November 25, 1996

Douglas J. Kalinowski, CIH, Chief
Department of Consumer & Industry Services
Bureau of Safety and Regulation
Division of Occupational Safety and Health
3423 N. Martin Luther King, Jr. Boulevard
P.O. Box 30195
Lansing, Michigan 48909

Dear Mr. Kalinowski:

This letter is a response to a request made by the Michigan Occupational Safety and Health Administration (MIOSHA), to the Region V Office of the Federal Occupational Safety and Health Administration (OSHA), regarding citations which were issued to Heinz, U.S.A. Michigan is a State Plan State which has adopted the identical Federal OSHA Process Safety Management (PSM) standard. See 46 FR 42943; 38 FR 27338.

Background summary. From July 24 through August 22, 1996, William Bosch, an Industrial Hygienist (IH) for MIOSHA, inspected a Heinz vinegar and pickle plant located in Holland, Michigan. On August 30, 1996, as a result of the inspection, MIOSHA issued one serious citation for alleged Process Safety Management (PSM) violations of 29 C.F.R. 1910.119, and, one other-than-serious citation for an alleged confined space violation of 29 C.F.R. 1910.146. The PSM violations included failure to develop a written plan of action under Section 1910.119(c)(1), failure to conduct a process hazard analysis under Section 1910.119(e)(1), failure to develop written operating procedures under Section 1910.119(f)(1), failure to establish and implement written procedures to maintain the on-going integrity of process equipment under Section 1910.119(j)(2), failure to develop and implement a hot work permit system under Section 1910.119(k)(2), failure to establish and implement written procedures to manage changes under Section 1910.119(l)(1), and, the failure to certify that an evaluation of compliance with the PSM standard had been conducted under Section 1910.119(o). On September 19, 1996, Heinz appealed both citations. Regarding the violation of Section 1910.146, Heinz challenged only the abatement date. Heinz also challenged the applicability of the PSM Standard claiming that its vinegar-making process falls within the exception under Section 1910.119(a)(1)(ii)(B). Because Heinz substantiated its claim with letters of interpretation issued by both the National Office of OSHA and the Vinegar Institute, MIOSHA requested that an interpretation be made by the National Office regarding the applicability of the PSM standard to this case.

Summary of facts. From the inspection findings made by IH Bosch and the appeal filed by Dave Barud, Manager of Compliance Audits for Heinz, there is no dispute of the essential facts. Ethanol (denatured ethyl alcohol) is a flammable liquid that, through processing, is converted to vinegar. At the Holland plant, ethanol is received by rail car and transferred to two 25,000 gallon atmospheric tanks for storage. More than 10,000 pounds are maintained in inventory. For processing vinegar, approximately 2,500 gallons of the ethanol is first pumped into one of six 19,000 gallon atmospheric blending tanks which contain approximately 11,000 gallons of water. Additional water is then added until the ethanol is diluted to a 12.5% or 25 proof solution. After thorough agitation, using either compressed air or a venturi-type recycle pump, the diluted solution is pumped to biological fermentation tanks where the conversion to vinegar is completed.

Basis of appeal. Two arguments are made in Heinz's appeal which challenge MIOSHA's findings that the vinegar-making procedures are a single process covered by the PSM standard. First, Heinz maintains that the dilution of ethanol is not a "process" as defined by the standard, and, because the diluted ethanol is combustible and not flammable, the standard does not apply to this segment of the vinegar-making procedure. Heinz further maintains that the storage and transfer of ethanol from the atmospheric tanks to the blending tanks is a separate process from the dilution segment and, therefore, the process falls within the exception to the requirements of the PSM standard. The Vinegar Institute also advocates these positions.

Analysis. The PSM standard defines a "process" as any activity involving a hazardous chemical including any use, storage, manufacturing, handling, or the on-site movement of such chemicals, or combination of these activities. Furthermore, any group of vessels which are interconnected such that a highly hazardous chemical could be involved in a potential release shall be considered a single process. See 29 C.F.R. 1910.119(b). Heinz's vinegar-making procedure consists of a combination of activities involving flammable ethanol: storage, use, and on-site movement. Also, its storage tanks are interconnected to blending vessels such that flammable ethanol can be involved in a potential release. Therefore, OSHA regards Heinz's vinegar-making procedures as a single process as defined by the plain language of the standard.

Heinz's argument that its vinegar-making procedures should be regarded as separate or distinct processes is contrary to both the plain language of the standard and to OSHA's intent. The preamble to the standard provides guidance ". . . . [A] new sentence has been added [to the standard] to clarify the fact that interconnected and nearby vessels containing a highly hazardous chemical would be considered part of a single process . . . ." 57 FR 6356, 6372. In this case, because there are interconnected vessels through which there is on-site movement of flammable ethanol, OSHA regards this as a single process under the standard.

The exception under Section 1910.119(a)(1)(ii)(B) applies only to storage and transfer activities. During its rulemaking, OSHA found that the storage and transfer activities of flammable liquids that are kept below their atmospheric boiling point without benefit of chilling or refrigeration do not have the potential for a catastrophic release. See 57 FR 6367. OSHA interpretations of Section 1910.119(a)(1)(ii)(B) written to Baker Performance Chemicals, Inc. and to Landel, Ripley & Diamond Attorneys, which were submitted by Heinz, clearly show that the exception is applicable only to storage and transfer. The exception is not applicable to a process which, in addition to storage in atmospheric tanks and associated transfer, includes any one or combination of the following flammable liquid activities: use, storage . . . manufacturing, handling, or on-site movement. See also Attached OSHA Interpretations to Metropolitan Manufacturers' Association, December 8, 1995; USA Engineering Inc., January 11, 1996; EMPE Inc., December 12, 1995; Hudman & Associate,.Inc., August 11, 1995; and The Rubber Manufacturers Association, May 3, 1993.

Whether the dilution phase may be segregated from the vinegar-making process has been answered in OSHA correspondence to Reskitt & Coleman Inc., used by Heinz to substantiate its appeal. Referencing the applicability of the PSM requirements to an employer's dilution program for hydrogen peroxide, OSHA indicated that an effective dilution program must preclude an otherwise covered concentration of hydrogen peroxide from being in the process at any particular time.

Heinz submitted several OSHA interpretations of the PSM standard which dealt with cargo tank motor vehicle (CTMV) activities that were not covered under the standard. The OSHA correspondence to Reskitt & Coleman explains that CTMVs are covered by OSHA standards only to the extent that they are not covered by DOT. Thus, Heinz is wrong to compare its vinegar-making procedure to operations involving CTMVs because transportation, which includes the operating activities of CTMVs such as loading, unloading, and blending, falls under Department of Transportation (DOT) jurisdiction and is not covered by OSHA by operation of law, 29 U.S.C. section 653(b)(1). In fact, the use of the word "movement" in the proposal to the standard was changed to "on-site movement" to "clarify that transportation falling under DOT jurisdiction is not covered." See 57 Fed. Reg. 6372. In this case, none of Heinz's vinegar-making procedure involves transportation activities that would be excluded from OSHA jurisdiction.

Conclusion. The potential for a release of flammable ethanol is present where there is on-site movement of ethanol interconnected with other vessels as part of a process. That flammable ethanol is blended with water to produce a diluted substance which is combustible but not flammable does not remove Heinz's compliance obligations under the PSM standard.

Thank you for your inquiry. If we can provide further assistance, please contact the Office of General Industry and Compliance, Ron Davies, 202-219-8031.

Sincerely,



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