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Oil blast safety ruling may have wider implications

Refinery explosion

A recent Occupational Safety and Health Review Commission ruling related to alleged safety violations stemming from a deadly oil refinery explosion in 2012 could have wider implications for companies dealing with highly hazardous chemicals, likely expanding the U.S. Occupational Safety and Health Administration’s reach, according to legal experts.

“It’s a really big deal,” said Micah Smith, Washington-based partner for Conn Maciel Carey LLP.

Clients in oil and gas and manufacturing could be affected by what many deem as OSHA’s expansion of what is included in the process when it comes to handling highly hazardous chemicals, he said.

“Any facility that has highly hazardous chemicals needs to pay attention to this,” said Amy Wachs, St. Louis-based partner with Husch Blackwell LLP.

The cause for concern is the commission’s March 28 affirmation of 12 citations and a $58,000 fine against a Wynnewood, Oklahoma, oil refinery operated by Wynnewood Refining Co. LLC, after two workers were killed in an explosion, the result of workers improperly starting a boiler, as detailed in more than 100 pages of documents in Secretary of Labor v. Wynnewood Refining Co. LLC.

Specifically, OSHA cited the refinery for 12 violations of various provisions of OSHA’s Process Safety Management standard, which the review commission affirmed despite the argument that OSHA’s 23-year-old standard for management of hazardous chemicals never intended to include processes that do not manage such chemicals — such as the steam boiler in question, according to experts weighing in.

“The process safety management standard is an extremely detailed way of a process of running a manufacturing plant, and it has a lot of details to it on how a facility has to operate and the various processes that have to be in place to ensure the plant doesn’t have mishaps … and to minimize the chance of mishaps,” said Ms. Wachs. “The question is now, what is the boundary of that process?”

Mr. Smith described a refinery operation as being a site where multiple processes are broken into “chunks,” each calling for its own PSM plan to be in compliance with OSHA’s requirements.

Prior to the Wynnewood ruling, it was widely understood that utilities unrelated to the manufacturing process are were not included in the requirements for PSM, according to Mr. Smith.

PSM affiliation comes from interconnection and co-location, he said, adding that the Wynnewood decision put the utilities boiler — which he and others consider to be not part of the refinery operation that handles highly hazardous chemicals — in the “process” on both the colocation and interconnection issues, thus creating a complicated situation for businesses that may find themselves out of compliance, experts warn.

“It’s utilities, it’s not highly hazardous,” Mr. Smith added, echoing sentiments from other legal experts.

“Generally a boiler does not contain highly hazardous chemicals,” said Ms. Wachs.

But OSHA and the review commission determined that the boiler is close to other processes and is interconnected, according to documents.

More troubling for businesses such as refineries is that the decision put Wynnewood out of compliance without the refinery even knowing that OSHA would expand PSM to utilities unrelated to the chemicals used in other processes, according to Shannon Broome, managing partner of the San Francisco office of Hunton Andrews Kurth LLP. “This creates a gotcha situation without providing notice in a manner to let companies know what is expected of them,” she said.

The ruling now poses a question for manufacturers dealing with chemicals, according to Ms. Wachs: “What are the boundaries of the process and what other aspects of this facility have to follow the standard?”

The answer is unclear, according to Ms. Broome.

“This expands the process definition so that one could argue that everything is interconnected, yet the PSM rules were written with integrated plants in mind and there was a reason why the interconnection language was used,” said Ms. Broome. “It was used to create demarcation, and this opinion seems to gloss over that.”





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