The 12 things OSHA wants to change about it PSM Standard and its enforcement

Here is a look at the 12 things OSHA wants to revise with regards to the PSM standard and its enforcement:

1. Clarifying the PSM Exemption for Atmospheric Storage Tanks
2. Expanding PSM Coverage and Requirements for Reactivity Hazards
3. Updating the List of Highly Hazardous Chemicals in Appendix A of the PSM Standard
4. Revising the PSM Standard To Require Additional Management-System Elements
5. Amending Paragraph (d) of the PSM Standard To Require Evaluation of Updates to Applicable RAGAGEP
6. Clarifying the PSM Standard by Adding a Definition for RAGAGEP
7. Expanding the Scope of Paragraph (j) of the PSM Standard To Cover the Mechanical Integrity of Any Safety-Critical Equipment
8. Clarifying Paragraph (l) of the PSM Standard With an Explicit Requirement That Employers Manage Organizational Changes
9. Revising Paragraph (n) of the PSM Standard To Require Coordination of Emergency Planning With Local Emergency-Response Authorities
10. Revising Paragraph (o) of the PSM Standard To Require Third-Party Compliance Audits
11. Changing Enforcement Policy of the PSM Exemption for Retail Facilities
12. Changing Enforcement Policy for Highly Hazardous Chemicals Listed in Appendix A of the PSM Standard Without Specific Concentrations

PLEASE NOTE there are changes proposed that would impact Oil- and Gas-Production Facilities and the Storage, Handling, and Management of Ammonium Nitrate but I have NOT addressed those here.  You can see the entire Notice and the Questions OSHA has asked commenters to answer HERE.

 

1. Clarifying the PSM Exemption for Atmospheric Storage Tanks

Pursuant to paragraph (a)(1)(ii) of §1910.119, the PSM standard applies to processes involving a flammable liquid or gas on site in one location in a quantity of 10,000 pounds or more. However, paragraph (a)(1)(ii)(B) contains an exemption for “flammable liquids stored in atmospheric tanks or transferred which are kept below their normal boiling point without benefit of chilling or refrigeration.”  In Secretary of Labor v. Meer Corporation (1997) (OSHRC Docket No. 95-0341), an administrative law judge ruled that PSM coverage does NOT extend to flammables stored in atmospheric tanks, even if the tanks are connected to a process. As a result, employers can exclude the amount of flammable liquid contained in an atmospheric storage tank, or in transfer to or from storage, from the quantity contained in the process when determining whether a process meets the 10,000-pound threshold quantity. The Meer decision was contrary to OSHA’s earlier interpretation [2] of paragraph (a)(1)(ii)(B), which was that the standard covered all stored flammables when connected to, or in close proximity to, a process.  OSHA believes that revising paragraph (a)(1)(ii)(B) to include flammable liquids in atmospheric storage tanks within or connected to PSM-covered processes would improve the safety of workers by remedying the issue in PSM enforcement that has existed since the Meer decision. In the questions in this RFI, the Agency requests comment on revising paragraph (a)(1)(ii)(B) to clarify that the PSM standard covers all stored flammables when connected to, or in close proximity to, a process.

