# Risk Management Modernization Rule JANUARY 5, 2016 EO 12866 INTERAGENCY BRIEFING ON THE MODERNIZATION OF THE RISK MANAGEMENT PROGRAM NPRM

OFFICE OF LAND AND EMERGENCY MANAGEMENT OFFICE OF EMERGENCY MANAGEMENT

# Agenda Background on:

◦ Existing regulatory framework for chemical facility safety and security and ◦ The current Risk Management Plan (RMP) rule 

## RMP Universe of Facilities Overview of Proposed Rule Provisions and Costs Questions & Comments

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# Background on Existing Regulatory Framework for chemical facility safety and security The RMP is one of several programs regarding chemical facility safety, including:

◦ OSHA Process Safety Management (PSM ) standard ◦ Management program for highly hazardous chemicals aimed at preventing and minimizing occupational/onsite exposure ◦ Emergency Planning and Community Right-to-know (EPCRA) requirements ◦ Local emergency planning and preparedness, emergency release notification, community right-to- know: provision of hazardous chemical storage inventory and toxic chemical release inventory to the community and first responders ◦ CAA Section 112(r)(1) general duty clause ◦ Facility owner/operators have a general duty to prevent and minimize releases ◦ DHS requirements – Chemical Facility Anti-terrorism Standards (CFATS) ◦ ATF requirements for explosives ◦ State/local requirements (e.g., NJ, Contra Costa County, CA regulations) 

### The RMP program closely aligns with OSHA’s PSM standard in content, policy interpretations, Agency guidance, and enforcement in order to avoid redundancy, conflict, and extra burden to industry. The RMP program expands upon the information provided to States and Local Emergency Planning Committees (LEPCs) under EPCRA.

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# Background on how RMP interconnects with PSM and EPCRA OSHA’s PSM

◦ Focused on risks to onsite employees and facility ◦ Triggered if the facility has an applicable chemical above the specified TQ in a process. ◦ There are 62 chemicals on both the RMP and PSM list of chemicals. RMP covers 27 chemicals not listed in PSM and PSM covers ~76 chemicals not listed in RMP. PSM covers wider range of flammables than RMP. ◦ Requires 14 elements, most of which are also RMP Program 3 requirements. 

### EPCRA

◦ Emergency response elements ◦ Local Emergency Planning Committees (LEPCs) must develop a community emergency response plan, review the plan at least annually, and provide information about chemicals in the community to citizen. ◦ Identify facilities and transportation routes of extremely hazardous substances ◦ Describe on and off-site emergency response procedures ◦ Determine the probable affected area and population by releases ◦ Describe local emergency equipment and facilities ◦ Training program for emergency responders and methods/schedules for drills ◦ Procedures for informing the public before, during, and after an accident

◦ Risk Management Plan information builds upon the information provided to LEPCs under EPCRA, focuses on facility-specific planning, and further expands planning and prevention efforts at the local level.

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# Background - current RMP rule Key aspects of the rule:

◦ Applies to all stationary sources with processes that contain more than a threshold quantity of a regulated substance ◦ Plan elements aimed at preventing accidental releases and reducing the severity of releases that occur ◦ All sources must prepare and submit an RMP to EPA at least every 5 years ◦ Covered processes fall within one of three prevention program levels based on: ◦ The potential for offsite consequences from a worst-case accidental release; ◦ Accident history; and ◦ Regulation under OSHA PSM

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# Background - RMP rule Program Levels Program 1 (642 facilities)

◦ Processes that would not affect the public in the event of a worst case release & no accidents with offsite consequences in the last 5 years ◦ Small quantities of flammables, less volatile toxics ◦ Limited accident prevention including hazard assessment and emergency response requirements 

## Program 2 ( 1272 facilities)*

◦ Processes not eligible for Program 1, not subject to Program 3 ◦ Mainly water & wastewater treatment in Federal OSHA states ◦ Additional hazard assessment, accident prevention, management, and emergency response requirements 

