Accidental Release Prevention Requirements: Risk Management Programs Under the Clean Air Act

Federal RegisterJan 13, 2017

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 68

[EPA-HQ-OEM-2015-0725; FRL-9954-46-OLEM]

RIN 2050-AG82

Accidental Release Prevention Requirements: Risk Management Programs Under the Clean Air Act

AGENCY:

Environmental Protection Agency (EPA).

ACTION:

Final rule.

SUMMARY:

The Environmental Protection Agency (EPA), in response to Executive Order 13650, is amending its Risk Management Program regulations. The revisions contain several changes to the accident prevention program requirements including an additional analysis of safer technology and alternatives as part of the process hazard analysis for some Program 3 processes, third-party audits and incident investigation root cause analysis for Program 2 and Program 3 processes; enhancements to the emergency preparedness requirements; increased public availability of chemical hazard information; and several other changes to certain regulatory definitions and data elements submitted in risk management plans. These amendments seek to improve chemical process safety, assist local emergency authorities in planning for and responding to accidents, and improve public awareness of chemical hazards at regulated sources.

DATES:

This final rule is effective on March 14, 2017.

ADDRESSES:

The EPA has established a docket for this action under Docket ID No. EPA-HQ-OEM-2015-0725. All documents in the docket are listed on the

http://www.regulations.gov

Web site. Although listed in the index, some information is not publicly available,

e.g.,

Confidential Business Information (CBI) or other information whose disclosure is restricted by statute. Certain other material, such as copyrighted material, is not placed on the Internet and will be publicly available only in hard copy form. Publicly available docket materials are available electronically through

http://www.regulations.gov

FOR FURTHER INFORMATION CONTACT:

James Belke, United States Environmental Protection Agency, Office of Land and Emergency Management, 1200 Pennsylvania Ave. NW., (Mail Code 5104A), Washington, DC 20460; telephone number: (202) 564-8023; email address:

belke.jim@epa.gov

, or: Kathy Franklin, United States Environmental Protection Agency, Office of Land and Emergency Management, 1200 Pennsylvania Ave. NW., (Mail Code 5104A), Washington, DC, 20460; telephone number: (202) 564-7987; email address:

franklin.kathy@epa.gov

Electronic copies of this document and related news releases are available on EPA's Web site at

http://www.epa.gov/rmp

. Copies of this final rule are also available at

http://www.regulations.gov.

SUPPLEMENTARY INFORMATION:

The contents of this preamble are:

I. General Information

A. Executive Summary

B. Does this action apply to me?

II. Background

A. Events Leading to This Action

B. Overview of EPA's Risk Management Program Regulations

III. Additional Information

A. Agency's Authority for Taking This Action

B. List of Regulated Substances

IV. Prevention Program Requirements

A. Incident Investigation and Accident History Requirements

B. Third-Party Audits

C. Safer Technology and Alternatives Analysis (STAA)

D. Stationary Source Location and Emergency Shutdown

V. Emergency Response Preparedness Requirements

A. Emergency Response Program Coordination With Local Responders

B. Facility Exercises

VI. Information Availability Requirements

A. Disclosure Requirements to LEPCs or Emergency Response Officials

B. Information Availability to the Public

C. Public Meetings

VII. Risk Management Plan Streamlining, Clarifications, and RMP Rule Technical Corrections

A. Revisions to § 68.160 (Registration)

B. Revisions to § 68.170 (Prevention Program/Program 2)

C. Revisions to § 68.175 (Prevention Program/Program 3)

D. Revisions to § 68.180 (Emergency Response Program)

E. Technical Corrections

VIII. Compliance Dates

A. Summary of Proposed Rulemaking

B. Summary of Final Rule

C. Discussion of Comments

D. Compliance Date Examples

IX. Statutory and Executive Order Reviews

A. Executive Order 12866: Regulatory Planning and Review and Executive Order 13563: Improving Regulation and Regulatory Review

B. Paperwork Reduction Act (PRA)

C. Regulatory Flexibility Act (RFA)

D. Unfunded Mandates Reform Act (UMRA)

E. Executive Order 13132: Federalism

F. Executive Order 13175: Consultation and Coordination With Indian Tribal Governments

G. Executive Order 13045: Protection of Children From Environmental Health Risks and Safety Risks

H. Executive Order 13211: Actions That Significantly Affect Energy Supply, Distribution or Use

I. National Technology Transfer and Advancement Act (NTTAA)

J. Executive Order 12898: Federal Actions To Address Environmental Justice in Minority Populations and Low-Income Populations

K. Congressional Review Act (CRA)

I. General Information

A. Executive Summary

1. Purpose of the Regulatory 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 (on May 11, 2016, ATF ruled that the fire was intentionally set.)

President Obama issued Executive Order 13650, “Improving Chemical Facility Safety and Security,” on August 1, 2013.

See ATF Announces $50,000 Reward in West, Texas Fatality Fire,

https://www.atf.gov/news/pr/atf-announces-50000-reward-west-texas-fatality-fire

For more information on the Executive Order see

https://www.whitehouse.gov/the-press-office/2013/08/01/executive-order-improving-chemical-facility-safety-and-security

Section 6(a)(i) of Executive Order 13650 requires that various Federal agencies 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.” One existing agency program is the Risk Management Program implemented by EPA under section 112(r) of the Clean Air Act (CAA) (42 U.S.C. 7412(r)). Section 6(c) of Executive Order 13650 requires the Administrator of EPA to review the chemical hazards covered by the Risk Management Program and expand, implement and enforce the Risk Management Program to address any additional hazards.

EPA proposed changes to its Risk Management Program regulations (40 CFR part 68) on March 14, 2016 (81 FR 13637) after publishing a “Request for Information” notice or “RFI” that solicited comments and information from the public regarding potential changes to the Risk Management

Program regulations (July 31, 2014, 79 FR 44604). While developing the proposed rulemaking, EPA convened a Small Business Advocacy Review (SBAR) panel to receive input from Small Entity Representatives (SERs). EPA also hosted a public hearing on March 29, 2016 to provide interested parties the opportunity to present data, views or arguments concerning the proposed action.

The Risk Management Program regulations have been effective in preventing and mitigating chemical accidents in the United States. However, EPA believes that revisions could further protect human health and the environment from chemical hazards through advancement of process safety management based on lessons learned.

2. Summary of the Major Provisions of the Regulatory Action

This action amends EPA's Risk Management Program regulations at 40 CFR part 68. These regulations apply to stationary sources (also referred to as “facilities”) that hold specific “regulated substances” in excess of threshold quantities. These facilities are required to assess their potential release impacts, undertake steps to prevent releases, plan for emergency response to releases, and summarize this information in a risk management plan (RMP) submitted to EPA. The release prevention steps vary depending on the type of process, but progressively gain granularity and rigor over three program levels (

i.e.,

Program 1, Program 2, and Program 3).

The major provisions of this rule include several changes to the accident prevention program requirements, as well as enhancements to the emergency response requirements, and improvements to the public availability of chemical hazard information. Each of these revisions is introduced in the following paragraphs of this section and described in greater detail in sections IV through VI, later in this preamble.

Certain revised provisions would apply to a subset of the processes based on program levels described in 40 CFR part 68 (or in one case, to a subset of processes within a program level). A full description of these program levels is provided in section II of this preamble.

a. Accident Prevention Program Revisions

This action includes three changes to the accident prevention program requirements. First, the rule requires all facilities with Program 2 or 3 processes to conduct a root cause analysis as part of an incident investigation of a catastrophic release or an incident that could have reasonably resulted in a catastrophic release (

i.e.,

a near-miss). This provision is intended to reduce the number of chemical accidents by requiring facilities to identify the underlying causes of an incident so that they may be addressed. Identifying the root causes, rather than isolating and correcting solely the immediate cause of the incident, will help prevent similar incidents at other locations, and will yield the maximum benefit or lessons learned from the incident investigation.

Second, the rule requires regulated facilities with Program 2 or 3 processes to contract with an independent third-party, or assemble an audit team led by an independent third-party, to perform a compliance audit after the facility has an RMP reportable accident. Compliance audits are required under the existing rule, but are allowed to be self-audits (

i.e.,

performed by the owner or operator of the regulated facility). This provision is intended to reduce the risk of future accidents by requiring an objective auditing process to determine whether the owner or operator of the facility is effectively complying with the accident prevention procedures and practices required under 40 CFR part 68.

The third revision to the prevention program adds an element to the process hazard analysis (PHA), which is updated every five years. Specifically, owners or operators of facilities with Program 3 regulated processes in North American Industrial Classification System (NAICS) codes 322 (paper manufacturing), 324 (petroleum and coal products manufacturing), and 325 (chemical manufacturing) are required to conduct a safer technology and alternatives analysis (STAA) as part of their PHA, and to evaluate the practicability of any inherently safer technology (IST) identified. The current PHA requirements include consideration of active, passive, and procedural measures to control hazards. These revisions support the analysis of those measures and adds consideration of IST alternatives. The provision is intended to reduce the risk of serious accidental releases by requiring facilities in these sectors to conduct a careful examination of potentially safer technology and designs that they could implement in lieu of, or in addition to, their current technologies.

b. Emergency Response Enhancements

This action also enhances the rule's emergency response requirements. Owners or operators of all facilities with Program 2 or 3 processes are required to coordinate with the local emergency response agencies at least once a year to determine how the source is addressed in the community emergency response plan and to ensure that local response organizations are aware of the regulated substances at the source, their quantities, the risks presented by covered processes, and the resources and capabilities at the facility to respond to an accidental release of a regulated substance.

Additionally, all facilities with Program 2 or 3 processes are required to conduct notification exercises annually to ensure that their emergency contact information is accurate and complete. This provision is intended to reduce the impact of accidents by ensuring that appropriate mechanisms and processes are in place to notify local responders when an accident occurs. One of the factors that can contribute to the severity of chemical accidents is a lack of effective coordination between a facility and local emergency responders. Increasing such coordination and establishing appropriate emergency response procedures can help reduce the effects of accidents.

This action also requires that all facilities subject to the emergency response program requirements of subpart E of the rule (or “responding facilities”) conduct field exercises and tabletop exercises. The frequency of these exercises shall be established in consultation with local emergency response officials, but at a minimum, full field exercises will be conducted at least once every ten years and tabletop exercises conducted at least once every three years. Responding facilities that have an RMP reportable accident, and document the response activities in an after-action report comparable to the exercise evaluation reports may use that response to satisfy the field exercise requirements. Furthermore, owner and operators of responding facilities that conduct exercises to meet other Federal, state or local exercise requirements may satisfy the RMP exercise requirements provided that the scope of the exercise includes the objectives of an RMP exercise. The purpose of this provision is to reduce the impact of accidents by ensuring that emergency response personnel understand their roles in the event of an incident, that local responders are familiar with the hazards at a facility, and that the emergency response plan is up-to-date. Improved coordination with emergency response personnel will better prepare responders to respond effectively to an incident and take steps to notify the community of appropriate actions, such as shelter-in-place or evacuation.

c. Enhanced Availability of Information

This action includes various enhancements to the public availability of chemical hazard information. The rule requires all facilities to provide certain basic information to the public, upon request. The owner or operator of the facility shall provide ongoing notification of availability of information elements on a company Web site, social media platforms, or through some other publicly accessible means. The rule also requires all facilities to hold a public meeting for the local community within 90 days of an RMP reportable accident. This provision will ensure that first responders and members of the community have easier access to appropriate facility chemical hazard information, which can significantly improve emergency preparedness and their understanding of how the facility is addressing potential risks.

EPA proposed requirements for facilities to provide certain information to the Local Emergency Planning Committee (LEPC), Tribal Emergency Planning Committee (TEPC)

or other local emergency response agencies. However, rather than prescribe information elements that must be provided upon request, EPA is requiring the owner or operator of a stationary source to share information that is relevant to emergency response planning as part of the coordination activities that occur annually between facility representatives and local emergency response agencies.

Note for the purposes of this document the term TEPC can be substituted for LEPC, as appropriate.

In addition to the major provisions described previously in this section, this action discusses comments received on other aspects of the proposed action including revisions to the list of regulated substances, location of stationary sources (related to their proximity to public receptors), requirements for emergency shutdown systems, compliance dates, technical corrections and revisions to the RMP requirements.

3. Costs and Benefits

a. Summary of Potential Costs

Approximately 12,500 facilities have filed current RMPs with EPA and are potentially affected by the revised rule. 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, including Federal installations that use RMP-regulated substances.

Table 1 presents the number of facilities according to the latest RMP reporting as of February 2015 by industrial sector and chemical use.

Table 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

1,466

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

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

445

Use chlorine (mostly for water treatment) and other chemicals.

Warehousing and storage

493

1,056

Use mostly ammonia as a refrigerant.

Total

12,542

Table 2 presents a summary of the annualized costs estimated in the regulatory impact analysis.

In total, EPA estimates annualized costs of $131.2 million at a 3% discount rate and $131.8 million at a 7% discount rate.

A full description of costs and benefits for this final rule can be found in the

Regulatory Impact Analysis—Accidental Release Prevention Requirements: Risk Management Programs Under the Clean Air Act, Section 112(r)(7).

This document is available in the docket for this rulemaking (Docket ID Number EPA-HQ-OEM-2015-0725).

Table 2—Summary of Annualized Costs

[Millions, 2015 dollars]

Provision

(percent)

Third-party Audits

$9.8

Incident Investigation/Root Cause

1.8

STAA

70.0

Coordination

16.0

Notification Exercises

1.4

Facility Exercises

24.7

Information Sharing with the Public

3.1

Public Meeting

0.4

Rule Familiarization

3.9

4.6

Total Cost *

131.2

131.8

* Totals may not sum due to rounding.

The largest average annual cost of the final rule is the STAA costs ($70.0 million), followed by the exercise costs ($24.7 million), coordination ($16 million), and third-party audits ($9.8 million). The remaining provisions impose average annual costs under $5 million each, including rule familiarization ($3.9-4.6 million), information sharing with the public ($3.1 million), incident investigation/root cause analysis ($1.8 million), notification exercises ($1.4 million), and public meetings ($0.4 million).

b. Summary of Potential Benefits

EPA anticipates that promulgation and implementation of this rule would result in a reduction of the frequency and magnitude of damages from releases. Accidents and releases from RMP facilities occur every year, causing fires and explosions; damage to property; acute and chronic exposures of workers and nearby residents to hazardous materials; and resulting in serious injuries and death. Although we are unable to quantify what specific reductions may occur as a result of these revisions, we are able to present data on the total damages that currently occur at RMP facilities each year. The data presented is based on a 10-year baseline period, summarizing RMP accident impacts and, when possible, monetizing them. EPA expects that some portion of future damages would be prevented through implementation of this final rule. Table 3 presents a summary of the quantified damages identified in the analysis.

