TEXAS EASTERN TRANSMISSION CORPORATION, TEXAS EASTERN CRYOGENICS CORPORATION, AND SINAPP CO-STATEN ISLAND, INC.  

OSHRC Docket Nos. 4091; 4078 (Consolidated) *

Occupational Safety and Health Review Commission

October 28, 1975

  [*1]  

Before BARNAKO, Chairman; MORAN and CLEARY, Commissioners

COUNSEL:

Francis V. LaRuffa, Regional Solicitor, U.S. Department of Labor

Norman Winston, Assoc. Reg. Sol., U.S. Department of Labor

Grant S. Lewis, for the employer

OPINIONBY: CLEARY

OPINION:

DECISION

CLEARY, Commissioner:

This matter is before the Commission in accordance with my order directing review of Judge Joseph Chodes' memorandum and order granting respondents' motions to vacate the citations issued by reason of the provisions of section 4(b)(1) of the Occupational Safety and Health Act of 1970 (29 U.S.C. §   651 et seq., hereinafter "the Act"). n1

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n1 Section 4(b)(1) reads in pertinent part as follows:

Nothing in this Act shall apply to working conditions of employees with respect to which other Federal agencies, . . ., exercise statutory authority to prescribe or enforce standards or regulations affecting occupational safety or health.

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We have reviewed the entire record.   For the reasons stated hereinafter, we adopt the Judge's decision only to the extent it is [*2]   consistent herewith.

I.   Proceedings

A.   Texas Eastern Transmission Corporation and Texas Eastern Cryogenics Corporation n2

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n2 There have been no evidentiary hearings in either of these combined cases.   The operative facts presented herein are taken from affidavits and statements of counsel.

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Respondents, Texas Eastern Transmission Corporation (hereinafter Tetco) and Texas Eastern Cryogenics Corporation, (herinafter Cryogenics) are engaged in the transmission storage and sale of natural gas. On and before February 10, 1973, they maintained as part of Tetco's interstate natural gas pipeline system a large facility on Staten Island, New York.

According to their brief, the facility of respondents Tetco and Cryogenics is described as follows:

The facility at Staten Island consists of a liquifaction (sic) plant capable of liquefying 10,000 thousand cubic feet ('MCF') of natural gas per day, a vaporization facility capable of vaporizing 200,000 MCF per day (that is, regasifying the LNG), and a 600,000 barrel [*3]   (25,200,000 gallon capacity storage tank which operates as a holding vessel. . . .

The facility was designed to enable respondents, Tetco and Cryogenics, to convert natural gas from its normal gaseous state to a liquid at cryogenic temperatures below -260 degrees F. and store the gas at these temperatures during the summer.   The liquid natural gas (LNG) could then be reconverted into gas and made available to consumers during periods of peak demand in winter.

The facility was constructed under a Certificate of Public Convenience and Necessity issued by the Federal Power Commission, dated April 26, 1966.   In addition, the design and construction of the facility were allegedly covered by National Fire Protection Association ("NFPA") Standard No. 59A.   The storage facilities were put into service in March of 1970 with tank and vaporizers ready for service for the 1970-1971 heating season.

Imported LNG was pumped into the large storage vessel. However, when the level of LNG reached approximately 52 feet, instrumentation indicated that a leak had developed in the liner material of the vessel. The inventory level of LNG was lowered to below 52 feet and the plant was retained in service [*4]   throughout 1971 and early 1972.

In January of 1972, evacuation of the tank in preparation for an inspection to determine the location of the leak and for repair was undertaken.   By mid-April and tank had been emptied and purged, and inspection and repairs commenced.   Repair work continued for almost a year.   Then, on February 10, 1973, fire destroyed the LNG holding tank and three of respondents' employees were killed. n3

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n3 Respondent Cryogenic contends, and Judge Chodes, apparently concludes, that Cryogenics was not an "employer" as defined by section 3(5) of the Act.   In light of our disposition of this motion with regard to Cryogenics, we need not reach this question.

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B.   Sinapp Company - Staten Island, Inc.

