BILL ANALYSIS Ó
SB 1300
Page 1
Date of Hearing: June 25, 2014
ASSEMBLY COMMITTEE ON LABOR AND EMPLOYMENT
Roger Hernández, Chair
SB 1300 (Hancock) - As Amended: June 18, 2014
SENATE VOTE : 24-9
SUBJECT : Refineries: turnarounds.
SUMMARY : Enacts specified requirements related to refinery
"turnarounds" and related occupational safety and health
enforcement costs. Specifically, this bill :
1)Defines "turnaround" as a planned, periodic shutdown (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.
2)Excludes from the definition of "turnaround" unplanned
shutdowns that occur due to emergencies or other unexpected
maintenance matters in a process unit or plant, or routine
maintenance, as specified.
3)Requires a refinery employer to submit to DOSH a full schedule
of planned turnarounds for all affected units every September
15 for the following calendar year.
4)Requires a petroleum refinery employer, at the request of
DOSH, to provide on-site access and specified documentation
relating to a planned turnaround at least 60 days prior to the
shutdown, including:
a) All corrosion reports and risk-based inspection reports
generated since the last turnaround.
b) Process hazard analyses generated since the last
turnaround.
c) Boiler permit schedules.
d) Management of change records related to repairs, design
modifications and process changes.
e) Work orders scheduled to be completed in the planned
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turnaround.
f) All temporary repairs made since the last turnaround.
5)Requires a petroleum refinery employer to submit notification
of any changes and supporting documents at least 30 days
before a planned turnaround, at the request of DOSH.
6)Authorizes DOSH, by agreement with a petroleum refinery
employer, to modify the reporting period as to any individual
item of information.
EXISTING LAW :
1)Defines "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 and requires:
a) The Occupational Safety and Health Standards Board to
adopt process safety management standards for refineries,
chemical plants, and other manufacturing facilities.
b) An employer to develop and maintain a compilation of
written safety information to enable the employee and
employees operating the process to identify and understand
the hazards posed by processes involving acutely hazardous
and flammable material.
c) An employer to perform a hazard analysis for
identifying, evaluation, and controlling hazards involved
in the process.
d) An employer to develop and implement written operating
procedures that provide clear instructions for safely
conducting activities involved in each process consistent
with the process safety information.
e) Each employee whose primary duties includes the
operating or maintenance of a process shall be trained in
an overview of the process with an emphasis on the specific
safety and health hazards, procedures, and safe practices
applicable to the employee's job tasks as well as refresher
and supplemental training documented by the employer's
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certification record.
2)Requires DOSH to annually fix and collect reasonable fees for
consultation, inspection, adoption of standards, and other
duties conducted pursuant to existing law. The fees shall be
sufficient to cover, at a minimum, the annual costs of 15
staff positions. All revenue collected is to be deposited
into the Occupational Safety and Health Fund and subject to
appropriation by the Legislature in the annual Budget Act.
FISCAL EFFECT : According to the Senate Appropriations
Committee, DIR estimates that it would incur annual costs of
roughly $250,000 (special funds) to implement the provisions of
this bill.
COMMENTS : According to the American Petroleum Institute (API),
a refinery 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. Turnarounds are
scheduled at least one to two years in advance and depending on
the process unit and the amount of maintenance needed, the
length of the turnaround can vary from one to four weeks or
more. API also stated that the less often units are started up
and taken down, the safer it is since refinery incidents are
more likely to occur during turnarounds.
Background on August 2012 Explosion at Chevron Richmond Oil
Refinery
According to an Interim Investigation Report from the U.S.
Chemical Safety and Hazard Investigation Board on the Chevron
Richmond Refinery Fire:
"On August 6, 2012, the Chevron U.S.A. Inc. Refinery in
Richmond, California experienced a catastrophic pipe failure
in the #4 Crude Unit. The pipe ruptured, releasing flammable,
hydrocarbon process fluid that partially vaporized into a
large vapor cloud that engulfed nineteen Chevron employees.
All of the employees escaped, narrowly avoiding serious
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injury. The ignition and subsequent continued burning of the
hydrocarbon process fluid resulted in a large plume of unknown
and unquantified particulates and vapor traveling across the
Richmond, California, area. In the weeks following the
incident, approximately 15,000 people from the surrounding
area sought medical treatment due to the release."
Multiple agencies opened investigations in response to the
incident including the Division of Occupational Safety and
Health (DOSH), the U.S. Chemical Safety and Hazard
Investigation Board (CSB), and the U.S. Environmental Protection
Agency (U.S. EPA). Additionally, Chevron also completed its own
internal investigation. The investigations identified serious
concerns about process safety management procedures at the
refinery and expressed the need for stronger preventative
safeguards.
On January 30, 2013, DOSH issued 25 citations against Chevron
USA, with proposed penalties totaling nearly $1 million
($963,200), for state safety standard violations related to the
refinery explosion. The citations included eleven "willful
serious" and twelve "serious" violations, resulting in the
highest penalties in DOSH's history. Among DOSH's findings, they
reported that:
Chevron did not follow the recommendations of its own
inspectors and metallurgical scientists to replace the
corroded pipe that ultimately ruptured and caused the fire.
Those recommendations dated back to 2002.
Chevron did not follow its own emergency shutdown
procedures when the leak was identified, and did not
protect employees.
