IIAR 2018 State of the Industry Report

state

2018

OF THE industry 1ST EDITION JANUARY 2018

CONTRIBUTORS Special thanks to all those who contributed to the inaugural 2018 State of the Industry Report.

Stephanie Smith, PE – Risk Management Professionals Werner Paulus – Refrigeration Design & Service Inc. Beth Fox – EVAPCO, Inc. Clark Jackson – Nestle USA Eileen McKeown – IIAR Kristen De La Pena – GCAP, LLC (Garden City Ammonia Program) Tom Melotik – Vilter Manufacturing LLC

AGENCY REPRESENTATIVES Greg Bazley – EPA Region 9 Bill Jones – EPA Region 9 Joe Beth Cholmondeley – OSHA Kansas City, MO Regional Office

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OF THE industry 1ST EDITION JANUARY 2018

TABLE OF CONTENTS 2 | Abstract 3 | Industry Background: A Brief History 4 | Industry Composition 5 | Inspections 6 | Accident / Release Data 6 | USEPA TRI Program Data 8 | USEPA NRC Reporting 10 | OSHA Violations Data 14 | Regulatory and Standards Update 15 | Chemical Facility Anti-Terrorism Standards (CFATS) Program 16 | Where is the Industry Headed?

18 | We Want to Hear From You – Survey Information 19 | References 20 | IIAR Mission

LIST OF FIGURES 4 | Figure 1: IIAR Membership by Category 7 | Figure 2: 2015 TRI National Analysis – Releases by Chemical (US EPA, 2017) 7 | Figure 3: 2015 TRI National Analysis – Releases by Industry (US EPA, 2017) 8 | Figure 4: 2011 to 2016 USEPA NRC Data – Ammonia Reportable Incidents 8 | Figure 5: 2011 to 2016 USEPA NRC Data – All Reportable Incidents 9 | Figure 6: 2011 to 2016 USEPA NRC Data – Ammonia Incidents by Discharger Type 9 | Figure 7: 2011 to 2016 USEPA NRC Data – Ammonia Incidents by Incident Cause 11 | Figure 8: 2011 to 2016 OSHA Violations by PSM Element 11 | Figure 9: 2011 to 2016 OSHA Violation Penalties by PSM Element 12 | Figure 10: 2011 to 2016 Annual OSHA Violations 13 | Figure 11: 2017 OSHA Violations by PSM Element (January through August) 13 | Figure 12: 2017 OSHA Initial Penalties by PSM Element (January through August)

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abstract This is the first State of the Industry Report published by the International Institute of Ammonia Refrigeration (IIAR). The objective of this report is to compile information about the ammonia refrigeration industry and present it to the IIAR membership on an annual basis. This report is the result of that fact-finding mission.

How much do we really know about ammonia and it’s use in industry?

The State of the Industry report provides details about the industry, specifically related to the use of ammonia as a refrigerant. How important is compliance and to be informed on the latest regulations and standards?

The report contains facts about the uses of ammonia and data reported to the United States Environmental Protection Agency (USEPA) and the Occupational Safety and Health Agency (OSHA) related to safety, inspections, incident reporting and violations. The data is provided for review, and to compare to individual facilities.

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OF THE industry 1ST EDITION JANUARY 2018

industry background: A BRIEF HISTORY Ammonia refrigeration dates back to the 1800s, when mechanical refrigeration was engineered utilizing the principle of vapor compression. While ammonia was first liquified in 1820 by an English scientist, it was in 1834 that the first closed-circuit refrigeration system was built. It wasn’t until 1854 that the first commercial ice-making machine was available, and by 1900, ammonia refrigeration was being widely used in the food industry, including shipping, breweries, and meat-packing.

Throughout the 20th century, refrigeration was improved, developed, and brought into the household. As a result, ammonia refrigeration remains one of the most efficient means for refrigeration to date. In addition to food and beverage production, ammonia is used in large air conditioning systems, agriculture, and power generation.

While standards and regulations continue to change the manner in which ammonia is regulated and stored, it wasn’t until recently that a renewed sense of safety culture was established by private organizations and public regulatory entities. Ammonia has an ozone depletion potential (ODP) of zero and a global warming potential (GWP) of zero, which makes it environmentally compatible by most standards. In addition, alternate natural refrigerants such as CO2 are becoming more popular as users adapt to everchanging environmental laws and safer operations of refrigeration systems.

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industry composition The ammonia refrigeration industry is diverse. IIAR has over 3,000 members from more than 50 countries around the world. Alliance organizations in Asia Pacific, Europe, Latin America, and North America make the international outreach very successful. Members of IIAR include design engineers, end users, contractors, equipment manufacturers, students, scientists, and trainers.

The chart below shows the distribution of members within IIAR, not included are employees of IIAR and honorary life members. The data below illustrates that end users, contractors, and manufacturers make up 76% of the organization membership.

IIAR is working towards building a stronger presence internationally, as well as developing standards for the industry that are ANSI-accredited. With 11 committees ranging from codes and standards to marketing to government relations, the membership is diverse in its talents and interests to advance the ammonia refrigeration industry.

