minimizing the costs to small entities.

 

Updating the Appendix A List of Covered Chemicals in the Existing PSM Standard

Appendix A of the existing PSM standard lists substances and threshold quantities to determine PSM coverage. OSHA is considering adding new chemicals to Appendix A. OSHA is considering, based on a review of updated sources and comments received on the RFI, adding the following chemicals to Appendix A of the existing PSM standard:
• Ammonium Nitrate
• Butyl Peroxyacetate, Tertiary
• Butyl Peroxypivalate, Tertiary
• Chlorodinitrobenzene
• Diethylaluminum Chloride
• Diethyl Telluride
• Dinitrobenzenes
• Dinitrotoluenes, molten liquid or solid
• Hydrazine, anhydrous
• Perchloric Acid, greater than 50% but less than 72%
• Picric Acid, wet, with not less than 10% water
• Sodium Hydroxide
• Toluene Diisocyanate

OSHA has not yet determined appropriate threshold quantities for each of these chemicals; the Panel seeks comment on both this list and appropriate threshold quantities. OSHA is considering adding chemical concentrations and appropriately updating the corresponding
threshold quantities of the following chemicals currently in Appendix A:
• Hydrogen Bromide
• Hydrogen Chloride / Hydrochloric Acid
• Hydrogen Fluoride / Hydrofluoric Acid

OSHA is also interested in soliciting feedback on the appropriate minimum concentrations for these three chemicals in regard to their potential hazards to workers. For example, EPA’s RMP rule covers hydrochloric acid at a concentration 37 percent or greater and hydrofluoric acid at 50 percent or greater; the threshold quantities are 15,000 pounds and 1,000 pounds respectively. It should be noted that the EPA is focused on public and environmental protection, while OSHA is focused on worker safety and health.

Additionally, OSHA is considering the addition of language to Appendix A stating that all forms of the listed chemicals are covered and the removal of “anhydrous” forms from the list of covered chemicals. OSHA is considering these changes because aqueous mixtures of Appendix A chemicals can present the same hazards as non-aqueous forms. If OSHA adopted this change, it would reverse past agency interpretations for certain listed chemicals that the aqueous form is not covered by PSM. In addition, by eliminating those entries in Appendix A which list an anhydrous form of a chemical, OSHA would ensure that aqueous mixtures of the chemical are within the scope of the standard.

OSHA estimates that:

  • 79 entities and 9,083 employees would be newly covered.4 (see Table IV-11).
  • 50 are small entities employing a total of 2,948 employees and 27 are entities with fewer than 20 employees employing a total of 172 employees.

The unit costs for these facilities are estimated to be most similar to “Chemical Manufacturers” in tables IV-2a through IV-5 of the background document.

  • Total costs for a new RMP program with a single process range from $66,781 to $386,931
  • Adding a processes to an existing program will cost $50,921 to $116,926
  • Program maintenance costs will be $23,383 to $150,843.

Questions for SERs
1. What fatalities or injuries have occurred at your facility involving non-PSM covered processes with the above-listed chemicals? Would following PSM requirements for those processes have prevented those worker injuries and fatalities?

2. Would expanding the existing PSM standard to include the above-listed chemicals address safety gaps at your facility?

3. How often should OSHA update the list of highly hazardous chemicals in Appendix A of § 1910.119? Is there a method, other than periodically updating the list of highly hazardous chemicals in Appendix A of § 1910.119 through rulemaking, that OSHA should use to prevent worker injuries and fatalities? Please explain.

4. What chemicals, if any, should OSHA add to the list of highly hazardous chemicals in Appendix A of § 1910.119 to prevent worker injuries and fatalities? Please provide any sources, data, or incident examples related to the hazards associated with these chemicals.

5. What would be the economic impacts of adding these chemicals to Appendix A? Are there any special circumstances specific to small entities that OSHA should consider with respect to adding these chemicals to Appendix A? Are OSHA’s cost estimates for a new RMP program with a single process, additional process estimates, and maintenance costs consistent with observations in your industry?

4These estimates do not include any entities due to the anhydrous change, for which the Agency solicits comment.

Adding Ammonium Nitrate to the Appendix A list of Covered Chemicals in the Existing PSM Standard

OSHA is considering adding Ammonium Nitrate (AN) as a listed chemical under PSM, prompted in part by the West Fertilizer Company incident on April 17, 2013. Currently, AN is primarily used in the production of fertilizer and explosives. OSHA estimated that the addition of AN to the Appendix A list of covered chemicals would expand the scope of PSM applicability to include the following sectors: fertilizer mixers, fertilizer applicators, and explosives distributors.

OSHA estimates that:

  • 691 total entities and 8,801 employees would be newly covered (see Table IV-12)
  • 675 are small entities employing 6,680 employees, and
  • 583 are entities with fewer than 20 employees that in total employ 2,231 employees.

OSHA has examined sources of RAGAGEP applicable to AN storage sites and estimates these sites would often need to install a fire-suppression system (most likely both a sprinkler and fire alarm system), and to coat wooden bins to prevent AN impregnation. Fertilizer storage facilities span a wide range of sizes, from 500 tons to over 45,000 tons (based on Doran, 2013; Hagen, 2014; and MidWest Plan Service, 1979). Unit costs for fire protection activities are estimated for three capacity scenarios in Table IV-13a of the background document. Installing sprinkler/fire-suppression systems range from $2 to $7 per square foot for existing buildings and $1 to $2 per square foot for new construction (Smith, 2014). In addition to fire prevention costs, under these changes AN storage sites would be required to comply with all PSM provisions. The complexity of these storage facilities is judged to be fairly low, and the Agency will use PSM unit cost estimates for the “Wholesaler” category, adjusted for specific conditions in this sector, see Table IV-13b in the background document. The costs to entities affected by this change would include having to establish a single process RMP program from scratch and ongoing maintenance program costs. Total costs for a new RMP program are estimated to be $4,258 and
program maintenance costs are estimated to be $2,409.

