Is Ag Ammonia Subject to PSM? | Blog No. 106
- Eli Macha, Founder & Industry Advisor
- 2 days ago
- 4 min read
There is a persistent misconception in the agricultural ammonia world that bulk
distribution facilities with large bullet tanks are “exempt” from federal process safety
rules. This belief often comes from partial or outdated interpretations of OSHA and EPA
exemptions. In reality, while certain exemptions do exist, they are narrow, and
misunderstanding them can leave facilities unintentionally out of compliance.
This article explains how anhydrous ammonia is used in agriculture, and why distribution
facilities are regulated, and how OSHA’s Process Safety Management (PSM) standard
and EPA’s Risk Management Program (RMP) actually applies.
Background on Ag Ammonia
Anhydrous ammonia is one of the most widely used industrial chemicals in the world,
and agriculture represents its single largest application. It is primarily used as a nitrogen
fertilizer, valued for its high nutrient concentration, cost efficiency, and effectiveness in
increasing crop yields.
In the United States, anhydrous ammonia is most commonly applied during the fall and
spring growing seasons, supporting large-scale production of crops such as corn,
wheat, sorghum, and other grains. Usage is especially concentrated in the Midwest,
Great Plains and other major agricultural regions.
To support this seasonal demand, a nationwide network of agricultural supply and
distribution facilities stores and transfers large quantities of anhydrous ammonia. These
sites typically use pressure vessels (“bullets”), nurse tanks, and transfer systems to
stage product before delivery to farms. While essential to the agricultural supply chain,
these facilities often store quantities well above federal regulatory thresholds, which
brings important safety and compliance obligations.
The OSHA PSM Retail Exemption
OSHA’s Process Safety Management (PSM) standard, 29 CFR 1910.119, applies to
processes involving threshold quantities of highly hazardous chemicals, including
anhydrous ammonia at or above 10,000 pounds.
The regulation contains a limited exemption for retail facilities under 29 CFR
1910.119(a)(2)(i).
Historically, some agricultural ammonia distributors have relied on this exemption
because they sell ammonia directly to end users (farmers). Over time, OSHA has
issued interpretation letters and enforcement guidance clarifying that the exemption is
narrow and depends on whether a facility genuinely operates as a retail establishment
— not simply on the agricultural nature of the product.
Facilities with large bulk storage, truck or rail offloading, and distribution-style operations
may not meet OSHA’s interpretation of a traditional retail facility, even if they sell to
farmers. As a result, the assumption that “ag ammonia is exempt from PSM” is often
overstated or incorrectly applied.
A Real-World Insight From an EPA Inspector
In a recent discussion with an EPA inspector, this distinction was made especially clear:
Even when an agricultural ammonia distribution facility qualifies for OSHA’s retail
exemption — and therefore is not subject to OSHA PSM — it is still subject to EPA’s
Risk Management Program (RMP) requirements.
This point is frequently misunderstood in practice. The absence of OSHA PSM
Coverage does not mean the absence of federal chemical accident prevention
obligations.
How OSHA PSM and EPA RMP Work Together
EPA’s Risk Management Program is codified in 40 CFR Part 68.
RMP assigns covered processes to one of three program levels:
Program 1 – limited applicability, typically small or low-risk operations
Program 2 – covered processes not eligible for Program 1 and not subject to
OSHA PSM
Program 3 – processes subject to OSHA PSM or certain listed industrial
classifications
Because Program 3 is explicitly tied to OSHA PSM coverage, facilities that qualify for
The OSHA retail exemption does not Program 3 facilities under EPA rules.
However, if they exceed the regulated threshold quantity for anhydrous ammonia (which
most bulk distributors do, they are still covered by RMP and therefore fall under
Program 2. This is the key regulatory distinction that often gets missed.
What RMP Program 2 Actually Requires
Program 2 is sometimes described as “less stringent” than Program 3, but that does not
mean it is informal or optional. It still requires a structured safety and risk management
approach.
Program 2 requirements include:
Registration and submission of a Risk Management Plan to the EPA
A hazard assessment, including off-site consequence analysis
Documented prevention program elements
Operating and maintenance practices appropriate to the process
Training for employees involved in covered operations
Incident investigation and corrective action procedures
Emergency response planning and coordination
EPA guidance on Program 2 can be found here:
While Program 2 does not mirror OSHA’s 14 PSM elements line-by-line, the underlying
expectations are similar. The main difference is that Program 2 allows more flexibility in
how requirements are implemented and documented.
In practice, many well-run Program 2 systems look structurally similar to simplified PSM
programs, just without some of the prescriptive requirements.
Why This Distinction Matters
When facilities assume they are “exempt,” they often end up with:
No formal RMP submission
Incomplete or outdated hazard analyses
Gaps in operating or maintenance documentation
Weak emergency coordination
Increased enforcement exposure during inspections
Greater risk following an accidental release
Understanding whether your operation is PSM-covered, PSM-exempt, or RMP Program
2, or otherwise classified, is foundational to compliance and risk management.
How We Can Help
If you operate a bulk anhydrous ammonia distribution facility and are unsure whether
the OSHA retail exemption applies, or whether your RMP obligations are being met, we
can help clarify your regulatory status and close gaps.
We regularly help facilities:
Evaluate the applicability of the OSHA PSM retail exemption
Determine the correct EPA RMP program level
Develop or update RMP Program 2–compliant documentation
Align real-world operations with regulatory expectations
Prepare for EPA or state inspections with confidence
Program 2 compliance does not have to be burdensome, but it does need to be
intentional, documented, and defensible.
Key Regulatory References
OSHA Process Safety Management Standard (29 CFR 1910.119)
OSHA Highly Hazardous Chemicals Appendix A
EPA Risk Management Program Overview
EPA RMP Program 2 Guidance
Thank you for reading!
Previous Blog: The Cold Truth: Episode 1 Recap | A Candid Conversation on Industrial Refrigeration with Ryan Reardon | Blog No. 105
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