1. Hot Topics in CAA – 112(r) Federal Program Update GA AWMA REGULATORY UPDATE CONFERENCE Adam G. Sowatzka April 16, 2013

2. Agenda Background Risk Management Program General Duty Clause EPA Enforcement Questions 2

3. Background 3

4. Why Address Risk Management? Congressional response to preventing further major chemical accidents: ― Bhopal, India (Methyl Isocyanate release, 2,800 deaths, 1984) ― Institute, West Virginia (100 plus injured, 1985) ― Pasadena, Texas (plastics plant fire, 23 deaths, 1989) http://www.youtube.com/watch?feature=player_detailpage&v=3l2PQEjMnnM 4

5. Risk Management Program – Federal Statutory Provisions EPCRA – Emergency Planning and Community Right-to-Know Act (SARA Title III), Sections 302- 312 CERCLA – Comprehensive Environmental Response, Compensation and Liability Act, Section 103 CAA – Clean Air Act Section 112(r)(7), Chemical Accident Prevention Provisions and Risk Management Plans; and Section 112(r)(1) General Duty Clause 5

6. CAA Section 112(r) Regulatory requirement for subject facilities to file a Risk Management Plan (RMP) by June 21, 1999 or before covered chemical is on site Includes “General Duty Clause” (GDC) requiring facilities to consider hazards and minimize risk posed by chemicals 6

7. EPA’s Risk Management Program 7

8. Who is subject to the RMP regulations? Stationary sources that have more than a threshold quantity (TQ) of a listed substance EPA has developed a list of chemicals: ― 77 toxic ― 63 flammable If a facility stores one of these chemicals at quantities greater than a TQ….. THE FACILITY MUST HAVE A RISK MANAGEMENT PLAN 8

9. Key Elements of RMP Employee participation plan Process safety information (documentation of the process) Process Hazard Analysis (PHA) Operating procedures Operator training Contractor evaluation and selection Pre-start-up safety reviews 9

10. Key Elements of RMP Cont’d Mechanical integrity program Hot work permitting process Management of Change (MOC) Incident investigation Emergency planning and response Compliance audits 10

11. RMP Filing Facilities must resubmit RMPs at 5 year intervals There are additional/on-going responsibilities − it is not a static program that ends with filing of RMP Certification of receipt and completion from RMP Reporting Center does not indicate that an RMP is in compliance with regulations 11

12. Important Dates Reported in RMPs Process Hazard Analysis (PHAs), compliance audits, and SOP review dates Red flags: ― Leaving these entries blank or having future dates ― Having dates (as of the filing) that are more than 5 years, 3 years, and 1 year past due 12

13. PHAs and Compliance Audits Must be performed by proper personnel Corrective actions/recommendations required for noted deficiencies If completion dates are not shown in facility documentation, objective quality evidence is required 13

14. General Duty Clause 14

15. General Duty Clause – CAA §112(r)(1) Statutory requirement, effective as of November 1990 No list of covered substances, no threshold quantities No reporting requirement, information sharing with public not required No exemptions or exclusions 15

16. General Duty Clause – CAA §112(r)(1) The owners and operators of stationary sources producing, processing, handling or storing such substances [i.e., a chemical in 40 CFR part 68 or any other extremely hazardous substance] have a general duty [in the same manner and to the same extent as the general duty clause in the Occupational Safety and Health Act (OSHA)] to identify hazards which may result from (such) releases using appropriate hazard assessment techniques, to design and maintain a safe facility taking such steps as are necessary to prevent releases, and to minimize the consequences of accidental releases which do occur. 16

17. Substances Covered Under GDC Extremely hazardous substances ― Short-term exposures associated with releases to air may cause death, injury, or property damage due to toxicity, reactivity, flammability, volatility, or corrosivity Includes, but not limited to, RMP list of toxic and flammable substances 17

18. Facility Responsibilities Under GDC Identify hazards of chemicals, and assess impact of potential releases Design and maintain safe facilities Follow codes, standards, and other business practices Minimize consequences of accidental releases 18

19. GDC – Considerations for Safe Practices What are similar businesses doing to minimize hazard? ― Codes and standard practices ― EPA and other Safety Alerts, Case Studies, and Investigation Reports ― Trade association guidelines What is the accident history of my industrial sector? ― Lessons learned 19

20. EPA Enforcement 20

21. Fiscal Years 2011-2013: Preventing the release of raw sewage and contaminated stormwater Preventing animal waste from contaminating surface and ground waters Cutting toxic air pollution that affects health Reducing air pollution from largest sources Reducing pollution from mineral processing operations Assuring energy extraction sector compliance EPA’s Enforcement Initiatives 21

22. EPA Enforcement Overview Inspection Information request Administrative Compliance Order Penalty action ― Administrative ― Judicial Referral ― Criminal 22

23. EPA RMP and GDC Enforcement CaseDatePenaltyInjunctive Relief Tyson Foods4/4/2013$3.9 millionRMP audits at 21 facilities JP Lillis Enterprises, d/b/a Cape Cod Ice 1/9/2013$225,000Various corrective actions related to its ammonia program Suiza Dairy Corporation 9/28/2012$275,000$3.75 million in facility upgrades C.A.I., Inc. of Danvers, Massachusetts 8/15/2011$100,000$1.3 million for site clean-up related to a removal action caused by a fire BP Products North America Inc. 9/30/2010$15 millionImplement defined compliance program including monthly reports to EPA D.D. Williamson & Co, Inc. 10/7/2009$300,000Conduct RMP audit and take corrective actions based on that audit 23

24. Questions Adam G. Sowatzka Partner King & Spalding 1180 Peachtree Street, N.E. Atlanta, GA 30309-3521 Direct: 404-572-3508 Fax: 404-572-5136 Cell: 770-309-5349 asowatzka@kslaw.com www.kslaw.com 24