Respondent owns and operates an adhesive and sealant manufacturing facility, which employs about 30 persons, is one of several plants that Respondent operates nationwide with about 45,000 employees worldwide. In the Facility’s manufacturing processes, the facility uses various highly flammable and/or toxic chemicals that are stored in outdoor tanks ranging in size from about 5,000 to 10,000 gallons each. The Facility is located in a commercial/light industrial area within one-half mile of numerous businesses, a children’s swim school, a church, a delicatessen, and residential homes.
On May 22, 2018, EPA Region 1 inspectors conducted a CAA Section 112(r) compliance evaluation inspection at the Facility. On January 29, 2019, EPA Region 1 issued a Notice of Potential Violation letter regarding potential GDC and RMP Rules violations at the Facility.
ALLEGED GDC VIOLATIONS
The Facility handles and stores toluene, methyl acetate, acetone, mineral spirits, methyl ethyl ketone, methylene chloride, and methylene diphenyl diisocyanate (“MDI”). Because of flammability and/or toxicity, these chemicals are “extremely hazardous substances” under the General Duty Clause.
The Facility stores the above-described GDC chemicals in outdoor horizontal and vertical storage tanks (“GDC storage tanks”) ranging in size from about 5,000 to 10,000 gallons. GDC chemicals are transported through piping from the GDC storage tanks to other parts of the Facility.
The GDC storage tanks and associated piping are subject to the General Duty Clause.
Count 1: Failure to Design/Maintain a Safe Facility
Under the General Duty Clause, owners and operators of stationary sources producing, processing, handling, or storing extremely hazardous substances have a general duty, in the same manner, and to the same extent as 29 U.S.C. § 654 [from the Occupational Safety and Health Act] to design and maintain a safe facility taking such steps as are necessary to prevent accidental releases of such substances. See Section 112(r)(1) of the CAA, 42 U.S.C. § 7412(r)(1).
The standard of care for designing and maintaining a safe facility is to base design considerations upon applicable design codes, federal and state regulations, and recognized industry practices; to prevent chemical releases or minimize their impacts; and to develop and implement standard operating procedures, preventative maintenance programs, personnel training programs, management of change practices, incident investigation procedures, and self-auditing procedures. Examples of design codes and recognized industry practices applicable to the industry include, for example, codes and guidelines issued by the National Fire Protection Association (“NFPA”), the Steel Tank Institute/Steel Plate Fabricator’s Association (“STI”), the American Petroleum Institute (“API”), and the American Society of Mechanical Engineers (“ASME”) (collectively hereinafter referred to as “Industry Standards”).
See also EPA’s Guidance for Implementation of the General Duty Clause Clean Air Act Section 112(r)(1) (May 2000) (“EPA’s General Duty Clause Guidance”). EPA consults these Industry Standards to understand the hazards posed by the use of various extremely hazardous substances and the standard of care that industries themselves have found to be appropriate for managing those hazards.
Failure to Conduct Tank Testing and Maintenance
At the time of EPA’s inspection of the Facility in May 2018, none of the outdoor GDC storage tanks had been properly evaluated to determine their fitness for ongoing use. See, e.g., STI’s Aboveground Storage Tanks Inspection Standard, commonly cited as “STI SP001,” which in Table 5.5 recommends professional inspections for Category 2 storage tanks every 10 years. The facility’s Category 2 GDC storage tanks had not been inspected since 2006, even though at the time of EPA’s inspection there was evident surface corrosion on tank nozzles, manways, and shell surfaces.
Further, the 9,000-gallon vertical GDC storage Tank #19 containing MDI, together with two other 9,000-gallon tanks, had been moved from another business location in Michigan but there were no records of tank testing performed for any of these tanks when they were re-installed and put into service at the Facility. See, e.g., the NFPA 30 Flammable and Combustible Liquids Code (commonly cited as “NFPA 30”) at Sections 21.5.1 and 21.5.2.4, which provide that all tanks must be tested before being placed into service and that vertical tanks must be tightness tested.
