Motiva Enterprises, LLC

Plain-English summary

Motiva operated a propane distribution terminal next to a refinery where storage tanks supplied propane to customer tanker trucks through connecting pipes. OSHA cited the terminal under the process safety management standard, relying on refinery tanks that normally held more than the 10,000-pound threshold. The Commission held that OSHA had not shown the covered process was both “on site” and “in one location,” as the standard requires for flammable gases. The stipulated record did not establish the distance between the tanks and terminal or whether a release in one area could affect the other, and OSHA did not provide an interpretation that gave independent meaning to those terms. The Commission reversed the judge, vacated the citations, and eliminated the $2,500 penalty.

Decision snapshot

• Cited standard(s): 29 C.F.R. § 1910.119
• Outcome: The Commission vacated all process-safety citations and the $2,500 penalty.
• Key point: Interconnected equipment alone did not prove that a flammable-gas process was “on site” and “in one location” when the record lacked evidence connecting the separate areas' release hazards.

Full text (OSHRC public release)

Motiva Enterprises, LLC, and its successors, Docket No. 02-2160

SECRETARY OF LABOR,

Complainant,

v.

OSHRC Docket No. 02-2160

MOTIVA ENTERPRISES, LLC, and its
successors,

Respondent.

APPEARANCES:

Howard Radzely, Solicitor of Labor; Joseph M. Woodward, Associate Solicitor for Occupational
Safety and Health; Alexander Fernández, Deputy Associate Solicitor for Occupational Safety and
Health; Daniel J. Mick, Counsel for Regional Trial Litigation; Peter J. Vassalo, Attorney for the
Secretary of Labor, U.S. Department of Labor, Washington, DC.

For the Complainant

Arthur G. Sapper, Esq.; McDermott, Will and Emery, Washington, DC ; Elizabeth K. Hay, Esq.,
Senior Attorney, Shell Oil Company, Houston, Texas, Of counsel

For the Respondent

DECISION

Before: RAILTON, Chairman, ROGERS, Commissioner, and THOMPSON, Commissioner.

BY THE COMMISSION:

For review before the Commission is a decision by Administrative Law Judge Michael
H. Schoenfeld affirming citations issued to Motiva Enterprises, LLC (Motiva) for violations of
29 C.F.R. § 1910.119, the process safety management (PSM) standard for highly hazardous
chemicals. The only issue to be decided, based on the parties’ stipulated record, is whether the
PSM standard applies to the conditions at Motiva’s propane distribution terminal. For the
reasons given below, we reverse the judge and vacate the citations.

BACKGROUND

On November 4, 2002, the Occupational Safety and Health Administration (OSHA)
issued Motiva two citations for alleged serious and “other than serious” violations of the PSM
standard at its propane refinery and distribution terminal in Delaware City, Delaware.

OSHA
proposed a total penalty of $2,500. Motiva timely contested the citations, and the parties
submitted the case to the judge on a stipulated record. Motiva concedes that the PSM standard
applies to the equipment in its propane refinery. Pursuant to the parties’ stipulation, Motiva only
disputes the Secretary’s claim that the PSM standard applies to the conditions at its Delaware
City distribution terminal. Motiva stipulated to all other elements of a violation, as well as the
characterization and penalties proposed for the citation items.

According to the stipulations, Motiva’s “Commercial Marketing and Distribution
Division” runs the distribution terminal, which dispenses and sells propane on a wholesale basis.
The distribution terminal is adjacent to Motiva’s propane refinery, which is run by Motiva’s
“Refining Division.” The refinery is separated from the terminal by a cyclone fence. Seven
storage tanks store propane at the refinery until the propane is dispensed at the distribution
terminal. Each of the seven propane storage tanks in the refinery connects to a pipe that
transports the propane over the cyclone fence and into the distribution terminal.

