[Federal Register Volume 82, Number 9 (Friday, January 13, 2017)]
[Rules and Regulations]
[Pages 4594-4705]
[FR Doc No: 2016-31426]

Vol. 82

Friday,

No. 9

January 13, 2017

Part IV

 Environmental Protection Agency

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 40 CFR Part 68

 Accidental Release Prevention Requirements: Risk Management Programs
Under the Clean Air Act; Final Rule

Federal Register / Vol. 82 , No. 9 / Friday, January 13, 2017 / Rules
and Regulations

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 68

[EPA-HQ-OEM-2015-0725; FRL-9954-46-OLEM]
RIN 2050-AG82

Accidental Release Prevention Requirements: Risk Management
Programs Under the Clean Air Act

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final rule.

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SUMMARY: The Environmental Protection Agency (EPA), in response to
Executive Order 13650, is amending its Risk Management Program
regulations. The revisions contain several changes to the accident
prevention program requirements including an additional analysis of
safer technology and alternatives as part of the process hazard
analysis for some Program 3 processes, third-party audits and incident
investigation root cause analysis for Program 2 and Program 3
processes; enhancements to the emergency preparedness requirements;
increased public availability of chemical hazard information; and
several other changes to certain regulatory definitions and data
elements submitted in risk management plans. These amendments seek to
improve chemical process safety, assist local emergency authorities in
planning for and responding to accidents, and improve public awareness
of chemical hazards at regulated sources.

DATES: This final rule is effective on March 14, 2017.

ADDRESSES: The EPA has established a docket for this action under
Docket ID No. EPA-HQ-OEM-2015-0725. All documents in the docket are
listed on the http://www.regulations.gov Web site. Although listed in
the index, some information is not publicly available, e.g.,
Confidential Business Information (CBI) or other information whose
disclosure is restricted by statute. Certain other material, such as
copyrighted material, is not placed on the Internet and will be
publicly available only in hard copy form. Publicly available docket
materials are available electronically through http://www.regulations.gov.

FOR FURTHER INFORMATION CONTACT: James Belke, United States
Environmental Protection Agency, Office of Land and Emergency
Management, 1200 Pennsylvania Ave. NW., (Mail Code 5104A), Washington,
DC 20460; telephone number:<PHONE_NUMBER>; email address:
<EMAIL_ADDRESS>or: Kathy Franklin, United States Environmental
Protection Agency, Office of Land and Emergency Management, 1200
Pennsylvania Ave. NW., (Mail Code 5104A), Washington, DC, 20460;
telephone number:<PHONE_NUMBER>; email address:
<EMAIL_ADDRESS>    Electronic copies of this document and related news releases are
available on EPA's Web site at http://www.epa.gov/rmp. Copies of this
final rule are also available at http://www.regulations.gov.

SUPPLEMENTARY INFORMATION: The contents of this preamble are:

I. General Information
    A. Executive Summary
    B. Does this action apply to me?
II. Background
    A. Events Leading to This Action
    B. Overview of EPA's Risk Management Program Regulations
III. Additional Information
    A. Agency's Authority for Taking This Action
    B. List of Regulated Substances
IV. Prevention Program Requirements
    A. Incident Investigation and Accident History Requirements
    B. Third-Party Audits
    C. Safer Technology and Alternatives Analysis (STAA)
    D. Stationary Source Location and Emergency Shutdown
V. Emergency Response Preparedness Requirements
    A. Emergency Response Program Coordination With Local Responders
    B. Facility Exercises
VI. Information Availability Requirements
    A. Disclosure Requirements to LEPCs or Emergency Response
Officials
    B. Information Availability to the Public
    C. Public Meetings
VII. Risk Management Plan Streamlining, Clarifications, and RMP Rule
Technical Corrections
    A. Revisions to Sec.  68.160 (Registration)
    B. Revisions to Sec.  68.170 (Prevention Program/Program 2)
    C. Revisions to Sec.  68.175 (Prevention Program/Program 3)
    D. Revisions to Sec.  68.180 (Emergency Response Program)
    E. Technical Corrections
VIII. Compliance Dates
    A. Summary of Proposed Rulemaking
    B. Summary of Final Rule
    C. Discussion of Comments
    D. Compliance Date Examples
IX. Statutory and Executive Order Reviews
    A. Executive Order 12866: Regulatory Planning and Review and
Executive Order 13563: Improving Regulation and Regulatory Review
    B. Paperwork Reduction Act (PRA)
    C. Regulatory Flexibility Act (RFA)
    D. Unfunded Mandates Reform Act (UMRA)
    E. Executive Order 13132: Federalism
    F. Executive Order 13175: Consultation and Coordination With
Indian Tribal Governments
    G. Executive Order 13045: Protection of Children From
Environmental Health Risks and Safety Risks
    H. Executive Order 13211: Actions That Significantly Affect
Energy Supply, Distribution or Use
    I. National Technology Transfer and Advancement Act (NTTAA)
    J. Executive Order 12898: Federal Actions To Address
Environmental Justice in Minority Populations and Low-Income
Populations
    K. Congressional Review Act (CRA)

I. General Information

A. Executive Summary

1. Purpose of the Regulatory Action
    The purpose of this action is to improve safety at facilities that
use and distribute hazardous chemicals. In response to catastrophic
chemical facility incidents in the United States, including the
explosion that occurred at the West Fertilizer facility in West, Texas,
on April 17, 2013 that killed 15 people (on May 11, 2016, ATF ruled
that the fire was intentionally set.) \1\ President Obama issued
Executive Order 13650, ``Improving Chemical Facility Safety and
Security,'' on August 1, 2013.\2\
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    \1\ See ATF Announces $50,000 Reward in West, Texas Fatality
Fire, https://www.atf.gov/news/pr/atf-announces-50000-reward-west-texas-fatality-fire.
    \2\ For more information on the Executive Order see https://www.whitehouse.gov/the-press-office/2013/08/01/executive-order-improving-chemical-facility-safety-and-security.
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    Section 6(a)(i) of Executive Order 13650 requires that various
Federal agencies develop options for improved chemical facility safety
and security that identify ``improvements to existing risk management
practices through agency programs, private sector initiatives,
Government guidance, outreach, standards, and regulations.'' One
existing agency program is the Risk Management Program implemented by
EPA under section 112(r) of the Clean Air Act (CAA) (42 U.S.C.
7412(r)). Section 6(c) of Executive Order 13650 requires the
Administrator of EPA to review the chemical hazards covered by the Risk
Management Program and expand, implement and enforce the Risk
Management Program to address any additional hazards.
    EPA proposed changes to its Risk Management Program regulations (40
CFR part 68) on March 14, 2016 (81 FR 13637) after publishing a
``Request for Information'' notice or ``RFI'' that solicited comments
and information from the public regarding potential changes to the Risk
Management

Program regulations (July 31, 2014, 79 FR 44604). While developing the
proposed rulemaking, EPA convened a Small Business Advocacy Review
(SBAR) panel to receive input from Small Entity Representatives (SERs).
EPA also hosted a public hearing on March 29, 2016 to provide
interested parties the opportunity to present data, views or arguments
concerning the proposed action.
    The Risk Management Program regulations have been effective in
preventing and mitigating chemical accidents in the United States.
However, EPA believes that revisions could further protect human health
and the environment from chemical hazards through advancement of
process safety management based on lessons learned.
2. Summary of the Major Provisions of the Regulatory Action
    This action amends EPA's Risk Management Program regulations at 40
CFR part 68. These regulations apply to stationary sources (also
referred to as ``facilities'') that hold specific ``regulated
substances'' in excess of threshold quantities. These facilities are
required to assess their potential release impacts, undertake steps to
prevent releases, plan for emergency response to releases, and
summarize this information in a risk management plan (RMP) submitted to
EPA. The release prevention steps vary depending on the type of
process, but progressively gain granularity and rigor over three
program levels (i.e., Program 1, Program 2, and Program 3).
    The major provisions of this rule include several changes to the
accident prevention program requirements, as well as enhancements to
the emergency response requirements, and improvements to the public
availability of chemical hazard information. Each of these revisions is
introduced in the following paragraphs of this section and described in
greater detail in sections IV through VI, later in this preamble.
    Certain revised provisions would apply to a subset of the processes
based on program levels described in 40 CFR part 68 (or in one case, to
a subset of processes within a program level). A full description of
these program levels is provided in section II of this preamble.
a. Accident Prevention Program Revisions
    This action includes three changes to the accident prevention
program requirements. First, the rule requires all facilities with
Program 2 or 3 processes to conduct a root cause analysis as part of an
incident investigation of a catastrophic release or an incident that
could have reasonably resulted in a catastrophic release (i.e., a near-
miss). This provision is intended to reduce the number of chemical
accidents by requiring facilities to identify the underlying causes of
an incident so that they may be addressed. Identifying the root causes,
rather than isolating and correcting solely the immediate cause of the
incident, will help prevent similar incidents at other locations, and
will yield the maximum benefit or lessons learned from the incident
investigation.
    Second, the rule requires regulated facilities with Program 2 or 3
processes to contract with an independent third-party, or assemble an
audit team led by an independent third-party, to perform a compliance
audit after the facility has an RMP reportable accident. Compliance
audits are required under the existing rule, but are allowed to be
self-audits (i.e., performed by the owner or operator of the regulated
facility). This provision is intended to reduce the risk of future
accidents by requiring an objective auditing process to determine
whether the owner or operator of the facility is effectively complying
with the accident prevention procedures and practices required under 40
CFR part 68.
    The third revision to the prevention program adds an element to the
process hazard analysis (PHA), which is updated every five years.
Specifically, owners or operators of facilities with Program 3
regulated processes in North American Industrial Classification System
(NAICS) codes 322 (paper manufacturing), 324 (petroleum and coal
products manufacturing), and 325 (chemical manufacturing) are required
to conduct a safer technology and alternatives analysis (STAA) as part
of their PHA, and to evaluate the practicability of any inherently
safer technology (IST) identified. The current PHA requirements include
consideration of active, passive, and procedural measures to control
hazards. These revisions support the analysis of those measures and
adds consideration of IST alternatives. The provision is intended to
reduce the risk of serious accidental releases by requiring facilities
in these sectors to conduct a careful examination of potentially safer
technology and designs that they could implement in lieu of, or in
addition to, their current technologies.
b. Emergency Response Enhancements
    This action also enhances the rule's emergency response
requirements. Owners or operators of all facilities with Program 2 or 3
processes are required to coordinate with the local emergency response
agencies at least once a year to determine how the source is addressed
in the community emergency response plan and to ensure that local
response organizations are aware of the regulated substances at the
source, their quantities, the risks presented by covered processes, and
the resources and capabilities at the facility to respond to an
accidental release of a regulated substance.
    Additionally, all facilities with Program 2 or 3 processes are
required to conduct notification exercises annually to ensure that
their emergency contact information is accurate and complete. This
provision is intended to reduce the impact of accidents by ensuring
that appropriate mechanisms and processes are in place to notify local
responders when an accident occurs. One of the factors that can
contribute to the severity of chemical accidents is a lack of effective
coordination between a facility and local emergency responders.
Increasing such coordination and establishing appropriate emergency
response procedures can help reduce the effects of accidents.
    This action also requires that all facilities subject to the
emergency response program requirements of subpart E of the rule (or
``responding facilities'') conduct field exercises and tabletop
exercises. The frequency of these exercises shall be established in
consultation with local emergency response officials, but at a minimum,
full field exercises will be conducted at least once every ten years
and tabletop exercises conducted at least once every three years.
Responding facilities that have an RMP reportable accident, and
document the response activities in an after-action report comparable
to the exercise evaluation reports may use that response to satisfy the
field exercise requirements. Furthermore, owner and operators of
responding facilities that conduct exercises to meet other Federal,
state or local exercise requirements may satisfy the RMP exercise
requirements provided that the scope of the exercise includes the
objectives of an RMP exercise. The purpose of this provision is to
reduce the impact of accidents by ensuring that emergency response
personnel understand their roles in the event of an incident, that
local responders are familiar with the hazards at a facility, and that
the emergency response plan is up-to-date. Improved coordination with
emergency response personnel will better prepare responders to respond
effectively to an incident and take steps to notify the community of
appropriate actions, such as shelter-in-place or evacuation.

