Regulatory Impact Analysis

Accidental Release Prevention Requirements: 

Risk Management Programs

Under the Clean Air Act, Section 112(r)(7)

U.S. Environmental Protection Agency (EPA)

Office of Land and Emergency Management (OLEM)

Office of Emergency Management (OEM)

1200 Pennsylvania Avenue, NW (Mail Code 5104A)

Washington, DC 20460 USA

February 24, 2016
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ACRONYMS

Acronym Definition

CSB Chemical Safety Board

EO Executive Order

EPCRA Emergency Planning and Community Right to Know Act 

FEMA Federal Emergency Management Agency

FTE Full Time Equivalent

IST Inherently Safer Technology

LEPC Local Emergency Planning Committee

NAICS North American Industrial Classification System 

OCA Offsite Consequence Analysis

OSHA Occupational Safety and Health Administration 

P1 Program Level 1

P2 Program Level 2

P3 Program Level 3

PHA Process Hazard Analysis

PSM Process Safety Management 

RFI Request for Information

RIA Regulatory Impact Analysis

RMP Risk Management Plan

SDS Safety Data Sheets

SERC State Emergency Response Commissions

STAA Safer Technology andAlternativesAnalysis

TEPC Tribal Emergency Planning Committee

TERC Tribal Emergency Response Commissions

TQ Threshold Quantity
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EXECUTIVE SUMMARY 

INTRODUCTION

In response to catastrophic chemical facility incidents in the United States, President Obama issued EO 

13650, “Improving Chemical Facility Safety and Security,”on August 1, 2013. The EO establishes the 

Chemical Facility Safety and Security Working Group (Working Group), co-chaired by the Secretary of 

Homeland Security, the Administrator of EPA, and the Secretary of Labor or their designated 

representatives at the Assistant Secretary level or higher, and comprised of senior representatives of 

other Federal departments, agencies, and offices.1 The EO requires the Working Group to carry out a 

number of tasks whose overall goal is to prevent chemical accidents, such as the explosion that occurred 

at the West Fertilizer facility in West, Texas, on April 17, 2013, which killed 15 people, most of whom 

were first responders, caused multiple injuries, and resulted in extensive building damage to the town. 2

Section 6(a)(i) of EO 13650 requires the Working Group to develop options for improved chemical 

facility safety and security that identify “improvements to existing risk management practices through 

agency programs, private sector initiatives, Government guidance, outreach, standards, and 

regulations.’’ Section 6(c) of EO 13650 requires the Administrator of EPA to review the Risk 

Management Program. As part of this effort to solicit comments and information from the public 

regarding potential changes to EPA’s RMP regulations (40 CFR part 68), on July 31, 2014, EPA published 

a “Request for Information” notice or “RFI” (79 FR 44604). 

EPA believes that the RMP regulations have been effective in preventing and mitigating chemical 

accidents in the United States; however, EPA is proposing revisions in order to further protect human 

health and the environment from chemical hazards through advancement of process safety 

management (PSM) based on lessons learned. These revisions are a result of a review of the existing 

Risk Management Program and information gathered from the RFI and EO listening sessions, and are 

proposed under the statutory authority provided by section 112(r) of the Clean Air Act (CAA) as 

amended (42 U.S.C. 7412(r)).

DESCRIPTION OF PROPOSED RULE AND ALTERNATIVES

The RIA analyzed the proposed new requirements and revisions to existing requirements as well as 

several alternatives for each.

 1 The White House. Executive Order – Improving Chemical Facility Safety and Security. August, 2013. 

https://www.whitehouse.gov/the-press-office/2013/08/01/executive-order-improving-chemical-facility-safetyand-security 2 CSB. January 2016. Final Investigation Report, West Fertilizer Company Fire and Explosion, West, TX, April 17, 

2013. REPORT 2013-02-I-TX. http://www.csb.gov/west-fertilizer-explosion-and-fire-/
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Third-Party Audits—(proposed revisions apply to existing §§68.58 and 68.79 and new §§68.59 and 68.80)

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 thirdparty 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 third-party would have to be someone with whom the facility does not have an existing or 

recent relationship and who meets specific qualification criteria. 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 three 

years for all compliance audits conducted for all P3 processes. The high cost alternative would apply 

every three years for all compliance audits conducted for Program 2 and Program 3 processes.

Root Cause Analysis—(proposed revisions apply to §§68.60 and 68.81)

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 P3 processes. The proposed option is the higher cost alternative andwould 

apply to RMP reportable accidents or near misses involving Program 2 and Program 3 processes. 

Safer Technology and Alternatives Analysis (STAA)—(proposed revisions apply to §68.67)

Under the proposed rule, facilities in NAICS codes 322 (paper manufacturing), 324 (petroleum and coal 

products manufacturing), and 325 (chemical manufacturing) with P3 processes would be required to 

conduct a STAA for each process as part of their PHA, 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 assess the reasonableness of implementing technology alternatives. The 

proposed rule is the low cost alternative, which would apply to all facilities with P3 processes in NAICS 

codes 322, 324, and 325. The mediumcost alternative would apply the requirement to all P3 processes. 

The high cost alternative would apply the requirement to all P3 processes and require facilities to 

implement feasible safer technology and alternatives.

Coordination Activities—(proposed revisions apply to §§68.90, new 68.93, and 68.95)

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 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 also includes a provision enabling the Local Emergency Planning Committee (LEPC) or 

local emergency response official to require that the RMP-facility owner or operator comply with the 
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emergency response program requirements of §68.95. Section 68.95 requires the 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. As a result of improved coordination between facility 

owners and operators and local emergency response officials, EPA believes that some facilities that are 

currently designated as non-responding facilities may become responding facilities (i.e., develop an 

emergency response program in accordance with §68.95). 

Alternatives to this provision are similar to the proposed requirements. One alternative would eliminate 

the option for local officials to require that a facility owner or operator comply with the requirements of 

§68.95. 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 with §68.95 may increase the likelihood 

of current non-responding facilities converting to responding facilities. These costs of converting are 

estimated in a sensitivity analysis in this RIA. A second alternative is a high cost alternative and would 

require all facilities with Program 2 or Program 3 processes to comply with §68.95, regardless of local 

response capability. This would be analogous to the requirements under the Oil Pollution Prevention 

regulation (40 CFR Part 112) where all facilities subject to the Facility Response Plan provisions at 

§112.20 are required to prepare and implement an emergency response plan for oil discharges into 

navigable waters or adjoining shorelines.

Exercises—(proposed revisions apply to new §68.96)

Notification 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. 

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 five 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 a year of an RMP reportable 

accident, but this may not impose any additional burden under the medium 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.

InformationDisclosure—(proposed revisions apply to new §68.205 and existing §68.210)

The proposed rule would require all facilities to disclose certain chemical hazard information to the 

public. The facility or its parent company, if applicable, would have to make the information available in 

an easily accessible manner, which might be presenting information on a company website, posting the 

information at public libraries, publishing it in local papers, or other means appropriate for particular 
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communities and facilities. The information to be disclosed includes names of regulated substances at 

the facility; Safety Data Sheets (SDS); accident history information; emergency response program 

information; and LEPC or local response agency contact information.

In addition, facility owners or operators would be required to provide, upon request,to the LEPC or 

other local response agencies information on all of the following that apply to the facility: regulated 

substances; five-year RMP reportable accident history; summaries of compliance audit reports; 

summaries of incident investigation reports; summaries of implementation of inherently safer 

technology (IST); and information on emergency response exercises, including schedules for upcoming 

exercises. Facilities owners or operators would be required to update this information annually.

Public Meetings—(proposed revisions apply to §68.210)

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 P2 and P3 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 P1 facilities)to hold a public meeting at 

least once every 5 years and within 30 days of an RMP reportable accident. 

SUMMARY OF COSTS

Approximately 12,500 facilities have filed current RMPs with 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.

Exhibit A presents the number of facilities according to the latest RMP reporting as of February 2015 by 

industrial sector and chemical use. 
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Exhibit A: Number of Affected Facilities by Sector

Sector NAICS Codes

Total 

Facilities Chemical Uses

Administration of environmental 

quality programs (i.e., governments) 924 1,923

Use chlorine and other chemicals for 

treatment

Agricultural chemical 

distributors/wholesalers

111, 112, 

115, 42491 3,667

Store ammonia for sale; some in 

NAICS 111 and 115 use ammonia as a 

refrigerant

Chemical manufacturing 325 1,465 Manufacture, process, store

Chemical wholesalers 4246 333 Store for sale

Food and beverage manufacturing 311, 312 1,476 Use mostly ammonia as a refrigerant

Oil and gas extraction 211 741

Intermediate processing (mostly 

regulated flammable substances and 

flammable mixtures)

Other

44, 45, 48, 

54, 56, 61, 

72

247

Use chemicals for wastewater 

treatment, refrigeration, store 

chemicals for sale

Other manufacturing 313, , 326,

327, 33 384

Use various chemicals in 

manufacturing process, waste 

treatment

Other wholesale 423, 424 302 Use mostly ammonia as a refrigerant

Paper manufacturing 322 70 Use various chemicals in pulp and 

paper manufacturing

Petroleum and coal products 

manufacturing 324 156

Manufacture, process, store (mostly 

regulated flammable substances and 

flammable mixtures)

Petroleum wholesalers 4247 276

Store for sale (mostly regulated 

flammable substances and flammable 

mixtures)

Utilities

221 (except 

22131, 

22132)

343 Use chlorine (mostly for water 

treatment)

Warehousing and storage 493 1,056 Use mostly ammonia as a refrigerant

Water/wastewater Treatment 

Systems

22131, 

22132 102 Use chlorine and other chemicals

Total 12,542

Exhibit B presents a summary of the costs estimated in the analysis. EPA estimates annualized costs of 

$158.3 million at a 3% discount rate, and $161.0 million at a 7% discount rate. Total undiscounted costs 

are $1.58 billion over the ten year time period, or $1.4 billion and $1.1 billion when discounted at 3 and 

7 percent, respectively. Exhibit B presents some elements that are beyond the proposed rule provisions, 

such as rule familiarization.
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Exhibit B: Summary of Costs (Millions, 2014 dollars)

Cost Elements Total 

Undiscounted

Total 

Discounted 

(3%)

Total 

Discounted 

(7%)

Annualized 

(3%)*

Annualized 

(7%)

Third-Party Audits $49.6 $42.3 $34.8 $5.0 $5.0

Root Cause Analysis $8.4 $7.2 $5.9 $0.8 $0.8

Safer Technology 

and Alternatives $347.9 $296.8 $244.3 $34.8 $34.8

Coordination $62.7 $53.4 $44.0 $6.3 $6.3

New Responders  ̊ $311.1 $281.6 $250.3 $33.0 $35.6

Notification Drills $13.8 $11.8 $9.7 $1.4 $1.4

Exercise Costs $606.6 $517.4 $426.0 $60.7 $60.7

LEPC Disclosure $129.2 $100.2 $82.5 $11.7 $11.7

Public Disclosure $39.8 $33.9 $27.9 $4.0 $4.0

Public Meetings $4.0 $3.4 $2.8 $0.4 $0.4

Rule Familiarization $2.4 $2.3 $2.2 $0.3 $0.3

Total Cost+ $1,575. $1,350.2 $1,130.5 $158.3 $161.0

* When annual costs for different years are equal to one another across the analysis time period, the annualized 

costs calculated using different discount rates (e.g., 3 and 7 percent) are equal. 

 ̊ Reflects costs for some facilities to convert from “non-responding” to “responding” as a result of improved 

coordination with local emergency response officials 

+ Values may not sum due to rounding

SUMMARY OF POTENTIAL BENEFITS

EPA had no data to project the specific impact of each proposed rule element on the probability and 

magnitude of chemical accidents. Indeed, the frequency and severity of the accidents themselves would 

be challenging to predict. However, a review of the RMP accident data and other data sources 

suggested that chemical accidents impose substantial costs on firms, employees, emergency 

responders, the community, and the broader economy. This RIA constructs and presents data for a 10-

year baseline period, summarizing RMP accident impacts and when possible monetizing them. The 

average annual cost of RMP accidents during the baseline was $274 million. However, the monetized 

impacts omit many important categories of accident impacts including lost productivity, the costs of 

emergency response, transaction costs, property value impacts in the surrounding community (that 

overlap with other benefit categories), and environmental impacts. Also not reflected in the 10-year 

baseline costs are the impacts of non-RMP accidents at RMP facilities and any potential impacts of rare 

high consequence catastrophes. A final omission is related to the information disclosure provision. 

Reducing the probability of chemical accidents and the severity of their impacts, and improving 

information disclosure by chemical facilities, as the proposed provisions intend, would provide benefits 

to potentially affected members of society.

Exhibit C summarizes all of the benefit categories qualitatively described in this RIA. There are four 

broad benefit categoriesrelated to accident prevention and mitigation including prevention of RMP 
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accidents, mitigation of RMP accidents, prevention and mitigation of non-RMP accidents at RMP 

facilities, and prevention of major catastrophes. The exhibit explains each and identifiesten associated 

specific benefit categories, ranging from avoided fatalities to avoided emergency response costs. Exhibit 

C also highlights and explains the information disclosure benefit category and identifiestwo specific 

benefits associated with it: improved efficiency of property markets and allocation of emergency 

resources.

Exhibit C: Summary of Social Benefits of Proposed Rule Provisions

Broad Benefit Category Explanation Specific Benefit Categories

Accident Prevention Prevention of future RMP facility 

accidents

• Reduced Fatalities

• Reduced Injuries

• Reduced Property 

Damage

• Fewer People 

Sheltered in Place

• Fewer Evacuations

• Avoided Lost 

Productivity

• Avoided Emergency 

Response Costs

• Avoided Transaction 

Costs

• Avoided Property 

Value Impacts*

• Avoided 

Environmental 

Impacts

Accident Mitigation Mitigation of future RMP facility 

accidents

Non-RMP accident prevention 

and mitigation

Prevention and mitigation of future 

non-RMP accidents at RMP facilities

Avoided Catastrophes Prevention of rare but extremely high 

consequence events

Information Disclosure Provision of information to the public 

and LEPCs

• Improved efficiency of 

property markets

• Improved resource 

allocation

* These impacts partially overlap with several other categories, such as reduced health and environmental impacts
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TABLE OF CONTENTS

EXECUTIVE SUMMARY .........................................................................................................................3

CHAPTER 1: INTRODUCTION AND BACKGROUND..................................................................................12

1.1 HISTORY .................................................................................................................................12

1.2 ORGANIZATION OF THE ANALYSIS ....................................................................................................17

CHAPTER 2: PROVISIONS AND ALTERNATIVES.......................................................................................19

2.1 ALTERNATIVES ANALYZED .............................................................................................................20

2.2 ADDITIONAL CHANGES ASSOCIATED WITH LOCAL COORDINATION ACTIVITIES .................................................22

2.3 SUMMARY OF AL TERNATIVES .........................................................................................................23

2.4 IMPACTS TO GOVERNMENTS..........................................................................................................25

CHAPTER 3:UNIVERSE OF REGULATEDFACILITIES .................................................................................26

3.1 CURRENT RMP FACILITIES ............................................................................................................26

3.2 DIVISIONS USED IN ANAL YSIS .........................................................................................................29

3.3 GOVERNMENT ENTITIES AFFECTED BY THE RUL E...................................................................................34

3.4 LIMITATIONS ............................................................................................................................35

CHAPTER 4: COSTS OF PROPOSEDREVISIONS .......................................................................................36

4.1. WAGE RATES ...........................................................................................................................36

4.2 RULE FAMILIARIZATION................................................................................................................37

4.3 PREVENTION PROGRAM RULE PROVISIONS .........................................................................................37

4.4. EMERGENCY RESPONSE PREPAREDNESS RULE PROVISIONS ......................................................................42

4.5. INFORMATION AVAILABILITY RULE PROVISIONS ....................................................................................45

4.6 NEW RESPONDERS .....................................................................................................................49

CHAPTER 5: TOTAL COSTS ..................................................................................................................54

5.1 ANALYTICAL ASSUMPTIONS ...........................................................................................................54

5.2 RULE FAMILIARIZATION................................................................................................................56

5.3 PREVENTION PROGRAM RULE PROVISIONS .........................................................................................56

5.4 EMERGENCY RESPONSE PREPAREDNESS REQUIREMENTS .........................................................................62

5.5 INFORMATION DISCLOSURE RUL E PROVISIONS.....................................................................................68

5.6 NEW RESPONDERS .....................................................................................................................71

5.7 COST UNCERTAINTIES ASSOCIATED WITH PREVENTION PROGRAM PROVISIONS...............................................76

5.8 TOTAL COSTS ...........................................................................................................................81

CHAPTER 6: BENEFITS.........................................................................................................................83

6.1 BENEFIT CATEGORIES ..................................................................................................................83

6.2 NUMBER AND COSTS OF BASELINE ACCIDENTS.....................................................................................88

6.3 BENEFITS COMPARED TO COSTS......................................................................................................96

6.4 AVOIDED CATASTROPHES .............................................................................................................97

6.5ADDITIONAL BENEFIT CATEGORIES ASSOCIATED WITH ACCIDENT PREVENTION AND MITIGATION .............................97

6.6 CONCLUSIONS......................................................................................................................... 101

CHAPTER 7: SMALL ENTITYIMPACTS.................................................................................................. 103

7.1 RMPAFFECTED SECTORS ........................................................................................................... 103

7.2 ESTIMATING THE NUMBER OF SMALL ENTITIES .................................................................................. 106
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7.3 ECONOMIC IMPACT ON SMALL ENTITIES .......................................................................................... 111

7.4 CONCLUSION .......................................................................................................................... 129

CHAPTER 8: ENVIRONMENTAL JUSTICE .............................................................................................. 130

8.1 BACKGROUND AND CONTEXT ....................................................................................................... 130

8.2 IDENTIFYING POTENTIAL ENVIRONMENTAL JUSTICE CONCERNS ASSOCIATED WITH RMP FACILITIES ..................... 130

8.3 ACTIONS TAKEN TO FACILITATE “FAIR TREATMENT” ............................................................................ 133

8.4 ACTIONS TAKEN TO FACILITATE “MEANINGFUL INVOLVEMENT” .............................................................. 133

CHAPTER 9:OTHER ANALYSES AND CONCLUSIONS.............................................................................. 136

9.1 UNFUNDED MANDATES REFORM ACT............................................................................................. 136

9.2 EMPLOYMENT IMPACTS ............................................................................................................. 136

9.3 LIMITATIONS AND CONCLUSIONS................................................................................................... 137

APPENDIX A.................................................................................................................................... 139

APPENDIX B .................................................................................................................................... 141

APPENDIX C .................................................................................................................................... 144
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CHAPTER 1: INTRODUCTION AND BACKGROUND

1.1 History

Serious chemical accidents occurring in the 1970s and 1980s, including accidents in Bhopal, India, 

Seveso, Italy, and Pasadena, Texas led to a series of legislative reforms relating to chemical safety in 

industrialized countries. 34 In the United States, the Emergency Planning and Community Right to Know 

Act (EPCRA) was enacted in 1986 to promote community emergency planning and preparedness and 

provide local responders and the public with information about the chemical hazards in their community

(42 U.S.C. 11002 et seq.). In 1990, sections 112(r) and 304 of the Clean Air Act were enacted to help 

prevent severe chemical facility accidents. Section 304 required the Occupational Safety and Health 

Administration (OSHA) to publish a chemical process safety standard to prevent accidental releases of 

chemicals that could pose a threat to employees. Section 112(r) required the Environmental Protection 

Agency (EPA) to publishAccidental Release Prevention Programregulationsto prevent chemical releases

or minimize their consequencesif they occur.

Section 112(r) required EPA to develop a list of at least 100 regulated substances which, in the case of an 

accidental release, are known to cause or may reasonably be anticipated to cause death, injury, or 

serious adverse effects to human health or the environment(42 U.S.C 7412(r)). EPA was also required 

to establish threshold quantities (TQs) for these substances, which would determine the applicability of 

rulesto prevent accidental releases of these substances. Section 112(r)(7)(B) required EPA to 

promulgate reasonable regulations and appropriate guidance to provide, to the greatest extent 

practicable, for the prevention and detection of accidental releases of regulated substances and for 

response to such releases by the owners or operators of the sources of such releases. The section 

mandates that the regulations require the owner or operator of a stationary source “to prepare and 

implement a risk management plan to detect and prevent or minimize accidental releases of such 

substances from the stationary source, and to provide a prompt emergency response to any such 

releases in order to protect human health and the environment.” The section further mandates that the 

plan include:

• A hazard assessment to assess the potential effects of an accidental release of any regulated 

substance. This assessment shall include an estimate of potential release quantities and a 

determination of downwind effects, including potential exposures to affected populations. Such 

assessment shall include a previous release history of the past 5 years, including the size, 

concentration, and duration of releases, and shall include an evaluation of worst case accidental 

releases; 

 3 Federal Emergency Management Agency. Phillips Petroleum Chemical Plant Explosion and Fire. October 1989. 

https://www.usfa.fema.gov/downloads/pdf/publications/tr-035.pdf 4 Nature 281, 521 (18 October 1979). http://www.nature.com/nature/journal/v281/n5732/pdf/281521a0.pdf
Page 13 of 147

• A program for preventing accidental releases of regulated substances, including safety 

precautions and maintenance, monitoring and employee training measures to be used at the 

source; and 

• A response program providing for specific actions to be taken in response to an accidental 

release of a regulated substance so as to protect human health and the environment, including 

procedures for informing the public and local agencies responsible for responding to accidental 

releases, emergency health care, and employee training measures. 

Finally, the section requires the owner or operator of an affected stationary source to develop and file a 

risk management plan with EPA, the Chemical Safety Board (CSB) (also established under the section), 

the State, and local response agencies.

OSHA adopted its process safety management standard (PSM) (codified at 29 CFR 1910.119) in 1992 (57 

FR 6403, Feb. 24, 1992). The PSM standard requires facilities to develop and implement an integrated 

approach to chemical process safety including the following elements: accurate, up-to-date diagrams of 

all process equipment, an analysis of the process hazards, standard operating procedures, training, 

maintenance, pre-startup reviews, management of change, compliance audits, incident investigation, 

employee participation, hot-work permits, contractor training, and emergency response. The 

applicability of the PSM standard is driven by the presence of specific chemicals in quantities above 

thresholdsset in the standard. 

EPA published its section 112(r) regulationsin two stages −a list of regulated substances and TQs in 

1994 (59 FR 4478, January 31, 1994), and the risk management program requirements in 1996 (61 FR 

31731, June 20, 1996); both are codified at 40 CFR part 68. As required by section 112(r), part 68

includes several major requirements that were not covered by the PSM standard. These include a 

hazard assessment consisting of an offsite consequence analysis (OCA) and five-year accident history, 

and the development and submission of a risk management plan (RMP) that summarizes a source’s risk 

management program. EPA also required stationary sources to develop a management system to 

oversee the programand included emergency response program requirements beyond those contained 

in the PSM standard. RMPs were first submitted to EPA in June 1999 and must be updated at least 

every 5 years. EPA has amended the rule a number of times to modify the list of substances,to alter 

data requirements, and to address other issues. The primary requirements adopted in 1996, however,

remain in place.

The Risk Management Programrule establishes three program levels and requiresfacility owners or 

operators to conduct hazard assessments and submit RMPs regardless of the program level. Program 1 

(P1) requirements apply to processes that would not affect the public in the case of a worst-case release 

and with no accidents with specific off-site consequences within the past five years. P1 provisions

impose limited hazard assessment requirements and emergency response requirements.

Program 2 (P2) applies to processes not eligible for P1 or subject to Program 3 (P3), and imposes 

streamlined prevention program requirements, including safety information, hazard review, operating 
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procedures, training, maintenance, compliance audits, and incident investigation elements. P2 

provisions also impose hazard assessment, management, and emergency response requirements. P2 

processes are primarily chlorine use atpublicly owned water and wastewater facilities, in States without

OSHA-approved State plans. To further reduce the burden on facilities with P2 processes, EPA 

developed and published a number of industry-specific guidance documents 5 and an OCA guidance

document.

P3 requirements apply to processes not eligible for P1 and either subject to OSHA's PSM standard, under 

federal or State OSHA programs, or classified in one of ten specified North American Industrial 

Classification System (NAICS) codes (1997 version) listed at 40 CFR 68.10(d)(1). The ten NAICS codes 

are: 

• 32211 (pulp mills) • 325192 (cyclic crude and intermediate manufacturing)

• 32411 (petroleum refineries) • 325199 (all other basic organic chemical 

manufacturing)

• 32511 (petrochemical manufacturing) • 325211 (plastics material and resin manufacturing)

• 325181 (alkali and chlorine 

manufacturing)

• 325311 (nitrogenous fertilizer manufacturing)

• 325188 (all other basic inorganic 

chemical manufacturing)

• 32532 (pesticide and other agricultural chemical 

manufacturing)

P3 requirements impose elements nearly identical to those in OSHA’s PSM standard as the accident 

prevention program. The P3 prevention program includes requirements relating to the following:

• Process safety information

• Process Hazard Analysis(PHA)

• Operating procedures

• Training

• Mechanical integrity

• Management of change

• Pre-startup review

• Compliance audits

• Incident investigations

• Employee participation

• Hot work permits, and

• Contractors.

 5 There are guidance documents for propane storage, refrigeration, water/wastewater treatment, warehouses, 

chemical distributors, and others. 
Page 15 of 147

P3 provisions also impose the same hazard assessment, management, and emergency response 

requirements that are required for P2.

The following flow chart demonstrates how facilities determine to which program level they are 

subject6:

Facilities7 that are exempt from the OSHA PSM standard may be subject to EPA requirements under the 

RMP rule. This occurs for several reasons. First,the lists of substances regulated are not identical; for 

example, EPA lists aqueous ammonia at any solution that is 20 percent ammonia or more; OSHA covers 

it only at concentrations of 44 percent or more. Second, because federal OSHA has no authority over 

State and local government employees, the OSHA PSM standard does not apply to publicly owned 

facilities (mainly water and wastewater treatment systems) in States where federal OSHA implements 

and enforces the standard (about half the States). Where States implement and enforce OSHA 

standards (referred to as State-plan States), the State is required to impose OSHA standards on State 

and local government employees as a condition of delegation. 8 Lastly, regulatory exemptions are not 

 

6 http://www2.epa.gov/sites/production/files/2013-10/documents/chap-02-final.pdf 7 Facilities are also commonly referred to as stationary sources, and the terms are used interchangeably 

throughout this document. 

8 Twenty-six states, Puerto Rico, and the Virgin Islands have OSHA-approved State Plans. In these states, publicly 

owned water and wastewater treatment plants are typically in P2. Twenty-two State Plans (21 states and one U.S. 
Page 16 of 147

identical; for example, the OSHA PSM standard exempts normally unoccupied remotefacilities, but the 

RMP rule does not.

Approximately 12,500 currently regulated facilities have filed RMPsfor approximately 17,000 processes. 

Most facilities have only one process, but certain industries, such as chemical manufacturing and 

petroleum refining, often have more than one regulated process; about 100 facilities have more than 10 

regulated processes. The population of RMP facilities is dynamic. Several thousand facilities have either 

switched chemicalsto non-regulated substances, reduced chemical inventories below threshold 

quantities, or ceased operations and subsequently deregistered fromthe program since the first RMPs 

were submitted in 1999. However, every year new facilities are registering and submitting new RMPs. 

Although the accident histories submitted with RMPs have shown a reduction in the frequency of 

accidents since the beginning of the program, there continue to be serious chemical releases. RMP data 

for 2004 through 2013, the most recent 10 year period with complete information, showsthat there are 

an average of 150 accidents each year with reportable impacts.

In April 2013, the West Texas Fertilizer Company, an RMP-regulated facility in West, Texas, that stored

anhydrous ammonia (an RMP- and PSM-regulated substance) and ammoniumnitrate (not regulated 

under the RMP rule or the PSM standard) caught fire, which led to a massive explosion of the 

ammonium nitrate. Fifteen people, most of them firefighters, died and more than 160 members of the 

public were injured. Two nearby schools, an apartment building, a nursing home, and much of the 

surrounding town were also damaged. 9 In addition to thistragedy, a number of other serious incidents 

demonstrate a significant risk to the safety of American workers and communities. On March 23, 2005, 

explosions at the BP Refinery in Texas City, Texas killed 15 and injured more than 170. 10 On April 2, 

2010, an explosion and fire at the Tesoro Refinery in Anacortes, Washington killed seven.

11 On August 6, 

2012, a fire at the Chevron Refinery in Richmond, California involving flammable fluids endangered 19 

Chevron employees and created a large plume of chemicals that traveled across the Richmond, 

 

territory) cover both private and state and local government workplaces. Public water and wastewater plants in 

these states are in P3. The remaining six State Plans (fivestates and one U.S. territory) cover state and local 

government workers only. Their public water/wastewater plants are P2. https://www.osha.gov/dcsp/osp/ 9 CSB. January 2016. Final Investigation Report, West Fertilizer Company Fire and Explosion, West, TX, April 17, 

2013. REPORT 2013-02-I-TX. http://www.csb.gov/west-fertilizer-explosion-and-fire-/ 10 U.S. Chemical Safety and Hazard Investigation Board (CSB). March 2007. Investigation Report: Refinery 

Explosion and Fire, Texas City, Texas, March 23, 2005. http://www.csb.gov/assets/1/19/CSBFinalReportBP.pdf. 11 CSB. May 2014. Investigation Report: Catastrophic Rupture of Heat Exchanger, Tesoro Anacortes Refinery, 

Anacortes, Washington, April 2, 2010. http://www.csb.gov/assets/1/7/Tesoro_Anacortes_2014-May-01.pdf.
Page 17 of 147

California area. Nearly 15,000 residents sought medical treatment due to the release. 12On June 6, 

2013, a fire and explosion at Williams Olefins in Geismar, Louisiana killed two and injured many more. 13

These incidents highlight the regulatory need that this proposed rule modernization is addressing. 

Section 112(r) of the Clean Air Act aimed to address low frequency and high consequence chemical 

events. These are catastrophic incidents which have large societal impacts when they occur, but very 

little likelihood for any individual chemical facility. As such, market forces may not provide an incentive 

for any given company to invest inmeasures to prevent such accidents as they’re so unlikely to occur at 

the individual level. However, looking across the United States and universe of regulated facilities, these 

accidents occur with sufficient frequency to warrant regulation.

In response to recent catastrophic chemical facility incidents such as the West explosion and others, in 

2013 PresidentObama issued Executive Order (EO) 13650, entitled Improving Chemical Facility Safety 

and Security,

14 which among other items, required EPA and OSHA to consider whether and how to 

update and modernize the RMP rule and PSM standard. Both EPA and OSHA issued requests for 

information (RFI) to seek input from the public and the regulated community on potential revisions to 

the rules. 15 EPA received a total of 579 public submissions on the RFI. Several public comments were 

the result of various mass mail campaigns 16 and contained numerous copies of letters or petition 

signatures. Approximately 99,710 letters and signatures were contained in these several comments. In 

general, members of the public that submitted commentssupported imposing more stringent 

requirements on facilities, including a requirement for industry to use inherently safer systems to 

prevent chemical disasters. The regulated industry opposed most suggested revisions to the rule as 

unnecessary and costly. The proposed rule is the result of EPA’s consideration of the comments, as well 

as of recommendations from the CSB,the Agency’s experience gained through participation in EO 13650 

listening sessions,

17 and information gained by EPA through inspection of RMP facilities and 

enforcement of the rule over the past sixteen years.

1.2 Organization of the Analysis

This regulatory impact analysis(RIA) is organized as follows:

 12 CSB. January 2014. Regulatory Report: Chevron Richmond Refinery Pipe Rupture and Fire, Chevron Richmond 

Refinery #4 Crude Unit, Richmond, California, August 6, 2012. Report No. 2012-03-I-CA. 

http://www.csb.gov/assets/1/19/CSB_Chevron_Richmond_Refinery_Regulatory_Report.pdf. 13 CSB. 2013. Ongoing Investigation of Williams Olefins Plant and Fire, Geismar, LA. June 13, 2013. 

http://www.csb.gov/williams-olefins-plant-explosion-and-fire-/. 14 https://www.whitehouse.gov/the-press-office/2013/08/01/executive-order-improving-chemical-facility-safetyand-security 15 OSHA’s RFI was published on December 9, 2013 (78 FR 73756) and EPA’s RFI was published on July 31, 2014 (79 

FR 44604).

16 The terms “form letter campaign” and “mass mail campaign” are used interchangeably throughout this report. 17 In 2013 and 2014, as part of the EO 13650 activities, the federal government held a dozen listening sessions, 

supplemented by two online webinars. For a list of locations and link to the notes for these sessions go to 

http://www.regulations.gov/#!docketDetail;D=DHS-2013-0075.
Page 18 of 147

• Chapter 2 describes the provisions that EPA is proposing to add or amend and the alternatives 

that EPA considered for each provision analyzed in this document.

• Chapter 3 discusses the universe of regulated entities and the various divisions used in the 

analysis.

• Chapter 4 discusses the basis for cost estimates for each of the provisions and alternatives and 

presents the unit costs.

• Chapter 5 presents the total costs and 10-year costs.

• Chapter 6 discusses the potential benefits of the rule.

• Chapter 7 presents the small entityimpacts.

• Chapter 8 presents the environmental justice analysis

• Chapter 9 discusses other statutory and related analyses.
Page 19 of 147

CHAPTER 2: PROVISIONS AND ALTERNATIVES

This chapter presents a summary of the provisions in the proposed rule and the alternatives analyzed. 

The provisions being proposed include revisions to existing prevention program and emergency 

response requirements as well as new requirements related to public disclosure of information. For 

some provisions EPA considered three alternatives, which represent low, medium, and high costs.

The RIA analyzed the following proposed new requirements and revisions to existing requirements as 

well as several alternatives for each:

1. Third-Party Audits—(proposed revisions apply to existing §§68.58 and 68.79 and new §§68.59 

and 68.80): Revising the compliance audit provisions by requiring the next compliance audit 

following an RMP reportable accident18 to be conducted by a third-party.

2. Root Cause Analysis- (proposed revisions apply to §§68.60 and 68.81): Revising the incident 

investigation provisions to require a root cause analysis following an RMP reportable accident 

or an incident that could reasonably have resulted in an RMP reportable accident (i.e., “near 

miss”).

3. Safer Technology and AlternativesAnalysis (STAA)—(proposed revisions apply to §68.67):

Revising the PHA provisions to add a requirement to conduct a STAA - defined as “the 

integration of a variety of risk reduction or risk management strategies that work toward 

making a facility and its chemical processes as safe as possible”19 - for a subset of P3 processes 

in specific NAICS codes.

4. Coordination Activities—(proposed revisions apply to §§68.90, new 68.93, and 68.95):

Reorganizing and clarifying existing requirementsfor all facilities with P2 and P3 processes to 

coordinate emergency response capabilities with local response agencies and adding a new 

requirement to coordinate annually, document these coordination activities, and allow the 

LEPC to require that the chemical facility take responsibility for its own emergency response.

5. Exercises—(proposed revisions apply to new §68.96): Adding new requirements for facilities to 

conduct exercises annually. This includes an annual notification exercise that applies to both 

responding and non-responding facilities. Owners and operators of responding facilities must 

conduct a field exercise once every five years (and after a RMP reportable accident) and 

tabletop exercises annually, in the other years.

6. Information Availability—(proposed revisions apply to new §68.205 and existing §68.210):

Adding a new requirement to make certain information available to the LEPC or local response 

agencies upon request. In addition, the proposed rule would revise the public information 

 18 RMP reportable accident means any accident that must be reported under the five-year accident history 

requirements of §68.42, which is an accidental release from a covered process that resulted in deaths, injuries, or 

significant property damage on-site, or known offsite deaths, injuries, evacuations, sheltering in place, property 

damage, or environmental damage.

19 EPA/OSHA Chemical Safety Alert: Safer Technology and Alternatives. June 2015. 

http://www2.epa.gov/sites/production/files/2015-06/documents/alert_safer_tech_alts.pdf
Page 20 of 147

availability requirements to simplify the presentation of existing publicly available information 

and help the public better understand the risks at the facility.

7. Public Meeting—(proposed revisions apply to §68.210): Adding anew requirement to hold a 

public meeting after an RMP reportable accident.

2.1 Alternatives Analyzed

Third-Party Audits—(proposed revisions apply to existing §§68.58 and 68.79 and new §§68.59 and 68.80)

The existing rule requires P2 and P3 processes to conduct a compliance audit at least once every 3 years. 

The proposed rule would require facilities with P2 and/or P3 processesto contract with an independent 

third-party to conduct the next scheduled compliance audit following an RMP reportable accident or 

after an implementing agency 20 determines that certain circumstances exist that suggest a heightened 

risk for an accident. The third-party would have to be someone with whom the facility does not have an 

existing or recent relationship and who meets specific qualification criteria. The low cost alternative 

(i.e., the proposed option) would apply only for P2 and P3 processes after an RMP reportable accident 

or at the request of the implementing agency. The medium cost alternative would apply every three 

years for all compliance audits conducted for all P3 processes. The high cost alternative would apply 

every three years for all compliance audits conducted for P2 and P3 processes.

Root Cause Analysis—(proposed revisions apply to §§68.60 and 68.81)

The proposed rule would require facilities with P2 and/or P3 processesto 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 P3 processes. The medium/high cost 

alternative (proposed option)would apply to RMP reportable accidents or near misses involving P2 and 

P3 processes. 