The distribution terminal contains two loading islands where customers wishing to
purchase propane park their tanker trucks. After parking next to an island, the driver of the truck
exits the vehicle and attaches a loading hose to the tanker truck. The driver then walks to the
end of the loading island and inserts a key card containing the customer’s account information
into an outdoor computer. Using the computer’s key pad, the driver enters numbers representing
the amount of propane desired and then activates the loading pump. Once activated, the loading
pump propels propane from one of the seven storage tanks located in the refinery, through a
connected pipe leading over the cyclone fence, and into the distribution terminal, where a
loading hose dispenses the propane into the tanker truck.

During this procedure, upwards of 39,000 pounds of propane may flow over a period of
30 minutes from the propane storage tank to its final repository in the tanker truck. While the
several pipes that run from the refinery’s storage tanks to the distribution terminal do not have
the combined capacity to contain 10,000 pounds of propane, each of the refinery’s seven storage
tanks (that feed propane to the distribution terminal) has the capacity to store up to 100,000
pounds of propane, and normally contains more than 10,000 pounds of propane at any given
time.

DISCUSSION

By its terms, the PSM standard applies to:

(ii) A process which involves a flammable liquid or gas … on site
in one location, in a quantity of 10,000 pounds … or more….

29 C.F.R. § 1910.119(a)(1)(ii). In his decision, the judge concluded that the conditions at the
cited terminal fell under the PSM standard based on his findings that: (1) the movement of the
propane from the propane storage tanks, through the pipes, and into the tanker trucks constituted
a “process”; and (2) the minimum amount of propane—which the parties agree is a flammable
gas—could be found either in the tanker trucks at the distribution terminal or in the propane
storage tanks at the refinery.

We agree with the judge that the stipulated record establishes that the cited activities
involve a quantity of 10,000 pounds of propane, the threshold amount identified in
§ 1910.119(a)(1)(ii). We base this on the stipulated fact that each of the seven storage tanks in
the refinery normally contains at least 10,000 pounds of propane. We do not rely, as the judge
did, on the amount of propane contained in the tanker trucks to meet the 10,000-pound threshold
quantity. Not only did the parties stipulate that the tanker trucks are not subject to regulation by
the Occupational Safety and Health (OSH) Act, but on review the Secretary refers to the judge’s
reliance on the amount of propane contained in the tanker trucks as error, albeit harmless.

We cannot agree, however, with the judge’s ultimate conclusion that the cited
distribution terminal is subject to the requirements of the PSM standard. Section
1910.119(a)(1)(ii) expressly requires that a “process” involving a flammable gas or liquid in a
quantity of 10,000 pounds or more be “on site” and “in one location” in order to be covered by
the PSM standard. Yet, the judge made no findings in his decision that any of the activities
involving the propane storage tanks in the refinery and the pipes connecting them to the
distribution terminal were “on site” and “in one location.”

The Secretary’s case is equally lacking. Indeed, the Secretary has failed not only to
address the meaning behind the terms “on site” and “in one location” – two important elements
of the PSM standard – but also to show how these elements are established on this record. The
Secretary contends only that the “process” alleged here is “on site in one location” because the
refinery storage tanks connect to pipes leading into the distribution terminal, and because the
standard’s definition of “process” states that interconnected vessels shall be considered a single
process, citing to a section of the preamble for support. Her view, however, effectively reads the
terms “on site” and “in one location” out of the standard. Because these terms were expressly
included in the provision, they must have some meaning apart from the separately defined
“process.” See Smith Steel Casting Co. , 15 BNA OSHC 1001, 1007, 1991-1993 CCH OSHD
¶ 29,314, p. 39,366 ( No. 80-2322, 1991) (consolidated) (as a basic rule of statutory construction,
a standard should be read as “a harmonious whole, and every word or phrase should be given
meaning to the extent possible”). Compare 29 C.F.R. §  1910.119(a)(1)(ii) (“on site” and “in one
location” are elements in determining whether the PSM standard applies to a process involving a
flammable liquid or gas) with 29 C.F.R. § 1910.119(a)(1)(i) (“on site” and “in one location” are
not elements in determining whether the PSM standard applies to a process involving a
hazardous chemical).