Table 3—Summary of Quantified Damages

[Millions, 2015 dollars]

Unit value

10-year total

Average/year

Average/accident

On-site

Fatalities

$8.6

$497.8

$49.8

$0.33

Injuries

0.05

105.2

10.5

0.69

Property Damage

2,054.9

205.5

1.4

On-site Total

2,657.9

265.8

1.8

Offsite

Fatalities

8.6

0.86

0.01

Hospitalizations

0.4

6.8

0.68

0.004

Medical Treatment

0.001

14.8

1.5

0.01

Evacuations *

0.0

7.0

0.70

0.004

Sheltering in Place *

0.0

40.9

4.1

0.03

Property Damage

11.4

1.1

0.007

Offsite Total

89.5

8.9

0.06

Total

2,747.3

274.7

1.8

* The unit value for evacuations is less than two hundred dollars and for sheltering in place is less than one hundred dollars so when expressed in rounded millions the value represented in the table is zero.

EPA monetized both on-site and offsite damages. EPA estimated total average annual on-site damages of $265.8 million. The largest monetized average annual on-site damage was on-site property damage, which resulted in average annual damage of approximately $205.5 million. The next largest impact was on-site fatalities ($49.8 million) and injuries ($10.5 million).

EPA estimated total average annual offsite damages of $8.9 million. The largest monetized average annual offsite damage was from sheltering in place ($4.1 million), followed by medical treatment ($1.5 million), property damage ($1.1 million), fatalities ($0.86 million), evacuations ($0.7 million), and hospitalizations ($0.68 million).

In total, EPA estimated monetized damages from RMP facility accidents of $274.7 million per year. The 10-year RMP baseline suggests that considering

only the monetized impacts of RMP accidents would mean that the rule's costs may outweigh the portion of avoided impacts from improved prevention and mitigation that were monetized. The annualized cost of the final rule (approximately $142 million annually) is approximately 52% of the average annual monetized costs in the 10-year baseline. 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 provision. Reducing the probability of chemical accidents and the severity of their impacts, and improving information disclosure by chemical facilities, as the provisions intend, would provide benefits to potentially affected members of society.

Table 4 summarizes four broad social benefit categories related to accident prevention and mitigation including prevention of RMP accidents, mitigation of RMP accidents, prevention and mitigation of non-RMP accidents at RMP facilities, and prevention of major catastrophes. The table explains each and identifies ten associated specific benefit categories, ranging from avoided fatalities to avoided emergency response costs. Table 4 also highlights and explains the information disclosure benefit category and identifies two specific benefits associated with it: Improved efficiency of property markets and allocation of emergency resources.

When considering the rule's likely benefits that are due to avoiding some portion of the monetized accident impacts, as well as the additional non-monetized benefits described previously, EPA believes the costs of the rule are reasonable in comparison to its benefits.

Table 4—Summary of Social Benefits of Final Rule Provisions

Broad benefit category

Explanation

Specific benefit categories

Accident Prevention

Prevention of future RMP facility accidents

• Reduced Fatalities.

Accident Mitigation

Mitigation of future RMP facility accidents

• Reduced Injuries.

Non-RMP accident prevention and mitigation

Prevention and mitigation of future non-RMP accidents at RMP facilities

• Reduced Property Damage.

• Fewer People Sheltered in Place.

Avoided Catastrophes

Prevention of rare but extremely high consequence events

• Fewer Evacuations.

• Avoided Lost Productivity.

• Avoided Emergency Response Costs.

• Avoided Transaction Costs.

• Avoided Property Value Impacts.*

• Avoided Environmental Impacts.

Information Disclosure

Provision of information to the public

• Improved efficiency of property markets.

• Improved emergency response resource allocation.

* These impacts partially overlap with several other categories such as reduced health and environmental impacts.

B. Does this action apply to me?

This rule applies to those facilities (referred to as “stationary sources” under the CAA) that are subject to the chemical accident prevention requirements at 40 CFR part 68. This includes stationary sources holding more than a threshold quantity (TQ) of a regulated substance in a process. Table 5 provides industrial sectors and the associated NAICS codes for entities potentially affected by this action. The Agency's goal is to provide a guide for readers to consider regarding entities that potentially could be affected by this action. However, this action may affect other entities not listed in this table. If you have questions regarding the applicability of this action to a particular entity, consult the person(s) listed in the introductory section of this action under the heading

entitled

FOR FURTHER INFORMATION CONTACT

For descriptions of NAICS codes, see

http://www.census.gov/cgi-bin/sssd/naics/naicsrch.

Table 5—Industrial Sectors and Associated NAICS Codes for Entities Potentially Affected by This Action

Sector

NAICS code

Administration of Environmental Quality Programs

924.

Agricultural Chemical Distributors:

Crop Production

111.

Animal Production and Aquaculture

112.

Support Activities for Agriculture and Forestry Farm

115.

Supplies Merchant Wholesalers

42491.

Chemical Manufacturing

325.

Chemical and Allied Products Merchant Wholesalers

4246.

Food Manufacturing

311.

Beverage Manufacturing

3121.

Oil and Gas Extraction

211.

Other

44, 45, 48, 54, 56, 61, 72.

Other manufacturing

313, 326, 327, 33.

Other Wholesale:

Merchant Wholesalers, Durable Goods

423.

Merchant Wholesalers, Nondurable Goods

424.

Paper Manufacturing

322.

Petroleum and Coal Products Manufacturing

324.

Petroleum and Petroleum Products Merchant Wholesalers

4247.

Utilities

221.

Warehousing and Storage

493.

II. Background

A. Events Leading to This Action

Recent catastrophic chemical facility incidents in the United States prompted President Obama to issue Executive Order 13650, “Improving Chemical Facility Safety and Security,” on August 1, 2013.

The purpose of the Executive Order is to enhance the safety and security of chemical facilities and reduce risks associated with hazardous chemicals to owners and operators, workers, and communities. The Executive Order 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 composed of senior representatives of other Federal departments, agencies, and offices. The Executive Order requires the Working Group to carry out a number of tasks whose overall aim is to prevent chemical accidents. In addition to the tragedy at the West Fertilizer facility in West, Texas, on April 17, 2013,

a number of other incidents have demonstrated 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 people and injured more than 170 people.

On April 2, 2010, an explosion and fire at the Tesoro Refinery in Anacortes, Washington, killed seven people.

On August 6, 2012, at the Chevron Refinery in Richmond, California, a fire involving flammable fluids endangered 19 Chevron employees and created a large plume of highly hazardous chemicals that traveled across the Richmond, California, area.

Nearly 15,000 residents sought medical treatment due to the release. On June 13, 2013, a fire and explosion at Williams Olefins in Geismar, Louisiana, killed two people and injured many more.

For more information on the Executive Order see

https://www.whitehouse.gov/the-press-office/2013/08/01/executive-order-improving-chemical-facility-safety-and-security.

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-/

. On May 11, 2016, ATF ruled that the fire was intentionally set. See ATF Announces $50,000 Reward in West, Texas Fatality Fire,

https://www.atf.gov/news/pr/atf-announces-50000-reward-west-texas-fatality-fire.

U.S. Chemical Safety and Hazard Investigation Board (CSB). March 2007. Investigation Report: Refinery Explosion and Fire, BP, Texas City, Texas, March 23, 2005. Report No. 2005-04-I-TX.

http://www.csb.gov/assets/1/19/CSBFinalReportBP.pdf.

CSB. May 2014. Investigation Report: Catastrophic Rupture of Heat Exchanger, Tesoro Anacortes Refinery, Anacortes, Washington, April 2, 2010. Report No. 2010-08-I-WA.

http://www.csb.gov/assets/1/7/Tesoro_Anacortes_2014-May-01.pdf.

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.

CSB. October 2016. Case Study: Williams Geismar Olefins Plant Reboiler Rupture and Fire, Geismar, Louisiana. Incident Date: June 13, 2013, No. 2013-03-I-LA. US Chemical Safety and Hazard Investigation Board, Washington, DC

http://www.csb.gov/williams-olefins-plant-explosion-and-fire-/.

Section 6 of the Executive Order is entitled “Policy, Regulation, and Standards Modernization.” This section, among other things, requires certain Federal agencies to consider possible changes to existing chemical safety and security regulations. To solicit comments and information from the public regarding potential changes to EPA's Risk Management Program regulations (40 CFR part 68), on July 31, 2014, EPA published an RFI (79 FR 44604). Information collected through the RFI informed the proposed rulemaking that was published on March 14, 2016 (81 FR 13637).

EPA received a total of 61,716 public comments on the proposed rulemaking. Several public comments were the result of various mass mail campaigns and contained numerous copies of letters or petition signatures. Approximately 61,467 letters and signatures were contained in these several comments. The remaining comments include 235 submissions with unique content, 10 duplicate submissions, and 4 non-germane submissions. In addition to these public submissions, EPA also received 8 written comments and had 22 members of the public provide verbal comments at a public hearing on March 29, 2016. Discussion of public comments can be found in topics included in this final rule and in the Response to Comments document,

available in the docket for this rulemaking.

2016. EPA Response to Comments on the 2016 Proposed Rulemaking Amending EPA's Risk Management Program Regulations. This document is available in the docket for this rulemaking.

B. Overview of EPA's Risk Management Program Regulations

Both EPA's 40 CFR part 68 RMP regulation

and Occupational Safety and Health Administration's (OSHA) 29 CFR 1910.119 Process Safety Management (PSM) standard were authorized in the CAA Amendments of 1990. This was in response to a number of catastrophic chemical accidents occurring worldwide that had resulted in public and worker fatalities and injuries, environmental damage, and other community impacts. OSHA published the PSM standard in 1992 (57 FR 6356, February 24, 1992), as required by section 304 of the 1990 CAAA, using its authority under 29 U.S.C. 653.

40 CFR part 68 is titled, “Chemical Accident Prevention Provisions,” but is more commonly known as the “RMP regulation,” the “RMP rule,” or the “Risk Management Program.” This document uses all three terms to refer to 40 CFR part 68. The term “RMP” refers to the document required to be submitted under subpart F of 40 CFR part 68, the Risk Management Plan. See

https://www.epa.gov/rmp

for more information on the Risk Management Program.

The 1990 CAA Amendments added accidental release provisions under section 112(r). The statute required EPA to develop a list of at least 100 regulated substances for accident prevention and related thresholds (CAA section 112(r)(3) through (5)), and authorized EPA to issue accident prevention regulations (CAA section 112(r)(7)(A)). The statute also required EPA to develop “reasonable regulations” requiring facilities with over a TQ of a regulated substance to undertake accident prevention steps and submit a “risk management plan” to various local, state, and Federal planning entities (CAA section 112(r)(7)(B)).

EPA published the RMP regulation in two stages. The Agency published the list of regulated substances and TQs in 1994 (59 FR 4478, January 31, 1994) (the “list rule”)

and published the RMP final regulation, containing risk management requirements for covered sources, in 1996 (61 FR 31668, June 20, 1996) (the “RMP rule”).

15 16

Both the OSHA PSM standard and the EPA RMP rule aim to prevent or minimize the consequences of accidental chemical releases through implementation of management program elements that integrate technologies, procedures, and management practices. In addition to requiring implementation of management program elements, the RMP rule requires covered sources to submit (to EPA) a document summarizing the source's risk management program—called a Risk Management Plan (or RMP). The RMP rule required covered sources to comply with its requirements and submit initial RMPs to EPA by June 21, 1999. Each RMP must be revised and updated at least once every five years from the date the plan was initially submitted.

Documents and information related to development of the list rule can be found in the EPA docket for the rulemaking, docket number A-91-74.

Documents and information related to development of the RMP rule can be found in EPA docket number A-91-73.

40 CFR part 68 applies to owners and operators of stationary sources that have more than a TQ of a regulated substance within a process. The regulations do not apply to chemical hazards other than listed substances held above a TQ within a regulated process.

EPA later revised the list rule and the RMP rule. EPA modified the regulated list of substances by exempting solutions with less than 37% concentrations of hydrochloric acid (62 FR 45130, August 25, 1997). EPA also deleted the category of Department of Transportation Division 1.1 explosives, and exempted flammable substances in gasoline used as fuel and in naturally occurring hydrocarbon mixtures prior to initial processing (63 FR 640, January 6, 1998).

EPA subsequently modified the RMP rule five times. First, in 1999, EPA revised the facility identification data and contact information reported in the RMP (64 FR 964, January 6, 1999). Next, EPA revised assumptions for the worst case scenario analysis for flammable substances and clarified what the Agency means by chemical storage not incidental to transportation (64 FR 28696, May 26, 1999). After the Chemical Safety Information, Site Security and Fuels Regulatory Relief Act (CSISSFRRA) was enacted on August 5, 1999, EPA excluded regulated flammable substances when used as a fuel or held for sale as a fuel at a retail facility (65 FR 13243, March 13, 2000). Later, EPA restricted access to offsite consequence analysis (OCA) data for the public and government officials to minimize the security risks associated with posting the information on the Internet (65 FR 48108, August 4, 2000). Finally, EPA revised the RMP executive summary to remove a requirement to describe the OCA; revised reporting deadlines for RMP reportable accidents and emergency contact changes; and made other minor revisions to RMP facility contact information (69 FR 18819, April 8, 2004).

The RMP rule establishes three “program levels” for regulated processes:

Program 1 applies to processes that would not affect the public in the case of a worst-case release and that have had no accidents with specific offsite consequences within the past five years. Program 1 imposes limited hazard assessment requirements, requires coordination with local response agencies, and requires submission of an RMP.

Program 2 applies to processes not eligible for Program 1 or subject to Program 3, and imposes streamlined prevention program requirements, including safety information, hazard review, operating procedures, training, maintenance, compliance audits, and incident investigation elements. Program 2 also imposes additional hazard assessment, management, and emergency response requirements.

