Before the dust settles and the funerals are complete, the politicians and the media are already clamoring for more regulations in order to prevent another catastrophe like the one in West, TX.  However, like in many occasions, it is not the regulatory framework that is the problem; it is the "retail" exemption and its improper application and defining by OSHA that has burned us in this tragedy.  The business appears to have done their reporting in 2011 and 2012 properly.  We will have to wait for the investigation report to learn if the reporting was not made available to those who needed it most.

I am not advocating for more regulation or that Ammonium Nitrate becomes a PSM/RMP chemical.  I am going to try and make the case that the current regulatory framework, even with the PSM “retail exemption”, is adequate to prevent such disasters.  I am going to try and explain the difference between compliance with the bare minimums (e.g. OSHA’s PSM and EPA’s RMP) and true “process safety”.  Here is how our current regulatory framework COULD HAVE and SHOULD HAVE prevented or certainly lessened the tragedy in West, TX.

As I explained in my article "How could the TX fertilizer plant be a Program 2 RMP?", it is OSHA's exemption of "retail facility" that originally allowed the fertilizer distributor to be exempted from OSHA's PSM requirements, which then allowed the facility to be a Program 2 RMP facility.  This means the facility needed to implement ONLY the following RMP elements, as compared to a Program 3:



§68.48 Safety information

§68.50 Hazard review

§68.52 Operating procedures

§68.54 Training

§68.56 Maintenance

§68.58 Compliance audits

§68.60 Incident investigation

§68.65 Process safety information

§68.67 Process hazard analysis

§68.69 Operating procedures

§68.71 Training

§68.73 Mechanical integrity

§68.75 Management of change

§68.77 Pre-startup review

§68.79 Compliance audits

§68.81 Incident investigation

§68.83 Employee participation

§68.85 Hot work permit

§68.87 Contractors


Most notably missing in this list of Program 2 elements is the requirement to conduct a Process Hazards Analysis (PHA) and to implement a Management of Change (MOC) program.  Here is how I see these two critical elements playing a role in how "up to" 270 tons of Ammonium Nitrate (AN) came to be stored in a building that was mere feet from a RMP covered process containing Anhydrous Ammonia (NH3).

There is a BIG difference between a Program 2 "hazard review" and a Program 3 (OSHA PSM) “Process Hazards Analysis” (PHA).  Such a big difference that the “hazard review” (68.50) does NOT include a "Facility Siting Assessment"; however, a Facility Siting Assessment is a BIG part of any PHA (68.67).  Now before some of you think this is the “smoking gun” as to how a fertilizer distributor could be located so close to homes, schools, and a nursing home think again!  Facility siting is MUCH DIFFERENT than “zoning” industrial facilities.  But the facility siting aspect SHOULD HAVE played a MAJOR ROLE in helping prevent AN from being stored on site. 

We should also notice that the Program 2 Prevention program states:

shall also conduct reviews whenever a major change in the process occurs

And this is our process safety learning opportunity!  Too much focus has been placed on the Ammonium Nitrate being on site and not enough focus on how our current regulatory framework may have been adequate if only it had been applied PROPERLY.  I know some of you may be asking how their RMP or even PSM could have prevented this accident since their only RMP/PSM covered chemical was NH3 and not AN.  This is correct, but from a pure process safety perspective, the AN being brought on site in ANY QUANTITY and stored in a wood-frame building mere feet from the NH3 storage bullets should have triggered an MOC in a full blown PSM/RMP program and AT LEAST triggered an update to the  “hazard review” in a Program 2 RMP.

This is a perfect example of how so many get lost in the regulatory aspect of PSM/RMP and loose sight of what I like to call “true process safety”.  This means that we have to not only look at what is happening within the battery limits of the covered process, we have to begin looking at ALL ASPECTS that could cause our process to be impacted. 