Failure to Anchor Tanks
Industry Standards, such as API Standard 650: Welded Steel Tanks for Oil Storage (commonly cited as “API 650”), provide for anchoring tanks. At the time of EPA’s inspection, vertical methyl acetate Tank #13 showed significant corrosion around the base and was not anchored to its concrete pad, despite a consultant’s wind load analysis and recommendations in 2006 and 2011. Vertical mineral spirits Tank #14 was similarly not anchored to its concrete pad.
Failure to Conduct Pipe Testing
At the time of EPA’s inspection, piping from the outdoor GDC storage tanks to Facility buildings had not been assessed with ultrasonic testing (“UT testing”). UT testing performed after EPA’s inspection indicated significant pipe thinning in many of the GDC tank pipe runs. See, e.g., API Standard 570: Piping Inspection Code (commonly cited as “API 570”) at Section 6 and Table 6-1, and API Recommended Practice 574: Inspection Practices for Piping System Components (commonly cited as “API 574”) at Sections 12.1 and 12.4, recommending that UT inspections generally be conducted not less than every 10 years with records kept of UT test locations and readings.
Failure to Label Pipes and Connection Ports
At the time of EPA’s inspection, piping from the outdoor GDC storage tanks to Facility buildings was not labeled to identify the pipes’ contents, physical state, or direction of flow, and insulated piping from the MDI tank was not labeled for contents or direction of flow. Also, chemical hose connection ports (i.e., chemical fill ports) mounted on the exterior wall of the Facility’s adhesive manufacturing building were unlabeled, so there was no indication of which chemical was to be pumped into each fill port. See, e.g., pipe labeling standards in ASME Standard A13.1: Scheme for the Identification of Piping Systems (commonly cited as “ASME A13.1”) at Section 3.1.
Failure to Perform Pipe Maintenance
Chemical transfer piping from hose connections to the outdoor GDC storage tanks were unpainted and had surface corrosion. See, e.g., NFPA 30 at Section 27.6.4, which recommends that above-ground piping subject to corrosion be suitably protected.
As alleged above in this Count and as set forth in EPA’s January 29, 2019 Notice of Potential Violation letter, for which all items discussed therein are incorporated in this CAFO by reference, the facility failed to conduct GDC tank testing, anchor GDC tanks, conduct GDC pipe testing, label GDC pipes and connection ports, and perform GDC pipe maintenance. Such failures could have led to a chemical release and caused serious harm.
Accordingly, the facility failed to design and maintain a safe facility and violated the General Duty Clause, Section 112(r)(1) of the CAA, 42 U.S.C. § 7412(r)(1).
Count 2: Failure to Minimize Consequences of Accidental Releases
Under the General Duty Clause, owners and operators of stationary sources producing, processing, handling, or storing extremely hazardous substances have a general duty, to the same extent as 29 U.S.C. § 654, to minimize the consequences of accidental releases. See Section 112(r)(1) of the CAA, 42 U.S.C. § 7412(r)(1).
Industry Standards for minimizing the consequences of an accidental release include, for example, minimizing tank overflows, maintaining secondary containment, controlling leaks, and labeling pipes. In addition, industry standards of care call for emergency response planning at facilities that have extremely hazardous substances. Emergency response planning includes, among other things, providing a Local Emergency Planning Committee with information needed to complete a Comprehensive Emergency Response Plan under 42 U.S.C. § 11003, coordinating with response agencies, conducting employee emergency response training, and conducting exercises.
Failure to Install Tank Overflow Controls
GDC storage Tanks #5 and #13 (5,000 and 10,000 gallons, respectively) did not have required tank overfill devices and were judged not fit for service in January 2019 tank test reports produced by a consultant. The overfill controls were installed in mid-2020. See, e.g., NFPA 30 at Section 21.7, containing overfill prevention requirements for aboveground tanks larger than 1,320 gallons, and 40 C.F.R § 112.8(c)(8), requiring overfill devices/systems for oil-containing storage tanks (including mineral spirits).