Improving Public and Worker Safety at Oil Refineries: Report of
the Interagency Working Group on Refinery Safety
Following the August 2012 explosion at Chevron's Richmond Oil
Refinery, Governor Brown convened a 13-agency Working Group to
explore ways of improving public and worker safety at and around
oil refineries through enhanced oversight, and to strengthen
emergency preparedness. Over an 18-month period, the group met
internally and with industry, labor, community, environmental,
academic, local emergency response and other stakeholders.
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The report details recommendations to improve emergency response
and preparedness. Specifically, the report made the following
recommendations:
Coordinating regulatory activities to avoid
duplication and increase effectiveness.
Establishing clear criteria for unified response
during emergencies and aligning radio communications
between industry firefighters and local first responders.
Improving information and data flows from refineries
to the public and state and local agencies.
Requiring refineries to implement inherently safer
systems to prevent emergencies and better protect workers
and neighboring communities.
Strengthening enforcement capacity to ensure
adequate oversight of refineries.
Assessing operational safety and organizational
structures at refineries to reduce human factors such as
lack of training, insufficient experience or fatigue that
can cause hazards.
Providing greater community access to air quality
monitoring information in and around refineries.
An Interagency Refinery Task Force was established in August
2013 to continue overseeing progress on the recommendations, and
will meet bimonthly to ensure proper implementation.
Recent Budgetary Action to Improve DOSH Staffing For Refinery
Safety
Last year's budget included changes to the Labor Code which
required DOSH to use its statutory authority to approve a fee by
March 31, 2014, to support an increase in funding and at least
15 new positions for the Process Safety Unit, which inspects oil
refineries and chemical plants. Those changes were enacted by
SB 71 (Budget and Fiscal Review Committee) and added Section
7870 to the Labor Code, which provides as follows:
"Notwithstanding the availability of federal funds to carry
out the purposes of this part, the division shall annually
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fix and collect reasonable fees for consultation,
inspection, adoption of standards, and other duties
conducted pursuant to this part. The fees shall be adopted
by March 31, 2014. All revenue collected from these fees
shall be deposited into the Occupational Safety and Health
Fund. The fees shall be sufficient to support, at a
minimum, the annual cost of 15 positions. The expenditure
of these funds shall be subject to appropriation by the
Legislature in the annual Budget Act or other measure."
In addition, the most recently-enacted budget appropriated
funding to DIR from the Occupational Safety and Health Fund for
the following purposes:
The Department of Industrial Relations shall report to
the Director of Finance, the chairpersons of the fiscal
committees of both houses of the Legislature, and the
Legislative Analyst's Office by February 1, 2015, on (a)
the status of Process Safety Management and Risk Management
Program regulatory changes, and (b) the status of all
efforts the department is making to implement
recommendations of the final report from the Governor's
Interagency Working Group on Refinery Safety.
The Department of Industrial Relations shall report to
the Director of Finance, the chairpersons of the fiscal
committees of both houses of the Legislature, and the
Legislative Analyst's Office by February 1, 2015, on (a)
the status of the department's annual workload evaluation
of the staffing needed to meet the enforcement requirements
of Section 7870 of the Labor Code, for both refinery
facilities and nonrefinery facilities that meet the
threshold for Cal-OSHA Process Safety Management regulatory
oversight, and the aggregate fees needed to support the
function, (b) the department's process or plan for
categorizing nonrefinery facilities that meet the threshold
for Cal-OSHA Process Safety Management regulatory oversight
by type of facility, risk level, and inspection cycles, (c)
the number of staffing vacancies, by classification, within
the Process Safety Management Unit, and (d) the number of
inspections performed, to date, during the current fiscal
year, by both type of facility and type of inspection.
ARGUMENTS IN SUPPORT :
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According to the author, oil refineries have no obligation under
state law to report their "turnaround" schedule to any part of
state or local government. Nor are they required to disclose
important information, such as repair schedules or corrosion
reports. The author argues that given the importance of
"turnarounds," both to the refinery itself as well as the public
safety risk they pose, allowing DOSH to know this information
may allow it to conduct targeted inspections of refinery
facilities. This bill would require petroleum refineries to
annually report their schedule for "turnarounds" to the division
and would require them to also submit documentation on refinery
safety and infrastructure.
Proponents argue that in the case of Chevron, had DOSH known
that Chevron had not inspected the section of piping that caused
the explosion, it is possible that DOSH could have done their
own inspection. Doing so, they argue, could have prevented an
incident that threatened public health, affected the
environment, and imposed severe financial costs.
PRIOR RELATED LEGISLATION :
This bill is very similar to SB 438 (Hancock) from 2013. SB 438
was held in the Assembly Appropriations Committee.
COMMITTEE STAFF COMMENT :
As with SB 438 from last year, the Western States Petroleum
Association (WSPA) has expressed concern to the author about the
potential disclosure of "trade secrets" information that may be
included in the information that is required to be disclosed to
DOSH. According to the author's office, the author is currently
working with WSPA and DIR on developing amendment language that
will address these concerns.
REGISTERED SUPPORT / OPPOSITION :
Support
Asian Pacific Environmental Network
Board of Supervisors of Contra Costa County
California Environmental Justice Alliance
Ms. Sherry McCoy
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Opposition
None on file.
Analysis Prepared by : Ben Ebbink / L. & E. / (916) 319-2091