Inputs Monitor Editor Davis Michaelsen adds his perspective into the happenings of the inputs markets.
The Fertilizer is Falling, The Fertilizer is Falling!
Jun 28, 2013
Senator Barbara Boxer had her day in court with the EPA and the U.S. Chemical Safety Board yesterday and the Senator did little to prove that the management at the West, Texas fertilizer station had done anything wrong. The national media response to the blast has been to overstate the dangers of solid ammonium nitrate and, indeed, all forms of fertilizer. These chicken littles are doing the industry more harm than good and while well intentioned enough -- all they want to do is keep explosions from happening -- in the case of West, it has been hard to nail down an actual crime.
If anything, the hearing was an indictment of government agency oversight. Remember, dry ammonium nitrate does not count as an 'extreme hazard' according to the EPA and the U.S. Chemical Safety Board. Sam Mannan, director of the Mary Kay O’Connor Process Safety Center at Texas A&M University told the AP the West disaster could have been avoided if the U.S. Occupational Safety and Health Administration had enforced its regulations on the storage of solid ammonium nitrate.
The management at West did have an appropriate risk management plan in place as required by law, but only in reference to the risk of anhydrous ammonia leaks. Ammonium nitrate in its solid form was not required to be part of the firm's risk management plan since solid AN does not qualify by the fed's own rules as an extreme hazard.
Boxer's hearing on June 27 made a few observations of note that may exonerate the owners and managers of the facility, but these same observations could lead to increased regulation which ALWAYS leads to increased cost and headache for end users and suppliers.
The first observation was that the storage facility at West did not have a sprinkler system in place. But no government agency requires sprinklers systems at locations like the West facility. In addition, the ammonium nitrate had been stored in a wooden building near a stash of organic seed. Ironic that in the denomization of fertilizer, organic seed is thrown under the bus as a contributor to the fire that led to the explosion. When Senate inquiries are reduced to castigating organic seed rather than ammonium nitrate, it is easy to see how the conversation has gotten completely out of hand.
The truth is, if anyone is to fault on this it is the government agencies who failed to require regulation of solid AN. Senator Boxer is looking for a cat to hang and coming up with nothing. The hearings also lumped the Geismar, LA olefin plant explosion that claimed two lives in with the West tragedy. As though fertilizer was also responsible for petroleum based explosions in neighboring states.
Now add last week's story about an Indiana grain and fertilizer facility that experienced an explosion. Initial reports from law enforcement and even from a trusted news source were that a 'fertilizer plant' had exploded and one more lay dead as a result. The next day, the reports of more deadly fertilizer were amended to note that it was a grain dust explosion that raised the alarm, not fertilizer.
Fertilizer regulators, the EPA and the U.S. Chemical Safety Board have some tough questions to answer. With lawsuits aimed at the ownership and parent companies of the West, TX fertilizer depot, federal regulatory failures are too glaring to be ignored. While the blame of the tragedy likely rests squarely in the category of a horrible accident, not criminal negligence, Senators and agencies need scape goats. As these chicken littles scramble to shift the blame first to ammonium nitrate -- stored as it was in solid form is not a qualified hazard, by law -- then to the lack of sprinklers -- not required by law -- then to the nearby organic seed, the truth of the matter becomes more clear.
Senator Boxer's clucking that the sky is falling is less and less likely to be heard as this debate rolls on. Accidents do happen in this and the petroleum industry -- and in every other occupation since the beginning of time. I do not mean to downplay the sacrifices of the brave first responders in West who lost their lives, nor do I mean to trivialize the devastation to the town of West. The fact that an Indiana man first reported to have been killed by fertilizer actually lost his life as a result of grain dust does nothing to make that family or his fellow employees feel any better. But if Senator Boxer and the EPA are looking to point fingers, they would do well to first look at the holes in their own system.
If solid ammonium nitrate were classified by EPA as an 'extreme hazard', all indications are that the West fertilizer company would have complied. If West had been in violation of law, it certainly would have come out by now. But the fact that West does have a risk management strategy in place for extreme hazard, anhydrous ammonia demonstrates their intent to comply. The fact that government agencies do not regulate the storage of solid ammonium nitrate does not constitute a crime on the part of the West storage facility but, rather, a non-issue legally until the Chemical Safety Board and EPA can prove otherwise.
So far, inquiries into the West, TX explosion have only served to prove that the sky is not falling, and that if the government wants to accuse fertilizer retailers of lax oversight, it had better come to the table with more than just accusations, mischaracterisations and fear-mongering.
"So all three of them run on and on until they meet Foxey Loxey. 'Where are you going?' asks Foxey Loxey. 'The sky is falling and we are going to the lion to tell him about it,' says Ducky Lucky. 'Do you know where he lives?' asks the fox. 'I don't,' says Chicken Little. 'I don't,' says Henny Penny. 'I don't,' says Ducky Lucky.'
'I do,' says Foxey Loxey. 'Come with me and I can show you the way.' He walks on and on until he comes to his den. 'Come right in,' says Foxey Loxey. They all go in, but they never, never come out again." (excerpt from Chicken Little)
Photo credit: chrisjfry / Foter.com / CC BY-NC-ND