That meaning, however, is not found in the preamble to the PSM Final Rule. See Process
Safety Management of Highly Hazardous Chemicals; Explosives and Blasting Agents (PSM
Final Rule), 57 Fed. Reg. 6355, 6372 (Feb. 24, 1992) (codified at 29 C.F.R. § 1910). The
preamble section upon which the Secretary relies is not, as she asserts, OSHA’s explanation of
the terms “on site” or “in one location,” but OSHA’s clarification of the definition of “process.”
PSM Final Rule, 57 Fed. Reg. at 6363. In fact, nowhere in the preamble does OSHA explain
how the terms “on site” and “in one location” should be applied to determine whether a process
involving flammable liquids or gases should be covered by the PSM standard. PSM Final Rule,
57 Fed. Reg. at 6356-6417.

The Secretary promulgated the PSM standard in response to a number of accidents
involving spills or releases of hazardous chemicals that resulted in major disasters. The
Preamble to the PSM Final Rule specifically noted the 1984 Bhopal, India accidental release of
methyl isocyanate resulting in more than 2,000 deaths, the 1989 Phillips 66 Chemical Plant
accident resulting in 24 deaths and 132 injuries, and the 1990 Arco Chemical incident resulting
in 17 deaths, among others. See PSM Final Rule, 57 Fed. Reg. at 6356. The Preamble to the
PSM Final Rule described the problem the standard would address as follows:

After the 1984 Bhopal, India incident involving an
accidental release of methyl isocyanate which resulted in more
than 2000 deaths, OSHA determined that it was necessary to
immediately investigate U.S. producers and users of methyl
isocyanate. This investigation indicated that while the chemical
industry is subject to OSHA’s general industry standards, these
standards do not presently contain specific coverage for chemical
industry process hazards, nor do they specifically address
employee protection from large releases of hazardous chemicals.

OSHA standards do exist for employee exposure to certain
specific toxic substances …, and hazardous chemicals are covered
generally by other OSHA standards such as the Hazard
Communication Standard, § 1910.1200. While these standards do
address hazardous chemicals, they focus on routine or daily
exposures and while in many cases they also address emergencies
such as spills, OSHA believes that they do not address the
precautions necessary to prevent large accidental releases that
could result in catastrophes .

PSM Final Rule, 57 Fed. Reg. at 6356-6357 (emphasis added). Thus, the express purpose of the
PSM standard is to set forth “requirements for preventing or minimizing the consequences of
catastrophic releases of toxic, reactive, flammable, or explosive chemicals.” 29 C.F.R.
§ 1910.119. Accordingly, in drafting the standard the Secretary created a framework to address
the hazards presented by such releases of chemicals, including provisions designed both to
prevent releases and to ameliorate their effects.

The legislative history of the standard has relevance in helping to give context to the
meaning of “on site” and “in one location.” In this case, however, the Secretary has failed to
provide an adequate explanation of what these terms mean and she agreed to a stipulated record
that lacks detail that could help resolve the issues.

In regard to the Secretary’s failure to provide an adequate explanation of the meaning of
the conjunctive requirement that a process be “on site” and “in one location”, since the Secretary
is the policymaking actor here ( Martin v. OSHRC (CF&I) , 499 U.S. 144 (1991)), we will leave it
to her in the first instance to tell us what she thinks these words mean. We will allow her to first
“grapple[] with” the meaning of these terms and offer an “authoritative interpretation.” See Akzo
Nobel Salt Inc. v. FMSHRC , 212 F.3d 1301 (D.C. Cir. 2000). Any such subsequent
interpretation offered in a future case will be reviewed under “standard deference principles.”
Id. In this case, however, she has failed to articulate an appropriate framework, and that is one
reason her case here fails.