Safer Technology and Alternatives Analysis (STAA)—(proposed revisions apply to §68.67)

Under the proposed rule, facilities in NAICS codes 322 (paper manufacturing), 324 (petroleum and coal 

products manufacturing), and 325 (chemical manufacturing) with P3 processes would be required to 

conduct a STAA for each process as part of their PHA, which occurs every 5 years. The STAA includes 

two parts: the initial analysis to identify alternatives, and a feasibility study to determine the costs and 

assess the reasonableness of implementing technology alternatives. The proposed rule is the low cost 

alternative, which would apply to all facilities with P3 processes in NAICS codes 322 (Paper 

Manufacturing), 324 (Petroleum and Coal Product Manufacturing), and 325 (Chemical Manufacturing). 

 20 The implementing agency is the federal state, or local agency that is taking the lead for implementation and 

enforcement of part 68 or the state or local equivalent.
Page 21 of 147

The medium cost alternative would apply the requirement to all P3 processes. The high cost alternative 

would apply the requirement to all P3 processes and require facilities to implement safer technology 

and alternatives that are considered feasible.

Coordination Activities—(proposed revisions apply to §§68.90, new 68.93, and 68.95)

Under the proposed rule, all facilities with P2 or P3 processes would be required to coordinate with local 

response agencies annually to determine response needs and ensure that response resources and 

capabilities are in place to respond to an accidental releaseof a regulated substance. The owner or 

operator would also be required to document coordination activities. The proposed rule also includes a 

provision enabling the LEPC or local emergency response official to require that the RMP-facility owner 

or operator comply with the emergency response program requirements of §68.95. Section 68.95 

requires the 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. As a result of improved 

coordination between facility owners and operators and local emergency response officials, EPA 

believes that some facilities that are currently designated as non-responding facilities may become 

responding facilities (i.e., develop an emergency response program in accordance with §68.95). For the 

proposed alternative, EPA conducted a sensitivity analysis estimating costs faced by RMP facilities that 

converted from non-responder to responder status (see Section 2.2 below).

Alternatives to this provision are similar to the proposed requirements. One alternative would eliminate 

the option for local officials to require that a facility owner or operator comply with the requirements of 

§68.95. A second alternative is a high cost alternative and would require all facilities with P2 or P3 

processes to comply with §68.95, regardless of local response capability21. This would be analogous to 

the requirements under the Oil Pollution Prevention regulation (40 CFR Part 112) where all facilities 

subject to the Facility Response Plan provisions at §112.20 are required to prepare and implement an 

emergency response plan for oil discharges into navigable waters or adjoining shorelines.

Exercises—(proposed revisions apply to new §68.96)

Notification Exercises. All facilities with P2 or P3 processes would be required to conduct a notification 

exercise annually to ensure that the contact list to be used in an emergency is complete, accurate, and 

up-to-date. 

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 conducttabletop exercises annually. Under the 

proposed option, which is the medium cost alternative, responding facilities would conduct a full field 

exercise at least once every five years and tabletop exercises annually in the interim years. Responding 

 21 For this alternative to the proposed option, the sensitivity analysis would not be relevant.
Page 22 of 147

facilities with an RMP reportable accident would also have to conduct a full field exercise within a year 

of an RMP reportable accident, but this may not impose any additional burden under the medium 

alternative as it would count as the required field exercise for the next 5-year period. Under the high 

cost alternative, responding facilities would conduct full field exercises annually.

Information Availability—(proposed revisions apply to new §68.205 and existing §68.210)

The proposed rule would require facility owners or operators to provide, upon request, to the LEPC or 

other local response agencies with information on all of the following that apply to the facility: regulated 

substances; five-year RMP reportable accident history; summaries of compliance auditreports; 

summaries of incident investigation reports; summaries of implementation of inherently safer 

technology (IST); and information on emergency response exercises, including schedules for upcoming 

exercises. Facilities owners or operators would be required to update this information annually.

In addition, all facilities would be required to disclose certain chemical hazard information to the public. 

The facility or its parent company, if applicable, would have to make the information available in an

easily accessible manner, which might be presenting information on a company website, posting the 

information at public libraries, publishing it in local papers, or other means appropriate for particular 

communities and facilities. The information to be disclosed includes names of regulated substances at 

the facility; Safety Data Sheets (SDS); accident history information; emergency response program 

information; and LEPC or local response agency contact information.

Public Meeting—(proposed revisions apply to §68.210)

The proposed rule would require facilities to hold a public meeting for the local community within 30

days of an RMP reportable accident. The mediumcost alternative would require P2 and P3 facilities to 

hold a public meeting at least once every five years and within 30 days of an RMP reportable accident. 

The high cost alternative would require all facilities (i.e., including P1 facilities) to hold apublic meeting 

at least once every five years and within 30 days of an RMP reportable accident. 

2.2 Additional Changes Associated with Local Coordination Activities

As a result of improved coordination between facility owners and operators and local emergency 

response officials, EPA believes that some facilities that are currently designated as non-responding 

facilities may become responding facilities. Therefore, in addition to the provisions listed above, the RIA 

estimates the costs associated with becoming a responding facility. This includes the costs of 

developing an emergency response program in accordance with §68.95, purchasing and maintaining 

appropriate equipment, training personnel, conducting exercises,and preparing the associated exercise 

reports for LEPCs.

In earlier rulemakings, EPA specified that if a facility owner oroperator determined that the local 

emergency responders did not have the training and equipment to respond to a release of an RMP 

regulated substance at the facility, then the facility owner or operatormust take responsibility for being 
Page 23 of 147

able to respond; however, it has become clear that in practice this has not always been the case. 

Information from EPA regional offices, State emergency organizations, and local response agencies has 

shown that facilities are not always coordinating or communicating with local responders, as required, 

and in some cases neither a facility nor its local response agency is prepared to respond to releases of 

regulated substances.

The proposed rule would explicitly require a facility owner or operator with a Program 2 or Program 3 

process to coordinate annually with local emergency responders to determine response needs and 

ensure that response resources and capabilities are in place to respond to an accidental release of a 

regulated substance. When the outcome of the response coordination activities demonstrates that local 

response capabilities are not adequate to respond, or upon the request of local responders, the facility 

owner or operator must develop an emergency response program in accordance with §68.95.

EPA examined RMP data to estimate the percent of RMP facilities with Program 2 and/or 3 processes 

that are non-responders, which means they are relying on local authorities to respond to any releases of 

regulated substances at the facility.22

Approximately 57 percent of facilities fell into this category. Many of these facilities are smaller facilities 

in rural areas. Unlike the other alternatives analyzed, the number and type of facilities that may convert 

from non-responder status to responderis uncertain. A previous FEMA analysis reported that 

approximately 76% of the population is covered by hazmat teams, which provides an indication of which 

facilities might have to become responding facilities.

23 However, the distribution of regulated facilities 

does not necessarily match the US population, so EPA used data from that FEMA report to conduct a 

sensitivity analysis. The RIA presentsthe costs associatedwith 25%, 50%, and 75% of the estimated 

number of non-responding facilities becoming responding facilitieswho are located in counties that do 

not have hazmat teams. The high cost alternative for coordination would require all P2 and P3 facilities 

to become responders.

2.3 Summary of Alternatives

Exhibit 2-1 presents the alternatives by rule requirement. Where cells are merged, the requirements 

are the same across the alternatives covered. For provisions that include alternative options analyzed, 

the proposed rule provisions are highlighted in gray.

 22 EPA. January 27, 2016. Technical Background Document for Notice of Proposed Rulemaking: Risk Management 

Programs under the Clean Air Act, Section 112(r)(7). 23 https://www.fema.gov/media-library/assets/documents/26675
Page 24 of 147

Exhibit 2-1: Alternatives by Regulatory Provision

Rule Provision Low Alternative Medium Alternative High Alternative

Prevention Program Elements

Third-party Audit

(§§68.58, 68.59, 

68.79, and 68.80))

Next compliance audit 

after RMP reportable 

accident(facilities with 

P2 and P3 processes)

All compliance audits at 

facilities with P3 processes 

conducted every three years 

by a third-party

All compliance audits at 

facilities with P2 and P3 

processes conducted 

every three years by a 

third-party

Root Cause Analysis

(§§68.60 and 68.81)

Applies to RMP

reportable accidents and 

“near misses” involving 

P3 processes

Applies to all RMP reportable accidents and “near misses” 

involving P2 and P3 processes 

STAA

(§68.67)

Facilities with P3 

processes in NAICS codes 

322, 324, 325 conduct

STAA and feasibility 

analyses

All facilities with P3 processes

conduct STAA and feasibility 

analyses

All P3 facilities conduct

STAA and feasibility 

analyses and implement 

feasible alternatives

Emergency Planning and Response

Coordination

(§§68.90, 68.93 and 

68.95)

All facilities with P2 and 

P3 processes coordinate 

with local responders and 

document annually

All P2 and P3 facilities 

coordinate and document 

annually; LEPC may require 

source to implement ER 

program

All P2 and P3 facilities 

must comply with ER 

Program (i.e., become 

responding facilities) 

regardless of local 

capability.

Notification

Exercises

(§68.96)

All facilities with P2 and P3 processes must verify their emergency notification contact 

information annually

Tabletop and Field 

Exercises

(§68.96)

Responding facilities 

conduct tabletop exercises

annually

Responding facilities 

conduct: a field exercise at 

least once every 5 years (and 

within one year of an RMP

reportable accident); 

tabletop exercises in the

other four years

Responding facilities 

conduct a field exercise 

annually

Information Disclosure

Disclosure to LEPC

(§68.205)

All facilities make certain information available to the LEPC or local emergency response 

officials upon request. 

Disclosureto the 

Public

(§68.210)

All facilities make certain chemical hazard information available to the public in an easily 

accessible manner.

Public Meeting

(§68.210)

Facilities hold a public 

meeting within 30 days of 

an RMP reportable 

accident.

P2 and P3 facilities hold a 

public meeting at least once 

every 5 years and within 30 

days of an RMP reportable 

accident.

All facilities hold a public 

meeting once every 5 

years and within 30 days

of an RMP reportable 

accident
Page 25 of 147

2.4 Impactsto Governments

The proposed rule imposes direct costs to local governments that own and operate RMP facilities 

(primarily water and wastewater systems, but also some power plants and swimming pools). The 

proposed rule also imposes indirect costs to local emergency response and planning agencies to review 

new information that would be submitted and to participate in exercises at the invitation of facility 

owners and operators. Although local agencies are not required to participate in exercises or review 

documents, many will do so. The RIA discusses and presentsthese costs separately.
Page 26 of 147

CHAPTER 3: UNIVERSE OF REGULATED FACILITIES

Approximately 12,500 facilities have filed current RMPs with 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 petroleumwholesalers 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. This chapter describes these facilities and how they 

are categorized for the purposes of the economic analysis.

3.1 Current RMP Facilities 

Exhibit 3-1 presents the number of facilities according to the latest RMP reporting as of February 2015

by industrial sector and chemical use. 

Exhibit 3-1: Number of Affected Facilities by Sector

Sector NAICS Codes Total Facilities Chemical Uses

Administration of 

environmental quality

programs (i.e., 

governments)

924 1,923 Use chlorine and other 

chemicals for treatment

Agricultural chemical 

distributors/wholesalers

111, 112, 115, 

42491 3,667

Store ammonia for sale; some in 

NAICS 111 and 115 use 

ammonia as a refrigerant

Chemical manufacturing 325 1,465 Manufacture, process, store

Chemical wholesalers 4246 333 Store for sale

Food and beverage 

manufacturing 311, 312 1,476 Use (mostly ammonia as a refrigerant)

Oil and gas extraction 211 741

Intermediate processing (mostly 

regulated flammable substances 

and flammable mixtures)

Other 44, 45, 48, 54, 56, 

61, 72 248

Use chemicals for wastewater 

treatment, refrigeration, store 

chemicals for sale

Other manufacturing 313, 326, 327, 33 384

Use various chemicals in 

manufacturing process, waste 

treatment

Other wholesale 423, 424 302 Use (mostly ammonia as a 

refrigerant)

Paper manufacturing 322 70 Use various chemicals in pulp 

and paper manufacturing

Petroleum and coal 

products manufacturing 324 156 Manufacture, process, store

(mostly regulated flammable 
Page 27 of 147

Sector NAICS Codes Total Facilities Chemical Uses

substances and flammable 

mixtures)

Petroleum wholesalers 4247 276

Store for sale (mostly regulated 

flammable substances and 

flammable mixtures)

Utilities 221 (except 22131, 

22132) 343 Use chlorine (mostly for water treatment)

Warehousing and storage 493 1,056 Use mostly ammonia as a 

refrigerant

Water/wastewater 

Treatment Systems 22131, 22132 102 Use chlorine and other chemicals

Total 12,542

Exhibit 3-2: Chart of Affected Facilities by Sector

The RMP rule applies to processes(i.e., activities involving regulated substancesincluding any use, 

storage, manufacturing, handling, or on-site movement of such substances, or combination of these 

activities) at facilitieswith regulated substances above threshold amounts. Many facilities may handle 

other chemicals that are not RMP-regulated or have processes that are not subject to the rule. In 

general,the cost of implementing the rule provisions varies primarily by the complexity of the processes 

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000
Page 28 of 147

involved. The chemical manufacturers and refineries have more covered processes perfacility and more 

complex issues to consider when evaluating hazards, designing exercises, conducting audits, 

investigating incidents, and explaining information to responders and the public compared to facilities 

that simply store or use chemicals in simple processes (e.g., refrigeration systems and water and waste 

treatment systems). For the purposes of the cost analysis, therefore, all facilities in NAICS 324 and 325 

(petroleum and coal productsmanufacturing and chemical manufacturing) are considered complex; all 

other facilities are considered simple.

The proposed STAA provision is limited to P3 processes in three sectors that have had a high frequency 

of accidental releases (NAICS codes 322, 324, and 325). These sectors were selected because they 

represent relatively complex processes that account for 49% of all RMP reportable accidents. 24 Exhibit 

3-3 presents the number of processes for all facilities by program level and for the three sectors, as well 

as the number of facilities within each program level.

Exhibit 3-3: Number of Processes by Program Level and Sector

Program Level Facilities Processes

1 642 1,096

2 1,272 5,448

3 10,628 14,454

Total 12,542 20,998

STAA Sectors Processes

NAICS 322 (Paper Manufacturing) 97

NAICS 324 (Petroleum and Coal Products Manufacturing) 1,453

NAICS 325 (Chemical Manufacturing) 2,758

Total 4,308

To analyze the STAA provision, EPA separated the processes in the three sectorsinto those that are 

more likely to involve manufacturing and reacting chemicals under more extreme conditions (i.e., high 

temperatures and pressures) from those that involve mixing and using chemicals under less extreme 

conditions. The former are the petroleum operations in NAICS 324, petrochemicals and other basic 

chemical manufacturing in NAICS 3251, and synthetics and resins in NAICS 3252. All other chemicals 

manufacturing sectors (agricultural chemicals, drugs, paints, soaps, and others) were merged with 

pulp/paper mills in the cost analysis and are assumed to mix and use chemicals under less extreme 

conditions. Exhibit 3-4presents the number of processes for the three sectors; NAICS codes 324, 3251, 

and 3252 are further disaggregated by the facility size because the level of effort for a STAA is likely to 

 24 February 2015 RMP Database.
Page 29 of 147

increase as the size of these more complicated processes increases, as measured by the number of FTEs 

involved in the process at the facility.

Exhibit 3-4: Number of Processes for STAA Sectors by Sector and Facility Size

Sector Processes 

Program 3

0-19 Full Time Equivalents 

(FTEs)

20-99 

FTEs

100+ 

FTEs

NAICS 324 (Petroleum and 

Coal products Manufacturing) 1,453 7 39 1,407

NAICS 325 (Chemical 

Manufacturing)

NAICS 3251 (Basic chemicals) 1,664 144 644 876

NAICS 3252 

(Synthetics/Resins) 400 14 151 235

NAICS 32XX (Other 

Chemicals) 694

NAICS 322 (Paper 

Manufacturing) 97

3.2 Divisions Used in Analysis

The RMP rule imposes different requirements on facilities based on Program levels. P3 processes are 

those that are not eligible for P1 and are subject to the OSHA PSM standard or are in certain NAICS 

codes (refineries, a limited number of chemical manufacturers, and pulp mills). Of the 2,442 processes

in the selected NAICS codes, all but 10 are listed assubject to OSHA PSM; two of the non-PSM processes

appearto have been misclassified (a wastewater treatment facility and farm co-operative) and three or 

four others may be subject to PSM (the substance listed is covered by OSHA at certain concentrations).

25

 25 Some facilities listed only 5-digit NAICS codes, so 10 other processes may be subject only to the RMP rule.
Page 30 of 147

Exhibit 3-5: Number of Facilities by Program Level

In July 2015, OSHA issued a new interpretation of its retail exemption, a policy that exempted certain 

employers under OSHA’s 1992 definition of “retail facility.” Prior to this change, most facilities that 

classified themselves as agricultural chemical distributors and many other wholesalers listed themselves 

as P2, because they were exempt from the OSHA PSM standard. The effect of the change in 

interpretation will make all of these facilities subject to OSHA’s PSMstandard and, therefore, subject to 

Program 3 of the RMP rule. To take that into account for this RIA, EPA has reclassified all P2 facilities 

that listed themselves in NAICS 11, 12, 15, 424 (wholesalers), and 493 (warehouses) as P3. As a 

consequence almost 85 percent of all RMP facilities (10,628) are now subject to P3 (See Exhibit 3-6). 

Most P2 facilities (935 out of 945) are publicly owned water/wastewater treatment facilities in States 

where OSHA (rather than the State) enforces OSHA rules26. As a resultof this difference, approximately

half of the water/wastewater treatment facilities have processes that are subject to P3 and half that are 

in P2 although there is no difference in the processes covered. The remaining P2 facilities are utilities 

that use aqueous ammonia and other facilities that use chemicals not subject to OSHA PSM. 27 Exhibit 3-

6 presents the number of facilities by sector and Program Level; publicly owned water/wastewater 

 26 For the reason why, please see Section 1.1 History above.

27 There are some facilities that listed themselves as P2 that have either selected the wrong Program level on the 

RMP submission or have incorrectly indicated that they are not subject to PSM, as they handle OSHA PSM 

chemicals in quantities far above the OSHA threshold. Because there are errors in the other direction among the 

public systems (i.e., facilities in States not subject to PSM that listed themselves as P3,), the analysis did not 

attempt to correct the errors.

P1 Facilities (642): 

Limited accident 

effects on public

P2 Facilities (1272): 

Not eligible for P1 or 

subject to P3

P3 Facilities (10628): 

Subject to OSHA PSM 

or in specified NAICS 

codes

Program 1 Program 2 Program 3
Page 31 of 147

treatment systems in the Exhibit are listed under governments (NAICS 92), while privately owned and 

operated systems are listed under NAICS 2213.

Exhibit 3-6: Number of Facilities by Sector and Program Level

Sector P1 P2 P3 Totals

NAICS 311, 312 Food and Beverage 

Manufacturer

3 11 1,462 1,476

NAICS 322 Pulp and Paper 1 1 68 70

NAICS 324 Petroleum 13 3 140 156

NAICS 325 Chemical 53 76 1,336 1,466

Other Manufacturing 62 73 249 384

NAICS 4246 Chemical Distributors 6 0 327 333

NAICS 4247 Petroleum Distributors 14 0 262 276

NAICS 11, 12, 15, 42491 Agricultural 10 0 3,657 3,667

NAICS 211 Oil and Gas Exploration 310 41 390 741

NAICS 2213 Water/Wastewater* 1 10 91 102

NAICS 221, 222 Utilities 38 72 233 343

NAICS 493 Warehousing 70 0 986 1,056

NAICS 423, 424 Other Wholesale 5 0 297 302

NAICS 92 Governments 15 935 973 1,923

Other 41 50 157 247

Total 642 1,272 10,628 12,542

* Except government-owned, which appear as NAICS 92 Government.

3.2.1 Facilities Affected by the STAA Requirement

For the medium cost alternative considered for the STAA (all P3 processes), processes outside of the 

three NAICS sectors discussed above were classified based on the level of effort needed to conduct the 

analysis. Moderate level of effort processes were those in other manufacturing sectors and 

refrigeration systems. Refrigeration systems were considered as moderate because they are usually 

large facilities that cool, chill, refrigerate, orfreeze various food or beverage products. Refrigeration 

systems occur in multiple NAICS codes; the food and beverage manufacturers and refrigerated 

warehouses(NAICS 49312) were the main sectors, but they also occur in agriculture, wholesale, 

terminals, and retail. Exhibit 3-7presents the number of processes in each of these categories. Water 

treatment systems, utilities, and gas plants were estimated to require a relatively low level of effort. 

Facilities that simply store chemicals for sale were estimated to require a very low level of effort to do 

an STAA because they generally have just tanks and loading/unloading equipment.
Page 32 of 147

Exhibit 3-7: Number of Other P3 Processes for STAA Alternatives by Type

Process Type/Level of Effort Number of P3 Processes

Manufacturing/Refrigeration Systems/moderate 3,460

Water/Gas/Utilities/low 1,899

Storage/very low 4,881

3.2.2 Universe Breakdown for Emergency Response Coordination and Exercise 

Requirements. 

The proposed requirements associated with emergency response depend on whether a facility responds 

to releases with its own personnel (or contractors) or relies on local public emergency responders. As 

explained above, the responding facilities were identified by examining information provided related to 

the emergency response plan in the RMP database. Exhibit 3-8presents the numbers of responding and 

non-responding facilities by complexity of the facility (refineries/chemical manufacturers as complex, all 

other facilities as simple) and by the number of full-time equivalent (FTE) employees on site, which 

affects the number of people involved in exercises. The large manufacturers were further divided 

because, unlike most of the facilities in the retail and wholesale sectors, they operate 24/7 and 

therefore have fewer workers at the facility at any one time than the FTE count listed in the RMP. For 

the analysis, large manufacturers were considered those with more than 300 FTE or potentially 100 FTE 

or more per shift (in general swing and night shifts have fewer employees onsite than the day shift if 

only because administrative personnel are not usually present). Hence, the analysis assigns costs to the 

773 manufacturers with 100 to 300 FTE the same as if they were in the 20-99 FTE category for the 

response provisions.

Exhibit 3-8: Responding and Non-responding Facilities by FTE and Complexity*

0-19 FTE 20-99 

FTE

100+ 

FTE

Total

Responding Facilities

Simple 1,640 880 1,466 3,986

Complex (NAICS 324, 325) 141 459 534 1,134

Total 1,781 1,339 2,000 5,120

Non Responding

Simple 4,728 899 731 6,358

Complex (NAICS 324, 325) 141 235 46 422

Total 4,869 1,134 777 6,780

Non-Responding (not in County with Hazmat Team)

Simple 3,242 358 280 3,880

Complex 77 141 14 232

Total 3,319 499 294 4,112

* Note: Exhibit does not include RMP facilities with only P1 processes
Page 33 of 147

A different way to classify facilities as small or large is based on the Small Business Administration’s 

standards for firms. The classification of RMP facilities on that basis is presented in Chapter 7.

3.2.3 Universe Breakdown for Provisions that Apply After an RMP Reportable Accident

Finally, the proposed third-party audit and root cause analysis provisions would apply only to facilities 

that have an RMP reportable accident (the root cause analysis provision would also apply to facilities 

that have a “near miss”). The existing rule requires reporting for accidental releases from covered 

processes with impacts that resulted in deaths, injuries, or significant property damage onsite, or known 

offsite deaths, injuries, evacuations, sheltering in place, property damage, or environmental damage. In 

practice, however, some facilities have reported accidental releases with no reported impacts. For the 

purposes of this analysis, EPA used only the number of RMP reportable accidents, which are those 

accidents with reported impacts. EPA analyzed the number of accidents reported during the prior 10-

year period. The reason is that prior to 2004, some facilities were still completing initial implementation 

of the rule; 2013 is the most recent year for which there are complete data28. Exhibit 3-9presents the 

number of RMP reportable accidents per year for 2004 through 2013. Exhibit 3-10 presents the number 

of RMP reportable accidents by industry sector for the same total 10-year timeframe.

Exhibit 3-9: RMP Reportable (Impact) Accident by Year

Year Impact Accidents

2004 197

2005 152

2006 140

2007 204

2008 168

2009 149

2010 128

2011 138

2012 118

2013 123

Total 1,517

Range 118 - 204

Average/Year 152

 28 A more detailed explanation is provided in Chapter 6.
Page 34 of 147

Exhibit 3-10: RMP Reportable Accidents by Sector

Sector Total 10-Year Accident Frequency per Facility

(over 10 years)

Refineries (NAICS 324) 169 1.08

Pulp and Paper (NAICS 322) 46 0.66

Chemical Manufacturers (NAICS 325) 530 0.36

Food/Beverage Manufacturers (NAICS 311, 312) 270 0.18

Other Manufacturers (All other NAICS 31-33) 53 0.14

Oil/Gas exploration (NAICS 211) 53 0.07

Warehouses (NAICS 493) 72 0.07

Other wholesalers (All other NAICS 423, 424) 20 0.07

Chemical/petroleum wholesalers (NAICS 4246, 4247) 38 0.06

Water/POTW (NAICS 22131, 22132, 92) 75 0.04

Agricultural Facilities (NAICS 11, 42491) 156 0.04

All Other 35 0.06

3.3 Government EntitiesAffected by the Rule

The rule affects governmental entities both directly and indirectly. Most of the facilities are water or 

wastewater treatment facilities, but there are some large swimming pools covered as well. Most of the 

governmental entities are cities, but the universe includes larger special districts (e.g., the Metropolitan 

Water District of Southern California) as well as some federal facilities. Of the governmental entities 

directly affected, 910 have one RMP facility, 268 have two regulated facilities, 60 have 3 facilities, 27 

have 4 facilities, and 27 have 5 or more. Not all facilities belonging to a governmental entity are located 

in the entity. There are fewer than 1,200 “parent” companies listed for publicly owned systems. 

Because facilities do not always list the owner or list variations of the owner’s name, it is not possible to 

develop an accurate estimate of the number of public entities affected by the rule. It is clear, however, 

that some of the larger cities and counties have a substantial number of facilities. For example, Los 

Angeles County owns and operates at least 33 facilities, which do not include the facilities owned by 

cities within the county.

Additionally, local or county governments will receive new information filed by RMP-regulated facilities

as a result of the proposed rule and may voluntarily participate in exercises held by facilities. Although 

this proposed rule doesn’t specify requirements for these government entities to review the information 

submitted or to take part in exercises, EPA expects that many of them will do so and therefore this 

analysis considers those indirect costs to local governments. The burden on any single local government 

will increase as the number of affected entities in its jurisdiction increases. Our cost estimates will 

reflect this added burden. There are 6,956 cities that have one or more RMP facilities. Although most 
Page 35 of 147

have only one RMP facility, a number have 20 or more, and there are counties with close to 200 RMP 

facilities(e.g., Harris County, TX). Thus, those counties with many RMP facilities may have greater 

indirect costs due to the additional volume of submitted information and requests for participation in 

exercises.

3.4 Limitations

The analysis assumes that every facility subject to the RMP rule has registered with EPA and filed an 

RMP. EPA recognizes that this may not be true. EPA and delegated implementing agencies search for 

and occasionally identify regulated facilities that have failed to submit RMPs.Historically, relatively few 

of these “non-filers” have been found, butwe have littlebasis for determining the full extent of such 

non-compliance. 

The RMP database may include facilities that are no longer operational. For this analysis, we removed 

one refinery (and nine processes) from the data because the facility appears to have closed in 2001 

without following the requirements to deregister. EPA recognizes there may be other facilities in the 

RMP database that are no longer operating.

The RMP facility population is dynamic. The number of RMP facilities and processes is expected to 

change over the period of analysis because of firms that will grow, shrink, close, or open in the near or 

distant future. Despite these expected changes, the analysis relies on the number and nature of RMP 

facilities and processes that exist as of the February 2015 RMP database as a constant estimate of future 

RMP facilities/processes. 

Finally, as discussed in more detail in Chapter 7, there are some problems with the data as filed with 

EPA. There are a number of facilities that list NAICS codes that are inaccurately applied, which means 

some facilities have misclassified themselves as P2 instead of P3, and for public facilities as P3 instead of 

P1 or P2. For example: EPA identified storage and terminal areas that were listed as refineries; 

agricultural co-operatives and refrigerated warehouses listed in multiple sectors; and large terminals 

listed as wholesalers, support for transportation, and warehouses. Although EPA has attempted to 

correct the most obvious problems, and the numbers in any category are EPA’s best estimate, they 

should be viewed as approximations. 
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CHAPTER 4: COSTS OF PROPOSED REVISIONS

This chapter outlines the assumptions used to estimate the incremental costs of the proposed revisions 

to the Risk Management Program and the alternative options under consideration. EPA does not 

estimate the baseline costs incurred to comply with the existing RMP regulations. 

The Agency sought to quantify and monetize costs where possible. When we were unable to quantify 

costs – for example, due to a high level of uncertainty about what actions would be taken as a result of 

the proposed change – we present a potential range of costs. The time frame of analysis is 10 years. As 

several of the proposed rule elements are required on a five yearperiod, we included a time span long 

enough to capture two full periods. 

Specific assumptions are outlined foreach rule provision below. The analysis employs a model facility 

approach in which representative facility categories were developed to reflect a variety of features 

expected to influence costs (e.g., process complexity, number of full-time employees, emergency 

response planning activities, etc.). Cost assumptions were developed for each model facility type and

addressed factors such as number of staff hours involved in implementing a provision, equipment costs, 

and fixed costs for contractor involvement. Prevailing wage rates were used to estimate per facility 

costs for rule provisions. With a model facility approach, the unit cost estimates represent averages that 

cover a wide variation in expected costs even within a single sector. Given the high level of uncertainty 

associated with the costs of some of the provisions, however, attempting to project costs for a more 

disaggregated universe would imply a level of knowledge of future costs that does not exist. 

4.1. Wage Rates

The Agency used the Bureau of Labor Statistics May 2014 Occupational Employment and Wage 

Estimates 29 to construct a weighted wage rate for different occupation categories. For all rule 

provisions, labor hours were assumed to be distributed across six general labor categories: 

Management, Corporate Management, Attorneys, Engineers, Production Staff, and Local Responders. 

The weighted wage rates for complex facilities (NAICS codes 324 and 325) were estimated separately 

from simple facilities because wages paid by these facilities are higher than in wholesale and 

government sectors, which dominate the simple facilities category. For each of the NAICS codes 

representing industries in the simple facilities category that are affected by the proposed rule provisions 

(Food and Beverage, Agricultural Facilities, etc.), standardized BLS Occupation Titles were identified to 

correspond to the six general labor categories. The wage rates for each BLS Occupation Title were 

multiplied by a fringe benefits factor of 1.5 to create a loaded wage rate. 30

 29 See http://www.bls.gov/oes/current/oes_nat.htm. 30 The benefits multiplier is based on an average for the sectors as estimated by BLS in its Employer Costs for 

Employee Compensation. BLS includes items such as sick leave and vacation as benefits. See 

http://www.bls.gov/news.release/ecec.nr0.htm.
Page 37 of 147

After loaded wage rates were established for each industry, they were combined to form a weighted 

average based on how prominent each industry waswithin its universe of facilities, eithersimple or

complex. Exhibit 4-1 presents the wage rates.

Exhibit 4-1: Weighted-Average Loaded Hourly Wage Rates (2014 Dollars)

Labor Category Simple Facilities Complex Facilities

Management $74.99 $99.64

Corporate Management $82.47 $100.71

Attorneys $101.81 $113.33

Engineers $55.22 $76.21

Production Staff $28.51 $41.56

Local Responders $53.43 $53.43

4.2 Rule Familiarization

RMP facility staff would require some time to review the final rule and determine which provisions apply 

to the facility. The time required for this review would be limited because most of the proposed 

provisions amend current requirements as opposed to introducing completely new provisions. Many of 

the provisions are straightforward such as those regarding public disclosure. Others apply only after an 

RMP reportable accident or near miss such as root cause analysis; relatively few facilities have 

reportable releases or near misses. Still others such asthe safer technology alternatives analysis are 

expected to take time to understand; however, apply to a limited number of facilities in sectors that are 

familiar with the issues associated with the rule provision. In addition to affected facilities, the analysis 

also assumed that all affected LEPC’s would need to review the rule to familiarize themselves with rules 

that affect facilities in their jurisdiction. EPA projects that all facilities with simple processes would need 

2 hoursto review the rule as would the few complex facilities in P1 and P2. Complex facilities in P3 are 

projected to spend 4 hours reviewing the rule. LEPC’s are projected to spend 1 hour reviewing the rule. 

Delegated state and local implementing agencies are projected to spend 4hours reviewing the rule. The 

unit costs are as follows:

• Simple facilities = 2 hour of management time or $149.97

• P1 and P2 complex facilities = 2 hour of management time or $199.28.

• P3 complex facilities = 4 hours of management time or $398.56.

• LEPCs = 1 hour of time or $53.43

• Delegated implementing agencies = 4 hours of management time or $299.94

4.3 Prevention Program Rule Provisions

Third-party Compliance Audits

The existing rule requires P2 and P3 facilities to conduct a compliance audit at least once every 3 years. 

The proposed provision requiresfacilities that have had RMP reportable accidents to contract with an 
Page 38 of 147

independent third-party to conduct the audit. The analysis estimated the cost of hiring a third-party to 

conduct the audit based on the public comments that EPA received through the July 31, 2014, Request 

for Information.Of the 14 comments providing input on the potential economic impacts of third-party 

audits, several comments specifically provided point estimates for the third-party auditor fee. 31 These 

estimates ranged between $10,000 and $20,000 for simpler facilities and up to $40,000 for complex 

facilities, and represented estimates for all auditor fees, including travel expenses. Thus, this RIA 

assumed $15,000 for simple facilities and $40,000 for complex facilities. These expenses are considered 

incremental to the costs for compliance audits that are covered in the original rule, as similar levels of 

facility staffing would be required to work with the third-party auditor (i.e., EPA does not expect the cost 

of the third-party auditor to be offset by cost savings from reduced staff levels of effort related to 

auditing). In addition, the analysis projects that management time would be devoted to identifying 

auditors, selecting an auditor, and contracting with that entity for third-party audit services.

The analysis estimates that the time required to contract for a third-party audit would vary with the 

complexity of the processes to be covered and multiple facility staff would be involved, except for the 

smallest category of facilities. At a minimum, one manager and one engineer would be involved to 

identify potential auditors and write the statement of work on which the auditor would base its bid. For 

larger firms that routinely contract and have contract departments, a contracts specialist and attorney 

would be part of the process. Many large firms and all governments would have standard contract 

language. Governments are estimated to spend more time on the contracting process, however, 

because most are required to solicit competitive bids and document the basis for the selection. Private 

firms may use a similar process but are not required to do so. Private firms are likely to spend time 

negotiating contract language after the award. In total, hourly assumptions and costs for a third-party 

audit are shown in Exhibit 4-2.

 31 See comments 0638 and 0667 – These two comments from industry specifically provided point estimates on the 

costs of third-party audits. One comment, received from J.R. Simplot Company, placed the cost of the audit 

between $36,000 and $40,000 for larger facilities, and approximately $20,000 for smaller, less complex facilities. 

The other comment, received from the American Coatings Association, indicated that third-party audits “could cost 

some of its member companies approximately $10,000 per facility.”
Page 39 of 147

Exhibit 4-2: Hourly Assumptions and Unit Costs for Hiring Third-party Auditors

Facility Type Total Hours for Contracting Process Facility 

Labor Cost

Auditor 

Fee

Total 

Management Attorneys Engineers Facility Cost

Simple w/ 0-19 FTEs 32 4 0 $2,807 $15,000 $17,807

Simple w/ 20-99 

FTEs

44 4 18 $4,701 $15,000 $19,701

Simple w/ 100+ FTEs 30 4 56 $5,749 $15,000 $20,749

Complex w/ 0-19 

FTEs 32 4 0 $3,642 $40,000 $43,642

Complex w/ 20-99 

FTEs 44 4 18 $6,209 $40,000 $46,209

Complex w/ 100+ 

FTEs 30 4 56 $7,710 $40,000 $47,710

Small Government 30 0 25 $3,630 $15,000 $18,630

Large Government 60 0 39 $8,951 $40,000 $48,951

Incident Investigation (Root Cause Analysis and Near Miss Investigation)

This proposed provision requiresthat facilities in specific program levels that have had an RMP

reportable accident or near miss incident conduct a root cause analysis, as part of their accident 

investigation, to determine the underlying reasons for the (near) failure. A root cause analysis is a 

structured process led by a person trained in the methodology. The time required may vary 

considerably based on the complexity of the processes involved. This analysis assumes that complex 

facilities would require 48 total hours (entirely engineering time) for a root cause analysis and simple 

facilities would spend 8 total hours (split evenly between engineering and production time). For near 

miss incidents, the analysis assumes that complex facilities would require 72 hours (12 hours of 

management, 36 hours of engineering, and 24 hours of production) for a complete near miss incident 

investigation and 14 hours (6 hours of management, 4 hours of engineering, and 4 hours production) for 

simple facilities.32 Root cause analyses for near miss incidents generally require more labor time across 

all categories because there are already investigation activities occurring with baseline accidents.

There are fewer additional hours required for RMP reportable accident root cause analyses because 

those accidents must already be investigated in the baselineand thus the effect of the proposed rule is 

only the net increase in labor for the root cause analysis. The increased labor affects only the 

engineering category for complex facilities, and only the engineering and production labor categoriesfor 

simple facilities. Root cause analyses for RMP reportable accidents are not expected to require 

additional management time beyond that already required for RMP reportable accidents. Management 

time is expected to be devoted primarily to decisions concerning resolution of corrective actions arising 

from the investigation, and these activities should require roughly the same amount of time whether 

corrective actions relate to root causes or other contributing causes. For simple facilities, additional 

 32 Assumptions based on EPA’s knowledge of industry practice.
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labor for root cause analyses was assumed to be evenly distributed between production staff and 

engineers. For complex facilities, all additional labor for root cause analysis was placed in the engineer 

labor category as a conservative estimation approach, as this category has a higher labor rate than 

production.

