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TESTIMONY OF JIM MAKRIS



TESTIMONY OF
JIM MAKRIS
DIRECTOR, CHEMICAL EMERGENCY
PREPAREDNESS AND PREVENTION OFFICE,
OFFICE OF SOLID WASTE AND
EMERGENCY RESPONSE
U.S. ENVIRONMENTAL PROTECTION AGENCY
BEFORE THE
COMMITTEE ON SMALL BUSINESS
U.S. HOUSE OF REPERESENTATIVES

July 29, 1999

Mr. Chairman, and Members of the committee, I am Jim Makris, Director of the Chemical Emergency Preparedness and Prevention Office in the Office of Solid Waste and Emergency Response at the U.S. Environmental Protection Agency. My responsibilities include the implementation of the Accidental Release Prevention Provisions under Section 112(r) of the Clean Air Act (CAA) and federal implementation of several sections of the Emergency Planning and Community Right-to-Know Act (EPCRA). These responsibilities provide an opportunity to assist in development of a coordinated and cooperative Federal, State, and local effort to prevent chemical accidents from occurring.

I am pleased to have this opportunity to present information about the importance of chemical safety, accident prevention, and community right to know.

Following the world's largest chemical accident in Bhopal, India, Congress passed the Emergency Planning and Community Right-To-Know Act in 1986. The law enhanced community planning and provided significant new information on chemical handling and releases to the public. Because of the public availability of chemical information, awareness of the potential danger from chemical use and production has grown. We have seen many facilities, including many small businesses, take steps to implement safety practices that prevent accidents. Government also has taken steps to improve emergency preparedness and accident prevention. But, much work remains to be done.

Risk Management Program

Through passage of Section 112(r) of the CAA in 1990, Congress recognized the need for facilities to develop or improve their planning and accident prevention programs to reduce the risk of accidents and allow local communities to enhance emergency preparedness and reduce risks. The law also recognized that citizens should have access to information about the hazards these facilities present.

In June 1996, EPA issued final regulations that required facilities handling certain hazardous substances to implement a risk management program and to file a Risk Management Plan (RMP) with EPA by June 21, 1999. This rule applies to a wide variety of facilities that manufacture, store, or use large quantities of toxic and flammable substances, including propane retail and distribution facilities.

The Small Business Regulatory Enforcement Fairness Act of 1996, under its Congressional Review provisions, provides that before a rule takes effect the agency promulgating the rule must submit a copy of the rule to each House of the Congress. As required, EPA submitted these documents to the U.S. Senate and the U.S. House of Representatives prior to publication of the final regulations in the Federal Register.

Propane was covered because it is one of 63 substances that meet the listing criteria. In fact, propane is just one of 140 RMP-regulated substances, although it does account for more facilities covered by the rule than any other listed chemical. EPA estimated that about 33,000 propane facilities nationwide would be affected. EPA focused on substances that are known to cause death, injury, or serious adverse effects to human health or the environment. In addition to toxic chemicals, EPA listed only those flammable gases and volatile flammable liquids assigned the National Fire Protection Association's (NFPA) highest flammable rating, NFPA-4. While fire is the major on-site concern associated with all flammable substances, EPA is concerned about explosions that have an impact on the public outside these facilities. Highly flammable substances with an NFPA-4 rating have a greater potential to generate disastrous vapor cloud explosions than substances that are less flammable, for instance, gasoline, which is rated NFPA-3.

One of the most devastating and costly vapor cloud explosions in the United States occurred at the Phillips 66 plant in Pasadena, Texas, in 1989. The explosion of ethylene and isobutane, both of which have similar flammability characteristics as propane, was equivalent to the detonation of 10 tons of TNT. The accident destroyed the plant, caused 23 deaths and business interruption costs were reported to be in excess of 700 million dollars.

Accident Data

EPA found accident data indicating that flammables were responsible for many accidents including several that resulted in deaths, injuries, and large scale evacuations and property damage in the United States and around the world. In fact, the second largest industrial chemical accident in history involved an explosion and fire at a propane terminal in Mexico City; 650 died and 6,400 were injured.