FIGURE IIAR MEMBERSHIP

BY CATEGORY Figure 1:1: IIAR Membership

by Category Other

Retired Student

Wholesaler

Academic

Affiliate

Manufacturer Rep International Affiliate

Manfuacturer

Contractor

End User 2

Engineer End User 1

state

Inspections

Protection Agency (USEPA) have increased their efforts for inspections of regulated facilities. While both industry OF THE The Occupational Safety and Health Administration (OSHA) and the United States Environmental 1ST EDITION JANUARY 2018

agencies have stated that their inspections have not increased in number, it can be argued that inspections have changed to include more in-depth inspection and increased time on-site to be more thorough. The

inspections The Occupational Safety and Health Administration (OSHA) and the United States Environmental Protection Agency (USEPA) have increased their efforts for inspections of regulated facilities. While both agencies have stated that their inspections have not increased in number, it can be argued that inspections have changed to include more in-depth inspection and increased time on-site to be more thorough. The main reason for a facility inspection is a planned inspection based on the last time the facility was inspected, but other reasons do exist. Complaints by local individuals or employees of the company, referrals to the agency, fatality or incident on-site, and follow-up to previous inspection are among other reasons for agencies to inspect a facility.

Inspections are generally based on the North American Industry Classification System (NAICS) code, which is related to the type of industry. 80% of inspections occur in the top 24 NAICS codes used in the United States. Inspections may also be based on the governing standard or regulation for a facility, which includes the USEPA Risk Management Plan (RMP), OSHA Process Safety Management (PSM) Program, General Duty Clause, Respiratory Protection, Lockout / Tagout, among others.

From 2014 to 2017, 166 inspections were conducted for the ammonia refrigeration industry. 80 were program planned inspections, while 76 were reported or referred in some way (Global Cold Chain Alliance, 2017). From these inspections, the highest numbers of violations came from inspections regarding PSM, personal protective equipment, Hazard Communication, chromium VI exposure hazards, Lock Out/Tag Out, and General Duty Clause.

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accident/release data Accident and release data was acquired from two (2) different reporting avenues for the purposes of this report. Data was acquired from the USEPA Toxic Release Inventory (TRI) Program and the USEPA National Response Center (NRC) reporting. The two (2) sources use different parameters to track accident and release data, but do show that ammonia is being used more safely and safer practices are being instituted within the industry.

USEPA TRI PROGRAM DATA The USEPA TRI Program tracks the management and potential impacts of toxic chemicals to human health and the environment. The “food” categorization for reporting includes livestock and agricultural product processing for human consumption, and does not include agricultural activities. In 2015, there were 1,571 food processing facilities (a total of 21,849 for all industries) registered in the TRI program. In other words, food processing facilities makes up approximately 7% of the total registered facilities in the TRI program.

Other industries categorized in the TRI Program include the following.

• Paper (includes facilities manufacturing

• Primary Metals (includes facilities

pulp, paper, and converted paper

that smelt and/or refine ferrous and

products; and printing and publishing).

nonferrous metals from ore, pig or scrap,

• Hazardous Waste Management (includes facilities that conduct hazardous waste collection, waste treatment and disposal, remediation, and other waste management services).

• Chemicals (includes facilities manufacturing basic chemicals, synthetic fiber/plastic/pigment, pesticides, pharmaceuticals, paints, and cosmetics).

using electrometallurgical and other process metallurgical techniques; and facilities that manufacture metal alloys and superalloys by introducing other chemical elements to pure metals).

• Electric Utilities (includes facilities generating, transmitting, and distributing electrical power).

• Metal Mining (includes facilities mining copper, zinc, lead, silver, gold, and other metals).

• Other.

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OF THE industry 1ST EDITION JANUARY 2018

chemical compared to the total number of incidents. At 5%, ammonia was one of the least contributing Additionally, in 2015, a total of 3.36 billion pounds of toxic chemicals were

chemicals to total releases in 2015.

released into the environment (US EPA, 2017). Of the total, five percent (5%) or 162.8

million pounds was– attributed releases.

Figure 1 illustrates release data, by Figure 2: 2015 TRI National Analysis Releasestobyammonia Chemical (US EPA, 2017)

chemical, utilizing the percentage of ammonia incidents for compared to the total chemical compared to the total number of incidents.

At 5%, waseach one chemical of the least contributing

number of incidents. At 5%, ammonia was one of the least contributing chemicals to total

chemicals to total releases in 2015.

releases in 2015.

Figure 2: 2015 TRI National Analysis – Releases by Chemical (US EPA, 2017) FIGURE 2: 2015 TRI NATIONAL ANALYSIS – RELEASES BY CHEMICAL (US EPA, 2017)

Furthermore, of the total 3.36 billion pounds released, four percent (4%) or 120 million pounds is attributed to the food manufacturing industry. Figure 2 shows the data attributed by industry, rather than chemical.

Furthermore, of the total 3.36 billion pounds released, four percent (4%) or 120 million pounds Even isstill, the food industry attributed to the food manufacturing industry. Figure 2 shows the data attributed by industry, rather was thanone of the lowest contributors to

chemical. Even still, the food industry was one of the lowest contributors to incidents that occurred in

incidents that occurred

2015.

Furthermore, of the totalin3.36 billion pounds released, four percent (4%) or 120 million pounds is 2015.

attributed the food industry.

Figure 2by shows the data by industry, rather than Figure 3:to2015 TRI manufacturing National Analysis – Releases Industry (USattributed EPA, 2017)

FIGURE 3: 2015 TRI NATIONAL ANALYSIS – RELEASES BY INDUSTRY (US EPA, 2017)

chemical. Even still, the food industry was one of the lowest contributors to incidents that occurred in 2015.