The parties agreed to a stipulated record that lacks detail that could help resolve the
issues. Specifically the record fails to address whether the distance from the refinery’s propane
storage tanks to the distribution terminal was such that a release in one of the refinery’s storage
tanks could involve the distribution terminal. Indeed, the Secretary points to no evidence that
clearly establishes the distance between these two areas; our attempts to determine the distance
based on the record before us results in a rough estimate at best, and it is not for the Commission
to fill gaps in the Secretary’s case.

Even if the distance between the refinery’s propane storage tanks and the distribution
terminal were known, the record lacks evidence that based on the combustible nature of propane
and the distance between the propane storage tanks and the distribution terminal, a release in one
of the refinery’s propane storage tanks could involve the distribution terminal. Conversely, there
is nothing in the record to show that an event originating at the distribution terminal could affect
the refinery’s propane storage tanks. Evidence on this subject might have assisted the
Commission in determining whether the cited activities were “on site” and “in one location.”
Without such evidence and without any explanation from the Secretary, given the record in this
case, there is simply no way the Commission can determine whether the PSM standard applies to
the cited distribution terminal.

We also do not believe that a determination as to whether the refinery and the terminal
are separate operations needs to be made. Motiva’s argument that the terminal and the refinery
are separate operations seems to raise a defense. However, as with the Secretary’s case, the
Respondent simply does not provide enough information for us to make any determination
concerning whether the refinery and the terminal are separate entities. Motiva would apparently
have us determine that they are two entities. On this record, however, we cannot make that
determination.

Accordingly, we reverse the judge’s decision and vacate the citations.

SO ORDERED.

/s/________

W. Scott Railton

Chairman

/s/________

Thomasina V. Rogers

Commissioner

/s/_________

Horace A. Thompson, III

Commissioner

Dated: September 22, 2006

SECRETARY OF LABOR,

Complainant,

v.

DOCKET No. 02-2160

MOTIVA ENTERPRISES, LLC,

Respondent.

Appearances:                             Mark V. Swirsky, Esq.

Office of the Solicitor

U. S. Department of Labor

Philadelphia, PA

For Complainant

Arthur G. Sapper, Esq.

McDermot, Will & Emery

Washington, DC

For Respondent

Before:                                       Michael H. Schoenfeld,

Administrative Law Judge

DECISION AND ORDER

Background and Procedural History

This case arises under the Occupational Safety and Health Act
of 1970, 29 U.S.C. §§  651 - 678 (1970) ("the Act").

Having had its worksite inspected by a compliance officer of
the Occupational Safety and Health Administration (“OSHA”), Motiva Enterprises, LLC,
("Respondent"), was issued two citations alleging one serious violation and one other-than-serious violation of the Process Safety Management Standard (“PSM Standard”) at 29 C.F.R. §
1910.119. A civil penalty of $ 2,500 was proposed. Respondent timely contested the citations.
By agreement of the parties, and with the approval of the Administrative Law Judge, the parties
have submitted this matter for a decision on the record pursuant to Rule 60, 29 C.F.R. §
2200.60.

The parties have filed a document entitled “Parties’ Stipulations and Statement of
Undisputed Material Facts” (“Stipulation”) with supporting attachments. They have also each
filed a supporting memorandum as well as a reply or response to the memorandum filed by the
opposing party.

Discussion

The sole issue between the parties is whether the PSM standard
applies to the cited facility. Inasmuch as Respondent operates both propane storage tanks and a
propane marketing terminal which are immediately adjacent to one another and are both
essential and integral to the continuous course of action of selling, dispensing and loading
propane into tanker trucks, I conclude that the cited propane marketing terminal is a constituent
part of an “activity involving a highly hazardous chemical.” Accordingly, the PSM standards
apply to the propane marketing terminal.

The essential facts are neither complex nor disputed.