For near miss incidents that could reasonably have resulted in a catastrophic release, the existing rule 

already requires an incident investigation. However, EPA believes that in the baseline many facility 

owners and operators did not understand or comply with the existing near miss incident investigation

requirements, so this analysis assumes some additional time will be required across all labor categories 

for near miss investigations.

The estimate of the time required for an incidentinvestigation is based on estimates in the original RMP 

RIA, which relied on best professional judgement and comments on the original rule proposal received 

from industry 33. The estimates in the original RMP RIA involved development of a labor model that 

assumed investigations would involvea team of management, technical, and production staff, and that 

staff at larger and more complex facilities would require more hours to complete an investigation. This 

analysis used reduced labor assumptions for near misses because investigations of incidents that do not 

damage equipment or harm workers would be less difficult to conduct than those that have to recreate 

conditions that existed prior to the release. Simple facility costs are estimated to include $1,000 for a 

trained facilitator to assist with the investigation. Complex facilities generally have staff familiar with 

the methodology and would staff the root cause analysis in-house. Exhibit 4-3 displays the hours 

assumed for each labor category for each type of facility, and the estimated cost per facility.

Exhibit 4-3: Unit Cost for Root Cause Analysis and Near Miss Investigation

Managers Engineers Production Other Costs FacilityCost

Near Miss - simple 6 4 4 $1,000 $1,785

Near Miss - complex 12 36 24 $4,937

Accidents -simple 0 4 4 $1,000 $1,335

Accidents - complex 0 48 0 $3,658

Safer Technology and Alternatives Analysis (STAA)

This proposed provision requiresfacilitieswith P3 processesin NAICS codes 322, 324, and 325 to 

conduct an STAA as part of their process hazard analysis (PHA), which occurs every 5 years. STAA is 

generally a process in which facility staff analyze their current processes and practices to determine if 

there are safer alternatives to their current operating practice. This can range from small changes –

such as upgrading valves –to large shifts like substituting less toxic or volatile chemicals. 

This RIA divides the STAA process into three parts: 

 33 Economic Analysis in Support of the Final Rule on RMP Regulations for the Chemical Accident Release 

Prevention, as Required by Section 112(r) of the CAA, May 21, 1996.
Page 41 of 147

1. The initial analysis to identify alternatives; 

2. A feasibility study to determine the costs and assess the reasonableness of implementing the 

change in light of other costs and programs; and 

3. Implementation of alternatives (implementation is not required under the proposed provision). 

Hourly labor assumptions for the initial analysis and the feasibility study are based on guidelines 

published by the American Institute of Chemical Engineers / Center for Chemical Process Safety 

(AIChE/CCPS) and consultation with engineers who have extensive experience in performing hazard 

analyses. 34 AIChE/CCPS has published several guidelines addressing the subjects of hazard analysis and 

safer technologies. Among these are:

- Inherently Safer Chemical Processes – A Life Cycle Approach, Second Edition (AIChE/CCPS,2009);

- Guidelines for Hazard Evaluation Procedures, Second Edition (AIChE/CCPS, 1992); and,

- Guidelines for Hazard Evaluation Procedures, Third Edition (AIChE/CCPS, 2008).

In Guidelines for Hazard Evaluation Procedures, Third Edition, CCPS notes that “Inherent safety reviews 

can be conducted as separate studies using a form of HAZOP Study, or they can be incorporated into 

HAZOP studies conducted for other purposes.”35 Inherently Safer Chemical Processes – A Life Cycle 

Approach expands on this concept, and also provides information on additional approaches to 

incorporating safer technologies into process hazard analyses, including checklist, “What-If”, Failure 

Mode and Effects Analysis, and other analytical methods. Based on this information, EPA developed a 

labor model for safer technologies reviews adapted from the HAZOP study and What-If/Checklist 

approaches, which are PHA methods commonly used by facilities subject to this proposed provision. 

Guidelines for Hazard Evaluation Procedures, Second Edition contains information on the typical days of 

effort required to complete HAZOP and What-If/Checklist PHAs for small/simple and large/complex 

facilities. 36 EPA adapted this information, and incorporated additional labor hours to account for the 

proposed rule’s requirement to determine the feasibility of inherently safer designs considered. 

The estimated laborhours assumed facilitator and scribe labor costs, as well as facility team and 

management participation that increased with process complexity. Facilities in NAICS 322, 324, and 325 

are expected to have staff qualified to conduct the analysis in-house. All other facilities would be 

expected to hire a consultant to lead the team. Most of these other facilities use chemicals or store 

them, but often rely on engineering firms or maintenance contractors to design the equipment and do 

anything other than routine minor maintenance. They may not, therefore, have staff knowledgeable 

enough in the process and design to identify and evaluate alternatives. The technical feasibility 

assessment considers the extent of process redesign, its engineering implications, and possible costs. As 

stated, most facilities except the large facilities in NAICS 322, 324 and 325 are expected to seek help 

 34 EPA consulted with engineers at ABS Consulting. 35 “HAZOP” is an acronym for “Hazard and Operability Study,” which is one PHA methodology allowed under the 

RMP rule.

36 See Guidelines for Hazard Evaluation Procedures, Second Edition (AIChE/CCPS, 1992), Table 5.4.
Page 42 of 147

from consultants (i.e., engineering firms). Storage and distribution facilities, which generally are very 

simple (mostly large tanks with loading/unloading equipment) are not expected to need a consultant to 

assess feasibility because chemical substitution is not as great a possibility (these facilities usually sell 

the chemical in question) and because the technical issues are limited. For example, most bulk 

anhydrous ammonia distributors are not likely to substitute another chemical for anhydrous ammonia. 

Exhibit 4-4 displays the hours assumed for each task by labor category and type of facility, and the 

resulting per facility cost estimates.

Implementation of safer alternatives is not required under the proposed option. The high cost 

alternative would apply the requirement to all P3 processes and require facilities to implement feasible 

safer technologies and alternatives. However, EPA has not projected implementation costs for this 

option because of the high degree of uncertainty associated with such projections (see Chapter 5 for 

further explanation).

Exhibit 4-4: Hourly Assumptions and Unit Costs for STAA

Sector

Labor Hours

Facility 

Cost Corporate 

Manager Engineer Consultant

Initial Analysis

Large facilities NAICS 324-325 608 $40,240

NAICS 322, Small/Medium 324, 325 252 $13,109

Other Manufacturers, Refrigeration 

Systems 100 $9,808 $17,429

Water/Gas Plants/Utilities 36 $6,000 $8,744

Storage Facilities 36 $6,000 $8,744

Feasibility Analysis

Large facilities NAICS 324-325 24 80 $8,514

NAICS 322, Small/Medium 324, 325 16 80 $8,000 $15,708

Other Manufacturers 16 32 $8,000 $12,050

Water/Gas Plants/Utilities and 

Refrigeration Systems 8 32 $5,200 $8,444

Storage Facilities 8 32 $3,244

4.4. Emergency Response Preparedness Rule Provisions

4.4.1 Emergency Response Program Coordination with Local Responders

This provision would require all facilities with P2 or P3 processesto coordinate with local responders 

annually to make themaware of the hazards at the facility. If the facility is a non-responder and relies 

on the local response force then the coordination would primarily focus on any changes that have 

occurred at the facility and confirm existing response strategies or develop new ones.
Page 43 of 147

If the facility is a responder and in charge of responding to its own chemical emergencies then the 

coordination would primarily focus on informing local entities on what response capabilities are in place 

and how the community may be impacted. The analysis assumes that the coordination effort would 

average 4 hours of facility management time and 4 hours of time from LEPCs to participate in 

coordination activities. EPA based this estimate on input from an EPA regional official who regularly 

participated in emergency coordination meetings with local responders and regulated facilities. 37 The 

time required for any particular facility may vary depending on a variety of factors including the 

familiarity of the local responders with the facility and its hazards. For many facilities, this coordination 

may already occur voluntarily in the baseline and would therefore not be an added cost; for others, it 

could take considerable time to arrange a personal meeting. In other words, EPA recognizes that there 

will be variability across facilities in this cost but adopts two cost estimates that vary only depending on 

whether the facility is simple or complex. In addition to the coordination effort, the proposed rule also 

requires documentation of that effort. The analysis uses an average of 4 hours of management time 

and applies it across all applicable facilities, as opposed to estimating current compliance with this 

provision. The estimates of labor hours and unit cost estimates are shown in Exhibit 4-5.

Exhibit 4-5: Hourly Labor and Unit Costs for Coordination with Local Responders

Facility Type Management LEPCs Facility Labor Cost

Complex Facilities 4 4 $514

Simple Facilities 4 4 $612

This proposed provision may lead to some current facilities who are non-responders to convert from 

non-responder to responder status. To estimate a range of possible impacts of non-responder 

conversions, the analysis conducts a sensitivity analysis of how many conversions may happen among 

the population of facilities in counties without existing hazardous materials (hazmat) teams among local 

emergency responders. The sensitivity analysis provides cost estimates for the conversion of 25 

percent, 50 percent, and 75 percent of current facilities who are non-responders and located in counties 

without a hazmat team.

4.4.2 Notification Drills

The proposed rule requires all facilities with P2 or P3 processes to conduct a notification drill, during 

which a facility member checks each person and agency on its emergency action contact list, to ensure 

that the contact information is accurate (e.g.,that the person listed is still in that position and the phone 

numbers and email addresses are correct). As the contact list is somewhat limited (the number of 

organizations to be contacted must be small enough that the primary ones could be contacted quickly), 

 37 September 01, 2015 email communication from Steve Mason, EPA Region 6 to Jim Belke, EPA Office of 

Emergency Management.
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the analysis estimated that it would take no more than 2 hours of engineering staff time to verify the 

information. The unit costs are shown in Exhibit 4-6.

Exhibit 4-6: Hourly Labor and Unit Costs for Notification Drills

Facility Type Engineers Facility Labor Cost

Complex Facilities 2 $152

Simple Facilities 2 $110

4.4.3 Facility Exercises

Responding facilities are facilities that intend to develop and implement the emergency response 

program required under §68.95 in order to respond to releases at their site. The proposed rule requires 

such facilities to conduct an annual exercise of theiremergency response program developed in 

accordance with §68.95 and in accordance with the community emergency response plan developed 

under 42 U.S.C. § 11003. 38 At least once every 5 years, a full field exercise would be required; in other 

years, facilities may conduct a tabletop exercise where the participants work together to identify a 

scenario and then establish objectives for the response without actually mobilizing responders and 

employees. The objectives for both field and tabletop exercises would include: 

1. Identifying who would be contacted in an emergency, 

2. Procedures and measures for emergency response after an accidental release of a regulated 

substance (e.g., what equipment would be deployed, who would be evacuated, how decisions 

on public notification would be made, who would contact the public, etc.), and 

3. Proper first-aid and emergency medical treatment necessary to treat accidental human 

exposures. 

In a field exercise, all of the steps of a response are carried out (e.g., responders and equipment would 

be deployed). The purpose of a field exercise is to evaluate the ability of the responders and other 

employees to implement the emergency response plan on which they have been trained.

The cost of both types of exercises vary with the size and complexity of a facility. Every phase of the 

process – planning, exercise, and post-action evaluation –would require more time for larger and more 

complex facilities. Smaller facilities have a limited number of possible scenarios (from leaks to slow 

releases to total failure of a storage vessel). Larger facilities, and particularly those with complex 

chemical processes, have more possible failure modes and a greater possibility of the first release 

triggering additional releases or creating other risks. EPA developed estimates of the time associated 

with both types of exercises and the number of people who would be involved by seeking input from 

EPA regional staff who have routinely participated in both types of exercises and by reviewing exercise 

 38 Section 303 of Emergency Planning and Community Right-to-Know Act (42 U.S.C. §11003). 

http://www.gpo.gov/fdsys/pkg/USCODE-2011-title42/html/USCODE-2011-title42-chap116.htm
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reports provided by EPA regional offices. Labor hours and unit costs for tabletop and field exercises are 

presented in Exhibits 4-7 and 4-8, respectively.

Exhibit 4-7: Hourly Labor and Unit Costs for Table-Top Exercises

Facility Type Management Engineers Production Emergency 

Responders

Facility

Cost

Simple w/ 0-19 FTEs 24 34 11 26 $5,380

Simple w/ 20-99 FTEs 29 34 28 31 $6,507

Simple w/ 100+ FTEs 61 61 60 48 $12,218

Complex w/ 0-19 FTEs 24 34 11 26 $6,829

Complex w/ 20-99 FTEs 29 34 28 31 $8,301

Complex w/ 100+ FTEs 84 92 98 78 $23,621

Exhibit 4-8: Hourly Labor for Field Exercises

Facility Type Management Engineers Production Emergency 

Responders

Facility

Cost

Simple w/ 0-19 FTEs 30 38 23 60 $8,209

Simple w/ 20-99 FTEs 48 64 72 87 $13,835

Simple w/ 100+ FTEs 78 68 232 129 $23,111

Complex w/ 0-19 FTEs 30 38 23 60 $10,047

Complex w/ 20-99 FTEs 48 64 72 87 $17,301

Complex w/ 100+ FTEs 136 136 760 192 $65,758

4.5. Information Availability Rule Provisions

Public Information Availability

This provision assumes two primary types of activities related to public disclosure: (1) disclosure to the 

community, and (2) disclosure to local emergency planning committees and other emergency 

responders.

For disclosure to the community, facilities would be required to make certain information available to 

the public either on the facility’s website,through file sharing, or through some other means (e.g., 

providing information at a public library, or other public offices, or providing it via e-mail). The proposed 

information elements should be readily available to facility managers because most of the information is 

already compiled for compliance with various health and safety regulations. The Safety Data Sheets are 

documentsthat OSHA requires every facility to have available for its employees, andwhich contain

chemical hazard information required under 29 CFR 1910.1200. The names of chemicals and 5-year 

accident history are already collected for reporting in the RMP. Especially for simple facilities, this 

information is unlikely to change much from year to year; the only cost associated with this element is 

the time required to collect and review the information for accuracy. The analysis estimates that simple 
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facilities would spend 2 hours per year reviewing the information to ensure that it is up-to-date. 

Complex facilities may have more information to review because they may manufacture, process, and 

use multiple regulated substances in multiple processes. The analysis estimated that small complex 

facilities would spend 4 hours collecting and reviewing the information. Large complex facilities were 

estimated to spend 16 hours per year because management and possibly counsel would need to ensure 

that the information was not subject to any restrictions related to security or confidential business 

concerns.

LEPC Information Availability

For disclosure to local emergency responders, the provision would require facilities to draft and provide 

summaries of certain activities upon request –compliance audits, any incident investigations, any 

implementation of IST, and exercise reports. Facilities would also have to provide the 5-year accident 

history, but this element is reported in the RMP and should require little effort beyond updating. EPA 

estimates that the summaries would require corporate management and legal review to maintain 

organizational consistency (for corporations with multiple facilities) and removal of any legally sensitive 

materials, such as Chemical-terrorism Vulnerability Information (CVI) or Confidential Business 

Information (CBI). Complex facilities, which have more covered processes that are subject to provisions, 

are projected to spend more time developing and reviewing information prior to submission to local 

agencies. The analysis further estimates that LEPCs will require time to review materials as they are 

submitted. The amount of time required scales with the complexity of the facility. The labor hour 

assumptions for each type of disclosure to the community and to local emergency responders are 

shown in Exhibit 4-9.
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Exhibit 4-9: Hourly Labor and Facility Costs

For Information Disclosure to the Community and to Local Emergency Responders

Provision/Facility 

Type Management Corporate Management Attorneys Engineers LEPCs

Facility or 

Responder

Costs

Public Disclosure –

Small Complex 2 0 0 2 0 $352

Public Disclosure –

Large Complex 8 0 0 8 0 $1,407

Public Disclosure –

Simple 1 0 0 1 0 $130

Accident History –

Simple 0.5 0.5 0.5 1 0 $185

Accident History –

Complex 1 1 1 1 0 $390

Audit Report –

Simple 2 2 2 4 0 $739

Audit Report –

Complex 4 4 4 8 0 $1,864

Investigation 

Reports - Simple 4 4 2 4 0 $1,054

Investigation 

Reports – Complex 8 4 8 12 0 $3,021

IST – Simple 4 4 4 4 0 $1,258

IST – Complex 8 4 8 16 0 $3,326

Exercise Reports –

Simple 2 1 1 4 0 $555

Exercise Reports –

Complex 2 2 2 8 0 $1,237

LEPC Review –

Simple 0 0 0 0 1 $53

LEPC Review –Small 

Complex 0 0 0 0 2 $107

LEPC Review –Large 

Complex 0 0 0 0 4 $214
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4.5.1 Public Meeting

This provision would require RMP facilities to hold a public meeting immediately following (i.e., within 

30 days of) an accident. The analysis estimates that each facility would need to spend time planning for 

the meeting –deciding when and where to hold the meeting, arranging the meeting space, developing 

and posting notices of the meeting, and developing materials to be presented and distributed. In 

addition, at least two people from the facility would attend the meeting, which was estimated to take 4 

hours of the attendees’ time; even if the meeting is only 2 hours, attendees would have to arrive early 

and would stay after the official ending to talk with people, collect extra materials, and close up the 

meeting space.

For simple and small complex facilities, the analysis estimated that total time for preparation would be 

12 hours and attendance would be 8 hours (2 managers for 4 hours each). For large complex facilities, 

where the information presented may be more complicated and subject to legal concerns (security and 

confidentiality), the analysis estimated that the facility staff would spend 24 hours preparing and 

reviewing presentations and handouts; 4 facility staff (2 managers and 2 engineers) would attend the 

meeting. The costs for space are expected to vary from nothing, when the meeting can be held in a 

public building, to between $500 and $1,000 when a meeting space must be rented or where the facility 

has to pay overtime to a custodian (e.g., at a public school). The materials distributed would also 

impose some costs, but most facilities may produce them in-house. It has been EPA’s experience after 

the passage of CSISSFRRA39 that most facilities conducted meetings less than 1 day in length and used 

public facilities. To arrive at a point estimate for the cost of a meeting room, the analysis took a sample 

of meeting room costs from a variety of locations and used the average of $550. 40 The analysis further 

estimated that every facility would need to rent a meeting space, which likely overestimates the cost of 

this provision. Exhibit 4-10 displays the assumed hours by labor category and facility type, and the 

resulting estimated facility costs.

 39 Chemical Safety Information, Site Security and Fuels Regulatory Relief Act 40 Meeting room price was determined using the average price of 17 meeting venues that could accommodate at 

least 20 individuals. The analysis used meeting rooms from Chicago, Houston, Phoenix, Kansas City, Philadelphia, 

and Atlanta. Data were provided by evenues.com.
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Exhibit 4-10: Hourly Labor and Unit Costs for Public Meetings

Facility Type Management Engineers Production Other Costs Facility Cost

Simple Facilities 8 8 4 $550 $1,706

Small Complex Facilities 8 8 4 $550 $2,123

Large Complex Facilities 16 16 8 $550 $3,696

4.6 New Responders

This cost provision is not a specific requirement of the proposed rule but addresses situations in which 

current non-responders may convert to being responders. It also addresses one of the alternative 

options (the High Option) under Emergency Response Program Coordination with Local Responders. 

EPA is aware that some facilities have assumed that the public responders could respond to accidents at 

the facility when the communities do not, in fact, have nearby responders with appropriate training and 

equipment for the hazards present at the facility (e.g., a hazardous materials or “hazmat” team). EPA 

used an existing analysis of hazmat team locations obtained from the Federal Emergency Management 

Agency (FEMA). Those data were compiled for the 2012 National Preparedness Report to characterize 

the existing coverage of hazmat teams.

41 The 2012 report found that “the nation has developed a 

mature set of assets for addressing hazardous materials incidents.” There were approximately 1,100 

state and local hazmat teams identified, and the FEMA report concluded that 76% of the population is 

covered by these hazmat response teams.

42. EPA used those data to estimate the number of RMP 

facilities that could potentially be required to develop an emergency response program. (See chapter 5 

for more detail on this subject).

The cost estimate for facilities that need to become responders assumes seven types of activities:

• Emergency response plan development, 

• Training, 

• Equipment purchase, 

• Tabletop exercises,

• Field exercises, 

• Emergency response program coordination with local emergency response officials, and 

• Public disclosure of exercise reports. 

For each activity category, the analysis categorizes facilities by complexity and size according to FTEs. 

 41 https://www.fema.gov/media-library/assets/documents/26675 42 The approach for estimating the 76% was roughly based on the population in proximity to a hazmat team.
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Emergency response plan development, training, and equipment purchase all use hourly assumptions 

estimated based on the requirements set by the OSHA Hazardous Waste Operations and Emergency 

Response (HAZWOPER) Standard (29 CFR 1910.120(q)), which any employer whose employees respond 

to releases of hazardous materials must meet. 43 Any employer whose employees would respond to the 

hazmat incidents must develop an emergency response plan and train the workers on responding to the 

particular hazards they may face. Based on discussions with EPA staff involved in emergency response 

planning, complex facilities are assumed to require 32 hours of manager time, 40 hours of engineering 

time (5 engineers spending 8 hours each), and 32 hours of production staff time to develop an 

emergency response plan. Simple facilities are assumed to require 16 hours of manager time, 16 hours 

of engineering time (4 engineers spending 4 hours each), and 8 hours of production staff time. The 

analysis estimates that all new responders will develop a plan in year 1, and then they will expend 10 

percent of the initial costs every year thereafter to maintain the plan.

Equipment purchase cost estimates were based on publicly available equipment vendor costs and EPA’s 

own experience of whatwould reasonably be required to respond to an incident. The list of items and 

costs estimates is as follows:

 43 The HAZWOPER standard uses the phrase “hazardous substances” but defines it to cover all DOT hazmat; 

regulated substances are a small subset of DOT hazmat.
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Exhibit 4-11: New Responder Equipment Costs44

Item Cost Per Item Number of Items Total Cost

Level A Suit $1,750 6 $10,500

Tyvek Suit (bulk pack) $200 1 $200

Cryogenic Gloves $180 10 $1,800

Chemical Resistance Boots $150 6 $900

Vinyl Boot Covers $7.00 6 $42

Neoprene Boot Covers $100 6 $600

Nitrile Rubber Gloves $12 6 $72

Viton Rubber Gloves $10 6 $60

PVC/Nitrile Gloves $56.95 6 $341.70

Self-contained Breathing Apparatus $5,500 6 $33,000

Spare Bottles SCBA $800 6 $4,800

Chlorine Kit “A” $2,300 1 $2,300

Chlorine Kit “B” $2,500 1 $2,500

Non-sparking Tool Kit $900 1 $900

Sledgehammer $55 3 $165

Bolt Cutter $85 1 $85

Sorbent Pad (100/bundle) $64 1 $64

Neutralizer (5 gallon bucket) $436 1 $436

Eye Wash Station $129 1 $129

Plastic Pools $10 3 $30

Total $58,925

The analysis used a point estimate for equipment costs of $60,000 for complex facilities and local 

government, and $50,000 for simple facilities, based on the number of staff who would be expected to 

use the equipment as fewer accidents occur at simple facilities relative to complex facilities.

In addition to plan development and equipment, the OSHA HAZWOPER Standard requiresthat any 

workers who may respond to hazmat releases to obtain training on proper procedures. At a minimum, 

responders need 24 hours of classroom training; at least two responders in any team need more 

extensive training, 40 hours of classroom training, and 3 days of operational training. A minimum 

hazmat team would include 5 responders; at least 4 responders are needed for any release45, and 1 

other would need to be trained to ensure that a facility had a full complement at any time (to cover 

vacations/sick leave/travel). Complex facilities and governments are estimated to need at least 6 

 44 Facility equipment costs are based on an estimate developed by EPA Region 6 emergency responders. Costs 

assume open market pricing for equipment needed to equip a six-person hazardous materials response team. See 

email from Steve Mason, EPA Region 6, to Jim Belke, EPA Office of Emergency Management, of June 2, 2015.

45 This is the minimum number of responders necessary to meet the emergency site entry team and backup 

personnel requirements specified under 29 CFR 1910.120(q)(3)(v) and (vi).
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responders. Because the training is generally available only in major cities, the analysis included travel 

time and per diem costs.

Most of the RMP facilities outside of the manufacturing sector are staffed only during the day, 5 days a 

week. The analysis estimates that they would, therefore, have only one hazmat team comprised of a 

single 5-person team. Manufacturing plants generally operate 24/7. Based on EPA’s experience, the 

analysis estimated that chemical manufacturers and refineries would have hazmat teams of at least 6 

people per shift, with 4 teams needed to cover the entire facility at all times. 46 Other manufacturing 

and large facilities were estimated to have a single 6-person team that is on-call for the off hours.

Based on EPA’s experience, the cost of training ranges from $450 (for the 24-hour course) to $1,600 (for 

the 72-hour course). 47 The analysis, therefore, used $450 and $800 for the training fees and $100 per

day for travel and expenses.

48 Beyond the training fee, the facility would have to pay the employees for 

their time and travel costs. Exhibits 4-12 and 4-13 present the hourly labor assumptions for emergency 

response plan development and training, respectively:

Exhibit 4-12: Hourly Labor for New Responder Emergency Response Plan Development

Facility Type Management Attorney Engineers Production Emergency 

Responders

Facility

Cost

Simple 16 0 16 8 0 $2,311

Complex and 

Local 

Government

32 0 40 32 0 $7,567

Exhibit 4-13: Hourly Labor for New Responder Training

Facility Type Management Attorneys Engineers Production Training Fees and 

Travel Expenses

Facility 

Cost

Simple 0 0 72 80 $4,850 $11,107

Complex w/ 

0-99 FTEs or 

Local 

Government

0 0 96 80 $5,600 $16,241

Complex w/ 

100+ FTEs 0 0 384 320 $22,400 $64,964

 46 A 3-shift schedule requires 5 shifts of workers to operate 24/7. 47 Some vendors provide training that is exclusively on-line and consequently considerably less expensive; OSHA 

has indicated in interpretation letters that such training is not sufficient to meet the requirements of the standard.

48 $100 per day is considered a blended average of likely travel expenses. GSA per diem rates generally suggest 

hotel rates of between $89 to upwards of $200 depending on the area and time of year. Meals and incidental 

expenses are in addition to that amount. However, state and local officials are generally not allowed per diems if 

travel and training is within 50 miles of home offices and private employers may seek to take training that is close 

to their location to minimize travel or overnight stays.
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New responders have ongoing costs that are different than the initial unit costs. As required by OSHA, 

the analysis estimates that each of 5 trained staff, for simple facilities, will need to undergo a refresher 

course annually that costs $100 per person. For large complex facilities, the analysis estimates that all 

24 trained staff will undergo the training. In addition, it is estimated that staff turnover will create 

additional initial training needs. All facilities are estimated to train one new responder per year. 

Assumptions for Tabletop and Field Exercises, and disclosure activities can be found in those respective 

sections of this chapter.

This portion of the analysis, although not a provision to itself, estimates the costs of non-responders 

converting to responders. Chapter 5 presents the total cost of the rule with a sensitivity analysis of 25 

percent, 50 percent, and 75 percent of current non-responders not in a county with a Hazmat team 

converting to responder status. One of the proposed options (the high option) for coordination with 

local responders requires all facilities to be responders (100 percent conversions).
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CHAPTER 5: TOTAL COSTS

EPA considered multiple options representing a range of costs for most of the proposed rule 

provisions.

49 This chapter presents the total costs of provisions by option, as well as total proposed rule 

costs, undiscounted, discounted, and annualized. Costs are projected over 10 years and discounted at 3 

percent and 7 percent. The time period was chosen because it islong enough for two rotations of the 

least frequent required activities (which occur every five years).

This chapter is organized as follows:

• Section 5.1 presents the broad analytical assumptions used in the analysis focusing primarily on 

the annual frequency of rule provision activities. 

• Section 5.2 shows the rule familiarization costs. 

• Section 5.3 describes the total costs associated with the proposed prevention program 

provisions –third-party compliance audits, incident investigation, and STAA. 

• Section 5.4 describes the total costs associated with the proposed emergency response 

preparedness provisions –emergency response program coordination with local responders, 

notification exercises, and facility exercises. 

• Section 5.5 describes the total costs associated with the proposed information sharing 

provisions –information sharing with LEPCs, information sharing with the public, and public 

meetings. 

• Section 5.6 describes the sensitivity analysis of total costs associated with the potential for 

current non-responding facilities to convert to responding facilities as a result of the proposed 

changes to the emergency response program coordination provisions. The analysis includes 

varying assumptions of the percentage of non-responding facilities that may become 

responders. 

• Section 5.7 shows the total costs for each rule provision option, as well as the total cost for the 

proposed rule.

5.1 Analytical Assumptions

Annual Frequency

The analysis generally divided total costs into initial year costs and ongoing costs. For provisions or 

options in which the activity occurs in several year increments, the annual frequency is a fraction 

representing what portion of facilities would likely be implementing the provision in any given year. For 

example, if an activity is expected to happen once every 5 years, the annual frequency would be 0.2, as 

20 percent of the applicable facilities would likely be completing the activity in any given year. The 

assumption that implementation would be distributed evenly across time (i.e., if facilities are required to 

 49 See Chapter 2 for detailed presentation of the options considered.
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conduct an activity once every 5 years, that one fifth would do it in any one year) may overstate the 

costs for some years and understate them for others. This issue primarily concerns the STAA and the 

medium and high options for third-party audits. The STAA is part of the PHA, which must be updated 

every 5 years. If facilities have maintained that schedule from the first PHA they conducted (i.e., they 

have not had to update the PHA prior to the 5-year anniversary, which would reset the clock for the next 

update), these costs may be concentrated over 1 to 3 years rather than distributed evenly over 5 years 

because facilities had 3 years to come into compliance with the original rule. The same issue arises with 

third-party audits when applied to all compliance audits in the medium and high options; all of the costs 

could occur in a single year as facilities’ first audit may have occurred in 1999. EPA, however, has no 

information on how frequently facilities have conducted PHAs or audits before the renewal date 

because of process or procedural changes, accidental releases, or information on risks that they thought 

needed to be reconsidered. 

Initial and Ongoing Costs

The analysis only used an ongoing cost when costs for years 2-10 were not the same as the initial cost 

components. If costs for years 2-10 were the same as the initial year (with some variation based on the 

annual frequency), then multiplying the initial cost by the annual frequency accounted for any 

continuing costs. The only proposed rule provisions with ongoing costs different from the initial costs 

are found for new responders (Section 5.5).

Capital Costs

The analysis did not monetize any capital costs (see the discussion on STAA implementation costs). The 

costs of equipment purchased for facilities becoming new responders has not been amortized. Although 

individual items of response equipment are relatively low cost, the overall cost of purchasing response 

equipment may cause some facilities to choose to finance response equipment purchasesin order to 

spread the costs over several years, while others may treatthemas an operating expenseand pay in a 

single year. By not amortizing responder equipment costs in this analysis, EPA is making the 

conservative assumption that facilities will pay these initial costs in a single year.
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5.2 Rule Familiarization

EPA did not analyze any options for rule familiarization, as this is not a provision of the rule, but rather a 

necessary cost of any rulemaking. All facilities and local governments are estimated to be affected by 

rule familiarization.

Exhibit 5-1: Rule Familiarization

Facility Type Unit Cost Facilities Total Initial Cost

Simple $150 10,921 $1,637,844

P1 and P2 Complex $199 145 $28,896

P3 Complex $399 1476 $588,278

LEPCs $53 1724 $92,113

Delegated Implementing Agencies $300 14 $4,199

Total 14,266 $2,351,330

5.3 Prevention Program Rule Provisions

Third-party Compliance Audits

EPA analyzed three options for the proposed requirement that a facility hire a third-party to conduct the 

compliance audit required under the existing rule. Under the existing rule, P2 and P3 facilities must 

conduct a compliance audit at least once every 3 years. 

Low Option (Proposed): Applicable to P2 and P3 Facilities Following an Accident

The low option would impose the requirement for a third-party auditor only on P2 or P3 facilities that 

had a reportable accidental release. These facilities would be required to contract with a third-party for 

their next scheduled compliance audit. Accident numbers are based on the RMP data fromRMP

reportable accidents, referenced in Exhibit 3-9, and are estimated based on the 10-year annual average. 

The RMP database contains data on accidents that have had reportable impacts, but also those without. 

Since this provision does not require third-party audits for accidents without any reportable impacts, we

deducted the number of accidents with no impactsfromthe total number of accidents in the RMP 

database. We also deducted the number of accidents that occurred at P1 facilities, as the proposed 

provision would only apply to P2 and P3 facilities. The analysis projects that the annual number and 

distribution of accidents among types of facilities will remain the same and that in any one year, the 

number of facilities conducting a third-party audit will be equal to the number of accidents.

50 That is, 

although the approximately 148 third-party audits for the P2 and P3 facilities that have a reportable 

release in 2016 may occur up to 3 years after the releases, depending on when the previous audit 

 50 EPA recognizes that subsequent to the current rule taking effect, accident rates may decrease but wishes to 

calculate a conservative cost estimate so assumes a constant accident rate.
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occurred, the analysis projects that over time, about 148 facilities would conduct such an audit each 

year. 51 The breakout for total costs is shown in Exhibit 5-2:

Exhibit 5-2: Total Annual Undiscounted Costs for Third-party Compliance Audits (Low Option)

Facility Type Annual Frequency Unit Cost Facilities Total Initial Cost

Simple w/ 0-19 FTEs 1 $17,807 19 $338,329

Simple w/ 20-99 FTEs 1 $19,701 15 $295,509

Simple w/ 100+ FTEs 1 $20,749 39 $809,219

Complex w/ 0-19 FTEs 1 $43,642 3 $130,925

Complex w/ 20-99 FTEs 1 $46,209 13 $600,722

Complex w/ 100+ FTEs 1 $47,710 53 $2,528,654

Small Government 1 $18,630 3 $55,890

Large Government 1 $48,951 4 $195,803

Total 149 $4,955,052

Medium Option: Applicable to All P3 Facilities

Under the medium option, all P3 facilities would have to hire a third-party to conduct compliance audits 

at the facility every three years. The analysis projects that a third of P3 facilities would, therefore, be 

conducting a third-party audit every year. Facility numbers are based on the RMP data and can be 

found in Exhibit 3-6. The breakout for total costs is presented in Exhibit 5-3.

Exhibit 5-3: Total Annual Undiscounted Costs for Third-party Compliance Audits (Medium Option)

Facility Type Annual Frequency Unit Cost Facilities Total Initial Cost

Simple w/ 0-19 FTEs 0.33 $17,807 5,488 $32,248,846

Simple w/ 20-99 FTEs 0.33 $19,701 1,093 $7,105,816

Simple w/ 100+ FTEs 0.33 $20,749 1,582 $10,832,330

Complex w/ 0-19 FTEs 0.33 $43,642 255 $3,672,460

Complex w/ 20-99 FTEs 0.33 $46,209 665 $10,140,641

Complex w/ 100+ FTEs 0.33 $47,710 572 $9,005,826

Small Government 0.33 $18,630 451 $2,772,718

Large Government 0.33 $48,951 522 $8,432,251

Total 10,628 $84,210,888

 51 The number of audits may be overstated because the number of facilities that had reportable releases over the 

ten-year period considered (1272) is lower than the number of releases reported (1516), according to the RMP 

accident database, as some facilities may have multiple accidents.
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High Option: Applicable to All P2 and P3 Facilities

Under the high option, all P2 and P3 facilities would have to hire a third-party to conduct compliance 

audits at the facility every three years. The analysis projects that a third of P2 and P3 facilities would, 

therefore, be conducting a third-party audit every year. Facility numbers are based on the RMP data 

and can be found in Exhibit 3-6. The breakout for total costs is presented in Exhibit 5-4.

Exhibit 5-4: Total Annual Undiscounted Costs for Third-party Compliance Audits (High Option)

Facility Type Annual Frequency Unit Cost Facilities Total Initial Cost

Simple w/ 0-19 FTEs 0.33 $17,807 6364 $37,396,439

Simple w/ 20-99 FTEs 0.33 $19,701 807 $5,246,471

Simple w/ 100+ FTEs 0.33 $20,749 1,262 $8,641,214

Complex w/ 0-19 FTEs 0.33 $43,642 285 $4,104,515

Complex w/ 20-99 FTEs 0.33 $46,209 694 $10,582,865

Complex w/ 100+ FTEs 0.33 $47,710 580 $9,131,781

Small Government 0.33 $18,630 972 $5,975,791

Large Government 0.33 $48,951 936 $15,119,899

Total 11,900 $96,198,975

Incident Investigation (Root Cause Analysis and Near Miss Investigation)

The RMP rule currently requires the owner or operator of a facility to investigate each incident which 

resulted in, or could reasonably have resulted in a catastrophic release (i.e., including a near miss). EPA 

is proposing to require a root cause analysis be conducted as part of the incident investigation and 

analyzed three options:

Low Option: Applicable to P3 Accidents and Near Misses

The low option would require P3 facilities to conduct root cause analyses for any RMP reportable 

accident and to investigate and conduct a root cause analysis for near misses. The current rule requires 

investigation of near misses as well, but due to significant noncompliance with this provision, the costs

of near miss investigations are being included in this analysis. The analysis estimates that there would 

be one near miss for each RMP reportable accident. The number of actual near misses is unknown and 

depends on a judgment of the seriousness of an incident and belief that it could reasonably have 

resulted in a catastrophic release. Industry estimates for the cost of incident investigations vary widely.
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Exhibit 5-5: Total Annual Undiscounted Costs for Root Cause Incident Investigation (Low Option)

Facility Type Unit Cost Facilities Total Initial Cost

P3 Near Miss – Simple $1,785 75 $133,863

P3 Near Miss – Complex $4,937 68 $335,695

P3 Accident – Simple $1,335 75 $100,119

P3 Accident – Complex $3,658 68 $248,758

Total 286 $818,435

Medium/High Option (Proposed): Applicable to P2 and P3 Accidents and Near Misses

The medium/high option would apply the requirements for root cause analysis and near miss 

investigation to all P2 and P3 facilities. Accident numbers are drawn from the data on RMP reportable 

accidents, referenced in Exhibit 3-9. 

