Regulatory Impact Analysis
Reconsideration of the 2017 Amendments to the
Accidental Release Prevention Requirements:
Risk Management Programs
Under the Clean Air Act, Section 112(r)(7)
U.S. Environmental Protection Agency (EPA)
Office of Land and Emergency Management (OLEM)
Office of Emergency Management (OEM)
1200 Pennsylvania Avenue, NW (Mail Code 5104A)
Washington, DC 20460 USA
April 27, 2018
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ACRONYMS
Acronym Definition
CFR
Code of Federal Regulations
CSAG
Chemical Safety Advocacy Group
CSB
Chemical Safety Board
DHS
Department of Homeland Security
EO
Executive Order
EPCRA
Emergency Planning and Community Right to Know Act
FR
Federal Register
FTE
Full Time Equivalent
1ST
Inherently Safer Technology
LEPC
Local Emergency Planning Committee
NAICS
North American Industrial Classification System
NPRM
Notice of Proposed Rulemaking
OCA
Offsite Consequence Analysis
OSHA
Occupational Safety and Health Administration
PI
Program Level 1
P2
Program Level 2
P3
Program Level 3
PHA
Process Hazard Analysis
PSM
Process Safety Management
RFI
Request for Information
RIA
Regulatory Impact Analysis
RMP
Risk Management Plan
SDS
Safety Data Sheets
SERC
State Emergency Response Commission
STAA
Safer Technology and Alternatives Analysis
TQ
Threshold Quantity
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TABLE OF CONTENTS
EXECUTIVE SUMMARY 5
CHAPTER 1: INTRODUCTION AND BACKGROUND 13
1.1 History and Need for the Rule 13
1.2 Framework and Organization of the Analysis 19
1.2.1 Framework 19
1.2.2 Organization 20
CHAPTER 2: DEREGULATORY PROVISIONS 21
2.1 Summary of Provisions and Impacts on Regulated Facilities 21
2.2 Impacts to Governments 23
CHAPTER 3: CHANGES IN UNIVERSE OF REGULATED FACILITIES RELATIVE TO RMP
AMENDMENTS RULE 24
3.1 2017 Versus 2015 RMP Facilities 24
3.2 Comparing Facility Divisions Used in the Analysis: 2017 versus 2015 RMP Data 26
3.2.1 Facilities Affected by the STAA Requirement 30
3.2.2 Universe Breakdown for Emergency Response Coordination and Exercise Requirements 30
3.2.3 Universe Breakdown for Provisions that Apply After an RMP Reportable Accident and for Baseline
Damage Estimates 32
3.2.3.1 Provisions Applicable After an Accident 32
3.2.3.2 Baseline Damages 35
3.2.4 Universe for Information Availability Provisions 35
3.3 Limitations 35
CHAPTER 4: UNIT COSTS AND COST SAVINGS OF PROPOSED RULE REVISIONS 37
4.1 Wage Rates 37
4.2 Rule Familiarization 38
4.3 Prevention Program Rule Provisions 41
4.3.1 Third-party Compliance Audits 41
4.3.2 Incident Investigation Root Cause Analysis 42
4.3.3 Safer Technology and Alternatives Analysis (STAA) 43
4.4 Emergency Response Preparedness Rule Provisions 46
4.4.1 Emergency Response Program Coordination with Local Responders 46
4.4.2 Notification Drills 47
4.4.3 Facility Exercises 47
4.5 Information Availability Rule Provisions 49
4.5.1 Public Information Availability 49
4.5.2 Public Meetings 51
Chapter 5: TOTAL COSTS 52
5.1 Analytical Assumptions 52
5.2 Costs and Cost Savings of the Proposed Rule 53
5.2.1 Rule Familiarization 53
5.2.2 Prevention Program Rule Revisions 54
5.2.2.1 Third-party Compliance Audits 54
5.2.2.2 Incident Investigation Root Cause Analysis 55
5.2.2.3 Safer Technology Alternatives Analysis (STAA) 56
5.2.3 Emergency Response Preparedness Requirements 57
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5.2.3.1 Emergency Response Program Coordination with Local Responders 57
5.2.3.2 Notification Exercises 57
5.2.3.3 Facility Exercises 57
5.2.4 Information Disclosure Rule Provisions 58
5.2.4.1 Public Meeting 58
5.2.4.2 Information Availability 58
5.3 Costs and Cost Savings Associated with Alternative Options 59
5.3.1 Alternative Option for Exercises 59
5.3.2 Alternative Option for Public Information Availability 59
5.4 Net Cost Savings 60
CHAPTER 6: BENEFITS 63
6.1 Benefit Categories 63
6.2 Benefits Associated with Alternative Options 65
6.2.1 Alternative Option for Exercises 65
6.2.2 Alternative Option for Public Information Availability 66
6.3 Baseline Accident Damages 66
CHAPTER 7: SMALL ENTITY IMPACTS 69
7.1 RMP Affected Sectors 69
7.2 Estimating the Number of Small Entities 71
7.2.1 Non-Government Facilities 74
7.2.2 Governments 75
7.3 Economic Impact on Small Entities 76
CHAPTER 8: ENVIRONMENTAL JUSTICE 77
8.1 Background and Context 77
8.2 Identifying Potential Environmental Justice Concerns Associated with RMP Facilities 77
8.2.1 Assessment of risks to relevant populations, based on proximity 78
8.2.2 Assessment of risks to relevant populations, in existing literature 79
8.2.3 Conclusions 80
8.3 Actions Taken to Facilitate "Fair Treatment" 80
8.4 Actions Taken to Facilitate "Meaningful Involvement" 81
CHAPTER 9: OTHER ANALYSES, LIMITATIONS, AND CONCLUSIONS 82
9.1 Unfunded Mandates Reform Act 82
9.2 Protection of Children from Environmental Health Risks and Safety Risks 82
9.3 Employment Impacts 84
9.4 Summary of Deregulatory Actions (E.0.13771,13777, and 13783) 85
9.5 Limitations and Conclusions 87
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EXECUTIVE SUMMARY
Introduction
In response to catastrophic chemical facility incidents in the United States, President Obama issued
Executive Order (EO) 13650, "Improving Chemical Facility Safety and Security/' on August 1, 2013. The
EO established 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 comprised of senior
representatives of other Federal departments, agencies, and offices.1 The EO required the Working
Group to carry out a number of tasks whose overall goal was to prevent chemical incidents, such as the
explosion that occurred at the West Fertilizer facility in West, Texas, on April 17, 2013, which killed 15
people, most of whom were first responders, caused multiple injuries, and resulted in extensive building
damage to the town.2
Section 6(a)(i) of EO 13650 required the Working Group to 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." Section 6(c) of EO 13650 required the Administrator of EPA to review the Risk
Management Program. As part of this effort to solicit comments and information from the public
regarding potential changes to EPA's RMP regulations (40 CFR part 68), EPA published a "Request for
Information" notice or "RFI" (July 31, 2014, 79 FR 44604), and a Notice of Proposed Rulemaking (NPRM)
(March 14, 2016, 81 FR 13637). While developing the proposed rule, 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 NPRM.
The result of the previous rulemaking effort described above was the Final Amendments to the Risk
Management Rule, referred to as the RMP Amendments Rule. This final rule was published in the
Federal Register on January 13, 2017 (82 FR 4594). In response to the RMP Amendments Rule, EPA
received several petitions from stakeholders expressing concerns and requesting a delay or stay of the
rule's implementation. In response, EPA's Administrator convened a proceeding for reconsideration of
the rule and provided on March 16, 2017 (82 FR 13968), a 90-day administrative stay of the rule's
1 The White House. Executive Order - Improving Chemical Facility Safety and Security. August 1, 2013.
httpsi//www. whitehouse.gov/the-press-office/2013/08/01/executive-order-improving-chemical-facilitv-safety-
and-security.
2 CSB. January 2016. Final Investigation Report, West Fertilizer Company Fire and Explosion, West, TX, April 17,
2013. REPORT 2013-02-l-TX. littpi//www.csb.go¥/west-fertilizer-explosioii-aiid-fire-/.
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effective date until June 19, 2017. The Agency further published a proposed rule on April 3, 2017 (82 FR
16146) to further delay the effective date of the RMP Amendment Rule until February 19, 2019 to allow
for the rule's reconsideration. After receiving and considering public comments on that proposed rule,
EPA finalized on June 19, 2017 (82 FR 27133), a new effective date of February 19, 2019. This proposed
rulemaking is the Agency's proposed reconsideration of the RMP Amendments Rule.
Description of Proposed Rule
The RIA analyzes the proposed revisions to the amended RMP requirements.
Third-Party Audits—(revisions apply to existing §§ 68.58, 68.79, 68.59, 68.80)
The Amendments Rule would require facilities to contract with a third-party to conduct the next
scheduled compliance audit within 12 months, following an RMP reportable accident or after an
implementing agency determines that conditions at the stationary source could lead to an accidental
release of a regulated substance or identifies problems with the prior third-party audit. At least one
member of the third-party audit team must be someone with whom the facility does not have an
existing or recent relationship and who meets specific qualification criteria.
This proposed rule would remove this requirement and allow the next required compliance audit to be
conducted with no third-party requirements and according to the existing compliance audit schedule of
one audit every 3 years.
Root Cause Analysis—(revisions apply to §§ 68.60 and 68.81)
The Amendments Rule would require facilities to conduct a root cause analysis as part of an incident
investigation following an incident that resulted in a catastrophic release or an incident that could
reasonably have resulted in a catastrophic release (i.e., "near miss"). A root cause analysis is a formal
process to identify underlying reasons for failures that lead to accidental releases. These analyses
usually require someone trained in the technique. The Amendments rule also clarified that "near
misses" should be investigated, required additional information in the investigation report and required
the report to be completed within 12 months.
This proposed rule would remove this requirement and revert to the previous requirement of Program 2
and 3 processes conducting an incident investigation (without explicitly requiring a root cause analysis,
additional reporting elements, or completion deadline) following an incident that resulted in a
catastrophic release or an incident that could reasonably have resulted in a catastrophic release.
Safer Technology and Alternatives Analysis (STAA)—(revisions apply to § 68.67)
Under the Amendments Rule, facilities in NAICS codes 322 (paper manufacturing), 324 (petroleum and
coal products manufacturing), and 325 (chemical manufacturing) with Program 3 processes would be
required to conduct a STAAfor each process as part of their process hazard analysis (PHA), which occurs
every 5 years. The STAA requirement included two parts: the initial analysis to identify alternatives, and
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a practicability3 study to determine whether a safer alternative could be successfully accomplished
within a reasonable time, accounting for economic, environmental, legal, social, and technological
factors.
This proposed rule would remove this requirement, and revert to the previous requirement of all
Program 3 processes performing a PHA update and revalidation every five years.
Coordination Activities—(revisions apply to §§ 68.90, 68.93, and 68.95)
Under the Amendments Rule, all facilities with Program 2 or Program 3 processes would be required to
coordinate with local response agencies annually to determine how the source is addressed in the
community emergency response plan and to ensure that local response organizations were aware of the
regulated substances at the source, their quantities, the risks presented by covered processes, and the
resources and capabilities at the source to respond to an accidental release of a regulated substance.
The owner or operator would be required to provide their source's emergency response plan, if one
exists, updated emergency contact information and any other information that local emergency
planning and response organizations identify as relevant to local emergency response planning. The
owner or operator would also be required to document coordination activities.
This proposed rule would retain this requirement, but would modify the rule language to address
security concerns with the type of information to be shared.
Exercises—(revisions apply to § 68.96)
The Amendments Rule did the following:
Notification Exercises. All facilities with Program 2 or Program 3 processes were required to conduct a
notification exercise annually to ensure that the emergency contact list is complete, accurate, and up-to-
date.
This proposed rule would retain this requirement with no changes.
Tabletop and Field Exercises. Responding facilities were required to conduct exercises of their
emergency response plans and invite local emergency response officials to participate. Facilities were
required to conduct tabletop exercises every 3 years and field exercises every 10 years at a minimum
based on communications with local emergency response officials.
This proposed rule would retain these provisions, but would remove the 10-year minimum frequency
requirement for field exercises, while still allowing owners and operators to consult with local
emergency response officials to establish an appropriate frequency for field exercises. The proposed
3 The RIA for the RMP Amendments proposed rule used the term "feasibility study" to denote this evaluation. In
the RMP Amendments final rule, the term "feasibility" was replaced with the term "practicability", but its
definition was unchanged. In this RIA, "feasibility" is used when referring to the RMP Amendments proposed rule
and "practicability" for the RMP Amendments final rule, however their meanings are interchangeable.
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rule would also give owners and operators more flexibility in establishing the scope of tabletop and field
exercises and in documenting exercises.
Information Disclosure—(revisions apply to § 68.210)
The Amendments Rule required all facilities to provide, upon request by any member of the public,
certain chemical hazard information for all regulated processes. Facilities would also have to provide
ongoing notification on a company website, social media platform, or through other publicly accessible
means that specified information is available to the public upon request. The information to be
disclosed includes names of regulated substances at the facility; Safety Data Sheets (SDS); accident
history information; emergency response program information; exercise schedules; and LEPC contact
information.
This proposed rule would remove this requirement, while the existing requirement of risk management
plans being available to the public as specified under the CAA and 40 CFR part 1400 would remain.
Public Meetings—(revisions apply to § 68.210)
The Amendments Rule would require facilities to hold a public meeting for the local community within
90 days of an RMP reportable accident.
This proposed rule would retain this requirement, but would modify the rule language to address
security concerns with the type of information to be shared at a public meeting and clarify that accident
information specified in § 68.42 (b) shall be provided for only the most recent accident.
Summary of Costs and Cost Savings
Approximately 12,500 facilities have filed current RMPs with EPA and are potentially affected by the
proposed rule changes. 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 that use RMP-regulated substances.
Exhibit A presents the number of facilities according to RMP reporting as of February 2015 by industrial
sector and chemical use. For this analysis, EPA compared the February 2015 RMP database used for
analysis of the Amendments Rule to the November 2017 RMP database for the purposes of
understanding and comparing how the universe of RMP facilities has changed in the intervening period
between developing the Amendments RIA and this RIA. The review found the number of facilities and
sectors to be similar.
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Exhibit A: Number of Affected Facilities by Sector
Sector
NAICS Codes
2015 Total
Facilities
2017 Total
Facilities
Percent
Change
Chemical Uses
Administration of
environmental
quality programs
(i.e., governments)
92, 2213
(Gov owned)
1,923
1,746
(10.14%)
Use chlorine and other
chemicals for water
treatment
Agricultural chemical
distributors/wholesal
ers
111, 112,
115, 42491
3,667
3,409
(7.57%)
Store ammonia for sale;
some in NAICS 111 and 115
use ammonia as a
refrigerant
Chemical
manufacturing
325
1,466
1,463
(0.21%)
Manufacture, process,
store
Chemical wholesalers
4246
333
329
(1.22%)
Store for sale
Food and beverage
manufacturing
311,312
1,476
1,528
3.40%
Use (mostly ammonia as a
refrigerant)
Oil and gas
extraction
211
741
750
1.20%
Intermediate processing
(mostly regulated
flammable substances and
flammable mixtures)
Other
44, 45, 48,
54, 56, 61,
71, 21
247
262
5.73%
Use chemicals for
wastewater treatment,
refrigeration, store
chemicals for sale
Other manufacturing
313, 326,
327, 33
384
379
(1.32%)
Use various chemicals in
manufacturing process,
waste treatment
Other wholesale
423, 424
302
308
1.95%
Use (mostly ammonia as a
refrigerant)
Paper manufacturing
322
70
70
0.00%
Use various chemicals in
pulp and paper
manufacturing
Petroleum and coal
products
manufacturing
324
156
157
0.64%
Manufacture, process,
store (mostly regulated
flammable substances and
flammable mixtures)
Petroleum
wholesalers
4247
276
340
18.82%
Store for sale (mostly
regulated flammable
substances and flammable
mixtures)
Utilities/Water
221(non
Gov owned
water)
445
452
1.55%
Use chlorine (mostly for
water treatment) and other
chemicals
Warehousing and
storage
493
1,056
1,125
6.13%
Use mostly ammonia as a
refrigerant
Total
12,542
12,318
(1.82%)
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Exhibit B presents a summary of the averted costs estimated in this RIA's analysis of the Amendments
Reconsideration proposed rule. EPA estimates annualized costs of -$87.9 million at a 3% discount rate,
and -$88.4 million at a 7% discount rate. Total undiscounted costs are -$875.20 million measured over a
ten-year period of analysis, or -$750.0 million and -$621.2 million when discounted at 3 and 7 percent,
respectively.4 In addition to the averted costs due to the proposed rescission of RMP Amendments Rule
provisions, Exhibit B presents cost estimates for rule familiarization of the new proposed rule. For those
RMP Amendments Rule provisions that are proposed to be rescinded, Exhibit B reflects a cost savings or
negative cost for the proposed rule (e.g., Third-party audits). For those RMP Amendments Rule
provisions that are proposed to be retained (e.g., public meetings), Exhibit B reflects no impact on costs
for the proposed rule by omitting those provisions.
Exhibit B: Summary of Costs and Averted Costs (Millions, 2015 Dollars+)
Cost Elements
Total
Undiscounted
Total Discounted
(3 %r
Total Discounted
(7%)
Annualized
(3%)
Annualized
(7%)
Costs
Rule Familiarization
(new)
$6.7
$6.5
$6.3
$0.76
$0.89
Total Cost
$6.7
$6.5
$6.3
$0.76
$0.89
Averted Costs
Rule Familiarization
(previous)
($34.7)
($33.7)
($32.4)
($3.9)
($4.6)
Third-Party Audits
($98.4)
($83.6)
($69.1)
($9.8)
($9.8)
Incident
Investigations
($18.1)
($15.4)
($12.7)
($1.8)
($1.8)
STAA
($700.2)
($597.3)
($491.8)
($70.0)
($70.0)
Information
Disclosure
($30.5)
($26.0)
($21.4)
($3.1)
($3.1)
Total Averted Cost
($881.9)
($756.4)
($627.5)
($88.6)
($89.3)
Total Net Cost*
($875.2)
($750.0)
($621.2)
($87.9)
($88.4)
+These estimates are presented in 2016 dollars in Exhibit 5-10.
*Values may not sum due to rounding.
Summary of Benefits
In the RMP Amendments rulemaking, EPA had no data to project the specific impact of each rule
element on the probability and magnitude of chemical accidents. Indeed, the frequency and severity of
4 The 10-year period of analysis (2004-2013) for the current RIA matches the period chosen for the 2017
Amendments rule. A 10-year period was selected for the 2017 rule because it was long enough for at least two
rotations of many of the infrequently required activities (which occurred every five years) and at least one
occurrence of the least frequently required activity (field exercises which were estimated to occur every 10 years).
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baseline accidents themselves would be challenging to predict. However, a review of the RMP accident
data and other data sources suggested that chemical accidents impose substantial costs on firms,
employees, emergency responders, the community, and the broader economy. The RMP Amendments
RIA constructed and presented data for a 10-year baseline period from 2004 to 2013, summarizing RMP
accident impacts and when possible monetizing them.5 The average annual cost of RMP accidents during
the 10-year baseline was $275 million. 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 damages were 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 availability provision. Improving availability
of information about RMP facilities to the public should improve the efficiency of location decisions and
nearby property markets as well as decisions about allocation of resources to emergency response
preparedness. In sum, reducing the probability of chemical accidents and the severity of their impacts,
and improving information disclosure by chemical facilities, as the provisions intended, would provide
benefits to potentially affected members of society.
The proposed Reconsideration rule will retain some portion of these benefits through the retention of
the provisions for coordination activities, exercises, and public meetings. However, some portion of the
2017 RMP Amendments Rule benefits will no longer be realized due to the repeal of many of the
provisions associated with accident prevention and some provisions that provided information.
The proposed Reconsideration rule produces benefits by way of increased facility security relative to the
2017 RMP Amendments rule. This benefit category reflects reduced risks of terror or other attacks,
thefts, and so on, that might have followed from freer-flowing information about the storage,
processing, and emergency response procedures for RMP chemicals at RMP facilities.
Exhibit C summarizes all of the benefit categories qualitatively described in the RMP Amendments RIA
that will be reduced by the proposed rulemaking. There are four broad 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 exhibit explains each and identifies ten associated specific benefit categories, ranging
from avoided fatalities to avoided emergency response costs. Exhibit C 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.
5 See https://www.regulations.gov/document?D=EPA-HQ-OEM-2015-0725-0734
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Exhibit C: Summary of Reduced Qualitative Benefits of Proposed Rule Provisions
Broad Cost Category
Explanation
Specific Benefit Categories
Accident Prevention
Prevention of future RMP facility
accidents
Repeals some provisions
related to:
• Reduced Fatalities
• Reduced Injuries
• Reduced Property
Damage
• Fewer People
Accident Mitigation
Mitigation of future RMP facility
accidents
Sheltered in Place
• Fewer Evacuations
• Avoided Lost
Productivity
• Avoided Emergency
Response Costs
• Avoided Transaction
Costs
• Avoided Property
Value Impacts*
Non-RMP accident prevention
and mitigation
Prevention and mitigation of future
non-RMP accidents at RMP facilities
Avoided Catastrophes
Prevention of rare but extremely high
consequence events
• Avoided
Environmental
Impacts
Information Disclosure
Provision of information to the public
Repeals some provisions
related to:
• Improved efficiency of
property markets
• Improved emergency
response resource
allocation
* These impacts partially overlap with several other categories, such as reduced health and environmental impacts
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CHAPTER 1: INTRODUCTION AND BACKGROUND
1.1 History and Need for the Rule
Serious chemical accidents occurring in the 1970s and 1980s, including accidents in Bhopal, India,
Seveso, Italy, and Pasadena, Texas led to a series of legislative reforms relating to chemical safety in
industrialized countries.6,7 In the United States, the Emergency Planning and Community Right to Know
Act (EPCRA) was enacted in 1986 to promote community emergency planning and preparedness and
provide local responders and the public with information about the chemical hazards in their community
(42 U.S.C. 11002 et seq.). In 1990, sections 112(r) and 304 of the Clean Air Act were enacted to help
prevent severe chemical facility accidents. Section 304 required the Occupational Safety and Health
Administration (OSHA) to publish a chemical process safety standard to prevent accidental releases of
chemicals that could pose a threat to employees. Section 112(r) required the Environmental Protection
Agency (EPA) to publish Accidental Release Prevention Program regulations to prevent chemical releases
or minimize their consequences if they occur.
