Regulatory Impact Analysis
Safer Communities by Chemical Accident Prevention
Final Rule
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, D.C. 20460 USA
August 30, 2023
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EXECUTIVE SUMMARY 6
CHAPTER 1: INTRODUCTION AND BACKGROUND 15
1.1 History and Need for the Rule 15
1.2 Organization of the Analysis 20
CHAPTER 2: FINAL RULE PROVISIONS 21
2.1 Summary of Provisions and Applicability to Private Sector Facilities 21
2.2 Applicability to Government-owned Facilities and Entities 25
2.3 Changes in the Final Rule RIA from the Proposed Rule RIA 25
CHAPTER 3: UNIVERSE OF RMP FACILITIES AND 26
3.1 Universe of RMP Facilities 26
3.2 Number and Costs of Baseline Accidents 34
3.3 Limitations 49
CHAPTER 4: COSTS OF FINAL RULE REVISIONS 50
4.1 Analysis Baseline 50
4.2 Wage Rates 50
4.3 Rule Familiarization 51
4.4 Prevention Program Provisions 52
4.5 RMP Justifications 61
4.6 Emergency Response 62
4.7 Information Availability 62
CHAPTER 5: TOTAL ESTIMATED COSTS OF THE FINAL RULE 65
5.1 Analytical Assumptions 65
5.2 Rule Familiarization 66
5.3 Prevention Program Rule Provisions 67
5.5 Emergency Response 72
5.6 Information Availability to the Public 73
5.7 Important Cost Uncertainties and Indirect Costs Associated with Prevention Program Provisions 74
5.8 Total Estimated Costs 76
CHAPTER 6: TOTAL BENEFITS OF THE FINAL RULE 78
6.1 Benefit Categories 79
6.2 Benefit Categories Associated with Accident Preventionand Mitigation 85
6.3 Avoided Accident Impacts: Breakeven Analysis 91
6.4 Conclusions 93
CHAPTER 7: REGULATORY ALTERNATIVES CONSIDERED 95
7.1 Lower-cost Regulatory Alternative 95
7.2 Higher Cost Regulatory Alternative 97
7.3 Summary of Regulatory Alternatives 99
CHAPTER 8: SMALL ENTITY ANALYSIS 102
8.1 RMP Affected Sectors 102
8.2 Estimating the Number of Small Entities 103
8.3 Economic Impact on Small Entities 106
8.4 Conclusion 113
CHAPTER 9: COMMUNITIES WITH ENVIRONMENTAL JUSTICE CONCERNS 115
9.1 Background 115
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9.2 Methods 116
9.3 Results Characterizing Baseline Conditions 119
9.4 Conclusions 128
9.5 Climate Change Impacts 128
CHAPTER 10: LIMITATIONS AND CONCLUSIONS 131
10.1 Limitations and Conclusions 131
CHAPTER 11: ANALYSES REQUIRED UNDER APPLICABLE STATUTES AND
EXECUTIVE ORDERS 133
11.1 Executive Order 12866: Regulatory Planning and Review and Executive Order 14094 Modernizing Regulatory Review 133
11.2 Unfunded Mandates Reform Act 133
11.3 Federalism 133
11.4 Employment Impacts 134
11.5 Paperwork Reduction Act of 1995 137
11.6 National Technology Transfer and Advancement Act 138
11.7 Consultation and Coordination with Indian Tribal Governments 138
11.8 Executive Order 13045: Protection of Children from Environmental Health Risks and Safety Risks 138
11.9 Executive Order 13211: Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use 138
APPENDIX A: COST ESTIMATES OF HF ALKYLATION CONVERSION 140
APPENDIX B: PROPERTY AND BUSINESS LOSSES IN THE PETROCHEMICAL SECTOR
142
APPENDIX C: SMALL ENTITY ANALYSIS DATA COMPARISON 144
C. 1 Proposed Rule Data Comparison 144
C.2 Final Rule Data Comparison 149
APPENDIX D: STAA IMPLEMENTATION MEASURE COSTS 154
APPENDIX E: UMRA WRITTEN STATEMENT 165
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Acronyms
Acronym
Definition
AFPM
American Fuel & Petrochemical Manufacturers
API
American Petroleum Institute
ASEC
Annual Social and Economic Supplement
ASM
Annual Survey of Manufacturers
AWWA
American Water Works Association
BEA
Bureau of Economic Analysis
BLS
Bureau of Labor Statistics
CAA
Clean Air Act
CBP
County Business Patterns
CSAG
Chemical Safety Advocacy Group
CSB
U.S. Chemical Safety Board
DUNS
Data universal numbering system
DC.
District of Columbia
E.O.
Executive Order
EPA
U.S. Environmental Protection Agency
EPCRA
Emergency Planning and Community Right to Know Act
GDP
Gross Domestic Product
FTE
Full-time employee
HF
Hydrofluoric acid
HHS
U.S. Department of Health & Human Services
ICR
Information Collection Request
ISD
Inherently safer design
1ST
Inherently safer technology
IPAWS
Integrated Public Alert and Warning System
LEPC
Local Emergency Planning Committee
NAICS
North American Industrial Classification System
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NIPA
National Income and Product Accounts
NPRM
Notice of Proposed Rulemaking
NTTAA
National Technology Transfer and Advancement Act
OCA
Offsite Consequences Analysis
OEM
Office of Emergency Management
OEWS
Occupational Employment and Wage Statistics
OSWER
Office of Solid Waste and Emergency Response
OLEM
Office of Land and Emergency Management
OMB
Office of Management and Budget
OSHA
Occupational Safety & Health Administration
PHA
Process Hazard Analysis
PSM
Process Safety Management
RAGAGEP
Recognized and Generally Accepted Good Engineering Practices
RFA
Regulatory Flexibility Act
RFI
Request for Information
RIA
Regulatory Impact Analysis
RMP
Risk Management Program
SBA
Small Business Administration
SDS
Safety Data Sheet
STAA
Safer Technology and Alternatives Analysis
TRI
Toxic Release Inventory
TQ
Threshold quantity
U.S.
United States
VSL
Value of a statistical life
WTP
Willingness to pay
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Executive Summary
Introduction
To bolster resilience to the impacts of climate change and prioritize environmental justice through
environmental policy and regulation in the United States, President Biden issued Executive Order (E.O.) 13990,
Protecting Public Health and the Environment and Restoring Science to Tackle the Climate Crisis. The E.O.
directs Federal agencies to review current regulations and take action to address these issues. To support these
priorities, EPA reviewed and proposed revisions to the current Risk Management Program (RMP)1 regulation.
The purpose of the final Safer Communities by Chemical Accident Prevention (SCCAP) final rule is to
make changes to the current RMP rule in order to improve safety at facilities that use and distribute hazardous
chemicals. EPA believes that the RMP regulations have been effective in preventing and mitigating chemical
accidents in the U.S. However, because major RMP accidents continue to occur, EPA in this final rule is taking
further steps to help protect human health and the environment from chemical hazards. The final rule revisions,
by giving special consideration to concerns about climate change and environmental justice and building on
lessons learned from the current regulatory program, will further protect human health and the environment from
chemical hazards through advancement of process safety. These revisions are informed by EPA's review of the
current RMP rule and data, information collected by EPA through oral testimonies from the summer 2021
listening sessions on June 16 and July 8, 2021, written public comments submitted in response to a request for
comment published by EPA prior to the development of the proposed rule (86 FR 28828; May 28, 2021), as well
as the proposal's open written comment period and September 2022 public hearings.
The final rule revisions seek to improve chemical process safety, assist in planning, preparing for, and
responding to RMP accidents, and improve public awareness of chemical hazards at regulated sources. To
accomplish this, these final rule provisions include several changes to the accident prevention program
requirements, enhancements to the emergency preparedness requirements, changes to increase public availability
of chemical hazard information, and changes or clarifications to certain regulatory definitions or issues. Some
final rule provisions target facilities in close proximity to certain other facilities and/or facilities that have had
recent accidents and/or facilities using a certain hazardous process (HF alkylation).
Provisions Analyzed in this RIA
This Regulatory Impact Analysis (RIA) analyzes the following new requirements and revisions to
current requirements.
Prevention Program
Safer Technology and Alternatives Analysis (STAA)— (Revisions apply to §68.3 and §68.67)
The current RMP rule does not require facilities to conduct a STAA. The final rule STAA requirement
includes two parts: the initial evaluation to identify alternatives and a practicability assessment to determine the
costs and assess the reasonableness of implementing technology alternatives. Under the final rule, all facilities
with Program 3 processes in North American Industrial Classification System (NAICS) code 324 and 325 are
required to conduct the initial evaluation. Of those facilities, facilities that have had an accident since their most
recent Process Hazard Analysis (PHA) or are located within one mile of another facility with a process in
NAICS code 324 or 325, also are required to conduct a practicability assessment.2 The final rule also requires
that all facilities in NAICS 324 using hydrofluoric acid (HF) in an alkylation unit (approximately 45 facilities)
conduct a practicability assessment to assess inherently safer alternatives to HF alkylation, regardless of accident
history or proximity to another NAICS 324- or 325-regulated facility.
1 Note that the acronym RMP is used generally to refer to both the Risk Management Program and risk management plans. For clarity,
throughout this RIA, RMP will refer to the Risk Management Program, and the term "risk management plan" will be written out.
2 EPA is making RMP information publicly available to allow facilities to identify and locate proximate facilities.
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STAA Implementation— (Revisions apply to §68.3 and §68.67)
Under the final rule, all facilities required to conduct a STAA practicability assessment (i.e., Program 3
NAICS 324 and 325 facilities that have had an accident since their most recent PHA, with an HF unit in a
NAICS 324 process, or are located within one mile of another facility with a NAICS 324 or 325 process) also are
required to implement at least one passive measure at the facility, or an inherently safer technology or design, or
a combination of active and procedural measures causing equivalent to or greater than the risk reduction of a
passive measure. EPA is providing facilities with flexibility to choose either one or a combination of inherently
safer technology (1ST) or inherently safer design (ISD), passive, active, or procedural measures, provided it
reduces risk at least as much as a practicable passive measure would achieve.
Root Cause Analysis— (Revisions apply to §§68.60 and 68.81)
Under the current RMP rule, facilities are required to conduct an incident investigation following an
incident which resulted or reasonably could have resulted in a catastrophic release. The final rule requires
facilities to conduct a root cause analysis as part of an incident investigation following an RMP-reportable
accident. A root cause analysis is a formal process to identify underlying reasons for failures that led to
accidental releases. These analyses require staff knowledgeable in selection and use of root cause analysis
techniques. The incident investigation revisions apply to all facilities with Program 2 and 3 processes that
experience an RMP-reportable accident. There are approximately 100 accidents with RMP-reportable impacts
per year in the baseline (see Exhibit 3-11).
Third-Party Audits— (Revisions apply to §§68.58 and 68. 79 and new §§68.59 and 68.80)
The current RMP rule requires facilities to conduct a compliance audit of Program 2 and Program 3
processes at least once every three years. This final rule, also applicable to Program 2 and Program 3 processes,
requires the next required compliance audit to be a third-party audit when any one of the following conditions
applies:
1. The facility has had an RMP-reportable accident; or
2. An implementing agency requires a third-party audit either due to conditions at the facility that could
lead to an accidental release of a regulated substance, or due to a previous third-party audit that failed
to meet the competency or independence criteria of §68.80(c).
Employee Participation— (Provisions apply to §68.83)
Under the current RMP rule, Program 3 process facilities" employee participation plans require the
owner or operator to consult with employees and their representatives on the conduct and development of
process hazards analyses and on the development of the other elements of process safety management (PSM).
The owner or operator must provide employees and their representatives access to process hazard analyses and
to all other information required to be developed under the current rule.
The final rule revises §68.83 and other aspects of employee participation to require six new components:
1. Program 2 facilities must develop written employee participation plans of action, which detail
employee roles in using reasonable judgment and communication procedures to identify, raise, and
address safety concerns. Facilities must also develop and implement a process for employees to
report on hazards and noncompliance and must provide employees and their representatives access
to hazard reviews and all other information required to be developed under the rule.
2. The Program 3 employee participation plan must include the consultation of employees and their
representatives regarding how to address, correct, resolve, document, and implement
recommendations of process hazard analyses, incident investigations, and compliance audits.
3. The Program 3 employee participation plan must include and ensure that effective methods are in
place so that employees knowledgeable in the process and their representatives have specific stop
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work authorities based on a potential for a catastrophic release. The specific authorities must
include:
a. Recommending to the operator in charge of a unit that an operation or process be shut down,
partially or completely, based on the potential for a catastrophic release;
b. Allowing a qualified operator in charge of a unit to shut down, partially or completely, an
operation or process based on the potential for a catastrophic release.
4. Program 3 employee participation plans must include a process for employees to report on hazards
and noncompliance.
5. Program 2 and Program 3 facilities must provide an annual written or electronic notice to employees
indicating RMP information is available.
6. Program 2 and Program 3 facilities must provide training to inform employees, their representatives,
and management involved in the process of the details of the written employee participation plan.
Backup Power for Perimeter Monitors— (Revisions apply to §§68.50 and 68.67)
The final rule requires air control or monitoring equipment associated with prevention and detection of
accidental releases from RMP-regulated processes where power loss has been identified as a major hazard to
have standby or backup power.
RMP Justification Hazard Evaluation Amplifications— (Revisions apply to §§68.50 and 68.67)
The final rule requires that hazard evaluations explicitly address natural hazards and the risk of power
failure. EPA believes that because natural hazards and power loss continue to be factors in RMP accidents and
present growing threats to process safety at RMP facilities, a requirement to evaluate and control natural hazards
and power loss risks should be explicitly stated in the RMP regulation. Hazard evaluations also must explicitly
define stationary source siting as inclusive of processes, equipment, buildings within the stationary source,
hazards posed by proximate stationary sources, and accidental release consequences posed by proximity to the
public and public receptors. The final rule requires that risk management plans explicitly include declined
natural hazard, power loss, and siting evaluation recommendations and their associated justifications.
RAGAGEP gap analysis— (Revisions apply to §§68.69 and 68.175)
The final rule requires that risk management plans explicitly include declined PHA recommendations
associated with adopting practices from the most recent version of RAGAGEP and their associated justifications.
Emergency Response
Community Notification of RMP Accidents— (Previsions apply to §§68.90 and 68.95)
The final rule adds a requirement to RMP facility owners and operators who designate themselves as a
non-responding facility to develop and implement, as necessary, procedures for informing the public and the
appropriate emergency response agencies about accidental releases of RMP-regulated substances. EPA is also
requiring that responding and non-responding facilities ensure that:
1. A community notification system is in place;
2. The public is promptly notified of an RMP accident release; and
3. The notification provides appropriate, timely data and information to local responders with the
current understanding and best estimates of the nature of the release.
Information Availability
Information Availability— (revisions apply to §68.210)
The final rule requires all facilities to disclose certain chemical hazard information to the public residing,
working, or spending significant time within 6 miles3 of the facility in the language (either English or one of two
3 EPA believes this distance to be reasonable given that 90 percent of all toxic worst-case distances to endpoints are 6 miles or less, and
almost all flammable worst-case distances are less than 1 mile.
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other major languages used in the community) requested by the requester.4 These are new information
availability requirements, not currently required. EPA is requiring owners and operators to maintain a record of
requesters. The facility or its parent company, if applicable, also must provide ongoing notification through
publicly accessible means regarding what information is available upon request for those members of the public,
how to request that information, and where to access information on community preparedness.
Regulatory Alternatives to the Final Rule
The RIA analyzed several regulatory alternatives to the final rule. EPA considered one regulatory
alternative with lower costs than the final rule costs and one with higher costs. The lower cost regulatory
alternative is the same as the final rule except that it considers alternatives for three provisions: root cause
analysis, third-party audits, and employee participation. The higher cost alternative applies the STAA and third-
party audit provisions to a broader set of facilities but is otherwise the same as the final rule. See Chapter 7 for a
description of each regulatory alternative EPA considered, estimates of the incremental costs of the alternatives
relative to a baseline of no new rulemaking and breakeven analyses of those alternatives.
Universe of RMP Facilities
Recent data show that 11,740 facilities have filed current risk management plans with EPA and are
potentially affected by the final rule. These facilities range from petroleum refineries and large chemical
manufacturers to water and wastewater treatment systems; chemical and petroleum wholesalers and terminals;
food manufacturers, packing plants, and other cold storage facilities with ammonia refrigeration systems;
agricultural chemical distributors; midstream gas plants; and a limited number of other sources that use RMP-
regulated substances. A table of the number of affected facilities by sector and NAICS code can be found in
Exhibit 3-1.
Summary of Estimated Costs of the Final Rule
Exhibit ES-1 presents a summary of the total undiscounted, discounted, and annualized costs of the final
rule. In total, EPA estimates annualized costs of $256.9 million at a 3 percent discount rate and $296.9 million at
a 7 percent discount rate over a 10-year period. The provisions associated with the largest annualized cost at a 3
percent discount rate are STAA implementation ($168.7 million), STAA practicability assessment ($27.0
million), and STAA initial evaluation ($18.5 million), followed by information availability ($12.8 million),
employee participation plan ($11.5 million), third-party audits ($7.5 million), rule familiarization ($5.8 million),
and a community notification system ($4.0 million). The remaining provisions impose annualized costs of less
than $1 million, including root cause analysis ($0.7 million), emergency backup power for perimeter monitors
used to detect RMP-regulated substances ($0.3 million), and RMP justifications ($0.1 million).
Exhibit ES-1. Summary of Estimated Costs (millions, 2022 dollars).
Cost Elements
Total
Undiscounted
Total
Discounted
(3%)
Total
Discounted
(7%)
Annualized
(3%)
Annualized
(7%)
Rule Familiarization
$50.9
$49.5
$47.6
$5.8
$6.8
Safer Technology Alternatives Analysis (STAA)
Initial Evaluation
$176.49
$158.2
$138.3
$18.5
$19.7
Practicability Assessment
$256.9
$230.2
$201.0
$27.0
$28.6
Implementation
$1,700.4
$1,438.9
$1,172.6
$168.7
$204.9
Root Cause Analysis
$7.3
$6.2
$5.1
$0.7
$0.7
Third-party Audits
$75.2
$64.2
$52.8
$7.5
$7.5
4 EPA plans to make RMP locational information for the entire regulated community available online. Currently, members of the public
can determine whether a neighboring facility is an RMP facility through searching EPA's Envirofacts.
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Cost Elements
Total
Undiscounted
Total
Discounted
(3%)
Total
Discounted
(7%)
Annualized
(3%)
Annualized
(7%)
Employee Participation Plan
$114.7
$97.9
$80.6
$11.5
$11.5
Backup Power for Perimeter
Monitors
$3.3
$2.8
$2.3
$0.3
$0.3
RMP Justifications
No Backup Power
$.2
$0.1
$0.1
$0.0**
$0.0**
Natural Hazards
$.4
$0.4
$0.3
$0.0**
$0.0**
Facility Siting
$.4
$0.4
$0.3
$0.0**
$0.0**
RAGAGEP
$.3
$0.2
$0.2
$0.0**
$0.0**
Community Notification
System
$39.7
$33.9
$27.9
$4.0
$4.0
Information Availability
$127.6
$108.8
$89.6
$12.8
$12.8
Total Cost*
$2,554.0
$2,191.7
$1,818.9
$256.9
$296.9
"Totals may not sum due to rounding.
** Costs are zero due to rounding. Unrounded costs are $15,798 for No Backup Power, $42,307 for Natural Hazards and Facility
Siting, and $27,582 for RAGAGEP.
Exhibit ES-2 provides undiscounted yearly costs for the final rule provisions, for Years 1-10. Rule
familiarization costs are incurred only in Year 1, and therefore are $0 in subsequent years.
Exhibit ES-2. Summary of Estimated Undiscounted Yearly Costs (millions, 2022 dollars).
Cost Elements
Year 1
Year 2
Year 3
Year 4
Year 5
Year 6
Year 7
Year 8
Year 9
Year 10
Rule Familiarization
$50.9
$0
$0
$0
$0
$0
$0
$0
$0
$0
STAA
Initial Evaluation
$29.9
$29.9
$29.9
$29.9
$29.9
$5.4
$5.4
$5.4
$5.4
$5.4
Practicability
Assessment
$43.2
$43.2
$43.2
$43.2
$43.2
$8.2
$8.2
$8.2
$8.2
$8.2
Implementation
$145.0
$150.5
$156.1
$161.7
$167.3
$172.8
$178.4
$184.0
$189.6
$195.1
Root Cause Analysis
$0.8
$0.8
$0.8
$0.8
$0.8
$0.8
$0.8
$0.8
$0.8
$0.8
Third-party Audits
$7.5
$7.5
$7.5
$7.5
$7.5
$7.5
$7.5
$7.5
$7.5
$7.5
Employee
Participation Plan
$11.5
$11.5
$11.5
$11.5
$11.5
$11.5
$11.5
$11.5
$11.5
$11.5
Backup Power for
Perimeter Monitors
$0.3
$0.3
$0.3
$0.3
$0.4
$0.4
$0.4
$0.4
$0.4
$0.4
Justifications**
No Backup Power
$0.0
$0.0
$0.0
$0.0
$0.0
$0.0
$0.0
$0.0
$0.0
$0.0
Natural Hazards
$0.0
$0.0
$0.0
$0.0
$0.0
$0.0
$0.0
$0.0
$0.0
$0.0
Facility Siting
$0.0
$0.0
$0.0
$0.0
$0.0
$0.0
$0.0
$0.0
$0.0
$0.0
RAGA GEP
$0.0
$0.0
$0.0
$0.0
$0.0
$0.0
$0.0
$0.0
$0.0
$0.0
Community
Notification System
$4.0
$4.0
$4.0
$4.0
$4.0
$4.0
$4.0
$4.0
$4.0
$4.0
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Cost Elements
Year 1
Year 2
Year 3
Year 4
Year 5
Year 6
Year 7
Year 8
Year 9
Year 10
Information
Availability
$12.8
$12.8
$12.8
$12.8
$12.8
$12.8
$12.8
$12.8
$12.8
$12.8
Total Cost*
$305.8
$260.5
$266.1
$271.7
$277.3
$223.4
$229.0
$234.5
$240.1
$245.7
* Totals may not sum due to rounding.
** Costs are zero due to rounding. Unrounded costs are $15,798 for No Backup Power, $42,307 for Natural Hazards and Facility Siting,
and $27,582 for RAGAGEP.
Baseline Damages
Accidents and releases from RMP facilities occur every year, involving toxic vapors, fires, and
explosions, and resulting in fatalities, injuries, property damage, evacuations, and more. Using data on facility-
reported accident impacts from the RMP Accident Database, EPA summarizes the damages that were caused by
RMP-reportable accidents during each of the five years from 2016 to 2020, the most recent five-year period for
which RMP program data is available. Exhibit ES-3 summarizes reported RMP accident impacts and, when
possible, monetizes them.5 During this timeframe, 488 RMP accidents with either or both onsite and offsite
damages occurred at RMP facilities. The reported impacts in the RIA correspond to program requirements (40
CFR 68.42 and 68.168), but many additional accident impacts are not required to be reported and thus are not
reflected in EPA's monetized estimates.
Exhibit ES-3. Summary of Quantified Baseline Damages 2016-2020 (millions, 2022 dollars).
Unit
Value
5-Year
Total
Average/Year
Average/Accident
Median
/Accident
Onsite
Fatalities
$10.4
$187.9
$37.57
$0.38
$0.00
Injuries
$0.05
$28.75
$5.75
$0.06
$0.05
Property Damage
$2,273
$454.58
$4.66
$0.00
Onsite Total
$2,489.49
$497.90
$5.10
$0.05
Offsite
Fatalities
$10.4
$0.00
$0.00
$0.00
$0.00
Hospitalizations
$0,045
$1.40
$0.28
$0.00
$0.00
Medical
Treatment
$0,001
$0.13
$0.03
$0.00
$0.00
Evacuations*
$0,000
$18.99
$3.80
$0.04
$0.00
Sheltering in
Place*
$0,000
$12.58
$2.52
$0.03
$0.00
Property Damage
$178.55
$35.71
$0.37
$0.00
Offsite Total
$211.66
$42.33
$0.43
$0.00
Total**
$2,701.14
$540.23
$5.54
$0.05
* The unit value is $293 for evacuations and $147 for sheltering-in place, so when expressed in rounded millions, the value
represented in the table is zero.
**Totals may not sum due to rounding.
EPA monetized reported onsite and offsite damages when possible. EPA estimated total average annual
onsite damages of $497.9 million. The largest monetized, average annual, onsite damage category was property
'Additional data on quantified damages caused by RMP-reportable accidents at RMP facilities for prior time periods, including from 2004
to 2013 and from 2014 to 2016, are presented in Chapter 3, Exhibit 3-16. Note that the averages include accidents for which the damages
were zero in individual categories (but non-zero in at least one category). The impacts also include environmental damage categories,
including soil and water contamination, among others, which EPA was not able to monetize. Information on additional unrnonetized or
unquantified damages is also presented in Chapter 3 and Chapter 6.
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damage, which resulted in average annual damage of approximately $454.58 million. The next largest impact
was onsite fatalities ($37.57 million) and injuries ($5.75 million).
Again, reflecting reported impacts, EPA estimated total average annual offsite damages of $42.33 million.
The largest monetized, average annual, offsite damage category was property damage, which resulted in average
annual damage of approximately $35.71 million. The next largest impact was from evacuations ($3.80 million),
sheltering in place ($2.52 million), hospitalizations ($0.28 million), and medical treatment ($0.03 million). In
total, EPA estimated monetized damages from RMP facility accidents over the five-year period of $540.23
million per year.6
Overall, monetized damages from reported accident impacts in the RMP Accident Database from 2016
through 2020 ranged from a low of $100 to a high of $700 million, with a median accident value of $50,000 for
the 488 RMP impact accidents. Median values were zero in all damage categories except for onsite (worker)
injuries. While an important objective of the final rule is to reduce the probability of a major catastrophe, the
baseline damages in Exhibit ES-3 do not reflect the full costs of a catastrophe. However, the baseline damages
shed light on the nature and extent of existing costs from RMP facility accidents. EPA has determined that the
final rule provisions will help mitigate these costs.
In addition to the monetized baseline accident damages reflecting impacts required to be reported by
RMP facilities, there are many additional RMP accident impacts that EPA was unable to quantify or monetize
due to a lack of data. Unquantified baseline damages include potential health risks from exposure to toxic
chemicals, lost productivity, responder costs, transaction costs, negative impacts on property values,
environmental damages, unquantified evacuation and shelter-in-place costs, and damages related to catastrophic
releases. In some cases, these damages could be even more detrimental to society than those damages that can be
quantified. These categories are discussed in detail in Chapter 6.
Summary of Benefits
EPA expects the final rule to reduce accident risks across the spectrum of RMP facilities and accident
categories. The rule requirements are targeted at reducing both the probability and the magnitude of the full
range of accident types regulated by the RMP program including fires, explosions, and releases of toxic vapors.
Accident risks posed by the variety of RMP facilities in numerous industries (listed in Exhibit 3-1) should
decrease, with larger impacts expected for P3 facilities and especially petroleum refineries and chemical
manufacturers that meet the three conditions for the STAA practicability and implementation requirements.
Avoided accident damages include those that are required to be reported by RMP facilities such as fatalities,
injuries, property damage, hospitalizations, medical treatment, evacuations, sheltering-in-place and others. EPA
also expects that the final rule provisions will reduce baseline damages that are not required to be reported such
as taxpayer-funded responder costs, transaction costs for parties affected by the accident, property value
6 See Chapter 3, Exhibit 3-16, for presentations of monetized damages for prior time periods. To obtain those estimates, EPA re-estimated
unit damage costs for the prior time periods by applying the same set of assumptions used for the current final rule analysis and updating
dollars to 2022. In particular, EPA re-estimated the costs assuming a fatality is valued at $10.4 million instead of $8.6 million (using the
BEA GDP deflator), hospitalization costs of $45,000 instead of $36,000, and BLS mean hourly wage rates of $28.88 instead of $22.65.
Previously, mean hourly wage was estimated as the cost per hour to shelter-in-place or evacuate. Relying on updated guidance, this final
rule analysis uses mean hourly wage plus voluntary benefits less taxes, which is estimated at $36.66. For 2004 to 2013, estimated
monetized damages from RMP facility accidents are $473.2 million (2022$) on average per year; for 2014 to 2016, estimated monetized
damages are $441.7 million (2022$) on average per year. In total, over the 2004 to 2020 time period, the average per year is $482.8 and
the average per accident is $3.4 million (2022$). EPA also updated accident data which can be continuously updated in RMP filings. This
resulted in differences in the raw accident data between the December 31, 2020, RMP data used in this final rule and RMP data used in
the amendments rule and reconsideration rule RIAs.
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reductions in neighborhoods nearby, unmonetized costs of evacuations and sheltering-in-place, the costs of
potential health risks from exposure to toxic chemicals, lost productivity, and more. In addition, information
benefits will be experienced due to several final rule provisions such as the community notification requirements
and the back-up power for monitoring equipment. Finally, the rule will reduce the likelihood of major
catastrophes. Although EPA was unable to quantify the reductions in damages that may result from the final rule
provisions, EPA expects that a substantial portion of future damages will be prevented by the final rule.
Costs Relative to Benefits: A Limited Breakeven Analysis
EPA is unable to estimate quantitative benefits for the final rule because EPA has no data to project the
specific contribution of each final rule provision to reductions in the frequency or severity of future accidents. As
shown by accident trends, accident frequency and severity are difficult to predict. In addition, EPA does not have
data to estimate the value of all categories of baseline damages that will be reduced by the final rule, nor is there
data to estimate the value of improved information due to the final rule. Therefore, the incremental impact on the
risk of an RMP facility release resulting from each of the revised RMP rule provisions is uncertain and the full
value of reduced risks is unknown. These unknowns prevent EPA from conducting a standard benefit cost
analysis.
Instead, to provide insight into the trade-off between the costs and benefits of the final rule provisions,
this RIA presents a breakeven analysis limited by incomplete information. The results of this analysis should be
viewed with caution. It consists of a simple comparison between the estimated annualized costs of the rule and
the limited set of monetized baseline accident impacts. The annualized costs of the final rule (at a 3 percent
discount rate) are estimated as $257 million, while average annual monetized accident impacts based on self-
reported RMP facility data are estimated as $540 million. The many baseline accident impacts that are not
reflected in the $540 million baseline accident cost estimate, yet are expected to be avoided as a benefit of the
final provisions, include responder costs, transaction costs, property value reductions, unmonetized costs of
evacuations and sheltering-in-place, the costs of potential health risks from exposure to toxic chemicals, and
productivity losses, among others. The $540 million estimate also does not reflect the full set of baseline
inefficiencies that will be improved due to the improved information offered by several of the final provisions
such as the community notification requirements and the back-up power for monitors. Finally, as explained
above, the baseline estimate of costs does not include major catastrophic losses. In light of these numerous
unmonetized impacts, the estimate of baseline costs potentially reduced by the final rule is only partial and is a
conservative estimate.
The limited breakeven analysis suggests that the final rule will need to reduce damages valued at
approximately $2 billion over any number of future accidents to achieve breakeven. Alternatively, on an annual
basis, given estimated annualized costs of approximately $257 million (3% discount rate) and an estimated
number of annual accidents of about 100, fewer than approximately 47 accidents, each with average monetized
damages of approximately $5.5 million as estimated for the most recent five-year baseline period, will need to be
prevented annually by the final rule to breakeven. Breaking even with fewer than 47 will depend on whether
high magnitude accidents are prevented and also on the value of the unquantified accident damages that will be
avoided. As the range of monetized accident impacts suggests (from $100 to $700 million for 2016 to 2020), the
variation in monetized damages is substantial. Preventing a single high cost accident annually would offset
annual rule costs. In sum, when considering the rule's likely benefits of avoiding some portion of the monetized
accident impacts, as well as the additional unmonetized benefits, EPA believes the costs of the rule are
reasonable in comparison to its expected benefits. When assessing the reasonableness of the benefits and burdens
of various regulatory options, EPA must place weight on both preventing more common accidental releases
captured in the accident history portion of the RMP database while also placing weight on less quantifiable
potential catastrophic events. The Agency's judgment as to what regulations are "reasonable" is informed by
both quantifiable and unquantifiable burdens and benefits.
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CHAPTER 1: Introduction and Background
1.1 History and Need for the Rule
1.1.1 Overview of the Risk Management Program
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.7,8 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 (CAA) were enacted to help prevent severe chemical
facility accidents. Section 304 required the Occupational Safety & Health Administration (OSHA) to publish a
chemical process safety standard (Process Safety Management, or PSM 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 detect and prevent or minimize
chemical releases and their consequences if they occur.
CAA section 112(r) required EPA to develop a list of at least 100 regulated substances known to cause
or that 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 that 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 facility "to prepare and implement a risk management plan to
detect and prevent or minimize accidental releases of such substances from the facility, 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 must include an estimate of potential release quantities and a determination of
downwind effects, including potential exposures to affected populations. Such assessment must include
a previous release history of the past five years, including the size, concentration, and duration of
releases, and must include an evaluation of worst-case accidental releases.
• 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.
• A response program providing for specific actions to be taken in response to an accidental release of a
regulated substance 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, section 112(r) requires the owner or operator of an affected facility to develop and file a Risk
Management Plan with EPA, the U.S. Chemical Safety Board (CSB) (also established under the section), and
State, and local response agencies.
7 Federal Emergency Management Agency. Phillips Petroleum Chemical Plant Explosion and Fire. October 1989.
https://www.interfire.org/res_file/pdf/Tr-035.pdf.
8 Flay, Alastair, A Technical Report on What Caused Italy's Dioxin Disaster Elas Too Many Loopholes, Nature, 281, 521 (October 18,
1979). http://www.nature.com/nature/journal/v281/n5732/pdf/281521a0.pdf.
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OSHA adopted its PSM standard (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 and include 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-work9 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 FR4478, January 31, 1994), and the RMP requirements in 1996 (61 FR31731, 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 consequences
analysis (OCA) and five-year accident history, and the development and submission of a risk management plan
that summarizes a source's RMP. 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 five years.
EPA has amended the rule over time to modify the list of substances, revise data requirements, and to address
other issues. The primary requirements adopted in 1996, however, remain in place.
The RMP 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 requirements apply to
processes that will not affect the public in the case of a worst-case release and with no accidents with specific
offsite consequences within the past five years. Program 1 provisions impose limited hazard assessment
requirements and emergency response requirements.
Program 2 provisions apply to processes not eligible for Program 1 or subject to Program 3, and impose
streamlined prevention program requirements, including safety information, hazard review, operating
procedures, training, maintenance, compliance audits, and incident investigation elements. Program 2 provisions
also impose hazard assessment, management, and emergency response requirements. Program 2 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 Program 2 processes, EPA developed and published several industry-specific guidance documents1" and an
OCA guidance document.
Program 3 requirements apply to processes not eligible for Program 1 and that are either subject to
OSHA's PSM standard, under Federal or State OSHA programs, or classified in one of ten specified NAICS
codes (1997 version) listed at 40 CFR 68.10(d)(1). The ten NAICS codes are:
• 32211 (pulp mills)
• 32411 (petroleum refineries)
• 32511 (petrochemical manufacturing)
• 325181 (alkali and chlorine manufacturing)
• 325188 (all other basic inorganic chemical manufacturing)
• 325192 (cyclic crude and intermediate manufacturing)
• 325199 (all other basic organic chemical manufacturing)
• 325211 (plastics material and resin manufacturing)
9 40 CFR 68.3 defines hot work as work involving electric or gas welding, cutting, brazing, or similar flame or spark-producing
operations.
10 Guidance documents for propane storage, refrigeration, water/wastewater treatment, warehouses, chemical distributors, and others are
available at: https://www.epa.gov/nnp/guidance-facilities-risk-management-programs-nnp.
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• 325311 (nitrogenous fertilizer manufacturing)
• 32532 (pesticide and other agricultural chemical manufacturing)
Program 3 requirements impose elements nearly identical to those in OSHA's PSM standard. The
Program 3 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.
Program 3 provisions also impose the same hazard assessment, management, and emergency response
requirements that are required for Program 2.
The following flow chart demonstrates how facilities determine the program level to which they are
subject:11
Facilities that are exempt from the OSHA PSM standard may be subject to EPA requirements under the
RMP rule. This can occur for several reasons. First, the lists of substances regulated are not identical; for
11 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/docmnents/chap-02-fmal.pdf.
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example, EPA lists aqueous ammonia in any solution that is 20 percent ammonia or more while OSHA covers
aqueous ammonia only at concentrations of 44 percent or more. Second, because 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 OSHA implements and enforces the standard
(about half the States). States with OSHA-approved workplace safety and health programs (referred to as State-
Plans) must implement and enforce standards that are at least as effective as federal OSHA standards for
protecting workers, and must also provide equivalent protection to State and local government employees as a
condition of OSHA approval. Last, regulatory exemptions are not identical; for example, the OSHA PSM
standard exempts normally unoccupied remote facilities, but the RMP rule does not.
1.1.2 Other Recent Rulemakings and Related Actions
In response to catastrophic chemical facility accidents such as the 2013 explosion at the West Texas
Fertilizer Company in West, Texas and others,12 in 2013, President Obama issued E.O. 13650, entitled
Improving Chemical Facility Safety and Security.13 This E.O. requires EPA and OSHA to consider whether and
how to update and modernize the RMP rule and PSM standard, among other requirements. Both EPA and OSHA
conducted public listening sessions14 and issued requests for information (RFIs) to seek input from the public and
the regulated community on potential revisions to the rules.15 Based on feedback received from the RFIs and
public listening sessions, EPA subsequently published a Notice of Proposed Rulemaking (NPRM) on March 14,
2016 (81 FR 13637). The 2017 amendments rule (Accidental Release Prevention Requirements: Risk
Management Programs Under the Clean Air Act) 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 17 years. The final amendments rule was published in the Federal Register on January 13,
2017 (82 FR 4594, hereafter referred to as the "2017 amendments rule").
In response to the 2017 amendments rule, EPA received three petitions for reconsideration from
stakeholders,161718 expressing concerns and requesting a delay or stay in the rule's implementation. On May 30,
2018, EPA published a proposed rule reconsidering the 2017 amendments rule. The final reconsideration rule
(Accidental Release Prevention Requirements: Risk Management Programs Under the Clean Air Act) was
published in the Federal Register on December 19, 2019 (84 FR 69834, hereafter referred to as the "2019
reconsideration rule").
1.1.3 Recent Events and Rationale Leading to the Final Rule
12 For more detail on the West Texas explosion and other accidents that led to the 2017 amendments rule (Accidental Release Prevention
Requirements: Risk Management Programs Under the Clean Air Act), see the 2017 amendments rule RIA.
13 https://www.wliitehouse.gov/the-press-office/2013/08/01/executive-order-improving-chemical-facilitv-safetv-and-secmitv.
14 In 2013 and 2014, as part of the E.O. 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 https://www.regulations.gov/search7filteFDHS-2013-
0075.
15 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).
16 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 U.S. LLP, Washington, DC. Document ID: EPA-HQ-OEM-2015-0725-0759 (RMP
Coalition petition).
17 The Chemical Safety Advocacy Group (CSAG) 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).
18 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).
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On January 20, 2021, President Biden issued E.O. 13990, Protecting Public Health and the Environment
and Restoring Science to Tackle the Climate Crisis.19 E.O. 13990 directed Federal agencies to review current
regulations and take action to address priorities established by the current Administration, including bolstering
resilience to the impacts of climate change and prioritizing environmental justice. The E.O. did not direct the
Agency to publish a solicitation for information from the public. However, on May 28, 2021 EPA issued a notice
of virtual public listening sessions and request for public comment to obtain information on the adequacy of
prior revisions to the RMP regulations including the 2017 amendments and 2019 reconsideration rules. The
virtual listening sessions were held on June 16 and July 8, 2021 and were attended by OSHA to foster continued
coordination with EPA. Commenters discussed revisions and updates to the prevention program, emergency
response requirements, information availability requirements, and regulated chemicals. Commenters also
discussed the importance of incorporating climate changes risks and impacts into the RMP regulations and
expanding the application of environmental justice.
The RMP regulations have contributed to the prevention and mitigation of chemical accidents in the
United States. Accident histories submitted with RMPs have shown a reduction in the frequency of accidents
since the beginning of the program. However, serious chemical releases from RMP-regulated processes have
continued. RMP data for 2011 through 2020, the most recent 10-year period with complete information, show
that each year an average 124 accidents occurred with RMP-reportable impacts. RMP data for 2016 through
2020, the most recent five-year period with complete information, averaged an annual 98 accidents with RMP-
reportable impacts. RMP-reportable accidents remain a significant concern to communities, particularly those
located near the perimeter of the facilities, and impose significant social costs annually. EPA believes that the
revisions to the RMP in this final rule will further protect human health and the environment from chemical
hazards through advancement of enhanced PSM.
Facilities subject to the RMP regulation pose significant risks to the public and the environment because
of the types and quantities of hazardous substances they store and use in chemical processes. These risks stem
from potential accidental chemical releases which can cause fires, explosions, and harmful vapor clouds.
Chemical accidents and their resulting impacts not only kill and injure people but can cause significant damage
to property, 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. Residents living nearby may need to shelter-in-place or evacuate. Properties
located near the accident may lose value because of the perceived risks posed by proximity to a facility that has
had an accident.
EPA expects the benefits of the final rule to include reductions in the numbers of people killed, injured,
and evacuated or otherwise inconvenienced by sheltering-in-place; reductions in the damage caused to property
onsite and offsite including product, equipment, and buildings; reductions in damages to the environment and
ecosystems; and reductions in emergency response and other resources diverted to protect people, extinguish
fires, and clean up affected areas. The final rule will also provide other benefits, such as increased public
information, leading to more efficient decisions in nearby property markets and regarding emergency response
preparedness. The final rule provisions reduce the probability of a catastrophic release. By reducing the chance
of an accidental release, the final rule also avoids expenditures on lawsuits and other transactions to address
resulting accidental harms.
Some of the final rule provisions target RMP facilities in close proximity to certain other RMP facilities
and/or RMP facilities that have had recent accidents. Both types of facilities increase the likelihood of exposures
to nearby communities to a future accident's offsite impacts. Because communities with environmental justice
19 https://www.wliitehouse.gov/briefing-room/presidential-actions/2021/01/20/executive-order-protecting-public-health-and-enviroiiment-
and-restoring-science-to-tackle-cliniate-crisis/
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concerns are over-represented in these nearby communities, the final rule provisions will provide proportionately
greater relief to historically marginalized fenceline communities than to the general population.
1.2 Organization of the Analysis
This RIA is organized as follows:
• Chapter 2 describes RMP provisions that EPA is adding or revising.
• Chapter 3 discusses the universe of regulated entities and the various divisions used in the analysis.
• Chapter 4 discusses the basis for cost estimates for each of the provisions and alternatives and presents
the unit costs.
• Chapter 5 presents the total estimated costs for each provision and for all provisions combined.
• Chapter 6 discusses the social benefits of the rule.
• Chapter 7 discusses the regulatory alternatives analyzed.
• Chapter 8 presents the small entity impacts analysis.
• Chapter 9 presents the environmental justice analysis.
• Chapter 10 discusses limitations of the analysis and conclusions.
• Chapter 11 discusses other analyses required under applicable statutes and E.Os.
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CHAPTER 2: Final Rule Provisions
This chapter presents a summary of the provisions in the final rule that EPA has determined impose new
costs. Total benefits of the final rule are addressed in Chapter 6. The final provisions include additions and
revisions to existing RMP requirements.
2.1 Summary of Provisions and Applicability to Private Sector Facilities
The RIA analyzed the following new requirements and revisions to current requirements:
2.1.1 New Prevention Program Provisions
New prevention program provisions include requirements for STAA, root cause analysis, third-party
audits, employee participation, and backup power for perimeter monitors.
The current RMP regulations do not require facilities to conduct a STAA. The STAA requirement in the
final rule includes multiple components: the initial evaluation to identify alternatives, a practicability assessment
to determine the costs and assess the reasonableness of implementing technology alternatives, and in some cases,
implementation of safer measures. The former two components are discussed under 2.1.1.1 and the
implementation component is discussed under 2.1.1.2.
2.1.1.1 STAA— (Revisions apply to §68.3 and §68.67)
Under the final rule, all facilities with Program 3 processes in NAICS codes 324 and 325 will be
required to conduct an initial evaluation of safer technologies and alternatives. Of those facilities, facilities that
have had an accident since their most recent process hazard analysis or that are located within one mile of
another facility with a covered process in NAICS code 324 or 325, will be required to also conduct a
practicability assessment.20 The final rule also requires that all facilities in NAICS 324 using HF in an alkylation
unit (approximately 45 facilities) conduct a practicability assessment to assess inherently safer alternatives to HF
alkylation, regardless of accident history or proximity to another NAICS 324- or 325-regulated facility. Because
EPA is requiring STAA only in sectors with the most frequent and severe documented and continuing accidents,
EPA expects the total burden of the STAA provision to be lower than the total burden that would have been
imposed by the 2017 amendments rule's proposed STAA provision (but removed in the 2019 reconsideration
rule), which would have applied more broadly.
2.1.1.2 STAA Implementation— (Revisions apply to §68.3 and §68.67)
Under the final rule, all facilities required to conduct a STAA practicability assessment (i.e., Program 3
NAICS 324 and 325 facilities that have had an accident since their most recent process hazard analysis, with an
HF unit in a NAICS 324 process, or located within one mile of another facility with a NAICS 324 or 325
process) are required to implement at least one passive measure at the facility, or an inherently safer technology
or design, or a combination of active and procedural measures equivalent to or greater than the risk reduction of
a passive measure. EPA is providing facilities with flexibility to choose either one or a combination of IST/ISD,
passive, active, or procedural measures, provided the choice reduces risk at least as much as a practicable passive
measure would achieve.
2.1.1.3 Root Cause Analysis— (Revisions apply to §§68.60 and 68.81)
A root cause analysis is a formal process to identify underlying reasons for failures that lead to
accidental releases. These analyses usually require staff trained in the technique. Under the current RMP rule,
facilities are required to conduct an incident investigation following an incident that resulted or reasonably could
have resulted in a catastrophic release. The final rule requires facilities to conduct a root cause analysis as part of
an incident investigation following an RMP-reportable accident. The new requirement will apply to all facilities
20 EPA is making RMP facility location information publicly available to allow facilities to identify and locate proximate facilities.
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with Program 2 and 3 processes that experience an RMP-reportable accident. There are approximately 100
accidents with onsite impacts per year in the baseline (see Exhibit 3-11).
2.1.1.4 Third-Party Audits— (Revisions apply to §§68.58 and 68. 79 and new §§68.59 and 68.80)
The current RMP rule requires facilities to conduct a compliance audit of Program 2 and Program 3
processes at least once every three years. The final rule, also applicable to Program 2 and Program 3 processes,
requires the next required compliance audit to be a third-party audit when any one of the following conditions
applies:
1. The facility has had an RMP-reportable accident; or
2. An implementing agency requires a third-party audit either due to conditions at the stationary
source that could lead to an accidental release of a regulated substance, or due to a previous third-
party audit that failed to meet the competency or independence criteria of §68.80(c).
EPA believes that these third-party audit provisions will help ensure that owners and operators of RMP
facilities objectively and adequately explore all opportunities to prevent or minimize accidental releases of
regulated substances to protect human health and the environment. EPA estimates that only a small number of
facilities will be subject to the third-party audit requirement each year.
2.1.1.5 Employee Participation— (Provisions apply to §68.83)
Under the current RMP rule, Program 3 process facilities" employee participation plans require the
owner or operator to consult with employees and their representatives on the conduct and development of
process hazards analyses and on the development of the other elements of PSM. The owner or operator must
provide employees and their representatives access to PHAs and to all other information required to be
developed under this rule.
The final rule revises §68.83 and other aspects of employee participation to require six new components:
1. Program 2 process facilities must develop written employee participation plans of action, which
detail employee roles in using reasonable judgment and communication procedures to identify, raise,
and address safety concerns. Facilities must also develop and implement a process for employees to
report on hazards and noncompliance and must provide employees and their representatives access
to hazard reviews and all other information required to be developed under this rule.
2. The Program 3 employee participation plan must include the consultation of employees and their
representatives regarding how to address, correct, resolve, document, and implement
recommendations of process hazard analyses, incident investigations, and compliance audits.
3. The Program 3 employee participation plan must include and ensure that effective methods are in
place so that employees knowledgeable in the process and their representatives have specific stop
work authorities based on a potential for a catastrophic release. The specific authorities must
include:
a. Recommending to the operator in charge of a unit that an operation or process be shut down,
partially or completely, based on the potential for a catastrophic release.
b. Allowing a qualified operator in charge of a unit to shut down, partially or completely, an
operation or process, based on the potential for a catastrophic release.
4. Program 3 employee participation plans must include a process for employees to report on hazards
and noncompliance.
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5. Program 2 and Program 3 process facilities must provide an annual written or electronic notice to
employees indicating RMP information is available.
6. Program 2 and Program 3 process facilities must provide training to inform employees, their
representatives, and management involved in the process of the details of the written employee
participation plan.
These employee participation provisions will ensure that owners and operators who have not fully
developed employee participation programs have additional measures in place to prevent and minimize
accidental releases of RMP-regulated substances. These new provisions will not impose a burden on facilities
that already have robust employee participation programs in place.
2.1.1.6 Backup Power for Perimeter Monitors— (Revisions apply to §§68.50 and 68.67)
Currently, many facilities voluntarily have backup power installed for perimeter monitors. The final rule
requires those facilities that have air control or monitoring equipment associated with prevention and detection
of accidental releases from RMP-regulated processes and that have identified power loss as a major hazard, to
install standby or backup power. EPA believes this will help ensure continuous monitoring so that potential
exposure to chemical substances can be measured during and following a natural disaster.
2.1.2 RMP Justifications
The final rule clarifies requirements for hazard evaluations to consider natural hazards and power
systems. It also requires justifications when facilities choose to decline certain recommendations.
2.1.2.1 Hazard Evaluation Amplifications— (Revisions apply to §§68.50 and 68.67)
The final rule requires that hazard evaluations explicitly address natural hazards and the risk of power
failure and standby or emergency power systems. EPA believes that because natural hazards and power loss
continue to be factors in RMP accidents and due to climate change present growing threats to process safety at
RMP facilities, a requirement to evaluate and control natural hazards should be explicitly stated in the RMP
regulation. Hazard evaluations will also have to explicitly define stationary source siting as inclusive of
processes, equipment, buildings within the stationary source, hazards posed by proximate stationary sources, and
accidental release consequences posed by proximity to the public and public receptors. The final rule will require
that RMPs explicitly include declined natural hazard, power loss, and siting evaluation recommendations and
their associated justifications.
2.1.2.2 Recognized and Generally Accepted Good Engineering Practices (RAGAGEP) gap analysis— (Revisions
apply to §§68.69 and 68.175)
The final rule requires that RMPs explicitly include declined PHA recommendations associated with
adopting practices from the most recent version of RAGAGEP and their associated justifications.
EPA assumes the clarifying amplifications will not impose a burden on facilities. EPA believes
including these declined recommendations and associated justifications will provide useful information about
potential hazards associated with a facility and will impose only a nominal burden on owners or operators.
2.1.3 Emergency Response
2.1.3.1 Community Notification of RMP Accidents— (Provisions apply to §§68.90 and 68.95)
The final rule will add a requirement that RMP facility owners and operators who designate themselves
as a non-responding facility, develop and implement, as necessary, procedures for informing the public and the
appropriate emergency response agencies about accidental releases of RMP-regulated substances. Responding
facilities should already have mechanisms and procedures in place in the baseline to notify the public through
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emergency response programs or plans.
EPA is also requiring that responding and non-responding facilities ensure that:
4. A community notification system is in place.
5. The public is promptly notified of an RMP accident release.
6. The notification provides appropriate timely data and information to local responders with the
current understanding and best estimates of the nature of the release.
EPA expects that these provisions, in combination with the currently required annual emergency
coordination meetings and notification exercises, will enhance coordinated notification to the public, improve
documented accountability for the notification process, and help ensure timely decisions about notification of
releases, particularly those with offsite impacts. The emergency response provisions apply to facilities with
Program 2 or 3 processes.
2.1.4 Information Availability
2.1.4.1 Information Availability— (revisions apply to §68.210)
The final rule requires all facilities to disclose certain chemical hazard information to the public residing,
working, or spending significant time within 6 miles21 of the facility in the language (either English or one of
two other major languages) used in the community as specified by the requester.22 These are new information
availability requirements. EPA is requiring owners and operators to maintain a record of requestors. The facility
or its parent company, if applicable, will also be required to provide ongoing notification through publicly
accessible means on three items:
1) The information that is available upon request for those members of the public,
2) How to request that information, and
3) Where to access information on community preparedness.
