OSHA’s “hydrocarbon fuel exemption” in PSM

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OSHA’s PSM exemption of  “Hydrocarbons used solely for workplace consumption as a fuel” is commonly misunderstood and often improperly applied.  In this article I hope to better explain how this exception can be utilized SAFELY and in FULL COMPLIANCE so that both “process safety” and “OSHA compliance” can be fully met.  Let’s start by looking that the fuels exemption in 1910.119(a)(1)(ii)(A) which states…

Hydrocarbon fuels used solely for workplace consumption as a fuel (e.g., propane used for comfort heating, gasoline for vehicle refueling), if such fuels are not a part of a process containing another highly hazardous chemical covered by this standard;

The intent here is to exclude flammable fuels that are being used in heating buildings or fueling vehicles.  For example, a facility has a large propane tank on site that is used to provide “back-up” fuel to building heaters that are used for heating buildings.  This would include boilers that are used SOLELY for providing steam as a means of comfort heating.  These types of uses of flammable fuels are EXEMPTED from the PSM coverage.  HOWEVER (and yes it is a HUGE “however”) when these flammable fuels (e.g. “hydrocarbons”) are used in a “process” already covered by PSM (and RMP) then these flammable fuels are PART OF THE COVERED PROCESS and fall within the requirements of PSM.  An example of this would be a boiler used in a “covered process” to provide steam, in which the boiler is “interconnected” to the covered process.  A little more direct would be using the fuel as a means to heat up the “covered chemical” that makes the process covered by PSM/RMP. In a Q&A document within the PSM CPL OSHA states the following:

Q. Are flammable liquids and gases used as fuels for such items as heaters or exchanges contained in (covered) processes also included within the coverage of the standard?

A. Furnaces, boilers, heaters, etc., fueled by flammable liquids or gases–regardless of the quantity of the fuel–used in processes that are otherwise covered by the PSM standard (i.e., the existence of a threshold quantity of another highly hazardous chemical) are considered part of the process and are covered by the PSM standard. Flammable liquid-or-gas-fueled furnaces, boilers, etc., used in processes not otherwise covered by the PSM standard are exempt from the standard.

OSHA has issued six (6) Letter’s of Interpretation on this matter and all six letters state the same position, exactly as it is worded in 1910.119(a)(1)(ii)(A)…

if such fuels are not a part of a process containing another highly hazardous chemical covered by this standard.

Let me try to explain something that some process safety professionals loose site of when assessing the process applicability.  I first point us back to the definition of a “process”…

Process means any activity involving a highly hazardous chemical including any use, storage, manufacturing, handling, or the on-site movement of such chemicals, or combination of these activities. For purposes of this definition, any group of vessels which are interconnected and separate vessels which are located such that a highly hazardous chemical could be involved in a potential release shall be considered a single process.

As we can see, a “process” is a set of vessels that are interconnected OR the vessels are “co-located” such that an incident in one process may cause a release of the HHC/EHS from the covered process.  So when we look at a process we have to look at the BIGGER picture and consider ALL INTERCONNECTED EQUIPMENT as part of the “covered process”.  When we look at process safety in this larger picture, OSHA’s rationale in 1910.119(a)(1)(ii)(A) makes a bit more sense.  In other words, we “cover” the “process” and not just the chemical within the process.  Hence, all chemicals in the “covered process” essentially become “covered chemicals” merely because they are used within the physical boundaries of our defined “covered process”.  OSHA has even included “utilities” as covered materials when they play a “critical role” in the process.  OSHA stated the following regarding “utilities” in a 2008 LOI:

As a result, it is OSHA’s position that if an employer determines that a utility system or any aspect or part of a process which does not contain an HHC but can affect or cause a release of HHC or interfere in the mitigation of the consequences of a release, then, relevant elements of PSM could apply to these aspects. OSHA’s position is that any engineering control, including utility systems, which meets the above criteria must be, at a minimum, evaluated, designed, installed, operated (training and procedures), changed, and inspected/tested/maintained per OSHA PSM requirements.

In the situation with flammable fuels, when they are INTERCONNECTED to a covered process they are NOT ELIGIBLE for the exemption in 1910.119(a)(1)(ii)(A).  But this may not be the end of the story…

It may be possible (I have not yet seen it done successfully or safely) to exclude these fuels from your PSM/RMP “battery limits”, thus excluding them from coverage within your “covered process”.  Much like we do when we draw up our “battery limits” for our covered process(s) that is INTERCONNECTED, if we are able to show that this “fuel” could not have a negative impact (e.g. not cause an upset in our covered process that could result in a release of the HHC/EHS or directly cause a release from our covered process) then MAYBE we could exclude the fuel from our covered “battery limits”.  BUT THIS IS ENTIRELY DIFFERENT than exempting the flammable fuel (e.g. hydrocarbon) using 1910.119(a)(1)(ii)(A). 

But as we know in the Process Safety world, nothing is black and white, so the flip side to the argument above is … even when the flammable fuels are NOT interconnected to the “covered process” they could still be covered by PSM/RMP and here’s how: “co-location”.  Lets say a facility is land-locked and just does not have adequate space for a large capacity butane tank the facility wishes to use for a process ENTIRELY separate from one of it’s “covered processes” (i.e. the process is NOT covered by PSM).  In NO WAY will this butane tank be “connected” to the covered process; however, because of the limited space (or for any other reason) the butane tank is located within mere feet from the covered process.  This large capacity tank may EVEN HAVE LESS than 10,000 pounds of butane in it, but because of it’s CLOSE PROXIMITY to the covered process, a release of butane gas or a fire involving butane could certainly impact the “covered process” thus calling into question if this butane tank and its associated equipment is “covered” by the PSM/RMP standard.  I am one process safety professional that will say without a doubt the butane tank and its associated equipment (e.g. vaporizers, piping, RVs, etc.) is covered, but there are many PSM Managers that would argue against my position.  I do not believe this is debatable, but this is the great thing about process safety… most everything is subjective in “performance oriented” standards and thus is open for debate.

