As we are now 20+ years into the PSM standard (16 years for RMP) I think it may be time to revisit the reason for these standards and what OSHA and EPA are trying to drive us to achieve and how our HHC/EHS inventory management plays a HUGE role in this effort. This MII requirement has not received a lot of attention from OSHA or EPA so there is NOT a lot of literature for us to refer to, but their intent is VERY CLEAR.
The entire purpose of this MII requirement being in both PSM/RMP was to help keep inventories down for those that exceeded the TQ of the HHC/EHS. The concern was that in using the TQ method to determine the applicability of the standard(s) was that once a process exceeded the TQ then the facility would make little to no effort to manage inventories as low as possible. In other words, by using the TQ application method a facility that exceeds the TQ would have NO INCENTIVE to manage inventories since they have already exceeded the TQ and PSM/RMP applies. And the entire function of OSHA/EPA using TQ applicability is to REDUCE INVENTORIES available for catastrophic accidents. BOTH PSM and RMP REQUIRE us to manage our inventories of our HHC/EHS:
1910.119(d)(2)(i)(C) Maximum intended inventory
and
1910.119(f)(1)(iii)(D) Quality control for raw materials and control of hazardous chemical inventory levels
NOTE: EPA’s RMP uses the following language:
Program 2… (2) Maximum intended inventory of equipment in which the regulated substances are stored or processed;
Program 3… (iii) Maximum intended inventory and (iv) Quality control for raw materials and control of hazardous chemical inventory levels;
1910.119(d)(2)(i)(C) is a function of PSI where we establish our maximum intended inventory that our covered process(s) was DESIGNED to SAFELY handle. This is where we establish our safe upper limit for LEVEL in our process vessels, we calculate the amount of the HHC/EHS that would be in our piping under operating conditions (as well as shutdown conditions), etc. Once we have established our PSI “maximum intended inventory” then 1910.119(f)(1)(iii)(D) takes over and requires us to CONTROL our inventory via our SOPs (e.g. administrative control) to ensure we do NOT exceed the maximum intended inventory established in our PSI.
But should we be driving our business to DEFINE inventory needs?
I say MOST CERTAINLY. We need to understand why we have X pounds on site vs. how long can we run with X pounds on site. Very often we find businesses who have XXXXXXXXXX pounds on site and they only use X per week/month. In some situations, we find that a business can remove themselves from PSM/RMP by merely changing their inventory management. And I am not using games to remove the facility (e.g. atm storage tanks/Meer decision, etc.), but by establishing their quantities needed to run at their established rates and we can get them substantially below the TQ for their HHC/EHS’s.
But we are still finding in 2015 that many businesses can not provide a rational explanation for their inventories other than “it is easier”, “it’s cheaper” or “that is how we have always done it”. This is far from the spirit and intent of the PSM/RMP standards, where OSHA/EPA are trying to drive facilities to REDUCE their inventories that would be available in an accident. We need to push businesses to REDUCE inventories in any manner they can, FULLY understanding that this will impact the business in many other ways – especially costs (e.g. not buying in bulk can increase costs).
Now let’s NOT lose site that there is a SIGNIFICANT risk associated with unloading trucks/railcars at an increased frequency. Any time we use a temporary connection to transfer our HHC/EHS our risk increase substantially, so the increase in receiving and unloading our HHC/EHS is something we ALWAYS have to keep in mind. But there is what I will call a “sweet spot” in our risk curve where we have increased our unloading activities, so we have increased our risk X amount, but because we have reduced our process inventories by XXXX we are still POSITIVE in our risk reduction. Look at it this way, unloading 3,500 gallons four times a month is better than having 14,000 gallons on site, especially when your production needs are 1,000 gallons per week. (NOTE: PSM/RMP use pounds to establish TQs, not gallons).
I understand that some materials are only offered by truck or rail, but there are repackaging companies who can provide a business with their HHC/EHS in different containers. Of course, there is a cost to this repackaging and businesses do NOT want to increase costs; but we have to compare this increased costs to the RISK of having more of the HHC/EHS on site, AS WELL as the costs associated with FULL compliance with PSM/RMP. What we find is that a business wants to believe that the costs of doing PSM/RMP are X when in fact X only gets the business about half way to PSM/RMP compliance – but this TRUE cost is NOT RECOGNIZED until an OSHA or EPA inspection. Businesses recognized an increased cost associated with their raw materials (e.g. HHC/EHS), but they tend to be ignorant when it comes to the indirect costs associated with managing a fully compliant PSM/RMP management system. So we have to educate business leaders on these costs and trust me when I say that a FULLY compliant PSM/RMP management system is NOT CHEAP to manage. But when a business see’s an increased cost per pound of their HHC/EHS they tend to recognize this increased costs and compare this to the HIDDEN and UNQUANTIFIED costs associated with all the PSM/RMP activities. This means we should try to QUANTIFY our costs associated with our PSM/RMP program and in my nest article I will help us define our cost structure for implementing and managing a PSM/RMP program.
But until then, let’s not forget the RISKS are there and we need to manage these risks and one SIMPLE MEANS is to REDUCE INVENTORIES.