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EPA Considering Major Changes to Risk Management Program

Spurred by several recent industrial incidents, both onshore and offshore, the U.S. Environmental Protection Agency has announced several potential revisions to its Clean Air Act Risk Management Program (RMP) regulations.  The RMP program Request for Information (2014 RMP RFI) contemplates a vast array of changes that could, on the one hand, increase the number of sources regulated, e.g., the addition of ammonium nitrate as a regulated substance; and on the other, increase the costs of those sources currently regulated, e.g., mandatory third-party audits, installation of automated detection and monitoring systems.

Other proposed changes could be controversial or simply difficult for sources to integrate, e.g., mandatory root cause investigations, siting requirements, mandatory disclosure of chemicals and accident history for the facility.  At this time, EPA indicates that it is not committed to undertaking a rulemaking and that it is engaged only in information gathering to assess whether changes to the RMP are necessary.  Comments on the RFI must be received by October 29, 2014. 

Risk Management Program Applicability

Section 112(r) was added to the 1990 Clean Air Act amendments in response to several chemical accidents that had occurred throughout the world resulting in fatalities in the workplace and surrounding communities and environmental damage.  Think Bhopal, India, where in 1984 a gas leak from a chemical factory caused the deaths of nearly 4,000 people.

Unlike many other Clean Air Act programs, EPA’s RMP regulations implementing Section 112(r) of the Clean Air Act do not impose emission limits on sources.  Instead, EPA’s RMP regulations establish a program to prevent and minimize the effects of chemical accidents.  Generally, the RMP regulations include a list of certain regulated substances that EPA determined “are known to cause or may reasonably be anticipated to cause death, injury, or serious adverse effects to human health or the environment” during an accidental release.   If a facility holds more than the EPA established “threshold quantity” for one of the regulated substances listed, it must comply with the RMP regulations by undertaking steps to prevent accidents and by submitting to the Agency and the government, a “risk management plan.”

What Triggered the RFI

Much like the 1990 Clean Air Act Amendments, the latest initiative undertaken by EPA has been spurred by recent industrial incidents, including the 2010 oil spill in the Gulf of Mexico and the 2013 explosion at a fertilizer plant in West, Texas.

Specifically, on April 17, 2013, President Obama issued Executive Order 13650, entitled “Improving Chemical Facility Safety and Security.”  In EO 13650, President Obama notes the importance of chemicals to the economy but that there are inherent risks associated with storage and handling.  EO 13650 directs federal agencies with regulatory authority to “further improve chemical facility safety and security in coordination with owners and operators”  by considering possible changes to chemical safety and security regulations.

On December 9, 2013, the Occupational Safety and Health Administration (OSHA) published an RFI focused on updating relevant standards, including its Process Safety Management (PSM) standard (2013 OSHA RFI).   While EO 13650 did not specifically direct EPA to respond, the Agency thought issuing the 2014 RMP RFI was appropriate in part because the OSHA PSM standard and EPA RMP regulations are “closely aligned in content, policy interpretations, Agency guidance, and enforcement.”  Many of the topics covered in the 2014 EPA RFI directly reference the 2013 OSHA RFI, and EPA has encouraged stakeholders to review that document as well.

The Scope of Potential Changes

While the 2014 RMP RFI is not a formal rule proposal and EPA has indicated it is not committed to a rulemaking, the momentum is swinging in the direction of an eventual proposed rule.  Considering that, it is important for potentially regulated entities to engage in the process and pay close attention to how EPA’s thoughts on these topics are evolving.

Expanding the Scope

The approach EPA has taken in the 2014 RMP RFI is broad.  In very basic terms, the Agency is considering changes that would (1) bring additional facilities into the RMP program; and (2) require additional costs for facilities subject to the RMP program.  EPA is not only considering expanding the list of regulated substances but also potentially lowering the threshold quantity for substances currently on the list.  For example, in response to several explosions over the past 75 years both in the U.S. and overseas (including most recently the 2013 explosion at a fertilizer plant in West, Texas) EPA is inquiring whether it should add ammonium nitrate to the regulated substances list.  EPA is specifically requesting comments on how to best address the safe storage, handling and risk management of ammonium nitrate.

Without any specific regulated substance in mind, EPA is also asking the public whether it should consider lowering the threshold quantity for any substance.  This opens the door to the public and any other organized commenter to make the argument to EPA that the threshold quantity for a currently regulated substance is too high and should be lowered to be more protective of human health and the environment.  Obviously, if EPA lowers the threshold quantity for any regulated substance, more facilities will fall into the RMP program.