Figure 3: 2015 TRI National Analysis – Releases by Industry (US EPA, 2017)

This data reveals that the industry, compared to other industries, is doing very well in reducing incidents of releases and initiating safer operations and practices throughout.

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8 This data reveals that the industry, compared to other industries, is doing very well in reducing incidents of releases and initiating safer operations and practices throughout.

USEPA NRC Reporting The USEPA NRC is the designated federal contact point for reporting various discharges to the

USEPA NRC REPORTING

environment in the United States and its territories. The reporting threshold for ammonia releases is 100 pounds. This report presents USEPA NRC data from 2011 through 2016. Data was acquired from the

The USEPA NRC is the designated federal contact point for reporting various discharges to

Right-To-Know Network (RTK) Network NRC reporting database (Right To Know Network, 2017) and

the environment in the United States and its territories. The reporting threshold for ammonia with assistance from USEPA Region 9 contributors.

releases is 100 pounds. This report presents USEPA NRC data from 2011 through 2016.

Figures 4 and 5 below show the 2011 to 2016 incidents specifically reported for ammonia releases and the

Data was acquired from the Right-To-Know Network (RTK) Network NRC reporting

2011 to 2016 incidents reported for all chemicals, respectively. Overall, national incidents have been on

database (Right To Know Network, 2017) and with assistance from USEPA Region 9

the decline since 2011. Ammonia incidents, in particular, have declined 58% from 2011 to 2016, while all

contributors.

incidents for all chemicals have only decreased by 15%. While the reasons behind the decline in

reportable incidents is not to studied, reasonablespecifically to assume thatreported increased awareness of safety concerns, Figures 4 and 5 below show the 2011 2016it isincidents for increased by regulatory agencies, and technological advances torespectively. design inherently safer ammonia releases and the inspections 2011 to 2016 incidents reported for all chemicals, systems allhave have contributions the declinesince in reportable Overall, national incidents been on theto decline 2011.incidents.

Ammonia incidents, in

particular, have declined Figure 4: 2011 to 2016 USEPA NRC Data – Ammonia Reportable Incidents FIGURE 4: 2011 TO 2016 USEPA NRC DATA 58% from 2011 to 2016, while all incidents for

–

AMMONIA REPORTABLE INCIDENTS USEPA NRC Reportable Incidents for Ammonia (2011 to 2016)

all chemicals have only

35

decreased by 15%. While

30

the reasons behind the

25

decline in reportable

20

incidents is not studied, it

15

is reasonable to assume

10

that increased awareness

5

of safety concerns,

0

33

24 21

24 20 14

2011

increased inspections by

2012

2013

2014

2015

2016

Figure 5: 2011 to 2016 USEPA NRC Data – All Reportable Incidents

regulatory agencies, and technological advances to design inherently safer systems all have contributions to the decline in reportable incidents.

FIGURE 5: 2011 TO 2016 USEPA NRC DATA – USEPA NRC All Reportable Incidents (2011 to 2016) ALL REPORTABLE INCIDENTS 35,000 30,000

28,476

28,590

29,168

28,503

26,915 24,189

25,000 20,000

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15,000 10,000 5,000 -

state

2011

2012

2013

2014

2015

2016

There was a total of 137 reported incidents for ammonia from 2001 to 2016. Figure 6 below demonstrates the breakdown by discharger type acquired from the RTK Network. Private enterprise accounts for 86%

OF THE industry

of the incidents in that timeframe, while public utilities accounted for 1%. This can be simply correlated to the fact that refrigeration systems and other ammonia uses are primarily private entities.

In Figure 7, the NRC data shows that the highest occurrence of incidents are caused by “other” causes 1ST EDITION JANUARY 2018 (42%), equipment failures (31%), and “unknown” causes (22%). These causes make up a total of 95% of the ammonia incidents reported by the NRC. While the majority of incidents were reported ambiguously,

Figure 6: 2011 to 2016 USEPA NRC Data – Ammonia Incidents by Discharger Type Figure 6: 2011 to 2016 USEPA NRC Data – Ammonia Incidents by Discharger Type Figure Figure 6: 6: 2011 2011 to to 2016 2016 USEPA USEPA NRC NRC Data Data –– Ammonia Ammonia Incidents Incidents by

by Discharger Discharger Type Type Figure 6: 2011 toPRIVATE ENTERPRISE 2016 USEPA NRC Data – Ammonia Incidents by Discharger Type Figure 6: 2011 to 2016 USEPA NRC Data – Ammonia Incidents by Discharger Type Figure 6: 2011 toPRIVATE ENTERPRISE 2016 USEPA NRC Data – Ammonia Incidents by Discharger Type