Respondent, through two different divisions, owns and operates
both a group of seven propane storage tanks and a propane marketing terminal at its Delaware
City Refinery. The properties are immediately adjacent to one another and are separated by a
cyclone fence. Propane stored in the tanks is fed through a series of pipes above and over
customers’ tanker trucks which pull up at loading islands at the terminal where they are loaded
with propane for sale, distribution and/or use elsewhere. Each of the seven storage tanks usually
contains more than 10,000 pounds of propane and has a capacity of 100,000 pounds of propane.
The pipes within the terminal, however, do not have the capacity to contain 10,000 pounds of
propane at any one time. While the amount of propane within a tanker truck varies, during the
loading of a single tanker truck, about 39,000 pounds of propane will flow through the pipes and
accumulate in the tanker truck within a period of approximately thirty (30) minutes.

T he Secretary has the burden of demonstrating by a
preponderance of the evidence that the cited standard applies.

The parties agree that the applicability of the PSM standards
rests upon whether the activity cited constitutes “a process” involving more than 10,000 pounds
of propane.

The parties offer differing interpretations of the definition of “process” found at 29
C.F.R. § 1910.119(b), which states;

“Process" means any
activity involving a
highly hazardous
chemical including
any use, storage,
manufacturing,
handling, or the on-site movement of
such chemicals, or
combination of these
activities. For
purposes of this
definition, any group
of vessels which are
interconnected and
separate vessels
which are located
such that a highly
hazardous chemical
could be involved in a
potential release shall
be considered a single
process.

(“PSM Definition.”) The essential difference between the Secretary and Respondent lies in
determining what constitutes “on-site” handling of propane.

The Secretary seeks to define “process” in terms of including
all interconnected aspects of a particular activity. The Secretary argues that the storage,
movement and loading is a single process of “handling” to which the standard applies, even
though it is stipulated that “the tanker truck, its movements and propane loading...are not subject
to the (OSH) Act”

because they are regulated by the U.S. Department of Transportation, and
even though the terminal piping, by itself, does not and cannot contain more than 10,000 pounds
of propane at any one time.

The Secretary maintains that the preamble to the publication of
the cited standard (57 F.R. 6356 et. seq. ) (February 24, 1991) as well as a number of published
letters of interpretation (which are included in the record in this matter) support her application
of the standard under the facts of this case. The Secretary is correct in her analysis.

First and foremost, the PSM Definition is abundantly clear on
its face. It is axiomatic that there is no need to offer, seek or rely upon convoluted alternative
rationales or to engage in micro-parsing where, as here, a definition is unambiguous. Indeed,
Respondent concedes that its propane terminal is covered by the first sentence of the definition.
(Respondent’s Motion of Judgment on Stipulated Record, p. 8; Respondent’s Reply to
Secretary’s Motion, p.8) Second, Respondent’s analytical framework, relying as it does on the
argument that the second sentence of the PSM Definition controls the outcome of this matter,
does not qualify as a recumbentibus.. Not only is the first sentence clear on its face, but it is
apparent from the language of the PSM Definition and its history that the second sentence does
not modify or limit the meaning of the first, but rather adds to or further explains the first. The
definition as a whole is more one concerned with “activity,” than with a particular location.
Further, the use of “any” to modify “activity” then in the first sentence creates broad coverage.
The second sentence serves to shed light on the focus of the standard being directed towards the
“activity” rather where that activity takes place. The regulatory description of the rationale for
the addition of the second sentence to the standard as it was originally proposed

is consistent
with the Secretary’s position. Moreover, the distinction between process and location is also
consistent with the material in the proposed standard’s preamble immediately preceding the
specific discussion of the sentence added to the process definition. In excluding from coverage
“normally unoccupied remote” facilities the Secretary relied on two factors; the sporadic
presence of employees and, more importantly, the geographic characteristics of the excluded
facility - requiring that it be both “not contiguous with” and “geographically remote from all
other buildings, processes or persons.” ( 57 F.R. 6404, February 24, 1991.)

