Appeals Court Orders EPA to Enforce Amended RMP; Overturns Trump Administration’s Delays

The Trump administration has suffered another setback in its effort to roll back or delay Obama-era EPA regulations. A federal appeals court in Washington, D.C., on Aug. 17 overturned EPA’s decision to delay the enforcement of its amended Risk Management Program (RMP), which was drafted in response to the West Fertilizer Co. explosion.

The amended RMP will now go into effect immediately for all chemical facilities that fall under the RMP’s Program 3 classification. It contains a number of provisions that were strongly opposed by chemical industry trade groups (GM April 22; May 27, 2016), including The Fertilizer Institute (TFI) and the Agricultural Retailers Association (ARA).

These provision include increasing the frequency and scope of “independent third-party compliance audits” while narrowing the pool of eligible auditors; requiring “root cause investigations” for chemical incidents and “near misses;” requiring companies to evaluate the feasibility of adopting inherently safer technologies (IST) as part of their process hazard analyses; enhancing coordination with local emergency response organizations; and enhancing public information sharing.

EPA previously estimated that some 10,628 facilities nationwide will be impacted by the amended RMP, including those that store more than 10,000 pounds of anhydrous ammonia.

The ruling was hailed by environmental groups and a number of lawmakers. “This decision means that people living near industrial facilities and those who respond to chemical accidents will have the stronger protections they deserve,” Air Alliance Houston Executive Director Bakeyah Nelson said in an Aug. 17 press release.

Sens. Cory Booker (D-N.J.) and Tom Carper (D-Del.) said in an August letter to EPA that the amended RMP “will save lives and create a safer working environment” for facility workers, first responders, and communities located near chemical facilities. “These constituencies deserve to live, raise their families, and work in a community that is safe from chemical disasters,” the letter said.

The amended RMP has had a bumpy ride since its January 2017 rollout. Originally slated to take effect in March 2017, EPA under Scott Pruitt’s leadership placed a 90-day hold on the rule (GM March 17, 2017) after a coalition of industry groups petitioned for a stay, arguing that the rule required facilities to publicize sensitive information about covered processes, and that stakeholders hadn’t had sufficient opportunity to comment.

EPA then proposed a two-year delay on the rule (GM April 14, 2017), pushing the effective date back to Feb. 19, 2019, so that EPA could have more time to initiate a new administrative process to solicit comments on modification to the rule. TFI at that time (GM April 21; May 26, 2017) said it supported the extension, and called on EPA “to reexamine several parts of the RMP proposal that will have unintended security and emergency response consequences.”

Earlier this year, Pruitt released another proposal to rescind several provisions of the amended RMP (GM May 25, p. 27), including those related to safer technology and alternatives analyses, third-party audits, incident investigations, information availability, and “several other minor regulatory changes.” In addition, EPA proposed to modify amendments relating to local emergency response coordination and notification.

In response, however, a coalition of environmental groups, as well as attorneys general from 11 states, filed a lawsuit in July challenging the delay. In its Aug. 17 ruling to vacate the delay, the U.S. Court of Appeals for the District of Columbia described the rule’s delay as “arbitrary and capricious,” and said it “makes a mockery of the statute.”

“By delaying the effective date, EPA has delayed compliance, reduced or eliminated the lead-up time to achieve the compliance that EPA had earlier found necessary, and thus has delayed life-saving protections,” the ruling said. “EPA may not employ delay tactics to effectively repeal a final rule while sidestepping the statutorily mandated process for revising or repealing that rule on the merits.”

The RMP ruling was viewed by many pundits as the third in a series of recent setbacks for an administration seeking to reduce the regulatory burden on industry. The ruling came just one day after a federal court in South Carolina overturned the Trump Administration’s attempt to delay the WOTUS rule (GM Aug. 24, p. 1), and barely a week after a federal appeals court ordered EPA to ban all remaining uses of the pesticide chlorpyrifos (GM Aug. 10, p. 33).

The Agricultural Retailers Association (ARA) told Green Markets on Aug. 29 that it commented in favor of the revisions that EPA was attempting to make to the amended RMP, and “disagrees with the court decision to overturn them instead of allowing the rulemaking process to run its course.”

It was not clear what the next legal maneuver might be for those opposed to the amended RMP. The EPA proposal in May to rescind portions of the amended RMP is still going through the rulemaking process, and is reportedly unaffected by the decision.

On Aug. 21, a letter was submitted to acting EPA Administrator Andrew Wheeler by former National Security Council staff member David Halperin and retired U.S. Army generals Russel L. Honoré and Randy Manner voicing strong support for the amended RMP and opposition to any weakened version. The letter repeatedly referenced the 2013 West Fertilizer explosion.