Section 112(r) required EPA to develop a list of at least 100 regulated substances which, in the case of an
accidental release, are known to cause or may reasonably be anticipated to cause death, injury, or
serious adverse effects to human health or the environment (42 U.S.C 7412(r)). EPA was also required to
establish threshold quantities (TQs) for these substances, which would determine the applicability of
rules to prevent accidental releases of these substances. Section 112(r)(7)(B) required EPA to
promulgate reasonable regulations and appropriate guidance to provide, to the greatest extent
practicable, for the prevention and detection of accidental releases of regulated substances and for
response to such releases by the owners or operators of the sources of such releases. The section
mandates that the regulations require the owner or operator of a stationary source "to prepare and
implement a risk management plan to detect and prevent or minimize accidental releases of such
substances from the stationary source, and to provide a prompt emergency response to any such
releases in order to protect human health and the environment." The section further mandates that the
plan include:
• A hazard assessment to assess the potential effects of an accidental release of any regulated
substance. This assessment shall include an estimate of potential release quantities and a
determination of downwind effects, including potential exposures to affected populations. Such
assessment shall include a previous release history of the past 5 years, including the size,
concentration, and duration of releases, and shall include an evaluation of worst case accidental
releases;
6 Federal Emergency Management Agency. Phillips Petroleum Chemical Plant Explosion and Fire. October 1989.
https://www.usfa.fema.gov/downloads/pdf/publications/tr-035.pdf.
7 Hay, Alastair, A Technical Report on What Caused Italy's Dioxin Disaster Has Too Many Loopholes, Nature, 281,
521 (18 October 1979). http://www.nature.com/nature/iournal/v281/n5732/pdf/281521a0.pdf.
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• A program for preventing accidental releases of regulated substances, including safety
precautions and maintenance, monitoring and employee training measures to be used at the
source; and
• A response program providing for specific actions to be taken in response to an accidental
release of a regulated substance so as to protect human health and the environment, including
procedures for informing the public and local agencies responsible for responding to accidental
releases, emergency health care, and employee training measures.
Finally, the section requires the owner or operator of an affected stationary source to develop and file a
risk management plan with EPA, the Chemical Safety Board (CSB) (also established under the section),
the State, and local response agencies.
OSHA adopted its process safety management standard (PSM) (codified at 29 CFR 1910.119) in 1992 (57
FR 6403, Feb. 24, 1992). The PSM standard requires facilities to develop and implement an integrated
approach to chemical process safety including the following elements: accurate, up-to-date diagrams of
all process equipment, an analysis of the process hazards, standard operating procedures, training,
maintenance, pre-startup reviews, management of change, compliance audits, incident investigation,
employee participation, hot-work permits, contractor training, and emergency response. The
applicability of the PSM standard is driven by the presence of specific chemicals in quantities above
thresholds set in the standard.
EPA published its section 112(r) regulations in two stages - a list of regulated substances and TQs in
1994 (59 FR 4478, January 31, 1994), and the risk management program requirements in 1996 (61 FR
31731, June 20, 1996); both are codified at 40 CFR part 68. As required by section 112(r), part 68
includes several major requirements that were not covered by the PSM standard. These include a
hazard assessment consisting of an offsite consequence analysis (OCA) and five-year accident history,
and the development and submission of a risk management plan (RMP) that summarizes a source's risk
management program. EPA also required stationary sources to develop a management system to
oversee the program and included emergency response program requirements beyond those contained
in the PSM standard. RMPs were first submitted to EPA in June 1999 and must be updated at least every
5 years. EPA has amended the rule a number of times to modify the list of substances, to alter data
requirements, and to address other issues. The primary requirements adopted in 1996, however, remain
in place.
The Risk Management Program rule establishes three program levels and requires facility owners or
operators to conduct hazard assessments and submit RMPs regardless of the program level. Program 1
(PI) requirements apply to processes that would not affect the public in the case of a worst-case release
and with no accidents with specific off-site consequences within the past five years. PI provisions
impose limited hazard assessment requirements and emergency response requirements.
Program 2 (P2) applies to processes not eligible for PI or subject to Program 3 (P3), and imposes
streamlined prevention program requirements, including safety information, hazard review, operating
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procedures, training, maintenance, compliance audits, and incident investigation elements. P2
provisions also impose hazard assessment, management, and emergency response requirements. P2
processes are primarily agricultural chemical distributors, chemical wholesalers and chlorine use at
publicly owned water and wastewater facilities, in States without OSHA-approved State plans. To further
reduce the burden on facilities with P2 processes, EPA developed and published a number of industry-
specific guidance documents8 and an OCA guidance document.
P3 requirements apply to processes not eligible for PI and either subject to OSHA's PSM standard, under
federal or State OSHA programs, or classified in one often specified North American Industrial
Classification System (NAICS) codes (1997 version) listed at 40 CFR 68.10(d)(1). The ten NAICS codes are:
• 32211 (pulp mills) • 325192 (cyclic crude and intermediate manufacturing)
• 32411 (petroleum refineries) • 325199 (all other basic organic chemical
• 32511 (petrochemical manufacturing) • 325211 (plastics material and resin manufacturing)
P3 requirements impose elements nearly identical to those in OSHA's PSM standard as the accident
prevention program. The P3 prevention program includes requirements relating to the following:
• Process safety information
• PHA
• Operating procedures
• Training
• Mechanical integrity
• Management of change
• Pre-startup review
• Compliance audits
• Incident investigations
• Employee participation
• Hot work permits, and
• Contractors.
8 There are guidance documents for propane storage, refrigeration, water/wastewater treatment, warehouses,
chemical distributors, and others.
manufacturing)
• 325181 (alkali and chlorine
manufacturing)
• 325188 (all other basic inorganic
chemical manufacturing)
• 325311 (nitrogenous fertilizer manufacturing)
• 32532 (pesticide and other agricultural chemical
manufacturing)
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P3 provisions also impose the same hazard assessment, management, and emergency response
requirements that are required for P2.
The following flow chart demonstrates how facilities determine to which program level they are
subject9:
Facilities10 that are exempt from the OSHA PSM standard may be subject to EPA requirements under the
RMP rule. This occurs for several reasons. First, the lists of substances regulated are not identical; for
example, EPA lists aqueous ammonia at any solution that is 20 percent ammonia or more; OSHA covers
it only at concentrations of 44 percent or more. Second, because federal OSHA has no authority over
State and local government employees, the OSHA PSM standard does not apply to publicly owned
facilities (mainly water and wastewater treatment systems) in States where federal OSHA implements
and enforces the standard (about half the States). Where States implement and enforce OSHA standards
(referred to as State-plan States), the State is required to impose OSHA standards on State and local
9 EPA. April 2004. General Guidance on Risk Management Programs for Chemical Accident Prevention (40 CFR Part
68). EPA-550-B-04-001. Chapter 2.
http://www2.epa.gov/sites/production/files/2013-10/documents/chap-02-final.pdf.
10 Facilities are also commonly referred to as stationary sources, and the terms are used interchangeably
throughout this document.
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government employees as a condition of delegation.11 Lastly, regulatory exemptions are not identical;
for example, the OSHA PSM standard exempts normally unoccupied remote facilities, but the RMP rule
does not.
Approximately 12,500 currently regulated facilities have filed RMPs for approximately 17,000 processes.
Most facilities have only one process, but certain industries, such as chemical manufacturing and
petroleum refining, often have more than one regulated process; about 100 facilities have more than 10
regulated processes. The population of RMP facilities is dynamic. Several thousand facilities have either
switched chemicals to non-regulated substances, reduced chemical inventories below threshold
quantities, or ceased operations and subsequently deregistered from the program since the first RMPs
were submitted in 1999. However, every year new facilities are registering and submitting new RMPs.
Although the accident histories submitted with RMPs have shown a reduction in the frequency of
accidents since the beginning of the program, there continue to be serious chemical releases. RMP data
for 2004 through 2013 show that each year there are an average of approximately 150 accidents with
reportable impacts.
In April 2013, the West Texas Fertilizer Company, an RMP-regulated facility in West, Texas, that stored
anhydrous ammonia (an RMP- and PSM-regulated substance) and ammonium nitrate (not regulated
under the RMP rule or the PSM standard), caught fire12, which led to a massive explosion of the
ammonium nitrate. Fifteen people, most of them firefighters, died and more than 160 members of the
public were injured. Two nearby schools, an apartment building, a nursing home, and much of the
surrounding town were also damaged.13 Additional serious incidents at RMP facilities demonstrate 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 and injured more than 170.14 On April 2, 2010, an explosion
and fire at the Tesoro Refinery in Anacortes, Washington killed seven.15 On August 6, 2012, a fire at the
Chevron Refinery in Richmond, California involving flammable fluids endangered 19 Chevron employees
and created a large plume of chemicals that traveled across the Richmond, California area. Nearly
11 Twenty-six states, Puerto Rico, and the Virgin Islands have OSHA-approved State Plans. In these states, publicly
owned water and wastewater treatment plants are typically in P2. Twenty-two State Plans (21 states and one U.S.
territory) cover both private and state and local government workplaces. Public water and wastewater plants in
these states are in P3. The remaining six State Plans (five states and one U.S. territory) cover state and local
government workers only. Their public water/wastewater plants are P2. httpsi//www.osha.gov/dcsp/osp/.
12 The Bureau of Alcohol, Tobacco, Firearms and Explosives ruled that the West Fertilizer fire was intentionally set.
See BATF: ATF Announces $50,000 Reward in West, Texas Fatality Fire (May 11, 2016), available at
https://www,atf,gov/news/pr/atf~announces-5QOOO-reward~west-texas-fatality-fire.
13 CSB. January 2016. Final Investigation Report, West Fertilizer Company Fire and Explosion, West, TX, April 17,
2013. REPORT 2013-02-l-TX. littpi//www.csb.go¥/west-fertilizer-explosioii-aiid-fire-/.
14 CSB. March 2007. Final Investigation Report: Refinery Explosion and Fire, Texas City, Texas, March 23, 2005.
httpi//www.csb.gov/assets/l/19/CSBFinalReportBP.pdf.
15 CSB. May 2014. Investigation Report: Catastrophic Rupture of Heat Exchanger, Tesoro Anacortes Refinery,
Anacortes, Washington, April 2, 2010. http://www.csb.gOv/assets/l/7/Tesoro Anacortes 2014-May-01.pdf.
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15,000 residents sought medical treatment due to the release.16 On June 6, 2013, a fire and explosion at
Williams Olefins in Geismar, Louisiana killed two and injured many more.17
Section 112(r) of the Clean Air Act aimed to address low frequency and high consequence chemical
accidents. These are catastrophic incidents, which have large societal impacts when they occur, but very
little likelihood for any individual chemical facility. As such, market forces may not provide an incentive
for any given company to invest in measures to prevent such accidents, as they are so unlikely to occur
at the individual level. However, looking across the United States and universe of regulated facilities,
these accidents occur with sufficient frequency to warrant regulation.
In response to recent catastrophic chemical facility incidents such as the West explosion and others, in
2013 President Obama issued Executive Order 13650, entitled "Improving Chemical Facility Safety and
Security,"18 which among other items, required EPA and OSHA to consider whether and how to update
and modernize the RMP rule and PSM standard. Both EPA and OSHA conducted public listening
sessions,19 and issued requests for information (RFI) to seek input from the public and the regulated
community on potential revisions to the rules.20 Based on feedback received from the RFI and public
listening sessions, EPA subsequently published a NPRM on March 14, 2016 (81 FR 13637). 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 Amendments Rule was the result of
EPA's consideration of the public comments received on the RFI and NPRM, recommendations from the
CSB, comments received during E.O. 13650 listening sessions, and information gained by EPA through
inspection of RMP facilities and enforcement of the rule over the previous seventeen years. The
Amendments Rule was published in the Federal Register on January 13, 2017 (82 FR 4594).
16 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-l-CA.
http://www.csb.gov/assets/l/19/CSB Chevron Richmond Refinery Regulatory Report.pdf.
17 CSB. October 2016. Case Study: Williams Geismar Olefins Plant Reboiler Rupture and Fire, Geismar, Louisiana.
Incident Date: June 13, 2013, No. 2013-03-l-LA. http://www.csb.gov/williams-olefins-plant-explosion-and-fire-/.
18 https://www.whitehouse.gov/the-press-office/2013/08/01/executive-order-improving-chemical-facilitv-safety-
and-security.
19 In 2013 and 2014, as part of the EO 13650 activities, the federal government held a dozen listening sessions,
supplemented by two online webinars. For a list of locations and link to the notes for these sessions go to
http://www, regulations,gov/#idocketDetail; D=DHS-2013-Q075.
20 OSHA's RFI was published on December 9, 2013 (78 FR 73756) and EPA's RFI was published on July 31, 2014 (79
FR 44604).
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In response to the 2017 final RMP Amendments Rule, EPA received several petitions from
stakeholders21,22,23, expressing concerns and requesting a delay or stay in the rule's implementation.
Concerns were that the rule was "over regulating" and imposed excessive costs and burdens, that it
conflicted with OSHA's PSM rule which targets the same set of facilities, and that it caused facility
security risks through its information disclosure requirements. In response, EPA's Administrator
convened a proceeding for reconsideration of the rule and provided on March 16, 2017 (82 FR 13968), a
90-day administrative stay of the rule's effective date until June 19, 2017. The Agency further published
a proposed rule on April 3, 2017 (82 FR 16146) to further delay the effective date of the Amendments
Rule until February 19, 2019 to allow for reconsideration of the rule. After receiving and reviewing
public comments on the proposed rule, EPA finalized on June 14, 2017 (82 FR 27133) a new effective
date of February 19, 2019. This proposed rulemaking is the Agency's proposed reconsideration of the
final rule published on January 13, 2017. This proposed rule: improves market efficiency by reducing
regulatory burden; improves consistency between EPA and OSHA rules and thereby streamlines
regulatory requirements; and improves facility security risks by removing some requirements for public
access to potentially sensitive information regarding chemical storage, processes, and emergency
response procedures.
1.2 Framework and Organization of the Analysis
1.2.1 Framework
The current RIA assumes full compliance with the 2017 RMP Amendments rule as the baseline from
which incremental changes occur. Thus, the 2017 RMP Amendments RIA is the starting point for the
analysis in the current RIA. Both analyses rest on the same framework of analysis; the same set of
underlying assumptions; and the same 2015 RMP database. While there currently are newer 2017 RMP
data available, due to the small differences between the 2015 and 2017 data sets, EPA believes that the
incremental change in the estimated costs (or cost savings) of the rule would be quite small and would
not justify undertaking a completely new analysis. Thus, this RIA presents the effects of reversing or
rescinding required risk prevention or mitigation or information provisions as eliminating the costs those
provisions were estimated to impose by the 2017 Amendments RIA.24 To provide insight into the
uncertainty introduced by relying on the older data, Chapter 3 of this RIA carefully presents and
compares new 2017 RMP data to the 2015 RMP data used for the 2017 RMP Amendments RIA. The
21 RMP Coalition's Petition for Reconsideration and Request for Agency Stay Pending Reconsideration of Final RMP
rule (82 FR 4594, January 13, 2017), February 28, 2017. Hogan Lovells US LLP, Washington, DC. Document ID: EPA-
HQ-OEM-2015-0725-0759 (RMP Coalition petition).
22 Chemical Safety Advocacy Group (CSAG)'s Petition and Reconsideration and Stay Request of the Final RMP rule
(82 FR 4594, January 13, 2017) March 13, 2017. Hunton & Williams, San Francisco, CA. Document No. EPA-HQ-
OEM-2015-0725-0766 (CSAG petition).
23 Petition for Reconsideration and Stay Submitted by The States of Louisiana, Arizona, Arkansas, Florida, Kansas,
Texas, Oklahoma, South Carolina, Wisconsin, West Virginia, and the Commonwealth of Kentucky by and through
Governor Matthew Bevin, March 14, 2017. Document ID: EPA-HW-OEM-2015-0725-0762 (States petition).
24 See 2017 Amendments RIA at https://www.regulations.gov/document?D=EPA-HQ-OEM-2015-0725-0734
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comparison suggests that most changes have been minor. Further explanation is provided in the
following chapters.
Benefits of the 2017 Amendments rule were not quantitatively estimated but only qualitatively
described. Benefits were not directly tied to specific provisions of the 2017 rule and consisted of a
variety of potentially avoided damages and improved efficiency impacts (from information provisions).
These will be partly eliminated by the current rule as explained in Chapter 6. EPA has not updated the
estimates of baseline damages to align with the 2017 RMP accident data. We continue to rely on the
analysis of accident data over the ten-year period from 2004 to 2013 presented in the 2017
Amendments Rule RIA. Chapter 3 carefully reviews the differences between 2015 and 2017 accident
data and finds some substantial differences. There are reasons to suspect some of the difference may be
due to a lag in reporting accidents. Further explanation is provided in Chapter 3.
Importantly, since the 2017 Amendments rule provisions have not yet become effective, any
incremental changes to the universe of regulated facilities would impact the costs estimated for a
provision in the Amendments rule RIA to the same degree that they would affect the cost savings
estimated for the same provision in the current Reconsideration rule RIA. In other words, a small
reduction in the number of relevant regulated facilities, for example, would marginally reduce the costs
of the incident investigation provisions of the Amendments rule, and therefore it would also reduce the
cost savings of repealing that provision in the Reconsideration rule. Or, considering a different example,
an increase in the number of processes subject to the STAA provision would increase the costs of that
provision in the Amendments rule, but also increase the cost savings associated with repealing the
provision in the Reconsideration rule, by the same amount.
1.2.2 Organization
This regulatory impact analysis (RIA) is organized as follows:
• Chapter 2 describes the provisions that EPA is repealing or amending
• Chapter 3 discusses the universe of regulated entities and the various divisions used in the
analysis.
• Chapter 4 discusses the basis for cost and averted cost estimates for each of the provisions
• Chapter 5 presents the total costs and averted costs.
• Chapter 6 discusses the benefits and foregone benefits.
• Chapter 7 presents the small entity impacts.
• Chapter 8 presents the environmental justice analysis
• Chapter 9 discusses other analyses, limitations of the RIA, and conclusions.
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CHAPTER 2: DEREGULATORY PROVISIONS
This chapter presents a summary of the provisions in the proposed rule. The provisions include repealing
several provisions from the previous RMP Amendments final rule and modifying some of the remaining
provisions25.
2.1 Summary of Provisions and Impacts on Regulated Facilities
The RIA analyzed the following provisions:
Third-Party Audits—(revisions apply to §§ 68.58, 68.79, 68.59 and 68.80)
The Amendments Rule would require facilities to contract with a third-party to conduct the next
scheduled compliance audit within 12 months following an RMP reportable accident or after an
implementing agency determines that conditions at the stationary source could lead to an accidental
release of a regulated substance or identifies problems with the prior third-party audit. At least one
member of the third-party audit team must be someone with whom the facility does not have an
existing or recent relationship and who meets specific qualification criteria.
This proposed rule would remove this requirement and allow the next required compliance audit to be
conducted with no third-party requirements and according to the existing compliance audit schedule of
one audit every 3 years.
Root Cause Analysis—(revisions apply to §§ 68.60 and 68.81)
The Amendments Rule would require facilities to conduct a root cause analysis as part of an incident
investigation following an incident that resulted in a catastrophic release or an incident that could
reasonably have resulted in a catastrophic release (i.e., "near miss"). A root cause analysis is a formal
process to identify underlying reasons for failures that lead to accidental releases. These analyses
usually require someone trained in the technique. The Amendments rule also clarified that "near
misses" should be investigated, required additional information in the investigation report and required
the report to be completed within 12 months.
This proposed rule would remove these requirements and revert to the previous requirement of
Program 2 and 3 processes conducting an incident investigation (without explicitly requiring a root cause
analysis, additional reporting elements or completion deadline) following an incident that resulted in a
catastrophic release or an incident that could reasonably have resulted in a catastrophic release.
25 See Section IV. of the preamble to the proposed rule for EPA's rationale for proposing to rescind or modify
regulatory provisions.
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Safer Technology and Alternatives Analysis (STAA)—(revisions apply to § 68.67)
Under the Amendments Rule, facilities in NAICS codes 322 (paper manufacturing), 324 (petroleum and
coal products manufacturing), and 325 (chemical manufacturing) with Program 3 processes would be
required to conduct a STAAfor each process as part of their PHA, which occurs every 5 years. The STAA
requirement included two parts: the initial analysis to identify alternatives, and a practicability26 study to
determine whether a safer alternative could be successfully accomplished within a reasonable time,
accounting for economic, environmental, legal, social, and technological factors.
This proposed rule would remove this requirement.
Coordination Activities—(revisions apply to §§ 68.90, 68.93, and 68.95)
Under the Amendments Rule, all facilities with Program 2 or Program 3 processes would be required to
coordinate with local response agencies annually to determine how the source is addressed in the
community emergency response plan and to ensure that local response organizations were aware of the
regulated substances at the source, their quantities, the risks presented by covered processes, and the
resources and capabilities at the source to respond to an accidental release of a regulated substance.
The owner or operator would be required to provide their source's emergency response plan, if one
exists, updated emergency contact information and any other information that local emergency
planning and response organizations identify as relevant to local emergency response planning. The
owner or operator would also be required to document coordination activities.
This proposed rule would retain this requirement, but would modify the rule language to address
security concerns with the type of information to be shared.
Exercises—(revisions apply to § 68.96)
The Amendments Rule did the following:
Notification Exercises. All facilities with Program 2 or Program 3 processes were required to conduct a
notification exercise annually to ensure that the emergency contact list is complete, accurate, and up-to-
date.
This proposed rule would retain this requirement with no changes.
Tabletop and Field Exercises. Responding facilities were required to conduct exercises of their
emergency response plans and invite local emergency response officials to participate. Facilities were
26 The RIA for the RMP Amendments proposed rule used the term "feasibility study" to denote this evaluation. In
the RMP Amendments final rule, the term "feasibility" was replaced with the term "practicability", but its
definition was unchanged. In this RIA, "feasibility" is used when referring to the RMP Amendments proposed rule
and "practicability" for the RMP Amendments final rule, however their meanings are interchangeable.
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required to conduct tabletop exercises every 3 years and field exercises every 10 years at a minimum
based on communications with local emergency response officials.
This proposed rule would retain both of these provisions, but would remove the 10-year minimum
frequency requirement for field exercises, allowing owners and operators to consult with local
emergency response officials to establish an appropriate frequency for field exercises. The proposed
rule would also give owners and operators more flexibility in establishing the scope of tabletop and field
exercises and in documenting exercises.
As an alternative proposal, EPA is considering whether to fully rescind the field and tabletop exercise
provisions.
Information Disclosure—(revisions apply to § 68.210)
The Amendments Rule required all facilities to provide, upon request by any member of the public,
certain chemical hazard information for all regulated processes. Facilities would also have to provide
ongoing notification on a company website, social media platform, or through other publicly accessible
means that specified information is available to the public upon request. The information to be
disclosed includes names of regulated substances at the facility; Safety Data Sheets (SDS); accident
history information; emergency response program information; exercise schedules; and LEPC contact
information.
This proposed rule would remove this requirement while the existing requirement of risk management
plans being available to the public as specified under the CAA and 40 CFR part 1400 would remain.
As an alternative proposal, EPA is considering whether to retain this requirement but remove all
required information elements except for exercise schedules.
Public Meetings—(revisions apply to § 68.210)
The Amendments Rule would require facilities to hold a public meeting for the local community within
90 days of an RMP reportable accident.
This proposed rule would retain this requirement, but would modify the rule language to address
security concerns with the type of information to be shared at a public meeting and clarify that accident
information specified in § 68.42 (b) shall be provided for only the most recent accident.
