Firm Pays $3M to Settle |Ammonia Release Claim

(CN) - Millard Refrigerated Services will pay $3 million to settle claims over an airborne release of ammonia from its Alabama facility in 2010 that sickened 152 people responding to the BP oil spill.

In a complaint filed on Friday, along with the motion for settlement, the U.S. Environmental Protection Agency and Department of Justice claim that on August 23, 2010 about 32,000 pounds of anhydrous ammonia was released from Millard's Theodore, Alabama, facility after refrigeration equipment malfunctioned.

The release itself was a violation of the Clean Air Act, the agencies said. More troubling at the time however was the fact exposure to high concentrations of anhydrous ammonia can be lethal.

According to the complaint, the travelled directly over a site where more than 800 people were working on decontaminating ships responding to the BP oil spill in the Gulf of Mexico.

The Mobile, Alabama, Emergency Management Agency ordered an evacuation of the surrounding area and a one mile shelter in place situation following the ammonia release. In all, 152 people working at the site and on ships were treated for symptoms of ammonia exposure at hospitals in the Mobile area, and four of them were admitted into intensive care units.

One Millard employee sustained injuries after briefly losing consciousness from ammonia inhalation, the agencies said.

The EPA said that during a subsequent investigation of the incident, it found that Millard failed to adequately address a well-known risk for ammonia production systems called hydraulic shock, which can cause catastrophic equipment failures. These failures can lead to hazardous releases of anhydrous ammonia.

The company's failure to address this risk, in addition to other deficiencies in its production and safety systems, amounted to 37 distinct violations of the Clean Air Act's Risk Management Program and General Duty Clause, the agency said.

These requirements compel companies that store or use potentially-hazardous substances like ammonia to identify the hazards posed by their operation, design and maintain a safe facility, and minimize the consequences of any releases that might occur.

The company's failure to immediately report a release of anhydrous ammonia above the reportable quantity to the National Response Center also amounted in a violation of the Community Right-to-Know Act and Comprehensive Environmental Response, Compensation, and Liability Act, the agency's said.

The EPA said it also discovered that Millard had two prior smaller ammonia releases caused by hydraulic shock, which should have signaled a need to take steps to prevent a catastrophic release like the one that occurred at the Theodore warehouse. Millard later sold the warehouse facility, which is no longer in operation.

The settlement was approved by Chief U.S. District Judge William Steele of the Mobile, Alabama Federal Court.

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