Facilities could provide this notification on a company website, at public libraries, in local papers, or via other
means appropriate for particular communities and facilities.
The information to be disclosed includes:
1. Names of regulated substances at the facility.
2. Safety Data Sheets (SDS) for all regulated substances at the facility.
3. Accident history information.
4. Declined recommendations and the justifications for declining them.
5. Emergency response program information.
6. List of scheduled exercises.
7. Local Emergency Planning Committee (LEPC) or local response agency contact information.
EPA believes these revised information availability provisions will improve information sharing within
communities, allow affected communities to obtain information from RMP facilities, and ensure information
availability in areas without LEPCs.
21 EPA believes this distance to be reasonable given that 90 percent of all toxic worst-case distances to endpoints are 6 miles or less, and
almost all flammable worst-case distances are less than 1 mile.
22 EPA plans to make RMP location information for the entire regulated community available online. Currently, the public can determine
whether a neighboring facility is an RMP facility through searching EPA's Envirofacts.
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2.2 Applicability to Government-owned Facilities and Entities
The final rule is applicable to local governments that own and operate RMP facilities (primarily water
and wastewater systems, but also some swimming pools23), to delegated agencies that implement the final rule,
and to LEPCs that coordinate with facilities.
2.3 Changes in the Final Rule RIA from the Proposed Rule RIA
The final rule RIA makes several changes from the proposed rule RIA in response to more recent data
availability, public comments, and differences between proposed and final regulatory requirements. The final
rule RIA updates all wage and other monetary assumptions, including monetized benefits, to use the more
recently available sources and presents results in 2022 dollars. The universe of facilities examined in the final
rule RIA remains the same as the universe in the proposed rule RIA. The final rule RIA updates or adds costs for
several provisions:
• Rule familiarization costs: updated assumptions on the number of hours required for Delegating
Implementing Agencies and most facilities to be consistent with LEPCs in response to public
comments.
• Third-party audits: Costs updated to reflect a change in the provision requiring third-party audits
after any accident.
• Initial Evaluation and Practicability Assessment: costs updated to reflect changes to the provision
requiring STAA initial evaluation for more facilities and the practicability assessment for certain
facilities that experience an accident since their most recent process hazard analysis. Updated cost
estimates to account for less effort required the second time a STAA analysis is completed.
• STAA Implementation: New cost for the provision now requiring certain facilities to implement one
or more measures that has up-to passive measure risk reduction.
• Public Disclosure: New cost added to capture translation and ID verification requirements.
• lustifications: New costs added to capture four justification requirements in RMP submissions for
RAGAGEP, Facility Siting, Natural Hazards, and Emergency Backup Power, which were not
previously costed in the proposed rule RIA.
• Emergency Backup Power for Perimeter Monitors: Updated generator cost assumptions and added
recurring operation and maintenance costs in response to public comments.
• Employee Participation Plan: Added a cost for training requirements in response to public
comments.
23 Swimming pools will not be regulated under RMP if they use or store chlorine below the threshold amount of 2,500 lbs. There have
been no RMP-reportable accidents from regulated swimming pools.
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CHAPTER 3: Universe of RMP Facilities and
Baseline Accident Costs
Recent data show that 11,740 facilities have filed current RMPs with EPA and are potentially affected
by the final rule. These facilities range from petroleum refineries and large chemical manufacturers to water and
wastewater treatment systems; chemical and petroleum wholesalers and terminals; food manufacturers, packing
plants, and other cold storage facilities with ammonia refrigeration systems; agricultural chemical distributors;
midstream gas plants; and a limited number of other sources that use RMP-regulated substances. This chapter
describes these facilities and how they are categorized for the purposes of the economic analysis.
3.1 Universe of RMP Facilities
Exhibit 3-1 presents the numbers of facilities according to RMP reporting as of December 31, 2020, by
industrial sector and chemical use. Exhibit 3-2 presents the number of facilities in each sector in the form of a
bar chart.
Exhibit 3-1: Number of Affected Facilities by Sector as of December 31, 2020.
Sector
NAICS Codes
Number of
facilities
Chemical Uses
Administration of
environmental quality programs
(i.e., governments)
92
10
Use chlorine and other chemicals for water
treatment
Water/sewage/other systems
(i.e., government-owned water)
2213 (Government-
owned)
1,439
Use chlorine and other chemicals for water
treatment
Agricultural chemical
distributors/wholesalers
11, 424 (except 4246,
4247)
3,315
Store ammonia for sale; some in NAICS 111
and 115 use ammonia as a refrigerant
Chemical manufacturing
325
1,502
Manufacture, process, store
Chemical wholesalers
4246
317
Store for sale
Food and beverage
manufacturing
311, 312
1,571
Use (mostly ammonia) as a refrigerant
Oil and gas extraction
211
719
Intennediate processing (mostly regulated
flammable substances and flammable
mixtures)
Other
21 (except 211), 23,
44, 45, 48, 491, 54,
55, 56, 61, 62, 71, 72,
81, 99
246
Use chemicals for wastewater treatment,
refrigeration, store chemicals for sale
Other manufacturing
313, 314, 315, 326,
327, 33
375
Use various chemicals in manufacturing
process, waste treatment
Other wholesale
421, 422, 423
39
Use (mostly ammonia) as a refrigerant
Paper manufacturing
321, 322
55
Use various chemicals in pulp and paper
manufacturing
Petroleum and coal products
manufacturing
324
156
Manufacture, process, store (mostly
regulated flammable substances and
flammable mixtures)
Petroleum wholesalers
4247
367
Store for sale (mostly regulated flammable
substances and flammable mixtures)
Utilities/water/wastewater
221 (Non-
government-owned
water)
519
Use chlorine (mostly for water treatment)
and other chemicals
Warehousing and storage
493
1,110
Use (mostly ammonia) as a refrigerant
Total
11,740
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Exhibit 3-2: Chart of Affected Facilities by Sector (2020).
* Governments means NAICS 92 facilities involved in administration of environmental quality programs. Government-owned
water means government-owned NAICS 2213 facilities involved in water, sewage, and other systems. Utilities/water/wastewater
means NAICS 221 facilities (including utilities, water, and wastewater) except government-owned water.
The RMP rule applies to processes at facilities with regulated substances above threshold quantities.
Processes are activities involving regulated substances including any use, storage, manufacturing, handling, or
onsite movement of such substances, or combination of these activities. In general, the cost of implementing the
rule provisions varies primarily by the complexity of the processes involved. Chemical manufacturers and
petroleum 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
employees, 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 cost
analysis, therefore, all facilities with NAICS 324 or 325 (petroleum and coal products manufacturing and
chemical manufacturing) processes are considered complex; all other facilities are considered simple.
3.1.1 RMP Data
The facility universe analyzed in the RIA is based on the RMP Database as of August 1, 2021 and
includes facilities active as of December 31, 2020.24 EPA used Microsoft Access queries and R code to pull and
analyze the data. The RMP Database includes information from each RMP submission, and identifies the
facility, its processes and their respective NAICS sectors and programs, any RMP-reportable accidents, as well
as other information reported in the RMP.
24 More detail on the RMP database, including access to the RMP database is available at https://www.epa.gov/nnp/accessing-nnp-data.
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To create the dataset of the universe of affected facilities, EPA selected from among the rows in the
Facility ID table for each EPA Facility ID, the row with the highest Facility ID without a deregistration date and
with a receipt date prior to 2021. This dataset was merged by Facility ID with the Processes table. To assign each
facility a NAICS sector and program level, EPA matched each facility to a process corresponding to that facility,
first from among the facility's complex processes (NAICS 324 or 325) and then by its highest program level. So,
if a facility has any complex processes, the facility was classified by the sector of one of those processes. Each
facility was assigned the highest program level of any of its processes. So, if a facility has any Program 3
processes, the facility was classified as Program 3.
3.1.2 Manual Adjustments
While both government-owned and non-government-owned NAICS 2213 facilities perform the same
functions, EPA expects that government-owned facilities will incur different burden hours than similar private
facilities. Therefore, to better assess the impacts on government-owned versus non-government-owned NAICS
2213 facilities, EPA reviewed all facilities categorized as NAICS 2213 to distinguish between private and
government ownership. EPA includes a category for government-owned NAICS 2213 facilities, which is
separate from the category for facilities that report as NAICS 92 government administration.
For this final rule, EPA explored alternative data sources to classify NAICS 2213 facilities as private or
government owned. EPA used its Facility Registry System (FRS) to crosswalk the data universal numbering
system (DUNS) numbers (unique nine-digit business identifiers) reported by facilities in their RMP with their
Water System ID for identification in EPA's Safe Drinking Water Information System (SDWIS) dataset. SDWIS
has information on registered water facilities and their ownership, so this crosswalk will allow EPA an
alternative dataset to establish ownership type for water facilities in RMP. Completing this exercise only
identified 731 facilities in SDWIS, a count that is lower than the number of facilities that identify as NAICS
2231 in their RMPs regardless of ownership. Reasons for the lower count could include DUNS numbers that are
inaccurately reported in RMPs, not all DUNS numbers having matches to Water System IDs in FRS, and NAICS
codes inaccurately reported in RMP submissions. Therefore, EPA relied on the manual adjustments performed
during the proposed rule stage to more accurately identify the facilities that are NAICS 2213 privately-owned
versus government-owned because searches using facility names provided a more accurate match.
3.1.2 Breakdowns Used in the Analysis
As explained in Section 1.1.1 Overview of the Risk Management Program, the RMP rule imposes
different requirements on facilities based on program levels of the facility's processes. Program 3 processes are
those that are not eligible for Program 1 and are subject to the OSHA PSM standard or are in certain NAICS
codes (refineries, a limited number of chemical manufacturers and pulp mills). Of the 4,769 processes in those
NAICS codes, 4,595 processes were at facilities that self-reported that they are subject to OSHA PSM.
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Exhibit 3-3: Number of Facilities by Program Level.
¦PI Facilities ¦ P2 Facilities ¦ P3 Facilities
A portion of Program 2 facilities (765 of 3,975) are publicly-owned water/wastewater treatment facilities
in States where OSHA (rather than the State) enforces OSHA rules.25 Because these facilities are publicly-
owned, their processes are considered Program 2. This contrasts with those not under public ownership (which
are Program 3), even though the processes are the same. The remaining Program 2 facilities are agricultural
distribution facilities that store anhydrous ammonia, utilities that use aqueous ammonia and other facilities that
store or use chemicals not subject to OSHA PSM.26
Exhibit 3-4 presents the number of facilities by sector and program level; publicly-owned
water/wastewater treatment systems (NAICS 2213) are listed as government-owned water, other government
facilities (NAICS 92) are listed as governments, and privately-owned and operated systems (NAICS 2213) are
listed under utilities/water (NAICS 221).
Exhibit 3-4: Number of Facilities by Sector and Program Level (2020).
Sector
NAICS Codes
PI
P2
P3
Total
Administration of environmental
quality programs (i.e., governments)
92
4
1
5
10
Water/sewage/other systems (i.e.,
government-owned water)
2213 (Gov't-owned)
6
786
647
1,439
Agricultural chemical
distributors/wholesalers
11,424 (except 4246, 4247)
3
2,635
677
3,315
Chemical manufacturing
325
54
63
1,385
1,502
Chemical wholesalers
4246
8
86
223
317
Food and beverage manufacturing
311, 312
3
3
1,565
1,571
Oil and gas extraction
211
300
31
388
719
Other
21, 23, 44, 45, 48, 491, 54, 55,
56, 61, 62, 71, 72, 81, 99
55
48
143
246
Other manufacturing
313, 314, 315, 326, 327, 33
67
65
243
375
25 See Section 1.1 History, for an explanation.
20 Some facilities that listed themselves as Program 2 have either selected the wrong program level on their RMP submission or have
incorrectly indicated that they are not subject to PSM, even though they handle OSHA PSM chemicals in quantities far above the OSHA
threshold. Because of errors in the other direction among the public systems (i.e., facilities in States not subject to PSM that listed
themselves as Program 3), the analysis did not attempt to correct the errors.
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Sector
NAICS Codes
PI
P2
P3
Total
Other wholesale
421, 422, 423
4
26
9
39
Paper manufacturing
321, 322
1
1
53
55
Petroleum and coal products
manufacturing
324
13
1
142
156
Petroleum wholesalers
4247
23
25
319
367
Utilities/ Water
221 (non-Gov't-owned water)
40
129
350
519
Warehousing and storage
493
79
75
956
1,110
Total
All
660
3,975
7,105
11,740
* Publicly-owned water/wastewater treatment systems (NAICS 2213) are listed as government-owned water. Other government
facilities (NAICS 92) are listed as governments. And privately-owned and operated systems (NAICS 2213) are listed under
utilities/water (NAICS 221).
3.1.2.1 Facilities Affected by the STAA Requirements
Applicability of the provision to conduct a STAA as part of the PHA is limited to processes in two
sectors (NAICS 324 and 325). These sectors have a history of a high frequency of accidental releases and were
selected because they represent complex processes that accounted for 43 percent of all RMP-reportable accidents
from 2016 to 2020.27 These sectors also have more costly accidents relative to other sectors, amounting to about
80 percent of all accident costs from 2016 to 2020.
STAA is generally a process to analyze a facility's current processes and practices to identify safer
alternatives to the current process operations. These can range from small changes - such as upgrading valves -
to large shifts such as substituting less toxic or volatile chemicals. Application of STAA for the final rule is
divided into three activities, two of which are consistent with prior EPA rulemakings involving STAA (2017
amendments rule and 2019 reconsideration rule): the initial evaluation to identify alternatives and a practicability
assessment to determine the costs and assess the reasonableness of implementing the change in light of other
costs and programs. This final rule adds a third activity related to the implementation of measures identified
from the STAA.
The requirement to conduct the initial evaluation of the STAA applies to all Program 3 facilities with
processes in NAICS 324 and 325. This is an increase in the facilities affected by this provision from the
proposed rule which proposed requiring an initial evaluation only of facilities with Program 3 regulated
processes in NAICS 324 (petroleum and coal products manufacturing) and 325 (chemical manufacturing)
located within one mile of another RMP-regulated facility process in NAICS 324 and 325, and all regulated
facilities in NAICS 324 using HF in an alkylation unit. California regulations28 already require a hierarchy of
controls analysis for refineries with HF unit processes, which is a similar, but more involved, evaluation of
IST/ISD than required by the provision in this final rule. Likewise, Contra Costa County, California regulations
and New Jersey regulations already require a review of IST/ISD by refineries and chemical facilities sufficient
for compliance with the STAA initial and practicability assessment requirements. Therefore, EPA excludes the
two California refineries with HF units, Contra Costa County's four refineries and nine chemical manufacturing
facilities, and New Jersey's two refineries and 21 chemical manufacturing facilities from the analysis of initial
evaluation costs in the final rule analysis. Exhibit 3-5 presents the number of processes and facilities by facility
size for the two sectors subject to the initial evaluation of STAA.
27 August 2021 RMP Database.
28 Cal. Code Regs. tit. 8, § 5189.1(1), Process Safety Management for Petroleum Refineries, Hierarchy of Hazard Controls Analysis.
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Exhibit 3-5: Number of Processes and Facilities Subject to STAA Initial Evaluation
(Complex Program 3 facilities, excluding California refineries with HF units, Contra Costa County
facilities, and New Jersey facilities) by Sector and HF Unit Presence (2020)
Sector
NAICS
Processes
Facilities
Processes per Facility
Petroleum and Coal Products
Manufacturing (no HF)
324
863
92
9.4
Petroleum and Coal Products
Manufacturing (with HF)
324
672
42
16.0
Chemical Manufacturing
325
2,799
1,355
2.1
Total
4,363
1,489
2.9
The requirements to conduct a practicability assessment and implement safer technology apply only to
Program 3 facilities with processes in NAICS 324 and 325 located within one mile of another facility with a
NAICS 324 or 325 process, or facilities that have had an accident since their most recent process hazard analysis
or have an HF alkylation unit process regardless of proximity to another NAICS 324 or 325-regulated facility.
Compared to the proposed rule, this requirement adds some facilities based on having had an accident since their
most recent process hazard analysis. As mentioned above, California refineries with HF units, Contra Costa
County facilities, and New Jersey facilities already must meet or exceed STAA practicability assessment
requirements. Therefore, EPA excluded the two California refineries with HF units, two refineries and seven
chemical facilities in Contra Costa County, and two refineries and nine chemical facilities in New Jersey from
the analysis of practicability assessment costs. EPA expects the cost of a STAA practicability assessment to vary
by facility size, type, and number of processes. Exhibit 3-6 presents the number of processes and facilities by
facility size for the two sectors subject to this provision.
Exhibit 3-6: Number of Processes and Facilities Subject to STAA Practicability Assessment
(Complex Program 3 facilities within one mile of another complex facility, with an accident,
or with an HF unit outside California, excluding Contra Costa County and New Jersey facilities) by
Facility Size and Sector (2020).
Sector
NAICS
FTE
Processes
Facilities
Processes per Facility
Petroleum and Coal Products
Manufacturing (no HF)
324
0-99
22
11
2.0
Petroleum and Coal Products
Manufacturing (no HF)
324
100+
543
36
15.1
Petroleum and Coal Products
Manufacturing (with HF)
324
100+
672
42
16.0
Chemical Manufacturing
325
0-99
417
293
1.4
Chemical Manufacturing
325
100+
826
216
3.8
Total
2,480
598
4.1
*Note: No refineries with 0-99 FTEs have an HF unit.
EPA anticipates that some facilities will conduct practicability studies to address alternatives considered
in multiple initial evaluations, Therefore, EPA broke down the facilities by NAICS (324 or 325) to analyze the
cost of the practicability assessment for the STAA provision. While the number of processes and facilities
subject to the STAA provision may fluctuate over time and recognizing that the total number of RMP facilities
has declined over the past two decades, EPA makes the simplifying assumption that the numbers of facilities
subject to the provision are constant across all years in the analysis and equal to the number as of December 31,
2020.
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By complying with the Contra Costa County's more stringent requirement to implement IST/ISD
measures, the county's facilities will already meet or exceed the final rule's STAA implementation requirement.
Therefore, EPA excludes two refineries and seven chemical facilities in Contra Costa County from the analysis
of STAA implementation costs. EPA expects the costs of implementation to vary by facility size, type, and
number of processes. Exhibit 3-7 presents the number of processes and facilities by facility size for the two
sectors subject to the provision.
Exhibit 3-7: Number of Processes and Facilities Subject to STAA Implementation
(Complex Program 3 facilities within one mile of another complex facility, with a recent accident,
or with an HF unit, excluding Contra Costa County facilities) by Facility Size and Sector (2020).
Sector
NAICS
FTE
Processes
Facilities
Processes per Facility
Petroleum and Coal Products
Manufacturing (no HF)
324
0-99
22
11
2.0
Petroleum and Coal Products
Manufacturing (no HF)
324
100+
557
37
15.1
Petroleum and Coal Products
Manufacturing (with HF)
324
100+
702
45
15.6
Chemical Manufacturing
325
0-99
425
300
1.4
Chemical Manufacturing
325
100+
830
218
3.8
Total
2,536
611
4.2
*Note: No refineries with 0-99 FTEs have an HF unit. The 702 processes at the 45 refineries with HF units and 557 processes at 37
refineries with 100+ FTEs without HF units (excluding processes at two Contra Costa County refineries) add up to 1,259 processes
at 82 refineries with 100+ FTEs (excluding processes at two Contra Costa County refineries).
3.1.2.2 Facility Universe Breakdown for Provisions that Apply After an RMP-Reportable Accident
The root cause analysis requirement will apply to P2 and P3 facilities as part of an incident investigation
following an RMP-reportable accident. The third-party audit analysis requirement will apply to P2 and P3
facilities that have had an RMP-reportable accident since the last audit or when an implementing agency requires
a third-party audit due to certain criteria at the facility.
For the purposes of this analysis, EPA analyzed only the RMP-reportable accidents, which are those
accidents with reported impacts29, between 2016 and 2020. Because accidents are low probability but high-cost
events, EPA used five-year annual averages to smooth over year-to-year fluctuations to estimate the number of
facilities that EPA expects to conduct third-party audits and root cause analyses. EPA uses average annual
accident estimates throughout the analysis. Exhibit 3-8 presents the five-year average annual number of RMP-
reportable accidents for the 2016-2020 period by program level and facility sector. These annual average
accidents for Program 2 and Program 3 facilities represent the numbers of annual root cause analyses EPA
expects to be required under the final rule for RMP-reportable accidents. EPA estimates the cost of the root
cause analysis to differ by type of facility, so the number of accidents is presented by facility type.
29 The RMP program requires facilities to report accidents that have certain impacts such as fatalities, injuries, evacuations, property
damage and so on - these are labeled RMP-reportable accidents. Facilities sometimes report accidents with no RMP-reportable impacts,
which are labeled nonreportable accidents. EPA has dropped the nonreportable accidents from the analysis.
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Exhibit 3-8: RMP-Reportable Accidents by Sector for Root Cause Analysis (2016-2020).
Average Annual RMP-Reportable Accidents by Program Levels and Facility Type (2016-2020)
Accidents
Program Level
Simple (Non-gov't)
Complex 324
Complex 325
Government
1
2.4
0.6
0.2
0.0
2
10.2
0.0
0.2
2.6
3
38.4
10.8
30.4
1.8
The third-party audit provision will apply to all P2 and P3 facilities that have had an accident or when an
implementing agency requires it. Exhibit 3-9 presents the five-year average annual number of RMP-reportable
accidents at P2 and P3 RMP facilities for the 2016-2020 period. These annual average accidents for Program 2
and Program 3 facilities represent the numbers of annual third-party audits for RMP-reportable accidents EPA
expects to be required under the final rule. EPA expects the cost of a third-party audit to vary by facility size and
type, and therefore separates the number of accidents by the facility's number of FTEs, whether the facility has
complex processes, and whether the facility is government-owned.
Exhibit 3-9: RMP Facilities with RMP-Reportable Accidents and Subject to Third-party Audits (2016-
2020).
Average Annual RMP-Reportable Accidents at P2 and P3 Facilities 2016-2020 by Facility Type and Size
Facility Type
FTEs
Complex
Simple
(non-gov't)
Government
0-19
1.6
15.4
1.8
20-99
7.6
8.0
1.2
100+
32.2
26.0
0.6
3.1.2.3 Universe Breakdown for Perimeter Monitors without Backup Power
The current RMP rule requires Program 2 facilities to perform a Hazard Review every five years and
Program 3 facilities to perform a more formal PHA (relative to Program 2) every five years. EPA is amplifying
power loss as a hazard in the regulatory text for PHAs/Hazard Reviews. The final rule will require facilities that
already have installed perimeter monitors and have identified power loss as a major hazard but have not installed
backup power for the monitors, to add backup power. Exhibit 3-10 provides the numbers of those facilities.
Exhibit 3-10: Facilities Requiring Backup Power for Perimeter Monitors by Program Level.
Program Level
Number of Facilities
P2
18
P3
374
3.1.3 Government Entities Affected by the Rule
The final rule will affect State and local government entities including entities that own RMP facilities
and 2,473 LEPCs and 13 State- and county-delegated implementing agencies. The final rule will impose both
direct and indirect costs. Direct costs are associated with activities required by RMP facilities owned by
government entities. Indirect costs are associated with 1) RMP facilities owned by government entities, LEPCs,
and delegated implementing agencies reviewing the final rule, and 2) LEPCs coordinating with facilities
regarding community notifications.
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Most government-owned facilities affected are water or wastewater treatment facilities, but some large
swimming pools will be covered as well. Most of the government entities are cities, but the universe includes
larger special districts (e.g., the Metropolitan Water District of Southern California) as well as some Federal
facilities. Of the 1,111 government entities directly affected, 905 have one RMP facility, 125 have two RMP
facilities, 43 have 3 facilities, 19 have 4 facilities, and 19 have 5 or more. Not all facilities owned by a
government entity are located in the entity's geographic region. There are fewer than 1,200 "parent" entities
listed for publicly-owned systems. Because facilities do not always list the owner or they list variations of the
owner's name, it is not possible to develop an accurate estimate of the number of public entities affected by the
rule. However, clearly, some larger cities and counties have many facilities. For example, the City of El Paso,
Texas, owns and operates at least 16 facilities.
3.2 Number and Costs of Baseline Accidents
Owners or operators of facilities subject to the RMP rule must submit certain information on accidents
that occurred over the previous five years if they resulted in onsite or offsite deaths, injuries, or property damage,
or if they led to an evacuation, shelter-in-place event, or offsite environmental damage. Due to a lack of
alternative data describing accident impacts more comprehensively, EPA reviewed the impacts reported to the
RMP facility database for accidents during 2016 through 2020 (the last year with complete data) to develop
baseline accident cost information.3" This five-year period was chosen to reflect the most recent trends regarding
RMP accidents.
As a representation of baseline accident impacts and costs, these data are less than complete. Many accident
costs are not required to be reported and thus are not reflected in the data. These are discussed in detail in
Chapter 6 and include responder costs, transaction costs, property value reductions, unmonetized costs of
evacuations and sheltering-in-place, the costs of potential health risks from exposure to toxic chemicals, and
productivity losses, among others. In addition, some accidents that occurred at RMP facilities during the five-
year period were not reported to EPA because the facility either closed after the accident, decommissioned the
process, or removed the regulated substance from the process involved in the accident before it was required to
submit a report to the RMP Database. For example, the Philadelphia Energy Solutions Refining and Marketing
LLC facility in Philadelphia, PA had a fire and explosions in the PES Girard Point refinery HF alkylation unit on
June 21, 2019, which resulted in the release of HF.31 This facility deregistered the affected process before the
deadline for their subsequent RMP report. Due to the omission of such accidents and the omission of the cost
categories listed in the beginning of this paragraph, the five-year baseline may under-represent the number and
magnitude of RMP chemical accidents.
The RMP accident database contains information on the initiating event and contributing factors for each
accident. The accident reporting instructions are that the impacts reported should be attributable to, or resulting
from, direct exposure to toxic concentrations, radiant heat, or overpressures from accidental releases or from
indirect consequences of a vapor cloud explosion from the accidental release. EPA reviewed RMP-reportable
accidents based on industry information and other resources, such as reports by the CSB, to attempt to ensure
that only impacts attributable to the release of a regulated substance were included in the analysis of baseline
damages.
3.2.1 Two Damage Cases
30 The accidents included those that occurred at facilities that may have subsequently deregistered from the RMP Program. As such, some
accidents analyzed may have occurred at facilities no longer subject to the RMP rule. Offsetting these, however, is the registration of new
facilities after 2020.
31 For a description of damages from this case see Section 3.2.1 CSB Report, Fire and Explosions at Philadelphia Energy Solutions
Refinery Elydrofluoric Acid Alkylation Unit, Factual Update, October 16, 2019, https://www.phila.gov/media/20191204161826/US-CSB-
PES-Factual-Update.pdf.
Page 34 of 167
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To illustrate the nature of damages from accidents at RMP facilities, this section describes the impacts of two
recent RMP-reportable accidents. To compile the following descriptions, EPA reviewed a variety of sources
including media reports and final U.S CSB reports.
Philadelphia Enersv Solutions (PES) Refinery Fire and Explosions
On Friday June 21, 2019, at approximately 4:00 AM, a release occurred at the Philadelphia Energy
Solutions (PES) refinery in Philadelphia, Pennsylvania. Propane and toxic hydrofluoric acid (HF) vapor had
escaped from a ruptured pipe in the PES refinery alkylation unit. The vapor found an ignition source and caused
a fire and three explosions. Three fragments of a large vessel flew into the air with a 19-ton piece flying across
the Schuylkill River and landing on its bank. Two other very large fragments landed on the refinery property. An
estimated 5,239 pounds of HF were released during the incident, with 1,968 pounds contained with water spray
within the unit and 3,271 pounds released into the atmosphere.32
HF is an extremely toxic chemical that is lethal at 30 ppm. HF can travel for miles and cause blindness,
serious burns, permanent injuries, or death. It is covered by the RMP when more than 1,000 pounds are used in a
process. The HF alkylation process at the PES Refinery was covered by the RMP Program at the time of the
incident.
Three field operators were in the alkylation unit when the incident occurred; two were in a blast resistant
local control room and one was just outside the room. Upon seeing the vapor cloud ignite soon after the release,
one worker opened the door to the local control room, which blew the field operator back into the room and to
the floor. Flames entered the doorway and then were extinguished. Ultimately, the operators opened the door and
escaped. The fire was extinguished the following day, June 22.33 Hazardous materials crews remained on the
scene until the incident was declared under control on September 24, 2019.34
A population of 117,000 lived within one mile of the PES refinery. Figure 3-1 shows the neighborhoods
(including parts of downtown Philadelphia) within one, three, and five miles of the facility.35
32 CSB 2022a. Fire and Explosions at Philadelphia Energy Solutions Refinery Hydrofluoric Acide Alkylation Unit. Investigation Report.
2022. October 11. https://www.csb.gov/philadelphia-energv-solutions-pes-refmerv-fire-and-explosions-/
33 Ibid.
34 Maykuth, Andrew. 2020. "Refinery to reimburse city $1.8 million - Philadelphia Energy Solutions says it will repay the costs of
emergency response to a fire and explosion that led to its closure." Philadelphia Inquirer. April 18.
35 CSB. 2022a.
Page 35 of 167
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Downtown Philadelphia
1-Mile Distance
3-Mile Distance
5-Mile Distance
Figure 3-1: The image is from an overhead satellite. The facility is outlined in blue. (Google, annotated by
CSB) (Source: CSB. 2022a., p. 31)
The social costs of this incident included costs internal and external to the refinery. Costs were imposed
on nearby residents, emergency responders, the city of Philadelphia, and refinery employees and owners, among
others. While this list is not exhaustive, EPA has identified the following social costs:
Page 36 of 167
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Five workers experienced minor injuries/6
• Nearby residents reported feeling their homes shake due to the explosions, saw black smoke, and
smelled "terrible odors".37
• Costs were imposed on the city of Philadelphia and regional emergency responders. Fire fighters from
the Philadelphia Fire Department and the local Industrial Firefighting Group responded to the incident,
as well as a PES emergency response team. More than 120 firefighters and more than 50 pieces of
equipment supplied by the Philadelphia Fire Department were used in the response. One firefighter
reported breathing problems and received treatment. The Philadelphia Department of Public Health Air
Management Services Lab collected and tested air samples. Hazardous materials crews were at the site
through September 24. The following year in April 2020, bankrupt PES publicly stated that it would
reimburse the city $1.8 million for the costs of the emergency response.38'39,4"
• Residents living east of the fire were asked to shelter in place starting at 5:41AM on the morning of the
release. Shortly after, the shelter-in-place area was narrowed to nearby neighborhoods east, north, and
south of the refinery. The order was lifted at 7:07AM.41
• Portions of Interstate 76 and Philadelphia's Piatt Bridge were temporarily closed.42 43
• The HF alkylation unit was severely damaged. Marsh Specialty (2022) estimated the total losses faced
by the refinery from property damage, debris removal, and cleanup at $300 million at the time of the
loss. This estimate does not include losses due to "business interruption, extra expenses, workforce
injuries or fatalities, and any liability claims/' 44
In a state legislative committee hearing several weeks after the incident, there was testimony that an
inspector from the Philadelphia Health Department measured an elevated level of HF gas near the refinery
during the incident but dismissed the reading as false. Written testimony by a Drexel University environmental
engineering professor asserted that the measurement was cause for additional protective measures for nearby
residents and yet no actions such as requesting that residents shelter-in-place for a longer period, were taken. In
response, the city's health department testified that the gas meter was not properly calibrated and that both the
refinery and the US EPA checked the test and confirmed that no HF was in the air.45
The refinery never re-opened and instead, declared bankruptcy and shut down. A proposal to redevelop
the property as a warehousing and "life sciences" hub was recently being considered with assurances to the
community of a safer facility.46,47,48
36 CSB. 2022a.
37 Miller, Jeanette and Sylvia Bennett. 2022. "3 years after refinery fire, we're still worried - Residents remain concerned about benzene
emissions as redevelopment continues at the site." Philadelphia Inquirer. June 21.
38 CSB. 2022a.
39 Maykuth, Andrew. 2020.
40 Sutton, Joe and Madeline Holcombe. 2019. "A fire at a Philadelphia oil refinery sparked an explosion felt for miles." CNN. June 21.
https://www.cnn.com/2019/06/21/us/philadelphia-refinerv-fire/index.html
41 Ibid.
42 Ibid.
43 McCoy, Craig R. and William Bender. 2019. "Despite explosions and fire, the city dodged a catastrophe." Philadelphia Inquirer. June
30.
44 Marsh JLT Specialty," 100 Largest Losses in the Hydrocarbon Industry," 27th ed., March 2022.
https://www.marsh.eom/us/industries/energv-and-power/insights/100-largest-losses/100-largest-losses-report-download.html.
45 Maykuth, Andrew. 2019. "Safety Questioned - False gas reading at refinery fire cited by experts as a need for better protections."
Philadelphia Inquirer. July 25.
40 Schmidt, Sophia. 2022. "Community benefits agreement talks to start in 2023 for Philly refinery redevelopment." WHYY. November
18. https://whvv.org/articles/pes-refinerv-redevelopment-communitv-benefits-agreement/
47 Sutton, Joe and Madeline Holcombe. 2019.
48 CSB. 2022a.
Page 37 of 167
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As a result of the incident, the CSB issued recommendations that EPA develop a program prioritizing
and emphasizing inspections of HF alkylation units and that EPA revise the RMP program to require a safer
technology and alternatives analysis of HF alkylation units to evaluate the practicability of inherently safer
technologies.49
Texas Petroleum Chemical (TPC) Group Chemical Plant Explosions and Fire
On November 27, 2019, the TPC Group Chemical Plant Butadiene Unit in Port Neches, Texas
experienced a series of explosions caused by a release of butadiene, a highly flammable chemical. The release
was tied to an out-of-service pump in the butadiene process unit and an accumulation of popcorn polymer. The
polymer expanded exponentially, increasing pressure, and ultimately caused piping to rupture. Once the
butadiene was released, it ignited and caused an explosion followed by multiple subsequent explosions. The blast
was felt up to 30 miles away. The explosions propelled process towers through the air that landed on site. Fires
burned for weeks afterward. 5"
Butadiene is a hazardous chemical due not only to its flammability, but also its toxicity and reactivity.
High concentrations of butadiene vapor can affect the central nervous system, in extreme cases potentially
causing unconsciousness, respiratory depression, and death. It is covered by the RMP when 10,000 pounds or
more are used in a process. The TPC Group Chemical Plant was covered by the RMP Program at the time of the
incident.51
Three workers were present in the butadiene process unit at 12:54 AM on November 27, 2019, two of
whom witnessed a pipe rupture that allowed butadiene to escape. They exited the unit immediately following the
release of butadiene. At 12:56 AM, the vapor cloud ignited, causing an explosion that caused severe damage to
piping and equipment in the unit and multiple fires. Known subsequent explosions occurred at 2:40 AM and at
1:48 PM. Workers manually isolated areas of the facility, containing initial fires. Smaller contained fires burned
for more than a month. On January 4, 2020, the TPC Port Neches Operation Incident Command reported that all
fires were extinguished.52
Approximately 18,000 people lived within one mile of the TPC Group Chemical facility. Figure 3-2
shows the neighborhoods within one, three, and five miles from the facility.53
49 CSB. 2022b. Recommendations: Philadelphia Energy Solutions (PES) Refinery Fire and Explosions (5 Recommendations). October 11.
https://www.csb.gov/recommendations/7F Investigationld=3604
50 CSB. 2022c. Popcorn Polymer Accumulation, Pipe Rupture, Explosions, and Fires at TPC Group Chemical Plant Butadiene Unit.
Investigation Report. 2022. December.
51 Ibid.
52 Ibid.
53 Ibid.
Page 38 of 167
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Figure 3-2: The image is from an overhead satellite. The facility is outlined in blue. (Google, annotated by
CSB) (Source: CSB 2022c, p. 17)
The social costs of the incident included damages sustained by the nearby community as well as the
facility itself. Affected parties included workers; nearby residents, businesses, and schools; ships and other users
of the Sabine-Neches Waterway; emergency responders; Jefferson County; and facility owners, among others.
EPA has identified the following, not necessarily exhaustive, list of social costs:
• Jefferson County Emergency Management responded.54,55
• Federal EPA personnel responded.
U.S. Chemical Safety and Hazard Investigation Board. 2022c. Popcorn Polymer Accumulation. Pipe Rupture, Explosions, and Fires at
TPC Group Chemical Plant Butadiene Unit. Investigation Report. 2022. December.
Dick, Jacob, Kim Brent, Monique Batson, Ronnie Crocker, and Kaitlin Bain. 2019. "SE Texas town rocked by chemical plant
explosion." Houston Chronicle. November 27. https://www.chron.com/news/article/The-latest-Explosion-at-Port-Neches-plant-
14866093.php
56 Kennedy, Merrit. 2019. "Massive Explosion Rips Through Texas Chemical Plant." National Public Radio. November 27.
https://www.npr.org/2019/ll/27/783263942/massive-explosion-rips-tlirough-texas-chemical-plant
Page 39 of 167
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• Firefighters from local agencies including the Port Neches Fire Department and from industry including
TPC Port Neches Operations fire team, sprayed water on the blaze to keep nearby equipment cool until
the fire "burned itself out."57,58
• Texas Commission on Environmental Quality responded to the initial explosion and conducted handheld
air monitoring. They stated that volatile organic compounds were released and could be harmful in high
concentrations.59
• Three workers (two TPC employees and one contractor) were briefly hospitalized and experienced
minor injuries.6"
• Five nearby residents reported injuries mostly related to shattered glass.61,62
• A mandatory evacuation was ordered at 3:28 pm on the day of the incident for a four-mile radius around
the facility, affecting over 50,000 residents of the cities of Port Neches, Groves, Nederland, and Port
Arthur. This was the afternoon prior to Thanksgiving Day - Thursday, November 28th. There was also a
curfew set between 10PM and 6AM. Both orders were lifted on November 29lh.fi'1'fi4'6" Prior to the
evacuation orders, shelter-in-place orders had been issued for a smaller area near the plant.66
• State law enforcement officers enforced the mandatory evacuation and curfew.67
• Residents were warned not to touch any debris that they might discover as it could be from the
explosions and could contain asbestos and/or be potentially contaminated. Residents were asked to
contact TPC who would test it, remove it and dispose of it.68
• The explosion reduced the use of the Sabine-Neches Waterway which carries the third largest volume of
cargo in the nation. The US Coast Guard issued a Marine Safety Information Bulletin on Nov 27th that
established a safety zone on the river from which vessels and people were prohibited from entering
without special permission. The prohibition ran from Nov 27th to Nov 29th.69
• The large plumes of smoke from the fire were potential sources of respiratory irritation according to
Troy Monk, TPC's safety director.7"
• Local, state, and Red Cross officials opened shelters and sent in supplies for the evacuees.71
• Port Neches schools did not reopen as scheduled following their Thanksgiving vacation because they
were cleaning, inspecting, and repairing buildings and having debris removed. School opening was
delayed by a week, from Dec 2nd to Dec 9th.72
• A shelter-in-place was ordered at 6PM on Dec 4th by the Port Neches Fire Chief for the 50,000 residents
of the City of Port Neches. This was followed by a voluntary evacuation order. The orders were in
response to concerns over air quality after elevated levels of butadiene were detected. Health effects of
57 CSB. 2022c.
58 Dicketal. 2019.
59 Kennedy. 2019.
60 CSB. 2022c.
61 Ibid.
02 CBS News. 2019. 60,000 people forced to evacuate after explosions at Texas chemical plant. November 27.
https://www.cbsnews.com/news/explosion-texas-plant-port-neches-chemical-plant-texas-tcp-fire-lanxess-charleston-soutli-carolina-
emergency-today/
63 CSB. 2022c.
64 CBS News. 2019.
05 Toal, Margaret, Nicholas Bogel-Burroughs and Manny Fernandez. 2019. "Thousands Evacuated in Texas After Explosion at Port
Neches Chemical Plant." The New York Times. November 27. https://www.nvtimes.com/2Q19/ll/27/us/texas-explosion-port-neches-
tpc.html
00 Dick et al. 2019.
67 Ibid.
68 CSB. 2022c.
69 Ibid.
70 Toal et al. 2019.
71 Ibid.
72 CSB. 2022c.
Page 40 of 167
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concern included dizziness, nausea, headaches, or throat and eye irritation. Both orders were lifted on
December 5th.73'74
• Environmental damage included fish or animal kills, water contamination and soil contamination.75
• Onsite property damage was estimated at $380m to $450m.76,77
• Offsite property damage occurred to nearby homes and businesses, including blown out windows and
doors and ripped -off roofing shingles of nearby homes and other buildings. Damages were estimated at
$150m.78,79
During the incident, Brent Roy of the United Steelworkers Union, which represented workers in the
facility, stated that if the tanks closest to the fire overheated, they would feed the ongoing fire and that other
nearby tanks posed yet more serious threats. The direction of the wind affected that threat.80 Jeff Branick of the
Jefferson County Office of Emergency Management explained that the blast that propelled a tower "like a
missile" led to concerns that if another large piece of debris were to go into the facility's tank farm, the results
could lead to catastrophe, hence the order to evacuate.81
On June 1, 2022, TPC filed for Chapter 11 bankruptcy.82 The processing units are no longer operating
and instead the facility is in operation as a terminal.83
3.2.2 Onsite RMP-reportable Accidents in the Five-year Baseline
Exhibit 3-11 presents the five-year data (2016 to 2020), by year, for onsite impacts of accidents. Deaths
and injuries are either to employees, public responders, or the public.
Exhibit 3-11: Onsite Impacts by Year: 2016-2020.
Year
Impact
Accidents
Employee
Deaths
Employee
Injuries
Public
Responder
Deaths
Public
Responder
Injuries
Public
Injuries
Public
Deaths
Value of
Property
Damage
(millions, 2022
dollars)
2016
127
4
136
0
3
0
0
$505.15
2017
109
3
108
6
1
20
0
$262.24
2018
92
2
140
0
0
0
0
$862.33
2019
100
1
110
0
1
0
0
$611.00
2020
60
2
56
0
0
0
0
$32.16
Annual
Average
97.6
2.4
110
1.2
1
4
0
$454.58
Total
RMP-
Reportable
488
12
550
6
5
20
0
$2,272.89
* Property damage values were obtained from the EPA RMP Database of self-reported information from regulated facility owners or
operators and adjusted to 2022 dollars. All other values were also obtained from the EPA RMP Database.
73 CSB. 2022c.
74 The Guardian. 2019. Texas: city residents urged to evacuate after chemical plant explosions. December 5.
https://www.theguardian.com/us-news/2019/dec/05/texas-port-neches-evacuation-air-qualitv-chemical-plant-explosions
75 TPC Group - Port Neches Operation, RMP Plan, received by EPA December 10, 2020
70 Marsh ILT Specialty. 2022.
77 TPC Group. 2020. '
78 Kennedy. 2019.
79 CSB. 2022c.
80 Dicketal. 2019.
81 Toaletal. 2019.
82 CSB. 2022c.
83 TPC Group. 2020.
Page 41 of 167
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Twelve onsite employee fatalities occurred over the five-year analysis period, which is an annual
average of 2.4 employee fatalities. Each accident with a fatality resulted in a single employee fatality, while the 6
public responder fatalities were from one accident. No deaths among the public occurred during this five-year
period.
The current RMP rule does not require facilities to disaggregate reported onsite injuries by severity.
However, under the RMP accident history requirements, an RMP-reportable accident injury means "any effect
on a human that results either from direct exposure to toxic concentration; radiant heat; or overpressure from
accidental releases or from the direct consequences of a vapor cloud explosion (such as flying glass, debris, or
other projectiles) from an accidental release and that requires medical treatment or hospitalization/'
Medical treatment means "treatment, other than first aid, administered by a physician or registered
professional personnel under standing orders from a physician"' (40 CFR 68.3). For some accidents for which
accident reports could be located from other sources, serious injuries (i.e., those requiring hospitalization) ranged
from none (e.g., SGL Carbon LLC July 2017 and East Dubuque Nitrogen Fertilizers June 2017 where all
workers were treated and released) to at least 29 reported injuries (Tyson Fresh Meats 2018); in the largest of
that sample of accidents (Valero Benicia Refinery 2017), 68 civilians received medical treatment.84 Injuries
described in reports varied from those that were treated with first aid alone at the scene, to severe burns and
disability. Although the RMP rule limits RMP-reportable injuries to those that require medical treatment other
than first aid, in some accidents, minor injuries treated with first aid have been reported. Onsite property damage
reports include a variety of damages including to buildings, machinery, equipment and other plant infrastructure.
Approximately $0.4 billion of the $2.3 billion in property damage reported occurred in accidents that had no
other RMP-reportable impacts onsite or offsite.
3.2.3 Offsite RMP-Reportable Impacts in the Five-year Baseline
Exhibit 3-12 presents the reported offsite impacts for the baseline including members of the public or
emergency responders who were injured or killed offsite, were required to evacuate or shelter-in-place, or who
incurred property damage as a result of the accidents. Of the 488 RMP-reportable accidents, 133 had RMP-
reportable offsite impacts.
Exhibit 3-12: Offsite Impacts by Year: 2016-2020.
Year
Impact
Accidents
with Offsite
Impacts
Number
of
Deaths
Hospital
Visits
People
Undergoing
other Medical
Treatment
Number
of People
Evacuated
Number
of People
Sheltered
in Place
Value of
Property
Damage
(millions, 2022
dollars)
2016
27
0
11
3
1,668
13,430
$4.67
2017
31
0
6
94
7,866
32,011
$0.06
2018
30
0
4
19
3,942
469
$0.35
2019
27
0
6
15
51,002
38,284
$173.33
2020
18
0
4
3
261
1,614
$0.14
Annual
Average
26.6
0
6.2
26.8
12,948
17,162
$35.71
84 After Two Major Refinery Accidents, Valero and Benicia Take Steps To Work Better Together
https://www.kaed.org/news/11756861/after-two-maior-refmerv-accidents-valero-and-benicia-take-steps-to-work-better-together
Page 42 of 167
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Year
Impact
Accidents
with Offsite
Impacts
Number
of
Deaths
Hospital
Visits
People
Undergoing
other Medical
Treatment
Number
of People
Evacuated
Number
of People
Sheltered
in Place
Value of
Property
Damage
(millions, 2022
dollars)
Total
RMP-
Reportable
133
0
31
134
64,739
85,808
$178.55
In the five-year baseline, the total number of offsite individuals evacuated as well as the value of
property damage are skewed by a single accident in 2019 in Port Neches, TX, the second damage case described
above in Section 3.2.1. Two years show high numbers for sheltering-in-place. Two accidents in 2019 with
approximately 12,000 people sheltering apiece accounted for the high 2019 number. The accident at Benicia, CA
in 2017 accounted for 28,000 of that year's shelter-in-place numbers as well.85
3.2.4 Distribution of Accident Impacts Across Sectors
In the five-year baseline, fatal accidents occurred primarily in the petroleum refining and chemical
manufacturing sectors, which accounted for eight of the 12 employee fatalities. The number of accidents per
facility is highest in these three sectors. Exhibit 3-13 presents a breakdown of RMP-reportable accidents, deaths,
and injuries by sector, including accidents with no impacts. Accidents with no impacts are included in the exhibit
because RMP requirements can also help prevent and mitigate non-RMP-reportable accidents (see Chapter 6).
The food and beverage manufacturers and warehouses are generally ammonia refrigeration systems, and the
agricultural chemical distributors store ammonia for use as a fertilizer. The right-most column of Exhibit 3-13
shows the number of facilities by NAICS code that had more than one RMP-reportable accident between 2016
and 2020.
Exhibit 3-13: Number of RMP-reportable and Non-reportable Accidents,
and Numbers of Fatalities and Injuries by Sector, 2016-2020.
Sector (NAICS)
Total 5-
Year
Accidents
(Reportable
and Non-
Reportable)
Average
Number
of
Accidents
per
Facility
Onsite
Worker or
Public
Responder
Fatalities
Onsite
Worker or
Public
Responder
Injuries
Onsite
Public
Injuries
Number of
Facilities
with >1
Accident
324: Petroleum and Coal
Products Manufacturing
137
0.88
2
59
0
14
325: Chemical
Manufacturing
316
0.21
2
177
0
29
311, 312: Food/Beverage
Manufacturers
158
0.10
6
147
0
3
322: Paper Manufacturing
38
0.70
0
30
0
5
313, 314, 315, 326, 327, 33:
Other Manufacturing
45
0.12
1
19
0
6
11, 42491: Agriculture and
Agricultural Chemical
Wholesale
102
0.03
0
17
0
3
85 https://www.kaed.org/news/11756861/after-two-maior-refiiierv-accidents-valero-and-bemcia-take-steps-to-work-better-togetlier
Page 43 of 167
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Sector (NAICS)
Total 5-
Year
Accidents
(Reportable
and Non-
Reportable)
Average
Number
of
Accidents
per
Facility
Onsite
Worker or
Public
Responder
Fatalities
Onsite
Worker or
Public
Responder
Injuries
Onsite
Public
Injuries
Number of
Facilities
with >1
Accident
4246: Chemical Wholesale
36
0.11
0
10
0
2
4247: Petroleum Wholesale
7
0.02
0
1
0
0
4244, 4245: Other
Agricultural Wholesale
7
0.03
0
1
0
0
493: Warehouse
33
0.03
2
28
0
2
211: Oil/Gas exploration
45
0.03
0
22
20
3
2213: Water/POTW
81
0.11
4
13
0
6
2211, 2212: Electric and Gas
Utilities
5
0.04
1
2
0
0
Other
143
0.06
0
29
0
0
Total
1,023
0.09
18
555
20
70*
* Adding Number of Facilities with >1 Accident for each sector equals 73, which exceeds the Total of 70 because some facilities were
counted in multiple sectors.
3.2.5 Monetized Costs of Chemical Accidents
While the RMP Database provides values of property damage, it includes only counts of fatalities, non-
fatal injuries, evacuations, and the number of people required to shelter-in-place. EPA estimated the values of
these impacts to better understand the magnitude of reported accident impacts during the five-year baseline. To
monetize fatalities, EPA applied the value of statistical life (VSL) recommended in EPA's Guidelines for
Preparing Economic Analysis (2010) (hereafter the Guidelines). For non-fatal injuries, EPA gathered data on
hospital costs from the U.S. Department of Health & Human Services (HHS) Agency for Healthcare and
Research and Quality Data (2020).86 Finally, for evacuations and shelter-in-place events, a value of labor time
was estimated using data from the Bureau of Labor Statistics (BLS) (2022) and the U.S. Census (2022).87
3.2.5.1 Fatalities and Injuries
Fatalities were valued using the Guideline's VSL of $7.4 million (2006 dollars) inflated to $10.4 million
(2022 dollars). In principle, valuation of injuries includes multiple components. The Guidelines explain that the
willingness to pay (WTP) to reduce the risk of experiencing an illness is the preferred measure of value for
morbidity effects and cites Freeman (2003). As described in Freeman (2003), WTP consists of four components:
• "Averting costs" to reduce the risk of illness.
• "Mitigating costs" for treatments such as medical care and medication.
• Indirect costs such as lost time from paid work, maintaining a home, and pursuing leisure activities.
• Less easily measured, but equally real, costs of discomfort, anxiety, pain, and suffering88.
80 http: //hcupnet. ahrq .gov.
87 For time valuation guidelines, see: https://www.epa.gov/environmental-economics/epa-valuing-time-handbook-2020. BLS data is from:
http://www.bls.gov/news.release/ecec.t01.htm. Census data is from: https://www.census.gov/data/tables/2022/demo/income-povertv/p60-
276.html.
88 Freeman III, A.M. 2003. The Measurement of Environmental and Resource Values: Theory and Methods. 2nd Ed. Washington, D.C.:
Resources for the Future.