PRIVATE ENTERPRISE PRIVATE ENTERPRISE UNKNOWN / BLANK PRIVATE ENTERPRISE 1% 1% PRIVATE ENTERPRISE UNKNOWN / BLANK 2% PRIVATE ENTERPRISE UNKNOWN / BLANK 1% 1% UNKNOWN / BLANK 1% PRIVATE CITIZEN 2% 1% 1% UNKNOWN / BLANK 1% 1% 2% UNKNOWN / BLANK PRIVATE CITIZEN 1% Figure 6: 2011 to 2016 USEPA NRC Data – Ammonia Discharger Type Figure 6: 2011 to 2016 USEPA NRC Data –Incidents AmmoniabyIncidents

by Discharger 2% 1% There was a total of 137 reported PRIVATE CITIZEN FIGURE 6: 2011 UNKNOWN / BLANK TO 2016 1% 2% 10% PRIVATE CITIZEN 1% PUBLIC UTILITY 2% 1% incidents for ammonia fromPRIVATE CITIZEN 2001 to USEPA NRC DATA – AMMONIA 10% 2% PRIVATE CITIZEN PUBLIC UTILITY Figure 6: 2011 to 2016 USEPA NRC Data – Ammonia Incidents by Discharger Typ 10% PRIVATE ENTERPRISE PRIVATE ENTERPRISE PUBLIC UTILITY PRIVATE CITIZEN 2016. Figure 6 below demonstrates BY DISCHARGER TYPE 10% Figure 6: 2011 INCIDENTS to 2016 USEPA NRC Data – Ammonia Incidents by Discharger Typ PUBLIC UTILITY OTHER / N/A 10% PUBLIC UTILITY the breakdown by discharger type 10% PUBLIC UTILITY OTHER / N/A UNKNOWN / BLANK UNKNOWN / BLANK PRIVATE ENTERPRISE 10% OTHER / N/A PUBLIC UTILITY acquired from the RTK Network.

1% 1% 1% 1% PRIVATE ENTERPRISE OTHER / N/A GOVERNMENT (local / 2% 2% OTHER / N/A Private enterprise accountsstate / federal) for 86%PRIVATE CITIZEN of UNKNOWN / BLANK PRIVATE CITIZEN OTHER / N/A GOVERNMENT (local / 1% 1% GOVERNMENT (local / UNKNOWN / BLANK OTHER / N/A the incidents in that timeframe, while GOVERNMENT (local / state / federal) 2% 1% 1% MILITARY GOVERNMENT (local / state / federal) 10% PRIVATE CITIZEN 10% PUBLIC UTILITY 2% PUBLIC UTILITY state / federal) public utilities accounted for 1%. This GOVERNMENT (local / MILITARY PRIVATE CITIZEN state / federal) MILITARY GOVERNMENT (local / MILITARY can be simply correlated tostate / federal) the fact POLICE DEPARTMENT 10% PUBLIC UTILITY OTHER / N/AOTHER / N/A MILITARY state / federal) 10% 86% PUBLIC UTILITY MILITARY POLICE DEPARTMENT that refrigeration systems and other POLICE DEPARTMENT MILITARY 86% OTHER / N/A POLICE DEPARTMENT FIRE DEPARTMENT 86% ammonia uses are primarily privateGOVERNMENT (local / GOVERNMENT (local / OTHER / N/A POLICE DEPARTMENT 86% state / federal) state / federal) POLICE DEPARTMENT 86% FIRE DEPARTMENT entities.

GOVERNMENT (local / FIRE DEPARTMENT 86% POLICE DEPARTMENT MILITARY FIRE DEPARTMENTMILITARY GOVERNMENT (local / 86% state / federal) FIRE DEPARTMENT In Figure 7, the NRC data FIRE DEPARTMENT shows that state / federal) MILITARY POLICE DEPARTMENT FIRE DEPARTMENT POLICE DEPARTMENT MILITARY the highest occurrence of incidents 86%

POLICE DEPARTMENT Figure 2011 to 2016 USEPA NRC Data – Ammonia are caused by 7: “other” causes (42%), POLICE DEPARTMENT FIRE DEPARTMENT FIRE DEPARTMENT Figure 7: 2011 2016 USEPA NRC Data – Ammonia equipment failures (31%),to and FIRE DEPARTMENT

86%

Incidents by86% Incident Cause 86% Incidents by Incident Cause Figure 7: 2011 to 2016 USEPA NRC Data –– Ammonia Incidents by Cause Figure 7: 2011 to 2016 USEPA NRC Data Ammonia Incidents EQUIPMENT

by Incident Incident Cause FIRE DEPARTMENT “unknown” causes (22%).

These FAILURE Figure 7: 2011 to 2016 USEPA NRC Data – Ammonia Incidents by Incident Cause Figure 7:a2011 to95% 2016 USEPA NRC Data – Ammonia Incidents EQUIPMENT

by Incident Cause causes make up total of of the FAILURE Figure 7: 2011 to 2016 USEPA NRC Data

by Incident Cause 2%– Ammonia Incidents EQUIPMENT FAILURE

EQUIPMENT FAILURE 1% UNKNOWN FIGURE 7: 2011 TO 2016 1% 2% Figure 7: 2011 to 2016 USEPA NRC Data – Ammonia IncidentFAILURE Cause Figure 7: 2011 to 2016 USEPA NRC Data –Incidents Ammoniaby Incidents by Incident Ca EQUIPMENT 2% Figure 7: 2011 USEPA to 2016 NRC Data – Ammonia Incidents by Incident Cause EQUIPMENT FAILURE 1% NRC. While the majority of incidents UNKNOWN 1% USEPA NRC DATA – AMMONIA 2% 1% UNKNOWNbyFAILURE EQUIPMENT Figure 7: 2011 to 2016 NRC Data – Ammonia Incidents Incident Cause 1% 1%USEPA 2% 1% UNKNOWN 1% 2% BY were reported ambiguously, 31% of OTHER INCIDENTS 1%INCIDENT CAUSEEQUIPMENT EQUIPMENT FAILURE UNKNOWNFAILURE 1%

ammonia incidents reported by the

incidents occurred from an equipment failure. The specific reasons are not recorded, but it is reasonable that many equipment failures may have occurred from at least one of the following causes.