2.2 Impacts to Governments
This proposed rule imposes direct cost savings (i.e., averted costs) to local governments that own and
operate RMP facilities (primarily water and wastewater systems, but also some power plants and
swimming pools). The RIA incorporates estimates of both direct and indirect cost savings to local
governments (such as the cost savings of not participating in emergency response exercises under an
alternative proposal) in the cost estimates for each regulatory provision.
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CHAPTER 3: CHANGES IN UNIVERSE OF REGULATED
FACILITIES RELATIVE TO RMP AMENDMENTS RULE
The RMP Amendments RIA utilized the February 2015 version of the RMP database to compile the
universe of RMP facilities. The database reflected that approximately 12,500 facilities had filed current
RMPs with EPA and could have been potentially affected by the Amendments final rule. These facilities
ranged 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 that use RMP-regulated
substances.
For this analysis, EPA compared the February 2015 RMP database to the most recent RMP database
from November 2017 for the purposes of understanding and comparing how the universe of RMP
facilities has changed in the intervening period between developing the Amendments RIA and this RIA.
The comparison revealed that the number of RMP facilities and processes had experienced minor
changes in the more than two years between rulemakings. In total, the number of RMP facilities
decreased by 1.8% over the time period, and included small changes in the number of facilities in most
industry codes and process levels. As described in this chapter, with the exception of the number of
accidents, EPA determined that the differences between the databases were minor. As a result, EPA
utilized the costs estimated for the 2017 RMP Amendments RIA as the baseline set of costs to be
impacted by the proposed Reconsideration rule.
3.1 2017 Versus 2015 RMP Facilities
Exhibit 3-1 presents a comparison of the number of RMP regulated facilities by industry sector in the
November 2017 RMP database (as adjusted by EPA) compared to the 2015 version of the database (as
adjusted by EPA). The exhibit presents the number of facilities by industrial sector and chemical use.
EPA adjusted the raw data from the 2017 database to align with the methodology for identifying RMP
facilities used in the 2017 RIA.27
Overall, the total number of regulated facilities in the 2017 database has decreased by 224 facilities
(12,542 -12,318 = 224), equating to a 1.8% decrease in the total universe of regulated facilities. Most of
the industrial sectors identified in Exhibit 3-1 experienced modest changes (~1% to 10%) in number of
facilities between 2015 and 2017. However, of note is a ten percent decrease in the number of
"government" facilities (i.e., facilities categorized in Exhibit 3-1 as "Administration of environmental
quality programs"). Government facilities include facilities in the RMP database that identified
themselves in NAICS code 92, as well as government-owned water and wastewater treatment facilities
27 Adjustments included assigning program levels to facilities according to their highest process, modifying water
treatment facilities to be considered municipal institutions (NAICS 92), and other data corrections.
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identified in NAICS 2213. In contrast to a decrease in government facilities, the 2017 RMP database
included a 19% increase in the number of petroleum wholesalers (NAICS 4247). The majority of this
increase comes from an increase in PI and P2 facilities. As Exhibit 3-1 illustrates, the 2017 database is of
course not an exact replica of the 2015 database; however, the changes are small in magnitude and do
not reflect a substantial change in the total universe of regulated RMP facilities.
Exhibit 3-1: Number of Affected Facilities by Sector - Comparison of 2015 and 2017 RMP Database
Sector
NAICS Codes
2015 Total
Facilities
2017 Total
Facilities
Percent
Change
Chemical Uses
Administration of
environmental
quality programs
(i.e., governments)
92, 2213
(Gov owned)
1,923
1,746
(10.14%)
Use chlorine and other
chemicals for water
treatment
Agricultural chemical
distributors/wholesal
ers
111, 112,
115, 42491
3,667
3,409
(7.57%)
Store ammonia for sale;
some in NAICS 111 and 115
use ammonia as a
refrigerant
Chemical
manufacturing
325
1,466
1,463
(0.21%)
Manufacture, process,
store
Chemical wholesalers
4246
333
329
(1.22%)
Store for sale
Food and beverage
manufacturing
311,312
1,476
1,528
3.40%
Use (mostly ammonia as a
refrigerant)
Oil and gas
extraction
211
741
750
1.20%
Intermediate processing
(mostly regulated
flammable substances and
flammable mixtures)
Other
44, 45, 48,
54, 56, 61,
71, 21
247
262
5.73%
Use chemicals for
wastewater treatment,
refrigeration, store
chemicals for sale
Other manufacturing
313, 326,
327, 33
384
379
(1.32%)
Use various chemicals in
manufacturing process,
waste treatment
Other wholesale
423, 424
302
308
1.95%
Use (mostly ammonia as a
refrigerant)
Paper manufacturing
322
70
70
0.00%
Use various chemicals in
pulp and paper
manufacturing
Petroleum and coal
products
manufacturing
324
156
157
0.64%
Manufacture, process,
store (mostly regulated
flammable substances and
flammable mixtures)
Petroleum
wholesalers
4247
276
340
18.82%
Store for sale (mostly
regulated flammable
substances and flammable
mixtures)
Utilities/Water
221(non
Gov owned
water)
445
452
1.55%
Use chlorine (mostly for
water treatment) and other
chemicals
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Warehousing and
storage
493
1,056
1,125
6.13%
Use mostly ammonia as a
refrigerant
Total
12,542
12,318
(1.82%)
Exhibit 3-2 presents a comparison of the number of facilities in each sector in the form of a bar chart.
Exhibit 3-2: Chart of Affected Facilities by Sector - Comparison of 2015 and 2017 RMP Database
4,000
3,500
3,000
-------
facility and farm co-operative) and three or four others may in fact be subject to PSM (the substance
listed is covered by OSHA at certain concentrations).28
Exhibit 3-3 represents the number of facilities by program level in the 2015 RMP database. The number
of facilities by program level in the 2017 RMP database differed slightly from the 2015 version. In the
2017 version, the number of PI facilities is 678 compared to 642 in the previous version (increase of
5.3%). The number of P2 facilities decreased from 5,920 to 5,606 from 2015 to 2017 (a decrease of
5.6%). For P3 facilities, the number of facilities increased from 5,980 to 6,034 (a 0.9% increase).
Exhibit 3-3: Number of Facilities by Program Level - 2015 RMP Database
P3 Facilities (5980):
Subject to OSHA PSM
or in specified NAICS
codes
PI Facilities (642):
Limited accident
effects on public
Program 1 ¦ Program 2 i Program 3
P2 Facilities (5920):
Not eligible for PI or
subject to P3
A portion of P2 facilities in the 2015 database (935 out of 5,920) are publicly owned water/wastewater
treatment facilities in States where Federal OSHA (rather than the State) enforces OSHA rules.29 These
facilities are not subject to PSM because Federal OSHA does not regulate public employers; thus, they
are not considered P3, although there is no difference in their process compared to those that are
subject to PSM. Publicly owned water facilities in OSHA-state-plan states are covered under PSM and
thus, are in P3. The remaining P2 facilities are agricultural distribution facilities that store anhydrous
28 Some facilities listed only 5-digit NAICS codes, so EPA could not conclusively determine whether their processes
are subject only to the RMP rule.
29 For the reason why, please see Section 1.1 History above.
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ammonia, utilities that use aqueous ammonia, and other facilities that store or use chemicals not
subject to OSHA PSM.30
Exhibit 3-4 presents a comparison of the number of RMP facilities in 2015 and 2017 by industrial sector
and program level. As shown in the Exhibit, the number of 2017 facilities in each program level have
marginally changed relative to the number of 2015 facilities. Overall, most changes by sector and
program level are modest (~1% to 10%). While some percent changes in Exhibit 3-4 appear significant,
the majority of changes in program level by industry sector are minor in magnitude and only represent
large percentage changes due to the small number of 2015 facilities in some sectors. Of note in Exhibit
3-4, as well as Exhibit 3-1, is an overall 18.82% increase in the number of petroleum wholesale
distributors (NAICS 4247) and an overall 10.14% decline in the number of government-owned facilities
(represented by NAICS 92 and 2213). Publicly owned water/wastewater treatment systems in these
Exhibits are listed under governments (NAICS 92), while privately owned and operated systems are
listed under NAICS 2213. The significant increase in petroleum wholesale distributors may be due to the
growth of U.S. domestic oil and natural gas production associated with hydraulic fracturing and
horizontal drilling (i.e., "fracking"). The decline in the number of government-owned facilities is likely
due to a continuing trend away from gaseous chlorine use for water disinfection. These are the largest
changes in overall magnitude of the industrial sectors identified in the Exhibits 3-1 and 3-4.
Certain cost estimates in the 2017 Amendments RIA depended upon whether a facility was considered
"complex." In general, the cost of implementing the RMP rule provisions varies primarily by the
complexity of the processes involved. The chemical manufacturers and refineries have more covered
processes per facility and more complex issues to consider when evaluating hazards, designing
exercises, conducting audits, investigating incidents, and explaining information to responders and the
public compared to facilities that simply store or use chemicals in simple processes (e.g., refrigeration
systems and water and waste treatment systems). For the purposes of the RMP Amendments RIA and
this cost analysis, therefore, all facilities in NAICS 324 and 325 (petroleum and coal products
manufacturing and chemical manufacturing) are considered "complex;" all other facilities are
considered "simple."
With regard to the number of complex facilities (NAICS 324, 325), the number of facilities has not
changed significantly from 2015 to 2017. The number of petroleum and coal product manufacturers has
increased by one (156 to 157), and the number of chemical manufacturing facilities has decreased by
three (1466 to 1463). While paper manufacturers fall within the category of "simple" facility, their
numbers are important for the STAA program element. The number of paper manufacturers (NAICS 322)
stayed constant at 70. The change in the number of all other simple facilities (all other NAICS codes)
30 There are some facilities that listed themselves as P2 that have either selected the wrong Program level on the
RMP submission or have incorrectly indicated that they are not subject to PSM, as they handle OSHA PSM
chemicals in quantities far above the OSHA threshold. Because there are errors in the other direction among the
public systems (i.e., facilities in States not subject to PSM that listed themselves as P3), the analysis did not
attempt to correct the errors.
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between 2015 and 2017 was greater than the change in complex facilities and paper manufacturers over
that timeframe; however, the total change amounted to only a 2% decrease in the total number of
simple facilities.
Exhibit 3-4: Number of Facilities by Sector and Program Level
Sector
2015
PI
2017
PI
%
Change
2015
P2
2017
P2
%
Change
2015
P3
2017
P3
%
Change
2015
Total
2017
Total
%
Change
NAICS 11, 12, 15,
42491 Agricultural
10
6
66.67%
3,371
3,021
(11.59%)
286
382
25.13%
3,667
3,409
(7.57%)
NAICS 4246
Chemical
Distributors
6
6
0.00%
0
0
0.00%
327
323
(1.24%)
333
329
(1.22%)
NAICS 325 Chemical
Manufacturing
53
50
(6.00%)
64
65
1.54%
1,349
1,348
(0.07%)
1,466
1,463
(0.21%)
NAICS 311, 312
Food and Beverage
Manufacturer
3
2
50.00%
11
6
(83.33%)
1,462
1,520
3.82%
1,476
1,528
3.40%
NAICS 92
Governments
15
14
(7.14%)
935
887
(5.41%)
973
845
15.15%
1,923
1,746
10.14%
NAICS 211 Oil and
Gas Exploration
310
317
2.21%
41
38
(7.89%)
390
395
1.27%
741
750
1.20%
Other
41
55
25.45%
62
55
(12.73%)
144
152
5.26%
247
262
5.73%
Other
Manufacturing
62
66
6.06%
73
75
2.67%
249
238
(4.62%)
384
379
(1.32%)
NAICS 423, 424
Other Wholesale
5
3
66.67%
291
298
2.35%
6
7
14.29%
302
308
1.95%
NAICS 322 Paper
Manufacturing
1
1
0.00%
1
1
0.00%
68
68
0.00%
70
70
0.00%
NAICS 324
Petroleum and Coal
Products
13
12
(8.33%)
3
3
0.00%
140
142
1.41%
156
157
0.64%
NAICS 4247
Petroleum
Distributors
14
27
48.15%
0
23
100.00%
262
290
9.66%
276
340
18.82%
NAICS 221, 222
Utilities
38
40
5.00%
72
69
(4.35%)
233
235
0.85%
343
344
0.29%
NAICS 493
Warehousing
70
78
10.26%
986
1,047
5.83%
0
0
0.00%
1,056
1,125
6.13%
NAICS 2213
Water/Wastewater*
1
1
0.00%
10
18
44.44%
91
89
(2.25%)
102
108
5.56%
Total
642
678
5.31%
5,920
5,606
(5.60%)
5,980
6,034
0.89%
12,542
12,318
(1.82%)
* Except government-owned, which appear as NAICS 92 Government.
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3.2.1 Facilities Affected by the STAA Requirement
Under the 2017 Amendments Final Rule, the applicability of the STAA provision was limited to P3
processes in three sectors (NAICS codes 322, 324, and 325) because they had a high frequency of
accidental releases as compared to other sectors (see 2017 Amendments RIA, Exhibit 3-8: RMP
Reportable Accidents by Sector) and they represent relatively complex processes. Accidents from these
three sectors accounted for 49% of all RMP reportable accidents.31 Under the proposed rule, EPA
proposes to rescind the STAA requirement to decrease burden on regulated facilities and maintain RMP
prevention program requirements consistent with OSHA's current PSM standard.
Exhibit 3-5 presents a comparison of the number of RMP P3 facilities and processes in 2015 and 2017 in
NAICS 322, 324, and 325. As shown in Exhibit 3-5, the number of facilities in each NAICS has changed
marginally relative to the 2015 version of the RMP database. The number of processes for each complex
industry sector increased slightly relative to the 2015 RMP database. The largest change is in the
number of NAICS 322 P3 processes, which increased from 96 in 2015 to 109 in 2017, representing a 12%
increase. However, this sector represents a relatively small number of facilities. The percentage
increase in the number of processes in NAICS 325, which represents the bulk of processes subject to the
STAA provision, was 3.53%, while the percentage change in NAICS 324 processes was only 1.57%.
Exhibit 3-5: Number of Processes and Facilities Subject to STAA Provision by Program Level and Sector
NAICS
2015 P3
Processes
2017 P3
Processes
2015 P3
Facilities*
2017 P3
Facilities*
Process Change/Facility
Change
NAICS 322
96
109
68
68
11.92%/0.00%
NAICS 324
1,444
1,467
140
142
1.57%/1.41%
NAICS 325
2,733
2,833
1,349
1,348
3.53%/ (0.07%)
Total
4,273
4,409
1,557
1,558
3.08%/0.06%
*Note that unlike Exhibit 3-1, the facility numbers in this Exhibit represent only the number of facilities with
Program 3 processes in sectors affected by the final Amendments Rule provision.
3.2.2 Universe Breakdown for Emergency Response Coordination and Exercise
Requirements
The requirements associated with the emergency response provisions in the 2017 RMP Amendments
Rule depend on whether a facility responds to releases with its own personnel (or contractors) or relies
31 February 2015 RMP Database.
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on local public emergency responders. Responding facilities were identified by examining information
provided to EPA related to the emergency response plan in the 2015 RMP database. Exhibit 3-6 presents
a comparison of the number of responding and non-responding RMP facilities by complexity of the
facility (refineries/chemical manufacturers as complex, all other facilities as simple) and by number of
employees between 2015 and 2017. Exhibit 3-6 compares simple and complex facilities by number of
full-time equivalent (FTE) employees on site, which affects the number of people involved in exercises.
The large manufacturers were further divided because, unlike most of the facilities in the retail and
wholesale sectors, they generally operate 24 hours a day, 7 days per week and therefore have fewer
workers at the facility at any one time than the FTE count listed in the RMP. For the 2017 Amendments
analysis, large manufacturers were considered those with more than 300 FTE or potentially 100 FTE or
more per shift (in general swing and night shifts have fewer employees onsite than the day shift if only
because administrative personnel are not usually present). Hence, the analysis assigned costs to the 773
manufacturers with 100 to 300 FTE the same as if they were in the 20-99 FTE category for the response
provisions.
As shown in Exhibit 3-6, the overall numbers of both responding and non-responding facilities have
dropped slightly from 2015 to 2017, consistent with the small decrease in the total number of RMP
facilities. The only major category of facilities to show a total change of more than 5% was complex non-
responding facilities, which increased by 11.14% (from 422 to 469 facilities). However, this increase was
more than offset by the decrease in the number of simple non-responding facilities, yielding an overall
marginal decrease in the number of non-responding facilities. The overall changes in the numbers of
responding and non-responding facilities reported in 2017 relative to the 2015 version of the RMP
database were slight.
Exhibit 3-6: Responding and Non-Responding Facilities by FTE and Complexity*
2015
2017
2015
2017
2015
2017
0-19
0-19
%
20-99
20-99
%
100+
100+
%
2015
2017
%
FTE
FTE
Change
FTE
FTE
Change
FTE
FTE
Change
Total
Total
Change
Responding
Simple
1,640
1,490
(9.15%)
880
846
(3.86%)
1,466
1,481
1.02%
3,986
3,817
(4.24%)
Complex
141
114
(19.15%)
459
435
(5.23%)
534
540
1.12%
1,134
1,089
(3.97%)
Total
1,781
1,604
(9.94%)
1,339
1,281
(4.33%)
2,000
2,021
1.05%
5,120
4,906
(4.18%)
Non-Responding
Simple
4,728
4,533
(4.12%)
899
921
2.45%
731
811
1.02%
6,358
6,265
(1.46%)
Complex
141
155
9.93%
235
275
17.02%
46
39
(15.22%)
422
469
11.14%
Total
4,869
4,688
(3.72%)
1,134
1,196
5.47%
777
850
9.40%
6,780
6,734
(0.68%)
* Note: Exhibit does not include RMP facilities with only PI processes
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3.2.3 Universe Breakdown for Provisions that Apply After an RMP Reportable Accident and
for Baseline Damage Estimates
The number of baseline accidents affects several estimates in the 2017 RMP Amendments RIA. Accident
numbers affect the costs estimated for rule provisions that must be implemented following an accident,
which include the third-party audit, incident investigation root cause analysis, and public meeting
provisions. Accident numbers and their associated impacts also affect estimates of baseline damages,
which are discussed in the qualitative benefits analysis. The 2017 Amendments RIA used the average
number of accidents reported by RMP facilities from 2004 to 2013 to estimate the burden of rule
provisions triggered by accidents, as well as baseline accident damages. As discussed further below,
accident data for 2014-2016 are now available, and these data show a continuing decline in the number
of RMP-reported accidents. The decline in the number of accidents observed in the most recent three
years of reported accident data would result in a reduction of the estimated costs of relevant 2017
Amendments rule provisions as well as a reduction in the baseline accident damages, if those estimates
had been based on the most recent 10-year period that includes accident totals from 2014, 2015, and
2016. However, EPA has not adjusted the cost estimates of repealed provisions in this RIA to account
for these new data. Recent substantial declines should be viewed as tentative. Past experience with
RMP facility accident reports suggests that following the next 5-year reporting wave (explained further
below), the current 2014, 2015, and 2016 accident totals will increase.
3.2.3.1 Provisions Applicable After an Accident
The third-party audit, and public meeting provisions of the 2017 RMP Amendments Final Rule apply to
facilities that have an RMP reportable accident. The root cause analysis provision applies to facilities
that have an incident that resulted in a catastrophic release or a "near miss." EPA assumed that the
number of catastrophic release incidents and number of near misses were each equivalent to the
number of RMP reportable accidents. The third-party audit provisions also apply to facilities where the
implementing agency identifies conditions that could lead to an accidental release or problems with a
prior third-party audit. In this rulemaking, EPA is proposing to rescind the third-party audit and root
cause analysis provisions to decrease regulatory burden on the universe of RMP facilities and maintain
the RMP prevention provisions consistent with OSHA's PSM standard. By rescinding these provisions,
EPA is assuming that facilities will not incur the costs associated with implementing them, as estimated
in the 2017 Amendments RIA. The current rulemaking proposes to retain the public meeting provisions
of the 2017 Amendments rule.
The RMP program, as discussed in the 2017 Amendments RIA, requires reporting for accidental releases
from covered processes with impacts that resulted in deaths, injuries, or significant property damage
onsite, or known offsite deaths, injuries, evacuations, sheltering in place, property damage, or
environmental damage. In practice, however, some facilities have reported accidental releases with no
reported impacts. For the purposes of the 2017 RMP Amendments RIA, EPA used only the number of
RMP reportable accidents, which are those accidents with reported impacts. EPA analyzed the number
of accidents reported during the prior 10-year period and only that period because prior to 2004, some
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facilities were still completing initial implementation of the rule, and 2013 was the most recent year for
which there were complete accident data when EPA began its analysis in early 2015.
Annual accident data are now available for 2014 - 2016,32 and these data show a continuing decline in
accident frequency, consistent with the trend over the previous 10-year period. Exhibit 3-7 presents the
number of RMP reportable accidents per year for 2004 through 2013, as presented in the 2017 RMP
Amendments final rule RIA, as well as the additional accident data now available for 2014 - 2016, and
10-year rolling averages for each available 10-year period. Exhibit 3-8 presents the same data in the
form of a bar chart, overlaid with a trend line illustrating the average annual decline in the number of
accidents over the 13-year period. As indicated in Exhibit 3-7, when including the additional 3 years of
accident data, the average number of impact accidents per year for each 10-year period drops from 152
(for the period from 2004 to 2013) to 137 (for 2007 to 2016, the most recent available 10-year period) -
a decrease of approximately 10%. This decrease would result in a decrease in the estimated cost savings
of repealing rule provisions triggered by reportable accidental releases relative to their costs as
estimated in the 2017 RIA. Of course they would also have resulted in an equal change to the costs of
implementing these provisions, if they had gone into effect (i.e., the cost estimate in the 2017 RMP
Amendments final rule RIA for provisions required following an accident would now be understood to
have been too high).
EPA notes, however, that accident totals for the most recent five years of data within the RMP national
database increase slightly after each major five-year RMP reporting cycle occurs. Major five-year
reporting cycles, or "waves", have occurred every five years after the 1999 compliance date of the
original rule; that is, in 2004, 2009, and 2014. This initially occurred because originally there was no
requirement to update RMP accident information until the next RMP submission was due, which
normally occurs every five years. Although EPA changed this requirement in 2004 to require owners and
operators to update their RMP accident history information within 6 months of any reportable accident,
not all sources consistently comply with this requirement. Some sources still update their accident
history information only when their next full five-year RMP update occurs, which for most sources
occurs in one of the "wave" years. Therefore, EPA expects that while the overall trend in accidents is
downward, actual accident numbers for 2014-2016 may increase above those shown here after the
2019 reporting wave occurs.33
32 EPA. April 2018. Risk Management Plan (RMP) Facility Accident Data, 2014-2016. USEPA, Office of Emergency
Management.
