Re: Feedback to Consultation Paper CER/10/021 on Safety Regulation in the LPG Industry in Ireland Phase 2 Legislation

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1 For the attention of Mr. Eamon Murtagh Gas Safety Manager, Commission for Energy Regulation, The Exchange, Belgard Square North, TALLAGHT, Dublin th March, 2010 Ref: 10A0057 CER Re: Feedback to Consultation Paper CER/10/021 on Safety Regulation in the LPG Industry in Ireland Phase 2 Legislation Dear Mr. Murtagh, This letter is in response to the Consultation Paper (Ref: CER/10/021) issued by CER on February 4 th 2010, Safety Regulation of the Liquefied Petroleum Gas Industry in Ireland Phase 2 Legislation. We would like to thank CER for the opportunity to provide comments and feedback on the proposed new legislation. In May 2009, CER published its Policy Paper Safety Regulation of the LPG Industry in Ireland. This set out a number of recommendations which were broken down into two phases for implementation. The current Consultation Paper is aimed at informing the development of Phase 2, which then involves the development of legislation to provide for the safety regulation of LPG distribution networks, reporting of LPG appliance-related incidents in a domestic setting and the promotion of LPG safety by CER. CER invited comments on the following aspects of the Consultation Paper: (a) The proposals for demarcation between CER and the HSA with respect to lines of responsibility set out in Sections 2.1 to 2.4. (b) CER s analysis of the existing safety gaps and their proposals to address these specific areas, with respect to CER, LPG suppliers and LPG distribution network operators, as set out in Sections 2.1 to 2.4. (c) The appropriateness of the Phase 2 legislative proposals as set out in Section 5.2. Byrne Ó Cléirigh Ltd., 30a Westland Square, Pearse Street, Dublin 2, Ireland. Telephone: (0) Facsimile: (0) Web: Registered in Dublin, Ireland. No Directors: LM Ó Cléirigh, BE, MIE, C Eng, FIEI, FI Mech E. AJ Clarke, BE, C Eng, FIEI. TV Cleary, BE, C Eng, FIEI, F I Chem E. JB Fitzpatrick, FCA. LP Ó Cléirigh, BE, MEngSc, MBA, C Eng, MIEI.

2 Our comments are set out as follows: (a) Demarcation between CER & the HSA The CER proposal, illustrated in Figure 1 of the Consultation Paper, is spelled out in more detail in Sections 2.1 to 2.4, which describe a number of different supply and distribution arrangements. In each case, CER will assume responsibility for safety enforcement downstream from the Emergency Control Valve (ECV) on the tank or cylinders. CER s remit includes the above-and/or below-ground lines connecting the ECV to the customer s premises, any pressure regulating valves or isolation valves on these lines, the internal pipe work within the customer s property and the various LPG burning appliances inside the customer s property. It is our view that the approach as illustrated would provide safety enforcement coverage for all aspects of the LPG industry in Ireland. (b) CER s Analysis of the Safety Gaps CER have identified a number of areas in the LPG supply chain which are not covered by the existing legislation and regulatory regime: LPG installers and LPG installations at domestic, commercial and industrial premises. LPG distribution networks supplied via underground pipe systems. Reporting of LPG appliance-related incidents in a domestic setting. The need for statutory responsibilities to be placed on undertakings to promote the safety of LPG customers and conduct LPG safety campaigns with respect to the safe utilisation of LPG. The shortfalls are identified with respect to the distribution networks and the installations at the customers properties. This seems to be a reasonable finding, as the 2009 Policy Paper (CER/09/082) identified the various regulatory requirements that apply to all elements of the network upstream from this. In addition to proposing a regulatory regime to cover these areas, the document also discusses the role of CER and the industry to educate customers on the risks associated with LPG and the importance of engaging with competent LPG installers for all LPG gas works. The Paper also identifies the importance of establishing a system whereby the LPG suppliers and installers would report LPG related incidents to CER. This could certainly prove to be a very useful means of building up a database of such incidents over time.