New Requirements

EPA is also requesting comment on several potential new requirements it could integrate into the RMP regulations.  While the scope of the 2014 RMP RFI is extremely broad, a few of the stand-out topics are discussed below.

EPA is inquiring whether it should consider mandating “stop work authority” and third-party audits much like the Bureau of Safety and Environmental Enforcement (“BSEE”) did in the wake of the 2010 oil spill in the Gulf of Mexico.

Currently, facilities may consider as a part of their process hazard analysis whether to install automated detection and monitoring systems to provide early warning of chemical releases.  While they may be considered, automated detection and monitoring systems may be too costly or simply not appropriate to actually implement.  Nonetheless, EPA is requesting comment on whether it should require facilities to “install monitoring equipment or sensors to detect releases of RMP regulated substances, or the conditions that could lead to such a release.”

EPA is also considering whether to expand the incident investigation requirements of the RMP regulations.  EPA is requesting comment on whether the RMP regulations should be broadened to mandate investigations of near misses and to determine root causes of accidents, near misses, and process upsets.   EPA is also inquiring whether it should establish specific time frames for concluding post-incident investigations.

While most recent discussions associated with mandating public disclosure of chemicals have revolved around the process of hydraulic fracturing in the upstream oil and gas industry, EPA has touched on the disclosure issue in the 2014 RMP RFI.  EPA is requesting comments on whether it should require regulated entities to disclose chemical names and quantities on their websites.

Overall, some of the major questions EPA is requesting comment on are related to the following topics:

  • What are the potential costs and economic impacts of amending existing regulatory requirements (including impacts on small entities)?

  • Should EPA expand the current list of “regulated substances”?

  • Should EPA remove certain “regulated substances” from its list or raise the Threshold Quantity?

  • Should the EPA add additional risk management system elements to the RMP requirements, including (1) measurements and metrics; (2) management review and continuous improvement; (3) Process Safety Competency; and (4) elements covered by BSEE’s SEMS rule, including “Stop Work Authority” and “Ultimate Work Authority”?

  • Should the management of change requirements be expanded to include management of “organizational changes”?

  • Should the RMP, like BSEE’s SEMS standard, require third-party audits?

  • Should EPA require that RMP-regulated facilities perform exercises or drills as a component of emergency response programs?

  • Should facilities be required to install automated detection and monitoring systems that would supplement either the existing process hazard analysis and/or emergency response requirements?

  • Should EPA establish siting requirements, including setback zone requirements for new stationary sources or for the processes inside a facility?

  • Should EPA require root cause investigations of incidents, process upsets and near-misses? If so, should EPA establish specific time frames for incident investigations to be completed?

  • Should EPA require that owners and operators consider the worst case scenario release based on the sum of all small containers used in a process?

  • Should EPA require facilities to disclose on their public websites chemical names, chemical quantities, executive summaries, links to LEPCs, community emergency plans, Safety Data Sheets (SDS) for hazardous chemicals present on site, EPCRA Tier 2 reports, release notification reports, and accident history?

Conclusion: Comment Submission

The 2014 RMP RFI could result in the first major update to EPA’s RMP regulations in nearly a decade.  The 2014 RMP RFI includes many additional questions and topics not discussed here.  If EPA ever finalizes a new rule based on the topics discussed in the 113-page document, it could result in new requirements for formerly unregulated facilities (e.g., manufacturers, fertilizer distributors and other facilities that have large amounts of explosives, blasting agents or fertilizers) as well as additional, and potentially costly, requirements for facilities currently subject to the RMP regulations.   Companies that are currently subject to the RMP regulations and those that might be subject in the future should therefore consider reviewing EPA’s proposal and submitting comments before the deadline on October 29, 2014.

© 2021 Bracewell LLPNational Law Review, Volume IV, Number 223

About this Author

Michael Weller, Government Investigations, Attorney, Bracewell law firm

Michael Weller advises clients in the context of government investigations and enforcement actions, regulatory compliance and advocacy, litigation, permitting, and in quantifying and allocating liabilities during business transactions. He represents clients in the energy sector, including upstream oil and gas companies and pipelines, as well as industry trade associations, manufacturers, importers, and financial institutions in a wide range of environmental law and business matters.

Mike joined Bracewell after working seven years as a biologist...

Heather M. Palmer, Bracewell Law Firm, Environmental Attorney

Heather Corken offers clients in-depth environmental regulatory knowledge and experience in energy-related environmental issues. As a partner in the environmental strategies group, Heather helps energy, petrochemical and pipeline companies and private equity firms that are seeking guidance on environmental compliance and the allocation of environmental liabilities in mergers and acquisitions.