2. Expanding PSM Coverage and Requirements for Reactivity Hazards

Paragraph (a) of § 1910.119 states that the standard applies to any “process which involves a chemical at or above the specified threshold quantities listed in Appendix A,” and to any “process which involves a Category 1 flammable gas (as defined in 1910.1200(c)) or a flammable liquid with a flashpoint below 100 °F (37.8 °C) on site in one location, in a quantity of 10,000 pounds (4535.9 kg),” unless the process meets one of the exceptions in § 1910.119(a)(1)(ii)(A) and (B). Appendix A of § 1910.119 contains a list of 137 highly hazardous chemicals that present a potential for a catastrophic event at or above the listed threshold quantities. A number of the chemicals listed in Appendix A are highly reactive chemicals based on a variety of metrics, including consensus standard sources, but the list does NOT cover all highly reactive chemicals.  OSHA has long been aware of the need to update the PSM standard to address hazards associated with reactive chemicals. In response to a 1995 chemical explosion that killed five workers at Napp Technologies, Inc., in Lodi, New Jersey, OSHA received a petition to revise its PSM standard to address reactivity hazards. OSHA and the U.S. Environmental Protection Agency (EPA) investigated the Napp Technologies accident and concluded in a jointly issued 1997 report (EPA-550-R-97-002) that the explosion was most likely triggered by an uncontrolled chemical reaction of water, sodium hydrosulfite, and aluminum powder. Aluminum powder and sodium hydrosulfate are relatively stable chemicals, with instability/reactivity ratings [3] of one [4] and two, [5] respectively. However, when both of these chemicals are mixed with water the reaction is extremely hazardous. In 2000, OSHA added an advance notice of proposed rulemaking (ANPRM) for reactive chemicals (RIN 1218-AB63) to its regulatory agenda. However, OSHA removed the item from its regulatory agenda in 2002 and never published the ANPRM. In 2003, the labor unions re-filed their petition for OSHA to revise its PSM standard to address reactivity hazards.  The CSB has also made a number of recommendations to OSHA on how the PSM standard could be amended to more comprehensively control reactive hazards. In a 2002 report, the CSB broadly recommended that OSHA extends PSM coverage to chemicals based on a class of highly reactive properties, similar to the way the existing PSM standard defines a class of flammable liquids or gasses. The CSB explained that a performance-based approach to evaluating reactive hazards would allow for both a comprehensive analysis and flexibility in implementation, but it cautioned that a proper hazard analysis of reactive hazards would require expertise in reactivity hazards.  One approach to regulating reactive hazards is the New Jersey Toxic Catastrophe Prevention Act (TCPA). Enacted in 1986, the TCPA is a New Jersey statute that contains many process safety elements similar to the PSM standard, but the TCPA differs from PSM by explicitly covering reactive hazards, including reactive mixtures. Unlike the PSM standard, which contains only one list of covered hazardous chemicals in Appendix A, the TCPA contains multiple lists. This includes the List of Individual Reactive Hazardous Substances, as well as a list of Reactive Hazard Substances Mixture Functional Groups. N.J.A.C. 7:31-6.3(a), Table I, Part D, Group I, N.J.A.C. 7:31-6.3(a), Table I, Part D, Group II. These functional groups include certain molecular structures that have been identified as highly reactive, based on scientific research and accident history. Under the TCPA, covered facilities must determine if any of the chemicals they are intentionally mixing include components on the Functional Group list. If so, then the facility must determine the heat of the reaction and the corresponding threshold quantity for TCPA coverage. This approach takes into account not only certain specific chemicals but also their overall reactivity in determining the level of coverage.  In the questions in this RFI, OSHA invites comment on different regulatory approaches to covering reactive hazards, including the approach used in the TCPA.

3. Updating the List of Highly Hazardous Chemicals in Appendix A of the PSM Standard

Appendix A of § 1910.119 contains a list of 137 highly hazardous chemicals that present a potential for a catastrophic event at or above the threshold quantity of the standard. OSHA compiled the Appendix A list of chemicals from multiple sources, including:

• New Jersey’s Toxic Chemical Prevention Act;
• Delaware’s Extremely Hazardous Substances Risk Management Act;
• The World Bank’s Manual of Industrial Hazard Assessment Techniques;
• U.S. Environmental Protection Agency’s List of Extremely Hazardous Substances;
• U.S. Department of Transportation’s Emergency Response Guidebook;
• Council of the European Communities’Council Directive of June 24, 1982, on the Major Accident Hazards of Certain Industrial Activities (82/501/EEC);
• United Kingdom Health and Safety Executive’s A guide to the Control of Major Accident Hazards Regulations 1999 (as amended);
• API’s Recommended Practice 750—Management of Process Hazards;
• National Fire Protection Association’s (NFPA) NFPA 49—Hazardous Chemicals Data; and
• Organization Resources Counselors, Inc.’s Recommendations for Process Hazards Management of Substances with Catastrophic Potential.

Every chemical listed in Appendix A appeared in at least one of these sources as warranting a high degree of management control due to its extremely hazardous properties; most of the chemicals appeared in several of the sources.  Appendix A has remained unchanged since OSHA promulgated the PSM standard in 1992. In the questions in this RFI, OSHA requests public comment on which chemicals, if any, the Agency should add to Appendix A through rulemaking. OSHA further seeks comment on methods for periodically updating Appendix A to ensure adequate protection of workers in PSM-covered facilities when new hazards are discovered and as technology and advancements in chemical science evolve.