## Program 3 (10628 facilities)*

◦ Processes subject to OSHA’s PSM or in one of 10 specified NAICS codes ◦ Larger facilities or those with complex processes ◦ Examples include: refining, chemical manufacturing, energy production, water treatment ◦ Must use OSHA’s PSM as accident prevention program and include additional hazard assessment, management, and emergency response requirements

OFFICE OF LAND AND EMERGENCY MANAGEMENT OFFICE OF EMERGENCY MANAGEMENT *Analysis reflects OSHA change to PSM retail exemption issued July 2015 6

# Comparison of RMP Program Requirements

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# RMP Universe of Facilities* Program 1 Program 2 Program 3 Small Large Small Large Small Large Petroleum and Coal Products Mfg 

### 5 8 0 3 21 119 156 Chemical Manufacturing 

### 32 21 49 15 458 891 1466 Food/Beverage Manufacturing 

### 1 2 6 5 368 1094 1476 Paper Manufacturing 

### 0 1 0 1 5 63 70 Other Manufacturing 

### 33 29 34 39 113 136 384 Agricultural Distributors 

### 9 1 0 0 1564 2093 3667 Chemical /petroleum wholesale 

### 5 15 0 0 160 429 609 Other wholesale 

### 0 5 0 0 100 197 302 Warehouses 

### 11 59 0 0 267 719 1056 Water / POTW 

### 6 10 527 418 463 601 2025 Oil & gas production 

### 88 222 13 28 104 286 741 Other 

### 29 50 66 68 128 249 590 Totals 

### 219 423 695 577 3751 6877 12542 642 1272 10628 OFFICE OF LAND AND EMERGENCY MANAGEMENT OFFICE OF EMERGENCY MANAGEMENT 

### RMP Facility Type Total

8 * Information obtained from EPA RMP databaseOFFICE OF LAND AND EMERGENCY MANAGEMENT OFFICE OF EMERGENCY MANAGEMENT Category (% of facilities that are small business in each category) P1 P2 P3 Total Petroleum and Coal Products Mfg (15%) 

### 8 0 161 169 Chemical Manufacturing (36%) 

### 6 6 518 530 Food/Beverage Manufacturing (25%) 

### 0 2 268 270 Paper Manufacturing (7%) 

### 0 0 46 46 Other Manufacturing (45%) 

### 1 9 43 53 Agricultural Distributors (43%) 

### 0 0 156 156 Chemical/petroleum wholesale (27%) 

### 2 0 36 38 Other wholesale (34%) 

### 0 0 20 20 Warehouses (27%) 

### 1 0 71 72 Water / POTW (49%) 

### 0 34 41 75 Oil & gas production (27%) 

### 8 1 44 53 Other (38%) 

### 9 5 21 35 Totals 

### 35 57 1425 1517 

# RMP Accidents (2004 – 2013)*

9 * Information obtained from EPA RMP database

# Overview of Proposed Revisions P1 P2 P3 Third - party a udits (applies to the next scheduled audit after an accident) * [Estimated 150/year] √ √ Incident Root Cause Analysis (only for facilities with accidents/near misses) * [Estimated 150/year] √ √ Safer Alternatives Analysis (applies to a subset of P3 in certain NAICS codes) * [Estimated 1,692 Facilities/4,308 Processes] √ Coordinating Emergency Response Program Requirements with Local Responders √ √ Emergency Response Exercises * √ √ Information Sharing * √ √ √

OFFICE OF LAND AND EMERGENCY MANAGEMENT OFFICE OF EMERGENCY MANAGEMENT * New Proposed Requirement 10

# Local 

# Coordination Current Requirements: Facilities must develop an emergency response program except when the community emergency response plan addresses toxic substances at the facility, or owner/operator has coordinated response actions for flammable substances with local fire department. (Applies to all P2 and P3) Issues to Address:

◦ States and locals have indicated that some RMP facilities have not adequately coordinated with Local Emergency Planning Committees (LEPCs) and local emergency responders . ◦ CSB accident investigations have identified poor coordination between RMP facilities and local responders ◦ Provisions intended to clarify existing RMP coordination requirement and supplement existing EPCRA requirements for local emergency planning ◦ EPCRA requires LEPC to develop local emergency plan ◦ RMP requires regulated facilities to coordinate with local responders and, if necessary, develop facility emergency response program & plan