Respondent, Sinapp Co. - Staten Island, Inc. (hereinafter Sinapp) is engaged in the construction business.   On and before February 10, 1973, it was engaged in repair activities at the LNG storage and distribution center and LNG cryogenics tank at respondents' [Tetco and Cryogenic] Staten Island facility.   [*5]   Thirty-seven of its employees died when the LNG tank caught fire.

C.   The Citations

Following investigations by complainant and pursuant to section 9(a) of the Act, respondents were issued citations for violations of section 5(a) of the Act. n4

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n4 See Appendix A.

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Tetco and Cryogenics were charged with willfully violating 5(a)(1) of the Act.   In addition, they were charged with willfully violating section 5(a)(2) of the Act for failure to comply with the occupational safety and health standards set forth at 29 CFR §   1910.37(n)(2), §   1926.20(b)(1), §   1926.21(b)(2), §   1926.21(b)(6)(i), §   1926.24 and §   1926.404(b).   Sinapp was charged with the serious violation of 29 CFR §   1926.20(b)(1), §   1926.21(b)(2), §   1926.21(b)(6)(i), §   1926.24 and §   1926.404(b).

D.   The Proceedings Before Judge Chodes

By letters timely mailed, respondents, Tetco, Cryogenics and Sinapp notified the Secretary of their intent to contest the alleged violations.   Jurisdiction thereafter vested with the Commission pursuant to section [*6]   10(c) of the Act and the cases were assigned to Judge Chodes who consolidated the Sinapp case with the case involving respondents Tetco and Cryogenics by order dated November 20, 1973.

On December 27, 1973, respondents Tetco and Cryogenics moved to dismiss the Secretary's complaint and vacate the citations and proposed penalties, arguing that the Secretary lacked jurisdiction under section 4(b)(1) of the Act to issue citations in the case.   Respondents argued that

The Secretary of Transportation has in fact exercised his authority under section 3(b) of the Pipeline Safety Act to 'establish minimum Federal safety standards for the transportation of gas and pipeline facilities.' In these circumstances section 4(b)(1) nullifies the applicability of this Act to respondents' Slaten Island, New York LNG facility.

By letter dated December 28, 1973, respondent Sinapp joined respondent's Tetco and Cryogenics in their motion to dismiss.

By memorandum and other dated March 26, 1974, Judge Chodes granted respondents' motion to dismiss.   In brief, Judge Chodes concluded that the Pipeline Safety Act gave the Secretary of Transportation authority to establish minimum federal safety standard   [*7]   for Pipeline facilities and the transportation of gas.   Pursuant to that authority, the Secretary of Transportation, through the Director, Office of Pipeline Safety [OPS], established Federal safety standards for LNG.   Those standards n5 were found to cover the working conditions that respondent's employees were involved in at the time of the alleged violations.   With particular regard to respondent Sinapp, Judge Chodes concluded that, although Department of Transportation regulation 49 CFR §   192.12(b) was limited to operators of LNG facilities, subsection (2) of the section 192.12(b) by its terms covered those who contracted with LNG operators to perform necessary modifications or repairs. n6

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n5 See Appendix A which, among other things, sets forth the NFPA standards presently under discussion that are incorporated by reference in the Office of Pipeline Safety's regulations.

n6 Under 49 CFR §   192.12(b)(2), "no 'operator' may store, treat, or transfer liquefied natural gas in a pipeline facility unless each modification or repair made to the facility after December 31, 1972, conforms to the applicable requirements of this Part 192 and NFPA Standard 59A insofar as practicable."

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II.   The Motion to Dismiss of Respondents Tetco and Cryogenics

Review of the background and need for the creation in the Department of Transportation of an Office of Pipeline Safety reveals concerns remarkably similar to those prompting occupational safety and health legislation.   Thus, in the summary to the House Report that accompanied the enacted bill it was noted that:

[T]he accident record of the industry has been a spotty one.   In certain areas it had been good; in other areas, statistics are lacking but many illustrations can be given of unfortunate and disastrous failures.

Present regulation by State Commissions is varied and indeed, there is difficulty in determining the effectiveness of State enforcement inasmuch as many of the States only recently have prescribed safety standards.   H.R. Rep. No. 1390, 90th Cong. 2nd Sess. (1966); 1968 U.S. Code Cong. and Ad. News 3232 (hereinafter House Report.) n7

In reaction to these problems Congress passed the Natural Gas Pipeline Safety Act of 1968 creating within the Department of Transportation, the Office of Pipeline Safety.

