The Cost of Non-Compliance | Part 9: Examples and Summaries of Real Inspection Reports

July 25th, 2023 | , , ,

introduction

Uriah Donaldson presented a technical paper at the 2023 IIAR Conference titled The Cost of Non-Compliance: An Objective Analysis of Federal EPA’s Enforcement at Ammonia Refrigeration Facilities. This blog series includes excerpts from his technical paper.

Part 9: Examples and Summaries of Real Inspection Reports

This last section reviews several examples of individual inspection reports representing common findings and penalty amounts from multiple regions. The purpose of this review is to help facility owners and operators better understand the cost of non-compliance. The complete database can be viewed in Appendix A for more detailed information.

Example 1: Region 3 | PHA Recommendations

In April of 2018, EPA conducted an inspection at a facility in Maryland. The ammonia refrigeration system had a maximum intended inventory of 22,000 lbs. The inspection report includes a single violation of the Process Hazard Analysis section of the RMP regulation (40 CFR §68.67(e)). The violation reads in part:

“Facility documents provided to EPA by Respondent subsequent to the inspection show that several significant findings and recommendations gathered during the Facility’s 2016 PHA had not been implemented as of the date of EPA’s inspection on April 18th 2018….”(40)

The case was settled in March 2020. The civil penalty assessed for this violation was $17,000.

Example 2: Region 3 | RAGAGEP and Mechanical Integrity

In October 2017, the EPA led an inspection at a facility in Pennsylvania. The ammonia system had a maximum intended inventory of 12,000 lbs. The inspection report identified two counts violating the RMP regulation: one related to process safety information requirements and the other related to mechanical integrity requirements. The violations read in part:

Count 1 – Failure to Comply with Process Safety Information Requirements 

The RMP Regulations require an owner or operator to comply with process safety information requirements at 40 CFR §68.65(d)(1)(2) i.e. to compile process safety information pertaining to design codes and standards relevant to the equipment and to document that the equipment in the process complies with recognize and generally accepted good engineering practices.

One recognized and generally accepted good engineering practice applicable to the anhydrous ammonia is… IIAR 2.

Section 5.17.1 of llAR 2 states that “where ammonia-containing equipment is installed in a location subject to physical damage, guarding or barricading shall be provided.” At the time of the Inspection, EPA determined that Respondent had numerous pieces of ammonia-containing equipment, namely evaporators, at the Facility in locations subject to forklift hazards.

Section 6. 7 .1 of IIAR 2 states that, “Each machinery room shall have access to a minimum of two eyewash/safety shower units, one located inside the machinery room and one located outside of the machinery room.” At the time of the Inspection, EPA determined that Respondent did not have an eyewash/safety shower unit located outside of the machinery room. 

Count 2 – Failure to Comply with Mechanical Integrity Requirements 

During the Inspection, EPA identified several mechanical integrity deficiencies documented in the Facility’s 2013 System Mechanical Integrity Evaluation that had not been corrected, including the needed repair of rusted piping under condensers, and the cleaning and repair of ammonia piping.(41)

The case was settled in February 2019. The civil penalty assessed for these violations was $59,857.

Example 3: Region 4 | Multiple Facilities

In November 2016, the EPA opened an inspection by issuing a “Notice of Concern” letter to a corporation doing business in the States of Alabama, Arkansas, and Mississippi, totaling five (5) separate facilities.(42) Onsite inspections were conducted at each facility, along with documentation review, resulting in numerous violations citing RAGAGEP, Process Hazard Analysis, Mechanical Integrity, and Training among others.

The case was settled in February 2020. The civil penalty assessed was $106,250. Additionally, the corporation was required to spend $398,438 on a Supplemental Environmental Project benefiting the local fire departments. In total, the civil penalty plus the SEP averaged approximately $100,000 per facility ($500,000 / 5 facilities). Each facility was also required to spend the necessary capital to correct the various deficiencies cited in the inspection report, including but not limited to: insulation and piping damage, labeling, installing of e-stops, and relief valve termination piping among many others.(43)

Example 4: Region 4 | Tier II Submission

In 2012, a facility in Georgia with more than 10,000 lbs. of ammonia failed to submit Tier II forms by March 1 of the reporting year in accordance with Section 312 of EPCRA. Following the EPA Enforcement Response Policy described earlier in this paper, a civil penalty of $24,375 was assessed.(44)

Example 5: Region 5 | Failure to make Immediate Notifications after Release

In June 2018, the EPA filed a complaint against a facility in Minnesota regarding two ammonia releases in June 2013 and September 2014. The facility failed to notify the National Response Center and the SERC immediately, violating both the CERCLA and EPCRA regulations. 

The case was settled in December 2018. A civil penalty of $75,000 for violating CERCLA and $75,000 for violating EPCRA was assessed, totaling $150,000. Additionally, the facility was required to spend $425,000 on a Supplemental Environmental Project to update its ammonia detection system, alarms, and controls within one year.(45)

Example 6: Region 6 | Failure to Submit an RMP for New Facility

In May 2011 the EPA conducted an inspection at a facility in Texas. The ammonia system had a maximum intended inventory of 18,000 lbs. The inspection report reads in part:

In July of 2005, Respondent completed construction on its new facility and put it into service. At that time the refrigeration system was charged with 18,000 lbs. of anhydrous ammonia. Respondent filed its initial RMP on August 11, 2009, more than 4 years after exceeding the threshold quantity.

The case was settled in January 2012. The civil penalty assessed was $45,750.(46)

Example 7: Region 9 | Common California Example 

In June 2018, the EPA inspected a California facility where the ammonia refrigeration system had a maximum intended inventory of more than 10,000 lbs. The inspection report identified multiple violations of the RMP regulation. Noteworthy examples include but are not limited to (1) inaccurate P&IDs, (2) failure to address engineering and administrative controls in the PHA study, (3) inadequate oil draining procedures, (4) lack of documented training, (5) failure to correct equipment operating outside of acceptable operating limits, and (6) failure to update the emergency contact information.

The case was settled in July 2021. The civil penalty assessed was $203,445.(47)

(40) US EPA Docket No. CAA-03-2020-0065; (41) EPA Docket No. CAA-03-2019-2021; (42) Even though Arkansas is technically part of Region 6, EPA region 4 took the lead to facilitate more efficient communication. This is instructive for corporations doing business in multiple states. Even if facilities are located in different EPA regions, that will not deter EPA from conducting a consolidated inspection. (43) EPA Docket No. CAA-04-2019-9960(b); (44) EPCRA-04-2012-2043(b); (45) EPA Docket No. MM -05-2018-0002, CERCLA-05-2018-0005, EPCRA -05-2018-0009; (46) CAA 06-2012-3510; (47)  CAA (112r)-09-2021-0043

The previous blogs in this series are available in the following links:

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