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# RMP Responder/Non

- responder* Category (% of facilities that are small business in each category) Responder Non-responder % Nonresponder P2 P3 P2 P3 Petroleum and Coal Products Mfg (15%) 

### 1 128 0 12 9% Chemical Manufacturing (36%) 

### 28 977 36 372 29% Food/Beverage Manufacturing (25%) 

### 4 958 7 504 35% Paper Manufacturing (7%) 

### 1 61 0 7 10% Other Manufacturing (45%) 

### 55 142 18 106 39% Agricultural Distributors (43%) 

### 0 580 0 3077 84% Chemical/petroleum wholesale (27%) 

### 0 374 0 218 37% Other wholesale (34%) 

### 0 89 0 208 70% Warehouses (27%) 

### 0 557 0 429 44% Water / POTW (49%) 

### 150 483 795 581 68% Oil & gas production (27%) 

### 11 238 30 152 42% Other (38%) 

### 66 216 68 161 45% Totals 

### 316 4803 954 5827 57% OFFICE OF LAND AND EMERGENCY MANAGEMENT OFFICE OF EMERGENCY MANAGEMENT 12 * Information obtained from EPA RMP database

# Local 

# Coordination Proposed revisions require facilities all P2 and P3 to: ◦ Coordinate annually with the LEPC/emergency responders and ensure response capabilities exist ◦ Document coordination (Include names & contact information for individuals involved, dates of coordination, and any conclusions/next steps). ◦ LEPC/emergency responders can request facility prepare emergency response program What are the outcomes of “coordination”? ◦ “Non- responding” source – coordination indicates that local public response capabilities are adequate to respond, appropriate notification mechanisms are in place, and local authorities have not requested that owner develop ER program ◦ “Responding” source – outcome of coordination indicates that local public response capabilities are not adequate to respond, or local authorities request that owner develop ER program. As a result, facility must develop an emergency response program according to Section 68.95 and respond to accidental releases of regulated substances at the facility. OFFICE OF LAND AND EMERGENCY MANAGEMENT OFFICE OF EMERGENCY MANAGEMENT 13 What is “coordination”?

◦ Facility and local responders meet & discuss response needs, capabilities, and roles: ◦ Determine resources needed to appropriately respond to regulated substance releases at facility ◦ Determine resources available from facility & local responders ◦ Identify capability gaps and develop plans to address ◦ Decide whether facility or local responders will respond to releases of regulated substances ◦ Assign response action roles and responsibilities

# Emergency Response Exercises Current Requirements: No RMP requirement for facilities to exercise their emergency response program or plan. Issues to Address:

◦ CSB accident investigations indicate that poor emergency response planning and execution by RMP facility owners/operators has increased the severity of accidents ◦ Requiring exercises is likely to improve emergency response by facilities and community responders and reduce the consequences of an accident on the community

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# Emergency Response Exercises Proposed Revisions: Require facilities to test their emergency response program through notification, tabletop, and field exercises (Applies to all P2 and P3)

◦ Require “responding” and “non - responding” facilities to conduct an annual notification exercise ◦ Require “responding” facilities to conduct the following exercises and invite local responders to participate: Tabletop exercise ◦ Frequency: Annually except in the year of a field exercise ◦ Scope : Same as field exercise without actual mobilization of personnel & equipment 

### An exercise evaluation report must be completed within 90 days of each exercise.

OFFICE OF LAND AND EMERGENCY MANAGEMENT OFFICE OF EMERGENCY MANAGEMENT 15 Field exercise:

◦ Frequency: Every 5 years and within one year following a reportable accident ◦ Scope : Test procedures for notification, evacuation, medical treatment, communications systems, emergency response personnel mobilization (including contractors, if appropriate), coordination with local responders, equipment deployment, and other actions identified in ER program as appropriate 15