This facility either had no AN or less than 10,000 pounds of AN on site before 2012, as 2012 was the first year they reported having an inventory that triggered the 10,000 pound EPCRA reporting threshold.  The NH3 had been on site since 1999 (i.e. their first year to submit an RMP – in fact at that time they had 200,120 pounds of NH3).  When the decision to begin storing and selling AN was made, this would not have necessarily triggered an MOC in and of itself; however, as soon as the business decides to use the warehouse to store/handle/process the AN this should have triggered an MOC due to the extreme close proximity of the AN to the covered process (e.g. NH3).  There will be some process safety professionals who will argue this is “over kill” and “gives PSM/RMP a bad name” and they will point to the fact that the NH3 bullets survived this catastrophe as proof that I am crazy for taking this position.  So be it, I stand by my position and hope to convince others that true process safety is where we need to be – no longer attempting to meet OSHA/EPA minimum process safety regulations nor being comfortable thinking we have achieved compliance. 

Back to the MOC… if doing one of my MOC’s, the shear fact that AN being stored in the building may not have triggered a PHA/facility siting update; however, when the business tells me they want to store 270 tons of AN inside the building that would have certainly raised some concern for me.  Had the business been a PSM/Program 3 process and been required to do an MOC, they would have been required to review the following:

§ 68.75   Management of change.

(a)   The owner or operator shall establish and implement written procedures to manage changes (except for “replacements in kind”) to process chemicals, technology, equipment, and procedures; and, changes to stationary sources that affect a covered process.

(b)   The procedures shall assure that the following considerations are addressed prior to any change:

(1) The technical basis for the proposed change;

(2) Impact of change on safety and health;

(3) Modifications to operating procedures;

(4) Necessary time period for the change; and,

(5) Authorization requirements for the proposed change.

(c) Employees involved in operating a process and maintenance and contract employees whose job tasks will be affected by a change in the process shall be informed of, and trained in, the change prior to start-up of the process or affected part of the process.

(d) If a change covered by this paragraph results in a change in the process safety information required by § 68.65 of this part, such information shall be updated accordingly.

(e) If a change covered by this paragraph results in a change in the operating procedures or practices required by § 68.69, such procedures or practices shall be updated accordingly.

Is it now coming into focus how a simple MOC could have helped prevent this tragedy?  But how many facilities actually do MOCs on changes outside their battery limits that could affect a covered process?  I know from my experience it was just a battle to get personnel to do an MOC anytime they changed the actual covered process!  I was often told I was “crazy”, “out of touch”, etc. when I would “stand in the way of business” requesting an MOC for changes outside the physical boundaries of our covered processes.  I may have hit a brick wall in West, TX as well, but the facts are - had this process been a PSM/RMP Program 3 process, an MOC would have been required and this MOC would have forced the facility to at least acknowledge the new AN business stood to impact the already covered process of storage and loading of NH3.  It could be argued that the level of detail in the MOC may not have prevented them from storing the AN in the warehouse, but we can debate that another day.  I am just pointing out that had this facility not been exempted as a “retail facility” and been required to implement a full PSM/RMP program, this would have included Management of Change and Process Hazard Analysis.

Let’s discuss “facility siting” as part of the required PSM/RMP Program 3 PHA.  This exercise could have certainly identified the AN as a potential problem; although there is no guarantee of this as “facility siting” is still a very misunderstood piece to the process safety puzzle.  However, if applied properly, a facility siting analysis should look at other hazardous chemicals and how they are stored/handled and how this could impact the covered process.  Of course, this applies only if AN is recognized as a hazard to the process.  This should have been clear as the material is classified as an Oxidizer (Class 5.1) by DOT.  A quick look at the hazards of an oxidizer and the fact the business wanted to store up to 270 tons should have been a trigger. 

Here is a Q&A from EPA regarding what they expect in “facility siting”…

Does EPA interpret the Program 3 process hazard analysis - stationary source siting requirement analogously to OSHA's Process Safety Management standard?

Yes. The requirement to consider stationary source siting during the process hazard analysis means that you should consider the location of the covered vessels and evaluate whether their location creates risks for offsite public or environmental receptors, as well as onsite receptors. This analysis should consider the proximity of the vessels that could lead to a release of a regulated substance. The proximity of the vessels to onsite equipment or activities nearby will have been considered for OSHA; the proximity of the vessels in relation to offsite receptors will be considered if not already considered for OSHA. The analysis may be done qualitatively. The analysis addresses whether the location of the vessels creates risks that could be reduced by changing the location or taking other actions, such as installing mitigation systems. The evaluation of offsite consequences is more fully addressed under the hazard assessment requirement.

