March 17, 2001

Phosphate plants under close eye

STEVE NEWBORN
of The Tampa Tribune

(Greg Fight, Tampa Tribune)

It's not like you can padlock the doors and walk away.

The complexities of keeping a phosphate processing plant operating are becoming clear to government regulators now overseeing two of them.

Ponds full of 1.5 billion gallons of acid and three mountains of radioactive waste mean you just can't shut off the machinery and turn out the lights.

The state could be stuck with the plants for years.

And taxpayers would be stuck with the tab.

When Mulberry Corp. told state environmental regulators in early February it couldn't afford to keep the plants running, it ignited fears of the potential for massive spills of highly acidic water into the Alafia River and Tampa Bay.

A U.S. Environmental Protection Agency task force took emergency control over the Mulberry Phosphates plant in Polk County and the Piney Point plant near Port Manatee.

When it turned control over to the Florida Department of Environmental Protection on Feb. 21, regulators had to figure out what to do with the plants.

``The state wouldn't want to just abandon the site,'' said Joe Bakker, chief of the Bureau of Mine Reclamation in Tallahassee.

This is the first time the state has been forced to step in and take over a phosphate plant in an emergency.

``I've never even heard of it,'' said Mike Lloyd, research director of chemical processing at the Florida Institute of Phosphate Research. ``I don't know if it's been anything that I'd have imagined.''

There's still a chance - an outside one at best - that Mulberry Corp. could round up new investors and take the plants back, as its president told The Tampa Tribune in a recent interview. An agreement reached with judges in Polk and Manatee counties gives the company until mid-April to get its financial house in order.

But the company must also secure pollution discharge permits, which DEP refused in December to renew for either of the facilities.

The company is disputing some of the agency's reasons for denying the permits, including DEP's contention the company has failed to comply with its financial obligations related to a catastrophic acid spill in 1997.

Long-term problem

There's a chance the company's liability carrier could pay the estimated $2.5 million to $3 million in restitution for the massive spill from Mulberry Phosphates into the Alafia, which may have killed more than a million fish.

But DEP is not taking any chances. It is developing a long-term contingency plan to either keep the plant's pumps operating or make the plants less dangerous to the environment, said Sam Zamani, administrator of the department's phosphate management program.

``I have no idea how long this will go on,'' Zamani said. ``We have several options. We are evaluating the cost of it and evaluating the engineering of it.''

He said it costs at least $400,000 a month to operate the plants and keep the pumps running to prevent an environmental catastrophe.

The money is being siphoned from the phosphate severance tax, a trust fund of money contributed by phosphate companies to help reclaim old mined-out land. The DEP has received permission to take $4 million from that fund, Zamani said.

A legislative bill filed Wednesday would tap the fund for up to $10 million to pay for emergency management of Mulberry's facilities. The bill also would establish a five-year fee on phosphate companies of $50,000 a year per gypsum stack to build an ``imminent hazard'' fund.

John Joyce, a spokesman for the Florida Phosphate Council, said his industry organization would not oppose such a tax.

``It's not something we're against,'' Joyce said. ``We think there should be some insurance there, so we're willing to cooperate with the department.''

The existing trust fund money is being used to pay the electricity bills to keep vital pumps running at Mulberry and Piney Point. The pumps keep water from overflowing in process ponds, where highly acidic water used in the making of fertilizer is stored.

The water is so acidic it meets federal standards for corrosive hazardous waste, said Tom Reese, a St. Petersburg lawyer who challenged plans to expand the Piney Point facility when Mulberry Phosphates purchased it several years ago.

``You don't want to step in it - it's like battery acid,'' Reese said.

Worldwide slump

Pumps also are used to recirculate rain water around the phosphogypsum stacks, which are laced with slightly radioactive byproducts of fertilizer production.

The money also pays for the skeleton staff Mulberry Phosphate kept at the two plants after they ceased production in 1999 because of slumping fertilizer prices. Declining demand has plunged the price of the benchmark diammonium phosphate from $200 per ton two years ago to $150 per ton now.

Zamani said the $4 million should last through June. After that, DEP has plans in the works to create a trust fund paid for by phosphate companies that would pay for any future takeovers.

The Hillsborough County Commission, meeting Thursday as the county Environmental Protection Commission, voted unanimously to ask the state for tougher accountability rules before granting permits to enterprises with the potential to do major environmental damage.