“The American people need more, not less, protection from chemical disasters, so we urge you to cancel this rule and instead strengthen safety measures,” the letter said. “To protect our national security, EPA must change course.”

The Andersons Inc. – Management Brief

The Andersons Inc., Maumee, Ohio, named Stephen F. Dowdle to the company’s board of directors, effective Sept. 1, 2018.

“We are looking forward to the contributions Stephen will bring to our board,” said Chairman Mike Anderson. “He offers a wealth of business and agronomy knowledge from his more than 30 years in the plant nutrient industry.”

Dowdle is the former president of sales for Potash Corp. of Saskatchewan Inc., which merged with Agrium Inc. to form Nutrien Ltd. in January. During the merger, he served as a senior advisor, providing transition assistance for sales operations. In addition to his experience at PotashCorp, he served 10 years as vice president and managing director for Canpotex Ltd. in Singapore. Dowdle has served on the boards of directors for Canpotex, Sinofert Holdings Ltd., and the International Plant Nutrition Institute.

He holds a bachelor’s degree from Brown University, and earned both his master’s and doctoral degrees in agronomy and soil science from the University of Hawaii.

Arianne Phosphate – Management Brief

Junior miner Arianne Phosphate, Saguenay, Quebec, which is advancing the Lac à Paul project in Quebec’s Saguenay-Lac-Saint-Jean region, has appointed Claude Lafleur, agr, to the board of directors. The company notes that he brings extensive experience in the agribusiness field, having served in senior management positions with several companies. For 16 years he was with Coop fédérée, including eight years as CEO.  He was also CEO of IFFCO Canada, the Canadian subsidiary of Indian Farmers Fertilizer Cooperative Ltd., India’s largest fertilizer manufacturer.

Lafleur is currently a member of Anges Quebec (Quebec Angels) Capital, a fund sponsored by Investissement Québec, Caisse de dépôt et placement du Québec, and Fonds de solidarité FTQ. He continues to sit on several boards, including Desjardins Groupe Assurance.

In conjunction with Lafleur’s appointment, he has been granted 200,000 stock options. Each option entitles the holder to purchase one common share of the company until Aug. 29, 2028, at a price of C$0.41 per share, this being the closing price of the company’s shares on the trading day preceding the date of grant. The options are subject to a three-year vesting period under the plan and the policy, and are also subject to regulatory approval.

Alset Changes Name and CEO

Junior miner Alset Minerals Corp., Vancouver, has changed its name to Organimax Nutrient Corp. Organimax common shares began trading on the TSX Venture Exchange on Aug. 28, and Alset’s were delisted.

The company said the change was made to better reflect the potentially exceptional quality of potassium contained in both the sediments and brines of the company’s salars, or salt-encrusted depressions, located in the Mexican states of Zacatecas and San Luis Potosi. The company also said the asset has the potential to produce sulfate of potash (SOP).

In February, the company engaged SRK Consulting to perform mineral resource estimates on three of its largest salars: La Salada, Santa Clara, and Caliguey. This work is ongoing, and is further being supported by consultants conducting mineralogy and beneficiation test work. In parallel to this program, the company will also be furthering its investigation of the potassium and lithium potential of the salar brines.

The company also announced that Timothy Mosey has agreed to immediately join the board of directors and become interim CEO. Gennen McDowall has stepped down as CEO, president, and director in favor of retirement. The company thanked McDowall for his leadership of the company over the past six months, and said it looks forward to continuing to work with him.

Mosey has over 27 years’ experience in the mining industry, with the past 11 years in the private equity investment space at Resource Capital Funds (RCF) and Traxys. As the managing director of the Traxys Projects investment fund, he was directly responsible for the investment and management of 15 projects around the globe. The company said his career has been focused on technical due diligence and project finance.

Mosey has also worked as a senior engineer with SRK Consulting. He holds a B.S. in Geological Engineering from South Dakota School of Mines and an M.S. in Mining Engineering from the Colorado School of Mines.

The company reports that Gilberto Zapata has resigned from the board. He will remain as country manager in Mexico and a consultant to the company.

The company also announced, subject to the approval of the TSX Venture Exchange, a proposed non-brokered private placement of up to 4 million units at a price of C$0.075 per unit, for gross proceeds of up to $300,000. Each unit shall comprise one common share in the capital of the company and one common share purchase warrant. Each warrant shall entitle the holder to purchase one common share at a price of $0.15 per share at any time within 36 months of the date of issuance. All securities to be issued under this private placement will be subject to a four-month resale restriction.

Brandt Releases Turf App

Brandt, Springfield, Ill., said on Aug. 27 that it has released a second product finder mobile app, this time for the turf marketplace. Available for iOS and Android devices, the Brandt Turf Product Finder app gives users the ability to search more than 200 Brandt, Grigg, and Brandt iHammer U.S. turf products.

