Industry Speaks Out On PHMSA’s Penalty Proposals, Other Actions

November 2012, Vol. 67, No. 11

An OSHA official involved in the discussions explains that a pure, performance-based rule would simply tell companies "have no accidents." The OSHA does have performance-based elements in its process safety management (PSM) rule established in 1992. It affects companies who have certain amounts of hazardous chemicals at their facilities. Energy refining and production companies are covered but not transmission pipelines, which are covered by other general industry and constructions rules issued by the OSHA.

The OSHA official said her agency has no plans to change any regulations at the moment and has no timeframe in place for making such a decision.

David Miller, director of standards for the American Petroleum Institute, who was at the workshop on Sept. 20-21 in Texas City, TX, says, "Anytime you get five top officials from five federal agencies together talking about safety-related issues, that is always a good thing."

"We thought it was positive to have the discussion about the right mix of performance- and prescriptive-based regulation, which is to say a more balanced approach to regulation," Miller continues. "At the end of the day, how much comes out of this is hard to say." He says the typical regulatory model is that an accident happens and a regulatory agency reacts in its traditional manner, which is to say with a prescriptive rule. He calls the workshop an effort to have a "more nuanced discussion" and "look at the bigger picture."

But many of the federal officials making presentations at Texas City sounded a bit dubious about changing their approach to regulation given the shortcomings they pointed to in some of current quasi "performance-based regulations."

The PHMSA's integrity management program for transmission pipelines has some performance-based elements, primarily the responsibility for companies to assess risks of pipelines in high-risk areas. At the Texas City meeting, Linda Daugherty, the Deputy Assistant Administrator at the PHMSA, said, "Recent events illustrate a weakness in managing risks." She explained that those weaknesses include inadequate: 1) knowledge of risk characteristics including recordkeeping, 2) processes to analyze interactive threats, 3) evaluation of ways to reduce or mitigate consequences, 4) process to select risk control measures, 5) lack of objective, systematic approach.

She added, "Industry generally asks for performance-based regulatory approaches until you give it to them."