A vaguely-worded standard used by the Occupational Safety and Health Administration (OSHA) for petroleum refinery safety enforcement is now less of a threat to industry employers, thanks to an administrative review decision.
The Occupational Safety and Health Review Commission sharply reduced the number of charges and dollar amount of citations leveled in 2010 against an Ohio refinery operated by BP Products North America, Inc. The charges stemmed from alleged violations of Process Safety Management (PSM) rules regarding highly hazardous chemicals, including 65 citation items contained in single willful citation.
On appeal, an Administrative Law Judge vacated all but five of the citations and reduced the $2,870,000 penalty to $35,000. That decision was appealed by OSHA’s ultimate boss, the Secretary of Labor, and was upheld on Oct 1 by the OSHR Commission.
The PSM standard was created by OSHA in 1992, but it wasn’t until 2007 that OSHA began to systematically inspect petroleum refineries as part of its Petroleum Refinery Process Safety Management National Emphasis Program (NEP).
The most contentious issue in the BP case was the meaning of the term “Recognized and Generally Accepted Good Engineering Principles” (RAGAGEP), which is used but not defined by OSHA in the text of the PSM standard. Making matters worse, both PSM and RAGAGEP are vaguely worded, providing those charged with a ready defense when cited under them—and that defense was needed when OSHA pressed forward with a comprehensive enforcement program.
“Many safety managers at refineries around the country were surprised at how easily OSHA was able to use the PSM standard to issue dozens of high-dollar-value citations by simply issuing multiple citations for each subsection of the standard,” notes attorney Christopher V. Bacon of the law firm of Vinson & Elkins.
The Review Commission made it clear that the PSM standard is a performance-oriented standard—not a prescriptive one—and that OSHA cannot second guess an employer’s discretion in deciding how to comply, Bacon explains. “Simply because OSHA claims something is RAGAGEP doesn’t make it so. There can be multiple RAGAGEPs as long as companies can show that they engaged in a deliberative process to come up with the standard that they are applying.”
Examples and a Warning
One example: OSHA had taken the position that certain pressure relief valves could not have an inlet pressure drop that exceeded 3%. BP noted that the American Petroleum Institute had qualified this principle, holding that a valve’s inlet pressure drop could exceed 3% if an engineering analysis had been conducted, which BP had done.
The commission also found that BP’s facility siting program—a program which assesses and addresses potential damage that a workplace explosion could cause to occupied buildings—had been reasonable and OSHA should not have second guessed the methodology used by BP for assessing risk and prioritizing remediation.
While most refineries give considerable thought to the issue of facility siting today—especially since the BP Texas City Refinery explosion in 2005—they often fail to document their analyses and siting decisions, Bacon points out. “The first requirement of the PSM standard is that employers must compile awritten Process Safety Information (PSI) statement, but many don’t. It is this lack of documentation that gets refineries in trouble.”
He says refineries also are often lax when it comes to documenting their compliance with RAGAGEP with respect to their relief systems. Refineries need to be able to document the standards that they are relying on, even if the refinery’s own engineers developed and implemented it, Bacon stresses.
Refineries have also been surprised by OSHA inspectors who have taken the time to pore over dozens of Piping and Instrumentation Diagrams (P&IDs) and to issue a citation because one of the P&IDs was not up to date.
According to Bacon, the OSH Review Commission should be looked upon by refinery operators as a good thing, as long as they have been diligent in preparing for the future. “This decision should be welcomed by any employer that already has a robust PSM program, even if a particular inspector takes issue with some of your analyses,” he says. “On the other hand, it is not going to help companies who lack PSI programs or who have not conducted a Process Hazard Analysis.”