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n7 Cf. S. Rep. 91-1282, 91st Cong. 2d Sess. (1970); H.R. Rep. 91-1291, 91st Cong. 2d Sess. (1970).

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OPS has exercised its statutory authority to issue safety and health regulations applicable to the working conditions of respondents' Tetco and Cryogenics employees.   An "operator" subject to the regulations is defined by 49 CFR §   192.3 as a person who engages in the transportation of gas. n8 The same section defines "transportation of gas" to mean the "gathering, transmission or distribution of gas by pipeline or the storage of gas, . . . ." [Emphasis added.] Clearly respondents Tetco and Cryogenics fit within these definitions.

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n8 Compare 49 U.S.C.A. §   1677(a)(1) stating that:

(a) Each person who engages in the transportation of gas or who owns or operates pipeline facilities shall - (1) at all times after the date any applicable safety standard established under this chapter takes effect comply with the requirements of such standard; (emphasis added).

  [*10]  

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Also, we reject the asserted application of Finebert Packing Co., No. 61 (March 22, 1974) to this case.   In Fineberg, it was noted that the policy or purpose of the Wholesome Meat Act is "above all" to protect the health and welfare of consumers and that workers were not within this class.   There, worker protection was incidental.   Here, the legislative history and the text of the Pipeline Safety Act show an intent to protect those employed in the industry as well as the public at large.   Thus, the House Report emphasized that of the 67 persons accidentally killed in the period studied "31 were non-employees and 36 were employees." Moreover, testimony before the House Committee revealed that employers were concerned with "lost-time" accidents. n9 In addition, the Pipeline Safety Act provides for employee inspection of relevant books, papers and documents to determine whether a person subject to the Pipeline Safety Act is in compliance.   49 U.S.C.A. §   1681(a) (1974).

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n9 House Report 3225, 3267.

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In his brief to this Commission the Secretary carefully traces the relationship of specific safety and health standards to what he describes as allegedly analogous standards of OPS and attempts to distinguish the standards.   Moreover, he asserts, NFPA Standard No. 59A adopted by reference by 49 CFR 192.12 applies: (1) only to the facility itself, i.e., design, location, construction, and (2) to the operation of that facility.

The arguments are resourceful, but they do not control the outcome of this proceeding.   Whether the OPS standards are the same or substantively different from the OSHA standards their content is of little moment.   In Mushroom Transportation Co., Inc., No. 1588 (1974), we held that:

Once another Federal agency exercises its authority over specific working conditions, OSHA cannot enforce its own regulations covering the same conditions.   Section 4(b)(1) does not require that another agency exercise its authority in the same manner or in an equally stringent manner. [Emphasis added.]

Concerning the applicability of NFPA Standard No. 59A, the standard patently applies to the facility [*12]   and its operation.   However, as incorporated by 49 CFR §   192.12(b)(2), the standard is made to apply to "each modification or repair made to the facility after December 31, 1972 . . . ." [Emphasis added.]

We also consider the letter attached as Exhibit A to the Secretary's Brief from the Department of Transportation's General Counsel to the Solicitor of Labor.   The Secretary declares the General Counsel's letter to be "dispositive" of the 4(b)(1) issue.   The General Counsel was asked: (1) If the Office of Pipeline Safety had statutory authority with respect to working conditions, particularly those pertaining to the prevention of fire and explosion of employees engaged in repair of an empty tank not then being used for storage of LNG; (2) if so, did that jurisdiction extend to all three respondents; and (3) has the Office of Pipeline Safety exercised its jurisdiction by promulgating enforceable standards covering the specific working conditions for which respondents were cited by the Secretary?

In his answer to question (1), the General Counsel sets out the jurisdictional perimeter of OPS, and then concludes without explanation that OPS has not exercised this authority "in any [*13]   manner" that would deprive the Department of Labor of "jurisdiction" pursuant to section 4(b)(1).   Yet the answers to questions (2) and (3) create ambiguity.   Thus, answer (2) declares:

The statutory authority to prescribe standards applies to pipeline facilities and transportation of gas (49 U.S.C. §   1672). This jurisdiction is viewed as applying only to the owner or operator of the facility. [Emphasis added.]