Exhibit 5-6: Total Undiscounted Costs for Root Cause Incident Investigation (Medium/High Option)

Facility Type Unit Cost Facilities Total Initial Cost

P2 Near Miss – Simple $1,785 5 $8,924

P2 Near Miss – Complex $4,937 1 $4,937

P3 Near Miss – Simple $1,785 75 $133,863

P3 Near Miss – Complex $4,937 68 $335,695

P2 Accident - Simple $1,335 5 $6,675

P2 Accident - Complex $3,658 1 $3,658

P3 Accident - Simple $1,335 75 $100,119

P3 Accident - Complex $3,658 68 $248,758

Total 298 $842,629

Safer Technology AlternativesAnalysis

EPA analyzed three options for the proposed requirement to conduct an STAA, but monetized costs for 

only two of the options. 

Low Option (Proposed): Applicable to a Subset of P3 Facilities

The low option would apply the rule provision to a subset of P3 processes – those in NAICS codes 322 

(pulp and paper manufacturing), 324 (petroleum and coal products manufacturing), and 325 (chemical 

manufacturing) –and require owner/operators to conduct an initial evaluation and feasibility study of 

potential safer technologies every 5 years as part of the PHA. EPA is not proposing to require 

implementation of any particular technology.
Page 60 of 147

Exhibit 5-7: Total Undiscounted Costs for STAA (Low Option)

Facility Type Annual Frequency Unit Cost Processes Total Initial Cost

Paper and Small/Medium Complex 0.2 $28,817 1,783 $10,276,120

Large Complex 0.2 $48,754 2,514 $24,513,659

Total 4,297 $34,789,779

Medium Option:Applicable to all P3 processes

The medium option would impose the requirement to conduct the initial analysis and determine 

feasibility on all P3 processes every 5 years as part of the PHA. Exhibit 5-8 presents the costsfor the 

medium option.

Exhibit 5-8: Total Undiscounted Costs for STAA (Medium Option)

Facility Type Annual 

Frequency

Unit Cost Processes

Total Initial 

Cost

Initial Phase Analysis

Paper and Small/Medium Complex 0.2 $13,109 1,783 $4,674,512

Large Complex 0.2 $40,240 2,514 $20,232,785

Simple Manufacturing 0.2 $17,429 455 $1,586,062

Water/POTW 0.2 $8,744 1,178 $2,060,004

Intermediate Gas Processing and Utilities 0.2 $8,744 721 $1,260,835

Refrigeration 0.2 $17,429 3,005 $10,474,982

Storage 0.2 $8,744 4,881 $8,535,553

Feasibility Analysis

Paper and Small/Medium Complex 0.2 $15,708 1,783 $5,601,609

Large Complex 0.2 $8,514 2,514 $4,280,874

Simple Manufacturing 0.2 $12,050 455 $1,096,566

Water/POTW 0.2 $8,444 1178 $1,989,522

Intermediate Gas Processing and Utilities 0.2 $8,444 721 $1,217,695

Refrigeration 0.2 $9,250 3005 $5,559,357

Storage 0.2 $3,244 4881 $3,167,271

Total 14,537 $71,737,628*

*Total may not sum due to rounding

High Option

The high option for STAA would require all P3 facilities to implement any STAA optionsthat the facility 

determined are feasible. Thus the costs for this option include the annual $71.7million estimated above 

for initial and feasibility analyses plus implementation costs. EPA has not projected implementation 

costs for this option because of several problems that result in a high degree of uncertainty associated 

with such projections. First, what exactly facilities consider to be a safer or inherently safer change has
Page 61 of 147

various interpretations. EPA reviewed the IST implementation reported by New Jersey (NJ)52 and Contra 

Costa County 53, where State and local laws require the analysis, to evaluate what types of changes might 

be expected from facilities. Contra Costa County officials disagreed with categories made by oil 

refineries and reclassified the majority of the items listed by three refineries from inherently safer to 

active or passive changes –active being changes that require operator intervention and passive being 

those that are automatic. NJ and commenters on the NJ program labeled the majority of changesthat

facilities claimed as IST as not IST. The descriptors applied to IST–minimization,substitution, 

moderation, and simplification –can often be applied to active and passive STAA measures, as well. 

Second, the high option would require facilities to adopt feasible IST changes, and the judgement 

regarding feasibility is subjective and thus very difficult to predict. The proposed rule defines feasible to 

mean “capable of being successfully accomplished within a reasonable time, accounting for economic, 

environmental, legal, social, and technological factors. Environmental factors would include 

consideration of potential transferred risks for new risk reduction measures.” For example, switching 

from chlorine to other water treatment methods is clearly technically possible; about half of the systems 

originally subject to the rule have made the switch away from chlorine and avoided continued coverage 

under the RMP rule. Whether it is feasible for a particular system would be driven by various factors, 

including the risk posed by the facility (e.g., is it close to inhabited areas or at some distance), other 

demands on the operating government (e.g., does the system need to replace aging pipelines, install 

water monitors, increase sewage treatment capacity, etc.), and perhaps other considerations. Most 

RMP facilities pose a variety of risks to workers and the public; any investment in risk reduction would 

be assessed at each facility in the context of those other risks. For example, most of the facilities with 

refrigeration systemssubject to the rule are involved in food processing and storage; the risks to the 

public of food contamination or spoilage from less effective refrigerant processesmay outweigh the risk 

of an ammonia release when determining where to invest capital funds. Many facilities subject to the 

rule have a wide range of environmental regulatory requirements, from reducing air emissions and 

avoiding spills, treating effluents, to reducing greenhouse gas emissions. Facilities may also have 

requirements related to chemical security. Some alternative refrigerants, such as CFCs and HCFCs, cause

ozone depletion. Changing to a different refrigerant such as carbon dioxide, a cheap and non-toxic 

refrigerant, would require different equipment to accommodate higher working pressures involved and 

may only be cost effective for new systems. All of these, as well as other concerns,mightbe factored 

into a facility owner’s decisions on where best to spend resources. 

Third, the costs of STAA changes range widely. A study of some human factors in the chemical process 

industry, presented in 2001, reported on changes that reduced risks to humans. The cost of these 

 

52 NJ DEP. January 15, 2010. Inherently Safer Technology (IST) Implementation Summary. New Jersey Department 

of Environmental Protection (NJDEP), Trenton, NJ. 

http://www.nj.gov/dep/rpp/brp/tcpa/downloads/IST_SUMWEB.pdf 53 CCHS. December 9, 2014. Annual Performance Review and Evaluation- Industrial Safety Ordinance. Contra 

Costa County Health Services (CCHS), Contra Costa County, CA. http://cchealth.org/hazmat/pdf/iso/iso-report.pdf.
Page 62 of 147

reductions ranged from less than $1,000 to about $100,000 (in current dollars). 54 The costs of replacing 

chlorine in water treatment systems are far higher.

55. Construction costs ranged from $650,000 to $13 

million and operating costs ranged from cost-savings to positive costs of $2.4 million or more a year. 

EPA obtained information on the cost of replacing or modifying hydrogen fluoride (HF) which is used at 

47 refineries for alkylation. Costs for installation of technology that involved reducing the volatility of HF 

by using an additive was estimated to range from $3.64 million to $7 million.56 The cost of conversion to 

use of a solid acid catalyst replacing HF is estimated at $50 million. 57It costs approximately $50 million to 

convert an HF alkylation unit to sulfuric acid, however, conversion is estimated to be one-half to twothirds of the cost of installing a new sulfuric acid alkylation unit.

58 Switching refrigerantsfrom an 

anhydrous ammonia to an ammonia-glycol systemappears to typically cost $4 to $6 million. 59 EPA has 

not projectedwhether the larger quantity of sulfuric acid that a refinery would need to replace HF 

would increase costs or whether there would be other changes in the operating costs. It is likely that 

any switch from ammonia, as the sole refrigerant, would increase the basic cost of refrigeration and 

increase other operating costs, as ammonia is generally more efficient (i.e., uses less energy) than other 

refrigerants. Chemical substitution, in any case, would be possible at less than half the facilities; the rest 

either manufacture the regulated substances or store them for sale. Some examples of lower cost 

measures include removing sampling stations, replacing vessel sight glasses withmagnetic level 

indicators, removing dead-leg piping, using smaller diameter pipe or seal-less pumps, lowering storage 

inventories, andmoderating process conditions such as operating temperature and pressure. 

EPA also has little information about the actual costs associated with somewhat larger projects that 

would replace, for example, piping or pumps with those made with stronger materials. The costs of 

these would be facility-specific and could vary widely. In short, as the previous examples indicate, a 

requirement to implement feasible STAA could add substantially to the cost of the rule.

5.4 Emergency Response Preparedness Requirements

5.4.1 Emergency Response Program Coordination with Local Responders

EPA analyzed two options related to coordination. The current rule requires owners or operators of 

regulated facilities with Program 2 or 3 processes to coordinate with local response authorities and in 

some cases develop an emergency response program in accordance with §68.95 except when the 

stationary source is included in the community emergency response plan developed under section 303 

 54 Attwood, Dennis and David Fennell, “Cost-effective Human Factors Techniques for Process Safety,” CCPS 

International Conference and Workshop, October 2-5, 2001, Toronto, ON, CANADA 55 http://www.gao.gov/assets/260/258480.pdf

56 See: http://www2.dupont.com/Clean_Technologies/en_US/assets/downloads/AlkyCurrentEvents2001.pdf 57 See: http://www.publicintegrity.org/2011/03/28/3798/new-oil-refinery-south-dakota-says-it-will-usealternative-toxic-acid 58 See: http://www.uspirg.org/sites/pirg/files/reports/Needless_Risk_USPIRG.pdf 59 See: http://yosemite.epa.gov/opa/admpress.nsf/0/1c6b8ee238fd17d185257996005b892f
Page 63 of 147

of EPCRA (for sources with regulated toxic substances) or has coordinated response actions with the 

local fire department (for sources with only regulated flammable substances) 

Low/MediumOption (Proposed): Applicable to Program 2 and 3 Facilities

The low/medium option enhances existing requirements by requiring Program 2 and 3 facilities to 

coordinate annually with local emergency responders to ensure resources and capabilities are in place 

to respond to an accidental release. This provision also requires facilities to document their

coordination activities including the names of individualsinvolved, organizational affiliations, and more. 

The purpose of the proposed revisions to the coordination requirement is to improve responders’

understanding of the risks at the facility and to better prepare them for a safe and timely response. 

Coordination activities may include a review of the facility’s emergency action plan, (for non-responding 

facilities) the facility’s emergency response plans (for responding facilities), and local response 

capabilities including providing information for the local community emergency response plan. Facility 

counts are drawn from Exhibit 3-6. This analysis assumes that facilities are not conducting coordination 

activities annually in the baseline, nor are they documenting those activities. The costs for the low and 

medium options are the same (the low option eliminates the provision allowing an LEPC to require that

the facility comply with §68.95) 60. The low and medium optionsmay also cause a portion of current 

non-responding facilities to convert to responders. We estimate this expected additional cost in a 

sensitivity analysis presented in Section 5.6. 

Exhibit 5-9: Total Undiscounted Costs for Coordination (Low/Medium Option)

Facility Type Annual Frequency Unit Cost Facilities Total Initial Cost

Simple P2/3 1 $514 10,345 $5,313,853

Complex P2/3 1 $612 1,555 $952,099

Total 11,900 $6,265,952

High Option: Applicable to All Current Non-responding Facilities

This high option would require all current non-responding facilities to comply with §68.95 and develop 

emergency response capabilities and an emergency response plan. The numberof non-responding 

facilities can be found in Exhibit 3-8. EPA projects that all nonresponding facilities would develop the 

plan in year one, and then spend 10 percent of the initial development costs maintaining the plan 

annually in years 2-10. EPA projects that all non-responders would purchase the necessary equipment 

in the first year and then spend 10 percent of the initial purchase price annually for years 2-10 for 

maintenance and replacement. In Exhibit 5-10, cost elements are presented by total initial costs, and 

maintenance costs, if applicable. If a sub-provision has an ongoing maintenance cost, it is assumed that 

the initial cost will be incurred in year 1, and the ongoing cost will be incurred in years 2-10. For 

 60 See Chapter 2 for a detailed description of alternative options for the coordination rule provision.
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facilities that do not have an ongoing cost, the initial cost will be incurred with the annual frequency 

provided.

Exhibit 5-10: Total Undiscounted Costs for Coordination and Developing an ER Program (High Option)

Facility Type Annual Frequency Unit Cost Facilities Total Initial Cost Maintenance Costs

Plan Development

Simple <20 FTEs N/A $2,311 4,724 $10,918,980 $1,091,898

Simple 20-99 FTEs N/A $2,311 899 $2,077,935 $207,793

Simple 100+ FTEs N/A $2,311 731 $1,689,622 $168,962

Complex <20 FTEs N/A $7,567 144 $1,089,621 $108,962

Complex 20-99 FTEs N/A $7,567 235 $1,778,200 $177,820

Complex 100+ FTEs N/A $7,567 47 $355,640 $35,564

Subtotal $17,909,997 $1,791,000

Training

Simple <20 FTEs N/A $11,107 4,071 $45,215,184 $11,078,537

Simple 20-99 FTEs N/A $11,107 774 $8,596,549 $2,106,310

Simple 100+ FTEs N/A $11,107 721 $8,007,897 $1,962,079

Complex <20 FTEs N/A $16,241 144 $2,338,694 $446,191

Complex 20-99 FTEs N/A $16,241 235 $3,816,619 $880,824

Complex 100+ FTEs N/A $64,964 47 $3,053,295 $582,527

Local Government N/A $16,241 788 $12,797,855 $2,953,571

Subtotal $83,826,094 $20,010,039

Equipment

Simple <20 FTEs N/A $50,000 4,071 $203,550,000 $20,355,000

Simple 20-99 FTEs N/A $50,000 774 $38,700,000 $3,870,000

Simple 100+ FTEs N/A $50,000 721 $36,050,000 $3,605,000

Complex <20 FTEs N/A $60,000 144 $8,640,000 $864,000

Complex 20-99 FTEs N/A $60,000 235 $14,100,000 $1,410,000

Complex 100+ FTEs N/A $60,000 47 $2,820,000 $282,000

Local Government N/A $60,000 788 $47,280,000 $4,728,000

Subtotal $351,140,000 $35,114,000

Table Top Exercise

Simple <20 FTEs 0.8 $5,380 4,724 $20,331,928 $0

Simple 20-99 FTEs 0.8 $6,507 899 $4,679,615 $0

Simple 100+ FTEs 0.8 $12,218 731 $7,144,981 $0

Complex <20 FTEs 0.8 $6,829 144 $786,690 $0

Complex 20-99 FTEs 0.8 $8,301 235 $1,560,535 $0

Complex 100+ FTEs 0.8 $23,621 47 $888,166 $0

Subtotal $35,391,915 $0

Field Exercise

Simple <20 FTEs 0.2 $8,209 4724 $7,756,324 $0
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Facility Type Annual Frequency Unit Cost Facilities Total Initial Cost Maintenance Costs

Simple 20-99 FTEs 0.2 $13,835 899 $2,487,452 $0

Simple 100+ FTEs 0.2 $23,111 731 $3,378,766 $0

Complex <20 FTEs 0.2 $10,047 144 $289,351 $0

Complex 20-99 FTEs 0.2 $17,301 235 $813,139 $0

Complex 100+ FTEs 0.2 $65,758 47 $618,121 $0

Subtotal $15,343,153 $0

LEPC Disclosure – Exercise Report

Simple <20 FTEs 1 $555 4724 $2,622,482 $0

Simple 20-99 FTEs 1 $555 899 $499,071 $0

Simple 100+ FTEs 1 $555 731 $405,807 $0

Complex <20 FTEs 1 $1,237 144 $178,138 $0

Complex 20-99 FTEs 1 $1,237 235 $290,712 $0

Complex 100+ FTEs 1 $1,237 47 $58,142 $0

Subtotal $4,054,354 $0

Total 6,780 $507,665,513 $56,915,039

The initial cost of $507,665,513 is the cost that all facilities will incur when they begin complying with 

this provision and convert from being non-responders to responders. The $56,915,039 is the cost that 

facilities will incur to maintain responder statusin terms of maintaining equipment, response plans, and 

training. Equipment costs make up approximately 70% of the costs of converting to an emergency 

responder. It seems possible that some facilities will finance the initial costs and spread them across 

multiple years. Thus the current assumption that facilities must pay these initial costs in a single initial 

yearis conservative. The initial costs for becoming responders includes training costs – such as course 

fees, labor hours, and travel costs – plus the cost of acquiring equipment, all of which must occur in the 

first year in order to meet OSHA requirements. Maintenance costs include the cost of annualrefresher 

training, the assumption that one new responder per year needs to be trained (to account for turnover), 

as well as costs for equipment that needs to be repaired orreplaced. 

For activities that have an annual frequency rate – all pertaining to facility exercises –the annual 

frequency represents how often facilities will need to implement that activity. As explained in section 

5.1, an annual frequency of 0.2 for field exercises effectively means 20% of facilities will be 

implementing this requirement in the first year of becoming a responder. The total costs for these 

provisions represent the number of facilities that would be implementing that expenditure in the first 

year of becoming a responder.
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Notification Exercises

EPA analyzed only one option for this provision.

Low/Medium/High Option: Applicable to all Program 2 and 3 Facilities

This provision would require all P2 and P3 facilities to conduct an annual notification exercise to verify 

that emergency contact information is up-to-date. This includes verifying that notification contact 

information foremergency responders, Federal, state and local response agencies, and other accidental 

release notification contacts is correct and includesfunctional phone numbers. The breakout of costs is

in Exhibit 5-11.

Exhibit 5-11: Total Undiscounted Costs for Notification Drills (All Options)

Facility Type Annual Frequency Unit Cost Facilities Total Initial Cost

Simple Facilities 1 $110 10,345 $1,142,519

Complex Facilities 1 $152 1,555 $237,021

Total 11,900 $1,379,540

Facility Exercises

EPA analyzed three options for emergency response exercises.

Low Option:Applicable to All P2 and P3 Responding Facilities

The low option would require all P2 and P3 responding facilities to conduct an annual tabletop exercise. 

The breakout of costs are in Exhibit 5-12. 

Exhibit 5-12: Total Undiscounted Costs for Facility Exercises (Low Option)

Facility Type Annual Frequency Unit Cost Facilities Total Initial Cost

Simple <20 FTEs 1 $5,380 1640 $8,823,127

Simple 20-99 FTEs 1 $6,507 880 $5,725,892

Simple 100+ FTEs 1 $12,218 1467 $17,923,542

Complex <20 FTEs 1 $6,829 141 $962,875

Complex 20-99 FTEs 1 $8,301 459 $3,810,029

Complex 100+ FTEs 1 $23,621 533 $12,590,231

Total 5,120 $49,835,696

Medium Option (Proposed): Applicable to All P2 and P3 Responding Facilities

The medium option would require all responding P2 and P3 facilities to conduct a field exercise every 5 

years and within one year after an RMP reportable accident and conduct an annual table top exercise in 

the other years. Given this timeline,the analysis used an annual frequency rate of 0.2 for the field 
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exercise and 0.8 for the tabletop exercises. The analysis also assumed that facilities with an accident 

would have met their 5-year field exercise requirement by conducting an exercise within one year of the 

accident, effectively pushing their next required field exercise out 5 more years. Therefore, postaccident exercises were assumed not to affectthe costs of this option. The breakout of costs isin 

Exhibit 5-13.

Exhibit 5-13: Total Undiscounted Costs for Facility Exercises (Medium Option)

Facility Type Annual Frequency Unit Cost Facilities Total Initial Cost

Table Top Exercise

Simple <20 FTEs 0.8 $5,380 1,640 $7,058,502

Simple 20-99 FTEs 0.8 $6,507 880 $4,580,713

Simple 100+ FTEs 0.8 $12,218 1,467 $14,338,834

Complex <20 FTEs 0.8 $6,829 141 $770,300

Complex 20-99 FTEs 0.8 $8,301 459 $3,048,023

Complex 100+ FTEs 0.8 $23,621 533 $10,072,185

Subtotal $39,868,557

Field Exercise

Simple <20 FTEs 0.2 $8,209 1,640 $2,692,712

Simple 20-99 FTEs 0.2 $13,835 880 $2,434,880

Simple 100+ FTEs 0.2 $23,111 1,467 $6,780,643

Complex <20 FTEs 0.2 $10,047 141 $283,322

Complex 20-99 FTEs 0.2 $17,301 459 $1,588,217

Complex 100+ FTEs 0.2 $65,758 533 $7,009,760

Total 5,120 $60,658,091

High Option: Applicable to All P2 and P3 Responding Facilities

The high option would require all P2 and P3 responding facilities to conduct an annual field exercise. 

The breakout of costs are in Exhibit 5-14.

Exhibit 5-14: Total Undiscounted Costs for Facility Exercises (High Option)

Facility Type Annual Frequency Unit Cost Facilities Total Initial Cost

Simple <20 FTEs 1 $8,209 1,640 $13,463,560

Simple 20-99 FTEs 1 $13,835 880 $12,174,402

Simple 100+ FTEs 1 $23,111 1,467 $33,903,213

Complex <20 FTEs 1 $10,047 141 $1,416,612

Complex 20-99 FTEs 1 $17,301 459 $7,941,083

Complex 100+ FTEs 1 $65,758 533 $35,048,801

Total 5,120 $103,947,670
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5.5 Information Disclosure Rule Provisions

5.5.1 Public Meeting

EPA analyzed three options for imposing a requirement to hold a public meeting.

Low Option (Proposed): Public Meeting Afteran RMP Reportable Accident

This option would require that facilities hold a public meeting within 30 days of an accidentmeeting the 

reporting criteria of §68.42. Similar to our approach for estimating the costs for third-party audits,

accident numbers are based on the RMP data from RMP reportable accidents, referenced in Exhibit 3-9, 

and are estimated based on the 10-yearannual average. As with third-party audits, we deducted the 

number of accidents with no impacts from the total numberof accidents in the RMP database. 

However, unlike third-party audits, we did not deduct the number of accidents that occurred at P1 

facilities, as the proposed provision will apply to any RMP facility that has an RMP reportable accident, 

including P1 facilities. The breakout of costs for this option is in Exhibit 5-15.

Exhibit 5-15: Total Undiscounted Costs for Public Meetings (Low Option)

Accident Type Annual Frequency Unit Cost Facilities Total Initial Cost

Complex 1 $3,696 82 $139,526

Simple 1 $1,706 70 $258,358

Total 152 $397,883

Medium Option: Public Meeting Every Five Years and After an RMP Reportable Accident; Applicable to All 

P2 and P3 Facilities

This option would require that all P2 and P3 facilities conduct a public meeting once every five years and 

immediately following an RMP reportable accident. The analysis uses an annual frequency of 0.2 to 

account for this. The breakout of costs is in Exhibit 5-16.

Exhibit 5-16: Total Undiscounted Costs for Public Meetings (Medium Option)

Facility Type Annual Frequency Unit Cost Facilities Total Initial Cost

Small Complex 0.2 $2,123 528 $224,194

Large Complex 0.2 $3,696 1027 $759,179

Simple 0.2 $1,706 10345 $3,529,077

Total 11,900 $4,512,451
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High Option: Public Meeting Every Five Years and After an RMP Reportable Accident; Applicable to All 

Facilities

This option would require that all facilities conduct a public meeting once every 5 years and immediately 

following an accident (i.e., P1 facilities would also have to comply). The analysis uses an annual 

frequency of 0.2 to account for this. The breakout of costs is in Exhibit 5-17.

Exhibit 5-17: Total Undiscounted Costs for Public Meetings (High Option)

Facility Type Annual Frequency Unit Cost Facilities Total Initial Cost

Small Complex 0.2 $2,123 565 $239,905

Large Complex 0.2 $3,696 1056 $780,617

Simple 0.2 $1,706 10921 $3,725,573

Total 12,542 $4,746,094

Information Availability

EPA analyzed one option (with multiple cost outcomes depending on whether the STAA provision would 

apply to a subset of P3 facilities (STAA low option) or whether it would apply for all P3 facilities (medium 

and high options)) for the information sharing provisions for the LEPC or emergency response officials 

and the public. 

LEPC or Emergency Response Officials

This proposed provision would require the facility owner or operator to make information on regulated 

substances, compliance audits, IST, accident history, incident investigations, and exercises available to 

the LEPC or emergency response officials upon request. Facilities owners or operators would be 

required to update this information annually. EPA had no information to determine how many LEPCs or 

emergency response officials would make such requests; however, EPA expectsthat all regulated 

facilities would incur costs to update the information annually. The provision to share compliance audit

summaries applies to P2 and P3 facilities. The provision for sharing IST implementation information is 

calculated based on the total number of processes for which this provision would apply. The other 

provisions for providing accident histories and investigation report summaries to LEPCs or emergency 

response officials are based on a subset of P2 and P3 facilities that are expected to have RMP reportable 

accidents. Costs of providing emergency response exercise information to LEPCs is based on the 

number of P2 and P3 responding facilities.61 

 61 The provision to share information on the names and quantities of regulated substances is similar to the public 

disclosure provision (the public disclosure provision does not require sharing chemical quantity information) and 

no additional costs are estimated for sending this information to the LEPCs or local emergency response officials.
Page 70 of 147

Public 

This provision would require the facility to make information available annually in a manner that is easily 

accessible to the public including: the names and Safety Data Sheets of regulated substances used at the 

facility,the facility’s five-year accident history, a summary of the emergency response program 

information reported in the RMP, a summary of emergency exercises conducted and a schedule for 

upcoming exercises, and LEPC contact information.

Low/Medium/High Option: Applicable to All Facilities

This provision would require that all facilities collect information related to RMP compliance and 

disclose itto the public and local emergency response agencies. Thisincludes 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 breakout of costs related to public disclosure and local 

emergency responders is in Exhibit 5-18:

Exhibit 5-18: Total Undiscounted Costs for Information Sharing Provisions (All Options)

Facility Type Annual 

Frequency Unit Cost Facilities (unless otherwise noted)

Total Initial 

Cost

Public Disclosure

Small Complex 1 $459 565 $259,090

Large Complex 1 $1,621 1,056 $1,711,295

Simple 1 $184 10,921 $2,005,498

LEPC Disclosure

Accident History – Simple 1 $185 372 $68,767

Accident History - Complex 1 $390 350 $136,464

Audit Report - Simple 0.33 739 10,345 $2,524,286

Audit Report - Complex 0.33 $1,864 1,555 $956,740

Investigation Reports - Simple 1 $1,054 372 $392,213

Investigation Reports - Complex 1 $3,021 350 $1,057,418

STAA – Simple 0.2 $1,258 1,783 processes $448,591

STAA – Complex 0.2 $3,326 2,514 processes $1,672,335

Exercise Reports – Simple 1 $555 3,987 $2,213,344

Exercise Reports - Complex 1 $1,237 1,133 $1,401,603

LEPC Review - Simple 1 $53 10,921 $583,509

LEPC Review - Small Complex 1 $107 565 $60,376

LEPC Review - Large Complex 1 $214 1,056 $225,688

Total $11,741,335
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5.6 New Responders

The proposed provision to improve coordination with local responders includes the possibility that local 

emergency response officials with jurisdiction may requirethat the owner or operator of the stationary 

source maintain an in-house emergency response capability. As a sensitivity analysis, EPA has examined 

different assumptions regarding the number of current non-responding facilities (see Exhibit 3-8for 

numbers) that might develop and maintain such in-house capability and thereby convert to responding 

facilities. 

EPA faced a lack of information regarding the number of nonresponding facilities that might develop 

their own emergency response programs to comply with the proposed rule’s coordination provision. As 

a consequence, EPA performed a sensitivity analysis that examined a facility’s proximity to existing 

hazardous materials (hazmat) teams. While this approach is less than ideal for a number of reasons 

explained below, the general idea was that proximity to an existing hazmat team reduces the likelihood 

that a facility will need to provide forits own emergency response. EPA used an existing analysis of 

hazmat team locations obtained from the Federal Emergency Management Agency (FEMA). Those data 

were compiled for the 2012 National Preparedness Report to characterize the existing coverage of 

hazmat teams. 62 The 2012 report found that “the nation has developed a mature set of assets for 

addressing hazardousmaterials incidents.” There were approximately 1,100 state and local hazmat 

teams identified, and the FEMA report concluded that 76% of the population is covered by these hazmat 

response teams. 63

Although the exact location of each hazmat team could not be identified from the FEMA data, it was 

possible to identify the county of each hazmat team (see Exhibit 5-19). Using ArcGIS tools, the maps of 

non-responding facilities and hazmat team counties were merged and appear as Exhibit 5-20. These 

data provide the boundaries for a sensitivity analysis of the number of non-responders that will become 

responders as a result of the proposed rule’s coordination requirements. 

Approximately 38.5% of non-responding facilities are located in counties with hazmat teams. Having a 

hazmat team within the same county makes it more likely that the RMP facility can rely on that team 

and not need to convert to responder status. However, this may be an overestimate of the percent that 

will not convert because being located in a county with a hazmat team does not necessarily mean that 

every chemical handled by a particular facility is covered by that team. On the other hand, it might 

underestimate hazmat team coverage as there are several states that have expended significant effort 

to have their whole state covered by hazmat response. For instance, Florida takes into account the 

location of RMP facilities in the planning of its hazmat response capabilities. 64 EPA’s county analysis does 

not account for such statewide planning and coverage. Since 38.5% of non-responding facilities are in 

hazmat counties, 61.5% are not “covered,”and might potentially have to become responders. This 

 62 https://www.fema.gov/media-library/assets/documents/26675 63 The approach for estimating the 76% was roughly based on the population in proximity to a hazmat team 64 http://www.floridadisaster.org/hazmat/serc/documents/2010%20SERC%20AR-final.pdf
Page 72 of 147

represents the upper bound of our sensitivity analysis. Full counts of facilities in and out of hazmat 

counties, broken down by the main facility categories, appear in Exhibit 5-21.
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Exhibit 5-19: Counties with Hazardous Material Teams
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Exhibit 5-20 Locations of Non-Responding Facilities
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Exhibit 5-21: Sensitivity Analysis of Percent of Non-Responding Facilities that Might Convert to 

Responder Status

Sector In a County with a Hazmat Team

Out In Percent

All Non-Responders 4,349 2,722 38.5%

Food/Bev. Manufacturers 204 294 59.0%

Ag. Facilities 2,328 742 24.2%

Chem Wholesale 113 104 47.9%

Warehouses 162 306 65.4%

Other Wholesale 2,270 645 22.1%

Oil Gas 262 75 22.3%

Water or POTW 654 703 51.8%

Refineries 10 8 44.4%

Chemical Manufacturers 237 184 43.7%

Pulp and Paper 1 4 80.0%

Using 61.5 percent on the high-end, the sensitivity analysis used this portion of the non-responding RMP

facility universe (equivalent to 4,112 facilities)to assume that 25%, 50%, and 75% of these nonresponding facilities would need to become responding facilities.

The unit cost breakdown is the same as presented in Exhibit 5-10. Exhibits 5-22, 5-23, and 5-24 present 

new responder costs for 25 percent, 50 percent, and 75 percent of current non-responding facilities to 

become responders. The components of the costs for this sensitivity analysis are described above in

Section 5.3.1 under the High Option alternative. 

Exhibit 5-22: Total Undiscounted Costs for New Responders: 25% Conversion (Millions, 2014 Dollars)

Provision Type 25% Conversion

Facilities

Total Initial 

Cost

Ongoing 

Costs

Plan Development 1,028 $2.7 $0.3

Training 1,028 $12.8 $3.0

Equipment 1,028 $53.9 $5.4

Table Top Exercise 1,028 $5.0 $0

Field Exercise 1,028 $2.1 $0

LEPC Disclosure – Exercise Report 1,028 $0.6 $0

Total* $77.1 $8.7

*Totals may not sum due to rounding
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Exhibit 5-23: Total Undiscounted Costs for New Responders: 50% Conversion (Millions, 2014 Dollars)

Provision Type 50% Conversion 

Facilities

Total Initial 

Cost

Ongoing 

Costs

Plan Development 2,056 $5.4 $0.5

Training 2,056 $25.7 $6.1

Equipment 2,056 $107.7 $10.7

Table Top Exercise 2,056 $10.1 $0

Field Exercise 2,056 $4.2 $0

LEPC Disclosure – Exercise Report 2,056 $1.2 $0

Total* $154.3 $17.4

*Totals may not sum due to rounding

Exhibit 5-24: Total Undiscounted Costs for New Responders: 75% Conversion (Millions, 2014 Dollars)

Provision Type 75% Conversion 

Facilities

Total Initial 

Cost

Ongoing 

Costs

Plan Development 3,084 $8.0 $0.8

Training 3,084 $38.5 $9.2

Equipment 3,084 $161.6 $16.2

Table Top Exercise 3,084 $15.1 $0

Field Exercise 3,084 $6.3 $0

LEPC Disclosure – Exercise Report 3,084 $1.8 $0

Total* $231.4 $26.2

*Totals may not add due to rounding

For the medium (proposed) option, the analysis assumed 50% conversion of non-responders.

5.7 Cost Uncertainties Associated with Prevention Program Provisions

Introduction

The proposed rule includes three prevention program provisions –third-party audits, incident 

investigation/root cause analysis, and STAA – involving information collection and analysis activities on 

the part of the owner or operator. These provisions can lead to a wide range of outcomes, and therefore 

costs, if and when the owner acts upon the findings and/or recommendations generated by the audit, 

investigation, or analysis. In the case of third-party audits and incident investigations, the existing rule 

requires the owner or operator to correct deficiencies identified during audits and to resolve incident 

report findings and recommendations. Thus, in the baseline, owner/operators would already take 

actions in response to findings from the baseline versions of these two provisions. The proposed rule 

imposes the requirement of a third-party audit in place of the baseline requirement for an audit that 

does not specify a third-party, when a facility has experienced an accident. Similarly the proposed rule 

imposes the requirement of a root cause analysis in place of the baseline requirement for an incident 
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investigation that does not specify targeting the root cause, when a facility has experienced an accident 

or a “near miss.” These provisions are proposed for facilities that have experienced accidents or near 

misses because the fact of the accident or near miss is a signal that a more objective, deeper analysis 

would be useful to ensure the facilities are in compliance and taking effective steps to remedy any 

underlying problems. 

Unlike the third-party audit and root cause provision, the proposed STAA provision applies to applicable 

facilities whether or not there has been an accident or near miss, targeting those that fall into the three 

NAICS codes, 322, 324, and 325, which have the highest accident rates. Also unlike the other two 

prevention provisions, the outcome of the STAA provision is not limited to ensuring compliance but goes

beyond compliance to consideration of any potentially feasible safer alternative technologies. However, 

for the proposed STAA provision (unlike its high-cost alternative that EPA is not proposing but explains in 

section 5.3) EPA would not require the owner to implement any inherently safer technologies(IST) 

determined to be feasible, but some owners may choose to implement IST voluntarily. This section 

examines the uncertainty associated with estimating the costs of actions that owners or operators may 

take as a result of developing additional information from these three provisions.

Third-party audits

Purpose of audit, potential for actions resulting from information collected

The purpose of a compliance audit is to examine whether the facility’s accident prevention program –

PHA, mechanical integrity program, operating procedures, etc. –is properly implemented and in 

compliance with 40 CFR part 68 requirements. Such an audit can result in a wide range of potential 

findings. The purpose of involving a third-party to conduct the audit following an accident is to ensure 

that the information gathered is from an unbiased source to look objectively at compliance with the 

RMP rule. Relative to the baseline audit requirement, EPA expects the third-party audits to lead to a 

different and more objective audit report that may result in more costly changes in facility processes; 

less costly changes; or changes with approximately the same cost as the baseline audit.One view is that 

we may expect more costly changes since the objectivity of the third-party auditor may give less regard 

to ensuing costs. However, EPA believes that such changes that may require more up-front costs than 

baseline audits could reduce the probability of another accident and bring the facility into compliance.

More efficient allocation of resources 

Rigorous auditing that takes advantage of expert advice provides a detailed and thorough examination 

of potential problems and constructs careful ideas to remedy those problems. In the baseline without 

the proposed rule, audits are being conducted with potentially less expertise or with biased information. 

The remedies suggested by a third-party audit are expected to be more efficient at identifying 

deficiencies and correcting risky situations than remedies that would occur in the baseline. From this 

perspective, there is an expectation that the more efficient remedies suggested by third-party audits will 

impose different costs but not necessarily additional costs. They may reveal underlying problems and 
Page 78 of 147

remedies that result in a more efficient allocation of the resources targeted at bringing the facility into 

compliance with the RMP rule.

Examples of auditing results that could lead to additional expenditures

Examples of potential actions resulting from audits could include more frequent equipment inspections, 

use of different or additional inspection methods, equipment upgrade or replacement, installation and 

use of different or additional hazard controls, altering process operating conditions, materials, or 

chemistry, modification of operating procedures, additional training, staffing changes, etc. The wide 

scope of compliance audits and variation in potential follow up actions causes uncertainty in estimating 

expected costs. This uncertainty is exacerbated by a lack of information about the incremental 

difference in changes that result from a third-party audit compared to a baseline audit. Due to these 

uncertainties and this lack of information, EPA did not estimate the expected costs from follow-up 

actions. 

