Farmer-Owned Corn Ethanol Cooperative Fined For Falsifying Air Pollution Records

Hammer51012/CC BY 2.0
"Cloud Maker."

When a company falsifies or changes it's pollution control records, even slightly, to make it seem like they are in compliance with a legally mandated operating permit - similar to a driver claiming his 'speedometer must be broken' when a cop pulls him over - generally indicates underlying financial performance problems and a management culture focused only on the bottom line. When this happens, the proactive management of occupational safety, community health, and environment - once a matter of company pride- typically goes by the wayside.

Elected officials commonly leap to the defense of plant owners and managers, so-charged, claiming that 'it's only paper work' and 'no real proof exists of pollution'. But, the law (and more specifically the legally required operating permit for air emissions) mandates paper records for a very good reason. It's not cost effective for inspectors to stop by every day to see if a factory is meeting limits: instead they rely on a periodic records review. The hands-off approach saves taxpayers money!

Here's an interesting example of what happens when the honor system breaks down - from the Minneapolis Star Tribune: "In its plea, Corn Plus admitted that its employees filed false reports in 2009 and 2010 indicating that its control equipment, known as bag houses, was working properly. Lovett said false monitoring logs also were created for the plant's scrubbers, which remove volatile organic compounds."

The upshot.
Heads rolled and Corn Plus also had to pay a large criminal fine.

Money quotes.

As one of Minnesota's oldest ethanol plants, built in 1993, Corn Plus has struggled with aging, less-efficient technology at a time when high corn prices have reduced ethanol refining margins, according to a recent regulatory filing by the cooperative.

In September, the cooperative's new general manager, Mark Drake, wrote to its more than 700 shareholders that without $12 million in federal tax credits this year for using an alternate-fuel boiler, the board "would have had to consider ceasing operations." Corn Plus recently said it would invest $20 million to make the plant more efficient.

Is it right to fine a company for non-compliance when one underlying cause was Congress changing it'smind about tax credits for ethanol?

Corn Plus took a chance on the ethanol fuel market 18 years ago and apparently had a pretty decent run of it until recently, when a number of circumstances (not just tax credits) changed.

Ethanol makers experienced improved financial performance because of changes out of their control - as in the case of natural gas prices falling drastically in response to increased fracking for natural gas production - but lost money because of increased corn prices caused by escalating Chinese grain demand. Many things affect business fortunes: in either direction. Blaming long-ago-agreed to conditions from an owner-signed operating permit is scapegoating, plain and simple.

Political perspective.
Nine times out of ten when a company gets caught for environmental violations there are parallel issues with safety and health; and, neighbors may be unhappy with pollution exposures - regardless of whether charges do or do not result from those aspects. This is why, in general, the Republican Party's full on attack on all environmental regulations is particularly irrational and wrong minded. It increases the likelihood of harm to workers and to the surrounding community.

Tags: Air Pollution

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