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US Finalizes Settlement with Millard Refrigerated Services over Ammonia Release

Millard will pay a $3 million penalty

WASHINGTON — The U.S. Environmental Protection Agency (EPA) and the U.S. Department of Justice (DOJ) have announced a final settlement with Millard Refrigerated Services that resolves alleged violations of the Clean Air Act, Emergency Planning and Community Right-to-Know Act, and Comprehensive Environmental Response, Compensation, and Liability Act for an airborne release of ammonia from Millard’s Theodore, Alabama, facility in 2010. Millard will pay a $3 million penalty for the release that sickened 152 people.

“EPA is serious about holding companies that threaten people’s health and safety accountable,” said Cynthia Giles, assistant administrator for EPA’s Office of Enforcement and Compliance Assurance. “It’s imperative that companies that use and store potentially-hazardous materials like ammonia ensure their operations do not pose a health risk to their employees or the public.”

“The release of ammonia created significant health problems,” said Assistant Attorney General John C. Cruden for the Environment and Natural Resources Division. “This settlement underscores how lapses in environmental management can have serious consequences, and today we are holding Millard accountable for this failure to ensure the safety of its workers and the surrounding community.”

On Aug. 23, 2010, the Millard Refrigerated Service warehouse in Theodore released approximately 32,000 pounds of anhydrous ammonia into the air after refrigeration equipment malfunctioned. The ammonia 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. A total of 152 people working at the site and on ships were treated for symptoms of ammonia exposure at hospitals in the Mobile area, four of whom were admitted into intensive care units. One Millard employee sustained injuries after briefly losing consciousness from ammonia inhalation.

During its investigation of the warehouse after the ammonia release, EPA found that Millard failed to adequately address a well-known risk for ammonia systems called hydraulic shock, which can cause catastrophic equipment failures. These failures can lead to hazardous releases of anhydrous ammonia. The agency said 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. 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 amounted to one CERCLA violation. The company’s failure to immediately report a release of anhydrous ammonia to the local and state emergency planning commissions and to file a follow-up reports for two releases amounted to three EPCRA violations.

EPA 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 sold the Theodore warehouse facility, which is no longer in operation.

The settlement was entered in the District Court in Mobile, Alabama.

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