Questions for SERs
1. Have there been fatalities or injuries at your facility resulting from an incident involving AN? Would inclusion of AN under PSM have prevented them? If not, would these prospective provisions address potential safety gaps at your facility?

2. Does your facility currently have a sprinkler system? Do your local building codes require such a system?

3. How can OSHA update its standards and improve its enforcement policy relating to the storage, handling, and management of ammonium nitrate to prevent worker injuries and fatalities?

4. Please discuss the economic impacts associated with such improvement, including any special circumstances specific to small entities the Panel should consider.

5. Do you consider your facility in compliance with § 1910.109(i) for the storage of ammonium nitrate?

6. Are there any other standards, including Department of Homeland Security and other consensus standards, applicable to ammonium nitrate storage, handling, and management that your facility follows? If so, which ones? What are the economic impacts of following these other standards?

7. Are OSHA’s cost estimates for a new RMP program with a single process, and maintenance costs consistent with observations in your industry?

Alternatives

The Agency is considering several alternatives that may minimize the economic impact on small entities. In the background document the eighth alternative addresses the modernizing of ammonium nitrate coverage (as specified by Executive Order 13650) outside of the PSM standard through a separate rulemaking activity. Under this alternative the requirements for AN in § 1910.109, Explosives and Blasting Agents Standard would be updated to incorporate industry best practices such as the National Fire Protection Association’s Hazardous Materials Code (NFPA 400). The Panel would appreciate comments and insights on this alternative or other alternatives that would achieve OSHA’s objectives while minimizing the costs to small entities.

Extending PSM requirements to Cover the Dismantling and Disposal of Explosives and Pyrotechnics

OSHA standard 1910.109, explosives and blasting agents, paragraphs § 1910.109(k)(2) and (3), requires that the manufacture of explosives and pyrotechnics follow the requirements of the PSM standard. Although dismantling and disposing explosives can be just as hazardous as the covered activities, dismantling and disposing are currently not covered by 1910.109 or PSM. OSHA is considering revising the scope of § 1910.109 (k)(2) and (k)(3) to include dismantling and disposal of explosives and pyrotechnics, so that these operations must follow the requirements of the PSM standard as well. OSHA’s estimates for the number of affected entities due to the expansion of the scope are in Table IV-14:

  • A total of 43 entities, all small, and 976 employees would be newly covered including,
  • 32 entities are employers with fewer than 20 employees; these entities have a total of 176 employees.

Unit costs are estimated to be similar to smaller “Other Manufacturers” in Tables IV-2a through IV-5 in the background document.

  • Total costs for a new program with a single process range from $26,468 to $32,601,
  • Additional processes are estimated to cost $15,746 to $19,074, and
  • Program maintenance costs are estimated to be $8,470 to $11,238.

Questions for SERs
1. If your facility would be included in PSM coverage under this revision, are your operations currently covered under regulations issued by ATF? Are there specific areas of workplace safety that are not covered by ATF that should be considered by OSHA? Is there overlap or inconsistencies between the Requirements of § 1910.109 and ATF regulations that would need to be addressed before an expansion should be recommended?

2. What fatalities or injuries have occurred in your explosive and/or pyrotechnics dismantling and disposal operations? Would following PSM requirements for those processes have prevented those worker injuries and fatalities? Would expanding the PSM standard to these operations address safety gaps at your facility?

3. Are OSHA’s cost estimates for a new RMP program with a single process, additional process estimates, and maintenance costs consistent with observations in your industry? What would be the economic impacts if OSHA extended PSM requirements to the dismantling and disposal of explosives and pyrotechnics?

4. Are there any special circumstances specific to small entities the Panel should consider with respect to this option?

5. The Panel would appreciate comments and insights on alternatives that would achieve OSHA’s objectives while minimizing the costs to small entities.

 

Changes that Affect the Requirements of PSM

The remaining possible modifications to the existing PSM standard will affect all facilities covered by the rule now, as well as any that are added to the scope of the standard.

 

Employee Participation and Stop Work Authority

OSHA recognizes that more employee participation can increase worker safety by empowering employees and giving them a more active role in their employer’s PSM program. OSHA is considering updating the current employee participation element in § 1910.119(c) to include
requirements for:

  • consulting with employees on the entire written employee participation plan;
  • a system for both employee input and management response to such input, specifying how management, non-management, and contract employees and/or their representatives will be included in this element of the PSM standard;
  • a policy for all employees, including employees of contractors, to recommend to the operator in charge of a process that an operation or process be shut down based on safety or health concerns; and
  • a policy giving the operator in charge of a process the authority to shut down an operation or process based on safety and health concerns, also known as Stop Work Authority (SWA). 

OSHA estimates that each month an establishment will have an hourly employee/management committee meeting to discuss any issues. OSHA assumes this committee consists of two managers, one engineer, one supervisor, and one operator for a total of five employee hours per month or sixty hours per year. The annual per-establishment burden and cost for this meeting is presented in Table IV-17 of the background document. Cost estimates vary by type of establishment from $3,203 to $5,227.

Stop Work Authority (SWA) would require creation and implementation of procedures that authorize employees, including employees of contractors, to recommend when a process should be shut down based on safety or health concerns. That would give the operator in charge of a process the authority to shut down an operation or process based on safety and health concerns. OSHA expects each
establishment to complete two activities when implementing a SWA:

  1. Developing the program: Managers will need to develop the elements of the SWA program and establish employee responsibilities under the program. OSHA believes that a manager will spend approximately one hour developing the SWA program, across all facility types.
  2. Employee Training: All employees will be required to complete training covering employee responsibilities under the SWA. The Agency estimates that each employee will participate in thirty minutes of training related to the SWA. OSHA also allocates thirty minutes for a manager to provide the training, assumes an average class size of ten employees, and anticipates that training will be held annually. In addition, OSHA estimates that thirty minutes of a manager’s time is required to prepare for each training session.