While answer (3) states:

OPS has not promulgated any regulations or standards covering working conditions of persons engaged in those activities for which OPS has statutory jurisdiction.   The OPS regulations and standards are applicable to the pipeline facilities themselves and the transmission of gas through those facilities. [Emphasis added.]

Answer (3) is literally consistent with 49 CFR §   192.1, the "scope" section of the relevant OPS regulations. That section expressly indicates that Part 192 prescribes safety requirements for pipeline facilities and the transportation of gas.   In that prescription, however, duties are clearly established under 49 CFR §   192.12 for an "operator" of a pipeline facility to comply with NFPA Standard No. 59A.

In addition, we   [*14]   reject the Secretary of Labor's theory of shifting jurisdiction depending upon whether gas is removed for the reasons assigned by the Administrative Law Judge on page 15 of his decision.

In light of the foregoing, we conclude that Tetco and Cryogenics are exempt from the Act because of the exercise by OPS of its authority under the Pipeline Safety Act. n9a

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n9a My own acceptance of this conclusion is qualified.   To be an "exercise" of statutory authority cognizable under section 4(b)(1) of the Act the mere adoption of regulations prescribing safety or health requirements is not enough.   The basic statutory purpose of assuring so far as possible a safe workplace for "every" working man and woman in the country strongly suggests that no vacuum in protection should result when another Federal agency adopts a regulation, but there is no likelihood that the regulation will be enforced.   An unenforced regulation does not contribute to an "effective enforcement program," as expressly contemplated by section 3(10) of the Act.   Congressional debate upon section 4(b)(1) supports this reading of the statutory purpose.   See Staff of Senate Comm. on Labor & Public Welfare, 92d Cong., 1st Sess., Legislative History of the Occupational Safety and Health Act of 1970, 1919 (Comm. Print 1971).   In the case before us, however, there is a presumption of regularity concerning the application of the OPS regulations as to owners and operators, and the presumption is not rebutted in this record.

  [*15]  

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III.   The Motion to Dismiss of Respondent Sinapp

We adopt, however, the Secretary of Labor's alternative argument that the Pipeline Safety Act and regulations issued thereunder are limited in their application to persons engaged in the transportation of gas or the operation of pipeline facilities.   As noted previously, n10 49 U.S.C.A. §   1677(a)(1) requires compliance with applicable pipeline safety standards from only persons engaged in the transportation of gas or to owners or operators of pipeline facilities.   Similarly, 49 CFR Part 192 is patently limited to operators engaged in storing, treating, or transferring liquefied natural gas. Accordingly, Sinapp, a contractor on this jobsite, has no statutory or regulatory obligation to comply with the requirements of 29 CFR Part 192, regardless of whatever its contractual obligations may be if any, for making repairs conforming to NFPA Standard 59A.

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n10 See note 8.

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With regard [*16]   to our dissenting colleague's opinion, we note that Sinapp is not engaged in the storage of gas, 49 U.S.C. §   1671(3), nor is it an owner or operator, 49 CFR §   192.3.   The references in 49 U.S.C. §   1672(b) to "replacement, and maintenance" only refer to the class and scope of the facilities and operations covered by that statute, as a reading of the entire section makes clear; they do not broaden the class of persons regulated by OPS, which is defined elsewhere.   Sinapp does not fall within that class of persons regulated.

We, therefore, conclude that respondent Sinapp's Motion to Dismiss under section 4(b)(1) must be denied.   The case is hereby remanded for further proceedings consistent with this decision.

So ORDERED.  

CONCURBY: MORAN (In Part)

DISSENTBY: MORAN (In Part)

DISSENT:

MORAN, Chairman, Commissioner, Concurring in Part and Dissenting in Part:

The affirmance of the Judge's dismissal of the charges against Texas Eastern Transmission Corporation and Texas Cryogenics Corporation is correct and I concur therewith.   The ruling, however, that Sinapp Co. - Staten Island, Inc., is not under the regulatory control of the Natural Gas Pipeline Safety Act of 1968 n11 is wrong and I respectfully dissent [*17]   therefrom.

