What EPA Claims Changes to RMP Will Cost
The U.S. Environmental Protection Agency (EPA) recently released its proposed amendments to the Chemical Accidental Release Prevention Program, aka the Risk Management Program. Concurrently, the Agency also released a Regulatory Impact Analysis (RIA).
Who’s Affected?
Approximately 12,500 facilities have filed current risk management plans (RMPs) with the EPA and are potentially affected by the proposed rule changes. These facilities range from petroleum refineries and large chemical manufacturers to water and wastewater treatment systems; chemical and petroleum wholesalers and terminals; food manufacturers, packing plants, and other cold storage facilities with ammonia refrigeration systems; agricultural chemical distributors; midstream gas plants; and a limited number of other sources that use RMP-regulated substances.
Note. Beginning September 2016, the U.S. Occupational Safety and Health Administration (OSHA) will be enforcing a change in its interpretation that narrows which retail establishments are exempt from Process Safety Management (PSM) requirements. According to the EPA, most of the facilities affected are already subject to the EPA RMP regulation, but due to their exemption from the PSM requirements, were generally subject to RMP Program 2 requirements. As a result of OSHA’s action, formerly Program 2 facilities that are no longer exempt from the PSM standard will become subject to the more stringent Program 3 requirements. To take that into account for the RIA, the EPA has reclassified all Program 2 facilities that listed themselves as wholesalers and warehouses as Program 3. As a consequence, almost 85% of all RMP facilities (10,628) are now subject to Program 3 requirements.
Major RMP Changes
In the RIA, the EPA explored low-, medium-, and high-cost alternatives for each of the major RMP changes. This article will state EPA’s projected cost for the Agency’s proposed alternative, which are averages for simple (i.e., smaller) and complex (i.e., larger) facilities.
Third-Party Audits. The existing rule requires Program 2 and Program 3 processes to conduct a compliance audit at least once every 3 years. The proposed rule would require facilities to contract with an independent third party to conduct the next scheduled compliance audit following an RMP reportable accident or after an implementing agency determines that certain circumstances exist that suggest a heightened risk for an accident. The proposed alternative is the low-cost one and would apply only for Program 2 and Program 3 processes after an RMP reportable accident or at the request of the implementing agency. The medium-cost alternative would apply every 3 years for all compliance audits conducted for all Program 3 processes. The high-cost alternative would apply every 3 years for all compliance audits conducted for Program 2 and Program 3 processes.
Ka-ching! $15,000 for simple facilities; $40,000 for complex facilities. Total costs for industry: $4.9 million
Root Cause Analysis and Incident Investigation. The proposed rule would require facilities to conduct a root cause analysis as part of an incident investigation following an RMP reportable accident or an incident that could reasonably have resulted in an RMP reportable accident (i.e., “near miss”). A root cause analysis is a formal process to identify underlying reasons for failures that lead to accidental releases. These analyses usually require someone trained in the technique. The low-cost alternative would apply the provision only to RMP reportable accidents or near misses in Program 3 processes. The proposed option is the higher-cost alternative and would apply to RMP reportable accidents or near misses involving Program 2 and Program 3 processes.
Ka-ching! $1,785 per near miss, $1,335 per accident for simple facilities; $4,937 per near miss, $3,658 per accident for complex facilities. Total cost for industry: $842,629
Safer technology and alternatives analysis (STAA). Under the proposed rule, paper manufacturing, petroleum and coal products manufacturing, and chemical manufacturing facilities with Program 3 processes would be required to conduct a STAA for each process as part of their process hazard analysis, which occurs every 5 years. The STAA requirement includes two parts: the initial analysis to identify alternatives and a feasibility study to determine the costs and to assess the reasonableness of implementing technology alternatives. The proposed rule is the low-cost alternative, which would apply to all paper manufacturing, petroleum and coal products manufacturing, and chemical manufacturing facilities with Program 3 processes. The medium-cost alternative would apply the requirement to all Program 3 processes, and the high-cost alternative would apply the requirement to all Program 3 processes and would require facilities to implement feasible safer technology and alternatives.
Ka-ching! $13,109 for initial analysis for all paper manufacturing facilities and simple petroleum and coal production and chemical facilities; $15,708 for feasibility analysis for all paper manufacturing facilities and simple petroleum and coal production and chemical facilities; $40,240 for initial analysis for complex petroleum and coal production and chemical facilities; $8,514 for feasibility analysis for complex petroleum and coal production and chemical facilities. Total cost for industry: $34.8 million.
