By John Stang
Federal and internal investigators believe the fatal November 2018 explosion at a US Ecology waste facility in Idaho was the result of an unintended chemical reaction, though they don’t necessarily agree on all details of the event.
US Ecology recently submitted its report identifying the cause of the explosion to the Idaho Department of Environmental Quality (DEQ). The state agency is studying the report, but will not discuss it until that review is complete, said Albert Crawshaw, DEQ waste and remediation manager.
The Boise, Idaho-headquartered environmental services company already faces a potential $66,300 fine from the U.S. Occupational Safety and Health Administration for five “serious” violations relating to the Nov. 17, 2018, explosion in Grand View that killed one-man and injured eight others. A sixth “serious” violation carried no financial penalty.
A post on the OSHA website does not provide details of the individual violations, but one item cites US Ecology for failing to “furnish employment and a place of employment which was free from recognized hazards that were causing or likely to cause death or serious physical harm to employees in that employees were exposed to explosion hazards of treating magnesium powder in water.”
The agency said employees up to Nov. 17 had been treating 9,210 pounds of magnesium dust by mixing it with water in a steel-lined bin in the primary waste treatment building at Grand View. The employee who was killed, Monte Green, 48, had been stabilizing magnesium metal, according to the OSHA notice. “Magnesium is reacted with water to make magnesium oxide, which is a more stable compound. During this process hydrogen and oxygen are released. The hydrogen ignited and in the presence of oxygen and created a large explosion. The employee was killed.”
US Ecology does not believe that loose hydrogen ignited, according to corporate spokesman Dave Crumrine. The company’s investigation concluded the explosion was caused by a reaction among water, magnesium, and a mixture of other chemicals that were not supposed to be in the wastes.
US Ecology is contesting the fines, which were levied in early May. OSHA finished its investigation before US Ecology completed its probe of the explosion, which has since been submitted to the federal agency.
The company is consulting government investigators, insurance companies, and its legal counsel to determine when its investigation report will be made public.
“US Ecology has had a long history of safe and compliant operations and a deeper understanding of the root cause has provided important insight into how we can prevent a similar incident from happening again,” Crumrine said by email. “Continued analysis and review of our processes will remain a priority and focus. It is vital we apply learnings from this incident as part of our continuous improvement efforts.”
The Grand View site, in southwest Idaho, is one of 30 environmental services facilities US Ecology operates in the United States, Canada, and Mexico. It provides disposal and treatment of hazardous and nonhazardous wastes, including very low-activity radioactive waste, naturally occurring radioactive material (NORM), and technologically enhanced naturally occurring radioactive material (TENORM).
The explosion severely damaged the primary waste-treatment building, as well as nearby waste handling, waste storage, maintenance, and administrative support structures, according to a recent US Ecology filing with the U.S. Securities and Exchange Commission. In its filing, US Ecology said it is fully cooperating with state and federal investigations.
“We lost capacity (volume) for treatment with the building and for storage with the adjacent building. We have received approval by the IDEQ to resume all permitted activities,” according to Crumrine. “There is no impact to the receipt of radioactive waste streams or the waste acceptance criteria used to evaluate radioactive wastes streams. Waste treatment, including. stabilization, solidification and neutralization processes are currently available at the permitted outdoor stabilization facility. The only impact to capabilities involves the lack of the stabilization building.”
The replacement stabilization building is being designed. The design will be submitted the Idaho DEQ for permit changes before the end of 2019, and construction is scheduled for 2020, Crumrine wrote.
He declined to provide financial figures on the recovery efforts.
So far, US Ecology has not faced any civil lawsuits due the explosions. “We cannot presently estimate the potential liability related to the incident,” its SEC filing says.
US Ecology to date this year has received $9.5 million in property-related insurance payments for damage from the explosion, according to the SEC filing. The company also has workers’ compensation insurance, business interruption insurance, and liability insurance for personal injury
The company booked a $4.5 million property insurance recovery in the second quarter for its Idaho property.
In February, the Idaho DEQ authorized US Ecology to resume disposal of bulk wastes at Grand View. Since then, US Ecology has gradually ramped up its waste treatment operations.
“In June, our Idaho operations regained a substantial — substantially all of its treatment capabilities,” US Ecology President and CEO Jeff Feeler said during the company’s quarterly earnings call on Aug. 2. “We are currently putting in additional infrastructure, hiring and training staff and redirecting volumes back to Idaho. This process will take time and is expected to ramp throughout the balance of the year.”
The “rebuild” at the Grand View facility is expected to stretch into 2020, Feeler told financial analysts: “It won’t be up to pre-event capacity or capacity and conditions but the reality is we anticipate that.”
For the second quarter, US Ecology reported $155.8 million in revenue, which generated $15.5 million in net income, or $0.70 per share. That was a healthy 14% step up from sales of $136.9 million in 2018, which was good for $13.2 million in net income, $0.60 per share.
US Ecology also booked $2.5 million in business development costs in the quarter, largely for its pending acquisition of NRC Group Holdings. “As we see it right now, everything is tracking to our fourth quarter close once stockholders approve the merger,” Feeler said during the call.
A merger vote date has not yet been scheduled.
Houston-based NRC Group Holdings is a global provider of environmental and waste management services that was formed last year by the merger of National Response Corp. and Sprint Energy Services, which were both affiliated with private equity firm J.F. Lehman.