c. Enhanced Availability of Information
    This action includes various enhancements to the public
availability of chemical hazard information. The rule requires all
facilities to provide certain basic information to the public, upon
request. The owner or operator of the facility shall provide ongoing
notification of availability of information elements on a company Web
site, social media platforms, or through some other publicly accessible
means. The rule also requires all facilities to hold a public meeting
for the local community within 90 days of an RMP reportable accident.
This provision will ensure that first responders and members of the
community have easier access to appropriate facility chemical hazard
information, which can significantly improve emergency preparedness and
their understanding of how the facility is addressing potential risks.
    EPA proposed requirements for facilities to provide certain
information to the Local Emergency Planning Committee (LEPC), Tribal
Emergency Planning Committee (TEPC)\3\ or other local emergency
response agencies. However, rather than prescribe information elements
that must be provided upon request, EPA is requiring the owner or
operator of a stationary source to share information that is relevant
to emergency response planning as part of the coordination activities
that occur annually between facility representatives and local
emergency response agencies.
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    \3\ Note for the purposes of this document the term TEPC can be
substituted for LEPC, as appropriate.
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    In addition to the major provisions described previously in this
section, this action discusses comments received on other aspects of
the proposed action including revisions to the list of regulated
substances, location of stationary sources (related to their proximity
to public receptors), requirements for emergency shutdown systems,
compliance dates, technical corrections and revisions to the RMP
requirements.
3. Costs and Benefits
a. Summary of Potential Costs
    Approximately 12,500 facilities have filed current RMPs with EPA
and are potentially affected by the revised rule. These facilities
range from petroleum refineries and large chemical manufacturers to
water and wastewater treatment systems; chemical and petroleum
wholesalers and terminals; food manufacturers, packing plants, and
other cold storage facilities with ammonia refrigeration systems;
agricultural chemical distributors; midstream gas plants; and a limited
number of other sources, including Federal installations that use RMP-
regulated substances.
    Table 1 presents the number of facilities according to the latest
RMP reporting as of February 2015 by industrial sector and chemical
use.

                                Table 1--Number of Affected Facilities by Sector
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                                                                        Total
                Sector                         NAICS codes           facilities            Chemical uses
----------------------------------------------------------------------------------------------------------------
Administration of environmental         924......................           1,923  Use chlorine and other
 quality programs (i.e., governments).                                              chemicals for treatment.
Agricultural chemical distributors/     111, 112, 115, 42491.....           3,667  Store ammonia for sale; some
 wholesalers.                                                                       in NAICS 111 and 115 use
                                                                                ammonia as a refrigerant.
Chemical manufacturing................  325......................           1,466  Manufacture, process, store.
Chemical wholesalers..................  4246.....................             333  Store for sale.
Food and beverage manufacturing.......  311, 312.................           1,476  Use--mostly ammonia as a
                                                                                refrigerant.
Oil and gas extraction................  211......................             741  Intermediate processing
                                                                                (mostly regulated flammable
                                                                                substances and flammable
                                                                                mixtures).
Other.................................  44, 45, 48, 54, 56, 61,               247  Use chemicals for wastewater
                                         72.                                        treatment, refrigeration,
                                                                                store chemicals for sale.
Other manufacturing...................  313, 326, 327, 33........             384  Use various chemicals in
                                                                                manufacturing process, waste
                                                                                treatment.
Other wholesale.......................  423, 424.................             302  Use (mostly ammonia as a
                                                                                refrigerant).
Paper manufacturing...................  322......................              70  Use various chemicals in pulp
                                                                                and paper manufacturing.
Petroleum and coal products             324......................             156  Manufacture, process, store
 manufacturing.                                                                     (mostly regulated flammable
                                                                                substances and flammable
                                                                                mixtures).
Petroleum wholesalers.................  4247.....................             276  Store for sale (mostly
                                                                                regulated flammable
                                                                                substances and flammable
                                                                                mixtures).
Utilities.............................  221......................             445  Use chlorine (mostly for
                                                                                water treatment) and other
                                                                                chemicals.
Warehousing and storage...............  493......................           1,056  Use mostly ammonia as a
                                                                                refrigerant.
                                                                  ----------------
    Total.............................  .........................          12,542  .............................
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    Table 2 presents a summary of the annualized costs estimated in the
regulatory impact analysis.\4\ In total, EPA estimates annualized costs
of $131.2 million at a 3% discount rate and $131.8 million at a 7%
discount rate.
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    \4\ A full description of costs and benefits for this final rule
can be found in the Regulatory Impact Analysis--Accidental Release
Prevention Requirements: Risk Management Programs Under the Clean
Air Act, Section 112(r)(7). This document is available in the docket
for this rulemaking (Docket ID Number EPA-HQ-OEM-2015-0725).

                  Table 2--Summary of Annualized Costs
                        [Millions, 2015 dollars]
------------------------------------------------------------------------
                Provision                  3  (percent)    7  (percent)
------------------------------------------------------------------------
Third-party Audits......................            $9.8            $9.8
Incident Investigation/Root Cause.......             1.8             1.8
STAA....................................            70.0            70.0
Coordination............................            16.0            16.0
Notification Exercises..................             1.4             1.4
Facility Exercises......................            24.7            24.7
Information Sharing with the Public.....             3.1             3.1
Public Meeting..........................             0.4             0.4
Rule Familiarization....................             3.9             4.6
                                         -------------------------------
    Total Cost *........................           131.2           131.8
------------------------------------------------------------------------
* Totals may not sum due to rounding.

    The largest average annual cost of the final rule is the STAA costs
($70.0 million), followed by the exercise costs ($24.7 million),
coordination ($16 million), and third-party audits ($9.8 million). The
remaining provisions impose average annual costs under $5 million each,
including rule familiarization ($3.9-4.6 million), information sharing
with the public ($3.1 million), incident investigation/root cause
analysis ($1.8 million), notification exercises ($1.4 million), and
public meetings ($0.4 million).
b. Summary of Potential Benefits
    EPA anticipates that promulgation and implementation of this rule
would result in a reduction of the frequency and magnitude of damages
from releases. Accidents and releases from RMP facilities occur every
year, causing fires and explosions; damage to property; acute and
chronic exposures of workers and nearby residents to hazardous
materials; and resulting in serious injuries and death. Although we are
unable to quantify what specific reductions may occur as a result of
these revisions, we are able to present data on the total damages that
currently occur at RMP facilities each year. The data presented is
based on a 10-year baseline period, summarizing RMP accident impacts
and, when possible, monetizing them. EPA expects that some portion of
future damages would be prevented through implementation of this final
rule. Table 3 presents a summary of the quantified damages identified
in the analysis.

                                     Table 3--Summary of Quantified Damages
                                            [Millions, 2015 dollars]
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                                             Unit value       10-year total     Average/year    Average/accident
----------------------------------------------------------------------------------------------------------------
                                                     On-site
----------------------------------------------------------------------------------------------------------------
Fatalities..............................              $8.6            $497.8             $49.8             $0.33
Injuries................................              0.05             105.2              10.5              0.69
Property Damage.........................  ................           2,054.9             205.5               1.4
                                         -----------------------------------------------------------------------
    On-site Total.......................  ................           2,657.9             265.8               1.8
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                                                     Offsite
----------------------------------------------------------------------------------------------------------------
Fatalities..............................               8.6               8.6              0.86              0.01
Hospitalizations........................               0.4               6.8              0.68             0.004
Medical Treatment.......................             0.001              14.8               1.5              0.01
Evacuations *...........................               0.0               7.0              0.70             0.004
Sheltering in Place *...................               0.0              40.9               4.1              0.03
Property Damage.........................  ................              11.4               1.1             0.007
                                         -----------------------------------------------------------------------
    Offsite Total.......................  ................              89.5               8.9              0.06
                                         -----------------------------------------------------------------------
        Total...........................  ................           2,747.3             274.7               1.8
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* The unit value for evacuations is less than two hundred dollars and for sheltering in place is less than one
  hundred dollars so when expressed in rounded millions the value represented in the table is zero.

    EPA monetized both on-site and offsite damages. EPA estimated total
average annual on-site damages of $265.8 million. The largest monetized
average annual on-site damage was on-site property damage, which
resulted in average annual damage of approximately $205.5 million. The
next largest impact was on-site fatalities ($49.8 million) and injuries
($10.5 million).
    EPA estimated total average annual offsite damages of $8.9 million.
The largest monetized average annual offsite damage was from sheltering
in place ($4.1 million), followed by medical treatment ($1.5 million),
property damage ($1.1 million), fatalities ($0.86 million), evacuations
($0.7 million), and hospitalizations ($0.68 million).
    In total, EPA estimated monetized damages from RMP facility
accidents of $274.7 million per year. The 10-year RMP baseline suggests
that considering

only the monetized impacts of RMP accidents would mean that the rule's
costs may outweigh the portion of avoided impacts from improved
prevention and mitigation that were monetized. The annualized cost of
the final rule (approximately $142 million annually) is approximately
52% of the average annual monetized costs in the 10-year baseline.
However, the monetized impacts omit many important categories of
accident impacts including lost productivity, the costs of emergency
response, transaction costs, property value impacts in the surrounding
community (that overlap with other benefit categories), and
environmental impacts. Also not reflected in the 10-year baseline costs
are the impacts of non-RMP accidents at RMP facilities and any
potential impacts of rare high consequence catastrophes. A final
omission is related to the information provision. Reducing the
probability of chemical accidents and the severity of their impacts,
and improving information disclosure by chemical facilities, as the
provisions intend, would provide benefits to potentially affected
members of society.
    Table 4 summarizes four broad social benefit categories related to
accident prevention and mitigation including prevention of RMP
accidents, mitigation of RMP accidents, prevention and mitigation of
non-RMP accidents at RMP facilities, and prevention of major
catastrophes. The table explains each and identifies ten associated
specific benefit categories, ranging from avoided fatalities to avoided
emergency response costs. Table 4 also highlights and explains the
information disclosure benefit category and identifies two specific
benefits associated with it: Improved efficiency of property markets
and allocation of emergency resources.
    When considering the rule's likely benefits that are due to
avoiding some portion of the monetized accident impacts, as well as the
additional non-monetized benefits described previously, EPA believes
the costs of the rule are reasonable in comparison to its benefits.

      Table 4--Summary of Social Benefits of Final Rule Provisions
------------------------------------------------------------------------
                                                       Specific benefit
     Broad benefit category           Explanation         categories
------------------------------------------------------------------------
Accident Prevention.............  Prevention of        Reduced
                                   future RMP          Fatalities.
                                   facility
                                   accidents.
Accident Mitigation.............  Mitigation of        Reduced
                                   future RMP          Injuries.
                                   facility
                                   accidents.
Non-RMP accident prevention and   Prevention and       Reduced
 mitigation.                       mitigation of       Property Damage.
                                   future non-RMP      Fewer
                                   accidents at RMP    People Sheltered
                                   facilities.         in Place.
Avoided Catastrophes............  Prevention of rare   Fewer
                                   but extremely       Evacuations.
                                   high consequence    Avoided
                                   events.             Lost
                                                       Productivity.
                                                       Avoided
                                                       Emergency
                                                       Response Costs.
                                                       Avoided
                                                       Transaction
                                                       Costs.
                                                       Avoided
                                                       Property Value
                                                       Impacts.*
                                                       Avoided
                                                       Environmental
                                                       Impacts.
Information Disclosure..........  Provision of         Improved
                                   information to      efficiency of
                                   the public.         property markets.
                                                       Improved
                                                       emergency
                                                       response resource
                                                       allocation.
------------------------------------------------------------------------
* These impacts partially overlap with several other categories such as
  reduced health and environmental impacts.