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n11 82 Stat. 725, 49 U.S.C. § §   1671 et seq.

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The evidence is uncontroverted that at the time of the accident Sinapp was engaged in repair and replacement activities on certain pipeline facilities herein.

49 U.S.C. §   1677(a)(1) provides:

"(a) Each person who engages in the transportation of gas n12 . . . shall (1) . . . [comply with] any applicable safety standard . . . established [here] under . . . ." (Emphasis added.)

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n12 "Transportation of gas" means the gathering, transmission or distribution of gas by pipeline or its storage . . . ." 49 U.S.C. §   1671(3).

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The lead opinion concludes without enumeration of any reasons therefor n13 that Sinapp was not "engaged" in the transportation of gas at the time it was making repairs and replacements. This conclusion cannot be supported in the light of 49 U.S.C. §   1672(b) which states [*18]   that standards shall be established which may apply to the:

". . . installation, . . . construction, . . . replacement, and maintenance of pipeline facilities." n14

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n13 The lead opinion correctly states that the standards here in issue apply only to "operators." An "operator" is ". . . a person who engages in the transportation of gas." 49 C.F.R. §   192.3.   Since that definition duplicates Congress' jurisdictional applicability of standards in general, no question arises as to whether §   192.3 narrows the scope of applicability as set forth in 49 U.S.C. §   1677(a)(1).

n14 "Pipeline facilities includes . . . pipe rights-of-way and any equipment facility . . . used in the transportation of gas . . . ." 49 U.S.C. 1671(4).

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During committee hearings preceding the enactment of this Act the Secretary of Transportation testified that:

"There is no question but what that every element of gas gathering, n15 transmission and distribution is moving gas." (Emphasis added.)

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n15 "Gathering" means all aspects of the transportation of gas from the well head to the consumer. H.R. Rep. No. 1390, 90th Cong. 2d Sess., 1968 U.S. Code Cong. and Ad. News 3234.

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The legislative history of this Act is replate with evidence that all phases of pipeline operations may be controlled through standards promulgated thereunder. n16

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n16 See, e.g., pages 3225, 3226, 3236 of the Legislative History, H.R. Rep. No. 1390, 90th Cong. 2d Sess.

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Indeed, standards found at 49 C.F.R. §   192.319 and §   192.321, which specify certain pipe installation requirements, §   192.325, which stipulates transmission line installation requirements, and §   192.327, which sets forth soil cover directives in the completion stage of installation, seem to relate to the type of work performed by a subcontractor employed to repair, replace, construct, or maintain a pipeline facility.

It therefore seems [*20]   consistent with the purposes of this Act n17 to believe that the jurisdictional scope of 49 U.S.C. §   1677(a)(1) includes a subcontractor doing work on a pipeline facility.   During the performance thereof, he is "engaged in the transportation of gas."

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n17 The purpose of this Act is that there shall be minimum Federal standards relevant to pipeline safety.   See 49 U.S.C. §   1672(b)(4); H.R. Rep. No. 1390, 90th Cong. 2d Sess., 1968 U.S. Code Cong. and Ad. News 3231; Armstrong, "Natural Gas pipeline Safety Act," 2 Natural Resources Lawyer 142 (1969).

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The case against Sinapp should therefore be resolved in the same manner as Texas Eastern and Texas Cryogenics. The decision below should be affirmed in its entirety.

Appendix A *

Description of the Alleged 5(a)(1)

Standard for the Production,

Violation [Tetco, Cryogenics]

Storage and Handling of

Liquefied Natural Gas (LNG)

NFPA No. 59A - 1971 (Major provisions)

On or about February 10, 1973, at

10.   Preface

the LNG Cryogenics tank at the

foot of Bloomfield Avenue, Staten

100.   This Standard outlines

Island, New York, the employer

basic methods of equipment

did not furnish to each of its

fabrication and installation as

employees employment and a place of

well as operating practices for

employment which were free from

protection of persons and pro-

recognized hazards that were

perty and provides guidance to all

causing or were likely to cause

persons concerned with the con-

death or serious physical harm to

struction and operation of equip-

its employees in that the number

ment for the production, storage,

of emergency exits available and

and handling of liquefied natural

means of egress were insufficient

gas (LNG).

for the number of employees within

the tank.

