August 2024
Digital Features
Digital Feature: U.S. EPA’s new Chemical Accident Prevention rule takes effect: What to know
On March 11, 2024, the U.S. Environmental Protection Agency published a final rule amending its Risk Management Program regulations. Here is what facility owners need to know about this new regulation.
C. ELLIS, Hunton Andrews Kurth LLP, San Francisco, California
On March 11, 2024, the U.S. Environmental Protection Agency (EPA) published a final rule amending its Risk Management Program (RMP) regulations at 40 C.F.R. Part 68 (Part 68).1 The RMP regulations were originally issued by the EPA in 1996 under the authority of the federal Clean Air Act (CAA) Section 112(r), in which Congress directed the EPA to issue regulations and guidance for chemical accident prevention at facilities using substances determined by the agency that pose the greatest risks to the surrounding community and environment from accidental releases. The RMP regulations in Part 68 are largely based upon industry-developed process safety concepts, and they direct compliance with industry-specific codes and standards for process design, inspection and maintenance. Key elements of the RMP regulations are:
- Hazard assessment. RMP facilities are required to analyze the potential effects of an accidental release on the surrounding population and environment, including worst-case and alternative accidental release scenarios, and to compile and maintain a 5-yr accident history for the facility.
- Prevention program. RMP facilities must extensively evaluate the hazards associated with their processes. They must also develop, implement and document a comprehensive accidental release program with detailed requirements for operating procedures, mechanical integrity, management of change, pre-startup safety review, compliance audits, incident investigation, employee participation, hot work permits and contractor safety.
- Emergency response program. The RMP regulations detail employee training measures for responding to accidental releases, coordination requirements with local emergency response agencies, and procedures for informing the public and response agencies (e.g., the fire department) if an accident occurs.
- RMP plan. RMP facilities are required to submit an RMP plan summarizing the results of the most recent process hazard analysis (PHA), and other information related to the facility’s implementation of the RMP regulations.
The Part 68 regulations apply to the owner or operator of a stationary source that has more than a threshold quantity of a regulated substance in a “process,” which is broadly defined to include a variety of industrial activities such as storage, manufacturing or onsite movement of regulated substances (which are listed, along with their threshold quantities, in 40 C.F.R. § 68.130). The most comprehensive requirements apply to Program 3 facilities, which are those that have processes in certain NAICS codes and are subject to the U.S. Occupational Safety and Health Administration (OSHA) Process Safety Management (PSM) standard at 29 C.F.R. § 1910.119. For Program 3 facilities, RMP requirements largely overlap with the OSHA PSM standard. Given this overlap, the EPA is required under CAA Section 112(r) to coordinate with OSHA in establishing new RMP requirements so that facilities are not subject to inconsistent requirements.
The March 2024 RMP final rule amplifies pre-existing RMP requirements and revives provisions that were adopted by the EPA in 2017 but largely rescinded in 2019 under the subsequent presidential administration. The March 2024 RMP final rule became effective on May 10, 2024, although the bulk of the new requirements have 3-yr compliance deadlines and must be implemented by May 10, 2027. While it is important for facilities to review the final rule in detail to understand the new requirements, the highlights are as follows:
- Hazard evaluation amplifications. The EPA made several enhancements to existing regulatory requirements for hazard reviews (Program 2 facilities) and PHAs (Program 3 facilities) to ensure that they explicitly address certain factors and incorporate new elements of analysis.
- Natural hazards. The final rule requires facility hazard evaluations to address “natural hazards that could cause or exacerbate an accidental release,” defining “natural hazards” broadly to include “meteorological, climatological, environmental, or geological phenomena that have the potential for negative impact, accounting for impacts due to climate change.” In doing so, EPA acknowledged that natural hazards and process operations vary throughout the United States, thus protective measures will also vary. Because the RMP rule is intended to be performance-based and not prescriptive, RMP facilities should tailor their natural hazards evaluations as appropriate for the specific locale.
