Firms in Driver’s Seat as EPA Resets Chemical Plant Safety Work

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By Sam Pearson

EPA Administrator Scott Pruitt’s move to scrap chemical security regulations issued in the waning days of the Obama administration stands to launch years more of discussion, this time on terms more favorable to industry organizations.

While industry groups pushed for Congress to overturn the regulation under the Congressional Review Act, their comments filed with the Environmental Protection Agency last year indicate at least some willingness for new, but more lenient, security regulations. Congress appears unlikely to overturn the regulation under the CRA, a procedure that would allow them to block it by a simple majority vote, before a deadline to use the law is reached later this week.

The regulation was a capstone of the Obama administration’s interagency effort to tighten chemical safety rules after a fertilizer explosion in West, Texas killed 15 people in 2013. EPA’s regulation aimed to strengthen safety requirements at high-risk facilities covered under its risk management program, which was created with the Clean Air Act Amendments of 1990.

As the new administration’s EPA mulls a new approach, industry-friendly changes could include relaxed auditing rules, an emphasis on existing industry programs, removal of a safer technologies alternatives assessment requirement, or more of a focus on security over public disclosure of facility information—all of which were laid out in public comments filed last year. Still, at least some groups say they may take a harder line this time around, questioning the premise of the overhaul.

Scott Jensen, a spokesman for the American Chemistry Council, said in an email to Bloomberg BNA the group’s views have “evolved a bit” since public comments filed last year.

The council, alongside the American Petroleum Institute, American Fuel and Petrochemical Manufacturers and others, petitioned the EPA to reconsider the regulation and sued the agency to block it from taking effect. The groups represent major corporations like Dow Chemical Co., DuPont Co., ExxonMobil Chemical Corp., Monsanto Co. and others.

The ACC “thinks that EPA’s analysis was flawed and they did not follow federal regulatory guidelines to demonstrate how the Agency’s new regulatory requirements would further reduce the risk of an accidental release,” Jensen said.

These views could hold sway with the new EPA leadership, which has shown an interest to accommodate business interests as it rolls back the previous administration’s initiatives. Pruitt has echoed the concerns in a letter he sent last year to the agency while serving as Oklahoma’s attorney general.

At a public meeting April 19, many industry groups agreed the regulation should be delayed, but haven’t fully outlined positions on what comes next.

The agency’s process in the Obama administration was “simply too rushed,” Richard Pavlak, an official at the law firm Katten Muchin Rosenman LLP in Washington, said at the public meeting on behalf of the Chemical Safety Advocacy Group, a coalition of refining, oil and gas, chemicals and manufacturing firms. The pace led to a “highly prescriptive final rule that runs counter to the performance standard approach” contained in the original risk management plan regulation, he said.

The EPA is taking public comments on the issue until May 19.

Delay ‘Beyond Meaning’

Mathy Stanislaus, the EPA’s former assistant administrator for land and emergency management, told Bloomberg BNA it was “beyond meaning why anyone would delay these requirements.”

Stanislaus, who played a leading role on the regulation from 2013 to 2017, said he found security concerns “a particularly false narrative and basically a substitute for not having the rule going in place.”

The EPA made changes to the process for facilities sharing information with Local Emergency Response Committees in response to industry concerns, Stanislaus noted, but still failed to win their support.

The rulemaking was “engaged and reflective of authentically listening,” he said.

Industry groups and the EPA have also approached the rule with different statistics, citing ones backing their narratives of the rule. Stanislaus and EPA noted more than 1,500 accidents at facilities covered by the program in the past 10 years. Industry firms, though, say reportable deaths at the same sites have declined 60 percent since 2004 and 92 percent of them did not have a reportable incident.

At the public hearing, Bill Erny, a senior director at ACC, said the EPA should target the “8 percent of facilities responsible for 100 percent of the accidents” and also offer compliance assistance.

In public comments last year, ACC requested extensive changes but largely left the premise of the rule unquestioned.

Erny, in the comments, described a public-private partnership to be called the Chemical Safety and Security Excellence Partnership that would leverage ACC’s existing ResponsibleCare program and federal resources.

In the paper, Erny described the program as similar to the Occupational Safety and Health Administration’s Voluntary Protection Programs and the U.S. Customs and Border Protection’s Customs-Trade Partnership Against Terrorism program.

OSHA started the VPP in in 1982. The program requires companies to meet certain prevention standards in exchange for an exemption from OSHA programmatic inspections, and firms are reevaluated every three to five years to ensure compliance.

C-TPAT, meanwhile, adds tougher border inspection requirements in exchange for conveniences to shippers like lower examination rates and faster processing times, the paper said.

ACC also left the door open for some kind of required auditing for facilities, but only after an “accidental release… that results in serious injury or death onsite or offsite.”

Stanislaus said both were good ideas, but “you’re never going to get the comprehensive, optimal safety regime if you just rely on that.”

Safety vs. Security

The short time between federal investigators’ surprise announcement they thought the West Fertilizer Co. fire was set intentionally and the close of the EPA’s public comment period drew industry complaints last year. Companies’ supposed lack of time to comment on the Bureau of Alcohol, Tobacco, Firearms and Explosives’ findings was the sole specific reason Pruitt cited in delaying the regulation.

Pruitt said some other issues also “may have lacked notice and would benefit from additional comment and response.”

ATF announced its findings at a press conference May 11, 2016, shortly before the close of a public comment period on the proposed rule May 13, 2016.

The regulation noted despite ATF’s ruling, the West explosion showed the lack of coordination between the fertilizer plant’s employees and local emergency responders. The final rule thus appropriately tries to boost Local Emergency Response Committees while preserving local flexibility, the EPA stated. Changes to advance this goal include requiring facility owners to communicate, conduct training exercises and other activities with the committees.

Should Pruitt’s EPA decide to emphasize security to prevent intentional acts like what ATF thinks happened in West, it could defer to the Department of Homeland Security’s Chemical Facility Anti-Terrorism Standards program, said Judah Prero, an attorney at Sidley Austin LLP and former ACC official. The idea would be to require facilities to take actions like building fences and control access to their sites rather than to change how the chemicals are produced or how information is shared, Prero said.

This would prevent situations “where someone can just waltz their way in and walk off with the stuff,” Prero said -- something that investigators found was common in West.

Any action is sure to take years and result in litigation from industry or public interest groups, said Michael Reer, an attorney at Harris, Finley & Bogle in Fort Worth, Texas.

“EPA will try to leave a very strong administrative record so that if this action is challenged in court, they have a very strong fallback,” Reer said.

To contact the reporter on this story: Sam Pearson in Washington at spearson@bna.com

To contact the editor responsible for this story: Paul Connolly at PConnolly@bna.com

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