33 This problem did not affect the 2017 RMP Amendments Rule RIA because the previous "wave" reporting year -
2014 - occurred the year prior to EPA extracting the accident data from the RMP National Database (i.e., EPA
extracted the data for the 2017 Amendments RIA in early 2015), so all accidents in years prior to 2014 would have
been represented in the dataset used for the 2017 Amendments RIA.
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Exhibit 3-7: RMP Reportable (Impact) Accidents by Year, 2004 - 2016
Year
Impact Accidents
2004
197
2005
152
2006
140
2007
204
2008
168
2009
149
2010
128
2011
138
2012
118
2013
123
2014
128*
2015
113*
2016
99*
Total (2004 - 2013)
1,517
Total (2005 - 2014)
1,448
Total (2006 - 2015)
1,409
Total (2007 - 2016)
1,368
Average/Year (2004 - 2013)
152
Average/Year (2005 - 2014)
145
Average/Year (2006 - 2015)
141
Average/Year (2007 - 2016)
137
*May increase after the 2019 RMP reporting wave occurs.
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Exhibit 3-8: RMP Reportable (Impact) Accident Trend, 2004 - 2016*
RMP Facility Accidents, 2004 - 2016
250
200
150
100
50
0
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
*The line represents a linear trend line over the 13 years of data. The average annual decline is
approximately 3.5%. Note that for the final three years, the number of reported impact accidents
may increase above those shown here after the 2019 RMP reporting wave occurs.
3.2.3.2 Baseline Damages
Estimates of baseline damages from accidents at RMP facilities would also change from what was
estimated for the 2017 RMP Amendments Rule if EPA was to update to the 2017 RMP data. The baseline
damages would likely decline to reflect the recent decreases in the annual number of reported
accidents. This would hold if the impacts associated with the accidents declined as well. This is discussed
further in Chapter 6.
3.2.4 Universe for Information Availability Provisions
The information availability provisions of the RMP Amendments final rule apply to all regulated facilities.
As already discussed, the overall universe of RMP regulated facilities has changed only marginally from
2015 to 2017.
3.3 Limitations
EPA has not updated the data in the current RIA cost analysis to reflect the November 2017 version of
the RMP database. Since the 2017 Amendments Rule has not yet become effective, any incremental
changes to the universe of regulated facilities would affect the costs of that rule to the same degree that
they affect the cost savings of the current Reconsideration Rule.
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However, the error in estimates may be larger for provisions depending on accident rates as well as for
the estimates of avoided accident damages (which provide insight into the magnitude of potential
benefits associated with the Amendments and Reconsideration rules). The reason is that the number of
accidents reported in the 2017 RMP data shows a continuing substantial annual decline. However, the
most recent substantial declines must be viewed as tentative. Past experience with RMP facility accident
reports suggests that following the next 5-year reporting wave, the current 2014, 2015, and 2016
accident totals will increase.
There are also limitations associated with the assumptions used in the 2017 Amendments RIA.34 The
2017 RMP Amendments RIA assumed that every facility subject to the RMP rule has registered with EPA
and filed an RMP as of 2015. EPA recognizes that this may not be true. EPA and delegated implementing
agencies search for and occasionally identify regulated facilities that have failed to submit RMPs.
Historically, relatively few of these "non-filers" have been found, but EPA has little basis for determining
the full extent of such non-compliance.
The RMP database may also include facilities that are no longer operational. For the 2017 RMP
Amendments analysis, EPA removed one refinery (and nine processes) from the data because the facility
appears to have closed in 2001 without following the requirements to deregister. EPA recognizes there
may be other facilities in the RMP database that are no longer operating.
The RMP facility population is dynamic. The number of RMP facilities and processes is expected to
change over the period of analysis because of firms that will grow, shrink, merge, close, or open in the
near or distant future. Despite these expected changes, the analysis relies on the number and nature of
RMP facilities and processes that exist as of the February 2015 RMP database as a constant estimate of
future RMP facilities/processes.
Finally, as discussed in more detail in Chapter 7, there are some problems with the data as filed with
EPA. There are a number of facilities that list NAICS codes that are inaccurately applied, which means
some facilities have misclassified themselves as P2 instead of P3, and for public facilities in Federal OSHA
states as P3 instead of P2. For example: EPA identified storage and terminal areas that were listed as
refineries; agricultural co-operatives and refrigerated warehouses listed in multiple sectors; and large
terminals listed as wholesalers, support for transportation, and warehouses. Although EPA has
attempted to correct the most obvious problems, and the numbers in any category are EPA's best
estimate, they should be viewed as approximations.
EPA's use of the 2015 RMP database in this analysis, subjects this RIA to the same limitations as those in
the 2017 RMP Amendments analysis.
34 Assumptions in the 2017 Amendments RIA are relevant to this analysis as EPA is utilizing the baseline
assumptions from the 2017 analysis in this RIA.
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CHAPTER 4: UNIT COSTS AND COST SAVINGS OF
PROPOSED RULE REVISIONS
This chapter discusses the quantifiable costs and cost savings (i.e., averted costs) associated with
rescinding rule provisions included in the 2017 RMP Amendments rule. It also presents the assumptions
used to estimate the incremental costs and cost savings. EPA does not estimate the baseline costs
incurred to comply with the 2017 RMP Amendments regulations enacted January 13, 2017, in this
analysis.35 Those baseline costs are estimated and explained in the 2017 RMP Amendments RIA.
The 2017 analysis employed a model facility approach in which representative facility categories were
developed to reflect a variety of features expected to influence costs (e.g., process complexity, number
of full-time employees, etc.). Cost assumptions were developed for each model facility type and
addressed factors such as number of staff hours involved in implementing a provision, equipment costs,
and fixed costs for contractor involvement. Prevailing wage rates were used to estimate per facility costs
for rule provisions. With a model facility approach, the unit cost estimates represent averages that cover
a wide variation in expected costs even within a single sector. Given the high level of uncertainty
associated with the costs of some of the provisions, however, attempting to project costs for a more
disaggregated universe would imply a level of knowledge of future costs that does not exist.
For this cost analysis, EPA assumes the baseline is compliance with the 2017 Amendments rule as
estimated by the 2017 RIA. The current Reconsideration rule reduces costs relative to that baseline. As
previously discussed in Chapter 3, the universe of RMP facilities remained largely unchanged from 2015
to 2017. EPA assumes that as of the effective date of the final version of this Reconsideration rule, few
facilities will have taken steps to begin implementing the 2017 Amendments. Thus, costs savings from
the proposed rescission of provisions under the Reconsideration rule will completely eliminate costs for
those provisions as estimated for the 2017 Amendments rule.
4.1 Wage Rates
In the Amendments RIA, the Agency used the Bureau of Labor Statistics May 2015 Occupational
Employment and Wage Estimates36 to construct a weighted wage rate for different occupation
categories. For all rule provisions, labor hours were assumed to be distributed across six general labor
categories: Management, Corporate Management, Attorneys, Engineers, Production Staff, and Local
Responders. The weighted wage rates for complex facilities (NAICS codes 324 and 325) were estimated
separately from simple facilities because wages paid by these facilities are higher than in wholesale and
government sectors, which dominate the simple facilities category. For each of the NAICS codes
35 The 2017 RMP Amendments regulations include requirements that are not being affected by this rulemaking.
Such regulations are not considered here as their costs and benefits were already incorporated in the 2017 RMP
Amendments RIA document.
36 See https://www.bls.gov/oes/2015/may/oes_nat.htm.
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representing industries in the simple facilities category that are affected by the rule provisions (Food
and Beverage, Agricultural Facilities, etc.), standardized BLS Occupation Titles were identified to
correspond to the six general labor categories. The wage rates for each BLS Occupation Title were
multiplied by a fringe benefits factor of 1.5 to create a loaded wage rate.37
After loaded wage rates were established for each industry, they were combined to form a weighted
average based on how prominent each industry was within its universe of facilities, either simple or
complex. The Reconsideration proposed rule utilizes the same wage rates as used in the 2017
Amendments RIA. Exhibit 4-1 presents the wage rates.
Exhibit 4-1: Weighted-Average Loaded Hourly Wage Rates (2015 Dollars)
Labor Category
Simple Facilities
Complex Facilities
Management
$77.15
$100.12
Corporate Management
$82.83
$102.67
Attorneys
$101.66
$128.73
Engineers
$55.67
$75.89
Production Staff
$29.69
$43.81
Local Responders
$54.47
$54.47
4.2 Rule Familiarization
EPA estimates that RMP facilities, as of the effective date of the final version of this Reconsideration
rule, will not have begun implementing or preparing for the implementation of the RMP Amendments
Rule due to its effective date having been extended until February 19, 2019. The Amendments RIA
contained assumptions regarding the level of effort required to become familiar with the revisions to
the RMP program and begin the initial stages of implementation of the RMP Amendments Rule. EPA
estimates that the labor burden and cost associated with becoming familiar with the rescinded
provisions of the 2017 RMP Amendments will not be imposed on RMP facilities, local responders, or
delegated implementing agencies. Instead, EPA assumes that RMP facilities, local responders, and
delegated agencies will only need to review and become familiar with the non-rescinded provisions of
the RMP Amendments and their proposed revisions in the RMP Reconsideration proposed rulemaking.
Therefore, for the purposes of this rulemaking, EPA is assuming a new cost associated with the labor of
becoming familiar with the non-rescinded and revised provisions of the 2017 Amendments rule, and a
cost savings associated with regulated facilities not being required to become familiar with the
provisions of the 2017 RMP Amendments final rule. While EPA acknowledges that some stakeholders
became familiar with the Amendments rule prior to the delay of the rule's effective date, EPA expects
that most facilities affected by it would not have done so, particularly for major provisions that are
proposed to be rescinded, as compliance with these provisions would not have been required until
37 The benefits multiplier is based on an average for the sectors as estimated by BLS in its Employer Costs for
Employee Compensation. BLS includes items such as sick leave and vacation as benefits. See
http://www.bls.gov/news.release/ecec.nrO.litrii.
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March 15, 2021. The single major provision with a compliance date prior to 2021 - local emergency
coordination, which had an original compliance date of March 14, 2018 - is not proposed to be
rescinded and therefore rule familiarization burden for this provision is accounted for in this RIA.
The RMP Reconsideration proposed rule proposes to rescind the RMP Amendments rule requirements
related to third-party audits, incident investigation root cause analyses, STAA, and chemical hazard
information availability to the public. The proposed rule also proposes to modify the language of the
local emergency coordination, facility exercises, and public meeting provisions. The proposed rule does
not introduce new provisions. Because of these changes, RMP facility staff will require some time to
review the final rule and determine how the RMP provisions have changed, and which provisions apply
to the RMP facility. Many of the revised provisions are straightforward, such as the rescission of the
chemical hazard information public disclosure provision. Others, such as the local emergency
coordination, exercise and public meeting provisions, have been modified and will require RMP facility
staff to review the non-rescinded provisions and any amendments to their language. Overall, EPA
expects RMP facilities to review the proposed rule to determine how the proposed rule differs from the
2017 Amendments Final Rule; however, labor burden is expected to be reduced relative to the rule
familiarization labor burden estimated in the 2017 Amendments RIA.
In the 2017 Amendments RIA, EPA projected that all facilities with simple processes would need four
hours to review the rule as would the few complex facilities in PI and P2.38 Under the Reconsideration
proposed rule, the estimated number of labor hours for simple facilities is reduced relative to the 2017
Amendments RIA from four hours of management time, to two hours. This reduction is due to the
rescission of the provisions applicable to simple facilities: third-party audits, root cause analysis, and
chemical hazard information availability. With their rescission, simple facilities will be subject to fewer
RMP provisions and will only need to be familiar with the structural changes of the rule and changes to
the language of the coordination, exercise and public meeting provisions.
For PI and P2 complex facilities, labor hours are expected to decrease from four hours of management
time to two. This reduction is due to the rescission of the provisions applicable to PI and P2 Complex
facilities: third-party audits, root cause analysis, and information availability. With their rescission, PI
and P2 complex facilities will be subject to fewer RMP provisions and will only need to be familiar with
the structural changes of the rule and changes to the language of the emergency coordination, exercise
and public meeting provisions.
Under the 2017 Amendments rule, complex facilities in P3 were projected to spend 292 hours reviewing
the rule.39 For P3 complex facilities, the majority of rule familiarization labor hours under the 2017
Amendments rule would have been spent on familiarization with rescinded provisions, particularly
38 Labor hour estimates for Simple, PI and P2 Complex, LEPC, and Implementing Agencies are taken from public
comment EPA-HQ-OEM-2015-0725-0554 provided by the American Water Works Association (AWWA).
39 See comment EPA-HQ-OEM-2015-0725-0363 provided by the Chemical Safety Advisory Group (CSAG) for labor
hour estimate. EPA used the midpoint of the P3 Complex high and low labor hour estimates.
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STAA, third-party audits, and incident investigation root cause analysis. Therefore, rule familiarization
for these facilities will be far less under this proposal. The hours will continue to be higher than for other
facility types as there will be some modifications to the exact requirements of the exercise provision,
which generally impact large complex facilities. In general, hour estimates represent time to read and
understand the requirements of the rule and additional time for those impacted by the changes to the
exercises provisions. The revised estimate for complex facilities is more in line with the NJ DEP estimate
for revisions to the NJ TCPA program, as recommended by the comments submitted to EPA by AWWA
and AFPM.40
LEPCs were projected to spend five hours reviewing the 2017 Amendments rule. EPA does not expect
LEPC labor hours for rule familiarization under this proposal to change relative to the 2017 RMP
Amendments RIA, as the rescinded and modified provisions are expected to have little effect on LEPC
burden. For delegated implementing agencies, labor hours are expected to decrease from four hours of
management time to two. This reduction is due to the rescission of the third-party audit, root cause
analysis, STAA, and chemical hazard information availability provisions.
Exhibit 4-2 shows projected unit labor hour burden estimates for RMP facilities, LEPCs, and delegated
implementing agencies to become familiar with the proposed rule.
Exhibit 4-2: Reconsideration Rule Familiarization Unit Costs (2015 dollars)
Facility Type
Labor Hours
Unit Costs
Managers
Corporate
Managers
Attorneys
Engineers
Production
Staff
Simple
2
0
0
0
0
$154
PI and P2
Complex
2
0
0
0
0
$200
P3 Complex
10
4
6
6
6
$2,902
LEPCs
5
0
0
0
0
$386
Delegated
Implementing
Agencies
2
0
0
0
0
$154
As indicated above, for the purposes of this RIA, EPA assumes all costs associated with rule
familiarization in the 2017 RMP Amendments RIA to be averted costs. However, EPA expects RMP
facilities to review the proposed rule to determine how the proposed rule differs from the 2017
Amendments Final Rule; those costs for reviewing those portions of the 2017 Amendments that were
not rescinded or revised are considered part of rule familiarization costs for this proposal. Exhibit 4-3
shows estimated unit averted costs of rule familiarization.
40 Please see comments EPA-HQ-OEM-2015-0725-0554 and EPA-HQ-OEM-2015-0725-0579 in the 2017 RMP
Amendments rulemaking docket.
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Exhibit 4-3: Unit Averted Costs of Rule Familiarization with Amendments Rule (2015 dollars)
Facility Type
Labor Hours
Facility
Averted
Cost
Managers
Corporate
Mgmt.
Attorneys
Engineers
Production
Simple
facilities
4
0
0
0
0
($309)
PI and P2
Complex
4
0
0
0
0
($400)
P3 Complex
20
48
12
87
125
($20,554)
LEPCs
5
0
0
0
0
($386)
Delegated
Implementing
Agencies
4
0
0
0
0
($309)
4.3 Prevention Program Rule Provisions
4.3.1 Third-party Compliance Audits
The RMP Reconsideration proposed rule proposes to rescind this provision in an effort to reduce facility
burden and maintain consistency with the OSHA PSM standard. Through the rescission of the provision,
regulated entities are expected to experience costs savings equal to the estimated costs of the provision
in the 2017 Amendments RIA.
The RMP Amendments RIA third-party compliance audit analysis estimated that the time required to
contract for a third-party audit would vary with the complexity of the processes to be covered and
multiple facility staff would be involved. At a minimum, one manager and one engineer would be
involved to identify potential auditors and write the statement of work on which the auditor would base
its bid. For larger firms that routinely contract and have contract departments, a contracts specialist and
attorney would be part of the process. Many large firms and all governments would have standard
contract language. Governments were estimated to spend more time on the contracting process,
however, because most are required to solicit competitive bids and document the basis for the
selection. Private firms were expected to use a similar process but were not required to do so. Private
firms were also likely to spend time negotiating contract language after the award.
Hourly assumptions and unit averted costs for third-party audits are shown in Exhibit 4-4.
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Exhibit 4-4: Hourly Assumptions and Unit Averted Costs for Hiring Third-party Auditors
Facility Type
Hours for Contracting Process
Facility
Labor Cost
Auditor
Fee
Facility
Averted
Cost
Management
Attorneys
Engineers
Simple w/ 0-19 FTEs
64
8
0
$5,751
$30,000
($35,751)
Simple w/ 20-99 FTEs
88
8
36
$9,607
$30,000
($39,607)
Simple w/ 100+ FTEs
60
8
112
$11,677
$30,000
($41,677)
Complex w/ 0-19
FTEs
64
8
0
$7,438
$80,000
($87,438)
Complex w/ 20-99
FTEs
88
8
36
$12,572
$80,000
($92,572)
Complex w/ 100+
FTEs
60
8
112
$15,537
$80,000
($95,537)
Small Government
60
0
50
$7,413
$30,000
($37,413)
Large Government
120
0
78
$17,934
$80,000
($97,934)
4.3.2 Incident Investigation Root Cause Analysis
The RMP Reconsideration Proposed Rule proposes to rescind the root cause analysis provision
introduced in the RMP Amendments Final Rule (and delete the term "near miss" used to clarify
understanding of those incidents that could have reasonably resulted in a catastrophic release).
Through the rescission of the provision, regulated entities are expected to experience costs savings
equal to the estimated costs of the provision in the 2017 Amendments RIA. However, the existing RMP
regulations still require investigation of any incidents that resulted in, or could have reasonably resulted
in a catastrophic release.
As stated in the Amendments RIA, root cause analyses were not expected to require additional
management time beyond that already required for incident investigation. Management time was
expected to be devoted primarily to decisions concerning resolution of corrective actions arising from
the investigation, and these activities should require roughly the same amount of time whether
corrective actions relate to root causes or other contributing causes. For simple facilities, additional,
non-management, labor for root cause analyses was assumed to be evenly distributed between
production staff and engineers. For complex facilities, in addition to management, it was estimated that
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due to the facility's size and complexity, several attorney hours would be required, along with the
acknowledgment of corporate management. It was also estimated that multiple hours of engineering
and production staff would be required to conduct the analysis.41
The estimate of the time required for an incident investigation was based on estimates in the original
1996 RMP RIA, which relied on best professional judgement and comments on the original rule proposal
received from industry.42 The estimates in the 1996 RMP RIA involved development of a labor model
that assumed investigations would involve a team of management, technical, and production staff, and
that staff at larger and more complex facilities would require more hours to complete an investigation.
Simple facility costs were estimated to include $1,000 for a trained facilitator to assist with the
investigation. Complex facilities generally have staff familiar with the methodology and would staff the
root cause analysis in-house.
Hourly assumptions and unit averted costs for rescission of the root cause analysis provision are shown
in Exhibit 4-5.
Exhibit 4-5: Unit Averted Costs for Root Cause Analysis
Facility Type
Labor Hours
Other
Costs
Facility
Averted
Cost
Managers
Corporate
Mgmt.
Attorneys
Engineers
Production
P2 - simple
6
0
0
4
4
$1,000
($1,804)
P2 - complex
68
0.5
6
30
28
$0
($11,135)
P3 - simple
6
0
0
4
4
$1,000
($1,804)
P3 - complex
68
0.5
6
30
28
$0
($11,135)
4.3.3 Safer Technology and Alternatives Analysis (STAA)
The RMP Reconsideration Proposed Rule proposes to rescind the STAA provisions introduced in the
2017 RMP Amendments Final Rule. The STAA provision of the RMP Amendments Final Rule requires
facilities with P3 processes in NAICS codes 322, 324, and 325 to conduct a STAA as part of their PHA,
which occurs every 5 years.
41 Labor estimates are the midpoint of the high and low labor estimates provided by CSAG in comment EPA-HQ-
OEM-2015-0725-0363.
42 Economic Analysis in Support of the Final Rule on RMP Regulations for the Chemical Accident Release
Prevention, as Required by Section 112(r) of the CAA, May 21,1996. EPA-HQ-OEM-2015-0725-0096
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STAA is generally a process in which facility staff analyze their current processes and practices to
determine if there are safer alternatives to their current operating practice. This can range from small
changes - such as upgrading valves - to large shifts like substituting less toxic or volatile chemicals.
The Amendments RIA divided the STAA process into three parts:
• The initial analysis to identify alternatives;
• A practicability study to determine the costs and assess the reasonableness of implementing the
change in light of other costs and programs; and
• Implementation of alternatives (implementation was not required under the final Amendments
rule).
The STAA provision included a requirement for facilities to conduct both an initial analysis and a
practicability study. An initial analysis was required of all facility processes. While some facilities affected
by the RMP Amendments Rule provision have likely already conducted an initial STAA for some
processes43, the Agency took the conservative approach of assuming that all facilities subject to the
STAA provision would conduct them for all processes.
Following the initial analysis, the RMP Amendments Final Rule required a practicability assessment if the
initial analysis determined the existence of potential inherently safer technology alternatives. In the
RMP Amendments RIA, EPA anticipated that some facilities would conduct practicability studies to
address alternatives considered in multiple initial analyses. As a consequence, some complex firms were
assumed to conduct practicability studies that address up to 12 different alternatives. For a description
of the number and types of practicability studies that form the basis of EPA's cost estimate, please see
Appendix D of the RMP Amendments RIA.
EPA's hourly labor assumption estimates in the 2017 Amendments RIA for the STAA initial analysis were
based on guidelines published by the American Institute of Chemical Engineers / Center for Chemical
Process Safety (AlChE/CCPS) and consultation with engineers who have extensive experience in
performing hazard analyses.44 Facilities in NAICS codes 322, 324, and 325 were expected to have staff
qualified to conduct the initial analysis in-house. All other facilities were expected to hire a consultant to
lead the team. Most of these other facilities use chemicals or store them, but often rely on engineering
firms or maintenance contractors to design the equipment and do anything other than routine minor
maintenance. They may not, therefore, have had staff knowledgeable enough in the process and design
to identify and evaluate alternatives.45
43 For example, some RMP facilities located in New Jersey and Contra Costa County, California have been subject
to rules requiring safer technology reviews since 2006 and 1999, respectively.
44 EPA consulted with engineers at ABS Consulting. See emails dated 6-11-15 (with attachments) and 6-18-15
between Myron Casada of ABS Consulting and Jim Belke of USEPA/OEM regarding 1ST Review cost estimate. EPA-
HQ-OEM-2015-0725-0678.
45 Additional discussion of EPA's methods for determining labor hours associated with the Initial Analysis can be
found in Section 4 of the 2017 RMP Amendments RIA.