• Lack of preventative maintenance • Aging equipment • Lack of Management of Change and/or Pre-Startup Safety Review documentation • Design incompatibilities • Operations outside of acceptable

limits

1% 2% 1% 1% 1% 2% 2% 1% 1% 1% 2% 1% 1% 1% 1% 1% 2% 1% 1% 1% 1% 1% 1% 1% 1% 31% 1% 1% 31% 31% 31% 31% 31% 31% 31%

42% 42% 42% 42% 42% 42% 42% 42%

42% 42% 42%

22% 22% 22% 22% 22% 22% 22% 22%

UNKNOWNEQUIPMENT FAILURE OTHER UNKNOWNEQUIPMENT FAILURE OTHER OTHER OPERATOR ERROR UNKNOWN UNKNOWN OTHER UNKNOWN OTHER OPERATOR ERROR UNKNOWN OPERATOR ERROR OTHER OTHER OTHER OPERATOR ERROR OTHER VESSEL SINKING OPERATOR ERROR OTHER OPERATOR ERROR VESSEL SINKING VESSEL SINKING OPERATOR ERROR OPERATOR ERROR OPERATOR ERROR OPERATOR ERROR VESSEL SINKING OVER PRESSURING OPERATOR ERROR VESSEL SINKING 31% 31% VESSEL SINKING OVER PRESSURING VESSEL SINKING VESSEL SINKING VESSEL SINKING OVER PRESSURING 31% VESSEL SINKING VESSEL SINKING OVER PRESSURING NATURAL PHENOMENON OVER PRESSURING (Hurricane, tornado, flood, OVER PRESSURING OVER PRESSURING OVER PRESSURING NATURAL PHENOMENON OVER PRESSURING earthquake) NATURAL PHENOMENON OVER PRESSURING OVER PRESSURING (Hurricane, tornado, flood, NATURAL PHENOMENON DUMPING (Hurricane, tornado, flood, NATURAL PHENOMENON earthquake) NATURAL PHENOMENON (Hurricane, tornado, flood, NATURAL PHENOMENON NATURAL PHENOMEN NATURAL PHENOMENON earthquake) DUMPING (Hurricane, tornado, flood, (Hurricane, tornado, flood, NATURAL PHENOMENON (Hurricane, tornado, flood, earthquake) (Hurricane, tornado, fl DUMPING NATURAL PHENOMENON (Hurricane, tornado, flood, earthquake) (Hurricane, tornado, flood, earthquake) DUMPING earthquake) TRANSPORT ACCIDENT earthquake) DUMPING (Hurricane, tornado, flood, earthquake) DUMPING earthquake) DUMPING DUMPING DUMPING 22% earthquake) DUMPING 22% TRANSPORT ACCIDENT 22% DUMPING TRANSPORT ACCIDENT TRANSPORT ACCIDENT TRANSPORT ACCIDENT TRANSPORT ACCIDENT TRANSPORT ACCIDENT TRANSPORT ACCIDENT TRANSPORT ACCIDENT TRANSPORT ACCIDENT TRANSPORT ACCIDENT

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OSHA violations data In addition to incident and release data, this report summarizes OSHA violations data, which was provided by the OSHA Kansas, Missouri Regional Office. Violations are an important parameter to summarize because it provides insight into compliance improvement within the industry.

From 2011 to 2016, OSHA recorded a total of 3,706 violations of the PSM regulations.

Of those, 2,961 were considered serious violations and resulted in over $18 million in initial penalties. Initial penalties are those issued during the initial violation notification.

OSHA allows facilities to negotiate lower fees for violations during informal conference.

The agreed upon penalty after informal conference is referred to as the “current penalty.”

During this time period, initial penalties were reduced to an approximate total of $12.5 million (a reduction of initial penalties of approximately $5.5 million). Reasons for penalty reductions are not documented.

Of the total violations, 848 were for 1910.119(j) – Mechanical Integrity violations and another 825 violations were for 1910.119(d) – Process Safety Information. Figure 8 below illustrates the distribution of the number of violations from 2011 to 2016 by PSM element. What does this mean? There are a great number of facilities that may not be properly maintaining their systems and documentation for Mechanical Integrity and Process Safety Information. In a presentation to the Global Cold Chain Alliance, OSHA reported that the top three (3) sub-section violations occurred in RAGAGEP compliance, equipment deficiencies, and written Mechanical Integrity procedures.

This correlation is also present in the monetary amounts for current penalties. In the five-year time period, almost half of the monetary amounts for violations came from 1910.119(j) – Mechanical Integrity ($3.3 million) and 1910.119(d) – Process Safety Information ($2.8 million). Figure 9 demonstrates the distribution of penalties over each PSM element.

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OF THE industry 1ST EDITION JANUARY 2018

Figure 8: 2011 to 2016 OSHA Violations by PSM Element

848 580

1 64

76 81

142 18

FIGURE 8: 2011 TO 2016 OSHA : 2011 to 2016 OSHA Violations

by PSM 848 VIOLATIONS

BY Element PSM ELEMENT 76 81

1 64 142

18

36 825 129

230

36

230

135

825

129

541 135

1910.119(c) - Employee Participation

1910.119(d) - Process Safet

1910.119(e) - Process Hazard Analysis

1910.119(f) - Operating Pro

1910.119(g) -580 Training

1910.119(h) - Contractors

1910.119(i) - Pre-Startup Safety Review

1910.119(j) - Mechanical In

1910.119(k) - Hot Work Permit 541 1910.119(m) - Incident Investigation 1910.119(o) - Compliance Audits

1910.119(c) - Employee Participation

1910.119(l) - Management

1910.119(n) - Emergency P

1910.119(p) - Trade Secret

1910.119(d) - Process Safety Information

This correlation is also present in the monetary amounts for current penalties.