The United States also has experienced devastating accidents related to propane. On New Year's Eve 1998, an accidental propane release and fire at a facility near Des Moines, Iowa, resulted in the evacuation of 10,000 nearby residents and the closure of a major interstate transportation route. Two firefighters were killed and seven other emergency responders were injured when a propane storage tank exploded at an Albert City, Iowa, poultry farm on April 9, 1998. At least seven other major accidents occurred at propane facilities in 1998. In total, these accidents involved at least 4 deaths, 22 injuries, many thousands of dollars of property damage, community evacuations, and other offsite impacts.

The core elements of process safety management required by the Risk Management Program rule directly address such accidents. Therefore, EPA expects that this regulation will ultimately reduce the number of accidents, injuries, and fatalities.

Exemption of Small Propane Users

EPA listened and responded to concerns that the RMP may cover propane users too small to pose a significant risk to the surrounding community. Such propane users may include hospitals, farms, restaurants, and hotels, as opposed to larger commercial or industrial users.

In an effort to draw a proper line between those facilities that warrant federal regulation and those that do not, on May 21 EPA issued a six-month administrative stay of the effective date of the RMP rule for most small users as it applies to all listed flammable hydrocarbon fuels, including propane, butane, ethane, propylene, and methane (natural gas). EPA's action, in effect, eliminated most of the small businesses that handled relatively small quantities of propane from filing Risk Management Plans.

The stay applies to fuels stored in any process that:

On May 21, EPA also issued a notice proposing to revise the RMP rule to exempt fuel processes that meet the above criteria. The Agency took this action not because they are inherently safe, but because flammable fuel processes with this criteria pose less of a threat to the public for two reasons: there is a lower likelihood of accidental release at facilities that use or store small amounts of fuel; and there is a lower risk of a vapor cloud explosion following an accident. EPA continues to believe that large manufacturers, distributors, and users of flammable fuel need to comply with the Risk Management Program to prevent accidents and to inform the public of risks in their community.

It is also important to note that prior to EPA's rulemaking, on April 27, the U.S. Court of Appeals granted a request from the National Propane Gas Association (NPGA) to exempt propane facilities from the Risk Management Program until further action by the court.

The current stay is not a final ruling. While the Court's stay is in effect, facilities will not have to file RMPs for their propane processes. The Court plans to hear oral argument on the case in the Fall of 1999. If companies met the criteria for the stay, they did not need to report by the June 21, 1999, reporting deadline. The Agency plans to issue a final rule on the proposed exemption by the time the stay expires on December 21.

Compliance Assistance

EPA labored to lessen the regulatory burden of 112(r) on industry and in particular small businesses. At the same time, EPA has been mindful of the fact that even a small business, if it handles more than a threshold quantity of a hazardous chemical or flammable material, can have an accident that harms the public and the environment if it is not used safely. Chemicals and flammable substances present the risk, not the size of the company.

To ease the regulatory burden on these facilities, EPA prepared model plans for a number of industry sectors, including large propane distributors and users and small propane users. These models make compliance with the Risk Management Program rule relatively easy. These guides recognized the safety practices embodied in existing industry standards, such as the National Fire Protection Association Standard 58, and encouraged propane facilities to take credit for those practices when implementing their risk management program and preparing their risk management plan. EPA also distributed free software to reduce the difficulty of preparation and submission of Risk Management Plans easy. EPA Regional offices and trade associations, such as the Chemical Manufacturers' Association also held workshops to help small businesses answer compliance concerns.

EPA is working with NFPA to strengthen Standard 58, as the current version does not capture all of the Risk Management Program elements. For example, conducting an assessment of the off-site impacts associated with accidental releases and communicating this information to first responders and the local community are not addressed by any other rule, code, or standard. On the other hand, some RMP requirements are satisfied by NFPA 58 and can be used to satisfy those RMP elements.