B. Does this action apply to me?

    This rule applies to those facilities (referred to as ``stationary
sources'' under the CAA) that are subject to the chemical accident
prevention requirements at 40 CFR part 68. This includes stationary
sources holding more than a threshold quantity (TQ) of a regulated
substance in a process. Table 5 provides industrial sectors and the
associated NAICS codes for entities potentially affected by this
action. The Agency's goal is to provide a guide for readers to consider
regarding entities that potentially could be affected by this action.
However, this action may affect other entities not listed in this
table. If you have questions regarding the applicability of this action
to a particular entity, consult the person(s) listed in the
introductory section of this action under the heading entitled FOR
FURTHER INFORMATION CONTACT.
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    \5\ For descriptions of NAICS codes, see http://www.census.gov/cgi-bin/sssd/naics/naicsrch.

   Table 5--Industrial Sectors and Associated NAICS Codes for Entities
                   Potentially Affected by This Action
------------------------------------------------------------------------
                   Sector                             NAICS code
------------------------------------------------------------------------
Administration of Environmental Quality      924.
 Programs.
Agricultural Chemical Distributors:
    Crop Production........................  111.
    Animal Production and Aquaculture......  112.
    Support Activities for Agriculture and   115.
     Forestry Farm.
    Supplies Merchant Wholesalers..........  42491.
Chemical Manufacturing.....................  325.
Chemical and Allied Products Merchant        4246.
 Wholesalers.
Food Manufacturing.........................  311.
Beverage Manufacturing.....................  3121.
Oil and Gas Extraction.....................  211.
Other \5\..................................  44, 45, 48, 54, 56, 61, 72.
Other manufacturing........................  313, 326, 327, 33.
Other Wholesale:
    Merchant Wholesalers, Durable Goods....  423.
    Merchant Wholesalers, Nondurable Goods.  424.

Paper Manufacturing........................  322.
Petroleum and Coal Products Manufacturing..  324.
Petroleum and Petroleum Products Merchant    4247.
 Wholesalers.
Utilities..................................  221.
Warehousing and Storage....................  493.
------------------------------------------------------------------------

II. Background

A. Events Leading to This Action

    Recent catastrophic chemical facility incidents in the United
States prompted President Obama to issue Executive Order 13650,
``Improving Chemical Facility Safety and Security,'' on August 1,
2013.\6\ The purpose of the Executive Order is to enhance the safety
and security of chemical facilities and reduce risks associated with
hazardous chemicals to owners and operators, workers, and communities.
The Executive Order establishes the Chemical Facility Safety and
Security Working Group (``Working Group''), co-chaired by the Secretary
of Homeland Security, the Administrator of EPA, and the Secretary of
Labor or their designated representatives at the Assistant Secretary
level or higher, and composed of senior representatives of other
Federal departments, agencies, and offices. The Executive Order
requires the Working Group to carry out a number of tasks whose overall
aim is to prevent chemical accidents. In addition to the tragedy at the
West Fertilizer facility in West, Texas, on April 17, 2013,\7\ a number
of other incidents have demonstrated a significant risk to the safety
of American workers and communities. On March 23, 2005, explosions at
the BP Refinery in Texas City, Texas, killed 15 people and injured more
than 170 people.\8\ On April 2, 2010, an explosion and fire at the
Tesoro Refinery in Anacortes, Washington, killed seven people.\9\ On
August 6, 2012, at the Chevron Refinery in Richmond, California, a fire
involving flammable fluids endangered 19 Chevron employees and created
a large plume of highly hazardous chemicals that traveled across the
Richmond, California, area.\10\ Nearly 15,000 residents sought medical
treatment due to the release. On June 13, 2013, a fire and explosion at
Williams Olefins in Geismar, Louisiana, killed two people and injured
many more.\11\
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    \6\ For more information on the Executive Order see https://www.whitehouse.gov/the-press-office/2013/08/01/executive-order-improving-chemical-facility-safety-and-security.
    \7\ CSB. January 2016. Final Investigation Report, West
Fertilizer Company Fire and Explosion, West, TX, April 17, 2013.
REPORT 2013-02-I-TX. http://www.csb.gov/west-fertilizer-explosion-and-fire-/. On May 11, 2016, ATF ruled that the fire was
intentionally set. See ATF Announces $50,000 Reward in West, Texas
Fatality Fire, https://www.atf.gov/news/pr/atf-announces-50000-reward-west-texas-fatality-fire.
    \8\ U.S. Chemical Safety and Hazard Investigation Board (CSB).
March 2007. Investigation Report: Refinery Explosion and Fire, BP,
Texas City, Texas, March 23, 2005. Report No. 2005-04-I-TX. http://www.csb.gov/assets/1/19/CSBFinalReportBP.pdf.
    \9\ CSB. May 2014. Investigation Report: Catastrophic Rupture of
Heat Exchanger, Tesoro Anacortes Refinery, Anacortes, Washington,
April 2, 2010. Report No. 2010-08-I-WA. http://www.csb.gov/assets/1/7/Tesoro_Anacortes_2014-May-01.pdf.
    \10\ CSB. January 2014. Regulatory Report: Chevron Richmond
Refinery Pipe Rupture and Fire, Chevron Richmond Refinery #4 Crude
Unit, Richmond, California, August 6, 2012. Report No. 2012-03-I-CA.
http://www.csb.gov/assets/1/19/CSB_Chevron_Richmond_Refinery_Regulatory_Report.pdf.
    \11\ CSB. October 2016. Case Study: Williams Geismar Olefins
Plant Reboiler Rupture and Fire, Geismar, Louisiana. Incident Date:
June 13, 2013, No. 2013-03-I-LA. US Chemical Safety and Hazard
Investigation Board, Washington, DC http://www.csb.gov/williams-olefins-plant-explosion-and-fire-/.
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    Section 6 of the Executive Order is entitled ``Policy, Regulation,
and Standards Modernization.'' This section, among other things,
requires certain Federal agencies to consider possible changes to
existing chemical safety and security regulations. To solicit comments
and information from the public regarding potential changes to EPA's
Risk Management Program regulations (40 CFR part 68), on July 31, 2014,
EPA published an RFI (79 FR 44604). Information collected through the
RFI informed the proposed rulemaking that was published on March 14,
2016 (81 FR 13637).
    EPA received a total of 61,716 public comments on the proposed
rulemaking. Several public comments were the result of various mass
mail campaigns and contained numerous copies of letters or petition
signatures. Approximately 61,467 letters and signatures were contained
in these several comments. The remaining comments include 235
submissions with unique content, 10 duplicate submissions, and 4 non-
germane submissions. In addition to these public submissions, EPA also
received 8 written comments and had 22 members of the public provide
verbal comments at a public hearing on March 29, 2016. Discussion of
public comments can be found in topics included in this final rule and
in the Response to Comments document,\12\ available in the docket for
this rulemaking.
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    \12\ 2016. EPA Response to Comments on the 2016 Proposed
Rulemaking Amending EPA's Risk Management Program Regulations. This
document is available in the docket for this rulemaking.
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B. Overview of EPA's Risk Management Program Regulations

    Both EPA's 40 CFR part 68 RMP regulation \13\ and Occupational
Safety and Health Administration's (OSHA) 29 CFR 1910.119 Process
Safety Management (PSM) standard were authorized in the CAA Amendments
of 1990. This was in response to a number of catastrophic chemical
accidents occurring worldwide that had resulted in public and worker
fatalities and injuries, environmental damage, and other community
impacts. OSHA published the PSM standard in 1992 (57 FR 6356, February
24, 1992), as required by section 304 of the 1990 CAAA, using its
authority under 29 U.S.C. 653.
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    \13\ 40 CFR part 68 is titled, ``Chemical Accident Prevention
Provisions,'' but is more commonly known as the ``RMP regulation,''
the ``RMP rule,'' or the ``Risk Management Program.'' This document
uses all three terms to refer to 40 CFR part 68. The term ``RMP''
refers to the document required to be submitted under subpart F of
40 CFR part 68, the Risk Management Plan. See https://www.epa.gov/rmp for more information on the Risk Management Program.
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    The 1990 CAA Amendments added accidental release provisions under
section 112(r). The statute required EPA to develop a list of at least
100 regulated substances for accident prevention and related thresholds
(CAA section 112(r)(3) through (5)), and authorized EPA to issue
accident prevention regulations (CAA section 112(r)(7)(A)). The statute
also required EPA to develop ``reasonable regulations'' requiring
facilities with over a TQ of a regulated substance to undertake
accident prevention steps and submit a ``risk management plan'' to
various local, state, and Federal planning entities (CAA section
112(r)(7)(B)).

    EPA published the RMP regulation in two stages. The Agency
published the list of regulated substances and TQs in 1994 (59 FR 4478,
January 31, 1994) (the ``list rule'') \14\ and published the RMP final
regulation, containing risk management requirements for covered
sources, in 1996 (61 FR 31668, June 20, 1996) (the ``RMP
rule'').15 16 Both the OSHA PSM standard and the EPA RMP
rule aim to prevent or minimize the consequences of accidental chemical
releases through implementation of management program elements that
integrate technologies, procedures, and management practices. In
addition to requiring implementation of management program elements,
the RMP rule requires covered sources to submit (to EPA) a document
summarizing the source's risk management program--called a Risk
Management Plan (or RMP). The RMP rule required covered sources to
comply with its requirements and submit initial RMPs to EPA by June 21,
1999. Each RMP must be revised and updated at least once every five
years from the date the plan was initially submitted.
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    \14\ Documents and information related to development of the
list rule can be found in the EPA docket for the rulemaking, docket
number A-91-74.
    \15\ Documents and information related to development of the RMP
rule can be found in EPA docket number A-91-73.
    \16\ 40 CFR part 68 applies to owners and operators of
stationary sources that have more than a TQ of a regulated substance
within a process. The regulations do not apply to chemical hazards
other than listed substances held above a TQ within a regulated
process.
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    EPA later revised the list rule and the RMP rule. EPA modified the
regulated list of substances by exempting solutions with less than 37%
concentrations of hydrochloric acid (62 FR 45130, August 25, 1997). EPA
also deleted the category of Department of Transportation Division 1.1
explosives, and exempted flammable substances in gasoline used as fuel
and in naturally occurring hydrocarbon mixtures prior to initial
processing (63 FR 640, January 6, 1998).
    EPA subsequently modified the RMP rule five times. First, in 1999,
EPA revised the facility identification data and contact information
reported in the RMP (64 FR 964, January 6, 1999). Next, EPA revised
assumptions for the worst case scenario analysis for flammable
substances and clarified what the Agency means by chemical storage not
incidental to transportation (64 FR 28696, May 26, 1999). After the
Chemical Safety Information, Site Security and Fuels Regulatory Relief
Act (CSISSFRRA) was enacted on August 5, 1999, EPA excluded regulated
flammable substances when used as a fuel or held for sale as a fuel at
a retail facility (65 FR 13243, March 13, 2000). Later, EPA restricted
access to offsite consequence analysis (OCA) data for the public and
government officials to minimize the security risks associated with
posting the information on the Internet (65 FR 48108, August 4, 2000).
Finally, EPA revised the RMP executive summary to remove a requirement
to describe the OCA; revised reporting deadlines for RMP reportable
accidents and emergency contact changes; and made other minor revisions
to RMP facility contact information (69 FR 18819, April 8, 2004).
    The RMP rule establishes three ``program levels'' for regulated
processes:
    Program 1 applies to processes that would not affect the public in
the case of a worst-case release and that have had no accidents with
specific offsite consequences within the past five years. Program 1
imposes limited hazard assessment requirements, requires coordination
with local response agencies, and requires submission of an RMP.
    Program 2 applies to processes not eligible for Program 1 or
subject to Program 3, and imposes streamlined prevention program
requirements, including safety information, hazard review, operating
procedures, training, maintenance, compliance audits, and incident
investigation elements. Program 2 also imposes additional hazard
assessment, management, and emergency response requirements.
    Program 3 applies to processes not eligible for Program 1 and
either subject to OSHA's PSM standard under Federal or state OSHA
programs or classified in one of ten specified industry sectors
identified by their 2002 NAICS codes listed at Sec.  68.10(d)(1). These
industries were selected because they had a higher frequency of the
most serious accidents as compared to other industry sectors. The ten
NAICS codes and the industries they represent are 32211 (pulp mills),
32411 (petroleum refineries), 32511 (petrochemical manufacturing),
325181 (alkalies and chlorine manufacturing), 325188 (all other basic
inorganic chemical manufacturing), 325192 (cyclic crude and
intermediate manufacturing), 325199 (all other basic chemical
manufacturing), 325211 (plastics material and resin manufacturing),
325311 (nitrogenous fertilizer manufacturing), or 32532 (pesticide and
other agricultural chemicals manufacturing).\17\ Program 3 imposes
elements nearly identical to those in OSHA's PSM standard as the
accident prevention program. The Program 3 prevention program includes
requirements relating to process safety information (PSI), PHA,
operating procedures, training, mechanical integrity, management of
change (MOC), pre-startup review, compliance audits, incident
investigations, employee participation, hot work permits, and
contractors. Program 3 also imposes the same hazard assessment,
management, and emergency response requirements that are required for
Program 2.
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    \17\ NAICS codes 325181 and 325188 are now combined and
represented as revised NAICS code 325180 in the 2012 and 2017 code
versions (other basic inorganic chemical manufacturing). NAICS code
325192 is now revised NAICS code 325194 (cyclic crude, intermediate,
and gum and wood chemical manufacturing) in the 2012 and 2017 code
versions.
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    The RMP rule has been effective in preventing and mitigating
chemical accidents in the United States and protecting human health and
the environment from chemical hazards. However, major incidents, such
as the West, Texas explosion,\18\ highlight the importance of reviewing
and evaluating current practices and regulatory requirements, and
applying lessons learned from other incident investigations to advance
process safety where needed.
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    \18\ CSB. January 2016. Final Investigation Report, West
Fertilizer Company Fire and Explosion, West, TX, April 17, 2013.
REPORT 2013-02-I-TX. http://www.csb.gov/west-fertilizer-explosion-and-fire-/.
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III. Additional Information

