EPCRA Tier II & CFATS Reporting 08/29/ All Rights Reserved Sage® Environmental Consulting EPCRA Tier II & CFATS Chemical Storage Programs 1 EPCRA Tier II & CFATS Chemical Storage Programs - How this could impact the upstream O&G industry Overlooked and Under Scrutiny! Rocky Mountain Environmental, Health, and Safety (EHS) Peer Group Quarterly Meeting April 17, 2014 Melissa Hart – Sage St. Louis Office

EPCRA Tier II & CFATS Reporting 08/29/ All Rights Reserved Sage® Environmental Consulting EPCRA Tier II & CFATS Chemical Storage Programs 2 Agenda - West Fertilizer Incident - EPCRA Tier II & CFATS at a Glance - Applicability of Regulations - Issues of Concern - Assuring Compliance - Sage’s Team of Experts

EPCRA Tier II & CFATS Reporting 08/29/ All Rights Reserved Sage® Environmental Consulting EPCRA Tier II & CFATS Chemical Storage Programs 3 EPCRA Tier II/Homeland Security – CFATSWest Fertilizer Incident EPCRA Tier II/Homeland Security – CFATS West Fertilizer Incident On April 17, 2013, an ammonium nitrate explosion occurred at the West Fertilizer Company storage and distribution facility in West, TX while emergency services personnel were responding to a fire at the facility.On April 17, 2013, an ammonium nitrate explosion occurred at the West Fertilizer Company storage and distribution facility in West, TX while emergency services personnel were responding to a fire at the facility. At least 15 people were killed, more than 160 were injured and more than 150 buildings were damaged or destroyed.At least 15 people were killed, more than 160 were injured and more than 150 buildings were damaged or destroyed. Investigators have confirmed that ammonium nitrate was the explosion trigger, but the cause of the initial fire is still unknown.Investigators have confirmed that ammonium nitrate was the explosion trigger, but the cause of the initial fire is still unknown. According to 2012 RMP filing - West stated it stored 540,000 pounds of ammonium nitrate and 110,000 pounds of anhydrous ammonia on the site.According to 2012 RMP filing - West stated it stored 540,000 pounds of ammonium nitrate and 110,000 pounds of anhydrous ammonia on the site. No CFATS filings.No CFATS filings. No Tier II reports were filed.No Tier II reports were filed. The 2012 RMP states “no fire risk or explosion hazard involved at the plant”.The 2012 RMP states “no fire risk or explosion hazard involved at the plant”. Police responded to at least 11 reports of burglaries and five separate ammonia leaks at West Fertilizer Company over the past 12 years, according to 911 dispatch logs and criminal offense reports.Police responded to at least 11 reports of burglaries and five separate ammonia leaks at West Fertilizer Company over the past 12 years, according to 911 dispatch logs and criminal offense reports.

EPCRA Tier II & CFATS Reporting 08/29/ All Rights Reserved Sage® Environmental Consulting EPCRA Tier II & CFATS Chemical Storage Programs 4

EPCRA Tier II & CFATS Reporting 08/29/ All Rights Reserved Sage® Environmental Consulting EPCRA Tier II & CFATS Chemical Storage Programs 5

EPCRA Tier II & CFATS Reporting 08/29/ All Rights Reserved Sage® Environmental Consulting EPCRA Tier II & CFATS Chemical Storage Programs 6

EPCRA Tier II & CFATS Reporting 08/29/ All Rights Reserved Sage® Environmental Consulting EPCRA Tier II & CFATS Chemical Storage Programs 7

EPCRA Tier II & CFATS Reporting 08/29/ All Rights Reserved Sage® Environmental Consulting EPCRA Tier II & CFATS Chemical Storage Programs 8

EPCRA Tier II & CFATS Reporting 08/29/ All Rights Reserved Sage® Environmental Consulting EPCRA Tier II & CFATS Chemical Storage Programs 9 EPCRA Tier II/Homeland Security – CFATS At a Glance… Why do facilities need these services? Regulatory Compliance Regulatory Compliance Civil & Criminal Penalties and/or Lawsuits Civil & Criminal Penalties and/or Lawsuits Property Transactions Property Transactions Baseline Assessments/Baseline Audits Baseline Assessments/Baseline Audits Emergency Responder Protection Emergency Responder Protection Long-Range Environmental Planning & Asset Allocations Long-Range Environmental Planning & Asset Allocations Security Planning Security Planning Sarbanes-Oxley Liability Assessment, Evaluation, Strategy Sarbanes-Oxley Liability Assessment, Evaluation, Strategy

