WASHINGTON, Oct. 21, 2015 - The reverberations from a deadly 2013 explosion at a fertilizer plant in West, Texas, can be heard in a new Obama administration regulatory action targeting sales of anhydrous ammonia.

In response to the explosion that killed 15 people, President Barack Obama signed Executive Order 13650 that August, which included a call for “modernizing key policies, regulations, and standards” among other suggestions. That executive order begat changes to Occupational Safety and Health Administration (OSHA) standards, particularly the Process Safety Management (PSM) of Highly Hazardous Chemicals. The changes would alter the retailer exemption to the PSM by striking the “50 percent rule,” which had been the previous litmus test for a business to be exempt from the standards. Under that test, if an establishment received more than 50 percent of its income from “direct sales of highly hazardous chemicals to the end-user,” it qualified for an exemption, even if the end-users are themselves commercial establishments. Now, OSHA is redefining that interpretation to only include businesses that sell in a retail setting in small quantities (less than 50 gallons), which could mean new regulations for fertilizer retailers selling product to farmers.

OSHA spelled out the new regulations in a letter to retailers in July. An appendix to the letter explained that farm supply companies selling chemicals like anhydrous ammonia for application on farmland “are not in retail trade because they do not sell chemicals in small quantities or containers to the general public.” The new regulations would require more paperwork and possibly more secure storage arrangements.

According to Daren Coppock, president and CEO of the Agricultural Retailers Association (ARA), the measure fails to address ammonium nitrate, the culprit in the West, Texas, explosion, and focuses on anhydrous ammonia. It has the potential to force some anhydrous retailers out of the market, forcing producers that want to use the product to travel greater distances to stock up.

“It won’t advance the cause of safety, and in fact it may make the safety concern worse than what we have today,” Coppock said.

Many in the agricultural community are not happy with this decision, saying the lack of exemptions for many retailers will prove much more costly than OSHA estimates. The agency figures the total initial cost for the 4,800 affected retailers will be “as low as $10.4 million,” or about $2,160 for each facility. ARA scoffs at that notion, saying the cost will more likely approach $27,500 at each facility, bringing the total cost to over $132 million. In a letter to OSHA officials, Coppock questioned if OSHA has even conducted a cost-benefit analysis.

“What I’ve been told by one person is that you can’t even buy the copies of the standards you need to comply with for $2,160 per site,” he said in an interview with Agri-Pulse.

ARA has entered into litigation alongside The Fertilizer Institute (TFI) to challenge the regulation. Coppock said they are hoping for a stay on the decision similar to the Waters of the U.S. lawsuit, mainly because the six-month timeline allotted by OSHA for compliance – which would expire in January – isn’t enough time for producers and retailers to make decisions about alternatives to anhydrous ammonia or to come into compliance with the PSM regulations.

While ARA is currently in litigation, Coppock said they are also considering other options, including legislation. Rep. Stephen Fincher, R-Tenn., is circulating a letter calling on OSHA to strike the changes in the July 22 letter and go through formal rulemaking. Coppock said OSHA never went through rulemaking – which would provide for things like a public comment period. Instead, the 50 percent rule was brought forth by an interpretation, and OSHA contends it can be removed the same way.

In addition to ARA and TFI, the National Corn Growers Association, American Farm Bureau Federation, National Council of Farmer Cooperatives, National Grain and Feed Association, and National Association of State Departments of Agriculture also oppose OSHA’s changes.


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