Regulatory oversight of NFPA 58 may fall short. On June 29, 1999, the U.S. Chemical Safety and Hazard Investigation Board (CSB) issued a report following an April 9 propane explosion in Iowa that determined that regulatory oversight of NFPA Standard 58 by the State Fire Marshal's Office was inadequate. The CSB report noted that the State Fire Marshal did not detect the deficiencies in the design and installation of the propane tank nor did they have a program in place to adequately monitor or inspect large propane facilities.

Cost of Compliance

EPA also was mindful of the resources available to small businesses when it developed the rule with three Program levels to reflect different levels of risk and levels of effort needed to prevent accidents. Program 1 is a minimal set of requirements for processes, such as those found at many small businesses, that have a very low risk of affecting the public in the event of an accident. Program 1 propane facilities needed to budget four to five hours and about $200 to prepare their plan and any supporting documentation. Program 2, a streamlined set of requirements for facilities not eligible for Program 1 or Program 3, would require between 18 to 44 hours and from $231 to $1679. These estimates could increase if facilities were not in compliance with NFPA Standard 58 or failed to use EPA's free guidance and software. Most propane users will either be eligible for Program 1 or Program 2.

Risk Still Exists

Propane still is an issue for CAA section 112(r)(7)(1), which establishes a general duty on all stationary sources using, handling or storing extremely hazardous substances to operate safely. Extremely hazardous substances include, but are not limited to, the substances EPA has listed under section 112(r)(3). The general duty clause requires companies to identify hazards that may result from their releases using appropriate hazard assessment techniques; to design and maintain a safe facility, taking steps to prevent releases; and to minimize the consequences of accidental releases that do occur, using all industry codes, standards, and good practices.

And while EPA intends to exempt most small propane users from Section 112(r) requirements, the Agency believes that some small businesses, such as propane distributors and retailers that handle quantities of propane above 67,000 pounds, should still report under Section 112(r).

Judging from the accident history, accidental releases of several of the listed toxic or flammable substances have left a harmful impact on the public and the environment. Consequently, EPA still believes that facilities that handle these highly toxic or flammable substances in large amounts should take action to prevent chemical accidents in the future.

The hazard associated with propane and other highly flammable substances is very real. Accidents at propane facilities have occurred nearly every year, and they have been directly related to poor hazard control. The core elements of process safety management required by the Risk Management Program rule directly address such causes in an effort to reduce accidents.

Risk Management Programs implemented by facilities will improve chemical safety in two ways. First, they will encourage facilities to identify and to address the hazards posed by their handling of flammable substances. Second, and equally important, they will provide information to the public about the potential risk of accidental releases and facilities' efforts to prevent and mitigate any releases. The availability of these plans is expected to stimulate communication among industry, local governments, and the public to improve accident prevention and emergency response practices.

We must not lose sight of the real improvements in chemical safety the RMP program as a whole hopes to achieve. Since the RMP rule was issued nearly three years ago, industry already has invested much time and effort to achieve risk reduction at their facilities. Many facility representatives told us that while they were at first skeptical of the benefits of the accident prevention program, completing a RMP led to many unexpected safety improvements at their facilities.

Conclusion

The principal intent of regulations issued under Section 112(r) is to prevent and mitigate accidents at industrial facilities that present the most risk to the public. While accidental releases involving as little as 10,000 pounds of propane can easily effect workers, EPA took action to only cover releases that generally constitute a serious risk to the public beyond the fence line. However, EPA continues to believe that facilities storing large quantities of propane, such as propane distributors and other industrial facilities, should submit Risk Management Plans. Accidents at these types of facilities have ranked among the most severe industrial accidents on record.

As I described earlier, we have responded to small business concerns by issuing regulations recognizing existing industry standards; producing tailored and detailed guidance, model plans, and free RMP software; and working with the small business community to ease compliance concerns. We believe that these efforts have eased the reporting burden and expense associated with the regulation. Our goal remains to protect human health and the environment.

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