Failure to Maintain Tank Secondary Containment
At the time of EPA’s inspection, the concrete secondary containment of the outdoor GDC chemical storage tanks was chipped and broken, and the epoxy coating appeared significantly deteriorated in many locations, all of which may have adversely impacted the containment and caused it to be non-watertight. See, e.g., NFPA 30 at Section 22.11.2.4, which provides that concrete or solid masonry containment walls must be designed to be liquid-tight even when fully loaded.
Failure to Control Leaks
A MDI pump in secondary containment for MDI-containing GDC storage Tank #19 was leaking during EPA’s May 2018 inspection. Absorbant towels had been placed under the leaking pump, but there were wet areas near the towels and on the floor beneath the pump. This was an unsafe situation because MDI is flammable and dangerous if inhaled. See, e.g., NFPA 30 at Sections 6.9.2 and 18.3.2, which provide that facilities control leakage and prevent spillage of flammable liquids.
Failure to Label Pipes and Connection Ports
Piping from the outdoor GDC storage tanks to Facility buildings was not labeled to identify the pipes’ contents, physical state or direction of flow. Insulated piping from the MDI tank was not labeled for contents or direction of flow. Also, chemical hose connection ports (i.e., chemical fill ports) mounted on the exterior wall of the Facility’s adhesive manufacturing building were unlabeled, so there was no indication of which chemical should be pumped into each fill port. See, e.g., ASME 13.1 at Section 3.1.
As alleged above in this Count and as set forth in EPA’s January 29, 2019 Notice of Potential Violation letter, for which all items discussed therein are incorporated in this CAFO by reference, the facility failed to install tank overflow controls, failed to properly maintain tank secondary containment structures, failed to properly control a spill from a leaking MDI pump, and failed to label pipes and connection ports. Such failures threatened to exacerbate the effects of any release of GDC chemicals that might occur.
Accordingly, the facility failed to minimize the consequences of accidental releases and violated the General Duty Clause, Section 112(r)(1) of the CAA, 42 U.S.C. § 7412(r)(1).
ALLEGED RMP VIOLATIONS
The Facility stores and uses dimethyl ether, propane/isobutane, and isopentane, which are all listed regulated substances under the RMP Rules (hereinafter, the “RMP regulated substances” or “RMP chemicals”). The facility stores the RMP regulated substances in three outdoor pressurized storage tanks (the “RMP storage tanks”) ranging in size from about 6,000 to 9,000 gallons.
The facility transports the RMP regulated substances via piping from the RMP storage tanks to other parts of the Facility, including the Facility’s Gas House, where the facility uses the RMP regulated substances in its adhesive manufacturing processes.
The Facility’s RMP storage tanks and associated piping, and manufacturing processes and associated equipment that use the RMP regulated substances, constitute “covered processes” at the Facility under the RMP Rules. As set out in it’s RMP plan, these covered processes are subject to RMP Program 3 requirements.
Count 3: Failure to Comply with Process Safety Information Requirements
At the time of EPA’s Inspection, the facility had not adequately documented and ensured that its process equipment complied with RAGAGEP.
Among other things, the facility failed to label piping carrying RMP chemicals from the Facility’s three outdoor RMP storage tanks to the Facility’s Gas House with labels identifying contents, physical state or direction of flow, as provided by ASME A13.1 at Section 3.1. Separately, a pressurized vessel in the Facility’s reactor room containing RMP chemicals had no nameplate stating its maximum allowable working pressure and date of installation, as provided in the ASME Boiler and Pressure Vessel Code, Section VIII, Division 1, as referenced by NFPA 58: Liquified Petroleum Gas Code (commonly cited as “NFPA 58”) at Section 5.2.1.1.
Accordingly, the facility failed to comply with the PSI requirements of the RMP Rules and violated 40 C.F.R. § 68.65.
Count 4: Failure to Perform an Adequate Process Hazard Analysis
At the time of EPA’s inspection, the facility’s PHA did not adequately identify, evaluate, or control process hazards. Among the PHA’s deficiencies were the following: the PHA contained a list of general chemical release scenarios with no specific engineering and administrative controls applicable to the hazards; the PHA contained no qualitative evaluation of possible safety or health effects that could arise from the failure of controls; and the PHA contained no system to address any recommendations or document their resolution.