4. Revising the PSM Standard To Require Additional Management-System Elements

Executive Order 13650 requires OSHA to “identify issues related to modernizing the PSM standard.” When OSHA promulgated the PSM standard in 1992, the standard adopted management-system elements based on best practices from the industry at the time. However, best practices have continued to evolve since 1992 and additional management-system elements may now be recognized to be necessary to protect workers. In this RFI, OSHA seeks public comment on additional management-system elements that would increase worker protection if required under the PSM standard.  The Center for Chemical Process Safety (CCPS) is an example of a safety organization that recommends additional management-system elements. CCPS specifies in its Risk Based Process Safety (RBPS) program 20 different management-system elements, a number of which are not included in the PSM standard.

One such RBPS element is “Measurement and Metrics,” described by CCPS as a system for establishing indicators to track the effectiveness of the management system. [6] In this element, the employer typically uses metrics to track leading and lagging safety indicators and to identify opportunities for improvement.

Another RBPS element is “Management Review and Continuous Improvement,” which CCPS describes as “the ongoing “due diligence” review by management that fills the gap between day-to-day work activities and periodic formal audits.” [7]

A third RBPS element is “Process Safety Competency,” which CCPS explains “encompasses three interrelated actions:

1. Continuously improving knowledge and competency,
2. ensuring that appropriate information is available to people who need it, and
3. consistently applying what has been learned.” [8]

OSHA also is considering adopting management-system elements from safety standards that other federal agencies promulgated since 1992. For example, the Bureau of Safety and Environmental Enforcement’s (BSEE) Revisions to Safety and Environmental Management Systems (SEMS II) final rule (78 FR 20423; 04/05/2013), which revised a number of requirements in 30 CFR 250, Subpart S, contains management-system elements not included in the PSM standard. In its SEMS II Fact Sheet (April 2013) [9] , BSEE describes three (3) of the main additional elements as follows:

• Developing and implementing a stop work authority that creates procedures and authorizes any and all offshore industry personnel who witness an imminent risk or dangerous activity to stop work.
• Developing and implementing an ultimate work authority that requires offshore industry operators to clearly define who has the ultimate work authority on a facility for operational safety and decision-making at any given time.
• Requiring an employee participation plan that provides an environment that promotes participation by offshore industry employees as well as their management to eliminate or mitigate safety hazards.

OSHA invites public comment on any additional management-system elements, or on expanding existing elements, including those elements discussed in this RFI to improve worker protection in facilities covered under the PSM standard. The Agency requests that commenters submit data and information on management-system elements from consensus standards, safety organizations, federal standards, or other sources that could increase worker safety if OSHA expanded the PSM standard to include the elements.

5. Amending Paragraph (d) of the PSM Standard To Require Evaluation of Updates to Applicable RAGAGEP

Paragraph (d)(3)(ii) of § 1910.119 requires employers to document that covered equipment complies with RAGAGEP. “For existing equipment designed and constructed in accordance with codes, standards, or practices that are no longer in general use,” paragraph (d)(3)(iii) of § 1910.119 further requires employers to “determine and document that the equipment is designed, maintained, inspected, tested, and operating in a safe manner.” However, the PSM standard does not require employers to evaluate updates to applicable RAGAGEP or to examine new RAGAGEP after evaluating and documenting compliance with either § 1910.119(d)(3)(ii) or (iii).  Through extensive collaboration and evaluation of incidents, many safety organizations periodically update their standards to improve work practices and protect workers against newly identified hazards. Since the practices constituting RAGAGEP under the PSM standard are constantly changing as a result of this process, evaluating updates to applicable RAGAGEP ensures that employers base a facility’s PSM program on the most up-to-date and accurate safety information available.

