Oil and Gas Production and Servicing Industry May Be Impacted
First, OSHA requests comment on whether the agency should amend § 1910.119(a)(2)(ii), which currently exempts oil and gas-well drilling and servicing from the scope of the PSM mandatory standard. OSHA originally exempted oil and gas-well drilling and servicing from the scope of the PSM standard because of an ongoing rulemaking where OSHA sought to comprehensively regulate the oil and gas industry. See 48 Fed. Reg. 57202 (Dec. 28, 1983). But OSHA never finalized that rule and subsequently removed it from the agency’s regulatory agenda. We believe that OSHA is inclined to apply the PSM standard to oil and gas-well servicing and drilling in light of the record growth of U.S. oil and gas production over the past several years (particularly in 2013, where domestic oil production rose by 15 percent over 2012 totals). Indeed, OSHA essentially admitted as much during a recent Small Business Administration Office of Advocacy meeting, where OSHA’s staff member responsible for coordinating the agency’s PSM revision effort under EO 13650 intimated that oil and gas industry employees are left unprotected by the current rule.
OSHA also seeks comment on whether the agency should resume “enforcement for PSM-covered oil-and-gas production facilities.” Here, OSHA notes that the exemption provided by § 1910.119(a)(2)(ii) does not apply to oil and gas production operators – and therefore could permit agency inspectors to enforce the PSM standard against production operators. Yet the agency concedes that in promulgating the original PSM standard, OSHA failed to conduct an economic analysis of the PSM’s impact on oil and gas production operations. Thus, “OSHA is considering completing this analysis so that it can resume enforcement of the PSM standard for oil-and-gas production facilities.” For all of these reasons, it appears OSHA would like to enforce the PSM when inspecting production facilities. The agency believes that enforcement “could prevent or mitigate accidents” in the oil and gas industry, where according to agency staff, accidents and injuries are on the rise.
OSHA is accepting comments on these two potential PSM amendments (and 15 others identified that apply generally to the employer community) until March 10, 2014. For further information, please contact Peter Gould at (303) 894-6176 or email@example.com.