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EPA had available data to estimate only the components identified in the second bullet, "Mitigating
costs" for treatments such as medical care and medication. The cost categories in bullets 1, 3 and 4 are not
included in EPA's estimates of the value of injuries and therefore, may result in an underestimate of monetized
accident costs. To value onsite injuries and offsite hospitalizations, the analysis reviewed the accident data to
determine the percentages of the accidents that involved explosions and fires, and the release of toxics. The
analysis then transferred the HHS data on the current costs for hospitalizations for poisoning (other than by
medicinal substances) to injuries from toxic releases; for burns to injuries from fire; and for open wounds, to
injuries from explosions. Because the costs for open wounds and poisoning were close ($49,430 and $44,820,
respectively), the analysis used the average of these two values for onsite injuries from toxic releases and
explosions; the cost for burns was $96,000. The analysis then created a weighted value of an onsite injury based
on the percentage of burn-related injury versus other impacts (fires were involved in 8 percent of the injury
incidents; open wounds were assumed to be the remainder of injury costs). This weighted value was
approximately $50,000.
The analysis used the cost of hospitalization for poisoning (rounded to $45,000) for hospitalizations
associated with offsite injuries because in the five-year baseline, these injuries were usually related to exposure
to toxic chemicals. For medical treatment other than hospitalization (offsite), the analysis used an estimate of
$1,000, which is above the $750 per person paid to the 14,000 people who sought medical treatment from the
Richmond refinery fire, and below the average emergency room charge.89 Offsite treatments that do not involve
hospitalization for exposure to fumes usually involve relatively low-cost treatments (e.g., oxygen, eye washes,
skin washes).
The $50,000 total cost estimate for onsite injuries has several limitations. As mentioned above for all
injuries, hospital costs are only one of four categories of social costs incurred. Due to a lack of data, costs could
not be estimated for the other categories which could be substantial including the value of lost time from work
and the value of discomfort, anxiety, pain and suffering. However, as an estimate of hospital costs, it is an over-
estimate for an unknown percentage of the injuries onsite that did not require hospitalization and may not
involve any medical costs or for injuries and toxic exposures that led to hospitalization and were minor enough
that the person was released within a day (the HHS cost estimates are based on a 3-day stay for poisonings and
injuries and an 8-day stay for burns). In the opposite direction, however, the $50,000 cost estimate is an
underestimate for those workers who were severely injured and for whom the medical costs will certainly have
involved lengthy hospital stays or more than hospitalization, e.g., costs associated with further medical treatment
as well as physical and occupational therapy or nursing home care.
89 HHS estimates the average hospital charge per emergency department visit was $5,587 in 2020 and the average hospital cost per
emergency department visit was $757 per visit ("http://hcupnet.ahrq.gov ). Charges differ from costs because they are based on prices for
services set by the health care provider before any discounts.
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3.2.5.2 Evacuations and Shelter-in-Place Events
The five-year baseline data do not provide any basis for estimating the time involved in the average
evacuation or sheltering-in-place. EPA assumes sheltering-in-place is less disruptive than an evacuation. To
estimate costs for evacuations and sheltering in place, the analysis assumed the value of time of $36.66 per
hour,9" that sheltering required 4 hours91, and that evacuations required 8 hours.92
3.2.5.3 Summary of Monetized Accident Impacts
The dominant monetized element of RMP facility RMP-reportable accidents for the most recent 5 years
of data is onsite property damage, followed by offsite property damage. The total monetized five-year cost of the
accidents is around $2.7 billion. Of that amount, $2.5 billion was caused by onsite impacts largely attributed to
property damage and fatalities. The offsite property damage derived largely from the damage case described
above that occurred in Port Neches, TX in 2019 causing $153 million of offsite property damage.
Exhibit 3-14: Average Impacts per Year and Accident: 2016-2020.
5-Year Total
Average/Year
Average/Accident
Onsite
Fatalities
18
3.6
0.037
Injuries
575
115
1.178
Property Damage
$2.3 billion
$454.6 million
$4.66 million
Offsite
Fatalities
0
0
0
Hospitalizations
31
6.2
0.064
Medical Treatment
134
26.8
0.275
Evacuations
64,739
12,948
132.662
Sheltering in Place
85,808
17,162
175.836
Property Damage
$179 million
$35.7 million
$0.37 million
The monetized cost of accidents shown in Exhibit 3-15 for the period 2016 to 2020 should be viewed in
the context of monetized costs of RMP accidents for other time periods. EPA analyses for two prior RMP
rulemakings, the 2017 amendments rule and the 2019 reconsideration rule, estimated monetized baseline
damages using the same categories as were used for Exhibit 3-15. For those analyses, EPA estimated monetized
baseline damages for the 10-year period from 2004 to 2013 and for the three-year period from 2014 to 2016.
90 EPA assumes the value of time equals the value of an average worker's after-tax wage and voluntary benefits
(https://www.epa.gov/environmental-economics/epa-valuing-time-handbook-2020'1. BLS data estimate the September 2022 mean hourly
wage at $28.88 across all workers. BLS data estimate that wage is 6% and voluntary benefits are 23.9% of mean total compensation. EPA
estimates that mean voluntary benefits equal 34.6% of mean wage by dividing 23.9% by 69%. See:
http://www.bls.gov/news.release/ecec.t01.htm. EPA estimates the income tax share of pretax income from 2022 Census data as: (median
household income - post-tax median household income) / median household income = ($70,784 - $65,345) / $70,784 = 7.7%. See:
https://www.census.gov/data/tables/2022/demo/income-povertv/p6Q-276.html. EPA estimates the value of time per hour as $28.88 - 7.7%
x $28.88 + 34.6% x $28.88 = $36.66.
91 The shelteringduration assumption is consistent with that used in the amendments rule RIA. In addition, CDC suggests sheltering-in-
place in response to a chemical accident will be "a few hours" but recognizes that every emergency is different.
https://emergencv.cdc.gov/planning/Shelteringfacts.asp.
92 The evacuation duration assumption is consistent with that used in the amendments rule RIA. CDC data from the 1999-2008 Hazardous
Substances Emergency Events Surveillance (HSEES) suggested that evacuations can last from a few minutes to 84 days, with a median
duration of 2 hours and an average duration of 11 days (https://www.cdc.gov/mmwr/pdf/ss/ss6402.pdf). Another study by Kim and Cho
(2020) models evacuations completing in 5 hours https://pubmed.ncbi.nlm.nih.gov/33339315/.
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EPA has re-estimated unit damage costs for these prior time periods.93 The new estimates apply the same set of
assumptions used for the current final rule analysis. However, the underlying RMP data on property damages
and reportable accidents is subject to being updated with more recent data years after an accident has occurred.
The higher values for the monetized costs of accidents from 2004 to 2013 and 2014 to 2016 compared to the
2017 amendments rule and 2019 reconsideration rule reflect these changes in data. Most notably, subsequent
adjustments to the value of property damages primarily drove the higher costs of accidents. The estimates for the
two prior time horizons are presented in 2022 dollars and appear in Exhibit 3-16.94
Exhibit 3-15: Monetized Accident Costs including Average per Year and per Accident for
2016-2020 (millions, 2022 dollars).
Unit Value
5-Year
Total
Average/Year
Average/Accident
Median/Accident
Onsite
Fatalities
$10.4
$187.9
$37.57
$0.38
$0.00
Injuries
$0,050
$28.75
$5.75
$0.06
$0.05
Property Damage
$2,273
$454.58
$4.66
$0.00
Onsite Total
$2,489.49
$497.90
$5.10
$0.05
Offsite
Fatalities
$10.4
$0.00
$0.00
$0.00
$0.00
Hospitalizations
$0,045
$1.40
$0.28
$0.0029
$0.00
Medical Treatment
$0,001
$0.13
$0.03
$0.0003
$0.00
Evacuations*
$0,000
$18.99
$3.80
$0.0389
$0.00
Sheltering in
Place*
$0,000
$12.58
$2.52
$0.0258
$0.00
Property Damage
$178.55
$35.71
$0.37
$0.00
Offsite Total
$211.66
$42.33
$0.43
$0.00
Total
$2,701.14
$540.23
$5.54
$0.05
*The unit values (cost per person) are $293 for evacuations and $147 for sheltering-in place, so when presented in rounded $ millions, the
value in the table is zero.
** Large offsite property damage is influenced by high offsite consequences reported from the 2019 TPC Group Explosion and Fire in
Port Neches, TX (see: https://www.csb.gov/tpc-group-explosion-and-fire/ .
93 To obtain these estimates, EPA re-estimated unit damage costs for the prior time periods by applying the same set of assumptions used
for the current final rule analysis and updating dollars to 2022. In particular, EPA re-estimated the costs assuming a fatality is valued at
$10.4 million instead of $8.6 million (using the BEA GDP deflator), hospitalization costs of $45,000 instead of $36,000, and BLS mean
hourly wage rates of $28.88 instead of $22.65. Previously, mean hourly wage was estimated as the cost per hour to shelter-in-place or
evacuate. Relying on updated guidance, this final rule analysis uses mean hourly wage plus voluntary benefits less taxes, which is
estimated at $36.66. For 2004 to 2013, estimated monetized damages from RMP facility accidents are $473.2 million (2022$) on average
per year; for 2014 to 2016, estimated monetized damages are $441.7 million (2022$) on average per year. In total, over the 2004 to 2020
time period, the average pr year is $482.8 and the average per accident is $3.4 million (2022$). EPA also updated accident data which can
be continuously updated in RMP tilings. This resulted in differences in the raw accident data between the December 31, 2020 RMP data
used in this final rule and RMP data used in the amendments rule and reconsideration rule RIAs.
94 For discussion of these estimates, see Chapter 6 in the Amendments Rule RIA. Regulatory Impact Analysis 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
Ave., NW (Mail Code 5104A), Washington, DC 20460. February 14, 2016. Also see Chapter 6 in the Reconsideration Rule RIA,
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 Ave., NW (Mail Code 5104A),
Washington, DC 20460. November 18, 2019.
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Exhibit 3-16: Monetized Accident Costs including Average per Year and per Accident
for 2004-2013 and 2014-2016 (millions, 2022 dollars)
2004-2013
2014-2016
Unit
Value
10-Year
Total
Average
per
Year
Average
per
Accident
3-Year
Total
Average
per
Year
Average
per
Accident
On site
Fatalities
$10.4
$741.0
$74.1
$0.4
$135.7
$45.2
$0.33
Injuries
$0.05
$109.9
$11.0
$0.07
$33.2
$11.1
$0.08
Property
Damage
$3,767.9
$376.8
$2.3
$1,136.9
$379.0
$2.7
On site Total
$4,618.7
$461.9
$2.8
$1,305.8
$435.3
$3.1
Offsite
Fatalities
$10.4
$10.4
$1.0
$0,006
$0
$0
$0
Hospitalizations
$0,045
$10.3
$1.0
$0,006
$1.1
$0.4
$0,003
Medical
Treatment
$0,001
$15.9
$1.59
$0,010
$0.03
$0.01
$0.0001
Evacuations*
$0.0
$11.6
$1.2
$0,007
$2.2
$0.7
$0.01
Sheltering-in-
Place*
$0.0
$60.4
$6.0
$0.04
$5.7
$1.9
$0.01
Property
Damage
$15.1
$1.5
$0.01
$10.4
$3.5
$0.0
Offsite Total
$113.3
$11.3
$0.07
$19.4
$6.5
$0.0
Total
$4,732.0
$473.2
$2.9
$1,325.1
$441.7
$3.2
*The unit value is $293 for evacuations and $147 for sheltering in place, so expressed in rounded millions, the value in the table is $0.
The estimates of monetized accident damages for the two prior time periods are somewhat lower than
for the most recent five-year period; for example, the average per year is $473.2 million for 2004 to 2013 and is
$441.7 million for 2014 to 2016. The average per accident is $2.9 million for 2004 to 2013 and is $3.2 million
for 2014 to 2016. In total over the 2004 to 2020 time period the average per year is $482.8 and the average per
accident is $3.2 million. Contributing factors to the higher values appearing in Exhibit 3-15 estimated for the
most recent five-year period are the high property damage and number of evacuations from the TPC Group
Chemical Plant explosion and fire in Port Neches, TX in 2019.
3.2.6 Unquantified and Unmonetized Baseline Damages
Building on the accident impacts required to be reported by RMP facilities, EPA has monetized some of
the baseline costs of chemical accidents. However, there are many other important impact and cost
categories of accidents that EPA was unable to monetize. These include:
o Damages related to major catastrophic releases
o Potential health risks from exposure to toxic chemicals
o Lost productivity at affected facilities
o Emergency response costs
o Transactions costs from potential subsequent legal battles
o Property value losses in nearby neighborhoods
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o Environmental damage
o Unquantified costs of evacuation and sheltering-in-place events.
Each of the categories listed above is explained in detail in Chapter 6, Section 6.2.
3.3 Limitations
While it is standard practice for EPA to assume that every facility subject to the RMP rule has registered
with EPA and filed an RMP, EPA recognizes that assumption may not be accurate. EPA and delegated
implementing agencies search for and occasionally identify RMP facilities that have failed to submit RMPs.
Historically, relatively few of these "non-filers" have been found, but EPA is unable to determine the full extent
of non-compliance. In addition, EPA recognizes that the RMP Database may include facilities that are no longer
operational after December 31, 2020, but failed to follow the requirements to deregister.
The numbers of RMP facilities and processes are expected to change over the period of analysis because
firms will grow, shrink, close, or open in the near or distant future. Despite these expected changes and other
limitations, the analysis relies on the number and nature of RMP facilities and processes in the RMP Database as
of December 31, 2020, using the August 1, 2021, RMP Database as a constant estimate of future RMP
facilities/processes. EPA selected this database version to reflect the most recent information about RMP facility
numbers and characteristics and because facilities are required to report accidents within six months; therefore, a
cutoff date of August 1, 2021, should include all facilities reporting accidents as of December 31, 2020.
However, some facilities may have not reported their accidents as they are required to do.
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CHAPTER 4: Costs of Final Rule Revisions
This chapter outlines the assumptions EPA used to estimate the incremental costs of the final rule
revisions to the RMP. This RIA does not estimate the baseline costs incurred to comply with the current RMP
regulations. Baseline costs are not necessary to estimate incremental costs for this rule. Baseline costs include
costs to comply with the current RMP regulations and have been accounted for in previous RMP RIAs and
therefore have not been repeated here.95
The Agency has quantified and monetized incremental costs of the final SCCAP rule where possible.
The time frame of analysis is 10 years. As several of the rule elements are required once in a five-year period,
EPA included a time span long enough to capture two five-year periods. Specific cost assumptions are outlined
for each rule provision below. The analysis employs 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 FTEs, 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.
4.1 Analysis Baseline
This analysis estimates only the incremental impacts of the final rule for those provisions that impose
new costs. Components of the Hazards Evaluation Amplification and the Emergency Response provisions
impose no new burden because they codify existing industry practice or RMP requirements. The final rule
revises regulatory text for Program 2 and Program 3 hazard evaluations to explicitly address both natural hazards
and standby or emergency power systems. The revised regulatory text for Program 2 and Program 3 hazard
evaluations also explicitly defines stationary source siting as inclusive of the placement of processes, equipment,
and buildings within the facility, the hazards posed by proximate facilities, and the accidental release
consequences posed by proximity to the public and public receptors. These requirements reflect existing industry
practice, and therefore, EPA assumes that these hazard evaluation amplifications will impose no new costs.
The final rule also revises emergency response provisions. The additional provision revises regulatory
text to require facilities to develop and implement, as necessary, procedures for informing the public and the
appropriate emergency response agencies about accidental releases of RMP-regulated substances. Under current
regulatory requirements, responding and non-responding facilities should already have mechanisms and
procedures in place to notify the public through their emergency response programs or plans, or through
coordination with local responders. Therefore, EPA does not estimate any new costs associated with these
components of the emergency response provisions. EPA does quantify the cost to ensure that a community
notification system is in place to warn the public within the area threatened by a release. Further discussion can
be found later in this chapter.
4.2 Wage Rates
The Agency used the BLS May 2022 Occupational Employment and Wage Statistics (OEWS)96 to
construct a weighted wage rate for different occupational categories that will be affected by the final rule. 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 analysis updates
95 Previous RMP RIAs include the 2019 reconsideration rule RIA (EPA-HQ-OEM-2015-0725-2089, available at:
https://www.regulations.gov/docmnent/EPA-HO-QEM-2015-0725-2089 , 2017 amendments rule RIA (EPA-HQ-OEM-2015-0725-0734),
available at: https://www.regulations.gov/docmnent/EPA-HO-OEM-2015-0725-Q734 , and the 1996 "Economic Analysis in Support of
Final Rule on Risk Management Program Regulations for Chemical Accident Release Prevention, as Required by Section 112(r) of the
Clean Air Act" EPA-HQ-OAR-2004-0365-0066 (available at: https://www.regulations.gov/document/EPA-HO-OAR-2004-0365-0Q66'l.
90 See https://www.bls.gov/oes/2022/mav/oes nat.htm.
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wages rates used in the proposed rule RIA which were based on BLS May 2020 OEWS. The weighted wage
rates for complex facilities (NAICS 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 representing sectors 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. BLS wages were then adjusted to account for fringe
benefits and overhead. Fringe benefits include payments to cover items such as paid leave, supplemental pay,
insurance, and retirement. Overhead includes resources to cover items such as office space and administrative
personnel issues. Applying the December 2022 national average benefit ratio of 0.45 97 and an overhead cost ratio
not inclusive of benefits of 0.3, the Agency multiplied the wage rates for each BLS Occupation Title by a factor
of 1.75 to create a fully loaded wage rate.98 After loaded wage rates were established for each industry, they
were combined to form a weighted average based on the prominence of each industry within its universe of
facilities, either simple or complex. Exhibit 4-1 presents the wage rates EPA used in the analysis.
Exhibit 4-1: Weighted-Average Loaded Hourly Wage Rates (2022 Dollars).
Labor Category
Simple Facilities
Complex Facilities
Management
$110.70
$137.52
Corporate Management
$102.02
$136.70
Attorneys
$150.79
$205.84
Engineers
$74.33
$99.12
Production Staff
$43.21
$66.71
Local Responders
$72.30
$72.30
Source: https://www.bls.gov/oes/2022/mav/oes nat.htm and
http://www.bls.gov/news.release/ecec.nrO.htm.
4.3 Rule Familiarization
RMP facility staff will spend time to review the final rule and determine which provisions apply to their
facility. Most of the final rule provisions revise current requirements rather than introducing completely new
provisions. Many provisions apply only after an RMP-reportable accident, e.g., root cause analysis. Still Others,
such as the STAA, are expected to take time to understand; although they apply to a limited number of facilities.
As such, EPA has adopted a methodology that assigns labor hour estimates based on facility types to reflect that
certain facilities will have to dedicate more time to familiarize themselves with rule provisions that apply only to
them.
EPA projects that the time facilities spend to review the final rule and determine which provisions apply
will be consistent with the time they spent to review the 2017 amendments rule because the number and content
of provisions are similar. EPA projects that all facilities with simple processes will need five hours to review the
rule as will the few complex facilities in Program 1 and Program 2. Complex facilities in Program 3 are
projected to spend 292 hours reviewing the rule. LEPCs and delegated State and local implementing agencies are
projected to spend five hours reviewing the rule. The hours for delegated State and county implementing
agencies are increased to five hours from four in the proposed rule to create consistency with LEPCs. Exhibit 4-2
presents the unit burden hour and cost estimates for rule familiarization.
97 BLS Employer Costs for Employee Compensation. For December 2022, Table 1 shows that for civilian workers, on average for the
nation, fringe benefits were 31.0% of total compensation, and 44.9% of wages.
98 For details explaining this approach, please see Elandbook on Valuing Changes in Time Use Induced by Regulatory Requirements and
Other EPA Actions, National Center for Environmental Economics, EPA-236-B-15-001 December 9, 2020.
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Exhibit 4-2: Estimated Unit Burden and Cost for Rule Familiarization (2022 Dollars).
Facility Type
Labor Hours
Facility
Cost
Managers
Corporate
Mgmt.
Attorneys
Engineers
Production
Simple
5
0
0
0
0
$553
PI andP2: Complex
5
0
0
0
0
$688
P3: Complex
20
48
12
87
125
$28,744
LEPCs
5
0
0
0
0
$553
Delegated Implementing
Agencies
5
0
0
0
0
$553
4.4 Prevention Program Provisions
4.4.1 STAA: Initial Evaluation and Practicability Assessment
STAA is generally a process to analyze a facility's current processes and practices to determine whether
there are safer alternatives to the current operating practices. These can range from small changes - such as
upgrading valves - to large changes such replacing toxic or volatile chemicals with less toxic or volatile
substitutes.
The final rule and this RIA divide the STAA process into three parts:
1. The initial evaluation to identify and document alternatives.
2. A practicability assessment to determine the practicability of implementing inherently safer
alternatives identified through the initial evaluation and to assess the reasonableness of
implementing the change.
3. Implementation of at least one passive measure, or an inherently safer technology or design, or a
combination of active and procedural measures equivalent to or greater than the risk reduction of
a passive measure.
The STAA provision will require facilities with Program 3 regulated processes in NAICS 324
(petroleum and coal products manufacturing) and 325 (chemical manufacturing) to conduct the initial evaluation
of the STAA as part of their PHA, which occurs every five years. An initial evaluation and documentation is
required of all facility processes. EPA believes that some facilities may already regularly conduct evaluations but
has taken the conservative approach of assuming that all facilities subject to the STAA provision will conduct
the initial evaluation for all processes as a result of the final rule. Following the initial evaluation, EPA is
requiring that facilities with Program 3 processes in NAICS 324 and 325 that are either located within one mile
of another RMP-regulated facility process in NAICS 324 and 325 or had an RMP-reportable accident since their
most recent PHA (i.e., in the past five years), and all regulated facilities in NAICS 324 using HF in an alkylation
unit, conduct a practicability assessment if the initial evaluation determines the existence of inherently safer
alternatives.
EPA expects a practicability assessment to be conducted only when warranted by the outcome of an
initial evaluation; i.e., where the initial evaluation has identified risk reduction or risk management strategies
applicable to the process at issue. EPA also anticipates that some facilities will conduct practicability studies to
address alternatives considered in multiple initial evaluations. Consequently, some complex firms are assumed to
conduct practicability studies that address up to 12 different alternatives. EPA is retaining the estimates of the
hours required to conduct an initial evaluation from the 2017 amendments rule RIA and updating the costs to
2022 dollars. EPA estimates that the initial evaluation will require a total of 738 hours (all engineering labor) for
NAICS 324 facilities" and a total of 130 hours (20 hours of management, 0.5 hours of corporate management,
99 Labor hours taken from average unit cost estimate submitted by Public Comment EPA-HQ-OEM-2015-0725-0579 provided by AFPM.
EPA derived labor hours from the unit cost estimate provided by the commenter using standard wage rates.
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3.5 hours of attorney time, 82.5 hours of engineering, and 23.5 hours of production staff support) for NAICS 325
facilities.1"" See Exhibit 4-5 below.
The technical practicability assessment considers the extent of process redesign, its engineering
implications, and possible costs of implementing inherently safer technologies identified in the initial evaluation.
To estimate the cost of the practicability assessment, referred to in some literature and comments as a feasibility
study, EPA maintains the approach it developed for the amendments rule RIA. That approach is to identify
"reference" STAA projects for the sectors affected by the provision, estimate costs of the reference projects, and
apply a percentage to the project cost to calculate the practicability assessment cost. Public comments received
on the proposed amendments rule provided practicability assessment cost information specifically for STAA
projects. This information was provided by American Water Works Association (AWWA), American Fuel &
Petrochemical Manufacturers (AFPM), American Petroleum Institute (API), and Chemical Safety Advocacy
Group (CSAG). EPA also identified sources examining feasibility studies of mining projects including
Mackenzie and Cusworth (2007)1"1. Since the amendments rule was promulgated, EPA identified an additional
paper, McLeod (2021)1"2, which summarizes lessons learned about practicability studies from the literature but
does not provide additional cost data. EPA was unable to locate new information on practicability assessment
costs or those costs in relation to project costs. Thus, EPA adopts the same 1.2 percent of project costs that was
estimated for the amendments rule RIA.1"3
The approach to estimating the costs of practicability assessments identified relevant reference projects
for each affected sector and cost estimates for each reference project and then applied the 1.2 percentage
estimate to project costs. EPA assumes Program 3 facilities already assess the practicability of some potential
alternatives. Hence, the reference projects reflect the addition of inherently safer and a few other alternatives in a
facility's practicability assessment as a result of the final rule. To estimate the cost of reference projects, EPA
gathered new data combined with data used for the amendments rule RIA. Several commenters on the proposed
amendments rule RIA provided estimates of the costs of potential STAA projects. AWWA offered cost estimates
for four STAA projects (see Exhibit 4-3 below and Table 4-10 in the comments, p. 4-21).104 The water industry
will not be affected by the final rule STAA provision, but EPA used these project costs to benchmark similar
reference project costs for the chemical manufacturing sector.
Exhibit
-3: AWWA Comment on Estimated Project Costs (2016)
Disinfection
Capital Costs
Technology
(millions, 2022 $)
Hypochlorite
$2.3
Chlorine Dioxide
$1.1
Ultraviolet
$14.7
Ozone
$29.6
100 Labor hours taken from the midpoint of the high and low labor hour estimates submitted by Public Comment EPA-HQ-OEM-2015-
0725-0594 made by CSAG. EPA used the midpoint of the commenter's high and low labor hour estimates to represent the labor burden of
small/medium complex facilities.
101 Mackenzie, W. and N. Cusworth. 2007. "The Use and Abuse of Feasibility Studies." Project Evaluation Conference. Melbourne, Vic,
19-20 June 2007. Noort, D J and Adams, C, 2006. Effective mining project management systems, in Proceedings International Mine
Management Conference, pp 87-96 (Hie Australasian Institute of Mining and Metallurgy: Melbourne), http: //www, enthalpy. c om. au/wp-
content/uploads/2013/09/The-Use-and-Abuse-of-Feasibilitv-Studies-Enthalpv.pdf.
102 McLeod, S. 2021. "Feasibility studies for novel and complex projects: Principles synthesized through an integrative review," Project
Leadership and Society.
103 For a detailed explanation of how the estimate was developed, see Appendix D in the amendments Rule Final RIA: US EPA.
Regulatory Impact Analysis. Accidental Release Prevention Requirements: Risk Management Programs Under the Clean Air Act, Section
112(r)(7). Dec 16, 2016.'(EPA-HQ-OEM-2015-0725-0734).
104 See AWWA comments on the proposed RMP amendments rule (EPA-HQ-OEM-2015-0725-0554).
Page 53 of 167
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An important potential STAA project for the final rule is the consideration by petroleum refiners of
converting an HF alkylation to safer technologies that replace HF with substitutes such as sulfuric acid, ionic
liquids, or solid acid. EPA was able to locate nine estimates of the costs to modify or replace an HF alkylation
unit. Two were already identified for the amendments rule RIA (including one provided by AFPM through
public comments)1"5 and seven that became available after development of that RIA. Appendix A presents the
cost estimates, which range from $50 million to $900 million, with a mean of $270 million, a median of $155
million, and a mode of $300 million. Thus, EPA has adopted an estimate of $300 million for this analysis, which
is unchanged from the amendments rule RIA. This may be a conservative estimate given that recent
advancements in technology target HF conversion and may be lowering conversion costs. Several recent articles
discuss a new, lower cost technology that converts existing HF alkylation units to use sulfuric acid and
simultaneously allows an expansion of production capacity.1"6
Additional STAA projects that might be considered by petroleum refiners include piping replacement
and miscellaneous small projects. For chemical manufacturers, STAA projects might include chemical
conversion, piping replacement, and other miscellaneous small projects. See Appendix D in the 2016 RIA for the
2017 amendments rule for a description of these projects and their estimated costs.1"7 Note that the costs of the
most expensive STAA projects will drive the majority of expenditures for practicability studies. The cost is then
multiplied by the number of facilities in the affected sector (assuming the costs are spread over five years), and
the costs for each sector are summed to calculate the overall costs of practicability studies.
Exhibit 4-4 illustrates the estimated costs for practicability studies using this approach; that is, it
approximates the costs of practicability studies as 1.2 percent of reference project costs. EPA developed a unit
cost estimate of the practicability assessment for each sector (petroleum refining and chemical manufacturing)
by weighting the reference projects by the number of facilities estimated to require that type of practicability
assessment.
Exhibit 4-4: STAA Practicability Assessment Cost Table (millions, 2022 dollars).
Sector
Reference Project
Reference
Project
Unit Cost
Units/
project
Numbe
r of
Faciliti
es
Total
Project
Cost
Wghted
Average
(sum of
sector's total
project costs
/ sector's
number of
facilities)
1.2
percent
of
Wghted
Average
Petroleum refining
HF alkylation
conversion*
$365.0
f
42
$15,316.3
$f86.2
$2.2
($4.4
HF, $.3f
non-HF)
Petroleum refining
2 major piping
replacements
$12.2
2
47
$U42.6
Petroleum refining
fO other small
STAA projects
$0.f
fO
89
$f08.2
Chemical
manufacturing
Chemical
conversion**
$6.f
f
101.8
$6f8.7
$2.8
$.03
105 AFPM provided a range of estimates from $100 million to $500 million, which EPA represents with a single value of $300 million.
See AFPM comments on the proposed RMP amendments rule (EPA-HQ-OEM-2015-0725-0579).
100 See Jenkins, Scott (2017) "Lower costs for converting alkylation units from hydrofluoric to sulfuric acid," Chemical Engineering. Nov
1Menachery, Martin (2017) "DuPont launches hydrofluoric acid alkylation conversion, expansion technology," Refining &
Petrochemicals. Sep 7 and Presley, Shane, Randy Peterson, Diwakar Rana, and Jason Nunez (2017) "Advances in E1F acid alkylation
conversion and expansion," Digital Refining. December.
107 See Appendix D "STAA Project Cost Data" and "Estimating Practicability Study Costs", pp 148-152. US EPA, 2016. Regulatory
Impact Analysis, Accidental Release Prevention Requirements: Risk Management Programs Under the Clean Air Act, Section 112(r)(7).
Page 54 of 167
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Sector
Reference Project
Reference
Project
Unit Cost
Units/
project
Numbe
r of
Faciliti
es
Total
Project
Cost
Wghted
Average
(sum of
sector's total
project costs
/ sector's
number of
facilities)
1.2
percent
of
Wghted
Average
Chemical
manufacturing
Piping replacement
$1.2
1
407.2
$495.0
Chemical
5 other small
$0.1
5
509
$309.4
manufacturing
STAA projects
*Assumes all refineries with HF alkylation processes study conversion, the remainder study two major piping replacement projects and all
study 10 small STAA projects.
"Assumes 20 percent of Program 3 chemical facilities study conversion, the remainder study minor piping replacement and all study five
small STAA projects.
Based on this analysis, the STAA practicability assessment cost for a facility in petroleum refining is
$2.2 million (or $4.4 million for a facility with an HF alkylation process and $306,326 for a facility without)
over a five-year period and for a facility in chemical manufacturing, $33,550 over a five-year period.
Exhibit 4-5 displays the hours and costs assumed for each task by labor category and type of facility, and
the resulting per facility cost estimates.
Exhibit 4-5: Hourly Labor and Unit Costs for STAA (2022 dollars).
Sector
Labor Hours
Facility
Cost
Manager
Corporate
Mgmt.
Attorneys
Engineers
Production
Initial Evaluation
Refineries
0
0
0
738
0
$73,149
Chemical
Manufacturers
20
0.5
3.5
82.5
23.5
$13,284
Sector
Facility Cost
Practicability Assessment
Refineries - HF
$4,390,674
Refineries - Non-HF
$306,326
Chemical Manufacturers
$33,550
4.4.2 STAA: Implementation Equivalent to Passive Measures
This final rule provision requires that facilities with Program 3 processes in NAICS codes 324 or 325
that have had an accident since their most recent PHA, have an HF unit in a 324 process, or are within 1 mile of
another 324 or 325 facility, implement a measure (IST/ISD, passive, active, or procedural) or combination of
measures (IST/ISD, passive, active, and/or procedural) reducing risk at least as much as would a passive measure
identified as practicable in the facility's STAA. If the facility identifies no practicable passive measures, then it
must implement a measure or set of measures reducing risk at least as much as would an active measure
identified as practicable. If the facility identifies no practicable active measures, then it must implement a
measure or set of measures reducing risk at least as much as would a procedural measure identified as
practicable.
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The cost of implementing risk reduction measures varies widely depending on the specific measure and
facility. To estimate a facility's cost of implementation per measure satisfying this provision, EPA identified cost
estimates of 30 risk reduction measures. Each cost estimate, the source of the estimate and other relevant
information are presented in Appendix D. These measures include four used to estimate practicability study costs
in the 2017 amendments rule, two from Eastern Research Group (ERG), six from other EPA documents, one
from a cost-benefit analysis of the Massachusetts Toxic Use Reduction Act (TURA), five from Toxic Use
Reduction Institute (TURI) case studies of implemented TURA measures, five from a list of examples of STAA
measures on a STAA consulting website, four from a 2012 National Academy of Sciences report, and two from
a news article's list of risk-reduction measures Chevron's Richmond Refinery promised in 2017.108 Some
sources directly provided cost estimates, while others required EPA to search online for cost information for
items matching a measure's description. See Appendix D for more information, including the cost data utilized.
These 30 measures do not include cost estimates for the IST/ISD measures of HF alkylation conversion
and chemical conversion from the 2017 amendment rule because facilities will always have an alternative to
implementing an IST/ISD measure. In other words, the costliest safety measures (i.e., those identified as
IST/ISD measures) are excluded from the cost estimates for STAA implementation because the analysis assumes
implemented measures instead will be less costly procedural, active, or passive measures. While facilities may
satisfy this provision by implementing either an IST/ISD measure or a passive-equivalent measure, EPA
assumes facilities will most likely implement IST/ISD when an IST/ISD's net cost is less than a passive
measure's cost. The net cost of an IST/ISD could be less than a passive measure's cost for a number of
reasons:
• Operating and Maintenance (O&M) cost - IST/ISD may have a change in O&M costs compared to
passive measures. For example, chemicals used in the process may change, which could cause changes
in recurring input costs, including potentially lower those costs.
• Productivity improvements - IST/ISD could result in productivity improvements from more efficient
process and changes to input costs.
• Safety improvements - IST/ISD may reduce risks of an accident more than would a passive-equivalent
measure. A lower accident risk will result in facility safety benefits and social benefits from fewer
accidents.
108 See Appendix D. Measures from past EPA documents include: three from EPA-HQ-OAR-2022-0730-0073, which is a 2023
memorandum from ERG with subject "Clean Air Act Section 112(d)(6) Technology Review for Storage Vessels Located in the SOCMI
Source Category that are Associated with Processes Subject to HON, Storage Vessels Associated with Processes Subject to Group I
Polymers and Resins NESHAP, and Storage Vessels Associated with Processes Subject to Group II Polymers and Resins NESHAP"
(available from: https://www.regulations.gov/document/EPA-HO-OAR-2022-0730-0Q73): two from the EPA Airport Pollution Control
Manual (available from https://www.epa.gov/economic-and-cost-analvsis-air-pollution-regulations/cost-reports-and-guidance-air-
pollution): and one from EPA-HQ-OAR-2010-0682-0194, which is a 2005 "Summary of Data Gathering Efforts: Emission Control and
Emission Reduction Activities" (available from https://www.regulations.gov/document/EPA-HO-OAR-2010-Q682-0194). The Benefit-
Cost Analysis of the Massachusetts Toxics Use Reduction Act is available from https://p2infohouse.org/ref/34/33463.pdf. The Toxic Use
Reduction Institute case studies include: "Columbia Manufacturing, Inc. Plating Operations Achieve Zero Wastewater Discharge"
(available from https://www.turi.org/content/download/9921/168937/file/Columbia+Manufacturing+OTA.+2015.pdf). "Toxics Use
Reduction and Resource Conservation: Competitiveness Impacts for Massachusetts Businesses" (available from
https://www.mass.gov/files/2017 competitiveness report ota and turi 6.pdf). "ChemGenes Corporation Toxics Use Reduction Case
Study: Cumulative, Decade-long Assistance from OTA and TURI Allow ChemGenes to Significantly Reduce Toxics and Save
Thousands" (available from https://www.mass.gov/files/chemgenes corp - 2018.pdf). and "Acushnet Rubber Company Toxics Use
Reduction Case Study: Company Achieves ISO 14001 Certification" (available from https://www.mass.gov/files/acushnet-rubber-
companv 5.pdf). Five measures come from website of STAA consulting firm Primatech (available from
https://www.primatech.com/technical/safer-technologies-and-alternative-analvsis). Four measures come from the 2012 National Academy
of Sciences report "The Use and Storage of Methyl Isocyanate (MIC) at Bayer CropScience" (available from
https://nap.nationalacademies.org/resource/13385/MIC-Summarv-Final.pdf). The Business & Learning Resources (BLR) news article
"Chevron to pay $1 million to settle Richmond Refinery citations" published August 2, 2017 is available from
https://safetv.blr.com/workplace-safetv-news/safetv-administration/OSHA-and-state-safetv-compliance-enforcement/Chevron-to-pav-l-
million-to-settle-Richmond-Refme/.
Page 56 of 167
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• Capital/facility reduced losses - Similar to safety, a lower accident risk will reduce losses to capital as
well as shorter than expected facility shutdown time from accidents.
Of the 30 risk-reduction measures with cost estimates, EPA applied five measures to NAICS 324
facilities only, 19 to NAICS 325 facilities only, and six to both. Twenty-seven (five NAICS 324 only, 17 NAICS
325 only, five both) of the 30 measures provide capital cost estimates, and 15 (two NAICS 324 only, 10 NAICS
325 only, three both 324 and 325) of the 30 provide recurring cost estimates. EPA lacks data on the safety
impacts of each measure, so it takes an agnostic approach of averaging capital costs from all 11 measures of all
types for NAICS 324 facilities and all 25 measures for NAICS 325 facilities. EPA estimates recurring costs as a
percent of capital costs by dividing the mean of the 15 recurring cost estimates by the mean of the 27 capital cost
estimates, rounded to the nearest whole percentage. EPA does not estimate facility costs due to forgone
production during measure implementation, nor does it estimate potential revenue gains or cost savings from
implementing a measure. Exhibit 4-6 presents the cost estimate per measure, which equals the cost estimate per
facility because EPA assumes each facility implements one measure per five-year period to satisfy the
requirement.
Exhibit 4-6: STAA Implementation Costs per Facility (2022 dollars).
Sector
Capital Cost
per Measure
Recurring Cost as a
Percent of Capital
Cost
Measures per
Facility
Capital and Recurring Cost
per Facility
Year 1
Year 6
Refineries
$4,449,414
4%
1.0
$4,627,390
$4,805,367
Chemical
Manufacturers
$546,494
4%
1.0
$568,354
$590,214
It is important to note that while EPA has estimated the cost of STAA implementation, EPA has not
estimated the cost savings facilities may gain from implementing these STAA measures. To the extent that
facilities do reap cost savings from these new technologies, EPA's estimates of gross costs can be offset partially
by those cost savings.1"9
4.4.3 Root Cause Analysis
This final rule provision will require that facilities in Programs 2 and 3 that have had an RMP-reportable
accident determine the underlying causes as part of their incident investigation. A root cause analysis is a
1119 Four examples of facilities in Massachusetts achieving potential offsetting cost savings from implementing STAA-type
measures are detailed in reports from the Massachusetts Office of Technical Assistance and the Massachusetts Toxic Use
Reduction Institute:
Massachusetts Office of Technical Assistance and Technology (April 2015). "Columbia Manufacturing, Inc. Plating
Operations Achieve Zero Wastewater Discharge." Massachusetts Executive Office of Energy and Environmental Affairs.
Accessed in April 2023 from:
https://www.turi.org/content/download/9921/168937/file/Columbia+Manufacturing+OTA.+2015.pdf.
Massachusetts Toxic Use Reduction Institute and Massachusetts Office of Technical Assistance and Technology
(September 2017). "Toxic Use Reduction and Resource Conservation: Competitiveness Impacts for Massachusetts
Businesses". TURI Report #2017-002. Accessed in April 2023 from:
https://www.mass.gov/files/2017 competitiveness report ota and turi 6.pdf.
Massachusetts Office of Technical Assistance and Technology (April 2016). "ChemGenes Corporation Toxics Use
Reduction Case Study: Cumulative, Decade-long Assistance from OTA and TURI Allow ChemGenes to Significantly
Reduce Toxics and Save Thousands." Massachusetts Executive Office of Energy and Environmental Affairs. Accessed in
April 2023 from: https://www.mass.gov/files/chemgenes corp - 2018.pdf.
Massachusetts Office of Technical Assistance (February 1997). Acushnet Rubber Company Toxics Use Reduction Case
Study: Company Achieves ISO 14001 Certification." Massachusetts Executive Office of Environmental Affairs. Accessed
in April 2023 from: https://www.mass.gov/files/acuslinet-rubber-companv 5.pdf.
Page 57 of 167
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structured process led by a person trained in the methodology. The time required may vary considerably based
on the complexity of the processes involved.
In the baseline, facilities are already required to conduct incident investigations; however, EPA expects
additional time will be required for the more rigorous root cause analysis. Management time is expected to be
devoted primarily to decisions concerning resolution of corrective actions arising from the investigation. For
simple facilities, EPA assumed that labor for root cause analyses will require management time and additional
time evenly distributed between production staff and engineers. For complex facilities, in addition to facility
management, EPA estimated that due to the facility's size and complexity, attorney hours will be required, along
with an estimated 0.5 hours of corporate management time. EPA also estimated that multiple hours of
engineering and production staff will be required to conduct the analysis.
Complex facilities are estimated to require 132.5 total hours (68 hours of management, 0.5 hours of
corporate management, 6 hours of attorneys, 30 hours of engineers, and 28 hours of production staff) for a root
cause analysis and simple facilities are estimated to require 14 total hours (6 hours of management, 4 hours of
engineering, and 4 hours of production). These hour estimates apply to root cause analyses of RMP-reportable
accidents and reflect the additional time required for root cause analyses over and above incident investigation.
EPA is retaining the estimate in the amendments rule RIA that simple facility costs include $1,000 for a
trained facilitator to assist with the investigation. EPA updated the estimate to 2022 dollars. EPA assumes that
complex facilities generally have staff familiar with the methodology and will conduct the root cause analysis in-
house. Exhibit 4-7 displays the hours assumed for each labor category for each type of facility, and the estimated
cost per facility.
Exhibit 4-7: Unit Cost for Root Cause Analysis (2022 dollars).
Labor Hours
Facility Type
Managers
Corporate
Mgmt.
Attorneys
Engineers
Production
Other
Costs
Facility
Cost
P2 - Simple
6
0
0
4
4
$1,216
$2,350
P2 - Complex
68
0.5
6
30
28
$0
$15,496
P3 - Simple
6
0
0
4
4
$1,216
$2,350
P3 - Complex
68
0.5
6
30
28
$0
$15,496
4.4.4 Third-party Audits
The current RMP rule requires Program 2 and Program 3 facilities to conduct a compliance audit at least
once every three years. The final rule requires Program 2 and Program 3 facilities that have had an RMP-
reportable accident to contract with an independent third-party to conduct the next required audit. The
amendments rule RIA estimated the cost of hiring a third-party to conduct an audit. The audit required under this
Page 58 of 167
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final rule will have the same estimated cost, so the estimated costs here are based on the unit costs and labor
hours estimated under the amendments rule, updated to 2022 dollars.11"
For the third-party audit estimates, the analysis assumes that the time required to contract for a third-
party audit will vary with the complexity of the processes to be covered and multiple facility staff will be
involved, except for the smallest category of facilities. At a minimum, one manager and one engineer will be
involved to identify potential auditors and write the statement of work on which the auditor will base its bid. For
larger firms that routinely contract and have contracting departments, a contracts specialist and attorney will be
part of the process. Many large firms and all governments are assumed to have standard contract language.
Governments are 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 may use a similar process but
are not required to do so. Private firms are likely to spend time negotiating contract language after the award.
Hourly assumptions and costs for a third-party audit are shown in Exhibit 4-8.
Exhibit 4-8: Hourly Labor and Unit Costs for Hiring Third-party Auditors (2022 dollars).
Facility Type
Total Hours for Contracting Process
Facility
Labor Cost
Auditor Fee
Total Facility
Cost
Mgm't
Attorneys
Engineers
Simple w/
0-19 FTEs
64
8
0
$8,291
$36,467
$44,758
Simple w/
20-99 FTEs
88
8
36
$13,624
$36,467
$50,091
Simple w/100+ FTEs
60
8
112
$16,173
$36,467
$52,640
Complex w/0-19
FTEs
64
8
0
$10,448
$97,246
$107,694
Complex w/ 20-99
FTEs
88
8
36
$17,317
$97,246
$114,563
Complex w/100+
FTEs
60
8
112
$20,999
$97,246
$118,246
Small Government
60
0
50
$10,358
$36,467
$46,826
Large Government
120
0
78
$24,234
$97,246
$121,480
4.4.5 Employee Participation Plan
The final rule will require employers to consult with employees when making decisions on
implementing recommendations from PHAs, compliance audits, and incident investigations; provide employees
the opportunity to stop work under certain circumstances; and provide opportunities for employees to report
RMP noncompliance (either anonymously or not, at the reporter's discretion). Specifically, the final rule will
require that the employee participation plan, at 40 CFR 68.83, include and ensure effective methods are in place
so that employees knowledgeable in the process and their representatives have authority to recommend to the
operator in charge of a unit that an operation or process be partially or completely shut down based on the
potential for a catastrophic release. The final rule will require facilities with Program 3 processes to include in
110 BEA National Income and Product Accounts (NIPA) Table 1.1.9. Implicit Price Deflators for Gross Domestic Product.
https://apps.bea.gov/iTable/iTable.cfm?reaid=19&step=3&isuri=l&nipa table list=13&categories=survev .
Page 59 of 167
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their employee participation plan explicit language that includes information for reporting of RMP-reportable
accidents or other related RMP non-compliance issues. This will require facilities with Program 3 processes to
update their current employee participation plans.
Facilities with Program 2 processes are not currently required to have an employee participation plan.
Therefore, they will need to develop an employee participation plan. The final rule will also require both
Program 2 and Program 3 facilities to provide annual written or electronic notice to employees indicating RMP
information is available and to train employees on the employee participation plan. Therefore, EPA estimates the
cost for Program 2 facilities to develop a new employee participation plan, Program 3 facilities to make minor
adjustments to current employee participation plans, and both Program 2 and Program 3 facilities to train
employees on the employee participation plan.
EPA assumes that the development of an employee participation plan for a facility with Program 2
processes is a comparable burden to that for developing an employee participation plan for a facility with
Program 3 processes. The 1996 RMP RIA did not include costs for employee participation plans for facilities
with Program 3 processes, based on the assumption that those costs were already adequately accounted for under
the OSHA PSM program. EPA therefore relied on the 1992 OSHA PSM RIA as the basis for the costs for
employee participation plans for facilities with Program 2 processes. The resulting estimates of hours by labor
category for each facility type are presented in Exhibit 4-9.
Exhibit 4-9: Hourly Labor and Unit Costs for Employee Participation Plan Development:
Facilities with Program 2 Processes (2022 dollars).
Facility Type
Mgr.
Corp.
Mgr.
Atty.
Eng.
Prod.
Staff
Facility
Cost
Simple (<20 FTE)
0
0
0
1
0.5
$96
Simple (20+ FTE)
0
0
0
3
0.5
$245
Complex (<20 FTE)
0
0
0
1
0.5
$132
Complex (20+ FTE)
0
0
0
3
0.5
$331
Facilities with Program 3 processes will need to update current employee participation plans. EPA
assumes that this will be a minimal effort, and that regardless of facility complexity, 0.5 hours for an engineer
and 0.5 hours for a production level staff will be required. The resulting unit costs, and these assumptions, are
presented in Exhibit 4-10.
Exhibit 4-10: Hourly Labor and Unit Costs for Employee Participation Plan Update (2022 dollars).
Facility Type
Mgr.
Corp Mgr.
Atty.
Eng.
Prod.
Staff
Facility
Cost
Simple
0
0
0
0.5
0.5
$59
Complex
0
0
0
0.5
0.5
$83
Facilities with Program 2 or Program 3 processes will need to train employees on employee participation
plans. EPA assumes that regardless of facility complexity 1 hour for a manager and 0.5 hours for a production
level staff will be sufficient to prepare and run the training. Facilities will incur an additional cost per employee.
EPA expects that each facility employee (assumed to be production level staff) will spend 0.5 hours in training.
The resulting unit costs, and these assumptions, are presented in Exhibit 4-11.
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Exhibit 4-11: Hourly Labor and Unit Costs for Employee Participation Plan Training (2022 dollars).
Facility Cost Type
Mgr.
Corp Mgr.
Atty.
Eng.
Prod.
Staff
Facility
Cost
Fixed Cost per
Facility
1
0
0
0
0.5
$138
Additional Cost
per Employee
0
0
0
0
0.5
$33
4.4.6 Emergency Backup Power for Perimeter Monitors
The final rule will require already installed perimeter monitoring equipment associated with prevention
and detection of accidental releases from RMP-regulated processes where power loss has been identified as a
major hazard to have standby or backup power to ensure compliance with the rule. Facilities with perimeter
monitoring equipment that have identified power loss as a major hazard but do not have backup power will need
to acquire backup power. Many continuous emissions monitoring systems have low power requirements.111 The
proposed rule assumed $1,000 per facility for their monitoring equipment backup power. This final rule revised
those assumptions to $3,300 per facility in any given year based on generator pricing and sensor power
requirement information from commercial websites, as well as an example of the number of perimeter monitors
at a facility.112 EPA assumes a facility's perimeter monitoring system will require a 1 kW backup generator, but
facilities may purchase a slightly more powerful model. EPA assumes a facility will pay $3,000 to purchase and
install such a small generator based on identifying an 8.5kW home generator listed for slightly below $3,000.113
EPA assumes a 5-year lifespan for the generator, so facilities will newly purchase or make equivalently costly
repairs every 5 years. EPA assumes ordinary annual operation and maintenance costs of 10% of purchase and
installation costs, or $300 per year. Exhibit 4-12 presents facility costs in the year of purchase (e.g., year 1 and 6)
and in years with only ordinary annual operation and maintenance costs (e.g., year 2-5 and 7-10).
Exhibit 4-12: Perimeter Monitor Backup Power Costs per Facility (2022 dollars).
Facility Type
Capital
Cost
Recurring Cost as a
Percent of Capital
Cost
Facility Cost
Years 1 & 6
Years 2-5 & 7-10
P2/3 with Perimeter Monitors
without Backup Power where
Power Loss is a Hazard
$3,000
10%
$3,300
$300
4.5 RMP Justifications
4.5.1 Hazard Evaluation Amplifications and RAGAGEP gap analysis
The final rule will explicitly require Program 2 and 3 facilities to address stationary source siting, natural
hazards, power loss, and a RAGAGEP gap analysis in their PHAs or Hazard Reviews. EPA assumes facilities
already address these issues and that language is just amplifying these implicit requirements. The stationary
source siting and natural hazards provisions will also require all Program 2 and 3 facilities to include a
justification in the RMP for each stationary source siting or natural hazards recommendation the facility declined
to implement. The RAGAGEP provision will also require all Program 3 facilities to include a justification for
111 Power requirements for a variety of continuous emissions monitoring systems can be found in reports at
https://www.epa.gov/emc/emc-continuous-emission-monitoring-svstems. For example, Ammonia CEMS specification tables list power
requirements, http://www.epa.gov/sites/default/files/2020-08/docmnents/04-nli3 cems.pdf.
112 One example sensor has a maximum power requirement of 5 watts ("https://www.rkiinstruments.eom/product/gd-70d-sample-draw-gas-
detector/). One example 64-channel controller requires 150 watts. ("https://www.rkiinstruments.eom/product/mc-6400-fixed-svstems-
controller/). A 2023 Environmental Integrity Project report map appears to show Valero's refinery in Texas City having 48 benzene
sensors along its perimeter ("https://storvmaps.arcgis.com/stories/9cc8aa37cb34444dbb053a097c22ba07 ).
113 https://norwall.com/categories/Standbv-Generators/.
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each PHA recommendation the facility declined to implement associated with adopting practices from the latest
version of RAGAGEP. EPA assumes each RMP with a Program 2 or 3 process will average two declined siting
recommendations and two declined natural hazards recommendations, and each RMP with a Program 3 process
will additionally average two declined RAGAGEP-related PHA recommendations. The power loss provision
will require Program 2 and 3 facilities to include justifications for any process without backup power. EPA
assumes each RMP will include a justification for every Program 2 and 3 process without backup power. The
RMP justifications will involve selecting from a dropdown menu of justification options. EPA assumes facilities
will take five minutes of manager time to identify which justification applies to a given declined
recommendation or process without backup power. Labor and facility costs are presented in Exhibit 4-13.
