BILL ANALYSIS �
SB 438
Page 1
Date of Hearing: August 14, 2013
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Mike Gatto, Chair
SB 438 (Hancock) - As Amended: April 4, 2013
Policy Committee: Labor and
Employment Vote: 6-1
Urgency: No State Mandated Local Program:
Yes Reimbursable: No
SUMMARY
This bill requires a refinery employer, by September 15 each
year, to submit to the Division of Occupational Safety and
Health (DOSH) a full schedule of planned turnarounds for the
various plants for the following calendar year. Specifically,
this bill:
1)Defines turnaround as any instance of an industrial plant or
unit being partially or totally taken offstream or offline for
the purposes of maintenance, overhaul, repair, inspection,
testing, or replacement of materials or equipment.
2)Requires a refinery employer, at the request of DOSH (also
known as Cal/OSHA), to submit specified documentation at least
60 days prior to a planned turnaround. The documentation
includes equipment and maintenance reports, as specified.
3)Requires a refinery employer, at the request of DOSH, to
submit the following documentation to them at least 30 days
prior to a planned turnaround:
Notification of any changes, and supporting documents, with
respect to the equipment and maintenance documents submitted
above, and written justification by the refinery employer for
any of these changes.
FISCAL EFFECT
Annual special fund costs of approximately $875,000 to Cal/OSHA
within the Department of Industrial Relations (DIR), to hire
additional expert staff to review the reports and provide
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assistance to oil refineries in completing them. This cost may
be offset by potential fee revenue.
SB 71 (Committee on Budget and Fiscal Review), Chapter 28,
Statutes of 2013, requires DIR to annually establish and collect
reasonable fees for consultation, inspection, adoption of
standards, and other duties conducted with the Process Safety
Unit within DIR to inspect oil refineries and chemical plants.
Specifically, statute requires the fees to be adopted by March
31, 2014 and deposited into the Occupational Safety and Health
Fund. The fees shall be sufficient to support, at a minimum, the
annual cost of 15 positions.
COMMENTS
1)Purpose . The California Energy Commission Reports there are a
total of 20 refineries in the state located in the San
Francisco Bay area, the Central Coast, the Los Angeles area
and the Central Valley. Approximately, two million barrels (a
barrel is equal to 42 U.S. gallons) of petroleum are processed
daily into a variety of products, with gasoline representing
about half of the total product volume.
According to the American Petroleum Institute, a turnaround is
"a planned, periodic shut down (total or partial) of a
refinery process unit or plant to perform maintenance,
overhaul and repair operations and to inspect, test and
replace process materials and equipment."
According to the author, "Despite the obvious importance of
turnarounds, Cal/OSHA is often unaware of when one will occur
at an oil refinery. This prevents Cal/OSHA from preparing for
a possible incident during a scheduled refinery turnaround.
It also means that Cal/OSHA inspectors are left unaware when
the last turnaround was done while preparing for and
performing inspections of refinery facilities.
"This is not an abstract concern. Chevron Corp. did not
inspect several sections of piping of its Richmond refinery
during a November 2011 turnaround. One of the sections had
thinned in thickness by 80 percent, which contributed to the
August 6 fire at the facility, one of the worst of such
incidents in recent years. The fire led to the hospitalization
of 15,000 Richmond residents."
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This bill requires a refinery employer, by September 15, to
submit to Cal/OSHA a full schedule of planned turnarounds for
the various plants for the following calendar year.
2)Existing law establishes the California Occupational Safety
and Health Act of 1973 to ensure safe and healthful working
conditions for all California workers by, among other things,
authorizing the enforcement of effective standards as well as
assisting and encouraging employers to maintain safe and
healthful working conditions. DOSH is charged with enforcing
occupational health and safety laws, orders, and standards,
including the investigation of alleged violations of those
provisions.
In 1990, the California Refinery and Chemical Plant Worker
Safety Act (The Act) was enacted and defined "process safety
management" as the application of management programs, which
are not limited to engineering guidelines, when dealing with
the risks associated with handling or working near hazardous
chemicals. The act requires Cal/OSHA to adopt process safety
management standards for refineries, chemical plants, and
other manufacturing facilities.
3)Interagency workgroup on oil refinery safety . In 2012,
Governor Brown established an interagency workgroup in the
aftermath of the fire at Chevron Corp. oil refinery in
Richmond, CA. The workgroup was charged with examining "ways
to improve public and worker safety through enhanced oversight
of refineries, and to strengthen emergency preparedness in
anticipation of any future incident." The group consisted of
participants from 13 agencies and departments, as well as the
governor's office.
In July 2013, the workgroup released a draft report entitled:
Improving Public and Worker Safety at Oil Refineries. The
draft document includes findings and recommendations relating
to emergency response/preparedness, regulation/oversight,
community education/alerts, and safety/prevention of hazardous
events. Specifically, the report states: "Gaps in the
regulatory schemes exist, including limitations on their
[governmental agencies] ability to cover all aspects of
process safety and the extent to which they are enforceable.
Regulatory agencies face multiple issues relating to
inspection and enforcement capabilities including: difficulty
in hiring, retaining, and training inspectors; lack of
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mechanisms for information sharing and coordination;
deficiencies in data and transparency; and, insufficient
penalties to create meaningful deterrence."
Analysis Prepared by : Kimberly Rodriguez / APPR. / (916)
319-2081