3 (c) Appropriateness of Phase 2 Legislative Proposals Scope of Legislation The following definition is proposed for LPG undertakings: i. LPG suppliers who import LPG from outside of Ireland and/or purchase LPG from refineries within Ireland ii. LPG Distribution Network Operators who own and operate LPG distribution networks through which LPG is conveyed to end use customers who are connected to a LPG distribution network The Consultation Paper proposes that CER would operate as a licensing authority for these LPG undertakings, on the basis that a licensing regime is the most appropriate approach to enforce the safety regulation of LPG undertakings. The document then goes on to describe the proposed powers that CER would have under this legislation. The main comment we would make here is that, based on the definition put forward for LPG undertakings, the proposed legislation would result in some overlap of the roles of CER and the HSA. The potential problem is that, based on the current wording, it may be argued that operators of shore terminals or re-distribution terminals that are already covered by the Seveso Regulations would come under the definition of LPG suppliers given above. This would mean that these facilities would then operate under two separate regulatory regimes which both cover similar aspects of their activities. This could lead to unnecessary duplication of effort on their part without giving rise to any appreciable improvement in safety and does not appear to be entirely in keeping with the proposed demarcation of safety responsibilities illustrated in Figure 1, referred to earlier. In this illustration, safety enforcement for LPG suppliers is shown as being the responsibility of the HSA, which would seem to us to be the more logical way in which to approach this. Perhaps the definitions in the Regulations would clarify this and ensure that the new legislation would not apply to facilities that are already covered under the Seveso Regulations. CER s Powers The Consultation Paper proposes a number of powers for CER. These are set out at a reasonably high level and seem to be consistent with what would be required to establish a safety regulatory framework. From the text here it seems clear that the focus of CER s powers will be on LPG pipelines rather than on storage facilities, which is in keeping with the proposed arrangements in Figure 1, referred to earlier.

4 The proposed regulations would enable CER to appoint an LPG Safety Officer whose powers would include, inter alia, inspection of pipelines and fittings, review of documentation and records and issuing of Improvement Directions, Improvement Notices or Prohibition Notices to LPG undertakings. It is presumably envisaged that a Safety Officer would be assigned to a specific LPG undertaking to ensure that they comply with the Regulations, in the same way that the HSA would assign an inspector to a Seveso establishment and the EPA would assign a designated inspector to an IPPC licensed activity. It is not clear from this document but we would expect that guidance to be given, either in the Regulations or in a separate guidance document published by CER, to allow LPG undertakings to understand the roles and powers of the Safety Officer and also to assist them in meeting their own obligations under the Regulations. Promotion of Safety The consultation document also proposes that CER will have responsibility to promote the safety of LPG customers and the general public. It states that the LPG undertakings may also have a role to regularly advise and provide information to their customers and to the public. It appears from the text that it will be the responsibility of the LPG undertakings to actually provide the information to the public while the role of CER will be to ensure that this is done. There are no indications given on how frequently the LPG undertakings would be required to review what is considered to be best practice and to update this information to customers and to the public. Reporting Incidents It is also envisaged that LPG undertakings would be required to report any LPG-related incidents to CER. We presume that the Regulations will define what is meant by a notifiable incident in this context. This is a good idea and CER will presumably use this information to develop and maintain an up to date database of such incidents across the country. Such a database could form a similar role to the incident database proposed by the Process Safety Leadership Group in the latest report into the Buncefield Incident. The PSLG plan is that this database will be shared across the entire sector, subject to data protection and other legal requirements. We would hope that CER would make similar provisions to share the incident database. CER may also want to consider drawing up a template or at least providing some headings under which the incidents should be reported, e.g. the cause or initiating event, the quantity of gas released, whether or not it ignited, extent of damage, injuries, etc.

5 Licensing Regime There are two high level options described: Option 1: LPG suppliers and distribution network operators would be separately licensed, with no provisions to prevent the same legal entity from holding both a LPG supply and LPG distribution licence. Option 2: A single licence for an LPG undertaking would be issued and appropriate licence conditions would be included depending on the activities being undertaken. Regardless of which option is chosen, the arrangements would be broadly similar. The licence would impose various conditions on the LPG undertaking to ensure that it meets its various requirements under the Regulations. CER s preliminary view is that a single licence, as described in Option 2, would be preferable and this seems to be a reasonable view to us. Yours sincerely, Thomas Leonard Chartered Engineer