Most biodiesel producers must comply with the federal Occupational Safety and Health Administration standard governing Process Safety Management (29 CFR 1910.119), a complex set of rules requiring massive documentation describing the process and safety information. The PSM standard is a valuable outline for safe biodiesel manufacturing, but it also presents opportunities for a facility to be fined. For example, if the current owner did not design the facility or was not subject to the standard when the facility first opened, it may be missing many of the design-related documents, start-up safety documentation and diagrams required under the standard. The government can fine the owner for that.

Management and employee turnover also can pose significant challenges to later management compliance. Even the most diligent biodiesel operators can be fined for lack of documentation. Therefore, biodiesel facility operators must develop a strategy for documenting PSM compliance, whether the current management is there at start-up or has inherited responsibility.

The first determination is whether a facility is now, or will soon be, subject to the PSM standard. Generally, the standard applies to a process that involves highly hazardous chemicals or a process that involves a flammable liquid or gas “on site in one location,” in a quantity of 10,000 pounds or more. For smaller biodiesel producers, the PSM standard might not apply.

Any commercial biodiesel facility will have flammable liquid on site, and probably more than 10,000 pounds (about 1,250 gallons). However, that quantity must be “on site in one location.” In June 2007, OSHA published an interpretation of this requirement. It concluded that when, through piping, tanks and other equipment that are interconnected, the process contains an aggregate of 10,000 pounds or the location of separate vessels is so close that an event of release involving one quantity of the material could cause release from a separate process, the volumes are combined. Therefore, a series of small processes in the same facility would not necessarily be combined to determine coverage, but OSHA often combines volumes to determine whether the 10,000-pound threshold is met, either because of interconnection or close proximity.

In the Meer case, the Occupational Safety and Health Review Commission held that simple storage in atmospheric tanks without benefit of refrigeration is not a covered process, even if the storage tank is interconnected to a covered process (OSHRC Docket No. 95-0341). In that case, the methanol and ethanol stored in tanks exceeded 10,000 pounds. The court concluded that an exception for storage in atmospheric tanks identified in the standard prevailed over OSHA’s position that flammable material in storage tanks interconnected to a process counts toward the 10,000-pound coverage threshold.  While biodiesel producers shouldn’t ignore the PSM standard based solely upon the Meer decision, a smaller producer faced with an OSHA inspection may benefit from this decision. 

Even if a small producer is exempt from PSM coverage now, efforts to comply are important. The producer may grow into coverage as production volume increases or as laws change. It’s more difficult to comply with PSM if PSM principles are not adopted and used as the facility is built, and employees are hired and trained, or if PSM-related documentation is not created as changes are made.

One simple approach to compliance is to create a binder divided into the following categories: 1) Piping and Instrumentation Diagrams, 2) Employee Involvement (training and in PSM program management), 3) Process Hazard Analysis, 4) Mechanical Integrity Evaluations, 5) Operating Procedures, 6) Prestart-up Safety Reviews (for new and restarting facilities), 7) Employee Training, 8) Contractor Procedures, 9) Management of Change (for parts replacement or process additions involving team decisions), and 10) Emergency Plans and Accident, or Close-call Investigation (procedures and documentation). Place all documentation that fits into each category into the binder, and then look at PSM standard requirements to determine what’s missing. Getting documentation organized is the first step to a legally sound PSM program.

Once documentation is organized, assemble a PSM team. Also, establish a change management team. The PSM team’s job is to get the entire program into compliance. The change management team’s job is to make sure no changes are made until they have evaluated the changes and then recommended those changes to the PSM team. It’s impossible to create a legally compliant PSM program without delegating compliance tasks. Therefore, regular meetings of the participants are a must so the efforts can be coordinated in a consistent manner and documented.

Author: Charles B. Palmer
Attorney, Michael Best & Friedrich
262-956-6518
cbpalmer@michaelbest.com