NH3 Regulation Confusion

dtn-img

By Todd Neeley
DTN Staff Reporter

OMAHA (DTN) -- Ag retailers who sell fertilizers have sued the Occupational Safety Hazard Administration over the agency's move to further regulate anhydrous ammonia in what the industry sees as a change that could hurt agricultural retailers.

The Agriculture Retailers Association is challenging OSHA in federal court for its plan to do away with the agriculture retailer exemption from a safety management standard that deals with the handling of dangerous chemicals.

Retailers are befuddled as to why OSHA responded to the ammonium nitrate tragedy by pushing to regulate anhydrous ammonia.

"It's a costly and unnecessary change to a regulation that is intended for manufacturers of hazardous chemicals, not for retailers," Brian Reuwee, director of communications for the Agriculture Retailers Association, told DTN.

Reuwee said it could costs ag retailers $20,000 to $30,000 to comply with the rule for a marginal gain in safety. In addition, he said, "OSHA's estimates of the costs involved were off by more than 10 times."

In a letter to members of Congress last week, the Agriculture Retailers Association said OSHA is moving forward with the anhydrous ammonia regulation changing the retailer exemption even as the U.S. Court of Appeals for the District of Columbia Circuit considers the lawsuit.

OSHA told the court in a letter in recent weeks the agency intends to move forward with updating the retailer definition in the safety standard, known as Process Safety Management, or PSM.

"The letter misstates whether application of PSM is necessary for OSHA to inspect retail facilities that store ammonium nitrate," the industry said in the letter to Congress May 13. "It ignores the safety commitment of our member companies who produce, distribute and retail fertilizer products and who practice safety daily as part of their company culture.

"It further ignores updates being done at the state level and the substantial commitments made by the industry and by the Agricultural Retailers Association and The Fertilizer Institute to provide compliance assistance to the industry through ResponsibleAg."

The letter to senators spells out what it says are three "key facts" when it comes to OSHA's pursuit of anhydrous ammonia regulations and their connection to the West Fertilizer explosion in April 2013.

Some 30 to 40 tons of ammonium nitrate detonated at the West Fertilizer facility in West, Texas. Federal investigators now believe the explosion was the result of an intentionally set fire. In the months following the explosion, a presidential executive order directed federal agencies to find ways to improve ammonium nitrate safety.

At the time of the explosion, the storage and handling of ammonium nitrate at West Fertilizer was "not compliant" with existing OSHA standards -- something documented in an investigation conducted by the U.S. Chemical Safety and Hazard Investigation Board.

The board concluded in a final report released in February that OSHA did little to safeguard ammonium nitrate stockpiles prior to the West Fertilizer explosion.

It was revealed ammonium nitrate was stored in wooden bins at West Fertilizer -- considered by OSHA regulations to be appropriate as long as the wood is treated to prevent the absorption of ammonium nitrate.

Second, despite the force of the blast felt for many miles away, anhydrous ammonia tanks on site remained intact. Photos taken in the aftermath show complete devastation of the facility -- except for the anhydrous ammonia tanks.

Third, the industry said in the letter to Congress last week OSHA had existing authority before the tragedy to inspect facilities for compliance, but the last time the agency visited West Fertilizer was in 1985.

"OSHA's assertion that it needs to subject these facilities to PSM in order to have authority to regulate or inspect them is patently false," the industry said in the letter.

"Based on these three important facts, a reasonable person would assume that OSHA's response to the instructions in Executive Order 13650 would focus on ammonium nitrate. A reasonable person would therefore be disappointed in OSHA's response to the Executive Order."

OSHA did not immediately respond to DTN's requests for comment.

OSHA, however, responded to the executive order by drafting a regulation to include rules on anhydrous ammonia that includes doing away with the agriculture retailer exemption. Agriculture retailers filed a lawsuit claiming OSHA did not follow federal administrative law in formulating the regulation.

Ag retail facilities have been exempt from the PSM standard since it was created in 1992. OSHA's retail facility exemption has covered agricultural retailers with 50% of fertilizer sales to end-users.

The industry argued in its lawsuit OSHA's proposal to change the exemption in a December 2013 request for information was not a formal comment period. Instead, OSHA should have followed the Administrative Procedures Act that requires notice and comment period.

RETAILERS PRESSURED

OSHA announced a six-month period where the standard would be in effect but not enforced so as to allow retailers to come into compliance. The industry objected because of the costs and time to comply in what it said was an inadequate notice.

Reuwee said he's unsure how or if the ATF announcement last week that fire at West Fertilizer was set intentionally will affect agriculture retailers.

"That the fire at West Fertilizer was set intentionally is a tragic and horrible conclusion," he said.

Read the Chemical Safety Board final report here: http://1.usa.gov/…

Read DTN's coverage of the ATF announcement here: http://bit.ly/…

Todd Neeley can be reached at todd.neeley@dtn.com

Follow him on Twitter @toddneeleyDTN

(CC/AG)