Program 3 applies to processes not eligible for Program 1 and either subject to OSHA's PSM standard under Federal or state OSHA programs or classified in one of ten specified industry sectors identified by their 2002 NAICS codes listed at § 68.10(d)(1). These industries were selected because they had a higher frequency of the most serious accidents as compared to other industry sectors. The ten NAICS codes and the industries they represent are 32211 (pulp mills), 32411 (petroleum refineries), 32511 (petrochemical manufacturing), 325181 (alkalies and chlorine manufacturing), 325188 (all other basic inorganic chemical manufacturing), 325192 (cyclic crude and intermediate manufacturing), 325199 (all other basic chemical manufacturing), 325211 (plastics material and resin manufacturing), 325311 (nitrogenous fertilizer manufacturing), or 32532 (pesticide and other agricultural chemicals manufacturing).

Program 3 imposes elements nearly identical to those in OSHA's PSM standard as the accident prevention program. The Program 3 prevention program includes requirements relating to process safety information (PSI), PHA, operating procedures, training, mechanical integrity, management of change (MOC), pre-startup review, compliance audits, incident investigations, employee participation, hot work permits, and contractors. Program 3 also imposes the same hazard assessment, management, and emergency response requirements that are required for Program 2.

NAICS codes 325181 and 325188 are now combined and represented as revised NAICS code 325180 in the 2012 and 2017 code versions (other basic inorganic chemical manufacturing). NAICS code 325192 is now revised NAICS code 325194 (cyclic crude, intermediate, and gum and wood chemical manufacturing) in the 2012 and 2017 code versions.

The RMP rule has been effective in preventing and mitigating chemical accidents in the United States and protecting human health and the environment from chemical hazards. However, major incidents, such as the West, Texas explosion,

highlight the importance of reviewing and evaluating current practices and regulatory requirements, and applying lessons learned from other incident investigations to advance process safety where needed.

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-/

III. Additional Information

A. Agency's Authority for Taking This Action

The statutory authority for this action 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 are amending in this document are based on EPA's rulemaking authority under section 112(r)(7) of the CAA (42 U.S.C. 7412(r)(7)). A more detailed discussion of the underlying statutory authority for the current requirements of the Risk Management Program rule appears in the action that proposed the Risk Management Program (58 FR 54190, 54191-93, October 20, 1993). The prevention program provisions discussed in this preamble (auditing, incident investigation, and safer technologies alternatives analysis) address the “prevention and detection of accidental releases.” The emergency coordination and exercises provisions in this rule modify existing provisions that provide for “response to such release by the owners or operators of the sources of such releases” (CAA section 112(r)(7)(B)(i)). This paragraph in the

statute calls for EPA's regulations to recognize differences in “size, operations, processes, class and categories of sources.” In this document, we maintain the distinctions in prevention program levels and in response actions authorized by this provision. The information disclosure provisions discussed in this document generally assist in the development of “procedures and measures for emergency response after an accidental release of a regulated substance in order to protect human health and the environment.” This information disclosure ensures the emergency plans for impacts on the community are based on more relevant and accurate information than would otherwise be available and ensures that the public can become an informed participant in such emergency planning.

Various commenters suggested that particular provisions of the proposed rulemaking were not consistent with CAA section 112(r) or other relevant statutes. We address these comments in each relevant section of the preamble and in the Response to Comments document,

available in the docket for this rulemaking. Some commenters also suggested that EPA has not complied with the requirements in CAA section 112(r)(7)(D) for the Administrator to “consult with the Secretary of Labor and the Secretary of Transportation” and “coordinate any requirements under this paragraph with any requirements established for comparable purposes by the Occupational Safety and Health Administration or the Department of Transportation.”

2016. EPA Response to Comments on the 2016 Proposed Rulemaking Amending EPA's Risk Management Program Regulations. This document is available in the docket for this rulemaking.

EPA disagrees with these comments. Under section 6 of Executive Order 13650, “Improving Chemical Facility Safety and Security,” the Executive Order Working Group, chaired by EPA, OSHA, and Department of Homeland Security (DHS), was tasked with enhancing safety at chemical facilities by identifying key improvements to existing risk management practices through guidance, policies, procedures, outreach, and regulations. As part of this task, the Working Group conducted extensive interagency coordination, and solicited public comment on potential options for improving chemical facility safety. EPA's coordination efforts included discussions with numerous Federal agencies, including OSHA and the Department of Transportation (DOT), on potential changes to the Risk Management Program rule. As EPA explained in the preamble to the proposed rulemaking, 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. This coordination has continued throughout the development of this rule and on OSHA's initial steps toward proposing potential changes to the PSM standard. EPA's coordination with DOT was less extensive because nothing in this rule changes its basic applicability provisions, which apply the rule only to stationary sources, and exclude transportation. However, EPA continues to coordinate with DOT through ongoing Executive Order activities, which includes updates on RMP regulatory development, and this coordination is sufficient to meet EPA's obligations under CAA section 112(r)(7)(D). As with OSHA, EPA has a long history of close coordination with DOT on implementation of the RMP, particularly where potential transportation-related issues arise, and the Agency fully intends for such coordination to continue.

B. List of Regulated Substances

As part of its work under Executive Order 13650, the Working Group solicited public comment on potential changes to the list of regulated substances for the Risk Management Program, including what actions to take to address ammonium nitrate (AN). EPA did not propose revisions to the list of regulated substances. Instead, EPA explained the actions other agencies in the Executive Order Working Group are considering to address AN and indicated that EPA will coordinate any potential changes to the list of substances in 40 CFR part 68 with the actions of these other agencies. EPA received several comments related to revising the list of regulated substances and whether to expand the list to include AN.

1. Discussion of Comments on the List of Regulated Substances

A couple of commenters expressed support for expanding the scope of regulated substances under the RMP rule. One private citizen stated that EPA should broaden the range of chemicals covered under RMP and account for effects on vulnerable populations including children and the elderly. A professional organization asserted that EPA should update the list of regulated substances and require facilities to “evaluate the risk of a reactive chemical accident and take appropriate measures, even if the chemicals in question are not on the list.”

However, multiple commenters supported EPA's decision not to revise the list of regulated substances in this action. These commenters opposed adding toxic or flammable substances to the list of regulated substances in a separate action. One industry commenter opposed the addition of combustible dust to the list, arguing that it is already regulated under OSHA and constitutes a low risk to the public.

EPA will consider these comments when determining whether to propose revisions to the list of substances.

2. Discussion of Comments on AN

Many commenters supported regulating AN in the RMP rule. Several commenters requested that EPA consider the danger to the public from AN, and other reactive chemicals, in its rulemaking. A state agency further asked EPA to ensure that calculations for the OCA consider the unique explosive characteristics of fertilizer grade ammonium nitrate (FGAN) and develop specific RMP guidance for regulated FGAN facilities. One commenter supported adding AN to the list of regulated substances but requested unique requirements for AN formulated as an explosive or blasting agent and FGAN. Another commenter claimed that EPA failed to address Executive Order 13650 by failing to address AN in the proposed rulemaking.

However, EPA also received comments opposed to adding AN to the list of regulated substances. One commenter stated that EPA didn't have authority to regulate FGAN under the CAA and urged the Agency against including FGAN under the RMP regulations. Another commenter supported EPA's decision not to change current threshold quantities and toxic endpoints.

An industry trade association requested EPA's support and recognition of its voluntary private sector comprehensive inspection and assessment organization and FGAN guidelines for fertilizer retail facilities.

EPA acknowledges that there is both support and opposition to regulating AN and will consider these comments when determining whether to take further action on this issue. In the interim, EPA encourages fertilizer retailers to review and use existing guidance. OSHA compiles several resources on their Fertilizer Industry Guidance on Storage and Use of Ammonium Nitrate Web

page at

https://www.osha.gov/dep/fertilizer_industry/

EPA disagrees with the commenter that indicated that EPA failed to address Executive Order 13650 when we chose not to propose to list AN in the list of regulated substances for the RMP regulations. In the proposed rulemaking, EPA explained that other agencies, including OSHA and DHS, are considering modifications to their regulations, and EPA will coordinate any potential changes to the list of substances in 40 CFR part 68 with the actions of these other agencies.

IV. Prevention Program Requirements

A. Incident Investigation and Accident History Requirements

1. Summary of Proposed Rulemaking

a. Definitions, § 68.3

EPA proposed to revise the definition of “catastrophic release” in § 68.3 to include impact categories identical to the description of accidental releases required to be reported under the accident history reporting requirements in § 68.42. The proposed definition, in § 68.3, would replace the phrase “that presents imminent and substantial endangerment to public health and the environment” with impacts categories including impacts that resulted in:

• On-site: Deaths, injuries, or significant property damage; or

• Offsite: Known deaths, injuries, evacuations, sheltering in place, property damage, or environmental damage.

EPA proposed to define “root cause” in § 68.3 to mean a fundamental, underlying, system-related reason why an incident occurred that identifies a correctable failure(s) in management systems.

b. Incident Investigation Sections, §§ 68.60 and 68.81

EPA proposed a number of revisions to the incident investigation provisions. EPA proposed to revise § 68.60, which is applicable to Program 2 processes, and § 68.81, which is applicable to Program 3 processes, by revising paragraph (a) to add subparagraphs (a)(1) and (a)(2) to better clarify the scope of incidents that must be investigated. Proposed subparagraph (a)(1) applied to an incident that resulted in a catastrophic release and clarifies that the owner or operator must investigate the incident even if the process involving the regulated substance is destroyed or decommissioned. Proposed subparagraph (a)(2) applied to a near-miss, which is an incident that could reasonably have resulted in a catastrophic release. EPA also proposed removing the phrase “of a regulated substance” from paragraph (a) because it is duplicative. The definition of “catastrophic release” refers to releases of regulated substances.

EPA also proposed to add a new paragraph (c) to § 68.60 requiring that an incident investigation team be established and consist of at least one person knowledgeable in the process involved and other persons with appropriate knowledge and experience to thoroughly investigate and analyze the incident. This is similar to the existing requirement in § 68.81(c) for Program 3 processes. EPA proposed that current § 68.60(c) through (f) would become § 68.60(d) through (g).

EPA proposed to revise the redesignated paragraph (d) in § 68.60 and current paragraph (d) in § 68.81 to revise the incident investigation report requirements. EPA proposed to change the word “summary” to “report” and require facility owners or operators to complete incident investigation reports within 12 months unless the implementing agency approves, in writing, an extension of time.

In addition, EPA proposed to amend and add new subparagraphs in the redesignated paragraph (d) in § 68.60 and current paragraph (d) in § 68.81 requiring additional elements in an incident investigation report. Specifically, EPA proposed to:

• Revise paragraph (d)(1) to require the time and location of the incident in the investigation report;

• Revise paragraph (d)(3) to specify that the description of the incident be in chronological order and provide all relevant facts;

• Add paragraph (d)(4) to require that the investigation report include the name and amount of the regulated substance involved in the release or near miss and the duration of the event;

• Add paragraph (d)(5) to require a description of the consequences, if any, of the incident;

• Add paragraph (d)(6) to require a description of emergency response actions taken;

• Renumber current paragraph (d)(4) to (d)(7) and require additional criteria related to the factors contributing to the incident, including the initiating event, direct and indirect contributing factors, and root causes. EPA also proposed to add language to paragraph (d)(7) to require that root causes be determined through the use of a recognized method.

• Renumber the current paragraph (d)(5) to (d)(8) and add language to require a schedule for addressing recommendations resulting from the investigation to be included in the investigation report.

Finally, in the redesignated § 68.60(g), EPA proposed to add the word incident before investigation and change “summaries” to “reports” for consistency.

c. Accident History, § 68.42

EPA also proposed to amend the five-year accident history section to require reporting of categories of root causes identified in the root cause analysis proposed to be required in §§ 68.60(d)(7) and 68.81(d)(7).

d. Hazard Review, § 68.50

For the Hazard review section, EPA proposed to amend subparagraph (a)(2) by adding a phrase at the end to require the owner or operator to consider findings from incident investigations.

e. Process Hazard Analysis (PHA), § 68.67

In the PHA section, EPA proposed to add subparagraph (c)(2) to require the owner or operator to address findings from incident investigations, as well as any other potential failure scenarios (

e.g.,

incidents that occurred at other similar facilities and or processes, failure mechanisms discovered in literature or from other sources of information).

f. Updates, § 68.190

In the Updates section, EPA proposed to amend paragraph (c) to require the owner or operator to report any accidents covered by § 68.42 and conduct incident investigations required under § 68.60 and/or § 68.81 prior to de-registering a process or stationary source that is no longer subject to the RMP rule.

2. Summary of Final Rule

EPA is not finalizing the proposed definition for catastrophic release and is instead maintaining the existing definition. Additionally, EPA is finalizing a modified version of the proposed definition of the term “root cause.” In the final definition EPA deleted the phrase “that identifies a correctable failure(s) in management systems.”

EPA is not finalizing the proposed revisions to the five-year accident history section in the final rule.

EPA is finalizing the following provisions as proposed:

• Hazard review section, § 68.50;

• Incident investigation section §§ 68.60 and 68.81;

• Process hazard analysis (PHA) section, § 68.67, to add subparagraph (c)(2).

• Updates section, § 68.190.

3. Discussion of Comments and Basis for Final Rule Provisions

EPA's rationale for modifying the accident investigation provisions to explicitly require root cause analysis for investigations of catastrophic releases and near miss events and to have the findings of these investigations integrated into the PHA remains generally the same as in the proposed rulemaking. In the discussion that follows and in the Response to Comment document, we explain the modifications to our approach and the basis for these modifications.

The most significant change in approach is to retain the catastrophic release definition. As became apparent in the comments, our view that having a common definition of reportable accidental release and catastrophic release would simplify and clarify compliance was outweighed by the potential burden of inadvertently expanding the number of investigated accidental releases. We continue to require investigations of near misses, but have provided additional guidance as to what we intend by the term. Other changes from the proposal are similarly intended to clarify terms used in the rule. Identification of root cause categories in accident history reporting has been eliminated because identifying root cause categories only provides limited information for understanding the root cause which is best attained by reviewing the complete incident investigation report. Implementing agencies and/or local emergency planners may still obtain the investigation report through direct contact with the facility. The changes we adopt in this final rule strike a balance between ensuring facilities and planners learn about the causes of catastrophic releases and near misses while also better targeting the reporting to minimize burden.

2016. EPA Response to Comments on the 2016 Proposed Rulemaking Amending EPA's Risk Management Program Regulations. This document is available in the docket for this rulemaking.

a. Definitions

Catastrophic release.