EPCRA Tier II & CFATS Reporting 08/29/ All Rights Reserved Sage® Environmental Consulting EPCRA Tier II & CFATS Chemical Storage Programs 10 EPCRA Tier II Applicability What is EPCRA Tier II? A means of providing citizens, state & local governments (e.g. SERC, LEPC, fire departments, etc) with information about hazardous chemicals and accidental releases of chemicals in their communities. A means of providing citizens, state & local governments (e.g. SERC, LEPC, fire departments, etc) with information about hazardous chemicals and accidental releases of chemicals in their communities. Used by emergency responders and communities to better prepare for emergencies, to proactively improve chemical safety, and to improve protection of public health and the environment. Used by emergency responders and communities to better prepare for emergencies, to proactively improve chemical safety, and to improve protection of public health and the environment. Information provided report form containing information about all chemicals stored on site. Reports are filed by March 1 annually for the prior calendar year. Information provided report form containing information about all chemicals stored on site. Reports are filed by March 1 annually for the prior calendar year.

EPCRA Tier II & CFATS Reporting 08/29/ All Rights Reserved Sage® Environmental Consulting EPCRA Tier II & CFATS Chemical Storage Programs 11 How does EPCRA Tier II apply to a facility? For any hazardous chemicals used or stored in the workplace, facilities For any hazardous chemicals used or stored in the workplace, facilities must maintain an MSDS file and submit a list of chemicals if must maintain an MSDS file and submit a list of chemicals if one or more of the chemicals is present at the facility in quantities one or more of the chemicals is present at the facility in quantities equal to, or greater than, the Threshold Planning Quantity (TPQ). equal to, or greater than, the Threshold Planning Quantity (TPQ). Hazardous Chemicals – 10,000 lbs or more at any one time.Hazardous Chemicals – 10,000 lbs or more at any one time. EHS – TPQ or 500 lbs (whichever is lower).EHS – TPQ or 500 lbs (whichever is lower). Reporting thresholds may be lower – depends on the individual State! Reporting thresholds may be lower – depends on the individual State! Reports sent to State (SERC), local (LEPC) & responding fire department Reports sent to State (SERC), local (LEPC) & responding fire department Reports contain location of chemicals and hazards Reports contain location of chemicals and hazards Accuracy of facility information can be a matter of life and death! Accuracy of facility information can be a matter of life and death! EPCRA Tier II Applicability

EPCRA Tier II & CFATS Reporting 08/29/ All Rights Reserved Sage® Environmental Consulting EPCRA Tier II & CFATS Chemical Storage Programs 12 How does EPCRA Tier II apply to a facility? Inventory must be updated throughout the year when necessary: Inventory must be updated throughout the year when necessary: A new chemical stored above a reporting threshold;A new chemical stored above a reporting threshold; An existing chemical first exceeds a reporting threshold; orAn existing chemical first exceeds a reporting threshold; or A significant change in information regarding a reported chemical.A significant change in information regarding a reported chemical. Updates to the Tier II report are due within 90 days of exceeding the threshold or obtaining significant new information for a chemical. Updates to the Tier II report are due within 90 days of exceeding the threshold or obtaining significant new information for a chemical. No minimum time limit on a material exceeding the threshold – a one time exceedance of a reporting threshold triggers reporting for that year. No minimum time limit on a material exceeding the threshold – a one time exceedance of a reporting threshold triggers reporting for that year. EPCRA Tier II Applicability

EPCRA Tier II & CFATS Reporting 08/29/ All Rights Reserved Sage® Environmental Consulting EPCRA Tier II & CFATS Chemical Storage Programs 13 Homeland Security – CFATS Applicability What is CFATS? Department of Homeland Security’s Chemical Facility Anti-Terrorism Standards (6 CFR Part 27) A risk-based approach for “chemical” facilities with a high-risk potential A risk-based approach for “chemical” facilities with a high-risk potential Chemicals of Interest (COI) are based on security issues Release Toxic/Release Flammable - chlorine, ammonia, propane, LNG Release Toxic/Release Flammable - chlorine, ammonia, propane, LNG Theft/diversion – chlorine, hydrogen peroxide, potassium nitrate, TNT Theft/diversion – chlorine, hydrogen peroxide, potassium nitrate, TNT Sabotage or contamination – aluminum powder Sabotage or contamination – aluminum powder COI screening threshold quantity similar to RMP TPQ for releases: Chlorine: Release lbs (1% conc.); Theft -500 lbs (9.77% conc.) Chlorine: Release lbs (1% conc.); Theft -500 lbs (9.77% conc.) Propane: Exempt for RMP, CFATS - Release - 10,000 lbs (1% conc.) Propane: Exempt for RMP, CFATS - Release - 10,000 lbs (1% conc.) Hydrochloric Acid: Release (≥37%) 15,000 lbs Hydrochloric Acid: Release (≥37%) 15,000 lbs

