OSHA UNVEILS CHEMICAL PROCESS SAFETY RULES

U.S. refiners, petrochemical producers, and gas processing plant operators face a new layer of federal regulatory oversight under new safety rules proposed by the Occupational Safety & Health Administration.

Although many practices included in the proposed standard are already in effect at many processing plants as a course of generally accepted engineering practices or existing safety and health codes, the new standard would give those practices the force of federal law.

The upshot is a likely increase in recordkeeping by process plant operators and a recognition that operators not following generally accepted safety practices will face fines and other penalties from the federal government.

OSHA began efforts to tighten chemical process safety management as a result of a Phillips 66 Co. accident last year at Pasadena, Tex. (OGJ, May 7, p. 32).

Publication of the rule in the July 17 Federal Register comes on the heels of another accident involving a Houston area petrochemical plant, a July 5 explosion and fire that claimed 17 lives at ARCO Chemical Co.'s Channelview, Tex., styrene monomer/propylene oxide plant (OGJ, July 16, p. 28).

Meantime, petrochemical and gasoline markets continue to reel in the wake of that accident, which sent prices of styrene and octane components soaring.

WHAT THE RULES TARGET

The new OSHA standard targets a wide spectrum of U.S. processing industries covering about 28,000 plants employing about 2.2 million workers involved in hazardous operations.

About 200 fatalities and 720 injuries and illnesses could be prevented annually by implementing the new standard, Labor Sec. Elizabeth Dole said.

OSHA put cost of compliance at about $637.7 million/year for industries covered. It estimates economic benefits from the new standard at $404.5 million/year. OSHA said, however, that its estimate of economic benefits might be too low because it doesn't take into account insurance or administrative costs, productivity improvements, and other accident prevention items.

Deadline for comments on the proposed rules is Oct. 15. OSHA scheduled a Nov. 27 hearing in Washington, D.C.

OSHA STANDARD DETAILS

Cornerstone of the standard is a process safety management (PSM) program that would require operators to conduct process hazard analyses of their plants.

Through such an analysis, an operator could determine where problems might occur, correct them, and plan emergency responses, OSHA said.

The proposal also would require employers to:

Compile process safety information and data about toxicity levels, permissible exposure levels, reactivity, corrosivity, and thermal/chemical stability of onsite materials.
Maintain and communicate effectively to employees safe procedures for process related tasks, including startup, special hazards, normal operation, temporary operation, and emergency shutdown.
Train workers to help them understand the nature and causes of problems arising from process operations and increase their awareness of specific hazards.
Ensure contractors onsite work safely and that contract employees are properly trained and informed of potential for fire, explosion, or toxic releases related to their work and the process as well as general safety rules and emergency procedures.
Perform periodic inspections of equipment at acceptable intervals and maintain mechanical integrity of pressure vessels, storage tanks, piping systems, relief and vent systems and devices, emergency shutdown systems, and controls, alarms, and interlocks.
Issue hot work permits to ensure plant operators are aware of potentially hazardous work being performed and appropriate safety precautions have been taken prior to beginning work.
Safely manage changes to process chemicals, technology, and equipment by establishing and maintaining written procedures prior to implementing changes, and by notifying and training employees as early as practicable about changes to come.
Use a team of experts to investigate potentially major incidents to identify the chain of events leading to them and determine causes.
Develop emergency action plans informing employees how to handle emergency shutdowns, evacuations, emergency response notifications, notification of other employees, and procedures for controlling emergencies.
Conduct compliance safety audits at least every 3 years to assess the effectiveness of the PSM in place.

CHANNELVIEW ACCIDENT ROLE?

An OSHA official said the Channelview accident heightened agency concerns about employee safety at refineries and petrochemical plants but was not connected with the timing of the safety standard's publication.

OSHA has been advising process industries for several months to begin implementing some of the safety measures, she said.

Although OSHA is not empowered to impose interim safety measures without following procedural guidelines, she said, officials are discussing ideas to beef up safety at process facilities during the comment period on the proposed PSM standard. An announcement is possible this week

While OSHA investigators might complete their onsite investigation this week, the agency's report on its investigation of the Channelview accident probably won't be complete "for the better part of 6 months," the OSHA official said.

Meantime, a Texas district judge lifted his temporary injunction that prevented ARCO from entering the blast area. The injunction stemmed from a suit by a blast victim's widow against ARCO and contractor Austin Industries Inc., Houston.

SCRAMBLE FOR SUPPLIES

Spot volumes of styrene were being offered last week at prices approaching 60cts/lb following shutdown of the plant. Whether there were takers at that price is uncertain. Styrene spot prices were averaging about 45cts/lb just before the accident.

ARCO said it still is evaluating ways to meet customers' needs for chemical feedstocks but would not comment on what actions were being taken or how long shortages might persist.

"It a mad scramble out for supplies," analyst Bill Urquhart, Bonner & Moore Associates, Houston, said of activity on styrene markets. "The interesting thing that we're finding is that there are some spot volumes available, even under these circumstances. The part that's puzzling is that some imports are supposed to be available, as well."

Gasoline markets also continue to feel repercussions from the accident, which shut down one fourth of U.S. methyl tertiary butyl ether capacity and sparked a scramble for substitutes for the key octane component.

"That's had an effect on toluene prices, which last week jumped up to $1.15/gal and since has come off some," Urquhart said. "MTBE moved up to that level, as well."

On the New York Mercantile Exchange, the price of unleaded gasoline futures for August delivery shot up 2.49cts to 64.44cts/gal on closing July 16 vs. 54.95cts just before the accident.