The new product follows last year’s release of the Brandt Ag Product Finder app. The app can be downloaded, free, for iOS at https://itunes.apple.com/us/app/brandt-turf-product-finder/id1433979702?mt=8; and for Android at https://play.google.com/store/apps/details?id=co.brandt.turf&hl=en_US.

BHP Jansen Hits Milestone; No Hurry to Make Decision, Says CEO

One shaft at BHP Billiton Ltd.’s giant deposit in Jansen, Sask., reached a depth of 1,005 meters (3,296 feet) on Aug. 18, and the second shaft will reach bottom in the coming days, Giles Hellyer, president of BHP’s Canadian unit, told Bloomberg. He said the move completes a critical excavation phase and is a “very significant” milestone that will unlock capacity options should the Melbourne-based company go ahead with the operation. The progress comes after the miner slowed development on the project following a prolonged slump in fertilizer prices, though the potash market is now in the midst of a rebound.

“Certainly, we have an expectation that markets will come into balance around the mid-to-late 2020s,” said Hellyer, noting that if BHP moves ahead with the Jansen project, it will be operational around the same time. “It’s fair to say the look and feel of the project has changed quite dramatically.”

BHP last year delayed plans to seek board approval for a planned $4.7 billion first phase of the project amid pressure from investors, including activist Elliott Management Corp. The project faces an uncertain future as BHP needs to decide whether to press ahead with development, add a partner, or sell or mothball the mine once the shafts are complete.

In the meantime, BHP has scaled down the project to cut costs and reduce risk, Hellyer said. While Jansen was initially slated to have between 8-10 million mt capacity, it has been reworked to be a “smaller, more nimble” operation, with an initial 4 million mt and the option to expand. The producer will spend about $205 million in fiscal 2018 and another $240 million in fiscal 2019, he said.

“We continue to work on the engineering of the project so that we can improve the returns,” CEO Andrew Mackenzie said on an Aug. 21 conference call. “We’re looking for a partner, which of course could give you early monetization, and we’re watching the market, but not in a hurry to make a decision.”

Russian Mining/Chemical Taxes Flat for Now

The Kremlin backed off a plan for a big tax increase on metal, mining, and chemical companies, in return for company pledges to invest in social projects that serve the nation, according to Bloomberg. Russian First Deputy Prime Minister Anton Siluanov told companies on Aug. 24 that taxes should remain unchanged, resisting a proposal from the President Vladimir Putin’s top economic aide, Andrey Belousov, that higher taxes could generate about 500 billion rubles ($7.5 billion) a year in additional revenue for the state budget. Siluanov, who is also Finance Minister, said that the government and companies will work on joint projects “that would be interesting to both parties.”

Belousov relented, telling reporters that if companies are ready to cooperate, it would be wrong to force them to invest in social projects through higher taxes. His initial proposal would have brought the taxes on metal, mining, and chemical companies in line with those in the oil and gas sector. He had argued that mining and chemical industries aren’t paying taxes on the windfall earnings generated by a rally in commodity prices and weaker ruble.

The Finance Ministry argued, however, that the tax proposals would hurt Russia’s investment climate.

Banks Take Stakes in China’s Lutianhua

Seven Chinese banks have taken stakes in nitrogen producer Lutianhua Group, Luzhou City, Sichuan Province, after the company failed to pay debt on time, according to Yicai Global. Bank of China’s Luzhou Branch will receive 23.5 million Lutianhua Group stocks, a 5.5 percent share, making it the largest shareholder. Others include Agricultural Bank of China, Bank of Chengdu, and Industrial and Commercial Bank.

CF Medicine Hat Optimizing Existing Capacity

While CF Industries Holdings Inc., Deerfield, Ill., is expecting to increase production at its Medicine Hat, Alba., facility, from its current turnaround, it reiterated to the Medicine Hat News that this will come from the optimization of existing capacity and not from additional capital investment or improvements at the facility. CF had earlier indicated its plans to increase production at Medicine Hat so as to take advantage of low natural gas prices.

CF reported on Aug. 8 (GM Aug. 10, p. 25) that it plans to increase ammonia supply at the company’s distribution terminal in Garner, Iowa, utilizing an additional 150,000 st/y from the Medicine Hat plant.

Namhae Fertilizer, Silica Ventures Reported

Namhae Chemical Corp., Seoul, is planning to invest in two new projects – one plant for specialty slow-release fertilizer and one for silica. The projects will be built in the Yeosu National Industrial Complex in Jeollanam-do in southern South Korea, according to a report by Pulse, a Korean business news publication. Both ventures will be with separate, unnamed Tokyo-based companies. The partners will reportedly invest 20 billion won in the fertilizer venture, 30 billion won in silica. The fertilizer is reportedly eyed for Korea, Southeast Asia, Japan, and Australia.

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