The Agency presents estimated unit costs associated with implementing a stop work authority in Table IV-18 of the background document. OSHA estimates a wide range of cost estimates, related both to the complexity of the plant and the number of employees, including all who would have to be trained to implement this provision. Table IV-18’s costs range from a low of $250 to a high of $117,025.
Questions for SERs

1. Are OSHA’s cost estimates for such a program consistent with your experience?

2. What would be the potential challenges and benefits of such a program?

3. Are you aware of injuries or fatalities that would have been prevented through better opportunities for worker participation your facility’s PSM program or the implementation of stop work authority?

4. Would implementation of greater employee participation in the PSM program or stop work authority address safety gaps in your facility?

5. The Panel would appreciate comments and insights on alternatives that would achieve OSHA’s objectives while minimizing the costs to small entities.

 

RAGAGEP Updates

PSM requires employers to document that covered equipment complies with recognized and generally accepted good engineering practices (RAGAGEP). However, § 1910.119(d)(3)(iii) of PSM states that for existing equipment designed and constructed to codes, standards, or practices that are no longer in general use, the employer need merely determine (and document) that the equipment is designed, maintained, inspected, tested, and operates in a safe manner. The PSM standard does not require employers to evaluate updates to applicable RAGAGEP or to examine new RAGAGEP after evaluating and documenting compliance with PSM. OSHA is considering adding a requirement to (d)(3)(iii) that employers periodically review RAGAGEP for updates, and when the employer discovers that RAGAGEP has been updated, implement those updates.

The cost of a requirement to review RAGAGEP for updates could vary widely depending on the specific process and relevant standards reviewed. To estimate the time spent reviewing RAGAGEP, OSHA commissioned a contractor to anonymously interview subject matter experts. The results of these interviews are captured in a memorandum titled “Current Industry Practices on Process Safety Management System” (Chicca, 2015). This memorandum summarizes interviews with various industry consultants and, given this information, the Agency estimates a range for the cost burdens of this activity. Any specific review cycle is estimated to take a year. For a large entity OSHA expects that three employees will be working on the review full time, while an additional nine to seventeen employees will spend the equivalent of one to four months of full time work each. For medium-sized facilities, OSHA estimates that the review would be performed by four to six employees, each spending one to four months of full time work. At smaller facilities, OSHA estimates there would be one or two employees spending one to four months each working full time on completing the review. Finally, the memorandum states that most facilities will initiate such a review when the consensus standards themselves have completed a review cycle which could be as frequent as every five years (p. A-X).

Therefore, OSHA estimates a five year cycle and takes one-fifth (or 20 percent) of total costs to derive the annual burden for continuous review. These costs are presented in Table IV-19 of the background document. The annual costs to review RAGAGEP vary by technological complexity of the facility and range from a low $1,393 to a high of $384,043.

Questions for SERs
1. Would such a requirement be more appropriate in another paragraph of the PSM standard? For example, should such a requirement become part of the Process Hazard Analysis revalidation requirements at 29 CFR 1910.119(e)(5)?

2. Does your facility evaluate updates to its selected RAGAGEP? If so, how does your facility monitor any updates, and how often do you evaluate them?

3. Is there another approach that can be used to ensure the incorporation of RAGAGEP into facility operations that is tangible and documentable?

4. Are OSHA’s cost estimates consistent with observations in your industry? Would there be other economic impacts of this requirement? Are there any special circumstances specific to small entities the Panel should consider with respect to this option?

5. Are you aware of injuries or fatalities that would have been prevented at your facility through the implementation of updated RAGAGEP? Would implementation of updated RAGAGEP address safety gaps in your facility?

Alternatives

The Agency is considering several alternatives that may minimize the economic impact on small entities. In the background document the proposed fourth alternative would limit the frequency of RAGAGEP update checks. Reducing the frequency could be achieved by either a fixed schedule of every three years or, every five years to coincide with the required PHA revalidation. The estimated cost for reducing the frequency by either three or five years would result in the following:

  • For fixed schedules of once every three years the cost would be reduced by one-third.
  • If a fixed schedule of once every five years is selected then the cost would reduce by one-fifth.

The background document includes estimated annualized costs for this alternative. The Panel would appreciate comments and insights on these alternatives, or other recommended alternatives from the industry that would achieve OSHA’s objectives while minimizing the costs to small entities. The Panel would appreciate comments and insights on alternatives that would achieve OSHA’s objectives while minimizing the costs to small entities.

Safer Technology and Alternatives Analysis

A number of stakeholders have advocated for OSHA to require the implementation of safer technology and alternatives, including inherently safer options. Safer technology and alternatives refer to risk reduction strategies developed through analysis using a hierarchy of controls. The hierarchy of controls organizes hazard controls into a framework. The hierarchy establishes that inherently safer options (e.g., elimination/reduction, substitution, attenuation, and simplification) are preferable and occupy the top of the hierarchy. OSHA is considering adding a requirement to PSM that employers identify and evaluate applicable safer technology and alternatives.

OSHA is considering adding requirements to the PHA specifying that employers must consider safer technology and alternatives when identified hazards result in an employer-specified level of risk. Requirements could specify that employers consider the hierarchy of control in determining the appropriate safeguards and document when safeguards at the top of the hierarchy cannot be implemented.

OSHA draws on the Center for Chemical Process Safety (CCPS) book, Inherently Safer Chemical Processes: A Life Cycle Approach, in developing the preliminary estimates of how long it might take employers to conduct a safer alternatives and technology analysis (CCPS, 2009). In this book, CCPS stated that such an analysis can take anywhere from a few hours to about two days (p. 202). It also states: “The composition of the inherent safety review team will vary depending upon the stages of the development cycle and the nature of the product/process” (p. 173). The book then goes on to list the number of staff and level of their skill-set needed for this task, which ranges from a team of four people (an industrial hygienist, chemist, level IV engineer, and an operations supervisor) for simpler processes, up to a team of seven (an industrial hygienist, chemist, two level IV engineers, two level V engineers, and an operations supervisor) for more complicated processes. The Agency uses this information to estimate a range of unit costs for small and large establishments, presented in Table IV-20 of the background document. The cost estimates in the table range from $750 to $9,774. Performing a safer alternatives and technology analysis will, at times, lead to the implementation of a discovered preferred alternative or technology. The Panel seeks comments on the frequency of this occurring.