How do we characterize these costs? 

The nature of audits is to discover areas of facility operation that are not in compliance with existing rule 

standards and identify actions to improve safety. This is true of existing audits as well as third-party 

audits. Indeed, the purpose of the proposed third-party audit provision is the same as the purpose of 

the self-audit provision in the current rule – to identify and correct failures in the facility’s prevention 

program. EPA believes that an accident occurring after a self-audit suggests that the self-audit may have 

been inadequateand may be an indicator that the firm was not in compliance with applicable prevention 

program elements of the rule. EPA recognizes that coming into compliance may entail additional 

expenditures by facility owners. While the costs of facilities coming into compliance were estimated in 

the 1996 RMP RIA, for the purpose of future analyses, EPA would like to better understand the 

magnitude of this additional spending. EPA requests comment on how much, if any, additional spending 

is expected from actions taken due to third-party auditor reports, relative to actions expected in 

response to auditor reports in the baseline. 65 

Incident investigation/Root Cause Analysis 

Purpose of investigation, potential for root cause provision to result in additional costs

The existing rule already requires incident investigations to be performed and findings to be addressed. 

However, the proposed rule contemplates a more thorough “root cause” investigation to identify 

underlying causes of an incident. The outcome of a root cause investigation could reveal more 

substantial system-related reasons why an incident occurred and identify correctable failures in 

 65 In the preamble to the proposed rule, EPA has requested public comment on the types of costs that result from 

independent audits (other than the cost of the audit) that are different from self-audit costs.
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management systems. These underlying causes may not be identified under the baseline incident 

investigation provision.

Examples of investigation findings from the root cause analysis that might involve significant costs

Similar to the audits, incident investigations can reveal a wide variety of incident causes. These can 

range from the immediate or proximate causes of an incident to its underlying, system-related cause or 

causes. For example, an investigation may reveal that the immediate cause of an incident was 

equipment failure (e.g., failure of a corroded pipe), or operator error (e.g., an operator performed 

procedural steps in an incorrect sequence). A deeper “root cause” investigation would go beyond these 

findings and identify the underlying reasons for why the equipment failed (e.g., underlying deficiencies 

in the facility’s mechanical integrity program) or why the operator made the error (e.g., underlying 

deficiencies in the facility’s operator training program). 

The baseline incident investigation provision requires the owner or operator to determine “the factors 

that contributed to the incident,” but does not explicitly require the owner to perform a root cause 

investigation. Some regulated facilities may already interpret the baseline provision as requiring root 

cause investigations, but EPA believes that many others do not. Because the proposed root cause 

investigation requirement is likely to result in many facilities identifying deeper system-related causes of 

incidents, actions taken to resolve these causes may require greater expenditures than those taken for 

the baseline investigation requirement, which may not lead to identification of system-related causes. 

For example, instead of replacing a single piece of failed piping, a root cause investigation may lead to 

facility-wide enhancements in piping inspections, and replacement of numerous additional piping 

sections where excessive corrosion was subsequently identified. Similarly, instead of providing 

additional training for a single operator, the root cause investigation may prompt a full overhaul of the 

facility’s operator training program, including use of new training techniques, and additional training for 

all process operators. Root cause investigations may also reveal multiple systemic accident causes. For 

example, in addition to identifying systemic training problems, the investigation may reveal that there 

were other underlying root causes such as an equipment design problem that led the operator to make 

the error (e.g., confusing labeling or equipment configuration), or unclear operating procedures. 

How do we characterize these costs? 

Resolving such system-related deficiencies is expected, on average, to require greater expenditures than 

resolving investigation findings related to baseline (i.e., non-root-cause) investigations. However, 

similar to audits, EPA expects that resolving underlying problems will, in the long term, reduce the 

probability and magnitude of a future accident. Similar to the audit, the incident investigation is 

intended to bring facilities into compliance by revealingdeficient aspects of facility operations –in this 

case, aspects that have caused an accident, and may cause future accidents. Just as with audit results, 

EPA recognizes that coming into compliance may entail additional expenditures by facility owners. Even 

though the costs of coming into compliance were estimated in the original RMP RIA, EPA would like to 

better understand the magnitude of this additional spending to possibly include itin future analyses. 
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EPA requests comment on additional costs that might occur due to root cause analysis, that are over 

and above costs that would occur in the baseline from the existing incident investigation requirement.66

STAA

Purpose of STAA provisions

The proposed STAA requirement is intended to reveal potential opportunities for regulated facilities to 

eliminate or substantially reduce the hazards associated with regulated processes by performing a 

detailed analysis of alternative process technologies. The STAA provision requires the owner or 

operator to consider process hazard controls in the following order of preference: inherently safer 

technology or design, passive measures, active measures, and procedural measures. The provision also 

requires the owner or operator to determine the feasibility of the inherently safer technologies and 

designs considered. 

The STAA provisions are targeted at three sectors – petroleum and coal products manufacturing, 

chemical manufacturing, and paper manufacturing –that have had a high frequency of RMP-reportable 

accidents relative to other RMP-regulated industry sectors. The baseline RMP requirements already 

require owners and operators of most facilities in these sectors to perform a PHA. The PHA provisions 

require facilities to identify, evaluate, and control process hazards using appropriate engineering and 

administrative controls. However, the baseline requirement does not explicitly require the owner or 

operator to consider inherently safer technologies. EPA believes that requiring owners and operators of 

higher risk facilities to consider safer technologies and alternatives –with an emphasis on inherently 

safer technologies –may reveal alternative hazard controls that were not considered in the baseline 

PHA requirement. 

The STAA provision is different than the audit and investigation provisions because the proposal does 

not require implementation of any process or operational changes identified as feasible. 

Implementation, unlike the other two proposed prevention provisions, would be voluntary and thereby 

move beyond the baseline and proposed RMP requirements.

In other words, EPA believes that some facilities may voluntarily implement inherently safer 

technologies as a result of conducting the STAA. This is, in part, because the proposed definition of 

“feasible”67 may result in implementation of alternatives that previously were not considered feasible 

(i.e., where implementation barriers such as costs or environmental and legal factors had previously

been judged as too high to warrant implementation). As a result of conducting a new STAA, the facility 

 66 In the preamble to the proposed rule, EPA has requested public comment on the types of costs that result from 

root cause investigations as compared to non-root-cause investigations. 67 The proposed rule defines feasible to mean “capable of being successfully accomplished within a reasonable 

time, accounting for economic, environmental, legal, social, and technological factors. Environmental factors 

would include consideration of potential transferred risks for new risk reduction measures.”
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owner or operator may re-assess and decide to implement an inherently safer alternative after 

reviewing the STAA and feasibility analysis. 

Costs of implementing STAA

The costs of implementing recommendations resulting from the STAA provision are uncertain, but in 

some cases could be quite high. As explained in Section 5.3, the known costs of certain STAA changes 

range from less than $1000 to $50 million. However, it is possible that a facility owner or operator 

would voluntarily choose to implement a high cost change if they believe its benefits warranted the 

expense. EPA did not attempt to estimate the costs of voluntary implementation of STAA changes for 

the same reasons it did not estimate implementation costs under the high option for this provision, 

where implementation of feasible STAA alternatives would be required. For many significant STAA 

changes, the costs would be facility-specific, and EPA has little information on the potential costs of 

large STAA projects. Additionally, judgements regarding what changes are considered to be safer or 

inherently safer, and the feasibility of such changes, is subjective. These factors make it very difficult to 

predict the costs of STAA changes and whether or not they would have occurred in the baseline. 

Nevertheless, EPA seeks comment on whether information exists to project what changes facilities are 

likely to voluntarily undertake for the categories of facilities subject to this proposed provision. EPA 

particularly requests cost data or studies for implementation of IST changes from any commenters who 

may prefer the high option for this provision.

5.8 Total Costs

The analysis presents total costs as total undiscounted costs over the 10 year period of analysis, total 

discounted (3 percent and 7 percent), and annualized (3 percent and 7 percent). When annual costs for 

different years are equal to one another across the analysis time period, the annualized costs calculated 

using different discount rates (e.g., 3 and 7 percent) are equal. 

Exhibit 5-25 presents the total costsfor all options. Blue cells represent the proposed rule option. 

Exhibit 5-26 presents the total cost for the proposed rule only.
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Exhibit 5-25: Total Costs (Millions, 2014 Dollars)

Cost Elements

Low Option Medium Option High Option

Annualized 

(3%)

Annualized 

(7%)

Annualized 

(3%)

Annualized 

(7%)

Annualized 

(3%)

Annualized 

(7%)

Third-party Audits $5.0 $5.0 $84.2 $84.2 $96.2 $96.2 

Root Cause 

Analysis $0.8 $0.8 $0.8 $0.8 $0.8 $0.8 

Safer Technology 

and Alternatives $34.8 $34.8 $71.7 $71.7 $71.7 $71.7 

Coordination $6.3 $6.3 $6.3 $6.3 $108.2 $116.9 

New Responders $16.5 $17.8 $33.0 $35.6 $49.5 $53.5 

Notification Drills $1.4 $1.4 $1.4 $1.4 $1.4 $1.4 

Exercise Costs $49.8 $49.8 $60.7 $60.7 $103.9 $103.9 

LEPC Disclosure $11.7 $11.7 $11.7 $11.7 $11.7 $11.7 

Public Disclosure $4.0 $4.0 $4.0 $4.0 $4.0 $4.0 

Public Meetings $0.4 $0.4 $4.5 $4.5 $4.7 $4.7 

Rule 

Familiarization $0.3 $0.3 $0.3 $0.3 $0.3 $0.3 

Total Cost* $130.9 $132.3 $278.6 $281.3 $452.6 $465.2 

* Totals may not sum due to rounding

Exhibit 5-26: Total Cost of Proposed Rule (Millions, 2014 Dollars)

Cost Elements Total 

Undiscounted

Total Discounted 

(3%)

Total Discounted 

(7%)

Annualized 

(3%)*

Annualized 

(7%)

Third-party Audits $49.5 $42.3 $34.8 $5.0 $5.0

Root Cause Analysis $8.4 $7.2 $5.9 $0.8 $0.8

Safer Technology 

and Alternatives $347.9 $296.7 $244.3 $34.8 $34.8

Coordination $62.7 $53.4 $44.0 $6.3 $6.3

New Responders $311.1 $281.6 $250.3 $33.0 $35.6

Notification Drills $13.8 $11.8 $9.7 $1.4 $1.4

Exercise Costs $606.6 $517.4 $426.0 $60.7 $60.7

LEPC Disclosure $129.1 $100.1 $82.4 $11.7 $11.7

Public Disclosure $39.8 $33.9 $27.9 $4.0 $4.0

Public Meetings $4.0 $3.4 $2.8 $0.4 $0.4

Rule Familiarization $2.4 $2.3 $2.2 $0.3 $0.3

Total Cost+ $1,575.4 $1,350.2 $1,130.3 $158.3 $161.0

+ Totals may not sum due to rounding

In total, the proposed rule would cost $158,284,120 (annualized 3 percent) or $160,962,918 (annualized 

7 percent) including 50 percent conversion of new responders. 
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CHAPTER 6: BENEFITS

Facilities subject to the RMP regulation pose significant risks to the public and the environment. These 

risks stem from potential accidental chemical releases that can cause fires, explosions, and harmful 

vapor clouds. Chemical accidents - fires and explosions in particular - notonly kill and injure people, but 

can do great damage to property. Property damage can include damage to goods produced, plant 

equipment and structures, and nearby industrial, commercial, and residential buildings, equipment, and 

furnishings. Damage can also occur to the natural environment and negatively affect nearby ecosystems 

and wildlife. Resources, such as emergency personnel and equipment, are diverted to address the fire, 

explosion, or vapor cloud. Properties located near the accident may lose value as a result ofthe 

perceived risks and other disamenities posed by proximity to the facility. 

Risks posed by RMP facilities are reduced by lowering the probability and magnitude of accidents, which 

is the objective of the proposed rule. Thus,the benefits of the proposed rule include reductions in the 

number of people killed, injured, and evacuated or otherwise inconvenienced by sheltering in place; 

reductions in the damage caused to property on-site and off-siteincluding product, equipment, and 

buildings; reductions in damages to the environment and ecosystems; and reductions in resources 

diverted to extinguish fires and clean up affected areas. The proposed rule would also provide other 

benefits, such as increased public information, which in addition to helping to minimize the impacts of 

accidents on the offsite public, could also lead to more efficient property markets in areas near RMP 

facilities.

6.1 Benefit Categories

Exhibit 6-1 illustrates the social benefits associated with each proposed rule provision. There are four 

primary social benefit categories identified by EPA. These include:

• Prevention of Future RMP Accidents: Several rule provisions would prevent accidents by 

triggering improvements in plant design, equipment, procedures, or operator training. 

Preventing serious accidents avoids numerous direct costs, including worker, responder, and 

public fatalities and injuries, public evacuations, public sheltering-in-place, and property and 

environmental damage. It also avoids indirect costs, such as lost productivity due to product 

damage and business interruption both on-site and off-site, expenditure of emergency response 

resources and attendant transaction costs, and reduced offsite property values.

• Mitigation of Future RMP Accidents: Several rule provisions would reduce the impacts of 

serious accidents by promoting a more rapid and efficient response to these incidents. If a 

serious chemical accident ormajor catastrophe occurs, mitigating its impacts benefits society by 

reducing the number of fatalities and injuries, reducing the magnitude of property damage and 

lost productivity both on-site and off-site, and reducing the extent of public evacuations, 

sheltering, and expenditure of emergency response resources. 
Page 84 of 147

• Improved Information: Three rule provisions would result in providing improved information to 

emergency planners, emergency responders, and the public. Providing improved information to 

emergency planners and responders is beneficial because it results in more efficient allocation 

of public response resources by improving the ability of planners and responders to make 

appropriate decisions concerning equipment, training, and procedures. Improved information 

will also improve local contingency planning and training of emergency responders. Providing 

better information to members of the public will allow people to make better decisions about 

where to live and work, what to do when an emergency occurs, and how to account for the 

market value of property located near RMP facilities.

• Prevention and Mitigation of Future non-RMP Accidents at RMP Facilities: Actions that prevent 

or reduce the severity of accidents in RMP-covered processes are also likely to prevent or 

mitigate non-RMP accidents at the same facilities because the same or similar actions can be 

taken with regard to processes and equipment notsubject to the regulation, often at minimal 

additional cost. For example, if an owner or operator implements operational safety policies to 

prevent or respond to an RMP-related emergency, itwill also improve their ability to respond to 

any emergency or accident at the facility because of the new operational safety policies.
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Exhibit 6-1: Social Benefits of Proposed Rule Provisions

Rule Provision Social Benefits (primary social benefit in bold)

1. Third-party audits Prevention of future RMP facility accidents

Mitigation of future RMP facility accidents

Prevention of future non-RMP accidents at RMP facilities

Mitigation of future non-RMP accidents at RMP facilities

2. Root cause analysis

3. Safer technology and alternatives 

analysis

4. Emergency coordination Mitigation of future RMP facility accidents

Improved information

Mitigation of future non-RMP accidents at RMP facilities 5. Emergency response exercises

6. LEPC information disclosure

Improved information

Mitigation of future RMP facility accidents

Mitigation of future non-RMP accidents at RMP facilities

7. Public information availability Improved information

Mitigation of future RMP facility accidents

8. Public meetings Improved information

Mitigation of future RMP facility accidents

As Exhibit 6-1 indicates, each rule provision would produce social benefits in multiple benefit categories. 

The primary social benefit category for each rule provision is indicated in bold type. Exhibit 6-1 

indicates, for example, that performing accident root cause analysis primarily will help prevent future 

similar accidents and that improved emergency coordination will primarily helpmitigate future accident 

impacts. The table suggests that providing better information to neighboring residents and businesses 

may improve the efficiency of their decisions about where to locate. Note that the table also identifies 

other benefit categorieslisted below the boldface primary one. For example, better informed neighbors 

may have improved responses to warnings that lower their potential exposure and panic, thereby 

mitigating damages. Additionally, residents who are extremely risk averse may decide to live further 

from RMP facilities after reviewing improved information, improving the efficiency of local real estate 

markets.

6.1.1 Prevention

Proposed rule provisions 1, 2, and 3 involve changes to the rule’s accident prevention program elements 

and are intended to lower the likelihood of future accidents of the same or similar type. Rule provision 

1, which would require certain compliance audits to be conducted by an independent third-party, 

should improve the objectivity of auditors and result in identification of safety problems and necessary 

process improvements before such deficiencies can result in accidents. Rule provision 2, the root cause 

analysis provision (that would apply after an RMP reportable accident or near miss), should prevent 

future accidents by identifying the underlying causes and corrective actions for serious accidents and 

near misses. Overtime, implementing the corrective actions and lessons learned through root cause 

analyses should prevent future accidents and result in a reduction of on-site and offsite impacts. Rule 

provision 3, the STAA analysis, should result in identification of potential process changes that, if 

implemented, would result in owners or operators using less hazardous substances, minimizing the 
Page 86 of 147

amount of regulated substances present in a process, moderating process conditions, or reducing 

process complexity. Such changes, if implemented, help prevent accidents by either eliminating the 

possibility of an accidental release entirely, by making a process more fault-tolerant, such that a minor 

process upset or equipment malfunction does not result in a serious accidental release, and by making 

releases that may occur less severe. The STAA analysis provision does not actually require the owner or 

operator to implement any changes, so it would only provide benefits if the facility voluntarily decides to 

implement changes. EPA has not estimated the costs of implementation in the cost analysis. 68

In addition to preventing future accidents, provisions 1, 2, and 3 have additional social benefits, 

including mitigation of future RMP facility accidents, prevention of future non-RMP accidents at RMP 

facilities, and mitigation of future non-RMP accidents at RMP facilities. These provisions can identify 

process improvements that result in less severe releases (e.g., an audit or investigation that identifies 

improvements to a release detection or mitigation system). 

6.1.2 Mitigation

Proposed rule provisions 4 and 5 are primarily focused on improving emergency response capabilities. 

Faster and better coordinated responses, including effective and efficient notification ofthe public,

should reduce human health impacts and property damage, and limit the number of on-site and off-site 

impacts. Bringing fires and releases under control more quickly and ensuring that workers and 

responders know the most effective actions to take for a particular facility under particular conditions 

could reduce the duration of incidents, the likelihood of injuries to emergency responders, and limit 

exposures—particularly for long-duration events. For example, a food plant in St. Tammany parish,

Louisiana,recently experienced an ammonia leak. The plant, a nearby commercial facility, and an 

interstate highway wereshut down for hours while hazardous material crews worked to contain the 

leak.

69

Improved emergency response to control fires could also prevent knock-on impacts, such as additional 

explosions at facilities that store highly flammable gases, potentially resulting in a release of a regulated 

substance. For example, a propane fire at a Texas refinery in 2007 caused a chlorine release, four 

injuries,total refinery evacuation, and a shutdown. 70 A 2009 natural gas explosion at a food 

manufacturing plant led to release of ammonia from the refrigeration system and 71 hospitalizations for 

 68 Although the costs associated with those changes may in some cases be high, it is unlikely that a facility would 

implement costly changes unless it determined that its own private benefits (for example, there could be 

production efficiency improvements as well as safety enhancements) would equal or exceed those costs.

69 Roberts, Faimon A. (2015) I-12 in St. Tammany and Tangipahoa Reopened After Ammonia Leak. The Advocate. 

Baton Rouge. October 16.

70 CSB Report, Valero Refinery Propane Fire, Final Report, July 9, 2008, http://www.csb.gov/valero-refinerypropane-fire/.
Page 87 of 147

toxic exposure. 71 Improving emergency response could also reduce the length of offsite exposures, 

which would lower the risk to the public.

The Emergency Coordination provision, number4, would require RMP facilities to keep written records 

of coordination efforts with local response agencies including dates, names, and affiliations of 

individuals contacted. This provision should improve emergency responses by ensuring that appropriate 

capabilities are established to respond to emergencies. The Exercise provision, number5, would require

almost all RMP facilities to perform notification exercises, and all respondingRMP facilities to perform

tabletop and field exercises. Such exercises increase emergency response readiness, both for RMP 

facility owners or operators and local responders, by testing emergency communications systems and 

emergency plans and by ensuring local and facility response personnel know what actions to take during 

various accident scenarios. Together, rule provisions 4 and 5 should mitigate the impact of RMP facility 

accidents that may occur. 

Improved coordination between facility owners and operators and the local emergency response 

officials and emergency exercises (when local responders are involved) also helps ensure that local 

officials know what to tell the public when real accidental releases occur. This improved information 

will lead to more efficient responses by the public.

6.1.3 Information Disclosure

Three of the proposed rule components (6, 7, and 8) directly target information provision. Providing 

information to the public and local agencies has multiple benefits. Better informing the public about 

chemicals at an RMP facility enables more efficient decisions in the marketplace for nearby properties. 

Nearby residents will be able to make more informed decisions about where to locate their homes and 

businesses. Those people who are more risk averse may prefer locating further away compared to 

people who are less risk averse. 

Better informing LEPCs enables more efficient decision-making regarding expenditures on equipment 

and training for emergency preparedness. By improving information available to the public and LEPCs 

about the chemicals stored and processes used at RMP facilities, equipment, materials and training will 

be better aligned with the risks presented by the RMP facility. In addition, if local residents and 

businesses understand the potential risks from a facility accident, they will be better able to understand 

recommendations for sheltering in place or evacuation and take appropriate actions should an actual 

incident occur, thereby mitigating the impacts of the event. Such knowledge can also help develop trust 

between the facility and the community, which could limit unnecessary concern and make residents 

more willing to act on recommendations.

 71 CSB Report, ConAgra Natural Gas Explosion and Ammonia Release, Final Report, February 4, 2010, 

http://www.csb.gov/conagra-natural-gas-explosion-and-ammonia-release/.
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6.1.4 Conclusion

The discussion in this section has qualitatively explained how the proposed rule provisions could prevent 

and mitigate accidents and improve information available to the public and LEPCs. EPA has no data or 

empirical estimates ofthe precise impact of each rule provision on the probability and magnitude of an 

accident, or on improved efficiency due to better information. In order to shed light on the existing 

landscape, however, in the next section EPA will describe in detail the number and costs of accidents 

currently associated with RMP facilities. To the extent practicable, the analysis monetizes the costs of 

damages to partially estimate the baseline costs that should decline due to the proposed rule. It also

qualitatively discusses other benefits that are expected outcomes of the proposed rule.

6.2 Number and Costs of Baseline Accidents

As part of the RMP Program, owners or operators of facilities subject to the rule must submit 

information on accidents that occurred over the previous 5 years if they produced on-site or offsite 

deaths, injuries, or property damage, or if they led to an evacuation,sheltering in place event, or offsite 

environmental damage. The analysis reviewed these data for all facilities that reported accidents that 

occurred from 2004 through 2013 (the last year with complete data) to provide a 10-year baseline.72 The 

beginning of the 10-year period was chosen as the earliest date that would fully reflectthe impacts of 

the most recent RMP rule update. 

Some accidents that occurred at RMP facilities during the 10-year period were not reported to EPA 

either because the facility closed subsequent to the accident, decommissioned the process, or removed 

the regulated substance from the process involved in the accident before it was required to submit a 

report to the RMP database. For example, a Praxair facility in St. Louis, Missouri, had a fire involving 

propylene cylinders on June 24, 2005, that resulted in one fatality and significant offsite property 

damage. 73 MFG Chemical, in Dalton, Georgia, released a cloud of allyl alcohol on April 12, 2004, that led 

to 154 people being medically treated, 5 hospitalized for chemical exposure, and a community 

evacuation. 74 Both of these facilities either closed or deregistered the affected process before the 

deadline for their subsequent RMP report. Due to the omission of such accidents, the 10-year baseline 

may under-represent the number and magnitude of RMP chemical accidents.

The RMP data indicated that there were 1,517 RMP reportable accidents among the 2,291 total 

accidents in the 10-year baseline. Facilities provided information for774 accidents that had no 

reportable impactsso EPA dropped them from the baseline database. The RMP accident database 

 72 The accidents included those that occurred at facilities that subsequently deregistered from the RMP Program. 

As such, some accidents analyzed may have occurred at facilities no longer subject to the RMP rule. Offsetting 

this, however, is the registration of new facilities subsequent to 2013. 73 CSB Report, Praxair Flammable Gas Cylinder Fire, Final Report, June 15, 2006, http://www.csb.gov/praxairflammable-gas-cylinder-fire/. 74 CSB Report, MFG Chemical Inc. Toxic Gas Release, Final Report, April 11, 2006, http://www.csb.gov/mfgchemical-inc-toxic-gas-release/.
Page 89 of 147

contains information on the initiating event and contributing factors for each accident. The impacts 

reported should be those attributable to, or resulting from, direct exposure to toxic concentrations, 

radiant heat, or overpressures from accidental releases or from indirect consequences of a vapor cloud 

explosion from the accidental release. However, EPA determined that there were some accidents 

where a release of a regulated substance was not the cause of the resulting impacts.

To address this difficulty, RMP reportable accidents were reviewed in detail based on industry 

knowledge and other resources, such as reports by the Chemical Safety Board, to ensure that only

impacts attributable to the release of a regulated substance were included. For example,for one 

accident, a review of the Chemical Safety Board report indicated that the initiating event was an 

explosion in a natural gas fuel line that led to a building collapse, the death of 4 workers, and in 

combination with a subsequent fire, the eventual release of ammonia.75 The analysis included the 

accident in the 10-year baseline, and retained the injuries, but excluded the 4 deaths and the property 

damage because they preceded the regulated substance release. In another case, EPA omits the 

accident and damages from the analyzed data because it appears that a fire was accidentally set by a 

flare fired on July 4 by a neighbor.

76

We indicate that one potential benefit of the proposed rule is prevention of “non-RMP” accidents at 

RMP facilities. Therefore, it is arguable that EPA should have counted these accidents and accident 

consequences in the baseline. However, EPA chose not to do so because it is a conservative approach to 

estimating the potential benefits of the proposed rule. 

 75 CSB Report, ConAgra Natural Gas Explosion and Ammonia Release, Final Report, February 4, 2010, 

http://www.csb.gov/conagra-natural-gas-explosion-and-ammonia-release/ 76 Fire at Patrick Cudahy meat packing plant in Cudahy, WI on July 9, 

2009,http://www.bizjournals.com/milwaukee/stories/2009/07/20/daily58.html
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6.2.1 On-site RMP Reportable Accidents in the 10-Year Baseline

Exhibit 6-2 presents the 10-year data, by year, for on-site impacts of accidents. Deaths and injuries are 

attributed to either employees or members of the public. 

Exhibit 6-2: On-site Impacts by Year

Year Impact 

Accidents

Employee 

Deaths

Employee 

Injuries

Public 

Injuries

Public 

Deaths

Value of Property 

Damage

2004 197 6 211 46 0 $124,186,397

2005 152 16 370 6 0 $343,100,280

2006 140 3 193 11 0 $181,088,015

2007 204 5 188 60 0 $207,676,070

2008 168 6 194 11 0 $514,472,444

2009 149 5 221 6 2 $87,029,904

2010 128 9 130 5 0 $114,845,119

2011 138 2 127 0 0 $108,642,919

2012 118 1 159 0 0 $86,245,834

2013 123 3 162 3 0 $287,608,254

Annual 

Average 151.7 5.6 195.5 14.8 0 $205,489,524

Total 

Reportable 1,517 56 1,955 148 2 $2,054,895,236

There were a total of 58 on-site fatalities over the 10-year analysis time period, which amounts to an 

annual average of 6 fatalities. Several accidents involved multiple fatalities. The largest accident during 

the time period was a refinery explosion in Texas City, Texas, in 2005 that killed 15 employees.77 In 

2010, a Tesoro refinery explosion in Anacortes, Washington, killed 7 employees 78, and a 2004 explosion 

at Formosa Plastics in Illiopolis, Illinois, killed 5 employees.79 There were 5 accidents that killed 2 

workers each, and the remaining employee deaths were single-fatality incidents. There were two onsite deaths to members of the public who were truck drivers loading a tank truck with ammoniawhen a 

line failure occurred.

80

The RMP rule does not require facilities to disaggregate on-site injuries by severity so it is not possible to 

determine from the RMP data alone, the severity of the on-site injuries. However, under the RMP 

accident history requirements, aRMP reportable accident injurymeans “any effect on a human that 

results either from direct exposure to toxic concentration; radiant heat; or overpressure from accidental 

 77 CSB. March 2007. Investigation Report: Refinery Explosion and Fire, Texas City, Texas, March 23, 2005. 

http://www.csb.gov/assets/1/19/CSBFinalReportBP.pdf

78 CSB. May 2014. Investigation Report: Catastrophic Rupture of Heat Exchanger, Tesoro Anacortes Refinery, 

Anacortes, Washington, April 2, 2010. http://www.csb.gov/assets/1/7/Tesoro_Anacortes_2014-May-01.pdf 79 CSB. April 2004. Investigation Report: Vinyl Chloride Monomer Explosion, Formosa Plastics Corp., Illiopolis, 

Illinois, April 23, 2004. http://www.csb.gov/assets/1/19/Formosa_IL_Report.pdf. 80 http://www.startribune.com/rosemount-oklahoma-firms-fined-in-2-deaths/95895109/
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releases or from the direct consequences of a vapor cloud explosion (such as flying glass, debris, or 

other projectiles) from an accidental release and that requires medical treatment or hospitalization.” 

Medical treatmentmeans “treatment, other than first aid, administered by a physician or registered 

professional personnel under standing orders from a physician” (40 CFR 68.3). Forsome accidents, 

where accident reports could be located from other sources, it appears that serious injuries (i.e., those 

requiring hospitalization) range from none (e.g., Leprino Foods August 2013 and Tysons Meats 2012 

where all workers were treated and released) to at least 50 percent of reported injuries(Delek Refining 

2008); in the largest accident (BP 2005), 66 workers were hospitalized, and 110 others were treated for 

minor injuries.81. Injuries described in reports varied from those that were treated with first aid alone at 

the scene to severe burns and permanent disability. Although the RMP rule limits reportable injuries to 

those that require medical treatment other than first aid, in some accidents, minor injuries treated with 

first aid have been reported. Regarding on-site property damage, the property affected included 

buildings, machinery, equipment and other plant infrastructure. Almost $677 million of the $2 billion in 

property damage reported occurred in accidents that had no other reportable impacts on-site or offsite.

6.2.2 Offsite Reportable Impacts in the 10-Year Baseline

Exhibit 6-3 presents the reported offsite impacts for the 10-year baseline including members of the 

public or emergency responders who were injured or killed offsite, were required to evacuate or shelterin-place, or who incurred property damage as a result of the accidents. Of the 1,517 reportable 

releases, 473 had reportable offsite impacts. One member of the public was killed as a result of a 

release of a regulated substance; that person drove into an ammonia cloud moving across a highway 82. 

There were approximately 50 incidents that listed offsite environmental damage but no other impacts. 

Because environmental damage is reported only as true/false, there is no basis for estimating the costs 

associated with the damage; they are not presented in either Exhibit 6-2 or 6-3.

 81 CSB, OSHA, and press reports were reviewed for larger accidents. CSB has investigated relatively few of the 

accidents in the database and does not always detail the severity of injuries. OSHA focuses investigations primarily 

on fatal accidents or those involving multiple hospitalizations. 82 http://www.ntsb.gov/investigations/AccidentReports/Pages/HZM1201s.aspx
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Exhibit 6-3: Offsite Impacts by Year

Year

Impact 

Accidents 

with 

Offsite 

Impacts

Number 

of 

Deaths

Hospital 

Visits

People 

undergoing 

Other 

Medical 

Treatment

Number of 

people 

Evacuated

Number 

of people 

Sheltered

in place

Value of 

Property 

Damage

2004 66 0 43 239 5,656 96,958 $1,414,834

2005 54 0 4 32 3,927 135,260 $687,996

2006 53 0 7 26 1,533 11,792 $833,000

2007 61 0 33 212 15,464 32,682 $122,980

2008 45 0 8 74 2,798 4,771 $318,191

2009 44 1 27 37 3,102 8,984 $7,750

2010 36 0 42 112 3,564 4,180 $2,475,500

2011 36 0 2 11 699 47,833 $235,104

2012 36 0 19 14,013 1,008 98,120 $1,536,600

2013 42 0 4 51 838 11,085 $3,720,150

Annual 

Average 47.3 0.1 18.9 1,480.7 3,859 45,167 $1,135,211

Total 

Reportable 473 1 189 14,807 38,589 451,665 $11,352,105

In the 10-year baseline, the total number of off-site people seeking medical treatment, other than 

hospitalization, is skewed by a single incident where 14,000 people sought treatment for exposure to 

smoke and particles from a fire at a Chevron refinery in Richmond, CA, in 2012.

83 For sheltering in place, 

six different accidents at the BP refinery in Texas City account for 257,000 people taking shelterwhich 

explainsthe high numbers for 2004 and 2005. 84

6.2.3 Distribution of Accident Impacts across Sectors

In the 10-year baseline, the data indicate that fatal accidents occurred primarily in the petroleum 

refining, chemical manufacturing, and pulp and papersectors. Accidents in these sectors accounted for 

all but 10 of the fatalities. These sectors also account for 87 percent of the onsite property damage 

(refineries alone account for 59 percent of the total). This is not surprising as these facilities handle 

highly flammable gases that can explode and burn. These are also large facilities with interconnected 

processes that can incur extensive damage in an explosion. The fatalities reported as RMP reportable 

impacts at refineries represent one third of all employee on-the-job fatalities reported to the Bureau of 

Labor Statistics for that sector for the 10-year period of 2004 to 2013. In the chemical manufacturing 

 

83 CSB. January 2014. Regulatory Report: Chevron Richmond Refinery Pipe Rupture and Fire, Chevron Richmond 

Refinery #4 Crude Unit, Richmond, California, August 6, 2012. Report No. 2012-03-I-CA. 

http://www.csb.gov/assets/1/19/CSB_Chevron_Richmond_Refinery_Regulatory_Report.pdf. 84 CSB. March 2007. Investigation Report: Refinery Explosion and Fire, Texas City, Texas, March 23, 2005. 

http://www.csb.gov/assets/1/19/CSBFinalReportBP.pdf.
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sector, RMP reported fatalities represent about 6 percent of worker on-the-job deaths in the sector for 

the period. 85 Exhibit 6-4presents a breakdown of RMP reportable accidents, deaths, and injuries by 

sector. The food and beverage manufacturers and warehouses are generally ammonia refrigeration 

systems; the agricultural chemical distributorsstore ammonia for use as a fertilizer. 

Exhibit 6-4: Accidents, Fatalities, and Injuries by Sector

Sector Total 10-Year 

Accidents

Accidents 

per Facility

Onsite 

Fatalities 86

Injuries 

Onsite

Injuries 

Offsite

NAICS 324- Petroleum and Coal 

Products Manufacturing 169 1.08 29 325 14,026

NAICS 325 - Chemical Manufacturing 530 0.36 15 585 378

NAICS 311, 312 - Food/Beverage 

Manufacturers 270 0.18 3 598 326

NAICS 322 –Paper Manufacturing 46 0.66 1 59 2

NAICS 331, 332, 333, 334, 336, 339 -

Other Manufacturing 53 0.14 1 66 14

NAICS 11, 12, 15, 42491 - Agricultural 

Chemical Distributors 156 0.04 2 157 161

NAICS 4246, 4247 -

Chemical/petroleum wholesale 38 0.06 0 30 31

NAICS 4244, 4245 -Other wholesale 20 0.07 0 62 15

NAICS 493 – Warehouse 72 0.07 2 77 9

NAICS 22131, 22132 - Water/POTW 75 0.04 1 89 19

NAICS 211 - Oil/Gas exploration 53 0.07 1 25 11

Other 35 0.06 1 30 4

Total 1,517 56 2,103 14,996

6.2.4 Monetized Costs of Chemical Accidents

While the RMP data base provides values of property damage, itincludes only counts of fatalities, nonfatal injuries, evacuations, and the numberof people required to shelter-in-place. EPA has applied 

estimates of the values of these impacts to better understand the magnitude of accident impacts during 

the 10-year baseline. To monetize fatalities, EPA applied the value of statistical life (VSL) recommended 

in EPA’sGuidelines for Preparing Economic Analysis(2010) (hereafter the Guidelines). For non-fatal 

injuries, EPA gathered data on hospital costs from the US Department of Health and Human Services 

 85 The BLS data reflect only facility employees killed, not contractors, who are accounted for under other NAICS 

codes. Therefore, these data understate the number of workers who died in refinery accidents.

http://www.bls.gov/iif/oshcfoi1.htm

86 Column excludes 3 public fatalities (see Exhibits 6-2 and 6-3).
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(HHS) Agency for Healthcare and Research and Quality Data (2012).

87 Finally, for evacuations and 

shelter-in-place events, values of labor time were drawn from the Bureau of Labor Statistics (2014). 88

6.2.4.1 Fatalities and Injuries

Fatalities were valued using the Guideline’s value of a statistical life ($7.9 million in 2008 dollars) inflated 

to 2014 dollars ($8.6 million). 

In principle, valuation of injuries includes multiple components. The Guidelines explain that the

willingness to pay (WTP)to reduce the risk of experiencing an illness is the preferred measure of value 

for morbidity effects: “As described in Freeman (2003), this measure consists of four components:

• “Averting costs” to reduce the risk of illness; 

• “Mitigating costs” for treatments such as medical care and medication; 

• Indirect costs such as lost time from paid work, maintaining a home, and pursuing leisure 

activities; and 

• Less easily measured but equally real costs of discomfort, anxiety, pain, and suffering.”

