July 17, 2006

Mr. Charles H. Morgan
One Atlantic Center
1201 West Peachtree Street
Atlanta, Georgia 30309-3424

Dear Mr. Morgan:

Thank you for your January 12, 2005 letter to the Occupational Safety and Health Administration's (OSHA's) Directorate of Enforcement Programs (DEP). We apologize for the delay in our reply. Our response is based on information you provided in your letter to me and follow-up communication with a member of my staff (phone call — February 22, 2005 and email — March 10, 2005). You have questions regarding OSHA's Flammable and Combustible Liquids Standard, 29 CFR 1910.106 related to pressure vessels used at oil and gas extraction/production facilities. Please be aware that this response may not be applicable to any question or situation not delineated within your original correspondence. Your specific issues are related to OSHA's requirements for pressure vessel safety. Please note that some of your scenarios and questions have been paraphrased.

Scenario: The following facts provide the basis for your questions:

• The facilities in question are on-shore oil and natural gas extraction/production facilities;
• These facilities do not fall under the requirements of OSHA's Process Safety Management of Highly Hazardous Chemicals; Explosives and Blasting Agents standard (PSM), 29 CFR 1910.119 (i.e., they are not gas plants, nor are they classified under Standard Industrial Classification code — SIC 1321);
• The pressure vessels serve to separate the crude oil/natural gas/water, and at some locations they dehydrate the natural gas;
• The pressure vessels are not used as storage tanks;
• After leaving the pressure vessels the oil and water are piped to storage tanks, and the natural gas is either sold or transported via pipeline for further processing;
• The size of the pressure vessels at these facilities varies from 16 - 60 inches in diameter and from 10 to 15 feet in length;
• The normal operating pressures typically range from 50 to 1,000 psig;
• The contents of these pressure vessels typically are "flammable liquids" as defined by 1910.106(a)(19);
• The pressure vessels at these facilities were constructed over a period of many years (1940s to 1990s). As a result, some of the vessels were constructed prior to the promulgation of 1910.106;
• Many of the pressure vessels at these facilities were constructed in accordance with the edition of the ASME Boiler and Pressure Vessel Code (Code) that was in effect when these vessels were constructed — each of these pressure vessels possess a manufacturer's nameplate that is properly stamped with the Code symbol (generally a "U" stamp).
• Some pressure vessels at these facilities may not have been constructed in accordance with the Code. As a result, these pressure vessels may not possess a manufacturer's nameplate stamped with the Code symbol; and
• Due to the age of some of the vessels, the transfer of ownership of some vessels, or the closing of offices containing the records related to some vessels, your client is not in possession of all the necessary documentation that would establish that all the vessels in question were built in accordance with the Code. You state that it is highly unlikely that your client would be able to obtain the documentation.
   

Background on PSM and Oil and Gas Production Facilities

OSHA stated in a 2000 memorandum to its Regional Administrators¹ that it would not enforce its PSM standards at oil and gas production facilities pending the outcome of an economic analysis with respect to the feasibility of compliance with PSM. Following the resolution of this issue, the oil and gas production facilities described above may be covered by the PSM standard.

For these reasons, our responses to your questions below do not address the application of any PSM requirements for pressure vessels.

Question 1: Are the pressure vessels located at oil and gas extraction/production facilities (as described in the scenario above) covered by the requirements of 1910.106 or some other OSHA standard that would require these pressure vessels to be built in accordance with or otherwise comply with the Code?

Note: The Code requirements relative to flammable and combustible liquids appear in only two provisions in 1910.106: 1910.106(b) and (i). By its terms, 1910.106(b) applies to "tank storage." Because the pressure vessels in question are process vessels and not storage vessels, it does not appear that 1910.106(b) would apply to the vessels in question. Similarly, by its terms, 1910.106(i) applies to "refineries, chemical plants, and distilleries." The pressure vessels in question are not used in refineries, chemical plants, or distilleries as those terms are specifically defined in 1910.106(a). Consequently, it would seem that 1910.106 does not impose any requirements regarding the Code on the vessels in question.

