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[COMPLIANCE TIPS]

By: KENNETH HANCHEY Senior Consultant ABS Consulting

JAMES THOMPSON Senior Consultant ABS Consulting

STEVE DIGHERO Process Safety Leader ABS Consulting

Are you fully prepared for OSHA's Chemical NEP?

OSHA is putting a lot more effort into process safety management (PSM) enforcement, as indicated by the high percentage of refineries that have been inspected receiving citations from their Refining National Emphasis Program (NEP), with average fines in excess of $120,000. Fines can be the tip of the iceberg compared to the bad press and cost to comply with the citations. Chemical facilities have an opportunity to avoid these consequences through thoughtful, advanced preparation. When OSHA deploys the NEP for the chemical industry it will be focusing on facilities that are in Program Level 3 in the EPA Risk Management Program (RMP). The refinery NEP program inspections have demonstrated that OSHA's NEP inspection methodology has changed significantly. The OSHA inspectors are not only asking whether specific programs, procedures and processes are documented, they are verifying implementation of these programs, procedures and processes via document reviews, interviews and field observations. In the Refining NEP, they have used a list of standard "static" questions plus "dynamic" questions that vary with each inspection. In addition, there are times when the inspectors are asking for documents that may be beyond that required by regulation. Typically these questions incorporate recognized and generally accepted good engineering practices (RAGAGEP). For example, inspectors have incorporated API 510, API 570 and various Center for Chemical Process Safety (CCPS) "Guidelines" books. The nature of the citations is changing with the experience of the inspectors, and has shifted the emphasis from personnel safety toward process safety. With more than 30 refinery NEP inspections to date, the inspectors are now more focused on PSM. The increasing process safety emphasis, demonstrated in the refinery NEP, will likely continue with the chemical NEP. The chemical NEP inspections were to have already begun, but significant accident investigations have delayed the start. The program directive is expected to be issued soon. The PSM focus areas in the refinery NEP inspections have been risk analysis, management of change (MOC) and RAGAGEP (mostly equipment related such as for vessels, piping and relief systems). The most frequent PSM citations have involved MOC implementation, addressing equipment deficiencies, operating procedures, process safety information for equipment, inspection/testing of equipment, and process hazard analysis (facility citing, human factors, completed/revalidated on schedule and timely completion of recommendations). OSHA may also use PSM-related questions from the Voluntary Protection Program, for example, electrical classification, controls, shutdowns and layers of protection analysis execution. Since the chemical NEP may cover the whole range of PSM, being fully compliant with PSM at all times is the best preparation. A good start is to locate and review your relevant process safety information (PSI) and mechanical integrity documents with reference to the refinery NEP document list. It is expected that there will not be a list of documents to be produced, nor is it expected that there will be a static list of questions for the chemical NEP. The refinery document list, the refinery NEP static list of questions and the VPP "PSM Supplement B Questions 2008" are the best references at this time. Expect strategic questions to determine your level of compliance. One could be, "How old is your oldest open action item from MOCs and incident investigations?" Another might be, "Do you have a procedure for batch cleanout?" Your initial answer may not determine if you are in compliance, but should let OSHA know if they need to investigate more in that area. Remember, PSM is more performancebased than prescriptive. An objective review of the items above by knowledgeable experts should then be considered. The facility's strategy should then be to first review and update the program areas that are most likely to be inspected (e.g., operating procedures, PSI, mechanical integrity program, PHAs, relief systems, written employee participation program). In summary, advance preparation will be the key to a successful NEP inspection. Potentially affected facilities should start preparing now. For more information, contact Kenneth Hanchey at (281) 673-2766 or e-mail [email protected]

[NEWS UPDATE]

Van Hollen introduces Green Bank Act of 2009

WASHINGTON -- Congressman Chris Van Hollen (D-Md.) recently introduced the Green Bank Act of 2009. The legislation creates the Green Bank as an independent, tax-exempt, wholly owned corporation of the United States. The bank's exclusive mission will be to provide a comprehensive range of financing support to qualified clean energy and energy efficiency projects within the United States. "Energy independence is central to our security, our economy and our environment. By creating the Green Bank, we will accelerate the development, deployment and production of clean energy and energy efficiency technologies across the country," said Van Hollen. The Green Bank Act of 2009 would do the following: · Create the Green Bank, which will have the exclusive mission of providing a comprehensive range of financing support to qualified clean energy and energy efficiency projects in the United States. · Provide the Green Bank with an initial capitalization of $10 billion through the issuance of Green Bonds by the Department of Treasury, with a

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maximum authorized limit of $50 billion in Green Bonds outstanding at any one time. · Assist in advancing vital national objectives -- including transitioning to a clean energy economy, job creation through the construction and operation of clean energy and energy efficient projects, abating climate change, energy independence from foreign sources and fostering long-term domestic manufacturing capacity in clean energy and energy efficiency technologies. · Include robust spending safeguards and public disclosure requirements to ensure that the Green Bank operates at the highest levels of efficacy, accountability and transparency. Original co-sponsors of the Green Bank Act of 2009 include Congressman David Loebsack (D-Iowa), Congresswoman Gabrielle Giffords (D-Ariz.), Congressman Earl Blumenauer (D-Ore.) and Congresswoman Madeleine Z. Bordallo (D-Guam). For more information, visit http:// vanhollen.house.gov or call (202) 225-5341.

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June/July 2009

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