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A recent ruling by the Occupational Safety and Health Review Commission could spell trouble for manufacturers dealing in hazardous chemicals who may not be aware they are now running afoul of federal regulations aimed at preventing dangerous explosions and chemical releases, experts say.
On March 28, the review commission ruled safety citations stemming from a deadly oil refinery explosion in 2012 were properly categorized as violations under the U.S. Occupational Safety and Health Administration’s process safety management standard, even though the blast happened at one of the refinery’s boilers, a utility long thought of as not included in the parameters of process safety management.
“OSHA standards are prescriptive in what is included and what is not included in process safety management,” said Don Abrahamson, a Katy, Texas-based certified process safety auditor and consultant with his firm Abrahamson Consulting LLC, which conducts mandatory safety audits of manufacturing plants. “Boiler explosions occur in hospitals, in factories, refinery, chemical plants … but boilers themselves are not particularly covered by the PSM standard.”
That’s why legal experts say the ruling could have wider implications for companies dealing with highly hazardous chemicals, putting several industries on watch.
The review commission affirmed 12 citations and levied a $58,000 fine against a Wynnewood, Oklahoma, oil refinery operated by Wynnewood Refining Co. LLC, after two workers died because of 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.
Officials with Wynnewood and their attorney did not return calls for comment.
The OSHA citations zeroed in on various provisions of OSHA’s PSM 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 hazardous chemicals, such as the steam boiler in question, according to experts.
The PSM standard “mainly applies to manufacturing industries, particularly those pertaining to chemicals, transportation equipment, and fabricated metal products” and that “other affected sectors include natural gas liquids; farm product warehousing; electric, gas, and sanitary services; and wholesale trade,” according to OSHA documents.
But under the review commission’s ruling, companies with utilities such as a boiler on-site could fall under the standard’s purview, said Micah Smith, Washington-based partner for Conn Maciel Carey LLP. “It’s a really big deal,” he added.
“Any facility that has highly hazardous chemicals needs to pay attention to this,” said Amy Wachs, St. Louis-based partner with Husch Blackwell LLP.
Most industries are in compliance and it’s rare when inspecting facilities — every three years, as is OSHA’s requirement — to find a boiler to be either located in proximity to a dangerous chemical process or involved in one, according to Mr. Abrahamson, a retired safety engineer.
“Boilers are typically not placed near a process, and there’s a good reason for that,” he said, adding this is usually the case not just for regulatory reasons, but because most manufacturers are aware debris could affect other parts of a plant or refinery if a boiler does explode.
Debris was one issue in the Wynnewood decision, according to the review commission’s documents that stated inspectors looking at the cause of the explosion that killed two workers “revealed shrapnel in the area surrounding the (boiler), and a ladder, which was attached to the west end of the boiler, that had been blown completely across the street.”
Location was one of OSHA’s arguments for the citations, as was interconnectivity — that the boiler used gas to start, according to documents.
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 were not included in the requirements for PSM, according to Mr. Smith. In addition, PSM affiliation comes from interconnection and co-location, he said.
But 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 co-location and interconnection issues, thus creating a complicated situation for businesses that may find themselves out of compliance, experts say.
“Generally a boiler does not contain highly hazardous chemicals,” said Ms. Wachs.
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,” she said. “It was used to create demarcation, and this opinion seems to gloss over that.”
A recent ruling from an independent agency that referees disputes over citations and penalties issued by the U.S. Occupational Safety and Health Administration could expand OSHA’s overall reach, according to legal experts.