Response 1: We agree with your analysis above. 1910.106(b) and 1910.106(i) do not apply to the design/fabrication/construction/installation (construction) of pressure vessels used for oil and gas production processing purposes such as you described, i.e. separation of oil/water/gas and the dehydration of natural gas. However, if pressure vessels are used to store flammable or combustible liquids, 1910.106(b)(1)(v)(b) mandates that Code pressure vessel construction requirements apply.

However, due to the serious hazards employees may be subject to as a result of the failure of pressure vessels used for oil and gas production processing purposes, an employer may be subject to Section 5(a)(1) of the OSH Act which requires employers to furnish a place of employment which is free from recognized hazards that are likely to cause death or serious physical harm to their employees.

The serious hazards related to the catastrophic failure of pressure vessels include being struck by high energy materials from the vessel and its contents, fire/explosion, and, depending on the vessel's contents, the release of toxic or corrosive materials. Pressure vessels can fail due to hazardous conditions related to their design, construction, operation, or in-service degradation. As a result, these production facilities, including the pressure vessels you describe, must be constructed properly to reduce the potential of a fire/explosion, high energy event, and/or a toxic or corrosives release from causing likely serious harm or death to employees. The mechanical integrity of production system equipment, including pressure vessel's construction is a recognized safe guard, especially in the petroleum industry, for protecting employees from serious hazards associated with the use of these vessels.

ASME and the American Petroleum Institute (API) have long recognized the serious safety considerations associated with the construction of pressure vessels. Both ASME and API recognize the Code as a recognized safe practice or good engineering practice for the construction of pressure vessels. Some API documents which acknowledge the Code and its construction requirements as a primary safeguard for the mechanical integrity of pressure vessels include:

1. API RP 74², Section 2 — References list the Code as an industry code, practice or standard. This section also refers to API Spec 12J³ and API Spec 12L⁴. Section 7 — (Design), identifies the design of pressure vessels as critical equipment which are essential in preventing the occurrence of, or mitigating the consequences of an uncontrolled event;
    
2. API 12J is an industry specification which covers among others the minimum requirements for the design and fabrication of oilfield type oil-gas-water separators used in the production of oil and/or gas. This specification contains many references to Code requirements such as construction, materials, testing, nameplate, stamping, etc;
    
3. API 12L is an industry specification that includes the minimum requirements for vertical and horizontal emulsion treaters. These treaters are pressure vessels used in the production industry for separating oil-water emulsions and gas. The function of these treaters is to dehydrate or dewater the produced crude oil to a specified level. This specification also contains many references to Code requirements such as construction, materials, corrosion, testing, inspection, nameplate, etc;
    
4. An API pressure vessel inspection code⁵ (API 510) applies to among others, pressure vessels constructed in accordance with the API/ASME Code for Unfired Pressure Vessels for Petroleum Liquids and Gasses, Section VIII of the Code. Additionally, API 510 applies to pressure vessels used for "Exploration and Production" for example producing, lease processing and treating liquid petroleum, natural gas and associated salt water. API 510 includes definitions for ASME Code and construction code. In these definitions, API states that the ASME Code was written for new construction of pressure vessels. Construction Code is said by API to be the code or standard to which the vessel was originally built, such as API/ASME.
   
   API 510 states that in 1931, API and ASME created a joint committee to formulate and prepare a code for safe practices for pressure vessels in the petroleum industry. These safe practices include the design and construction of pressure vessels. That code was titled the API/ASME Code for Unfired Pressure Vessels for Petroleum Liquids and Gasses and was first published in 1934. API/ASME stated that they believed the Code actually applied to pressure vessels in most services.
    

The hazards related to the catastrophic failure of pressure vessels due to unsafe construction are recognized by the oil and gas industry (upstream and downstream) and by the petrochemical and refining industries. This hazard is the same whether the pressure vessel is used for exploration and production or is used in a refinery/chemical plant. To control the hazards related to the catastrophic failure of pressure vessels, employers must assure the mechanical integrity of their pressure vessels. One feasible means of abating this hazard would be to construct pressure vessels to Code requirements.