An accident that occurred at a Formosa Plastics facility in Point Comfort, Texas, on October 6, 2005, illustrates the importance of evaluating updates to applicable RAGAGEP. A trailer towed by a forklift became snagged and pulled a small drain valve out of a strainer in a liquid propylene system at the facility. Escaping propylene rapidly vaporized, causing a series of explosions and fires that injured 16 workers. According to the CSB’s investigation report on the incident (CSB Report No. 2006-01-I-TX), Formosa and the company that sold the plant design failed to evaluate updates to applicable RAGAGEP for fireproofing structural steel that supports critical safety systems. The CSB concluded in its report that had Formosa fireproofed the steel according to more recent RAGAGEP, then “the consequences of this incident would likely have been less severe.” OSHA invites public comment on the best approach to revising paragraph (d) of the PSM standard to require employers to evaluate updates to applicable RAGAGEP could help prevent or mitigate accidents like the October 6, 2005, Formosa explosion, and increase worker protection in PSM-covered facilities.

6. Clarifying the PSM Standard by Adding a Definition for RAGAGEP

The term “recognized and generally accepted good engineering practices” (RAGAGEP) appears in paragraphs (d)(3)(ii) and (j)(4)(ii) of § 1910.119, but the PSM standard does not contain a definition for the term. For guidance purposes, OSHA’s Petroleum Refinery NEP directive (CPL 03-00-010) provides one example of an RAGAGEP definition from CCPS’s Guidelines for Mechanical Integrity Systems:
Recognized And Generally Accepted Good Engineering Practices” (RAGAGEP)—are the basis for engineering, operation, or maintenance activities and are themselves based on established codes, standards, published technical reports or recommended practices (RP) or similar documents. RAGAGEPs detail generally approved ways to perform specific engineering, inspection or mechanical integrity activities, such as fabricating a vessel, inspecting a storage tank, or servicing a relief valve.  Although the CCPS’s definition of RAGAGEP is not an official OSHA definition, it is consistent with OSHA’s intent when it promulgated the standard. In its PSM proposal, OSHA would have required employers to follow commonly accepted consensus standards and industry codes. 55 FR 29150, 29155 (July 17, 1990). In promulgating the final rule, OSHA changed the requirement that employers comply with applicable published codes to the requirement that they comply with “recognized and generally accepted good engineering practices.” In making this change, OSHA explained that RAGAGEP would include codes and standards published by organizations such as NFPA, ASTM, and ANSI, as well as “appropriate internal standards.” 57 FR at 6390-91. OSHA made the change in response to comments expressing a number of concerns about the proposed language. These included comments about employers’ difficulties in obtaining relevant codes and standards, potential confusion on which codes were required by OSHA in a given situation, the possibility that codes and standards could become outdated, and the inability of employers to use more stringent internal standards. OSHA believed it was clear from the context of this change that it intended “appropriate internal standards” to be those employers developed when published codes and standards were unavailable or outdated, or that were more stringent than published standards. 57 FR at 6390-91. However, OSHA did not include a definition of RAGAGEP in the standard itself.  In this RFI, OSHA invites public comment on whether the Agency should clarify the PSM standard by including an explicit definition of RAGAGEP in § 1910.119 to assist employers in complying. OSHA requests that commenters specify if the Agency should adopt the CCPS’s definition of RAGAGEP in § 1910.119, or any other appropriate definition and whether inclusion of a definition would increase worker protection and enhance process safety.

7. Expanding the Scope of Paragraph (j) of the PSM Standard To Cover the Mechanical Integrity of Any Safety-Critical Equipment

Paragraph (j) of § 1910.119 requires employers to implement an ongoing mechanical integrity program with respect to their PSM-covered processes. For processing, storing, or handling highly hazardous chemicals, employers must use equipment designed, constructed, installed, and maintained to minimize the risk of an uncontrolled release. Elements of an effective mechanical integrity program include:

• Identifying and categorizing equipment and instrumentation;
• inspecting and testing their frequency;
• maintaining procedures;
• training maintenance personnel;
• having criteria for acceptable test results;
• documenting test and inspection results; and
• documenting manufacturer recommendations for equipment and instrumentation.

Paragraph (j)(1) states that the mechanical integrity requirements of the PSM standard apply to:

• 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); and
• pumps.