Exhibit 4-13: Hourly Labor and Facility Costs for RMP Justifications (2022 dollars).
Facility
Type
Annual
Frequency
Manager
Labor Hours
Manager Hourly
Loaded Wage
Facility Cost
per
Justification
Simple
0.2
0.083
$110.70
$9
Complex
0.2
0.083
$137.52
$11
4.6 Emergency Response
4.6.1 Community Notification of RMP Accidents
The final rule will require all facilities with Program 2 or 3 processes to provide accidental release
notification and data to local responders and ensure that a community notification system is in place. The
presence of State and/or local Integrated Public Alert and Warning System (IPAWS)114 alerting authorities
covering all 50 States plus D.C., Puerto Rico, and the U.S. Virgin Islands implies that the infrastructure is in
place nationwide for facilities to ensure community notification. Therefore, the direct cost associated with the
provision will be coordination between the facilities and local responders.
EPA assumes all facilities with Program 2 or 3 processes will have to take some additional steps to
coordinate with local responders to ensure a process is in place to transfer accidental release notification and data
to local responders and ensure the successful ability to use a community notification system. EPA assumes
simple facilities will require an additional 2 hours of facility management time and an additional 1 hour of local
responder time for them to communicate with each other about a community notification system and for the
facility to provide any additional information necessary for coordination and document this additional
coordination. EPA assumes the additional coordination time for complex facilities will be approximately double
that of simple facilities. The unit costs are shown in Exhibit 4-14.
Exhibit 4-14: Hourly Labor and Unit Costs for Community Notification (2022 dollars).
Facility Type
Managers
Local
Responders
Facility Cost
Simple Facilities
2
1
$293
Complex Facilities
4
2
$695
4.7 Information Availability
The final rule will require facilities to make certain information available upon request to community
members living, working, or spending significant amounts of time within 6 miles of a facility either through file
114 https://www.fema.gov/emergencv-managers/practitioners/integrated-public-alert-waming-svstem.
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sharing, providing information at a public library or other public offices, or providing it via e-mail or on the
facility's website. The provision will require facilities to inform the public about what information is available
upon request and how to obtain the requested information. The information elements should be readily available
to facility managers because most of the information is already compiled for compliance with various health and
safety regulations. For example, the information is already contained in safety data sheets (SDSs) which 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 five-year accident history
are already collected for reporting in the RMP. Especially for simple facilities, this information is unlikely to
change much from year to year; the only cost associated with this element is the time required to collect and
review the information for accuracy.
EPA assumes, on average, facilities will receive one information request in any given year. The analysis
estimates that simple facilities will spend 2 hours reviewing the information to ensure that it is up-to-date.
Complex facilities may have more information to review because they may manufacture, process, and use
multiple regulated substances in multiple processes. The analysis estimates that small complex facilities will
spend 4 hours collecting and reviewing the information. Large complex facilities were estimated to spend 54
hours because management and possibly counsel will need to ensure that the information was not subject to any
restrictions related to security or confidential business information concerns. Labor and facility costs are
presented in Exhibit 4-15.
Exhibit 4-15: Hourly Labor and Facility Costs to Collect and Review Information (2022 dollars).
Facility
Type
Annual
Frequency
Labor Hours
Other
Facility
Management
Attorney
Engineer
Costs
Costs
Simple Facilities
1
1
0
1
$0
$185
Small Complex
1
2
0
2
$0
$473
Large Complex
1
8
10
36
$0
$6,727
The provision will also require facilities to translate the information into two languages in addition to
English. EPA assumes each facility will perform two translations once during each five-year RMP period,
averaging one fifth of facilities each year. EPA assumes simple facilities will translate 7,000 words and that
complex facilities will translate 45,000 words per language, each at a cost of $0.10 per word.115 Unit and facility
costs are presented in Exhibit 4-16.
115 EPA identified translation websites (e.g., translate.com, translationpartner.com, and thetranslationcompany.com) with prices ranging
from $0.06 to $0.40 per word. EPA assumes all facilities will translate 1,500 words for exercises, LEPC contact information, and new
requirements. EPA averaged the number of words for regulated substance information, accident history, and emergency response program
in an RMP (1,341 simple and 3,452 complex) and the number of regulated substances (1.5 simple and 15.5 complex) each from two
simple facilities (California Dairies Fresno CA RMP and City of Saginaw WW Treatment Saginaw MI RMP) and from two complex
facilities (Hexion Hope AR RMP and Valero Port Arthur TX RMP). Assuming one SDS per regulated substance and 2,576 words per
SDS (the number of words in sample SDS from OSHA: https://www.osha.gov/sites/default/files/202Q-
04/Sample%20SDS%2OHandout.pdf), EPA estimates an average simple facility will translate (1,500 + 1,341 + 1.5 x 2,576) = 6,705
words and an average complex facility will translate (1,500 + 3,452 + 15.5 x 2,576) = 44,880 words per language. Rounding to the nearest
thousand, EPA assumes 7,000 words per simple facility and 45,000 words per complex facility per language.
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Exhibit 4-16: Unit and Facility Costs to Translate Information into Two Languages (2022 dollars).
Facility
Type
Annual
Frequency
Price per
Word
Words per
Language
Languages
per Facility
Facility
Costs
Simple Facilities
0.2
$0.10
7,000
2
$1,400
Small Complex
0.2
$0.10
45,000
2
$9,000
Large Complex
0.2
$0.10
45,000
2
$9,000
EPA assumes an average of one public information request per facility per year and that facilities will
require ID verification, resulting in a cost burden for members of the public requesting information. EPA
assumes information requestors will spend one hour to provide identification and obtain the requested
information, with half doing so electronically and the other half in-person. The cost per hour spent on ID
verification equals the value of a requestor's leisure time, which EPA estimates to be $35.90.116 EPA estimates
that each requestor providing identification in person will also face travel costs of $11.79.117 Unit costs are
presented in Exhibit 4-17.
Exhibit 4-17: Unit Costs and Public Burden for ID Verification (2022 dollars).
Facility
Type
Annual
Frequency
(A)
Public
Burden
Hours
(B)
Value per
Hour of
Leisure
(C)
Cost of Travel
to and from
Facility
(D)
In-person
Share of ID
Verifications
(E)
Public Cost per
ID Verification
(AxBxC + DxE)
All
1
1
$36.66
$11.79
50%
$42.56
110 Value per hour of leisure = (average hourly wage) x (1 - income tax share of pretax income + voluntary benefits as a percent of wages)
= $28.88 x (1 - 7.7% + 34.6%) = $36.66. Average hourly wage comes from Wages and salaries (all workers), Table 1 Employer Costs of
Employee Compensation by ownership, Sep 2022: https://www.bls.gov/ecec/tables.htm. Income tax share of pretax income = (median
household income - median post-tax income) median household income = ($70,784 - $65,354 $70,784) = 7.7%. Median household
income and median post-tax income come from https://www.census.gov/data/tables/2022/demo/income-povertv/p60-276.html. Voluntary
benefits as a percent of wages = voluntary benefits share of total compensation / wage share of total compensation = 0.239 0.69 =
34.6%, which comes from https://www.bls.gov/news.release/ecec.t01.htm.
117 Travel cost per in-person ID verification = (travel cost per mile) x (miles of travel) = $0,983 x 12 miles = $11.79. For travel cost per
mile, EPA uses the 2023 IRS standard mileage rate of $0,655 (based on a study of an individual's fixed and variable costs of operating an
automobile, see: https://www.irs.gov/newsroom/irs-issues-standard-mileage-rates-for-2023-business-use-increases-3-cents-per-mile )
inflated by 50% to $0,983 to account for other travel costs. EPA assumes 12 miles of travel, reflecting the maximum round-trip distance
given that facilities must make information available only to residents and workers within six miles of the facility.
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CHAPTER 5: Total Estimated Costs of the Final Rule
This chapter presents the estimated costs of each final rule provision as well as estimated total,
undiscounted, discounted, and annualized final rule costs projected over 10 years and discounted at 3
percent and 7 percent, as required by the Office of Management and Budget (OMB).118 The 10-year
annualization period was chosen because it covers two PHA cycles, and of the activities required by the
final rule that occur the least frequently; that is, every five years. Total estimated costs are developed by
applying the estimated unit costs discussed in Chapter 4 to the universe of affected facilities presented in
Chapter 3.
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 estimated rule familiarization costs.
• Section 5.3 describes the estimated total costs for new prevention program rule provisions, including
STAA, root cause analysis, third-party audits, the employee participation plan, and perimeter monitor
backup power.
• Section 5.4 describes the estimated total costs associated with the emergency response provisions in the
final rule.
• Section 5.5 describes the estimated total costs associated with the final provision for information
availability.
• Section 5.6 describes the total costs associated with final rule provisions requiring justifications.
• Section 5.7 discusses major uncertainties associated with the cost estimates.
• Section 5.8 shows the estimated total costs for each rule provision, as well as the estimated total cost for
the final rule.
5.1 Analytical Assumptions
5.1.1 Annual Frequency
The analysis generally divided total costs into initial year costs and ongoing costs. For provisions in
which the activity occurs in multiple-year increments, the annual frequency is a fraction representing the portion
of facilities assumed to implement the provision in any given year. For example, if an activity is expected to be
conducted once every five years, the annual frequency will be 0.2, with 20 percent of the applicable facilities
assumed to implement the activity each year. The assumption that implementation will be distributed evenly
across time may overstate the costs for some years and understate them for others. This issue primarily concerns
the STAA and third-party audits. The STAA is part of the PHA, which must be updated every five years or more
frequently because of process or procedural changes, accidental releases, or information on risks that triggered
an updated PHA or compliance audit.
5.1.2 Initial and Ongoing Costs
Ongoing costs differ from the initial costs for rule familiarization (Section 5.2), STAA, and backup
power for perimeter monitors. The analysis used an ongoing cost when costs for years 2 through 10 were
different from the initial cost components. If costs for years 2 through 10 were the same as the initial year, then
multiplying the initial cost by the annual frequency accounted for any continuing costs.
5.1.3 Capital Costs
The analysis included two categories of capital costs; those associated with acquiring a generator to
provide backup power for perimeter monitoring and those associated with implementing STAA. The costs of
equipment purchased for facilities required to implement backup power or implement STAA are not amortized.
118 OMB Circular A-4, Regulatory Analysis. September 17, 2003.
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Some facilities may choose to finance equipment purchases to spread the costs over several years, while others
may treat them as an operating expense and pay them in a single year.
By not amortizing equipment costs in this analysis, EPA is making the conservative assumption that
facilities will pay these initial costs in a single year (year 1) and that the equipment retains no monetary value
upon installation. For backup power, this is likely conservative, given that EPA assumes the generator for
backup power will cost $3,000 and that each facility will purchase only one generator that will last for 5 years
before needing a replacement or major maintenance and repairs of equivalent cost. For STAA implementation,
this assumption is likely to be accurate for simpler, less-capital-intensive measures where most of the upfront
costs are from labor effort or for measures where the equipment installation is quick, but removal is difficult.
However, this assumption is less likely to be accurate for many other potential implementation measures with
multi-year implementation timelines and larger capital costs where equipment may retain substantial resale value
for some years. The effect of STAA implementation on a facility's value varies by measure and facility, and
EPA lacks data on average values of old equipment replaced and on the ease of resale of equipment installed to
implement STAA measures.
Financing would smooth a facility's costs of directing resources (for example, labor and materials)
toward construction and/or installation for the measure. Many chemical plants, ethanol plants, and other
processing assets do not typically finance parts of facilities. They would finance only equipment/processes that
can be separated out, meaning that some STAA implementation measures that fall into this category may not be
financed. Additionally, many facilities may not want, or be able to get, from primary lenders loans for the typical
size of STAA implementation measures (see Exhibit 4-6) being considered as industry loans tend to be for
amounts larger than $25 million.119 As a result of these financing considerations, and the value considerations in
the prior paragraph, EPA makes the simplifying assumption that all upfront costs of implementation occur in a
single year and are not amortized.
While construction and installation may take multiple years for some measures, all facilities must
implement the measures within five years, so EPA believes it is reasonable to assume one-fifth of total capital
costs occur in each year, per five-year period.
5.2 Rule Familiarization
EPA estimated the cost of rule familiarization, which, while not a provision of the final rule, is a
necessary activity for facilities to successfully implement the rule provisions. See Exhibit 5-1.
Exhibit 5-1: Rule Familiarization (2022 dollars).
Facility Type
Unit Cost
Facilities
Total Cost
(Incurred in
Year 1)
Simple
$553
10,082
$5,580,285
Program 1 and Program 2 Complex
$688
131
$90,076
Program 3 Complex
$28,744
1,527
$43,892,735
LEPCs
$553
2,473
$1,368,781
Delegated Implementing Agencies
$553
13
$7,195
Total
14,226
$50,939,073
119 Information on typical facility financing behavior obtained from communication with ICF engineers and limited data on refinery
project finance investment from https://esfccompanv.com/en/proiects/oil-and-gas/refineries-lending-and-fmancing/
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5.3 Prevention Program Rule Provisions
Major provisions of the final rule include several changes to accident prevention program requirements
designed to reduce the likelihood and/or severity of future accidents. These include new requirements for STAA
initial evaluation, practicability assessment, and implementation of practicable measures; as well as root cause
analysis, third-party audits, employee participation plans, emergency backup power for perimeter monitors, and
hazard evaluation amplifications and RAGAGEP gap analysis. Costs vary considerably across requirements.
5.3.1 Safer Technology Alternatives Analysis (STAA) Initial Evaluation and Practicability Assessment
The RMP rule currently does not require facilities to conduct a STAA. The final rule's STAA provision
will apply to facilities with either NAICS 324 (petroleum and coal products manufacturing) or 325 (chemical
manufacturing) processes. The provision will require owners/operators to conduct an initial evaluation of
potential safer technologies every five years as part of the PHA. If the facility had an accident since its most
recent PHA, has an HF unit, or is within one mile of another facility with processes in NAICS 324 or 325, then it
will also have to conduct a practicability assessment of potential IST/ISD every five years as part of the PHA.
EPA believes the States of California (only at refineries with HF units) and Massachusetts and Contra Costa
County, California, which have existing requirements similar to the STAA requirement, are likely already
conducting activities that will satisfy EPA's new requirement. EPA also believes this cost will be reduced after
the first five-year PHA cycle because after the initial PHA, EPA requires owners/operators to update and
revalidate a PHA to ensure that the PHA is consistent with the current processes. Revalidation is a much less
costly activity than conducting the initial PHA. EPA believes the cost of an initial STAA evaluation and
practicability assessment will likewise be lower after the first submission; that is, in all subsequent 5-year
submissions. However, EPA estimates this cost as identical in both the first and second five-year cycles in the
period of analysis for affected facilities only required to conduct STAA only because of an accident. For the
remaining facilities, EPA assumes the cost in the second five-year cycle will average 18% of the cost in the first
five-year cycle.12" Exhibits 5-2 and 5-3 present the estimated costs for the provision in Years 1-5 and Years 6-10,
respectively.
Exhibit 5-2: Estimated Annual Costs for STAA Initial Evaluation and Practicability Assessment
Years 1-5 (2022 dollars).
Facility Type
Annual
Unit Cost
Number of
Total Annual
Frequency
Units
Cost
Initial Phase Analysis
Refineries
0.2
$73,149
1,535
$22,456,638
Chemical Manufacturers
0.2
$13,284
2,799
$7,436,475
Total
4,334
$29,893,113
Practicability Analysis
Refineries
0.2
$2,233,771
89
$39,761,125
HF
0.2
$4,390,674
42
$36,881,660
Non-HF
0.2
$306,326
47
$2,879,465
Chemical Manufacturers
0.2
$33,550
509
$3,415,390
Total
598
$43,176,515
120 For affected facilities without accidents, EPA assumes 20% will have major updates to STAA in years 6-10 and 80% will simply
revalidate. EPA assumes major updates will cost 50% of a full STAA review cost and revalidation will cost 10%. Some facilities may
conduct a full STAA initial evaluation if a new or simple facility begins a complex process. Some facilities without accidents may
conduct a full STAA practicability assessment in years 6-10 if a new or simple facility begins a complex process within a mile of a
complex facility or if a complex facility is within one mile of a simple facility that begins a complex process. However, EPA does not
estimate the frequency with which STAA will newly apply to a facility. Instead, EPA assumes the number of facilities conducting a full
STAA in years 6-10 will equal the number of complex P3 facilities that had an accident between 2016 and 2020 but are not within 1 mile
of another complex facility and does not have an HP unit.
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Grand Total
$73,069,638
* Totals may not sum due to rounding.
Exhibit 5-3: Estimated Annual Costs for STAA Initial Evaluation and Practicability Assessment
Years 6-10 (2022 dollars).
Facility Type
Annual
Frequency
Unit Cost
Number of
Units
Total Annual
Cost
Initial Evaluation
Refineries
0.2
$13,167
1,535
$4,042,195
Chemical Manufacturers
0.2
$2,391
2,799
$1,338,565
Total
4,334
$5,380,760
Practicability Analysis
Refineries
0.2
$419,013
89
$7,458,427
HF
0.2
$790,321
42
$6,638,699
Non-HF
0.2
$87,205
47
$819,729
Chemical Manufacturers
0.2
$7,336
509
$746,823
Total
598
$8,205,250
Grand Total
$13,586,011
* Totals may not sum due to rounding.
5.3.2 STAA Implementation of Practicable Measures
Under the final rule's STAA provisions, facilities required to conduct a STAA practicability assessment
(i.e., Program 3 NAICS 324 or 325 facilities with an accident since their most recent PHA, with an HF unit in a
NAICS 324 process, or within one mile of another NAICS 324 or 325 facility) will also be required to
implement at least one or more practicable measure every five years as part of the PHA. The implemented
measure(s) may be IST/ISD, passive, active, and/or procedural, but must reduce risk at least as much as would
an identified practicable passive measure (or active if no practicable passive measure is identified, or procedural
if no practicable passive or active measure is identified). EPA believes facilities in Contra Costa County, which
has existing requirements for facilities to implement IST/ISD, are likely already conducting activities that will
satisfy EPA's requirement. EPA estimates the cost as increasing each year in the period of analysis due to
accumulating recurring O&M costs as facilities implement measures. Recurring O&M costs accumulate as each
year, another one-fifth of facilities implement new measures, while measures implemented in prior years
continue to incur the O&M costs. Exhibits 5-4 and 5-5 present the estimated total costs for the provision in Years
1-5 and Years 6-10, respectively.
Exhibit 5-4: Estimated Annual Costs for STAA Implementation Years 1-5 (2022 dollars).
Facility
Type
Capital
Cost
Annual
Frequency
Unit
Capital
Cost
Unit
Recurring
Cost
Facilities
Total Annual Cost in Year:
1
2
3
4
5
Refineries
0.2
$4,449,414
$177,977
93
$86,069,456
$89,379,820
$92,690,184
$96,000,548
$99,310,911
Chemical
Manufacturers
0.2
$546,494
$21,860
518
$58,881,469
$61,146,141
$63,410,813
$65,675,485
$67,940,157
Total
611
$144,950,926
$150,525,961
$156,100,997
$161,676,032
$167,251,068
* Totals may not sum due to rounding.
"Total annual recurring cost = (year)x(capital cost annual frequency) x(unit recurring cost) x(facilities)
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Exhibit 5-5: Estimated Annual Costs for STAA Implementation Years 6-10 (2022 dollars).
Facility
Type
Capital
Cost
Annual
Frequency
Unit
Capital
Cost
Unit
Recurring
Cost
Facilities
Total Annual Cost in Year:
6
7
8
9
10
Refineries
0.2
$4,449,414
$177,977
93
$102,621,275
$105,931,639
$109,242,002
$112,552,366
$115,862,730
Chemical
Manufacturers
0.2
$546,494
$21,860
518
$70,204,829
$72,469,500
$74,734,172
$76,998,844
$79,263,516
Total
611
$172,826,104
$178,401,139
$183,976,175
$189,551,210
$195,126,246
* Totals may not sum due to rounding.
"Total annual recurring cost = (year) x(capital cost annual frequency) x(unit recurring cost) x (facilities)
5.3.3 Root Cause Analysis
The RMP rule currently requires the owner or operator of a facility to investigate each incident that
resulted in or could have reasonably resulted in a catastrophic release. The final rule will require all Program 2
and Program 3 facilities to conduct a root cause analysis for any RMP-reportable accident. Accident numbers are
drawn from the data on RMP-reportable accidents, referenced in Exhibit 3-8. The total costs of this provision are
provided in Exhibit 5-6.
Exhibit 5-6: Total Undiscounted Costs for Root Cause Incident Investigation (2022 dollars).
Facility Type
Unit Cost
Avg. Annual
Number of Accidents
(2016-2020) per year
Total Annual
Cost
P2 Accident - Simple
$2,350
12.8
$30,079
P2 Accident - Complex
$15,496
0.2
$3,099
P3 Accident - Simple
$2,350
40.2
$94,466
P3 Accident - Complex
$15,496
41.2
$638,448
Total
94.4
$766,092
5.3.4 Third-party Audits
The RMP rule currently requires Program 2 and Program 3 facilities to conduct a compliance audit at
least once every three years. The final rule will require that the next scheduled compliance audit be conducted by
a contracted third-party for any Program 2 or Program 3 facility that had an RMP-reportable accidental release.
Accident numbers are based on the RMP data from RMP-reportable accidents, referenced in Exhibit 3-9.
Numbers of affected facilities are estimated based on the average number of RMP-reportable accidents from
2016 to 2020. The RMP Database contains data on accidents with and without RMP-reportable impacts. Because
this provision does not require third-party audits for accidents with no RMP-reportable impacts, EPA deducted
those accidents from the total in the RMP Database.
The analysis assumes that the annual number and distribution of accidents among types of facilities
reflects the 5-year baseline estimates and that in any one year, the number of facilities conducting a third-party
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audit will be equal to the average number of accidents.121 That is, although the approximately 94 third-party
audits for accidents at Program 2 and Program 3 facilities may occur up to three years after the release,
depending on when the previous audit occurred, the analysis projects over time that 94 facilities will conduct
such an audit each year.122 The breakout for total costs is shown in Exhibit 5-7:
Exhibit 5-7: Total Annual Undiscounted Costs for Third-party Audits (2022 dollars).
Facility Type
Annual
Frequency
Unit Cost
Facilities
Total Annual
Cost
Simple w/ 0-19 FTEs
1
$44,758
15
$689,279
Simple w/ 20-99 FTEs
1
$50,091
8
$400,727
Simple w/100+ FTEs
1
$52,640
26
$1,368,646
Complex w/ 0-19 FTEs
1
$107,694
2
$172,311
Complex w/ 20-99 FTEs
1
$114,563
8
$870,680
Complex w/100+ FTEs
1
$118,246
32
$3,807,505
Small Government
1
$46,826
3
$140,477
Large Government
1
$121,480
1
$72,888
Total
94
$7,522,514
* Totals may not sum due to rounding.
5.3.5 Employee Participation Plan
The RMP rule currently requires only facilities with Program 3 processes to develop an employee
participation plan. The final rule will require all facilities with a Program 2 process to newly develop an
employee participation plan, in addition to facilities with Program 3 processes. These newly developed employee
participation plans, as well as all facilities with Program 3 processes which already have an employee
participation plan, will need to include newly explicit language for employees reporting any RMP-reportable
accidents or other related RMP non-compliance issues. Facilities with both Program 2 and 3 processes will also
have to provide employees with annual notice that RMP information is available and train employees on the
employee participation plans. Program 3 facilities will have to update their employee participation plans for
owners or operators to consult with employees and their representatives on recommendation decisions and
provide employees knowledgeable in the process and their representatives stop work authority under certain
conditions. EPA assumes facilities will review their employee participation plan before each required annual
notice and conservatively assumes these reviews may cost annually as much as facilities" one-time cost to
develop and update the employee participation plans under this new requirement. EPA assumes employees
receive training on the plan once every five years. Exhibit 5-8 presents the costs for the provision.
Exhibit 5-8: Estimated Costs for Employee Participation Plan Provision (2022 dollars).
Facility Type
Annual
Frequency
Unit
Cost
Facilities
Total
Annual
Cost
Program 2 requirement to develop new employee participation plan
Simple Facilities w/ 0-19 FTEs
1
$96
3,415
$327,602
Simple Facilities w/ 20+ FTEs
1
$245
496
$121,314
Complex Facilities w/ 0-19 FTEs
1
$132
29
$3,842
121 EPA recognizes that subsequent to the final rule being finalized, accident rates may change.
122 The number of audits may be overstated because some facilities had multiple accidents in the same three-year period, resulting in only
one third-party audit.
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Facility Type
Annual
Frequency
Unit
Cost
Facilities
Total
Annual
Cost
Complex Facilities w/ 20+ FTEs
1
$331
35
$11,575
Total
3,975
$464,333
Program 3 requirement to update current employee participation plan
Simple Facilities
1
$59
5,578
$327,801
Complex Facilities
1
$83
1,527
$126,612
Total
7,105
$454,413
Program 2 requirement to train employees on employee participation plan
Trained Employees
0.2
$33
60,793
$405,571
Facilities
0.2
$138
3,975
$109,329
Total
3,975
$514,900
Program 3 requirement to train employees on employee participation plan
Trained Employees
0.2
$33
1,475,579
$9,844,095
Facilities
0.2
$138
7,105
$195,417
Total
7,105
$10,039,512
Grand Total
11,080
$11,473,158
*
Totals may not sum due to rounding. The "Facilities" column reflects the number of facilities except for the "Trained
Employees" rows where it reflects the number of trained employees.
5.3.6 Emergency Backup Power for Perimeter Monitors
The final rule's backup power provision will require facilities with processes that have perimeter
monitors and have identified power loss as a major hazard to implement emergency backup power for their
perimeter monitors. Among these facilities, those that have not yet implemented emergency backup power will
incur a cost to purchase and install a backup generator for their perimeter monitors. EPA assumes the life of the
backup generator to be five years. EPA makes the conservative assumption that facilities will pay for the backup
generator in a lump sum every five years. EPA estimates 392 facilities must implement backup power for
perimeter monitoring by counting the number of active Program 2 and 3 facilities in the RMP database (as of 31
December 2020) that report having perimeter monitors, a cooling loss hazard (as a proxy for power loss being a
major hazard), and no backup power. Exhibit 5-9 presents the estimated costs for the provision.
Exhibit 5-9: Total Undiscounted Costs for Backup Generator for Perimeter Monitors
at Facilities with a Process that has a Perimeter Monitor and Power Loss Hazard
without Backup Power (2022 Dollars).
Facility
Type
Capital Cost
Annual
Frequency
Unit
Capital
Cost
Unit
Recurring
Cost
Facilities
Total Annual Cost in Year:
1
2
3
4
5-10
Total
0.2
$3,000
$300
392
$258,720
$282,240
$305,760
$329,280
$352,800
5.4 RMP Justifications
5.4.1 Hazard Evaluation Amplifications and RAGAGEP Gap Analysis
The final rule will require Program 2 and 3 facilities to include in their RMP a justification for why the
facility has not installed emergency backup power for each process without emergency backup power, and
justifications for each declined natural hazards recommendation and stationary source siting recommendation.
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The final rule will also require Program 3 facilities to include in their RMP a justification for each declined PHA
recommendation associated with the most recent version of RAGAGEP. EPA assumes the number of
justifications for not implementing backup power will equal the number of Program 2 and 3 processes without
backup power as of December 31, 2020. EPA assumes each Program 2 and Program 3 facility will, on average,
provide two natural hazards justifications and two siting justifications, and each Program 3 facility will
additionally average two RAGAGEP justifications. Exhibits 5-10, 5-11, 5-12, and 5-13 present the estimated
costs for the RMP justification provisions.
Exhibit 5-10: Costs for Emergency Backup Power RMP Justification Provision (2022 dollars).
Facility Type
Annual
Frequency
Cost per
Justification
Justifications
Total Annual
Cost
Simple
0.2
$9
7,471
$13,784
Complex
0.2
$11
879
$2,015
Total
8,350
$15,798
Exhibit 5-11: Costs for Natural Hazards RMP Justification Provision (2022 dollars).
Facility Type
Annual
Frequency
Cost per
Justification
Justifications
Total Annual
Cost
Simple
0.2
$9
18,978
$35,014
Complex
0.2
$11
3,182
$7,293
Total
22,160
$42,307
Exhibit 5-12: Costs for Stationary Source Siting RMP Justification Provision (2022 dollars).
Facility Type
Annual
Frequency
Cost per
Justification
Justifications
Total Annual
Cost
Simple
0.2
$9
18,978
$35,014
Complex
0.2
$11
3,182
$7,293
Total
22,160
$42,307
Exhibit 5-13: Costs for RAGAGEP RMP Justification Provision (2022 dollars).
Facility Type
Annual
Frequency
Cost per
Justification
Justifications
Total Annual
Cost
Simple
0.2
$9
11,156
$20,582
Complex
0.2
$11
3,054
$7,000
Total
14,210
$27,582
5.5 Emergency Response
5.5.1 Community Notification of RMP Accidents
The RMP rule currently requires only responding Program 2 and 3 facilities to have procedures in
place for informing the public and the appropriate Federal, State, and local emergency response agencies
about accidental releases. The final rule will require both responding and non-responding Program 2 and 3
facilities to ensure a community notification system is in place. This analysis assumes that facilities are
coordinating annually with LEPCs to ensure a community notification system is used to communicate
information about RMP-reportable accidents. Exhibit 5-14 presents the cost for this provision.
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Exhibit 5-14: Costs for Coordinating Community Notification (2022 dollars).
Facility Type
Annual
Frequency
Unit
Cost
Facilities
Total Annual
Cost
Facility Burden
Simple P2/3
1
$221
9,288
$2,056,326
Complex P2/3
1
$550
1,792
$985,751
Total
11,080
$3,042,077
LEPC Burden
Simple P2/3
1
$72
9,288
$671,500
Complex P2/3
1
$145
1,792
$259,114
Total
11,080
$930,614
Facility + LEPC BURDEN
Grand Total
$3,972,691
5.6 Information Availability to the Public
5.6.1 Costs to Facilities
The RMP rule currently does not require facilities to conduct information availability activities. The final
rule will require all facilities, including those with Program 1 processes, to make information related to RMP
compliance available upon request in a manner that is easily accessible to community members residing,
working, or spending significant time within 6 miles of the facility. The information will include the names and
SDSs of regulated substances used at the facility, the facility's accident history, emergency response program
information, and LEPC contact information. The assumption is that each facility receives 1 request per year from
a community member residing within 6 miles of the facility. The breakout of costs to facilities related to
Information Availability is in Exhibit 5-15.
Exhibit 5-15: Costs to Facilities for Information Availability Provision (2022 dollars).
Facility Type
Annual
Frequency
Unit Cost
Facilities
Total Annual
Cost
Simple
1
$185
10,082
$1,865,424
Small Complex
1
$473
1,050
$496,941
Large Complex
1
$6,727
608
$4,089,892
Total
11,740
$6,452,257
5.6.2 ID Verification Cost to the Public
EPA expects facilities will require community members to verify their identification before disclosing the
requested information. EPA assumes each year one community member per facility will request information.
The breakout of costs to the public in requesting information from facilities is in Exhibit 5-16.
Exhibit 5-16: Costs to Public for ID Verification from Information Availability Provision (2022 dollars).
Community Members
Requesting Information
Annual
Frequency
Unit Cost
Number of
Requests
Total Annual
Cost
Total
1
$42.56
11,740
$499,645
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5.7 Important Cost Uncertainties and Indirect Costs Associated with Prevention Program Provisions
This section highlights some of the uncertainties associated with estimating the costs of the of the
STAA, the root cause analysis and the third-party audit final rule provisions. It considers the potential indirect,
follow-on costs that facilities could incur if they were to implement recommendations resulting from those
provisions.
5.7.1 STAA
The STAA requirement is intended to identify potential opportunities for certain complex regulated
facilities to eliminate or substantially reduce the hazards or risks associated with regulated processes by
performing a detailed analysis of alternative process technologies. The STAA provision will require the owner or
operator to consider process hazard controls in the following descending order of preference: IST/ISD, passive
measures, active measures, and procedural measures. The provision also will require the owner or operator to
determine the practicability of the IST/ISD considered.
The STAA provision is targeted at two sectors - petroleum and coal products manufacturing, and
chemical manufacturing (NAICS codes 324 and 325, respectively) - which have had a high frequency of RMP-
reportable accidents relative to other RMP-regulated industry sectors. The provisions will apply only to certain
facilities in these two sectors.
The current RMP rule already requires owners and operators of most facilities in these sectors to
perform a PHA. The PHA provision requires facilities to identify, evaluate, and control process hazards using
appropriate engineering and administrative controls. However, the baseline requirement does not explicitly
require the owner or operator to consider IST/ISD. EPA believes that requiring owners and operators of higher
risk facilities to consider safer technologies and alternatives - with an emphasis on IST/ISD - may identify
alternative hazard controls that were not considered in the baseline PHA requirement.
The STAA provision will require facilities, every five years, to implement at least one process or
operational change identified as practicable that reduces risk at least as much as would a practicable passive
measure. While implementation of IST/ISD will both satisfy and exceed what is necessary for both the baseline
and final rule STAA requirements, EPA believes that some facilities may voluntarily implement IST/ISD as a
result of conducting the STAA. This is, in part, because the final rule's definition of "practicable" may result in
the adoption of alternatives that previously were not considered practicable (i.e., where barriers such as costs or
environmental and legal factors previously had been judged as too high to warrant implementation).123
Additionally, after review of the STAA and practicability analysis, the facility owner or operator may re-assess
and decide to implement inherently safer alternatives.
The costs of voluntary implementation of recommendations resulting from the STAA provision are
uncertain. A facility owner or operator may voluntarily implement a high-cost change if they believe its benefits
warrant the expense. For example, a facility might expect the reduction in accident risks from a safer technology
to offset the extra costs of that technology. EPA did not attempt to estimate the costs of voluntary
implementation of alternative technologies identified in a STAA because of a high degree of uncertainty
associated with which and how many facilities might voluntarily implement STAA projects. Judgments
regarding which changes are considered safer or inherently safer, and the practicability of implementing such
changes, are subjective. Additionally, some facilities that may have adopted IST/ISD or other risk-reduction
measures in the absence of this rule may instead choose to adopt alternatives satisfying the final rule's
implementation requirement which achieve different levels of risk reduction than they would have done in the
absence of this rule. EPA expects that, overall, the requirement will result in facilities identifying more options
to reduce risk and implementing a larger number of more effective risk-reduction measures than facilities would
123 Practicability as defined in this final action means the capability of being successfully accomplished within a reasonable
time, accounting for environmental, legal, social, technological and economic factors. Environmental factors would include
consideration of potential transferred risks for new risk reduction measures.
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in the absence of the rule, particularly among facilities that in the baseline have infrequent voluntary
implementation of risk-reduction measures.
5.7.2 Root Cause Analysis
The RMP rule currently requires facilities to conduct incident investigations and address their findings.
However, the final rule contemplates a more thorough "root cause" investigation to identify underlying causes of
an accident. The outcome of a root cause investigation could reveal more substantial system-related reasons why
an incident occurred and identify correctable failures in management systems. These underlying causes may not
be identified under the baseline incident investigation provision. Similar to compliance audits, incident
investigations can reveal a wide variety of causes for an incident. These can range from the immediate or
proximate causes of an incident to its underlying, system-related cause or causes. For example, an investigation
may reveal that the immediate cause of an incident was equipment failure (e.g., failure of a corroded pipe), or
operator error (e.g., an operator performed procedural steps in an incorrect sequence). A deeper "root cause"
investigation will go beyond these findings and identify the underlying reasons why the equipment failed (e.g.,
underlying deficiencies in the facility's mechanical integrity program) or why the operator made the error (e.g.,
underlying deficiencies in the facility's operator training program).
The baseline incident investigation provision requires the owner or operator to determine "the factors
that contributed to the incident," but does not explicitly require the owner to perform a root cause investigation.
Some regulated facilities may already interpret the baseline provision as requiring root cause investigations or
may opt for a root cause investigation in an effort to uncover systemic problems, but EPA believes that many
others do not. Because the new root cause investigation requirement is likely to result in many facilities
identifying deeper, system-related causes of incidents, actions taken to resolve these issues may require greater
expenditures than what will occur under the baseline investigation requirement. For example, instead of
replacing a single piece of failed piping, a root cause investigation could lead to facility-wide enhancements in
piping inspections, and replacement of numerous additional piping sections where excessive corrosion was
subsequently identified. Similarly, instead of providing additional training for a single operator, the root cause
investigation could prompt an overhaul of the facility's operator training program, including use of new training
techniques and additional training for all process operators. Root cause investigations may also reveal multiple
systemic accident causes. For example, in addition to identifying systemic training problems, the investigation
may reveal other underlying root causes such as an equipment design problem that led the operator to make the
error (e.g., confusing labeling or equipment configuration), or unclear operating procedures.
Resolving system-related deficiencies is expected, on average, to require greater expenditures than
resolving investigation findings related to baseline (i.e., non-root-cause) investigations. However, similar to
audits, EPA expects that resolving underlying problems will, in the long term, reduce the probability and
magnitude of a future accident. Similar to the audit, the incident investigation is intended to bring facilities into
compliance by revealing deficient areas of facility operations - in this case, areas that have caused an accident
and may cause future accidents. However, EPA does not have information or data showing the increment in
costs faced by a facility implementing changes recommended by a root cause analysis relative to a less deep
incident investigation. Due to these uncertainties and this lack of information, EPA did not estimate potential
costs from follow-up actions.
5.7.3 Third-party audits
The purpose of a compliance audit is to examine whether the facility's accident prevention program -
PHA, mechanical integrity program, operating procedures, etc. - is properly implemented and in compliance
with 40 CFR part 68 requirements. Compliance audits can produce a wide range of findings. Changes
recommended in the third-party audit relative to in-house compliance audits may be more costly.
Rigorous auditing by trained experts provides a detailed and thorough examination of potential problems
and presents potential solutions to remedy those problems. Currently, compliance audits may be conducted by
staff with less expertise than a third-party expert, or in-house staff that is not arms-length from the facility. The
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remedies suggested by a third-party audit are expected to be more efficient at identifying deficiencies and
correcting hazards than remedies that will be recommended in the baseline. From this perspective, EPA expects
that the more effective remedies suggested by third-party audits will impose different, but not necessarily
additional, costs. They may reveal underlying problems and remedies that result in a more efficient allocation of
the resources targeted at bringing the facility into compliance with the RMP rule.
Examples of potential actions resulting from third-party audits include more frequent equipment
inspections, use of different or additional inspection methods, equipment upgrade or replacement, installation
and use of different or additional hazard controls, altering process operating conditions, materials, or chemistry,
modification of operating procedures, additional training, and staffing changes, among others. The wide scope of
compliance audits and variation in potential follow up actions create uncertainty in estimating expected costs,
which is exacerbated by a lack of information about the incremental difference in changes that result from a
third-party audit compared to a baseline audit. Due to these uncertainties and this lack of information, EPA did
not estimate the potential incremental costs from follow-up actions from a third-party audit relative to a baseline
compliance audit.
5.8 Total Estimated Costs
The analysis presents total costs as total undiscounted costs over the 10-year period of analysis, total
discounted costs (at 3 percent and 7 percent), and annualized costs (at 3 percent and 7 percent). When annual
costs for different years are equal across the analysis time period, which is the case for all provisions except for
the rule familiarization activity and STAA, the annualized costs calculated using different discount rates (e.g., 3
and 7 percent) are equal. Exhibit 5-17 presents the total estimated costs for the final rule. In total, the final rule is
estimated to cost $257 million per year (annualized at 3 percent) and $297 million per year (annualized at 7
percent).
Exhibit 5-17: Total Estimated Costs of the Final Rule (mil
ions, 2022 dollars).
Cost Elements
Total
Undiscounted
Total
Discounted
(3%)
Total
Discounted
(7%)
Annualized
(3%)
Annualized
(7%)
Rule
Familiarization
$50.9
$49.5
$47.6
$5.8
$6.8
STAA
Initial Evaluation
$176.4
$158.2
$138.3
$18.5
$19.7
Practicability
$256.9
$230.2
$201.0
$27.0
$28.6
Implementation
$1,700.4
$1,438.9
$1,172.6
$168.7
$204.9
Root Cause
Analysis
$7.7
$6.5
$5.4
$0.8
$0.8
Third-party
Audits
$75.2
$64.2
$52.8
$7.5
$7.5
Employee
Participation Plan
$114.7
$97.9
$80.6
$11.5
$11.5
Backup Power
for Perimeter
Monitors
$3.3
$2.8
$2.3
$0.3
$0.3
Justifications
No Backup Power
$0.2
$0.1
$0.1
$0.0**
$0.0**
Natural Hazards
$0.4
$0.4
$0.3
$0.0**
$0.0**
Facility Siting
$0.4
$0.4
$0.3
$0.0**
$0.0**
RAGAGEP
$0.3
$0.2
$0.2
$0.0**
$0.0**
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Community
Notification
System
$39.7
$33.9
$27.9
$4.0
$4.0
Information
Availability
$127.6
$108.8
$89.6
$12.8
$12.8
Total Cost*
$2,554.0
$2,191.7
$1,818.9
$256.9
$296.9
* Totals may not sum due to rounding.
** Annualized Costs for RMP Justification provisions are zero due to rounding. Unrounded costs for No Backup Power are
$15,798 at 3% and 7% discount rates, for Natural Hazards and Facility Siting are $42,307 at 3% and 7% discount rates, and for
RAGAGEP, are $27,582 at 3% and 7% discount rates.
Exhibit 5-18 provides undiscounted yearly costs for the final rule provisions, for both Year 1, Years 2-5,
and Years 6-10. Rule familiarization costs are incurred only in Year 1, and therefore are $0 in subsequent years.
STAA initial evaluation and practicability assessment costs are smaller in Years 6-10 than in Years 1-5.
Exhibit 5-18. Summary of Estimated Undiscounted Yearly Costs (millions, 2022 dollars).
Cost Elements
Year 1
Year 2
Year 3
Year 4
Year 5
Year 6
Year 7
Year 8
Year 9
Year 10
Rule Familiarization
$50.9
$0
$0
$0
$0
$0
$0
$0
$0
$0
STAA
Initial Evaluation
$29.9
$29.9
$29.9
$29.9
$29.9
$5.4
$5.4
$5.4
$5.4
$5.4
Practicability
Assessment
$43.2
$43.2
$43.2
$43.2
$43.2
$8.2
$8.2
$8.2
$8.2
$8.2
Implementation
$145.0
$150.5
$156.1
$161.7
$167.3
$172.8
$178.4
$184.0
$189.6
$195.1
Root Cause Analysis
$0.8
$0.8
$0.8
$0.8
$0.8
$0.8
$0.8
$0.8
$0.8
$0.8
Third-party Audits
$7.5
$7.5
$7.5
$7.5
$7.5
$7.5
$7.5
$7.5
$7.5
$7.5
Employee
Participation Plan
$11.5
$11.5
$11.5
$11.5
$11.5
$11.5
$11.5
$11.5
$11.5
$11.5
Backup Power for
Perimeter Monitors
$0.3
$0.3
$0.3
$0.3
$0.4
$0.4
$0.4
$0.4
$0.4
$0.4
Justifications**
No Backup Power
$0.0
$0.0
$0.0
$0.0
$0.0
$0.0
$0.0
$0.0
$0.0
$0.0
Natural Hazards
$0.0
$0.0
$0.0
$0.0
$0.0
$0.0
$0.0
$0.0
$0.0
$0.0
Facility Siting
$0.0
$0.0
$0.0
$0.0
$0.0
$0.0
$0.0
$0.0
$0.0
$0.0
RAGAGEP
$0.0
$0.0
$0.0
$0.0
$0.0
$0.0
$0.0
$0.0
$0.0
$0.0
Community
Notification System
$4.0
$4.0
$4.0
$4.0
$4.0
$4.0
$4.0
$4.0
$4.0
$4.0
Information
Availability
$12.8
$12.8
$12.8
$12.8
$12.8
$12.8
$12.8
$12.8
$12.8
$12.8
Total Cost*
$305.8
$260.5
$266.1
$271.7
$277.3
$223.4
$229.0
$234.5
$240.1
$245.7
* Totals may not sum due to rounding.
"Annual Costs for RMP Justification provisions are zero due to rounding. Unrounded costs are $15,798 for No Backup Power, $42,307
for Natural Hazards and Facility Siting, and $27,582 for RAGAGEP.
Undiscounted costs over the 10-year timeframe are estimated to vary from $223 million in Year 6, to $306
million in Year 1.
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CHAPTER 6: Total Benefits of the Final Rule
This Chapter presents discussion and analysis of the total benefits of the final rule. Section 6.1
discusses how the various provisions of the final rule will avoid or mitigate accidents and result in
benefits. Section 6.2 discusses benefit categories associated with avoided and mitigated accidents. Section
6.3 discusses the break-even analysis of the rule. Finally, Section 6.4 presents some conclusions.
Facilities subject to the RMP regulations pose significant risks of negative impacts from
accidental releases of toxic vapors, fires, and explosions to the public and the environment. This chapter
qualitatively explains how the final rule provisions could prevent and mitigate RMP facility accidents. It
outlines a broad set of social benefits associated with the rule. The chapter concludes with a comparison
of costs to baseline damages and presents a breakeven analysis.
EPA is unable to estimate quantitative benefits for the final rule because EPA has no data to
project the specific contribution of each final rule provision to reductions in the frequency or severity of
future accidents. As shown by accident trends, accident frequency and severity are difficult to predict.
Based on RMP accident data and other data, chemical accidents can impose substantial costs on firms,
employees, emergency responders, the community, and the broader economy. Reducing the risk of such
accidents and the severity of the impacts when accidents occur, and improving information availability, as
the final provisions intend, will provide benefits to the potentially affected members of society.
Chemical accidents at RMP facilities and their associated impacts not only kill and injure people,
but also can cause tremendous damage to property. This 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. Residents and other people in nearby communities may be required or requested to evacuate
or shelter-in-place. 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 resulting from the
perceived risks and other disamenities created by proximity to the accident. Risks posed by RMP facilities
are reduced by lowering the probability and magnitude of accidents, which is the objective of the final
rule. While many of the final rule provisions reduce risks for a large segment of regulated facilities,
several are more targeted. The third-party audit and root cause analysis requirements are focused on
lowering risks at facilities that have experienced one or more accidents. The STAA provision focuses on
lowering risks in industrial sectors with greater rates of accidents, and in areas with more than one RMP
facility or at facilities that have an HF unit or have experienced one or more accidents.
By reducing the risk of accidents, the benefits of the final rule include reductions in the numbers
of fatalities and injuries both onsite and offsite. Reductions are also expected in the number of residents
evacuated or otherwise inconvenienced by sheltering in place; reductions in the damage caused to
property onsite and offsite of the facility including damages to product, equipment, and buildings;
reductions in damages to the environment and ecosystems; and reductions in resources diverted to
extinguish fires and clean-up affected areas. Other benefits include potentially avoided major
catastrophes, avoided property value damages and business disruption, reduced legal and other transaction
costs, more efficient and effective emergency preparedness, more efficient allocation of public resources,
and more efficient property and capital markets.
EPA expects that the final rule will generate other benefits, such as from increased public
information availability. Improved information about risks at RMP facilities may also lead to more
efficient property markets in areas near these facilities. More detailed information about nearby risks
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allows participants in property markets to refine the values they place on nearby properties and decisions
about where to locate. The outcome should be property values that more closely reflect actual risks and
decisions that better reflect true preferences. Better information about risks at RMP facilities also
facilitates more efficient use of emergency responder resources. Finally, for publicly-owned facilities,
more public information about risks may facilitate efficiency in capital markets.
The 2017 amendments rule contained various new provisions applicable to RMP-regulated
facilities addressing prevention program elements (including STAA, root cause analysis, and third-party
audits), emergency response coordination with local responders (including emergency response
exercises), and information availability to the public. The RIA for that rule qualitatively and
quantitatively discussed benefits related to accident prevention, mitigation, and information disclosure. In
December 2019, the 2019 reconsideration rule rescinded certain information disclosure provisions of the
2017 amendments rule, removed most new accident prevention requirements added by the 2017
amendments rule, and modified other provisions. The benefits that would have been generated by the
modified and rolled back provisions were also eliminated. Under this final rule, those benefits will be
restored to the extent the provisions are the same. For example, the STAA provision is being restored,
although it will apply to a smaller set of facilities compared to the 2017 amendments rule. For the current
analysis, EPA presents and updates much of the benefits analysis developed for the 2017 amendments
rule.
6.1 Benefit Categories
Exhibit 6-1 illustrates the social benefits associated with each final rule provision. EPA identified
four primary social benefit categories:
• Prevention of Future RMP Accidents: Several final rule provisions will help prevent accidents by
triggering improvements in RMP process design, equipment, procedures, or operator training.
Preventing serious accidents avoids numerous direct costs, including worker, responder, and
public fatalities and injuries, public evacuations, public sheltering in place, and property and
environmental damage. It also avoids negative impacts that are difficult to quantify, such as lost
productivity due to lost or damaged property and business interruption both onsite and offsite,
expenditure of emergency response resources and attendant transaction costs, and reduced offsite
property values.
• Mitigation of Future RMP Accidents: Several final rule provisions will reduce the impacts or
severity of accidents by promoting a more rapid and efficient response to these accidents. If a
serious 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 onsite and offsite, and reducing the extent of public evacuations, sheltering
in place and expenditure of emergency response resources.
• Improved Public Information Availability. Notification procedures will be available upon request
to the public residing, working, and spending significant time within 6 miles of an RMP facility.
Facilities will also be required to ensure a community notification system is in place to warn the
public within the area threatened by a release. In addition, EPA will require facilities to provide
entities, including the public, with initial RMP accidental release information during releases of
regulated substances. EPA expects this requirement to generate benefits because it may 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 also improve local contingency planning and training of emergency
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responders. In addition, more timely information and accessible alerts through the community
notification system ensure the public can receive authenticated emergency and life-saving alerts
when there is an accident. Better information about nearby risks can improve the efficiency of
nearby property markets and information about risks of publicly-traded firms can improve the
efficiency of capital markets.
• Prevention and Mitigation of Future non-RMP Accidents at RMP Facilities: Actions that prevent
or reduce the severity of accidents in RMP-covered processes are also likely to prevent or
mitigate non-RMP accidents at the same facility because the same or similar actions can be taken
for processes and equipment not subject to the regulation, often at minimal additional cost. For
example, new operational safety policies implemented by an owner or operator to prevent or
respond to an RMP-related emergency will also improve their ability to respond to any
emergency or accident at the facility.
Exhibit 6-1: Social Benefits of Final Rule Provisions.
Rule Provision
Social Benefits
1. STAA*
Prevention of future RMP facility accidents
Mitigation of future RMP facility accidents
Prevention and mitigation of future non-RMP accidents at
RMP facilities
Avoided major catastrophes
2. Root cause analysis*
3. Third-party audits*
4. Employee Participation Plan
5. RMP Justifications
Mitigation of future RMP facility accidents
Mitigation of future non-RMP accidents at RMP facilities
6. Emergency Response Provisions
Mitigation of future RMP facility accidents
Mitigation of future non-RMP accidents at RMP facilities
7. Information Availability
Improved information
Mitigation of future RMP facility accidents
Mitigation of future non-RMP accidents at RMP facilities
* The provision increases the likelihood that RMP facilities will adopt process changes superior to those that would
have occurred in the baseline. This incremental improvement results in the social benefits which appear in the right
hand column. Note that a wide variety of process changes might result, depending on the industry, the findings of the
analysis or audit, the specific facility or process, and so on.
As Exhibit 6-1 indicates, each rule provision is expected to generate social benefits in multiple
benefit categories. The primary social benefit category for each rule provision is indicated in bold type.
Exhibit 6-1 indicates, for example, that performing an accident root cause analysis is expected to reduce
the risks and magnitudes of future RMP and non-RMP accidents at RMP facilities and of major
catastrophes. The emergency response provisions are another example. The provisions require a
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community notification system which helps improve information available to the public and emergency
responders. This will mitigate future RMP accidents as well as impacts of non-RMP accidents at RMP
facilities.
The following sections discuss each primary benefit category in more detail: accident prevention,
accident mitigation, and information provision. Each of the primary social benefit categories identified in
Exhibit 6-1 is associated with more specific benefits which are elaborated in the conclusion of this chapter
and the discussion of Exhibit 6-3.
