“I don’t believe in life after death. But I do believe in some grinding destiny that watches over us on earth. If I didn’t, the safety valve would fail and the boiler would explode.”  ‑ Hedy Lamarr, inventor and actor

We’ve been blowing up boilers since the dawn of the industrial revolution. By now, you’d think we would know how to prevent it. Yet, boiler explosions still happen.

On September 28, 2012, a boiler at the Wynnewood Refinery in Oklahoma exploded during a plant turnaround, killing two employees. What was a very bad day became even worse when OSHA, with its staff spread so thin that there is only one inspector for every 59,000 workers in the U.S., showed up to investigate.

Because the boiler was connected to units with more than the PSM threshold quantity of flammables, and because it was in close proximity to those units, OSHA considered the boiler part of the PSM-covered process and cited the refinery. Wynnewood Refinery, arguing that boilers only contain water, which is not on anyone’s list of hazardous chemicals, disagreed and vowed to appeal.

An Act of Principal

There is not much upside to appealing an OSHA citation. Overall, the law limits the fines to amounts that are relatively modest, far less than the legal fees associated with an appeal. Occasionally, though, companies are so indignant at a citation that they do appeal. When they are successful, they change the regulatory landscape for all of us.

The Meer decision in 1997 made clear that the atmospheric tank exemption in the PSM standard, which excluded flammable liquids stored in tanks designed to operate between 0 and 0.5 psig without benefit of refrigeration actually excluded flammable liquids stored in tanks designed to operate between 0 and 0.5 psig without benefit of refrigeration. Regardless of numerous OSHA letters of interpretation attempting to unsay the plain language of the regulation.

The Petro-Hunt decision in 2012 ruled that OSHA cannot require flame retardant clothing by simply issuing a letter of interpretation when there is nothing in their regulations that requires flame retardant clothing at petrochemical facilities. The judge told OSHA that if they want to enforce a new rule, then they must make a new rule, following the normal rule-making procedures.

And in 2015, OSHA didn’t even let it get to court.  When OSHA issued a letter of interpretation stating that by ‘anhydrous hydrochloric acid’, they meant to include anything at 37% hydrochloric acid or higher, there was an enormous outcry. “No amount of interpretation can possibly mean that 63% water has the same meaning as the plain meaning of  the word ‘anhydrous’.” After a year, OSHA backed down, knowing that any judge in the country, conservative or liberal, would have to agree that while 37% hydrochloric acid might deserve to be covered under PSM, it wasn’t.

Connected or Co-located

Unlike the Meer Decision or the Petro-Hunt Decision, or even OSHA’s willful misunderstanding of what “anhydrous” meant, the PSM standard had very carefully and explicitly defined what was meant by “process” when it came to process safety:

Process means any activity involving a highly hazardous chemical including any use, storage, manufacturing, handling, or the on-site movement of such chemicals, or combination of these activities. For purposes of this definition, any group of vessels which are interconnected and separate vessels which are located such that a highly hazardous chemical could be involved in a potential release shall be considered a single process.

The first thing that should jump out is that what OSHA calls a process is quite different from what a process engineer would call a process. OSHA’s definition includes storage, so a warehouse is a process. OSHA’s definition includes on-site movement, so pumping through a pipeline would be a process. A process, as in a unit operation, isn’t part of OSHA’s definition. So, while there may be consternation by process engineers upon learning how OSHA has chosen to define “process”, OSHA certainly has defined it.

Then OSHA’s definition goes on. Specifically, a process is “any group of vessels which are interconnected.” A process consisting of interconnected vessels also includes separate vessels that are located such that highly hazardous vessels could be involved in a potential release.  In brief, vessels that are connected or co-located.

The Akzo-Nobel Memorandum

In a memorandum published in 1997, known as the Akzo-Nobel Memorandum, OSHA gave some guidance on how certain equipment in this collection of connected or co-located equipment may be excluded from the covered process, but the starting point is that all connected and co-located equipment comprise a single process:

Aspects of the process which contain a highly hazardous chemical (HHC) would be covered by all PSM elements.

Aspects [of the process] which do not contain a HHC, but are interconnected or located nearby are part of the process. Such aspects may or may not be covered by the PSM standard based on whether the particular aspects [of the process] could cause a HHC release or interfere with mitigating the consequences if there was a HHC release. If the particular aspects do not contain a HHC but could cause a HHC release or interfere with mitigating the consequences of a HHC release, then based on the employer’s analysis, various elements of PSM would apply to these aspects.

If based on this analysis, it is determined that interconnected equipment downstream from the stipulated covered process cannot cause a HHC release or interfere with the mitigation of the consequences of a HHC release, and the equipment does not itself contain a TQ or greater amount of a HHC, then such equipment could safely be considered outside the limits or boundaries of the covered process.

OSHA’s guidance boils down to answering three questions:

  1. Does a piece of equipment in a covered process contain a HHC? – Then it’s covered.
  2. If it doesn’t, is there anything about the piece of equipment that could cause a release or interfere with mitigating a release? – Then it’s covered.
  3. If doesn’t, and couldn’t cause a release, and couldn’t interfere with mitigating a release? – Then it’s not covered.

Wynnewood Refinery’s Argument

Wynnewood Refinery argued that since their boiler only contained water, not any HHC, it couldn’t possibly be part of a PSM-covered process.

OSHA argued that since the boiler was connected to equipment that contained a HHC, it was part of that PSM-covered process. OSHA went on to argue that because the boiler was adjacent to the PSM-covered process, it would have been covered even if it had not been connected.

The only way it could have been excluded from the covered process is if Wynnewood Refinery had performed an analysis to show that a boiler explosion could not have caused a release of HHC or interfered in any way with mitigating a release of HHC.  Having seen the aftermath of boiler explosions, that is a hard case to make, assuming that the analysis was done.

OSHA’s argument was clearly consistent with the language of the standard. That it was also consistent with their letters of interpretation is immaterial; letters of interpretation are intended to give guidance, but as the preamble to every letter of interpretation states,

“OSHA requirements are set by statute, standards and regulations. Our interpretation letters explain these requirements and how they apply to particular circumstances, but they cannot create additional employer obligations.”

That said, we ignore letters of interpretation at our own legal peril.

The 10th Circuit Court of Appeals Rules

Wynnewood Refinery did appeal, all the way to the 10th Circuit Court of Appeals. The 10th Circuit is comprised of Kansas, Oklahoma, New Mexico, Colorado, Wyoming, and Utah, and that court is not known as a hot-bed of liberalism. It’s recent ruling in favor of OSHA, noting that the language of the regulation is plain and that Wynnewood Refinery did not have a case, simply confirms what each of us should have already known.

Since then, there has been a flurry of press, editorials, and other punditry about how the Federal courts have expanded the scope of PSM and the power of OSHA.

Nothing could be further from the truth. The courts simply ruled that OSHA had been acting within the limits of its authority, as prescribed by the PSM standard, which was established under the normal rulemaking procedures during the administration of President George H.W. Bush, Republican.

What Does the Court Decision Mean?

For most of you, the recent court decision from the 10th Circuit Court of Appeals should mean nothing. Continue to evaluate the boundaries of your PSM-covered processes carefully. Be prepared to justify the exclusion of any equipment from an otherwise “connected or co-located” process with a rigorous analysis.

The right thing to do hasn’t changed. PSM has not expanded. You’ll be fine.