In the preamble to the PSM final rule, OSHA explained that “if an employer deems additional equipment to be critical to a particular process, that employer should consider that equipment to be covered by this paragraph and treat it accordingly” (57 FR 6389, February 24, 1992). In light of the limited list of covered equipment in paragraph (j)(1), OSHA addresses hazards associated with other types of safety-critical equipment through citations for violations of Section 5(a)(1) of the OSH Act.  Revising paragraph (j) to explicitly apply the mechanical integrity requirements of the PSM standard to all equipment the employer identifies as critical to process safety-critical equipment, in addition to the equipment currently listed in the standard, would provide the industry with proper notice regarding coverage of such equipment. OSHA invites comment on whether the addition of this provision to paragraph (j) will increase worker safety and whether any further clarifying revisions would be recommended to ease implementation.

8. Clarifying Paragraph (l) of the PSM Standard With an Explicit Requirement That Employers Manage Organizational Changes

Paragraph (l) of § 1910.119 requires employers to establish and implement written procedures to manage change, including all modifications to equipment, technology, procedures, raw materials, and processing conditions other than replacements in kind. Temporary changes are subject to the management-of-change requirements of the standard. Employers must properly identify and review all PSM-covered changes before implementation.  The existing standard does not explicitly state that employers must follow management-of-change procedures for organizational changes, [10] such as

• changes in management structure,
• budget cuts, or
• personnel changes;

however, as noted in a March 31, 2009, Memorandum for Regional Administrators from Richard Fairfax, [11] it is OSHA’s position that paragraph (l) covers organizational changes if the changes have the potential to affect process safety. Since the original promulgation of the PSM rule, it has become well established in the safety community that organizational changes can have a profound impact on worker safety and, therefore, employers should evaluate organizational change like any other change. Illustrating the significant hazards that organizational changes can produce, the CSB identified a lack of organizational management of change as a significant factor in the 2005 BP Texas City Refinery accident that killed 15 workers and injured over 170 others (CSB Report No. 2005-04-I-TX). OSHA invites comments on whether revising paragraph (l) to clarify that the PSM standard’s organizational management-of-change requirements will increase worker safety.

9. Revising Paragraph (n) of the PSM Standard To Require Coordination of Emergency Planning With Local Emergency-Response Authorities

Paragraph (n) of § 1910.119 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 paragraphs (a), (p), and (q) of § 1910.120, the Agency’s Hazardous Waste Operations and Emergency Response (HAZWOPER) standard. While some OSHA standards, such as § 1910.146, Permit-Required Confined Spaces, require employers to coordinate emergency planning with local emergency-response authorities, the existing PSM standard does not contain such a requirement. Existing §§ 1910.38 and 1910.120 do not require coordination of emergency planning with outside parties if the employer chooses to evacuate employees from the danger area when an emergency occurs that does not permit employees to assist in handling the emergency.  When emergency responders and other workers do not have adequate information or employer coordination about hazardous chemicals in a facility, they are at elevated risk of death and serious injury. On April 17, 2013, an ammonium nitrate explosion at the West Fertilizer Company storage and distribution facility in West, Texas, killed at least 15 people—the majority of whom were firefighters responding to a fire at the facility—and injured over 160 others. [12] OSHA believes that revising paragraph (n) of the PSM standard to require facilities to coordinate emergency planning with local emergency-response authorities could help prevent or mitigate similar accidents by allowing first responders to develop the appropriate strategies in advance of their arrival and seeks comment on the appropriate mechanism and corresponding language to incorporate such coordination requirements into paragraph (n).

10. Revising Paragraph (o) of the PSM Standard To Require Third-Party Compliance Audits

Paragraph (o)(1) of § 1910.119 requires employers to audit the PSM program in their facilities for compliance every three years. Paragraph (o)(2) further requires that the audits “be conducted by at least one person knowledgeable in the process.” However, § 1910.119 does not require employers to use a third party in conducting the compliance audits. According to CCPS, “Third party auditors (typically, consulting companies who can provide experienced auditors) potentially provide the highest degree of objectivity.” [13]  It is notable that BSEE’s Safety and Environmental Management Systems (SEMS) standard, 30 CFR 250, Subpart S, requires audits conducted by an independent third party, subject to approval by BSEE, or by designated and qualified personnel if the employer implements procedures to avoid conflicts of interest. In addition, BSEE’s SEMS II revisions to the standard require that, by June 4, 2015, the team lead for compliance audits must be independent and represent an accredited audit service provider. In the preamble to its SEMS II final rule, BSEE discussed its third-party-auditing requirements as follows:

Consistent audits performed by well trained and experienced auditors are critical to ensuring that SEMS programs are successfully implemented and maintained on the OCS. As a result, we are adopting industry best practices related to SEMS audits and auditor qualifications. The industry is already voluntarily adopting these practices in many deepwater operations. We believe that the application of these requirements to all OCS operations will result in more robust and consistent SEMS audits. (78 FR 20430; 04/05/2013.)