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The technical practicability assessment considers the process redesign, its engineering implications, and
possible costs of technologies identified in the initial analysis. EPA's labor estimate assumptions for the
practicability assessment were informed by consultations with stakeholders and public comments. EPA's
approach to estimating the costs of practicability studies is described in detail in Appendix D of the 2017
RMP Amendments RIA. In summary, EPA used identified reference projects to estimate sample project
costs for each facility class (i.e. large complex, chemical manufacturer small/medium complex, and
paper manufacturing).46 After compiling a list of sample project costs, EPA applied a practicability study
rule of thumb to the total cost of the projects, assuming that all practicability studies will cost 1.2% of a
project's total cost. Appendix D of the RMP Amendments RIA presents a sensitivity analysis adopting
different assumptions regarding the cost of practicability studies. EPA concluded that 1.2% of total
project costs is representative of the costs of a practicability study through reviewing published articles,
web sources, and public comments on the cost of feasibility studies.47
From the reference practicability project cost estimates, EPA estimated that practicability studies for a
large complex facility would typically cost approximately $1.38 million over a 5-year period ($276,000
annually). A small/medium complex facility practicability study was estimated to typically cost $27,607
over a 5-year period ($5,521 annually). On average, a paper manufacturing practicability study was
estimated to cost $163,048 over a 5-year period ($32,610 annually).48 However, as stated in the
Amendments final rule, implementation of safer alternatives was not required under the final rule.
The Reconsideration rulemaking proposes to eliminate the requirement to conduct an STAA. As such,
the proposed rule has the benefit of averting the costs associated with implementing the STAA
provision, including both the initial analysis and practicability assessment required in the RMP
Amendments Final Rule.
For developing unit costs for the initial analysis of the STAA provision in the 2017 Amendments RIA, EPA
separated the processes in the three sectors into those that are more likely to involve manufacturing
and reacting chemicals under extreme conditions (i.e., high temperatures and pressures) from those
that involve mixing and using chemicals under less extreme conditions. The former are the petroleum
operations in NAICS code 324, petrochemicals and other basic chemical manufacturing in NAICS code
3251, and synthetics and resins in NAICS code 3252. All other chemical manufacturing sectors
(agricultural chemicals, drugs, paints, soaps, and others) were assumed to mix and use chemicals under
less extreme conditions. The paper manufacturing sector was deemed to use chemicals under simpler
conditions and was separated from the all other chemicals category. Exhibit 4-6 displays the labor hours
46 Large complex project costs were taken from Public Comment EPA-HQ-OEM-2015-0725-0579 provided by AFPM,
Small/medium complex and paper manufacturing project costs from Public Comment EPA-HQ-OEM-2015-0725-
0554 provided by AWWA.
47 See Table D-4 in Appendix D of the RMP Amendments RIA for a table of published articles, web sources, and
public comments.
48 Appendix D of the RMP Amendments RIA explains the sources of reference project costs and Table D-6 presents
the reference project cost estimates.
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and costs assumed for each task (initial analysis and practicability assessment) by labor category and
type of facility, and the resulting per facility averted cost estimates.
Exhibit 4-6: Hourly Assumptions and Unit Averted Costs for STAA (2015 dollars)
Sector
Labor Hours
Facility
Averted
Cost
Manager
Corporate
Mgmt.
Attorneys
Engineers
Production
Consultant
Initial Analysis
Large facilities
NAICS 324-325
0
0
0
738
0
0
($56,006)
NAICS 322,
Small/Medium
324, 325
20
0.5
3.5
82.5
23.5
0
($9,795)
Paper
Manufacturing
20
0.5
3.5
82.5
23.5
0
($9,795)
Simple
Manufacturing
10
0
2.5
22.5
22.5
$9,808
($13,824)
Water/POTW/
Government
10
0
2.5
22.5
22.5
$6,000
($10,016)
Gas Processing
Plants
10
0
2.5
22.5
22.5
$6,000
($10,016)
Refrigeration
10
0
2.5
22.5
22.5
$9,808
($13,824)
Storage
Facilities and
Other
10
0
2.5
22.5
22.5
$6,000
($10,016)
Sector
Facility Averted Cost
Practicability Analysis
Large facilities NAICS 324-325
($1,380,000)
NAICS 322, Small/Medium 324, 325
($27,607)
Paper Manufacturing
($163,059)
Simple Manufacturing
($18,000)
Water/POTW/Government
($306,000)
Gas Processing Plants
($18,000)
Refrigeration
($18,000)
Storage Facilities and Other
($6,000)
4.4 Emergency Response Preparedness Rule Provisions
4.4.1 Emergency Response Program Coordination with Local Responders
The Emergency Response Coordination provision of the 2017 RMP Amendments Final Rule requires all
facilities with P2 or P3 processes to coordinate with local responders annually to make them aware of
the hazards at the facility. If the facility is a non-responder and relies on the local response force, then
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the coordination would primarily focus on any changes that have occurred at the facility and confirm
existing response strategies or develop new ones.
If the facility is a responder and in charge of responding to its own chemical emergencies, then the
coordination would primarily focus on informing local entities on what response capabilities are in place
and how the community may be impacted by an accident.
The coordination provision in the 2017 Amendments final rule states that coordination shall include,
"providing to the local emergency planning and response organizations, the facility's emergency
response plan if one exists, emergency action plan, updated emergency contact information, and any
other information that local emergency planning and response organizations identify as relevant to local
emergency response planning." Reconsideration petitioners indicated that the phrase, "any other
information that local emergency planning and response organizations identify as relevant to local
emergency response planning," could include items not needed by LEPCs such as security vulnerabilities
and plans. To address RMP facility security concerns and help ensure RMP facility security, EPA is
proposing to remove the "any other information" language in the provision. This would have the effect
of limiting the type of information an LEPC could request from an RMP facility to only that information
specified in the regulation.
The proposed modification of the coordination provision is not expected to impact implementation or
compliance costs associated with the provision. It is conceivable that removing the "any other
information" language from the provision will reduce anticipated facility burden; however, that
reduction is likely to be small. The removal of the "any other information" phrase clarifies EPA's original
intent for the coordination provision, and therefore does not influence the cost assumptions listed in
the RMP Amendments RIA.49
4.4.2 Notification Drills
The 2017 Amendments Final Rule required all facilities with P2 or P3 processes to conduct a notification
drill, during which an RMP facility would contact each person and agency on its emergency action
contact list to ensure that the contact information is accurate (e.g., that the person listed is still in that
position and the phone numbers and email addresses are correct). The RMP Reconsideration proposed
rule would not modify the notification drills provision of the 2017 Amendments final rule.
4.4.3 Facility Exercises
The 2017 RMP Amendments final rule requires responding facilities (facilities that intend to develop and
implement the emergency response program required under § 68.95 in order to respond to releases at
their site) to conduct exercises of their emergency response program and plan developed in accordance
with § 68.95. The Amendments final rule requires that at least once every 10 years, a full field exercise
49 For more information on the costs of the Coordination provision, please see Section 4.4.1 of the 2017 RMP
Amendments RIA.
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be conducted; and every three years, a facility must conduct a tabletop exercise. During a tabletop
exercise, the participants would work together to identify a scenario and then establish objectives for
the response without actually mobilizing responders and employees. The objectives for both field and
tabletop exercises would include:
1. Identifying who would be contacted in an emergency,
2. Exercising procedures and measures for emergency response after an accidental release of a
regulated substance (e.g., what equipment would be deployed, who would be evacuated, how
decisions on public notification would be made, who would contact the public, etc.), and
3. Exercising proper first-aid and emergency medical treatment necessary to treat accidental
human exposures to regulated substances.
In a field exercise, the steps of a response are actually carried out (e.g., responders and equipment
would be deployed). The purpose of a field exercise is to evaluate the ability of the responders and
other employees to implement the emergency response plan on which they have been trained.
In this proposed rule, EPA is proposing to eliminate the ten-year frequency requirement for full field
exercises. With the elimination of the ten-year frequency requirement, facilities would consult with local
emergency response officials to establish an appropriate frequency for field exercises. With no
minimum frequency requirement, facilities and local responders will have the option to choose when to
conduct a full field exercise. Although facilities and responders may therefore choose to hold field
exercises at a frequency greater than ten years, EPA has taken the conservative approach for cost
estimation to assume that the average RMP facility will still conduct a field exercise every ten years. This
assumption is based on the rationale that facilities, even without the minimum frequency requirement,
will conduct field exercises at least this often in order to train new employees and community
responders on the workings of the facility's emergency plan. The Amendments Final Rule also permits
facilities to meet the exercise requirements with joint and combined exercises as a way to reduce costs
(for both facilities and local responders). EPA expects many facilities will take advantage of this
alternative means of complying with the exercise requirement. While it is likely that many facilities will
conduct joint exercises or conduct exercises at a frequency greater than once every ten years, reducing
burden on facilities and allowing for greater flexibility, EPA notes that it is also possible that some
facilities may choose to conduct exercises independently and on a more frequent basis.
In addition to removing the minimum frequency requirement for field exercises, EPA is also proposing to
establish more flexible scope and documentation provisions for field and tabletop exercises. Under this
proposal, documentation of both types of exercises would still be required, but the items specified for
inclusion in exercises and exercise evaluation reports under the RMP Amendments rule would be
recommended, and not required. As with the removal of the minimum frequency for field exercises,
this change could reduce the burden on facilities of conducting and documenting exercises. However, as
a conservative approach toward estimating the costs of the exercise provisions, EPA is assuming no cost
savings associated with these proposed changes.
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The proposed rule would not modify the minimum frequency requirement for table top exercises from
the 2017 RMP Amendments Rule. Therefore, as with field exercises, EPA is estimating that the costs of
table top exercises will not change under this proposed rule.
Alternative Option for Exercises
As an alternative to eliminating the ten-year frequency requirement for full field exercises and
establishing more flexible scope and documentation provisions for field and tabletop exercises, EPA is
considering whether to fully rescind the field and tabletop exercise provisions. Under this alternative
proposal, all of the costs associated with tabletop and field exercises from the Amendments rule would
be averted costs under the Reconsideration rule. In the event that EPA were to finalize this alternative
proposed option, unit averted costs of tabletop and field exercises under the Reconsideration rule
would be estimated to be equal to the negative of their unit costs under the Amendments rule.
Depending upon the facility type (simple or complex) and facility size (number of FTEs), unit averted
exercise costs would vary from ($5,487) to ($21,277) for tabletop exercises, and from ($8,381) to
($35,565) for field exercises. See section 4.4.3 of the Amendments RIA for more details regarding the
unit costs of tabletop and field exercises under the Amendments rule.50
4.5 Information Availability Rule Provisions
4.5.1 Public Information Availability
The RMP Reconsideration proposed rule proposes to rescind the chemical hazard information
availability provisions in § 68.210 (b) - (c) of the RMP Amendments Final Rule.
Under the RMP Amendments Final Rule, regulated facilities would be required to make certain
information available upon request to the public. The provision also required facilities to provide
ongoing notification to inform the public on how to obtain the requested information, on either a
company Web site, social media platforms, or through other publicly accessible means. The information
elements were expected to be readily available to facility managers because most of the information is
already compiled for compliance with various health and safety regulations. For example, Safety Data
Sheets are documents that OSHA requires every facility to have available for its employees, and which
contain chemical hazard information required under 29 CFR 1910.1200. The names of chemicals and the
facility's 5-year accident history are already collected for reporting in the RMP. Especially for simple
facilities, this information was expected to be unlikely to change much from year to year; the only cost
associated with this element was the time required to collect and review the information for accuracy.
In the RMP Amendments RIA, EPA estimated that 50% of facilities would receive one information
request in any given year. The RMP Amendments RIA estimated that simple facilities would spend 2
hours reviewing the information to ensure that it is up-to-date. Complex facilities would have more
information to review because they may manufacture, process, and use multiple regulated substances
50 See Amendments rule RIA, pgs. 45-47.
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in multiple processes. The analysis estimated that small complex facilities would spend 4 hours
collecting and reviewing the information. Large complex facilities were estimated to spend 54 hours
because management and possibly counsel would need to ensure that the information was not subject
to any restrictions related to security or confidential business concerns.
The Reconsideration rulemaking proposes to eliminate the Amendments rule requirement to disclose
this chemical hazard information to the public. As such, the proposed rule has the benefit of averting
the costs associated with implementing the chemical hazard information availability provision in the
RMP Amendments final rule. Through the rescission of the provision, EPA and the regulated universe of
facilities are expected to experience costs savings in line with the estimated costs of the provision in the
2017 Amendments RIA. Averted labor and facility costs are presented in Exhibit 4-7.
Exhibit 4-7: Facility Unit Averted Costs for Public Disclosure
Facility
Type
Annual
Frequency
Labor Hours
Other Costs
Facility
Averted
Costs
Management
Attorney
Engineer
Small
Complex
0.5
2
0
2
$0
($352)
Large
Complex
0.5
8
10
36
$0
($4,820)
Simple
Facilities
0.5
1
0
1
$0
($133)
Alternative Option for Public Information Availability
As an alternative to rescinding all of the public information availability elements of the Amendments
rule, EPA is considering rescinding all except the information on exercise schedules, as information on
upcoming facility exercises would be the only item of information required to be disclosed in the public
availability provisions of the Amendments rule that is not already available from another source. Under
this alternative, EPA believes that public information disclosure costs may be lower than they are under
the Amendments rule. However, as facilities would still be required to provide ongoing notification of
the availability of exercise schedule information and provide the information upon request, the
reduction in costs may be quite small, and as a conservative approach, EPA assumes that the cost of this
provision would be equal to its cost under the Amendments rule. Therefore, if EPA were to adopt this
alternative, the unit cost of the rule would increase by up to $133 for simple facilities, up to $352 for
small complex facilities, and up to $4,820 for large complex facilities. In other words, the cost savings
illustrated in Exhibit 4-7 would be eliminated.
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4.5.2 Public Meetings
The 2017 RMP Amendments final rule requires RMP facilities to hold a public meeting to provide
accident information required under § 68.42, as well as other relevant chemical hazard information such
as that described in § 68.210(b), no later than 90 days after any accident subject to reporting under §
68.42. The RMP Reconsideration proposed rule proposes to retain the requirement for the owner or
operator of a stationary source to hold a public meeting, but to rescind the requirement to provide the
"other relevant chemical hazard information." The requirement to provide "other relevant chemical
hazard information" could be interpreted to be an overly broad requirement for information, similar to
the requirement to provide "any other information that local emergency planning and response
organizations identify as relevant to local emergency response planning" to LEPCs, which EPA is also
proposing to rescind. However, as with the rescission of the similar language in the emergency
coordination provision, EPA does not expect that deleting this language from the public meeting
provision will have a significant impact on the costs of that provision, and has not projected any costs (or
cost savings) associated with this change. EPA also proposes to amend the public meeting provision to
require the information listed in § 68.42 (b) for only the most recent accident, and not for previous
accidents covered by the 5-year accident history requirement of § 68.42(a). This proposed modification
should provide clarity for the regulated community regarding the public meeting requirements. EPA
does not expect that deleting this language from the public meeting provision will have a significant
impact on the costs of that provision, and has not projected any costs (or cost savings) associated with
this change.
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Chapter 5: TOTAL COSTS
This chapter aggregates unit costs to present the total costs, including averted costs, of the proposed
Reconsideration Rule provisions. Consistent with the 2017 Amendments RIA, costs are projected over 10
years and discounted at 3 percent and 7 percent. The 10-year time period was chosen for the 2017 rule
because it was long enough for at least two rotations of many of the infrequently required activities
(which occurred every five years) and at least one occurrence of the least frequently required activity
(field exercises which were estimated to occur every 10 years).
This chapter is organized as follows:
• Section 5.1 presents the broad analytical assumptions used in the analysis focusing primarily on
the annual frequency of rule provision activities.
• Section 5.2 presents the costs and averted costs of the proposed rule
o Section 5.2.1 shows the rule familiarization costs.
o Section 5.2.2 describes the total averted costs of the prevention program provisions -
third-party compliance audits, incident investigation, and STAA.
o Section 5.2.3 describes the total averted costs associated with the emergency response
preparedness provisions - emergency response program coordination with local
responders, notification exercises, and facility exercises,
o Section 5.2.4 describes the total averted costs associated with the information
availability provisions.
• Section 5.3 presents costs and cost savings associated with alternative regulatory options
• Section 5.4 presents net costs of the proposed rule.
5.1 Analytical Assumptions
Annual Frequency
The analysis generally divided total costs into initial year costs and ongoing costs. For provisions in which
the activity occurs in several year increments, the annual frequency is a fraction representing what
portion of facilities would likely be implementing the provision in any given year. For example, if an
activity is expected to happen once every 5 years, the annual frequency would be 0.2, as 20 percent of
the applicable facilities would likely be completing the activity in any given year. The assumption that
implementation would be distributed evenly across time (i.e., if facilities are required to conduct an
activity once every 5 years, that one fifth would do it in any one year) may overstate the costs for some
years and understate them for others.
Initial and Ongoing Costs
The analysis only used an ongoing cost when costs for years 2-10 were not the same as the initial cost
components. If costs for years 2-10 were the same as the initial year (with some variation based on the
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annual frequency), then multiplying the initial cost by the annual frequency accounted for any
continuing costs. The only cost element with ongoing costs different from initial costs is rule
familiarization.
Baseline Scenario
The baseline for the proposed Reconsideration rule assumes the costs of compliance with the 2017
Amendments rule are as estimated in the 2017 RIA. Estimates of additional or fewer hours required to
implement the proposed rule are calculated relative to the hours estimated for complying with the 2017
RMP Amendments. The baseline scenario assumed no change in facility requirements or in the number
of regulated facilities or processes.
5.2 Costs and Cost Savings of the Proposed Rule
5.2.1 Rule Familiarization
Rule familiarization is a necessary cost of any rulemaking. All facilities, local governments, and delegated
implementing agencies are estimated to be affected by rule familiarization. This cost is incurred in the
first year of the rule only. The costs of conducting rule familiarization activities for the proposed rule are
described in Exhibit 5-1.
Exhibit 5-1: Rule Familiarization with proposed Reconsideration Rule (2015 dollars)
Facility Type
Unit Cost
Entities
Total Cost
Simple
$154
10,920
$1,684,965
PI and P2 Complex
$200
133
$26,632
P3 Complex
$2,902
1489
$4,321,767
LEPCs
$386
1724
$665,037
Delegated Implementing Agencies
$154
14
$2,160
Total
14,280
$6,700,561
All facilities, local governments, and delegated implementing agencies were estimated to be affected by
familiarization with the 2017 RMP Amendments final rule. This cost was only expected to be incurred in
the first year of the rule. The averted costs of not conducting rule familiarization activities for the 2017
RMP Amendments final rule are described in Exhibit 5-2.
Exhibit 5-2: Rule Familiarization Averted Costs
Facility Type
Unit Cost
Entities
Total Averted Cost
Simple
$309
10,920
($3,369,930)
PI and P2 Complex
$400
133
($53,264)
P3 Complex
$20,554
1489
($30,605,095)
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LEPCs
$389
1724
($665,037)
Delegated Implementing Agencies
$309
14
($4,320)
Total
14,280
($34,697,646)
5.2.2 Prevention Program Rule Revisions
5.2.2.1 Third-party Compliance Audits
Under the RMP rule before the 2017 RMP Amendments, P2 and P3 facilities must conduct a compliance
audit at least once every 3 years. The Amendments final rule imposed the requirement for a third-party
audit only on P2 or P3 facilities that had a reportable accidental release, or when requested by an
implementing agency following a determination of conditions that could lead to an accidental release or
identification of problems with a prior third-party audit. These facilities were required to contract with a
third-party for their next scheduled compliance audit. Accident numbers were based on the RMP data
from RMP reportable accidents, referenced in Exhibit 3-7, and were estimated based on the 10-year
annual average. The 2015 RMP database contains data on accidents that have had reportable impacts,
but also those without. The RMP Amendments third-party compliance audits provision did not require
third-party audits for accidents without reportable impacts, unless an implementing agency requires an
audit as a result of conditions at the source that could lead to an accidental release or because of
problems with a prior third-party audit. In the RMP Amendments RIA, EPA assumed that implementing
agencies would rarely exercise this authority. Therefore, EPA deducted the number of accidents with no
impacts from the total number of accidents in the RMP database, to get the number of accidents with
impacts which are reported in Exhibit 3-7. EPA also deducted the small number of accidents that
occurred at PI facilities, as the provision would only apply to P2 and P3 facilities. The 2017 RMP
Amendments analysis projected that the annual number and distribution of accidents among types of
facilities will remain the same and that in any one year, the number of facilities conducting a third-party
audit will be equal to the number of accidents.51 That is, although the approximately 148 third-party
audits for the P2 and P3 facilities that had a reportable release in 2017 may occur up to 3 years after the
releases, depending on when the previous audit occurred, the analysis projects that over time, about
148 facilities would conduct such an audit each year.52
The proposed rule would rescind the third-party compliance audit provision. Rescission of the third-
party audit provision would result in the estimated cost of the 2017 RMP Amendments provision
51 EPA recognizes that subsequent to the 2017 RMP Amendments rule taking effect, accident rates may decrease
(as Exhibit 3-7 shows, accident rates were decreasing prior to the 2017 Amendments rule), but wishes to calculate
a conservative cost estimate so we are assuming a constant accident rate.
52 The number of audits may be overstated because the number of facilities that had reportable releases over the
ten-year period considered (1,272) is lower than the number of releases reported (1,516), according to the RMP
accident database, as some facilities may have multiple accidents.
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becoming an averted cost. Exhibit 5-3 shows the total averted costs of rescinding the third-party audit
provision.
Exhibit 5-3: Total Annual Undiscounted Averted Costs for Third-party Compliance Audits
Facility Type
Annual Frequency
Unit Averted Cost
Facilities
Total Annual Averted Cost
Simple w/ 0-19 FTEs
1
($35,751)
18
($643,516)
Simple w/20-99 FTEs
1
($39,607)
15
($594,099)
Simple w/100+ FTEs
1
($41,677)
40
($1,667,091)
Complex w/ 0-19 FTEs
1
($87,438)
3
($262,313)
Complex w/ 20-99 FTEs
1
($92,572)
13
($1,203,442)
Complex w/100+ FTEs
1
($95,537)
52
($4,967,906)
Small Government
1
($37,413)
3
($112,238)
Large Government
1
($97,934)
4
($391,735)
Total
148
($9,842,339)
5.2.2.2 Incident Investigation Root Cause Analysis
The 2017 RMP Amendments Final Rule required a root cause analysis for any incident that resulted in a
catastrophic release or was a near miss. The 2017 RMP Amendments RIA estimated that the number of
catastrophic release incidents was equal to the number of RMP reportable accidents and that there
would also be one near miss for each RMP reportable accident. The number of actual near misses is
unknown and depends on a judgment of the seriousness of an incident and belief that it could
reasonably have resulted in a catastrophic release. Industry estimates for the cost of incident
investigations vary widely. The Amendments final rule applies the requirements for root cause analysis
for incident investigation to all P2 and P3 facilities. For the purposes of calculating how often this
provision would be incurred, accident numbers were drawn from the data on RMP reportable accidents,
referenced in Exhibit 3-7.
