Florida DEP has short memory, conveniently forgets its major role in Piney Point problem

Published July 6, 2003

The warning signs were clear: The Piney Point fertilizer plant was headed for disaster.

State regulators knew in 1995 that the owner, Mulberry Corp., was struggling. If it went under, the state would be stuck with hundreds of millions of gallons of highly acidic wastewater in towering gypsum stacks perched on the edge of Tampa Bay.

A review of hundreds of files by the St. Petersburg Times found that the state, instead of intervening, bent the rules by not closing the gypsum stacks as the law requires and by not acting on warnings that the owner was in financial trouble.

A bad situation soon become dangerous. State officials finally took control in 2001 – after the owner walked away.

Now a top state regulator calls Piney Point “one of the biggest environmental threats in Florida history.” State officials fear the waste will spill into Tampa Bay, killing millions of fish and destroying plant life for miles.

So this week they plan to launch a desperate solution: Treat the waste, load it on a barge, spray it into the Gulf of Mexico and hope for the best.

Phosphate executives say the state was too slow to act.

“Did they have enough authority to shut Piney Point down? I think they did,” said Bob Hugli of the Florida Phosphate Council. “I don’t know why they waited so long.”

Critics say the Department of Environmental Protection was coddling the company when it should have been protecting the environment. Because of DEP, “these CEOs got their money and left the state holding the bag,” said state Rep. J.D. Alexander, R-Lake Wales.

DEP officials deny they gave Piney Point any breaks. They say state law tied their hands.

“We did all we could do under the existing phosphate regulations,” DEP Deputy Secretary Allan Bedwell said while touring the plant last month.

After the takeover, DEP officials underestimated the urgency of the cleanup and relied on untested technology that has not lived up to expectations.

The potential disaster for Tampa Bay worsens with every driving rain, and the cleanup cost keeps growing. The latest estimate: $140-million.

Cleaning up the mess has drained a state fund financed by a phosphate tax intended for restoring strip-mined land. Thousands of acres will not be restored unless the Legislature acts.

Location, location

It seems an ideal spot for a fertilizer factory: nearly 700 acres in Manatee County on U.S. 41, across from a rail line and Port Manatee. But the location is the problem. A mile away lies Bishop Harbor, a sensitive aquatic preserve on Tampa Bay.

A subsidiary of Borden, the milk company, built the plant in 1966. Within a year Borden was caught dumping waste into Bishop Harbor. More dumping occurred in February 1970, creating a series of fish kills that extended through the summer.

The plant changed hands at least four times. No matter who owned the place, toxic leaks sickened workers, killed cattle and drove neighbors from their homes.

The one constant: mountains of radioactive waste that grew to tower over the landscape.

Factories producing fertilizer from phosphate also churn out a radioactive byproduct called phosphogypsum. To dispose of it, the phosphate industry stacks it up into white sandy mountains. Piney Point’s two phosphogypsum stacks – gyp stacks for short – are 50 to 70 feet high.

Making fertilizer requires lots of water. As it comes out of the factory the water is hot and as corrosive as battery acid. First it goes into cooling ponds, where some evaporates. Then it’s pumped to the top of the stacks. Rainfall adds millions of gallons more, but an active plant can reduce that with reuse and evaporation.

The stacks at Piney Point were built with no liner underneath, allowing waste laden with radium and heavy metals to seep into the underground aquifer. In 1994 DEP fined the company $135,000 for the contamination, but agreed over three years to whittle that down to $12,000.

The company also owned a similar plant near the small Polk County town of Mulberry. During heavy rains in December 1997, a dike broke and 55-million gallons of the water poured into the Alafia River. The spill killed more than 1-million fish.

Mulberry Corp. promised to spend millions to make up the error. Instead, it went out of business.

Flooding disaster

Every gyp stack in Florida is a ticking time bomb. If the water gets too high, disaster results.

Federal rules require owners to make sure that if an exceptionally hard rain falls, the dikes won’t overflow. If the water creeps too high, the owners are supposed to treat it with lime, then dump enough in the nearest waterway to drop it to the safe level.

In the past decade, Piney Point was one of two stacks where that happened. In 1998, DEP allowed millions of gallons to flow into Bishop Harbor.

When a fertilizer plant is running, the gyp stack water is easy to control. The plant reuses the water, heating it up. The amount lost to evaporation usually balances out any gains from rainfall.

But Piney Point was idle for most of the 1990s, so there was little evaporation. Maintaining safe water levels in an idle gyp stack requires crews running pumps 24 hours a day. If the pumps stop, Piney Point’s tainted water would likely overflow the ponds, spilling into Tampa Bay.

During a Piney Point bankruptcy in 1991, a DEP official worried that the stacks might not be maintained anymore. Sam Zamani, a phosphate regulator in DEP’s Tampa office, suggested to his superiors that the state file a court claim for $10-million to close the stacks permanently.

Instead the state waited. In 1993 a new owner took over. Led by investors Judas Azuelos and Philip Rinaldi, Mulberry Corp. promised to resurrect the plants. It didn’t happen.

