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Smithfield Foods Environmental Conference August 4, 2011

Smithfield Foods Environmental Conference August 4, 2011. RMP/PSM Case Study. John Morrell, Sioux Falls, SD. 17,000 head/day harvesting facility 250 million pounds/year of processed meats 100 acres 133 buildings 2 million square feet under roof Ammonia inventory over 300,000 lbs on-site

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Smithfield Foods Environmental Conference August 4, 2011

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  1. Smithfield FoodsEnvironmental Conference August 4, 2011 RMP/PSM Case Study

  2. John Morrell, Sioux Falls, SD • 17,000 head/day harvesting facility • 250 million pounds/year of processed meats • 100 acres • 133 buildings • 2 million square feet under roof • Ammonia inventory over 300,000 lbs on-site • Over 14 miles of ammonia refrigeration piping • Over 100 year old facility

  3. Innocent Start – December 2009 Nice young fellow from US EPA Region 8 completes a RMP inspection of the Sioux Falls facility. No issues with RMP, No issues with EPCRA (Tier II, and Form R). No issues with frequency and thoroughness of PSM/RMP Compliance Audit, PHA, and MI Inspections. No issues with mechanical integrity at the cold storage facility. Oh, by the way you had a 20,000 lb ammonia release in 2004 caused by surface corrosion on a pipe that went through freeze/thaw cycles, 8 people went to the hospital and you paid OSHA fines. Can I see where it happened.

  4. Physical Appearance Matter • Alley 10: Insulation and vapor barrier in poor condition – tanks and pipes; • Signs of corrosion on exposed metal; • Paint chipped and pealing; • Little to no pipe labeling.

  5. Follow up Visit – April 2010 • Digging Deep – Mechanical Integrity Inspections report signs of corrosion and recommend corrective action; • Deeper - Work Orders cancelled without explanation; • And Deeper Yet - Further inspection of mechanical integrity issues – Identified two safety relief valves out of 15 that were not replaced within the last 5 years.

  6. Dodged a Bullet? • In September 2010 US EPA sends us an all clear letter but it was not clearly defined. • It turned out that it was only for the Cold Storage Distribution Center. • No word on Alley 10 and issues from the main plant.

  7. Department of Justice Letter January 2011 DOJ letter details 10 deficiencies: • SRVs • Insulation Conditions – Tanks • Insulation Conditions – Pipes • Corrosion – Metal Structural Supports • Corrosion – Painted metal chipped/pealed • Wooden Supports • Tank Nameplates • Pipe Labeling • Work Orders – Lack of Completion • MOC – Not Completed (Tabware to SAP Conversion)

  8. Repeat Findings from 2004 Incident • Inspection and Testing Program for Safety Relief Valves (replace every 5 years); • Pressure Vessel Nameplates; • Inspection and Testing Program for Piping and Pressure Vessels; • Not correcting deficiencies in equipment in a safe and timely manner.

  9. Negotiation with DOJ • 2 SRVs, total of 327 days in service past the 5 year replacement time frame x $37,500 per day per violation = $12.25 million; • No economic benefit for PSM deficiencies, so 2.4% = $294,000; Cooperation (30% off) = $206,000

  10. Consent Decree • Of the 10 deficiencies, 8 were fixed prior to the meeting in Denver. • Consent Decree for two long term issues: Pipe Labeling and Tank Nameplates; • We’ve got a year to fix it. • We’ll be done in six months.

  11. Refrigeration Modernization Project • Alley 10 Replacement • Review of All Tank and Pipe Insulation • Replace worn insulation and vapor barriers • Prioritization of Freeze/Thaw Systems • Multi-million dollar, multi-year project

  12. Lessons Learned • Large, Complex Facility; Large, Complex Issues. • Need a trained, engaged, experienced, and dedicated PSM Leader at every facility. Sioux Falls just hired Richard Haggler. • A Corporate PSM Manager is beneficial. JMFG just hired Scott Goad, P.E. • Strategic Engineering Planning on a corporate level for profit sustaining projects is beneficial. • PSM Program requires continued vigilance. It’s not just a paper shuffling exercise, it’s a best practice model for safe operation of hazardous chemicals.

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