Coordination Activities. Under the proposed rule, all facilities with Program 2 or Program 3 processes would be required to coordinate with local response agencies annually to determine response needs and to ensure that response resources and capabilities are in place to respond to an accidental release of a regulated substance. The owner or operator would also be required to document coordination activities. The proposed rule includes a provision enabling the Local Emergency Planning Committee (LEPC) or local emergency response official to require the RMP facility owner or operator to develop an emergency response program that includes an emergency response plan, procedures for use, inspection and maintenance of response equipment, training for responding employees, and procedures to review and update the program. Some facilities that are currently designated as nonresponding facilities may become responding facilities (i.e., develop an emergency response program under 40 CFR 68.95). Alternatives to this provision are similar to the proposed requirements. One alternative would eliminate the option for local officials to require a facility owner or operator to comply with the emergency response requirements. This alternative, although the costs analyzed are the same as the proposed option, may result in lower actual costs as local officials’ ability to require compliance may increase the likelihood of current nonresponding facilities converting to responding facilities. A second alternative is a high-cost alternative and would require all facilities with Program 2 or Program 3 processes to comply with the 40 CFR 68.95 emergency response provisions, regardless of local response capability.
Ka-ching! $612 for simple facilities; $514 for complex facilities. Total cost for industry: $6.3 million. For new responders: Equipment costs: $58,925. Total cost for industry: initial—$351.1 million; maintenance—$35.1 million; Emergency response plan development: $2,311 for simple facilities; $7,567 for complex facilities. Total cost for industry: initial—$17.9 million; maintenance—$1.8 million; Training: $11,107 for simple facilities; $16, 241 for complex facilities with 99 or fewer employees, $64,964 for facilities with 100 or more employees. Total cost for industry: initial—$83.8 million; maintenance—$20 million
Exercises. This would be a new requirement under the RMP regulations. It includes Notification Exercises and Tabletop and Field Exercises. All facilities with Program 2 or Program 3 processes would be required to conduct a notification exercise annually to ensure that the emergency contact list is complete, accurate, and up to date.
Ka-ching! $1.1 million for simple facilities; $237,021 for complex facilities. Total initial cost for industry: $1.4 million.
Tabletop and Field Exercises. The proposed rule would require responding facilities to conduct annual exercises of their emergency response plans and invite local emergency response officials to participate. Under the low-cost alternative, facilities would conduct tabletop exercises annually. Under the proposed option, which is the medium-cost alternative, facilities would conduct a full field exercise at least once every 5 years and tabletop exercises annually in the interim years. Facilities with an RMP reportable accident would also have to conduct a full field exercise within 1 year of an RMP reportable accident, but this may not impose any additional burden under the medium-cost alternative, as it would count as the required field exercise for the next 5-year period. Under the high-cost alternative, facilities would conduct full field exercises annually.
Ka-ching! Simple facilities’ initial costs: Tabletop exercises—$4.6 million to $14.3 million depending on the size of the facility; Field exercises—$2.4 million to $6.8 million depending on the size of the facility. Complex facilities’ initial costs: Tabletop exercises—$770,300 to $10.1 million depending on the size of the facility; Field exercises—$283,322 to $7 million depending on the size of the facility. Total initial cost to industry: $100.1 million.
Information Disclosure. The proposed rule would require that all facilities collect information related to RMP compliance and disclose it to the public and to local emergency response agencies. This includes those with Program 1 processes. However, facilities in Program 1 are not required to generate some information (e.g., they are not required to do compliance audits). The information would be updated annually. There are different cost estimates for public disclosure and LEPC disclosures.
Ka-ching! Public disclosure. Simple facilities’ initial costs: $2 million; complex facilities’ initial costs: $259,090 to $1.7 million depending on the size of the facility. Total cost for industry: $3.98 million; LEPC disclosure. Simple facilities’ initial costs: $6.2 million; complex facilities’ initial costs: $5.5 million. Total cost for industry: 11.7 million.
Public meetings. The proposed rule would require facilities to hold a public meeting for the local community within 30 days of an RMP reportable accident. The medium-cost alternative would require Program 2 and Program 3 facilities to hold a public meeting at least once every 5 years and within 30 days of an RMP reportable accident. The high-cost alternative would require all facilities (i.e., including Program 1 facilities) to hold a public meeting at least once every 5 years and within 30 days of an RMP reportable accident.
Ka-ching! $258,358 for simple facilities; $139,526 for complex facilities. Total initial cost to industry: $397,883.
For more information or assistance with your Environmental and Health & Safety regulatory compliance needs, contact Ralph Carito at Total Environmental & Safety, LLC (Total) at rcarito@TotalEnviron.com or 908-442-8599.