State rules say a stack that sits idle for more than a year should be closed permanently, the water drained off, the top covered. Yet DEP officials never enforced the rule at Piney Point because the company promised to revive the plant.

In 1995, state officials drew up new rules requiring gyp stack owners to pass an annual financial test. Flunk and the state would refuse permits. The test was based on the cost of closing the stack, though not the millions to dispose of the water.

Even so, DEP employee Phil Coram noted then that Mulberry Corp. would probably flunk the new test, calling the company “problematic in terms of providing financial responsibility.”

More than once in the late ’90s, DEP let Mulberry executives postpone for months filing their audited financial statements, giving them time to cut deals that made them appear viable.

By January 2000, the illusion of viability had vanished. Mulberry executives told creditors that they had shut down all operations. Still DEP officials did nothing, baffling phosphate industry officials.

“We were not surprised they failed,” CF Industries executive Stephen Wilson wrote DEP later, “and would like to understand how they could possibly have met the present financial responsibility standards.”

State records show DEP bent the rules.

In April 2000, Mulberry senior vice president Robert Stewart wrote to DEP’s top mining regulator, Joe Bakker, conceding his company had laid off employees and stiffed creditors. So Stewart was “all the more appreciative of the fact that your group has been working with us during these difficult times …”

Stewart wrote that he gave Bakker financial statements showing Mulberry passed the test. No auditor checked Mulberry’s statements.

“You indicated that the use of the unaudited statements was most likely acceptable to the DEP as long as certified financials were forthcoming,” Stewart wrote Bakker.

Stewart promised to submit audited statements by June. Months passed. In December 2000, DEP notified Mulberry it would lose its permit. The company was just weeks from bankruptcy.

Stewart, who now works for a phosphate company in Texas, did not return calls for comment. Bakker was unavailable. His boss, DEP director of water resource management Mimi Drew, said she did not recall anything about Mulberry’s statements.

DEP attorney Jonathan Alden denied his agency bent the rules or agreed to accept the unaudited financial statements. He said DEP staff had “continual conversations” with Mulberry executives about getting the audited statements, though a Times search of DEP files in Tallahassee and Tampa turned up no records of such conversations.

As for the delays, Alden said, “a lot of companies file their financials late. But we were pushing to get the financials from Mulberry.”

Actually, Mulberry didn’t file audited statements because it could not afford it, said Herb Donica, the Tampa lawyer handling the bankruptcy.

“If you don’t have the money to pay for an audit,” he said, “it’s the same as going to a business meeting with somebody and they’re wearing one shoe.”

DEP unprepared

Former Piney Point employees say they saw the writing on the wall a year before the collapse.

“You start hearing that vendors aren’t being paid,” said ex-employee Ivan Nance. “The power company isn’t getting paid and you know.”

A DEP inspection in late December 2000 found that Piney Point was on the verge of having its power cut off for nonpayment. No power meant no pumps circulating the water. Still, DEP did nothing.

On Jan. 30, 2001, the company walked away.

Though the crisis had been looming for years, DEP officials were unprepared. The U.S. Environmental Protection Agency took charge the first two weeks.

When DEP finally took over, the first contractor it hired to operate Piney Point went bankrupt. The contractor that took over followed suit, DEP records show. A DEP official joked in a memo that “this project was really cursed.”

Initially the DEP, mindful of the Alafia River spill, focused on the Polk County stacks, where the water levels were too high. Piney Point seemed safe.

In July 2001, though, engineers warned that Piney Point couldn’t handle a heavy storm. A three-year drought had kept the stacks from overflowing.

Had DEP taken over Piney Point before 2001, the drought might have given the state time to close the stacks. The drought ended shortly after the takeover, though, and in the fall Tropical Storm Gabrielle inundated the area.

With too much water in the stacks, DEP turned to the same solution Borden had used: It dumped millions of gallons of waste, with elevated levels of acid and nitrogen, into Bishop Harbor in late 2001.

Nobody knew, not even the DEP staff at the aquatic preserve. But when local officials found out, they complained the dumping was ruining Tampa Bay.

The Florida Wildlife Federation urged DEP to seek federal Superfund status. But Bedwell, the DEP’s deputy secretary, said the agency had “a more cost-effective and faster” alternative.

In July 2002, DEP launched that alternative: running the waste through reverse-osmosis filters, the same process that turns salty water into fresh.

But reverse osmosis was an untested solution. The filters and membranes clogged repeatedly, slowing processing. Meanwhile the screened-out impurities were being dumped back into the ponds, making the pollution even more concentrated.

Still, between that and trucking the waste to various sewer plants, DEP officials thought Piney Point was in good shape. Then, on New Year’s Eve 2002 came the kind of a storm that hits once every 500 years. It dropped 16.5 inches of rain and wiped out all the gains the state had made the previous year.

So in January, DEP officials notified the EPA they were considering the unthinkable: dumping into the gulf. Although unprecedented, it would be the only way to get rid of a lot of waste before hurricane season filled Piney Point to the breaking point.