848 1910.119(e) - Process Hazard Analysis 1910.119(f) - Operating Procedures 1910.119(g) - Training

580

almost half of1910.119(h) the monetary amounts for violations came from 1910.119(j) – M Contractors

($3.3 million)1910.119(j) and 1910.119(d) – Process Safety Information ($2.8 million). Fi Mechanical Integrity

1910.119(i) - Pre-Startup Safety Review 36 129

distribution of penalties over each PSM element.

1910.119(l) - Management of Change

1910.119(k) - Hot Work Permit 541 1910.119(m) Incident Investigation 135

1910.119(n) - Emergency Planning and Response

1910.119(o) - Compliance Audits

1910.119(p) - Trade Secrets

1910.119(c) - Employee Participation

1910.119(d) - Process Safety Information

Figure 9: 2011 to 2016 OSHA Violation Penalties by PSM Element

This correlation is also present in the monetary amounts for current penalties. the five-year time period, FIGURE 9: 2011 TO 2016 OSHA VIOLATION PENALTIES BYInPSM ELEMENT 1910.119(e) - Process Hazard Analysis 1910.119(f) Operating Procedures almost$3,500,000 half of the monetary1910.119(h) amounts for violations came from 1910.119(j) – Mechanical Integrity 1910.119(g) - Training Contractors ($3.3 million) and 1910.119(d) – Process Safety Information ($2.8 million). Figure 9 demonstrates the 1910.119(i) - Pre-Startup Safety Review 1910.119(j) Mechanical Integrity $3,000,000 distribution of penalties over each PSMManagement of Change element.

1910.119(k) - Hot Work Permit 1910.119(l) $2,500,000

1910.119(m) - Incident Investigation

1910.119(n) - Emergency Planning and Response

1910.119(o) - Compliance Audits $2,000,000

1910.119(p) - Trade Secrets

$1,500,000 elation is also present in the monetary amounts for current penalties. In the five-year time period,

lf of the monetary amounts for violations came from 1910.119(j) – Mechanical Integrity $1,000,000

lion) and 1910.119(d) – Process Safety Information ($2.8 million). Figure 9 demonstrates the $500,000

on of penalties over each PSM element. $0

10

Figure 10 illustrates the total violations broken down annually. It is important to note that the number of violations can greatly differ depending on the availability of inspectors and how many inspections are

11

12

Figure 10: 2011 to 2016 Annual OSHA Violations FIGURE 10: 2011 TO 2016 ANNUAL OSHA VIOLATIONS 1200 1000 800 600 400 200 0

2011

2012

2013

2014

2015

2016

illustrates the total violations brokenthat down annually.

It is occurred importantintoeight note that DataFigure from 10 January through August 2017 shows 327 violations (8) months and the number of violations can greatly differ depending on the availability of inspectors

initiated $2.6 million in penalties. This is equivalent to approximately 45% of the 2016 violations and and how many inspections are conducted in a single year. In the last five years, 2013

approximately 67% of the initial penalties from 2016. Although inspections and reporting were not had more violations than any other year and an increase in violations occurred between complete the2016, time the datamay wascorrelate collected 2017,National Figures Emphasis 11 and 12Program show that violations and 2015 at and which to for OSHA’s (NEP) and directive CPL 03-00-021 for inspecting facilities the PSM Program (Directorate of penalties, respectively, in Mechanical Integrity andunder Process Safety Information still remain the top two (2) Enforcement Programs, 2017). Although the directive did not take effect until January

contributors to violations and penalties.

2017, it is possible that OSHA inspectors initiated their efforts earlier than the directive.

The 2017 violations data was not available in-full at the time this report was written, but the number of violations looked comparable to those for 2016.

Data from January through August 2017 shows that 327 violations occurred in eight (8) months and initiated $2.6 million in penalties. This is equivalent to approximately 45% of the 2016 violations and approximately 67% of the initial penalties from 2016. Although inspections and reporting were not complete at the time the data was collected for 2017, Figures 11 and 12 show that violations and penalties, respectively, in Mechanical Integrity and Process Safety Information still remain the top two (2) contributors to violations and penalties.