Although EPA received some support for the proposed definition of “catastrophic release,” many commenters were opposed to the revision. Many commenters, including government agencies, industry trade associations, and facilities, argued that EPA's proposed definition of “catastrophic release” (1) expands its scope, rather than clarifying it, (2) is redundant of OSHA's authority to regulate workplace safety by including on-site damage or injuries, and (3) exceeds the CAA authority to regulate only ambient air beyond a facility's property.

EPA also received some comments identifying other concerns with the proposed change to the definition of “catastrophic release.” Some commenters, including a few facilities, said that the proposed definition is too vague, and some commenters noted that terms such as “injuries,” “significant property damage,” “environmental damage,” and “major” are not defined. A facility and a private citizen commented that the wording of the definition implies that a “catastrophic release” could include a fire, regardless of whether an actual release of regulated material occurs due to the fire, and also implies that releases involving on-site environmental damage would not be considered catastrophic.

Many commenters, including a state government agency, facilities, and industry trade associations, argued that EPA's proposed definition of “catastrophic release” would regulate workplace safety concerns that are outside EPA's authority to regulate under the CAA. Commenters asserted that EPA has authority to address through regulation and enforcement offsite impacts of facility releases, not on-site impacts. A facility asserted that the proposed definition inappropriately expands the scope of EPA's reach into workplace safety by requiring investigations of releases that would also include impacts to on-site workers or property. An industry trade association stated that the definition ignores Congress's express prohibition against EPA “exercising statutory authority to prescribe or enforce standards or regulations affecting occupational safety and health.” This commenter further argued that on-site injuries should be excluded from the proposed definition because OSHA already has jurisdiction in this area and because these often do not pose any risk to public health or the environment.

A facility stated that the proposed revision directly contradicts EPA's long-held interpretation that the references in section 112(r)(2)(A) to “ambient” air limit the Agency's authority to activities with offsite consequences. The commenter asserted that in the proposed rulemaking the EPA does not acknowledge the contradiction from its previous position or explain what new statutory authority exists or why it now has the authority to regulate workplace incidents.

Due to the large number of comments opposing the proposed revision to the definition of “catastrophic release,” EPA has decided not to finalize the proposed language. EPA believed that providing a consistent trigger for accident investigations and reportable accidents under the accident history requirements of § 68.42 would simplify compliance for the regulated community. EPA acknowledges that the proposed revision may have inadvertently expanded the definition and therefore the type of accident that could trigger an investigation. Some reportable incidents under the accident history provision may not pose an imminent and substantial threat to public health and the environment (see 40 CFR 68.3 (

Catastrophic release

)). Due to EPA's decision to retain the existing “catastrophic release” definition and not go forward with the proposed revision, the authority issues raised in comments are moot. However, contrary to one commenter's claim, it has never been EPA's position that the references in section 112(r) to “ambient” air limit the Agency's authority to regulate only activities with offsite consequences. On the contrary, it has been the Agency's longstanding position that incidents that primarily or even exclusively impact on-site receptors are potentially relevant to protection of the public and the environment from the risks of an accidental release. As EPA explained in the Response to Comments document for the original RMP rule, certain on-site accident impacts are relevant because they “may reflect safety practices at the source” and because “accidental releases from covered processes which resulted in deaths, injuries, or significant property damage on-site, involve failures of sufficient magnitude that they have the potential to affect offsite areas.”

EPA, Risk Management Plan Rule: Summary and Response to Comments, Excerpt from Volume 1: Table of Contents, Introduction, and Sections 3, 16 and 17. May 24, 1996, pp 3-11 and 17-4. Document No. EPA-HQ-OEM-2015-0725-0153,

https://www.regulations.gov/document?D=EPA-HQ-OEM-2015-0725-0153

For similar reasons, requiring investigation of accidents with on-site impacts is not redundant to OSHA's authority when such accidents have the potential to affect offsite areas.

Root cause.

Many commenters opposed the proposed definition of “root cause.” These commenters, which included industry trade associations, facilities, and a private citizen, said that EPA should revise the definition of “root cause” to remove “system-related” and “management system,” reasoning that not all incidents are due to system failures. One commenter also stated that the definition assumes that there is only

one root cause and that the failure is correctable, when there can be many causes and the investigators may not be able to determine what is “correctable.” An association of government agencies agreed that the investigation should identify all root causes of failure, regardless of whether they are deemed correctable or related to the management system. An industry trade association stated that EPA should not define “root cause” and instead should defer to facilities to rely on standard definitions from independent safety organizations. Another industry trade association also argued that EPA does not need to define “root cause” because current incident investigator requirements, which call for the investigator to uncover “the factors that contributed to the incident,” are sufficient. Other industry trade associations commented that it is very misleading and may lead to incorrect enforcement proceedings to require a facility to identify a management system failure as a root cause of incidents whose true root cause is a design deficiency, equipment failure, or misuse of equipment.

EPA agrees with some of the comments, and is finalizing the proposed definition of “root cause” with modifications. EPA deleted the language regarding identifying correctable failure(s) in management systems. In response to the comment that the definition assumes that there is only one root cause, EPA agrees that there are often multiple root causes. The final rule defines “root cause” in the singular, but does not preclude the possibility of more than one root cause. EPA agrees with the comments that support investigations identifying all root causes, and the Agency notes that the root cause requirements in the final rule require the owner or operator to identify “root causes.”

b. Accident History Reporting

Some government agencies, an industry trade association, and a professional association agreed that the RMP accident history should include the root causes of incidents. However, other commenters, including industry trade associations and a facility, stated that the existing reporting requirements in § 68.42 are sufficient, and that requiring root cause reporting in the five-year accident history is an additional burden that is not offset by improved performance.

Although EPA believes there could be some benefit to identifying root cause categories within a facility's accident history, in most cases, the Agency believes the incident investigation report must be reviewed in order to fully understand root causes attributed to that incident. Implementing agency officials can obtain investigation reports during inspections or by using the Agency's information gathering authorities when needed. Therefore, EPA did not finalize the proposed requirement.

c. Changes to Hazard Review (§ 68.50) and Process Hazard Analysis (PHA) (§ 68.67) Requirements

Hazard review and PHA.

Some commenters, including several government agencies, a professional organization, and an industry trade association, supported the requirement to include incident investigation findings in the hazard review. Other commenters opposed the requirement. Some of these commenters stated that the OSHA PSM standard already requires PHAs to address previous incidents, and EPA's changes are therefore unnecessary. One industry trade association commented that, as written, the proposal would require facilities to include all findings from all investigations for the facility's entire history.

Another commenter argued that incident investigation findings should not be required for PHAs because PHA teams typically use established techniques and requiring the “findings from incident investigations” to be included would not be a good fit for these types of assessments.

EPA disagrees with commenters and is finalizing these requirements as proposed, so that findings from incident investigations are considered when hazard reviews are conducted. EPA notes that the basic purpose of a hazard review is to identify what process equipment malfunctions or human errors could potentially lead to accidental releases, and then to identify what safeguards are needed in order to prevent such malfunctions and errors from occurring. An obvious source of information about such malfunctions and errors is information gained from investigating incidents that have previously occurred within the covered process. For this reason, the Program 3 analog to the hazard review, the PHA, already requires the owner or operator to identify any previous incidents that had a likely potential for catastrophic consequences when conducting the PHA.

EPA therefore not only disagrees with the commenter who stated that including findings from incident investigations within the PHA “would not be a good fit” for the PHA (as the existing rule already contains this requirement), but also believes that this requirement should be incorporated into the hazard review. EPA also disagrees that widely-used PHA (or hazard review) techniques preclude consideration of prior incidents—all PHA and hazard review techniques that EPA is aware of are easily adapted to allow consideration of prior incident scenarios. The commenter provided the example of the Hazard and Operability Study (HAZOP) PHA technique as an example of a technique for PHAs that is widely accepted but does not consider prior incidents. EPA disagrees that the HAZOP may not be adapted to consider prior incident causes. In fact, this PHA technique, which EPA acknowledges is widely used, is specifically intended to identify process deviations that can lead to undesirable consequences, as well as the causes and consequences of such deviations, and safeguards necessary to protect against the deviation from occurring. Incident scenarios are a key source of knowledge for conducting this technique. According to the Center for Chemical Process Safety (CCPS) “Guidelines for Hazard Evaluation Procedures—Second Edition with Worked Examples” (AIChE/CCPS, 1992, pp 143) “the knowledge-based HAZOP Analysis study can help ensure that the company's practices, and therefore its experience, have indeed been incorporated in the design.” The CCPS Guidelines also provide a specific example of how incident information can be incorporated into the HAZOP:

As a more specific example, consider the discharge from a centrifugal pump. The guide-word HAZOP approach would apply the guide word “Reverse” to identify the need for a check valve. The knowledge-based HAZOP approach might also identify the need for a check valve

because an actual problem was experienced with reverse flow

. . . [emphasis added].

In response to the comment regarding the requirements of OSHA PSM, EPA notes that this final rule requirement is applicable to Program 2 covered processes, which are not subject to the OSHA PSM standard.

Other potential failure scenarios.

Some commenters opposed including “other potential failure scenarios” in the process hazards analysis (PHA). A state agency and an industry trade association stated that it is unclear what “any other potential failure scenarios” means. The state agency also said that facilities may not have access to or knowledge of issues at similar facilities. A facility said that EPA should provide a clearinghouse of “potential failure scenarios” so that facilities will have access to them. An industry trade association commented that a literature

review would not provide much information and would be costly to conduct.

In response, as stated in the preamble to the proposed rulemaking, other potential failure scenarios can include incidents that occurred at other similar facilities and or processes, failure mechanisms discovered in literature, or from other sources of information. EPA believes that it is appropriate to research information about other potential scenarios and consider these scenarios when conducting a (PHA). Regarding the comment to provide a clearinghouse of scenarios, given the variety of processes and stationary sources, and ongoing changes to technologies, it would be difficult to establish a one-stop resource that would identify all potential failure scenarios for all processes covered under the rule. However, EPA believes that owners and operators are in the best position to obtain incident information relevant to their own covered processes. In most cases, industry trade associations will be a useful source for this information. Such information is also commonly available in trade journals, at industry conferences, in industry newsletters, in the Chemical Safety Board's accident investigation reports, in reference publications (

e.g.,

Lees' Loss Prevention in the Process Industries

), and through other professional networks. EPA therefore believes that information about other potential failure scenarios that are potentially relevant to a covered process should not be costly for the owner or operator to conduct and will benefit both the regulated stationary sources and its surrounding community.

Lees, Frank P. 2012. Loss Prevention in the Process Industries, Fourth Edition. Butterworth-Heinemann.

http://www.sciencedirect.com/science/book/9780123971890

Regarding the comment that this provision will require the owner or operator to review findings from all incident investigations for the facility's entire history—EPA agrees that the owner or operator should review all available incident information, but notes that the rule does not require the owner or operator to retain incident investigation reports for more than five years. However, if the owner or operator has access to incident information beyond that period, they should incorporate it into their hazard review as appropriate.

d. Destroyed or Decommissioned Processes

EPA received various comments regarding the proposed rulemaking's requirement for investigation of incidents that resulted in destruction or decommissioning of a process. Several commenters, including local agencies, facilities, an advocacy group, and an association of government agencies, expressed support for the requirement that an incident investigation with a root cause analysis be performed for incidents involving processes units that were destroyed or will be decommissioned. A local agency and a facility explained that this information could improve safety for other processes at the same facility or at other facilities.

EPA also received comments opposing incident investigations for destroyed or decommissioned processes. A facility and industry trade associations commented that there is no benefit to requiring investigations in cases where a process is decommissioned or destroyed.

EPA also received comments in opposition to registration requirements for decommissioned processes. A facility and an industry trade association said that there is no incremental safety benefit to requiring a destroyed or decommissioned unit to remain registered under RMP until after the incident investigation is complete. The commenters argued that this requirement imposes additional paperwork burdens without any additional safety benefit.

EPA is finalizing this requirement as proposed. The Agency agrees with the commenters who support this requirement because it will ensure that when incidents occur, particularly incidents so severe that the owner or operator elects to decommission the process involved or where the process is destroyed in the incident, lessons are learned as a result, both for the benefit of the owner/operator, and potentially for other stationary sources with similar processes.

In response to the comments opposed to the registration requirements for decommissioned processes, EPA believes that the additional paperwork burden regarding such requirements is minimal, as the processes would have already been registered in the source's most recent RMP. New accident history information may be added to the RMP without performing a full update. Following that correction, if the affected process has been decommissioned or destroyed, and if the source has multiple covered processes, the owner or operator would update their RMP to reflect the loss of the affected process (this would be required whether or not the incident was investigated). If the affected process was the only process at the source, after completing the investigation and correcting the existing RMP, the owner or operator would submit a deregistration notice for the source to EPA. Deregistration is already required by § 68.190(c) when a source is no longer subject to Part 68. Therefore, from a paperwork standpoint, the primary effect of this change would be the timing of when deregistration occurs. EPA believes the potential benefits of the knowledge gained from the incident investigation warrant this delay in deregistering a source.

e. Near Misses

In the proposed rulemaking, EPA did not propose a definition for the term “near miss,” although EPA did include the term in proposed revisions to §§ 68.60 and 68.81, paragraph (a)(2), in the phrase: “Could reasonably have resulted in a catastrophic release (

i.e.,

was a near miss).” EPA also sought public comment on whether to include a formal definition for the term. EPA received comments both supporting and opposing a definition of “near miss.”

Requests to define “near miss.”

Several commenters, including government agencies, industry trade associations, facilities, and an advocacy group, recommended defining “near miss” to reduce vagueness, uncertainty around which incidents require investigation, and the reliance on owners and operators to define the term. A local agency and an industry trade association suggested providing examples of near misses in guidance. A local agency said that EPA should clarify whether a release is considered a “near miss” if it was a controlled release. Other commenters, including a state agency and an industry trade association, opposed a regulatory definition of the term, stating that facilities should be permitted to determine what qualifies as a “near miss” that requires investigation. A state agency also said that EPA should not define “near miss” because it would be challenging to provide a definition that is suitable for all industry sectors. An industry trade association stated that the rule raises constitutional due process concerns because the rule lacks specificity to define the “near miss” standard and fails to provide adequate notice to the regulated community as to what the RMP rule will require.

EPA is finalizing the language in paragraph (a)(2) of §§ 68.60 and 68.81 as proposed, and has elected not to finalize a regulatory definition of “near miss” to identify incidents that require investigation. The criteria for determining incidents that require investigation will continue to include events that “could reasonably have resulted in a catastrophic release.”