# Information Sharing Current Requirements: Facility RMP must be made available to the public and LEPC/first responders (data restrictions apply based on security concerns). (Applies to all facilities) Issue to Address: LEPCs, first responders, and members of the public have indicated that:

◦ Chemical facility information and data -sharing efforts, at the local level, needs significant improvement ◦ Improve access and understanding, ◦ Ensure greater transparency without compromising security 

### ◦ LEPCs and first responders need access to the most relevant and actionable chemical hazard and risk information for their needs, in an easily accessible format, to better support planning and preparedness efforts ◦ Community residents and organizations need basic information regarding chemical risks at facilities, presented in a clear and consistent manner

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# Information Sharing Proposed revisions add new disclosure elements for all facilities:

◦ To LEPCs and emergency responders ◦ To general public ◦ Public meetings (Every 5 years and within 30 days of a reportable accident) 

## The information should be conveyed without revealing CBI or trade secret information. Any summary information should adequately explain the findings, results, or analysis being provided while avoiding technical jargon.

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# Information Sharing

- LEPC Summaries of chemical hazard information must be provided for the following: ◦ Information on RMP regulated substances− names and quantities of regulated substances held in a process ◦ Five year accident history information (reported under §68.42) ◦ Compliance audits ◦ Incident investigation reports (with root cause findings) ◦ IST implemented or planned to be implemented, if applicable (note: facilities are not required to implement IST, however, if they do, it is useful information for LEPCs/first responders to have in their local emergency planning efforts) 

## ◦ Exercises−including schedules and reports.

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# Information Sharing

- Public Chemical hazard information must be provided in an easily accessible manner (i.e . Posting on a company website, public file sharing website, or social media website, or placing a file at a public library or local government office): ◦ Five year accident history information (reported under §68.42) ◦ Exercises . Summary information would include information on emergency response exercises required under §68.96, including: ◦ Schedules for upcoming exercises, ◦ Reports for completed exercises as described in § 68.96(b)(3), and ◦ Any other related information ◦ LEPC contact information, including : ◦ LEPC name, phone number, web address, and email addresses of LEPC contacts, as available

OFFICE OF LAND AND EMERGENCY MANAGEMENT OFFICE OF EMERGENCY MANAGEMENT 19 ◦ RMP Regulated substances information . Names and quantities of regulated substances held in a process ◦ Safety data sheets (SDS) for all regulated substances located at the facility ◦ Emergency response program. Summary information would include: ◦ Whether the source is a responding stationary source or a non - responding stationary source; ◦ Name, organizational affiliation, phone number, and e- mail address of local emergency response organizations with which the owner or operator last coordinated emergency response efforts; and ◦ For “responding stationary sources,” procedures for informing the public and local emergency response agencies about accidental releases

# Information Sharing

- Public Meetings Public meeting must be held:

◦ Every five years and ◦ Within 30 days of a reportable accident Public meeting will discuss:

◦ The chemical hazard information that would be provided to the public ◦ Provide the opportunity for the facility to explain how they are addressing risks and preventing accidents 

### Multiple facilities can hold their public meetings together and/or Public meeting can be held in concurrence with a regularly scheduled LEPC meeting that is open to the public Facilities must notify the community about the public meeting and can use various methods including:

◦ Publishing a notice in a local paper, ◦ Social media, and/or ◦ Fliers in public places, like the local library

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# Incident Investigations & Root Cause Analysis Current Requirements: Facility owners/operators must conduct incident investigations following an incident that resulted in or could have resulted in a catastrophic release (includes a “near miss”). (Applies to all P2 and P3) Issue to Address:

◦ Strengthening incident investigation requirements to identify the underlying reasons for a chemical accident which would lead to preventing future accidents and ensuring compliance. Eliminates the risk of reoccurrence of a particular accident and similar accidents that could result from the same system -wide root causes ◦ Current catastrophic release definition (includes a “near miss”) not well defined and misinterpreted. ◦ CSB, industry good safety practices/guidance, EPA and state and local programs have all cited support for root cause investigations

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# Incident Investigations & Root Cause Analysis Proposed Revisions (Applies to P2 and P3):

