TEXAS AG INDUSTRIES ASSOCIATION
Regulatory Compliance After the West
Fertilizer Explosion
Benjamin Rhem
Jackson Walker L.L.P.
brhem@jw.com• 512-236-2012
Diana Rader
W&M Environmental Group, Inc.
drader@wh-m.com• 512-493-9698
Texas City – 1947
Presentation Outline
• Public Reaction and Increased Scrutiny
• Regulatory Maze
– Reporting
– Handling
– Environmental
• Compliance Recommendations
• Texas Audit Privilege Act
Headlines
“Texas Fertilizer Plant Fell Through Regulatory Cracks”
Headlines
“Hearing on West Fertilizer Explosion Shows Lack of
Regulation and Coordination”
Headlines
“Probe of Texas Fertilizer Plant Blast Finds Industry under
Lax Regulation”
Increased Federal Scrutiny
August 1, 2013 – President Obama signed
an Executive Order to improve chemical
facility safety and security
– Within 90 days DHS, Labor Dept., and Dept. of
Agriculture must develop list of potential
regulatory and legislative proposals to improve
chemical facility safety standards
– Identify best practices
– Improve Coordination with state and local
authorities
Increased Federal Scrutiny
• EPA, OSHA, and the ATF issued a
chemical advisory for ammonium nitrate
– Not regulations, just recommendations
– Focused primarily on safe handling and
storage of higher density, solid pellets
• Avoid storage in confined spaces
• Utilize sprinkler systems and automatic fire
detection systems
• Avoid storage close to dust producing organic
materials (i.e., grains, seeds, sugar)
State Reaction
• “I think everyone in the agricultural
community is going to take a real hard
look at this. We definitely need to draw
lessons from this.” - Tim Herrman, State Chemist
• “Through their elected officials, [Texans]
clearly send the message of their comfort
with the amount of oversight.” – Gov. Rick
Perry
State Reaction
• “Texas might be better served by
identifying those substances that are
catastrophic in nature or have the potential
for mass destruction, like ammonium
nitrate in West, Texas – so that additional
preventative measures may be taken.” –
Special Report to the Texas House of Representatives
Regarding West, Texas Disaster
Applicable Regulations
• Reporting
– Tier II Reports
• Extremely Hazardous Substance – 500 pounds
• Hazardous Chemical – 10,000 pounds
• Exemption – “routine agricultural operations” or
“fertilizers held for sale…to the ultimate consumer”
– Chemical Facility Anti-Terrorism Standards
• Top screen threshold for ammonium nitrate:
– 2000 pounds when in fertilizer form (with a nitrogen
concentration of 23% or greater)
• Upon review, DHS will determine if the facility is a “high
risk” facility
Applicable Regulations
• Handling
– U.S. Pipeline and Hazardous Material Safety
Administration
– EPA – Risk Management Plans
– State Chemist
Applicable Regulations
• Environmental
– Air Quality
– Wastewater Discharge
– Waste Disposal
Recommendations
• Evaluate Facility Risks
• Company Culture
• Insurance
• Emergency Management Plans
• Self-Audit
Texas Audit Privilege Act
• Legal Requirements
– Notice of Audit
– 6 months to Complete Audit
– Submit Voluntary Disclosures of Violations
and Corrective Action Plan
– 6 months to complete Corrective Actions
– Obtain immunity from penalties associated
with violations of state laws that are
voluntarily disclosed
Texas Audit Privilege Act
• Audit Process
– Define the scope of the audit (air, water,
waste, health & safety)
– Step 1 – Review TCEQ records
– Step 2 – Site visit, interviews, site records
review
– Step 3 – Letter report and Disclosure of
Violations Table
Site Visit
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Facility tour
Observe processes
Incoming materials
Material storage and handling
Outgoing products and wastes
Personnel interviews
Records review
Typical Records Reviewed
• Permits,
Authorizations,
Registrations,
Certifications (Air,
Water & Waste)
• Plans – Stormwater,
SPCC, Hazard
Communication Plans
• Waste Manifests
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Inventory Records
Shipping papers
Inspection logs
Material Safety Data
Sheets (MSDS)
• Tier 2 reports
• TRI reports
Staying in Compliance
• Designate a person-in-charge, and train them
• Keep waste characterization documents
• Use manifests and document monthly waste
generation
• Consistency
• Look for waste minimization opportunities
• Keep records current
• Manage your stormwater
• Use the Texas Audit Privilege Act
Questions
If you ask me anything I don't know, I'm
not going to answer.
- Yogi Berra
brhem@jw.com
drader@wh-m.com