Unfortunately, data were not available to estimate the components identified in the first, third, and final 

bullets. These cost categories are omitted from EPA’s estimates, which rely solely on the costs of 

medical care. For on-site injury and offsite hospitalization, the analysis reviewed the accident data to 

determine the percentage of the accidents that involved explosions and fires and the percentage that 

involved the release of toxics. The analysis then used the HHS data on the current costs for 

hospitalizations for poisoning (other than by medicinal substances) to transfer to injuries from toxic 

releases, for burns to transfer to injuries associated with fire, and foropen wounds to transfer to injuries 

from explosions. 89 Because the costs for open wounds and poisoning were close ($37,700 and $35,300, 

respectively),the analysis used the average of these two valuesfor on-site injuries; the costs for burns 

was $100,000. The analysis then created a weighted value of an on-site injury based on the propensity 

for a burn-related injury versus other impacts(fires were involved in 18 percent of the injury incidents, 

open wounds were assumed to be the remainder of injury costs). This was approximately $50,000. The 

analysis used the cost of hospitalization for poisoning (rounded to $35,000) for hospitalizations 

associated with offsite injuries because in the 10-year baseline these injuries were usually related to 

exposure to toxic chemicals. For medical treatment, other than hospitalization (offsite), the analysis 

used an estimate of $1,000, which is above the $750 per person paid to the 14,000 people who sought 

medical treatment from the Richmond refinery fire, and slightly below the average emergency room 

cost; people offsite are generally seeking treatment for exposure to fumes, which usually involves 

relatively low cost treatments (e.g., oxygen, eye washes, skin washes).

 87 http://hcupnet.ahrq.gov 88 http://www.bls.gov/oes/current/oes_nat.htm 89 http://hcupnet.ahrq.gov/ See HCUP National (Nationwide) Inpatient Sample (NIS)- specific diagnosis statistics.
Page 95 of 147

The $50,000 cost estimate for on-site injuries is inaccurate for several reasons. As mentioned above for 

all injuries, hospital costs are only one of four categories of social costs incurred. EPA’s estimates are 

conservative by omitting three of the four categories, due to a lack of data. However, as an estimate of 

hospital costs, it is an over-estimate for an unknown percentage of the injuries on-site that did not 

require hospitalizations and may not involve any medical costs 90Orfor injuries and toxic exposures that 

led to hospitalizations andwere minor enough that the person was released within a day (the HHS cost 

estimates are based on 3-day stays for poisonings and injuries, 8 days for burns). However, in the 

opposite direction, the $50,000 cost estimate is understated for those workers who were severely 

injured, for whom the medical costs would certainly have involved more than hospitalization. There 

would be costs associated with further medical treatment, and physical and occupational therapy. 

6.2.4.2 Evacuations and Shelter-in-Place Events

The 10-year baseline data do not provide any basis for estimating the time involved in the average 

evacuation or sheltering. EPA assumes that sheltering-in-place is less disruptive than evacuations. To 

estimate costs for evacuations and sheltering-in-place, the analysis assumed the value of time of 

affected people was $22.65 per hour, and that the shelterings occupied 4hours, and the evacuations 8 

hours. 91

6.2.4.3 Summary of Monetized Accident Impacts

The dominant monetized element of RMP facility reportable accidents is on-site property damage, 

followed by onsite fatalities. The total monetized 10-year cost of the accidents is about $2.7 billion. 

$2.6 billion of that is caused by on-site impacts, and about $2.5 billion is attributed to property damage 

and fatalities. Monetizing the values of accidents during the 10-year baseline involved a high degree of 

uncertainty associated with the estimated unit values for on-site injuries, off-site hospitalization, 

evacuations, and sheltering-in-place. However, these components of cost are small relative to the total 

cost of chemical accidents. Exhibit 6-5summarizes the 10-year baseline reportable accident impacts 

and Exhibit 6-6presents the monetized 10-year baseline accident costs.

 90 Even for widely investigated accidents, few details on injury levels are available. For the most serious accident 

in the RMP data, the March 2005 BP explosion and fire, which killed 15 workers, the level of injury among the 170 

listed (in the facility RMP) is not well described. The CSB report indicates that 180 people were injured in the 

accident, and that 114 of these received only first aid and the injuries for the remaining individuals were serious 

enough to require medical treatment, days away from work, and/or restricted work hours. One press report 

stated that several were severely injured. 

91 BLS data put the mean hourly wage at $22.65 across all workers at the end of 2014.

http://www.bls.gov/news.release/ecec.t01.htm
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Exhibit 6-5: Average Impacts per Year and Accident

10-Year Total Average/Year Average/Accident

On-site

Fatalities 58 5.80 0.038

Injuries 2,103 210 1.386

Property Damage $2,054,895,236 $205,489,524 $1,354,578

Offsite

Fatalities 1 0.10 0.001

Hospitalizations 189 19 0.125

Medical Treatment 14,807 1,481 9.76

Evacuations 38,589 3,859 25.44

Sheltering in Place 451,665 45,167 298

Property Damage $11,352,105 $1,135,211 $7,483

Exhibit 6-6: Monetized Accident Costs per Year and Accident

Unit Value 10-Year Total Average/Year Average/Accident

On-site

Fatalities $8,583,113 $497,820,554 $49,782,055.40 $328,161.21

Injuries $50,000 $105,150,000 $10,515,000 $69,314

Property Damage $2,054,895,236 $205,489,524 $1,354,578

On-site Total $2,657,865,790 $265,786,579 $1,752,053

Offsite

Fatalities $8,583,113 $8,583,113 $858,311 $5,658

Hospitalizations $36,000 $6,804,000 $680,400 $4,485

Medical Treatment $1,000 $14,807,000 $1,480,700 $9,761

Evacuations $181 $6,992,327 $699,233 $4,609

Sheltering in Place $91 $40,920,849 $4,092,085 $26,975

Property Damage $11,352,105 $1,135,211 $7,483

Offsite Total $89,459,394 $8,945,939 $58,971

Total $2,747,325,184 $274,732,518 $1,811,024

6.3 Benefits Compared to Costs

The 10-year RMP baseline suggests that considering only the monetized impacts of RMP accidents 

would mean that the rule’s costs likely outweigh the portion of impacts from improved prevention and 

mitigation that were monetized. The annualized cost of the proposed rule (estimated to range from 

$130 million with no new responders to $162 million if 50percent of non-responders must become 

responders) is between 47 % and 60 % of the average annual monetized costs in the 10-year baseline. 

However, the monetized impacts of RMP accidents omit important benefit categories including avoided 

impacts of non-RMP accidents at RMP facilities; the information benefits described above; and 
Page 97 of 147

additional benefit categories not reported in the RMP data that result from accident prevention and 

mitigation. Additional benefit categoriesinclude lost productivity; avoided responder costs; avoided 

transaction costs; protected property values; and avoided environmental impacts;In addition, the 

proposed rule may cause a reduction in the probability or magnitude of a major catastrophe such as the 

toxic gas release at Bhopal or the explosion at Phillips in Pasadena, TX in 1989. No such major 

catastrophes are reflected in the 10-year baseline. The following sections describemajor catastrophes 

and additional benefit categories not covered by the RMP data that derive from accident prevention and 

mitigation.

6.4 Avoided Catastrophes

Congress, in enacting section 112(r), was focused on catastrophic accidents such as Bhopal, which are 

extremely rare, but very high consequence events. The large chemical facility accidents that have 

occurred in the US and Europe, since the beginning of the chemical era, have not approached this level 

of damage, although it is possible that one could do so. The single largest U.S. chemical accident, the 

explosion at Phillips, Pasadena, TX, in 1989 killed 23 workers ($197 million in current dollars), injured at 

least 150 more ($7.5 million), and did $1.4 billion in property damage. 92 The 10-year baseline does not 

include a major catastrophe such as these. If the proposed revisions were to prevent or substantially 

mitigate even one accident of this magnitude, the benefits generated would be dramatic. 

6.5 Additional Benefit Categories Associated with Accident Prevention and 

Mitigation

The sections below present a discussion of benefits from the proposed rule provisions for which there is 

either limited or no information in the RMP data. EPA qualitatively describes each category as a cost of 

accidents. The proposed rule is expected to reduce costs in each of these categories by an uncertain 

amount. In each case, data were unavailable to quantify expected impacts of the rule. 

6.5.1.1 Avoided Lost Productivity

A major cost associated with some chemical releases that is not captured in the 10-year-baseline 

estimates presented above, is lost productivity that can result if a facility or process unit must be shut 

down or is destroyed. The RMP data include estimates of property damage but specifically exclude 

estimates of lost productivity.93 EPA has not estimated these costs because of a lack of data. Such costs 

are highly variable based on the type of release, the extent of the damage, the location of the facility, 

and product being produced. Marsh, a risk management and energy consultancy, has collected data on 

 92 Marsh, The 100 Largest Losses, 1974-2013, Large Property Damage Losses in the Hydrocarbon Industry,

23rd Edition. 

https://uk.marsh.com/Portals/18/Documents/100%20Largest%20Losses%2023rd%20Edition%202014.pdf

93 EPA instructions for RMP submissions specifically direct the owner or operator not to include any losses incurred 

as a result of business interruption. See page 74 of the RMP*eSubmit User’s Manual (EPA, March 2014); 

http://www.epa.gov/rmp/rmpesubmit-users-manual. 
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10,000 accidents in the petrochemical sector over 40 years and published 23 editions of its “100 Largest 

Losses” reports. These limited data suggest that lost productivitymay range from zero to four to five 

times the cost of property damage. 94 Many releases of toxics do not result in property damage and, 

therefore, have a limited impact on business beyond the loss of the chemical itself. Explosions and fires, 

however, can produce substantial damage. 

The Marsh accident summaries provide examples of the extent of damage and the impact on 

production, as well as on the variability in those impacts. One refinery facility had $240 million in 

damage, but continued to operate; another with the same level of damage was shut down for 6 months. 

Production units affected by major explosions have been shut down for weeks or months or more than a 

year. Some accident reports indicate production continued but at a reduced rate for weeks or months. 

A refinery accident that shuts down one or more units will affect the firm involved, especially if it has no 

other refinery in the area or its other units do not have the capacity to increase production. Such 

reduced production may, however, be offset by increased production at other firms. Refining capacity 

in the US is located primarily in the Gulf Coast and West Coast regions; accidents that shut down units in 

those areas are less likely to have economic impacts beyond the firm owning the refinery if other nearby 

refineries can increase production. Accidents at refineries in other regions could impose social costs

because even if other refineries can produce more, there may be higher costs of transporting products 

longer distances. 

Broader losses could occur in the petrochemical sector where some facilities may be one of the only 

sources for some products. Even in that sector, however, losses may be limited to the firm involved. 

For example, the 1989 explosion at the Phillips plant in Pasadena, TX, which destroyed two units at the 

facility appears to have had a limited impact on the economy even though it was the only domestic 

source for one product. 95 Appendix A provides a list of the major US accidents cited by Marsh in its 2013 

publication, with losses adjusted by Marsh to 2013 dollars. These accidents are limited to those that 

might have occurred at RMP facilities (offshore oil and distribution accidents were omitted) and to those 

that were not the result of natural disasters where the damage was the result of flooding or wind, rather 

than chemical releases. The accident list does not include all serious accidents because Marsh excluded 

any accident that produced less than $130 million in property damage. (The publication covers 

accidents worldwide.) Nonetheless, the list indicates the range of property damage and the lost 

productivity. 

6.5.1.2 Avoided Emergency ResponseCosts

EPA was unable to locate data summarizing the costs associated with responding to a chemical release, 

fire, or explosion. Very likely these costs vary widely depending on the incident. A response may 

involve facility fire brigades, community fire departments, volunteer fire departments, and mutual aid 

 94 Marsh, The 100 Largest Losses, 1974-2013, Large property damage losses in the Hydrocarbon Industry

23rd Edition. Marsh provides estimates of property damage in current dollars and in a few cases, business loss 

costs.

95 http://www.nytimes.com/1989/10/25/us/reverberations-for-industries-but-not-for-us-households.html
Page 99 of 147

groups. There is also the cost associated with equipment depreciation and fire suppressant used. The 

level of effort and equipment use can be seen in two incidents reported by Marsh. For a 1999 refinery 

fire in CA, approximately 300 firefighters and 33 fire trucks participated in the two-and-a-half-hour 

effort to control the fire. Foam concentrate consumption totaled 3,200 gallons. A 1989 explosion at a 

Louisiana refinery used approximately 48,000 gallons of foam concentrate, 200 fire brigade members, 

and 13 pumper units during the firefighting effort, which extinguished the fire approximately 14 hours 

after the initial explosion. Foam concentrate costs between $20 and $60 per gallon; the cost of the fire 

suppressant alone for these two fires ranged from $64,000 to almost $2.9 million. In sum, EPA expects 

that these costs are significant.

6.5.1.3 Avoided Transaction Costs

One consequence of chemical accidents is often litigation. Particularly when the public is affected, 

facilities are often sued. For example, a 1988 refinery explosion led to more than 5,000 property 

claims96. There are substantial costs associated with making and responding to such claims and the 

litigation surrounding them, both on behalf of plaintiffs and defendants. Rule provisions that reduce the 

number or severity of accidents could reduce the number of lawsuits and the amount of resources 

directed toward litigation.

6.5.1.4 Avoided Property Value Impacts

Following an explosion or other chemical release at an RMP facility, the marketplace for nearby 

properties will adjust to reflect changes in perceived risk, changes in the aesthetic appeal of the 

surrounding area, and potentially reduced ecological services. An established literature in economics 

has estimated the impacts on nearby property values of a wide variety of contaminated, toxic, or 

potentially toxic sites. 97 A variety of papers have specifically examined the impact on property prices of 

hazardous industrial facilities, usually finding that prices increase with distance from the facility.98 To 

improve understanding of the benefits of the proposed rule, we targeted research on the property value 

impact of accidents, not simply proximity to hazardous facilities. Several studies are particularly 

relevant. Carroll et al (1996) studied property prices in neighborhoods surrounding the Pepcon chemical 

facility in Nevada before and aftera dramatic explosion in 1988. 99 Data were for almost 5,000 property 

 96 See Marsh, Shell Norco explosion. 97 For reviews of the literature,see Boyle, M. A. and K. A. Kiel. 2001. A Survey of House Price Hedonic Studies of 

the Impact of Environmental Externalities. Journal of Real Estate Literature 9(2): 117-144.

or Banzhaf, S. and E. McCormick, January 2007. Moving Beyond Cleanup: Identifying the Crucibles of 

Environmental Gentrification, NCEE Working Paper Series 200702, National Center for Environmental Economics, 

U.S. Environmental Protection Agency.

98 See Grislain-Letrémy, C. and A. Katossky 2014. The impact of hazardous industrial facilities on housing prices: A 

comparison of parametric and semiparametric hedonic price models. Regional Science and Urban Economics 49: 

93-107 for a review of the literature. (Their Appendix A.1 summarizes findings.) 99 Carroll, T.M., Clauretie, T.M., Jensen, J. and Waddoups, M. September 1996. The Economic Impact of a 

Transient Hazard on Property Values: The 1988 PEPCON Explosion in Henderson, Nevada. The Journal of Real 

Estate Finance and Economics, Volume 13, Issue 2, pp 143-167.
Page 100 of 147

transactions from 1986 to 1990. The explosion was followed by a 17.6% decline in property values in 

the two closest towns of Green Valley and Henderson (located a mean distance from the Pepcon plant 

of 3.2 miles and 3.5 miles respectively). It was later announced that the Pepcon facility would be rebuilt 

over 100 miles away. Local home prices rebounded by 38% after the announcement, suggesting that 

proximity to the plant prior to the explosion was suppressing property values. 

Hansen et al. (2006) studied the effect of a 1999 fuel pipeline explosion in Bellingham, Washington. 100 

While the explosion was not from a chemical facility, its property value impacts may be comparable. 101

The data analyzed were a sample of Bellingham single family home sales located within a mile of two 

pipelines. The sales transacted from 5 and a half years prior to the explosion to 5 years after. Following 

the event, property prices were significantly adversely affected, with the mean property price 

discounted by 4.6% for a property 50 feet from the pipeline or 2.3% at 100 feet, 1.2% at 200 feet and 

0.2% at 1,000 feet. The authors concluded that the effect diminished over time. 

These studies suggest that preventing or mitigating an accident at a chemical facility may prevent or 

mitigate property value losses in nearby neighborhoods. Note that any avoided property value losses 

represent part of society’s combined valuation of reduced risks to human health, reduced ecosystem 

services, and negative impacts on aesthetic appeal. Property value losses would represent only nearby 

homeowners, not any other affected parties such as employees who do not reside in the immediate 

neighborhood.

6.5.1.5 Avoided Environmental Impacts

In addition to information on deaths, injuries, property damage, evacuations, and sheltering in place, 

the RMP rule requires owners and operators to report within the five-year accident history accidental 

releases that result in environmental damage. However, the environmental damage information 

contained in the RMP database is limited, for two reasons. First, most releases of RMP-regulated 

substances do not result in lingering contamination issues because most regulated substances are either 

highly volatile toxics thatwill rapidly disperse in air, or highly flammablesubstances thatignite if 

released in the presence of an ignition source. The other reason is that RMP accident history reports 

indicate general categories of environmental damage (e.g., fish or animal kills, tree, lawn, shrub, or crop 

damage, etc.), but do not contain any estimates of damage valuation, or other specific information on 

reported impacts. 

Notwithstanding these limitations, some RMP accidents do result in environmental damage. For 

example, in the 10-year baseline there were approximately 50 incidents in which offsite environmental 

 100 Hansen, J. L., E. D. Benson and D. A. Hagen. 2006. Environmental Hazards and Residential Property Values: 

Evidence from a Major Pipeline Event. Land Economics 82(4): 529-541. 101 An important difference between a pipeline and a chemical facility is that pipelines may not be as noticeable. 

Parts of the pipelines in Bellingham were buried. Unlike homes near the Pepcon plant, for the five-year period 

prior to the Bellingham pipeline explosion, nearby property prices showed no effect of proximity to a pipeline. 

However, we are interested here in the impact of accidents or, for evaluating the proposed rule, the impact of 

accident prevention, so the house price effects of a pipeline explosion seem informative. 
Page 101 of 147

damage was the only impact reported. Rule provisions that prevent or mitigate the extent of accidental 

releases are therefore likely to prevent or reduce the environmental impacts associated with those 

releases, but these benefits cannot be quantified using the available data.

6.6 Conclusions

It is not possible to estimate quantitative benefits for the proposed rule. EPA has no data to project the 

specific impact on accidents made by each proposed rule provision. The accidents themselves have 

highly variable impacts that are difficult to predict. However, it is clear from the RMP accident data and 

other data, such as that reported by Marsh, that chemical accidents can impose substantial costs on 

firms, employees, emergency responders, the community, and the broader economy. Reducing the risk 

of such accidents and the severity of the impacts when accidents occur, and improving information 

provision, as the proposed provisions intend, would provide benefits to the potentially affected 

members of society.

Exhibit 6-9 summarizes all of the benefit or accident cost categories described in this chapter. There are 

four broad benefit categories related to accident prevention and mitigation including RMP accidents, 

non-RMP accidents at RMP facilities, and potentialmajor catastrophes. The exhibit explains each and 

identifiesten associated specific benefit categories. Exhibit 6-7also highlights and explains the 

information disclosure benefit category and identifies two specific benefits associated with it.
Page 102 of 147

Exhibit 6-7: Summary of Social Benefits

Broad Benefit Category Explanation Specific Benefit Categories

Accident Prevention Prevention of future RMP facility 

accidents

• Reduced Fatalities

• Reduced Injuries

• Reduced Property 

Damage

• Fewer People 

Sheltered in Place

• Fewer Evacuations

• Avoided Lost 

Productivity

• Avoided Emergency 

Response Costs

• Avoided Transaction 

Costs

• Avoided Property 

Value Impacts*

• Avoided 

Environmental 

Impacts

Accident Mitigation Mitigation of future RMP facility accidents

Non-RMP accident prevention 

and mitigation

Prevention and mitigation of future nonRMP accidents at RMP facilities

Avoided Catastrophes Prevention of rare but extremely high 

consequence events

Information Disclosure Provision of information to the public and 

LEPCs

• Improved efficiency of 

property markets

• Improved resource 

allocation

* These impacts partially overlap with several other categories, such as reduced health and environmental impacts

To get a sense of the size of the population affected by the proposed rule provisions, EPA determined

the number of people that would be affected by facility worst case scenarios and alternative release 

scenarios. A worst case scenario generally identifies the largest potential reach and effect of a 

hypothetical accidental release. The alternative release scenario identifies the potential reach and 

effect under more realistic circumstances than the worst-case scenario. Using RMP data and MARPLOT, 

EPA was able to determine that the aggregate U.S. population potentially impacted by worst case 

scenarios is approximately 177 million. The aggregate U.S. population potentially impacted by 

alternative release scenarios is approximately 40 million. 102 Although the 10-year baseline of accidents 

does not include a major catastrophe – such as the Pasadena, TX explosion –the population estimates 

do demonstrate that a significant portion of the U.S. population are at risk for these scenarios. Many of 

the provisions proposed in this rule are intended to reduce the risks and impacts for this large portion of 

the country.

 102 EPA. January 27, 2016. Technical Background Document for Notice of Proposed Rulemaking: Risk Management 

Programs under the Clean Air Act, Section 112(r)(7).
Page 103 of 147

CHAPTER 7: SMALL ENTITY IMPACTS

The Regulatory Flexibility Act as amended (RFA) (5 U.S.C. 601-612) requires agencies to determine 

whether a proposed rule will have a “significant economic impact on a substantial number of small 

entities.” The Small Business Administration (SBA) sets the standard for defining a small entity by 5 or 6-

digit NAICS code, for businesses (13 CFR part 121); governments are considered small if they serve fewer 

than 50,000 residents.103 Although “significant economic impact” is not defined by either the RFA or 

SBA, EPA guidance provides example thresholds of one percent and three percent of revenues.104 This 

analysis, however, uses the more stringent one percent threshold because almost 39 percent of the 

small entities affected by the rule are agricultural chemical distributors; data from the Department of 

Agriculture indicates that net income in this sector is less than three percent of sales. 105

This chapter presents the analysis of potential impacts of the rule on small entities. The first section 

discusses the industrial sectors reported by RMP facilities. The second section describes the approach 

to determining how many facilities and firms subject to the rule are small based on SBA standards. The 

third section discusses the economic impacts of the rule on small entities.

7.1 RMP Affected Sectors

The RMP rule affects a broad range of sectors (296 separate NAICS codes are listed in RMP filings; 240 of 

these are associated with small entities). The primary sectors subject to the rule and the SBA standards 

for defining a small firm are shown in Exhibit 7-1. A dollar value standard refers to firm revenues in 

millions; the full-time-equivalent (FTE) employees applies to the firm’s total FTE, not the number at any 

one location. For governments, the standard is based on the population served. The NAICS codes are 

presented at the 2 to 6-digit level based on whether the SBA standard varies for the 5 and 6-digit codes 

and whether there are a substantial number of RMP facilities in the sector. 106 For example, the SBA 

standard for the wholesale trade sector, NAICS code 42, is the same across all codes (100 FTE).

 103 Some small governments serve substantial populations associated with businesses, particularly irrigation 

districts that serve large farming areas, but few residences, and small cities that have large tourist-related 

businesses.

104 See Chapter 2 of Final Guidance for EPA Rulewriters: Regulatory Flexibility Act, 

http://www.epa.gov/rfa/documents/Guidance-RegFlexAct.pdf. 105 http://www.usda.gov/wps/portal/usda/usdahome?contentid=2013/10/0199.xml 106 In some cases, NAICS codes are disaggregated to 5 digits and in others 6 digits. SBA does not include all 6-digit 

codes in its regulation.
Page 104 of 147

Exhibit 7-1: Industry Sector Small Entity Standards

NAICS Sector Standard NAICS Sector Standard

111 Crop Production $0.75m 3253

Pesticide, Fertilizer, 

and Other Agricultural 

Chemical 

Manufacturing

500 FTE

112 Animal Production and 

Aquaculture $0.75m-$15m 3254

Pharmaceutical and 

Medicine 

Manufacturing

750 FTE

115 Support Activities for 

Agriculture and Forestry $7.5m 3255

Paint, Coating, and 

Adhesive 

Manufacturing

500 FTE

211111 Crude Petroleum and 

Natural Gas Extraction 500 FTE 3256

Soap, Cleaning 

Compound, and Toilet 

Preparation 

Manufacturing

500-750 

FTE

221112 Fossil Fuel Electric Power 

Generation 750 FTE 3259

Other Chemical 

Product and 

Preparation 

Manufacturing

500-750 

FTE

22131 Water Supply and 

Irrigation Systems $27.5m 326

Plastics and Rubber 

Products 

Manufacturing

500 -1000 

FTE

22132 Sewage Treatment 

Facilities $20.5m 327 Nonmetallic Mineral Product Manufacturing

500 -1000 

FTE

3111 Animal Food

Manufacturing 500 FTE 331 Primary Metal Manufacturing

500 -1000 

FTE

3112 Grain and Oilseed Milling 500 -1000 FTE 332 Fabricated Metal 

Product Manufacturing

500 -1000 

FTE

3113 Sugar and Confectionery 

Product Manufacturing 500-750 FTE 333 Machinery Manufacturing

500 -1000 

FTE

3114

Fruit and Vegetable 

Preserving and Specialty 

Food Manufacturing

500 -1000 FTE 334

Computer and 

Electronic Product 

Manufacturing

500 -1000 

FTE

3115 Dairy Product 

Manufacturing 500 FTE 335

Electrical Equipment, 

Appliance, and 

Component 

Manufacturing

500 -1000 

FTE

3116 Animal Slaughtering and 

Processing 500 FTE 336

Transportation 

Equipment 

Manufacturing

500 -1000 

FTE

3117

Seafood Product 

Preparation and 

Packaging

500 FTE 337 Furniture and Related 

Product Manufacturing 500 FTE

3118 Bakeries and Tortilla 

Manufacturing 500-750 FTE 339 Miscellaneous Manufacturing 500 FTE
Page 105 of 147

NAICS Sector Standard NAICS Sector Standard

3119 Other Food 

Manufacturing 500 FTE 42 Wholesale Trade 100 FTE

3121 Beverage Manufacturing 500 FTE 44422

Nursery, Garden 

Center, and Farm 

Supply Stores

$11m

322 Paper Manufacturing 500-750 FTE 45431 Fuel Dealers 50 FTE

32411 Petroleum Refineries 1500 FTE 48691 Pipeline Transportation 

of Refined Product 1,500 FTE

32412

Asphalt Paving, Roofing, 

and Saturated Materials 

Manufacturing

500 FTE 48821 Support Activities for 

Rail Transportation $15m

32419

Other Petroleum and 

Coal Products 

Manufacturing

500-750 FTE 4931 General Warehousing 

and Storage $27.5m

3251 Basic Chemical 

Manufacturing 750-1000 FTE 56179 Other Services to Buildings and Dwellings $7.5m

3252 Resin and Synthetic 

Rubber Manufacturing 750-1000 FTE 5621

5622 Waste Management $38.5m

92 Governments

<50,000 

residents 

served

The codes that some facilities listed in their RMP filings are problematic. First, many firms list multiple 

NAICS codes for their facilities. Particularly for agricultural chemical distributors there is often no clear 

reason for assigning facilities to different NAICS codes when the activities appear to be the same (e.g., 

facilities named as agricultural co-ops appear in NAICS 111, 115, 32531, 325312, 325313, 325314, 

325193, 42451, 42459, 42491, 444, 453, and 493). For other facilities, the parent firm has listed its 

facilities in the code appropriate for activities occurring at a specific location, but not appropriate for the 

firm (e.g., integrated gas exploration, production, and distribution companies have facilities in NAICS 

211, 424, 486, and 488; integrated oil firms list facilities in NAICS 211, 213, 221, 324, 325, 424, and 541). 

Second, not all of the NAICS codes listed exist; some are clearly earlier versions of current codes (42269 

rather than 42469) and were recoded, but others represent subsectors that do not exist, making them 

difficult to define. Third, checks of some facilities indicate that the sector listed is incorrect; the only 

facility with less than 5 FTEs listed for NAICS 32511 (petrochemicals) is variously described in Internet 

sources as an aerosol packager (an official Missouri report), a paperboard company, or an agricultural 

chemical distributor (it was recoded to NAICS 32599). Finally, almost all of the governmental entities, 

which should be listed under NAICS code 92, listed themselves under other codes, primarily 2213 (water 

and wastewater treatment), but also under chemical manufacturing and waste management; all of 

these were recoded to NAICS 924. Some of the other facilities listed under NAICS 2213 belong to 

manufacturing plants. The decision rules applied to re-categorize firms into correct NAICS codes are 

discussed below.
Page 106 of 147

7.2 Estimating the Number of Small Entities 

The RFA and the SBA standards apply to firms, not facilities (or establishments, the term used by the 

Economic Census) because the costs of the rule are ultimately borne by the firm, rather than the facility. 

Therefore, to determine the number of small entities, the analysis identified the number of firms and 

the size of those entities. The RMP data include facility and parent company name as well as the 

number of full time equivalents (FTE) for the facility and the NAICS codes. Although this information 

facilitates the small entity analysis, a review of the data indicated a substantial number of issues. Parent 

company information was often missing and when present, incorrect. For example, for one company 

with 68 facilities, 15 listed no parent company, 52 listed the company name, and only 1 listed the name 

of the foreign firm that owns the company. Two cooperatives with 20 and 30 RMP facilities listed zero 

FTEs for every facility; research indicated that one is among the largest firms in its sector, with revenues 

of about $1 billion and a senior management team of 15 people. The size of the parent cooperative for 

the second could not be determined and, therefore, it was categorized as small. Research on one facility 

determined that it was owned by another firm; that firm in turn was determined to own 8 companies, 

most of which have RMP facilities but none of which had identified the parent company. Particularly in 

the oil and gas sectors, where corporate structures include multiple divisions that are separate legal 

entities for management and tax purposes, and where mergers are frequent, facilities often list the 

intermediate entities rather than the actual parent company or the entity that purchased the site rather 

than the current owner.

To develop an estimate of the number of small entities, the analysis required a series of reviews of the 

data to identify the large entities and the small entities that were part of small firms owning multiple 

facilities. First, any facility that exceeded 1,500 FTE was categorized as large; 1,500 FTE is the highest 

threshold for large entities when the SBA standard is based on FTE. Based on Economic Census data, it 

was determined that any facility of that size would also generate revenues high enough to exceed the 

highest revenue threshold of any covered sector. Second, SBA sets its standards to ensure that while 

most firms in a sector are classified as small, the largest firms in a sector are not. Any facility that 

belonged to the largest firms in the sector were classified as large (e.g., each of the 96 facilities that 

belong to Tysons Foods). Industry data on the largest firms in each of the major sectors (agricultural 

chemical distributors, food manufacturers, chemical manufacturers, and oil and gas companies) were 

used to identify those firms. The largest government entities were also identified in this screen (e.g., all 

federal entities; any State-owned facility; water systems serving Los Angeles, New York City, Chicago, 

etc.). 

The data were reviewed to identify parent companies that were clear from the facility name, but not 

included in the parent company field. That made it possible to determine the total FTE for facilities 

belonging to the same parent company and compare that number to the SBA standard (when in FTEs). 

If the total FTE exceeded the standard, all the facilities were classified as large. Where the facilities 

listed different NAICS codes, the analysis applied either the code used for a majority of the facilities or, if 

no single code dominated, the code with the highest threshold. For example, if a firm had facilities in 
Page 107 of 147

sectors where the standards were 500 and 1000 FTE, the 1000 FTE standard was used to determine if 

the firm was large. 

For remaining facilities, if there were multiple facilities belonging to a single firm and the total FTE 

approached the threshold or if the name included “USA” or “US holdings”, which implied an 

international company, Internet searches were conducted to identify whether the facilities belonged to 

a firm with other facilities or employees. For example, a chemical company with 7 facilities with a total 

of less than 300 FTE was determined to belong to a Finnish firm with more 4,000 employees. For oil and 

gas exploration facilities (NAICS 211), which often have general names (e.g., gas plant 1), EPA’s facility 

registry system was checked to determine which firm owned the facility. 107

The RFA defines small governments as governments of cities, counties, towns, townships, villages, 

school districts, or special districts, with a population of less than fifty thousand.108 Most governmental 

RMP facilities are water and wastewater treatment systems and listed a city or county as the owning 

entity. A check of budgets that were available for some of the smallest cities indicated that the systems

(1) are sub agencies of the city/county and (2) obtain some revenues from the general fund although 

most of their revenues are derived from user fees. To determine which facilities belong to small 

governments, the population for the associated city or county was determined by checking the 2014 

estimates from the Census. For special water and irrigation districts, their Internet sites were checked 

for information on the population served. Exhibit 7-2 presents the number of small and large facilities 

by program level. Exhibit 7-3 presents the small/large breakdown by sectors.

Exhibit 7-2: Number of Facilities Owned by Small and Large Entities by Program Level

RMP Program Small Large Total

Program 3 3,996 6,619 10,615

Program 2 695 590 1285

Program 1 219 423 642

Total 4,910 7,632 12,542

The number of small entities is likely to be overstated. Particularly in the agricultural chemical 

distributor sector, it was not possible to determine common ownership among facilities with common 

names (e.g., Farmers Cooperative). Not all of these facilities have websites and, when they do, they do 

not always provide information on ownership or locations. Unless the names were identical and the 

facilities located in the same State, the analysis assumed that they belonged to separate firms. It is also 

likely that for many of these facilities the FTE reported are too low. A number of the agricultural 

chemical distributors listed multiple facilities at zero FTE even though they are open more than 8 hours a 

day, 5 days a week. 

 107 http://www.epa.gov/enviro/html/fii/index.html 108 5 U.S.C. 602.
Page 108 of 147

The classification of facilities as Program 1, 2, or 3 is based solely on the RMP data submitted, but, as 

explained in Chapter 3, EPA has reclassified the wholesale facilities and certain others based on OSHA’s 

revised interpretation of the PSM retail exemption,whichwill move these facilities from Program 2 to 

Program 3. A review of other facilities indicates that, in some cases, classifications in the RMP database 

are inappropriate. For example, of the 701 water/wastewater facilities in State-plan states, 661 listed 

themselves correctly as P3, but 40 (including those in a major city) listed themselves as P2. 109Of the 

1,194 publicly owned facilities in States where Federal OSHA implements the PSM standard, 893 listed 

themselves correctly as P2, but 301 said they are P3. In addition, there are more than 500 other 

facilities that listed themselves as P2 (outside of the primary agricultural retail sectors); although many 

of these are, in fact, agricultural chemical distributors, others appear to be facilities thatshould be 

subject to Program 3. 

Exhibit 7-3: Program Level and Size by Sector

Program 1 Program 2 Program 3 Total

NAICS Description Small Large Small Large Small Large

311 Food Mfg. 1 2 6 5 357 1,014 1,385

312 Beverage/Ice 0 0 0 0 11 80 91

322 Paper/Pulp 0 1 0 1 5 63 70

324 Petroleum 5 8 0 3 21 119 156

325 Chemical 32 21 49 27 458 878 1,465

313, 321, 326, 

327, 33 Other Manufacturing 33 29 34 39 113 136 384

4246 Chemical Distributors 2 4 0 0 91 236 333

4247 Petroleum Distributors 3 11 0 0 69 193 276

11, 12, 15, 

42491 Agricultural 9 1 0 0 1,809 1,848 3,667

211 Oil and Gas Exploration 88 222 13 28 104 286 741

2213 Water/Wastewater 0 1 6 4 12 79 102

221 222 Utilities 22 16 35 37 80 153 343

493 Warehousing 11 59 0 0 267 719 1,056

423, 424 Other Wholesale 0 5 0 0 100 197 302

92 Governments 6 9 521 414 451 522 1,923

Other 7 34 31 32 48 96 248

Total 219 423 695 590 3,996 6,619 12,542

 109 About half of the States have accepted delegation to enforce OSHA rules; OSHA refers to these as State-plan 

States. As a condition of delegation, the State must impose OSHA standards on State and local governments. 

Federal OSHA has no authority over those governments, so in States where OSHA enforces the rules, they do not 

apply to governments.
Page 109 of 147

7.2.1. FIRMS

The RFA applies to firms, not facilities (or establishments, the term used by the Economic Census). For 

facilities owned by small firms, the analysis identified 1,296 parent companies and 1,184 facilities with 

no parent company, for a total of 2,480 firms that are small entities. Because firms own facilities in 

different program levels it is not possible to disaggregate firms by program level accurately. Exhibit 7-4 

presents the data on small firms, disaggregated by the total FTE for all the RMP facilities operated by the 

firms. The exhibit presents firms in four groups: single locations where no parent company was 

identified; firms with single locations whose name indicated that it owned other presumably non-RMP 

facilities at other locations;110 facilities that listed a parent company, but had only one RMP location; 

and firms that listed a parent company and have multiple RMP facilities. Firms with multiple locations 

were separated because the FTE counts for these (and for parent companies) will understate the total 

FTE of the firm and, therefore, the revenue base. Note that this exhibit does not include small 

governments.

Exhibit 7-4: Small Firms by FTE Totals

Firms <5 FTE

5-19 

FTE

20-99 

FTE

100+ 

FTE

Total 

Firms

Total RMP 

Facilities

No Parent Company

Single Location 187 355 376 230 1,148 1,148

Multiple locations 30 2 5 1 38 38

Parent Company

Single RMP Location 67 238 325 188 818 818

Multiple RMP locations 53 154 193 76 476 1,928

Total 337 749 899 495 2480 3,932*

* Total RMP facilities excludes the 978 small government facilities.