Question 2: What are the effective date(s) of any OSHA standard(s) that would require pressure vessels located at oil and gas extraction/production facilities to be built in accordance with or otherwise comply with the Code?

Response 2: Without more information about the specific nature and purpose of the pressure vessels located at oil and gas extraction/production facilities we cannot list all the standards that would apply in these situations. However, specific OSHA standards that might apply to the operations you describe, based on factors such as the material contained in the vessel or the specific use of the vessel, may include, but are not necessarily limited to, 29 CFR 1910.106 and 1910.169. For pressure vessels required to comply with 1910.106, Flammable and Combustible Liquids, and those required to comply with 1910.169, Air Receivers, the effective date was February 15, 1972 [36 FR 10466].

Question 3: Do the applicable standards, if any, apply retroactively to pressure vessels constructed before the effective date of the standard or are any such pressure vessels grandfathered; i.e., exempt from the specific requirements that the pressure vessels be built in accordance with or otherwise comply with the Code?

Response 3: Any pressure vessels built before the effective dates of any applicable OSHA standards must comply with the 1968 edition of the Code, where Code compliance is required by a specific standard. OSHA addressed this issue in a previous Memorandum⁶ to one of its Regional Administrators in which it stated all pressure vessels must comply with the 1968 edition of the Code.

Question 4: What do the standards specifically intend when they require a vessel to "be built in accordance with the Code"? Is it OSHA's intention that "built in accordance with the ASME Boiler and Pressure Vessel Code" means that the vessel shall have a manufacturer's nameplate with a valid Code symbol stamp (such as the "U" stamp), or just that the vessel must have been built in accordance with the principles of the Code?

Response 4: Your question highlights the difference between building a pressure vessel "in accordance" with the Code and building a pressure vessel to the "principles" of the Code. Your question suggests that an employer could use a pressure vessel which was constructed to all the requirements of the Code for the pressure retaining portions of the vessel, but if the pressure vessel did not include a manufacturer's nameplate, other required records and a valid Code symbol stamp (nameplate, records and stamping denoted from this point forward as "NRS") it would still comply with the Code because it is built using its principles.

The manufacturer's NRS serves a safety management and hazard control function and is part of the quality control system for construction of a Code vessel. The Code NRS assures employers that they are using pressure vessels that have been constructed to a nationally recognized consensus standard/good engineering practice. Without the quality control system required by the Code through its specifications for NRS, employers cannot determine if they have pressure vessels which have been constructed to a recognized standard, and they cannot assure that their vessels are safe to operate.

OSHA therefore interprets the statement "built in accordance with the ASME Boiler and Pressure Vessel Code" to require that employers use pressure vessels that at least conform with the requirements of the Code, including the proper maintenance and display of NRS.

Scenario: Even though a pressure vessel does not display any NRS information, the employer believes the pressure vessel meets all other requirements under OSHA standards.

Question 5: To determine and document that such vessels are suitable for their intended use, and in doing so, bring the vessels into full compliance with applicable OSHA standards, is it acceptable to conduct an evaluation that would include: 1) appropriate nondestructive testing (for example, radiography, ultrasonic thickness testing, hardness testing, pressure testing, etc.) to ascertain the current condition of the vessel; and 2) detailed code calculations (using appropriately conservative safety factors) for each vessel component to establish the allowable operating parameters for the vessel (specifically, the maximum allowable working pressure and maximum allowable operating temperature)?

Response 5: Pressure vessels which are required by a specific OSHA standard, such as 1910.106(b)(1)(v) or 1910.106(i)(3)(i) and (ii), to be constructed in accordance with the Code must meet all requirements, including NRS requirements of the 1968 version of the Code, as stated in Response 3. Consequently, the employer would not be in compliance with specific OSHA "Code construction" standards when the Code-required NRS is not available.

OSHA recognizes that there are pressure vessels in use, especially older vessels, that do not have the Code-required NRS. We understand that there are some requirements of the Code that cannot be satisfied when the NRS is not available to the employer. For example, it may not be possible to retroactively obtain design and construction aspects such as welding procedures and use of certified welders.

