General Duty vs. PSM/RMP: Is there a benefit to dropping below the 10,000lb threshold?

Several times a year I get a phone call or an email from a client that wants to lower the NH3 inventory below the federal 10,000lb threshold so they are no longer subject to the PSM/RMP rules. It’s a conversation I’ve had nearly a hundred times over my career, so I thought it would be worth writing down my thoughts on this subject for posterity. The factors break down into three categories: Logistical, Regulatory and Safety.

Logistical: If you’re close to the 10,000lb threshold, you may be able to reduce the NH3 inventory below the regulatory line of 10,000lbs., but there are some things worth considering:

Is it safe? A system operating below the level it was designed to operate is often called starved. Starved systems can be unsafe due to the increased rates of vapor propelled slugging and low vessel levels causing pumps to cavitate. This isn’t something you want to do without consulting a design engineer.

Can I keep it at this level? If we dropped our system inventory to 9,900lbs., we are going to have to ensure it stays below the 10,000lb threshold or we can end up in a regulatory nightmare. Future charges (to replace losses) will require careful calculation to ensure that we stay on the right side of the threshold. This can be done through a good inventory management program, but it’s something you’re going to want to plan for.

Regulatory: If we drop below the 10,000lb threshold, we can remove ourselves from the federal RMP & DHS registries, but we will still have to meet the OSHA and EPA General Duty requirements for our NH3 refrigeration system.

To quote OSHA:

“Employers can be cited for violating the General Duty Clause if there is a recognized hazard and they do not take reasonable steps to prevent or abate the hazard.”

When we discuss things like “recognized hazard” we are discussing the things that are outlined in appropriate RAGAGEP. What would be RAGAGEP for an NH3 refrigeration system below 10,000lbs? At a minimum, ALL the IIAR standards & bulletins as well as the IIAR ARM (Ammonia Refrigeration Management) program. What does that mean?

  • The system design still has to comply with IIAR 2 Standard for Safe Design of Closed-Circuit Ammonia Refrigeration Systems
  • The installation still has to comply with IIAR 4 Installation of Closed-Circuit Ammonia Refrigeration Systems
  • The startup and commissioning still has to comply with IIAR 5 Start-up and Commissioning of Closed-Circuit Ammonia Refrigeration Systems
  • The process safety information and maintenance program still has to comply with IIAR
    • Bulletin 108 Guidelines for: Water Contamination in Ammonia Refrigeration Systems
    • Bulletin 109 Minimum Safety Criteria for a Safe Ammonia Refrigeration System
    • Bulletin 110 Guidelines for: Start-Up, Inspection and Maintenance of Ammonia Mechanical Refrigerating Systems
    • Bulletin 114 Guidelines for: Identification of Ammonia Refrigeration Piping and System Components
    • Bulletin 116 Guidelines for: Avoiding Component Failure in Industrial Refrigeration Systems Caused by Abnormal Pressure or Shock
    • The upcoming IIAR Standard 6 Inspection, Testing, and Maintenance of Closed-Circuit Ammonia Refrigeration Systems which will replace all the above bulletins
  • The operating procedures still has to comply with IIAR 7 Developing Operating Procedures for Closed-Circuit Ammonia Mechanical Refrigerating Systems
  • The overall system safety management program will have to comply with the IIAR ARM program which is about 90% of the paperwork burden of a full PSM/RMP program.

If you are looking at that list and thinking “There’s almost no benefit to dropping below the 10,000lbs mark from a regulatory standpoint” you aren’t wrong. There is ONE and it’s fairly minor: Generally speaking, your potential fines for violating OSHA’s or EPA’s General Duty clause are smaller than those for violating PSM/RMP. I say generally, because that’s not always the case. As an example, here’s a consent agreement for a $185,000 fine under the EPA’s General Duty clause.

Let me summarize the regulatory situation of a General Duty NH3 refrigeration facility in a single sentence: A General Duty NH3 refrigeration system is going to have 95% of the regulatory burden of a PSM/RMP facility (and thus have to do the same things as a PSM/RMP facility would) but you won’t have the well-understood PSM/RMP structure to help manage that regulatory burden.

Safety: In theory, any inventory reduction provides some small measure of reduced risk. In practical terms, though, there is usually very little effect. Often, due to the way our systems are designed (and the way the RMP scenarios are calculated) there is no change at all in the calculated area of effect of a release scenario*. Also, it’s important to keep in mind that very small amounts of NH3 can pose a danger to your personnel – it doesn’t matter that you’ve reduced your inventory from 11,000lbs to 9,900lbs when a release of 5lbs can pose mortal danger to a technician.

In my experience though, the real danger of reducing your inventory below the threshold is that facilities that do so almost always give their General Duty compliance a lower priority than they gave to their PSM/RMP compliance. These facilities become less safe because they believe that they are less exposed to OSHA and the EPA.

Conclusion: Yes, lowering your inventory can produce a slight increase in inherent safety and a lower regulatory exposure, but in practice, it usually does very little other than give the facility an excuse to de-prioritize safety and compliance.

I work with many companies with National and International brands. Nearly ALL of these companies treat their General Duty facilities as if they have over the 10,000lb threshold, for the same reason: Brand protection – You never want to be in a position where you are making the argument that you didn’t provide the highest level of safety to your employees and your community because you didn’t have to by law!

* No, Worst-Case and Alternate release scenarios are not required by General Duty plants, but I always calculate and map them so the facility understands the possible ramifications of a release on their community.

About Brian Chapin

PSM / RMP Compliance Consultant
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