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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