Thursday, September 27, 2018

US Nitrogen's Recovery Limited


By Walter F. Roche Jr.

A federal judge has ruled that US Nitrogen can collect no more than $2.2 million and not the more than $30 million claimed from an engineering firm that the Greene County firm hired to design its ammonium nitrate facility.
In a 19-page ruling issued this week, U.S. District Judge Michael L. Brown granted Weatherly Inc.'s motion for partial summary judgment.
In the suit filed in U.S. District Court in Atlanta US Nitrogen claimed that Weatherly's faulty design for the Midway facility forced it to remove and rebuild the concrete foundation holding compressors used in the manufacturing process.
Weatherly responded by citing provisions in the contract between the two firms that set a 15 percent cap on any damages US Nitrogen could recover.
In the ruling Brown noted that US Nitrogen contended that the concrete foundations cracked and could not withstand the dynamic motion of the compressors. In addition the chemical firm charged that certain piping systems designed by Weatherly were "incomplete and erroneous."
Weatherly, however, countered by citing the clause in their contract capping any damages at 15 percent of the original contract or $2.2 million.
Brown ruled that the cap was valid and binding despite US Nitrogen's claim that it was invalid under Georgia law. He concluded that the case cited by US Nitrogen's lawyers did not apply. In that case a third party was involved, but there was no third party involved in the dispute between US Nitrogen and the engineering firm.
"Two sophisticated parties drafted this provision," Brown wrote referring to the damage cap. Nor did it violate public policy, he added.
"The agreement between Weatherly and USN represents a reasonable allocation of risk between these two sophisticated businesses" Brown wrote, adding that the cap was enforceable. "There is no other plausible interpretation of the contract."
Brown also rejected US Nitrogen's claim that the cap should be $3.3 million based on the $20 million ultimately paid to Weatherly. But Brown said the cap provision was based on the original contract price of $14.69 million.
"Both parties scrutinized the language and ultimately approved it," the ruling states. "Weatherly is correct on all accounts," the ruling concludes.
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Tuesday, September 25, 2018

US Nitrogen Claim Disputed by "Partner"


By Walter F. Roche Jr.

A dispute has arisen between US Nitrogen LLC and its partner, Praxair, Inc., over which company is responsible for a violation of a permit issued by the Tennessee Department of Environment and Conservation.
In a letter to TDEC sent last week Praxair's environmental manager Scott Poole charged that it was US Nitrogen and not Praxair that was responsible for the violation cited by TDEC in an Aug. 24 notice.
In a one-page letter to Michelle Owenby, a TDEC director, Poole wrote that "There should be no question that US Nitrogen remains responsibility for any alleged non-compliance with that permit."
The Praxair letter follows a claim by US Nitrogen to TDEC that Praxair was responsible for any violation.
Citing the history of the permit Poole said that despite discussions about a transfer of a construction permit between the two firms a formal transfer has yet to occur.
"US Nitrogen's suggestion that liability for their actions transfers with the permit is without any basis in law or regulation," Poole wrote, adding that "On this basis, US Nitrogen is the appropriate recipient of the Aug. 24 letter from TDEC, not Praxair."
Praxair, which produces liquid carbon dioxide largely for the beverage industry, is located on the same Greene County parcel as US Nitrogen. It receives the chemical from US Nitrogen.
The violation notice was issued following an on-site visit to the Midway facility in July. According to the notice the permit limit on the production of carbon dioxide and greenhouse gases.
Amanda Davis, a TDEC director, wrote that the records showed the company failed to comply with a permit provision limiting the production of carbon dioxide to 90,789 tons per year. In addition the records showed the company exceeded the permit limit for the production of greenhouse gases, the letter Aug. 24 letter stated.
The violation notice also charges that US Nitrogen failed to comply with another permit requirement for monthly data reports on the liquefaction operation.
US Nitrogen manager Andrew Velo subsequently wrote to TDEC that it was Praxair and not US Nitrogen that was responsible for any violations.
Contact: wfrochejr999@gmail.com


Tuesday, September 18, 2018

US Nitrogen Plans New Chemical Operation


By Walter F. Roche Jr.