Accordingly, the facility failed to comply with the PHA requirements of the RMP Rules and violated 40 C.F.R. § 68.67.
Count 5: Failure to Comply with Operating Procedures Requirements
At the time of EPA’s inspection, the facility did not ensure that operating procedures for the Facility’s covered processes were kept up to date and certified. The facility’s operating procedures for receiving and unloading propane/isobutane were undated and contained no information regarding updates or regular certifications, and no remedial steps if deviations occurred.
Accordingly, the facility failed to comply with RMP operating procedures requirements and violated 40 C.F.R. § 68.69.
Count 6: Failure to Comply with Mechanical Integrity Requirements
The facility failed to perform necessary inspections and testing of equipment used in its RMP-covered processes at the Facility. Among other things, it failed to timely conduct internal inspections of the Facility’s three outdoor, pressurized RMP storage tanks.
At the time of EPA’s inspection, the RMP tanks had been in service at the Facility since 2003 but had not been inspected. After EPA’s inspection, the facility arranged for inspections of the RMP storage tanks, but these inspections did not include required internal tank inspections. See API 510: Pressure Vessel Inspection Code (commonly cited as “API 510”) at Section 6.5.1.1, which provides that internal inspections of pressurized tanks shall be performed at no less than ten-year intervals.
Further, the facility failed to regularly test or replace the RMP storage tanks’ pressure relief valves (“PRVs”). See API 510 at Section 6.6.3.2; API 576: Inspection of Pressure-relieving Devices (commonly cited as “API 576”) at Section 6.4.1; and NFPA 58 at Annex E, Section E.2.3.2.
In addition, the facility failed to timely conduct UT testing on pipes carrying RMP chemicals from the RMP storage tanks to the Facility’s Gas House. See API 570 at Section 6 and Table 6-1, and API 574 at Sections 12.1 and 12.4, recommending that UT inspections generally be conducted not less than every 10 years with records kept of UT test locations and readings.
Accordingly, the facility failed to comply with RMP mechanical integrity requirements and violated 40 C.F.R. § 68.73.
Count 7: Failure to Comply with Training Requirements
The facility failed to provide initial training to new employees who were assigned to operate RMP covered processes in the Facility’s Gas House, where RMP chemicals are used as bulk adhesive propellants. It also failed to certify in writing that these employees had the required knowledge and skills to safely operate these processes.
Accordingly, the facility failed to comply with RMP training requirements and violated 40 C.F.R. § 68.71.
Penalty Payment:
EPA has determined that it is fair and proper to assess a civil penalty of $345,000 for the violations alleged in this matter.
Non-Penalty Conditions
As a condition of settlement under CAA Section 113(d)(2)(B), Respondent agrees to comply with the non-penalty provisions of Appendix 1, which is attached to this CAFO and incorporated herein by reference. Respondent shall comply with Appendix 1 beginning from the Effective Date of this CAFO.
APPENDIX 1: NON-PENALTY COMPLIANCE TERMS
A. Pipe Inspections and Compliance Measures
1. To correct the GDC pipe inspection violations, Respondent hired a new, qualified inspection consultant who conducted new inspections, with UT testing, of all of the GDC-subject pipe runs connecting the Facility’s outdoor GDC storage tanks to Facility buildings. Respondent’s consultant has provided Respondent with a GDC pipe inspection report (the “Solvent Piping Inspection Report,” dated December 14, 2020), which includes photographs of the pipes and the results of the UT testing performed on the pipes. A copy of this inspection report has been provided to EPA.
2. The Solvent Piping Inspection Report contains various recommendations for repairs, maintenance, testing, and other corrective work involving the GDC pipe runs. Respondent certifies that it has addressed and resolved the report’s recommendations for GDC piping corrective work with the exception of the following:
(a) repair of the cracked pipe bridge support leg that services the low viscosity mixer supply piping;
(b) preparation of areas adjacent to the low viscosity mixing building to accommodate effective drainage and vegetation control, and to maintain noncontact with soil or stone; and
(c) preparation and re-coating of piping at low viscosity mixer building penetrations, and prevention of stormwater impact on these penetrations.