Under the final rule, this criterion, rather than a definition of “near miss,” applies to determine which incidents require investigation. However, the rule makes clear that a “near miss” is an example of an event that “could reasonably have resulted in a catastrophic release.” EPA agrees with commenters who said it would be difficult to address in a single definition the various types of incidents that may occur in RMP-regulated sectors that should be considered near misses, and therefore be investigated. Instead, facility owners or operators will need to decide which incidents “could reasonably have resulted in a catastrophic release.” This may be based on the seriousness of the incident, the process(es) involved, and the specific conditions and circumstances involved. In the 1996 Response to Comments on the original rule, EPA acknowledged that the range of incidents that reasonably could have resulted in a catastrophic release is very broad and cannot be specifically defined.

EPA decided to leave it up to the owner or operator to determine whether an incident could reasonably have resulted in a catastrophic release and to investigate such incidents.

EPA. May 24, 1996. Risk Management Plan Rule, Summary and Response to Comments. Volume 1, p. 16-4. Docket No. A-91-73, Document No. IX-C-1.

EPA understands from the comments that there was some uncertainty about the term near miss. EPA's experiences with RMP facility inspections and incident investigations show there have been incidents that were not investigated, even though under slightly different circumstances, the incident could have resulted in a catastrophic release. While most of these events did not result in deaths, injuries, adverse health or environmental effects, or sheltering-in-place, the Agency believes that in some cases, if circumstances had been slightly different, a catastrophic release could reasonably have occurred.

As described in the preamble to the proposed rulemaking, and as noted by one commenter, there is a CCPS definition of “near miss.” CCPS defines a “near miss” as an event in which an accident causing injury, death, property damage, or environmental impact, could have plausibly resulted if circumstances had been slightly different.

For example, a runaway reaction that is brought under control by operators is a near miss that may need to be investigated to determine why the problem occurred, even if it does not directly involve a covered process both because it may have led to a release from a nearby covered process or because it may indicate a safety management failure that applies to a covered process at the facility. Similarly, fires and explosions near or within a covered process, any unanticipated release of a regulated substance, and some process upsets could potentially lead to a catastrophic release.

CCPS's “Process Safety Leading and Lagging Metrics—You Don't Improve What You Don't Measure” explains that a near miss has three essential elements.

These include:

CCPS. January 2011. Process Safety Leading and Lagging Metrics—You Don't Improve What You Don't Measure, p. 36. CCPS, American Institute of Chemical Engineers, New York, NY. John Wiley and Sons.

http://www.aiche.org/sites/default/files/docs/pages/CCPS_ProcessSafety_Lagging_2011_2-24.pdf

• An event occurs, or a potentially unsafe situation is discovered;

• The event or unsafe situation had reasonable potential to escalate; and

• The potential escalation would have led to adverse impacts.

The CCPS document and the CCPS “Guidelines for Investigating Chemical Process Incidents” contain many examples of near misses, which can be an actual event or discovery of a potentially unsafe situation.

Examples of incidents that should be investigated include 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.

CCPS. March 2003. Guidelines for Investigating Chemical Process Incidents, 2nd ed., p. 68.

Near misses should also include any incidents at nearby processes or equipment outside of a regulated process if the incident had the potential to cause a catastrophic release from a nearby regulated process. An example would be a transformer explosion that could have impacted nearby regulated process equipment causing it to lose containment of a regulated substance. Near misses could also include process upsets such as activation of relief valves, interlocks, blowdown systems, or rupture disks.

The intent is not to include every minor incident or leak, but focus on serious incidents that could reasonably have resulted in a catastrophic release, although EPA acknowledges this will require subjective judgment. EPA will update existing RMP guidance to reflect the revised RMP requirements and will provide guidance to identify what types of incidents could be considered near misses.

The concept of “near miss” has a meaning in industry and in the chemical engineering profession. In this preamble and in guidance, EPA has explained the concept and has identified sources that explain the term, and EPA believes that this satisfies any due process concerns raised by commenters related to the definition of this term. These sources put the regulated community on notice of EPA's expectations under the rule and thus also address the due process concerns raised by commenters regarding notice to the regulated community as to what the RMP rule will require. EPA expects that by expanding the root cause analysis requirement to near misses that could have resulted in a catastrophic incident, some stationary sources will be able to take corrective actions before another similar, but catastrophic incident occurs in the future. For example, as discussed in the March 14, 2016 RMP proposed rulemaking (81 FR 13637), incidents at Tosco Refinery, Georgia Pacific, Shell Olefins, Morton International, BP Texas City Refinery and Millard Refrigerated Services all involved near-misses or less serious incidents involving the same cause as the later catastrophic release.

Industry suggestions for clarifying near misses.

A few industry trade associations commented that the examples of near misses that EPA provided in the NPRM, such as excursions of process parameters and activation of protections devices such as relief valves, should not be considered “near misses.” The commenters said that many of these examples are safeguards that are designed to be used to prevent catastrophic releases. An industry trade association also proposed a definition of “near miss” that would be limited only to scenarios where the final safeguard or layer of protection is activated, such that a release would have occurred if not for that control.

In response to these comments, EPA agrees that not all excursions of process parameters outside control levels or all instances of protective device activation should necessarily be considered to be near misses. EPA expects that activation of protective devices should be investigated when the failure of such devices could have reasonably resulted in a catastrophic release. However, EPA does not agree that near miss investigations should only include situations that resulted in activation of a final safeguard or layer of protection. This may be appropriate in some cases, but in others, multiple layers of protection may quickly fail. EPA

believes that owners and operators must use reasonable judgement to decide which incidents, if they had occurred under slightly different circumstances, could reasonably have resulted in a catastrophic release, and investigate those incidents.

f. Investigation Timeframe

EPA received many comments in support of a shorter investigation timeframe. Many commenters, including a local agency and a professional association, stated that 12 months is too long to complete most investigations, and some commenters said that the timeframe should be shortened to five or six months. Some commenters also stated there should be a shorter timeframe, but with the ability to request an extension.

Other commenters, including state and local agencies and industry trade associations, said that EPA should allow for 12 months to complete an investigation and also allow extensions for especially large or complex incidents. Some commenters also recommended requiring interim reports. An industry trade association asked EPA to clarify that the 12-month period is only for completing the investigation report, not for implementing the recommendations in the report.

Other commenters, including facilities and industry trade associations, said that EPA should not impose any deadline for completing incident investigations. A few commenters, including a facility and industry trade associations, commented that an arbitrary deadline does not account for the complexity of the incident, the types of process units involved, or the need to retain outside consultants or experts to complete the investigation.

After considering these comments, EPA has decided to finalize the requirement to complete incident investigations within twelve months as proposed. EPA believes that this timeframe will provide a reasonable amount of time to conduct most investigations, while also ensuring that investigation findings are available relatively quickly in order to assist in preventing future incidents. For very complex incident investigations that cannot be completed within 12 months, EPA is allowing an extension of time if the implementing agency approves such an extension, in writing. EPA encourages owners and operators to complete incident investigations as soon as practicable, and believes that 12 months is typically long enough to complete even complex incident investigations. However, EPA provided flexibility for facilities to request more time to complete investigations when they consult with their implementing agency and receive written approval for an extension.

g. Incident Investigation Team

Some commenters, including a Federal agency, local government agencies, an association of government agencies, and an industry trade association, supported the proposed requirements under § 68.60(c) for the owner or operator of a Program 2 process to establish an incident investigation team consisting of at least one person knowledgeable in the process involved and other persons with appropriate knowledge and experience to thoroughly investigate and analyze the incident. Other commenters opposed these requirements. A facility commented that the incident investigation team requirements are unnecessary because they are already covered by the OSHA PSM standard. A private citizen commented that the requirement assumes that all investigations will be conducted by a team, when it is possible for a competent individual to perform all aspects of the investigation if given access and support by the facility owner or operator. The commenter also stated that although the proposed rulemaking provides significant information on who may perform a third-party audit, it does not specify the qualifications of persons who may perform investigations and certify investigation reports.

EPA is finalizing the Program 2 incident investigation requirements, as proposed. The Agency agrees with the commenters who support requiring at least one person on the investigation team to be knowledgeable in the process involved and other persons with appropriate knowledge and experience in incident investigation techniques, as EPA believes these provisions are necessary to ensure that facilities thoroughly investigate and analyze incidents and their root causes.

EPA disagrees that these incident investigation team requirements are already covered by the OSHA PSM standard. The requirements for Program 3 processes in the current rule already include a provision for incident investigation teams; however, the incident investigation team requirements in this rule apply to Program 2 processes, which by definition are not covered by the OSHA PSM standard. EPA agrees that the requirement assumes that all investigations will be conducted by a team. EPA believes that all incident investigations, whether conducted on Program 2 or Program 3 processes, should involve a team of at least two people, particularly given the requirement under the final rule for investigations to include analysis of root causes. However, beyond the requirements specified in the final rule (

i.e.,

to establish an investigation team consisting of at least one person knowledgeable in the process involved and other persons with appropriate knowledge and experience to thoroughly investigate and analyze the incident), the Agency does not believe it is necessary to specify additional qualification criteria for incident investigation team members.

h. Root Causes

Support for root cause requirements.

Many commenters, including government agencies, advocacy groups, a facility, and others, expressed support for the requirements to determine root causes through the use of a recognized method and to include information on root causes in investigation reports. The commenters supported these provisions as a way to prevent future incidents. Most of these commenters also expressed support for applying the root cause analysis requirement to both catastrophic release incidents and to incidents that could reasonably have resulted in a catastrophic release (

i.e.

near misses). These commenters stated that conducting root cause analysis on near misses would allow the owner or operator to identify and make corrective actions before a catastrophic incident occurs. Some commenters also supported EPA's proposal to allow the use of any recognized method to complete a root cause analysis.

EPA agrees with these comments and believes that requiring root cause analyses for catastrophic releases and near misses, and including root cause information in incident investigation reports is vital for understanding the nature of these events. EPA is finalizing, as proposed, the requirements that root causes must be determined through the use of a recognized method and that information on root causes must be included in investigation reports. As previously noted, however, the final rule includes a modified version of the proposed definition of the term “root cause.” The phrase “that identifies a correctable failure(s) in management systems” from the proposed definition has been deleted.

Opposition for root cause requirements.

EPA also received many comments opposing the proposed root cause analysis requirements. Some commenters, including industry trade associations and Federal agencies, said

that requiring the owner or operator to conduct a root cause analysis versus other investigation methods is unnecessary. Some of these commenters also argued that root cause analysis assumes that there is an underlying management or system-related cause behind every incident, which may not be the case and which EPA has failed to prove. An industry trade association and a facility stated that EPA should not require facilities to select from a predetermined list of root causes so as to avoid forcing them to fit their findings into a category that may not be appropriate.

Regarding these comments, EPA agrees that root cause analysis may result in identifying causes that are not always an underlying management or system-related cause, but still believes that the analysis is necessary to understand why the accident occurred so that the causes can be addressed. Therefore, we have modified the definition of “root cause” to remove the phrase “that typically identifies a correctable failure(s) in management systems” in order to remove the implication that all incidents involve correctable management system failures. EPA also notes that the final rule does not require facilities to select from a predetermined list of root causes or force them to fit their findings into an inappropriate category.

Many commenters argued that EPA should not require root cause analyses for near misses. A Federal agency, industry trade associations, and some facilities stated that EPA should not require root cause analyses for near misses because the requirement would increase compliance burdens and costs on facilities and take attention away from other safety activities. A few industry trade associations also argued that the quality of safety reviews will be diluted by applying the requirement to low-consequence, high-frequency events. One industry trade association stated that requiring a root cause analysis for near misses creates a false equivalency between near misses and actual catastrophic releases.

While EPA acknowledges that requiring root cause analyses for near misses may impose some additional burden on facilities, the Agency disagrees that the burden is unwarranted or that it will take attention away from other safety activities. The Agency notes that catastrophic release near miss events are infrequent events, and therefore do not typically divert attention from other safety activities. However, EPA believes that investigation of such incidents, when they occur, should be a high priority safety activity for regulated stationary sources, because these investigations can lead to the correction of problems which could ultimately prevent much more serious and costly catastrophic release incidents.

EPA also disagrees that the final rule applies the root cause investigation requirement to low-consequence, high-frequency events. The final rule requires root cause investigations only for incidents that resulted in, or could reasonably have resulted in, a catastrophic release. Such incidents are unusual. Based on accident history information reported to EPA, most regulated sources have never experienced a catastrophic release incident, and the Agency also believes that near misses will also be relatively rare events. The final rule does not presume any “equivalency” between near misses and actual catastrophic releases. The Agency notes that actual catastrophic releases may be more difficult to investigate if the incident requires extensive cleanup, damage assessment, evidence collection, etc.—activities that are unlikely to be necessary for near miss events. However, lessons learned from catastrophic releases and near misses should both benefit the source and its surrounding community, whether or not such events are viewed as equivalent.

Root cause requirements for Program 2 facilities.

Some commenters opposed requiring root cause analyses for Program 2 processes. An industry trade association said that since most incidents happen at facilities with Program 3 facilities, it is unnecessary to expand this requirement to Program 2 facilities. Another industry trade association said root cause analyses should only be required at Program 3 facilities because the methodology is most appropriate for complex incidents.

While it is true that most RMP-reportable incidents occur at Program 3 processes, EPA decided that there was little justification for limiting the root cause requirements to only Program 3 processes, because some serious accidents also occur at Program 2 processes. Also, the Agency notes that some of the accidents at Program 2 processes occur at publicly owned water and wastewater treatment facilities that are not in Program 3 only because they are not located in a state with an OSHA-approved State Plan. Unlike state and local government employees at facilities in states with OSHA-approved State Plans, state and local government employees at facilities in states under Federal OSHA authority are not covered by the OSHA PSM standard. This results in regulated processes at these sources being placed in Program 2, even though the processes generally pose the same risk as similar processes at publicly owned water or wastewater treatment processes that are located at sources in OSHA State Plan states.

Incident investigation methodology.

One commenter argued that EPA does not have authority to specify a specific incident investigation and analysis methodology and should remove all references to or requirement for any named investigation or analysis method from its proposed rulemakings. The commenter cited various provisions of the CAA and the language within the Memorandum of Understanding between CSB and EPA and asserted that CSB is the lead entity for accident investigations and has the authority to specify a named investigation method. Other commenters, including a state agency and facilities, said that EPA has not provided examples of how to determine what is a recognized method or which consensus bodies are to be used to determine recognized methods.