Questions for SERs

1. Are OSHA’s estimates of cost consistent with observations in your industry? Are there other economic impacts that the identification and implementation of safer technologies and alternatives might impose?

2. Are there any special circumstances specific to small entities the Panel should consider with respect to this option?

3. Are you aware of injuries or fatalities that would have been prevented at your facility through the identification and implementation of safer technologies and alternatives as part of the PHA process? Would implementation of safer technologies and alternatives as part of the PHA process address safety gaps in your facility?

Alternatives

The Agency is considering several alternatives that may minimize the economic impact on small entities. The fifth alternative would limit the requirement for safer technologies and alternatives analysis to employers who have certain chemicals or hazards. The Panel would appreciate comments and insights on this alternative or other alternatives put forth by the affected industries that would achieve OSHA’s objectives while minimizing the costs to small entities.

 

Adding “Critical” Equipment to the List of Covered Equipment under Mechanical Integrity

OSHA is considering expanding the list of equipment to which the requirements of the mechanical integrity (MI) requirements of 1910.119(j) apply. Currently, the MI section of the PSM regulation applies to six categories of equipment:

  • Pressure vessels and storage tanks
  • Piping systems (including piping components, such as valves)
  • Relief and vent systems and devices
  • Emergency shutdown systems
  • Controls (including monitoring devices and sensors, alarms, and interlocks)
  • Pumps

OSHA is considering adding a requirement to § 1910.119(j) specifying that other equipment deemed critical will be included in the application of the PSM standard’s mechanical integrity provisions and adding to the definitions section, § 1910.119(b), a definition of critical equipment that includes equipment where failure can lead directly to a release of HHC or equipment that is relied upon as a safeguard in the PHA.

There are various sources that identify particular types of equipment that might be critical in this sense. In 2007, the American Society of Safety Engineers (ASSE) published an article on MI compliance issues that listed equipment types whose failure might create the necessary pre-conditions for a catastrophic release. Further, the article noted that equipment designed to mitigate the potential damage or consequences if a highly hazardous chemical is actually released might be reasonably included in an MI program (Hazzan, 2007).

OSHA judges the average unit cost of the items listed above is within the range estimated for the equipment already covered by the Mechanical Integrity provisions § 1910.119(j) and costs would be comparable to the costs to implement the Mechanical Integrity provisions presented in Tables IV-2a through IV-5 of the background document.

The Panel solicits comment on this assumption overall, as well as comment on both the cost and necessity of various individual pieces of equipment.

Questions for SERs

1. Would expanding the scope of § 1910.119(j) to cover the mechanical integrity of all equipment the employer identifies as critical to process safety, in addition to the equipment listed in existing § 1910.119(j), prevent worker injuries and fatalities?

2. Does your facility have any equipment not covered under § 1910.119(j) that is critical to process safety? If so, what type(s) of equipment? Did you identify the equipment as safety-critical through a PSM process hazard analysis? How did your facility determine that the equipment was safety-critical, and does your facility treat the equipment as if it were PSM covered for safety or other reasons? Please explain.

3. Are OSHA’s estimates of costs consistent with observations in your industry? Are there other economic impacts of expanding the scope of § 1910.119(j) in this way? Are there any special circumstances specific to small entities the Panel should consider with respect to this option?

Alternatives

OSHA is considering several alternatives that may minimize the economic impact on small entities. The seventh alternative would specify and limit the equipment covered by the Mechanical Integrity (MI) section of the PSM standard. Under this alternative, OSHA would expand the list of covered equipment under the MI section of the PSM standard to include equipment that is most likely considered “critical.”

The Panel would appreciate comments and insights on this alternative or other alternatives that would achieve OSHA’s objectives while minimizing the costs to small entities.

 

Adding Emergency Response Planning and Coordination Requirements

The existing PSM standard requires employers to establish and implement an emergency action plan in accordance with § 1910.38, OSHA’s Emergency Action Plans (EAP) standard, and to meet applicable requirements in § 1910.120, OSHA’s Hazardous Waste Operations and Emergency Response (HAZWOPER) standard. While some OSHA standards require employers to coordinate emergency planning with local emergency response authorities, the existing PSM standard does not. OSHA is considering adding additional requirements for emergency response planning, including coordination with local responders, conducting emergency drills, and evaluation of local emergency response capabilities.

OSHA is considering requiring that employers establish a process to identify, prevent, prepare for, and/or respond to emergencies, including:

  • Development of plans to prevent and minimize risks for potential emergencies, such as the availability of emergency response resources (e.g., medical rescue, crisis response, law enforcement, fire departments, etc.);
  • Periodic testing of the emergency plans through drills and similar activities, such as tabletop exercises.

Knowing the types of hazards in advance can help local emergency response authorities to determine what precautions need to be taken when responding to specific facilities. Pre-planning will also ensure that first responders have the appropriate training to respond to such incidents.

Testing provides an opportunity to evaluate the effectiveness of those plans and helps to ensure that both responders and workers know what they should do in emergencies.

Questions for SERs

1. Are you aware of injuries or fatalities that would have been prevented at your facility through the development and implementation of an emergency response plan, including drills? Would implementation of such a plan process address safety gaps in your facility?

2. What information should OSHA require PSM-covered facilities to provide to local emergency response authorities? For example, should OSHA require employers to provide safety data sheets for all on-site chemicals, list the quantities of chemicals, list the location of chemicals, provide block-flow diagrams, list fire-mitigation systems present, or report known fire and explosion risks in the facility?