In its investigation report on the 2005 BP Texas City Refinery explosion, the CSB identified a lack of rigorous compliance audits as a contributing factor in the accident. As the CSB noted in its report, the resulting settlement agreement [14] between OSHA and BP required BP to retain a third-party compliance auditor with PSM expertise, subject to approval by OSHA, to assess the company’s PSM program. OSHA is aware that third-party compliance auditors exist and are already utilized by some of the PSM regulated community. In the questions in this RFI, OSHA seeks comment on whether revising paragraph (o) of the PSM standard to require employers to use a qualified third party for compliance audits would increase worker protection through a more rigorous and objective PSM auditing process.
OSHA is also seeking comment on increasing the required frequency of compliance audits. In addition, the Agency is seeking comment on requiring specific timeframes for responding to deficiencies found in the compliance audit process.

11. Changing Enforcement Policy of the PSM Exemption for Retail Facilities

The PSM standard contains an exemption from coverage for retail facilities at 29 CFR 1910.119(a)(2)(i). Although the term “retail facility” is not defined, the Preamble to the Final PSM standard noted that chemicals in retail facilities are generally in small packages, containers, and allotments, and gives the example of gasoline stations as a type of facility that would typically qualify for the exemption. 57 FR 6356, 6369 (February 24, 1992).  Other Federal Government agencies have explicit definitions of retail facilities. In particular, the U.S. Department of Commerce, which is responsible for the development of the North American Industry Classification System (NAICS) that organizes businesses into specific industrial sectors for economic and statistical purposes, characterizes retail trade as follows:

The Retail Trade sector comprises establishments engaged in retailing merchandise, generally without transformation, and rendering services incidental to the sale of merchandise. The retailing process is the final step in the distribution of merchandise; retailers are, therefore, organized to sell merchandise in small quantities to the general public.  North American Industry Classification System Manual (“NAICS Manual”), Sector 44-45—Retail Trade.

OSHA has stated that this NAICS Manual definition applies in interpreting the retail exemption. In a November 8, 1995, memo from Enforcement Programs director Richard Fairfax to Acting Region 10 Administrator Richard S. Terrell, OSHA distinguished retail end users from wholesale end users:

[T]he “retail facilities” exception is intended to apply to an establishment in the retail trade as delineated in the Standard Industrial Classification (SIC) Manual. With exceptions, retail trade establishments sell merchandise to the general public for personal or household consumption. On the other hand, wholesale trade establishments may sell similar merchandise for exclusive use by industry . . . Income derived from selling [merchandise] to the industry may not be counted as “income obtained from direct sales to end users” for the purpose of qualifying for the “retail facilities” exception under paragraph 1910.119(a)(2)(i).

Notwithstanding this general statement, OSHA has also issued letters saying that a facility that is primarily engaged in selling anhydrous ammonia product to farmers (a wholesale operation under the NAICS definition) could qualify for the § 1910.119(a)(2)(i) retail-facilities exemption. For example, January 26, 2001, letter from Richard Fairfax to J.D. Varn III of Varnco, Inc. which states that a facility selling 75% of its anhydrous ammonia to farmers qualifies for the retail exemption because the farmers were the “end users” of the product.  Applying the retail facility exemption in this way is inconsistent with the normal meaning of “retail” and the preamble’s explanation of the purpose of the exemption. As stated in the preamble, OSHA chose to exclude retail facilities from PSM coverage because the limited container, package, or allotment sizes of the chemicals typically found at these facilities do not present the same safety hazards as those encountered at establishments working with large, bulk quantities of materials. Facilities selling large or bulk quantities of materials would typically fall into Sector 42—Wholesale Trade of the NAICS system, which includes facilities that sell or arrange the purchase or sale of raw and intermediate materials and supplies used in production. As a result of increased workplace hazards associated with large, bulk quantities of highly hazardous chemicals, OSHA believes that only retail trade facilities listed in NAICS sectors 44 and 45 that sell highly hazardous chemicals in small containers, packages, or allotments to the general public qualify for the retail facilities exemption in 29 CFR 1910.119(a)(2)(i).  In light of OSHA’s inconsistent statements on the application for the retail exemption, the Agency is inviting comment on what the exemption should cover and whether OSHA’s current enforcement policy adequately addresses workplace hazards associated with these facilities.