Here are the six LOI’s that discuss using the 1910.119(a)(1)(ii)(A) exemption:

Here is some more Q&A that can be found in the PSM CPL regarding the “fuel exemption” we have discussed here…

(a)(1)(ii)(A) Application–Exceptions–Hydrocarbon fuels

Does the PSM standard apply to ceramic manufacturing facilities utilizing propane in amounts exceeding 10,000 pounds as the fuel for firing ceramic ware in a process which does not involve any other highly hazardous chemicals?

No. The PSM standard would not apply to such a situation.

 

Does gasoline used as a fuel to test run inboard and outboard engines fall within the scope of the PSM standard?

Gasoline used in such a manner does not fall within the scope of 1910.119, because it is used as a fuel in this situation and thus meets the exception at 1910.119(a)(l)(ii)(A). However, other OSHA standards, such as 1910.106, Flammable and combustible liquids, would apply.

 

Does the PSM standard apply to a plant that has more than 10,000 pounds of hydrocarbon fuel on site where the fuel is used solely as a fuel for a furnace used to melt glass?

The requirements of 1910.119 do not apply to this situation because 1910.119(a)(1)(ii)(A) of the standard specifically excludes from coverage hydrocarbon fuels used solely for workplace consumption as a fuel if the fuel is not part of a process containing another highly hazardous chemical covered by the standard.

 

(a)(1)(ii)(A) Tote tanks
350-gallon tote tanks containing flammable liquids are used at a facility to refuel vehicles. Are they covered by the standard?

No. 1910.119(a)(1)(ii)(a) exempts hydrocarbon fuels used solely for workplace consumption as a fuel (e.g., gasoline for vehicle refueling) if such fuels are not part of a process containing another highly hazardous chemical covered by the standard. They are, however, covered under 1910.106.

 

Lastly, the question I always get in return for my position is… how much flammable material that is NOT interconnected to the process does it take to impact a covered process?  My answer… it all depends on the flammable material, storage method, and storage location.  I have personally suffered a significant loss in a PSM covered process that was caused by improper storage of totes containing toluene.  The totes were stored “out of the way”, which meant they were stored off the “beaten path” which also meant out of the view of prying eyes.  This location just happened to be in an area not accessible by sprinklers and one that was NOT intended for flammable liquid storage.  The area was at ground level, but within some main support beams for the process structure.  The area was diked as it was still considered part of the physical boundaries of the “covered process”; however, the structure around these drums was not fire proofed/insulated.  A forklift dropped a full tote and 660 gallons of toluene was spilled into the process dike and was ignited by static electricity (only ignition source that could not be ruled out).  This of course was a very bad thing as the area was not protected by sprinklers, was not accessible by our fixed monitor nozzles, and was exposing large portions of the metal structure to extreme fire conditions.  No one was injured, but the business suffered significant losses and ended up with a compliance nightmare with OSHA and EPA.  So again, the answer is “it depends”… it depends on a lot of little things that can add up to one big nightmare of an incident. 

OSHA has stated they have no definitive method for determining distance or segregation of flammables, as well as the following:

(a)(1)(i) and (b) Covered process–dispersal of inventory

Can an employer who keeps threshold quantities of highly hazardous chemicals listed in Appendix A to 29 CFR 1910.119, such as ammonia, separated into smaller lots and used and stored in separate systems or locations, be exempt from the requirements of the PSM standard?

From a storage standpoint, the 1910.119 standard would not apply to an employer who segregates his inventory by dispersing storage of highly hazardous chemicals, such as ammonia, in amounts which do not exceed the threshold quantity so that a release from one storage area would not contribute to or cause a release from others around the workplace. Additionally, an employer could reduce his on-site inventory of highly hazardous chemicals by ordering more frequent, smaller shipments so that they do not exceed the threshold quantities set forth in the PSM Standard.

 

The PSM standard’s non-mandatory Appendix C suggests that, if reduced inventory of highly hazardous chemicals is not feasible, an employer might consider dispersing inventory to several locations on-site. When are such materials to be considered part of a single process?

Under the definition of “process” provided at 29 CFR 1910.119(b), any group of vessels which are interconnected and separate vessels which are located such that a highly hazardous chemical could be involved in a potential release shall be considered a single process. Inventories of highly hazardous chemicals would not be considered to be adequately dispersed if the storage vessels are connected with or in proximity to a covered process such that they could be involved in a potential release.

 

What evaluation techniques are appropriate to determine adequate separation distances?

OSHA has not developed, nor is it aware of, any standard evaluation technique to determine adequate distances to separate chemical inventories. If an employer chooses to disperse highly hazardous chemicals on-site, the separation distances would have to be determined on a case-by-case basis, considering such factors as the nature of the chemicals and covered processes, total inventories, threshold quantities of pertinent chemicals, and facility layout.

So in closing, we need to understand that OSHA’s PSM standard is a “performance oriented” standard and that EACH situation needs to be assessed individually.  But when we want to use the “hydrocarbon fuel exemption” we need to ensure the process it is being used in is NOT a covered process or located in such proximity that the hydrocarbon fuel could impact a covered process.

All comments, questions, and challenges are welcome.  You can comment publically below or e-mail me privately.

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