OSHA’s PSM “retail” exemption

But lets look at this tragedy through the lens of the current regulatory requirements the facility fell under… EPA RMP Program 2.  As I stated earlier, this program level REQUIRED the “hazard review” be updated whenever a major change in the process occurs.  There are some that will claim storing 270 tons of AN within mere feet of the NH3 bullets is not a change in the “covered process”.  Here lies our problem… not recognizing that changes outside the “covered process” can impact the process. 

But the bottom line here is the ability for the business to be exempted from OSHA’s PSM, which in turn allowed the facility to be a RMP Program 2.  So why did OSHA exempt “retail establishments” from their PSM requirements?  For this answer we turn to the PSM Preamble, and for those who have never understood this exemption before, you may be very surprised:

With respect to the exclusion of retail facilities and normally unmanned remote facilities, OSHA believed that such facilities did not present the same degree of hazard to employees as other workplaces covered by the proposal. Therefore OSHA should not require a comprehensive process safety management system in addition to other applicable OSHA standards addressing flammable and combustible liquids, compressed gases, hazard communication, etc., for retail facilities and unmanned remote facilities.

Certainly, highly hazardous chemicals may be present in both types of work operations. However, OSHA believes that chemicals in retail facilities are in small volume packages, containers and allotments, making a large release unlikely. OSHA received few comments disagreeing with the exemption of retail facilities (e.g., gasoline stations). OSHA has retained the exemption in the final rule.

So as you can see, the "spirit" behind the exemption was to exclude true retail businesses where the general public is coming and going and purchasing quantities much smaller than 1,000 gallons nurse tanks of highly hazardous chemicals!  OSHA did not see businesses with their highly hazardous chemicals in smaller volume containers as having the same degree of hazards as a facility with the highly hazardous chemical stored in larger containers.  However, where OSHA missed the boat is how they defined “retail facility”.  They ended up using a “business measure” and did not take into consideration how the highly hazardous chemical is stored.  Here is OSHA’s 2005 LOI explaining the “retail” exemption:

OSHA considers an establishment to be qualified under the PSM "retail facilities" exemption, if that establishment receives more than half of its income from the direct sales of the PSM-covered highly hazardous chemical (HHC) to end users. The income referenced above applies to the income obtained from the sales of PSM-covered HHCs, and not the total sales of the establishment. For example, establishment A distributes and sells HHC X to a chain of supply stores and to homeowners (end users). Establishment A obtains 60% of its income from the sale of HHC X to the chain of supply stores - these supply stores are not the direct end users or consumers. The other 40% of the income obtained from the sale of HHC X is from sales to homeowners. Since establishment A's income from homeowners (end users) is less than 50%, establishment A does not qualify for the PSM retail exemption. In addition, if establishment A sells other products besides PSM-covered chemicals, the income derived from the sale of the other products is not part of the determination of whether establishment A qualifies for the retail exemption. 

As we can see, there is absolutely NO mention of container size in their official method of defining a “retail facility”; hence we ended up with a facility that has 117,000 pounds of NH3 being exempted from PSM because the business obtained more than 50% of its income from the sale of NH3 to end users.  The facility reported in their 1999 RMP as having 210,120 pounds of NH3.  However, they stated in their RMP their NAICS classification was “42451” which is for “Grain and field bean merchant wholesalers”.  “Wholesalers” typically do not sell to “end users”, so I am not sure if this is an error in their reporting or an error in their determination they are a “retail facility”.  

Why does all this matter?  Without this PSM retail exemption, OSHA and EPA would have required the facility to implement a FULL PSM/RMP prevention program and thus improved the chances this accident could have been avoided altogether or at least mitigated to a lesser degree by exercising those elements I have laid out in this article.

View 's profile on LinkedIn

  LinkedIn Group Button



seminar logo white

I am teaching another 1-Day Course for ASSE

Intro to Process Safety Management.

February 13, 2017 

The Rio, Las Vegas, NV


 kmcllaw logo

an unpaid endorsement



an unpaid endorsement


kemkey logo

an unpaid endorsement

safteng man copy



 organdonor website reputation