6.1.1 Prevention
Final rule provisions for STAA, root cause analysis, third-party audits, and employee
participation plans involve changes to the current RMP rule's accident prevention program elements and
are intended to lower the likelihood of future accidents of the same or similar type.
The STAA requirement applies to facilities with a Program 3 process in NAICS 324 or 325. The
practicability assessment portion of the requirement applies only to Program 3 NAICS 324/325 facilities
that had accident since their last PHA, that are located within one mile of another facility with a process
in NAICS code 324 or 325, or that have an HF alkylation unit in a NAICS 324 process. The STAA
should result in identification of potential process changes which, if implemented, will result in owners or
operators using less hazardous substances, minimizing the quantities of regulated substances present in a
process, moderating process conditions, or reducing process complexity.
The final rule also requires that facilities with Program 3 processes in NAICS code 324 or 325
that have had an accident, have an HF unit in a 324 process, or are within 1 mile of another 324 or 325
facility implement a measure (IST/ISD, passive, active, or procedural) or combination of these measures
that reduce risk at least as much as would a passive measure identified as practicable in the facility's
STAA. Such changes help reduce the prevalence of higher risk processes. They prevent accidents by
either eliminating the possibility of an accidental release entirely by making a process more fault-tolerant,
such that a minor process upset, or equipment malfunction is less likely to result in a serious accidental
release; and by making releases that do occur, less severe. The requirement is expected to change the
level of risk reduction facilities achieve. The requirement may encourage some facilities to implement
complementary measures which enhance cumulative risk reduction. EPA expects that, overall, the
requirement will result in facilities identifying more options to reduce risk and implementing a larger
number of more effective risk-reduction measures than facilities would in the absence of the rule,
particularly among facilities that in the baseline have infrequent voluntary implementation of risk-
reduction measures.
The root cause analysis provision is expected to prevent future accidents by identifying the
underlying causes and corrective actions for serious accidents. Overtime, EPA expects that implementing
the corrective actions and lessons learned through root cause analyses should prevent future accidents and
result in a reduction of onsite and offsite impacts.
The third-party audit provision requires regularly scheduled compliance audits to be conducted by
an independent third-party for facilities that have had an accidental release or when required by an
implementing agency. This differs from the current compliance audit requirement, which does not set
requirements regarding auditor independence for these or other facilities. The final rule specifies third-
party auditor qualifications including both competency and independence requirements. These safeguards
regarding competency and independence should improve auditor objectivity and performance. In fact,
peer-reviewed empirical literature has found that auditors are less likely to be lenient or biased when
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sufficient safeguards are in place to ensure auditor independence from the facility under review. Relative
to the baseline, the third-party audit requirement increases the likelihood that audits will result in
identification of safety problems and necessary process improvements before such deficiencies can result
in accidents.
EPA expects the employee participation plan provision to prevent future accidents as well.
Although employees currently may be involved in the development of plans and procedures (through 40
CFR 68.83 or otherwise), they may not be guaranteed "a seat at the table" when final decisions are made
about process operations that they are directly involved in that pose hazards that could threaten their
health and safety. Employees may have practicable recommendations for hazard evaluations, incident
investigations, and compliance audits that may reduce hazards at RMP facilities. Involving directly
affected employees in these discussions and decisions will help ensure that the most effective
recommendations for reducing hazards and minimizing risks to employees and the public are given the
proper consideration.
Climate change is associated with extreme weather events that can trigger accidental releases.
One way EPA is addressing the risks associated with climate change impacts in the final regulation is by
emphasizing language in the process hazard analysis requiring owners and operators to consider the
impacts of natural hazards including climate change-related weather events. While EPA does not assign a
cost to this provision, to the extent that the final provisions prevent the potential consequences of
accidents at regulated facilities as the result of natural hazards, EPA expects these provisions to provide
benefits from those mitigated or avoided accidents.
These provisions will also reduce the probability of a major catastrophe - a rare but extremely
high consequence accident.
In addition to preventing future accidents, these provisions will generate additional social
benefits, including mitigation of future RMP facility accidents, prevention of future non-RMP accidents
at RMP facilities, and mitigation of future non-RMP accidents at RMP facilities. These provisions can
identify process improvements that result in less severe releases (e.g., an audit or investigation that
identifies improvements to a release detection or mitigation system).
6.1.2 Mitigation
Final rule provisions for emergency response and hazard evaluation amplifications are primarily
focused on mitigating consequences of accidents. One component of the emergency response provisions
ensures that a community notification system is in place to warn the public within the area threatened by
release. The emergency response provisions expand recordkeeping and implementation related to a
community notification system to non-responding facilities. EPA expects that this expansion will ensure
that all facilities subject to emergency response requirements have documented knowledge of the public
notification process that will occur in the event of an accidental release at the facility. The provision also
will help clarify the facility's role in the implementation of the notification process by requiring the owner
or operator to provide the information needed to initiate a public release notification. In combination with
annual emergency coordination meetings and notification exercises already required in the baseline, this
will enhance coordinated notification to the public, improve documented accountability for the
notification process, and help ensure timely decisions about notification of releases, particularly those
with offsite impacts. These changes will result in faster and better coordinated responses, including
effective and efficient notification of the public, that will reduce human health impacts and property
damage, and help reduce the number of onsite and offsite impacts. Finally, fires and releases will be under
control more quickly and ensuring that workers and responders know the most effective actions to take
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for a particular facility under certain conditions, the provision could reduce the duration of accidents as
well as the likelihood of injuries to emergency responders. Exposures may also be limited—particularly
for long-duration events.
Hazard evaluation amplifications can mitigate the consequences of accidents by requiring
facilities with Program 2 and Program 3 processes to explicitly address natural hazards that could lead to
or exacerbate an accidental release. Accident consequences should also be mitigated through an explicit
requirement that facilities address standby or emergency power systems. Finally, mitigation should result
from EPA explicitly defining stationary source siting as inclusive of the placement of processes,
equipment, buildings, and hazards posed by proximate facilities, and accidental release consequences
posed by proximity to the public. Natural hazards continue to be a factor in RMP accidents and present a
growing threat to process safety at RMP facilities. Therefore, at a minimum, a requirement to evaluate
and control natural hazards will allow for accidents to have lower consequences when natural hazards do
occur. For example, the provision requires facilities with perimeter monitors to implement backup power
if they do not have it already also can mitigate the consequences of accidents. Should there be a natural
cause for loss of power, this requirement will ensure that perimeter monitors are able to continue to detect
releases at the fenceline and allow for a quicker response. This may also mitigate the consequences of
some accidents that might otherwise occur when releases are not detected early enough.
6.1.3 Improved Information
Several of the final rule provisions target information provision, including community
notification under the emergency response provision and information availability; specifically, the final
rule provision requiring facilities to disclose information upon request by nearby community members.
The community notification provisions will improve coordination with the local community by ensuring
systems are in place to provide quick information when there is an accidental release. The other
components of the emergency response provisions will ensure the public and emergency responders are
aware of the chemicals stored and processes used at RMP facilities, equipment, and materials. In addition,
if local community members and businesses understand the potential risks from a facility accident, they
will be better able to understand recommendations or orders from local officials for sheltering in place or
evacuation and take appropriate actions should an actual accident occur. Community members and
businesses will be better prepared for possible accidents, thereby mitigating the impacts of the event.
Better public information will improve efficiency of nearby property markets, and better information
provided to emergency responders will improve the efficiency of their decisions regarding preventive
measures to take and equipment and materials to purchase. Finally, improved information about publicly
traded firms could improve the efficiency of capital markets.
6.1.4 Evidence from the Literature
Evidence of the effectiveness of several of the rule provisions can be found in the peer reviewed
literature. Regarding root cause analysis, Carroll et al. (2002) concluded that the cultural legacy of a root
cause analysis at a chemical plant "was embodied in managers' increased openness to new ideas,
individuals' questioning attitude and disciplined thinking, and a root cause analysis process that provided
continual opportunities to learn and improve."124 Root cause analysis is used widely in health care, where
its effectiveness was studied by Percarpio, et al. (2008). Case studies of root cause analysis were gathered
from 38 articles, 11 of which measured its effectiveness. Safety improvement following root cause
analysis was reported by all 11 articles. However, the authors noted that the evidence of improved safety
124 Carroll, J.S., J.W. Rudolph, and S. Hatakenaka. "Lessons Learned from Non-Medical Industries: Root Cause Analysis as
Culture Change at a Chemical Plant." Qual Saf Health Care. 2002 Sep, 11(3) 266-9.
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was anecdotal and that further formal studies are still needed.125 A later empirical analysis by Percarpio
and Watts (2013) of data on root cause analysis for 139 medical centers from 2004 through 2006
concluded that facilities that completed fewer than four analyses per year had higher rates of
postoperative complications, but it was not clear that root cause analyses directly improved patient
safety.126 CSB investigations have indicated that root cause analyses help eliminate or substantially
reduce the risk of reoccurrence of the incident and other similar incidents. The CSB investigations of the
2004 Formosa Plastics Corporation incident,127 the 2005 BP Texas City Refinery incidents,128 and the
2010 Millard Refrigerated Services incident129 found that root causes of prior, similar incidents were not
identified, which contributed to subsequent incidents.
When independent third-party auditing is necessary and appropriate, the literature indicates that
without sufficient safeguards to ensure auditor independence, auditors are more likely to provide lenient
or biased audit reports that can fail to accurately identify problems and violations by the regulated entity.
For example, Duflo, et al. (2013) found that plants in India reduced actual pollution emissions following a
strengthening of requirements regarding third-party audits.13" Kunreuther, McNulty, and Kang (2002)
characterized as successful a variety of third-party inspection programs, several of which included
insurance components. The programs included third-party inspections of U.S. steam boilers, Los Angeles
hygiene services, and a Massachusetts waste cleanup program. Based on case studies, the authors
concluded, "The use of third-party inspections has had very beneficial effects on reducing the risks
associated with different activities/'131
The final rule will require RMP facilities to make certain types of information available to the
public upon request, including chemical hazard information, names of regulated substances, SDSs;
accident history information and more. As stated by Oberholzer-Gee and Mitsunari (2006), "... if
individuals pay attention to information regulation, this type of regulation can possibly lead to the spatial
reallocation of resources in the metropolitan economy/' Many studies of the effect of publicly available
information on market transactions, including property markets have been conducted and many have
focused on potential impacts of the Toxic Release Inventory (TRI). For example, Oberholzer-Gee and
Mitsunari (2006) examined property values in the Philadelphia region from 1988 to 1990 - one year prior
and one year after publication of the TRI. The researchers concluded that after the release of TRI data, the
predicted effect of pollution on property values changed and on average property values declined.132 Not
all studies of pollution information found significant effects. Mastromonaco (2015) states "...evidence
that the public internalizes information on toxic emissions, for example in the housing and stock markets,
125 Percarpio, Katherine B., Vince B. Watts, and William B. Weeks. "The Effectiveness of Root Cause Analysis: What Does the
Literature Tell Us?" The Joint Commission Journal on Quality and Patient Safety, 34(7). 2008, July. 391-8.
120 Percarpio, Katherine B., and Vince Watts. "A Cross-Sectional Study on the Relationship Between Utilization of
Root Cause Analysis and Patient Safety at 139 Department of Veterans Affairs Medical Centers." The Joint Commission Journal
on Quality and Patient Safety, 39(1). 2013. January, pp 32-7.
127 CSB, "Formosa Plastics Vinyl Chloride Explosion," last modified Mar. 6, 2007, https://www.csb.gov/formosa-plastics-vinvl-
chloride-explosion/.
128 CSB, "BP America Refinery Explosion," last modified Mar. 20, 2007, https://www.csb.gov/bp-america-refmerv-explosion/ .
129 CSB, "Millard Refrigerated Services Ammonia Release," last modified Jan. 15, 2015, https://www.csb.gov/millard-
refrigerated-services-ammonia-release/.
130 Duflo, Esther, Michael Greenstone, Rohini Pande, and Nicholas Ryan. "Truth-Telling by Third-Party Auditors and The
Response of Polluting Firms: Experimental Evidence from India," 128 Q. J. OF ECON. 4 at 1499-1545 (2013).
131 Kunreuther, Eloward C., Patrick J. McNulty, and Yong Kang. "Third-Party Inspection as an Alternative to Command and
Control Regulation." Risk Analysis Vol 22, Issue 2, April 2002, pp 309-318.
132 Oberholzer-Gee, F. and M. Mitsunari. "Information Regulation: Do the Victims of Externalities Pay Attention?"
Journal of Regulatory Economics. 2006. 30: 141.
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is mixed/'133 The current RMP rule makes additional information beyond toxics emissions available to
the public. Mastromonaco (2015) looked beyond the impact of emissions data and examined a regulatory
change in 2001 that lowered the threshold for required reporting for lead to the TRI. The paper studied
San Francisco property value data to explore whether the new listing of existing facilities using lead that
previously did not report to the TRI affected values of houses located near those facilities. The conclusion
was that identifying a plant as a TRI plant significantly reduced nearby property values, suggesting that
nearby residents adjusted their risk perceptions upward following newly available public risk
information.134
6.1.5 Conclusion
The discussion in this section has qualitatively discussed how the final rule provisions will aid in
the prevention and mitigation of accidents and improve information available to the public and LEPCs.
EPA has no data or empirical estimates of the precise impact of each rule provision on the probability or
magnitude of an accident, or on improved efficiency due to better information. To shed light on the
landscape in the baseline, in Section 3.2.5 EPA described in detail the number and costs of accidents
currently associated with RMP facilities. To the extent practicable, that analysis monetizes the costs of
damages to partially estimate the baseline costs that EPA expects will decline due to the final rule.
However, there are additional benefits to the final rule beyond those that data allow to be monetized. As
illustrated in Section 3.2.1, EPA describes the impacts of two recent RMP-reportable accidents to further
illustrate the nature of damages from accidents at RMP facilities including some that can be monetized
and some that cannot. The following presents and explains additional baseline accident damages that
could not be monetized.
6.2 Benefit Categories Associated with Accident Prevention and Mitigation
In addition to the avoided costs from the reduced likelihood of an accident or a catastrophe, the
rule will generate benefits in other important categories, including avoided impacts of non-RMP accidents
at RMP facilities; the information benefits described above; and additional benefit categories not reported
in the RMP data that result from accident prevention and mitigation. Additional benefit categories include
avoided major catastrophes, avoided health risks from exposure to toxic chemicals, avoided lost
productivity, avoided responder costs, avoided transaction costs, protected property values, avoided
environmental impacts, avoided unqualified evacuation and shelter-in-place costs, and potential benefits
to communities with environmental justice concerns. The sections below present a discussion of these
baseline damages that could not be monetized.
6.2.1 Major Catastrophes
In enacting section 112(r), Congress was focused on catastrophic accidents such as Bhopal, which
are extremely rare, but very high consequence events. The large chemical facility accidents that have
occurred in the U.S. and Europe have not approached this level of damage, although it is possible that
could happen. The single largest chemical accident in the U.S., the explosion at Phillips in Pasadena, TX,
in 1989 killed 23 workers ($239 million in 2022 dollars), injured at least 150 more ($7.5 million), and
caused $1.8 billion in property damage.135 The five-year baseline period included in this analysis does not
133 Mastromonaco, Ralph. "Do Environmental Right-to-Know Laws Affect Markets? Capitalization of Information in
the Toxic Release inventory," Journal of Environmental Economics and Management, 71. 2015. May. Pp 54-70. To
support this statement, the author cites Hamilton ("19951 Khanna et al. (19981 Bui (2005). Bui and Maver ("20031
Banzhaf and Walsh (2008) and Konar and Cohen (1997).
134 See footnote 43 for the full Mastromonaco (2015) citation.
135 EPA estimated the values of injuries and deaths that occurred in Pasadena using the same values applied to injuries and deaths
at RMP facility-reported accidents. See Exhibit 3-15 in the accompanying RIA for specific values and Section 3.2.5.1 "Fatalities
and Injuries" in the RIA for detailed explanations of how those values were estimated. The $1.8 billion in property damage was
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include a major catastrophe, nor were any reflected in the Amendments RIA time frame of 2004 to 2013.
If the final rule provisions were to prevent or substantially mitigate even one accident of this magnitude,
the benefits generated will be dramatic.
6.2.2 Potential Health Risks from Exposure to Toxic Chemicals
A baseline cost from RMP facility accidents is potential and/or perceived health risks from
exposure to toxic chemicals. A benefit of the final rule in reducing the likelihood of an accident will be
reduced long-term health risks from exposure to toxic chemicals. EPA is unable to quantify this benefit
because in many cases the health risks from exposure to many toxic chemicals are unknown and may only
be discovered years after an accident occurs. These health risks may occur from toxic chemical releases
into the air, surface water, or soil. In addition, beyond actual health impacts, there may be costs to the
public from stress and uncertainty associated with perceived risk of long-term health problems due to
chemical accidents.
6.2.3 Lost Productivity
A major cost associated with some chemical accidents that is not captured in the five-year-
baseline estimates presented above is the lost productivity that can result if a facility or process unit must
be shut down or is destroyed. The RMP data include estimates of property damage but specifically
exclude estimates of lost productivity.136 EPA has not estimated these costs because of a lack of data.
Such costs are highly variable based on the type of release, the extent of the damage, the location of the
facility, and product being produced. Marsh Specialty, a risk management and energy consultancy, has
collected data on 10,000 accidents in the petrochemical sector over 40 years and published 27 editions of
its "100 Largest Losses" reports.137 Their data suggest that lost productivity is typically two or three times
the cost of onsite property damage and sometimes much more than that.138 For example, a series of three
explosions at a refinery in Sweeney, Texas on April 13, 1991 resulted in $225 million in 2002 dollars
($353 million in 2022 dollars) of business interruption losses, five times the $45 million ($71 million in
2022 dollars) in property damage.139 Applying a multiplier of two or three to the annual average onsite
property damages of $455 million over the 5-year period of 2016 to 2020 from RMP-related accidents
included in this analysis, the annual productivity losses would be $909 million (using a factor of two) or
$1,364 billion (using a factor of three). Many chemical accidents do not result in property damage and,
therefore, have a limited impact on business beyond the loss of the chemical itself. Explosions and fires,
however, can produce substantial damage.
The Marsh accident summaries provide examples of the extent of damage and the impact on
production as well as the variability in those impacts. One refinery facility had $240 million in damage
but continued to operate; another that experienced the same level of damage was shut down for 6 months.
Production units affected by major explosions have been shut down for weeks, months or more than a
estimated by Marsh JLT Specialty, "100 Largest Losses in the Hydrocarbon Industry," 27th ed., March 2022.
https://www.marsh.eom/iis/industries/energy-and-power/insights/100-largest-losses/100-largest-losses-report-download.htinl.
130 EPA instructions for RMP submissions specifically direct the owner or operator not to include any losses incurred as a result
of business interruption. See page 74 of the RMP*eSubmit User's Manual (EPA, August 2019);
http://www.epa.gov/nnp/nnpesubmit-users-manual.
137 Marsh JLT Specialty," 100 Largest Losses in the Hydrocarbon Industry," 27th Edition, March 2022. Accessed from
https://www.marsh.eom/uk/industries/energv-and-power/insights/100-largest-losses.html. Marsh provides estimates of large
property damage losses in the hydrocarbon industry from 1974 to 2021 in current and 2021 dollars and in a few cases, business
loss costs.
138 Marsh JLT Specialty, "The 100 Largest Losses 1974-2015: Large property damage losses in the hydrocarbon industry," 24th
Edition, March 2016. Accessed from https://www.marsh.com/uk/industries/energv-and-power/insights/100-largest-losses.html.
Marsh provides estimates of large property damage losses in the hydrocarbon industry and in a few cases, business loss costs.
139 Marsh JLT Specialty, "The 100 Largest Losses 1972-2001: Large property damage losses in the hydrocarbon-chemical
industries," 20th Edition, February 2003. Accessed from https://enatech.irc.ec.europa.eu/download/attacliment/123.
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year. Some accident reports indicate production continued but at a reduced rate for weeks or even months.
A refinery accident that shuts down one or more units will affect the firm involved, especially if it has no
other refinery in the area or its other units do not have the capacity to increase production. In some cases,
such reduced production may be offset by increased production at other firms. Refining capacity in the
U.S. is located primarily in the Gulf Coast and West Coast regions; accidents that shut down units in
those areas may be less likely to have economic impacts beyond the firm owning the refinery if other
nearby refineries can increase production. However, in some cases regional supply disruptions and related
impacts may occur. As illustrated by the case studies, firm closure has occurred in response to serious
accidents.
According to a RAND Corporation study, lost production capacity resulting from the August 12,
2012, Chevron Richmond refinery accident cost California consumers an additional $447 million in
increased gasoline costs.14" The study also estimated that the February 18, 2015, accident at ExxonMobil
in Torrance cost California consumers more than $2.4 billion due to shutdown of a production unit. In
addition to lost production, accidents at refineries in other regions could impose additional social costs
because even if other refineries can increase production, higher costs of transporting products longer
distances may result.
Broader losses could occur in the petrochemical sector where some facilities may be the sole
source for some products. Even in that sector, however, losses may be limited to the firm involved. For
example, the 1989 explosion at the Phillips plant in Pasadena, TX, which destroyed two units at the
facility appears to have had a limited impact on the economy even though the plant was the only domestic
source for one product.141 Appendix B provides a list of the major U.S. accidents cited by Marsh in its
2020 publication, with property damages adjusted by Marsh to 2021 dollars, as well as some business
interruptions in accident year dollars. These accidents are limited to those that might have occurred at
RMP facilities (offshore oil and distribution accidents were omitted). In cases where the damage was the
result of flooding or wind, the flooding or wind damage was a secondary effect of an accident where the
primary cause was a chemical release and not a natural disaster. The accident list does not include all
serious accidents because Marsh excluded any accident that produced less than $130 million in property
damage (the publication covers accidents worldwide). Nonetheless, the list indicates the range of property
damage and the lost productivity in the United States.
6.2.4 Emergency Response Costs
EPA was unable to locate data summarizing the costs associated with responding to a chemical
release, fire, or explosion. Those costs are very likely to vary widely depending on the accident. A
response may involve facility fire brigades, community fire departments, volunteer fire departments, and
mutual aid organizations. There is also the cost associated with equipment depreciation and fire
suppressant used. The level of effort and equipment use can be seen in accidents reported by Marsh. For
example, in 1999, approximately 300 firefighters and 33 fire trucks participated in the 2 Vi hour effort to
control a fire at a refinery in California. Foam concentrate consumption totaled 3,200 gallons.142 At a
foam concentrate cost between $20 and $60 per gallon, the cost of the fire suppressant alone will range
from $64,000 to almost $192,000. In sum, EPA expects that these costs are significant.
140 RAND, Cost-Benefit Analysis of Proposed California Oil and Gas Refinery Regulations.
https://www.rand.org/content/dam/rand/pubs/research reports/RR1400/RR1421/RAND RR1421.pdf.
141 http://www.nvtimes.com/1989/10/25/us/reverberations-for-industries-but-not-for-us-households.html.
142 See Marsh (2022), March 25,1999 Richmond, CA explosion.
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6.2.5 Transaction Costs
Chemical accidents result in transactions between parties that consume time and other resources
that will otherwise be directed to other productive activities. For example, litigation can impose
substantial transaction costs. Particularly when the public is affected, facilities are often sued; a 1988
refinery explosion led to about 5,200 property claims.143 Substantial costs are associated with making and
responding to such claims and the associated litigation, both on behalf of plaintiffs and defendants. Rule
provisions that reduce the number or severity of accidents could reduce the number of lawsuits and the
resources expended on litigation. In addition, there is lost time to the public from often necessary
interactions with government agencies, responsible parties, and media to try and understand the "true"
cause, nature, and implications of chemical accidents due to perceived or real information barriers.
6.2.6 Property Value Impacts
Values of properties in close proximity may be affected by an RMP facility accident. Property
values may be changed because damages caused by an accident may result in persistent effects. These
effects may include including offsite damage to buildings and other structures and environmental damage
which change the aesthetic appeal of the surrounding area and potentially reduce ecological services.
Nearby residents may have concerns about health risks from the potential for continued exposure to toxic
chemicals released during an accident. An accident could also serve as a signal affecting nearby residents'
perceptions and expectations regarding future accidents and risks (Guignet, et al. 2023b)144. These
potential changes can affect the values of nearby properties.
Two recent hedonic property value analyses have examined the impact of RMP facility accidents
on residential property values (Guignet et al. 2023a, b)145. Using a difference in differences estimation
approach, Guignet et al. (2023b) studied nationwide data on RMP facility accidents and residential
transactions between 2004 and 2019 that occurred within 5.75 km (3.57 miles) of an accident. The
analysis found that accidents with only onsite impacts reduced nearby property values between zero and
two percent. However, accidents with impacts that occurred offsite, including fatalities, hospitalizations,
people in need of medical treatment, evacuations, sheltering in place events, and/or property and
environmental damage, reduced home values by two to three percent. The lower values persisted for
about 10 to 12 years on average. The paper estimates an average loss of $5,350 per home in 2021 year
values. Aggregating across the communities near the 661 facilities that experienced an offsite impact
accident in their data, Guignet et al. (2023b) calculate a total $39.5 billion loss.
In the second paper, Guignet et al. (2023a) analyzed RMP facilities and accidents in a smaller
geographic area - the three states of Michigan, Ohio, and Pennsylvania - from 2004 through 2014. The
analysis used alternative difference-in-differences and triple differences approaches that allowed
comparison between homes before and after an accident, near an accident versus farther away, and homes
near facilities with an accident versus near facilities with no accidents. The study concluded that accidents
with offsite impacts caused a five to eight percent decrease in home values within 5 km (3.1 miles) of a
facility accident. Both studies concluded that nearby homeowners experienced significant losses
following an accident with offsite impacts. Thus, provisions that reduce the risks and expected
magnitudes of such accidents will protect nearby property values. Guignet et al. (2023a) found that homes
located near facilities regardless of whether an accident has occurred are already valued significantly
lower than homes farther away. Accidents can further depress property values and exacerbate disparities
143 See Marsh (2022), Shell Norco explosion.
144 Guignet, Dennis, Robin R. Jenkins, James Belke, and Henry Mason. 2023b. The property value impacts of industrial chemical
accidents. Journal of Environmental Economics and Management. 120 (2023) 102839.
145 Guignet, Dennis, Robin R. Jenkins, Christoph Nolte, and James Belke. 2023a. The External Costs of industrial Chemical
Accidents: A Nationwide Property Value Study. Journal of Housing Economics. 62 (2023) 101954.
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in home values. This is an important distributional concern considering that residential property is a key
source of wealth to many households.
Other research has not specifically targeted RMP facilities but t is relevant to understanding the
benefits of the final rule including a variety of papers that have specifically examined the impact on
property prices of being near hazardous industrial facilities, usually finding that prices increase with
distance from the facility.146 Early research on the property value impact of industrial accidents includes
Carroll et al (1996) which studied property prices in neighborhoods surrounding the Pepcon chemical
facility in Nevada before and after a dramatic explosion in 19 8 8.147 Data for around 5,000 property
transactions from 1986 to 1990 showed that the explosion was followed by a 17.6 percent decline in
property values in the two closest towns of Green Valley and Henderson.
Two studies have examined the effects of pipeline explosions on nearby property values. While
the explosions were not from chemical facilities, the property value impacts may be comparable.148
Preliminary findings by Cheng, et al. (2022) of nationwide property value impacts of accidents at natural
gas pipelines suggest that values within 1 km (.62 mile) of natural gas distribution pipelines declined by 7
percent compared to properties 1 to 2 km (.62 to 1.24 miles) from an explosion.149 Hansen et al. (2006)
studied the effect of a 1999 fuel pipeline explosion in Bellingham, Washington.15" Following the pipeline
explosion, prices of properties within a mile were significantly adversely affected, with the mean property
price discounted by 4.6 percent for a property 50 feet from the pipeline, and declining at further distances.
These studies strongly suggest that preventing or mitigating an accident at a chemical facility may
prevent or mitigate property value losses in nearby neighborhoods. Note that any avoided property value
losses represent part of society's combined valuation of reduced risks to human health, reduced
ecosystem services, and negative impacts on aesthetic appeal. At the same time, property value losses
reflect losses only to nearby homeowners, and not to other affected parties such as employees, emergency
responders, and others who are affected through avenues other than property values, including affected
individuals who do not live in the immediate neighborhood.
6.2.7 Environmental Impacts
In addition to data on deaths, injuries, property damage, evacuations, and sheltering in place, the
current RMP rule requires owners and operators to report within the five-year accident history those
accidental releases that result in environmental damage. However, the environmental damage information
contained in the RMP database is limited. RMP accident history reports indicate general categories of
environmental damage (e.g., fish or animal kills, tree, lawn, shrub, or crop damage, etc.), but do not
contain estimates of damage valuation or other specific information on reported impacts.
14oFor a review of papers that have estimated the impacts of hazardous industrial facilities on property values, see Grislain-
Letremy, C. and A. Katossky 2014. The impact of hazardous industrial facilities on housing prices: A comparison of parametric
and semiparametric hedonic price models. Regional Science and Urban Economics 49: 93-107 for a review of the literature.
(Their Appendix A. 1 summarizes findings.)
147 Carroll, T.M., Clauretie, T.M., Jensen, J. and Waddoups, M. September 1996. The Economic Impact of a Transient Hazard on
Property Values: The 1988 PEPCON Explosion in Henderson, Nevada. The Journal of Real Estate Finance and Economics,
Volume 13, Issue 2, pp 143-167.
148 An important difference between a pipeline and a chemical facility is that pipelines may not be as noticeable. Pipeline
accidents may increase awareness of baseline risks as well as change perceptions of post-accident risks.
149 Cheng, N, Li, M., Liu, P., Luo, Q., Tang, C., Zhang, W., 2022. Pipeline Incidents and Property Values: A Nationwide
Hedonic Analysis. Social Science Research Network. May. Available at.
https://papers, ssrn.com/sol3/papers.cfm?abstract id=4116305.
150 Hansen, J. L., E. D. Benson and D. A. Hagen. 2006. Environmental Hazards and Residential Property Values: Evidence from
a Major Pipeline Event. Land Economics 82(4): 529-541.
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Rule provisions that prevent or mitigate the extent of accidental releases are therefore likely to
prevent or reduce the environmental impacts associated with those releases. These benefits cannot be
quantified using the available data.
6.2.8 Unquantified Costs of Evacuation and Sheltering-in-place Events
While EPA has estimated the baseline time costs of evacuations and sheltering-in-place events,
there are additional costs that EPA is unable to quantify. Some of these additional costs were described in
the cases presented in Section 3.2.1. The following list highlights examples of additional unquantified
impacts of evacuations and sheltering in place events:
• Inconvenience of relocating to a relative's or friend's house.
• If staying at a hotel, expenses for rooms, meals, parking151 and the stress of not knowing whether
you will be reimbursed for hotel and related expenses (e.g., restaurant meals).152
• The emotional toll of deaths or illness experienced by pets and yard animals left behind such as
dogs, backyard chickens, goats etc.153
• Loss of subsistence agriculture or homegrown produce.
• Cost of bottled water purchased by municipalities, other governments, relief organizations, and
businesses.154
• Cost of bottled water purchased by individuals - individuals impacted by accidents may choose to
purchase bottled water for their household rather than rely on municipal or other water systems
due to perceived or real risk of water contamination.155
• Other contamination averting behaviors (e.g., such as gloves, masks, and air/water
filters/purifiers; limiting of outdoor time, which may also disrupt social networks and exercise
activities; and increased time and resources spent boiling tap water, washing, and cleaning).156,157
• Cost of children missing school.158
6.2.9 Potential impacts to communities with environmental justice concerns
While EPA is unable to estimate the incremental changes in accident risks from the provisions of
this final rule, the baseline distribution of population (see Chapter 9) suggests that the benefits of the
provisions may reduce potential exposure for historically vulnerable populations. Communities within
one mile and three miles of RMP facilities have higher percentages of people belonging to historically
151 Average daily rate (ADR) of a hotel stay was $154.32 https://www.costar.com/article/78750475/str-us-hotel-rate-revenue-per-
available-room-improve-in-september.
152 Bonanno, G. A., Brewin, C. R., Kaniasty, K, & Greca, A. M. L. (2010). Weighing the Costs of Disaster: Consequences,
Risks, and Resilience in Individuals, Families, and Communities. Psychological Science in the Public Interest, 11(1), 1-49.
https://doi.Org/10.1177/1529100610387086https://ioiniials.sagepub.com/doi/10.1177/1529100610387086.
153 Carlson, D et al. Monetizing Bowser: A Contingent Valuation of the Statistical Value of Dog Life. (2019). Journal of Benefit-
Cost Analysis, 11(1), 131-149. doi:10.1017/bca.2019.33 https://www.Cambridge.org/core/ioumals/iournal-of-benefit-cost-
analvsis/article/nionetizing-bowser-a-contingent-valuation-of-the-statistical-value-of-dog-
life/86EB120F86F7376DC366F6578C8CFEFl.
154 $650,000 per month in Flint, Michigan https://www.freep.com/story/news/local/niicliigan/flint-water-crisis/2018/04/06/flint-
water-bottled-drinking/493954002/.
155 Jakus, Paul & Shaw, William & Nguyen, To & Walker, Mark. (2009). Risk Perceptions of Arsenic in Tap Water and
Consumption of Bottled Water. Water Resources Research. 45. 10.1029/2008WR007427.
https://agupubs.onlinelibrarv.wilev.coni/doi/full/10.1029/2008WR007427.
150 Bonanno, G. A., Brewin, C. R., Kaniasty, K., & Greca, A. M. L. (2010). Weighing the Costs of Disaster: Consequences,
Risks, and Resilience in Individuals, Families, and Communities. Psychological Science in the Public Interest, 11(1), 1-49.
https://doi.Org/10.1177/1529100610387086https://ioimials.sagepub.coni/doi/10.1177/1529100610387086.
157 https://www.epa.gov/cliildren/what-you-can-do-protect-cliildren-environniental-risks
158 https://www.oecd.org/education/The-econoniic-inipacts-of-coronavirus-covid-19-leaniing-losses.pdf.
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vulnerable income, race, and ethnic groups compared to the national average. The disparity is even more
acute when looking at RMP facilities classified under NAICS codes 324 and 325 or by number of
accidents between 2016 and 2020. Populations living closer to RMP-regulated facilities are more likely to
be exposed if an accidental release occurs at an RMP facility. Thus, these releases pose a greater risk to
historically vulnerable populations. Hence, EPA anticipates that provisions reducing the risk of these
releases will benefit vulnerable populations. Several of the final rule provisions will prove especially
helpful, including the stationary source siting requirements, increased information availability for
fenceline communities, backup power for perimeter monitoring, and community notification and related
response planning improvements.
6.3 Avoided Accident Impacts: A Limited Breakeven Analysis
EPA expects the final rule to reduce accident risks across the spectrum of RMP facilities and
accident categories. The rule requirements are targeted at reducing both the probability and the magnitude
of the full range of accident types regulated by the RMP program including fires, explosions, and releases
of toxic vapors. Accident risks posed by the variety of RMP facilities in the numerous industries listed in
Exhibit 3-1 should decrease, with larger impacts expected for P3 facilities and especially petroleum
refineries and chemical manufacturers that meet the three conditions for STAA practicability and
implementation requirements. EPA expects the provisions, especially the STAA provision, to ameliorate
the upper end of the distribution of accident magnitudes so that the highest impact accidents are less
likely.
Section 3.2.5 describes the number and impacts of accidents currently associated with RMP
facilities based on their self-reported accident histories over 2016 to 2020. A limited set of accident
impacts are monetized. These monetized values range from a low of $100 to a high of $700 million for a
single accident. Important to note is that these monetized accident impacts do not reflect a major
catastrophe (a low probability but very high consequence accident). However, the final rule provisions are
expected to reduce the likelihood that one would occur.
While data constraints prevent EPA from conducting a benefit-cost analysis of the final rule, to
provide insight into the trade-off between the costs and benefits of the final rule provisions, this RIA
presents a limited breakeven analysis consisting of a simple comparison between the estimated annualized
costs of the rule and the limited set of monetized baseline accident impacts. The results of this analysis
should be viewed with caution. The annualized costs of the final rule (at a 3 percent discount rate) are
estimated as $257 million, while average annual monetized accident impacts based on self-reported RMP
facility data are estimated as $540 million. Important to note is that many baseline accident impacts are
not reflected in the $540 million baseline accident cost estimate, yet these additional unmonetized impacts
are expected to be avoided as a benefit of the final provisions. These impacts include taxpayer-funded
responder costs, transaction costs for parties affected by the accident, property value reductions in nearby
neighborhoods (which reflect the risks to residents159), unmonetized costs of evacuations and sheltering -
in-place, the costs of potential health risks from exposure to toxic chemicals, and more. The $540 million
estimate also does not reflect the full set of baseline inefficiencies that will be improved due to the
improved information offered by several of the final provisions such as the community notification
requirements and the back-up power for monitors. Finally, as explained above, the baseline estimate of
costs does not include a major catastrophic loss. In light of these numerous unmonetized impacts, the
estimate of baseline costs potentially reduced by the final rule is only partial.
159 Property value losses reflect and overlap with values of risks to human health, reduced ecosystem services, and
negative impacts on aesthetic appeal experienced by nearby residents.
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For a sense of the potential magnitude of omitted baseline accident costs, consider estimates of
the property value impacts of an RMP facility accident discussed in Section 6.2.6 and productivity losses
discussed in Section 6.2.3 above. A recent nationwide hedonic property value analysis focused
specifically on the impact of RMP facility accidents on residential property values (Guignet et al.
2023b).16" The research concluded that accidents with reported offsite impacts reduced the values of
homes located within 5.75 km (3.57 miles) by two to three percent and that on average, the lower values
persisted for about a decade. The study estimated an average loss of $5,350 per home in 2021 year values.
Across the communities near the 661 facilities that experienced an offsite impact accident during the
study period covering transactions between 2004 and 2019, Guignet et al. (2023b) calculated a total loss
of $39.5 billion. As for productivity losses, a Marsh 2016 report observed that business interruption
insurance claims in the energy sector were typically 2 to 3 times a facility's property loss value.161
Applying such a multiplier to the annual average onsite property damages of $455 million over the 5-year
period of 2016 to 2020 from RMP-related accidents included in this analysis, the annual average
productivity losses would be $909 million (using a factor of 2) to $1,364 billion (using a factor of 3).
Keeping in mind the noted omissions from the $540 million estimate of annualized baseline
accident impacts, the final rule will need to reduce damages valued at approximately $2 billion over any
number of future accidents to achieve breakeven. Given the estimated $257 million annualized rule costs,
if accident impacts are reduced by at least $257 million annually, the benefits of the rule will break even
with its costs. This could mean the prevention or mitigation of a single high cost accident such as the
$700 million high end accident in the 2016 to 2020 period. Or, alternatively, considering an estimated
number of annual accidents of about 100 (see Exhibit 3-11) with an average cost of $5.5 million each and
ignoring unqualified accident impacts, it could mean the prevention of 47 or fewer accidents per year
with the number fewer depending on the value of unmonetized and information benefits.
As the range of monetized accident impacts suggests (from $100 to $700 million for 2016 to
2020), the variation in monetized damages is substantial. The estimates of monetized accident damages
for the time periods for two prior RMP rules give lower averages. For example, the average per year is
$473.2 million for 2004 to 2013 and is $441.7 million for 2014 to 2016. The average per accident is $2.9
million for 2004 to 2013 and is $3.2 million for 2014 to 2016.162
Also of note is the timing of costs incurred to comply with the rule versus the timing of benefits.
The rule's benefits of accident prevention and mitigation and improved information occur only after the
l0° Guignet, Dennis, Robin R. Jenkins, Christoph Nolte, and James Belke. 2023b. The External Costs of industrial Chemical
Accidents: A Nationwide Property Value Study. Journal of Housing Economics. 62 (2023) 101954.
101 Marsh JLT Specialty, "The 100 Largest Losses 1974-2015: Large property damage losses in the hydrocarbon industry," 24th
Edition, March 2016. Accessed from https://www.marsh.com/uk/industries/energv-and-power/insights/100-largest-losses.html.
Marsh provides estimates of large property damage losses in the hydrocarbon industry and in a few cases, business loss costs.
102 See Chapter 3, Exhibit 3-16, for presentations of monetized damages for prior time periods. To obtain those estimates, EPA
re-estimated unit damage costs for the prior time periods by applying the same set of assumptions used for the current final rule
analysis and updating dollars to 2022. In particular, EPA re-estimated the costs assuming a fatality is valued at $10.4 million
instead of $8.6 million (using the BEA GDP deflator), hospitalization costs of $45,000 instead of $36,000, and BLS mean hourly
wage rates of $28.88 instead of $22.65. Previously, mean hourly wage was estimated as the cost per hour to shelter-in-place or
evacuate. Relying on updated guidance, this final rule analysis uses mean hourly wage plus voluntary benefits less taxes, which is
estimated at $36.66. For 2004 to 2013, estimated monetized damages from RMP facility accidents are $473.2 million (2022$) on
average per year; for 2014 to 2016, estimated monetized damages are $441.7 million (2022$) on average per year. In total, over
the 2004 to 2020 time period, the average per year is $482.8 and the average per accident is $3.4 million (2022$). EPA also
updated accident data which can be continuously updated in RMP filings. This resulted in differences in the raw accident data
between the December 31, 2020 RMP data used in this final rule and RMP data used in the amendments rule and reconsideration
rule RIAs.
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costs incurred to implement provisions; in other words, the costs incurred today lead to benefits
experienced at a later time. In some cases, the benefits may be experienced almost immediately and in
other cases, they may occur many years later. For example, ensuring a community notification system is
in place would be expected to result in benefits as soon as the next need for an emergency response
occurs but may still provide a benefit to emergency response even a few years later. On the other hand,
STAA initial evaluation and practicability assessment costs would be expected to begin resulting in
accident prevention and mitigation benefits only after a facility implements risk reduction measures in
response to the analyses, which may be years after the facility incurs the cost of conducting the analyses
but would be expected to continue reducing accident risks for many more years to come.
Conceptually, these future benefits should be discounted similarly to how future costs are
discounted. This would imply that achieving average annualized benefits of $257 million for the rule to
break even within the 10-year period of analysis may require preventing slightly more than an annual
average of 47 or fewer accidents, depending on how much more concentrated in later years benefits are
than are costs. However, the role of timing also implies that the rule could break even within a longer
period of analysis with fewer than 47 or fewer annual accidents prevented if benefits consistently exceed
costs in the years following the initial decade..
When considering the rule's likely benefits that a portion of the monetized accident impacts
would be avoided, as well as additional unmonetized accident impacts, information benefits, and avoided
risks of catastrophe as described above, EPA believes the costs of the rule are reasonable in comparison to
anticipated benefits.
6.4 Conclusions
EPA is unable to estimate quantitative benefits for the final rule because the agency has no data to
project the specific impact on potential future accidents of each final rule provision. As the data show,
past accidents have generated highly variable impacts, so the impacts of future accidents are difficult to
predict. However, it is clear from the RMP accident data and other data, such as hedonic property value
analyses and the data reported by Marsh, that chemical accidents can impose substantial costs on firms,
employees, emergency responders, the community, and the broader economy.163 The final rule's
objectives to reduce risks across the range of RMP accident types and the spectrum of RMP facilities,
reduce the severity of impacts when accidents do occur, and improve information available to the public,
will provide substantial benefits to potentially affected members of the public.
Exhibit 6-3 summarizes the benefit or accident cost categories described in this chapter. Four
broad benefit categories are related to accident prevention and mitigation including RMP accidents, non-
RMP accidents at RMP facilities, and potential major catastrophes. The exhibit explains each and
identifies ten associated specific benefit categories. Exhibit 6-3 also highlights and explains the
Information Availability benefit category and identifies two specific benefits associated with it. To further
illustrate the nature of damages from accidents that could be avoided at RMP facilities, Section 3.2.1
describes the impacts of two recent RMP-reportable accidents.
EPA conducted a simple and limited breakeven analysis with limited data on the final rule's
benefit values because while EPA was able to quantify and monetize estimated costs of the final rule, it
163 Marsh, The " 100 Largest Losses in the Hydrocarbon Industry," 27th Edition 2022. Accessed from
https://www.marsh.com/uk/industries/energy-and-power/insights/100-largest-losses.html.
Marsh provides estimates of large property damage losses in the hydrocarbon industry from 1974 to 2021 in current and 2021
dollars and in a few cases, business loss costs.
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cannot sufficiently quantify or monetize estimated benefits. The results of this limited analysis should be
viewed with caution due to the omission of key unmonetized benefits. The final rule will need to reduce,
or mitigate, damages valued at approximately $257 million per year over any number of future accidents
to achieve breakeven. EPA compared this cost estimate to estimates of RMP accident impacts, noting that
many accident impacts could not be monetized so the comparison is limited. However, setting aside
important unmonetized accident damages, and ignoring the information benefits of the rule and that no
major catastrophes are represented in the baseline accident cases, if the rule prevents a single high cost
accident per year or 47 accidents that imposed average costs, the rule's benefits and costs would more
than breakeven.
EPA believes that the reductions in the probability and magnitude of accidents justify the costs of
the final rule. When assessing the reasonableness of the benefits and burdens of various regulatory
options, EPA must place weight on both preventing more common accidental releases captured in the
accident history portion of the RMP database while also placing weight on less quantifiable potential
catastrophic events. The Agency's judgment as to what regulations are "reasonable" is informed by both
quantifiable and unquantifiable burdens and benefits.
Exhibit 6-3: Summary of Social Benefits.
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 Health Risks of exposure to toxics
• Avoided Lost Productivity
• Avoided Emergency Response Costs
• Avoided Transaction Costs
• Avoided Property Value Impacts*
• Avoided Environmental Impacts
Accident Mitigation
Mitigation of future RMP facility
accidents
Non-RMP Accident
Prevention and
Mitigation
Prevention and mitigation of
future non-RMP accidents at
RMP facilities
Avoided Major
Catastrophes
Prevention of rare but
extremely high consequence
events
Information Availability
Provision of information to the
public and emergency responders
• Improved efficiency of property markets
• Improved resource allocation
*These impacts partially overlap with several other categories.
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CHAPTER 7: Regulatory Alternatives Considered
The RIA analyzed two regulatory alternatives to the final rule: one alternative with lower costs
and one with higher costs. The lower-cost alternative considers alternatives for four provisions: STAA,
root cause analysis, third-party audits, and employee participation. The higher-cost regulatory alternative
considered includes more costly versions of the STAA and third-party audit provisions.
7.1 Lower-cost Regulatory Alternative
The lower cost regulatory alternative considers alternatives for STAA, root cause analysis, third-
party audits, and employee participation plans.
7.1.1 STAA - (revisions apply to §68.3 and §68.67)
The final rule STAA provision will require a STAA initial evaluation for all complex (NAICS
324 or NAICS 325) facilities with a Program 3 process and a STAA practicability assessment and
implementation of a passive-equivalent measure for those complex Program 3 facilities that have had an
accident, that are within 1-mile of another complex facility, or that have an HF unit in a NAICS 324
process. The less stringent STAA provision would require only a STAA initial evaluation for all complex
facilities with a Program 3 process. No facilities would be required to conduct a practicability assessment
or implement any measures. The unit costs applied to the STAA provision are consistent with the unit
costs presented in Exhibit 4-5. The total costs of the lower cost STAA provision are summarized in
Exhibit 7-1.
Exhibit 7-1: Total Undiscounted Costs for STAA Provision
Lower Cost Regulatory Alternative (2022 Dollars).
Facility Type
Annual
Frequency
Unit Cost
Processes
Total Initial
Cost
Total Year 6
Cost
Initial Evaluation
Refineries
0.2
$73,149
1,535
$22,456,638
$4,042,195
Chemical Manufacturers
0.2
$13,284
2,799
$7,436,475
$1,338,565
Subtotal
4,334
$29,893,113
$5,380,760
Grand Total
$29,893,113
$5,380,760
* Totals may not sum due to rounding
7.1.2 Root Cause Analysis - (revisions apply to §§68.60 and 68.81)
The final rule revises the incident investigation provisions to require a root cause analysis
following an RMP-reportable accident. The incident investigation revisions will apply to all facilities with
Program 2 and 3 processes that experience an RMP-reportable accident. The lower-cost regulatory
alternative would apply to only facilities with Program 3 processes that experience an RMP-reportable
accident. Accident numbers are based on the RMP data from RMP-reportable accidents, referenced in
Exhibit 3-8, and are estimated based on the five-year annual average. The unit costs applied to the
accidents are consistent with the unit costs presented in Exhibit 4-6. The total initial cost of the lower-cost
root cause analysis provision is summarized in Exhibit 7-2.
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Exhibit 7-2: Total Annual Undiscounted Costs for Root Cause Analysis
Lower Cost Regulatory Alternative (2022 Dollars).
Facility Type
Unit Cost
Accidents
Total Initial Cost
P3 Accidents - simple
$2,350
40
$94,466
P3 Accidents - complex
$15,496
41
$638,448
Total
81
$732,914
7.1.3 Third-party Audits - (revisions apply to §§68.58 and 68.79 and new §§68.59 and 68.80))
The final rule will revise the 2017 amendments rule compliance audit provision by requiring
facilities with a Program 2 or 3 process having one accident, to contract with a third-party to conduct the
next scheduled compliance audit. The lower-cost alternative would revise the 2017 amendments rule
compliance audit provisions by requiring only Program 2 and 3 facilities with two RMP-reportable
accidents within five years to contract with a third-party to conduct the next scheduled compliance audit.
Exhibit 7-3 presents the number of Program 2 and 3 facilities by facility type and size with
multiple RMP-reportable accidents during the 2016-2020 five-year period, based on RMP data. The unit
costs applied to the third-party audit alternative are consistent with the unit costs presented in Exhibit 4-7.
The total cost of the lower-cost third-party audit provision is summarized in Exhibit 7-3.
Exhibit 7-3: Total Annual Undiscounted Costs for Third-party Audits
Lower Cost Regulatory Alternative (2022 Dollars).
Facility Type
Annual
Accident
Frequency
Unit Cost
Facilities
Total Initial
Cost
Simple w/ 0-19 FTEs
1
$44,758
5
$223,792
Simple w/ 20-99 FTEs
1
$50,091
4
$200,364
Simple w/ 100+ FTEs
1
$52,640
11
$579,043
Complex w/ 0-19 FTEs
1
$107,694
1
$107,694
Complex w/ 20-99 FTEs
1
$114,563
5
$572,816
Complex w/ 100+ FTEs
1
$118,246
32
$3,807,505
Small Government
1
$46,826
2
$93,651
Large Government
1
$121,480
1
$121,480
Total
61
$5,706,345
7.1.4 Employee Participation - (revisions apply to §68.83)
EPA is revising employee participation requirements for owners and operators of regulated
facilities with Program 3 processes. The final rule will require that the employee participation plan
include consultation of employees and their representatives on addressing, correcting, resolving,
documenting, and implementing recommendations or findings of process hazard analyses, incident
investigations, and compliance audits, at a minimum. In addition, the final rule will require that the
Program 3 employee participation plan include and ensure that effective methods are in place so that 1)
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employees knowledgeable in the process and their representatives have the authority to recommend to the
operator in charge of a unit that an operation or process be partially or completely shut down, and 2) a
qualified operator in charge of a unit may partially or completely shut down an operation or process,
based on the potential for a catastrophic release. EPA is requiring that an employee participation plan for
Program 2 and Program 3 processes include explicit language addressing worker participation and
reporting, along with information on how to report RMP-reportable accidents or related RMP non-
compliance issues. Last, EPA is requiring that Program 2 and 3 facilities train employees on the employee
participation plan.
The lower-cost regulatory alternative will add provisions to the employee participation
requirements only for owners and operators of regulated facilities with Program 3 processes and will not
require training. To estimate the cost of this option, EPA applied the unit cost estimates from Exhibit 4-9
to facilities with Program 3 processes. The total cost estimate is presented in Exhibit 7-4.
Exhibit 7-4: Total Annual Undiscounted Costs for Employee Participation Plan
Lower Cost Regulatory Alternative (2022 Dollars).
Facility Type
Annual
Frequency
Unit Cost
Facilities
Total Initial
Cost
Simple
1
$59
5,578
$327,801
Complex
1
$83
1,527
$126,612
Total
7,105
$454,413
7.2 Higher Cost Regulatory Alternative
The higher-cost regulatory alternative includes more stringent STAA and third-party audit
provisions than the final rule, combined with all other final rule provisions.