3. Does your facility provide information to, or coordinate emergency planning with, local emergency-response authorities? If so, what information do you provide, and what activities are involved in the coordinated planning. Are there any special circumstances that necessitated the information sharing or coordination of emergency planning? Are there issues surrounding Confidential Business Information?

4. What would be the economic impact of requiring employers to provide such information? Are there any special circumstances specific to small entities the panel should consider with respect to this option? What would be the cost to emergency-response authorities of coordinating emergency planning with PSM-covered employers? How does OSHA’s estimates of cost compare to observations in your industry?

The Panel would appreciate comments and insights on alternatives that would achieve OSHA’s objectives while minimizing the costs to small entities.

 

Facility Emergency Drills

OSHA is considering requiring that establishments conduct annual mock emergency disaster drills that would require full staff participation. For certain plants there may be an essential minimal number of staff needed to remain on duty to maintain plant operations. Time to conduct the drill is likely to vary greatly depending on plant size and the emergency situation being simulated. Cost estimates for such a drill are present in Table IV-21 of the background document. Emergency drill costs are heavily dependent on number of employees and the cost estimates range from a low $434 to a high of $368,032.

Questions for SERs

1. Are the estimates of conducting a mock drill consistent with observations in your industry?

2. If your own facility performs such drills, how often are they performed? What coordination do you perform with local responders for these drills? Are there other economic impacts of conducting drills in this way?

3. Are there any special circumstances specific to small entities the Panel should consider with respect to this option?

4. The Panel would appreciate comments and insights on alternatives that would achieve OSHA’s objectives while minimizing the costs to small entities.

5. Does your company have local emergency responders who are capable of participating in such mock drills?

 

First Responder Plant Tours

One way coordination with local emergency responders might be enhanced is for the employer to conduct annual establishment tours with local first responders. These tours would allow first responders to gain familiarity with the plant, as well as the types of chemicals on site. Based on the Agricultural Retailers Association document, Building Productive Relationships with First Responders (ARA, No Date), OSHA expects each facility will have to spend time both preparing for the tour as well as conducting the tour itself:

Preparing for the Tour: Plant staff may choose to gather and produce supplemental documents to provide to first responders on the tour, such as a handout on the types of chemicals at the plant and how they are handled or a map of the plant. They may also choose to review a checklist of topics they wish to discuss on the tour. OSHA assumes that preparing for the tour may take between one, and one and one-half hours for four employees.

Conducting the Tour: The tour should discuss key information such as the layout of the building, building materials used, emergency exit routes, and the types of chemicals stored on site. OSHA estimates four employees will conduct the tour and it will last between one and four hours depending on the plant size. The Agency presents cost estimates for such a plant tour in Table IV-22 of the background document. Cost estimates range from a low of $348 to a high of $2,468.

Questions for SERs

1. Are the estimates of conducting a first responder plant tour consistent with observations in your industry? Are there other economic impacts of conducting tours in this way?

2. Are there any special circumstances specific to small entities the Panel should consider with respect to this option?

3. The Panel would appreciate comments and insights on alternatives that would achieve OSHA’s objectives while minimizing the costs to small entities.

4. Do you currently conduct plant tours with local emergency responders?

 

Evaluation of Local Emergency Response Capabilities

Currently, the PSM standard requires employers to establish and implement an emergency action plan for the entire facility in accordance with the provisions of 29 C.F.R. § 1910.38 Subpart E Emergency Action Plans. This emergency action plan may describe scenarios where the facility will completely evacuate and default emergency response to the local emergency responders. However, there are no provisions to ensure that the local emergency responders are capable of responding to the emergency event. OSHA is considering requiring that establishments conduct evaluations of the capabilities of the local first responders. OSHA expects that establishments will communicate with local emergency responders and formally assess their capabilities. OSHA has a similar requirement in its confined spaces standard (see 29 C.F.R. § 1926.1211(a), final rule at 80 FR 25366.) The economic analysis for the confined spaces standard estimated that it would take “one hour of supervisor time to establish rescue procedures” (80 FR 25495) and OSHA uses this as starting point for this requirement, doubling this time to two hours to include a full evaluation of the local responder. Table IV-23 presents this cost in the background document. OSHA estimates a range from a low of $122 to a high of $232 for this activity.

Questions for SERs

1. If OSHA proposes a regulatory amendment to require coordination, what types of information would be most helpful to facilities in evaluating potential local responders? What experiences have you personally had with evaluating potential local responders? How does OSHA’s estimates of cost compare to observations in your industry?

2. The Panel would appreciate comments and insights on alternatives that would achieve OSHA’s objectives while minimizing the costs to small entities.

 

Process Hazard Analysis Management Sign-Off

Subsection (e)(5) of the existing PSM standard requires that the employer “establish a system to promptly address the [PHA] team’s findings and recommendations; assure that the recommendations are resolved in a timely manner and that the resolution is documented; [and] document what actions are to be taken.” Typically, a PHA team identifies hazards and makes recommendations to management, who then decides whether or not to implement those recommendations. Management may decide not to implement PHA team recommendations for a variety of reasons. However, most PHA team recommendations result from an identified hazard and if management does not implement a recommendation, a hazard may be left unabated.

OSHA is considering adding requirements to § 1910.119(e)(5) specifying that if management decides not to implement or make modifications based on PHA team findings and recommendations, management will ensure that the hazard identified by the PHA team has been adequately addressed. This could take the form of a formal document with management signature(s), approving the actions taken (or lack thereof) in order to resolve PHA team recommendations.

OSHA estimates that one hour of a manager’s time and one hour of the appropriate technical staff would be required to complete the formal documentation. See Table IV-24 in the background document. Cost estimates there range from $105 to $227.

Questions for SERs

1. Does management at your facility evaluate PHA recommendations? If so how often do you evaluate them? When PHA recommendations are not implemented how does your facility address the hazard?