Commissioner Pat Frank said she was opposed to the use of mining reclamation funds to subsidize financially ailing operations. The commission will ask the state to require more than a letter of credit or demonstration of financial solvency before granting such permits.

Any takers?

Central Florida's Bone Valley, a geological formation rich in phosphates needed to produce the world's fertilizers, has numerous mining and processing operations.

Would any existing phosphate producer consider buying Mulberry's two plants and relieving the state of the trouble?

Not likely, Lloyd said.

And if there is, he said it would be someone from outside the area - maybe even Europe - who has deep enough pockets to pay the company's debts. One French bank, Credit Acricole Indosuez, claims Mulberry Corp. owes it $36 million.

``If I had to guess, I would tell you the present economics say no,'' Lloyd said of a possible sale. ``But I'm also enough of realist to say if the price was right, there is a possibility of somebody buying it.''

He said that because of the downturn in prices for fertilizer worldwide, industry leaders such as IMC and PCS have idled their phosphate operations in Louisiana and North Florida, respectively.

``It's very difficult to say any of these people would get enthused about getting involved, just to see another plant sit idle,'' he said.

And then there's the history of the plants.

Mulberry Phosphates was the fifth owner of the two plants in 34 years. It bought them from Royster in 1993, after that company declared bankruptcy. And before that, they were owned by a Connecticut man named Earl Becker.

Lloyd did note one positive lure for a possible buyer - Mulberry also owns the Wingate Creek Mine in Manatee County, which would guarantee a source of phosphate rock for fertilizer production.

Keeping it going

In the meantime, Zamani said state regulators have to make sure the pumps on the process ponds are operating and keep mechanics and electricians on site to carry out maintenance activities. This is considered critical to preventing any acidic water from breaching the treatment impoundments and killing fish in the Alafia River and Tampa Bay.

The main thing they have to watch is the level of water in the ponds that were established as a byproduct of fertilizer production. Heavy rains combined with shoddy maintenance of an overflow pipe were blamed for the 1997 spill of 54 million gallons of acidic water from the Mulberry plant into nearby wetlands and the headwaters of the Alafia River.

The wave of acidic water killed untold numbers of fish all the way to its mouth at Tampa Bay.

There are nearly 1 billion gallons of acidic water locked up in the treatment ponds in Mulberry, Zamani said. A spill of that magnitude into the Alafia River could be catastrophic, he said.

And Piney Point contains half a billion gallons in its ponds. The plant lies just off Tampa Bay near Port Manatee, where a spill could kill anything alive in that portion of the Bay.

The only good thing about the company going under is that it happened in the dry season, Zamani said.

``The drought is helping us out,'' he said. ``It's giving us breathing room for assessing the situation in the upcoming wet season. We're putting ourselves in a position to protect the environment and have adequate capacity for storing rainfall during the wet season.''

One permanent solution is removing the acidic water from the process ponds, Bakker said. The water could either be treated, by making it less acidic and therefore less of a threat if it breaches the pond walls, or piped to another phosphate plant that has excess capacity.

But the cost of neutralizing the acid could exceed $30 million at Piney Point alone, Lloyd said. And removing the water and storing it in huge tanks or leak-proof storage ponds would be just as costly.

Mountains of trouble

And then there's the gypstacks.

That's the industry's term for the huge mountains of phosphogypsum, the slightly radioactive waste leftover from fertilizer production. The EPA has banned its use in construction because of the radiation.

So there they sit, like the flat-topped mesas of the American Southwest.

There are two stacks at Mulberry, soaring 12 stories over the flatlands of Bone Valley. And one 200-acre stack at Piney Point reaches 65 feet over Tampa Bay.

Because of the toxicity and heavy metals present, rain that runs off the gypstacks has to be collected, stored and treated.

So the state could pony up the cost to close the gypstacks at the two plants.

That involves reshaping the mountains, flattening the slope and lining it with a thick layer of dense plastic, Zamani said. Then, mounds of topsoil would have to be dumped atop the layer and grass planted to ease the amount of runoff.

And once again, taxpayers would get stuck with the tab. How much, we may soon find out.

Staff writers Jan Hollingsworth and Susan Green contributed to this story. Green can be reached at (813) 657-4529 or sgreen@tampatrib.com

• To learn more about the phosphate fertilizer industry, click here