3. Respondent shall complete the remaining corrective work by no later than April 30, 2021. If inclement weather causes schedule delays for any of this work, Respondent shall inform EPA by email by no later than April 30th and shall complete all delayed work by no later than May 30, 2021.
B. Tank Inspections and Compliance Measures
4. To correct the RMP tank inspection violations, Respondent hired a new, qualified inspection consultant who conducted new inspections of the Facility’s three RMP storage tanks. Respondent’s consultant has provided Respondent with an inspection report for each of the RMP storage tanks (collectively, the “RMP Tank Inspection Reports,” each dated October 15, 2020). Respondent’s consultant also provided an inspection report for the RMP pipe runs (the “Process Piping Inspection Report,” dated November 4, 2020). Copies of these inspection reports have been provided to EPA.
5. The RMP Tank Inspection Reports and the Process Piping Inspection Report contain various recommendations for repairs, maintenance, testing, and other corrective work involving the RMP storage tanks and the RMP pipe runs. Respondent certifies that it has addressed and resolved the reports’ recommendations for RMP tank and piping corrective work with the exception of the following:
(a) replacement of the RMP tanks’ excess flow valves, and
(b) testing of the RMP tanks’ emergency shutoff valves
6. Respondent shall complete the remaining corrective work by no later than April 30, 2021. Respondent shall also complete the re-sealing of exterior secondary containment walls for the Facility’s RMP/GDC storage tanks, and shall replace the reactor vessel in the Facility’s Gas House with a new, certified reactor vessel, by no later than April 30, 2021.
If inclement weather causes schedule delays for any of this work, Respondent shall inform EPA by email by no later than April 30th and shall complete all delayed work by no later than May 30, 2021.
Separately, Respondent shall complete all interior RMP/GDC pipe labeling by no later than April 30, 2021. In addition, Respondent shall incorporate the following into the Facility’s mechanical integrity and preventative maintenance programs:
(a) annual testing for tank emergency shutoff valves;
(b) regular replacement (based on service life) of excess flow valves if the valves cannot be tested safely;
(c) API 510 inspections of the RMP storage tanks at five-year intervals; and
(d) formal external inspection of the RMP pipe runs at five-year intervals.
C. Independent Third-Party Compliance Audit
7. Respondent shall hire an independent third-party auditor to conduct a CAA Section 112(r) compliance audit at the Facility, produce a written audit report, and provide the report to Respondent and EPA. Respondent shall correct any CAA Section 112(r) compliance deficiencies found as a result of the audit.
8. The audit shall review and evaluate Respondent’s compliance at the Facility with the RMP Rules’ Program 3 requirements set out at 40 C.F.R. §§ 68.65–68.87, including requirements for process safety information, process hazard analysis, operating procedures, mechanical integrity, and training. The audit shall also review and evaluate Respondent’s compliance at the Facility with the General Duty Clause in Section 112(r)(1) of the CAA, including whether the Facility is complying with current recognized and generally-accepted good engineering practices (“RAGAGEP”) for any tanks and other equipment that store or transfer extremely hazardous chemicals.
9. Within 120 days after the effective date of this CAFO, Respondent shall hire a third-party auditor (“Auditor”) that will use a team with at least two persons (“Team”) to conduct the audit required by this Section. At or before the time of hiring, Respondent shall submit the Team members’ resumes and qualifications to EPA. One or more members of the Team shall be generally knowledgeable regarding adhesive/sealant manufacturing or other operations that would have similar RMP and GDC requirements as practiced at the Facility, shall be knowledgeable with the requirements of 40 C.F.R. Part 68 and the GDC, and shall have at least five years of experience conducting Program 3 compliance audits and process hazard analyses. Prior to commencing the audit, the Team members shall become familiar with this CAFO and the alleged violations herein, and with RAGAGEP for the adhesive/sealant manufacturing industry.
