February 4, 2022Client Alert

EPA Warns of Compliance Deficiencies in Chemical Warehouses and Distribution Facilities

The Clean Air Act (“CAA”) and Emergency Planning and Community Right to Know Act (“EPCRA”) require chemical warehouses and distribution facilities to implement safety measures to mitigate the risk of release from hazardous chemicals. The Environmental Protection Agency (“EPA”)—through a series of recent inspections—found that many facilities have failed to develop adequate measures to comply with these laws and has since issued an alert to warn regulated parties about noncompliance.

The EPA’s Alert specifically discusses compliance issue with CAA § 112(r)(7) and the implementing regulations for Risk Management Programs (40 C.F.R. Part 68) which require facilities that use hazardous substances above a specified quantity to develop risk management programs that include a hazard assessment, a prevention program with safety precautions, and maintenance, monitoring, and employee training measures, as well as an emergency response program. Further, EPA references CAA § 112(r)(1), known as the General Duty Clause, and various provisions of the EPCRA to emphasize that, in some cases, more than one law applied.

Some specific instances of non-compliance concerns are reflected in the EPA’s Alert. EPA has found regulated parties commonly fail to account for the chemicals in all containers that could be affected by the same emergency event, such as a fire. Additionally, regulated parties often fail to file and implement a Risk Management Program because facility management systems do not flag when chemical inventories exceed regulatory thresholds. Other instances of noncompliance have involved mistaken weight calculations for flammable mixtures and other inadequate storage or recordkeeping practices.

EPA provided a list of “lessons learned” from chemical warehouse cases involving the aforementioned statutory provisions. Those lessons learned include:

  • Lack of good inventory management leads to Risk Management Program and EPCRA violations for having chemicals present over regulatory thresholds.
  • Lack of attention to solutions or mixtures leads to incorrect calculation of threshold quantities for reporting.
  • Employees need clear information on how to avoid co-location of incompatible chemicals.
  • Facilities should ensure that their buildings are structurally appropriate for the storage of chemicals and equipped with proper fire protection (e.g., alarms and sprinklers, etc.).
  • Awareness is needed for when Risk Management Program requirements apply.
  • Facilities need to coordinate with local emergency responders.
  • A maintenance and prevention program for pipes, valves, and tanks is needed. The program should include how to achieve appropriate tank integrity and secondary containment.
  • Facilities need to address the storage of chemicals with appropriate aisle space and segregated incompatible chemicals appropriately.

Michael Best & Friedrich LLP remains ready to assist clients who may be at-risk for targeted enforcement by the EPA. For questions or concerns regarding compliance for chemical warehouses and distribution facilities, contact Todd E. Palmer.

*Law Clerk Gary Bridgens contributed to this client alert.

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