US Nitrogen, a subsidiary of a major explosives manufacturer, is planning to operate a major new production facility on its Greene County, Tenn facility that will require four new storage tanks with a combined capacity of 128,400 gallons.
The plans to produce some 43.4 million gallons per year of a combustible fluid (RDT-8) were disclosed in a Sept. 11 filing with the Tennessee Department of Environment and Conservation. In addition to the four new tanks the operation will require the presence 365 days per year of two rail cars.
According to the letter from Andrew Velo of US Nitrogen the rail cars will be used for storage and the oil from the tankers will be transferred to a mix tank where the oil and an emulsifier will be combined to produce a bulk ammonium nitrate emulsion.
Velo's letter asks that TDEC consider the four tanks as insignificant emission sources under state air pollution control regulations. The disclosure and request were included in a three-page letter to Michelle W. Owenby, director of TDEC's division of air pollution control.
Attached to the letter were several appendices including a safety data sheet on the finished product, which is used in the production of explosives.
The data sheet describes RDT-8 as a combustible liquid that may be fatal if swallowed and presents a danger to eyes and lungs.
According to the data sheet the liquid should not be exposed to heat, open flames and other sources of ignition.
According to Velo's letter one of the four tanks will hold 13,500 gallons and will be used to store an emulsifier, which will be offloaded from tankers. A second 34,500 gallon tank will serve as a mix tank to blend the oil and the emulsifier.
The RDT-8 will then be transferred to a third tank with a 65,800 gallon capacity. Finally the RDT-8 will be transferred to a 14,600 gallon tank, which will be processed to produce a bulk ammonium nitrate emulsion.
The company stated that some 8.7 million pounds of emulsifier will be used annually while some 34.7 million gallons of the oil mix will be utilized. The amount of the final product produced will be 43.4 million gallons, according to US Nitrogen.
Citing the low vapor pressure of the ingredients, the letter contends that the final product will also have a low vapor pressure.
"Depending on market availability, products other than the oil mixture and emulsifier may be used to produce RDT-8," the letter states.
"Based on these emission calculations, US Nitrogen requests that the division designate the new tanks each as an insignificant emission unit," Velo concluded.
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Saturday, September 15, 2018

US Nitrogen: Violation Notice Misdirected


By Walter F. Roche Jr.

A Greene County chemical firm is charging that Tennessee environmental officials erred when they sent the company a violation notice last month and the notice should have gone to another company operating on the same Midway site.
In a letter to Michelle Owenby of the Tennessee Department of Environment and conservation, Andrew Velo of US Nitrogen LLC said the permit in question had been transferred in June to Praxair, Inc.
Amanda Davis, a TDEC official had stated in an Aug. 24 letter to Velo that the permit had been violated because US Nitrogen failed to report the amount of liquefied carbon dioxide it had transferred to Praxair, a company on the same site as US Nitrogen.
Stating that US Nitrogen believed the violation notice was "directed to the wrong party," Velo wrote that US Nitrogen had transferred the permit in question to Praxair effective June. 11.
Attached to his letter was a June 29 letter to TDEC informing it of the permit transfer. He also enclosed a copy of a letter from Praxair to TDEC on July 17 acknowledging the transfer.
"Therefore," Velo concluded, "Praxair is the appropriate recipient of the Aug. 24 violation letter."
Velo had already sent a letter to TDEC on Sept. 10 stating that the information regarding the amount of carbon dioxide piped to Praxair was already available to TDEC.
Contact: wfrochejr999@gmail.com

Wednesday, September 12, 2018

US Nitrogen Water Use Drops


By Walter F. Roche Jr.

The volume of water being pumped from the Nolichucky River dropped dramatically in July, according to a report filed by US Nitrogen with the Tennessee Department of Environment and Conservation.
The one-page report filed today shows the chemical company drew a little under 8.8 million gallons from the river in July for use in manufacturing ammonium nitrate. That compares to some 18 million pumped from the river in June.
The Midway company also reported discharging 5.6 million gallons back into the river during July. In June the company discharged 7.6 million gallons in the river.
The pumping is done through two 12 mile long pipelines from Midway to the Noliuchucky River. US Nitrogen obtained a disputed permit from the state to install the pipeline along two state highways. The legality of that permit is being challenged in ongoing litigation in Davidson Chancery Court in Nashville.
According to the monthly report very little water was drawn from the river from July 1 to July 5 but between July 13 and July 16 nearly a million gallons per day was pumped from the river.
On 19 days in July the company did not discharge any water back into the river but on 12 other days more than 500,000 gallons were discharged.
US Nitrogen is required under the terms of its permit to file monthly reports on the water drawn from and discharged to the Nolichucky.
Contact: wfrochejr999@gmail.com

Friday, September 7, 2018

US Nitrogen Seeks Eased Permit


By Walter F. Roche Jr.

US Nitrogen is asking Tennessee regulators to eliminate a provision in one of its permits setting a limit on the emission of so-called greenhouse gases.
In a two-page letter to the Tennessee Department of Environment and Conservation, Andrew Velo cited a U.S. Supreme Court ruling and a subsequent advisory from the U.S. Environmental Protection Agency as justification for the request.
In the letter to Michelle Owenby, a TDEC manager, Velo wrote that while the greenhouse gas limits were included in the original permit and remained even after another amendment was approved by TDEC, the court ruling along with EPA guidance changed the requirements.
The prior amendment to the conditional major operating permit was approved in July of last year.
"At that time, however," Velo continued, "the GHG (Greenhouse Gas) emission limits included in the original PSD (Prevention of Significant Deterioration)construction permits remained in the minor source construction permits."
He concluded by requesting that the "greenhouse gas emission limits not be included in the conditional major operating permit."
The request from the Greene County chemical comes as TDEC is considering what if any penalty to impose due to violations of other permit conditions.
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