The proposed rule would rescind the incident investigation root cause analysis provision. Rescission of
the provision would result in the estimated cost of the 2017 RMP Amendments provision becoming an
averted cost. Exhibit 5-4 shows the total averted costs of rescinding the incident investigation root cause
analysis provision.
Exhibit 5-4: Total Annual Undiscounted Averted Costs for Root Cause Incident Investigation
Facility Type
Annual Frequency
Unit Averted Cost
Facilities
Total Averted Annual Cost
P2 Near Miss - Simple
1
($1,804)
18
($32,478)
P2 Near Miss - Complex
1
($11,135)
0
$0
P3 Near Miss - Simple
1
($1,804)
63
($113,673)
P3 Near Miss - Complex
1
($11,135)
68
($757,199)
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P2 Accident - Simple
1
($1,804)
18
($32,478)
P2 Accident - Complex
1
($11,135)
0
$0
P3 Accident - Simple
1
($1,804)
63
($113,673)
P3 Accident - Complex
1
($11,135)
68
($757,199)
Total
298*
($1,806,700)
* Total number of facilities may not sum to twice the total of the number of facilities in the third-party provision,
due to the rounding of the number of P2 Simple accidents.
5.2.2.3 Safer Technology Alternatives Analysis (STAA)
In the 2017 RMP Amendments rule, only a subset of P3 facilities (i.e., those in NAICS codes 322 (paper
manufacturing), 324 (petroleum and coal products manufacturing), and 325 (chemical manufacturing))
were required to conduct an STAA. This provision required owner/operators to conduct an initial
evaluation and practicability study of potential safer technologies every 5 years as part of the PHA. As
the STAA is performed as part of the PHA, for the purposes of the 2017 Amendments analysis, EPA
assumed that the same STAA costs were incurred every five years (this is a conservative assumption, as
sources may not need to repeat analyses of safer alternative technology options evaluated during
previous PHA cycles). EPA did not require the implementation of safer technology alternatives.
Separations by facility instead of process were made to analyze the cost of the practicability study for
the STAA provision. Numbers of processes and facilities used in conjunction with unit costs for the large
complex, medium/small complex and paper manufacturing sectors are shown in Exhibit 5-5.
The proposed rule would rescind the STAA provision in an effort to reduce facility burden. Rescission of
the provision would result in the estimated cost of the 2017 RMP Amendments STAA provision
becoming an averted cost. Exhibit 5-5 shows the total averted costs of rescinding the STAA provision.
See also Appendix D of the RMP Amendments RIA for more information.
Exhibit 5-5: Total Annual Undiscounted Averted Costs for STAA
Facility Type
Unit Cost (for 5
years)
Processes
Total Averted Annual Cost
Initial Analysis
Small/Medium Complex
$9,795
2,733
($5,353,778)
Paper Manufacturing
$9,795
96
($188,058)
Large Complex
$56,006
1,444
($16,174,575)
Total
($21,716,411)
Unit Cost
Facilities
Total Averted Annual Cost
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Practicability Assessment
Small/Medium Complex
$27,607
1,349
($7,448,400)
Paper Manufacturing
$163,059
68
($2,217,600)
Large Complex
$1,380,000
140
($38,640,000)
Total
1,557
($48,306,000)
Grand Total
($70,022,411)
5.2.3 Emergency Response Preparedness Requirements
5.2.3.1 Emergency Response Program Coordination with Local Responders
The emergency response coordination provision from the 2017 RMP Amendments Rule requires all
facilities with P2 or P3 processes to coordinate with local responders annually to make them aware of
the hazards at the facility. If the facility is a non-responder and relies on the local public response force,
then the coordination would primarily focus on any changes that have occurred at the facility and
confirm existing response strategies or develop new ones. If the facility is a responder and in charge of
responding to its own chemical emergencies, then the coordination would primarily focus on informing
local entities on what response capabilities are in place and how the community may be impacted by an
accident.
In addition to including coordination information related to emergency plans and contact information,
the 2017 Amendments Rule also contained language that permitted LEPCs to request "any other
information" from an RMP facility. To address security concerns, EPA is proposing to remove the "any
other information" language from the provision. This modification is not expected to affect facility costs.
While it is conceivable that removing the "any other information" language from the provision will
reduce anticipated facility burden, EPA believes that reduction is likely to be small and therefore does
not estimate averted costs for this provision.
5.2.3.2 Notification Exercises
EPA is not proposing to modify the notification provision of the 2017 RMP Amendments. Therefore, EPA
does not anticipate costs or cost savings associated with this provision.
5.2.3.3 Facility Exercises
In this proposed rule, EPA is proposing to eliminate the ten-year frequency requirement for full field
exercises, and to make the scope and documentation requirements for field and tabletop exercises
more flexible. As described in section 4.4.3, EPA has taken a conservative approach and does not
anticipate that these changes will impact the implementation costs estimated for the 2017 Amendments
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Rule. The 2017 Amendments RIA assumed that each affected RMP facility would conduct a full field
exercise once every ten years. With the elimination of the ten-year frequency requirement, facilities will
have the option to choose when to conduct a full field exercise, which may be at a frequency greater
than ten years. Although some facilities may choose to hold field exercises at a frequency greater than
ten years, EPA has taken the approach to assume that the average RMP facility will still conduct a field
exercise every ten years. This assumption is based on the rationale that facilities, even without the
frequency requirement, will conduct field exercises at least every ten years to train new employees and
community responders on the workings of the emergency plan. The Amendments Rule also permits
facilities to meet the exercise requirements with joint and combined exercises as a way to reduce costs
(for both facilities and local responders). EPA expects many facilities will take advantage of this
alternative means of complying with the exercise requirement.
As EPA's assumptions surrounding field exercise implementation have not changed relative to the
Amendments RIA, EPA does not anticipate costs or cost savings associated with the modification of the
provision.
5.2.4 Information Disclosure Rule Provisions
5.2.4.1 Public Meeting
For the public meeting provision of the 2017 RMP Amendments Rule, EPA's proposed to rescind the
requirement to provide "other relevant chemical hazard information, such as that described in
paragraph (b) of this section [§ 68.210]" to members of the public. EPA also proposes to amend the
public meeting provision to provide the information listed in § 68.42 (b) for only the most recent
accident, and not for previous accidents covered by the 5-year accident history requirement of §
68.42(a). As discussed in section 4.5.1, EPA does not expect that deleting the language regarding "other
relevant chemical hazard information..." nor requiring the accident information in § 68.42 for only the
most recent accident in the public meeting provision will have a significant impact on the costs of the
provision. Therefore, EPA does not anticipate costs or cost savings associated with this provision.
5.2.4.2 Information Availability
The 2017 RMP Amendments Rule required facilities to make chemical hazard information available to
the public upon request. Under the provision, the owner or operator of the facility must provide
ongoing notification of availability of specified information elements on a company website, social
media platform, or through some other publicly accessible means. The information to be disclosed
included: the names and Safety Data Sheets of regulated substances used at the facility, the facility's
five-year accident history, a summary of the emergency response program information reported in the
RMP, a summary of emergency exercises conducted and a schedule for upcoming exercises, and LEPC
contact information. The 2017 Amendments Rule required all facilities to disclose this information to the
public upon request. This requirement applies to all RMP facilities, including those facilities with only
Program 1 processes.
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The proposed rule would rescind the chemical hazard information availability provision in § 68.210(b) -
(c) in an effort to reduce facility burden and address security concerns with the provision. Rescission of
the provision would result in the estimated cost of the 2017 RMP Amendments provision becoming an
averted cost. Exhibit 5-6 shows the total averted costs of rescinding the information availability
provision.
Exhibit 5-6: Total Annual Undiscounted Averted Costs for Information Sharing Provisions
Facility Type
Annual
Frequency
Unit Cost
Facilities (unless
otherwise noted)
Total Averted
Annual Cost
Public Disclosure
Small Complex
0.5
$352
708
($124,615)
Large Complex
0.5
$4,820
914
($2,202,851)
Simple
0.5
$133
10920
($725,197)
Total
($3,052,663)
5.3 Costs and Cost Savings Associated with Alternative Options
5.3.1 Alternative Option for Exercises
As an alternative to eliminating the ten-year frequency requirement for full field exercises and
establishing more flexible scope and documentation provisions for tabletop and field exercises, EPA is
considering whether to fully rescind the tabletop and field exercise provisions. Under this alternative
proposal, all of the costs associated with tabletop and field exercises from the Amendments rule would
be averted costs under the Reconsideration rule. Total averted costs for tabletop and field exercises are
not shown as a separate exhibit in this RIA; however, Exhibit 5-12 of the Amendments RIA presents the
total costs of tabletop and field exercises under the Amendments rule.53 In the event that EPA were to
finalize this alternative proposed option, total averted costs of tabletop and field exercises under the
Reconsideration rule would be estimated to be equal to the negative of their total costs under the
Amendments rule, or approximately - $25 million annually.
5.3.2 Alternative Option for Public Information Availability
As an alternative to rescinding all of the public information availability elements of the Amendments
rule, EPA is considering rescinding all except the information on exercise schedules. Under this
alternative, while EPA believes that public information disclosure costs may be lower than they are
under the Amendments rule, as a conservative approach, EPA assumes that the cost of this provision
would still be approximately equal to its cost under the Amendments rule. Therefore, if EPA were to
adopt this alternative, the total cost of the proposed rule would increase by up to $3.1 million (see
Exhibit 5-6).
53 See Amendments rule RIA, pg. 63.
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5.4 Net Cost Savings
Exhibit 5-7presents total costs of the RMP Reconsideration proposed rule as total undiscounted costs
over the 10-year period of analysis, as well as total discounted (3 percent and 7 percent), and annualized
(3 percent and 7 percent) costs. When annual costs for different years are equal to one another across
the analysis time period, the annualized costs calculated using different discount rates (e.g., 3 and 7
percent) are equal.
Exhibit 5-7: Total and Annual Costs of Proposed Rule (Millions, 2015 Dollars)
Cost Elements
Total
Undiscounted
Total Discounted
(3%)
Total Discounted
(7%)
Annualized
(3%)'
Annualized
(7%)
Rule Familiarization
$6.7
$6.5
$6.3
$0.76
$0.89
Total Cost
$6.7
$6.5
$6.3
$0.76
$0.89
In total, the proposed rule would cost $762,000 (annualized 3 percent) or $891,000 (annualized 7
percent).
The analysis presents total averted costs for revised or rescinded provisions as total undiscounted costs
over the 10-year period of analysis, as well as total discounted (3 percent and 7 percent), and annualized
(3 percent and 7 percent) costs. When annual costs for different years are equal to one another across
the analysis time period, the annualized costs calculated using different discount rates (e.g., 3 and 7
percent) are equal. Exhibit 5-8 presents the total averted cost for the proposed rule.
Exhibit 5-8: Total and Annual Averted Costs of Proposed Rule (Millions, 2015 Dollars)
Cost Elements
Total
Undiscounted
Total Discounted
(3%)
Total Discounted
(7%)
Annualized
(3%)
Annualized
(7%)
Rule Familiarization
($34.7)
($33.7)
$32.4)
($3.9)
($4.6)
Third-Party Audits
($98.4)
($83.6)
($69.1)
($9.8)
($9.8)
Incident Root Cause
Analysis
($18.1)
($15.4)
($12.7)
($1.8)
($1.8)
STAA
($700.2)
($597.3)
($491.8)
($70.0)
($70.0)
Information
Disclosure
($30.5)
($26.0)
($21.4)
($3.1)
($3.1)
Total Averted Cost*
($881.9)
($756.4)
($627.5)
($88.6)
($89.3)
* Values may not sum due to rounding.
Comparing the costs to averted costs on net this proposed rule leads to cost savings and therefore
qualifies as a deregulatory action. Exhibits 5-9 and 5-10 display the total and annualized costs of the
proposed rule compared with the averted costs in 2015 and 2016 dollars, respectively.
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Exhibit 5-9: Comparison of Total Costs and Total Averted Costs of Proposed Rule (Millions, 2015
Dollars)
Cost Elements
Total
Undiscounted
Total Discounted
(3%)
Total Discounted
(7%)
Annualized
(3%)
Annualized
(7%)
Costs
Rule Familiarization
(new)
$6.7
$6.5
$6.3
$0.76
$0.89
Total Cost
$6.7
$6.5
$6.3
$0.76
$0.89
Averted Costs
Rule Familiarization
(previous)
($34.7)
($33.7)
($32.4)
($3.9)
($4.6)
Third-Party Audits
($98.4)
($83.6)
($69.1)
($9.8)
($9.8)
Incident Root Cause
Analysis
($18.1)
($15.4)
($12.7)
($1.8)
($1.8)
STAA
($700.2)
($597.3)
($491.8)
($70.0)
($70.0)
Chemical Hazard
Information
Disclosure
($30.5)
($26.0)
($21.4)
($3.1)
($3.1)
Total Averted Cost
($881.9)
($756.4)
($627.5)
($88.6)
($89.3)
Total Net Cost*
($875.2)
($750.0)
($621.2)
($87.9)
($88.4)
*Values may not sum due to rounding.
Exhibit 5-10: Comparison of Total Costs and Total Averted Costs of Proposed Rule (Millions, 2016
Dollars)
Cost Elements
Total
Undiscounted
Total Discounted
(3%)
Total Discounted
(7%)
Annualized
(3%)
Annualized
(7%)
Costs
Rule Familiarization
(new)
$6.8
$6.6
$6.3
$0.77
$0.90
Total Cost
$6.8
$6.6
$6.3
$0.77
$0.90
Averted Costs
Rule Familiarization
(previous)
($35.2)
($34.1)
($32.9)
($4.0)
($4.7)
Third-Party Audits
($99.7)
($85.1)
($70.0)
($10.0)
($10.0)
Incident Root Cause
Analysis
($18.3)
($15.6)
($12.9)
($1.8)
($1.8)
STAA
($709.4)
($605.2)
($498.3)
($70.9)
($70.9)
Chemical Hazard
Information
Disclosure
($30.9)
($26.4)
($21.7)
($3.1)
($3.1)
Total Averted Cost
($893.5)
($766.4)
($635.8)
($89.8)
($90.5)
Total Net Cost*
($886.8)
($759.8)
($629.4)
($89.1)
($89.6)
*Values may not sum due to rounding.
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The proposed rule would rescind several provisions of the 2017 RMP Amendments Final Rule that
imposed significant compliance costs on RMP facilities. The RMP Reconsideration RIA estimates that the
proposed rule, including elimination of the need to review and plan for the implementation of the 2017
RMP Amendments Rule and rescinding the third-party audit, incident investigation root cause analysis,
STAA, and chemical hazard information disclosure provisions, could result in a cost savings of $88 million
(3% and 7% discount rate) annually (in 2015 dollars).
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CHAPTER 6: BENEFITS
This chapter qualitatively discusses the benefit categories associated with the 2017 RMP Amendments
Rule and how they will change in response to the proposed Reconsideration rule. Accident mitigation
and a portion of the information benefits will be retained, while accident prevention benefits will be
foregone. A new benefit category associated with the proposed rule is improved facility security. This
chapter also reviews the baseline damages associated with RMP accidents and how the newer 2017
RMP data might suggest they are lower than estimated for the 2017 RMP Amendments Rule.
6.1 Benefit Categories
The RMP Amendments Rule produced a variety of benefits from prevention and mitigation of future
RMP and non-RMP accidents at RMP facilities, avoided catastrophes at RMP facilities, and easier access
to facility chemical hazard information and accident history.54 These benefit categories are summarized
in Exhibit 6-1.
Exhibit 6-1: Summary of Qualitative Benefits of Amendments Rule Provisions
Broad Benefit Category
Explanation
Specific Benefit Categories
Accident Prevention
Prevention of future RMP facility
accidents
• Reduced Fatalities
• Reduced Injuries
• Reduced Property
Damage
• Fewer People
Sheltered in Place
• Fewer Evacuations
• Avoided Lost
Productivity
Accident Mitigation
Mitigation of future RMP facility
accidents
• Avoided Emergency
Response Costs
• Avoided Transaction
Costs
• Avoided Property
Value Impacts*
• Avoided
Environmental
Impacts
Non-RMP accident prevention
and mitigation
Prevention and mitigation of future
non-RMP accidents at RMP facilities
54 For detailed information see Chapter 6 of the 2017 RMP Amendments rule RIA.
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Avoided Catastrophes
Prevention of rare but extremely high
consequence events
Information Disclosure
Provision of information to the public
• Improved efficiency of
property markets
• Improved emergency
response resource
allocation
* These impacts overlap with several other categories, such as reduced health and environmental impacts.
The proposed Reconsideration rule would retain the revised local emergency coordination and exercise
provisions of the 2017 Amendments final rule, which convey mitigation benefits. If a chemical accident
or major catastrophe occurs, mitigating its impacts benefits society by reducing the number of fatalities
and injuries, reducing the magnitude of property damage and lost productivity both on-site and off-site,
and reducing the extent of public evacuations, sheltering, and expenditure of emergency response
resources. These retained provisions along with public meetings - the latter is also retained by the
proposed Reconsideration rule - also produce social benefits by improving the information going to
emergency planners, responders, and the public. These are benefits of the 2017 Amendments rule
because the rule is expected to result in more efficient allocation of public response resources by
improving the ability of planners and responders to make appropriate decisions concerning equipment,
training, and procedures. Improved information may improve local contingency planning and training of
emergency responders. Providing better information to members of the public will allow people to
make better decisions about where to live and work, what to do when an emergency occurs, and how to
account for the market value of property located near RMP facilities.
The proposed reconsideration of the prevention program requirements (e.g., third-party audits, incident
investigation, STAA), as well as certain information disclosure provisions in the RMP Amendments Rule
would result in a reduction in the magnitude of prevention and information benefits, relative to the
baseline post 2017 Amendments rule. The prevention program provisions were designed to prevent
accidents by triggering improvements in plant design, equipment, procedures, or operator training, for
example. Preventing serious accidents avoids numerous types of direct damages, including worker,
responder, and public fatalities and injuries, public evacuations, public sheltering-in-place, and property
and environmental damage. It also avoids indirect damages, such as lost productivity due to product
damage and business interruption both on-site and off-site, expenditure of emergency response
resources and attendant transaction costs, and reduced offsite property values. As all of the prevention
program provisions of the Amendments final rule are proposed to be rescinded, any prevention benefits
associated with those provisions would be foregone. A portion of the information benefits would also be
foregone due to the proposed reduction in information disclosure requirements.
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Not reflected in Exhibit 6-1, the current proposed Reconsideration rule produces benefits by way of
increased facility security relative to the 2017 RMP Amendments rule. The proposed rule rescinds the
information disclosure provision that required facilities, upon request, to disclose information including
names of regulated substances at the facility; Safety Data Sheets (SDS); accident history information;
emergency response program information; exercise schedules; and LEPC contact information. Petitioner
CSAG noted that the Department of Homeland Security (DHS) raised security concerns during White
House Office of Management and Budget (OMB) review of the proposed Amendments rule about
security threats posed by information disclosure requirements.55 DHS oversees the Chemical Facility
Anti-Terrorism Standards (CFATS) program which regulates high-risk facilities to improve security. Both
DHS (20 1 2)56 and the Council on Foreign Relations highlight two threats posed by chemical facilities. As
summarized by the Council on Foreign Relations: "A direct attack or sabotage could expose the
surrounding population to hazardous chemicals, or theft of chemicals could provide terrorists with
a weapon for use in a later attack." (Kaplan 2006).57 This benefit category reflects reduced risks of
terror, theft, or other security breaches that might have followed from freer-flowing information about
the storage, processing, and emergency response procedures for RMP chemicals at RMP facilities.
6.2 Benefits Associated with Alternative Options
6.2.1 Alternative Option for Exercises
As an alternative to eliminating the ten-year frequency requirement for full field exercises and
establishing more flexible scope and documentation provisions for field and tabletop exercises, EPA is
considering whether to fully rescind the field and tabletop exercise provisions. Under this alternative
proposal, notification drills would still be required, but there would be no requirement to conduct either
field or tabletop exercises. The primary social benefit of field and tabletop exercises is to mitigate future
RMP accidents by increasing emergency response readiness, both for RMP facility owners or operators
and local responders, by testing emergency systems and plans, and by ensuring local and facility
response personnel know what actions to take during various accident scenarios. Emergency exercises
that involve local responders also can produce benefits through improved information disseminated to
the public because local officials will have better knowledge about what to tell the public when real
accidental releases occur. This improved information also leads to more efficient decision-making by
the public. Lastly, emergency exercises could lead to mitigation of non-RMP accidents at RMP facilities,
55 Chemical Safety Advocacy Group (CSAG)'s Petition for Reconsideration and Stay Request of the Final RMP rule
(82 FR 4594, January 13, 2017), March 13, 2017, Hunton & Williams, San Francisco, CA. EPA-HQ-OEM-2015-0725-
0766, page 6.
56 U.S. Department of Homeland Security. September 2012. Chemical Sector Security Awareness Guide: A Guide for
Owners, Operators, and Chemical Supply-chain Professionals. Accessed at
https://www.dhs.gov/sites/default/files/publications/DHS-Chemical-Sector-Security-Guide-Sept-2012-508.pdf
57 Kaplan, Eben. December 11, 2006. Targets for Terrorists: Chemical Facilities. Council on Foreign Relations.
Accessed at https://www.cfr.org/backgrounder/targets-terrorists-chemical-facilities
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as both facility personnel and local responders are better trained to respond to accidents in general.
Rescinding the emergency exercise provision would forgo its economic and social benefits.
6.2.2 Alternative Option for Public Information Availability
As an alternative to rescinding all of the public information availability elements of the Amendments
rule, EPA is considering rescinding all except the information on exercise schedules, as information on
upcoming facility exercises would be the only item of information required to be disclosed in the public
availability provisions of the Amendments rule that is not already available from another source. Under
this alternative, additional information provision benefits would be retained.
6.3 Baseline Accident Damages
The 2017 Amendments Rule RIA did not associate quantitative risk reductions with particular rule
provisions. Similarly, for the current proposed Reconsideration rule, this RIA does not estimate specific
changed risks or damages. EPA instead provides information about the magnitude of baseline damages
from accidents at RMP facilities. We emphasize that the Amendments rule RIA did not claim that all
baseline accident damages would be prevented by the Amendments rule's provisions. Likewise, the
baseline accident damages should not be viewed as equal to the magnitude of foregone benefits under
this reconsideration proposal, particularly since the proposal would retain some provisions of the
Amendments rule.
