New EPA Facility Safety Rule Faces Uncertain Future

Written by and

On October 14, 2016, the Environmental Protection Agency (EPA) sent its final revised facility safety rule to the White House Office of Management & Budget (OMB) for pre-publication review. The rule would update EPA’s Risk Management Plan (RMP), a program established under Section 112(r) of the Clean Air Act (CAA) to improve the safety of industrial plants that use or store more than a threshold quantity of a hazardous substances. The current rule requires only that covered companies submit to EPA a plan to reduce the risk of future accidents from releases; the February 25, 2016 version of the revised rule would require that certain facilities consider safer chemicals or processes in hazard assessments; require third party audits after a reportable release to reduce future accidents; aim to improve coordination between facilities and local emergency planners; and improve the public availability of chemical hazard information.[1] Publication of the rule on the EPA website would trigger both the ability of plaintiffs to sue based on the rule and the ability of lawmakers to challenge the rule under the Congressional Reform Act (CRA). However, it is not clear that the rule will make it to EPA’s website anytime soon, primarily for three reasons.

First, the timing is tight. OMB review typically takes 90 days, though review can be shorter or longer depending on the regulation. Ninety days from October 14, 2016 is January 12, 2017—just eight days before the Presidential inauguration. Although EPA has indicated that it intends to publish the rule on its website in December, it is unclear if OMB will complete its review before the administration’s term expires.

Second, a recent D.C. Circuit Court of Appeals decision impacted the data on which the rulemaking process relied and it is unclear if EPA had time to sufficiently account for that impact before sending the proposed rule to OMB. EPA noted in its February 2016 proposed rule that classification of certain facilities under its rule is influenced by how a facility is classified under the Occupational Safety and Health Administration’s (OSHA’s) process safety management (PSM) rule. In July 2015, OSHA issued a revised interpretation to its PSM retail exemption that narrowed the number of exempted entities, thereby altering how some entities were classified under the EPA’s rule and, in turn, affecting the economic costs and projections contained in EPA’s February 2016 rule proposal. On September 23, 2016, a three-judge panel of the D.C. Circuit Court of Appeals vacated OSHA’s interpretation, which would have affected the economic costs and projections in EPA’s rule.[2] It is unclear if EPA had time to fully account for all possible ramifications of the D.C. Circuit’s decision in the time that lapsed between the court’s decision and EPA’s submission to OMB.

Third, EPA and OSHA will soon issue guidance on the use of inherently safer technology (IST), such as safer chemicals and processes, in industrial facilities. EPA is not expected to include an IST mandate in the final RMP rule despite environmentalists strongly advocating for an IST mandate throughout EPA’s rulemaking process. During OMB review, advocates from both the environmental and industry sides will likely seek an audience with White House officials to address their respective issues with the final revised RMP rule, which could lengthen the OMB process and enhance the timing concerns discussed above.

Finally, for context, it is worth noting that this EPA rulemaking is part of a larger effort by the Obama administration to improve the safety and security of industrial facilities. On August 1, 2013, after an explosion at a warehouse facility in West, TX killed 15 people and wounded 200 others, President Obama issued Executive Order 13650, titled “Improving Chemical Facility Safety and Security.”[3] In response, the Department of Justice (DOJ), the Department of Labor (DOL), and EPA have stepped up their enforcement and prosecutions under both worker safety and environmental laws.[4] Deputy Attorney General Sally Q. Yates last December signed a Memorandum of Understanding between DOJ and DOL on the criminal prosecution of worker safety laws[5] and announced that the Environment and Natural Resources Division (ENRD) at DOJ would take over responsibility for criminal worker safety prosecutions.[6] Most major corporations have long combined responsibility for environmental, health and safety (EHS) matters, so consolidation of EHS enforcement under ENRD more closely aligns the organizational structure of regulatory enforcement with the entities subject to that enforcement.

For any additional questions regarding this advisory, please contact Bruce Pasfield or Phil Sandick.

[1] Accidental Release Prevention Requirements: Risk Management Programs Under the Clean Air Act, 81 Fed. Reg. 13,638 (proposed Feb. 25, 2016) (to be codified at 40 C.F.R. pt. 48) available at https://www.gpo.gov/fdsys/pkg/FR-2016-03-14/pdf/2016-05191.pdf.
[2] Agric. Retailers Ass’n v. United States Dep’t of Labor, No. 15-1326, — F.3d —, 2016 WL 5315200 (D.C. Cir. Sept. 23, 2016).
[3] Exec. Order No. 13,650, 78 Fed. Reg. 48,029 available at https://www.gpo.gov/fdsys/pkg/FR-2013-08-07/pdf/2013-19220.pdf.
[4] John C. Cruden, Assistant Attorney General, Environment and Natural Resources Division, Keynote Address at the American Bar Association, Section of Environment, Energy and Resources, Environmental and Workplace Safety Criminal Enforcement Conference (Oct. 26, 2016) available at https://www.justice.gov/opa/speech/assistant-attorney-general-john-c-cruden-delivers-keynote-address-american-bar.
[5] Memorandum of Understanding Between the U.S. Departments of Labor and Justice on Criminal Prosecutions of Worker Safety Laws (Dec. 17, 2015) available at https://www.justice.gov/enrd/file/800526/download.
[6] Memorandum from Sally Q. Yates, Deputy Attorney General, Prosecutions of Worker Safety Violations (Dec. 17, 2015) available at https://www.justice.gov/enrd/file/800431/download.