◦ Propose revisions to “catastrophic release” definition to be consistent with reportable accidental release, i.e. an accident with deaths, injuries, evacuations, sheltering in place, property damage, or environmental damage ◦ Applies to a catastrophic release (i.e., an RMP reportable accident) or an incident that could reasonably have resulted in a catastrophic release (i.e. a near miss) ◦ As part of incident investigation, the owner or operator must complete a root cause investigation (i.e. identify the fundamental reasons why an incident occurred and the correctable failures in management systems) ◦ EPA would propose to define “root cause” as a fundamental, underlying, system - related reason why an incident occurred that identifies correctable failure(s) in management systems ◦ A report must be completed within 12 months (unless extension approved, in writing, by implementing agency)

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# Incident Investigations & Root Cause Analysis- Near Misses Rule currently requires incident investigations for near misses:

◦ §68.60(a) The owner or operator shall investigate each incident which resulted in, or could reasonably have resulted in a catastrophic release. ◦ §68.81(a ) The owner or operator shall investigate each incident which resulted in, or could reasonably have resulted in a catastrophic release of a regulated substance. 

### EPA is proposing to add the term “near miss” to mean incidents which could reasonably have resulted in a catastrophic release Examples include: ◦ Events or unsafe situations that under slightly different circumstances could have resulted in a catastrophic release or had reasonable potential to escalate ◦ Runaway reactions, fires, explosions, or vapor cloud releases that did not result in impacts ◦ Some process upsets, such as: ◦ Excursions of process parameters beyond pre-established critical control limits; ◦ Activation of layers of protection such as relief valves, interlocks, rupture discs, blowdown systems, halon systems, vapor release alarms, and fixed vapor spray systems; and ◦ Activation of emergency shutdowns.

OFFICE OF LAND AND EMERGENCY MANAGEMENT OFFICE OF EMERGENCY MANAGEMENT 23 EPA will coordinate with OSHA and other agencies as appropriate on explaining the term “near-miss” by continuing staff -level collaboration during rule development and the interagency review process.

# Safer Alternatives Analysis Current Requirements: Facility owners/operators must develop a PHA to identify, evaluate, and control process hazards involving regulated substances. (Applies to all P3) Issue to Address:

◦ Many RFI comments urged EPA to incorporate safer technologies into the Risk Management Program to prevent or minimize the effects of chemical accidents ◦ Center for Chemical Process Safety (CCPS) guidelines support the use of safer technologies to improve chemical safety and reduce risk of chemical accidents ◦ Various CSB investigations and EPA inspections have indicated that incorporating IST measures could have prevented serious accidents ◦ Inherently safer technologies are more robust and reliable measures and should be used, if feasible, to improve safety ◦ There are many opportunities for making processes safer and should be seriously considered ◦ Advances in IST and safer alternatives ◦ Adopted by some state and local governments ◦ Adopted by some companies ◦ Strengthening PHA requirements to incorporate the full hierarchy of hazard controls could prevent or minimize the effects of chemical accidents on the local communities, the environment, and consumers as well as employees at the facility

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# Safer Alternatives Analysis Proposed Revisions would apply to P3 facilities in NAICS codes:

◦ 322 (paper manufacturing), ◦ 324 (petroleum & coal products manufacturing), and ◦ 325 (chemical manufacturing) EPA would propose to define feasible to mean:

◦ Capable of being successfully accomplished within a reasonable time, accounting for economic, environmental, legal, social, and technological factors. Owner/operator would not be required to implement any prescribed technology, however EPA is taking comment on whether implementation should be required. Requires owner/operator to analyze, as part of PHA, potential safer technologies and alternatives.

◦ Consider, in the following order of preference, inherently safer technology or design, passive measures, active measures, and procedural measures. ◦ A combination of risk management measures may be used to achieve the desired risk reduction. ◦ Inherently safer technologies are those measures that reduce or eliminate the hazards and include minimization, substitution of less hazardous chemical, moderation of the process, and simplification of the process/procedures. ◦ Determine the feasibility of inherently safer technologies and designs considered. ◦ The PHA would include a description of how the analysis was done, findings and recommendations, and this information should be documented and retained at the facility. EPA is not specifying a prescribed level of risk reduction and analysis can be done using existing PHA methods (currently in regulations) or other recognized methods for analyzing safer technology and alternatives.