This analysis also divides facilities by responder status. There are a total of 1,404 small responding 

facilities and 3,289 small non-responding facilities (includes governments, but excludes P1 facilities). 

Exhibit 7-5 breaks down the number of small non-government facilities that indicated in their RMPs that 

they are not responders, by FTE. (Government facilities are excluded because FTEs do not reflect the 

size of the governmental entity.) If any current non-responding facilities should become responders as a 

result of the proposed revisions to the regulation, then costs to purchase and maintain equipment, train 

personnel, and conduct exercises increase based on the number of people at the facility. Appendix A 

provides a breakdown of the number of facilities by 3 and 5/6-digit NAICS code by FTE and responder 

status for non-governmental facilities.

 110 For example, X Cooperative, Y terminal/plant/location. 
Page 110 of 147

Exhibit 7-5: Non-Governmental Non-Responding Facilities by FTE

Non-Responders

0-19 FTE 1,869

20-99 FTE 489

100+ FTE 179

Total 2,537

The proposed rule would impose the STAA requirements on facilities with P3 processes in three NAICS 

codes – 322 (paper and pulp), 324 (petroleum), and 325 (chemicals). Exhibit 7-6 presents the 

breakdown of facilities owned by small firms in those sectors by facility FTE.

Exhibit 7-6: P3 Facilities Owned by Small Firms and Subject to STAA by Facility Size and Sector

STAA Facilities Facility Size

0-19 FTE 20-99 FTE 100+

NAICS 322 5

NAICS 324 1 9 11

NAICS 3251/3252 39 222 54

NAICS 3253-3259 40 66 37

7.2.2 GOVERNMENTS

As shown in Exhibit 7-3, there are a combined total of 972 facilities with P2 and P3 processes that are 

owned and operated by small governments (i.e., the government serves less than 50,000 residents). 

Because governments that serve populations above 15,000 have revenues well above $10 million so 

that the costs of the rule would never exceed 1%, the analysis focused on those that served fewer than 

15,000 people. Exhibit 7-7 presents the number of all small governments and the number serving less 

than 15,000 by the number of RMP facilities they operate. Three government facilitiesincluded in the 

number of small governments and number of small government non-responders could not be classified 

by population; each is a special district for which information could not be located to determine 

residents served. Two are in very small rural areas and likely serve fewer than 5,000; the third is in a 

suburb of Salt Lake City and appears to serve at least 25,000 residents.

Exhibit 7-7: Small Governments by the Number of RMP Facilities (P2 and P3) Operated

Category Number of Governments Number of Facilities

All Small Governments 689 972

Non Responders 524 750

Non Responders <15,000 Residents 257 364

Non Responders <10,000 Residents 165 210

Non Responders <5,000 Residents 58 75
Page 111 of 147

Unlike the facilities operated by small firms that have multiple RMP facilities, water and wastewater 

systems operated by small governments are generally in the same town. Where a small firm with 

multiple facilities may have to train response teams for each facility it operates, a small city or town is 

more likely to train a single response team to cover all of its facilities. 

In addition to cities and local districts with RMP-regulated facilities, cities and towns where other RMPregulated facilities are located may also incur indirect costs associated with participation in exercises 

and with reviewing information submitted to the LEPCs or emergency response officials. LEPCs are 

organized at both the city and county level depending on the location. RMP facilities are located in 

more than 1,000 counties and more than 5,000 cities/towns/villages. The counties have from 1 to 187 

facilities (the latter is Harris County, TX, which covers Houston). Although in general the smallest 

counties have only one or two facilities, there are a few small counties with more than five.

7.3 Economic Impact on Small Entities 

7.3.1 Costs for Small Entities

Under the proposed rule, all facilities would be required to make certain information available to the 

public and, upon request,to the LEPC. Practically, P1 facilities would not have to spend more than an 

hour a year on this disclosure because the information disclosed to the public is information every 

facility should have readily available and because the additional information disclosed to the LEPC 

relates to provisions that do not apply to P1 facilities. Therefore, the RIA has not considered P1 small 

facilities in the analysis of impacts.

P2 and P3 facilities would incur the same costs for the other proposed provisions except the STAA. Each 

facility would be required to disclose information to the publicannually, disclose information to LEPCs or 

emergency response officials upon request, coordinate with the local responders, and conduct a 

notification drill annually. If the facility is a responder, it would have to hold an annual exercise, 

including at least one full field exercise every 5 years. P3 facilities in NAICS codes 322, 324, and 325 

would have to conduct an STAA as part their PHA every 5 years.

If a facility has an RMP reportable accident, it would incur costs for obtaining a third-party to conduct 

their next scheduled compliance audit. It would also incur additional costs to conduct a root cause 

analysis as part of the incident investigation, and to hold a public meeting within 30 days of the 

accident. Facilities would also be required to conduct investigations of near misses, including a root 

cause analysis. Finally, if a facility has to become a responder, it would incur costs to develop an 

emergency response plan, train personnel to respond, purchase and maintain equipment, and conduct 

exercises. 

Exhibit 7-8 presents three sets of costs: low year, annualized, and high year (excludes costs incurred 

after an accident or a near miss). Low-year costs represent costs for years in which routine annual costs 

apply. These include costs for coordinating with local responders, conducting notification exercises 

(applies to all P2 and P3 facilities), conducting tabletop exercises (applies only to responders), and 
Page 112 of 147

updating disclosure information to the LEPC and the public. High-year costs represent a year in which 

every applicable provision would occur, except costs incurred after an accident or “near miss.” This 

includes the routine annual costs and periodic costs that apply either every 3 or 5 years (i.e., field 

exercise in lieu of a tabletop exercise, public disclosure requirements, and STAA). Because the STAA 

provisions would only apply to a subset of facilities (i.e., those in NAICS 322, 324, and 325), these 

facilities are broken out separately in the last two rows of the exhibit. Complex facilities are those 

categorized as NAICS 324 or 325 and simple facilities are all others. Annualized costs average the low 

costs incurred for four years with the high costs incurred every fifth year.

Exhibit 7-8: Low, Annualized, and High Year Combined Costs for Small Entities by Group

Low Year Cost Annualized High Year Cost

Simple Complex Simple Complex Simple Complex

P2 and P3 facilities (excludes P3 facilities subject to STAA)

Non Responder $808 $1,223 $808 $1,223 $808 $1,223

Responder 0-19 FTE $6,743 $9,289 $8,158 $10,898 $9,572 $12,507

Responder 20+ FTE $7,870 $10,761 $11,885 $15,261 $15,900 $19,761

P3 facilities subject to STAA

Non Responder n/a $1,223 n/a $17,295 n/a $33,366

Responder <20 FTE n/a $9,289 n/a $26,970 n/a $44,650

Exhibit 7-9 presents the incremental costs that current non-responding facilities would incur to become 

responders. These costs include developing an emergency response program pursuant to §68.95, 

employee training, and purchasing andmaintaining response and personal protective equipment, but do 

not include the costof exercises. The incremental cost would be added to the responder costs shown in 

Exhibit 7-8. The high-year costs are the first year costs when the emergency response program would 

be developed, personnel trained, and equipment purchased. The low-year cost covers refresher 

training,training for new employees, and equipment maintenance and replacement. The annualized 

cost is annualized over 10 years assuming the high year costs occur in the first year and the low year 

costs in the nine subsequent years.

Exhibit 7-9: Incremental Costs to Become a Responder

Low Annualized High Year

Simple <20 $5,402 $9,799 $49,367 

Simple 20+ $6,038 $10,689 $52,546 

Complex <20 $8,657 $15,877 $80,853 

Governments $8,010 $14,449 $72,405 

Governments are presented separately in Exhibit 7-9 because they would incur higher costs than other 

simple facilities as a consequence of operating a water treatment facility. This is, in part, because they 

would need more equipment, specifically chlorine cylinder repair kits as well as personal protective 

equipment for a higher number of people. Governments are expected to train more people to ensure 
Page 113 of 147

that an adequate number of personnel are available at all times; firefighters may be busy with other 

critical responses when a release occurs so backups would be needed. Governments also have fewer 

options than other RMP facility owners/operators. A privately owned facility that is a non-responder 

can choose to remain a non-responder if the local government is capable to respond or if the 

owner/operator can help fund the local government to develop hazmat response capability. If a public 

water system is operated by a city or town that does not have appropriate response capability (e.g., a 

hazardous materials, or hazmat, response team), the local government would need to develop a hazmat 

response capability unless the town is close to another community that has a hazmat team and is willing 

to respond. Both public and private facilities could hire emergency response-action contractors to 

respond, but many and perhaps most of the small RMP facilities are in rural areas that are too far from 

contractors to make that a realistic option for releases that require a rapid response. As discussed in 

Chapter 6, more than three quarters of RMP reportable accidents last less than an hour.

As can be seen in Exhibit 7-8, a non-responder with a simple process 111 would only need revenues of 

$81,000 for the annualized costs to be below one percent of its revenues. If that facility had to become 

a responder it would need revenues of $1 million to $5 million to have revenues that exceed one 

percent of costs (based on annualized and high-year costs). As seen in Exhibits 7-8 and 7-9, small 

governments would need revenues of $816,000 to $957,000 if they are already responders, but $1.5 

million to $7.3 million if they have to become responders. Small chemical companies subject to STAA 

would need revenues above $2.7 million to $4.5 million if they do not need to become responders and

almost $10 million if they do become responders.

If a simple facility has an accident its one-year cost could be as high $52,000; for a complex facility, the 

cost could be as high as $88,000. Because the third-party audit would not necessarily occur in the same 

year as the accident, however, these costs could be distributed over time.

7.3.2 Estimating Revenues for Small Entities

As is the case for most rules that affect small entities, almost all of the small entities are privately held 

and little if any information is available on their revenues. Revenue per establishment was calculated 

from the 2007 Economic Census by dividing total revenue by the number of establishments. A deflator 

was applied to increase revenues to 2013 dollars. (The Economic Census uses “establishment” to 

describe single locations and presents data on establishment and firm levels; it does not, however, 

provide firm-level data for all sectors.) 

Exhibit 7-10 presents the data for the sectors with entities small enough to have revenues that might fall 

below the one percent threshold. For some sectors, the Economic Census provides data only for 0-4 

FTE; for others, it provides data for 1 FTE establishments, 2 FTE, and 3-4 FTE. The Economic Census does 

not cover the agricultural sectors. As noted above, most of the facilities in the agricultural sector appear 

to be agricultural wholesalers,so the analysis used the revenue estimate for NAICS 42491 for these. The 

 111 There are no simple processes at very small facilities that are subject to STAA. 
Page 114 of 147

values listed for NAICS 325199 are for the chemical sector as a whole (NAICS 325) because the Census 

did not include data for establishments thissmall for this sector. Where cells are blank in the Exhibit, 

either there are no facilities that fall into the category or the Census does not list revenue data for the 

category. 112 Shaded cells indicate revenues that would exceed costs of the proposed rule by a factor of 

100 or more even in the highest cost year for facilities that needed to become responders,so any facility 

in that size category or above would not be potentially subject to a cost that would exceed one percent 

of revenues. Because the revenues for NAICS 211 are so high for the smallest facilities, no other data 

are listed for that sector. One percent of the highlighted revenues would exceed the cost of the 

proposed rule even in the highest cost year for facilities that needed to become responders, so any 

facility in that size category or above would not be potentially subject to a cost that would exceed one 

percent of revenues. 

Column 2 provides two numbers: first, the number of facilities in the sector that are in size categories 

with revenues low enough that the cost of the rule could exceed one percent of revenues; and, second, 

the number of non-responders out of that total. For example, there are 1,174 small agricultural 

chemical distributorsin NAICS 42491 with fewer than 10 FTE; 1,062 of them are non-responders. Any 

non-responder that remains a non-responder in that sector or any current responder should have 

revenues above the one percent threshold. Any non-responder that has to become a responder, 

however, would incur first year costs that exceed one percent of revenues.

The analysis used facility rather than firm-level revenue for two reasons. First, firm-level data are not 

available for all sectors, particularly manufacturing. Second, it is not possible to determine firm sizes for 

many of the facilities. Focusing on facility level revenue is conservative. If the costs for individual 

facilities that a firm owns do not exceed one percent of the facility revenues, the costs will not exceed 

one percent at the firm level. For example, if a firm owns three facilities, each of which has costs that do 

not exceed one percent of the revenue generated by the facility, the cost will not exceed one percent at 

the firm level where revenues will be at least the total of revenues from each facility. It may not be the 

case, however, that if a firm owns facilities where the cost of the rule would exceed one percent at 

some facilities but not others that the costs would exceed one percent at the firm level. 

The Census Bureau has not published recent data on revenues for cities (the most recent data are from 

2002) and does not cover cities of less than 25,000 population. The Census provides revenue data for 

total local government revenues by county (covering all governmental entities including special districts 

within the country) and a per capita revenue estimate. The Census data indicated that the lowest per 

capita revenue for a covered county was about $1,024 in 2002 dollars (DeKalb County, MO, with 2 

facilities) ($1350 in 2014 dollars). 113 Two other sources (one of which covers all Massachusetts cities and 

 112 Usually data are not presented because there are too few establishments in the size category and listing the 

data could reveal confidential information.

113 http://censtats.census.gov/usa/usa.shtml
Page 115 of 147

towns) indicated a range of $900 to more than $2,500 for expenditures per person. 114 The smallest town 

covered by the rule has about 150 residents and a number of others have fewer than 1,000, but in many 

of these cases it is not clear whether the town owns and operates the facility or whether it is operated 

by a district that serves multiple communities. In a few cases, EPA was able to locate budget data from 

small towns and special districts. Revenues per resident ranged from $196 for a special district that 

serves 9,200 people to $1400. The sample, however, is so small that it would not be appropriate to 

generalize from it. There are some exceptions on the high end as well. One city with a population of 

less than 8,000 has revenues of close to $200 million (based on tourist business); another small city 

operates a combined water system, power system, and cable system; although the water system 

produces revenues of $2.5 million, the combined system reported revenues of $190 million. For the 

purpose of the RFA determination, EPA has assumed that revenues per person would not exceed $1,000 

and that any city of less than 10,000 that might need to become a responder could incur costs in the

high cost year that would exceed one percent of revenues. As shown in Exhibit 7-7, there are 165 small 

governments operating 210 facilities that are non-responders and that serve fewer than 10,000 people.

There are a number of small governments that operate multiple RMP facilities. Although government 

revenues do not increase based on the number of facilities, costs to local governments are not likely to 

scale in the same way as they do for private companies. A local government that operates two or more

water and wastewater treatment plants would, if needed, develop a single hazmat team because the 

facilities are generally in the same town. The government could issue combined public information and 

hold joint exercises.

Small cities and counties may also participate in emergency response exercises held by RMP facilities 

and may review information provided by these facilities to LEPCs or other local agencies. These 

activities are voluntary, but it is reasonable to assume that local agencies will spend some time on them. 

Involvement in exercises would generally require less than 8 hours of any participant’s time or 

considerably less than one percent of any person’s annual working hours. Reviewing information 

disclosed would take only one to four hours per facility. Unless a city has a substantial number of RMP 

facilities the effort required would not impose significant costs.

 114

http://parca.samford.edu/LocalGovernment/municipal/Report%20Montgomery%20Revenue%20Comparisons%20

2010%204.2.10.pdf?AspxAutoDetectCookieSupport=1

http://www.boston.com/yourtown/specials/snapshot/massachusetts_snapshot_expenditures_2012/

(expenditures per resident)
Page 116 of 147

Exhibit 7-10: Average Revenue/Establishment for FTE Class (Economic Census)

Total # 

facilities/ 

# of

nonresponders 

where rule 

costs could > 

1% rev

FTEs

NAICS Code 0-4 1 2 3-4 5-9 10-19 20-49 50-99

111 46/37 $1,495,000 $3,329,000 $5,960,000 $11,640,000 $22,735,000

112 1/1 $1,495,000 $3,329,000 $5,960,000 $11,640,000 $22,735,000

115 113/78 $1,495,000 $3,329,000 $5,960,000 $11,640,000 $22,735,000

211112 0 $13,888,000

221119 17/14 $1,837,168 $3,330,268 $6,225,566 $9,896,888

22121 0 $7,505,716 $22,926,662

32512 30/11 $2,692,000 $6,941,000 $13,381,000 $23,392,000

32518 13/3 $1,652,000 $6,207,000 $11,475,000 $23,285,000

325181 3/2 $1,652,000 $6,606,000

325188 2/1 $2,257,000 $6,207,000 $11,475,000 $23,285,000

32519 0 $1,424,000 $11,437,000 $34,910,000

325193 0 $14,208,000 $21,051,000 $88,511,000

325199 7/1 $1,424,000 $11,437,000 $34,910,000

325314 45/32 $1,192,000 $3,424,000 $6,211,000 $15,952,000

32532 5/1 $942,000 $28,422,000

32551 4/2 $662,000 $2,381,000 $5,342,000 $13,223,000

32552 2/2 $854,000 $3,099,000 $6,545,000 $16,207,000

32599 9/2 $720,000 $2,507,000 $6,907,000 $14,578,000

325998 6/2 $1,424,000 $3,329,000 $8,379,000 $17,995,000

42399 2/1 $851,039 $1,428,979

42451 20/20 $4,744,000 $9,671,000 $18,349,000 $42,265,000 $74,456,000
Page 117 of 147

Total # 

facilities/ 

# of

nonresponders 

where rule 

costs could > 

1% rev

FTEs

NAICS Code 0-4 1 2 3-4 5-9 10-19 20-49 50-99

42459 19/16 $1,148,000 $5,184,000 $6,655,000 $15,718,000 $17,531,000 $56,881,000

42469 79/31 $1,973,000 $4,949,000 $5,806,000 $18,120,000 $28,325,000

42471 $11,807,000 $15,665,000 $11,807,000 $19,088,000 $37,556,000 $127,559,000

42491 1537/1371 $1,495,000 $3,329,000 $5,960,000 $11,640,000 $22,735,000

44422 16/5 $305,000 $595,000 $991,000 $1,798,000 $3,681,000 $6,247,000

453998 7/5 $478,000 $675,000 $1,134,000 $2,223,000

49311 30/22 $208,000 $378,000 $529,000 $836,000 $1,422,000 $2,477,000 $3,550,000

49312 272/44 $279,000 $420,000 $579,000 $1,125,000 $2,418,000 $4,516,000 $6,666,000

49313 82/59 $725,000 $781,000 $1,673,000 $2,373,000 $4,018,000

49319 45/13 $444,000 $736,000 $949,000 $1,220,000 $1,906,000

56179 14/14 $132,642 $239,000 $366,000 $661,000 $1,393,000 $3,176,000

Highlighted cells indicate facility categories where 1 percent of revenues, for any facility in that size category, or above, would exceed the costs of the proposed 

rule even in the highest cost year (including costs for non-responders to become responders).
Page 118 of 147

7.3.3 Initial Regulatory Flexibility Analysis

Pursuant to section 603 of the RFA, the EPA prepared an initial regulatory flexibility analysis (IRFA) that 

examines the impact of the proposed rule on small entities along with regulatory alternatives that could 

minimize that impact.

7.3.3.1 Why EPA is Considering this Action

The purpose of this action is to improve safety at facilities that use and distribute hazardous chemicals. 

In response to catastrophic chemical facility incidents in the United States, including the explosion that 

occurred at the West Fertilizer facility in West, Texas, on April 17, 2013 that killed 15 people, President 

Obama issued EO 13650, “Improving Chemical Facility Safety and Security,”on August 1, 2013. Section 

6(a)(i) of EO 13650 requires that various Federal agencies develop options for improved chemical facility 

safety and security, including modernizing regulations. As a result, EPA is proposing revisions to the Risk 

Management Program (40 CFR part 68). For more information on EO 13650, see Section 1.1 of this 

document.

7.3.3.2 Objectives of, and Legal Basis for, the Proposed Rule

EPA believes that the RMP regulations have been effective in preventing and mitigating chemical 

accidents in the United States; however, EPA believes thatrevisions could further protect human health 

and the environment from chemical hazards through the advancement of process safety based on 

lessons learned. These revisions are a result of a review of the existing Risk Management Program and 

information gathered from the RFI and EO listening sessions, and are proposed under the statutory 

authority provided by CAA section 112(r) as amended (42 U.S.C. 7412(r)).

7.3.3.3 Estimate of the Number of Small Entities to which the Proposed Rule Will Apply

The RMP rule affects a broad range of sectors (296 separate NAICS codes are listed in RMP filings; 240 of 

these are associated with small entities). The RMP data include facility and parent company name as 

well as the number of full time equivalents (FTE) for the facility and the NAICS codes. To develop an 

estimate of the number of small entities, the analysis required a series of reviews of the data to identify 

the large entities and the small entities that were part of small firms owning multiple facilities. For more 

information on the analysis to estimate the number of small entities, see Section 7.2 of this document. 

7.3.3.4 Projected Reporting, Recordkeeping and Other Compliance Requirements of the 

Proposed Rule

Under the proposed rule, all facilities would be required to make certain information available to the 

public and, upon request,to the LEPC or local emergency response officials. Program 1 facilities would 

not likely have to spend more than an hour a year on this disclosure because the information disclosed 

to the public is information every facility should have readily available and because the additional 

information that would be provided, upon request,to the LEPC relates to provisions that do not apply to 
Page 119 of 147

Program 1 facilities. Therefore, the IRFA has not considered Program 1 small facilities in the analysis of 

impacts.

Program 2 and Program 3 facilities would incur the same costs for the other proposed provisions except 

the STAA. Each facility would be required to update information to be disclosed annually, coordinate 

with the local responders, and conduct a notification drill annually. If the facility is a responder, it would 

have to hold an annual exercise, including at least one full field exercise every 5 years. Program 3 

facilities in NAICS codes 322, 324, and 325 would have to conduct an STAA as part their PHA every 5 

years.

If a facility has an accident, it would incur costs to hold a public meeting within 30 days of an RMP 

reportable accident. It would also incur costs for obtaining a third-party to conduct theirnext scheduled 

compliance audit and to conduct a root cause analysis as part of the incident investigation. Facilities 

would also be required to conduct root cause investigations of near misses. Finally, if a facility has to 

become a responder, it would incur costs to develop an emergency response plan, train personnel to 

respond, purchase and maintain equipment, and conduct exercises. 

Section 7.3.1 of this document describes the costs of the proposed rule for small entities. 

7.3.3.5 Related Federal Rules

The Risk Management Program is one of several programs regarding chemical facility safety and 

security. EO 13650 directed Federal agencies to identify ways to modernize policies, regulations, and 

standards to enhance safety and security in chemical facilities. The EO established a Chemical Facility 

Safety and Security Working Group to oversee this effort, which is tri-chaired by the EPA, DOL, and DHS. 

Members of the Working Group (at the management and staff level) regularly share information in 

order to coordinate activities on any work involving revisions in regulations, such as revisions to OSHA’s 

PSM standard and DHS’ CFATS regulations. These efforts also serve to avoid unnecessary duplication, 

overlap and conflicts with the Risk Management Program requirements.

OSHA’s 29 CFR 1910.119 PSM standard

Mandated by the CAAA of 1990 and issued in 1992, the PSM standard sets requirements for the 

management of highly hazardous substances to prevent and mitigate hazards associated with 

catastrophic releases of flammable, explosive, reactive, and toxic chemicals that may endanger workers. 

The PSM standard covers the manufacturing of explosives and processes involving threshold quantities 

of flammable liquids and flammable gasses, as well as 137 other highly hazardous chemicals.

The OSHA PSM standard, similar to the EPA RMP rule, aims to prevent or minimize the consequences of 

accidental chemical releases through implementation of management program elements that integrate 

technologies, procedures, and management practices. The EPA RMP regulation closely tracks the 

accident prevention measures contained in the OSHA PSM standard because Section 112(r)(7)(D) of the 

CAA requires EPA to coordinate the RMP regulation with “any requirements established for comparable 
Page 120 of 147

purposes” by OSHA. Consequently, the OSHA PSM standard and EPA RMP regulation are closely aligned 

in content, policy interpretations, Agency guidance, and enforcement. 

Since the inception of these regulations, EPA and OSHA have coordinated closely on their 

implementation in order to minimize regulatory burden and avoid conflicting requirements for 

regulated facilities. For example, owners and operators of RMP covered processes also subject to the 

OSHA PSM standard will generally have met their RMP accident prevention program obligations if they 

have properly implemented their PSM program.

Standards for Owners and Operators of Hazardous Waste Treatment, Storage, and Disposal Facilities 

(40 CFR 264 and 265)

These regulations establish minimum national standards which define the acceptable management of 

hazardous waste including requirements for arrangements that owners and operators of hazardous 

waste facilities make with local authorities. In sections 264.37 and 265.37, hazardous waste generators 

are required to attempt to make arrangements for emergency response activities with local authorities, 

and document the refusal of local or State authorities to complete such arrangements in the operating 

record.

Occupational Safety and Health Act General Duty Clause

Section 5(a)(1) of the Occupational Safety and Health (OSH) Act requires employers to provide its 

employees with a workplace free from recognized hazards that are causing, or are likely to, cause death 

or serious physical harm.

EPA’s EPCRA regulations (40 CFR 350-372)

Following the 1984 release of approximately 40 tons of MIC into the air in Bhopal, India, that killed over 

3,700 people and the 1985 leak of 500 gallons of aldicarb oxime from a Union Carbide facility in 

Institute, West Virginia, Congress passed EPCRA in October 1986. 115 The purpose of EPCRA is twofold: (1) 

to encourage and support emergency planning efforts at the state and local levels, and (2) to provide 

the public and local governments with information concerning potential chemical hazards present in 

their communities.

EPCRA created state and local infrastructure designed to (1) prepare for and mitigate the effects of a 

chemical incident and (2) ensure that information on chemical risks in the community is provided to the 

first responders and the public. These state and local entities are the State Emergency Response 

Commissions (SERCs), Tribal Emergency Response Commissions(TERCs), LEPCs, and Tribal Emergency 

Planning Committees (TEPCs). Representatives on the LEPCs include local officials and planners, facility 

 115 http://www.nytimes.com/1985/08/12/us/toxic-cloud-leaks-at-carbide-plant-in-west-virginia.html
Page 121 of 147

owners and operators, first responders, health and hospital personnel, environmental groups, and 

citizen/members of the public. 

A central requirement of LEPCs and TEPCs is to develop a local emergency response plan. These plans 

are required to: 

• Identify facilities and transportation routes of extremely hazardous substances and assess the 

risk based on chemical information from facilities; 

• Describe on-site and offsite emergency response procedures; 

• Designate a community coordinator and facility emergency coordinator(s) to implement the 

plan; 

• Describe emergency notification procedures; 

• Describe how to determine the probable affected area and population by releases (including 

identification of critical community receptors and assets); 

• Describe local emergency equipment and facilities and the persons responsible for them; 

• Describe evacuation plans;

• Identify the training program for emergency responders (including schedules); and 

• Identify the methods and schedules for exercising emergency response plans.

Under the community right-to-know section of EPCRA, certain facilities that manufacture, process, or 

store any hazardous chemicals are required to submit an SDS or list of hazardous chemicals, grouped

into hazard categories, to SERCs, TERCs, LEPCs, TEPCs, and local fire departments. Under the Hazard 

Communication Standard, OSHA requires SDSs that describe the properties, hazards, and health effects 

of these chemicals as well as emergency response procedures and appropriate personal protection 

equipment. Facilities must also annually report their inventories of all on-site chemicals for which SDSs 

are required that are stored above reporting threshold quantities to SERCs, LEPCs, and local fire 

departments. LEPCs must use information about chemical inventories at facilities and SDSs in developing 

their local emergency plans; this information must also be available to the public.

CAA Section 112(r)(1) general duty clause

The statute requires facility owners and operators to identify hazards; design, maintain and safely 

operate a facility; and prevent and minimize releases of any regulated substances under §112(r)(3) (40 

CFR Part 130) and “any other extremely hazardous substance.”116

DHS’s CFATS regulations 6 CFR part 27

 116 Although the term “any other extremely hazardous substance" is not defined, the legislative history of the 1990 

CAA amendments indicates that the term would include any agent "which may or may not be listed or otherwise 

identified by any Government agency which may as the result of short-term exposures associated with releases to 

the air cause death, injury or property damage due to its toxicity, reactivity, flammability, volatility, or corrosivity." 

See: http://www2.epa.gov/sites/production/files/2013-10/documents/gdcregionalguidance.pdf.
Page 122 of 147

The CFATS program, established in 2007, regulates chemical facilities that present a high level of security 

risk to ensure they have security measures in place to reduce the risks associated with their possession 

of chemicals of interest (COI). There are 325 COI and 137 of the 140 RMP regulated substances are 

included on the list of COI.

The CFATS program requires the development, submission, and implementation of Site Security Plans 

(SSPs) (or Alternative Security Programs in lieu of SSPs), which document the security measures high-risk 

chemical facilities use to satisfy the applicable risk-based performance standards (RBPS) under CFATS. 

These plans are not “one-size-fits-all,” but in-depth, highly customized, and dependent on each facility’s 

unique circumstances.

Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) requirements for explosives

ATF is responsible for enforcing Federal explosives laws that govern commerce in explosives in the 

United States, including licensing, storage, recordkeeping, and conduct of business. ATF conducts 

inspections of Federal explosives licensees who manufacture, import, sell, or store explosives in the 

United States to ensure that explosives are managed in accordance with Federal regulations found at 27 

CFR part 555.

7.3.3.6 Description of Alternatives to the Proposed Rule

In section 2.1, we describe the various regulatory alternatives that were analyzed for each provision. In 

most cases, EPA chose regulatory alternatives that had reduced impacts on small businesses relative to 

other alternatives that EPA considered. In this section, we discuss each regulatory provision, explain 

whether and how the proposed provision minimizes impacts on small businesses, and discuss additional 

recommendations resulting from the Small Business Advocacy Review (SBAR) Panel that could further 

mitigate small business impacts. EPA has requested comment on these recommendations in the 

preamble to the proposed rule.

Third-Party Audits

EPA evaluated three options for this provision and selected the lowest cost alternative, which would 

apply the requirement only to sources with P2 and/or P3 processes that have had an RMP reportable 

accident. The other alternatives would have required that all compliance audits be conducted by thirdparties for sources with either P3 processes or P2 and P3 processes. Limiting the applicability of this 

proposed provision to sources that have had RMP reportable accidents minimizes its impact to the 

overall universe of RMP facilities, and particularly to small businesses. As indicated in Exhibit 5-25, the 

estimated cost of the high option ($96.2 million annualized) is nearly 20 times higher than the estimated 

costs of the proposed option ($5.0 million annualized). Furthermore, a majority of the costs for the 

proposed option would likely be borne by large businesses, as historically, most RMP accidents have 

occurred at facilities that do not meet SBA small business criteria. Exhibit 7-11 shows the percentage of 

accidents from 2004-2013 that occurred at small and large facilities.
Page 123 of 147

Exhibit 7-11: Percentage of Accidents at Small and Large RMP facilities, 2004 – 2013

Sector

P1 P2 P3

Total

Small Large Small Large Small Large

NAICS 325 - Chemical 

Manufacturing 0 6 1 5 53 465 530

NAICS 311, 312 - Food/Beverage 

Manufacturers 0 0 2 0 58 210 270

NAICS 322 –Paper Manufacturing 0 0 0 0 9 37 46

NAICS 331, 332, 333, 334, 336, 339 

- Other Manufacturing 0 0 4 0 12 27 43

NAICS 11, 12, 15, 42491 -

Agricultural Chemical Distributors 0 0 0 0 91 65 156

NAICS 4246, 4247 -

Chemical/petroleum wholesale 0 2 0 0 7 29 38

NAICS 4244, 4245 -Other wholesale 0 0 0 0 7 13 20

NAICS 493 – Warehouse 0 1 0 0 18 53 72

NAICS 324- Petroleum and Coal 

Products Manufacturing 2 6 0 0 15 146 169

NAICS 22131, 22132 - Water/POTW 0 0 14 20 17 24 75

NAICS 211 - Oil/Gas exploration 4 4 1 0 10 34 53

Other 3 7 7 4 7 17 45

Total 9 26 29 29 304 1,120 1,517

While the proposed third-party audit provision should have fairly low impact on small businesses, the 

SBAR Panel made additional recommendations to further minimize the impacts of this provision on 

small businesses. The Panel recommended that EPA consider proposing streamlined independence 

requirements for small businesses (i.e. based on size of the facility). The Panel also recommended that 

EPA limit the independence criteria to individuals participating in the audit rather than the entire 

company. The Panel further recommended that EPA seek comments on:

• Eliminating the independence requirement, in its entirety, and retaining existing requirement 

for compliance audits;

• Limiting applicability of the third-party audit provision by only requiring third-party audits, for 

Program 3 facilities, triggered by major accidents that have offsite impacts and how to define or

characterize “major accidents with offsite impacts”;

• Deleting the current PE requirement and considering other independent accreditation for thirdparty auditors which also carry ethical requirements, such as CSP, CIH, CFPS, CHMM, CPEA, or 

CPSA; and
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• The impacts a third-party auditor may have on a facility’s security and the measures that should 

be included in the rule provision to protect facilities from terrorism or release of CBI from a 

third-party auditor.

EPA incorporated preamble language to address these Panel recommendations in section IV.B of the

preamble.

Incident Investigation/Root Cause Analysis

In this case, EPA considered two potential regulatory options, and proposed the higher cost option, 

which would apply the requirement for an incident root cause analysis to all RMP reportable accidents 

and near misses involving P2 and P3 processes. The lower cost option would apply the requirement to 

accidents and near misses at only P3 processes. Although the Agency chose the higher cost option, this 

provision is estimated to be one of the least costly provisions of the proposed rule. In fact, the costs for 

both options considered were nearly indistinguishable –as indicated in Exhibit 5-25, both the low and 

proposed options are estimated to cost approximately $0.8 million annually. Therefore, EPA believes 

that the additional safety benefit of requiring owners and operators of P2 processes to also conduct root 

cause analyses after incidents and near misses was warranted.

The SBAR Panel also made recommendations to further minimize the impacts of this provision on small 

businesses. The Panel recommended that EPA clarify our intent that incident investigations are not 

intended to cover minor accidents or minor near misses that could not reasonably have resulted in a 

catastrophic release. The Panel further recommended that EPA consider proposing to require root cause 

analysis only for reportable releases, not including near misses. The Panel recommended that EPA clarify 

in the preamble the comparative advantages of a root cause analysis to the current incident 

investigation requirements in §§68.60 and 68.81 of the rule. Finally, the Panel recommended that EPA 

seek comments on:

• Whether the root cause analysis requirement should be eliminated; 

• The revised definition of catastrophic release and whether it should be limited to loss of 

life, serious injury or significant damage or loss of offsite property; and 

• Examples of near misses.

EPA incorporated preamble language to address these Panel recommendations in section IV.A of the 

preamble.

STAA

For STAA, EPA examined three potential alternative regulatory options, and chose the least costly 

option. The proposed option, which would apply the STAA requirement to P3 processes in NAICS 322

(paper manufacturing), 324(petroleum and coal products manufacturing), and 325 (chemical 

manufacturing), costs $34.8 million annually and is approximately half as costly as the medium option

($71.7 million annually), which would apply the requirement to all P3 processes, and likely far less costly 
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than the high option, which would require implementation of feasible safer alternatives for all P3 

processes.

The low-cost STAA option not only minimizes the overall number of sources that are subject to it, but is 

also biased toward larger sources. This is because the three sectors selected for regulation under this 

proposed provision all have a lower percentage of small entities than the overall percentage of small 

entities within the RMP facility universe. As indicated in Exhibit 7-12, approximately 39% of facilities 

regulated under the RMP regulation are owned by small entities. In comparison, NAICS 322 (paper 

manufacturing) has about 20% RMP-regulated small businesses within the sector, while NAICS 324 

(petroleum and coal products manufacturing) and 325 (chemical manufacturing) each have 

approximately 10% small businesses.

Exhibit 7-12: Percentage of Small Businesses in NAICS 322, 324, 325 and Overall

Sector Small Total Percentage 

Small

NAICS 322 –Paper 

Manufacturing 9 46 19.6%

NAICS 324- Petroleum and 

Coal Products 

Manufacturing

17 169 10.1%

NAICS 325 - Chemical 

Manufacturing 54 530 10.2%

All Sectors 4,910 12,542 39.1%

The SBAR Panel also made recommendations to further minimize the impacts of this provision on small 

businesses. The Panel recommended that EPA explain what evidence we have that caused us to 

reconsider the 1996 assessment that IST analysis was unlikely to yield additional benefits. The Panel 

further recommended that EPA seek comments on:

• Whether to eliminate this requirement;

• Limiting this provision to require analyses only to be conducted at the design stage of new 

processes; and

• Exempting batch toll manufacturers from this requirement.

EPA incorporated preamble language to address these Panel recommendations in section IV.C of the

preamble.

Emergency Response Program Coordination with Local Responders

The proposed option (medium option) would require all facilities with P2 or P3 processes to coordinate 

with local response agencies annually and document coordination activities. This option would also 

allow the LEPC or local emergency response officials to require that the RMP-facility owner or operator 
Page 126 of 147

comply with the emergency response program requirements of §68.95. EPA considered, but did not 

propose, the more stringent option of requiring all facilities with P2 or P3 processes to implement an 

emergency response program and respond to accidental releases at the facility. The proposed option is 

estimated to cost $6.3 million annually and is far less costly than the high option, which would likely 

have exceeded $100 million annually. Therefore, by selecting the medium option, EPA substantially 

reduced the cost impact for the many small entities that may rely on local response organizations to 

respond to accidental releases at the source (see Exhibit 3-8 and Appendix B for more information on 

the number, size, and industrial categories of non-responding facilities).

