Because it is the cheapest and most potent form of nitrogen fertilizer around, he also peddles it to a couple neighboring farmers, who come down the road to collect it in two-ton “nurse tanks” for application on their own land.
They all know it’s toxic. While not an explosive, improperly released fumes can choke a person to death. But “running the pencil to it,” as Krackau put it, they also know they’re saving $15 to $20 per acre over using less concentrated liquid nitrogen. And he said the farmers he sells to have been around the chemical their whole lives and know how to handle it.
But like thousands of other small-time anhydrous dealers across America, Krackau, 52, is thinking of shutting down. He just got hit with a $25,000 fine after a Department of Transportation inspector saw one of his neighbors transporting about $900 worth of anhydrous from Krackau’s farm in a nurse tank that lacked the proper markings, breaking rules Krackau said he didn’t know existed.
He was planning on investing about $7,000 to bring the tanks up to standard. But by the end of September, he’ll face a whole new set of regulations, this time by the Department of Labor.
“They won’t be able to use it down here,” Krackau said. “It’s getting that everybody’s coming after you, pay this, pay that. And it’s just not worth it any more.”
The federal government issued the new regulations after the 2013 explosion in West that killed 15 people, including 12 first responders, and destroyed a nursing home, apartment complex, nearby homes and school buildings. It caused an estimated $100 million in damages.
What bothers opponents is that the explosion in West — a town north of Waco on Interstate 35 — was not caused by the anhydrous ammonia stored there, but instead by ammonium nitrate detonated in what has been deemed an arson.
“Which is a little puzzling,” said Jimmy Schulz of SureGrow Ag in Wharton. “You know, if they're not even up to speed on what happened in West, what makes them the authority on anything else?”
In a July 2015 memo, the department’s Occupational Safety and Health Administration, or OSHA, revised a 23-year-old definition of “retailers” that are exempt from its process safety management, or PSM, standards on anhydrous. Under the new definition, some 3,800 smaller dealers like Krackau would be considered wholesalers, and like manufacturers will be subject to the regulations.
A bipartisan group of lawmakers that includes the congressman whose district includes West are trying to block funding to implement the revision — which is set to go into effect Oct. 1 — saying compliance costs could run upward of $30,000 in the first year and would potentially put many of those smaller vendors out of business.
Industry critics say the rule change could introduce new hazards by forcing farmers to transport the chemical longer distances and store it themselves. And many are rankled that the changes came as a result of an interpretive memo that they say skirted the usual rule-making procedure of publishing in the Federal Register and allowing for a period of public comment.
The memo came in response to President Obama's August 2013 executive order to improve the safety of industrial facilities following the explosion in West.
OSHA could not comment on the memo or criticisms of it due to pending litigation. But according to OSHA’s published commentary, the old interpretation of retail facilities was meant to exclude those that are low risk because they sold only small amounts of hazardous chemicals.
The West facility stored more than 50,000 pounds of anhydrous ammonia, which was more than five times the threshold quantity to trigger the PSM standard. West was exempted as a retailer from the standard because it sold the chemical directly to farmers.
David Michaels, OSHA’s assistant secretary of labor, has cited EPA data that between 2004 and 2013 more than 80 workers and nine first responders were injured in incidents at agricultural ammonia facilities.
“I am concerned that actions that may eliminate or weaken the protections afforded by implementation of the July 2015 guidance will continue to expose workers, first responders and residents to unnecessary and preventable risks,” Michaels said in a May 6 letter to Congress.
Why anhydrous ammonia?
Anhydrous ammonia is made up of hydrogen and nitrogen, a vital plant nutrient that is rapidly depleted by farming. The widespread use of nitrogen fertilizers such as anhydrous ammonia dates back to the end of World War II, when the government built plants that could produce 1.6 million tons of nitrogen-rich ammonia to make bombs. With the war over, the U.S. was suddenly the global leader in production of very potent fertilizers.
Under high pressure, the gas is compressed into a liquid that when pumped into the soil spreads rapidly in a gaseous form. In Texas, it’s widely used to produce corn, wheat, sorghum and cotton.