Facilities subject to the RMP regulation pose significant risks to the public and the environment. These
risks stem from potential accidental chemical releases that can cause fires, explosions, and harmful
vapor clouds. Chemical accidents - fires and explosions, in particular - not only kill and injure people, but
can do great damage to property. Property damage can include damage to goods produced, plant
equipment and structures, and nearby industrial, commercial, and residential buildings, equipment, and
furnishings. Damage can also occur to the natural environment and negatively affect nearby ecosystems
and wildlife. Resources, such as emergency personnel and equipment, are diverted to address the fire,
explosion, or vapor cloud. Properties located near the accident may lose value as a result of the
perceived risks and other disamenities posed by proximity to the facility. Exhibits 6-2 and 6-3 summarize
some of these baseline damages, monetizing when possible.58
Exhibit 6-2: Average Impacts per Year and Accident (2004 - 2013)
10-Year Total
Average/Year
Average/ Accident
On-site
Fatalities
58
5.8
0.04
Injuries
2,103
210
1.39
Property Damage
$2.1 billion
$205.5 million
$1.4 million
Offsite
58 For detailed information on accident cost estimates see chapter 6 of the 2017 RMP Amendments rule RIA.
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Fatalities
1
0.10
0.001
Hospitalizations
189
19
0.125
Medical Treatment
14,807
1,481
9.76
Evacuations
38,589
3,859
25.44
Sheltering in Place
451,665
45,167
298
Property Damage
$11.4 million
$1.1 million
$0.01 million
Exhibit 6-3: Monetized Accident Costs per Year and Accident (Millions, 2015)
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
Offsite
Fatalities
$8.6
$8.6
$0.86
$0.01
Hospitalizations
$0.04
$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
* 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.
Note that Exhibits 6-2 and 6-3 are based on the 2015 RMP data and the annual number of accidents and
associated impacts reported there. As explained in Chapter 3, the annual number of accidents reported
in the 2017 RMP data has declined. This decline suggests that baseline accident damages may indeed be
lower than estimated based on the 2015 data and that Exhibits 6-2 and 6-3 may overstate baseline
damages. However, as noted in Chapter 3, experience with the RMP data suggests that the number of
accidents reported for the most recent years will often increase during the next 5-year reporting wave.
Thus, the number of accidents reported for the most recent years in the 2017 RMP data set may rise.
EPA identified several past cases of security breaches or planned security breaches at chemical facilities.
In 2015, a truck was driven into a warehouse containing chemicals in France leading to an explosion, as
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part of an apparent terror attack (Trager 2015)59. One of the 1993 World Trade Center bombers, Nidal
Ayyad, worked at a New Jersey chemical company and procured chemicals to make the bomb. The
Government Accountability Office cites a Justice Department finding that in the late 1990s domestic
terrorists plotted an attack on a chemical facility housing large quantities of propane (Kaplan 2006)so.
Finally, the theft of anhydrous ammonia, a key ingredient in production of the illicit drug
methamphetamine, is a well know security threat at facilities that store it. These thefts have caused
accidental chemical releases from the facilities. For example, siphoning activities have resulted in valves
being left open. Several past examples of thefts accompanied by accidental releases are summarized in
US EPA 2000, pp 1-361. These examples illustrate general security risks at chemical facilities, and not
necessarily risks posed by information disclosure.
59 Trager, Rebecca. July 2, 2015. Failed Terror Attack Raises Alarms About Chemical Plant Security. Chemistry
World, Royal Society of Chemistry. Accessed at https://www.chemistryworld.com/news/failed-terror-attack-raises-
alarms-about-chemical-plant-security/8708.article
60 Kaplan, Eben. 2006. Targets for Terrorists: Chemical Facilities. Council on Foreign Relations. December 11,
20016. Accessed at https://www.cfr.org/backgrounder/targets-terrorists-chemical-facilities
61 U.S. Environmental Protection Agency. March 2000. Anhydrous Ammonia Theft. EPA-F-00-005. Accessed at
https://www.epa.gov/sites/production/files/2013-ll/documents/csalert.pdf
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CHAPTER 7: SMALL ENTITY IMPACTS
The Regulatory Flexibility Act, as amended, (RFA) (5 U.S.C. 601-612) requires agencies to determine
whether a rule will have a "significant economic impact on a substantial number of small entities." The
Small Business Administration (SBA) sets the standard for defining a small entity by 5 or 6-digit NAICS
code, for businesses (13 CFR part 121); governments are considered small if they serve fewer than
50,000 residents.62 Although "significant economic impact" is not defined by either the RFA or SBA, EPA
guidance provides example thresholds of one percent and three percent of revenues.63 This analysis,
however, uses the more stringent one percent threshold because almost 30 percent of the small entities
affected by the rule are agricultural chemical distributors; data from the Department of Agriculture
indicates that net income in this sector is less than three percent of sales.64
This chapter presents the analysis of impacts of the rule on small entities. The first section discusses the
industrial sectors reported by RMP facilities. The second section describes the approach to determining
how many facilities and firms subject to the rule are small based on SBA standards. The third section
discusses the economic impacts of the rule on small entities.
7.1 RMP Affected Sectors
The RMP rule affects a broad range of sectors (296 separate NAICS codes are listed in RMP filings; 240 of
these are associated with small entities). The primary sectors subject to the rule and the SBA standards
for defining a small firm are shown in Exhibit 7-1. A dollar value standard refers to firm revenues in
millions; the full-time-equivalent (FTE) employees applies to the firm's total FTE, not the number at any
one location. For governments, the standard is based on the population served. The NAICS codes are
presented at the 2- to 6-digit level based on whether the SBA standard varies for the 5- and 6-digit codes
and whether there are a substantial number of RMP facilities in the sector.65 For example, the SBA
standard for the wholesale trade sector, NAICS code 42, is the same across all codes (100 FTE).
62 Some small governments serve substantial populations associated with businesses, particularly irrigation
districts that serve large farming areas, but few residences, and small cities that have large tourist-related
businesses.
63 See Chapter 2 of Final Guidance for EPA Rulewriters: Regulatory Flexibility Act, https://www.epa.gov/reg-
flex/epas-action-development-process-final-guidance-epa-rulewriters-regulatory-flexibility-act
64 httpi//www.usda.eov/wps/portal/usda/usdahome?contentid=2013/10/0199.xml.
65 In some cases, NAICS codes are disaggregated to 5 digits and in others 6 digits. SBA does not include all 6-digit
codes in its regulation.
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Exhibit 7-1: Industry Sector Small Entity Standards
NAICS
Sector
Standard
NAICS
Sector
Standard
111
Crop Production
$0.75m
3254
Pharmaceutical and Medicine
Manufacturing
1,000 -1,250
FTE
112
Animal Production and
Aquaculture
$0.75m -
$15m
3255
Paint, Coating, and Adhesive
Manufacturing
500 -1,000
FTE
115
Support Activities for
Agriculture and Forestry
$7.5m -
$27.5m
3256
Soap, Cleaning Compound,
and Toilet Preparation
Manufacturing
750 - 1,250
FTE
211111
Crude Petroleum and
Natural Gas Extraction
1,250 FTE
3259
Other Chemical Product and
Preparation Manufacturing
500 -1,500
FTE
221112
Fossil Fuel Electric Power
Generation
750 FTE
326
Plastics and Rubber Products
Manufacturing
500 - 1,250
FTE
22131
Water Supply and
Irrigation Systems
$27.5m
327
Nonmetallic Mineral Product
Manufacturing
500 - 1,250
FTE
22132
Sewage Treatment
Facilities
$20.5m
331
Primary Metal Manufacturing
500 - 1,250
FTE
3111
Animal Food
Manufacturing
500 -1,000
FTE
332
Fabricated Metal Product
Manufacturing
500 -1,500
FTE
3112
Grain and Oilseed Milling
500 -1,000
FTE
333
Machinery Manufacturing
500 -1,500
FTE
3113
Sugar and Confectionery
Product Manufacturing
750 - 1,250
FTE
334
Computer and Electronic
Product Manufacturing
500 - 1,250
FTE
3114
Fruit and Vegetable
Preserving and Specialty
Food Manufacturing
750 - 1,250
FTE
335
Electrical Equipment,
Appliance, and Component
Manufacturing
500 -1,500
FTE
3115
Dairy Product
Manufacturing
750 - 1,250
FTE
336
Transportation Equipment
Manufacturing
1,000 -1,500
FTE
3116
Animal Slaughtering and
Processing
750 - 1,250
FTE
337
Furniture and Related Product
Manufacturing
500 -1,000
FTE
3117
Seafood Product
Preparation and
Packaging
750 FTE
339
Miscellaneous Manufacturing
500 -1,000
FTE
3118
Bakeries and Tortilla
Manufacturing
750 - 1,250
FTE
42
Wholesale Trade
100 -150 FTE
3119
Other Food
Manufacturing
750 - 1,250
FTE
44422
Nursery, Garden Center, and
Farm Supply Stores
$llm
3121
Beverage Manufacturing
750 - 1,250
FTE
45431
Fuel Dealers
100 FTE
322
Paper Manufacturing
500 -1,500
FTE
48691
Pipeline Transportation of
Refined Product
1,500 FTE
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NAICS
Sector
Standard
NAICS
Sector
Standard
32411
Petroleum Refineries
1,500 FTE
48821
Support Activities for Rail
Transportation
$15m
32412
Asphalt Paving, Roofing,
and Saturated Materials
Manufacturing
500 - 750 FTE
4931
General Warehousing and
Storage
$27.5m
32419
Other Petroleum and
Coal Products
Manufacturing
500 - 750 FTE
56179
Other Services to Buildings
and Dwellings
$7.5m
3251
Basic Chemical
Manufacturing
1,000 - 1,250
FTE
5621
Waste Management
$38.5m
3252
Resin and Synthetic
Rubber Manufacturing
1,000 - 1,250
FTE
5622
Waste Treatment and
Disposal
$38.5m
3253
Pesticide, Fertilizer, and
Other Agricultural
Chemical Manufacturing
500 -1,000
FTE
92
Governments
<50,000
residents
served
Some codes listed by facilities in their RMP filings are problematic. First, many firms list multiple NAICS
codes for their facilities. Particularly for agricultural chemical distributors there is often no clear reason
for assigning facilities to different NAICS codes when the activities appear to be the same (e.g., facilities
named as agricultural co-ops appear in NAICS codes 111, 115, 32531, 325312, 325313, 325314, 325193,
42451, 42459, 42491, 444, 453, and 493). For other facilities, the parent firm has listed its facilities in the
code appropriate for activities occurring at a specific location, but not appropriate for the firm (e.g.,
integrated gas exploration, production, and distribution companies have facilities in NAICS codes 211,
424, 486, and 488; integrated oil firms list facilities in NAICS codes 211, 213, 221, 324, 325, 424, and
541). Second, not all of the NAICS codes listed exist; some are clearly earlier versions of current codes
(42269 rather than 42469) and were recoded, but others represent subsectors that do not exist, making
them difficult to define. Third, checks of some facilities indicate that the sector listed is incorrect; the
only facility with less than five FTEs listed for NAICS code 32511 (petrochemicals) is variously described
in Internet sources as an aerosol packager (an official Missouri report), a paperboard company, or an
agricultural chemical distributor (it was recoded to NAICS code 32599). Finally, almost all of the
governmental entities, which should be listed under NAICS code 92, listed themselves under other
codes, primarily 2213 (water and wastewater treatment), but also under chemical manufacturing and
waste management; all of these were recoded to NAICS code 924. Some of the other facilities listed
under NAICS code 2213 belong to manufacturing plants. The decision rules applied to re-categorize
firms into correct NAICS codes are discussed below.
7.2 Estimating the Number of Small Entities
The RFA and the SBA standards apply to firms, not facilities (or establishments, the term used by the
Economic Census) because the costs of the rule are ultimately borne by the firm, rather than the facility.
Therefore, to determine the number of small entities, the analysis identified the number of firms and
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the size of those entities. The RMP data include facility and parent company name as well as the number
of full time equivalents (FTE) for the facility and the NAICS codes. Although this information facilitates
the small entity analysis, a review of the data indicated a substantial number of issues. Parent company
information was often missing and when present, incorrect. For example, for one company with 68
facilities, 15 listed no parent company, 52 listed the company name, and only one listed the name of the
foreign firm that owns the company. Two cooperatives with 20 and 30 RMP facilities listed zero FTEs for
every facility; research indicated that one is among the largest firms in its sector, with revenues of about
$1 billion and a senior management team of 15 people. The size of the parent cooperative for the
second could not be determined and, therefore, it was categorized as small. Research on one facility
determined that it was owned by another firm; that firm in turn was determined to own 8 companies,
most of which have RMP facilities but none of which had identified the parent company. Particularly in
the oil and gas sectors, where corporate structures include multiple divisions that are separate legal
entities for management and tax purposes, and where mergers are frequent, facilities often list the
intermediate entities rather than the actual parent company or the entity that purchased the site rather
than the current owner.
To develop an estimate of the number of small entities, the analysis required a series of reviews of the
data to identify the large entities and the small entities that were part of small firms owning multiple
facilities. First, any facility that exceeded 1,500 FTE was categorized as large; 1,500 FTE is the highest
threshold for large entities when the SBA standard is based on FTE. Based on Economic Census data, it
was determined that any facility of that size would also generate revenues high enough to exceed the
highest revenue threshold of any covered sector. Second, SBA sets its standards to ensure that while
most firms in a sector are classified as small, the largest firms in a sector are not. The data were
reviewed to identify parent companies that were clear from the facility name, but not included in the
parent company field. That made it possible to determine the total FTE for facilities belonging to the
same parent company and compare that number to the SBA standard (when in FTEs). The analysis
treated all facilities owned by the same parent company as large if one or more of those facilities were
classified as large according to the appropriate SBA standard for that facility's NAICS code. For example,
if a parent company owned two facilities, one in NAICS code 211111 (SBA standard: 1,250 FTE) with
1,000 employees and the second in NAICS code 221112 (SBA standard: 750 FTE) with 1,000 employees),
both facilities would be classified as large. Industry data on the largest firms in each of the major sectors
(agricultural chemical distributors, food manufacturers, chemical manufacturers, and oil and gas
companies) were used to identify those firms. The largest government entities were also identified in
this screen (e.g., all federal entities; any State-owned facility; water systems serving Los Angeles, New
York City, Chicago, etc.).
The RFA defines small governments as governments of cities, counties, towns, townships, villages,
school districts, or special districts, with a population of less than fifty thousand.66 Most governmental
RMP facilities are water and wastewater treatment systems and listed a city or county as the owning
66 5 U.S.C. 601.
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entity. A check of budgets that were available for some of the smallest cities indicated that the systems
(1) are sub agencies of the city/county and (2) obtain some revenues from the general fund although
most of their revenues are derived from user fees. To determine which facilities belong to small
governments, the population for the associated city or county was determined by checking the 2014
estimates from the Census. For special water and irrigation districts, their Internet sites were checked
for information on the population served. Exhibit 7-2 presents the number of small and large facilities by
program level. Exhibit 7-3 presents the small/large breakdown by sectors.
Exhibit 7-2: Number of Facilities Owned by Small and Large Entities by Program Level
RMP Program
Small
Large
Total
Program 3
2,348
3,632
5,980
Program 2
2,577
3,343
5,920
Program 1
268
374
642
Total
5,193
7,349
12,542
The number of small entities is likely to be overstated. Particularly in the agricultural chemical
distributor sector, it was not possible to determine common ownership among facilities with common
names (e.g., Farmers Cooperative). Not all of these facilities have websites and, when they do, they do
not always provide information on ownership or locations. Unless the names were identical and the
facilities located in the same State, the analysis assumed that they belonged to separate firms. It is also
likely that for many of these facilities the FTE reported are too low. A number of the agricultural
chemical distributors listed multiple facilities at zero FTE even though they are open more than 8 hours a
day, 5 days a week.
The classification of facilities as Program 2 or 3 is based solely on the RMP data submitted and on
existing program classification standards. A review of other facilities indicates that, in some cases,
classifications in the RMP database are inappropriate. For example, of the 701 water/wastewater
facilities in State-plan states, 661 listed themselves correctly as P3, but 40 (including those in a major
city) listed themselves as P2.67 Of the 1,194 publicly owned facilities in States where Federal OSHA
implements the PSM standard, 893 listed themselves correctly as P2, but 301 said they are P3. In
addition, there are more than 500 other facilities that listed themselves as P2 (outside of the primary
agricultural retail sectors); although many of these are, in fact, agricultural chemical distributors, others
appear to be facilities that should be subject to Program 3.
67 About half of the States have accepted delegation to enforce OSHA rules; OSHA refers to these as State-plan
States. As a condition of delegation, the State must impose OSHA standards on State and local governments.
Federal OSHA has no authority over those governments, so in States where OSHA enforces the rules, they do not
apply to governments.
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Exhibit 7-3: Program Level and Size by Sector
Program 1
Program 2
Program 3
Total
NAICS
Description
Small
Large
Small
Large
Small
Large
311
Food Mfg.
2
1
6
5
481
890
1,385
312
Beverage/Ice
0
0
0
0
29
62
91
322
Paper/Pulp
0
1
1
0
12
56
70
324
Petroleum
5
8
0
3
33
107
156
325
Chemical
39
14
53
11
578
771
1,466
313, 321,326,
327,33
Other Manufacturing
36
26
40
33
143
106
384
4246
Chemical
Distributors
2
4
0
0
89
238
333
4247
Petroleum
Distributors
2
12
0
0
73
189
276
11,12,15,
42491
Agricultural
9
1
1,438
1,933
148
138
3,667
211
Oil and Gas
Exploration
113
197
18
23
129
261
741
2213
Water/Wastewater
0
1
6
4
12
79
102
221 222
Utilities
27
11
48
24
116
117
343
493
Warehousing
18
52
309
677
0
0
1,056
423,424
Other Wholesale
0
5
102
189
4
2
302
92
Governments
6
9
520
415
448
525
1,923
Other
9
32
36
26
53
91
247
Total
268
374
2,577
3,343
2,348
3,632
12,542
7.2.1 Non-Government Facilities
The analysis divides facilities by responder status. There are a total of 1,718 small responding facilities
and 3,207 small non-responding facilities (includes governments, but excludes PI facilities). Exhibit 7-4
breaks down by FTE, the number of small non-government facilities that indicated in their RMPs that are
not responders. Government facilities are excluded because FTEs do not reflect the size of the
governmental entity. Appendix B of the RMP Amendments Rule RIA provided a summary of the number
of facilities by 3 and 5/6-digit NAICS code by FTE and responder status for non-governmental facilities.
Exhibit 7-4: Small Non-Governmental Non-Responding Facilities by FTE
Non-Responders
0-19 FTE
1,691
20-99 FTE
521
100+ FTE
248
Total
2,460
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The RMP Amendments Rule Final Regulatory Flexibility Analysis included STAA requirements for small
entities and estimated 623 such entities would be subject to these requirements. This proposed rule
rescinds the STAA requirements and thus results in averted costs to these entities.
7.2.2 Governments
As shown in Exhibit 7-3, there are a combined total of 968 facilities with P2 and P3 processes that are
owned and operated by small governments (i.e., the government serves less than 50,000 residents).
Because governments that serve populations above 15,000 have revenues well above $10 million so
that the costs of the rule would never exceed 1%, the analysis focused on those that served fewer than
15,000 people. Exhibit 7-5 presents the number of all small governments and the number serving less
than 15,000 by the number of RMP facilities they operate. Three government facilities included in the
number of small governments and number of small government non-responders could not be classified
by population; each is a special district for which information could not be located to determine
residents served. Two are in very small rural areas and likely serve fewer than 5,000; the third is in a
suburb of Salt Lake City and appears to serve at least 25,000 residents.
Exhibit 7-5: Small Governments by the Number of RMP Facilities (P2 and P3) Operated
Category*
Number of Governments
Number of Facilities
All Small Governments
689
968
Non Responders
524
747
Non Responders <15,000 Residents
257
367
Non Responders <10,000 Residents
165
213
Non Responders <5,000 Residents
58
78
*Values are cumulative.
Unlike the facilities operated by small firms that have multiple RMP facilities, water and wastewater
systems operated by small governments are generally in the same town. Where a small firm with
multiple facilities may have to train response teams for each facility it operates, a small city or town is
more likely to train a single response team to cover all of its facilities.
In addition to cities and local districts with RMP-regulated facilities, cities and towns where other RMP-
regulated facilities are located may also incur indirect costs associated with participation in exercises.
RMP facilities are located in more than 1,000 counties and more than 5,000 cities/towns/villages. The
counties have from 1 to 187 facilities (the latter is Harris County, TX, which covers Houston). Although in
general the smallest counties have only one or two facilities, there are a few small counties with more
than five.
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7.3 Economic Impact on Small Entities
The RMP Amendments final rule considered a broad range of costs on small entities based on facility
type. As estimated in the 2017 Amendments RIA, the provisions in that final rule had quantifiable
impacts on small entities. This proposed rule largely repeals, or retains with slight modification, the
provisions incurring costs on small entities. As a result, EPA expects the proposed rule to impose
negative costs for all facilities, including small entities. Even PI facilities, which were exempted from
most provisions in the RMP Amendments Final Rule (and therefore would not see large negative costs in
this proposed rule because the repeals did not affect them), would still experience a cost savings
(negative costs) as a result of the rule's implementation. The only new costs imposed on small entities
would be rule familiarization with the proposed rule, but even that cost would be offset by savings
associated with eliminating the larger costs associated with becoming familiar with the RMP
Amendments. Exhibit 7-6 demonstrates the change in rule familiarization costs for the RMP
Amendments and the proposed rule.
Exhibit 7-6: Rule Familiarization Cost Comparison
Category
2017 RMP Amendments
Cost
Proposed Rule Cost
Difference
Simple Facilities
$308.60
$154.30
($154.30)
PI and P2 Complex Facilities
$400.48
$200.24
($200.24)
P3 Complex Facilities
$20,554.13
$2,902.45
($17,651.66)
Conservatively, given that the per facility costs of the rule are at least -$154.30 and potentially a much
greater negative cost based on facility type, this rule will not impose a significant economic burden on
small entities by imposing a cost that exceed the threshold amount of 1% of company revenues.
Accordingly, the Administrator of the EPA hereby certifies that that this proposed rule will not have a
significant economic impact on a substantial number of small entities. EPA invites comment from
members of the public who believe there will be a significant impact on small entities impacted by this
rule.
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CHAPTER 8: ENVIRONMENTAL JUSTICE
8.1 Background and Context
Executive Order 12898, "Federal Actions to Address Environmental Justice in Minority Populations and
Low-Income Populations" (February, 1994) places a responsibility on federal agencies for "identifying
and addressing, as appropriate, disproportionately high and adverse human health or environmental
effects of its programs, policies, and activities on minority populations and low-income populations in
the United States[.]" This section explains how EPA has addressed environmental justice issues
associated with this rulemaking.
Environmental risks may result from industrial or commercial activities by private actors, or from
governmental activities or programs. When those risks are disproportionately borne by particular
subpopulations, environmental justice is achieved through Fair Treatment and Meaningful
Involvement.6S
Fair treatment refers to efforts to prevent environmental risks and harms from
disproportionately affecting a particular group of people.