However, an employer may still come into compliance with applicable OSHA standards requiring Code construction where the stamping on a pressure vessel becomes indistinct or the nameplate is lost, illegible, or detached, but traceability to the original data is still possible. Where there is traceability, the owner/employer must have the stamped data replaced. The National Board of Boiler and Pressure Vessel Inspectors provides a procedure⁷ to restamp pressure retaining items/vessels where stamping or nameplate problems exist.

In cases where traceability is not possible, OSHA will treat as a de minimis violation any pressure vessel that is required by a specific OSHA standard, such as 1910.106(b)(1)(v), 1910.106(i)(3)(i) and (ii) to be built in accordance with the Code, but that does not have the Code-required NRS, provided that the criteria below are met:

1. The employer can demonstrate that it has taken reasonable steps to obtain or retain the required NRS. For example, did the employer contact the previous owner in an attempt to obtain the pressure vessel's NRS; if the employer has the pressure vessel number, did it contact ASME or the National Board of Boiler and Pressure Vessel Inspectors to obtain the required records; does the employer have a procedure in place to assure that any new or used pressure vessel it purchases or takes control of has the required CodeNRS; does the employer routinely purchase used pressure vessels without the NRS; and
    
2. The employer verifies the fitness-for-operations integrity of the vessels by utilizing the procedure contained in API 510, Section 6.7. This procedure is for pressure vessels with no "traceability," such as those with no nameplate and minimal or no design or construction documentation. This procedure includes items such as: performing inspections and making necessary repairs; defining design parameters, and preparing drawings and calculations; basing calculations on applicable codes/standards; evaluating unidentified materials; use of radiography; marking with nameplate or stamping; and performing pressure testing.
    

Thank you for your interest in occupational safety and health. We hope you find this information helpful. OSHA requirements are set by statute, standards, and regulations. Our interpretation letters explain these requirements and how they apply to particular circumstances, but they cannot create additional employer obligations. This letter constitutes OSHA's interpretation of the requirements discussed. Note that our enforcement guidance may be affected by changes to OSHA rules. Also, from time to time we update our guidance in response to new information. To keep apprised of such developments, you can consult OSHA's website at http://www.osha.gov. If you have any further questions, please feel free to contact the Office of General Industry Enforcement at (202) 693-1850.

Sincerely,



Richard E. Fairfax, Director
Directorate of Enforcement Programs



[Corrected 4/24/2009]

¹ OSHA Memorandum to Regional Administrators: Subject: OSHA will not enforce the PSM standard at oil and gas production facilities Dated: 04/11/2000 (http://www.osha.gov/pls/oshaweb/owadisp.show_document?p_table=INTERPRETATIONS&p_id=23727) [ back to text ]

² API RP 74, Recommended Practice for Occupational Safety for Onshore Oil and Gas Production Operations, 1st Edition, October, 2001, API [ back to text ]

³ API Specification 12J (Spec 12J), Specification for Oil and Gas Separators, October 1, 1989, API [ back to text ]

⁴ API Specification 12L, Specification for Vertical and Horizontal Emulsion Heaters, 4th Ed., Nov. 1, 1994, API - Exploration and Production Department [ back to text ]

⁵ API 510, Pressure Vessel Inspection Code: Maintenance Inspection, Rating, Repair and Alteration, Addendum 4, August 2003, API [ back to text ]

⁶ OSHA Memorandum to Regional Administrator - Linda R. Anku, From: John B. Miles, Jr., Director, Directorate of Field Operations, 12/16/85, Q&A #5(http://www.osha.gov/pls/oshaweb/owadisp.show_document?p_table=INTERPRETATIONS&p_id=19361) [ back to text ]

⁷ What to Do When a Nameplate Is Lost, National Board of Boiler and Pressure Vessel Inspectors; (http://www.nationalboard.org/NationalBoard/NBIC/NamePlate.aspx) [ back to text ]