A. Agency's Authority for Taking This Action

    The statutory authority for this action is provided by section
112(r) of the CAA as amended (42 U.S.C. 7412(r)). Each of the portions
of the Risk Management Program rule we are amending in this document
are based on EPA's rulemaking authority under section 112(r)(7) of the
CAA (42 U.S.C. 7412(r)(7)). A more detailed discussion of the
underlying statutory authority for the current requirements of the Risk
Management Program rule appears in the action that proposed the Risk
Management Program (58 FR 54190, 54191-93, October 20, 1993). The
prevention program provisions discussed in this preamble (auditing,
incident investigation, and safer technologies alternatives analysis)
address the ``prevention and detection of accidental releases.'' The
emergency coordination and exercises provisions in this rule modify
existing provisions that provide for ``response to such release by the
owners or operators of the sources of such releases'' (CAA section
112(r)(7)(B)(i)). This paragraph in the

statute calls for EPA's regulations to recognize differences in ``size,
operations, processes, class and categories of sources.'' In this
document, we maintain the distinctions in prevention program levels and
in response actions authorized by this provision. The information
disclosure provisions discussed in this document generally assist in
the development of ``procedures and measures for emergency response
after an accidental release of a regulated substance in order to
protect human health and the environment.'' This information disclosure
ensures the emergency plans for impacts on the community are based on
more relevant and accurate information than would otherwise be
available and ensures that the public can become an informed
participant in such emergency planning.
    Various commenters suggested that particular provisions of the
proposed rulemaking were not consistent with CAA section 112(r) or
other relevant statutes. We address these comments in each relevant
section of the preamble and in the Response to Comments document,\19\
available in the docket for this rulemaking. Some commenters also
suggested that EPA has not complied with the requirements in CAA
section 112(r)(7)(D) for the Administrator to ``consult with the
Secretary of Labor and the Secretary of Transportation'' and
``coordinate any requirements under this paragraph with any
requirements established for comparable purposes by the Occupational
Safety and Health Administration or the Department of Transportation.''
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    \19\ 2016. EPA Response to Comments on the 2016 Proposed
Rulemaking Amending EPA's Risk Management Program Regulations. This
document is available in the docket for this rulemaking.
---------------------------------------------------------------------------

    EPA disagrees with these comments. Under section 6 of Executive
Order 13650, ``Improving Chemical Facility Safety and Security,'' the
Executive Order Working Group, chaired by EPA, OSHA, and Department of
Homeland Security (DHS), was tasked with enhancing safety at chemical
facilities by identifying key improvements to existing risk management
practices through guidance, policies, procedures, outreach, and
regulations. As part of this task, the Working Group conducted
extensive interagency coordination, and solicited public comment on
potential options for improving chemical facility safety. EPA's
coordination efforts included discussions with numerous Federal
agencies, including OSHA and the Department of Transportation (DOT), on
potential changes to the Risk Management Program rule. As EPA explained
in the preamble to the proposed rulemaking, the OSHA PSM standard and
EPA RMP regulation are closely aligned in content, policy
interpretations, Agency guidance, and enforcement. Since the inception
of these regulations, EPA and OSHA have coordinated closely on their
implementation in order to minimize regulatory burden and avoid
conflicting requirements for regulated facilities. This coordination
has continued throughout the development of this rule and on OSHA's
initial steps toward proposing potential changes to the PSM standard.
EPA's coordination with DOT was less extensive because nothing in this
rule changes its basic applicability provisions, which apply the rule
only to stationary sources, and exclude transportation. However, EPA
continues to coordinate with DOT through ongoing Executive Order
activities, which includes updates on RMP regulatory development, and
this coordination is sufficient to meet EPA's obligations under CAA
section 112(r)(7)(D). As with OSHA, EPA has a long history of close
coordination with DOT on implementation of the RMP, particularly where
potential transportation-related issues arise, and the Agency fully
intends for such coordination to continue.

B. List of Regulated Substances

    As part of its work under Executive Order 13650, the Working Group
solicited public comment on potential changes to the list of regulated
substances for the Risk Management Program, including what actions to
take to address ammonium nitrate (AN). EPA did not propose revisions to
the list of regulated substances. Instead, EPA explained the actions
other agencies in the Executive Order Working Group are considering to
address AN and indicated that EPA will coordinate any potential changes
to the list of substances in 40 CFR part 68 with the actions of these
other agencies. EPA received several comments related to revising the
list of regulated substances and whether to expand the list to include
AN.
1. Discussion of Comments on the List of Regulated Substances
    A couple of commenters expressed support for expanding the scope of
regulated substances under the RMP rule. One private citizen stated
that EPA should broaden the range of chemicals covered under RMP and
account for effects on vulnerable populations including children and
the elderly. A professional organization asserted that EPA should
update the list of regulated substances and require facilities to
``evaluate the risk of a reactive chemical accident and take
appropriate measures, even if the chemicals in question are not on the
list.''
    However, multiple commenters supported EPA's decision not to revise
the list of regulated substances in this action. These commenters
opposed adding toxic or flammable substances to the list of regulated
substances in a separate action. One industry commenter opposed the
addition of combustible dust to the list, arguing that it is already
regulated under OSHA and constitutes a low risk to the public.
    EPA will consider these comments when determining whether to
propose revisions to the list of substances.
2. Discussion of Comments on AN
    Many commenters supported regulating AN in the RMP rule. Several
commenters requested that EPA consider the danger to the public from
AN, and other reactive chemicals, in its rulemaking. A state agency
further asked EPA to ensure that calculations for the OCA consider the
unique explosive characteristics of fertilizer grade ammonium nitrate
(FGAN) and develop specific RMP guidance for regulated FGAN facilities.
One commenter supported adding AN to the list of regulated substances
but requested unique requirements for AN formulated as an explosive or
blasting agent and FGAN. Another commenter claimed that EPA failed to
address Executive Order 13650 by failing to address AN in the proposed
rulemaking.
    However, EPA also received comments opposed to adding AN to the
list of regulated substances. One commenter stated that EPA didn't have
authority to regulate FGAN under the CAA and urged the Agency against
including FGAN under the RMP regulations. Another commenter supported
EPA's decision not to change current threshold quantities and toxic
endpoints.
    An industry trade association requested EPA's support and
recognition of its voluntary private sector comprehensive inspection
and assessment organization and FGAN guidelines for fertilizer retail
facilities.
    EPA acknowledges that there is both support and opposition to
regulating AN and will consider these comments when determining whether
to take further action on this issue. In the interim, EPA encourages
fertilizer retailers to review and use existing guidance. OSHA compiles
several resources on their Fertilizer Industry Guidance on Storage and
Use of Ammonium Nitrate Web

page at https://www.osha.gov/dep/fertilizer_industry/.
    EPA disagrees with the commenter that indicated that EPA failed to
address Executive Order 13650 when we chose not to propose to list AN
in the list of regulated substances for the RMP regulations. In the
proposed rulemaking, EPA explained that other agencies, including OSHA
and DHS, are considering modifications to their regulations, and EPA
will coordinate any potential changes to the list of substances in 40
CFR part 68 with the actions of these other agencies.

