North Dakota politicians and agriculture leaders say a “reinterpretation” of U.S. Department of Labor rules may lead to one-third of North Dakota’s fertilizer retailers eliminating anhydrous ammonia sales.
U.S. Sen. John Hoeven said he is working with the state’s Department of Agriculture, producer organizations and fertilizer sales dealers to kill the proposed change that would hold 275 small fertilizer retailers in the state and around 3,800 nationwide to the same standards as much larger warehouse wholesalers, thereby raising costs for the retailers and, in turn, farmers.
Hoeven said around 90 North Dakota fertilizer retailers have stated they’d be likely to eliminate anhydrous ammonia sales if the new standards are put in place. Anhydrous ammonia is the primary nitrogen fertilizer used by North Dakota farmers.
Ron Kessel, a sales representative at Helena Chemical in New England, said while his company wouldn’t have to eliminate anhydrous sales, “it would change how we do business.”
Last July, the Occupational Safety & Health Administration released a memorandum titled “Process Safety Management of Highly Hazardous Chemicals and Application of the Retail Exemption,” detailing its revised interpretation of rules for exempting retail fertilizer facilities from the same standards larger fertilizer warehouses are held to. According to the memorandum, the change is tied to President Barack Obama’s executive order to improve chemical facility safety and security following the West, Texas, explosion in April 2013.
“You’ve got people out here trying to farm — it’s a tough time for farmers because of low commodity prices — and they come out with these rules and regulations and say it’ll cost a couple thousands, and that’s not true at all,” Hoeven said.
Gary Knutson, executive director of the North Dakota Agricultural Association, said he’s still waiting for answers for why the changes are necessary, as well as a breakdown of costs associated with the proposed changes.
“Bottom line is, we’re looking for answers yet,” Knutson said.
Hoeven said OSHA and the Department of Labor haven’t been transparent with the costs that would be associated with storage improvements southwest North Dakota retailers would need to make to be in compliance with the reinterpreted rules.
OSHA documents state the cost, on average, would only be around $2,100 per facility. But Hoeven and others vehemently dispute that.
The senator said OSHA denied a freedom of information request sent by state Agriculture Commissioner Doug Goehring’s office asking about details for how it came to the $2,100 figure.
“That’s not right,” Hoeven said. “It’s going to cost them more than 10 times that.”
Delane Thom, the general manager for CHS Southwest Grain near Taylor, said he figures his company would have to spend more than $100,000 to upgrade its nine anhydrous ammonia distribution sites, and that’s “just the tip of the iceberg.” He added he’ll have a more concrete idea of how much his company would be spending after a third-party assesses its locations for compliance changes.
Should the regulations go through, Thom said Southwest Grain would have no choice but to pass the costs on to farmers, and said discussions would be had about closing some of its satellite anhydrous locations.
“That’s not our intent, but we’ve just got to make a business decision at that point and see if it feasibly makes any sense,” Thom said.
Kessel and other North Dakota’s fertilizer retailers say they already have strict regulations on how they must store and distribute hazardous materials, and the new regulations would force them to pass additional costs along to farmers and producers.
“We want all of employees and our farmers in our local communities to be safe,” he said. “We’re very concerned and cognitive of that. We don’t know that these additional regulations are going to make it any safer without adding a bunch of additional costs to it.”
Kessel said another area of safety concern being raised by retailers is that if some satellite anhydrous retail sites around the state were to close because of the new regulations, it’d create a more direct hazard because many farmers would be putting anhydrous tanks on the road for longer periods of time.
Under North Dakota law, the heavy anhydrous tanks cannot be hauled at more than 25 mph.
“If you actually have nurse tanks being pulled that much further and through that much traffic, I think it’s going to add some safety concerns,” he said.
Thom said he could foresee farmers — some of whom have invested hundreds of thousands of dollars into purchasing their own anhydrous tanks — moving away from anhydrous ammonia and toward urea as their primary nitrogen fertilizer. However, he said, farmers need to use twice as much urea for it to have the same effect as anhydrous ammonia, which could add more costs to his and other businesses.
Hoeven wrote a letter to U.S. Secretary of Labor Thomas Perez on April 28 addressing his concerns. North Dakota Rep. Kevin Cramer in March was part of a bipartisan group of 41 members of Congress who requested the 2017 Labor, Health and Human Services, Education appropriations bill prevent using federal funds to implement new regulations on anhydrous ammonia facilities throughout the nation.
Hoeven said he’s likely to put a provision preventing the anhydrous ammonia regulations from being implemented in the Department of Labor’s 2017 funding bill.
“I’ll put legislation in to stop it if I have to,” he said.