2. Are the Agency’s estimates of cost consistent with observations in your industry? Are there other economic impacts of such a requirement?

3. Are there any special circumstances specific to small entities the Panel should consider with respect to this option?

4. Are you aware of injuries or fatalities that would have been prevented had PHA recommendations been implemented that your facility?

5. Does your management ever decide to not implement PHA recommendations? Why? Please provide examples.

6. The Panel would appreciate comments and insights on alternatives that would achieve OSHA’s objectives while minimizing the costs to small entities.

 

Root Cause Analysis

Currently, PSM-covered establishments are required to investigate incidents (§ 1910.119(m)) but they are not required to conduct a root-cause analysis. Learning from incidents and near misses is an effective way to prevent future incidents, but is best accomplished when investigations determine and address the underlying or root causes of the incidents rather than solely determining the initiating events. OSHA is considering the addition of a requirement to § 1910.119 specifying that the employer conduct a root-cause investigation of all incidents.

OSHA estimates that conducting a root cause analysis increases the time needed to conduct a routine incident investigation by 50 percent. Therefore, the Agency estimates, based on the PSM RIA (OSHA, 1992), that the incremental burden of adding a root-cause analysis to an incident investigation is 28 – 30 hours per investigation. This estimate includes the time to conduct the investigation, prepare a report, and address the report’s findings. The cost and burden associated with conducting a root-cause analysis are presented in Table IV-25 of the background document. OSHA’s estimate of the cost to conduct the currently required incident investigation is presented in Tables IV-2a through IV-5 of the background document. The additional cost for doing a root cause analysis shown in Table IV-25 ranges from $276 to $11,487.

Questions for SERs

1. Does your facility conduct root cause investigations of incidents? Are OSHA’s estimates of burden consistent with observations in your industry? Are there any special circumstances specific to small entities the Panel should consider with respect to this option?

2. Are there any reasons why a facility would not want to conduct a root cause analysis?

Third Party Compliance Audits

At present, the PSM standard requires that employers certify that they have evaluated compliance with the PSM provisions at least every three years and that the audit is performed by at least one person knowledgeable in the covered process (§ 1910.119). An audit report must also be prepared and responses must be made to the audit findings. OSHA is considering amending § 1910.119 to require that an audit be conducted by a qualified third-party auditor and adding, in the definitions section, a definition of a qualified third-party auditor.

The hourly burden estimates for conducting third-party audits are taken from the PSM RIA (OSHA, 1992) and the RMP EA (EPA, 1996) (see Table B-14 of the background document), with the assumption that the hourly burden for conducting an audit will not change between using an in-house team or a third party team. To estimate the cost, OSHA multiplied the hourly burden for conducting the audit and preparing the audit report with the hourly wage of an outside consultant, $235 per hour (see Table B-15 in the background document). Cost estimates in Table IV-26 range from a low of $1,022 to a high of $68,507.

Questions for SERs

1. Should OSHA revise § 1910.119(o) to require employers to use compliance auditors (internal or third party) with certain minimum credentials or certifications? If so, what minimum credentials or certifications should the Agency require? What burden might this place on small businesses?

2. What amount of time do third-party auditors typically spend on getting up to speed on a particular plan’s processes before the audit can actually start? Do you foresee difficulties finding an auditor due to a shortage of qualified auditors for your specific type of facility?

3. Are clarifications needed to help entities understand when past relationships with a potential auditor would disqualify them for this role?

4. Does your facility use a third party for conducting compliance audits under § 1910.119(o) for safety or other reasons? Please explain.

5. Would revising § 1910.119(o) to require employers to use a third party for compliance audits prevent worker injuries and fatalities?

6. What would be the economic impacts of revising § 1910.119(o) in this way (e.g., typical consultant fees, additional work hours required, special circumstances specific to small entities, etc.)?

7. Are there any special circumstances specific to small entities the Panel should consider with respect to this option?

8. Are third-party auditors more likely to understand a facility’s processes, or be more objective/superior than in-house/internal auditors?

Alternatives

The Agency is considering several alternatives that may minimize the economic impact on small entities of third-party audits. These regulatory alternatives are:

  • Alternative 9 proposed in the background document, would modify the compliance audits requirements, requiring only third-party participation but not third-party auditing. This would lessen the burden on employers by allowing them to employ a single, third-party PHA participant instead of an entire third-party auditing team.
  • Alternative 10 proposed in the background document, would modify the compliance audit requirements, making the third-party audits voluntary. OSHA would grant an extension on the compliance audit frequency for employers who utilize third-party auditors from three to five years. This would lessen the burden on employers by allowing them to continue to perform compliance audits exactly as was previously required by the PSM standard.
  • Alternative 11 proposed in the background document, would modify the compliance audit requirements, requiring third-party audits after any reportable RMP accidental release. This alternative would mimic EPA’s proposed requirement to conduct third-party audits only after a RMP reportable accident.

The Panel would appreciate all comments and insights on this alternative or other recommended alternatives by the industry that would achieve OSHA’s objectives while minimizing the costs to small entities.

Additional Requirements for Reactivity hazards

For covered facilities, the existing PSM standard requires employers to compile process safety information, including reactivity data (§ 1910.119(d)(1)(iv)) and hazardous effects of inadvertent mixing (§ 1910.119(d)(1)(vii)), and to determine and evaluate hazards (§ 1910.119(e)). OSHA is considering adding requirements to provide additional protection against reactivity hazards.

OSHA is considering:

  • Adding a requirement to § 119(d)(1)(iv) specifying that employers must use more than one source to collect reactivity data. Relevant data sources would be compiled in a non-mandatory appendix.
  • Adding a requirement to § 1910.119(e) specifying that the PHA should include evaluation of reactivity hazards.

Questions for SERs

1. Have there been fatalities or injuries at your facility related to reactives? If not, would this address potential safety gaps at your facility?

