OSHA's Narrowed PSM Retail Exemption Now On Hold

Posted on 11/1/2016 by James Griffin and Roger Marks

In a regulatory interpretation issued July 22, 2015, OSHA narrowed the exemption from its Process Safety Management (PSM) Standard for retail facilities. Before this memo was issued, OSHA’s PSM “retail exemption” applied to facilities that “generate more than 50% of their income from direct sales of chemicals to end users.” 

In the July interpretation, OSHA narrowed the PSM exemption to include only those facilities that fall into the NAICS definition of retail trade (NAICS codes 44 and 45). This action was taken in part as a response to the April 2013 ammonium nitrate explosion at a fertilizer plant in the town of West, Texas and the subsequent Executive Order to improve chemical safety (EO 13650)

Narrowed Retail Exemption Put on Hold

The new interpretation would have taken effect last month. However, since OSHA updated its interpretation of “retail” under the PSM Standard, industry groups including the Agricultural Retailers Association and the Fertilizer Institute had filed suit to stop the Agency from enforcing PSM compliance at facilities that no longer meet OSHA’s definition of “retail.”

Last month, the US Court of Appeals for the DC Circuit ruled against OSHA. This means that the narrowed interpretation of “retail” is on hold, at least for now. For the foreseeable future, the old version of the PSM retail exemption will still apply for facilities that “generate more than 50% of their income from direct sales of chemicals to end users.”

OSHA PSM chemical process tank

What Is Process Safety Management?

OSHA’s Process Safety Management (PSM) Standard at 29 CFR 1910.119 is a set of requirements for managing hazards associated with “processes” that involve highly hazardous chemicals. The PSM requirements apply to employers who operate processes that use designated hazardous chemicals in amounts that exceed given thresholds.

How Does OSHA Define “Employer” and “Process”?

Under the PSM Standard, “employer” has the usual OSHA meaning of every private business or non-profit institution that employs employees. In states authorized to oversee an OSHA State Plan, “employer” also includes government entities and their employees.
Under the PSM Standard, a “process” can mean any of the following with respect to highly hazardous chemicals:
  • Use
  • Storage
  • Manufacturing
  • Handling
  • On-site movement

What Chemicals Are Covered Under OSHA’s PSM Standard, and What Are the Thresholds?

Two kinds of chemicals trigger OSHA's PSM Standard:

  • Any chemical listed as a highly hazardous chemical in Appendix A to the PSM Standard (29 CFR 1910.119)

Threshold quantities set in Appendix A range from 15,000 lbs. for methyl chloride and some ammonia solutions down to 100 lbs. for sarin, ozone, and methyl hydrazine.

  • Any other flammable liquid or gas

Threshold quantities for other flammable liquids and gasses are generically set at 10,000 lbs.

Exceptions from OSHA's PSM Standard 

Exceptions from OSHA's PSM Standard are available for:

  • Retail facilities, but only if they’re purely retail, as discussed in recent fact sheets
  • Remote facilities of any kind that are normally unoccupied
  • Oil and gas well drilling and servicing operations
If you operate a covered process or fulfill the criteria above, then you are subject to OSHA’s PSM Standard and must take the steps necessary to comply.

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