Emphasis on Details, Documentation

Process safety management requires comprehensive hazard analysis and records.
By Susanne Retka Schill | August 12, 2013

A good process safety management (PSM) program in an ethanol plant is thorough down to the details, including a diagram of every pipe, valve and sensor, showing model and make—the pipe and instrument diagram (P&ID). Backing that up are files of process safety information (PSI), including, but not limited to material safety data sheets (MSDS). There’s also SOPs, MIPs, the PSSR, MOC and PHA to consider.

 “A producer would be wise to have someone who understands all of those acronyms and what they mean,” says Charles Palmer, a partner with the law firm Michael Best and Friedrich LLP. While ethanol producers know well that an accident or complaint can trigger an inspection by the Occupational Health and Safety Administration, in the past two years, OSHA has also randomly selected several plants for inspection. Since November 2011, OSHA has had a national emphasis program on process safety management.

 Though ethanol plants are small compared to mammoth oil refineries or petrochemical manufacturers, they are held to the same comprehensive process safety standards. There is one big difference. “One of the nice things about the ethanol industry is that it is a relatively new area of energy production,” says Greg Dale, a partner with Faegre Baker Daniels LLP.  “As an industry, it’s relatively new compared to petroleum. We’re dealing with newer equipment, more modern technology and, associated with that, more modern safety parameters built into the system.”

 A search of the OSHA database for records involving ethyl alcohol manufacturers shows that, indeed, older facilities generally have the most violations. Over the past three years, the number of violations per plant ranged from just one to the highest at 17, with most being less than five violations. The penalties ranged from just under $1,000 to nearly $10,000 per violation. The initial penalty was almost always reduced. In 2011, 23 plants were inspected and in 2012 another 15. Ten plants were inspected through June of this year.

 The database reveals that in the 12 inspections conducted between October 2011 and September 2012, there were 77 violations and a total of $160,000 in penalties. By far, the largest category was for process safety management violations, at 37, accounting for $113,000 in penalties. The other categories trailed far behind, with six violations on permit-required confined spaces and five citations each for respiratory protection, hazard communication and general requirements. Other categories received one or two citations each.

 “The guys that got five citations, but who really put a lot of work into their PSM and felt they had their ducks in a row and were really on top it, were surprised that they got five citations,” Palmer says. “You’re talking about people who take a lot of pride in what they do, and one citation is too much.” It can be challenging, too, to explain the fines to a board of directors, he says. “But there’s hundreds of different ways you can be cited under the PSM standard and it’s unusual that if OSHA is doing a PSM inspection you don’t get a citation.”

 The PSM standard requires a thorough examination of all potential safety issues in a process hazard analysis (PHA) that must be reviewed every five years at a minimum by a plant’s PSM committee. Standard operating procedures (SOPs) must be written for every part of the process, complete with safety protocols. Organizational charts are needed that show employee roles and responsibilities, and records must be kept to document that employees are properly trained and informed on safety procedures. Process safety information (PSI) must be available for each component of the system, including, but not limited to material safety data sheets (MSDS). The P&ID must be kept current, showing every process component, and a mechanical integrity program (MIP) in place that insures equipment is regularly inspected and properly maintained.

 The management of change (MOC) process demonstrates the sort of detail and thoroughness required. Palmer uses the example of replacing a tank. “A committee sits down and says here’s the material in the old tank, the valves in the old tank and the features of the old tank that were put in here to provide these safety factors. The new one is different in these five ways: Do they provide all of the old safety features? Will they provide more? Will it interact properly with the rest of the system? People on the committee pick apart potential problems and there’s notes being taken.” The MOC file for that change to the process should include documentation that the manufacturer agrees that the features on the new tank are equal to or superior to the old, he says, and that features on the new won’t interact adversely on other parts of the process.

 Another problematic area can be the prestartup safety review (PSSR), which documents that new systems are properly installed and all pertinent operating, maintenance and safety procedures are valid and in place and employees are properly trained. While such a comprehensive requirement for a new plant, or newly installed system, seems achievable, the standard applies all the way back to when the plant was initially built. “The frustration is I can’t recreate history,” Palmer explains. “I can’t, as the person in charge today, go back and correct the things that weren’t done yesterday.” He has seen cases where OSHA wants to go back several years, even to startup. “You can imagine if you have to have every valve, every pipe, every tank, what model, what make, what number, and all the details that are in the system, and you can’t take the system apart and find those things if it wasn’t done right initially.” It is particularly frustrating on acquisitions, he says. “The current ownership and management is being held responsible for the sins of the past.” There has been some success, through not conclusive, with legal challenges seeking a statute of limitations for OSHA, he adds.

 With such a daunting standard, what are managers to do if they are concerned about holes in their PSM program?

 A number of engineering firms include safety in their consulting services and several companies specialize in safety program management. Many plants manage their safety programs in-house, but rely on these contractors for regular safety audits to help in identifying problem areas.

 Palmer says on occasion, managers express concern that such audits will provide a roadmap for a future OSHA inspector. Involving an attorney can shield some information under attorney/client protection, he says. Part of a PSM program, though, is demonstrating that employers are regularly assessing process hazards, identifying potential problems and taking steps to fix them.

 Palmer has other pointers for ethanol producers. When OSHA comes knocking, the employer has the right to know why they are there, he says. “If an employee complains about a forklift being unsafe, the goal is to take them to that forklift and show them the forklift is not unsafe and close the inspection at that point, rather than it expanding into PSM, grain handling and a wall-to-wall inspection.”If an ethanol producer negotiates a settlement with OSHA to reduce penalties, Palmer recommends the producer get a list of specific steps needed to address the violation that can be checked off as they are completed.

 It is important to know that the average OSHA inspector is not qualified to do a full PSM inspection, he adds. “If you are prepared, you’ve got your documentation, your manuals, you’ve got a person who is knowledgeable and is on the ball with respect to PSM, who shows significant training and knows the answers and is prepared in an organized fashion to lay out those answers—the inspector is likely to accept the documentation and may want to look at one component of the process, but not do a full blown inspection.”

 Having an inspection expand to full-blown will require OSHA to bring in a qualified PSM team leader, he adds. “These are individuals who have worked in the chemical or petroleum industries and they are very familiar with large refineries. They will expect an extreme amount of detail in process safety management, and will be looking under every rock. If there’s a valve missing on your P&ID, you’re going to get a citation for it. If your diagram doesn’t show everything—you can imagine if it’s not drawn to the absolute detail—multiple citations for that. Anytime you made a change and you didn’t go through change management, a citation for that.

 ”When asked whether such detailed PSM standards are considered onerous, Dale replies, “They are. They do require a great deal of employer attention. They were set out that way.” Process industry facilities are very complex, he points out. “You have various forms of energy coming together—electrical, thermal, mechanical—all in a combined process. Unless there’s an organized method in which you track things like maintenance and review hazards, things tend to get away from some employers.” While good documentation can be onerous, he admits, it helps with addressing issues before they become a problem or an incident. “World history is replete with examples. By the very nature of these facilities, if something goes wrong, it can go catastrophically wrong.

 ”Both attorneys say the ethanol industry is proactive and genuinely concerned with providing safe work environments. “OSHA has the ability to factor into its penalty the good faith of the employer,” Dale says. In the view of the inspector, “is this an employer that seeks to do the minimum or is this a very comprehensive program? It’s audited regularly and any issues that are identified are promptly rectified. Those kinds of things can have an effect on penalty levels and just overall perspective of OSHA as to whether this is an employer that means business about the health and safety of workers.”

Author: Susanne Retka Schill
Senior Editor, Ethanol Producer Magazine