EPCRA Tier II & CFATS Reporting 08/29/ All Rights Reserved Sage® Environmental Consulting EPCRA Tier II & CFATS Chemical Storage Programs 14 What is CFATS? Covered facilities are required to comply the following reports: Top Screen (Initial Notification if COI exceed thresholds)Top Screen (Initial Notification if COI exceed thresholds) Security Vulnerability Assessment (SVA) – If DHS considers High RiskSecurity Vulnerability Assessment (SVA) – If DHS considers High Risk Site Security Plan (SSP) – Must comply with Performance StandardsSite Security Plan (SSP) – Must comply with Performance Standards Any information or documents (whether written, verbal, electronic or digital) used to prepare the above listed notifications and plans is considered “Chemical – terrorism Vulnerability Information” or CVI Highly confidential and must meet STRICT security requirementsHighly confidential and must meet STRICT security requirements ONLY authorized CVI Sage Personnel trained and given “need to know” by the employer or client, can deal with CFATS related workONLY authorized CVI Sage Personnel trained and given “need to know” by the employer or client, can deal with CFATS related work Client personnel must be CVI to discuss details of CFATSClient personnel must be CVI to discuss details of CFATS Homeland Security – CFATS Applicability

EPCRA Tier II & CFATS Reporting 08/29/ All Rights Reserved Sage® Environmental Consulting EPCRA Tier II & CFATS Chemical Storage Programs 15 What is CVI? Information developed to prepare the Top Screen, SVA or SSPInformation developed to prepare the Top Screen, SVA or SSP All written correspondence from DHS pertaining to review and approval of the CFATS notifications & plansAll written correspondence from DHS pertaining to review and approval of the CFATS notifications & plans Documents relating to audits or inspections by DHSDocuments relating to audits or inspections by DHS All DHS – related records required to be created/retained by facilityAll DHS – related records required to be created/retained by facility Sensitive portions of orders, notices or lettersSensitive portions of orders, notices or letters Unless a person is CVI authorized (e.g. consultant, facility personnel, outside officials, etc.), with a “need to know”; you cannot discuss CFATS details with anyone, even in your own company! Homeland Security – CFATS Applicability

EPCRA Tier II & CFATS Reporting 08/29/ All Rights Reserved Sage® Environmental Consulting EPCRA Tier II & CFATS Chemical Storage Programs 16 Homeland Security – CFATS Covered Facilities Chemical Manufacturing Storage and DistributionChemical Manufacturing Storage and Distribution Energy and UtilitiesEnergy and Utilities Agriculture and FoodAgriculture and Food Paints and CoatingsPaints and Coatings RefineriesRefineries LNG terminalsLNG terminals Fuel terminalsFuel terminals ExplosivesExplosives MiningMining ElectronicsElectronics PlasticsPlastics Universities & Research InstitutionsUniversities & Research Institutions Healthcare and PharmaceuticalHealthcare and Pharmaceutical 3

EPCRA Tier II & CFATS Reporting 08/29/ All Rights Reserved Sage® Environmental Consulting EPCRA Tier II & CFATS Chemical Storage Programs 17 EPCRA Tier II/Homeland Security – CFATS Issues of Concern with Tier II and CFATS? Accuracy: Misreporting/misidentification of chemicals and their hazards;Misreporting/misidentification of chemicals and their hazards; Missing chemicals – failing to report all applicable hazardous chemicals; andMissing chemicals – failing to report all applicable hazardous chemicals; and Unknown or incorrect storage locations of hazardous chemicals in a facility.Unknown or incorrect storage locations of hazardous chemicals in a facility. Agency Oversight : Except for a handful of states, neither Federal nor local authorities are auditing these programs.Except for a handful of states, neither Federal nor local authorities are auditing these programs. DHS’ CFATS is a security-based “chemical” regulation; many small and medium-sized companies’ are not aware the regulation applies to their operations.DHS’ CFATS is a security-based “chemical” regulation; many small and medium-sized companies’ are not aware the regulation applies to their operations. Little to no communication or cross training between regulating agencies.Little to no communication or cross training between regulating agencies. BEST EXAMPLE  West Fertilizer Explosion

