March 22, 2016 Practice Points

Chemical Manufacturers May Soon Be Subject to Stricter Regulations

By Alan D. Mathis

The U.S. Environmental Protection Agency (EPA) has proposed revisions to the Accidental Release Prevention Requirements of Risk Management Programs under the Clean Air Act, Section 112(r)(7). According to the EPA, its proposed revisions are intended "to improve safety at facilities that use and distribute hazardous chemicals." See Proposed Rule at 13640.

The EPA's proposals are in response to Executive Order 13650, which was issued by President Obama on August 1, 2013, following several high-profile chemical facility incidents—most notably, an explosion at a fertilizer plant in West, Texas, in April 2013. The focus of the Executive Order was to reduce risks associated with hazardous chemicals to owners, operators, workers, and communities by enhancing the safety and security of chemical facilities. In particular, the Executive Order emphasized strengthening community planning and preparedness, enhancing federal operational coordination, improving data management, and modernizing policies and regulations.

The EPA's proposed regulations, if adopted, would require subject facilities to: (1) conduct a root cause analysis as part of their incident investigations; (2) contract with an independent third-party to perform compliance audits; (3) conduct a safer technology and alternatives analysis to evaluate the feasibility of any inherently safer technology identified; (4) coordinate with local emergency response agencies at least annually to improve incident response capabilities; (5) conduct notification exercises annually to make sure the facility's emergency contact information is accurate and complete; (6) conduct periodic field exercises; (7) provide certain chemical hazard information to the public through the facility's website; and (8) hold a public meeting for the local community within a specified timeframe after a reportable incident.

The EPA estimates that 12,500 facilities are potentially affected by the proposed rule changes. The types of facilities potentially affected "range from petroleum refineries and large chemical manufacturers to water and wastewater treatment systems; chemical and petroleum wholesalers and terminals; food manufacturers, packing plants, and other cold storage facilities with ammonia refrigeration systems; agricultural chemical distributors; midstream gas plants" and other facilities holding regulated substances.

A public hearing on the EPA's proposals will be held on March 29, 2016, in Washington, D.C., at William J. Clinton East Building, Room 1153 (Map Room), 1201 Constitution Ave. NW., Washington D.C., 20460.

Public comments on the proposed revisions are due by May 13, 2016, and can be submitted through the Federal eRulemaking Portal with reference to docket EPA-HQ-OEM-2015-0725.

Practice Pointers

  • Monitor developments in EPA's Risk Management Plan regulations, which may be coming later this year, and advise affected clients accordingly.
  • Take advantage of opportunities to comment on the proposed rules at the public hearing on March 29, 2016, or by submission on or before May 13, 2016.

Keywords: products liability, litigation, chemical manufacturers, EPA, regulations, Risk Management Programs, Clean Air Act, Executive Order 13650

Alan D. Mathis is with Butler Snow LLP in Birmingham, Alabama.

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