SOUTH SIOUX CITY | Big Ox Energy will pay nearly $50,000 as part of a settlement with the Environmental Protection Agency this week, following an investigation into hazardous gas issues that occurred at the South Sioux City bioenergy plant late last year.
The settlement, signed Monday, resolves alleged violations of the federal Clean Air Act. Under the deal, the Denmark, Wisconsin-based company agrees to pay a $10,320 civil penalty and contribute an ambulance and hazardous materials safety equipment to the South Sioux City Fire Department worth nearly $40,000.
The EPA specifies that releases of chemical gases from the plant's biogas production and packaging facility led to the hospitalization of an employee on Dec. 14, 2016. The worker was injured after he drilled a hole into an anaerobic digester to install a pipe and chemical gases were released.
A joint investigation by the EPA and Nebraska Department of Environmental Quality found the plant was using biogas, methane and hydrogen sulfide in its processing, was emitting hydrogen sulfide from its facility and failed to identify hazards using appropriate techniques outlined in the Clean Air Act, according to a news release issued Tuesday.
The EPA alleges that Big Ox Energy failed to identify hazards that could result from the releases of the gases using appropriate hazard assessment techniques.
Big Ox Energy has since conducted a hazard assessment and has agreed to work with the EPA and state to prevent future chemical releases, according to the release.
A statement from Big Ox Energy director of business and development Kevin Bradley said the company works with state and local agencies to ensure it complies with standards and avoids adverse impacts within the community.
The EPA release says hydrogen sulfide associated with the plant also entered the city sewer system, leading to the displacement of 26 households last fall. But Bradley said the settlement does not address wastewater issues and said that the EPA has not alleged in the settlement that hydrogen sulfide gas infiltrated the homes.
"The settlement solely arises under the Clean Air Act planning provisions as they relate to a one-time incident last year inside the Big Ox plant that has since been settled with OSHA," he said.
He said Big Ox Energy maintains that faulty plumbing, not wastewater, was the primary cause of the odor issues in South Sioux City, citing a study that showed hydrogen sulfide had generally not entered homes that had plumbing systems in compliance with building codes.
In the settlement, the company agrees to donate equipment worth at least $39,225 to the South Sioux City Fire Department. The designated items include a Ford 450 ambulance, a defibrillator and chest compression equipment.
This equipment will assist in emergency response to chemical accidents and environmental emergencies. Similar equipment was necessary and used during the response to the chemical release at the Big Ox facility in December 2016, according to the settlement.
By agreeing to a $10,320 civil penalty, the company avoided the potential of a much heftier fine. The maximum civil penalty for Clean Air Act violations is $45,268 per day of the violation.
The settlement comes after Big Ox Energy received a consent order in June from the Nebraska Department of Environmental Quality concerning compliance with state air and water regulations.
The NDEQ in part alleged Big Ox in October 2016 had received and released wastewater into the sewage system that failed to meet pH standards and that this had "caused or materially contributed" to hydrogen sulfide formation in the sewer. The consent order did not carry financial penalties but outlined a series of improvements for Big Ox to make to its monitoring and environmental management controls.
The company also was fined more than $60,000 earlier this year after settling three citations from the Occupational Safety and Health Administration that detailed a lack of protection, education and safety practices for employees, which at times left employees vulnerable to hazardous gases inside the facility.
Big Ox Energy's more than $30 million plant uses an anaerobic digestion process to extract organic nutrients from animal, grain and other waste to create methane. The clean-burning fuel is then sold into the natural gas pipeline. The plant went online Sept. 2, 2016 in the Roth Industrial Park.
Residents began reporting putrid odors from the plant in mid-October when sewer gas permeated some homes in a five-block area of Red Bird Lane and Le Mesa Way, along 39th Street, both indoors and outdoors.
Many residents blamed the plant for causing the issues in the line the residents and the plant, at the time, shared.
In May, 16 families and one business filed political subdivision tort claims against the city, detailing $35 million in alleged property damages and personal injuries resulting from exposure to the potentially-deadly fumes.
After filing a tort claim, residents must wait at least six months to file a lawsuit against the city, under state law. The tort claims say Big Ox Energy also will be the subject of future legal action.