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OF THE industry 1ST EDITION JANUARY 2018

Figure 11: 2017 OSHA Violations by PSM Element (January through August) 89

5 1

14

37

16 4

10 75

14

3

19

1910.119(c) - Employee Participation FIGURE 11: 2017 OSHA 1: 2017 OSHA Violations

by PSM Element (January through August) VIOLATIONS

BY PSM ELEMENT 1910.119(e) - Process Hazard Analysis 89 37 (JANUARY THROUGH AUGUST) 1910.119(g) - Training 5 1

14

16 4

10 75

14

3

19

40

1910.119(d) - Process Safet

1910.119(f) - Operating Pro 1910.119(h) - Contractors

1910.119(i) - Pre-Startup Safety Review

1910.119(j) - Mechanical In

1910.119(k) Hot Work Permit 40

1910.119(l) - Management

1910.119(m) - Incident Investigation

1910.119(n) - Emergency Pl

1910.119(o) - Compliance Audits

89

1910.119(c) - Employee Participation

1910.119(d) - Process Safety Information

1910.119(e) - Process Hazard Analysis 37 1910.119(g) - Training

1910.119(f) - Operating Procedures 1910.119(h) - Contractors

1910.119(i) - Pre-Startup Safety Review

1910.119(j) - Mechanical Integrity

40 1910.119(k) Hot Work Permit 10 19 1910.119(m) Incident Investigation 3

1910.119(l) - Management of Change 1910.119(n) - Emergency Planning and Response

1910.119(o) - Compliance Audits

FIGURE 12: 2017 OSHA INITIAL PENALTIES BY 1910.119(c) - Employee Participation Process Safety Information Figure 12: 2017 OSHA Initial1910.119(d) Penalties

by PSM Element (January (JANUARY 1910.119(e) - Process Hazard Analysis 1910.119(g) - Training

$1,000,000 $900,000

1910.119(i) - Pre-Startup Safety Review $800,000

1910.119(k) - Hot Work Permit

$700,000

1910.119(m) - Incident Investigation

THROUGH AUGUST) 1910.119(f) Operating Procedures

PSM ELEMENT through August)

1910.119(h) - Contractors 1910.119(j) - Mechanical Integrity 1910.119(l) - Management of Change 1910.119(n) - Emergency Planning and Response

$600,000

1910.119(o) - Compliance Audits

$500,000 $400,000 $300,000 $200,000 $100,000 $0

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13 Regulatory and Standards Update Many regulatory agencies have been reviewing and updating their regulations as a result of Executive

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regulatory and standards update Many regulatory agencies have been reviewing and updating their regulations as a result of Executive Order (EO) 13650 (The White House, 2013) signed by President Barak Obama, which required interagency cooperation to enhance and improve the safety and security of chemical facilities. Since the EO 13650 was signed, the USEPA and OSHA have initiated several updated regulations in regards to the RMP and PSM Programs.

On April 3, 2017, the USEPA issued a proposed rule with additional requirements for regulated facilities above the thresholds listed in the RMP regulation. The new RMP Rule promulgation has been postponed until February 19, 2019.

On May 11, 2016, OSHA issued their enforcement policy guidelines on recognized and generally accepted good engineering practices (RAGAGEP). The guidelines provide additional detail to what is considered RAGAGEP and what sources are available to determine if a facility meets this requirement as part of their PSM Program. Likely as a result of this, IIAR is anticipating its release of IIAR Standard 9 to address RAGAGEP for ammonia refrigeration in 2018. IIAR Standard 9 should be able to provide a firm guide for RAGAGEP compliance for the industry.

For those in California, the California Office of Emergency Services (CalOES) and the California Occupational Health and Safety Administration (Cal/OSHA) each have established additional requirements specifically for refineries in California. While there may not be a direct connection for ammonia refrigeration, many are wondering if these agencies eventually plan on including the NAICS code for ammonia refrigeration at some point in the future.

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Chemical Facility Anti-Terrorism Standards (CFATS) Program Since October 2015, representatives from various committees in IIAR have been in discussions with the Department of Homeland Security (DHS) regarding the necessity for anhydrous ammonia to remain on the DHS CFATS Chemicals of Interest list. The purpose of the program is to examine the need for security in using anhydrous ammonia under certain applications and particular areas of the country. DHS argues that if a chemical is found to pose a risk to human life or health, it should be evaluated for the need to conduct a Security Vulnerability Assessment (SVA).

IIAR has taken the stance, along with much of industry and other groups, that facilities utilizing ammonia in a closed-loop system should not be subject to this review and potentially a SVA. Since quantities above the threshold limit through EPA and OSHA are covered under different regulations, IIAR argues that the effort by the DHS is redundant; not to mention that no known uses for anhydrous ammonia in closed-loop systems have required a SVA. IIAR remains positive in it’s efforts to work with both government agencies and private industry in order to find a solution to meet everyone’s needs. More information is available on the IIAR website’s summary of the DHS Roundtable from 2015.

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where is the industry headed?

There are many challenges that face the industrial refrigeration industry in the future.

Emerging regulations surrounding refrigerants, including changes to the USEPA and OSHA programs and California’s Refrigerant Management Program, may initiate further complications in reporting and the usage of alternative refrigerants.

For instance, the California Air Resources Board (CARB) is aiming to reduce the amount of high- GWP refrigerants by 2020. High-GWP refrigerants include those that have a 150-times, or more, equivalent global warming potential than carbon dioxide (CO2), which includes R-11, R12, R-22, R-401A, R-410A, R-507, R-134a, and R-407C. Methods of reduction would include new requirements for newly installed systems, incentives to reduce inventory or remove high-GWP refrigerants, and mandatory phase-downs for certain uses of high-GWP refrigerants.

While only in California, historically, federal government agencies have eventually adopted California regulations into Federal regulations, watching California for the effectiveness of the regulations in question. And while regulatory air boards are restricting the use of some alternate refrigerants, USEPA and OSHA are increasing enforcement on ammonia uses. This leaves end-users in a situation where they must decide which regulations they will choose to be governed by, rather than if they can remove their facility from a under a regulatory agency by restricting their inventory or using alternative refrigerants.

