There have recently been several reports of releases of ethanol and denaturant at ethanol plants around the country. Given the large increase in ethanol production, there may be more spills unless the industry reacts. While I am not offering an excuse for these spills, I can offer some general insights based on what I know about several of the spills and what the industry can do to help prevent further spills.

From what I have seen, most of these spills are occurring during transfer operations of ethanol from storage tanks to railroad tank cars or from tanker trucks or rail cars delivering denaturant (usually gasoline) to ethanol plants. That the spills are generally not occurring from on-site storage or during ethanol production testifies to the safe design and operation of these plants and the success of Spill Prevention Control and Countermeasures Plans and tightened engineering standards for storage tanks.

One explanation for the recent increase in reported spills is the sheer increase in ethanol production in the United States. Production of ethanol has increased four-fold from 1.7 billion gallons in 1999 to 7.2 billion gallons in 2008. This increase in ethanol production is matched by a proportionate increase in the handling of denaturant by ethanol plants. This means that the industry has had to hire, train, and supervise a large number of new employees to move ethanol from the refinery to tanker cars. In fact, if you assume that an average railroad tanker car holds 30,000 gallons of ethanol, the industry must go through nearly a quarter of a million transfer operations each year. If those operations have a 99.99% success rate then there will still be 24 spills each year across the country. A 99.9% success rate would create 240 spills per year. There is obviously little room for error as neither the public nor the regulators will tolerate such a large number of spills on an annual basis. Even a few high-profile spills involving fires, destruction of habitat, streams or ponds will trigger a request for additional regulation and oversight. With ethanol production projected to nearly double over the next several years, this industry has a clear need to tighten its own procedures and training in order to reduce the number of spills and avoid new regulatory oversight.

Not all of these ethanol-related spills are solely attributable to the plants and their employees. There have been a number of spills and fires involving ethanol caused by railroad derailments and accidents. There is little that the ethanol industry can do to prevent such accidents. Another related problem is the fact that individual railroad tank cars are not under the continuous control of the ethanol plant. Once the car leaves the plant for its destination, usually a refinery or fuel distribution point, the plant is powerless if the employees at that distant location do not properly shut the valves once the tanker car is emptied. If those valves are not properly inspected when they arrive back at the ethanol plant, fuel can be released as the tanks are filled. Likewise, valves and seals can work loose or fail over time, a problem that is likely to increase as the massive fleet of railroad tank cars built to handle ethanol begins to age. In fact, the age of the railroad tanker cars has been a factor in a number of spills that I have worked on.

Not all spills can be blamed on third parties, however. Failure to oversee filling operations, failure to train personnel, and the presence of unfamiliar valves on older railroad tank cars can and have led to inadvertent releases. Constant and well-conceived training and responsible oversight of transfer operations is needed. The Iowa Department of Natural Resources is once again offering the Iowa TRANSCAER Ethanol Training Tour to help local communities respond to hazardous materials transportation emergencies. While emergency response training is important, training to prevent spills cannot be overlooked.

Why is it important for this industry to prevent spills? The most obvious reason is that a major spill of denaturant or gasoline is a huge safety hazard. It does not take much to imagine what can happen if 30,000 gallons of ethanol or denaturant catches fire. Also, both ethanol and gasoline can cause great harm to the environment if released to rivers and lakes.

Another reason that it is important to avoid spills is that the regulatory burden on a company can be tremendous. Multiple agencies can be involved any time that a spill occurs. In addition to state agencies, the EPA can also get involved. In fact, I have noticed a recent increase in oversight activities by the EPA. The EPA is conducting its own investigation into spills already investigated by state agencies. One continuing focus of attention by the EPA is the requirement that companies report spills to the National Response Center (1-800-424-8802) within fifteen minutes. Failure to make a timely report will almost always result in a penalty. Whether recent EPA investigations will result in either over-filing or additional federal penalties or actions remains to be seen. Another federal agency that can become involved in spill investigations involving rail cars is the Federal Railroad Administration (“FRA”), a division of the U.S. Department of Transportation. The FRA has opened a number of investigations into ethanol spills involving railroad cars. And if there were not enough federal agencies getting involved, the Department of Homeland Security has recently issued final regulations creating comprehensive new reporting, recordkeeping, and site security requirements concerning storage and use of potentially hazardous chemicals.

— James Pray