2. Are there any special circumstances specific to small entities the Panel should consider with respect to this option?

3. The Panel would appreciate comments and insights on alternatives that would achieve OSHA’s objectives while minimizing the costs to small entities.

 

New Management System Elements and Record Control Processes

OSHA’s existing PSM standard uses a management system approach to prevent releases of highly hazardous chemicals. When OSHA promulgated the PSM standard in 1992, the standard adopted management-system elements based on best practices from industry at the time. However, best practices have continued to evolve since 1992 and additional management system elements are recognized as effective in preventing incidents. OSHA is considering the following additions or changes to § 1910.119 in management-system elements: Written PSM Management Systems; Employee Participation and Stop Work Authority; Periodic Evaluation and Corrective Actions; Performance Metrics, Root-Cause Analysis; and Documented Management Decisions on PHA recommendations.

Several of these items have been discussed above.

Questions for SERs

1. Would expanding the scope of the PSM standard to require additional management-system elements, or expanding the scope of existing PSM management-system elements, prevent worker injuries and fatalities? If so, please describe the elements, the safety benefits, any
economic impacts associated with expanding the scope of the PSM standard in this way, and any special circumstances specific to small entities that OSHA should consider.

2. Does your facility follow any management-system elements not required under § 1910.119 for PSM-covered operations? If so, please describe the additional management-system elements, the safety benefits, any economic impacts associated with the following elements, and any special circumstances specific to small entities.

The Panel would appreciate comments and insights on alternatives that would achieve OSHA’s objectives while minimizing the costs to small entities.

 

Written PSM Management Systems

OSHA is considering a requirement that employers develop and implement a written PSM Management system which would include (i) written procedures for all elements specified in the standard, (ii) the identification of records required by the standard, and (iii) a records retention policy. These procedures and records would be available to all employees.

The ANSI/AIHA Z10-2012: Occupational Health and Management Systems consensus standard states that a document record and control process will require that an establishment create and maintain records, as well as update records as necessary, and that these records should be stored in a safe and easily accessible place. Given this standard and the fact that establishments already have these procedures implemented, the only additional cost to employers would be to document the procedures and retain records. OSHA estimates that it will take between eight and sixteen hours of a Level IV engineer’s time to write out the procedures and an additional two to four hours to gather and retain the records. The estimated costs associated with this activity are presented in Table IV-27 of the background document. Cost estimates range from $412 to $2,071.

Questions for SERs

The Panel would appreciate comments and insights on alternatives that would achieve OSHA’s objectives while minimizing the costs to small entities.

 

Evaluation and Corrective Action

OSHA is considering requiring employers to develop a system for periodic review and necessary revisions to ensure the PSM management system is effective in preventing incidents. It could include requirements for taking corrective action based on the inputs specified in the standard including, employee suggestions, PHA recommendations, operator training, pre-startup safety reviews, equipment testing and inspection, management of change, incident investigation action items, lessons learned from emergency drill, and action items compliance audits.

OSHA’s cost estimates for this potential requirement are taken from the US Pipeline and Hazardous Materials Safety Administration’s economic analysis for a regulation on Pipeline Safety: Integrity Management Program for Gas Distribution Pipelines (PHMSA, 2009). This rule requires that each gas distribution system operator develop a formal integrity management program, and as part of that program, establish a baseline and develop and monitor performance measures in order to evaluate the effectiveness of its integrity management program.

For the cost analysis of implementing an evaluative and correction system, OSHA estimates one-quarter of the burden for data acquisition and analysis as presented in Table 14 of (PHMSA, 2009), which includes process safety indicators among other activities. Table IV-28 presents these cost estimates in the background document. Cost estimates for initial start-up range from $2,611 to $61,689, while ongoing costs range from $1,044 to $13,549.

Questions for SERs

Are the cost estimates made by the Agency consistent with observations in your industry?

The Panel would appreciate comments and insights on alternatives that would achieve OSHA’s objectives while minimizing the costs to small entities.

 

Clarifications and Minor Modifications to the PSM Standard

This section covers a series of clarifications that OSHA believes involve no costs. The Panel welcomes comment on these updates, what an employer could do to comply with these modifications and clarifications, and whether any costs would likely be incurred.

 

Process Safety Information

Paragraph (d) requires that process safety information is compiled in accordance with the schedule for PHAs set in paragraph (e)(1). Paragraph (l) Management of Change, requires that the PSI be updated as a result of any changes. OSHA’s intent is that the PSI be maintained and continuously updated. Language could be added to the standard to clarify this intent.

 

Mechanical Integrity

Paragraph (j)(5) requires that the employer “correct deficiencies in equipment that are outside acceptable limits (defined by the process safety information in paragraph (d) of this section) before further use or in a safe and timely manner when necessary means are taken to assure safe operation.”

Language could be added to the standard to clarify that deficiencies should be corrected when the equipment:

  • is not operating or functioning as designed by the manufacturer or is outside of acceptable limits;
  • is not operating as defined by the process safety information; or
  • poses a potential risk of release of a hazardous or toxic chemical.

 

Management of Change

OSHA’s standing interpretation is that the Management of Change (MOC) element of the existing PSM standard already covers organizational changes. However, confusion on the applicability of the PSM standard to organizational changes remains. OSHA plans to add minimal language to the MOC section in order to clarify that organizational changes are an example of a change covered by the PSM standard.

 

RAGAGEP Definition

Subsections 1910.119(d)(3)(i) and (ii) and (j)(4) require that employers document that equipment and inspection and test procedures comply with recognized and generally accepted good engineering practices (RAGAGEP). However, the existing PSM standard does not define RAGAGEP. For clarification, OSHA is considering adding a definition of RAGAGEP in 1910.119(b). This definition would be based on already established enforcement policy.