Travis Miller, a soil and crop scientist and interim associate director for state operations for the Texas A&M AgriLife Extension Service, said the widespread availability of anhydrous ammonia helped revolutionize U.S. agriculture.
The average yield of corn in the 1950s was about 30 bushels per acre, he said. The average yield today is about 170 bushels an acre, in large part due to the application of nitrogen.
“Anhydrous ammonia is the building block for all forms of nitrogen we use other than what we might get from organic farms like manure or guano,” Miller said. “And if you don’t have nitrogen fertilizers, I would expect (the farmers’) yields would drop by 50 to 60 percent in most of our commodities.”
Farmers who have been struggling to raise yields in what has been a low commodities market would have an even tougher time should suppliers pull out and the cost of the fertilizer becomes prohibitive, he said.
“Most of the farmers are losing money right now,” Miller said. “If they had to pay 50 percent or more for nitrogen, that would be a major blow to them.”
Donnie Dippel, president of the Texas Ag Industries Association, said the memo caught dealers off guard.
“All of a sudden they woke up and decided that no, the retailers were under this plan also,” he said. “That’s backwards from where things usually go. Usually you do the rule changes and then enforce it. You don’t enforce it and then do rules. And that’s what OSHA’s trying to do right now.”
He said some retailers had already dropped anhydrous, not willing to deal with the red tape and costs of the new risk management plans.
“The scary part to me is that when these retailers are going out of business, there’s farmers out there that still need this product,” he said. “And so what happens a lot of times is the farmer will come in and buy stuff from the dealer and he will put it out on his farm. And at that point OSHA or EPA has no control of it any more.”
“There’s no rules for the farmer,” Dippel continued. “So now the farmer — he can be storing it, he can be transporting it, there’s nobody that’s looking at his equipment and the storage tanks ... and he can be right there on the edge of town just like the retailer.”
Backdoor rule-making?
At least two lawsuits were filed by industry groups that said the memo process, which also was used for two other revised interpretations of PSM, amounted to backdoor rule-making.
One, brought by the American Chemistry Council, settled last month with OSHA agreeing to revise a separate memo and push implementation back several months to April 2017.
But that settlement had no effect on the new definition of “retailer,” which is the subject of a lawsuit brought by The Fertilizer Institute, Agricultural Retailers Association, and more than a dozen other entities.
“Picking and choosing who the law applies to effectively amends the law, and is thus a quintessentially legislative action,” according to court documents filed in the lawsuit.
OSHA’s responses have centered on the position that the definition was previously ambiguous and that the agency’s reinterpretation of retailer is a clarification that does not constitute a new rule.
A federal appeals court is expected to make a ruling on the case soon.
In March, 41 members of Congress, including U.S. Rep. Bill Flores, R-Waco, signed a letter urging Oklahoma Republican Tom Cole, chairman of the House Appropriations subcommittee that deals with the Labor Department, and Connecticut Democrat Rosa DeLauro, the ranking member, to cut off funding to implement the changed standards.
“We are concerned that these changes will place a significant time and cost burden on America’s agricultural retailers without providing them and other impacted stakeholders with an adequate opportunity to provide the Agency with input prior to the policy change,” the lawmakers wrote.
OSHA did relent and agree to conduct a formal rule-making process, but did not rescind the memo.
“The regs regarding anhydrous ammonia are the typical way that the Obama regulatory machine has operated in that they go propose a regulation, a set of regulations, in search of a problem that really doesn’t exist,” said Flores, whose district includes West.
The West response
After a long investigation, Bureau of Alcohol, Tobacco, Firearms and Explosives officials concluded that on April 17, 2013, someone set a fire to the seed room of the West Fertilizer Co. According to OSHA’s Chemical Safety Board, the flames detonated about 30 of the up to 60 tons of fertilizer grade ammonium nitrate (FGAN), stored there.
By comparison, Timothy McVeigh used only 2 tons of the chemical to blow up the Alfred P. Murrah Federal Building in downtown Oklahoma City in 1995, leaving 168 people dead and hundreds more injured.
“OSHA efforts to oversee facilities that store and handle FGAN fell short at the time of the incident,” the Chemical Safety Board said of the West explosion, noting that ammonium nitrate was “inadvertently omitted” from the list of chemicals that fall under the PSM standard.