- Power loss. Facility hazard evaluations must now address the risk of power failure, as well as standby or emergency power systems. Additionally, starting May 10, 2027, Program 2 and 3 facilities must ensure that monitoring equipment associated with the prevention and detection of accidental releases has standby or backup power.
- Stationary source siting. The final rule makes explicit that siting assessments conducted as part of a Program 3 facility PHA or Program 2 hazard evaluation must address the placement of processes, equipment and buildings within the facility; hazards posed by proximate facilities; and accidental release consequences posed by proximity to the public and public receptors.
Importantly, the EPA characterizes the above-described provisions as “amplifications” of existing requirements and assumed in the final rule that they would impose no new requirements or costs on facilities. They thus became effective immediately with the final rule’s effective date of May 10, 2024, except the requirement to “ensure” monitoring equipment has backup power, which has a May 10, 2027, compliance date.
- Safer technology and alternatives analysis (STAA). By far, the most onerous and costliest provision of the final rule, the EPA finalized requirements for certain Program 3 facilities to conduct a STAA (either as part of their next PHA or separately) by May 10, 2027. The requirement applies to all RMP facilities with Program 3 processes in petroleum refining (NAICS 324) and chemical manufacturing (NAICS 325). STAA is an established technique for analyzing and selecting risk reduction measures using a hierarchy of hazard controls, which are ordered from least to most likely to fail. Under this analytical technique, controls that eliminate hazards (e.g., chemical substitution, simplifying process design), referred to as “inherently safer technology or design” (IST/ISD), are at the top of the hierarchy as the most preferable means of risk reduction. After IST/ISD, and in order of preference, passive measures (risk reduction measures that do not require power or activation), active measures (measures that require power or activation) and procedural measures (e.g., rules of operation or administrative controls) are also analyzed as part of the hierarchy.
Under the final rule, a subset of the NAICS 324/325 facilities required to conduct a STAA are also required to conduct a practicability assessment of the ISTs/ISDs considered, and to implement at least one practicable passive measure or IST/ISD, or similarly protective active or procedural measure(s) after each STAA. These practicability assessment and implementation requirements apply to the following subset of NAICS 324/325 facilities with Program 3 processes: (1) NAICS 324/325 facilities that are located within 1 mi of another NAICS 324/325 facility with RMP covered processes, (2) NAICS 324 facilities with hydrofluoric acid (HF) alkylation covered processes and (3) NAICS 324/325 facilities that have an RMP-reportable accident (see 40 C.F.R. § 68.42) since their most recent PHA.
- Recognized and generally accepted good engineering practices (RAGAGEP) gap analysis. The EPA finalized amendments to the Program 3 PHA provisions to require facilities to analyze any gaps in safety between the codes, standards or practices to which their processes were designed and constructed, and the most current version of applicable codes, standards or practices. These codes, standards or practices are frequently referred to as RAGAGEP. According to the EPA, this RAGAGEP gap analysis is already expected under 40 C.F.R. §§ 68.65(d)(2) and (3) for Program 3 processes, thus it is characterized as “mere clarification” with immediate effect.
- Hazard evaluation information availability. Facilities will be required to document the outcomes of the new hazard evaluation elements in their RMP plans, which the EPA is intending to make more widely available to the public (as a matter of policy rather than rule). Program 2 and 3 facilities will have to document in their plans any recommendations that were declined from natural hazard, power low and siting hazard evaluations and the justification for declining the recommendations. Program 3 facilities will also have to document recommendations declined from their RAGAGEP gap analysis and ISTs/ISDs implemented since the last PHA, if any, and the technology category (substitution, minimization, simplification and/or moderation).
- Third-party compliance audits. Under existing RMP regulations, Program 2 and 3 facilities are required to conduct compliance audits at least every 3 yr to verify that the procedures and practices developed under the Prevention Program are adequate and are being followed. The final rule instituted a new requirement, effective May 10, 2027, for the next required compliance audit to be a third-party audit for (1) facilities that have either had one RMP-reportable release from a covered process, or (2) where the RMP implementing agency requires a third-party audit due to conditions at the facility that could lead to an accidental release or because a previous third-party audit failed to meet the newly-established independence or competency criteria.
