A law firm asked OSHA about two upstream oil and gas scenarios: wet natural gas from production wells processed through treating facilities (CO2/H2S removal and dehydration), then run through mechanical refrigeration units or Joule-Thompson plants, with flammable product storage exceeding 10,000 pounds. In one scenario the processing happened at wellhead sites without accessible gathering systems; in the other, multiple gathering pipeline connections existed to prepare product for pipeline transmission. The question was whether these operations fall within OSHA's enforcement stay on PSM in oil and gas production.
OSHA answered no on both scenarios. The 2000 enforcement stay applies only to industry codes that were not covered by the economic analysis in the original PSM rulemaking. OSHA did include SIC 1321, Natural Gas Liquids (NAICS 211130), during the PSM rulemaking, so facilities that recover natural gas liquids and conduct manufacturing, handling, and on-site storage activities constitute covered processes subject to enforcement when threshold quantities are met (29 CFR 1910.119(a)).
The bottom line: OSHA will enforce PSM at these facilities when they contain 10,000 pounds or more of flammable gases or liquids, unless an exception under 29 CFR 1910.119(b) applies. OSHA also noted that the EPA Risk Management Program (40 CFR 68) may apply to the same processes.