EPA disagrees with these comments. While the final rule does not require use of a specific incident investigation or analysis method (the final rule allows the owner or operator to determine root causes using “a recognized method”), nothing in the CAA precludes EPA from requiring sources to conduct incident investigations. Contrary to the commenter's suggestion, the legislative history specifically contemplates EPA requiring accident investigations (see Senate Report at 242-43

). The Agency notes that the existing RMP rule already contains such a requirement applicable to Program 2 and Program 3 processes. Like other risk management provisions, CAA section 112(r)(7)(B)(i) requires investigation requirements to be reasonable, but nothing in the statute otherwise limits EPA from requiring the investigation to address the issue of the underlying root cause of the accident.

Senate Committee on Environment and Public Works, Clean Air Act Amendments of 1989, Senate Report No. 228, 101st Congress, 1st Session (1989)—“Senate Report”.

Nothing in this final rule interferes with the ability of the CSB to conduct its accident investigations. The incident investigation provision we adopt is designed to have the facility learn from its accidents and near misses in order to identify ways to improve the facility's prevention program. The root cause investigations in this rule serve a distinct purpose from the oversight purposes of the CSB.

EPA also disagrees that we should specify recognized investigation methods or point to specific governing

bodies for such methods. Investigation methods evolve over time, and new methods may be developed, so any list promulgated by EPA in this rule may soon be obsolete. The Agency took a similar approach in the PHA requirements for the existing rule, where it listed several potential methods, but also included the option to use an appropriate equivalent methodology. EPA recommends that owners and operators consult available literature on root cause investigation. For example, CCPS has published Guidelines for Investigating Chemical Process Incidents, which provides extensive guidance on incident investigations, near miss identification, root cause analysis, and other related topics.

CCPS 2003. Center for Chemical Process Safety, Guidelines for Investigating Chemical Process Incidents, 2nd Edition, NY: AIChE.

i. Other Incident Investigation Report Requirements

A few commenters, including a Federal agency, expressed support for the proposal to require additional information to be included in incident investigation reports. Several other commenters expressed opposition to various proposed incident investigation report requirements. A facility said that EPA's proposed changes are unnecessary because each of the proposed items is already required under the OSHA PSM standard. Some industry trade associations opposed requiring facilities to include the results of the root cause analysis in the incident investigation report, saying this could increase the likelihood of lawsuits against the facility if those reports are made public, or could result in the release of confidential business information.

EPA believes that providing the additional required information is vital for understanding the nature of the incident and should be included in the incident investigation report. Some facility owners or operators may already voluntarily include root cause information and other elements required under this rule (

e.g.,

time and location of incident, name and amount of substance involved in the release, etc.) in incident investigation reports prepared to comply with the RMP rule. However, §§ 68.60 and 68.81 are being revised to require this information to ensure clarity and consistency among reports. While the OSHA PSM standard contains the same incident investigation reporting requirements as the existing RMP rule for Program 3 processes, prior to this rule, neither regulation required reporting of root cause information nor the other report elements required in this rule. EPA disagrees with the conjecture that there may be an increased possibility of lawsuits is a good reason not to include root causes and other factual incident information in incident investigation reports. We note that the current rule requires a report that discusses factors contributing to the incident and recommendations resulting from the investigation, so to the extent that litigants would seek to use reports to establish cause or preventability of an incident, the litigation risk is there already. To the extent that the root cause discussion contains CBI, the existing rule provides methods for asserting CBI claims. Identifying root causes can prevent future incidents, thereby reducing accidental release impacts.

B. Third-Party Audits

EPA proposed to require owners or operators of certain RMP facilities to perform third-party audits, in order to prevent accidents and ensure compliance with part 68 requirements. The third-party audits are similar to the compliance audits already required by §§ 68.58 and 68.79, but EPA expects that independent compliance audits will assist stationary sources to come fully into compliance with the applicable prevention program requirements. The details of these requirements are described further.

1. Summary of Proposed Rulemaking

a. Definitions

EPA proposed to define “third-party audit” in § 68.3 as a compliance audit conducted pursuant to the requirements of § 68.59 and/or § 68.80, by an entity (individual or firm) meeting the competency, independence and impartiality criteria in those sections.

b. Compliance Audit Requirements Under §§ 68.58 and 68.79

EPA proposed changes to §§ 68.58 and 68.79 to require third-party compliance audits for both Program 2 and Program 3 processes, under certain conditions and to clarify existing requirements for compliance audits. EPA proposed to edit §§ 68.58(a) and 68.79(a) to add the language “for each covered process” to clarify that all compliance audits, self and third-party, shall address compliance with the provisions of Subpart C or D for each covered process. EPA also added a sentence at the end of the paragraph to reference when a compliance audit must be a third-party audit.

EPA also proposed to add paragraphs (f) through (h) in §§ 68.58 and 68.79. Paragraph (f) identified third-party audit applicability. EPA proposed that the next required compliance audit for an RMP facility would be a third-party audit when one of the following conditions apply:

• An accidental release, meeting the criteria in § 68.42(a), from a covered process has occurred; or

• An implementing agency requires a third-party audit based on noncompliance with the requirements of this subpart, including when a previous third-party audit failed to meet the competency, independence, or impartiality criteria of § 68.59(b) or § 68.80(b).

Proposed paragraph (g) described the procedure when an implementing agency requires a third-party audit and proposed an internal appeals process. EPA proposed to require an implementing agency to provide written notice to the facility owner or operator stating the reasons for the implementing agency's preliminary determination that a third-party audit is necessary. The owner or operator would have an opportunity to respond by providing information to, and consulting with, the implementing agency. The implementing agency would then provide a final determination to the owner or operator. If the final determination requires a third-party audit, the owner or operator would have an opportunity to appeal the final determination. EPA proposed that the implementing agency would provide a written, final decision on the appeal to the owner or operator after considering the appeal.

Proposed paragraph (h) described the schedule for completing third-party audits. The proposed language required the audit and associated report to be completed, and submitted to the implementing agency within 12 months of when any third-party audit is required or within three years of completion of the previous compliance audit, whichever is sooner. The provision also allowed an implementing agency to specify a different schedule.

c. Third-Party Compliance Audit Requirements in §§ 68.59 and 68.80

EPA proposed new §§ 68.59 and 68.80, which included requirements for both third-party compliance audits and third-party auditors. In paragraph (a), EPA proposed that owners or operators engage a third-party auditor to evaluate compliance with the provisions of subpart C or D (as applicable) when the applicability criteria of § 68.58(f) or § 68.79(f) are met.

Auditor qualifications.

In paragraph (b), EPA proposed third-party auditor qualifications and required facility owners and operators to document that the third-party auditor or audit team meets competency and independence criteria of the rule. Specifically, EPA proposed that facility owners or operators determine and document that the third-party auditors meet the competency criteria in paragraph (b)(1) and the independence criteria in paragraph (b)(2).

EPA proposed competency criteria for auditors, requiring third-party auditors to be:

• Knowledgeable with the requirements of part 68;

• 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

• A licensed Professional Engineer (PE) or include a licensed PE on the audit.

EPA also proposed independence and impartiality criteria that would apply to the third-party auditor or auditing team, and to each audit team member, individually. Specifically, the criteria would have required the auditor/audit team to:

• Act impartially when performing all activities under this section;

• Receive no financial benefit from the outcome of the audit, apart from payment for the auditing services;

• Not have conducted past research, development, design, construction services, or consulting for the owner or operator within the last 3 years. For purposes of this requirement, consulting does not include performing or participating in third-party audits pursuant to § 68.59 or § 68.80;

• Not provide 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;

• Ensure that all personnel involved in the audit sign and date the conflict of interest statement in § 68.59(d)(8); and

• Ensure that all personnel involved in the audit do not accept future employment with the owner or operator of the stationary source for a period of at least 3 years following submission of the final audit report. For purposes of this requirement, employment does not include performing or participating in third-party audits pursuant to § 68.59 or § 68.80.

In addition, in paragraph (b)(3), the proposed rulemaking required the auditor to have written policies and procedures to ensure that all personnel comply with the applicable competency, independence, and impartiality requirements.

Audit report.

EPA proposed requirements for the audit report in paragraph (c). In paragraph (c)(1) EPA specified the scope and content of these reports, including a statement to be signed by the third-party auditor certifying that the third-party audit was performed in accordance with the requirements of subpart C or D, as applicable. EPA also proposed to require that the final third-party audit reports identify any adjustments made by the third-party auditor to any draft third-party audit reports provided to the owners or operators for their review or comment.

Proposed paragraph (c)(2) included requirements for third-party auditors to retain reports and records. Proposed paragraph (c)(3) required the audit report to be submitted to the implementing agency at the same time, or before, it is provided it to the owner or operator. Proposed paragraph (c)(4) provided that the audit report and related records could not be claimed as attorney-client communications or as attorney work products, even if written for or reviewed by legal staff.

Third-party audit findings.

EPA proposed in paragraph (d)(1), to require owners or operators, as soon as possible, but no later than 90 days after receiving the final audit report, to determine an appropriate response to each of the findings in the audit report, and develop and provide to the implementing agency a findings response report. EPA proposed that the findings response report would include:

• A copy of the final audit report;

• An appropriate response to each of the audit report findings;

• A schedule for promptly addressing deficiencies; and

• A statement, signed and dated by a senior corporate officer, certifying that appropriate responses to the findings in the audit report have been identified and deficiencies were corrected, or are being corrected, consistent with the requirements of subpart C or D of 40 CFR part 68.

EPA proposed in paragraph (d)(2), to require the owner or operator to implement the schedule to address deficiencies identified in the audit findings response report, and document the action taken to address each deficiency, along with the date completed.

Proposed paragraph (d)(3) required the owner or operator to provide a copy of documents required under paragraphs (d)(1) and (d)(2) to the owner or operator's audit committee of the Board of Directors, or other comparable committee, if one exists.

Recordkeeping.

Finally, EPA proposed recordkeeping requirements for the owner or operator in paragraph (e). The proposal would have required the owner or operator to retain records at the stationary source, including: The two most recent third-party audit reports, related findings response reports, documentation of actions taken to address deficiencies, and related records; and copies of all draft third-party audit reports. Those sections would further have required the owner or operator to provide draft third-party audit reports, or other documents, to the implementing agency upon request. EPA proposed that requirements would not apply to any documents that are more than five years old.

2. Summary of Final Rule

Regulated entities must engage a third-party to conduct an independent compliance audit when they (1) have an RMP reportable accident or (2) have been notified by an implementing agency of a determination of either conditions that could lead to an accidental release or problems with a prior third-party audit.

EPA is finalizing the proposed requirements for third-party auditors with modifications that include:

• Revising the applicability criteria for third-party audits required by implementing agencies from noncompliance to conditions that could lead to an accidental release;

• Providing for a third-party audit team, led by an independent third-party, which may now include a wide variety of additional, non-independent personnel, including facility employees and other personnel;

• Eliminating the competency criterion that the auditor be a PE;

• Revising the third-party auditor independence criteria to increase the number and diversity of qualified and available auditors; and

• Removing the requirement that either or both draft and final audit reports be submitted to implementing agencies.

EPA believes these changes address many of the most significant public comments EPA received on the proposed third-party audit requirements.

a. Definitions

In the final rule, EPA revised the definition of “third-party audit” to reflect the changes in §§ 68.59 and 68.80, which, when applicable, require that an owner or operator must either engage a third-party auditor or assemble an auditing team led by a third-party auditor. EPA also deleted the reference to impartiality, because impartiality is a criterion under the independence criteria in §§ 68.59(c)(2) and 68.80(c)(2) and there is no need to highlight this term individually.

b. Compliance Audit Requirements Under §§ 68.58 and 68.79

EPA is finalizing paragraph (a) as proposed. This includes clarifying language “for each covered process” added to §§ 68.58(a) and 68.79(a).

EPA is finalizing the applicability requirements set forth in §§ 68.58(f)(1) and 68.79(f)(1) as proposed but modifies the criterion in §§ 68.58(f)(2) and 68.79(f)(2) to apply when an implementing agency requires a third-party audit due to conditions at the stationary source that could lead to an accidental release of a regulated substance, or when a previous third-party audit failed to meet the competency or independence criteria of § 68.59(c).

EPA is also finalizing the implementing agency notifications and appeals process in paragraph (g), as proposed. However, the final rule language includes minor editorial revisions. The language of subparagraph (g)(1) requires the implementing agency to provide written notice to the owner or operator that describes the basis for the determination. The language of §§ 68.58(g)(3) and 68.79(g)(3) was modified to delete the unnecessary phrase “of this section.”

EPA has modified and clarified the schedule for completing a third-party audit in paragraph (h) as follows:

• EPA deleted the language requiring the auditor to submit the audit report to the implementing agency.

• The final rule requires a third-party audit to be completed within 12 months, unless a different timeframe is specified by the implementing agency. However, EPA made changes to simplify and clarify the schedule requirements.

○ Subparagraph (h)(1) requires a third-party audit to be completed within 12 months of an RMP reportable accident.

○ Subparagraph (h)(2) requires a third-party audit to be completed within 12 months of the date of the implementing agency's final determination, or if appealed, within 12 months of the date of the final decision on the appeal.

c. Third-Party Compliance Audit Requirements in §§ 68.59 and 68.80

EPA is finalizing paragraph (a) as proposed but modified the language slightly to clarify that the owner or operator shall engage a third-party to conduct an audit to evaluate compliance with subpart C or D as applicable.

Third-party auditors and auditing teams.

In the final rule, EPA added paragraph (b) to provide options for assembling a third-party auditor or an audit team. In addition to engaging a fully independent third-party auditing firm, owners or operators may assemble auditing teams that include competent and independent third-party auditor team leaders and other qualifying, non-independent personnel. The owner or operator shall either:

• Engage a third-party auditor meeting all of the competency and independence criteria of the rule (subparagraph (b)(1)); or

• Assemble an auditing team, led by a third-party auditor meeting all of the competency and independence criteria. The team may include:

○ Other employees of the third-party auditor firm meeting the independence criteria of the rule; and

○ Other personnel not employed by the third-party auditor firm (subparagraph (b)(2)).