 

Application

Paragraph (a) specifies that the standard covers processes that involve a chemical at or above the specified threshold quantities listed in Appendix A of the standard. OSHA is considering the addition of text to the standard to clarify that the threshold quantity for mixtures of covered highly hazardous chemicals (HHC) would be determined by multiplying the concentration (by weight) of the HHC by the weight of the entire mixture. This represents OSHA’s interpretation of Appendix A, and would provide the clarity about the PSM standard’s scope that the court found lacking in United States v. Ward, 2001 WL 1160168 (E.D. Pa. Sept. 2, 2001). However, OSHA anticipates no change of its current enforcement policy of covering only those chemicals present in mixtures at least a one percent concentration, where there is no minimum concentration specified in Appendix A, in making the threshold quantity determination.

Question for SERs:

  • Would implementation of any of these measures have prevented a fatality or injury at your facility? Do they otherwise address a potential safety gap at your facility? The Panel would appreciate comments and insights on alternatives that would achieve OSHA’s objectives while minimizing the costs to small entities.

 

Unit Costs for Implementing and Maintaining the Existing PSM Standard

In order to evaluate the costs for newly covered establishments, or newly covered PSM processes, OSHA is providing a short overview of the estimates costs for implementing a PSM program. Costs for a PSM program break into two categories: those that must occur for each new process (the PHA, for example), and those that are inherent to having a PSM program at all (emergency response program, for example).

Costs also break into two temporal categories: those that occur the first year a new process or program is in existence, and those ongoing costs required to ensure continuing compliance with the standard. For each program element OSHA estimated the total: costs for creating a PSM program from scratch, for adding a new process to an existing PSM program, and then the ongoing costs for these two elements. Unit cost for a new PSM program with a single process was estimated from the PSM RIA and range from 707 to 26,888 hours across industries. The RMP EA has a much wider range, from a low of 236 hours for a small Sewage Treatment Plant to a high of 111,508 hours for a very large Chemical Processer. Dollar costs for each program element were calculated by multiplying the burden hours for the associated occupations by the wage for the worker implementing the PSM program. The PSM RIA has a range of total costs of $42,520 to $936,704. The RMP EA estimates range from a low of $14,035 to a high of $3,875,638.

The numbers of hours and costs for adding a new process to an existing PSM program are additive. For example, a new facility with three processes would have costs of establishing a new, single process PSM program plus two times the relevant costs of adding a new process to an existing PSM program. The PSM RIA estimates total costs for an additional process ranging between $31,358 and $76,429. Across all industry types, the RMP EA has a range, from $2,408 to $498,319.

The PSM RIA estimated the ongoing costs for a Single Process PSM program, ranges from $16,183 to $267,768 for year to year costs while the RMP EA estimated that costs across industry types ranges from $5,335 to $1,600,992. The PSM RIA estimated that the annual per-process cost ranges from $13,633 to $32,110 while the RMP EA estimates that costs range from a low of $2,104 to a high of $211,157. The Panel is seeking comment on all hours and cost estimates, for all program elements and industry types.

 

Summary of All Facilities and Employees Both Covered by the Existing PSM

Standard and Newly Affected Based on the Updates Being Considered

The following provides preliminary estimates of the total number of affected facilities and employees both for the existing PSM standard and for the possible changes to the PSM standard. See Appendix A of the background document for a full discussion of the data sources and methodology used to estimate the affected population for each possible change to the existing PSM standard under consideration.

Under the existing standard 10,524 entities are estimated to be covered. Under a revised PSM standard OSHA estimates 9,803 additional entities would be affected. The largest additions are from the two oil and gas-related NAICS industries which together add 8,338 new entities to the scope of this rule. OSHA estimates the total number of employees affected by a revised PSM standard is 278,228. An estimated 9,285 small entities employing 118,296 workers, and 7,936 entities with 20 employees or fewer, employing 28,770 workers are estimated to be newly affected by a revised PSM standard that adopts all options under consideration.

If all the potential changes under consideration are adopted into a revised PSM standard, the Agency estimates the total numbers of affected entities to be 20,323 including those entities within the scope of the existing PSM standard and possible additions. These entities employ 1,824,140 employees. Of these affected entities and employees, the Agency estimates that 17,157 are SBA-defined small entities that employ 753,351 workers, while 13,773 are entities with 20 employees or fewer that employ 68,257 workers.

Additional Questions

1. What compliance assistance could OSHA provide if these changes were promulgated to best help small entities comply in the least burdensome manner?

2. Are the unit costs that are discussed in this issues document or in the cost section of the SER Background Document reasonable?

3. Are there types of costs, actions, or items that the Agency is either over- or under-estimating, or that the Agency has failed to consider at all?

4. Are there any potential provisions for which OSHA has presented cost estimates that the SERs believe would not require employers to undertake additional actions or incur additional costs, over and above current practice?

5. Are there any special circumstances or conditions specific to small entities that the panel should consider?

 

References

ANSI/AIHA Z10-2012. American Society of Safety Engineers. “ANSI/AIHA Z10-2012. American National Standard – Occupational Health and Management Safety Systems.”

CCPS, 2009. Center for Chemical Process Safety, Inherently safer chemical processes: a life cycle approach, (2nd Edition).
Chicca, 2015. “Memorandum: Current Industry Practices on Process Safety Management System”, David Chicca, OSHA/DSG. Information provided from Mary Kay O’Connor Process Safety Center through Project Enhancement Corporation, memo to Lisa Long, OSHA/DSG, June 5, 2015.

Doran, T. 2013. “New fertilizer storage facility delivers efficiency,” AgriNews, January 29, 2013. Available at: http://www.agrinewspubs.com/Content/News/MoneyNews/Article/New-fertilizer-storage-facility-deliversefficiency/8/27/6056
(Accessed December 28, 2014).

EPA, 1996. Environmental Protection Agency, Economic Analysis in Support of Final Rule on Risk Management Program Regulations for Chemical Accident Release Prevention as required by Section 112(3) of the Clean Air Act.

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