In sum, the
Secretary knew and made use of the difference between concepts of activity and location. There
was no intent and there is no language supporting the view that the second sentence restricts or
limits the first sentence of the definition of “process.” (See, 57 F.R. 6371-72, February 24,
1991.)

Several other arguments made by Respondent bear mentioning
briefly. The fact that the pipes themselves do not together have the capacity to contain 10,000
pounds of propane at any one time is inconsequential. The threshold amount is reached by either
the amount in the storage tanks on the immediately adjacent and contiguous property owned,
operated and controlled by Respondent or by the amount in each tanker truck being loaded
which, even though not regulated by OSHA, nonetheless places at the terminal up to 39,000
pounds of propane. Respondent’s argument that the lack of a stipulation that the pipes and
tanks constitute a single process is fatal to the Secretary’s case is incorrect. The application of a
definition to a given or arrived at set of facts is an act of reasoning and is a legal conclusion, or,
perhaps, a mixed finding of fact and conclusion of law. Where a case is submitted on the record,
or indeed after a hearing, an administrative law judge relies not only on stipulated facts but, as
the finder of fact, also arrives at factual findings based upon reasonable inferences arising from
the established facts. In this case, the established facts give rise to the reasonable inference that
the acts of storing propane, moving propane from tanks to terminal and the filling of propane
tanker trucks, constitutes a single process. In addition, Respondent’s claim that the tanker trucks
cannot be the basis of coverage under the PSM standard in this case is rejected. First, even
without considering the amounts of propane in the trucks, the terminal in this case is neither
remote nor distant from tanks containing amounts exceeding the threshold for coverage. Second,
even if the trucks are not covered by OSHA regulations, DOT regulations have not been shown
to cover the working conditions of Respondent’s employees in and around the terminal. Under
Respondent’s theory, Respondent’s employees in and about the terminal would remain without
coverage. Third, the interpretation letter relied upon by Respondent (Letter from H. Berrien
Zettler to John Anicello of February 4, 1994) (Attachment I) is neither applicable nor binding. If
anything, it is consistent with coverage where, as here, there is a single process and the threshold
amount is present within close proximity. Finally, Respondent’s “fair notice” argument is
rejected in light of the unambiguity and clarity of the PSM coverage provision and in light of the
extensive materials contained in public documents available both at the time of and since its
publication.

FINDINGS OF FACT

The Parties’ Stipulations and Statement of Undisputed
Material Facts is incorporated herein in its entirety. It contains all facts necessary for a
determination of all relevant issues. Fed. R. Civ. P. 52(a). All arguments, proposed findings of
fact and conclusions of law inconsistent with this decision are hereby rejected.

CONCLUSIONS OF LAW AND ORDER

1. Respondent was, at all times pertinent hereto, an employer
within the meaning of section 3(5) of the Occupational Safety and Health Act of 1970, 29 U. S.
C. §§ 651-678 (1970).

2. The Occupational Safety and Health Review Commission
has jurisdiction over the parties and the subject matter.

3. The Process Safety Management Standards apply to the
conditions cited in citations issued to Respondent on or about November 4, 2002.

4. Respondent was in noncompliance with the standards as
cited in the citations.

5. The noncompliance detailed by Items 1a and 1c of Citation
1were serious violations of section 5(a)(2) of the Act, 29 U.S.C. § 654(a)(2), within the meaning
of section 17(k) of the Act, 29 U.S.C. § 666(j). Respondent’s noncompliance with the standards
cited in Item 1b of Citation 1 and Item 1 of Citation 2 were other-than-serious violations.

6. A single civil penalty of $2,500 is assessed for the violations
identified in Citation 1, Items 1a and 1c. No civil penalty is assessed for the violations identified
in Citation 2.

7. Respondent shall abate all violations within 120 days of the
date of this Order.

/s/_

Michael H. Schoenfeld

Judge, OSHRC

Date: July 7, 2003

Washington, D.C.