Thursday, December 5, 2013

OSHA Considering Revisions to Process Safety Management Standard that Would Affect Oil and Gas Industry

On August 1, 2013, President Barack Obama issued Executive Order No. 13650 in the aftermath of an April 17, 2013 ammonium nitrate explosion that killed 15 people at a West Fertilizer Company facility in West, Texas.  Executive Order No. 13650 is aimed at improving safety and security at chemical facilities across the nation.  As part of that objective, the Executive Order requires the Secretary of Labor to review and suggest improvements to OSHA’s Process Safety Management (“PSM”) standard (29 C.F.R. §1910.119), which prescribes a comprehensive management program for hazardous chemicals in the workplace.

In compliance with Executive Order No. 13650, OSHA has announced a Request for Information (RFI) seeking public comment on potential revisions and/or updates to its PSM standard and other related standards such as its Explosives and Blasting Agents standard (29 C.F.R. §1910.109), Flammable Liquids Standard (29 C.F.R. §1910.106), and Spray Finishing Standard (29 C.F.R. §1910.107).   

The potential revisions/updates identified by OSHA in the RFI focus primarily upon increasing the coverage of the standards.  Two of the most significant actions being considered by OSHA would bring the oil and gas industry within the purview of the PSM standard when it is currently not subject to the same.  

Specifically, OSHA is seeking comment on whether to strike or retain the exemption contained within §1910.119(a)(2)(ii) for oil and gas well drilling and servicing operations.  

Additionally, OSHA is considering completion of a proper economic analysis of PSM standard coverage of oil and gas production facilities so that enforcement of the PSM standard can be resumed for these facilities.  Although oil and gas productions facilities have never been exempted from the PSM standard like oil and gas well drilling and servicing operations have, OSHA was forced to suspend enforcement of the PSM standard as to those facilities after objections from the American Petroleum Institute and a subsequent concession by OSHA that the original economic analysis for the PSM standard did not include oil and gas productions facilities.

Oil and gas firms are urged to consult Executive Order No. 13650 and OSHA’s RFI to develop a more complete understanding of the potential changes to the PSM standard and related standards under consideration by OSHA that could affect the inductry.  Those who wish to comment on the RFI can do so at when the RFI is published in the Federal Register.