Meaningful involvement refers to inclusion of potentially affected populations in decisions
about activities or programs to address those risks. Meaningful involvement may include
facilitating the involvement of populations potentially affected by those activities or programs. It
also entails ensuring that potentially affected populations have an opportunity to participate in
decisions and influence decisions about those activities or programs. "Empowering
communities" is a specific goal established by the OSWER Environmental Justice Task Force.69
EPA used these principles in identifying and ameliorating environmental justice issues associated with
RMP facilities.
8.2 Identifying Potential Environmental Justice Concerns Associated with
RMP Facilities
At all facilities regulated under the Risk Management Program, an accidental release of a regulated
substance creates a hazard to surrounding communities and environments. These hazards include, for
example, exposure to toxic substances, fires, explosions, and noxious gas clouds.
68 Guidance on Considering Environmental Justice During the Development of Regulatory Actions, US EPA, May
2015. EPA-HQ-OEM-2015-0725-0102.
69 "OSWER Environmental Justice Task Force Draft Final Report", EPA 540/R-94/004, April 1994. Also see
"Integration of Environmental Justice into OSWER Policy, Guidance, and Regulatory Development" (OSWER
directive No. 9200, 3-17, Sept 21, 1994).) EPA-HQ-OEM-2015-0725-0100.
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In undertaking actions in response to Executive Order 13650 while developing the RMP Amendments
Rule/0 EPA sought to determine if there were environmental justice concerns associated with these risks
from stationary sources regulated under the RMP rule. The agency assessed data using EPA tools and
census information, and reviewed existing academic and gray literature on risks to populations of
concern.
8.2.1 Assessment of risks to relevant populations, based on proximity
Facilities that are regulated under the Risk Management Program pose risks of fire, explosion, and/or
exposure to hazardous chemicals. Chemical hazards include burns, corrosive damage to people and
property, as well as exposure associated with acute toxicity. Exposure from these facilities may put local
populations at risk through inhalation, ingestion, or dermal contact.
Exhibit 8-1 shows the demographics in the vicinity of RMP sites, using locational data from the RMP
database and demographic data from EPA's EJSCREEN tool.71 The analysis shows that minority and low-
income populations are more likely to be in proximity to those facilities (and thus at greater risk) than
other populations.72
Exhibit 8-1: Demographic Profile of Key Populations
Location
Population
Low-income
Minority
Linguistically isolated
Total near RMP facilities73
31.27 million
13,757,000
14,770,000
2,482,000
US Total
309.14 million
104,256,000
112,235,000
15,905,000
Percentage of population
near RMP facilities74
44%
47%
8%
Percentage of overall US
population
34%
36%
5%
Difference in percentage
of populations near RMP
sites75
10% more
11% more
3% more
70 "Improving Chemical Facility Safety and Security," August 2013.
71 See httpi//www2.epa.gov/sites/production/files/2015-
05/documents/ejscreen technical document 20150505.pdf.
72 Demographic data on populations are from the American Community Survey 2008-2012, US Census Bureau.
https://www.census.gOv/programs-survevs/acs/news/data-releases/2012/rejease.html#par textimage 0
73 Not including facilities in Puerto Rico and Guam.
74 This analysis counts each person for once for each RMP facility they are near. There is a likelihood of a small
degree of double-counting, therefore, for those who are in close proximity to two or more facilities. However, this
effect is likely to be small, as the data show that less than 5% of the US population is in close proximity to two or
more RMP facilities.
75 For the comparable Exhibit 8-1 presented in the Amendments RIA, EPA had expressed the difference in
populations as the percentage change between two percentages. For the table above, EPA has expressed the
difference in populations as a simple difference in percentage values, which we believe more accurately
characterizes the differing risks.
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44% of people in proximity (defined as living within a one-mile radius) to RMP sites are low-income; the
average in the US population is 34%. Low-income is defined here as less than twice the Census Bureau's
poverty threshold.
47% of people in proximity to RMP sites are ethnic minorities, including any designation except for
"Non-Hispanic, White." It therefore includes those identifying as Hispanic white or as multiracial white.
The average in the US population (overall) is 36%.
The other demographic indicator EPA examined was "linguistic isolation." This category consists of
households where no one over age 14 speaks English well, and some other language is spoken at home.
8% of populations in proximity to RMP facilities are linguistically isolated, compared to only 5% in the
general US population. This characteristic is important for understanding disproportionate impact,
inasmuch as these people are less likely to be aware of risks, to understand them, and to know what to
do to help protect themselves.
In comparison to the general US population, therefore, EPA can conclude that populations surrounding
RMP facilities are:
• 10% more likely to be low-income;
• 11% more likely to be minorities; and
• 3% more likely to be linguistically isolated.
To the extent that populations living closer to facilities are more likely to be exposed if a release occurs,
RMP facilities pose a greater risk to these key demographic groups.
8.2.2 Assessment of risks to relevant populations, in existing literature
Studies external to EPA have also examined these issues. A 2004 analysis by the University of
Pennsylvania examined risk to surrounding minority communities, based on an assessment of the
potential for releases and property damages and injuries at RMP facilities.76 The writers also compared
those risks with the demographics of surrounding communities. They found significant correlations
between riskier facilities (larger and featuring more complex chemical processes) with location in
counties with larger African American populations. They concluded:
"Thus, higher risk facilities are more likely to be found in counties with sizeable poor and/or
minority populations that disproportionately bear the collateral environmental, property, and
health risks."
76 Elliott, M.R., et a I, "Environmental Justice: frequency and severity of US chemical industry accidents and the
socioeconomic status of surrounding communities" Journal of Epidemiology and Community Health 2004; 58:24-
30. EPA-HQ-OEM-2015-0725-0105
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In 2014, the Environmental Justice and Health Alliance for Chemical Policy Reform found that the
populations vulnerable to releases from chemical facilities are disproportionately black or Latino.77
Compared to the US population as a whole, these vulnerable populations have higher rates of poverty,
lower incomes, and education levels. In particular, this report focuses on the communities closest to the
facilities (at the "fence line").
In 2016, Center for Effective Government found that people of color and people living in poverty,
especially poor children of color, are significantly more likely to live in fenceline zones of RMP facilities
than whites and people with incomes above the poverty line.78
8.2.3 Conclusions
Based on analysis of RMP data and other studies, EPA concludes that there is evidence that risks from
RMP facilities fall on minority and low-income populations, to a significantly greater degree than those
risks affect other populations. Therefore, EPA believes that this action may have disproportionately high
and adverse human health or environmental effects on minority populations, low-income populations
and/or indigenous peoples, as specified in Executive Order 12898 (59 FR 7629, February 16, 1994).
8.3 Actions Taken to Facilitate "Fair Treatment"
Chapters 4 and 5 describe the costs and cost savings resulting from this rule, and Chapter 6 describes
the loss of benefits and reduction in security risks that EPA anticipates resulting from this rule. These
include, for example, loss of the benefit of potentially preventing some future accidental releases that
might have been avoided by implementing the prevention program provisions of the Amendments rule,
contrasted to the new benefit of avoiding potential security incidents that might have resulted from the
open-ended emergency coordination and public information availability provisions of the Amendments.
Of note, EPA believes that some of the Amendments rule's benefits of mitigating the damages when
releases at RMP facilities occur and improving information for emergency planners and responders will
still occur under this proposed rule.
EPA was unable to associate the magnitude of risk increases or risk reductions with the removal of
specific Amendments rule provisions. As noted, accident risks may increase while security risks may
decrease. To the extent that this rule results in either increases or reductions of risk to US populations
overall, EPA anticipates that it will result in greater risks or risk reductions for minority communities and
lower-income communities, since they bear a larger portion of the risk. As EPA does not know the
magnitude of risk changes, the extent to which risks faced by populations in close proximity to RMP
facilities will increase or decrease is also unknown.
77 Who's in Danger? A Demographic Analysis of Chemical Disaster Vulnerability Zones, May 2014. The report was
produced in collaboration with Coming Clean and The Center for Effective Government.
httpi//com ingcleaninc.org/whats-new/whos-in-danger-report.
78 Center for Effective Government. January 2016. Living in the Shadow of Danger - Poverty, Race, and Unequal
Chemical Facility Hazards, https://www.foreffectivegov.org/sites/default/files/shadow-of-danger-highrespdf.pdf
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8.4 Actions Taken to Facilitate "Meaningful Involvement"
Addressing environmental justice concerns entails meaningful involvement by affected communities.
While developing the RMP Amendments Rule, EPA took a variety of steps to consult with communities
that might be threatened by hazardous substances, including conducting a series of listening sessions,
public communication efforts, and a webinar regarding addressing potential hazards from RMP
stationary sources and other facilities. See Section 8.4 of the RIAforthe RMP Amendments Rule for a
description of these efforts. Because this proposed rule does not impose any additional costs on
affected communities, EPA did not conduct additional engagement activities associated with this
proposed rulemaking.
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CHAPTER 9: OTHER ANALYSES, LIMITATIONS, AND
CONCLUSIONS
9.1 Unfunded Mandates Reform Act
The Unfunded Mandates Reform Act of 1995 (2 U.S.C. 1531-1538) requires agencies to conduct a cost
benefit analysis of any rulemaking that may impose a net cost of $100 million or more for state, local
and tribal governments, in the aggregate, or the private sector in any one year. Though this proposed
rule will not result in such an expenditure, the Agency does discuss the effect of this rule throughout this
document.
9.2 Protection of Children from Environmental Health Risks and Safety Risks
Executive Order 13045 - Protection of Children from Environmental Health Risks and Safety Risks (62 FR
19885, April 23, 1997) requires agencies to identify and assess health and safety risks that may
disproportionately affect children and ensure that activities address disproportionate risks to children.
Children may be more vulnerable to environmental exposures and/or the associated health effects, and
therefore more at risk than adults. Actions are subject to the Executive Order if they are economically
significant; concern an environmental health risk or safety risk that the EPA has reason to believe may
disproportionately affect children; and were initiated after April 21, 1997, or if a notice of proposed
rulemaking (NPRM) was published on or after April 21, 1998.
This action is not subject to Executive Order 13045 because it is not economically significant as defined
in Executive Order 12866, and EPA does not believe the environmental health or safety risks addressed
by this action present a disproportionate risk to children.
An analysis of the number of people and children living in near proximity to the approximately 12,500
RMP regulated facilities that submitted a RMP to EPA was done by the Center for Effective Government
with results published in a January 2016 report.79 This study reported the number of residents, children
and children under the age of five that live within one mile of an RMP facility. The data was based on
RMP facility location data (latitude/longitude) reported from 12,545 RMP facilities current as of
December 31, 2014, and demographic information on the populations living near RMP facilities from
U.S. Census Bureau American Community Survey (ACS) 5-year estimates spanning 2009-2013. EPA
compared the results from this study to total U.S. population demographics using population data
79 Center for Effective Government. January 2016. Living in the Shadow of Danger - Poverty, Race, and Unequal
Chemical Facility Hazards. httpsi//www,foreffectivegov,org/sites/default/files/shadow~of~danger-highrespdf,pdf
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reported in the same 2009-2013 5-Year ACS data.80 Results of this comparison are shown in Exhibit 9-1.
The small differences from these comparisons show that children living within one mile of an RMP
facility are not substantially more likely to be exposed to potential release of a hazardous chemical due
to a chemical accident at an RMP facility than other children, and thus are not disproportionally at risk.
Exhibit 9-1: Demographic Profile of Children near RMP sites
Location
Population
Children
Children less
than 5 years
old.
Total near RMP facilities
23 million
5.7 million81
1.6 million
US Total
311.54 million
73.83 million
20 million
Percent of population
near RMP facilities
24.8%
7%
Percent of overall US
population
23.7%
6.4%
Difference in percentage
of populations near RMP
sites
0.9% greater
0.6% greater
EPA also notes that none of the RMP accidents included in the 10-year analysis period (2004 - 2013)
resulted in reported injuries or fatalities to children. Most injuries and fatalities occurred to adult facility
workers and emergency responders; the relatively few public injuries and fatalities that occurred were
also to adults. Other accident impacts, such as evacuations and sheltering-in-place, affected the general
population near RMP facilities, including children. Future accidents at RMP facilities could potentially
have these and other more severe impacts on the general population, including injuries and fatalities.
However, as the proportion of children living near RMP facilities is not significantly higher than the
80 Census Bureau. 2009-2013 American Community Survey 5-Year Estimates, Sex and Age.
httpsi//www. census.gov/acs/www/data/data-tables-and-tools/data-profiles/2013/
Click on United States, Demographic Characteristics — includes Sex and Age, Race, Hispanic Origin, Housing Units.
Total population: 311,536,594.
Percent of total population 18 years and over: 76.3%
Number of children under 5 years: 20,052,112
81 Assumed children in study were below age of 18.
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proportion of children in the general population, EPA does not believe that risks addressed by the RMP
Reconsideration rule would affect children disproportionately.
EPA's Policy on Evaluating Health Risks to Children82 is broader than E.O. 13045 in that it calls upon EPA
"to consider the risks to infants and children consistently and explicitly as a part of risk assessments
generated during its decision making process, including the setting of standards to protect public health
and the environment." The applicability of the policy does not depend on whether risks are
"disproportionate" or different from risks to adults. For actions concerning health or safety risks for
which the EPA is already conducting a risk assessment, EPA's policy is to develop a separate assessment
of risks to infants and children or to document clearly why we did not develop one. For the RMP
reconsideration rule, EPA is not conducting a children's health or risk assessment to inform its regulatory
action. Unlike regulations that involve assessments of risk for a specific substance or type of hazard, the
risk management program is a management-based system of safety practices for industrial facilities
handling a wide variety of chemicals, and requires facility owners or operators to develop procedures
and controls to maintain and safely operate processes and equipment to prevent chemical accidents
and mitigate any accidental releases that may occur. Given the wide latitude in selection of risk controls
afforded to facility owners and operators under such a regulatory program, EPA believes it unlikely that
any quantitative assessment of children's health risks would meaningfully inform this proposal.
9.3 Employment Impacts
Executive Order 13777 directs federal agencies to consider a variety of issues regarding the
characteristics and impacts of regulations, including the effect of regulations on jobs (Executive Order
13777 (2017)).83 Employment impacts of environmental regulations are composed of a mix of potential
declines and gains in different areas of the economy over time. Regulatory employment impacts can
vary across occupations, regions, and industries; by labor demand and supply elasticities; and in
response to other labor market conditions. Employment impacts from environmental regulation are
difficult to disentangle from changes driven by other economic factors. Employment impacts may occur
in the directly regulated sector, the environmental protection sector, and in upstream, and other related
sectors. Multiple impacts are incurred by firms in regulated industries. New costs that are incurred to
protect the environment may include labor, energy, capital, materials, and other costs; although for the
current rulemaking, costs, and averted costs, are largely for labor hours. As environmental protection
costs increase, if firms pass along costs to consumers, output may decrease, which could cause a
decrease in labor demand. Conversely, if environmental protection costs decrease, as would occur
under the proposed rule, output may increase, resulting in increased labor demand. There may also be
operational impacts incurred by regulated firms as they modify operations to adapt to changing
82 EPA. Guide to Considering Children's Health When Developing EPA Actions: Implementing Executive Order
13045 and EPA's Policy on Evaluating Health Risks to Children. October 2006.
httpi//www2. epa.gov/children/guide-considering-childrens-health-when-developing-epa-actions-implementing-
executive-order
83 https://www.federalregister.gov/documents/2017/03/01/2017-04107/enforcing-the-regulatory-reform-agenda
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regulatory requirements; the direction of that impact on labor demand is a function of the interaction
between the regulatory requirements and the firm's labor intensity of production.
In the 2017 Amendments RIA, EPA did not include a complete analysis of labor market effects of the
final Amendments rule (see Amendments rule RIA, section 9.2). EPA noted that in general, an
environmental regulation can be understood as an increase in demand for a particular output:
environmental quality. Meeting this new demand can result in increased demand for the various factors
of production (including labor). EPA further determined that the final Amendments rule was unlikely to
have significant impacts on employment, because even in a year where a large complex facility complied
with all of the Amendments rule requirements, the total labor hours would represent about one half
FTE84, but those hours would be distributed across many employees. For simple non-responding
facilities, under the final Amendments rule, the annual labor cost would average less than 120 hours
distributed among several workers. Therefore, EPA judged that at most, perhaps a facility might need to
hire another employee to comply with the Amendments rule or to cover the work that would otherwise
have been done by those workers involved in compliance activities. The proposed Reconsideration rule
would rescind several provisions of the final Amendments rule, including the STAA, root cause analysis,
third-party audit, and information availability provisions, and make changes to the emergency exercise
provisions to allow more flexibility to owners and operators in complying with them. As demonstrated
in this RIA, the net effect of these changes would be to avert most of the costs associated with the final
Amendments rule. Therefore, as the Amendments rule would have been unlikely to have significant
impacts on employment, EPA expects that the Reconsideration rule is also unlikely to have significant
employment impacts. To the extent any such impacts occur, they would be in the opposite direction to
impacts associated with the Amendments rule.
9.4 Summary of Deregulatory Actions (E.0.13771,13777, and 13783)
E.O. 13771 requires that for "every one new [E.O. 13771 regulatory action] issued, at least two prior
regulations be identified for elimination, and that the cost of planned regulations be prudently managed
and controlled through a budgeting process." 85
Implementation guidance for E.O. 13771 issued by OMB states that agencies may comply with these
requirements by issuing at least two E.O. 13771 deregulatory actions for each E.O. 13771 regulatory
action, and defines both of these types of E.O. 13771 actions for purposes of designating an agency
action as being regulatory or deregulatory. An E.O. 13771 deregulatory action is defined as "an action
that has been finalized and has total costs less than zero." EPA has determined that this proposed rule, if
finalized, would be a deregulatory action under E.O. 13771.
84 One full time equivalent (FTE) equates to 2080 labor hours. Under the Amendments rule, a large complex facility
could expend approximately half this much to comply with all Amendments rule requirements (including
annualized labor costs of periodic provisions, such as STAA, coordination, etc.).
85 https://www.federalregister.gov/documents/2017/02/03/2017-02451/reducing-regulation-and-controlling-
regulatory-costs
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As a deregulatory action, the rulemaking is averting costs that would have been incurred had the action
not been taken. By "averted cost/' EPA means a cost savings or negative cost of the proposed action. In
this rulemaking, EPA is avoiding the costs of implementing several provisions of the RMP Amendments
final rule. The avoidance of these costs is counted by EPA as a negative cost to the regulated universe.
Consequently, this proposed rule has total costs less than zero, and therefore, if finalized, would be a
deregulatory action under E.O. 13771.
Accordingly, this rule would contribute to Agency compliance with section 2(a) of E.O. 13771 regarding
issuing at least two E.O. 13771 deregulatory actions for each E.O. 13771 regulatory action, and with
section 2(c) of E.O. 13771 regarding offsetting the costs of E.O. 13771 regulatory actions with cost
savings from E.O. 13771 deregulatory actions.86
Executive Order 13777, "Enforcing the Regulatory Reform Agenda," issued February 24, 2017, requires
agency Regulatory Reform Task Forces to identify regulations that, among other things, impose costs
that exceed benefits, evaluate these regulations, and make recommendations to the agency head
regarding their repeal, replacement, or modification, consistent with applicable law.
The proposed rule would repeal significant portions of the 2017 RMP Amendments Final Rule. Exhibit 5-
10 provides final estimates of rule-related costs and cost savings in 2016 dollars, consistent with the
guidance on the Executive Order 13771 (Reducing Regulation and Controlling Regulatory Costs). EPA
estimates that the proposed rule would result in costs of -$875.2 million on an undiscounted basis, -
$749.89 million discounted at 3%, -$627.24 million discounted at 7% over the 10-year time frame of
analysis, and -$88.34 million and -$89.34 million on an annualized basis at 3% and 7% respectively, all
expressed in 2016 dollars to respond to OMB guidance, representing a decrease in costs, or a cost
savings. Consequently, the cost of this proposed rule is less than zero, and therefore, the rule, if
finalized, would be a deregulatory action under both E.O. 13771 and 13777.
With regard to E.O. 13777, this rule would contribute to Agency compliance with section 2(a) of E.O.
13771 regarding issuing at least two E.O. 13771 deregulatory actions for each E.O. 13771 regulatory
action, and with section 2(c) of E.O. 13771 regarding offsetting the costs of E.O. 13771 regulatory
actions with cost savings from E.O. 13771 deregulatory actions.
Executive Order 13783, "Promoting Energy Independence and Economic Growth," issued March 28,
2017, requires executive departments and agencies to immediately review existing regulations that
potentially burden the development or use of domestically produced energy resources and
appropriately suspend, revise, or rescind those that unduly burden the development of domestic energy
resources beyond the degree necessary to protect the public interest or otherwise comply with the
law.87 E.O. 13783 also requires that environmental regulations be of greater benefit than cost, when
86See httpsi//www.epa.gov/laws-regulations/epa-deregulatory-actions
87 https://www.federalregister.gov/documents/2017/03/31/2017-06576/promoting-energy-independence-and-
economic-growth
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permissible under law. For discussion of how this proposed rule complies with E.O. 13783, please refer
to preamble text.
9.5 Limitations and Conclusions
As discussed in detail in Chapters 3 and 6, the data on which this analysis is based are necessarily
limited. EPA has attempted to correct obvious errors, such as removing accidents reported more than
once and reclassifying some facilities to more appropriate NAICS codes, but some issues related to
facility employment size and ownership could not be resolved. EPA could not add accidents that had not
been reported or correct accident impact data where they may have been inaccurate.
Components of the cost estimates for rule familiarization, emergency response coordination, and
several other provisions were provided by public commenters in response to EPA requests for
information made in the RMP Amendments proposed rule.
The analysis used a model facility approach so that each estimate represents the average for a group of
facilities, not a point estimate for any one facility. This analysis has attempted to develop reasonable
central estimates recognizing that the range of costs incurred by individual facilities could be wide. The
number of people who would participate in field exercises will vary considerably based on facility size
and location. Facilities of any size and complexity in urban industrial areas may involve more people in a
field exercise than the same facilities would if located at a considerable distance from other facilities.
In this analysis, EPA has built from a baseline of compliance with the 2017 RMP Amendments RIA, and
EPA has continued to use the 2015 RMP database, as was used for the 2017 Amendments rule RIA. Not
switching to the most recent version of the RMP database is a potential source of error. However, while
the 2017 RMP database is a better reflection of the current universe of RMP facilities than the 2015
version, the difference in the databases is generally small. See chapter 3 for a detailed comparison of
the two data sets.
Regarding the costs estimated in this RIA, there is an additional level of uncertainty pertaining to a
facility's responder status. EPA does not anticipate a net change in the number of responding or non-
responding facilities as a result of the proposed rule. However, it remains an uncertainty if facilities will
alter their response capabilities as a result of more frequent emergency response coordination. To avoid
a false degree of specificity, the cost calculations do not include an assumption regarding the number of
facilities who might become responders or who might change from responder to non-responder.
Chapter 5 estimates the averted costs and Chapter 6 qualitatively describes benefits and foregone
benefits of the proposed rule. Even though benefits and foregone benefits could not be quantified
because of lack of data, EPA believes the benefits and averted costs are large enough to justify the
foregone benefits.
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