IV. Prevention Program Requirements

A. Incident Investigation and Accident History Requirements

1. Summary of Proposed Rulemaking
a. Definitions, Sec.  68.3
    EPA proposed to revise the definition of ``catastrophic release''
in Sec.  68.3 to include impact categories identical to the description
of accidental releases required to be reported under the accident
history reporting requirements in Sec.  68.42. The proposed definition,
in Sec.  68.3, would replace the phrase ``that presents imminent and
substantial endangerment to public health and the environment'' with
impacts categories including impacts that resulted in:
     On-site: Deaths, injuries, or significant property damage;
or
     Offsite: Known deaths, injuries, evacuations, sheltering
in place, property damage, or environmental damage.
    EPA proposed to define ``root cause'' in Sec.  68.3 to mean a
fundamental, underlying, system-related reason why an incident occurred
that identifies a correctable failure(s) in management systems.
b. Incident Investigation Sections, Sec. Sec.  68.60 and 68.81
    EPA proposed a number of revisions to the incident investigation
provisions. EPA proposed to revise Sec.  68.60, which is applicable to
Program 2 processes, and Sec.  68.81, which is applicable to Program 3
processes, by revising paragraph (a) to add subparagraphs (a)(1) and
(a)(2) to better clarify the scope of incidents that must be
investigated. Proposed subparagraph (a)(1) applied to an incident that
resulted in a catastrophic release and clarifies that the owner or
operator must investigate the incident even if the process involving
the regulated substance is destroyed or decommissioned. Proposed
subparagraph (a)(2) applied to a near-miss, which is an incident that
could reasonably have resulted in a catastrophic release. EPA also
proposed removing the phrase ``of a regulated substance'' from
paragraph (a) because it is duplicative. The definition of
``catastrophic release'' refers to releases of regulated substances.
    EPA also proposed to add a new paragraph (c) to Sec.  68.60
requiring that an incident investigation team be established and
consist of at least one person knowledgeable in the process involved
and other persons with appropriate knowledge and experience to
thoroughly investigate and analyze the incident. This is similar to the
existing requirement in Sec.  68.81(c) for Program 3 processes. EPA
proposed that current Sec.  68.60(c) through (f) would become Sec.
68.60(d) through (g).
    EPA proposed to revise the redesignated paragraph (d) in Sec.
68.60 and current paragraph (d) in Sec.  68.81 to revise the incident
investigation report requirements. EPA proposed to change the word
``summary'' to ``report'' and require facility owners or operators to
complete incident investigation reports within 12 months unless the
implementing agency approves, in writing, an extension of time.
    In addition, EPA proposed to amend and add new subparagraphs in the
redesignated paragraph (d) in Sec.  68.60 and current paragraph (d) in
Sec.  68.81 requiring additional elements in an incident investigation
report. Specifically, EPA proposed to:
     Revise paragraph (d)(1) to require the time and location
of the incident in the investigation report;
     Revise paragraph (d)(3) to specify that the description of
the incident be in chronological order and provide all relevant facts;
     Add paragraph (d)(4) to require that the investigation
report include the name and amount of the regulated substance involved
in the release or near miss and the duration of the event;
     Add paragraph (d)(5) to require a description of the
consequences, if any, of the incident;
     Add paragraph (d)(6) to require a description of emergency
response actions taken;
     Renumber current paragraph (d)(4) to (d)(7) and require
additional criteria related to the factors contributing to the
incident, including the initiating event, direct and indirect
contributing factors, and root causes. EPA also proposed to add
language to paragraph (d)(7) to require that root causes be determined
through the use of a recognized method.
     Renumber the current paragraph (d)(5) to (d)(8) and add
language to require a schedule for addressing recommendations resulting
from the investigation to be included in the investigation report.
    Finally, in the redesignated Sec.  68.60(g), EPA proposed to add
the word incident before investigation and change ``summaries'' to
``reports'' for consistency.
c. Accident History, Sec.  68.42
    EPA also proposed to amend the five-year accident history section
to require reporting of categories of root causes identified in the
root cause analysis proposed to be required in Sec. Sec.  68.60(d)(7)
and 68.81(d)(7).
d. Hazard Review, Sec.  68.50
    For the Hazard review section, EPA proposed to amend subparagraph
(a)(2) by adding a phrase at the end to require the owner or operator
to consider findings from incident investigations.
e. Process Hazard Analysis (PHA), Sec.  68.67
    In the PHA section, EPA proposed to add subparagraph (c)(2) to
require the owner or operator to address findings from incident
investigations, as well as any other potential failure scenarios (e.g.,
incidents that occurred at other similar facilities and or processes,
failure mechanisms discovered in literature or from other sources of
information).
f. Updates, Sec.  68.190
    In the Updates section, EPA proposed to amend paragraph (c) to
require the owner or operator to report any accidents covered by Sec.
68.42 and conduct incident investigations required under Sec.  68.60
and/or Sec.  68.81 prior to de-registering a process or stationary
source that is no longer subject to the RMP rule.
2. Summary of Final Rule
    EPA is not finalizing the proposed definition for catastrophic
release and is instead maintaining the existing definition.
Additionally, EPA is finalizing a modified version of the proposed
definition of the term ``root cause.'' In the final definition EPA
deleted the phrase ``that identifies a correctable failure(s) in
management systems.''
    EPA is not finalizing the proposed revisions to the five-year
accident history section in the final rule.
    EPA is finalizing the following provisions as proposed:
     Hazard review section, Sec.  68.50;
     Incident investigation section Sec. Sec.  68.60 and 68.81;
     Process hazard analysis (PHA) section, Sec.  68.67, to add
subparagraph (c)(2).

     Updates section, Sec.  68.190.
3. Discussion of Comments and Basis for Final Rule Provisions
    EPA's rationale for modifying the accident investigation provisions
to explicitly require root cause analysis for investigations of
catastrophic releases and near miss events and to have the findings of
these investigations integrated into the PHA remains generally the same
as in the proposed rulemaking. In the discussion that follows and in
the Response to Comment document, we explain the modifications to our
approach and the basis for these modifications.\20\ The most
significant change in approach is to retain the catastrophic release
definition. As became apparent in the comments, our view that having a
common definition of reportable accidental release and catastrophic
release would simplify and clarify compliance was outweighed by the
potential burden of inadvertently expanding the number of investigated
accidental releases. We continue to require investigations of near
misses, but have provided additional guidance as to what we intend by
the term. Other changes from the proposal are similarly intended to
clarify terms used in the rule. Identification of root cause categories
in accident history reporting has been eliminated because identifying
root cause categories only provides limited information for
understanding the root cause which is best attained by reviewing the
complete incident investigation report. Implementing agencies and/or
local emergency planners may still obtain the investigation report
through direct contact with the facility. The changes we adopt in this
final rule strike a balance between ensuring facilities and planners
learn about the causes of catastrophic releases and near misses while
also better targeting the reporting to minimize burden.
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    \20\ 2016. EPA Response to Comments on the 2016 Proposed
Rulemaking Amending EPA's Risk Management Program Regulations. This
document is available in the docket for this rulemaking.
---------------------------------------------------------------------------

a. Definitions
    Catastrophic release. Although EPA received some support for the
proposed definition of ``catastrophic release,'' many commenters were
opposed to the revision. Many commenters, including government
agencies, industry trade associations, and facilities, argued that
EPA's proposed definition of ``catastrophic release'' (1) expands its
scope, rather than clarifying it, (2) is redundant of OSHA's authority
to regulate workplace safety by including on-site damage or injuries,
and (3) exceeds the CAA authority to regulate only ambient air beyond a
facility's property.
    EPA also received some comments identifying other concerns with the
proposed change to the definition of ``catastrophic release.'' Some
commenters, including a few facilities, said that the proposed
definition is too vague, and some commenters noted that terms such as
``injuries,'' ``significant property damage,'' ``environmental
damage,'' and ``major'' are not defined. A facility and a private
citizen commented that the wording of the definition implies that a
``catastrophic release'' could include a fire, regardless of whether an
actual release of regulated material occurs due to the fire, and also
implies that releases involving on-site environmental damage would not
be considered catastrophic.
    Many commenters, including a state government agency, facilities,
and industry trade associations, argued that EPA's proposed definition
of ``catastrophic release'' would regulate workplace safety concerns
that are outside EPA's authority to regulate under the CAA. Commenters
asserted that EPA has authority to address through regulation and
enforcement offsite impacts of facility releases, not on-site impacts.
A facility asserted that the proposed definition inappropriately
expands the scope of EPA's reach into workplace safety by requiring
investigations of releases that would also include impacts to on-site
workers or property. An industry trade association stated that the
definition ignores Congress's express prohibition against EPA
``exercising statutory authority to prescribe or enforce standards or
regulations affecting occupational safety and health.'' This commenter
further argued that on-site injuries should be excluded from the
proposed definition because OSHA already has jurisdiction in this area
and because these often do not pose any risk to public health or the
environment.
    A facility stated that the proposed revision directly contradicts
EPA's long-held interpretation that the references in section
112(r)(2)(A) to ``ambient'' air limit the Agency's authority to
activities with offsite consequences. The commenter asserted that in
the proposed rulemaking the EPA does not acknowledge the contradiction
from its previous position or explain what new statutory authority
exists or why it now has the authority to regulate workplace incidents.
    Due to the large number of comments opposing the proposed revision
to the definition of ``catastrophic release,'' EPA has decided not to
finalize the proposed language. EPA believed that providing a
consistent trigger for accident investigations and reportable accidents
under the accident history requirements of Sec.  68.42 would simplify
compliance for the regulated community. EPA acknowledges that the
proposed revision may have inadvertently expanded the definition and
therefore the type of accident that could trigger an investigation.
Some reportable incidents under the accident history provision may not
pose an imminent and substantial threat to public health and the
environment (see 40 CFR 68.3 (Catastrophic release)). Due to EPA's
decision to retain the existing ``catastrophic release'' definition and
not go forward with the proposed revision, the authority issues raised
in comments are moot. However, contrary to one commenter's claim, it
has never been EPA's position that the references in section 112(r) to
``ambient'' air limit the Agency's authority to regulate only
activities with offsite consequences. On the contrary, it has been the
Agency's longstanding position that incidents that primarily or even
exclusively impact on-site receptors are potentially relevant to
protection of the public and the environment from the risks of an
accidental release. As EPA explained in the Response to Comments
document for the original RMP rule, certain on-site accident impacts
are relevant because they ``may reflect safety practices at the
source'' and because ``accidental releases from covered processes which
resulted in deaths, injuries, or significant property damage on-site,
involve failures of sufficient magnitude that they have the potential
to affect offsite areas.'' \21\
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    \21\ EPA, Risk Management Plan Rule: Summary and Response to
Comments, Excerpt from Volume 1: Table of Contents, Introduction,
and Sections 3, 16 and 17. May 24, 1996, pp 3-11 and 17-4. Document
No. EPA-HQ-OEM-2015-0725-0153, https://www.regulations.gov/document?D=EPA-HQ-OEM-2015-0725-0153.
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    For similar reasons, requiring investigation of accidents with on-
site impacts is not redundant to OSHA's authority when such accidents
have the potential to affect offsite areas.
    Root cause. Many commenters opposed the proposed definition of
``root cause.'' These commenters, which included industry trade
associations, facilities, and a private citizen, said that EPA should
revise the definition of ``root cause'' to remove ``system-related''
and ``management system,'' reasoning that not all incidents are due to
system failures. One commenter also stated that the definition assumes
that there is only

one root cause and that the failure is correctable, when there can be
many causes and the investigators may not be able to determine what is
``correctable.'' An association of government agencies agreed that the
investigation should identify all root causes of failure, regardless of
whether they are deemed correctable or related to the management
system. An industry trade association stated that EPA should not define
``root cause'' and instead should defer to facilities to rely on
standard definitions from independent safety organizations. Another
industry trade association also argued that EPA does not need to define
``root cause'' because current incident investigator requirements,
which call for the investigator to uncover ``the factors that
contributed to the incident,'' are sufficient. Other industry trade
associations commented that it is very misleading and may lead to
incorrect enforcement proceedings to require a facility to identify a
management system failure as a root cause of incidents whose true root
cause is a design deficiency, equipment failure, or misuse of
equipment.
    EPA agrees with some of the comments, and is finalizing the
proposed definition of ``root cause'' with modifications. EPA deleted
the language regarding identifying correctable failure(s) in management
systems. In response to the comment that the definition assumes that
there is only one root cause, EPA agrees that there are often multiple
root causes. The final rule defines ``root cause'' in the singular, but
does not preclude the possibility of more than one root cause. EPA
agrees with the comments that support investigations identifying all
root causes, and the Agency notes that the root cause requirements in
the final rule require the owner or operator to identify ``root
causes.''
b. Accident History Reporting
    Some government agencies, an industry trade association, and a
professional association agreed that the RMP accident history should
include the root causes of incidents. However, other commenters,
including industry trade associations and a facility, stated that the
existing reporting requirements in Sec.  68.42 are sufficient, and that
requiring root cause reporting in the five-year accident history is an
additional burden that is not offset by improved performance.
    Although EPA believes there could be some benefit to identifying
root cause categories within a facility's accident history, in most
cases, the Agency believes the incident investigation report must be
reviewed in order to fully understand root causes attributed to that
incident. Implementing agency officials can obtain investigation
reports during inspections or by using the Agency's information
gathering authorities when needed. Therefore, EPA did not finalize the
proposed requirement.
c. Changes to Hazard Review (Sec.  68.50) and Process Hazard Analysis
(PHA) (Sec.  68.67) Requirements
    Hazard review and PHA. Some commenters, including several
government agencies, a professional organization, and an industry trade
association, supported the requirement to include incident
investigation findings in the hazard review. Other commenters opposed
the requirement. Some of these commenters stated that the OSHA PSM
standard already requires PHAs to address previous incidents, and EPA's
changes are therefore unnecessary. One industry trade association
commented that, as written, the proposal would require facilities to
include all findings from all investigations for the facility's entire
history.
    Another commenter argued that incident investigation findings
should not be required for PHAs because PHA teams typically use
established techniques and requiring the ``findings from incident
investigations'' to be included would not be a good fit for these types
of assessments.
    EPA disagrees with commenters and is finalizing these requirements
as proposed, so that findings from incident investigations are
considered when hazard reviews are conducted. EPA notes that the basic
purpose of a hazard review is to identify what process equipment
malfunctions or human errors could potentially lead to accidental
releases, and then to identify what safeguards are needed in order to
prevent such malfunctions and errors from occurring. An obvious source
of information about such malfunctions and errors is information gained
from investigating incidents that have previously occurred within the
covered process. For this reason, the Program 3 analog to the hazard
review, the PHA, already requires the owner or operator to identify any
previous incidents that had a likely potential for catastrophic
consequences when conducting the PHA.
    EPA therefore not only disagrees with the commenter who stated that
including findings from incident investigations within the PHA ``would
not be a good fit'' for the PHA (as the existing rule already contains
this requirement), but also believes that this requirement should be
incorporated into the hazard review. EPA also disagrees that widely-
used PHA (or hazard review) techniques preclude consideration of prior
incidents--all PHA and hazard review techniques that EPA is aware of
are easily adapted to allow consideration of prior incident scenarios.
The commenter provided the example of the Hazard and Operability Study
(HAZOP) PHA technique as an example of a technique for PHAs that is
widely accepted but does not consider prior incidents. EPA disagrees
that the HAZOP may not be adapted to consider prior incident causes. In
fact, this PHA technique, which EPA acknowledges is widely used, is
specifically intended to identify process deviations that can lead to
undesirable consequences, as well as the causes and consequences of
such deviations, and safeguards necessary to protect against the
deviation from occurring. Incident scenarios are a key source of
knowledge for conducting this technique. According to the Center for
Chemical Process Safety (CCPS) ``Guidelines for Hazard Evaluation
Procedures--Second Edition with Worked Examples'' (AIChE/CCPS, 1992, pp
143) ``the knowledge-based HAZOP Analysis study can help ensure that
the company's practices, and therefore its experience, have indeed been
incorporated in the design.'' The CCPS Guidelines also provide a
specific example of how incident information can be incorporated into
the HAZOP:

    As a more specific example, consider the discharge from a
centrifugal pump. The guide-word HAZOP approach would apply the
guide word ``Reverse'' to identify the need for a check valve. The
knowledge-based HAZOP approach might also identify the need for a
check valve because an actual problem was experienced with reverse
flow . . . [emphasis added].

In response to the comment regarding the requirements of OSHA PSM, EPA
notes that this final rule requirement is applicable to Program 2
covered processes, which are not subject to the OSHA PSM standard.
    Other potential failure scenarios. Some commenters opposed
including ``other potential failure scenarios'' in the process hazards
analysis (PHA). A state agency and an industry trade association stated
that it is unclear what ``any other potential failure scenarios''
means. The state agency also said that facilities may not have access
to or knowledge of issues at similar facilities. A facility said that
EPA should provide a clearinghouse of ``potential failure scenarios''
so that facilities will have access to them. An industry trade
association commented that a literature

review would not provide much information and would be costly to
conduct.
    In response, as stated in the preamble to the proposed rulemaking,
other potential failure scenarios can include incidents that occurred
at other similar facilities and or processes, failure mechanisms
discovered in literature, or from other sources of information. EPA
believes that it is appropriate to research information about other
potential scenarios and consider these scenarios when conducting a
(PHA). Regarding the comment to provide a clearinghouse of scenarios,
given the variety of processes and stationary sources, and ongoing
changes to technologies, it would be difficult to establish a one-stop
resource that would identify all potential failure scenarios for all
processes covered under the rule. However, EPA believes that owners and
operators are in the best position to obtain incident information
relevant to their own covered processes. In most cases, industry trade
associations will be a useful source for this information. Such
information is also commonly available in trade journals, at industry
conferences, in industry newsletters, in the Chemical Safety Board's
accident investigation reports, in reference publications (e.g., Lees'
Loss Prevention in the Process Industries \22\), and through other
professional networks. EPA therefore believes that information about
other potential failure scenarios that are potentially relevant to a
covered process should not be costly for the owner or operator to
conduct and will benefit both the regulated stationary sources and its
surrounding community.
---------------------------------------------------------------------------

    \22\ Lees, Frank P. 2012. Loss Prevention in the Process
Industries, Fourth Edition. Butterworth-Heinemann. http://www.sciencedirect.com/science/book/9780123971890.
---------------------------------------------------------------------------

    Regarding the comment that this provision will require the owner or
operator to review findings from all incident investigations for the
facility's entire history--EPA agrees that the owner or operator should
review all available incident information, but notes that the rule does
not require the owner or operator to retain incident investigation
reports for more than five years. However, if the owner or operator has
access to incident information beyond that period, they should
incorporate it into their hazard review as appropriate.
d. Destroyed or Decommissioned Processes
    EPA received various comments regarding the proposed rulemaking's
requirement for investigation of incidents that resulted in destruction
or decommissioning of a process. Several commenters, including local
agencies, facilities, an advocacy group, and an association of
government agencies, expressed support for the requirement that an
incident investigation with a root cause analysis be performed for
incidents involving processes units that were destroyed or will be
decommissioned. A local agency and a facility explained that this
information could improve safety for other processes at the same
facility or at other facilities.
    EPA also received comments opposing incident investigations for
destroyed or decommissioned processes. A facility and industry trade
associations commented that there is no benefit to requiring
investigations in cases where a process is decommissioned or destroyed.
    EPA also received comments in opposition to registration
requirements for decommissioned processes. A facility and an industry
trade association said that there is no incremental safety benefit to
requiring a destroyed or decommissioned unit to remain registered under
RMP until after the incident investigation is complete. The commenters
argued that this requirement imposes additional paperwork burdens
without any additional safety benefit.
    EPA is finalizing this requirement as proposed. The Agency agrees
with the commenters who support this requirement because it will ensure
that when incidents occur, particularly incidents so severe that the
owner or operator elects to decommission the process involved or where
the process is destroyed in the incident, lessons are learned as a
result, both for the benefit of the owner/operator, and potentially for
other stationary sources with similar processes.
    In response to the comments opposed to the registration
requirements for decommissioned processes, EPA believes that the
additional paperwork burden regarding such requirements is minimal, as
the processes would have already been registered in the source's most
recent RMP. New accident history information may be added to the RMP
without performing a full update. Following that correction, if the
affected process has been decommissioned or destroyed, and if the
source has multiple covered processes, the owner or operator would
update their RMP to reflect the loss of the affected process (this
would be required whether or not the incident was investigated). If the
affected process was the only process at the source, after completing
the investigation and correcting the existing RMP, the owner or
operator would submit a deregistration notice for the source to EPA.
Deregistration is already required by Sec.  68.190(c) when a source is
no longer subject to Part 68. Therefore, from a paperwork standpoint,
the primary effect of this change would be the timing of when
deregistration occurs. EPA believes the potential benefits of the
knowledge gained from the incident investigation warrant this delay in
deregistering a source.
e. Near Misses
    In the proposed rulemaking, EPA did not propose a definition for
the term ``near miss,'' although EPA did include the term in proposed
revisions to Sec. Sec.  68.60 and 68.81, paragraph (a)(2), in the
phrase: ``Could reasonably have resulted in a catastrophic release
(i.e., was a near miss).'' EPA also sought public comment on whether to
include a formal definition for the term. EPA received comments both
supporting and opposing a definition of ``near miss.''
    Requests to define ``near miss.'' Several commenters, including
government agencies, industry trade associations, facilities, and an
advocacy group, recommended defining ``near miss'' to reduce vagueness,
uncertainty around which incidents require investigation, and the
reliance on owners and operators to define the term. A local agency and
an industry trade association suggested providing examples of near
misses in guidance. A local agency said that EPA should clarify whether
a release is considered a ``near miss'' if it was a controlled release.
Other commenters, including a state agency and an industry trade
association, opposed a regulatory definition of the term, stating that
facilities should be permitted to determine what qualifies as a ``near
miss'' that requires investigation. A state agency also said that EPA
should not define ``near miss'' because it would be challenging to
provide a definition that is suitable for all industry sectors. An
industry trade association stated that the rule raises constitutional
due process concerns because the rule lacks specificity to define the
``near miss'' standard and fails to provide adequate notice to the
regulated community as to what the RMP rule will require.
    EPA is finalizing the language in paragraph (a)(2) of Sec. Sec.
68.60 and 68.81 as proposed, and has elected not to finalize a
regulatory definition of ``near miss'' to identify incidents that
require investigation. The criteria for determining incidents that
require investigation will continue to include events that ``could
reasonably have resulted in a catastrophic release.''

Under the final rule, this criterion, rather than a definition of
``near miss,'' applies to determine which incidents require
investigation. However, the rule makes clear that a ``near miss'' is an
example of an event that ``could reasonably have resulted in a
catastrophic release.'' EPA agrees with commenters who said it would be
difficult to address in a single definition the various types of
incidents that may occur in RMP-regulated sectors that should be
considered near misses, and therefore be investigated. Instead,
facility owners or operators will need to decide which incidents
``could reasonably have resulted in a catastrophic release.'' This may
be based on the seriousness of the incident, the process(es) involved,
and the specific conditions and circumstances involved. In the 1996
Response to Comments on the original rule, EPA acknowledged that the
range of incidents that reasonably could have resulted in a
catastrophic release is very broad and cannot be specifically
defined.\23\ EPA decided to leave it up to the owner or operator to
determine whether an incident could reasonably have resulted in a
catastrophic release and to investigate such incidents.
---------------------------------------------------------------------------

    \23\ [thinsp]EPA. May 24, 1996. Risk Management Plan Rule,
Summary and Response to Comments. Volume 1, p. 16-4. Docket No. A-
91-73, Document No. IX-C-1.
---------------------------------------------------------------------------

    EPA understands from the comments that there was some uncertainty
about the term near miss. EPA's experiences with RMP facility
inspections and incident investigations show there have been incidents
that were not investigated, even though under slightly different
circumstances, the incident could have resulted in a catastrophic
release. While most of these events did not result in deaths, injuries,
adverse health or environmental effects, or sheltering-in-place, the
Agency believes that in some cases, if circumstances had been slightly
different, a catastrophic release could reasonably have occurred.
    As described in the preamble to the proposed rulemaking, and as
noted by one commenter, there is a CCPS definition of ``near miss.''
CCPS defines a ``near miss'' as an event in which an accident causing
injury, death, property damage, or environmental impact, could have
plausibly resulted if circumstances had been slightly different.
    For example, a runaway reaction that is brought under control by
operators is a near miss that may need to be investigated to determine
why the problem occurred, even if it does not directly involve a
covered process both because it may have led to a release from a nearby
covered process or because it may indicate a safety management failure
that applies to a covered process at the facility. Similarly, fires and
explosions near or within a covered process, any unanticipated release
of a regulated substance, and some process upsets could potentially
lead to a catastrophic release.
    CCPS's ``Process Safety Leading and Lagging Metrics--You Don't
Improve What You Don't Measure'' explains that a near miss has three
essential elements.\24\ These include:
---------------------------------------------------------------------------

    \24\ CCPS. January 2011. Process Safety Leading and Lagging
Metrics--You Don't Improve What You Don't Measure, p. 36. CCPS,
American Institute of Chemical Engineers, New York, NY. John Wiley
and Sons. http://www.aiche.org/sites/default/files/docs/pages/CCPS_ProcessSafety_Lagging_2011_2-24.pdf.
---------------------------------------------------------------------------

     An event occurs, or a potentially unsafe situation is
discovered;
     The event or unsafe situation had reasonable potential to
escalate; and
     The potential escalation would have led to adverse
impacts.
    The CCPS document and the CCPS ``Guidelines for Investigating
Chemical Process Incidents'' contain many examples of near misses,
which can be an actual event or discovery of a potentially unsafe
situation.\25\ Examples of incidents that should be investigated
include some process upsets, such as: excursions of process parameters
beyond pre-established critical control limits; activation of layers of
protection such as relief valves, interlocks, rupture discs, blowdown
systems, halon systems, vapor release alarms, and fixed vapor spray
systems; and activation of emergency shutdowns.
---------------------------------------------------------------------------

