February 7, 1996

Mr. David A. Berg
GATX Terminals Corporation
500 West Monroe Street
Chicago, IL 60661-3678

Dear Mr. Berg:

This is in response to your July 28, 1994, letter requesting interpretation of the Process Safety Management (PSM) of Highly Hazardous Chemicals (HHCs) Standard, 29 CFR 1910.119. Specifically, you requested clarification on a number of PSM issues which may be applicable to an array of petroleum and chemical products that GATX handles as a "for hire public terminal lessor at facilities which are capable of receiving and shipping bulk liquids by ship, rail, barge, and truck and some of which are connected to major petroleum pipelines." Your questions and our replies follow. Please accept our apology for the delay in responding.

Question 1:

Aside from those chemicals specifically listed in the regulations, GATX Terminals has determined that the majority of its operations do not fall under the PSM regulation as a result of the 1910.119(a)(1)(ii)(B) exception that states "...flammable liquids stored in atmospheric storage tanks or transferred which are kept below their boiling point without benefit of chilling or refrigeration...."

GATX's business is the storage and transfer of chemical and petroleum products. A fundamental part of this storage/transfer process includes commingling batches of finished products, such as gasoline, and providing additives to products prior to, and in some eases during, the actual transfer. GATX feels that this "blending" of finished products and additives falls within the storage and transfer exception as stated above. Are we correct in our assumptions?

Reply:

The atmospheric tank exception at 1910.119(a)(1)(ii)(B) is applicable to a process which includes only the activities of storage and associated transfer. When a process includes handling, onsite movement, use, or manufacturing activities, this exception would not apply. We recommend that you carefully consider the definition of "process" at 1910.119 to determine further applicability of the PSM standard in situations where flammable liquids are stored at a worksite.

A process which, at any one point in time, contains a threshold quantity or greater amount of a HHC, as specified by the PSM standard, and which includes blending and additive operations in addition to atmospheric tank storage and associated transfer, would be covered by the PSM standard. This interpretation would not apply to gasoline blending and additive operations which are performed within an atmospheric tank which is not part of a process involving other activities described above.

Question 2:

As a result of the storage and transfer of products, such as gasoline and other flammable liquids, from atmospheric storage tanks to tank trucks, rail cars, and barges, GATX is required to utilize vapor recovery and incineration equipment. GATX has determined that vapor recovery and incineration equipment used in conjunction with the storage and transfer of flammable liquids is also excepted from coverage by the PSM regulations. Are we correct in our assumption?

Reply:

Vapor recovery and incineration equipment interconnected with an atmospheric tank is considered a single process. As discussed in the reply to Question 1, the exception at 1910.119(a)(1)(ii)(B) would not apply, because this process includes onsite movement and handling in addition to atmospheric tank storage and associated transfer of flammable liquid activities.

Question 3:

If GATX is not correct in its assumptions in Question 2 and vapor recovery/incineration equipment is covered under the PSM regulations, it would seem to make the PSM exception moot due to the "interconnected" design of atmospheric storage tanks, transfer racks, and vapor recovery equipment. How can GATX keep its vapor recovery/incineration equipment outside of the PSM regulations?

Reply:

As noted in the reply to Question 2, vapor recovery and incineration equipment interconnected with an atmospheric tank is considered a single process. Unless additional, unaddressed circumstances require coverage, a process such as this would not be covered by the PSM standard if it always contains less than a threshold quantity, that is, 10,000 pounds (4535.9 kg) of flammable liquids.

Please note that threshold quantity is determined by the aggregate amount of flammable liquids contained in a process at any one point in time. Also, with reference to the definition of "process" at 1910.119(b), vessels which are located, such that an HHC in one would not be involved in the potential release as a result of an incident in the other, would be considered part of separate processes. When feasible, OSHA encourages an employer to use these alternatives.

Question 4:

A public storage tank farm consists of multiple storage tanks, transfer racks, and physically "interconnected" piping. GATX has made the assumption that, as long as physical and administrative controls are designed into the system, that is, valves, check valves, and operational management programs for product transfers, the entire public terminal would be excepted from the PSM regulation, even if one tank and its associated piping is covered by the regulation (containing a specific chemical on the list, such as formaldehyde). Are we correct?

Reply:

For the purposes of the "process" definition at 1910.119(b), "...any group of vessels which are interconnected and separate vessels which are located such that a highly hazardous chemical could be involved in a potential release shall be considered a single process." The boundaries of the covered process would be extended to include quantities of flammable liquids stored in separate atmospheric tanks located such that there is reasonable probability that an explosion in the covered process would affect the nearby atmospheric tanks and provide a potential for a catastrophic release of the flammable liquids stored inside. (See the preamble discussion in the middle column of page 6372 of the PSM Final Rule published in the Federal Register, Volume 57, Number 36, on Monday, February 24, 1992, a copy of which is enclosed.) This interpretation is predicated on the assumption that an event such as an explosion can take place in the covered process notwithstanding engineering and administrative controls required by the PSM standard to prevent catastrophic releases of HHCs.

Question 5:

Wastewater treatment systems are a normal part of a public terminal operation. These systems usually contain a mixture of products and require the introduction of additive compounds and other processes such as air filtration and/or ultraviolet treatments. GATX assumes that as long as these products are conducted in atmospheric storage tanks, they are also excepted from the PSM regulations as long as there are no specific chemicals as specified on the PSM list. Correct?

Reply:

You have not provided sufficient information to respond to your question directly. If a wastewater treatment process contains a threshold or greater amount of flammable liquid(s) or gas(es), or a toxic or reactive chemical listed in Appendix A in the PSM standard, it would be a covered process as stipulated in the reply to Question 3 above.

Question 6:

GATX tank farms are, in some cases, interconnected via pipeline to a refinery or a chemical facility. Products received from these facilities can be finished products or blend stocks that will be used at a later time. GATX has assumed that even though these products are "interconnected" to an adjacent refinery and manufacturer, the process is excepted for GATX due to the fact that the products are being stored in atmospheric storage tanks, are not on the specific list of chemicals with threshold quantities, and are physically separated from the refinery and manufacturer's process via a series of valves on their property as well as GATX's, and via a series of testing and line setups. Are we correct in our assumption?

Reply:

Applicability of (and, when applicable, compliance with) the PSM standard would be determined on the following basis:

An employer has adjacent worksites. These adjacent work sites are considered one worksite, because they are under the control of one employer. Any group of vessels which are interconnected and any separate vessels which are located such that a highly hazardous chemical could be involved in a potential release on either or both worksites is considered a single process.

Two different employers have adjacent worksites. Each of these worksites is considered a separate worksite, because each is under the control of a different employer. Any group of vessels on one worksite which are interconnected to any group of vessels on the other worksite and any separate vessels which are located such that a highly hazardous chemical could be involved in a potential release are considered separate from any group of vessels on the other worksite.

In summary, the applicability of the PSM Standard with respect to adjacent worksites is determined on an employer basis, not on a worksite basis.

Question 7:

If a tank was "designed for" storage above atmospheric pressure but is being used at atmospheric pressure, does this meet the definition for excepted under the atmospheric storage provision of the regulation?

Reply:

Under paragraph 1910.106(b)(1)(iii)(c), low pressure tanks and pressure vessels may be used as atmospheric tanks for storage of flammable liquids.

We appreciate your interest in employee safety and health. If we can be of further assistance, please contact Mr. Ronald Davies of my staff, telephone 202 219-8031, extension 110.

Sincerely,



John B. Miles, Jr., Director
Directorate of Compliance Programs