NH3 Reg Rejected

OMAHA (DTN) -- A federal agency violated the law in its attempt to tighten regulations on anhydrous ammonia following the ammonium nitrate explosion and tragedy that killed 15 people at West Fertilizer Co. in West, Texas, in April 2013, the U.S. Court of Appeals for the D.C. Circuit ruled Friday.

The Occupational Safety and Health Administration, or OSHA, should have posted the proposed regulation changes for public comment and followed the procedures such a comment period usually entails, the court said.

Instead, OSHA issued an enforcement memorandum on July 22, 2015, in an attempt to remove an exemption anhydrous ammonia retail facilities enjoy to the agency's process safety management, or PSM, standard. The PSM applies to fertilizer and other facilities that handle hazardous materials.

The Agricultural Retailers Association and the Fertilizer Institute sued OSHA in May after the agency narrowed the retailer exemption. The groups, in a press statement Friday, estimate the court's ruling saves retailers some $100 million in compliance costs.

OSHA had estimated its revised definition would have subjected up to 4,800 additional facilities to the PSM standard.

The appeals court ruled OSHA should have posted for public comment the proposed changes to the PSM standard.

"Under our decisions, when an action by OSHA corrects a particular hazard, as opposed to adjusting procedures for detection or enforcement, it amounts to a 'standard,'" the court said in its opinion.

"Applying that understanding, we conclude that the agency's narrowing of the substantive scope of the exemption for retail facilities qualified as issuance of a 'standard.' We therefore have jurisdiction and OSHA was required to adhere to notice-and-comment procedures."

Daren Coppock, president and chief executive officer of the Agricultural Retailers Association, said in a statement the ruling shows why it was important for federal agencies to follow procedure.

"This administration has broadly and unjustly avoided proper procedure to construct and reinterpret myriad federal regulations without public input," he said.

OSHA created the PSM standard in 1992 to protect workers from hazardous chemicals such as anhydrous ammonia. That standard always has exempted "retail facilities" from the requirements.

The exemption, according to an OSHA letter shortly after the 1992 standard was drafted, applies to "an establishment...at which more than half of the income is obtained from direct sales to end users."

Agricultural retailers were befuddled as to why OSHA responded to the tragedy in West, Texas, which was caused by an ammonium nitrate explosion, by pushing tougher regulates on anhydrous ammonia, which played no part in that explosion.

OSHA had said narrowing the exemption would eliminate "policy and regulatory gaps" so as to help "prevent incidents like the West Fertilizer explosion." The appeals court, however, did not rule on the merits of OSHA's proposed changes to the standard.

U.S. Sen. Deb Fischer, R-Neb., a member of the Senate Environment and Public Works Committee, said in a statement Friday, "Now, our ag producers will face one less hardship so they can focus on feeding the world and providing for their families."

In July, Fischer joined Sen. Heidi Heitkamp, D-N.D., in introducing legislation to stop OSHA's narrowing of the exemption.

During a hearing of the U.S. Senate Subcommittee on Regulatory Affairs and Federal Management Friday, Heitkamp called on OSHA to delay the standards.

"Farmers and retailers in North Dakota have made it clear that these new federal standards would hurt retailers, family farmers and rural economies," she said.

"More than 30 retailers in North Dakota alone could stop carrying this critical fertilizer in October if these new standards go into effect. And it's no secret why -- complying with the new standards could cost as much as $50,000 per facility, according to North Dakota's Department of Agriculture."

WEST INCIDENT

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.

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.

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

Follow him on Twitter @toddneeleyDTN

(GH/AG)

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