“Other personnel” may be facility personnel, personnel from any other facilities owned or controlled by the owner or operator, and/or any non-independent second or third-party consultants or contractors the owners or operators choose to include on the auditing teams they assemble under subparagraph (b)(2). In addition, the auditing teams may include other employees of the third-party auditor firm who meet the independence criteria of subparagraph (c)(2). Such personnel need not individually meet the final rule's third-party auditor competency criteria as long as the independent third-party audit team leader, pursuant to his/her evaluation of audit team member competencies under subparagraph (d)(2), determines that the full audit team includes all of the competencies required to successfully complete the audit pursuant to the requirements in the final rule.

Auditor qualifications.

The final rule retains the third-party auditor qualification requirements in paragraph (b) of the proposed rulemaking but redesignated as paragraph (c). The qualification requirements set forth in this paragraph apply only to the third-party auditors. The third-party auditor qualifications are clarified and modified as described further in this preamble.

In the final rule, EPA simplified the introductory paragraph to indicate that the owner or operator shall determine and document that the third-party auditor(s) meets the competency and independence requirements set forth in the subparagraphs.

Subparagraph (c)(1) identifies competency criteria that apply to third-party auditors.

EPA is finalizing the competency criteria as proposed, except to delete the requirement for a licensed PE to conduct the audit or participate on the audit team.

The competency criteria do not apply to other personnel, not employed by the third-party auditor firm, that participate on the auditing team (

e.g.,

facility personnel).

Subparagraph (c)(2) identifies independence criteria that apply to third-party auditors. EPA is amending and finalizing the proposed independence criteria as follows:

• EPA is deleting the phrase “and impartiality” from the title because the impartiality requirement is listed as one of several criteria, and it is unnecessary to highlight the term separately.

• EPA clarified that retired employees qualify as third-party auditors when financial attachments are limited to retirement and/or health plans.

• EPA revised the timeframe that limits third-party auditors past and future research, development, design, construction services, or consulting services to two years. EPA further clarified that if the firm employs personnel that did conduct these services within the prescribed timeframe, then these personnel may not participate in the audit.

• The final rule requires third-party audit personnel to sign and date a conflict of interest statement documenting that they meet the independence criteria.

• The limitation regarding future employment with the owner or operator has been modified to apply to only third-party personnel involved in the audit and the timeframe decreased to two years.

EPA is finalizing subparagraph (c)(3), as proposed, to require auditors to have written policies and procedures to ensure that all personnel comply with the qualification criteria—except to delete the word impartiality from the criteria description.

Third-party auditor responsibilities.

EPA is adding requirements for the owner or operator to provide certain responsibilities to the third-party auditor.

Paragraph (d) requires the

owner or operator to ensure that the third-party auditor:

EPA is finalizing auditor responsibilities to ensure that third-party auditors maintain certain responsibilities when audit teams are comprised of both third-party auditor personnel and other personnel. EPA did not propose roles and responsibilities for independent third-party auditors because, in the proposed approach, independent third-party auditors were responsible for conducting all auditing activities.

• Manages the audit and participates in audit initiation, design, implementation, and reporting;

• Determines appropriate roles and responsibilities for the audit team members based on the qualifications of each team member;

• Prepares the audit report and where there is a team, documents the full audit team's views in the final audit report;

• Certifies the final audit report and its contents as meeting the requirements of the rule; and

• Provides a copy of the audit report to the facility owner or operator.

Audit report.

EPA is redesignating and finalizing audit report requirements under paragraph (e) of the final rule with modifications. EPA reorganized and added one report requirement to the proposed subparagraphs (c)(1)(i) to (c)(1)(v). These are subparagraphs (e)(1) to (e)(6) in the final rule.

EPA also amended the audit report provisions in the final rule to simplify the applicable provisions and simplify the requirements for preparing and handling the third-party audit reports:

• Subparagraph (e)(1) requires the report to identify all persons participating on the audit team, including their employers and/or affiliations. The report must also document that third-party auditors meet the competency criteria of the rule;

Note-only third-party auditors must meet the competency criteria of the rule-does not apply to other personnel on an audit team.

• EPA added an additional requirement under subparagraph (e)(2) for the auditor to describe in the report, or incorporate by reference, policies and procedures to ensure all third-party personnel comply with the competency and independence criteria of the rule;

• Proposed subparagraphs (c)(ii) and (c)(iii) are finalized as proposed and redesignated as (e)(3) and (e)(4). The report must document the auditor's compliance evaluation for each covered process and document the findings of the audit, including any identified deficiencies;

• Subparagraph (e)(5) requires the report to summarize any significant revisions between draft and final versions of the report;

• Subparagraph (e)(6) requires the auditor or audit team leader to sign and date a certification. The certification is finalized as proposed except to remove the last sentence that acknowledges penalties for submitting false information;

• EPA deleted the provision that required the auditor to maintain copies of all reports and records;

EPA retains its authority under Section 114 of the CAA to require regulated entities to make such records available to the Agency, as appropriate, upon request or during inspections. EPA is finalizing recordkeeping requirements under paragraph (g) of the final rule.

• EPA deleted the provision that required the auditor to submit the report to the implementing agency at the same time as it would be provided to the owner or operator; and

• EPA deleted the provision limiting attorney-client privilege.

Third-party audit findings.

EPA is finalizing requirements for the owner or operator to prepare a findings response report; develop a schedule to address deficiencies; and submit the findings response report and schedule to the Board of Directors. These requirements are redesignated to paragraph (f) of the final rule with the following modifications to the findings response report:

• EPA deleted the proposed requirement to submit the findings response report to the implementing agency; and

• EPA amended the owner/operator certification in the findings response report to add a sentence indicating that the owner or operator has engaged a third-party to perform or lead an audit team to conduct a third-party audit in accordance with the requirements of 40 CFR 68.80. EPA also modified the final sentence of the certification to clarify that submitting false information includes making false material statements, representations, or certifications.

This change was made to track the language of Section 113(c)(2)(A) of the CAA which makes it illegal for regulated entities to “make any false material statement, representation, or certification.”

EPA is finalizing requirements in subparagraph (f)(2) to develop a schedule to address deficiencies as proposed, except to modify the title of the provision to schedule implementation and correct citations to redesignated paragraphs.

EPA is also finalizing the requirement in subparagraph (f)(3) to submit the findings response report and implementation schedule to the board of directors as proposed with minor modifications to update citations to redesignated paragraphs, and capitalize Board of Directors in the title. In addition, the end of the last sentence was changed to reference a comparable committee, or individual, if applicable.

Recordkeeping.

EPA is finalizing the recordkeeping requirements as proposed in paragraph (d) with the following modifications:

• The paragraph has been redesignated as paragraph (g) in the final rule;

• EPA eliminated the proposed subparagraphs and moved the language of proposed subparagraph (e)(1) into the main paragraph with edits to clarify that the owner or operator shall retain at the stationary source the two most recent final third-party audit reports;

• EPA eliminated the proposed requirement for owners or operators to retain copies of all draft third-party audit reports (subparagraph (e)(2) of the proposed rulemaking); and

• EPA amended the recordkeeping provision for Program 3 processes in § 68.80(e) to delete the sentence that applied the recordkeeping provisions to any documents that were five-years old or less. This revision is consistent with current recordkeeping compliance audits under § 68.79(e) and corrects an error in the proposed rulemaking text.

3. Discussion of Comments and Basis for Final Rule Provisions

Several comments supported the proposed third-party audit requirements, including one stating that the commenter found that internal audits often fail to identify systemic process safety deficiencies. However, many commenters opposed the proposed third-party compliance audit provisions, including some who expressed general opposition, reasoning that existing requirements and mechanisms are working. Some comments argued that the costs outweigh the benefits associated with this provision or that audits by internal resources are more cost-effective and less disruptive, while still providing adequate assessment and encouraging compliance.

EPA has retained a third-party audit requirement in the final rule. We continue to rely on the rationale expressed in the proposed rulemaking. However, in the final rule, we have modified the requirements for the audit team to expand the potential membership while still retaining the critical role of the independent auditor in the review of the compliance program. In the discussion that follows and in the Response to Comment document, we explain the modifications to our approach and the basis for these modifications.

While the RMP rule does not prohibit accidental releases, an accidental release can be an indication of a prevention program that both needs

improvement and that may benefit from an audit by someone independent from the source's historic program and the management of the source. The requirements finalized in this rule are not based on a wide finding that the original compliance audit requirement of the RMP rule does not have value; instead, we promulgate this requirement to target a subgroup that have had indications of potential problems not detected and addressed by the traditional audit structure.

2016. EPA Response to Comments on the 2016 Proposed Rulemaking Amending EPA's Risk Management Program Regulations. This document is available in the docket for this rulemaking.

EPA believes it is appropriate to require a subset of RMP-regulated facilities to engage competent and independent third-party auditors following an RMP-reportable accident or identification of conditions at the stationary source that could lead to an accidental release of a regulated substance. The purpose of the third-party audit is to assist the owners and operators in determining whether facility procedures and practices to comply with subparts C and/or D of the RMP rule (

i.e.,

the prevention program requirements) are adequate and being followed. Thus, EPA is finalizing requirements for third-party audits when required under § 68.58 and/or § 68.79, to require that owners and operators ensure that third-party auditors meet qualification criteria, audits are conducted and documented, and findings are addressed pursuant to the requirements of § 68.59 and/or § 68.80, as applicable. EPA notes that under part 68, sources with any Program 2 and/or Program 3 processes are already required to conduct compliance audits every three years. This rule does not change the requirement that RMP facilities regularly conduct RMP compliance audits but provides only that, in specific situations, those audits be performed by a third-party or a team led by a third-party, pursuant to the schedule in § 68.58(h) and/or § 68.79(h) of the rule.

EPA considered, but did not adopt, changes to the final rule that would establish additional processes or programs under which EPA or other regulatory agencies must first approve or credential third-party auditors before owners or operators can engage them. Nor did EPA modify the rule to establish or reference additional independent auditor accreditation programs or auditor accreditation oversight committees or otherwise require potential third-party auditors to be accredited by an independent auditing or accreditation body before owners or operators may engage the auditors under this rule. For some programs, external accreditation of third-party auditors adds additional rigor to the process of ensuring the competence and independence of the auditors but such external accreditation can be time-consuming and add financial costs. EPA believes that the level of effort and resources necessary to establish these programs would cause unnecessary delays in implementing third-party compliance audit requirements and are not warranted for the small universe of facilities that may be subject to these requirements. Comments on significant issues relating to third-party audits are summarized and discussed further in this preamble. The following also discusses EPA's basis for the third-party audit provisions adopted in this final rule.

a. Third-Party Auditing Constitutional Law and Agency Authority Issues

EPA's enforcement authority.

Several commenters stated that EPA should rely on its existing enforcement authority, including the ability to require third-party audits in particular enforcement proceedings, rather than requiring third-party audits more generally. Another encouraged EPA to focus on enforcing existing audit requirements. Similarly, another recommended that EPA address facilities deemed to be incapable of performing objective self-auditing through EPA's enforcement authorities. One commenter argued that the proposed third-party audit requirements violate the U.S. Constitution's Fifth Amendment Due Process Clause because the proposal seeks to outsource EPA's inspectional duties to a third-party and force facility owners or operators to accept and implement the third-party's findings without processes to protect the due process rights of those subject to the audits. A few commenters stated that the proposed third-party auditing provisions are an unlawful and unconstitutional circumvention of Congressional appropriations limits on EPA's enforcement budget. Specifically, the commenters argued that the Anti-Deficiency Act prohibits EPA from augmenting its enforcement budget by mandating that third parties oversee the RMP program.

EPA disagrees with the commenters. Third-party audits do not constitute enforcement, nor do they substitute for inspections by implementing agencies, and as such, EPA believes that they do not violate either the Due Process Clause of the Fifth Amendment, or the Anti-Deficiency Act. In addition, as discussed further in this preamble, EPA believes that there is no violation of the Due Process Clause of the Fifth Amendment regarding implementation of third-party audit findings.

The third-party audits required in this final rule are compliance audits, similar to the current self-audit requirements, only conducted by a team led by a third-party auditor. The Senate Environment and Public Works Committee identified program audits “by company personnel . . . or outside consultants” as an element of prevention program rules within the range of authorities provided EPA.

See

Senate Report at 243.

The findings of a third-party audit are intended to identify noncompliance that was not discovered by facility personnel during self-audits, and are not intended primarily to bring such findings to the attention of government regulators. In fact, the audits are designed primarily to benefit owners or operators by assisting them to identify both actual noncompliance as well as operational or equipment deficiencies, previously unidentified risk factors, and accident release and/or regulatory noncompliance precursor conditions which, if uncorrected, could lead to releases and/or enforcement actions. Proactively addressing deficiencies, risk factors, and precursor conditions to accidental releases and regulatory noncompliance will provide financial, regulatory, and environmental benefits for facility owners and operators and communities. EPA has reasonably targeted third-party audit requirements at facilities that have had RMP reportable incidents that may demonstrate weaknesses in prior self-assessments and at facilities of heightened concern for implementing agencies.

Senate Committee on Environment and Public Works, Clean Air Act Amendments of 1989, Senate Report No. 228, 101st Congress, 1st Session 211 (1989)—“Senate Report.”

Furthermore, third-party compliance audits in no way constitute regulatory inspections of, or enforcement at, RMP-regulated facilities. This rule is clear that third-party auditors' or third-party audit teams' findings are not, in and of themselves, determinations of regulatory violations. Nor are the audit reports or related documentation required to be automatically submitted to implementing agencies. EPA believes there is no violation of the Due Process Clause of the Fifth Amendment regarding implementation of third-party audit findings. Owners or operators must address all third-party audit findings, the rule provides that addressing the audit findings may include, where appropriate, determining that some specific findings were based on incorrect factual assumptions or were otherwise inappropriate to implement. Thus, as described further

in this preamble, the owner or operator of a stationary sources may determine an appropriate response to the findings in the audit report, and are not required to accept findings when they can justifiably decline to adopt them, and EPA believes that determining appropriate responses, and addressing of deficiencies, risk factors, and precursor conditions to accidental releases and regulatory noncompliance pursuant to the third-party audit regulatory requirements, do not constitute violations of the Due Process Clause of the Fifth Amendment.

Finally, nothing in this rule relieves the EPA of any of its responsibilities under the CAA or implies that EPA will not continue to use its enforcement authorities under the CAA or devote resources to monitoring and enforcing this rule. The third-party auditing regulatory requirements simply ensure that regulated entities will, in a carefully-defined subset of circumstances, take reasonable measures to assess and ensure their own compliance.

Security and CBI concerns.