12. Changing Enforcement Policy for Highly Hazardous Chemicals Listed in Appendix A of the PSM Standard Without Specific Concentrations

Appendix A of the PSM standard lists highly hazardous chemicals and threshold quantities that must be met to establish PSM coverage. Although Appendix A provides specific concentrations for 11 of its listed chemicals, the standard is silent on concentrations for the remaining 126 listed chemicals. For example, Appendix A lists hydrogen peroxide at concentrations of 52% by weight or greater, but the appendix does not provide a specific concentration for hydroxylamine. OSHA has issued interpretation letters taking a variety of positions regarding coverage of chemicals that have no listed concentration. Under one such approach, OSHA considers PSM coverage to apply if threshold quantities of such chemicals are present at commercial grade. As noted in a 1994 Letter of Interpretation from Compliance Programs Deputy Direction H. Berrien Zettler to Mr. Luc Hamelin of IVACO, Inc., OSHA defined commercial grade to mean “a typical maximum concentration of the chemical that is commercially available and shipped.” The letter added that to determine commercial grade concentrations, an employer may refer to any published catalog of chemicals for commercial sales.  In 1999, an explosion at Concept Sciences, Inc. in Allentown, Pennsylvania, killed five people as the company was attempting to produce concentrated hydroxylamine. A U.S. District Court dismissed a subsequent criminal indictment related to this incident based on inconsistencies in OSHA’s statements regarding coverage of hydroxylamine. The Court pointed out that the PSM standard is ambiguous with respect to concentrations of Appendix A chemicals. It concluded that in light of a series of OSHA letters that were themselves inconsistent, no reasonable person in the defendant’s position could determine how a chemical is covered by the standard. U.S. v. Ward, 21 BNA OSHC 1882, 1884 (2001). In light of this, OSHA believes it is important to issue a clear and authoritative statement about PSM coverage of chemicals for which Appendix A does not include a specific concentration.
With respect to the commercial grade approach, OSHA also realizes that it is difficult to determine the maximum commercial grade of many of the highly hazardous chemicals listed in Appendix A. In addition, the maximum commercial grade of a chemical may change over time due to technological innovation or changes in the industry. Furthermore, even where the concentration of a PSM-listed highly hazardous chemical falls below the correctly determined maximum commercial grade, the chemical may still present a hazard because substances in a mixture retain their original properties. For example, a solution of any concentration of hydroxylamine can form pure hydroxylamine crystals, which can rapidly decompose and cause fires or explosions.  An interpretative approach that is consistent with the regulatory language and that addresses this concern is the approach currently used by EPA under the Risk Management Program (RMP). Similar to OSHA’s list of highly hazardous chemicals in Appendix A of the PSM standard, the EPA RMP provides a list of toxic substances in 40 CFR 68, Appendix A—Table of Toxic Endpoints. However, in contrast to OSHA’s “commercial grade” policy for PSM-listed chemicals, EPA considers a mixture containing an RMP-listed substance to be covered if the concentration is greater than one percent and the calculated weight of the substance in the mixture is greater than the threshold quantity. [20] With a few exceptions, this rule does not apply in cases where the operator can demonstrate that the partial pressure of the substance in the mixture is less than 10 mmHg.
OSHA invites comment on whether it should adopt the EPA’s policy for RMP-listed substances as a simpler and more practical approach to addressing hazards associated with Appendix A chemicals that do not have listed concentrations. If OSHA adopts this policy, the Agency would consider a PSM-listed chemical in a mixture to be covered if the concentration of the chemical were greater than one percent and the calculated weight of the chemical in the mixture were greater than the threshold quantity. OSHA believes this represents a more practical, consistent, and straightforward approach to coverage of Appendix A chemicals under the PSM standard.