Beveridge & Diamond
 

More Enforcement of Section 112(r) of the Clean Air Act

Beveridge & Diamond, P.C., October 4, 2012

On September 28, 2012, a dairy processing company in Puerto Rico with a history of anhydrous ammonia releases, Suiza Dairy Corporation, agreed to pay a $275,000 penalty, and undertake $3.75 million in facility upgrades and other improvements.  This settlement resolved violations of section 112(r)(1) of the Clean Air Act, known as the general duty clause, and EPA’s related Risk Management Program regulations under section 112(r)(7) of the Clean Air Act.  EPA has aggressively enforced the general duty clause, which gives EPA broad authority to require companies handling extremely hazardous chemicals to institute additional controls in order to prevent accidental releases.

Legal Background

The general duty clause (GDC) and EPA’s Risk Management Program (RMP) requirements originated in the Clean Air Act Amendments of 1990.  Both aim to prevent accidental releases of hazardous chemicals from stationary sources.  The GDC is explicitly modeled on the general duty clause in section 5(a)(1) of the Occupational Safety and Health Act of 1970.  It provides:

The owners and operators of stationary sources producing, processing, handling or storing [extremely hazardous substances] have a general duty in the same manner and to the same extent as section 654, title 29 of the United States Code, to identify hazards which may result from such releases using appropriate hazard assessment techniques, to design and maintain a safe facility taking such steps as are necessary to prevent releases, and to minimize the consequences of accidental releases which do occur.

The RMP regulations, 40 C.F.R. Part 68, are modeled in part on OSHA’s Process Safety Management standard, 29 C.F.R. § 1910.119.  They require facilities that exceed threshold quantities of listed regulated substances to develop and implement a risk management plan that addresses a variety of topics, including worker notification, procedures for handling an accidental release, and coordination with local emergency agencies, assessments of risks to neighboring communities, and periodic audits.  RMP requirements are typically included in a facility’s Title V operating permit, which requires an annual certification of compliance with all permit terms. 

The Suiza Settlement

Suiza operates dairy processing and manufacturing facilities in Rio Piedras and Aguadilla, Puerto Rico.  As part of its operations, Suiza handles, stores, and uses large quantities of anhydrous ammonia, a regulated toxic substance.  In July 2005 and May 2007, there were accidental releases of anhydrous ammonia from the Rio Piedras Facility into the ambient air.  Approximately 1,146 pounds of anhydrous ammonia were released during the May 2007 incident alone, and as many as 14 residents in the nearby community required medical attention as a result of that release, and 9 of these required an overnight hospital stay.

EPA inspected the Rio Piedras and Aguadilla facilities following the releases and complaints by nearby residents about ammonia vapors.  EPA identified several hazardous conditions, including corrosion on the anhydrous ammonia transfer lines, inadequate alarms, improper ventilation, improper labeling of valves and equipment, the presence of fire and explosion hazards, and inadequate emergency response equipment.  It determined that Suiza had failed to comply with the GDC and RMP.  In September 2007, EPA issued administrative orders requiring Suiza to address the hazards and come into compliance with the CAA’s safety requirements at both facilities.

In May 2009, EPA again inspected both facilities to determine the status of their compliance with the GDC, RMP, and administrative orders.  EPA determined that there were over 40 violations.  In particular, it found that Suiza was violating the GDC by failing to identify hazards, design and maintain a safe facility, and minimize the consequences of accidental releases at both facilities, and that Suiza was violating the RMP requirements by failing to submit a risk management plan for the Rio Piedras facility in a timely manner.

On September 28, 2012, the Environment and Natural Resources Division of the Justice Department filed a complaint on behalf of EPA against Suiza in the U.S. District Court for the District of Puerto Rico.  It alleged violations of the GDC, RMP, and the administrative orders, and sought daily penalties up to the statutory maximums for each violation.  (For a copy, click here.)  On the same day, a draft consent agreement was filed with the court.  Under that draft consent decree, Suiza will pay a $275,000 fine and undertake approximately $3.75 million of compliance measures.  The compliance measures include improvement of the refrigeration systems at both facilities, reduction of the amount of anhydrous ammonia used in the refrigeration process at the facilities, the installation of an enhanced alarm system at the Aguadilla facility, and the implementation of community emergency drills in the communities located near the facilities.  The Justice Department will soon solicit public comments on the draft consent agreement.  (For a copy, click here.)

Broad Enforcement of Section 112(r)

The Suiza settlement is another in a series of significant enforcement actions brought under the GDC and RMP, and reflects EPA’s focus on circumstances where there are repeated violations of GDC or RMP, as well as harm to the local community.  Previous major actions include:

  • In 2011, a $1.3 million settlement with C.A.I., Inc. of Danvers, Massachusetts following a 2006 explosion and chemical fire that destroyed a 12,000 square foot building, damaged 94 homes and 6 businesses. 
  • In 2010, a $15 million settlement with BP Products North America Inc. related to fires and a leak at BP’s Texas City refinery.
  • In 2008, a guilty plea to a felony charge for violation of RMP and a $100,000 fine by ice cream manufacturer Hershey Creamery Company.  (For a client alert on this case, click here.)
  •  In 2007, a guilty plea to a felony charge and a criminal fine of more than $60 million for BP Products North America’s violation of RMP following a 2005 explosion at its Texas City refinery.

EPA has also brought numerous administrative enforcement actions under section 112(r), including:

  • A 2012 consent agreement with Scully Welding Supply Company, a retail gas facility in Pennsylvania, relating to alleged GDC violations with respect to the handling and storage of Chemolene, methanol, and propane, with penalties of more than $60,000.
  • A 2012 consent agreement with USA Pork Packers, Inc., a food processor in Pennsylvania, following alleged GDC violations in connection with an ammonia release, with penalties of more than $18,000.
  • A 2012 consent agreement with Public Service Company of Colorado alleging RMP violations at a gas plant, with penalties of $50,000.
  • A 2012 consent agreement with Forrest Paint Company alleging RMP violations pertaining to butane and propane, with penalties of $18,000.
  •  A 2011 consent agreement with Chemicals and Solvents, Inc., a Virginia chemical company, relating to alleged GDC violations relating to the handling and storage of acetone, methanol, hydrifin, xylene, alcohols, caustic potash, hydrogen peroxide, and sulfuric acid, with penalties of more than $29,000.
  • A 2011 pending complaint against Nustar Refining, LLC, a Texas refiner, alleging GDC violations following a release of jet fuel and subsequent fire, seeking a penalty of $37,500.

For a printable PDF of this article, please click here.

For more information please contact Mark Duvall at mduvall@bdlaw.com or Jayni Lanham at jlanham@bdlaw.com.

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