A few commenters expressed security concerns associated with third-party compliance audits. One commenter was concerned with ensuring proper treatment of confidential information by third-party auditors, and asserted that the proposed rulemaking does not address whether or not a facility will be able to limit the release of sensitive information once a third-party auditor is involved. Another comment was received stating that facility and process security are concerns for the commercial explosives industry, and recommended that EPA eliminate the third-party audit requirements. This commenter reasoned that internal staff at explosives sites would have undergone mandatory background checks but third-party auditors wouldn't necessarily be subject to the same security screening. A few commenters stated that attempts to find auditors with appropriate security clearances would further limit the pool of available qualified auditors. One commenter asserted that the third-party compliance audit requirements create legal concerns given that the third parties would be privy to potential CBI or information that should be protected under attorney-client privilege.

EPA acknowledges commenters concerns; however, facility owners or operators routinely obtain and review the internal policies, procedures, and qualifications of a wide range of consultants and contractors before engaging them in order to assess their qualifications to perform consulting or contractual services. EPA is confident owners and operators will be able to ensure that third-party auditor personnel meet applicable security criteria.

Regarding concerns that the third-party compliance audit requirements create legal concerns given that the third-parties would be privy to potential CBI, the contracts or other agreements between owner/operators and third-party auditors can address how any potential confidential business information is handled by the third-party.

With regard to information that arguably should be protected under evidentiary privileges, EPA's view is that the third-party audit reports and related records under this rule, like other documents prepared pursuant to part 68 requirements, such as process safety information, PHAs, operating procedures and others, are not documents produced in anticipation of litigation. With respect to the attorney-client communication privilege specifically, the third-party auditor is arms-length and independent of the stationary source being audited. The auditor lacks an attorney-client relationship with counsel for the audited entity. Therefore, in EPA's view, neither the audit report nor the records related to the audit report provided by the third-party auditor are attorney-client privileged (including documents originally prepared with assistance or under the direction of the audited source's attorney). Nevertheless, EPA recognizes that the ultimate decision maker on questions of evidentiary privileges are the courts. Therefore, this rule does not contain a specific regulatory provision prohibiting assertion of these privileges.

b. Requirement To Conduct Compliance Audit for Each Covered Process

EPA received several comments regarding the clarification in §§ 68.58(a) and 68.79(a) of the proposed rulemaking that all RMP audits must address “each covered process” at a facility. Some commenters opposed this clarification. A few commenters indicated that this would be a change, and asserted that EPA has endorsed guidance from the CCPS allowing facilities with a large number of covered processes to audit a representative sample of processes.

One commenter argued that it was punitive for an accidental release from one process to automatically trigger a third-party audit requirement for all covered processes. A few commenters stated that requiring that all RMP-covered processes at the facility be audited regardless of what process triggered the requirement to perform the third-party audit would result in duplication of efforts with little benefit where processes at multi-process facilities are on different auditing schedules and third-parties are required to audit processes that were recently audited and not related to the incident that triggered the third-party audit. One commenter stated that requiring audits of processes that are not part of an incident would tie-up plant resources for longer than needed, which was particularly notable to the commenter because these processes would very likely still be operating after the incident and at the time of the audit.

Finally, commenters asserted that it is unfair and more burdensome to require larger facilities with multiple processes to audit each covered process, arguing that they would essentially be auditing all the time, where small facilities with one or two processes would have a lesser auditing burden.

EPA disagrees with commenters that believe it is punitive or redundant to require an audit of all RMP-covered processes at the facility, including those not involved in an RMP-reportable accident. Under existing rules, each facility compliance audit must address each covered process at least every three years. The third-party audit required under this rule simply replaces the next scheduled self-compliance audit, which must address each covered process.

EPA has consistently maintained that, at least every three years, owners or operators must, under the RMP rule, certify that they have evaluated compliance with the prevention program requirements for

each covered process.

”In EPA's General Risk Management Guidance, issued in 2004 and updated in 2009, in Chapter 6, “Prevention Program (Program 2)” Section 6.7 “Compliance Audits (§ 68.58)”, under the heading “What Do I Need to Do?” it states “At least every three years, you must certify that you have evaluated compliance with the prevention program requirements for

each covered process

” [emphasis added]. In addition, Chapter 7 of this guidance, “Prevention Program (Program 3)” Section 7.9 “Compliance Audits (§ 68.79),” states “You must conduct an audit of the process to evaluate compliance with the prevention program requirements at least once every three years.” While EPA does list the 1993 edition of CCPS Guidelines for Auditing Process Safety Management Systems as a reference source within this guidance, EPA disagrees that the CCPS guidelines endorse allowing large facilities to audit a representative sample of covered processes.

EPA has also clearly stated its position within the Notice of Proposed Rulemaking preamble for the initial RMP regulation, and in the Response to Comments for that rule. In response to a question concerning whether facilities could stagger compliance audits where there are multiple processes at a facility, EPA stated, in the Response to Comments document, that a source “may choose to audit different processes on different schedules (if) over each three-year period, all covered processes are audited.”

Furthermore, while OSHA's original PSM compliance audit guidelines may have allowed for auditing a sample of processes, the current guidelines are consistent with EPA's General Risk Management Guidance. See OSHA's “Appendix C to § 1910.119—Compliance Guidelines and Recommendations for Process Safety Management (Nonmandatory).” EPA's decision to retain, in §§ 68.59(e)(3) and 68.80(e)(3) of the final rule, the requirements for the third-party audit reports to document the auditor's evaluation, for each covered process, of the owner or operator's compliance with the prevention program provisions is thus consistent with both the initial RMP rule and EPA's longstanding interpretation of the scope of the rule.

EPA. May 24, 1996. Risk Management Plan Rule, Summary and Response to Comments. Volume 1, p. 15-2. Docket No. A-91-73, Document No. IX-C-1.

EPA also disagrees with commenters' burden argument for larger companies and facilities with a larger number of processes. These larger facilities typically also have more personnel and resources, where smaller facilities with fewer processes may have fewer employees, so the burden of auditing is proportionate for these facilities. Furthermore, larger facilities with more processes, in general, are likely to have more potential opportunities for accidental releases due to their size, complexity, and scale of operations. Therefore, it is appropriate for such facilities' auditing responsibilities to be commensurate to their size, complexity, and scale of operations.

c. Third-Party Audit Applicability

Some commenters generally supported the proposed applicability requirements. However, many commenters opposed the requirements, requesting that EPA narrow, limit, or eliminate these requirements.

RMP-reportable accident criterion.

A commenter encouraged EPA to develop a narrower range of circumstances that can trigger a third-party audit to ensure they will not become an overwhelming compliance function, and detract from the performance-based aspects of RMP. Other commenters recommended limiting the requirements to: Releases that result in offsite impacts, such as offsite deaths, serious injuries, or significant environmental contamination; Program 3 facilities; facilities with multiple releases or multiple major accidents; or incidents that result in significant impacts to workers, or to the community. Another commenter stated that third-party audits should not be required automatically, but should only be required if the facility has experienced an accidental release that meets the criteria in § 68.42(a) and EPA makes the determination that there is good cause for the audit, in light of the particular circumstances and facts surrounding the release in question. One commenter stated that the accidental release trigger was not an effective way to improve public safety and urged EPA to adopt a more proactive and targeted approach.

EPA disagrees with commenters that third-party compliance audits will become an overwhelming compliance function. EPA has limited applicability of third-party audits to circumstances in which an RMP reportable accident has occurred or where conditions exist at the source that could lead to a release. In responding to the previous comments, it is necessary to provide context for how infrequently third-party auditing will, in practice, be necessary under the final rule, both in absolute numbers of such audits and their number relative to the full universe of RMP-regulated stationary sources already subject to the RMP rule's self-auditing requirements.

Currently, there are approximately 12,000 stationary sources with Program 2 and/or Program 3 processes. The final rule requires third-party compliance audits only under the following two conditions:

• If there has been an RMP reportable accident (

i.e.,

an accidental release from an RMP facility meeting the five-year accident history criteria as described in § 68.42(a)); or

• If an implementing agency makes a determination that a third-party audit at an RMP facility is necessary, based on conditions “that could lead to an accidental release of a regulated substance” or a prior third-party audit at the facility.

EPA does not expect these criteria to impact a large percentage of stationary sources with Program 2 and/or Program 3 processes. For example, comparing the number of facilities which in past years have had an RMP reportable accident (averages approximately 150/year), with the number of current stationary sources with Program 2 and/or Program 3 processes, would represent less than 2% of stationary sources subject to this requirement, due to an accident, on an annual basis. For more information on the number of RMP reportable accidents over a ten-year period see section IX.A of this preamble.

EPA also disagrees with suggestions to limit the applicability of third-party compliance audits to releases with offsite impacts, deaths, injuries, or significant environmental impacts. The purpose of the third-party audit is to help reduce the risk of future accidents by requiring an independent and objective audit to determine whether the owner or operator of the facility is effectively meeting the prevention program requirements of the RMP rule. Stationary sources that have had accidents and/or substantial noncompliance with Risk Management Program requirements may pose a greater risk to the surrounding communities. EPA agrees that releases with offsite impacts, deaths, injuries, or significant environmental impacts are potential indicators of noncompliance with RMP prevention program requirements. But so are accidental releases that involve significant property damage on-site, or known offsite evacuations, sheltering in place, property damage, or environmental damage of any degree.

The existing self-audit requirements under §§ 68.58 and 68.79 incorporate a proactive evaluation of prevention program requirements for Program 2 and Program 3 processes. However, when a facility has an accidental release or noncompliance that could lead to an accidental release of a regulated substance, EPA has determined that further self-auditing may be insufficient to prevent accidents and ensure safe operation. Therefore, we believe it is appropriate to require such stationary sources to undergo third-party auditing to better assist owners and operators and implementing agencies to determine whether the procedures and practices developed by the owner and/or operator under subparts C and/or D of the RMP rule (

i.e.,

the prevention program requirements) are adequate and being followed. EPA believes this approach will improve public safety overall by preventing future accidents at the source.

Overlap between incident investigations and third-party audits.

Many commenters recommended that EPA focus on incident investigations after accidental releases rather than third-party audits. Some commenters reasoned that incident investigations are

the activities that are most likely to mitigate both the severity of future incidents and the potential for recurrence. Some commenters stated that third-party audits should not be required when an incident investigation is also required because both of these activities require substantial internal resources and the incident investigation is more responsive to health and safety concerns. Some commenters also stated that requiring a facility to conduct the third-party audit after an accidental release has the potential to dilute resources from the facility's efforts to complete a comprehensive incident investigation and implement associated improvements. One commenter suggested that an incident investigation be required immediately after a catastrophic release but not a third-party audit, and that EPA could then require the stationary source's next three-year compliance audit (after the completion of the incident investigation) to have some degree of independence to assess the effectiveness of the changes made in response to the incident investigation.

EPA disagrees with commenters. Following an accident, incident investigations often reveal that facilities have deficiencies in some prevention program requirements related to that process. Incident investigations generally only evaluate the affected process, and do not necessarily address all covered processes at a facility, or even all prevention program elements for the affected process. However, compliance audits entail a systematic evaluation of the full prevention program for all covered processes, and EPA expects that third-party audits should identify deficiencies in any other covered processes at such facilities.

EPA believes that conducting the third-party compliance audits immediately after an accidental release is necessary to identify and correct existing noncompliance at prevention program facilities that could lead to future releases. EPA acknowledges that conducting third-party audits at the same time as incident investigations may impact the availability of facility resources for these activities. However, this is not a sufficient argument to delay the independent audit. Facilities may hire personnel from different firms to conduct the two activities or, for some facilities with knowledgeable internal staff to conduct investigations, they may only need to hire the third-party.

Although we agree with the commenter that suggested that compliance audits assess the effectiveness of changes made in response to an incident investigation, we disagree that this assessment must be made by a third-party. The owner or operator will resume the three-year schedule to conduct self-compliance audits after the third-party audit and, at that time, the facility owner or operator may consider the findings of the incident investigation and the third-party compliance audit when assessing compliance with prevention program requirements.

Implementing agency criterion.

Many commenters argued that the third-party audit trigger associated with implementing agency findings of noncompliance should either be eliminated or significantly revised. Commenters expressed concerns with allowing an implementing agency to require a third-party audit based on a noncompliance determination. Commenters were also concerned about the potential for inconsistent or arbitrary decisions by implementing agencies, and a few commenters were concerned about the potential for abuse of this mechanism by implementing agencies. One commenter expressed due process concerns related to the triggers for third-party compliance audits, stating that the proposed rulemaking fails to provide the regulated facility an opportunity to contest implementing agency allegations of noncompliance. Commenters also requested clarification on whether an implementing agency could require a third-party compliance audit following a site inspection by the implementing agency.

In response to comments, EPA has revised the third-party audit applicability criterion by requiring the implementing agency to base a determination on conditions at the stationary source that could lead to an accidental release of a regulated substance, rather than on noncompliance. An implementing agency may determine that a third-party audit is necessary following inspections, audits, or facility visits, if conditions are observed at the stationary source that could lead to an accidental release of a regulated substance. The implementing agency may choose to take other action following an inspection, as appropriate.

Conditions at a stationary source that could lead to an accidental release may include, but are not be limited to, significant deficiencies with process equipment containing regulated substances, such as unaddressed deterioration, rust, corrosion, inadequate support, and/or other lack of maintenance that could lead to an accidental release. The presence of small “pinhole” releases, that do not meet the criteria in § 68.42(a) for RMP-regulated accidental releases, could also constitute conditions that could lead to a larger accidental release of a regulated substance. The occurrence of several prior accidental releases that did not meet the reporting criteria in § 68.42(a) at or from a facility could also constitute conditions which could lead to potentially more severe accidental releases. These releases may be a potential indicator that an owner or operator is not complying with RMP prevention program requirements and would benefit from a third-party audit to prevent future accidental releases.

EPA believes that having the implementing agency evaluate whether conditions exist that could lead to an accidental release better addresses the types of situations where a third-party audit would be most effective and will minimize the potential for inconsistent or arbitrary decisions made by implementing agencies. EPA also believes that the revised criterion is responsive to commenters' requests to narrow the applicability of these requirements. The criterion focuses on conditions with the potential to lead to accidental releases, rather than authorizing implementing agencies to require third-party audits under a potentially wide range of circumstances, including minor noncompliance.

In the final rule, a facility owner or operator has an opportunity to challenge the underlying findings when an implementing agency requires

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