    \25\ CCPS. March 2003. Guidelines for Investigating Chemical
Process Incidents, 2nd ed., p. 68.
---------------------------------------------------------------------------

    Near misses should also include any incidents at nearby processes
or equipment outside of a regulated process if the incident had the
potential to cause a catastrophic release from a nearby regulated
process. An example would be a transformer explosion that could have
impacted nearby regulated process equipment causing it to lose
containment of a regulated substance. Near misses could also include
process upsets such as activation of relief valves, interlocks,
blowdown systems, or rupture disks.
    The intent is not to include every minor incident or leak, but
focus on serious incidents that could reasonably have resulted in a
catastrophic release, although EPA acknowledges this will require
subjective judgment. EPA will update existing RMP guidance to reflect
the revised RMP requirements and will provide guidance to identify what
types of incidents could be considered near misses.
    The concept of ``near miss'' has a meaning in industry and in the
chemical engineering profession. In this preamble and in guidance, EPA
has explained the concept and has identified sources that explain the
term, and EPA believes that this satisfies any due process concerns
raised by commenters related to the definition of this term. These
sources put the regulated community on notice of EPA's expectations
under the rule and thus also address the due process concerns raised by
commenters regarding notice to the regulated community as to what the
RMP rule will require. EPA expects that by expanding the root cause
analysis requirement to near misses that could have resulted in a
catastrophic incident, some stationary sources will be able to take
corrective actions before another similar, but catastrophic incident
occurs in the future. For example, as discussed in the March 14, 2016
RMP proposed rulemaking (81 FR 13637), incidents at Tosco Refinery,
Georgia Pacific, Shell Olefins, Morton International, BP Texas City
Refinery and Millard Refrigerated Services all involved near-misses or
less serious incidents involving the same cause as the later
catastrophic release.
    Industry suggestions for clarifying near misses. A few industry
trade associations commented that the examples of near misses that EPA
provided in the NPRM, such as excursions of process parameters and
activation of protections devices such as relief valves, should not be
considered ``near misses.'' The commenters said that many of these
examples are safeguards that are designed to be used to prevent
catastrophic releases. An industry trade association also proposed a
definition of ``near miss'' that would be limited only to scenarios
where the final safeguard or layer of protection is activated, such
that a release would have occurred if not for that control.
    In response to these comments, EPA agrees that not all excursions
of process parameters outside control levels or all instances of
protective device activation should necessarily be considered to be
near misses. EPA expects that activation of protective devices should
be investigated when the failure of such devices could have reasonably
resulted in a catastrophic release. However, EPA does not agree that
near miss investigations should only include situations that resulted
in activation of a final safeguard or layer of protection. This may be
appropriate in some cases, but in others, multiple layers of protection
may quickly fail. EPA

believes that owners and operators must use reasonable judgement to
decide which incidents, if they had occurred under slightly different
circumstances, could reasonably have resulted in a catastrophic
release, and investigate those incidents.
f. Investigation Timeframe
    EPA received many comments in support of a shorter investigation
timeframe. Many commenters, including a local agency and a professional
association, stated that 12 months is too long to complete most
investigations, and some commenters said that the timeframe should be
shortened to five or six months. Some commenters also stated there
should be a shorter timeframe, but with the ability to request an
extension.
    Other commenters, including state and local agencies and industry
trade associations, said that EPA should allow for 12 months to
complete an investigation and also allow extensions for especially
large or complex incidents. Some commenters also recommended requiring
interim reports. An industry trade association asked EPA to clarify
that the 12-month period is only for completing the investigation
report, not for implementing the recommendations in the report.
    Other commenters, including facilities and industry trade
associations, said that EPA should not impose any deadline for
completing incident investigations. A few commenters, including a
facility and industry trade associations, commented that an arbitrary
deadline does not account for the complexity of the incident, the types
of process units involved, or the need to retain outside consultants or
experts to complete the investigation.
    After considering these comments, EPA has decided to finalize the
requirement to complete incident investigations within twelve months as
proposed. EPA believes that this timeframe will provide a reasonable
amount of time to conduct most investigations, while also ensuring that
investigation findings are available relatively quickly in order to
assist in preventing future incidents. For very complex incident
investigations that cannot be completed within 12 months, EPA is
allowing an extension of time if the implementing agency approves such
an extension, in writing. EPA encourages owners and operators to
complete incident investigations as soon as practicable, and believes
that 12 months is typically long enough to complete even complex
incident investigations. However, EPA provided flexibility for
facilities to request more time to complete investigations when they
consult with their implementing agency and receive written approval for
an extension.
g. Incident Investigation Team
    Some commenters, including a Federal agency, local government
agencies, an association of government agencies, and an industry trade
association, supported the proposed requirements under Sec.  68.60(c)
for the owner or operator of a Program 2 process to establish an
incident investigation team consisting of at least one person
knowledgeable in the process involved and other persons with
appropriate knowledge and experience to thoroughly investigate and
analyze the incident. Other commenters opposed these requirements. A
facility commented that the incident investigation team requirements
are unnecessary because they are already covered by the OSHA PSM
standard. A private citizen commented that the requirement assumes that
all investigations will be conducted by a team, when it is possible for
a competent individual to perform all aspects of the investigation if
given access and support by the facility owner or operator. The
commenter also stated that although the proposed rulemaking provides
significant information on who may perform a third-party audit, it does
not specify the qualifications of persons who may perform
investigations and certify investigation reports.
    EPA is finalizing the Program 2 incident investigation
requirements, as proposed. The Agency agrees with the commenters who
support requiring at least one person on the investigation team to be
knowledgeable in the process involved and other persons with
appropriate knowledge and experience in incident investigation
techniques, as EPA believes these provisions are necessary to ensure
that facilities thoroughly investigate and analyze incidents and their
root causes.
    EPA disagrees that these incident investigation team requirements
are already covered by the OSHA PSM standard. The requirements for
Program 3 processes in the current rule already include a provision for
incident investigation teams; however, the incident investigation team
requirements in this rule apply to Program 2 processes, which by
definition are not covered by the OSHA PSM standard. EPA agrees that
the requirement assumes that all investigations will be conducted by a
team. EPA believes that all incident investigations, whether conducted
on Program 2 or Program 3 processes, should involve a team of at least
two people, particularly given the requirement under the final rule for
investigations to include analysis of root causes. However, beyond the
requirements specified in the final rule (i.e., to establish an
investigation team consisting of at least one person knowledgeable in
the process involved and other persons with appropriate knowledge and
experience to thoroughly investigate and analyze the incident), the
Agency does not believe it is necessary to specify additional
qualification criteria for incident investigation team members.
h. Root Causes
    Support for root cause requirements. Many commenters, including
government agencies, advocacy groups, a facility, and others, expressed
support for the requirements to determine root causes through the use
of a recognized method and to include information on root causes in
investigation reports. The commenters supported these provisions as a
way to prevent future incidents. Most of these commenters also
expressed support for applying the root cause analysis requirement to
both catastrophic release incidents and to incidents that could
reasonably have resulted in a catastrophic release (i.e. near misses).
These commenters stated that conducting root cause analysis on near
misses would allow the owner or operator to identify and make
corrective actions before a catastrophic incident occurs. Some
commenters also supported EPA's proposal to allow the use of any
recognized method to complete a root cause analysis.
    EPA agrees with these comments and believes that requiring root
cause analyses for catastrophic releases and near misses, and including
root cause information in incident investigation reports is vital for
understanding the nature of these events. EPA is finalizing, as
proposed, the requirements that root causes must be determined through
the use of a recognized method and that information on root causes must
be included in investigation reports. As previously noted, however, the
final rule includes a modified version of the proposed definition of
the term ``root cause.'' The phrase ``that identifies a correctable
failure(s) in management systems'' from the proposed definition has
been deleted.
    Opposition for root cause requirements. EPA also received many
comments opposing the proposed root cause analysis requirements. Some
commenters, including industry trade associations and Federal agencies,
said

that requiring the owner or operator to conduct a root cause analysis
versus other investigation methods is unnecessary. Some of these
commenters also argued that root cause analysis assumes that there is
an underlying management or system-related cause behind every incident,
which may not be the case and which EPA has failed to prove. An
industry trade association and a facility stated that EPA should not
require facilities to select from a predetermined list of root causes
so as to avoid forcing them to fit their findings into a category that
may not be appropriate.
    Regarding these comments, EPA agrees that root cause analysis may
result in identifying causes that are not always an underlying
management or system-related cause, but still believes that the
analysis is necessary to understand why the accident occurred so that
the causes can be addressed. Therefore, we have modified the definition
of ``root cause'' to remove the phrase ``that typically identifies a
correctable failure(s) in management systems'' in order to remove the
implication that all incidents involve correctable management system
failures. EPA also notes that the final rule does not require
facilities to select from a predetermined list of root causes or force
them to fit their findings into an inappropriate category.
    Many commenters argued that EPA should not require root cause
analyses for near misses. A Federal agency, industry trade
associations, and some facilities stated that EPA should not require
root cause analyses for near misses because the requirement would
increase compliance burdens and costs on facilities and take attention
away from other safety activities. A few industry trade associations
also argued that the quality of safety reviews will be diluted by
applying the requirement to low-consequence, high-frequency events. One
industry trade association stated that requiring a root cause analysis
for near misses creates a false equivalency between near misses and
actual catastrophic releases.
    While EPA acknowledges that requiring root cause analyses for near
misses may impose some additional burden on facilities, the Agency
disagrees that the burden is unwarranted or that it will take attention
away from other safety activities. The Agency notes that catastrophic
release near miss events are infrequent events, and therefore do not
typically divert attention from other safety activities. However, EPA
believes that investigation of such incidents, when they occur, should
be a high priority safety activity for regulated stationary sources,
because these investigations can lead to the correction of problems
which could ultimately prevent much more serious and costly
catastrophic release incidents.
    EPA also disagrees that the final rule applies the root cause
investigation requirement to low-consequence, high-frequency events.
The final rule requires root cause investigations only for incidents
that resulted in, or could reasonably have resulted in, a catastrophic
release. Such incidents are unusual. Based on accident history
information reported to EPA, most regulated sources have never
experienced a catastrophic release incident, and the Agency also
believes that near misses will also be relatively rare events. The
final rule does not presume any ``equivalency'' between near misses and
actual catastrophic releases. The Agency notes that actual catastrophic
releases may be more difficult to investigate if the incident requires
extensive cleanup, damage assessment, evidence collection, etc.--
activities that are unlikely to be necessary for near miss events.
However, lessons learned from catastrophic releases and near misses
should both benefit the source and its surrounding community, whether
or not such events are viewed as equivalent.
    Root cause requirements for Program 2 facilities. Some commenters
opposed requiring root cause analyses for Program 2 processes. An
industry trade association said that since most incidents happen at
facilities with Program 3 facilities, it is unnecessary to expand this
requirement to Program 2 facilities. Another industry trade association
said root cause analyses should only be required at Program 3
facilities because the methodology is most appropriate for complex
incidents.
    While it is true that most RMP-reportable incidents occur at
Program 3 processes, EPA decided that there was little justification
for limiting the root cause requirements to only Program 3 processes,
because some serious accidents also occur at Program 2 processes. Also,
the Agency notes that some of the accidents at Program 2 processes
occur at publicly owned water and wastewater treatment facilities that
are not in Program 3 only because they are not located in a state with
an OSHA-approved State Plan. Unlike state and local government
employees at facilities in states with OSHA-approved State Plans, state
and local government employees at facilities in states under Federal
OSHA authority are not covered by the OSHA PSM standard. This results
in regulated processes at these sources being placed in Program 2, even
though the processes generally pose the same risk as similar processes
at publicly owned water or wastewater treatment processes that are
located at sources in OSHA State Plan states.
    Incident investigation methodology. One commenter argued that EPA
does not have authority to specify a specific incident investigation
and analysis methodology and should remove all references to or
requirement for any named investigation or analysis method from its
proposed rulemakings. The commenter cited various provisions of the CAA
and the language within the Memorandum of Understanding between CSB and
EPA and asserted that CSB is the lead entity for accident
investigations and has the authority to specify a named investigation
method. Other commenters, including a state agency and facilities, said
that EPA has not provided examples of how to determine what is a
recognized method or which consensus bodies are to be used to determine
recognized methods.
    EPA disagrees with these comments. While the final rule does not
require use of a specific incident investigation or analysis method
(the final rule allows the owner or operator to determine root causes
using ``a recognized method''), nothing in the CAA precludes EPA from
requiring sources to conduct incident investigations. Contrary to the
commenter's suggestion, the legislative history specifically
contemplates EPA requiring accident investigations (see Senate Report
at 242-43 \26\). The Agency notes that the existing RMP rule already
contains such a requirement applicable to Program 2 and Program 3
processes. Like other risk management provisions, CAA section
112(r)(7)(B)(i) requires investigation requirements to be reasonable,
but nothing in the statute otherwise limits EPA from requiring the
investigation to address the issue of the underlying root cause of the
accident.
---------------------------------------------------------------------------