101.   It is recognized that ad-

vancement in engineering and im-

provements in equipment may re-

sult in equipment fabrication methods

and operating practices which differ

from those specifically called for in

this Standard.   Yet, such deviations

or improvements may provide desirable

safety and compatible operation

meeting the intent of this Standard.

Such deviations may be accepted when

the authority having jurisdiction has

made a special investigation of all

factors and, based on sound experience

and engineering judgment, concludes

that the proposed deviations meet the

intent of this Standard.

Text of Standard Allegedly

violated.   [Tetco, Cryogenics]

29 CFR §   1910.37(n)

921.   The planning of effective fire

and leak control measures shall be

(2) Fire alarm signaling equipment

coordinated with the authority having

shall be restored to service as

jurisdiction and local emergency

promptly as possible after each test

handling agencies, such as fire and

or alarm, and shall be kept in nor-

police departments, who are expected

mal condition for operation.   Equipment

to handle such emergencies.

requiring rewinding or replenishing

shall be rewound or replenished as

promptly as possible after each test

or alarm.

[Tetco, Cryogenics, Sinapp]

29 CFR §   1926.20(b)

(b) Accident prevention res-

See subparts 100, 101 above

ponsibilities.   (1) It shall be

the responsibility of the em-

ployer to initiate and maintain

such programs as may be necessary

to comply with this part.

29 CFR §   1926.21(b)

(2) The employer shall in-

102.   In the interest of safety, it

struct each employee in the recogni-

is important that persons engaged

tion and avoidance of unsafe condi-

in handling LNG understand the

tions and the regulations appli-

properties of this product and that

cable to his work environment to

they be thoroughly trained in safe

control or eliminate any hazards or

practices for its handling.

other exposure to illness or

injury.

29 CFR §   1926.21(b)

94.   Personnel Safety

(6)(i) All employees required

to enter into confined or enclosed

940.   Personnel shall be advised of

spaces shall be instructed as to

the serious danger from frostbite

the nature of the hazards involved,

which can result upon contact with

the necessary precautions to be

LNG or cold refrigerants

taken, and in the use of protective

and emergency equipment required.

9400.   Suitable protective clothing

The employer shall comply with any

and equipment shall be available.

specific regulations that apply to

work in dangerous or potentially

dangerous areas.

29 CFR §   1926.24 Fire protection

921.   The planning of effective fire

and prevention.

and leak control measures shall be

coordinated with the authority having

The employer shall be responsi-

jurisdiction and local emergency

ble for the development and main-

handling agencies, such as fire and

tenance of an effective fire pro-

police departments, who are expected

tection and prevention program at

to handle such emergencies.

the job site throughout all phases

of the construction, repair, al-

922.   Normally, gas fires (including

teration, or demolition work.   The

LNG) should not be extinguished until

employer shall ensure the availa-

the source can be shut off.   However,

bility of the fire protection and

portable fire extinguishers suitable

suppression equipment required by

for gas fires, preferably of the dry

Subpart F of this part.

chemical type, shall be available at

strategic locations within an LNG

facility and on tank vehicles.

29 CFR §   1926.404(b)

75.   Electrical Equipment

(b) All components and utiliza-

750.   Electrical equipment and

tion equipment used in a hazardous

wiring shall be of the type

location shall be chosen from among

specified by and shall be installed

those listed by a nationally recog-

in accordance with the National

nized testing laboratory, such as

Electrical Code, NFPA No. 70.

Underwriters' Laboratories, Inc.,

or Factory Mutual Engineering Corp.,

except custom-make components and

utilization equipment.

76.   Electrical Grounding and Bonding

760.   General

7600.   Electrical grounding and

bonding shall be provided as required

by 540 and 6130 of NFPA No. 77, Static

Electrcity, and NFPA No. 70, National

Electrical Code.

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* See footnote 4 of the decision.

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