10. Unless otherwise authorized in advance by EPA, the Auditor and Team members shall not have performed any work for Respondent or for any of Respondent’s officers within the last three years, and shall not perform any such work for three years following submission of the final audit report. The Auditor and Team members shall receive no financial benefit from the outcome of the audit apart from payment for auditing services.
Respondent’s contract with the Auditor shall contain a statement documenting that the Auditor and Team members meet the independence requirements of this Paragraph.
At all times during the audit, Respondent shall provide the Team with unimpeded access to all documents and information related to the Facility’s compliance with the CAA’s GDC and the RMP Rules, including but not limited to the Facility’s current process safety information, process hazard analysis, operating procedures, training materials and records, and mechanical integrity-related procedures, inspections, and testing, including all tank and piping inspections and testing and all documents related to repairs or corrective measures recommended, planned, and/or taken as a result of such inspections and testing.
The Team shall perform at least one on-site inspection of the Facility during the audit, and Respondent shall provide the Team with unimpeded access to the Facility during the inspection(s). The Team shall photograph or video its observations of the Facility’s outdoor storage tanks and piping and equipment associated with these tanks, and the Facility’s indoor RMP and GDC-subject processes and equipment, including any observed potential RMP/GDC noncompliance at any of these storage tanks, piping, processes, or equipment.
If during the audit, the Team discovers a condition at the Facility that, in the Team’s independent judgment, constitutes an imminent and substantial endangerment to human health or the environment, the Team shall immediately notify Respondent and EPA of the condition. Respondent shall immediately address and ameliorate the condition and immediately consult with EPA as to how best to eliminate it.
Within 180 days after the effective date of the CAFO, the Auditor shall complete the audit. Within 60 days after completing the audit, the Auditor shall provide a written final audit report (“Final Report”) to Respondent and EPA. Two copies of the Final Report shall be provided to EPA. Respondent shall not review or comment on the Final Report, or any draft versions thereof, prior to the Final Report being provided to EPA.
The Final Report shall describe in detail the results of the audit, including, but not limited to, the following:
(a) the Team’s audit procedures, and the information reviewed and evaluated by the Team during the audit,
(b) Respondent’s current compliance obligations at the Facility with regard to the RMP Rules and the CAA GDC;
(c) Respondent’s current compliance status at the Facility with regard to the RMP Rules and the CAA GDC, including any current potential noncompliance with any RMP or GDC requirements;
(d) any potential noncompliance identified by the Team or Respondent during the audit that was corrected prior to the issuance of the Final Report, including the date(s) on which the noncompliance commenced and was corrected;
(e) recommendations for potential improvements or modifications to Respondent’s CAA Section 112(r) compliance programs or operating procedures and practices at the Facility to ensure compliance; and
(f) any other information relating to Respondent’s CAA Section 112(r) compliance at the Facility that in the judgment of the Auditor merits review by Respondent or EPA.
16. The Final Report shall include a specific discussion of Respondent’s CAA Section 112(r) compliance obligations, and compliance status, for all storage tanks and associated piping at the Facility that are subject to either the RMP Rules or the CAA GDC, including tank and piping inspections, testing and maintenance. The Final Report shall append a list of the Facility’s RMP compliance documents (e.g., process safety information, process hazard analysis) and all tank and equipment inspection, testing and repair documents reviewed by the Team during the audit, with each such document identified by title, author and date. The Final Report shall also append a captioned log of photographs, and a copy of any videos, taken during the Team’s on-site inspection(s) of the Facility.
Respondent shall address and fully correct as soon as possible any potential noncompliance identified in the Final Report. Within 30 days after receiving the Final Report, Respondent shall provide notice to EPA describing what actions Respondent has taken and/or will take to fully correct the noncompliance. If Respondent believes that any identified potential noncompliance in the Final Report does not constitute actual noncompliance, Respondent shall, as part of the written notice required in this Paragraph, provide to EPA a detailed explanation of Respondent’s views. If requested by either party, EPA and Respondent shall meet within thirty (30) days after receipt of the Final Report to discuss the report and its findings.
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