    \26\ Senate Committee on Environment and Public Works, Clean Air
Act Amendments of 1989, Senate Report No. 228, 101st Congress, 1st
Session (1989)--``Senate Report''.
---------------------------------------------------------------------------

    Nothing in this final rule interferes with the ability of the CSB
to conduct its accident investigations. The incident investigation
provision we adopt is designed to have the facility learn from its
accidents and near misses in order to identify ways to improve the
facility's prevention program. The root cause investigations in this
rule serve a distinct purpose from the oversight purposes of the CSB.
    EPA also disagrees that we should specify recognized investigation
methods or point to specific governing

bodies for such methods. Investigation methods evolve over time, and
new methods may be developed, so any list promulgated by EPA in this
rule may soon be obsolete. The Agency took a similar approach in the
PHA requirements for the existing rule, where it listed several
potential methods, but also included the option to use an appropriate
equivalent methodology. EPA recommends that owners and operators
consult available literature on root cause investigation. For example,
CCPS has published Guidelines for Investigating Chemical Process
Incidents, which provides extensive guidance on incident
investigations, near miss identification, root cause analysis, and
other related topics.\27\
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    \27\ CCPS 2003. Center for Chemical Process Safety, Guidelines
for Investigating Chemical Process Incidents, 2nd Edition, NY:
AIChE.
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i. Other Incident Investigation Report Requirements
    A few commenters, including a Federal agency, expressed support for
the proposal to require additional information to be included in
incident investigation reports. Several other commenters expressed
opposition to various proposed incident investigation report
requirements. A facility said that EPA's proposed changes are
unnecessary because each of the proposed items is already required
under the OSHA PSM standard. Some industry trade associations opposed
requiring facilities to include the results of the root cause analysis
in the incident investigation report, saying this could increase the
likelihood of lawsuits against the facility if those reports are made
public, or could result in the release of confidential business
information.
    EPA believes that providing the additional required information is
vital for understanding the nature of the incident and should be
included in the incident investigation report. Some facility owners or
operators may already voluntarily include root cause information and
other elements required under this rule (e.g., time and location of
incident, name and amount of substance involved in the release, etc.)
in incident investigation reports prepared to comply with the RMP rule.
However, Sec. Sec.  68.60 and 68.81 are being revised to require this
information to ensure clarity and consistency among reports. While the
OSHA PSM standard contains the same incident investigation reporting
requirements as the existing RMP rule for Program 3 processes, prior to
this rule, neither regulation required reporting of root cause
information nor the other report elements required in this rule. EPA
disagrees with the conjecture that there may be an increased
possibility of lawsuits is a good reason not to include root causes and
other factual incident information in incident investigation reports.
We note that the current rule requires a report that discusses factors
contributing to the incident and recommendations resulting from the
investigation, so to the extent that litigants would seek to use
reports to establish cause or preventability of an incident, the
litigation risk is there already. To the extent that the root cause
discussion contains CBI, the existing rule provides methods for
asserting CBI claims. Identifying root causes can prevent future
incidents, thereby reducing accidental release impacts.

B. Third-Party Audits

    EPA proposed to require owners or operators of certain RMP
facilities to perform third-party audits, in order to prevent accidents
and ensure compliance with part 68 requirements. The third-party audits
are similar to the compliance audits already required by Sec. Sec.
68.58 and 68.79, but EPA expects that independent compliance audits
will assist stationary sources to come fully into compliance with the
applicable prevention program requirements. The details of these
requirements are described further.
1. Summary of Proposed Rulemaking
a. Definitions
    EPA proposed to define ``third-party audit'' in Sec.  68.3 as a
compliance audit conducted pursuant to the requirements of Sec.  68.59
and/or Sec.  68.80, by an entity (individual or firm) meeting the
competency, independence and impartiality criteria in those sections.
b. Compliance Audit Requirements Under Sec. Sec.  68.58 and 68.79
    EPA proposed changes to Sec. Sec.  68.58 and 68.79 to require
third-party compliance audits for both Program 2 and Program 3
processes, under certain conditions and to clarify existing
requirements for compliance audits. EPA proposed to edit Sec. Sec.
68.58(a) and 68.79(a) to add the language ``for each covered process''
to clarify that all compliance audits, self and third-party, shall
address compliance with the provisions of Subpart C or D for each
covered process. EPA also added a sentence at the end of the paragraph
to reference when a compliance audit must be a third-party audit.
    EPA also proposed to add paragraphs (f) through (h) in Sec. Sec.
68.58 and 68.79. Paragraph (f) identified third-party audit
applicability. EPA proposed that the next required compliance audit for
an RMP facility would be a third-party audit when one of the following
conditions apply:
     An accidental release, meeting the criteria in Sec.
68.42(a), from a covered process has occurred; or
     An implementing agency requires a third-party audit based
on noncompliance with the requirements of this subpart, including when
a previous third-party audit failed to meet the competency,
independence, or impartiality criteria of Sec.  68.59(b) or Sec.
68.80(b).
    Proposed paragraph (g) described the procedure when an implementing
agency requires a third-party audit and proposed an internal appeals
process. EPA proposed to require an implementing agency to provide
written notice to the facility owner or operator stating the reasons
for the implementing agency's preliminary determination that a third-
party audit is necessary. The owner or operator would have an
opportunity to respond by providing information to, and consulting
with, the implementing agency. The implementing agency would then
provide a final determination to the owner or operator. If the final
determination requires a third-party audit, the owner or operator would
have an opportunity to appeal the final determination. EPA proposed
that the implementing agency would provide a written, final decision on
the appeal to the owner or operator after considering the appeal.
    Proposed paragraph (h) described the schedule for completing third-
party audits. The proposed language required the audit and associated
report to be completed, and submitted to the implementing agency within
12 months of when any third-party audit is required or within three
years of completion of the previous compliance audit, whichever is
sooner. The provision also allowed an implementing agency to specify a
different schedule.
c. Third-Party Compliance Audit Requirements in Sec. Sec.  68.59 and
68.80
    EPA proposed new Sec. Sec.  68.59 and 68.80, which included
requirements for both third-party compliance audits and third-party
auditors. In paragraph (a), EPA proposed that owners or operators
engage a third-party auditor to evaluate compliance with the provisions
of subpart C or D (as applicable) when the applicability criteria of
Sec.  68.58(f) or Sec.  68.79(f) are met.

    Auditor qualifications. In paragraph (b), EPA proposed third-party
auditor qualifications and required facility owners and operators to
document that the third-party auditor or audit team meets competency
and independence criteria of the rule. Specifically, EPA proposed that
facility owners or operators determine and document that the third-
party auditors meet the competency criteria in paragraph (b)(1) and the
independence criteria in paragraph (b)(2).
    EPA proposed competency criteria for auditors, requiring third-
party auditors to be:
     Knowledgeable with the requirements of part 68;
     Experienced with the facility type and processes being
audited and the applicable recognized and generally accepted good
engineering practices (RAGAGEP);
     Trained or certified in proper auditing techniques; and
     A licensed Professional Engineer (PE) or include a
licensed PE on the audit.
    EPA also proposed independence and impartiality criteria that would
apply to the third-party auditor or auditing team, and to each audit
team member, individually. Specifically, the criteria would have
required the auditor/audit team to:
     Act impartially when performing all activities under this
section;
     Receive no financial benefit from the outcome of the
audit, apart from payment for the auditing services;
     Not have conducted past research, development, design,
construction services, or consulting for the owner or operator within
the last 3 years. For purposes of this requirement, consulting does not
include performing or participating in third-party audits pursuant to
Sec.  68.59 or Sec.  68.80;
     Not provide other business or consulting services to the
owner or operator, including advice or assistance to implement the
findings or recommendations in an audit report, for a period of at
least 3 years following submission of the final audit report;
     Ensure that all personnel involved in the audit sign and
date the conflict of interest statement in Sec.  68.59(d)(8); and
     Ensure that all personnel involved in the audit do not
accept future employment with the owner or operator of the stationary
source for a period of at least 3 years following submission of the
final audit report. For purposes of this requirement, employment does
not include performing or participating in third-party audits pursuant
to Sec.  68.59 or Sec.  68.80.
    In addition, in paragraph (b)(3), the proposed rulemaking required
the auditor to have written policies and procedures to ensure that all
personnel comply with the applicable competency, independence, and
impartiality requirements.
    Audit report. EPA proposed requirements for the audit report in
paragraph (c). In paragraph (c)(1) EPA specified the scope and content
of these reports, including a statement to be signed by the third-party
auditor certifying that the third-party audit was performed in
accordance with the requirements of subpart C or D, as applicable. EPA
also proposed to require that the final third-party audit reports
identify any adjustments made by the third-party auditor to any draft
third-party audit reports provided to the owners or operators for their
review or comment.
    Proposed paragraph (c)(2) included requirements for third-party
auditors to retain reports and records. Proposed paragraph (c)(3)
required the audit report to be submitted to the implementing agency at
the same time, or before, it is provided it to the owner or operator.
Proposed paragraph (c)(4) provided that the audit report and related
records could not be claimed as attorney-client communications or as
attorney work products, even if written for or reviewed by legal staff.
    Third-party audit findings. EPA proposed in paragraph (d)(1), to
require owners or operators, as soon as possible, but no later than 90
days after receiving the final audit report, to determine an
appropriate response to each of the findings in the audit report, and
develop and provide to the implementing agency a findings response
report. EPA proposed that the findings response report would include:
     A copy of the final audit report;
     An appropriate response to each of the audit report
findings;
     A schedule for promptly addressing deficiencies; and
     A statement, signed and dated by a senior corporate
officer, certifying that appropriate responses to the findings in the
audit report have been identified and deficiencies were corrected, or
are being corrected, consistent with the requirements of subpart C or D
of 40 CFR part 68.
    EPA proposed in paragraph (d)(2), to require the owner or operator
to implement the schedule to address deficiencies identified in the
audit findings response report, and document the action taken to
address each deficiency, along with the date completed.
    Proposed paragraph (d)(3) required the owner or operator to provide
a copy of documents required under paragraphs (d)(1) and (d)(2) to the
owner or operator's audit committee of the Board of Directors, or other
comparable committee, if one exists.
    Recordkeeping. Finally, EPA proposed recordkeeping requirements for
the owner or operator in paragraph (e). The proposal would have
required the owner or operator to retain records at the stationary
source, including: The two most recent third-party audit reports,
related findings response reports, documentation of actions taken to
address deficiencies, and related records; and copies of all draft
third-party audit reports. Those sections would further have required
the owner or operator to provide draft third-party audit reports, or
other documents, to the implementing agency upon request. EPA proposed
that requirements would not apply to any documents that are more than
five years old.
2. Summary of Final Rule
    Regulated entities must engage a third-party to conduct an