Effect of new OSHA regulation on construction, oil and gas industries remains unclear

New OSHA regulations could have an economic impact on construction and fracking companies.

New OSHA regulations could have an economic impact on construction and fracking companies.

Following the release of the U.S. Occupational Safety and Health Administration's new regulations on worker exposure to silica, industry leaders and safety officials are taking a look at how the new guidelines will affect the construction and oil and gas industries.

Crystalline silica is a material found in the earth's crust, most commonly in the form of quartz. Silica is present in many building materials, including sand, stone, rock, concrete, brick, block and mortar. As OSHA explained, exposure to respirable crystalline silica occurs during cutting, sawing, drilling and crushing of construction materials containing silica or when drilling into mineral layers in the ground. It also occurs during hydraulic fracturing, also known as fracking.

Silica dust becomes hazardous when its particles are small enough to be inhaled. Once silica penetrates the lungs, it may cause fatal lung diseases, including silicosis and lung cancer. Silica exposure has also been linked to kidney disease.

As The New York Times reported, federal safety officials have been urging a strengthening of OSHA's silica standard since the 1970s. Currently, various industries have exposure limits ranging from 100 to 250 micrograms per cubic meter of air over eight hours. The new standard reduces exposure to 50 micrograms across all sectors. The updates also require employers to keep records of employee exposure and provide medical examinations every three years for workers who must wear respirators for at least 30 days a year due to high exposure risk.

"Silica dust becomes hazardous when its particles are small enough to be inhaled."

The regulation is expected to affect an estimated 2.3 million workers, with about 2 million employed in the construction field. Speaking with the Times, U.S. Labor Secretary Thomas E. Perez said the update was a long time coming.

"This is no different than the story of asbestos," Perez said. "After 40 years, the political will has finally caught up with the science."

Debate surrounds the potential costs of compliance
Although the OSHA changes bring the standard in line with decades-old National Institute for Occupational Safety and Health recommendations, several industry groups have argued the update is unnecessary. Industry leaders pointed out that many sectors are already using voluntary measures including respirators that block silica dust or vacuums that remove it from the air. Groups including the National Industrial Sand Association have argued OSHA has not shown sufficient evidence that reducing the exposure limit from the 100 micrograms per cubic meter previously used by some sectors to the new 50 micrograms limit has any significant health benefits.

As Rigzone magazine reported, The Independent Petroleum Association of America also criticized OSHA for not convening a small business advocacy review panel for upstream oil and gas before issuing the final rule. According to IPAA Executive Vice President Lee Fuller, this makes it more difficult for the industry to know how the changes will affect businesses financially.

"The purpose of the panel is to examine costs, impacts and possible alternatives to minimize the adverse impacts regulations can have on small businesses," Fuller said in a statement. "Ideally, one of the results of such a review would be a better understanding of the cost impacts and potential job losses, which might result from today's rule."

"Industry groups say the update may cause financial strain on small and large businesses."

Both the IPAA and the American Petroleum Institute had previously filed comments with the Labor Department in February 2014, stating the proposed update was a "burdensome rule" that would cause financial strain on small and large businesses within the oil and gas industry.

While the economic costs of compliance remain to be seen, affected industries will have some time to adapt to the changes. As Bloomberg BNA reported, the new standard goes into effect on June 23, but OSHA is granting up to five years for employers to make the necessary changes. The compliance deadline for the construction industry is June 23, 2017, and the deadline for general industry and maritime is June 23, 2018. Fracking operations were given the most generous deadline: June 23, 2021.

However, as Bloomberg noted, it is important for employers to come into compliance in time to meet these deadlines. As most OSHA updates only allow a couple months lead time for industries to adapt, the delayed deadlines granted for the silica exposure standard are somewhat rare – making it highly unlikely industries will receive any extension beyond these dates.