While EPA does not believe it is necessary to require that all facilities develop an in-house response 

capability, the Agency believes that non-responding facilities, even if they are small businesses, must still 

coordinate with local public responders so that they are prepared to handle emergencies at the facility. 

EPA expects that these coordination activities will result in some sources, including some small entities, 

becoming responding facilities, which may involve additional costs for those facilities (see section 5.6). 

EPA believes this is necessary to meet the objectives of Clean Air Act section 112(r), which requires the 

Agency to promulgate regulations to (among other things) provide for a prompt emergency response to 

any accidental releases in order to protect human health and the environment. We also note that the 

2013 accident at West Fertilizer, which was one of several accidents that triggered the Executive Order 

that ultimately led to this rule proposal, occurred at a facility that would likely have been considered a 

small entity under the established SBA criteria. The Agency believes it is appropriate to require that such 

facilities conduct adequate emergency coordination, and if necessary, develop adequate emergency 

response capabilities, even if they are small.

The SBAR Panel also made recommendations to further minimize the impacts of this provision on small 

businesses. The Panel recommended that EPA explain how coordination should occur between local 

emergency response officials and small facilities and clarify requirements for facilities that make a “good 

faith” effort to coordinate with local emergency response officials. The Panel also recommended that 

EPA seek comment on the proposed frequency for annual coordination. EPA incorporated preamble 

language to address these Panel recommendations in section V.A of the preamble. 

Exercises

Notification Exercises

The proposed rule would require all facilities with P2 or P3 processes to annually conduct an emergency 

notification exercise to ensure that their emergency contact list is complete, accurate, and up-to-date. 

This proposed provision is expected to be one of the least costly rule provisions at $1.4 million annually 

(only the incident investigation root cause analysis and public meetings provisions are estimated to cost 

less). Therefore EPA did not consider any alternatives to reduce the impact of this provision on small 

businesses, nor did the SBAR panel make any such recommendations.

Tabletop and Field Exercises
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The proposed option was the medium option, and would require responding facilities to conduct a full 

field exercise at least once every five years and tabletop exercises annually in the interim years. This 

option was substantially less costly than the high option ($61 million vs $104 million annually), which 

would require annual field exercises. As this provision only affects responding facilities, which tend to 

more often be large facilities (see Exhibit 3-8), EPA has proposed an option that mitigatesthe impact on 

small entities. EPA also considered a low option that would only require annual tabletop exercises. This 

option would have saved approximately $11 million annually. We did not propose the low option 

because the Agency believes that periodic field exercises are an important component of a 

comprehensive emergency response program. Nevertheless, this was also a recommendation from the 

SBAR panel and we have requested comment on the low option provision in the preamble to the 

proposed rule.

The SBAR Panel also made other recommendations to further minimize the impacts of this provision on 

small businesses. The Panel recommended that EPA clarify that participation by local responders is not 

required for a facility to comply with exercise requirements and thatfield exercises and drills required 

by other state and Federal regulations could meet this requirement if the facility’s emergency response 

plan is tested as part of those exercises. The Panel also recommended that EPA seek comments on:

• Whether the exercise provision should be eliminated; 

• How to address postponement and rescheduling issues (which SERs have indicated may 

take up to a year); 

• Limiting the requirement to only tabletop exercises; and

• The frequency of required field and tabletop exercises.

EPA incorporated preamble language to address these Panel recommendations in section V.B of the 

preamble.

Information Availability

There are three proposed information disclosure requirements.Under the proposed requirements, all 

facilities would be required to make certain information available to the public. Upon receiving a 

requestfrom their LEPC or local emergency response official, regulated facilities would also be required 

to provide certain information to the LEPCor emergency response officials. Lastly, facilities would be 

required to hold public meetings within 30 days of any RMP reportable accident. In the preamble to the 

proposed rule, EPA has requested public comments on whether all regulated facilities should be 

required to hold a public meeting every five years and after an RMP reportable accident, or whether a 

requirement for periodic and post-accident public meetings should be limited to only P2 and P3 

facilities. Although EPA has not proposed specific alternatives to minimize the impact of the information 

disclosure provisions on small businesses, the Agency believes that in general, smaller facilities will bear 

lower costs to comply with these provisions. By requiring certain information disclosure elements (i.e., 

incident investigation and public meeting provisions) only following an RMP reportable accident, EPA is

minimizing the impact to the overall universe of RMP facilities, and particularly to small businesses. 
Page 128 of 147

Most RMP reportable accidents have generally occurred at facilities that do not meet SBA small business 

criteria (see Exhibit 7-11). Also, small facilities will generally have fewer processes, fewer chemicals, 

fewer accidental releases, etc., on which to provide information to LEPCs and the public.

The SBAR panel also made recommendations to further minimize the impacts of this provision on small 

businesses. The Panel recommended that EPA:

• Consider only requiring facilities to develop chemical hazard information summaries and 

allowing LEPCs to make reasonable requests for additional information;

• Make chemical hazard information available upon request by the LEPC rather than 

requiring it to be automatically submitted by the facility;

• Require that a public meeting be held only after an RMP reportable accident; and

• Allow public meetings to be combined with any meeting open to the general public (e.g. 

city council, municipal board, or LEPC meeting). 

The Panel also recommended that EPA seeks comments on:

• Narrowing the approach to require a one page summary of each significant chemical 

hazard during a fire identifying the product, its properties, its location and firefighting 

measures for responders-- a one-page summary of information that addresses chemical 

hazard information and emergency response measures;

• Limiting the amount of information to be shared with LEPCs; 

• Whether EPA should specify a format for summary information to make it easier for 

local officials to find and interpret the information that they need:

• Ways to limit the scope of the information elements shared with the public as well as 

the format in which information should be provided (e.g. a one-page summary of 

information that addresses chemical hazard information and emergency response 

measures);

• Whether the existing RMP data, including the executive summary, are adequate for the 

public in the absence of a specific request, and 

• Whether additional information should only be provided to the public upon request.

• Whether it is appropriate to require public meetings;

• Whether to eliminate the public meeting requirement and instead require the facility to 

schedule a meeting with the LEPC and/or emergency responders 60 to 90 days after an 

accident or incident;

• Whether public meetings should be held upon request (e.g., LEPC or its community 

equivalent) rather than automatically within an established timeframe; and

• Extending the timeframe from 30 to 90 days or whether there is a more appropriate 

timeframe for scheduling a meeting following an RMP reportable accident and who 

should be included in the invitation (e.g. limit to local emergency response officials and 

LEPCs).
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EPA incorporated preamble language to address these Panel recommendations in section VI of the 

preamble. EPA also revised the proposed rule to incorporate the following two Panel recommendations 

as the proposed options:

• Make chemical hazard information available upon request by the LEPC rather than 

requiring it to be automatically submitted by the facility; and

• Require that a public meeting be held only after an RMP reportable accident.

7.4 Conclusion

It is possible that the costs of the rule would exceed one percent of revenues for some RMP small 

entities that are currently not responders. The maximum number affected would be 1,442. In years 

where the STAA analysis occurs or a field exercise occurs, the cost could exceed the threshold for a 

larger number of facilities. The most significant cost for small entities, however, will be incurred by 

those that have to become responders; in the first year of compliance, when they have to pay for 

training and response equipment, the costs are likely to exceed one percent of revenues for many of the 

facilities with fewer than 20 FTE. Facilities owned and operated by governments serving fewer than 

10,000 people may incur costs above one percent of their revenues in the initial year if the government 

has to train and equip a hazmat team. These governments may be able to obtain funding to cover some 

training costs through grants from the Pipeline and Hazardous Materials Safety Administration of the 

U.S. Department of Transportation; local responders may also attend training courses offered by the 

Federal Emergency Management Agency at no cost (other than travel and expenses).

In developing the proposed rule, EPA considered alternatives to reduce the impacts on small entities. 

The proposal limits the STAA provision to high risk sectors, removing what could be a substantial burden 

on other sectors that would probably have to hire consultants to conduct the analyses. EPA considered 

limiting applicability of some provisions to P3 facilities, but with the shift in OSHA’s interpretation of the

retail facility exemption under the PSM standard, the effect of such a change was reduced (most P2 

facilities will shift to P3). A substantial majority of P2 facilities that will remain are government water 

and wastewater treatment systems; because the only difference between those systems in P2 and those 

in P3 is the applicability of OSHA PSM (i.e., there is no difference in the risk posed), EPA could not justify 

providing regulatory relief to these facilities who are in P3. EPA did not consider exempting small 

facilities or governments from the requirement to become responders if the local agencies are not 

capable of responding or ask the facility to handle any accidents in-house. The smallest facilities that 

are not responders are too often in rural areas where there may be no hazmat response capability 

within a reasonable distance and, in some cases, in areas with no local fire department. When it 

enacted section 112(r), Congress clearly required facilities to ensure that there was a capability to 

respond to releases. 
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CHAPTER 8: ENVIRONMENTAL JUSTICE

8.1 Background and Context

Executive Order 12898, “Federal Actions to Address Environmental Justice in Minority Populations and 

Low-Income Populations” (February, 1994) places a responsibility on federal agencies for “identifying 

and addressing, as appropriate, disproportionately high and adverse human health or environmental 

effects of its programs, policies, and activities on minority populations and low-income populations in 

the United States[.]” This section explains how EPA has addressed environmental justice issues 

associated with this rulemaking. 

Environmental risks may result from industrial or commercial activities by private actors, or from 

governmental activities or programs. When those risks are disproportionately borne by particular 

subpopulations, environmental justice is achieved through Fair Treatment and Meaningful 

Involvement. 117

Fair treatment refers to efforts to prevent environmental risks and harms from 

disproportionately affecting a particular group of people. 

Meaningful involvementrefers to inclusion of potentially affected populations in decisions 

about activities or programsto address those risks. Meaningful involvement may include 

facilitating the involvement of populations potentially affected by those activities or programs. 

It also entails ensuring that potentially affected populations have an opportunity to participate 

in decisions and influence decisions about those activities or programs. “Empowering 

communities” is a specific goal established by the OSWER Environmental Justice Task Force 118

EPA used these principles in identifying and ameliorating environmental justice issues associated with 

RMP facilities. 

8.2 Identifying Potential Environmental Justice Concerns Associated with 

RMP Facilities 

At all facilities regulated under the Risk Management Program, an accidental release of a regulated 

substance creates a hazard to surrounding communities and environments. These hazards include, for 

example, exposure to toxic substances, fires, explosions, and noxious gas clouds. 

 

117 Guidance on Considering Environmental Justice During the Development of Regulatory Actions, US EPA, May 

2015. 

118 “OSWER Environmental Justice Task Force Draft Final Report”, EPA 540/R-94/004, April 1994. Also see 

“Integration of Environmental Justice into OSWER Policy, Guidance, and Regulatory Development” (OSWER 

directive No. 9200, 3-17, Sept 21, 1994)
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In undertaking actions in response to Executive Order 13650119, EPA sought to determine if there were 

environmental justice concerns associated with these risks from stationary sources regulated under the 

RMP rule. We assessed data using EPA tools and census information, and reviewed existing academic 

and gray literature on risks to populations of concern. 

8.2.1 Assessment of risks to relevant populations, based on proximity

Facilities that are regulated under the Risk Management Program pose risks of fire, explosion, and/or 

exposure to hazardous chemicals. Chemical hazards include burns, corrosive damage to people and 

property, as well as exposure associated with acute toxicity. Exposure from these facilities may put local 

populations at risk through inhalation, ingestion, or dermal contact.

Exhibit 8-1 shows the demographics in the vicinity of RMP sites, using locational data from the RMP 

database and demographic data from EPA’s EJSCREEN tool.

120 The analysis shows that minority and lowincome populations are more likely to be in proximity to those facilities (and thus at greater risk) than 

other populations.

121

Exhibit 8-1: Demographic Profile of Key Populations

Location Population Low-income Minority Linguistically isolated

Total near RMP 

facilities122

31.27 million 13,757,000 14,770,000 2,482,000

US Total 309.14 million 104,256,000 112,235,000 15,905,000

Demographics of 

population near RMP 

facilities123

44% 47% 8%

Demographics of overall 

US population

34% 36% 5%

Difference in populations 

near RMP sites

29% greater 31% greater 60% greater

44% of people in proximity (defined as living within a one-mile radius) to RMP sites are low-income; the 

average in the US population is 34%. Low-income is defined here as less than twice the Census Bureau’s 

poverty threshold.

 119 “Improving Chemical Facility Safety and Security,” August 2013.

120 See http://www2.epa.gov/sites/production/files/2015-

05/documents/ejscreen_technical_document_20150505.pdf. 121 Demographic data on populations are from the American Community Survey 2008-2012, US Census Bureau.

https://www.census.gov/programs-surveys/acs/news/data-releases/2012/release.html#par_textimage_0

122 Not including facilities in Puerto Rico and Guam. 123 This analysis counts each person for once for each RMP facility they are near. There is a likelihood of a small 

degree of double-counting, therefore, for those who are in close proximity to two or more facilities. However, this 

effect is likely to be small, as the data shows that less than 5% of the US population is in close proximity to two or 

more RMP facilities.
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47% of people in proximity to RMP sites are ethnic minorities, including any designation except for 

“Non-Hispanic, White.” It therefore includes those identifying as Hispanic white or as multiracial white. 

The average in the US population (overall) is 36%. 

The other demographic indicator we examined was “linguistic isolation.” This category consists of 

households where no one over age 14 speaks English well, and some other language is spoken at home. 

8% of populations in proximity to RMP facilities are linguistically isolated, compared to only 5% in the 

general US population. This characteristic is important for understanding disproportionate impact, 

inasmuch as these people are less likely to be aware of risks, to understand them, and to know what to 

do to help protect themselves. 

In comparison to the general US population, therefore, we can conclude that populations surrounding 

RMP facilities are:

• 29% more likely to be low-income;

• 31% more likely to be minorities; and

• 60% more likely to be linguistically isolated. 

To the extent that populations living closer to facilities are more likely to be exposed if a release occurs, 

RMP facilities pose a greater risk to these key demographic groups. 

8.2.2 Assessment of risks to relevant populations, in existing literature 

Studies external to EPA have also examined these issues. A 2004 analysis by the University of 

Pennsylvania examined risk to surrounding minority communities, based on an assessment of the 

potential for releases and property damages and injuries at RMP facilities.124 The writers also compared 

those risks with the demographics of surrounding communities. They found significant correlations 

between riskier facilities (larger and featuring more complex chemical processes) with location in 

counties with larger African American populations. They concluded:

“Thus, higher risk facilities are more likely to be found in counties with sizeable poor and/or 

minority populations that disproportionately bear the collateral environmental, property, and 

health risks.”

In 2014, the Environmental Justice and Health Alliance for Chemical Policy Reform found that the 

populations vulnerable to releases from chemical facilities are disproportionately black or Latino. 125 

Compared to the US population as a whole, these vulnerable populations have higher rates of poverty, 

 124 Elliott, M.R., et al, “Environmental Justice: frequency and severity of US chemical industry accidents and the 

socioeconomic status of surrounding communities” Journal of Epidemiology and Community Health 2004; 58:24-

30.

125 Who’s in Danger? A Demographic Analysis of Chemical Disaster Vulnerability Zones, May 2014. The report was 

produced in collaboration with Coming Clean and The Center for Effective Government. 

http://comingcleaninc.org/whats-new/whos-in-danger-report
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lower incomes, and education levels. In particular, this report focuses on the communities closest to the 

facilities (at the “fence line”). 

8.2.3 Conclusions 

Based on analysis of RMP data and other studies, EPA concludes that there is evidence that risks from 

RMP facilities fall on minority and low-income populations, to a significantly greater degree than those 

risks affect other populations. 

8.3 Actions Taken to Facilitate “Fair Treatment” 

Chapter 6 describes the reductions in risk that EPA anticipates to result from this rule. These include 

reducing the frequency of releases and accidents at RMP facilities, mitigating the damages when 

releases do occur, and improved information for affected communities and for emergency planners and 

responders. 

To the extent that this rule results in reductions of risk to US populations overall, EPA anticipates that it 

will result in greaterrisk reductions for minority communities and lower-income communities, since 

they bear a larger portion of the risk. Note that this reduces the absolutedisparity in risks, but not the 

relative disparity in risk that is associated with proximity to RMP facilities. Thus, EPA believes that this 

proposed rule will not have potential disproportionately high and adverse human health or 

environmental effects on minority, low income, or indigenous populations because it increases the level 

of environmental protection for all affected populations without having any disproportionately high and 

adverse human health or environmental effects on any population, including any minority, low-income 

or indigenous populations.

8.4 Actions Taken to Facilitate “Meaningful Involvement” 

Addressing environmental justice concerns entails meaningful involvement by affected communities. 

EPA has taken actions to ensure that these communities have a significant role in characterizing the risks 

associated with RMP facilities. In addition, EPA has facilitated communities’ involvement in assessing 

problems concerning RMP facilities and policy options for addressing these problems. 

EPA took a variety of steps to consult with communities that might be threatened by hazardous 

substances. In coordination with other agencies undertaking reviews regarding EO 13650, EPA, along 

with other key federal agencies, conducted a series of listening sessions and public communication 

efforts regarding addressing potential hazards from RMP stationary sources and other facilities. 

EPA participated in public sessions between November 2013 and January 2014 on the following dates: 

• November 5, 2013, Texas City, TX 

• November 15, 2013, Washington, DC

• November 19, 2013, Springfield, IL 
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• December 11, 2013, Orlando, FL

• January 9, 2014, Los Angeles CA 

• January 14, 2014, Washington DC 

• January, 2014 in Sacramento, CA 

• February 27, 2014 in Newark, NJ 

In addition, EPA participated in a webinar on the topic in November, 2013. 

Representatives from a variety of stakeholder organizations presented information and statements to 

the federal agencies convening these sessions. Many of those giving testimony represented 

neighborhood and community groups, and especially groups with information regarding minority, lowincome, and indigenous populations. Presentersfrom the following organizations provided information 

on the risk to those populations from chemical facilities: 

• Center for Health Environment and Justice

• Center for the Urban Environment 

• Louisiana Bucket Brigade

• Louisiana Environmental Justice Community Organizing Coalition

• Louisiana Environmental Action Network

• Mossville (LA) Environmental Action Now

• Just Transition Alliance 

• East Yard Communities for Environmental Justice 

• Communities for a Better Environment

• Public Citizen 

• Citizens for CleanAir and Clean Water 

• Texas Environmental Justice Advocacy Service

• Environmental Justice Health Alliance 

• Community In-Power and Development Association

• Coalition for a Safe Environment 

• Air Alliance Houston 

• People not Pozos – Esperanza Community Housing Corporation 

• San Pedro Homeowners United 

• Citizens for Responsible & Equal Environmental Protection

• Ironbound Community Corporation 

As a result of these consultations, EPA gathered important information regarding environmental justice 

at communities impacted by RMP facilities.126 

 126 Notes from the consultations and public comments can be found at: 

http://www.regulations.gov/#!documentDetail;D=DHS-2013-0075-0001.
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Topics addressed included: 

• The association between high-risk areas and low-income areas.

• Insufficient information received by local communities about hazards presented by nearby 

facilities, and the need for enhanced information sharing. 

• Cumulative effects of risks in communities affected by multiple RMP facilities.

• The need for local communities to be able to participate in planning activities, and problems 

that occur when those opportunities not available.

• The need to help communities with information and planning to enable them to better 

understand chemical facility hazards and know what to do when a release of hazardous 

materials occurs.

• Emphasizing the particular vulnerability of EJ communities to detrimental effects of disasters, 

especially regarding racial discrimination.

• The effects of existing health disparities, cumulative impacts of facilities, and limited resources 

available to community members to understand and help solve the risk problems. 

• The process of notifying local communitieswhen a chemical accident occursis poor and 

irregular. Alarm and siren systems are often not effective. 

• Inadequate communication between Local Emergency Planning Committees and local citizens.

• The need for addressing and incorporating environmental justice issues within disaster plans, 

such as evacuation, return and rebuilding, and understanding and addressing health 

consequences. 

These consultations provided invaluable information about impacts on poor and minority communities, 

directly from affected community members and environmental justice groups. They also provided a 

means for involvement ofthese communities in developing policy options to address those risks. 

Several of the components of this proposed rule –and their concomitant benefits –are based on the 

information and issues brought to EPA’s attention in these sessions. 
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CHAPTER 9: OTHER ANALYSES AND CONCLUSIONS

9.1 Unfunded Mandates Reform Act 

The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531–1538) requires agencies to conduct a cost 

benefit analysis of any rulemaking that may impose a net costs of $100 million or more for state, local 

and tribal governments, in the aggregate, or the private sector in any one year. It is possible that this 

proposal may result in expenditures of $100million or more in a year. The cost-benefit analysis 

presented in this document meets the requirement of the Act. See Appendix C of this document for 

more information that addresses requirements under Section 202 of UMRA.

9.2 Employment Impacts 

Executive Order 13563 “Improving Regulation and Regulatory Review” (76 FR 3821; January 18, 2011) 

requires Federal agencies to consider the employment impacts of regulatory policy. Specifically, 

Executive Order 13563 states, “Our regulatory system must protect public health, welfare, safety, and 

our environment while promoting economic growth, innovation, competitiveness, and job creation.” 

Economic research evaluating the employment impacts of environmental regulation has shown that the 

net employment effect is ambiguous. Several impacts are incurred by firms in regulated industries, and 

the net effect of the impacts should be evaluated jointly to determine the overall effect. Increasing 

production costs raise the cost of business operations; some of these new regulatory costs are labor 

costs, while others are capital costs. As production costs increase and firms pass along costs to 

consumers, output may decrease, which could cause a decrease in labor demand. There are also 

operational impacts incurred by regulated firms as they modify operations to comply with new 

regulatory requirements; the direction of that impact on labor demand is a function of the interaction 

between the regulatory requirements and the firm’s labor intensity of production. In general, the net 

effect of an environmental regulation on employment in regulated sectors and the overall economy is 

indeterminate. See Berman and Bui (2001) for a theoretical model of employment effects of 

environmental regulation. 

This RIA does not include a complete analysis of labor market effects of the proposed rule. In general, 

an environmental regulation can be understood as an increase in demand for a particular output: 

environmental quality. Meeting this new demand can result in increased demand for the various factors 

of production (including labor). EPA has determined that the proposed rule is unlikely to have 

significant impacts on employment. Even in a year where a large complex facility would have to conduct 

a field exercise, a third-party audit, a root cause analysis, and a near miss investigation, the total labor 

hours would represent about one FTE, but those hours would be distributed across many employees. 

About half of the total labor hours of that scenario is for the field exercise, which is estimated to involve 

more than 60 facility staff. For simple non-responding facilities the annual labor cost would average less 

than 10 hours distributed among several workers. At most, perhaps a facility might need to hire another 

employee to comply with the rule or to cover the work that would otherwise have been done by those 
Page 137 of 147

workers involved in compliance activities. The third-party audit and root cause analysis provisions may 

generate work for consultants, but the number of hours involved per facility is less than a single FTE. 

9.3 Limitations and Conclusions 

As discussed in detail in Chapters 3 and 7, the data on which this analysis is based are necessarily 

limited. EPA has attempted to correct obvious errors, such as removing accidents reported more than 

once and reclassifying some facilities to more appropriate NAICS codes, but some issues related to 

facility employment size and ownership could not be resolved. EPA could not add accidents that had 

not been reported or correct accident impact data where they may have been inaccurate. 

The estimated costs forthird-party audits,root cause analysis and public meetings project past accident 

rates into the future. The near miss estimates assume one near miss for each accident, but whether this 

is accurate will depend on how individual facilities interpret what constitutes a near miss. Some 

industry publications project much higher ratios of near misses to actual releases. EPA has not defined 

near miss, but even if it had, deciding whether a series of events could have produced a release that 

would meet the definition of catastrophic release will always be a matter of opinion. Similarly, what 

constitutes safer technology is open to interpretation as is what is considered to be feasible. In these 

circumstances, some operators may adopt a narrow interpretation, while others may adopt a broad 

interpretation. Questions related to interpretation apply to most performance-based rules where there 

are few if any bright lines that define what constitutes compliance. The result is that some facilities may 

spend far more than estimated, while others may spend less. 

The number of non-responding facilities that may become responders and the costs they will incur are 

unknown. For the former, the analysis provides a range of conversion estimates to indicate the 

potential total costs. In order to assessthe cost to any individual facility for coming into compliance, 

however, EPA necessarily had to use estimates of the number of people who would be trained and the 

amount of equipment that would be purchased. The analysis does not address the possibility that a 

facility might have to acquire fire-fighting expertise and equipment, which would impose additional 

costs. The sensitivity analysis conducted in Chapter 5 analyzed costs for 25 percent, 50 percent, and 75 

percent of current non-responders in counties without a Hazmat team to become responders.

The number of regulated facilities that will receive a request from their LEPC or emergency response 

officials to provide chemical hazard information is also unknown. Unlike the approach to the nonresponder conversions, EPA had no data to narrow the range of estimates. However, facility owners or 

operators would be required to update this information annually; therefore, EPA expectsthat all 

regulated facilities would incur costs forthis provision. 

Finally, the analysis used a model facility approach so that each estimate represents the average for a 

group of facilities, not a point estimate for any one facility. This analysis has attempted to develop 

reasonable central estimates recognizing that the range of costs incurred by individual facilities could be 

wide. For example, the estimated third-party auditor cost for a complex facility is the same for all 
Page 138 of 147

complex facilities, but it is unlikely that an auditor would charge the largest facility, which has more than 

30 covered processes, the same amount as it would a facility with only one or two covered processes. 

The number of people who would participate in field exercises will vary considerably based on facility 

size and location. Facilities of any size and complexity in urban industrial areas may involve more people 

in a field exercise than the same facilities would if located at a considerable distance from other 

facilities. 

The benefits analysis is qualitative. There were no data to connect the specific rule elements with 

specific reductions in expected probabilities or magnitudes of RMP chemical accidents. In addition, 

many of the accident impacts expected to be reduced by the rule, such as lost productivity or 

emergency response costs, could not be quantified even for the 10-year baseline accident record. Lack 

of data also meant that other benefits of the rule such as improved information could not be quantified.
Page 139 of 147

APPENDIX A

PROPERTY AND BUSINESS LOSSES IN THE PETROCHEMICAL INDUSTRY
Page 140 of 147

APPENDIX A—PROPERTY AND BUSINESS LOSSES IN THE PETROCHEMICAL INDUSTRY

Location Date

Property

Damage 

$M (2013

Dollars)

Business 

Loss $M Notes

Refinery Texas City 5/30/1978 $190

Petrochemical Delaware 10/29/1980 $140

Refinery Romeoville 7/23/1984 $450

Petrochemical Pampa 11/14/1987 $480 $240

Petrochemical Henderson 5/4/1988 $640 plant destroyed

Refinery Norco 5/5/1988 $610

Refinery Richmond 4/10/1989 $190 25% of capacity lost for 5 

months

Petrochemical Pasadena 10/23/1989 $1,400 full production not restored 

for 2 years

Refinery Baton Rouge 12/24/1989 $140 refinery shut for 3 days, 

reduced capacity for 3 

weeks

Petrochemical Sea Drift 3/12/1991 $180 $165 production reduced for a 

year

Petrochemical Sterlington 5/1/1991 $240 $270 one unit destroyed

Refinery Wilmington 10/8/1992 $150 production reduced by more 

than half for 7 months

Petrochemical Belpre 5/27/1994 $330 production unit destroyed

Petrochemical Cedar Bayou 10/20/1994 $240 includes business loss

Petrochemical Port Neal 12/13/1994 $370

Petrochemical Deer Park 9/22/1997 $230

Refinery Richmond 3/25/1999 $190 unit shut down for year

Refinery Carson City 4/23/2001 $190 unit shut down for 2 months

Refinery Lemont IL 8/14/2001 $370 unit shut down for year

Petrochemical Illiopolis 4/23/2004 $200 most of plant destroyed

Refinery BP/TX 3/23/2005 $260

Petrochemical TX 4/29/2006 $250 plant closed for 6 months

Refinery TX 2/28/2008 $240 plant continued to operate

Petrochemical Geismar 6/13/2013 $510 plant closed for almost a 

year

Source: Marsh, The 100 Largest Losses, 1974-2013, Large Property Damage Losses in the Hydrocarbon 

Industry, 23rd Edition. 

https://uk.marsh.com/Portals/18/Documents/100%20Largest%20Losses%2023rd%20Edition%202014.pdf

The table includes 24 accidents that reflect only U.S. incidents in the refinery and petrochemical sectors from 

1978 forward, only incidents that may have been related to a release of a regulated substance, and only 

damage unrelated to natural disasters. 
Page 141 of 147

APPENDIX B

Number of Small Entities by NAICS Code and Facility FTE

Total and Non-Responders
Page 142 of 147

Number of Small Entities by Facility FTE and NAICS Code, Total and Non Responders

All Non-Responders

NAICS 0-4 FTE 5-9 FTE 10-19 

FTE

20-99 

FTE

NAICS 0-4 FTE 5-9 FTE 10-19 

FTE

20-99 

FTE

111 41 34 14 7 111 34 28 12 6

112 1 0 0 0 112 1

115 61 69 53 53 115 42 43 36 44

211 56 18 22 27 211 36 8 8 11

213 1 1 2 2 213 1

221 8 11 22 70 221 4 11 17 35

2213 9 0 6 2 2213 4 0 4 1

236 1 236 0 0 0 0

311 3 4 9 114 311 1 3 6 52

312 0 0 1 5 312 0 0 1 1

313 1 313 0 0 0 0

324 1 9 324 2

32512 1 2 0 1 32512 1 1 0 0

32518 4 3 6 21 32518 1 1 1 1

325181 0 0 2 3 325181 0 0 2 0

325188 0 1 4 15 325188 0 1 2 4

32519 0 0 2 5 32519 0 0 0 2

325193 0 0 2 110 325193 0 0 1 87

325199 1 1 6 39 325199 0 1 3 11

325314 4 6 8 5 325314 3 6 6 5

32532 2 1 1 7 32532 1 0 0 2

32551 1 1 2 9 32551 0 1 1 1

32552 0 0 1 5 32552 0 0 1 2

32599 1 2 3 6 32599 0 1 2 1

325998 0 1 5 24 325998 0 1 3 9

326 0 1 3 35 326 0 0 1 18

327 1 327 0 0 0 0

331 0 1 2 8 331 1 0 1 4

332 0 0 6 9 332 0 0 4 4

333 0 0 0 2 333 0 0 0 1

334 0 0 0 4 334 0 0 0 2

335 0 0 0 1 335 0 0 0 0

336 0 0 0 1 336 0 0 0 0

339 2 8 339 0 0 1 2

423 2 0 0 2 423 1 0 0 1

424 42 32 18 4 424 33 25 14 4

4246 21 25 21 24 4246 17 16 12 12
Page 143 of 147

All Non-Responders

NAICS 0-4 FTE 5-9 FTE 10-19 

FTE

20-99 

FTE

NAICS 0-4 FTE 5-9 FTE 10-19 

FTE

20-99 

FTE

4247 34 15 13 7 4247 18 6 8 3

4249 766 408 212 79 4249 711 351 189 64

444 4 2 1 444 4 1 0 0

447 1 447 0 0 1 0

453 4 2 3 453 4 1 2 0

484 1 1 5 5 484 0 1 3 1

486 0 0 2 2 486 0 0 0 0

488 0 3 1 1 488 0 1 0 0

49311 3 3 3 5 49311 3 3 3 4

49312 9 5 17 52 49312 9 5 17 52

49313 18 10 3 5 49313 15 5 2 3

49319 6 5 6 12 49319 2 2 2 6

541 0 2 0 2 541 0 1 0 2

561 10 0 4 0 561 10 0 4 0

562 0 1 0 2 562 0 0 0 0
Page 144 of 147

APPENDIX C

UMRA Written Statement
Page 145 of 147

UMRA Written Statement

I. Introduction

Title II of the 1995 Unfunded Mandates Reform Act (UMRA; 2 U.S.C. 1531-1538) requires Federal 

agencies, unless otherwise prohibited by law, to assess the effects of their regulatory actions on State, 

local, and tribal governments and the private sector. Specifically, Section 202 of UMRA generally 

requires Federal agencies to prepare a written statement, including a cost-benefit analysis, for each 

proposed and final rule with "Federal mandates" that may result in expenditures by State, local, and 

tribal governments, in the aggregate, or to the private sector, of $100 million or more in any one year. 

Section 202 requires that “Written Statements” contain five elements of information:

1. An identification of the provision of Federal law under which the rule is being promulgated;

2. A qualitative and quantitative assessment of the anticipated costs and benefits of the Federal 

mandate, including the costs and benefits to State, local, and tribal governments or the private 

sector, as well as the effect of the Federal mandate on health, safety, and the natural

environment;

3. Estimates by the agency, if and to the extent that the agency determines that accurate 

estimates are reasonably feasible, of:

(a) the future compliance costs of the Federal mandate; and

(b) any disproportionate budgetary effects of the Federal mandate upon any particular 

regions of the nation or particular State, local, or tribal governments, urban or rural or 

other types of communities, or particular segments of the private sector;

4. Estimates by the agency of the effect on the national economy, such as the effect on 

productivity, economic growth, full employment, creation of productive jobs, and international 

competitiveness of United States goods and services, if and to the extent that the agency in its 

sole discretion determines that accurate estimates are reasonably feasible and that such effect 

is relevant and material; and

5. Description of the extent of the agency’s prior consultation with elected representatives (under 

section 204) of the affected State, local, and tribal governments, including a summary of the 

comments and concerns that were presented by State, local, or tribal governments either orally 

or in writing to the agency; and a summary of the agency’s evaluation of those comments and 

concerns.

This document constitutes the “Written Statement” to meet this requirement for the RMP proposed 

rule. The Environmental Protection Agency (EPA) has conducted a cost-benefit analysis for this action, 

which has been submitted in the docket entitled “Regulatory Impact Analysis” (RIA).
Page 146 of 147

II. Response to Five Information Elements

A. Identification of the Provision of Federal Law Under Which the Rule is Being Promulgated

The statutory authority for the RMP rule is provided by section 112(r) of the CAA as amended (42 U.S.C. 

7412(r)). Each of the portions of the Risk Management Program rule we propose to modify in this notice 

are based on EPA’s rulemaking authority under section 112(r)(7) of the CAA (42 U.S.C. 7412(r)(7)).

B. Cost to State, Local, and Tribal Governments and the Private Sector

As estimated in the RIA, there are approximately 12,500 facilities that have filed RMPs with 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.

EPA estimates annualized costs of $158.3 million at a 3% discount rate and $161.0 million at a 7% 

discount rate. Of this amount, average annualized costs to State/local governments total $19.8 million at 

a 3% discount rate and $20.2 million at 7% discount rate consisting of estimated regulatory compliance 

costs for State/local governments that currently own or operate RMP-regulated sources plus costs to 

local governments (i.e., LEPCs, emergency response officials and state implementing agencies) for rule 

familiarization and voluntary participation in coordination activities, exercises and review of information 

submitted to LEPCs. The estimated average annualized cost to the private sector totals approximately 

$138.5 million at a 3% discount rate and $140.8 million at a 7% discount rate.

Although there are RMP facilities located on tribal lands, EPA does not have information on the number 

of tribal-owned regulated facilities, and therefore, has not estimated costs to tribes in the RIA for the 

proposed rule.

C. Extent to Which Costs to State, Local, and Tribal Governments May be Paid by EPA or Other Federal 

Agencies, or to Which there are Available Federal/EPA Resources to Carry out a Federal 

Intergovernmental Mandate

EPA does not provide funding to state, local or tribal governments for implementation of the Risk 

Management Program rule; or to fund costs for participation in emergency response coordination 

activities and facility exercises; or review information submitted to LEPCs. 

D. Estimates of Future Compliance Costs and Budgetary Effects on Particular Regions of the Country, 

or Particular State, Local, or Tribal Governments or Communities, or Particular Segments of the 

Private Sector

The RIA assessed potential effects of the RMP rule on regulated entities (including government entities 

subject to the rule) and voluntary costs to state and local governments that participate in emergency 
Page 147 of 147

response coordination activities, facility exercises and review of reports submitted to LEPCs or local 

emergency response officials.

E. Extent of EPA’s Prior Consultation with Affected State, Local, and Tribal Governments

Over the 16 years of implementing the RMP program and, most recently through EO 13650 listening 

sessions, webinars, and consultations, EPA has engaged states and local communities to discuss 

chemical safety issues. In the nine EO 13650 Improving Chemical Facility Safety and Security listening 

sessions and webinars, held between November 2013 and January 2014, states and local communities 

identified lack of chemical facility participation and coordination in local emergency contingency 

planning as a key barrier to successful local community preparedness. Additionally, EPA has had 

consultations with states and local communities through participation in the NASTTPO annual meetings 

to discuss key issues related to chemical facility and local community coordination and what areas of the 

RMP regulations need to be modernized to facilitate this coordination and improve local emergency 

preparedness and prevention. Key priority options discussed with NASTTPO states and local 

communities included: improving emergency response coordination between RMP facilities and 

LEPCs/first responder and requiring emergency response exercises of the RMP facility plan to involve 

LEPCs, first responders and emergency response personnel.

This action may significantly or uniquely affect small governments. The EPA consulted with small 

governments concerning the regulatory requirements that might significantly or uniquely affect them. 

Through the July 31, 2014 RFI (79 FR 44604), EPA sought feedback from governmental entities while 

formulating the proposed revisions in this action. Additionally, EPA participated in ongoing consultations 

with affected small entity representatives (including small governmental entities) through a Small 

Business Advocacy Review (SBAR) panel. EPA convened an SBAR panel in accordance with the 

requirements of the RFA, as amended by the Small Business Regulatory Enforcement Fairness Act 

(SBREFA).