The EPA asked Florida to consider alternatives, but DEP said all were impractical or too costly. Bedwell blamed the state’s budget shortfall, but said Florida is no skinflint.

“Some think that Florida is pursuing barging as a “cheap’ solution for the threat at Piney Point,” he wrote. “This is obviously not the case: Gulf dispersion is the highest cost water management option for the site. The lowest cost option is discharging into Bishop Harbor and Tampa Bay. … DEP is willing to pay a higher price for gulf dispersion to protect lives and the environment.”

In April, the EPA agreed to the gulf dumping.

Price soars

The money DEP is spending on Piney Point is staggering. In just 13 days during July 2001, the lead consultant billed the state for $1.1-million. One company charged $49 an hour for its secretaries’ work.

DEP officials persuaded a judge to put the plant in the hands of a receiver, Lutz lawyer Louis Timchak. He hired another law firm to help. When Timchak ($175 an hour) talks to his attorneys at Fowler White ($175-$325 an hour), all the bills go to DEP. Timchak estimates the cleanup and closure cost at $140-million, nearly 10 times the amount DEP estimated in April 2001.

The money has come from a tax on the phosphate industry. It was supposed to be spent to restore 27,000 acres of Central Florida marred by strip-mining. But Piney Point is draining it all. Unless the Legislature replenishes the fund, that strip-mined land will always resemble a moonscape.

The fund is not as big as it could have been because the phosphate industry persuaded Gov. Jeb Bush and the Legislature in 1999 to reduce the tax. Now the lawmakers want to raise it.

Lawmakers this spring proposed a higher tax and criminal penalties for any executive who files false financial statements. It went nowhere.

Its sponsor, Rep. Alexander, worries about a disaster bigger than Piney Point. Phosphate companies are struggling, noted Alexander, a staunch ally of the industry.

“We could end up with a multibillion-dollar cleanup cost that may well end up on the taxpayers,” he said. “There’s the potential that some of the companies could not close the stacks they have, and we’d be in a mess.”

Times staff researchers Cathy Wos, John Martin and Smitha Ballal contributed to this report.

DEP turns a blind eye

Here’s how the state Department of Environmental Protection bent the rules for the Piney Point phosphate plant:

+ Gypsum stacks that sit idle for more than a year are supposed to be permanently closed. Piney Point’s stayed open for years.

+ Phosphate companies are required to file annual audited financial statements. Instead, the company submitted unaudited statements and DEP did nothing for months.

+ A DEP inspection in late December 2000 found that Piney Point hadn’t paid its electric bill and was on the verge of having its power cut off. DEP inquired but did not act.

Spreading it in the gulf

Since being abandoned in January 2001, the condition of the Piney Point fertilizer plant has grown increasingly worse. The gypsum stacks (radioactive waste from making fertilizer) holding 1.2-billion gallons of wastewater are in danger of spilling into Tampa Bay. The state received permission from the U.S. Environmental Protection Agency to dump treated wastewater into the Gulf of Mexico to avoid an environmental disaster in Tampa Bay if a hurricane strikes.

Dispersing the water

A barge called the New York will transport treated wastewater from the Piney Point plant, near Port Manatee, to a 19,500-square-mile area starting about 40 miles offshore.

1. The barge’s cargo holds are loaded with 7.5-million gallons of treated wastewater below deck.2. When the barge reaches the designated area, unloading pumps spray the water at 2,000 gallons per minute into the gulf.

Over eight hours the barge should disperse about 1-million gallons of water. The barge would make repeat trips over the next five months. Depths of the gulf in this area reach about 130 feet.

How currents will disperse chemicals

The Gulf of Mexico has a unique ocean current, similar to the shape of a cul-de-sac. The current consists of a strong Gulf Loop and an eddy. The following steps show the gulf’s repeating cycle.

Cycle 1: The Gulf Loop current brings water from the Caribbean Sea through the Straits of the Yucatan and carries water out through the Straights of Florida.

Cycle 2: The Gulf Loop can be short or long. When the wastewater is dumped off the coast, the current could carry it down the shoreline and out to the Atlantic.

Cycle 3: When the current moves from long to short, it pinches off a spinning body of water called an eddy. The eddy’s current circulates the wastewater.

Cycle 4: The eddy drifts westward over many weeks and slowly loses energy. The eddy could carry wastewater from one side of the gulf to the other.

The plant

Before it went bankrupt in 2001, Mulberry Corp. operated a phosphate fertilizer manufacturing complex in Manatee County. The inactive complex consists of a sulfuric acid plant, phosphoric acid plant, ammoniated phosphate fertilizer plant and the infrastructure to support these operations. A pipeline will transfer the water from the plant to Port Manatee where it will be pumped on a barge shipped to the gulf.

The existing ponds are composed of old and new ponds. There are also two process water ponds and stormwater runoff collection ditches. The while watershed area is approximately 452 acres.

The current gypsum stacks holding 1.2-billion gallons of untreated wastewater pose a great threat to humans and the environment. The stacks reach heights from 50 to 70 feet.