The more stringent STAA provisions would require a STAA initial and practicability analysis and
implementation of a passive-equivalent measure for all complex (NAICS 324 orNAICS 325) facilities
with a Program 3 process. The unit costs applied to the STAA provisions are consistent with the unit costs
presented in Exhibits 4-5 and 4-6. The total annual costs of the higher-cost STAA provisions are
summarized in Exhibits 7-5, 7-6, and 7-7.
Exhibit 7-5: Total Annual Undiscounted Costs for STAA Initial Evaluation and Practicability
Assessment Provision Higher Cost Regulatory Alternative (2022 Dollars).
Facility Type
Annual
Frequency
Unit Cost
Units
Total Initial
Cost
Total Year 6
Cost
Initial Evaluation
Refineries
0.2
$73,149
1,535
$22,456,638
$4,042,195
Chemical Manufacturers
0.2
$13,284
2,799
$7,436,475
$1,338,565
Subtotal
4,334
$29,893,113
$5,380,760
Practicability Analysis
Refineries - HF
0.2
$4,390,674
42
$36,881,660
$6,638,699
Refineries - Non-HF
0.2
$306,326
92
$5,636,400
$1,014,552
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Facility Type
Annual
Frequency
Unit Cost
Units
Total Initial
Cost
Total Year 6
Cost
Chemical Manufacturers
0.2
$33,550
1,355
$9,092,050
$1,636,569
Subtotal
1,489
$51,610,109
$9,289,820
Grand Total
$81,503,222
$14,670,580
* Totals may not sum due to rounding
Exhibit 7-6: Total Annual Undiscounted Costs for STAA Implementation Provision Higher Cost
Regulatory Alternative Years 1-5 (2022 dollars).
Facility
Capital
Cost
Unit
Capital
Cost
Unit
Recurring
Cost
Facilities
Total Annual Cost in Year:
Type
Annual
Frequency
1
2
3
4
5
Refineries
0.2
$4,449,414
$177,977
138
$127,715,968
$132,628,120
$137,540,273
$142,452,425
$147,364,578
Chemical
Manufacturers
0.2
$546,494
$21,860
1,376
$156,411,007
$162,426,815
$168,442,623
$174,458,431
$180,474,239
Total
1,514
$284,126,974
$295,054,935
$305,982,896
$316,910,856
$327,838,817
* Totals may not sum due to rounding.
Exhibit 7-7: Total Annual Undiscounted Costs for STAA Implementation Provision Higher Cost
Regulatory Alternative Years 6-10 (2022 dollars).
Facility
Capital
Cost
Unit
Capital
Cost
Unit
Recurring
Cost
Facilities
Total Annual Cost in Year:
Type
Annual
Frequency
6
7
8
9
10
Refineries
0.2
$4,449,414
$177,977
138
$152,276,731
$157,188,883
$162,101,036
$167,013,188
$171,925,341
Chemical
Manufacturers
0.2
$546,494
$21,860
1,376
$186,490,047
$192,505,855
$198,521,662
$204,537,470
$210,553,278
Total
1,514
$338,766,777
$349,694,738
$360,622,698
$371,550,659
$382,478,619
* Totals may not sum due to rounding.
The more stringent third-party audit provision would require all scheduled compliance audits at
facilities with Program 3 processes to be conducted every three years by a contracted third party. The
analysis projects that one-third of affected facilities would, therefore, conduct a third-party audit every
year. The unit costs applied to the third-party audit alternative are consistent with the unit costs presented
in Exhibit 4-8. The total costs of the higher-cost third-party compliance provision are summarized in
Exhibit 7-8.
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Exhibit 7-8: Total Annual Undiscounted Costs for Third-party Audits
Higher Cost Regulatory Alternative (2022 Dollars).
Facility Type
Annual
Frequency
Unit Cost
Facilities
Total Initial Cost
Simple w/ 0-19 FTEs
0.33
$44,758
1,383
$20,633,615
Simple w/ 20-99 FTEs
0.33
$50,091
1,313
$21,923,124
Simple w/100+ FTEs
0.33
$52,640
2,230
$39,129,246
Complex w/ 0-19 FTEs
0.33
$107,694
271
$9,728,398
Complex w/ 20-99 FTEs
0.33
$114,563
679
$25,929,465
Complex w/100+ FTEs
0.33
$118,246
577
$22,742,553
Small Government
0.33
$46,826
632
$9,864,600
Large Government
0.33
$121,480
20
$809,867
Total
7,105
$150,760,867
7.3 Summary of Regulatory Alternatives
EPA compared the total cost of the regulatory alternatives to the final rule. Each regulatory
alternative consists of the alternative provisions presented above, combined with all other final rule
provisions. The analysis presents total costs as total undiscounted costs over the 10-year period of
analysis, total discounted (3 percent and 7 percent), and annualized (3 percent and 7 percent). When
annual costs for different years are equal across the analysis period, the annualized costs calculated using
rates (e.g., 3 and 7 percent) are equal. Exhibit 7-9 summarizes the costs and highlights the provisions that
are different from the final rule under each regulatory alternative.
As described in Chapter 5, EPA estimates the final rule will cost $256.9 million (annualized 3
percent) or $296.9 (annualized 7 percent). The lower-cost regulatory alternative would cost $48.4 million
(annualized 3 percent) or $50.5 million (annualized 7 percent). The higher-cost regulatory alternative
would cost $567.2 million (different discount annualized at 3 percent) or $642.2 million (annualized at 7
percent).
Because EPA does not quantify the benefits of the regulatory alternatives, EPA assumes that the
benefits will move higher or lower qualitatively with the stringency of the alternatives considered.
Therefore, EPA believes a reduction in regulatory measures under the lower-cost alternative would be
associated with reduced lower benefits and that the higher-cost alternatives would increase result in
higher benefits than would the final rule. In selecting between the alternatives, EPA has tried to balance
new prevention program requirements with costs incurred by the regulated community.
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Exhibit 7-9: Annualized Estimated Costs of Regulatory Alternatives
Compared to Final Rule (millions, 2022 Dollars).
Cost Elements
Low-Cost Regulatory
Alternative (Annualized)
Final Rule (Annualized)
High-Cost Regulatory
Alternative (Annualized)
3%
7%
3%
7%
3%
7%
Rule
Familiarization
$5.8
$6.8
$5.8
$6.8
$5.8
$6.8
STAA
Initial Evaluation
$18.5
$19.7
$18.5
$19.7
$18.5
$19.7
Practicability
None
None
$27.0
$28.6
$32.0
$34.0
Implementation
None
None
$168.7
$204.9
$330.6
$401.6
Root Cause
Analysis
$0.7
$0.7
$0.8
$0.8
$0.8
$0.8
Third-party Audits
$5.7
$5.7
$7.5
$7.5
$150.8
$150.8
Employee
Participation Plan
$0.5
$0.5
$11.5
$11.5
$11.5
$11.5
Backup Power for
Perimeter Monitor
$0.3
$0.3
$0.3
$0.3
$0.3
$0.3
No Backup
Power**
$0.0
$0.0
$0.0
$0.0
$0.0
$0.0
Natural Hazards**
$0.0
$0.0
$0.0
$0.0
$0.0
$0.0
Stationary Source
Siting**
$0.0
$0.0
$0.0
$0.0
$0.0
$0.0
RAGAGEP**
$0.0
$0.0
$0.0
$0.0
$0.0
$0.0
Community
Notification
$4.0
$4.0
$4.0
$4.0
$4.0
$4.0
Information
Availability
$12.8
$12.8
$12.8
$12.8
$12.8
$12.8
Total Cost*
$48.4
$50.5
$256.9
$296.9
$567.2
$642.2
* Totals may not sum due to rounding.
** Costs are zero due to rounding, Unrounded costs are $15,798 for No Backup Power, $42,307 each for Natural Hazards and
Stationary Source Siting, and $27,582 for RAGAGEP both at 3% and 7% discount rates.
EPA also conducted breakeven analyses for the two regulatory alternatives to give a sense of
the decline in damages from accidents that will be needed to equal, or offset, the estimated costs of the
final rule under each alternative. Under the lower-cost alternative, annualized costs are approximately
$48 or $51 million at discount rates of 3% and 7% respectively, and annualized costs are $567 or $642
Page 100 of 167
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million at 3% and 7% respectively for the higher-cost alternative. For the lower-cost regulatory
alternative to breakeven on an annual basis given estimated annualized costs of approximately $50
million and an estimated number of annual accidents of about 100, fewer than approximately 9
accidents per year, each with average monetized damages of approximately $5.5 million as estimated
for the most recent five-year baseline period, will need to be prevented. For the final rule under the
higher-cost regulatory alternative to breakeven on an annual basis given estimated annualized costs of
approximately $600 million and an estimated number of annual accidents of about 100, approximately
all accidents, each with average monetized damages of approximately $5.5 million as estimated for the
most recent five-year baseline period, will need to be prevented. Keep in mind that EPA expects that,
relative to the final rule, the number of accidents will be higher with provisions under the lower-cost
alternative and will be lower with more stringent provisions under the higher-cost alternative.
The numbers of prevented accidents needed to break even will depend again on the value of the
unquantified accident damages that will be avoided, including the value of avoided health risks of
exposure to toxic chemicals, lost productivity, responder costs, transaction costs, negative impacts on
property values, environmental damages, unquantified evacuation and shelter-in-place costs, and
damages related to catastrophic releases.
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CHAPTER 8: Small Entity Analysis
The Regulatory Flexibility Act (RFA), as amended (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.164 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.165 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.166
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 size standards. The
third section discusses the economic impacts of the rule on small entities.
8.1 RMP Affected Sectors
The RMP rule affects a broad range of sectors (facilities listed in RMP filings are classified into
198 NAICS codes). These facilities are owned by small entities in 303 NAICS codes. The primary sectors
subject to the rule and the SBA size standards for defining a small parent entity are shown in Exhibit 8-
l.167 A dollar value size standard refers to firm revenues in millions; the full-time-equivalent employees
applies to the firm's total FTE, not the number at any one facility belonging to that entity. For
governments, the size standard is based on the population served by the government entity. The NAICS
codes are presented at the 2- to 6-digit level based on whether the SBA size standard varies for the 5- and
6-digit codes and whether there are a substantial number of RMP facilities in the sector.168 For example,
the SBA size standard for the wholesale trade sector, NAICS 111, is the same across all codes ($1
million).
Exhibit 8-1: SBA Industry Sector Small Entity Size Standards.
NAICS
Sector
Size
Standard
111
Crop Production
$1.0 million
112
Animal Production and Aquaculture
$1.0 -$16.5 million
115
Support Activities for Agriculture and Forestry
$8 - $30 million
211111
Crude Petroleum and Natural Gas Extraction
1,250 FTE
221112
Fossil Fuel Electric Power Generation
750 FTE
22131
Water Supply and Irrigation Systems
$30 million
104 Some small governments serve substantial populations associated with businesses, particularly irrigation districts that serve
large fanning areas but few residences, and small cities that have large tourist-related businesses.
105 See Chapter 2 of Final Guidance for EPA Rulewriters: Regulatory Flexibility Act,
http://www.epa.gov/rfa/docimients/Guidance-RegFlexAct.pdf.
100 http://www.usda.gov/wps/portal/usda/usdahome?contentid=2013/10/0199.xml.
107 SBA definitions of small businesses apply to a firm's parent company and all affiliates as a single entity. Size standards
effective March 17, 2023 https://www.sba.gov/document/support-table-size-standards
108 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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NAICS
Sector
Size
Standard
22132
Sewage Treatment Facilities
$22 million
3111
Animal Food Manufacturing
500 - 1,000 FTE
3112
Grain and Oilseed Milling
500 - 1,000 FTE
3113
Sugar and Confectionery Product Manufacturing
750 - 1,250 FTE
3114
Fruit and Vegetable Preserving and Specialty Food Manufacturing
750 - 1,250 FTE
3115
Dairy Product Manufacturing
750 - 1,250 FTE
3116
Animal Slaughtering and Processing
750 - 1,250 FTE
3117
Seafood Product Preparation and Packaging
750 FTE
3118
Bakeries and Tortilla Manufacturing
500 - 1,250 FTE
3119
Other Food Manufacturing
500 - 1,250 FTE
3121
Beverage Manufacturing
750 - 1,250 FTE
322
Paper Manufacturing
500 - 1,500 FTE
32411
Petroleum Refineries
1,500 FTE
3254
Pharmaceutical and Medicine Manufacturing
1,000 - 1,250 FTE
3255
Paint, Coating, and Adhesive Manufacturing
500 - 1,000 FTE
3256
Soap, Cleaning Compound, and Toilet Preparation Manufacturing
750 - 1,250 FTE
3259
Other Chemical Product and Preparation Manufacturing
500 - 1,500 FTE
326
Plastics and Rubber Products Manufacturing
500 - 1,500 FTE
327
Nonmetallic Mineral Product Manufacturing
500 - 1,500 FTE
331
Primary Metal Manufacturing
500 - 1,500 FTE
332
Fabricated Metal Product Manufacturing
500 - 1,500 FTE
333
Machinery Manufacturing
500 - 1,500 FTE
334
Computer and Electronic Product Manufacturing
500 - 1,250 FTE
335
Electrical Equipment, Appliance, and Component Manufacturing
500 - 1,500 FTE
336
Transportation Equipment Manufacturing
1,000 - 1,500 FTE
337
Furniture and Related Product Manufacturing
500 - 1,000 FTE
339
Miscellaneous Manufacturing
500 - 1,000 FTE
42
Wholesale Trade
100 - 250 FTE
44422
Nursery, Garden Center, and Fann Supply Stores
$12 million
45431
Fuel Dealers
100 FTE
48691
Pipeline Transportation of Refined Product
1,500 FTE
48821
Support Activities for Rail Transportation
$16.5 million
8.2 Estimating the Number of Small Entities
This analysis of small entities is based on a unique list of entities associated with the current
universe of RMP regulated facilities. To create the unique list, EPA relied on (1) data from Data Axle, a
business data provider, which indicated the company name or parent company name based on facility
addresses, and (2) parent company names from the RMP Database. In response to multiple commenters,
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EPA completed a second analysis with data from D&B Hoovers, which can be found in Appendix C. The
objective is to compare the conclusions drawn from the two different data sources. The RMP Database
provides facility-level counts of employees and NAICS codes for processes within the facility; however,
the small entity classification requires data on all employees, or revenue for sectors with a revenue size
standard, across all locations owned by the entity or entity's parent company. In addition, the appropriate
NAICS code for the small entity analysis is not necessarily the NAICS code associated with the RMP
process, but the one associated with the largest source of revenue for the entity or parent company. For
example, an entity in the pipeline transportation sector, NAICS 486, owns a facility in NAICS 324, and
therefore will face STAA costs. Therefore, for each unique business, EPA retrieved data from Data Axle
on the revenue, NAICS code, and employee count for each entity, parent company, or corporate entity as
appropriate. A summary of the number of facilities, the number of unique entities, the breakdown of
private sector and government entities, and their size classifications is provided in Exhibit 8-2. The
breakdown of small and non-small private sector entities differs slightly from the breakdown in the
proposed rule RIA, Exhibit C-l, due to the use of updated SBA size standards in the final rule analysis.
Exhibit 8-2: RMP Facility and Entity Counts.
Number
Percent of
Total Facilities
11,740
Total Entities
5,649
Private Sector Entities
4,538
80% of total entities
Small
2,636
58% of private sector entities
Non-small
1,902
42% of private sector entities
Government Entities
1,111
20% of total entities
Small
630
57% of government entities
Non-small
481
43% of government entities
EPA identified 5,649 unique entities owning RMP regulated facilities. Of those 5,649 unique
entities, EPA was able to determine that 1,111 (20 percent) are government entities and the remaining
4,538 (80 percent) are private sector entities.
8.2.1 Private Sector Entities
Of the 4,538 private sector entities, EPA was able to obtain data matches of revenue and/or
employee data for 3,123. EPA then classified each private sector entity as small or non-small based on the
SBA size standard for the entity's NAICS code and the relevant employee- or revenue-based size
standard. EPA determined that of the total 4,548 private sector entities, 2,636 private sector entities are
small, and of those, 1,776 are small based on their employee or revenue data using Data Axel data. These
small private sector entities have an average of 129 employees and average annual revenue of
approximately $68.1 million. The size classification of the remaining 860 private sector small entities was
determined through additional analysis described below. Further discussion of small entities refers to only
small private sector small entities, there no nonprofits in the population. Government small entities are
discussed in sections 8.2.2 and 8.3.2.
To assess the remaining unmatched entities (1,306), EPA extrapolated the results of the size
classification. At the 3-digit NAICS level, EPA estimated the percent of small and non-small entities and
assumed that unmatched entities within those NAICS codes will have the same distribution of small and
non-small. For example, in NAICS sector 424 (Merchant Wholesalers, Nondurable Goods) there are 979
total parent entities. Of those, 309 were classified as small, 223 as non-small, and 447 did not have
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employee data to classify. To classify the 447 entities as small or non-small the percent of small entities
in the matched data (58.1 percent or 309 out of 532) was used to classify 260 of the 447 unmatched
entities as small. Across all sectors, 860 unmatched entities were classified as small and 555 unmatched
entities were classified as non-small. The totals presented in Exhibit 8-2 above, therefore represent the
1,776 classified as small using Data Axle data and the estimated 860 entities classified as small using the
extrapolation analysis, resulting in 2,636 total small private sector entities (58 percent of private sector
entities).
Exhibit 8-3 presents an analysis of facilities and the size of entity they are associated with to
provide an understanding of the distribution of private sector owned facilities by program level. The
results show that Program 3 has a larger proportion of facilities owned by non-small private sector entities
than Program 2 and facilities. That is, almost 65 percent of Program 3 facilities (4,148 of 6,422) are
owned by a non-small private sector entity compared to 51 percent of Program 2 facilities (1,612 of
3,162) and 48 percent of Program 1 facilities (310 out of 651).
Exhibit 8-3: Analysis of Private Sector Facility Ownership by Program Level.
Number of
PI
Facilities
Number of
P2
Facilities
Number of
P3
Facilities
Total Facilities
660
3,975
7,105
# of facilities owned by:
Private Sector Entities
651
3,162
6,422
Small
341
1,550
2,274
Non-small
310
1,612
4,148
Exhibit 8-4 presents the top ten six-digit NAICS sectors with the largest share of small entities
relative to other sectors. Percentages were derived from the number of matched entities from each
NAICS, as described above. Most small employers fall within the Farm Supplies Merchant Wholesalers
industry, comprising 8 percent of all small entities, followed by the Farm Product Warehousing and
Storage industry, comprising 5 percent of all small entities. No one industry makes up a significant share
of the small entities impacted by this rule.
Exhibit 8-4: Distribution of Small Employers by Top 10 6-Digit NAICS Code.
NAICS Code
Description
Number of
Matched Entities
Share of Small
Employers by
NAICS
424910
Farm Supplies Merchant Wholesalers
146
8.2%
493130
Farm Product Warehousing and Storage
96
5.4%
444220
Nursery and Garden Centers
60
3.4%
493120
Refrigerated Warehousing and Storage
57
3.2%
424690
Other Chemical and Allied Products Merchant
Wholesalers
53
3.0%
325998
All Other Miscellaneous Chemical Product and
Preparation Manufacturing
48
2.7%
424720
Petroleum and Petroleum Products Merchant
Wholesalers (except Bulk Stations and Tenninals)
44
2.5%
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NAICS Code
Description
Number of
Matched Entities
Share of Small
Employers by
NAICS
211120
Crude Petroleum Extraction
41
2.3%
221118
Other Electric Power Generation
38
2.1%
325311
Nitrogenous Fertilizer Manufacturing
31
1.7%
All other NAICS codes
1,162
65.4%
8.2.2 Government Entities
The RFA defines small governments as governments of cities, counties, towns, townships,
villages, school districts, or special districts, with a population of fewer than 50,000.169 Most
governmental RMP facilities are water and wastewater treatment systems and listed a city or county as the
owner 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. EPA checked the 2019 population estimates
from the Census for the associated city or county to identify which facilities belong to small governments.
For government entities that owned multiple facilities, the combined population of the facility cities or
towns was used for classification. Government entities were classified as small if the population was
fewer than 50,000. Based on the Census data, 630 of the total 1,111 government entities are small (57
percent).
Exhibit 8-5 presents an analysis of facilities and the size of entity they are associated with to
provide an understanding of the distribution of government owned facilities by program level. Just over
48 percent of Program 3 facilities (331 facilities out of 683) are owned by non-small government sector
entities compared to 45 percent of Program 2 facilities (369 facilities out of 813). There are few Program
1 government-owned facilities.
Exhibit 8-5: Analysis of Government Sector Facility Ownership by Program Level.
Number of
PI
Facilities
Number of
P2
Facilities
Number of
P3 Facilities
Total Facilities
660
3,975
7,105
# of facilities owned by:
Government Entities
9
813
683
Small
2
444
352
Non-small
7
369
331
8.3 Economic Impact on Small Entities
To understand the distribution of impacts on small entities, EPA estimated the cost for each
facility to comply with the final rule. This was done by applying cost estimates for the following cost
categories to facilities in the affected universe, per facility or per process:
• Rule Familiarization
169 5 U.S.C. 602.
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STAA
• Root Cause Analysis
• Third-Party Audits
• Employee Participation Plan
• Employee Participation Plan Training
• Translation
• Emergency Backup Power
• Justifications
• Community Notification Plan
• Information Availability
The costs used for each cost category are consistent with the costs described in Chapter 4: Unit
Costs of Final Rule Provisions. EPA provides a summary of relevant NAICS codes for provisions with a
smaller number of impacted sectors in Exhibit 8-6.170 After calculating the cost for each facility to comply
with the final rule, the costs for all facilities owned by each unique small entity were summed to estimate
the total impact to each small parent entity. These costs were then compared to revenue data for each
small entity to develop an estimate of the percent of revenue impacted. EPA takes a conservative
approach to estimating costs for small entities by assuming that facilities will face all costs in the same
year (the first year). That is, if a facility incurs costs from a provision that does not necessarily occur in
the first year (such as third-party audits, which will occur when the next compliance audit is due, or
STAA, which will occur in a year prior to the PHA), the analysis assumed that an annual cost of those
provisions occurs in the first year when other costs such as rule familiarization occur. In practice,
facilities are not likely to face costs of every provision in the first year. An additional conservative
assumption, discussed in more detail in Section 5.1.3, is that capital costs are not amortized for facilities.
To estimate the number of impacted small businesses with RMP-reportable accidents between
2016 and 2020 (n=488 accidents, 382 among unique facilities), EPA used the percent (%) of affected
facilities that are small businesses for each NAICS code (small entities divided by total RMP regulated
facilities in that NAICS code for 2020) and applied this percentage to the number of facilities with
accidents in that sector between 2016 and 2020. Using this method, EPA estimates that 2% (n=8) of the
facilities with accidents subject to this regulation may be small businesses. Of these, 50% (n=4) are in
NAICS 324 and 325.
Exhibit 8-6: Impact on Small Private Sector Entities by Provision and NAICS.
Provision
Impacted
Entity
NAICS
Code*
Impacted Entity
Sector Description
Average Cost Per Impacted
Entity
Number
of Small
Entities
Root Cause
Analysis
311
Food Manufacturing
$2,350
1
325
Chemical
Manufacturing
$30,993
3
327
Nonmetallic Mineral
Product Manufacturing
$2,350
1
331
Primary Metal
Manufacturing
$2,350
1
170 NAICS codes are chosen by the entity which own the RMP facilities based on the largest source of revenue for the parent
entity. The entity's NAICS code is not necessarily the NAICS code associated with the RMP process in the facility.
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Provision
Impacted
Entity
NAICS
Code*
Impacted Entity
Sector Description
Average Cost Per Impacted
Entity
Number
of Small
Entities
424
Merchant Wholesalers,
Nondurable Goods
$2,350
1
523
Securities, Commodity
Contracts, and Other
Financial Investments
and Related Activities
$2,350
1
Community
Notification
System
Many**
$221 -$2,500****
1,682
Employee
Participation
Plan
Many**
$59-$495****
1,682
221
Utilities
$50,091
1
311
Food Manufacturing
$52,640
1
324
Petroleum and Coal
Products Manufacturing
$118,246
2
325
Chemical
Manufacturing
$111,460
13
Third-Party
327
Nonmetallic Mineral
Product Manufacturing
$52,640
1
Audit
332
Fabricated Metal
Product Manufacturing
$118,246
1
493
Warehousing and
Storage
$50,091
1
523
Securities, Commodity
Contracts, and Other
Financial Investments
and Related Activities
$116,404
2
Information
Availability
Many* * *
$185 -$14,879****
1,740
Rule
Familiarizatio
n
Many* * *
$553 -$79,973****
1,740
211
Oil and Gas Extraction
$2,267,877
5
213
Support Activities for
Mining
$626,406
1
STAA
236
Construction of
Buildings
$626,406
2
238
Specialty Trade
Contractors
$626,406
7
314
Textile Product Mills
$639,690
1
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Provision
Impacted
Entity
NAICS
Code*
Impacted Entity
Sector Description
Average Cost Per Impacted
Entity
Number
of Small
Entities
321
Wood Product
$319,845
Manufacturing
z
324
Petroleum and Coal
$3,549,005
o
Products Manufacturing
y
325
Chemical
Manufacturing
$835,948
105
326
Plastics and Rubber
$630,834
"X
Products Manufacturing
332
Fabricated Metal
$652,975
Product Manufacturing
4
335
Electrical Equipment,
Appliance, and
Component
Manufacturing
$13,284
3
423
Merchant Wholesalers,
$2,282,843
A
Durable Goods
424
Merchant Wholesalers,
$658,262
46
Nondurable Goods
441
Motor Vehicle and Parts
$626,406
1
Dealers
446
Health and Personal
Care Stores
$626,406
1
486
Pipeline Transportation
$7,471,600
1
523
Securities, Commodity
Contracts, and Other
$631,388
O
Financial Investments
and Related Activities
o
524
Insurance Carriers and
$2,565,404
Related Activities
Z
541
Professional, Scientific,
$1,288,981
10
and Technical Services
561
Administrative and
$626,406
1
Support Services
211
Oil and Gas Extraction
$3,300
2
213
Support Activities for
Mining
$3,300
1
Backup Power
for Perimeter
Monitors
221
Utilities
$3,300
3
238
Specialty Trade
Contractors
$3,300
1
311
Food Manufacturing
$3,300
10
321
Wood Product
$3,300
1
Manufacturing
322
Paper Manufacturing
$3,300
2
Page 109 of 167
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Provision
Impacted
Entity
NAICS
Code*
Impacted Entity
Sector Description
Average Cost Per Impacted
Entity
Number
of Small
Entities
325
Chemical
Manufacturing
$3,960
10
326
Plastics and Rubber
Products Manufacturing
$4,950
4
327
Nonmetallic Mineral
Product Manufacturing
$3,300
2
332
Fabricated Metal
Product Manufacturing
$3,300
1
333
Machinery
Manufacturing
$3,300
2
334
Computer and
Electronic Product
Manufacturing
$3,300
2
339
Miscellaneous
Manufacturing
$3,300
1
424
Merchant Wholesalers,
Nondurable Goods
$7,920
5
443
Electronics and
Appliance Stores
$3,300
1
445
Food and Beverage
Stores
$3,300
2
484
Truck Transportation
$3,300
1
486
Pipeline Transportation
$6,050
6
488
Support Activities for
Transportation
$3,300
1
493
Warehousing and
Storage
$3,300
1
517
T elecommunications
$3,300
1
523
Securities, Commodity
Contracts, and Other
Financial Investments
and Related Activities
$3,300
1
531
Real Estate
$3,300
3
541
Professional, Scientific,
and Technical Services
$3,300
3
Justification
Many* * * *
*
$46-$366****
1,045
Translation
Many* * *
$1,400-$15,000****
1,740
Employee
Participation
Plan Training
Many**
$171 -$76,539****
1,628
* 3-digit NAICS codes are based on the entity owning RMP facilities, which may be different from the RMP facility 3-digit
NAICS.
** The provision impacts all small entities owning P2 and P3 facilities, encompassing 72 NAICS sectors.
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*** Hie provision impacts all small entities, encompassing 73 NAICS sectors.
**** Range is an average small entity provision cost across NAICS codes.
***** The provision impacts all small entities owning P3 facilities, encompassing 65 NAICS sectors.
8.3.1 Cost Impacts on Private Sector Small Entities
The results of the analysis for private sector small entities are presented in Exhibit 8-7, below.
The analysis found that 90.8 percent of small entities will incur estimated cost impacts that are less than 1
percent of their revenue and an estimated 2.8 percent of small entities are assumed to be impacted at the
greater than 3 percent level. Combined, only 9.2 percent of small private sector entities are assumed to be
impacted at the greater than 1 percent level. Another way to express this is that of the total estimated
2,636 small private sector entities, an estimated 2,393 entities will be impacted at less than 1 percent of
revenue, 167 entities will be impacted at between 1 percent and 3 percent of revenue, and 75 will be
impacted at greater than 3 percent of revenue.
Exhibit 8-7: Cost Impacts as a Proportion of Total Revenue for
Small Private Sector Entities.
Proportion of Revenue
Impacted
Number of Small
Entities*
% of Small
Entities
Average
Small Entity
Cost**
Average Small
Entity Revenue**
< 1%
2,393
90.8%
$72,525
$72,392,517
1% - 3%
167
6.3%
$629,271
$41,222,630
>3%
75
2.8%
$1,083,823
$19,034,833
* Small entity count differs slightly from Exhibit 8-2 due to rounding.
** For entities in NAICS codes with revenue-based size-standards, the average small entity cost and revenue are considerably
lower ($31,500 and $6.0 million, respectively)
Exhibit 8-8 presents the distribution of small entity revenue impacts across six-digit NAICS
sectors, with the top ten highlighted from the remaining NAICS sectors. The proportion of revenue
impacted was calculated for small entities with revenue data (1,776). This is fewer than the total number
of small entities affected by the rule (2,636) and analyzed above because the extrapolation exercise
described in Section 8.2.1 was done at the 3-digit NAICS level. Most 6-digit NAICS codes have too few
entities from which to reasonably extrapolate. Thus, EPA focused the analysis of revenue impacts by 6-
digit NAICS sectors on only those entities with matched revenue data. Exhibit 8-8 shows the number of
matched entities for each of the top ten sectors designated as small, as well as the remaining sectors for
which these small entities had corresponding six-digit NACIS information. The NAICS subsector 325998
has a larger percentage of entities with revenue impact greater than 3 percent. This can be explained by
the SB A size standards and entity revenue. This subsector has a lower size standard than the other NAICS
325 sectors, with a limit of 500 employees versus 1,000+ employees for other subsectors, meaning more
entities were qualified as small. As a result, the subsector's average revenue is lower than the other
NAICS 325 sectors entities, which increases the proportion of revenue impacted for this particular
subsector.
Exhibit 8-8: Revenue Impacts by 6-digit NAICS Code for Small Entities with Matched Data.
NAICS Code
NAICS Description
Number of
Matched Entities
Proportion of Revenue
Impacted
< 1%
1% - 3%
>3%
424910
Farm Supplies Merchant Wholesalers
146
93%
6%
1%
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NAICS Code
NAICS Description
Number of
Matched Entities
Proportion of Revenue
Impacted
< 1%
1% - 3%
>3%
493130
Farm Product Warehousing and Storage
96
95%
5%
0%
444220
Nursery and Garden Centers
60
93%
5%
2%
493120
Refrigerated Warehousing and Storage
57
96%
2%
2%
424690
Other Chemical and Allied Products Merchant
Wholesalers
53
86%
14%
0%
325998
All Other Miscellaneous Chemical Product and
Preparation Manufacturing
48
67%
24%
9%
424720
Petroleum and Petroleum Products Merchant
Wholesalers (except Bulk Stations and Tenninals)
44
100%
0%
0%
211120
Crude Petroleum Extraction
41
94%
3%
3%
221118
Other Electric Power Generation
38
100%
0%
0%
325311
Nitrogenous Fertilizer Manufacturing
31
74%
19%
6%
All Other
1,162
90%
6%
4%
8.3.2 Cost Impacts on Government Small Entities
A combined total of 798 facilities are owned and operated by small governments (i.e., the
government serves fewer than 50,000 residents). EPA has not been able to obtain data on government
revenue. The Census Bureau has not published recent data on revenues for cities (the most recent data are
from 2002) and does not cover cities of fewer than 25,000 population. The Census Bureau provides
revenue data for total local government revenues by county (covering all government entities including
special districts within the county) and a per capita revenue estimate. The Census data indicated that the
lowest per capita revenue for a covered county was around $1,024 in 2002 dollars (DeKalb County, MO,
with 3 facilities) ($1,666 in 2022 dollars).171 The smallest town covered by the final rule has
approximately 440 residents and several others have fewer than 1,000. However, in many of these cases it
is not clear whether the town owns and operates the facility or whether it is operated by a district that
serves multiple communities. In a few cases, EPA was able to locate budget data from special districts
and smaller towns. Revenues per resident ranged from $196172 for a special district that serves 9,200
people to $1,955 for a town that serves 15,421173 people.174 The sample, however, is so small that it is not
appropriate to generalize from it and special district revenue may not be appropriate to compare with
government entities that are owned by municipalities, which could have larger revenues. There are some
exceptions on the high end as well. One town with a population of fewer than 8,000 has revenues of close
to $200 million (based on tourist business); another small city operates a combined water system, power
system, and cable system; although the water system produces revenues of $2.5 million, the combined
system reported revenues of $190 million.
171 U.S. Census Bureau, Census of Governments, https://www.census.gov/programs-survevs/gov-fmances/data/historical-
data.html.
172 Norton Virginia CNW Sewer Authority, https://www.nortonva.gov/72/CNW-Sewer-Autliority. Accessed March 4, 2022.
173 U.S. Census Bureau 2020. QuickFacts: Eden city, North Carolina. Retrieved from
https://www.census.gov/quickfacts/fact/table/edencitynortlicarolina/BZA210219.
174 City of Eden Financial Statements. June 30, 2020.
https://www.edennc.us/lionie/showpublishe%20ddocunient/3781/637623947334730000
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Exhibit 8-9 and Exhibit 8-10 summarize the impacts of the final rule on small governments. To
understand the impacts, Exhibit 8-9 presents the number of small government entities with costs that fall
into certain ranges. Exhibit 8-10 presents the same data in percentage terms. From the results, the
majority of small governments, except those with between 15,000 and 50,000 residents, will experience
total impacts from the final rule estimated between $2,000 and $3,000.
For all small governments, 97 percent have cost impacts less than or equal to $10,000, and only
17 small governments are estimated to experience an impact greater than $10,000. The largest impact to a
small government is $55,819 for a facility that serves an estimated population of 46,500. For the rule to
have a larger than 1 percent impact, this entity will need to have revenue of less than $5.6 million, or less
than $120 per resident. For small governments with populations of fewer than 5,000, the cost impacts are
smaller: 53 have impacts less than or equal to $3,000 (78 percent) and no small governments with
populations fewer than 5,000 have cost impacts greater than $10,000. The smallest government entity in
the data is for a facility located in Avinger, TX; population 440 with a cost of $2,860 from the final rule.
To experience an impact larger than 1 percent, this municipality will need to have revenue of less than
$286,022, or less than $650 per resident.
Exhibit 8-9: Cost Impacts to Small Governments
(Number of Small Governments with Costs in the Given Range).
Category
Number of
Governments
<$1,000
$1,000-
$2,000
$2,000-
$3,000
$3,000-
$10,000
>$10,000
Small
630
0
0
365
248
17
15,000 - 50,000 Residents
330
0
0
156
165
9
<15,000 Residents
300
0
0
209
83
8
<10,000 Residents
187
0
0
140
44
3
<5,000 Residents
68
0
0
53
15
0
Exhibit 8-10: Distribution of Cost Impacts to Small Governments
(Percent of Small Governments with Costs in the Given Range).
Category
Number of
Governments
<$1,000
$1,000-
$2,000
$2,000-
$3,000
3,000-
$10,000
>$10,000
Small
630
0%
0%
58%
39%
3%
15,000 - 50,000
Residents
330
0%
0%
47%
50%
3%
<15,000 Residents
300
0%
0%
70%
28%
3%
<10,000 Residents
187
0%
0%
75%
24%
2%
<5,000 Residents
68
0%
0%
78%
22%
0%
8.4 Conclusion
The small entity analysis indicates that the final rule will not impose a significant economic
burden to a substantial number of small entities exceeding the threshold amount of 1 percent of small
entity revenues. For private sector entities, EPA estimated that 9.2 percent of small entities will
experience costs exceeding 1 percent of revenue and only 2.8 percent of entities will have costs greater
than 3 percent of revenue. For small governments, EPA does not have data to estimate the percent of
entities with different percent of revenue impacts. However, based on costs to small governments and
Page 113 of 167
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their respective populations, EPA concludes that it is unlikely that a small government will experience a
cost impact larger than 1 percent of revenue. The second analysis that EPA conducted with data from
D&B Hoovers in Appendix C further confirms that the final rule will not impose a significant economic
burden to small entities and suggests that the final rule has a smaller impact on small private sector
entities. Using D&B Hoovers data, EPA estimated that 6.0 percent of small entities will experience costs
exceeding 1 percent of revenue and only 1.9 percent of entities will have costs greater than 3 percent of
revenue. Accordingly, the Administrator of EPA hereby certifies that that this final rule will not have a
significant economic impact on a substantial number of small entities.
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CHAPTER 9: Communities with Environmental Justice
Concerns
This chapter summarizes EPA's analysis to identify communities with environmental justice
concerns that could be affected by the rulemaking and discuss the cumulative effects of climate change
and the provisions on the identified communities.
9.1 Background
This chapter helps to address the following Executive Orders (EOs): Executive Order 12898:
Federal Actions to Address Environmental Justice in Minority Populations and Low-Income Populations;
Executive Order 14008: Tackling the Climate Crisis at Home and Abroad; and Executive Order 14096:
Revitalizing Our Nation's Commitment to Environmental Justice for All
Each Federal agency must make the achievement of environmental justice part of its mission "by
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." Section 2-2 of E.O. 12898 provides that each Federal agency must conduct its programs,
policies, and activities that substantially affect human health or the environment in a manner that ensures
such programs, policies, and activities do not have the effect of (1) excluding persons (including
populations) from participation in; or (2) denying persons (including populations) the benefits of; or (3)
subjecting persons (including populations) to discrimination under, such programs, policies, and activities
because of their race, color, or national origin.
E.O. 14008 calls on Federal agencies to make achieving environmental justice part of their
missions "by developing programs, policies, and activities to address the disproportionately high and
adverse human health, environmental, climate-related and other cumulative impacts on disadvantaged
communities, as well as the accompanying economic challenges of such impacts." It also declares a
policy "to secure environmental justice and spur economic opportunity for disadvantaged communities
that have been historically marginalized and overburdened by pollution and under-investment in housing,
transportation, water and wastewater infrastructure and health care." Under E.O. 13563 (76 FR 3821,
January 21, 2011), Federal agencies may consider equity, human dignity, fairness, and distributional
considerations, where appropriate and permitted by law. E.O. 14008 directs Federal agencies to develop
programs, polices and activities to address the disproportionate health, environmental, economic, and
climate impacts on disadvantaged, historically marginalized and overburdened communities. Similarly,
E.O. 14096 re-emphasizes the commitment of the Executive branch to include the achievement of
environmental justice in the mission of each agency and to evaluate the impacts of regulations and other
Federal activities on communities with environmental justice concerns. E.O. 14096 places a responsibility
on Federal agencies to "identify, analyze, and address disproportionate and adverse human health and
environmental effects (including risks) and hazards of Federal activities, including those related to climate
change and cumulative impacts of environmental and other burdens with environmental justice
concerns[.]" Additionally, E.O. 14096 suggests improved environmental justice analyses through
"disaggregating environmental risk, exposure, and health data by race, national origin, income,
socioeconomic status, age, sex, disability, and other readily accessible and appropriate categories." The
Agency has reflected this suggestion by disaggregating the following proximity analysis by race and
ethnicity.
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The Agency defines "environmental justice" as the fair treatment and meaningful involvement of
all people regardless of race, color, national origin, or income with respect to the development,
implementation, and enforcement of environmental laws, regulations, and policies.175 The Agency defines
the term "fair treatment" to mean both that no people should bear disproportionate burdens of
environmental harms and risks, and that the distribution of reduction in risk from EPA actions does not
exclude particular communities. The incorporation of environmental justice into EPA rulemaking is
guided by two EPA documents: (1) Technical Guidance for Assessing Environmental Justice in
Regulatory Analysis116 and (2) Guidance on Considering Environmental Justice During the Development
of Regulatory Action.1 The Technical Guidance for Assessing Environmental Justice in Regulatory
Analysis178 establishes the expectation that analysts conduct the highest quality environmental justice
analysis feasible in support of rulemakings, recognizing that what is possible will be context-specific.
When assessing the potential for disproportionately high and adverse health or environmental
impacts of regulatory actions on historically underserved and overburdened communities, EPA strives to
answer three broad questions:
(1) Is there evidence of potential environmental justice concerns in the baseline (the state of the
world absent the regulatory action)? Assessing the baseline will allow EPA to determine whether
pre-existing disparities are associated with the pollutant(s) under consideration (e.g., are the
effects of the pollutant(s) more concentrated in some population groups?).
(2) Is there evidence of potential environmental justice concerns for the regulatory option(s) under
consideration? Specifically, how are the pollutant(s) and its (their) effects distributed for the
regulatory options under consideration? And,
(3) Do the regulatory option(s) under consideration exacerbate or mitigate environmental justice
concerns relative to the baseline?179
It is not always possible to quantitatively assess all three questions. For instance, in some
regulatory contexts it may only be possible to quantitatively characterize the baseline due to data and
modeling limitations.
9.2 Methods
EPA seeks to characterize potential environmental justice concerns associated with baseline risks
from RMP facilities. EPA conducted a proximity-based analysis using variables from EJSCREEN and the
U.S. Census Bureau's American Community Survey (ACS) to combine environmental and
sociodemographic information on areas surrounding RMP facilities. To assess the environmental justice
implications of this final action, EPA quantified community sociodemographic variables surrounding
current, actively regulated facilities as of December 31, 2020, for which there were valid coordinates
175 EPA (2022). Learn About Environmental Justice, https://www.epa.gov/environmentaliustice/learn-about-environmental-
justice. Accessed February 10, 2022.
170 EPA (2016). Technical Guidance for Assessing Environmental Justice in Regulatory Analysis.
https://www.epa.gov/sites/production/files/2016-Q6/docmnents/eitg 5 6 16 v5.1.pdf.
177 EPA (2018). Guidance on Considering Environmental Justice During the Development of Regulatory Actions.,
https://www.epa.gov/sites/default/files/2015-06/docmnents/considering-ei-in-rulemaking-guide-fmal.pdf.
178 EPA (2016). Technical Guidance for Assessing Environmental Justice in Regulatory Analysis.
https://www.epa.gov/sites/production/files/2016-Q6/docmnents/eitg 5 6 16 v5.1.pdf.
179 Differential impacts on population groups of concern can only be identified in relation to a comparison group. A comparison
group can be defined in multiple ways, for instance in terms of individuals with similar socioeconomic characteristics located at a
broader geographic level or with different socioeconomic characteristics within an affected area. The goal is to select a
comparison group that allows one to identify how the effects of the regulation vary by race, ethnicity, and income separate from
other systematic differences across groups or geographic areas.
Page 116 of 167
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(n ! 1.714). N
Tlie distribution of RMP facilities across the U.S. is shown below in Exhibit 9-1. Every state in
the continental U.S. has multiple RMP facilities and at least one facility that has had one or more
accidents. However, certain areas appear to have a higher concentration of facilities than others. While the
Agency did not perform a hot spot analysis, the map shows that there appears to be a large concentration
of RMP facilities in the Midwest, with other apparent clusters located in fairly industrial areas, such as the
Mid-Atlantic coast, the Central Valley in California, and along the Gulf of Mexico throughout Texas and
Louisiana. RMP facilities with one or more accidents tend to be located more heavily where there are
clusters of RMP facilities. With the exception of North Dakota, largely rural states, such as Maine, New
Hampshire, and Vermont, as well as much of the Mountain West have far fewer RMP facilities than the
rest of the U.S.
Exhibit 9-1. Distribution of RMP Facilities in the United States
mm.
RMP Facilities with At Least One Accident
RMP Facilities
Due to data limitations, EPA was not able to determine a direct measure of risk or exposure from
each facility. As a result, EPA used proximity to facility location as a surrogate, which assumes that any
risks from the facility are limited to the designated boundary (i.e., people located outside of the
designated boundary are not exposed to any risks from the facility) and that all individuals within the
180 The facility universe is based on the RMP Database as of August 1,2021. The facility universe differs slightly from the
universe considered in other chapters as it includes only those facilities for which there were accurate coordinate locations. For
this analysis, 49 facilities were removed from the facility universe because they did not have accurate coordinate locations.
Page 117 of 167
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designated boundary are equally exposed.
9.2.1 Data
The Agency downloaded the number of low-income individuals from EJSCREEN and used that
data to calculate the population that is low-income.181 The Agency obtained race and ethnicity population
data from the 2017-2021 ACS 5-year estimates in order to calculate the percent of the total population
that identifies with each racial/ethnic group. All data was reported at the Census Block Group (CBG)
level.
9.2.2 Main Proximity-Based Analysis
For the main proximity analysis, EPA analyzed the sociodemographic characteristics of the
communities living within one and three miles from the universe of RMP facilities. The one-mile buffer
was used for the evaluation of proximal environmental justice communities in the 2019 Reconsideration
Rule and represents communities likely to experience localized stressors from the associated facility.
However, when modeling the worst-case release scenario, chemicals released from the industrial
processes at the facilities can vary in exposure trajectory and distance. To capture the potential for further
communities to be affected by any chemical release, the Agency also considered populations living within
three miles of the facilities.182
For cases when multiple RMP facilities were closely located, and the circular buffers drawn
around each facility overlapped, the Agency combined the overlapping buffers into one larger buffer. The
combination of overlapping buffers enabled the Agency to avoid double counting populations that resided
in the overlapping area of multiple buffers. The Agency then intersected the buffers with CBGs to
identify which communities were within the buffer areas. For cases when only a fraction of a CBG
intersected with a buffer, the Agency used an areal apportionment method to identify the relevant affected
households and individuals. In other words, EPA used the fraction of the overlap area between CBG and
buffer area to estimate the number of residents in that CBG living within the buffer area. For example, if
40 percent of the CBG area intersects with a buffer, then the Agency assumed that 40 percent of the
CBG's population live within the buffer.
The Agency then compared the sociodemographic characteristics of potentially affected
communities (defined as those living within one and three miles from RMP facilities) to characteristics of
unaffected communities (defined as those who live outside of the one-mile buffer around RMP facilities
nationwide).183 The comparison group population was identified by first finding CBGs that fall
completely outside of the one-mile buffers around RMP facilities and summing the associated population.
For CBGs that partially overlap with the buffer areas, EPA used the areal apportionment method
described above to estimate the number of CBG residents that live outside of the buffer area, before
summing the associated population.
9.2.3 Proximity Analyses Focused on Specific Subsets of RMP Facilities
181 For this analysis, low-income individuals are defined as individuals earning less than or equal to twice the federal poverty
level.
182 Facilities provide information to households living up to six miles away, reflective of a worst-case chemical release scenario,
but this analysis focused on communities most likely to be affected by the rulemaking.
183 To generate a consistent comparison group that was not inclusive of the communities likely to be affected by the rulemaking,
EPA used the population outside of the one-mile buffers since it would be a relevant comparison population for both the one-mile
and three-mile buffers.
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In addition to the main proximity-based analysis, EPA conducted additional proximity analyses
evaluating populations living near specific subsets of RMP facilities. This enabled EPA to better
characterize how the effects of the final rule may vary across communities given that facilities vary in the
ultimate risk they pose to proximal populations. EPA evaluated how community characteristics differ
based on process types, the number of RMP-related accidents reported between 2004 and 2020, program
level, and chemical storage.
EPA evaluated three specific measures of potential risk: (1) RMP facilities categorized by the
number of RMP-related accidents reported from 2004 to 2020, (2) RMP facilities categorized by the
program level they belong in, and (3) RMP facilities categorized by the ratio of the quantity of chemical
used in a process relative to the chemical's regulatory threshold quantity. Facilities with a higher number
of historical accidents from 2004 to 2020 were considered to be potential locations of higher cumulative
burden from additional accidents. Program levels are assigned to regulated processes within RMP
facilities, based on the relative potential for public impacts and the level of effort needed to prevent
accidents. Facilities with processes classified as Program 3 were considered to be of higher potential risk
than facilities with processes classified as Program 1 or 2. For this analysis, each RMP facility was
assigned the maximum program level of any of the facility's processes (e.g., a facility with level 2 and 3
processes was assigned Program 3). Similarly, facilities that have large quantities of chemicals in a
process can pose a higher risk to the surrounding communities than those that have smaller amounts. This
analysis focused on each facility's maximum ratio between the quantity of a chemical in a process and the
chemical's regulatory threshold.184
9.3 Results Characterizing Baseline Conditions
The main proximity-based analysis shows that a higher proportion of individuals who identify as
Black alone (non-Hispanic) or Hispanic or are low-income live within one and three miles of RMP
facilities (and thus are at potentially greater risk) compared to the comparison group (Exhibit 9-2). For
example, the percentages of the population within one mile of RMP facilities that identifies as Black
alone (non-Hispanic) or Hispanic are 15.6 percent and 27.6 percent, respectively, compared to 11.8
percent and 17.7 percent of the U.S. population comparison group.185 Likewise, 38.0 percent of
individuals living within one-mile of an RMP facility are low-income compared to 28.5 percent of the
U.S. population comparison group.
Similar patterns emerge when examining race, ethnicity, and poverty status of communities living
near the subset of facilities that experienced at least one accident between 2004 and 2020 (Exhibit 9-2). In
each case the percentages are higher than the analysis of the full universe of active facilities (i.e., 18.3
percent Black, non-Hispanic individuals, 31.9 percent Hispanic individuals, and 40.8 percent low-income
individuals). This pattern also persists when evaluating communities in proximity to RMP facilities with
processes categorized under NAICS codes 324 and 325 and RMP facilities, including RMP facilities
within that subset that have had at least one RMP-reportable accident (Exhibit 9-3).
184 RMP facilities have less than 1 to more than 27,000,000 times the regulatory threshold quantities of regulated chemicals.
185 Note that the large difference between the size of the affected population within one mile of RMP facilities versus the size of
those within three miles is caused the fraction of urban areas that intersect with the buffers. While only portions of large cities
intersect with one-mile buffers, most large cities are almost completely covered by the three-mile buffers. As such, the number of
affected individuals increases drastically between the one to three-mile buffers.