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# Third - Party Compliance Audits Current Requirements: Facility owners/operators must perform compliance audits every three years. (Applies to all P2 and P3) Issue to Address: Self-auditing may be insufficient to ensure compliance with RMP requirements and promote safe stationary source operation and accident prevention.

◦ Chemical Safety Board (CSB) and EPA have identified a lack of rigorous compliance audits which failed to identify key safety deficiencies as a contributing factor in several accidents (i.e., BP Texas City refinery and Citgo Corpus Christi refinery). ◦ Third -party audits are required by other federal programs to ensure safe operations. For example, the Bureau of Safety and Environmental Enforcement (BSEE) promulgated revisions to their Safety and Environmental Management Systems (SEMS II) requirements, following the BP Deepwater Horizon spill, to ensure the safe operations of offshore oil and natural gas drilling and production facilities. ◦ Industry recognizes the benefits of third -party auditing programs and has established programs and standards for third -party audits for many facilities subject to the RMP rule. Some industry groups, such as SOCMA and the Center for Offshore Safety (COS), require certain types of third - party audits for their members . ◦ Research shows that without sufficient safeguards to ensure auditor independence, auditors are more likely to provide lenient or biased audit reports that can fail to accurately identify problems and violations by the regulated entity

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# Third - Party Compliance Audits Proposed revisions require all P2 and P3 facilities to conduct a third-party audit in lieu of a compliance audit following an RMP reportable accident.*

◦ The scope of the third - party audit shall be the same as the compliance audit (i.e., audit prevention program implementation for all covered processes). ◦ The third - party audit shall be completed within 12 months of an RMP reportable accident or within 3 years of completion of the previous compliance audit, whichever is sooner. [Note: This audit and its schedule are independent of the incident investigation requirement and its schedule.] 

### ◦ Criteria and standards for third - party auditor competence include: • knowledgeable with the requirements of the RMP Prevention program requirements; • experienced with the facility type and processes being audited and the applicable recognized and generally accepted good engineering practices (RAGAGEP); • trained or certified in proper auditing techniques; and • be a licensed Professional Engineer (PE), or include a licensed PE on the audit team

OFFICE OF LAND AND EMERGENCY MANAGEMENT OFFICE OF EMERGENCY MANAGEMENT 27 * An RMP reportable accident means an accidental release meeting the criteria in §68.42(a) from a covered process at a stationary source

# Third - Party Compliance Audits Independence and impartiality requirements for third party auditors and audit teams include:

◦ Acting impartially when performing all third- party audit activities; ◦ Receiving no financial benefit from the outcome of the audit, apart from payment for auditing services; ◦ Not having conducted past research, development, design, construction services, or consulting* for the owner or operator within the last 3 years (including any “associated” third- party auditors); ◦ Not providing other business or consulting services to the owner or operator, including advice or assistance to implement the findings or recommendations in an audit report, for a period of at least 3 years following submission of the final audit report; ◦ Ensuring all personnel involved on the audit team sign and date a conflict of interest statement certify that the audit followed the requirements of the rule and contains not false statements; and ◦ Ensuring all personnel involved in the audit do not accept future employment* with the owner or operator of the facility for a period of at least 3 years following submission of the final audit report.

OFFICE OF LAND AND EMERGENCY MANAGEMENT OFFICE OF EMERGENCY MANAGEMENT 28 * Note- participation in third- party audits does not constitute “consulting” and “future employment” for the purposes of this requirement. 28

# Estimated Unit Costs ( in actual $)*

OFFICE OF LAND AND EMERGENCY MANAGEMENT OFFICE OF EMERGENCY MANAGEMENT * Sources for estimate include technical literature, public comments, other similar programs, RMP database, and EPA labor models

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# Questions?

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