The EPA Finalizes Changes to the Risk Management Program

The final rule requires the development of safer alternatives in chemical manufacturing, processing, and storage.

The United States Environmental Protection Agency[1] (EPA) recently announced the imminent publication of its Safer Communities by Chemical Accident Prevention Rule[2], which will significantly change the Clean Air Act Risk Management Program [3](RMP). The new rule — in the works since an ammonium nitrate fertilizer explosion[4] killed 15 people in 2013 — will cover 11,740 facilities[5], including chemical plants, warehouses, and other storage facilities.

A pre-publication version[6] of the rule was released on March 1, 2024. The final rule will take effect 60 days after publication in the Federal Register[7].

The EPA’s RMP and OSHA’s PSM

The EPA’s new Risk Management Program (RMP) requirements parallel the Process Safety Management Program[8] (PSM) at the Occupational Safety and Health Administration[9] (OSHA), with different emphasis. When an accidental release of a regulated chemical substance occurs, OSHA is concerned about employee health in workplaces. The EPA is concerned about the impact of that accidental chemical release on human health and the environment in surrounding communities. The EPA estimates that approximately 131 million people live within 3 miles (4.8 km) of a covered facility.

OSHA’s revisions to the PSM standard [10]are still in the pre-rule stage[11] of the rulemaking process. However, the agency’s recent PSM enforcement directive [12]to field staff indicates that work is progressing on the update, and the publication of a proposed new rule could be coming sooner than we think.

Key changes

One of the most onerous aspects of the new rule is the requirement for owners to develop and analyze alternatives — safer technologies and chemicals — to reduce risks. If safer measures aren’t possible, the EPA wants to see justification.

Specifically, the rule requires petroleum refineries, chemical plants, and coal product manufacturing facilities to include as part of their RMP a Safer Communities by Chemical Accident Prevention[13] evaluation “to address the risk of all regulated substances, substitute less-hazardous substances, moderate the use of regulated substances, or simplify RMP-covered processes to further prevent or mitigate the effects of accidental releases.”

Other critical changes highlighted in the EPA’s news release emphasize employee participation, planning, and communication.

• Advancing employee participation, training, and opportunities for employee decision-making in facility accident prevention

• Reiterating the allowance of a partial or complete process shutdown in the event of a potentially catastrophic release
• Implementing a process to allow employees and their representatives to report specific unaddressed hazards anonymously
• Requiring third-party compliance audits and root cause analysis incident investigation for facilities that have had a prior accident
• Enhancing facility planning and preparedness efforts to strengthen emergency response by ensuring chemical release information is shared with local responders promptly and that a community notification system is in place to warn the community of any impending release
• Emphasizing the requirement for regulated facilities to evaluate risks of natural hazards and climate change, including any associated loss of power
• Increasing transparency by providing access to RMP facility information for communities nearby.

The final rule incorporates numerous other regulatory amendments, including new rules about facility siting, root cause analysis, and the frequency and scope of emergency response training exercises. There is also some clarifying information about facilities currently under a pre-existing retail facility RMP exemption.

What now?

While it is likely that the final rule will be challenged in court, delaying its effective date, covered facilities should nevertheless begin thinking seriously about implementation by familiarizing themselves with the specifics of the new rule. The EPA has made it clear in its National Enforcement and Compliance Initiatives[14] plan for FY 2024-2027 that its focus is chemical accident risk prevention, including new RMP requirements. If you are involved in any aspect of the hazardous chemical manufacturing, processing, distribution, and storage supply chain, the EPA is watching you and probably planning to visit sometime in the next few years.

Compliance could entail significant capital expenditures. Employers need to start planning for that eventuality. The EPA estimates the annualized implementation costs to range between $260 million and $300 million. Actual costs could be higher, given the as-yet-unknown expenses associated with the “alternative analysis” requirements of the rule.

If you have any questions or concerns about how changes to the EPA’s Risk Management Program will affect your business — and how to evaluate and plan for its impact — don’t hesitate to contact Orr & Reno for assistance.

James F. Laboe[15]