EPCRA Tier II & CFATS Reporting 08/29/ All Rights Reserved Sage® Environmental Consulting EPCRA Tier II & CFATS Chemical Storage Programs 18 EPCRA Tier II/Homeland Security – CFATS Assuring Compliance Assessment of Chemical Management SystemAssessment of Chemical Management System How are chemical purchases and use tracked?How are chemical purchases and use tracked? Does the system include non-production related materials (e.g. maintenance)?Does the system include non-production related materials (e.g. maintenance)? Is the system limited to bulk materials only?Is the system limited to bulk materials only? Applicability DeterminationApplicability Determination What chemical programs apply?What chemical programs apply? Several other programs exist outside of Tier II and CFATSSeveral other programs exist outside of Tier II and CFATS PSM, RMP and Hazard Communication (OSHA, CAA)PSM, RMP and Hazard Communication (OSHA, CAA) TRI Reporting (EPCRA Section 313)TRI Reporting (EPCRA Section 313) Emergency Planning and Notification (EPCRA Sections 302, 304)Emergency Planning and Notification (EPCRA Sections 302, 304) Pesticides (FIFRA)Pesticides (FIFRA) TSCATSCA Are proper thresholds being applied for each type of chemical-related program?Are proper thresholds being applied for each type of chemical-related program? Have all required reports been submitted based on review?Have all required reports been submitted based on review?

EPCRA Tier II & CFATS Reporting 08/29/ All Rights Reserved Sage® Environmental Consulting EPCRA Tier II & CFATS Chemical Storage Programs 19 Review of Tier II Reporting DocumentationReview of Tier II Reporting Documentation Do Tier II reports include all hazardous chemicals present above a threshold?Do Tier II reports include all hazardous chemicals present above a threshold? Is the inventory information in the Tier II report accurate?Is the inventory information in the Tier II report accurate? Are the hazards associated with each reported chemical accurate?Are the hazards associated with each reported chemical accurate? Are the reports submitted to the proper authorities in a timely fashion?Are the reports submitted to the proper authorities in a timely fashion? Are changes to hazardous chemical inventories throughout the year properly reported when necessary?Are changes to hazardous chemical inventories throughout the year properly reported when necessary? CFATS Applicability and Documentation ReviewCFATS Applicability and Documentation Review Does the facility have COI onsite? (Look at Appendix A list)Does the facility have COI onsite? (Look at Appendix A list) Is the facility aware of CFATs and conducted a CFATS applicability determination?Is the facility aware of CFATs and conducted a CFATS applicability determination? EPCRA Tier II/Homeland Security – CFATS Assuring Compliance

EPCRA Tier II & CFATS Reporting 08/29/ All Rights Reserved Sage® Environmental Consulting EPCRA Tier II & CFATS Chemical Storage Programs 20 EPCRA Tier II/Homeland Security – CFATS Sage’s Team of Experts CFATS – CVI Certified Personnel (and with EPCRA Expertise) Melissa (Missy) Hart – 28 years experience in EPCRA auditing, reporting, compliance and data management; 5 years of CFATS applicability determinations and reporting assistance in Top Screens. Currently working with Kari on SVA with Sage Clients.Melissa (Missy) Hart – 28 years experience in EPCRA auditing, reporting, compliance and data management; 5 years of CFATS applicability determinations and reporting assistance in Top Screens. Currently working with Kari on SVA with Sage Clients. Kari Keegan – 15 years experience; 7.5 years experience completing and/or managing Tier II reports, CFATS applicability and Top Screen questionnaires.Kari Keegan – 15 years experience; 7.5 years experience completing and/or managing Tier II reports, CFATS applicability and Top Screen questionnaires. Emmett Keegan – 23 years experience; over 200 EHS audits, including Tier II programs and CFATS applicability; experience compiling data and assembling Tier II reports; experience completing CFATS Top Screen.Emmett Keegan – 23 years experience; over 200 EHS audits, including Tier II programs and CFATS applicability; experience compiling data and assembling Tier II reports; experience completing CFATS Top Screen. EPCRA Tier II Pam Hesterberg – 20 years experience - over 150 EHS audits, including Tier II and TRI programs & applicability determinations; experience compiling data, building tracking tools and assembling Tier II and TRI reports for clients in many industrial sectors.Pam Hesterberg – 20 years experience - over 150 EHS audits, including Tier II and TRI programs & applicability determinations; experience compiling data, building tracking tools and assembling Tier II and TRI reports for clients in many industrial sectors. Lorin Jaeger - 2 years experience – expertise in assembling, completing, reporting and auditing of Tier II & TRI reports for various industrial sectors, completed Tier II reports using state-specific reporting requirements for over 800 different facilities in 19 statesLorin Jaeger - 2 years experience – expertise in assembling, completing, reporting and auditing of Tier II & TRI reports for various industrial sectors, completed Tier II reports using state-specific reporting requirements for over 800 different facilities in 19 states

EPCRA Tier II & CFATS Reporting 08/29/ All Rights Reserved Sage® Environmental Consulting EPCRA Tier II & CFATS Chemical Storage Programs 21 Thank You! For any further questions or concerns, feel free to contact us! Missy Hart – St. Louis Office (o) ext. 101 (c) Kari Keegan – Chicago Office (c)