Page 119 of 167
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Exhibit 9-2. Demographic and Socioeconomic Composition for RMP Fenceline Communities
Percentage
of
Individuals
Percentage
of
Individuals
that
Identify as
American
Indian and
Alaska
Native
Alone
(non-
Hispanic)
Percentage
of
Percentage
of
Individuals
Percentage
of
Individuals
that
Identify as
Some
Other
Race Alone
(non-
Hispanic)
Percentage
of
Individuals
that
Identify as
Two or
More
Races
Percentage of
Individuals
Earning Less
Than or
Equal to
Twice the
Federal
Poverty Level
Number
of
Facilities
Buffer
Distance
(Miles)
Total
Population
that
Identify as
Black or
African
American
Alone
(non-
Hispanic)
Individuals
that
Identify as
Asian
Alone
(non-
Hispanic)
that Identify
as Native
Hawaiian
and Other
Pacific
Islander
Alone (non-
Hispanic)
Percentage of
Individuals that
Identify as
Hispanic or
Latino
Facilities
1
7,453,862
18.3%
0.4%
4.6%
0.2%
0.3%
2.8%
31.9%
40.8%
with
accidents
2004-
1,487
3
87,442,724
17.4%
0.3%
6.5%
0.2%
0.4%
3.1%
26.9%
34.2%
2020
All
11,714
1
24,755,209
15.6%
0.4%
4.8%
0.2%
0.3%
3.0%
27.6%
38.0%
active
facilities
3
130,875,693
15.1%
0.4%
5.9%
0.2%
0.4%
3.1%
24.1%
33.3%
National Comparison Group
309,242,323
11.8%
0.6%
5.6%
0.2%
0.4%
3.2%
17.7%
28.5%
Page 120 of 167
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Exhibit 9-3. Demographic and Socioeconomic Composition for Fenceline Communities of
NAICS 324 & 325 RMP Facilities
NAICS
Codes
Number
of
Facilities
Buffer
Distance
(Miles)
Total
Population
Percentage
of
Individuals
that
Identify as
Black or
African
American
Alone (non-
Hispanic)
Percentage
of
Individuals
that
Identify as
American
Indian and
Alaska
Native
Alone (non-
Hispanic)
Percentage
of
Individuals
that
Identify as
Asian Alone
(non-
Hispanic)
Percentage
of
Individuals
that Identify
as Native
Hawaiian
and Other
Pacific
Islander
Alone (non-
Hispanic)
Percentage
of
Individuals
that
Identify as
Some Other
Race Alone
(non-
Hispanic)
Percentage
of
Individual
s that
Identify as
Two or
More
Races
Percentage
of
Individuals
that
Identify as
Hispanic or
Latino
Alone
Percentage
of
Individuals
Earning
Less Than
or Equal to
Twice the
Federal
Poverty
Level
Facilities
with
accidents
2004-
2020
324
94
1
362,108
16.7%
0.6%
5.3%
0.4%
0.3%
3.4%
35.8%
41.9%
3
1,031,086
19.2%
0.3%
5.3%
0.2%
0.2%
3.3%
27.9%
36.1%
325
355
1
4,474,800
16.2%
0.5%
7.2%
0.5%
0.3%
3.2%
35.2%
38.8%
3
13,212,135
19.5%
0.3%
6.5%
0.2%
0.4%
3.0%
28.7%
36.4%
All
active
facilities
324
161
1
502,258
14.1%
0.5%
4.4%
0.4%
0.3%
3.1%
37.9%
41.0%
3
3,621,220
18.3%
0.3%
4.9%
0.2%
0.3%
3.2%
26.8%
36.7%
325
1,524
1
5,351,558
17.3%
0.5%
6.5%
0.4%
0.3%
3.2%
34.4%
39.0%
3
30,165,954
18.3%
0.3%
6.4%
0.2%
0.4%
3.1%
25.7%
35.4%
National Comparison Group
309,242,323
11.8%
0.6%
5.6%
0.2%
0.4%
3.2%
17.7%
28.5%
Page 121 of 167
-------
Next, EPA evaluated how the race, ethnicity, and poverty characteristics of communities living
within one and three miles of an RMP facility differ by the number of accidents between 2004 and 2020
(Exhibit 9-4). The greater the number of historical accidents, the more cumulative burden an additional
accident from the same facility could have on proximal communities. While the percentage of Black
(non-Hispanic), Hispanic, and low-income individuals living within one and three miles of facilities who
have experienced at least two or more accidents are broadly similar to the characteristics of communities
living in proximity to the full universe of active RMP facilities, this is not the case in the tail of the
distribution (i.e., communities in proximity to facilities who have experienced 16 or more accidents
between 2004 and 2020).186 For these communities, they have a higher percentage of Black (non-
Hispanic) (24.9 percent and 42.7 percent for one and three mile distances), Hispanic (50.1 percent and
14.5 percent for one and three mile distances), and low-income (48.9 percent and 44.5 percent for one and
three mile distances) individuals than both the national comparison group and the full universe of active
facilities.
186 The tail end of the distribution corresponds to fewer than five RMP facilities.
Page 122 of 167
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Exhibit 9-4. Demographic and Socioeconomic Composition of Fenceline Communities to RMP Facilities Based on Number of Historical
RMP-reportable Accidents (2004-2020)
Percentage
of
Individuals
Percentage
of
Individuals
that
Identify as
American
Indian and
Alaska
Native
Alone
(non-
Hispanic)
Percentage
of
Percentage
of
Individuals
that
Identify as
Native
Hawaiian
and Other
Pacific
Islander
Alone (non-
Hispanic)
Percentage
of
Individuals
Percentage
of
Individuals
that
Identify as
Two or
More
Races
Percentage
of
Individuals
that
Identify as
Hispanic or
Latino
Alone
Percentage of
Individuals
Number
of
Accidents
Number
of
Facilities
Buffer
Distance
(Miles)
Total
Population
that
Identify as
Black or
African
American
Individuals
that
Identify as
Asian
Alone
that
Identify as
Some
Other
Race
Earning Less
Than or
Equal to
Twice the
Federal
Alone
(non-
Hispanic)
(non-
Hispanic)
Alone
(non-
Hispanic)
Poverty
Level
2-3
296
1
1,106,582
16.1%
0.4%
4.4%
0.3%
0.3%
3.0%
35.4%
41.7%
3
16,364,676
14.6%
0.3%
5.6%
0.2%
0.3%
2.5%
43.2%
37.8%
4-9
85
1
162,274
27.9%
0.3%
3.9%
0.0%
0.4%
2.4%
18.9%
41.8%
3
2,727,926
21.0%
0.2%
3.4%
0.0%
0.3%
2.4%
33.8%
39.1%
10-15
12
1
25,910
17.0%
0.3%
2.8%
0.5%
0.0%
6.2%
20.6%
38.5%
3
222,318
23.6%
0.2%
2.0%
0.2%
0.2%
3.5%
16.5%
34.4%
16 +
6
1
4,813
24.9%
0.1%
0.1%
0.0%
0.0%
1.3%
50.1%
48.9%
3
55,231
42.7%
0.1%
0.9%
0.2%
0.2%
1.7%
14.5%
44.5%
All active
11,714
1
24,755,209
15.6%
0.4%
4.8%
0.2%
0.3%
3.0%
27.6%
38.0%
facilities
3
130,875,693
15.1%
0.4%
5.9%
0.2%
0.4%
3.1%
24.1%
33.3%
National Comparison Group
309,242,323
11.8%
0.6%
5.6%
0.2%
0.4%
3.2%
17.7%
28.5%
Page 123 of 167
-------
EPA next evaluated how the socioeconomic characteristics of communities surrounding RMP
facilities differ by the highest process program level for the facility. For the subset of RMP facilities with
a history of accidents, communities within one mile of a Program 3 facility have a somewhat higher
percentage of low-income individuals (41 percent) and Hispanic individuals (27.4 percent) compared to
communities within one mile of Program 1 (34.5 percent and 17.4 percent, respectively) and Program 2
(38.7 percent and 22.0 percent, respectively) facilities (Exhibit 9-5). In contrast, a lower percentage of
Black (non-Hispanic) individuals (18.4 percent) live within one mile of a Program 3 facility with a history
of accidents compared to comparable Program 1 (36.6 percent) or Program 2 (20.8 percent) facilities.
Page 124 of 167
-------
Exhibit 9-5. Demographic and Socioeconomic Composition of Fenceline Communities to RMP Facilities Based on Program Level
Program
Level
Number
of
Facilities
Buffer
Distance
(Miles)
Total
Population
Percentage
of
Individuals
that
Identify as
Black or
African
American
Alone
(non-
Hispanic)
Percentage
of
Individuals
that
Identify as
American
Indian and
Alaska
Native
Alone
(non-
Hispanic)
Percentage
of
Individuals
that
Identify as
Asian
Alone
(non-
Hispanic)
Percentage
of
Individuals
that
Identify as
Native
Hawaiian
and Other
Pacific
Islander
Alone
(non-
Hispanic)
Percentage
of
Individuals
that
Identify as
Some
Other
Race
Alone
(non-
Hispanic)
Percentage
of
Individuals
that
Identify as
Two or
More
Races
Percentage
of
Individuals
that
Identify as
Hispanic
or Latino
Percentage of
Individuals
Earning Less
Than or
Equal to
Twice the
Federal
Poverty
Level
Facilities
with
accidents
2004-
2020
1
15
1
75,276
36.6%
0.2%
3.4%
0.0%
0.1%
3.4%
17.4%
34.5%
3
313,138
30.9%
0.2%
6.6%
0.1%
0.4%
3.6%
12.5%
30.8%
2
285
1
387,373
20.8%
0.3%
3.6%
0.0%
0.5%
2.9%
22.0%
38.7%
3
5,565,629
16.5%
0.6%
3.8%
0.2%
0.3%
3.1%
21.4%
33.7%
3
1,178
1
2,375,329
18.4%
0.5%
4.0%
0.2%
0.4%
3.2%
27.4%
40.8%
3
14,672,843
12.8%
0.4%
5.5%
0.4%
0.3%
3.5%
22.9%
32.6%
All active
facilities
1
161
1
1,947,659
18.1%
0.3%
4.2%
0.2%
0.3%
2.6%
33.3%
37.9%
3
49,999,348
18.1%
0.3%
7.8%
0.2%
0.3%
3.0%
29.3%
33.5%
2
3,073
1
7,025,577
14.6%
0.4%
4.1%
0.2%
0.3%
2.7%
31.1%
39.0%
3
78,200,397
15.6%
0.3%
6.2%
0.1%
0.3%
2.9%
27.8%
34.3%
3
4,737
1
19,527,152
15.7%
0.4%
5.2%
0.2%
0.4%
3.1%
28.3%
38.0%
3
110,348,761
15.8%
0.4%
6.0%
0.2%
0.4%
3.1%
24.8%
33.6%
All active facilities,
regardless of program
level
11,714
1
24,755,209
15.6%
0.4%
4.8%
0.2%
0.3%
3.0%
27.6%
38.0%
3
130,875,693
15.1%
0.4%
5.9%
0.2%
0.4%
3.1%
24.1%
33.3%
National Comparison Group
309,242,323
11.8%
0.6%
5.6%
0.2%
0.4%
3.2%
17.7%
28.5%
Page 125 of 167
-------
EPA then looked at how the socioeconomic characteristics of communities near facilities differ
based on the ratio of the quantity of chemical in a process to its regulatory threshold (described in this
chapter as chemical process quantity multiplier) (Exhibit 9-6)187. For all active facilities, as the chemical
process quantity multiplier increases, the percentage of individuals that are Black (non-Hispanic), Asian
(non-Hispanic), Hispanic, and low income tend to trend towards the percentages for the full universe of
active RMP facilities. For low income, the one exception is that the percentage of individuals that are low
income is markedly lower (22.8 percent and 30.1 percent for communities within one mile of facilities
with at least one accident from 2004 to 2020 and for communities within one mile of all active facilities
in the RMP universe, respectively) in communities with the lowest chemical process quantity multiplier
compared to all other quantity categories. The percentage of individuals that are low income for
communities within one mile of facilities with at least one accident from 2004 to 2020 and with the
lowest chemical process quantity multiplier (22.8 percent) is even lower than the percentage of
individuals that are low income for the national comparison group (28.5 percent). However, overall, the
vulnerability of communities does not appear to trend with the potential risk associated with larger
exceedances of chemical regulatory thresholds.
187 EPA could not calculate a chemical process quantity multiplier for ten RMP facilities that were then excluded from this
analysis.
Page 126 of 167
-------
Exhibit 9-6. Demographic and Socioeconomic Composition of Fenceline Communities to RMP Facilities Based on Chemical Process
Quantity
Chemical
Process
Quantity
Multiplier
Number
of
Facilities
Buffer
Distance
(Miles)
Total
Population
Percentage
of
Individuals
that
Identify as
Black or
African
American
Alone (non-
Hispanic)
Percentage
of
Individuals
that
Identify as
American
Indian and
Alaska
Native
Alone (non-
Hispanic)
Percentage
of
Individuals
that
Identify as
Asian
Alone
(non-
Hispanic)
Percentage
of
Individuals
that Identify
as Native
Hawaiian
and Other
Pacific
Islander
Alone (non-
Hispanic)
Percentage
of
Individuals
that
Identify as
Some
Other
Race Alone
(non-
Hispanic)
Percentage
of
Individuals
that
Identify as
Two or
More
Races
Percentage
of
Individuals
that
Identify as
Hispanic
or Latino
Alone
Percentage of
Individuals
Earning Less
Than or
Equal to
Twice the
Federal
Poverty
Level
Facilities
with
accidents
2004-
2020
<1
3
1
3,484
4.5%
0.1%
29.5%
5.9%.
0.1%
1.4%
41.9%.
22.8%
3
1,092,307
6.9%
1.8%.
4.6%
0.3%.
0.3%
2.9%
48.8%.
40%
1 - 10
440
1
1,343,521
16.8%
0.4%
4.5%
0.1%
0.4%
3%
31.9%.
40.2%
3
9,140,989
14.2%
0.3%
6.3%
0.3%.
0.4%
3.4%.
21.3%.
31.6%.
10 - 100
559
1
1,202,206
22.2%
0.5%
4.4%
0.4%.
0.4%
3.3%.
25.3%.
40.8%.
3
9,966,411
17.0%
0.3%
5.9%
0.2%
0.4%
2.9%
23.8%.
32%
100 +
475
1
1,110,338
21.2%
0.4%
4.2%
0.2%
0.2%
3.0%
21.6%
39.5%.
3
14,634,978
20.8%
0.4%
5.0%
0.3%.
0.4%
3.7%
19%
34.4%.
All active
facilities
<1
21
1
125,727
20.9%
0.2%
12.3%.
0.2%
0.3%
2.4%
33.9%.
30.1%.
3
6,411,279
20.0%
0.3%
9.6%
0.2%
0.4%
2.9%
29.9%
34.8%.
1 - 10
4,919
1
18,074,265
16.2%
0.4%
5.1%
0.2%
0.3%
3%
29.4%
38.8%.
3
110,713,053
15.9%
0.4%
6.1%
0.2%
0.4%
3.1%
25.4%
33.9%.
10 - 100
5,247
1
10,875,005
16.4%
0.4%
3.9%
0.1%
0.3%
2.9%
28.1%
39.3%.
3
97,306,641
15.9%
0.3%
6.0%
0.2%
0.3%
3.1%
25.6%
34.0%.
100 +
1,732
1
3,924,887
14.6%
0.4%
4.3%
0.2%
0.3%
3.1%
28.4%
37.6%.
3
62,392,042
16.9%
0.3%
6.4%
0.1%
0.4%
3.0%
21.5%
34.0%.
All active facilities,
regardless of chemical
storage
11,714
1
24,755,209
15.6%
0.4%
4.8%
0.2%
0.3%
3.0%
21.6%
38.0%.
3
130,875,693
15.1%
0.4%
5.9%
0.2%
0.4%
3.1%
24.1%
33.3%.
National Comparison Group
309,242,323
11.8%
0.6%
5.6%
0.2%
0.4%
3.2%
17.7%
28.5%
Page 127 of 167
-------
9.4 Conclusions
In the main proximity analysis, communities near RMP facilities and facilities with RMP-
reportable accidents have higher percentages of low income individuals and Black (non-Hispanic) and
Hispanic residents compared to the national comparison group. To the extent that populations living
closer to RMP facilities are more likely to be exposed to a chemical if an accidental release at an RMP
facility occurs, these releases pose a greater risk to these demographic groups of interest. In terms of risk
associated with potential cumulative burden, the additional proximity analyses found that communities
near the few RMP facilities with many historical accidents from 2004 to 2020 had even greater
percentages of low income, Black (non-Hispanic), and Hispanic individuals compared to the full universe
of active facilities as well as facilities with fewer accidents. In terms of exposure to potential risk
associated with the severity of accidents, EPA found that communities in proximity to facilities with
Program Level 3 processes had higher percentages of low income and Hispanic individuals compared to
the full universe of active facilities as well as facilities with lower program levels. By contrast, EPA also
found that the percentage of Black (non-Hispanic), Hispanic, Asian, and low-income individuals tended
to decrease as the chemical process quantity multiplier increased.
While EPA is unable to estimate the incremental changes in accident risks from the provisions
finalized by this rule, the baseline distribution of population as well as the findings from subsequent
analyses that look at the socioeconomic characteristics of communities near facilities with a large number
of accidents or classified as Program 3 facilities suggests that the benefits of the provisions may reduce
potential exposure for communities with higher percentages of Black (non-Hispanic), Hispanic and low
income populations. In addition, EPA believes that several of the provisions in this final action will
benefit underserved populations, such as requiring facilities in NAICS codes 324 and 325 to conduct a
Safer Technology Alternatives Analysis, increase information availability for fenceline communities,
include backup power for perimeter monitoring, conduct root cause analyses for facilities that have
reported accidents, and improve community notification and related response planning.
9.5 Climate Change Impacts
EPA also considered the potential impacts of climate change and the provisions on communities
with environmental justice concerns. Scientific assessment and Agency reports produced over the past
decade by the U.S. Global Change Research Program (USGCRP),188189 the Intergovernmental Panel on
188 USGCRP. (2018). Impacts, Risks, and Adaptation in the United States: Fourth National Climate Assessment, Volume II
[Reidmiller, D.R., C.W. Avery, D.R. Easterling, K.E. Kunkel, K.L.M. Lewis, T.K. Maycock, and B.C. Stewart (eds.)]. U.S.
Global Change Research Program, Washington, DC, USA, 1515 pp. doi: 10.7930/NCA4.2018.
189 USGCRP. (2016): The Impacts of Climate Change on Human Health in the United States: A Scientific Assessment.
Crimmins, A., J. Balbus, J.L. Gamble, C.B. Beard, J.E. Bell, D. Dodgen, R.J. Eisen, N. Fann, M.D. Hawkins, S.C. Herring, L.
Jantarasami, D.M. Mills, S. Saha, M.C. Sarofim, J. Trtanj, and L. Ziska, Eds. U.S. Global Change Research Program,
Washington, DC, 312 pp. http://dx.doi.org/10.7930/J0R49NQX.
Page 128 of 167
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Climate Change (IPCC),190191,192'193 and the National Academies of Science, Engineering, and
Medicine,194'195 provide evidence that the impacts of climate change raise potential environmental justice
concerns. These reports conclude that poorer or predominantly non-White communities can be especially
vulnerable to climate change impacts because they tend to have limited adaptive capacities and are more
dependent on climate-sensitive resources such as local water and food supplies or have less access to
social and information resources. Individuals living in socially and economically disadvantaged
communities, such as those living at or below the poverty line or who are experiencing homelessness or
social isolation, are also at greater risk of health effects from climate change. While difficult to isolate
from related socioeconomic factors, race appears to be an important factor in vulnerability to climate-
related stress, with elevated risks for mortality from high temperatures reported for Black individuals
compared to White individuals after controlling for factors such as air conditioning use. Some research
has found that race or ethnicity alone, more than other individual demographic and socioeconomic
characteristics, may play a significant role in determining one's risk of experiencing harm from climate
change. This includes estimates that Black individuals are 40 percent more likely than non-Black
individuals to live in areas of the United States experiencing the highest projected increases in mortality
rates due to changes in extreme temperatures (under a scenario of 2°C of global warming). Additionally,
Hispanic and Latino individuals in weather-exposed industries were found to be 43 percent more likely to
currently live in areas with the highest projected labor hour losses due to extreme temperatures.196
190 Oppenheimer, M., M. Campos, R.Warren, J. Birkmann, G. Luber, B. O'Neill, and K. Takahashi. (2014).
Emergent risks and key vulnerabilities. In: Climate Change 2014: Impacts, Adaptation, and Vulnerability. Part A:
Global and Sectoral Aspects. Contribution of Working Group II to the Fifth Assessment Report of the
Intergovernmental Panel on Climate Change [Field, C.B., V.R. Barros, D.J. Dokken, K.J. Mach, M.D. Mastrandrea,
T.E. Bilir, M. Chatteijee, K.L. Ebi, Y.O. Estrada, R.C. Genova, B. Girma, E.S. Kissel, A.N. Levy, S. MacCracken,
P.R. Mastrandrea, and L.L.White (eds.)]. Cambridge University Press, Cambridge, United Kingdom and New York,
NY, USA, pp. 1039-1099.
191 Porter, J.R., L. Xie, A.J. Challinor, K. Cochrane, S.M. Howden, M.M. Iqbal, D.B. Lobell, andM.I. Travasso,
(2014). Food security and food production systems. In: Climate Change 2014: Impacts, Adaptation, and
Vulnerability. Part A: Global and Sectoral Aspects. Contribution of Working Group II to the Fifth Assessment
Report of the Intergovernmental Panel on Climate Change [Field, C.B., V.R. Barros, D.J. Dokken, K.J. Mach, M.D.
Mastrandrea, T.E. Bilir, M. Chatteijee, K.L. Ebi, Y.O. Estrada, R.C. Genova, B. Girma, E.S. Kissel, A.N. Levy, S.
MacCracken, P.R. Mastrandrea, and L.L.White (eds.)]. Cambridge University Press, Cambridge, United Kingdom
and New York, NY, USA, pp. 485-533.
192 Smith, K.R., A.Woodward, D. Campbell-Lendrum, D.D. Chadee, Y. Honda, Q. Liu, J.M. Olwoch, B. Revich,
and R. Sauerborn (2014). Human health: impacts, adaptation, and co-benefits. In: Climate Change 2014: Impacts,
Adaptation, and Vulnerability. Part A: Global and Sectoral Aspects. Contribution of Working Group II to the Fifth
Assessment Report of the Intergovernmental Panel on Climate Change [Field, C.B., V.R. Barros, D.J. Dokken, K.J.
Mach, M.D. Mastrandrea, T.E. Bilir, M. Chatteijee, K.L. Ebi, Y.O. Estrada, R.C. Genova, B. Girma, E.S.
Kissel,A.N. Levy, S. MacCracken, P.R. Mastrandrea, and L.L.White (eds.)]. Cambridge University Press,
Cambridge, United Kingdom and New York, NY, USA, pp. 709-754.
193 IPCC. (2018). Global Warming of 1.5°C. An IPCC Special Report on the impacts of global warming of 1.5°C
above pre-industrial levels and related global greenhouse gas emission pathways, in the context of strengthening the
global response to the threat of climate change, sustainable development, and efforts to eradicate poverty [Masson-
Delmotte, V., P. Zhai, H.-O. Portner, D. Roberts, J. Skea, P.R. Shukla, A. Pirani, W. Moufouma-Okia, C. Pean, R.
Pidcock, S. Connors, J.B.R. Matthews, Y. Chen, X. Zhou, M.I. Gomis, E. Lonnoy, T. Maycock, M. Tignor, and T.
Waterfield (eds.)]. In Press.
194 National Research Council. (2011). America's Climate Choices. Washington, DC: The National Academies
Press, https://doi.org/10.17226/12781.
195 National Academies of Sciences, Engineering, and Medicine. (2017). Communities in Action: Pathways to
Health Equity. Washington, DC: The National Academies Press, https://doi.org/10.17226/24624.
196 EPA. (2021). Climate Change and Social Vulnerability in the United States: A Focus on Six Impacts.
U.S. Environmental Protection Agency, EPA 430-R-21-003. www.epa.gov/cira/social-vulnerability-report.
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Climate change is associated with extreme weather events that can trigger accidental releases. As
shown in Chapter 9.3, communities near RMP facilities, and therefore most affected by accidental
releases, have higher percentages of both low-income residents and residents belonging to historically
underserved and overburdened racial and ethnic groups. EPA is addressing climate change impacts in the
final regulation by emphasizing language in the process hazard analysis requiring owners and operators to
consider the impacts of natural hazards including climate change-related weather events. To the extent
that the final provisions mitigate the potential consequences of accidents at regulated facilities as the
result of natural hazards, EPA expects these provisions to benefit nearby communities with environmental
justice concerns.
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CHAPTER 10: Limitations and Conclusions
10.1 Limitations and Conclusions
The analyses of costs, benefits, and other impacts contained in this RIA faced many limitations.
The primary limitations are discussed below.
Facility 5-year RMP Reports
Corrections made. As discussed in detail in prior chapters, the data used for the cost and baseline
damage analyses include information from facility 5-year RMP reports. EPA has attempted to correct
obvious errors in the reports, such as removing duplicate accident reports and reclassifying some facilities
to more appropriate NAICS codes (for example, government-owned wastewater treatment). EPA has also
identified owners of facilities and acquired revenue and employee data for the small entity analysis. In
cases where accidents were not reported or accident impact data were inaccurate, EPA was unable to
make corrections but does not expect such errors to be large. The estimated baseline damages, as well as
the estimates of costs for third-party audits and root cause analysis, reflect these limitations plus the latter
also project past accident rates into the future.
Limited benefits information. EPA's benefits analysis is qualitative. EPA did not have data to
correlate the final rule provisions with specific reductions in expected probabilities or magnitudes of RMP
chemical accidents. However, EPA does provide detailed estimates of the baseline damages reported by
RMP facilities, which for numerous reasons, the Agency believes are an underestimate of total accident
costs. While these estimated baseline damages are not equivalent to an estimate of the benefits of this
rule, EPA did identify reasons, described elsewhere in this RIA (e.g., section 6.1.1 above) why EPA
expects the provisions of this rule to decrease and/or mitigate baseline accident damages, thereby
providing some insights that generally gauge quantitative, monetized benefits.
One reason that the estimated baseline accident damages are underestimates is that EPA was able
to monetize only the baseline accident impacts required to be reported by facilities, including fatalities,
injuries, property damage, and certain costs associated with evacuations and sheltering-in-place events.
EPA expects the final rule to reduce many additional accident impacts including responder costs,
transaction costs, property value reductions, unmonetized costs of evacuations and sheltering-in-place, the
costs of potential health risks from exposure to toxic chemicals, and productivity losses, but due to a lack
of data, could not estimate their magnitudes or values. A second reason is that some accidents may not be
reported because the facility goes out of business before filing the RMP report, resulting in an
underestimate of historical damages. Lack of data also meant that other benefits of the rule, such as
improved information, could not be quantified. Finally, when EPA examined updated facility estimates of
the magnitudes of impacts reported, facilities that reported corrected estimates have tended to increase the
magnitudes.
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STAA Information
Potential cost savings not estimated. It is important to note that while EPA has estimated the cost
of STAA implementation, EPA has not estimated the cost savings facilities may gain from implementing
these STAA measures. To the extent that facilities do reap cost savings from these new technologies,
EPA's estimates of gross costs can be offset partially by those cost savings.
Example technologies and approach to practicability study cost estimate. While what constitutes
safer technologies will vary for each specific RMP process, identification of safer technologies should be
based on recognized approaches by chemical process designers. EPA realizes that safer technology
determinations will vary among industry sectors, as will what is considered practicable and included in a
practicability analysis. To estimate the costs of the practicability assessment of safer technologies, EPA
relied on estimates of costs of example technologies, which may, of course, differ from the actual
technologies studied by firms complying with the requirement. In addition, the assumption that a
practicability assessment costs approximately 1.2% of reference project costs is highly simplistic. The
result for EPA's analysis of the STAA requirement is that costs for some facilities may be overestimated,
while costs for others may be underestimated. See Sections 4.4.2 and 5.1.3 for a more detailed discussion.
Dated information from prior proposed rule.
The cost estimates for rule familiarization, STAA, and emergency response coordination are
based in part on public comments made in response to EPA requests for information during the proposed
rule stage of the 2017 amendments rule. For this final rule, which restored aspects of those provisions,
cost estimates were based on some of those same public comments EPA received on the 2017
amendments rule. However, there may have been subsequent changes to these costs. A more accurate cost
analysis would rely on data compiled by independent researchers or on an EPA survey of regulated
facilities. However, time and resource constraints prevented EPA from compiling such data.
Model facility approach.
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. For example, in the analysis, the estimated third-party audit cost for a complex facility is the same
for all complex facilities, but it is unlikely that an auditor will charge the largest facility, which has more
than 30 covered processes, the same fee as a facility with only one or two covered processes.
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CHAPTER 11: Analyses Required Under Applicable
Statutes and Executive Orders
11.1 Executive Order 12866: Regulatory Planning and Review and Executive Order 14094 Modernizing
Regulatory Review
This action is a "significant regulatory action", as defined under section 3(f)(1) of Executive
Order 12866, as amended by Executive Order 14094. Accordingly, EPA submitted this action to OMB
for Executive Order 12866 review. Documentation of any changes made in response to the Executive
Order 12866 review is available in the docket.
11.2 Unfunded Mandates Reform Act
This action includes a Federal mandate which may result in the expenditure by State, local, and
Tribal governments, in the aggregate, or by the private sector, of $100 million or more (adjusted for
inflation) in any one year. EPA estimates annualized total costs of $256.9 million at a 3% discount rate
and $296.9 million at a 7% discount rate. Of this amount, average annualized costs to State/local
governments total $5.0 million at a 3% discount rate and $5.1 million at 7% discount rate consisting of
estimated regulatory compliance costs for State/local governments that currently own or operate RMP-
regulated sources plus costs to local governments (i.e., LEPCs, emergency response officials and State
implementing agencies) for rule familiarization and voluntary participation in coordination activities,
exercises and review of information submitted to LEPCs. The estimated average annualized cost to the
private sector totals approximately $252.2 million at a 3% discount rate and $292.1 million at a 7%
discount rate. See Appendix E of this document for more information that addresses requirements under
Section 202 of UMRA. This action is not subject to the requirements of section 203 of UMRA because it
contains no regulatory requirements that might significantly or uniquely affect small governments.
With regard to Section 205 of UMRA, the Agency considered finalizing the regulatory
requirements as proposed as well as the regulatory alternatives considered in Chapter 7 of this RIA.
However, none of the alternative options successfully fulfilled the objectives of the rule, which seek to
seek to prevent or reduce the impacts of RMP accidents on communities near facilities. These objectives
are accomplished by promoting prevention generally and through targeted enhanced measures at the most
accident-prone facilities, which historically have had a disproportionate share of accidents and the
costliest accidents. Some of these same facilities have widely known safer alternatives available. The
objectives are also accomplished by enhancing emergency response training and planning through better
information access and exchange among the facility, emergency responders, and the community
potentially exposed to accidents. A market failure results when RMP accidents impose burdens on nearby
communities. Firms do not have an appropriate level of incentive to prevent and/or mitigate these external
costs. The Agency believes that the rule objectives to prevent or reduce the impacts of accidents on
communities near facilities are best achieved by the selected provisions for this final rule, particularly,
implementation of process safeguards or IST/ISD to prevent accidents and allowing a wider segment of
the public potentially affected by accidents to access emergency preparedness information.
11.3 Federalism
E.O. 13132 (64 FR 43255, August 10, 1999) requires Agencies to develop an accountable process
to ensure "meaningful and timely input by State and local officials in the development of regulatory
policies that have federalism implications." Policies that have federalism implications are defined in the
E.O. to include regulations that have "substantial direct effects on the States, on the relationship between
the national government and the States, or on the distribution of power and responsibilities among the
various levels of government."
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Under section 6 of E.O. 13132, Agencies may not issue a regulation that has federalism
implications, that imposes substantial direct compliance costs, and that is not required by statute unless
the Federal government provides the funds necessary to pay the direct compliance costs incurred by State
and local governments or the agency consults with State and local officials early in the process of
developing the regulation. The Agency also may not issue a regulation that has federalism implications
and that preempts State law unless the Agency consults with State and local officials early in the process
of developing the regulation.
The final rule will affect State and local government entities, including entities that own RMP-
regulated facilities, LEPCs, and 13 State-and county- delegated implementing agencies. The final rule
imposes both direct and indirect costs. Direct costs are associated with activities required by regulated
facilities owned by government entities. Indirect costs are associated with 1) regulated facilities owned by
government entities, LEPCs, and State implementing agencies reviewing the final rule, and 2) LEPCs
coordinating with facilities.
Most of the government-owned facilities are water or wastewater treatment facilities, but some
large swimming pools are covered as well. Most of the government entities are cities, but the universe
includes larger special districts (e.g., the Metropolitan Water District of Southern California). In addition,
13 State-and county-delegated implementing agencies will face small costs from the final rule.
The EPA has concluded that this action will not have federalism implications. The maximum
annual cost to State and local government entities, including LEPCs and the 13 delegated implementing
agencies, is estimated to be $18.9 million in 2022 dollars.197 Therefore, the final rule will not have a
substantial and direct effect on State and local governments when compared to the $25 million threshold
which triggers federalism implications. In addition, the final rule does not change the relationship
between State and local governments and the Federal government nor delegate new responsibilities from
the Federal government to State and local governments.
11.4 Employment Impacts
The effects of environmental regulation on employment are generally a mixture of potential
declines and gains in different areas of the economy over time with a general expectation that some
workers will shift to activities that are more environmentally protective than before the regulation.
Regulatory employment impacts can vary across occupations, regions, and industrial sectors; by labor and
product demand and supply elasticities; and in response to other labor market conditions. There are
significant challenges when trying to isolate the employment effects due to an environmental regulation
from employment effects due to a wide variety of other possibly concurrent economic changes, including
the state of the macroeconomy generally. Considering these challenges, the economics literature provides
a constructive framework and empirical evidence. The current employment impacts analysis focuses on
impacts on labor demand. (Environmental regulation may also affect labor supply through changes in
worker health and productivity.198)
Economic research evaluating the employment impacts of environmental regulation has shown
that the net effect on employment is ambiguous. Employment impacts may occur in the directly regulated
sector, the environmental protection sector, and in upstream and other related sectors. Even within the
197 For the purposes of defining "maximum annual cost to government entities" the $18.9 million reflects if all government
entities were to face costs in the same year which is very conservative.
198 Zivin Joshua Graff andNeidell Matthew. "Air Pollution's Hidden Impacts." Science 359, no. 6371 (January 5, 2018): 39—40.
https://doi.org/10.1126/science.aap7711.
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directly regulated sector, multiple impacts may be experienced. New costs that are incurred to protect the
environment may include labor, energy, capital, materials, and other costs Firms may pass along to
consumers increased costs from environmental protection, leading demand for output to decrease, which
could cause a decrease in labor demand. There may also be operational impacts experienced by regulated
firms as they modify operations to comply with new 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 general, the net effect of an environmental regulation on employment in
regulated sectors, the sectors providing environmental protection, and the overall economy is
indeterminate. Berman and Bui (2001)199 provide a theoretical model of employment effects of
environmental regulation.
To put the costs of this final rule and their potential employment impacts into perspective, EPA
collected data on employment, revenue, and average wages from 2016 to 2020 for the 324 and 325
NAICS sectors, the sectors expected to be most affected by the rule. All nominal dollar amounts have
been adjusted for inflation to 2022 dollars using BEA's GDP price deflator. Data on the number of
employees for each sector came from the County Business Patterns (CBP) for the years 2016 through
2020. The 324 NAICS sector employed an average of approximately 107,000 workers over this time
period, while the 325 NAICS sector employed an average of approximately 800,000. Over these five
years, the 324 NAICS sector employment increased 6.7 percent, while the 325 NAICS sector employment
increased 8.8 percent. Data collected from the BLS OEWS for the 324 and 325 NAICS sectors shows that
average wages for each sector were $89,830 and $78,070 in 2020 compared to $86,291 and $77,178 in
2016, respectively. On the other hand, likely heavily influenced by the Covid 19 pandemic, the Annual
Survey of Manufacturers (ASM) reported revenue declined from 2018 through 2020 to $407.3 billion for
NAICS 324 and $788.0 billion for NAICS 3 25.200 Revenue figures typically exceed $700 billion and
$800 billion for each sector, respectively. Labor productivity, calculated as revenue per employee, was
$3.6 million for the 324 sector and $0.9 million for the 325 sector in 2020. These figures are well above
the $0.3 million labor productivity average across all sectors of the economy.2"1 The annualized 7 percent
discounted costs of the final rule in 2022, totaling $297 million, make up roughly 0.07 percent and 0.04
percent of revenues for the 324 and 325 NAICS sectors, respectively. While not all the costs of the final
rule will be borne by the 324 and 325 NAICS sectors, these sectors largely make up the Program 3
facilities affected by this rule and will bear a large share of the costs estimated for the final rule. Exhibits
11-1 and 11-2 present this data for both sectors, respectively.
Exhibit 11-1: Employment, Average Wages, Revenue
and Labor Productivity for NAICS Sector 324
Year
Employment
Average
Wages
Revenue
($1,000)
Labor
Productivity
(Revenue /
Employment)
2016
104,748
$86,291
-
-
2017
105,730
$85,706
-
-
2018
107,040
$87,238
$789,540,346
$7,376,124
2019
107,509
$88,166
$691,528,576
$6,432,285
199 Berman, Eli, and Linda Bui. "Environmental Regulation And Productivity: Evidence From Oil Refineries." The Review of
Economics and Statistics 83, no. 3(2001): 498-510.
200 Only data for the years 2018 through 2020 were collected from the ASM.
201 This figure was derived using 2017 Economic Census data, in which the revenue across all sectors amounted to $37.0 trillion.
When divided by 124.6 million employees in 2017, the labor productivity per employee equals $296,550. Adjusting for inflation
to 2022 dollars increases the labor productivity to $315,687 per employee.
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Year
Employment
Average
Wages
Revenue
($1,000)
Labor
Productivity
(Revenue /
Employment)
2020
111,764
$89,830
$407,274,260
$3,644,056
Exhibit 11-2: Employment, Average Wages, Revenue
and Labor Productivity for NAICS Sector 325
Year
Employment
Average
Wages
Revenue
($1,000)
Labor
Productivity
(Revenue /
Employment)
2016
766,771
$77,178
-
-
2017
784,725
$78,229
-
-
2018
798,028
$78,822
$889,826,800
$1,115,032
2019
817,229
$78,469
$843,620,095
$1,032,293
2020
834,524
$78,070
$788,044,252
$944,304
EPA also analyzed data on the demographic breakdown of these two sectors, presented in Exhibit
11-3, from the Current Population Survey (CPS) Annual Social and Economic Supplement (ASEC) for
the year 2020. Both sectors predominantly employ male and white workers. Of all employees within the
324 and 325 NAICS sectors, 3.2 percent and 9.4 percent of employees were identified as belonging to a
racial and/or ethnic minority.
Exhibit 11-3: NAICS Sectors 324 and 325 Demographic Characteristics
Demographic Characteristic
NAICS 324
NAICS 325
Gender
Male
91.5%
89.4%
Female
8.5%
10.6%
Race (Non-Hispanic)
Asian
2.2%
6.6%
Black
0.1%
0.9%
White
97.6%
92.4%
Native American or Hawaiian Pacific Islander
0.1%
0.1%
Ethnicity (All races)
Hispanic
1.0%
1.8%
Minority Status
Minority
3.2%
9.4%
This RIA does not include a complete analysis of labor market effects of the final rule. However,
in a year when a large complex facility will have to conduct a third-party audit, a root cause analysis and
an initial evaluation of safer technologies, the total labor hours required will average significantly fewer
than a single FTE. The STAA practicability assessment and STAA implementation will require additional
labor, but EPA does not estimate labor hours for those requirements. STAA practicability assessments
will likely involve labor for engineers to assess the technical practicability and for corporate managers to
assess the financial practicability of different projects. STAA implementation that involves replacing,
constructing, or installing equipment and structures will require labor as part of initial costs, as will
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developing new programs and procedures and training staff. Implemented measures may have recurring
labor needs to operate and maintain equipment, programs, and procedures. Finally, third-party audit and
root cause analysis provisions may generate work for consultants. In general, EPA does not expect any
facility will need to hire new employees as a result of the requirements of the final rule.
11.5 Paperwork Reduction Act of 1995
The information collection activities in this rule will be submitted for approval to OMB under the
Paperwork Reduction Act of 1995. The Information Collection Request (ICR) document that the EPA
prepared has been assigned EPA ICR number 2725.02. You can find a copy of the ICR in the docket for
this rule, and it is briefly summarized here. The information collection requirements are not enforceable
until OMB approves them.
EPA believes that the Risk Management Program regulations, originally promulgated on June 20,
1996, codified as 40 CFRpart 68, and later amended, have been effective in preventing and mitigating
chemical accidents in the United States. However, EPA also believes that revisions could further protect
human health and the environment from chemical hazards through advancement of PSM based on lessons
learned. The revisions in this final rule are a result of reviewing the existing Risk Management Program
and information gathered from the 2021 listening sessions. State and local authorities will use the
information in RMPs to modify and enhance their community response plans. The agencies implementing
the RMP rule use RMPs to evaluate compliance with 40 CFR part 68 and to identify sources for
inspection because they may pose significant risks to the community. Citizens may use the information to
assess and address chemical hazards in their communities and to respond appropriately in the event of a
release of a regulated substance. These revisions are made under the statutory authority provided by
section 112(r) of the CAA as amended (42 U.S.C. 7412(r)).
Respondents/affected entities: The industries that are likely to be affected by the requirements in
the regulation fall into numerous NAICS codes. The types of stationary sources affected by the
rule 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. Among the stationary sources potentially affected, the Agency has
determined that 2,636 are regulated private sector small entities and 630 are small government
entities.
Respondent's obligation to respond: Mandatory (CAA sections 112(r)(7)(B)(i) and (ii), CAA
sections 112(r)(7)(B)(iii), 114(c), CAA 114(a)(1))).
Estimated number of respondents: 14,226.
Frequency of response: Occasional.
Total estimated burden: 1,190,991 hours (per year). Burden is defined at 5 CFR 1320.3(b).
Total estimated cost. $126,796,471 (per year); includes $12,413,710 annual operations and
maintenance costs and $78,400 annual capital costs.
An agency may not conduct or sponsor, and a person is not required to respond to, a collection of
information unless it displays a currently valid OMB control number. The OMB control numbers for the
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EPA's regulations in 40 CFR are listed in 40 CFR part 9. When OMB approves this ICR, the Agency will
announce that approval in the Federal Register and publish a technical amendment to 40 CFR part 9 to
display the OMB control number for the approved information collection activities contained in this final
rule.
11.6 National Technology Transfer and Advancement Act
Section 12(d) of the National Technology Transfer and Advancement Act (NTTAA) of 1995, Pub
L. No. 104-113, Sec. 12(d) directs EPA to use voluntary consensus standards in its regulatory activities
unless doing so will be inconsistent with applicable law or otherwise impractical. Voluntary consensus
standards are technical standards (e.g., materials specifications, test methods, sampling procedures, and
business practices) that are developed or adopted by voluntary consensus standard bodies. The NTTAA
directs the EPA to provide Congress, through the OMB, explanations when the Agency decides not to use
available and applicable voluntary consensus standards.
The regulatory options do not involve technical standards. Nothing in the regulatory options will
prevent the use of voluntary consensus standards for any measurements, where available, and the EPA
encourages permitting authorities and regulated entities to do so. Therefore, the EPA is not considering
the use of any voluntary consensus standards.
11.7 Consultation and Coordination with Indian Tribal Governments
E.O. 13175 (65 FR 67249, November 6, 2000) requires EPA to develop an accountable process to
ensure "meaningful and timely input by tribal officials in the development of regulatory policies that have
tribal implications/' "Policies that have tribal implications'' is defined in the E.O. to include regulations
that have "substantial direct effects on one or more Indian Tribes, on the relationship between the Federal
government and the Indian Tribes, or on the distribution of power and responsibilities between the federal
government and Indian Tribes."
This action has Tribal implications. However, it will neither impose substantial direct compliance
costs on federally recognized Tribal governments, nor preempt Tribal law. Approximately 260 RMP
facilities are located on Tribal lands. Tribes could be impacted by the final rule either as an owner or
operator of an RMP-regulated facility or as a Tribal government when the tribal government conducts
emergency response or emergency preparedness activities under EPCRA. One Tribal government owns
three facilities that combined will incur less than $2,100 in costs and another Tribal government owns one
facility that will incur less than $900 in costs.
11.8 Executive Order 13045: Protection of Children from Environmental Health Risks and Safety Risks
E.O. 13045 directs Federal agencies to include an evaluation of the health and safety effects of
the planned regulation on children in Federal health and safety standards and explain why the regulation
is preferable to potentially effective and reasonably feasible alternatives. This action is not subject to E.O.
13045 because the EPA does not believe the environmental health risks or safety risks addressed by this
action present a disproportionate risk to children. EPA believes that the revisions to the Risk Management
Program regulations made by this final rule will further protect human health, including the health of
children, through advancement of process safety.
11.9 Executive Order 13211: Actions Concerning Regulations That Significantly Affect Energy Supply,
Distribution, or Use
E.O. 13211 requires Agencies to prepare a Statement of Energy Effects when undertaking certain
agency actions. Such Statements of Energy Effects shall describe the effects of certain regulatory actions
on energy supply, distribution, or use, notably: (i) any adverse effects on energy supply, distribution, or
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use (including a shortfall in supply, price increases, and increased use of foreign supplies) should the
proposal be implemented, and (ii) reasonable alternatives to the action with adverse energy effects and the
expected effects of such alternatives on energy supply, distribution, and use. The OMB implementation
memorandum for E.O. 13211 outlines specific criteria for assessing whether a regulation constitutes a
"significant energy action" and will have a "significant adverse effect on the supply, distribution or use of
energy."202 Those criteria include:
• Reductions in crude oil supply in excess of 10,000 barrels per day.
• Reductions in fuel production in excess of 4,000 barrels per day.
• Reductions in coal production in excess of 5 million tons per year.
• Reductions in natural gas production in excess of 25 million mcf per year.
• Reductions in electricity production in excess of 1 billion kilowatt-hours per year, or in excess of
500 megawatts of installed capacity.
• Increases in the cost of energy production in excess of 1 percent.
• Increases in the cost of energy distribution in excess of 1 percent.
• Significant increases in dependence on foreign supplies of energy. Having other similar adverse
outcomes, particularly, unintended ones.
The final rule will not impose adverse effects on the supply, distribution, or use of energy. Some
refineries may face costs from the final rule, for example from STAA; however, the combined costs will
result in a de minimis increase in the cost of energy production. As such, the final rule does not constitute
a significant regulatory action under E.O. 13211 and the EPA did not prepare a Statement of Energy
Effects.
202 E.O. 13211 was issued May 18, 2002. The OMB later released an Implementation Guidance memorandum on July 13, 2002.
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APPENDIX A: Cost Estimates of HF Alkylation Conversion
Cost
estimate
($millions)
Technology or
Location
Year of
Estimate
Barrels
per day
(BPD)
Description
$50
Exelus, a chemical
technology company
2011
Not
Available
Conversion to solid acid catalyst2"3 to replace traditional
liquid acids (no bpd provided).2"4
$87
Chevron Salt Lake
City
2016
4,500
Converting existing HF unit to ionic liquids (Honeywell
process) 4,500 bpd. "Chevron will convert the existing
4,500-b/d HF alkylation unit at Salt Lake City to
ISOALKY, a proprietary alkylation technology
developed by Chevron USA Inc. and now licensed by
Honeywell International Inc.'s UOP LLC, that uses ionic
liquids instead of HF or sulfuric acids as a liquid
alkylation catalyst for production of high-octane fuels,
UOP said" (Oil & Gas Journal, 10/4/2016). Cost
estimates for two contracts appear in Oil & Gas Journal
2/1/17: $67 million + $20 million 205
$900
Torrance Refinery
in Torrance CA
2017
30,000
Conversion to new sulfuric acid unit using Sulfuric Acid
Alkylation Technology to produce 30,000 BPD of
alkylate product: $600m for alkylation unit;
$300m for acid regeneration plant.2"6
$300
(from a
range of
$100 to
$500)
American Fuel and
Petrochemicals
Manufacturers
(AFPM) an
association
representing larger
petroleum facilities.
2015
Not
Available
AFPM members estimate costs to modify or replace an
HF alkylation unit will more realistically range from
$100 million to $500 million in capital, depending on
facility-specific considerations.2117
$100
Delek Louisiana
2018
6,000
New conventional sulfuric acid alkylation unit
203 EPA located two additional estimates of Solid Acid alkylation projects estimated as costing $25m and $23m but given that
this technology is relatively new, EPA limited the representation of it to a single conservative data point - the $50m estimate
included in the table. For a description of the two additional estimates see Zhang, S., L. Wilkinson, L. Ogunde, R. Todd, C.
Steves, and S Haydel. 2016. Norton Engineering: Alkylation Technology Study: Final Report. South Coast Air Quality
Management District (SCAQMD). September 9. https://www.aqmd.gov/docs/default-source/permitting/alkylation-technology-
study-final-report. pdf
204 Elamby, Chris. 2011. "New oil refinery in South Dakota says it will use alternative to toxic acid." The Center for Public
Integrity. March 28. Citing James Nehlsen, a process development manager at Exelus, Inc. Available at:
https://publicintegritv.org/ineaualitv-povertv-opportunitv/workers-rights/worker-health-and-safetv/fueling-fears/new-oil-refinerv-
in-south-dakota-savs-it-will-use-alternative-to-toxic-acid/.
205 Oil and Gas Journal, "Chevron's Salt Lake City refinery plans alkylation unit revamp." Oct 4, 2016. Available at:
https://www.ogi.com/refming-processing/article/17250762/chevrons-salt-lake-citv-refmerv-plans-alkvlation-unit-revamp: Oil
and Gas Journal, "Chevron's Utah refinery lets contract for alkylation technology retrofit." Feb 8, 2017. Available at:
https://www.ogi.com/refining-processing/article/17290342/chevrons-utah-refmerv-lets-contract-for-alkvlation-teclinologv-retrofit
200 Letter from Torrance Refining Company, Torrance, CA to Bruce Moe, City Manager, Manhattan Beach CA, dated March 16,
2018. Bums/McDonnell, PBF Energy, Report Brief: Alkylation Study & Estimate, Torrance Refinery, Project No. 98037. July
2017, see Tab 1. Available at: https://torrancerefmerv.eom/wp-content/uploads/2018/03/TORC-Comment-Letter-with-
Attachments-Agenda-Item-No.-K. 11 .pdf: South Coast AQMD, Governing Board Meeting, "Status Update on PR 1410 -
Hydrogen Fluoride Storage and Use at Petroleum Refineries." Diamond Bar, CA February 1, 2019. Available at:
http://www.aamd.gov/docs/default-source/Agendas/Governing-Board/2019/2019-febl-025.pdf?sfvrsn=6: Buhl, Larry. "Activists
and Oil Refiners Square Off Over Hydrofluoric Acid," Undark. October 10, 2018. Available at:
https: //undark. org/2018/10/10/hvdrofhioric-acid-oil-refming-explosion/.
207 See public comment on 2015 proposed RMP amendments rule EPA-HQ-OEM-2015-0725-0579, pp 142. Comment submitted
by AFPM.
Page 140 of 167
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Cost
estimate
($millions)
Technology or
Location
Year of
Estimate
Barrels
per day
(BPD)
Description
6,000 bpd. "HOUSTON (IC-)-US refiner Delek US
Holdings will install a 6,000 bbl/day alkylation unit at its
Krotz Springs, Louisiana, refinery, according to
information made available on Tuesday. . . Total cost is
estimated at $103m, according to the filing."2"8
$300
Valero Houston
2016
13,000
New conventional sulfuric acid alkylation unit 13,000
bpd. "The $300 million Houston alkylation project
announced in January entered the detailed engineering,
procurement, and construction phase of the development
process during the quarter. This 13,000 BPD unit, which
upgrades low-cost natural gas liquids into premium-value
alkylate, is expected to be completed in the first half of
2019."209
$400
Valero, St. Charles,
Louisiana
2017
25,000
New advanced sulfuric acid (requires less acid, and size
equals the Torrance refinery in LA) 25,000 bpd.
"Included in the growth investments is the construction of
a new 25,000 barrels per day alkylation unit at the St.
Charles refinery, which received final approval from the
company's Board of Directors last week. Total cost for
the alkylation unit is estimated at $400 million, and
completion is expected in the second half of 2020."21"
$155
DuPont Stratco
2016 with
2010 labor
rates
25,000
Stratco Sulfuric Acid Alkylation unit to produce 25,000
bpd alkylate plus an Order of Magnitude cost estimate for
a 250 STPD Sulfuric Acid Regeneration Plant (required
capacity for a 25,000 bpd Alky Unit) is $45 million
USD.21'1
$145
ExxonMobil
2016 with
2010 labor
rates
25,000
ExxonMobil sulfuric acid for 25,000bpd plus an Order of
Magnitude cost estimate for a 250 STPD Sulfuric Acid
Regeneration Plant (required capacity for a 25,000 bpd
Alky Unit) is $45 million USD.212
208 Communities for a Better Environment citing ("https://www.cbecal.org/wp-content/uploads/2019/02/CBE-fact-sheet-MHF-
replacement-COST-greatlv-exagerated-O1312019.pdf): US Delek Holdings to add alkylation unit at Louisiana refinery,
Independent Commodity Intelligence Services (ICIS) News, 2018/01/16, from refinery SEC filing:
https://www.icis.com/explore/resources/news/2018/01/16/10183692/us-delek-holdings-to-add-alkvlation-unit-at-louisiana-
refinery/.
209 Communities for a Better Environment citing ("https://www.cbecal.org/wp-content/uploads/2019/02/CBE-fact-sheet-MHF-
replacement-COST-greatlv-exagerated-01312019.pdf): Valero Energy Reports First Quarter 2016 Results, 13,000 bpd unit,
GlobeNewsWire, 05/03/2016. Available at: https://www.globenewswire.com/news-release/2016/05/03/835929/0/en/Valero-
Energv-Reports-First-Quarter-2016-Results.html.