In addition to OSHA’s increased efforts for enforcement, additional training and experience is being initiated for OSHA inspectors. This training includes six (6) training sessions and six (6) partnered inspections with a fully-trained inspector. This may mean that more informed and further trained inspectors will be evaluating facilities’ compliance with all applicable regulations; however, no plans have been made to address inspector shortages

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to enable the agency to inspect all the required facilities. Currently, only a small percentage of facilities are inspected by OSHA. More encouraging, however, are the advances within the industry utilizing newer technologies and refrigerants as alternatives to ammonia. For example, many facilities have opted to design CO2 refrigeration systems, which is a low-GWP refrigerant and very efficient. Even with additional regulations that may surround the use of CO2, this refrigerant is increasingly studied for its sustainability in the industry.

Another encouraging technology is low-charge ammonia systems. They are more efficient and use much less ammonia than traditional systems. Low-charge systems are becoming more popular in urban areas and for facilities that want to limit their regulatory compliance requirements.

Cascade, or dual, refrigerant systems are also becoming more common in the industrial refrigeration industry. Ammonia-CO2 and ammonia-glycol systems have been emerging as the new and more efficient methods to utilizing refrigeration. The largest consideration in utilizing any refrigeration system over another is the facility’s needs for loading, operations, and expansion.

The future of IIAR holds some promising potential as it works to establish a worldwide standard for building industrial refrigeration facilities. Internationally, there is currently no established standard for the global market and industry. Many countries have opted to adopt North American standards that may not meet the needs of the country or may not be feasible within that county. The IIAR Code Committee has taken on the effort to develop an international “gap analysis� of standards from around the world to establish a new international design standard that all countries can use. In recent years, Costa Rica has adopted the IIAR 2 standard, while India and China have adopted parts of the same standard. Versions of IIAR 2 standards are available in Spanish and Mandarin, and are often used throughout the world as the established standard. Most recently, Chile has committed to adopting standards, as the government is mandating regulation on the ammonia refrigeration industry. In subsequent editions of the State of the Industry Report, this committee is committed to providing more information on the international involvement of IIAR and its chapters.

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we want to hear from you!

We ask that our members participate in our first State of the Industry survey to serve as an initial data set for future reports. Each year we will expand on survey questions.

SURVEY QUESTIONS • For those who have classified reportable incidents to the NRC as “other” or “unknown,” was there more information later to classify it differently? If so, what was the new classification?

• What new technologies (cascade systems, low-charge systems, etc.) are end-users actually using and how do they compare to “traditional” ammonia refrigeration systems?

• If the membership could make 1 change/suggestion to the regulatory community, what would you change/suggest?

• What is the biggest challenge faced for end-users in the industrial refrigeration industry?

• What information would you like to see in future reports?

YOU MAY PARTICIPATE IN THIS SURVEY IN 1 OF 2 WAYS The first is through the IIAR Member App. A link to an online survey will be available through the 2018 Conference portion. You may also go online to access the same online survey: www.iiar.org/iiar/wcm/stateoftheindustry.

Information collected in this survey will be reported in the next IIAR State of the Industry report to be delivered at the 2019 IIAR Natural Refrigeration Conference & Expo in Phoenix, Arizona, March 3–6.

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references Directorate of Enforcement Programs. (2017, January). OSHA Directive CPL 03-00-021.

Retrieved from OSHA: https://www.osha.gov/OshDoc/Directive_pdf/CPL_03-00-021.pdf Global Cold Chain Alliance. (2017). ChemNEP & Ammonia Refrigeration Enforcement Update.

Right To Know Network. (2017, January 5). NRC Incidents Report Search. Retrieved from Right To Know Network: http://www.rtk.net/erns/search.php The White House. (2013). Executive Order 13650 - Improving Chemical Facility Safety and Security. Washington DC: Office of the press Secretary.

US EPA. (2017, January). Releases of Chemicals in the 2015 TRI National Analysis.

Retrieved from United States Environmental Protection Agency: https://www.epa.gov/ trinationalanalysis/releases-chemicals-2015-tri-national-analysis

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IIAR is the world’s leading advocate for the safe, reliable and efficient use of ammonia and other natural refrigerants. IIAR members share their collective knowledge and experience to produce consensus documents that address various aspects of the natural and industrial refrigeration industry.

IIAR has broad industry representation including manufacturers, design engineers, contractors, end users, academics, scientists, and trainers. IIAR sets the standard for providing advocacy, education and the most up-to-date technical information to the ammonia and natural refrigeration community.

We help professionals develop their skills and further their careers by promoting the common interests of our 3,000 plus members.

OUR VISION AND MISSION Our Vision is to be globally recognized as the leading advocate for the safe, reliable and efficient use of ammonia and other natural refrigerants.

Our Mission is to provide advocacy, education, and standards for the benefit of the global community in the safe and sustainable design, installation and operation of ammonia and other natural refrigerant systems.

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The World’s Largest Meeting Dedicated to the Natural Refrigeration Industry!

Join us for the 2019 IIAR Natural Refrigeration Conference & Expo in Phoenix, Arizona from March 3rd to March 6th. The annual IIAR Conference & Expo provides an unrivaled opportunity for the industry’s leading manufactures, contractors, trainers and other service providers to showcase their latest innovations and products. It is the best place for natural refrigeration professionals to connect, collaborate and discuss the latest innovations and complex issues facing the industry.

Visit www.iiar.org/events for more details.