Brian Reuwee, spokesman for the Agricultural Retailers Association, in an email said it was important to note that the anhydrous ammonia (NH3), which is on the list, didn’t ignite in West.
“Although NH3 was on-site, the tanks performed as designed and were some of the few structures left standing at the blast site,” he wrote.
The West explosion set off a flurry of reflection in Washington, D.C., and Austin.
State legislators floated two bills on the handling of ammonium nitrate. One, by Rep. Kyle Kacal, R-College Station, and Sen. Brian Birdwell, R-Granbury, resulted in a new Texas law that requires ammonium nitrate be stored at least 30 feet away from combustible materials. In the case of the West explosion, the seed room was connected to the fertilizer building.
Gov. Greg Abbott has come under fire for a 2014 ruling preventing state officials from releasing information on where the fertilizer is stored, saying only the private facilities themselves could make the information public. The ruling made it nearly impossible for people to find out about any nearby stockpiles of hazardous chemicals.
“Texans deserve to know what kinds of chemicals are being stored in their communities,” Abbott wrote in a July 2014 opinion piece for the San Antonio Express-News. “At the same time, the Texas Legislature is equally concerned about providing terrorists a road map to all facilities in Texas that could be used to build bombs and destroy communities.”
The facilities also are a target for people who cook methamphetamine, a highly addictive illegal drug.
Chemical confusion
During a House hearing on the blast in August 2013, Rep. Patrick Meehan, R-Pennsylvania, said he was discouraged to learn that the Department of Homeland Security didn’t know about the West plant.
During the hearing, Flores said that the problem stemmed from the company’s “failure to comply with existing regulations and the lack of oversight and — and enforcement. It didn't occur from a lack of regulations, it appears.”
“Before Congress or regulatory agencies consider new statutes or rule-making, they should make sure that the ones we have are being properly implemented and adjudicated,” Flores said.
Dippel testified that after the West explosion his phone was ringing off the hook with questions from retail dealers confused about the regulations.
“Texas has an ammonium nitrate law,” he said. “And they're one of the six states that has an ammonium nitrate law which requires that the product be secured. And you cannot ship to a retailer before they have a plan in place with the Feed and Fertilizer Control Service.”
Sean Moulton, director of open government policy at the Center for Effective Government, pointed to a jumble of agencies and rules. Federal and state agencies were aware of different aspects of the West plant but didn’t share their knowledge about the ammonium nitrate.
OSHA hadn’t visited the West facility since 1985, when inspectors levied a $30 fine for a serious violation for storage of anhydrous ammonia.
West recovers
West’s middle and high school students started the school year a few weeks ago in a new campus, which West Mayor Tommy Muska said was yet another step on the return toward normalcy for the small city.
“They’ve been in portable buildings since the explosion,” he said. “It’s a big benchmark. It’s one of the many benchmarks that the city has gone through over the last three and a half years.”
A new school brings new hope that people will buy property and build, he said, no longer discouraged by the idea of their children having to go to a temporary school. Of the 120 destroyed homes, 100 have been rebuilt, he said, with the remainder largely owned by elderly residents who moved to nursing homes or other places.
The nursing home has been back up and running for over a year. The city park was rebuilt thanks to a collaboration of public and private funds. The Dallas Mavericks pitched in with a new basketball court.
A new group of young men has helped rebuild the ranks of the volunteer fire department. The city has implemented new fire codes and is working on zoning, and especially zoning for extraterritorial jurisdiction. The fertilizer plant was outside city limits.
Yet even Muska questioned OSHA’s expanded regulation of anhydrous ammonia.
“I’m not one that would over-regulate the industry,” he said. “We do have a lot of agriculture. Fertilizer plants are needed in the agribusiness, in and around West, in and around the country. And so whatever regulations you put on them are going to be passed along, either to the consumer or farmer or somebody.”
As for ammonium nitrate, Muska pointed to the new state law on storage.
“It may not have gone as far as some people would like, but I do think it did at least bring (storage issues) into the limelight, to the forefront, that there’s a problem with it.”
lbrezosky@express-news.net
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