210 Communities for a Better Environment citing ("https://www.cbecal.org/wp-content/uploads/2019/02/CBE-fact-sheet-MHF-
replacement-COST-greatlv-exagerated-01312019.pdf): Valero Energy Reports First Quarter 2016 Results, 13,000 bpd unit,
GlobeNewsWire, 05/03/2016. Available at: https://www.globenewswire.com/new s-release/2016/05/03/835929/0/en/Valero-
Energv-Reports-First-Ouarter-2Q16-Results.html.
211 Zhang, S.; L. Wilkinson; L. Ogunde; R. Todd; C. Steves; S. Haydel. Norton Engineering: Alkylation Technology Study:
FINAL REPORT. South Coast Air Quality Management District, 09/09/2016. Available at: https://www.aamd.gov/docs/default-
source/permitting/alkvlation-technologv-studv-linal-report.pdf.
212 Zhang, S.; L. Wilkinson; L. Ogunde; R. Todd; C. Steves; S. Haydel. Norton Engineering: Alkylation Technology Study:
FINAL REPORT. South Coast Air Quality Management District, 09/09/2016. Available at: https://www.aamd.gov/docs/default-
source/permitting/alkvlation-technologv-studv-linal-report.pdf.
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APPENDIX B: Property and Business Losses in the
Petrochemical Sector
Type of Facility
Location
Date
Property
Damage $M
(2021 Dollars)
Business Loss
$M (accident
year $)
Notes
Refinery
Texas City TX
5/30/1978
$256
Refinery
Romeoville IL
7/23/1984
$603
Petrochemical
Port Neal IA
12/13/1994
$491
$60
Petrochemical
Pampa TX
11/14/1987
$627
$300
Petrochemical
Henderson NV
5/4/1988
$841
Plant destroyed
Refinery
Norco LA
5/5/1988
$808
Demolished and
rebuilt unit
Refinery
Richmond CA
4/10/1989
$246
25% of capacity
lost for 5
months, unit
restored after 2
years
Petrochemical
Pasadena TX
10/23/1989
$1,843
$680
Full production
not restored for
2 years
Petrochemical
Seadrift TX
3/12/1991
$235
$165
Production
reduced for one
year
Petrochemical
Sterlington LA
5/1/1991
$313
$270
One unit
destroyed
Refinery
Wilmington CA
10/8/1992
$200
Production
reduced by 53%
max capacity for
7 months
Petrochemical
Belpre OH
5/27/1994
$440
Production unit
destroyed
Petrochemical
Cedar Bayou
TX
10/20/1994
$315
Includes
business loss
Refinery
Pascagoula MS
8/16/2007
$310
Major portion
continued to
operate
Petrochemical
Deer Park TX
6/22/1997
$304
Unit shut down
for 10 months
Refinery
Richmond CA
3/25/1999
$248
$240
Unit shut down
for one year
Refinery
Carson City CA
4/23/2001
$248
Unit shut down
for 2 months
Refinery
Lemont IL
8/14/2001
$589
$330
Unit shut down
for one year
Petrochemical
Illiopolis IL
4/23/2004
$268
Up to 75% of
plant destroyed
Page 142 of 167
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Type of Facility
Location
Date
Property
Damage $M
(2021 Dollars)
Business Loss
$M (accident
year $)
Notes
Refinery
Texas City TX
3/23/2005
$340
Petrochemical
Port Arthur TX
4/29/2006
$325
Plant closed for
6 months
Refinery
Big Spring, TX
2/18/2008
$551
Resumed some
processing after
2 months, all
after 8 months
Refinery
Wisconsin
4/26/2018
$457
Refinery
Philadelphia
6/21/2019
$342
Refinery closed
Petrochemical
Port Neches TX
11/27/2019
$434
Sources: Marsh JLT Specialty, "100 Largest Losses in the Hydrocarbon Industry," 27th ed., March 2022.
https://www.marsh.com/us/industries/energv-and-power/insights/100-largest-losses/10Q-largest-losses-report-
download.html. Marsh, "The 100 Largest Losses, 1974-2019, Large Property Damage Losses in the Hydrocarbon
Industry,"26th Edition, March 2020. https://www.marsh.eom/us/industries/energv-and-power/insights/100-largest-losses-
in-the-hvdrocarbon-industrv.html. Marsh, "The 100 Largest Losses 1974-2013 Large Property Damage Losses in the
Hydrocarbon Industry," 23rd Edition, March 2014. https://enatech.irc.ec.europa.eu/download/attachment/244. The table
includes 25 accidents that reflect only U.S. accidents in the refinery and petrochemical sectors from 1978 forward, only
accidents that may have been related to a release of a regulated substance, and only damage unrelated to natural disasters
except for the 1994 Cedar Bayou flooding and 2007 Pascagoula oil fire.
Page 143 of 167
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APPENDIX C: Small Entity Analysis Data Comparison
EPA received public comments questioning the Agency's use of Data Axle data in the small
entity analysis because the data are not publicly available due to Data Axle's data privacy restrictions. To
address these concerns, EPA used Dun & Bradstreet (D&B) Hoovers data on private firms impacted by
the rule to develop a second, small entity analysis, which EPA is making publicly available in the docket
for this rulemaking. This analysis also serves as a robustness check on the Data Axle small entity analysis
results. EPA developed this comparison of small entity analysis results for both the proposed and final
rule cost estimates.
C.l Proposed Rule Data Comparison
This section compares the proposed rule small entity analysis using Data Axle data
(referred to as the original analysis) with a duplicate analysis using D&B Hoovers data and found
the results to be largely the same; i.e., the proposed rule would not have imposed a significant
economic impact on a substantial number of small entities. For private sector entities, EPA
estimates that based on Data Axle and D&B Hoovers data, respectively, 3.1 and 1.8 percent of (89
and 22) small entities would have experienced costs exceeding 1 percent of revenue, and only 0.2
and 0.2 percent of entities (5 and 5) would have incurred costs greater than 3 percent of revenue.
EPA retrieved data from Data Axle and D&B Hoovers on the revenue, NAICS code, and
employee count for each entity, parent company, or corporate entity, as appropriate. A summary of the
number of facilities, the number of unique entities, the breakdown of private sector and government
entities, and their size classifications is provided in Exhibit C-l. To provide a direct comparison of the
proposed rule results using the two data sources, the small parent entities are classified using 2019 SB A
size standards, which differ from the size standard classifications that the Chapter 8 final rule RFA
analysis uses.
Exhibit C-l: RMP Facility and Entity Counts.
D&B Hoovers
Data Axle
Number of Entities
Percent
Number of
Entities
Percent
Total Facilities
11,740
11,740
Total Entities
5,508
5,649
Private Sector Entities
4,480
81% of total entities
4,538
80% of total
entities
Small
2,189
49% of private sector entities
2,911
64% of private
sector entities
Non-small
2,242
51% of private sector entities
1,627
36% of private
sector entities
Government Entities
1,028
19% of total entities
1,111
20% of total
entities
Page 144 of 167
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Small
590
57% of government entities
630
57% of
government
entities
Non-small
438
43% of government entities
481
43% of
government
entities
As Exhibit C-l shows, in the proposed rule small entity analysis using Data Axle, EPA identified
5,649 unique entities owning RMP-regulated facilities. Of those 5,649 unique entities, EPA was able to
determine that 1,111 (20 percent) are government entities (e.g., State and local governments, LEPCS,
special water districts, etc.) and the remaining 4,538 (80 percent) are private entities. In the revised
analysis using D&B Hoovers, EPA identified 5,508 unique entities owning RMP regulated facilities. Of
those 5,508 unique entities, EPA was able to determine that 1,028 (19 percent) are government entities
and the remaining 4,474 (81 percent) are private sector entities.
Each facility is "assigned" an associated business entity, or if applicable, an ultimate parent
entity. This means that some facilities not associated with an ultimate parent entity in the Data Axle data
may be associated with an ultimate parent entity in the D&B Hoovers data, and vice versa, and which
explains the differences in entity counts and size classification. Data Axle has an algorithm matching
facility addresses with known businesses and uses their database to connect those businesses to any parent
companies. EPA's original analysis assigned facilities to entities using company name. D&B Hoovers
uses the DUNS number reported in the RMP or FRS Databases. DUNS numbers then connect to
businesses in the D&B Hoovers database and can be connected to any parent companies. In the analysis,
DUNS numbers are used to assign facilities to entities. Government counts differ slightly between
datasets due to a different method of assigning facilities to entities.
Exhibits C-2 and C-3 present an analysis of facilities and the size of ownership entity associated
with them to provide an understanding of the distribution of private sector owned facilities by Program
Level. The results show that Program 3 has a larger proportion of facilities owned by non-small private
sector entities than Programs 2 and 1 facilities. That is, based on Data Axle and D&B Hoovers data,
respectively, non-small private sector entities own 59 and 82 percent of Program 3 facilities (3,781 of
6,422 and 5,239 of 6,387) compared to 48 and 55 percent of Program 2 facilities (1,526 of 3,163 and
1,719 of 3,137) and 43 and 79 percent of Program 1 facilities (282 of 651 and 502 of 634).
Exhibit C-2: Analysis of Private Sector Facility Ownership by Program Level, Data Axle.
Number of
PI
Facilities
Number of
P2
Facilities
Number of
P3
Facilities
Total Facilities
660
3,975
7,105
# of facilities owned by:
Private Sector Entities
651
3,162
6,422
Small
369
1,636
2,641
Non-small
282
1,526
3,781
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Exhibit C-3: Analysis of Private Sector Facility Ownership by Program Level, D&B Hoovers.
Number of
PI
Facilities
Number of
P2
Facilities
Number of
P3
Facilities
Total Facilities
648
3,942
7,058
# of facilities owned by:
Private Sector Entities
634
3,137
6,387
Small
132
1,418
1,148
Non-small
502
1,719
5,239
Exhibits C-4 and C-5 present an analysis of facilities and the size of entity associated with them
to provide an understanding of the distribution of government-owned facilities by program level. Both
analyses show a similar distribution. Based on Data Axle and D&B Hoovers data, respectively, non-small
government sector entities own 48 and 46 percent of Program 3 facilities (331 facilities out of 683 and
330 of 671) compared to 45 and 49 percent of Program 2 facilities (369 facilities out of 813 and 367 of
805). There are few Program 1 government-owned facilities.
Exhibit C-4: Analysis of Government Sector Facility Ownership by Program Level, Data Axle.
Number of
PI
Facilities
Number of
P2
Facilities
Number of
P3 Facilities
Total Facilities
660
3,975
7,105
# of facilities owned by
Government Entities
9
813
683
Small
2
444
352
Non-small
7
369
331
Exhibit C-5: Analysis of Government Sector Facility Ownership by Program Level, D&B Hoovers.
Number of
PI
Facilities
Number of
P2
Facilities
Number of
P3 Facilities
Total Facilities
648
3,942
7,058
# of facilities owned by:
Government Entities
14
805
671
Small
3
438
341
Non-small
11
367
330
EPA estimated the cost for each facility to comply with the final rule. These estimates are applied
to the same facilities across data sources. This was done by applying cost estimates for the following cost
categories to facilities in the affected universe, per facility or per process:
• Rule Familiarization
• STAA
• Root Cause Analysis
Page 146 of 167
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• Third-Party Audits
• Employee Participation Plan
• Emergency Backup Power
• Community Notification Plan
• Information Availability
The costs used for each cost category are consistent with the costs described in the
proposed rule RIA, Chapter 4: Unit Costs of Proposed Rule Provisions, and are applied to the same
facilities across data sources. The differences in facility matching between the two data sources
drive the differences in average small entity cost in Exhibit C-6 and Exhibit C-7.
The comparison results of the analysis for private sector small entities are presented in
Exhibits C-6 and C-7, below. The analyses using Data Axle and D&B Hoovers show similar cost-
to-revenue impacts, with estimates that 96.9 and 99.0 percent of small entities will incur cost
impacts of less than 1 percent of their revenue and the same estimate of 0.2 percent of small
entities with impacts greater than 3 percent, respectively. Only 3.1 percent of small private sector
entities using Data Axle, and 1.0 percent using D&B Hoovers are estimated to face impacts greater
than 1 percent. In both analyses, of the entities with impacts greater than 3 percent, one small
entity associated with a facility with a HF Alkylation faces STAA costs, which creates a large
increase in the average small entity cost. Removing the entity facing this STAA cost results in a
much smaller average small entity cost to the entities with impacts greater than 3 percent, with
average cost decreasing from $636,278 to $49,519 using Data Axle and from $1.0 million to
$41,413 using D&B Hoovers.
Exhibit C-6: Cost Impacts as a Proportion of Total Revenue for
Small Private Sector Entities, Data Axle.
Proportion of
Revenue
Impacted
Number of
Small Entities
% of Small
Entities
Average
Small Entity
Cost ($)
Average
Small Entity
Revenue
< 1%
2,822
96.9%
$10,618
$51,340,929
1% - 3%
84
2.9%
$108,921
$6,638,322
Total >3%
5
0.2%
$636,278
$4,955,000
Total >3%
without HF
Alkylation
4
0.1%
$49,519
$1,218,750
Small entity
with HF
Alkylation
1
0.03%
$2,983,317
$19,900,000
Page 147 of 167
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Exhibit C-7: Cost Impacts as a Proportion of Total Revenue for
Small Private Sector Entities, D&B Hoovers.
Proportion of
Revenue
Impacted
Number of
Small Entities
% of Small
Entities
Average
Small Entity
Cost ($)
Average
Small Entity
Revenue
< 1%
2,167
99.0%
$34,352
$162,876,973
1% - 3%
17
0.8%
$44,391
$3,708,068
Total >3%
5
0.2%
$1,022,048
$7,326,442
Total >3%
without HF
Alkylation
4
0.18%
$41,413
$1,039,664
Small entity
with HF
Alkylation
1
0.05%
$2,983,317
$19,900,000
The primary sectors subject to the rule and the SB A size standards for small parent entities
that were in effect when the proposed rule was published are shown in Exhibit C-8.213
Exhibit C-8: SBA Industry Sector Small Entity Size Standards, 2019.
NAICS
Sector
Size
Standard
111
Crop Production
$0.75 million
112
Animal Production and Aquaculture
$0.75 -$15 million
115
Support Activities for Agriculture and Forestry
$7.5 - $27.5 million
211111
Crude Petroleum and Natural Gas Extraction
1,250 FTE
221112
Fossil Fuel Electric Power Generation
750 FTE
22131
Water Supply and Irrigation Systems
$27.5 million
22132
Sewage Treatment Facilities
$20.5 million
3111
Animal Food Manufacturing
500 - 1,000 FTE
3112
Grain and Oilseed Milling
500 - 1,000 FTE
3113
Sugar and Confectionery Product Manufacturing
750 - 1,250 FTE
3114
Fruit and Vegetable Preserving and Specialty Food Manufacturing
750 - 1,250 FTE
3115
Dairy Product Manufacturing
750 - 1,250 FTE
3116
Animal Slaughtering and Processing
750 - 1,250 FTE
3117
Seafood Product Preparation and Packaging
750 FTE
3118
Bakeries and Tortilla Manufacturing
750 - 1,250 FTE
3119
Other Food Manufacturing
750 - 1,250 FTE
3121
Beverage Manufacturing
750 - 1,250 FTE
322
Paper Manufacturing
500 - 1,500 FTE
213 SBA definitions of small businesses apply to a firm's parent company and all affiliates as a single entity.
Page 148 of 167
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NAICS
Sector
Size
Standard
32411
Petroleum Refineries
1,500 FTE
3254
Pharmaceutical and Medicine Manufacturing
1,000 - 1,250 FTE
3255
Paint, Coating, and Adhesive Manufacturing
500 - 1,000 FTE
3256
Soap, Cleaning Compound, and Toilet Preparation Manufacturing
750 - 1,250 FTE
3259
Other Chemical Product and Preparation Manufacturing
500 - 1,500 FTE
326
Plastics and Rubber Products Manufacturing
500 - 1,250 FTE
327
Nomnetallic Mineral Product Manufacturing
500 - 1,250 FTE
331
Primary Metal Manufacturing
500 - 1,250 FTE
332
Fabricated Metal Product Manufacturing
500 - 1,500 FTE
333
Machinery Manufacturing
500 - 1,500 FTE
334
Computer and Electronic Product Manufacturing
500 - 1,250 FTE
335
Electrical Equipment, Appliance, and Component Manufacturing
500 - 1,500 FTE
336
Transportation Equipment Manufacturing
1,000 - 1,500 FTE
337
Furniture and Related Product Manufacturing
500 - 1,000 FTE
339
Miscellaneous Manufacturing
500 - 1,000 FTE
42
Wholesale Trade
100 - 150 FTE
44422
Nursery, Garden Center, and Fann Supply Stores
$llm
45431
Fuel Dealers
100 FTE
48691
Pipeline Transportation of Refined Product
1,500 FTE
48821
Support Activities for Rail Transportation
$15m
C.2 Final Rule Data Comparison
EPA conducted the final rule small entity analysis using both Data Axle and D&B
Hoovers. The analysis indicates that the final rule will not impose a significant economic impact
on a substantial number of small entities using either data source. For private sector entities, EPA
estimates that 9.3 and 7.8 percent of small entities will experience costs exceeding 1 percent of
revenue, and only 2.8 and 1.9 percent of entities will have costs greater than 3 percent of revenue
based on Data Axle and D&B Hoovers data, respectively.
EPA retrieved data from Data Axle and D&B Hoovers on the revenue, NAICS code, and
employee count for each entity, parent company, or corporate entity as appropriate. A summary of the
number of facilities, the number of unique entities, the breakdown of private sector and government
entities, and their size classifications is provided in Exhibit C-9. To provide a direct comparison of the
final rule results using the two data sources, the small parent entities are classified using March 17, 2023
SB A size standards.
Page 149 of 167
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Exhibit C-9: RMP Facility and Entity Counts.
D&B Hoovers
Data Axle
Number of
Entities
Percent
Number of
Entities
Percent
Total Facilities
11,740
11,740
Total Entities
5,649
5,508
Private Sector Entities
4,538
80% of total
entities
4,480
81% of total
entities
Small
2,636
58% of private
sector entities
2,263
51% of private
sector entities
Non-small
1,902
42% of private
sector entities
2,214
49% of private
sector entities
Government Entities
1,111
20% of total
entities
1,028
19% of total
entities
Small
630
57% of
government
entities
590
57% of
government
entities
Non-small
481
43% of
government
entities
438
43% of
government
entities
In the final rule small entity analysis using Data Axle data, EPA identified 5,649 unique entities
owning RMP regulated facilities. Of those 5,649 unique entities, EPA determined that 1,111 (20 percent)
are government entities and the remaining 4,538 (80 percent) are private sector entities. In the revised
analysis using D&B Hoovers data, EPA identified 5,508 unique entities owning RMP regulated facilities.
Of those 5,508 unique entities, EPA determined that 1,028 (19 percent) are government entities and the
remaining 4,480 (81 percent) are private sector entities.
Each facility is "assigned" an associated owner entity, or if applicable, an ultimate parent entity.
This means that some facilities not associated with a parent entity in the Data Axle data may be associated
with a parent entity in D&B Hoovers data, and vice versa, which explains the differences in entity counts
and size classification. Data Axle has an algorithm matching facility addresses with known business and
uses their database to connect those businesses to any parent entity. EPA's original analysis assigned
facilities to entities using company name. D&B Hoovers uses the DUNS number reported in the RMP or
FRS Databases. DUNS numbers then connect to businesses in the D&B Hoovers database and can be
connected to any parent companies. In the analysis, DUNS numbers are used to assign facilities to
entities. Government counts differ slightly due to a different method of assigning facilities to entities.
Additionally, Data Axle proposed rule and final rule small entity counts differ slightly due to outliers
found in the final rule analysis.
Page 150 of 167
-------
Exhibits C-10 and C-l 1 present an analysis of facilities and the size of entity associated with
them to provide an understanding of the distribution of private sector owned facilities by program level.
The results show that Program 3 has a larger proportion of facilities owned by non-small private sector
entities than Program 2 and 1 facilities. That is, based on Data Axle and D&B Hoovers data, respectively,
roughly 65 percent and 82 percent of Program 3 facilities, respectively, (4,148 of 6,422 and 5,212 of
6,387) are owned by a non-small private sector entity compared to 51 percent and 55 percent of Program
2 facilities (1,612 of 3,162 and 1,710 of 3,137) and 48 percent and 79 percent of Program 1 facilities (310
of 651 and 500 of 634).
Exhibit C-10: Analysis of Private Sector Facility Ownership by Program Level, Data Axle.
Number of
PI
Facilities
Number of
P2
Facilities
Number of
P3
Facilities
Total Facilities
660
3,975
7,105
# of facilities owned by:
Private Sector Entities
651
3,162
6,422
Small
341
1,550
2,274
Non-small
310
1,612
4,148
Exhibit C-ll: Analysis of Private Sector Facility Ownership by Program Level, D&B Hoovers.
Number of
PI
Facilities
Number of
P2
Facilities
Number of
P3
Facilities
Total Facilities
648
3,942
7,058
# of facilities owned by:
Private Sector Entities
634
3,137
6,387
Small
134
1,427
1,175
Non-small
500
1,710
5,212
Exhibits C-l 2 and C-l 3 present an analysis of facilities and the size of entity associated with
them to provide an understanding of the distribution of government-owned facilities by program level.
The analyses show a similar distribution across program level. Based on Data Axle and D&B Hoovers
data respectively, non-small government sector entities own 48 and 49 percent of Program 3 facilities
(331 facilities out of 683 and 330 of 671) compared to 45 and 46 percent of Program 2 facilities (369
facilities out of 813 and 367 of 805). There are few Program 1 government-owned facilities.
Exhibit C-12: Analysis of Government Sector Facility Ownership by Program Level, Data Axle.
Number of
PI
Facilities
Number of
P2
Facilities
Number of
P3 Facilities
Total Facilities
660
3,975
7,105
# of facilities owned by:
Government Entities
9
813
683
Small
2
444
352
Non-small
7
369
331
Page 151 of 167
-------
Exhibit C-13: Analysis of Government Sector Facility Ownership by Program Level,
D&B Hoovers.
Number of
PI
Facilities
Number of
P2
Facilities
Number of
P3 Facilities
Total Facilities
648
3,942
7,058
# of facilities owned by:
Government Entities
14
805
671
Small
3
438
341
Non-small
11
367
330
EPA estimated the cost for each facility to comply with the final rule. These estimates are applied
to the same facilities across data sources. This was done by applying cost estimates for the following cost
categories to facilities in the affected universe, per facility or per process:
• Rule Familiarization
• STAA
• Root Cause Analysis
• Third-Party Audits
• Employee Participation Plan
• Employee Participation Plan Training
• Translation
• Emergency Backup Power
• Justifications
• Community Notification Plan
• Information Availability
The costs used for each cost category are consistent with the costs described in this final
rule's Chapter 4: Unit Costs of Final Rule Provisions and are applied to the same facilities across
data sources. The comparison results of the analysis for private sector small entities are presented
in Exhibits C-14 and C-15, below. The differences in facility matching between the two data
sources drive the differences in average small entity cost. The results show that the analyses using
Data Axle and D&B Hoovers are similar in impact. Based on Data Axle and D&B Hoovers data,
respectively, an estimated 90.8 and 94.0 percent of small entities will incur cost impacts that are
less than 1 percent of their revenue and an estimate of 2.8 and 1.9 percent of small entities with
impacts greater than 3 percent. Only 9.2 percent of small private sector entities using Data Axle,
and 6.0 percent using D&B Hoovers, are estimated to face impacts greater than 1 percent. In both
analyses, of the entities with impacts greater than 3 percent, one small entity associated with a
facility with a HF Alkylation faces STAA costs, which creates a large increase in the average small
entity cost. Removing the entity facing this STAA cost results in a much smaller average small
entity cost to the entities with impacts greater than 3 percent. Average cost decreases from
$1,083,824 to $964,491 using Data Axle and from $590,327 million to $279,599 using D&B
Hoovers.
The small entity analysis indicates that the final rule will not impose a significant
economic burden on small entities by imposing a cost to a substantial number of entities exceeding
the threshold amount of 1 percent of small entity revenues. This analysis using D&B Hoovers data
Page 152 of 167
-------
further confirms that the final rule will not impose a significant economic burden and suggests that
the final rule has a smaller impact on small private sector entities.
Exhibit C-14: Cost Impacts as a Proportion of Total Revenue for Small Private Sector Entities,
Data Axle.
Proportion of
Revenue
Impacted
Number of
Small Entities*
% of Small
Entities
Average
Small Entity
Cost ($)**
Average
Small Entity
Revenue**
< 1%
2,393
90.8%
$72,525
$72,392,517
1% - 3%
167
6.3%
$629,271
$41,222,630
Total >3%
75
2.8%
$1,083,824
$19,034,833
Total >3%
without HF
Alkylation
74
2.8%
$964,591
$19,018,195
Small entity
with HF
Alkylation
1
0.04%
$7,283 ,931
$19,900,000
*Small entity count differs slightly from Exhibit C-9 due to rounding.
** For entities that are determined by revenue, the average small entity cost and revenue are considerably lower ($31.5
thousand and $6.0 million, respectively).
Exhibit C-15: Cost Impacts as a Proportion of Total Revenue for
Small Private Sector Entities, D&B Hoovers.
Proportion of
Revenue
Impacted
Number of
Small Entities
% of Small
Entities
Average
Small Entity
Cost ($)*
Average
Small Entity
Revenue*
< 1%
2,128
94.0%
$80,820
$162,812,788
1% - 3%
92
4.1%
$382,763
$23,460,790
Total >3%
43
1.9%
$590,327
$5,800,884
Total >3%
without HF
Alkylation
42
1.9%
$279,599
$5,181,077
Small entity
with HF
Alkylation
1
0.04%
$7,292,953
$19,900,000
* For entities that are determined by revenue, the average small entity cost and revenue are considerably lower ($72,500 and $8.7
million, respectively).
Page 153 of 167
-------
APPENDIX D: STAA Implementation Measure Costs
The below table presents data used to develop the per measure costs used to estimate costs of STAA implementation. The "Sector" column
presents the NAICS 324 or NAICS 325 sector that the data is applicable to. In some cases, this is a single sector based on the source of data
providing information and cost data on a measure for the particular sector. In other cases, when the sector could not be determined from the
source, both sectors are considered. The "Measure" column contains a brief description of the measure, as best described in the source where the
measure was identified. "Capital Cost" and "Recurring Cost" fields present data converted to 2022 dollars as sources reported cost data in a variety
of dollar years. Not all sources reported recurring costs and therefore some are left as "N/A". In addition, some sources reported a range of capital
costs and in those cases the range of original values are reported. EPA uses a mid-point when there was a range. The "Measure Identification
Source" column indicates where the example measure was identified from with the following "Measure URL" column containing the source link.
In some cases, the name of a measure was identified in this column but there was no accompanying cost data. In the "Notes on Measure Cost"
column EPA presents additional links and notes, particularly when the measure identified has costs from a different source.
Sector
Measure
Capital
Cost 2022
Dollars
Recurring
Annual
Cost 2022
Dollars
Recurring
Cost as a %
of Capital
Cost
Minimum
Capital
Cost
Maximum
Capital
Cost
Measure
Identification
Source
Measure URL
Notes on Measure Cost
324
Pressure vessel design
$550,000
$10,000
2%
$100,000
$1,000,000
PrimaTech
httDs://\vww.Dr
imatech.eom/t
echnical/safer-
technoloeies-
and-
alternative-
Capital cost from:
httos ://www. halvorsenusa. co
m/resources/nressure-vessel-
cost-cstimations-Driciim-
rates-
exnenses/#:~:text=Small%20
analvsis
nressure%20vessels%20such
%20as.%241%2C000%2C00
0.00%20to%20manufacture
%20and%20deliver.
Recurring cost from:
httos ://www. maintenanceand
eneineerine. com/2020/04/15/
what-is-the-real-cost-of-
Drcssurc-vcsscl-rcDair/.
Repair costs run into tens of
thousands of dollars.
Page 154 of 167
-------
Sector
Measure
Capital
Cost 2022
Dollars
Recurring
Annual
Cost 2022
Dollars
Recurring
Cost as a %
of Capital
Cost
Minimum
Capital
Cost
Maximum
Capital
Cost
Measure
Identification
Source
Measure URL
Notes on Measure Cost
324
Major piping
replacement
$12,155,797
N/A
N/A
N/A
N/A
Amendments
Rule
324
Replace all carbon steel
piping that transports
corrosive liquids with
more corrosion-
resistant chrome-alloy
piping
$17,712,288
N/A
N/A
N/A
N/A
Safety.BLR.com:
Chevron to pay $1
million to settle
Richmond
Refinery citations
(2 Aug 2017)
httos ://safetv .blr. com/workolace-safetv-
news/safetv-administration/OSHA-and-state-
safetv-comoliance-enforcement/Chevron-to-
oav-1 -million-to-settle-Richmond-Refine/
324
Major upgrades to HF
alkylation unit (e.g.,
rapid acid transfer
system upgrades, water
mitigation system
upgrades, HF detection
system upgrades,
process heater/burner
management upgrades)
$6,000,000
N/A
N/A
$2,000,000
$10,000,000
ERG
324
Develop and implement
criteria and new
innovative procedures
to monitor equipment to
ensure safe operation of
process safety
equipment and alert
operators when
equipment should be
replaced
$5,904,096
$354,246
6%
N/A
N/A
Safety.BLR.com:
Chevron to pay $1
million to settle
Richmond
Refinery citations
(2 Aug 2017)
httos ://safetv.b
lr.com/workr)l
ace-safetv-
news/safetv-
administration/
OSHA-and-
state-safetv-
coniDliancc-
enforcement/C
hcvron-to-Dav-
1-million-to-
settle-
Richmond-
Refine/
Chevron reports 2018
operating costs equal 6% of
value of property, capital,
and equipment at cost
($20,544 million / $340,244
million):
httos ://chevroncora ecs-
web.com/static-
file s/8 7b 5b 3 3 d-4328-494b -
afe9-6a0dc01dd556
Page 155 of 167
-------
Sector
Measure
Capital
Cost 2022
Dollars
Recurring
Annual
Cost 2022
Dollars
Recurring
Cost as a %
of Capital
Cost
Minimum
Capital
Cost
Maximum
Capital
Cost
Measure
Identification
Source
Measure URL
Notes on Measure Cost
324/325
Storage vessel controls:
install internal floating
roof storage vessel
(IFR) with proper seals
and install enhanced
fitting controls to
reduce emissions
$144,433
$12,999
9%
$48,144
$398,394
CAA Section
112(d)(6)
Technology
Review for
Storage Vessels
Located in the
Ethylene
Production Source
Category
httt>s://www.re
eulations.eov/
document/EPA
-HO-OAR-
2017-0357-
0015
Cost per facility with
ethylene production units
(including petroleum
refineries). Recurring costs
are 5% of capital costs for
maintenance + 4% of capital
costs for property taxes,
insurance, and
administration.
324/325
Storage vessel retrofit
with geodesic domes:
convert external
floating roof storage
vessels (EFRs) to IFRs
via use of geodesic
domes to reduce
emissions
$1,777,428
$71,097
4%
$274,423
$4,946,830
CAA Section
112(d)(6)
Technology
Review for
Storage Vessels
Located in the
Ethylene
Production Source
Category
httt>s://www.re
eulations.eov/
document/EPA
-HO-OAR-
2017-0357-
0015
Cost per facility with
ethylene production units
(including petroleum
refineries). Recurring costs
are 4% of capital costs for
property taxes, insurance, and
administration.
324/325
Storage vessel
enhanced monitoring:
liquid level overfill
warning monitors and
roof landing warning
monitors on storage
vessels with IFR or
EFR (or leak detection
and repair for fittings
on fixed roof storage
vessels) to reduce
emissions
$22,447
N/A
N/A
$5,657
$51,153
CAA Section
112(d)(6)
Technology
Review for
Storage Vessels
Located in the
Ethylene
Production Source
Category
httt>s://www.re
eulations.eov/
document/EPA
-HO-OAR-
2017-0357-
0015
Cost per facility with
ethylene production units
(including petroleum
refineries).
Page 156 of 167
-------
Sector
Measure
Capital
Cost 2022
Dollars
Recurring
Annual
Cost 2022
Dollars
Recurring
Cost as a %
of Capital
Cost
Minimum
Capital
Cost
Maximum
Capital
Cost
Measure
Identification
Source
Measure URL
Notes on Measure Cost
324/325
Infrared camera for gas
leak detection (e.g.,
FLIR GFx320, GF306,
or GF620)
$106,089
N/A
N/A
$29,083
$145,417
Summary of Data
Gathering Efforts:
Emission Control
and Emission
Reduction
Activities
httt>s://www.re
eulations.eov/
document/EPA
-HO-OAR-
2010-0682-
0194
Teledyne FLIR example:
httt>s://www.flir.com/t>roduct
s/efx320/?model=74902-
0102&vertical=ootical+eas&
seement=solutions
324/325
Small STAA project:
human factors
techniques (program
ring back feature on
alarms, program
warning alarms,
consistency of read
outs, alarms on inlet
streams, changes to
make consolidation of
control rooms possible,
nominations screens)
$121,558
N/A
N/A
$1,216
$121,558
Amendments
Rule
Human factors techniques in
chemical process industry to
reduce risks to humans.
See: Attwood, Dennis and
David Fennell, "Cost-
effective Human Factors
Techniques for Process
Safety," CCPS International
Conference and Workshop,
October 2-5, 2001, Toronto,
ON, CANADA.
324/325
New responder training
N/A
$49,832
N/A
$19,933
$79,731
Amendments
Rule
httos ://www. re eulations. sov/document/EP A-
HO-OEM-2015-0725-0029
325
Piping replacement
$1,215,580
$48,623
4%
N/A
N/A
Amendments
Rule
Small scale piping replacement project costs
about $1 million. See public comment EPA-
HQ-OEM-2015-0725-0579, pp 142. Comment
submitted by AFPM. Also see public comment
EPA-HQ-OEM-2015-0725-0536-29 submitted
by API. Labor and maintenance costs in
conventional ethylene plant are 3-5% of fixed
capital investment:
httDs:/Adoc.DLib/docLiincnts/Dlant-desian-and-
economics-for-chemical-eneineers-
2e23idralafl)
Page 157 of 167
-------
Sector
Measure
Capital
Cost 2022
Dollars
Recurring
Annual
Cost 2022
Dollars
Recurring
Cost as a %
of Capital
Cost
Minimum
Capital
Cost
Maximum
Capital
Cost
Measure
Identification
Source
Measure URL
Notes on Measure Cost
325
Upgrade facility, install
new plating line, and
implement a closed-
loop water treatment
system
$4,862,319
N/A
N/A
N/A
N/A
TURI
Costs based on implementation by Columbia
Manufacturing:
httt>s://www.turi.ore/content/download/9921/16
8937/file/Colmnbia+Manufacturins+OTA.+20
15.odf
325
Add trivalent chromium
plating
$56,329
$24,318
43%
N/A
N/A
TURI
Costs associated with Independent Plating:
httt>s://www.mass.eov/files/2017 coniDCtitivcn
ess reoort ota and turi 6.pdf
325
Parametric monitoring
equipment for CO
emissions using
temperature and other
combustion operating
parameters
$63,916
$47,243
74%
N/A
N/A
Cost Reports and
Guidance for Air
Pollution
Regulations: EPA
Airport Pollution
Control Manual
httr>s://www.e
oa.eov/econo
mic-and-cost-
analvsis-air-
Dollution-
reeulations/cos
t-rcDorts-and-
euidance-air-
do 11 lit ion
Emissions control costs:
httt>s://www.eoa.eov/sites/def
ault/files/2020-
07/documents/cs2ch4.t>df
325
Sprinkler system that is
triggered by smoke or
heat
$568,803
$27,808
5%
$252,801
$884,804
National
Academy of
Sciences; The Use
and Storage of
Methyl Isocyanate
(MIC) at Bayer
CropScience
httDs://naD.nati
onalacademies
.ors/resource/1
3385/MIC-
Summarv-
Final.odf
Cost based on average sf
NAICS 325:
httos ://www. eia. eov/consum
Btion/manufacturins/data/201
0/t>df/Table9 l.odf)
*$2-7 (price per sf estimate
for adding sprinkler system):
httt>s://smokeeuard.com/bloe
/2022/februarv/02/what-is-
the-cost-of-a-commercial-
firc-SDrinkler-
svstem#:~:text=If%20voui%
20Droiect%20is%20ne\\.Dcr
Page 158 of 167
-------
Sector
Measure
Capital
Cost 2022
Dollars
Recurring
Annual
Cost 2022
Dollars
Recurring
Cost as a %
of Capital
Cost
Minimum
Capital
Cost
Maximum
Capital
Cost
Measure
Identification
Source
Measure URL
Notes on Measure Cost
%20sauare%20foot%20of%2
Ocoverage
Maintenance cost = $0.03-
0.22/sq ft for larger facilities:
httos ://www. costowl. com/b2
b/securitv/securitv-fire-
sori nklcr-
svstem/#:~:text=Installing%2
0fire%20sr)rinklers%20costs
%20%241-
%242%20r>ei%20sauare%20
foot.or%203%C2%A2-
22%C2%A2%20r>er%20saua
re%20foot%20foi%201arger
%20facilities
325
Inerting dust cloud by
N2, C02 and rare gases
$250,000
$107,719
43%
$100,000
$400,000
Amyotte, Khan. &
Klez
httt>s://www.ic
heme.org/medi
a/9602/xxi-
t>at>er-106.t>df
Large nitrogen generator:
httDs://gasgcnerationsolutions
. com/nitro gen-generator-
orice/
httDs://nitrogen-
generators.com/nitrogen-
gencrator-Dricc/. Cost for
measure & metering stations,
inert gas sluices, nozzles for
injecting liquid N2 into gas
stream, & inert blanketing in
tanks. 2015 article on cost for
N2 system foundation + gas
recovery unit + N2 recovery
electric costs + maintenance:
N2 supply system, 10-hp
Page 159 of 167
-------
Sector
Measure
Capital
Cost 2022
Dollars
Recurring
Annual
Cost 2022
Dollars
Recurring
Cost as a %
of Capital
Cost
Minimum
Capital
Cost
Maximum
Capital
Cost
Measure
Identification
Source
Measure URL
Notes on Measure Cost
blower, convey line,
2xl0ftA3 hoppers, 6" rotary
airlock, dust filter, air
operated discharge valve, N2
recovery line:
httos ://www. chemeneonline.
com/combustible-dust-
cxolosions-
inerting/?t>aeenum= 1
325
Custom refrigerated
condenser system
(including a
refrigeration unit, a
VOC condenser, and a
recovery tank) used for
emissions control
$177,959
$29,701
17%
N/A
N/A
Cost Reports and
Guidance for Air
Pollution
Regulations: EPA
Airport Pollution
Control Manual
httt>s://www.e
oa.eov/econo
mic-and-cost-
analvsis-air-
Dollution-
reeulations/cos
t-rcDorts-and-
euidance-air-
do 11 lit ion
$145,000 capital cost =
{[($46,480 refrigeration unit
+ $13,210 VOC condenser +
$4,751 recovery tank)*1.18
for instrumentation, controls,
taxes, & freight] *1.71 install
factor}* 1.10 contingency
factor. $24,200 recurring cost
= operating labor +
maintenance + utilities +
overhead + admin charges +
property tax + insurance.
httt>s://www.eoa.eov/sites/def
ault/files/2017-
12/documents/refrieeratedco
ndenserschaoter 7thedition f
inal.odf
325
New chromatography
system: R&D & testing
& medium pressure
liquid chromatography
equipment
$116,716
N/A
N/A
N/A
N/A
TURI
Costs based on implementation by
ChemGenes:
httt>s://www.mass.eov/files/chemeenes com -
2018.t)df
Page 160 of 167
-------
Sector
Measure
Capital
Cost 2022
Dollars
Recurring
Annual
Cost 2022
Dollars
Recurring
Cost as a %
of Capital
Cost
Minimum
Capital
Cost
Maximum
Capital
Cost
Measure
Identification
Source
Measure URL
Notes on Measure Cost
325
Solvent recovery
system
$35,701
N/A
N/A
N/A
N/A
TURI
Costs based on ChemGenes:
httt>s://www.mass.eov/files/chemeenes com -
2018.pdf
325
Install a new zinc oxide
dispensing system that
reduces toxic waste and
materials handling
$56,069
N/A
N/A
N/A
N/A
TURI
Costs based on implementation by Acushnet
Rubber Company:
httt>s://www.mass.eov/files/acushnet-rubber-
coniDanv 5,ixlf
325
Good management
practices/standard
operating procedures
N/A
$184,000
N/A
N/A
N/A
National
Academy of
Sciences; The Use
and Storage of
Methyl Isocyanate
(MIC) at Bayer
CropScience
httDs://naD.nati
onalacademies
.ors/resource/1
3385/MIC-
Summarv-
Final.ixlf
Cost based on good
manufacturing practices
(GMP) compliance cost per
medium establishment:
httos ://instantaniD. coiii/suddo
rt/a i n d -c o i n d 1 i a nc e/a i n d-
coniDliancc-cost/
325
Operator training
N/A
$20,000
N/A
N/A
N/A
National
Academy of
Sciences; The Use
and Storage of
Methyl Isocyanate
(MIC) at Bayer
CropScience
httDs://naD.nati
onalacademies
.ors/resource/1
3385/MIC-
Summarv-
Final.ixlf
Cost from heavy equipment
operator training cost:
httos: //t o ta 1 e a u i d i lie n 11 ra i n i nu
. com/blo g/how-much-does-
heaw-eauiranent-ooerator-
trainine-cost/.
Alternative source:
httos://www.cat.com/en US/
s ii d D o rt /c a t -1 ra i n i n a/ H c a y v -
E a u i d l lie n t -O dc ra t o r-
T rainine. html#tabs-
5f3b6b54f8-item-
724efa7516-tab
325
Management systems
(e.g., alarm
management program)
$195,621
N/A
N/A
$167,675
$223,567
National
Academy of
Sciences; The Use
and Storage of
httDs://naD.nati
onalacademies
.ors/resource/1
3385/MIC-
Cost from:
httos ://www. isa. org/intech-
home/2020/march-
aDril/fcat u res/a la rm-
Page 161 of 167
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Sector
Measure
Capital
Cost 2022
Dollars
Recurring
Annual
Cost 2022
Dollars
Recurring
Cost as a %
of Capital
Cost
Minimum
Capital
Cost
Maximum
Capital
Cost
Measure
Identification
Source
Measure URL
Notes on Measure Cost
Methyl Isocyanate
(MIC) at Bayer
CropScience
Summarv-
Final.odf
manaeement-auestions-that-
evervone-
asks#:~:text=Based%20on%
20this%20roueh%20olan%2
C%20the%20cost%20canthi
s%20oroeram%20mieht%20
cost%20about%20%24150K
%20%E2%80%93%20%242
00K
325
Smaller-scale and
larger-scale procedural
measures
$50,000
N/A
N/A
$5,000
>$50,000
ERG
correspondence
with EPA
325
Pressure vessel design
$30,000
$10,000
33%
$3,500
$60,000
PrimaTech
httDs://\vww.Dr
imatech.eom/t
echnical/safer-
technoloeies-
and-
alternative-
analvsis
Cost based on H2:
httt>s://www.enerev. sov/sites
/default/files/2016/09/f3 3/fct
o li2 storase 700bar works
hot) 2 iamcs.Ddf.
Potential alternate source:
httos ://www. halvorsenusa. co
m/resources/oressure-vessel-
cost-cstiinations-Dricina-
rates-
e\Dcnscs/#:~:te\t=SinaH%20
oressure%20vessels%20such
%20as.%241%2C000%2C00
0.00%20to%20manufacture
%20and%20deliver.
Recurring cost from:
httos ://www. maintenanceand
ensineerins. com/2020/04/15/
what-is-the-real-cost-of-
Page 162 of 167
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Sector
Measure
Capital
Cost 2022
Dollars
Recurring
Annual
Cost 2022
Dollars
Recurring
Cost as a %
of Capital
Cost
Minimum
Capital
Cost
Maximum
Capital
Cost
Measure
Identification
Source
Measure URL
Notes on Measure Cost
Drcssurc-vcsscl-rcDair/.
Repair costs run into tens of
thousands of dollars.
325
Modular spill
containment berms
$19,450
N/A
N/A
$4,238
$28,943
PrimaTech
httDs://\vww.Dr
imatech.eom/t
echnical/safer-
technoloeies-
and-
alternative-
analvsis
Best-selling modular spill
containment benn cost:
httos ://store. interstateoroduct
s.coin/Droducts/ultratcch-
lnodular-aorilla-SDill-
containment-benn-5 5 -x-5 5 -
x-6.html.
Minimum cost is for a one-
step spill contaimnent benn:
httos ://store. interstateoroduct
s.com/Droducts/onc-stCD-
soill-contaimnent-benn-12-x-
36-x-24.html.
Maximum cost is most
expensive containment benn
with a listed price (more
expensive require quotes):
httos ://store. interstateoroduct
s.com/oroducts/ultra-
containment-wall-svstem-61 -
x-61-x-3-8795.html.
325
Blast wall
$923,773
N/A
N/A
$473,042
$1,568,020
PrimaTech
httDs://\vww.Dr
imatech.eom/t
echnical/safer-
technoloeies-
and-
alternative-
analvsis
Cost from:
httos://bio s. redsuard.com/bla
st-resistant-buildins-cost
Page 163 of 167
-------
Sector
Measure
Capital
Cost 2022
Dollars
Recurring
Annual
Cost 2022
Dollars
Recurring
Cost as a %
of Capital
Cost
Minimum
Capital
Cost
Maximum
Capital
Cost
Measure
Identification
Source
Measure URL
Notes on Measure Cost
325
Alarms (e.g.,
commercial fire alarm
system)
$1,011,205
$101,120
10%
$505,602
$1,516,807
PrimaTech
httDs://\vww.Dr
imatech.eom/t
echnical/safer-
technoloeies-
and-
alternative-
analvsis
Cost based on average sf
NAICS 325:
httos ://www. eia. eov/consum
otion/manufacturine/data/201
0/Ddf7Tablc9 l.odf)
*$4-12 (price per sf to add
complicated or retrofit fire
alarm system):
httos ://www. theoricer. ors/co
mmercial-fire-alarm-svstem-
cost/#:~:text=Holdine%20oth
er%20elements%20constant
%2C%20a%20tvr)ical%20svs
tem%20%E2%80%93.%246
%20oei%20sauare%20foot%
20covered%20bv%20the%20
svstem) .
$50-100/month monitoring &
miscellaneous annual fees of
10% of total project cost:
httos ://www. costowl. com/b2
b/securitv/securitv-fire-
alann-svstem/.
325
TURA measure
$217,476
N/A
N/A
$8,551
$217,476
Benefit-Cost
Analysis of the
Massachusetts
Toxics Use
Reduction Act
httt>s://r>2infoh
ouse.ore/ref/34
/33463.t)df
Average capital costs per
facility under TURA in 1997
(appears to be upward trend
in average capital costs 1990-
1997).
Page 164 of 167
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APPENDIX E: UMRA Written Statement
I. Introduction
Title II of the 1995 Unfunded Mandates Reform Act (UMRA; 2 U.S.C. 1531-1538) requires
Federal agencies, unless otherwise prohibited by law, to assess the effects of their regulatory actions on
State, local, and tribal governments and the private sector. Specifically, Section 202 of UMRA generally
requires Federal agencies to prepare a written statement, including a cost-benefit analysis, for each
proposed and final rule with "Federal mandates" that may result in expenditures by State, local, and tribal
governments, in the aggregate, or to the private sector, of $100 million or more in any one year. Section
202 requires that "Written Statements" contain five elements of information:
1. An identification of the provision of Federal law under which the rule is being promulgated;
2. A qualitative and quantitative assessment of the anticipated costs and benefits of the Federal
mandate, including the costs and benefits to State, local, and tribal governments or the private
sector, as well as the effect of the Federal mandate on health, safety, and the natural environment;
3. Estimates by the agency, if and to the extent that the agency determines that accurate estimates
are reasonably feasible, of:
(a) the future compliance costs of the Federal mandate; and
(b) any disproportionate budgetary effects of the Federal mandate upon any particular
regions of the nation or particular State, local, or tribal governments, urban or rural or
other types of communities, or particular segments of the private sector;
4. Estimates by the agency of the effect on the national economy, such as the effect on
productivity, economic growth, full employment, creation of productive jobs, and international
competitiveness of U.S. goods and services, if and to the extent that the agency in its sole
discretion determines that accurate estimates are reasonably feasible and that such effect is
relevant and material; and
5. Description of the extent of the agency's prior consultation with elected representatives (under
section 204) of the affected State, local, and tribal governments, including a summary of the
comments and concerns that were presented by State, local, or tribal governments either orally or
in writing to the agency; and a summary of the agency's evaluation of those comments and
concerns.
This document constitutes the "Written Statement" to meet this requirement for the RMP rule.
The EPA has conducted a cost-benefit analysis for this action, which is included in this RIA.
II. Response to Five Information Elements
1. Identification of the Provision of Federal Law under Which the Rule is Being Promulgated
The statutory authority for the RMP rule is provided by section 112(r) of the CAA as
amended (42 U.S.C. 7412(r)). Each of the portions of the RMP rule EPA implemented in this
notice are based on EPA's rulemaking authority under section 112(r)(7) of the CAA (42 U.S.C.
7412(r)(7)
2. Cost to State, Local, and Tribal Governments and the Private Sector
Page 165 of 167
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As estimated in the RIA, approximately 11,740 facilities have filed RMPs with EPA and
are potentially affected by the 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.
EPA estimates annualized costs of $256.9 million at a 3% discount rate and $296.9
million at a 7% discount rate. Of this amount, average annualized costs to State/local
governments total $5.0 million at a 3% discount rate and $5.1 million at 7% discount rate
consisting of estimated regulatory compliance costs for State/local governments that currently
own or operate RMP-regulated sources plus costs to local governments (i.e., LEPCs, emergency
response officials and state implementing agencies) for rule familiarization and voluntary
participation in coordination activities, exercises and review of information submitted to LEPCs.
The estimated average annualized cost to the private sector totals approximately $252.2 million at
a 3% discount rate and $292.1 million at a 7% discount rate.
Although there are RMP facilities located on tribal lands, EPA does not have information
on the number of tribal-owned regulated facilities, and therefore, has not estimated costs to tribes
in the RIA for the rule.
3. Extent to Which Costs to State, Local, and Tribal Governments May be Paid by EPA or Other
Federal Agencies, or to which there are Available Federal/EPA Resources to Carry out a Federal
Intergovernmental Mandate
EPA does not provide funding to State, local or tribal governments for implementation of
the RMP rule; or to fund costs for participation in emergency response coordination activities and
facility exercises; or review information submitted to LEPC.
4. Estimates of Future Compliance Costs and Budgetary Effects on Particular Regions of the
Country, or Particular State, Local, or Tribal Governments or Communities, or Particular
Segments of the Private Sector
The RIA assessed potential effects of the RMP rule on regulated entities (including
government entities subject to the rule) and voluntary costs to State and local governments that
participate in emergency response coordination activities, facility exercises, and review of reports
submitted to LEPCs or local emergency response officials.
5. Extent of EPA's Prior Consultation with Affected State, Local, and Tribal Governments
Over the 23 years of implementing the RMP program and, most recently through EO
13990 listening sessions, meetings, and public hearings, EPA has engaged States and local
communities to discuss chemical safety issues. In the two EO 13990 listening sessions and three
proposal hearings, held in luly 2021 and September 2022, States and local communities identified
lack of facility coordination with local responders and the community as a key barrier to
successful local community preparedness. Additionally, EPA has held consultations with States
and local communities through participation in the NASTTPO annual meetings to discuss key
issues related to chemical facility and local community coordination and the areas of the RMP
regulations which need to be modernized to facilitate this coordination and improve local
emergency preparedness and prevention. Key priority options discussed with NASTTPO States
Page 166 of 167
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and local communities included improving emergency response coordination between RMP
facilities and LEPCs/first responders.
This action is not subject to the requirements of section 203 of UMRA because it
contains no regulatory requirements that might significantly or uniquely affect small
governments. On April 7, 2022, September 1, 2022, and September 5, 2023, EPA met with small
governments concerning the regulatory requirements that might affect them. Also, through the
May 28, 2021, notice of virtual public listening sessions; request for public comment (86 FR
28828) and August 31, 2022, NPRM (87 FR 53556), EPA sought feedback from governmental
entities while formulating the revisions in this action.
Page 167 of 167
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