Under the “independence” criterion, third-party auditors would be required to act impartially when performing all audit-related activities; receive no financial benefit from the outcome of the audit, apart from payment for auditing services; ensure that all third-party personnel involved in the audit sign and date a conflict of interest statement; and ensure that all third-party personnel involved in the audit do not accept future employment with the owner or operator of the stationary source for a period of at least two years following submission of the final audit report. With respect to competency, third-party auditors must be knowledgeable in RMP requirements, experienced with the facility type, processes being audited and RAGAGEP, and trained and/or certified in proper auditing techniques. Facilities may either engage a third-party auditor meeting the independence and competency criteria or assemble an auditing team that is led by a third-party auditor meeting these criteria.
- Public information availability. In the final rule, the EPA explains its view that public availability of facility and process safety information will motivate facility owners and operators to improve their safety performance in response to local community oversight. In keeping with this view, the EPA finalized extensive new information availability requirements, including that facilities must provide certain information upon request by any member of the public residing, working or spending significant time within 6 mi of the facility’s fenceline. Such information includes the names of regulated substances used in processes at the facility; safety data sheets (SDSs) for all the regulated substances located at the facility; accident history information; summary information regarding the facility’s emergency response program; a list of scheduled emergency exercises, excluding dates; LEPC contact information; and declined recommendations from the facility’s STAA analysis, RAGAGEP gap analysis, and natural hazard, power loss and siting hazard evaluations.
Facilities must provide ongoing notification on a company website, social media platforms or other publicly accessible platforms of the availability of this information upon request. Upon receiving a request, the facility owner or operator must provide the requested information within 45 d. The information must be available in English or in at least any two other commonly spoken languages by the population potentially affected, as requested. A record of the members of the public requesting chemical hazard information must be generated and maintained for 5 yr.
- Other new requirements. The EPA also finalized new requirements for Program 2 and 3 facilities to conduct a root cause analysis for all RMP-reportable incidents and to prepare an incident investigation report within 12 mos of the incident (unless the implementing agency approves an extension). Root cause analysis of RMP-reportable incidents must be conducted using a recognized method. The EPA also finalized extensive new employee participation and emergency response requirements, among other things.
Overall, key themes of the March 2024 final rule are that public information sharing will lead to improved safety performance; that historically accident-prone facilities and/or industries should be subject to more prescriptive, rule-based requirements aimed at reducing the likelihood of low-probability, high-consequence incidents; and that expanding the scope of participation in RMP analyses to encompass third parties (e.g., independent auditors, employee representatives) will improve the quality of these analyses (e.g., incident investigations, PHAs, compliance audits). To the extent that the EPA policy changes on these issues under a new presidential administration in the future, the final rule is likely to be reconsidered and potentially rescinded in whole or in part—as has occurred during the last two changes of administration.
A group of Republican states and a coalition of industry groups filed petitions in the U.S. Court of Appeals for District of Columbia Circuit seeking judicial review of the final rule. This litigation is in its early stages and so far, no party has sought to stay the effective dates in the rule. In addition, House Republicans introduced a Congressional Review Act (CRA) resolution seeking to rescind the final rule, teeing up a mandatory vote on the resolution. The resolution is currently under committee review, but even if it passes both the House and Senate, it will almost certainly be vetoed by President Joe Biden.
Notwithstanding the uncertainty of potential future political or litigation developments that could impact the above-described new requirements in the March 2024 RMP Final Rule, it is recommended that impacted facilities begin implementation of those provisions that took immediate effect in May and plan for future compliance with those provisions subject to later effective dates.
LITERATURE CITED
1 U.S. EPA, “Accidental release prevention requirements: Risk management programs under the Clean Air Act; safer communities by chemical accident prevention; final rule,” May 10, 2024, online: https://www.federalregister.gov/documents/2024/03/11/2024-04458/accidental-release-prevention-requirements-risk-management-programs-under-the-clean-air-act-safer
Comments