Unclear definitions in PSM standard cause OSHRC to reverse judge's decision

Abstract

A propane refinery and distribution terminal in Delaware, was assessed a penalty of $2,500 for violating the process safety management (PSM) standard for highly hazardous chemicals. Although the company admits that the PSM standard applies to the equipment in its propane refinery, it disputes the applicability of the standard to its distribution terminal, which dispenses and sells propane on a wholesale basis.

The refinery houses seven storage tanks that normally contain more than 10,000 pounds of propane at any given time. These tanks are connected to a pipe that transports the propane over a cyclone fence, separating the refinery from the distribution terminal. Customers wishing to purchase propane from the company, simply park their tanker trucks at one of the two loading islands and activate the pump after entering a code into the computerized system.

Conclusion

The judge concluded that the conditions at the cited terminal fell under the PMS standard because:

• The movement of propane from the storage tanks, through the pipes, and into the tanker trucks constituted a "process."
• The minimum amount of propane could be found either in the tanker trucks at the distribution terminal or in the propane storage tanks at the refinery

The Occupational Safety and Health Review Commission (OSHRC) did not agree. The Secretary of Labor cited a section of the preamble to the PSM Final Rule to support her claim that, in this case, the "process" is "on site in one location" because the refinery storage tanks connect to pipes leading into the distribution terminal, and the standard's definition of "process" states that interconnected vessels must be considered a single process.

According to OSHRC, that meaning is not found in the preamble. In fact, nowhere in the preamble does OSHA explain how the terms "on site" and "in one location" should be applied to determine whether a process involving flammable liquids or gases should be covered by the PSM standard.

Since the Secretary failed to provide an adequate explanation of these terms and no evidence clearly establishes the distance between these two areas, OSHRC reversed the judge's decision and voided the citations.

Full text decision

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