ERP - Environmental Risk Professionals

Storage Tanks

Agricultural co-ops may store large volumes of fertilizer, pesticides, or fuels in aboveground storage tanks. Catastrophic failure of an aboveground storage tank caused by an accident or rupture of the tank could cause its contents to enter and breach the secondary containment or exceed the capacity of the secondary containment structure. Releases or spills from storage tanks may also occur during the loading or unloading of contents, from damage to piping systems or corrosion or breaches in tank bottoms. Releases can impact soil, groundwater, surface waters, third-party properties, or natural resources.

Waste Management and Disposal

Cleaning storage tanks, equipment, or vehicles at agricultural co-ops may generate contaminated wastewater and sludge. Wastewater or waste materials may be taken to a non-owned disposal facility or wastewater treatment facility. Spills could occur during cleaning, storage, transport, or transfer from waste storage areas, creating environmental risks. Waste generators must determine if their wastes are hazardous and require special disposal or recycling procedures. Improper waste disposal could lead to environmental liability and legal consequences for violating regulatory requirements.

Air Emissions

Air emissions could be generated from various sources at agricultural co-ops, including tanks, silos, idling trucks, or during loading/unloading operations. Vapor control devices may not be present on aboveground gasoline storage tank systems or may malfunction, resulting in air emissions that could exceed permit limits, resulting in civil fines and third-party claims.

Chemical Storage and Releases

Containers (such as drums, totes, or smaller volume containers) of pesticides, motor vehicle fluids, and other chemicals may be stored at agricultural co-ops. If containers are not provided with secondary containment or stored on soil, a release could impact soil or groundwater, collect in stormwater run-off, or migrate to surface waters or off-site properties.

Transportation and Transit Releases

Accidental releases during the transportation of fuels or chemicals to or from agricultural co-ops due to improper cargo securement, a loose valve, or vehicle upsets or overturns can result in emergency response costs and claims for cleanup. Also, third-party claims could result from bodily injury or property damage from a release.

Vehicle and Equipment Fluid Leaks

Trucks loading and unloading at these facilities can have fuel or automotive fluid leaks. Also, if a co-op stores, uses, or maintains powered farming equipment, fuels and fluids from the equipment could migrate to the soil, groundwater, or surface water.

Anhydrous Ammonia Release and Health Hazards

Farming operations often use anhydrous ammonia, which may be stored and supplied by agricultural co-ops. Storage, transfer, and transport of this chemical could result in a release. When released, anhydrous ammonia can form a vapor cloud. Anhydrous ammonia, even in small concentrations in the air, can be extremely irritating to the eyes, throat, and breathing passages. Also, because ammonia boils at -28 degrees Fahrenheit, the expanding gas can freeze human flesh. Therefore, a release could result in third-party bodily injury and property damage claims.

Stormwater Contamination and Run-off

Stormwater captured in secondary containment structures or coming into contact with chemicals or petroleum products at agricultural co-op facilities can be impacted by pollutants. If not properly monitored or contained, impacted stormwater could migrate to soil, groundwater, or surface water.

Underground Storage and Filtration Leaks

Underground storage tanks and oil-water separators can be subject to leaks or spills if they become damaged or cracked, are not adequately monitored, or are improperly maintained. These can impact soil or groundwater, and contamination could migrate off-site.

Grain Elevator Dust

Some agricultural co-ops store grain in grain elevators, which are subject to dust explosions. Fine-grain particles may be suspended in the air within the enclosed space of an elevator. If the dispersed particles are in high enough concentration, explosions can occur. These explosions could injure third parties or result in particulates migrating in stormwater to surface water bodies, impacting natural resources.

Off-Site Application and Chemical Drifts

Application of fertilizers or pesticides by agricultural co-ops at off-site farms can result in off-site services pollution liability risks. Overapplication could result in soil or groundwater impacts or run-off of chemicals in stormwater to surface water bodies. Also, wind may disperse the chemicals onto adjacent properties, which could impact a crop at a neighboring property, leading to third-party suits.

Fumigants

Fumigants are often used on grains stored in grain elevators to kill pests. Many historic fumigants have lost their EPA registration status because of their negative environmental impact or because of toxicity or safety concerns. Past use of these fumigants may have caused environmental impacts at agricultural co-op grain storage facilities.

On-site cleanup of new and pre-existing pollution conditions

Off-site cleanup of new and pre-existing pollution conditions

Third-party claims for bodily injury and property damage

Third-party claims for cleanup

Defense of third-party claims

Both sudden and gradual pollution conditions

Aboveground and underground storage tanks

Loading and unloading

Emergency response costs

Civil ﬁnes and penalties

Business interruption resulting from pollution conditions

First and third-party transportation pollution liability

Off-site services pollution liability

Crisis/reputation management

Non-owned disposal sites

Natural resource damage claims

Mold, bacteria, viruses, legionella, and more

Illicit abandonment

Claims Scenarios & Examples

A fuel spill resulted from a broken supply line to an aboveground storage tank. The stormwater outlet valve on the secondary containment for the tank was inadvertently left open, and the fuel spill flowed into an irrigation ditch and a nearby river. The agricultural co-op was held responsible for the remediation efforts. Remedial activities included removing soil, dredging parts of the river, and implementing a river sediment monitoring plan. Claim costs exceeded $2 million.

Over 50 farmworkers were exposed to chlorpyrifos that drifted from a mandarin orange orchard into an adjacent cabbage field. A dozen workers reported vomiting, nausea, and fainting symptoms, and one had to be taken to the hospital. The agricultural co-op, which applied the chemical, was sued for third-party bodily injury claims.

An agricultural cooperative-owned truck was transporting pesticides to a member farm. During transit, the truck spilled a three-mile trail of pesticide through a farming community, spewing fumes that sent at least 11 people to the hospital and forced the evacuation of a trailer park. Emergency response costs, cleanup costs, and third-party claims resulted.

While filling a liquid fertilizer aboveground storage tank at an agricultural co-op, a valve on the tanker malfunctioned, releasing 4,500 gallons of liquid fertilizer. The fertilizer migrated into an adjacent field and a stream, contaminating soil and groundwater and causing an algal bloom and fish kill. The company was required to perform remediation, and the business was fined for intangible damages, including natural resource damages.

An agricultural co-op stored diesel fuel in an underground storage tank for fuel supply. The piping from the UST to the dispenser had a crack in a joint that went undetected for an extended period. A substantial amount of fuel was released into the soil and groundwater. Remediation costs exceeded $600,000.

A valve on an anhydrous ammonia storage tank at an agricultural co-op was damaged, releasing aqueous ammonia. The release caused an evacuation within a one-mile radius of the facility. There were inhalation-related injuries to seventy-five people. Five people were sent to intensive care for complications related to lung damage. The business interruption, bodily injury, and defense costs exceeded $1 million.

Pesticide drifted onto organic crops and led to litigation involving a neighboring farm and the agricultural co-op that applied the pesticide. The organic farm owner claimed that the drift from pesticide overspray on the adjacent farm tainted his crops. Federal regulations specify that “organic” crops, if tainted by pesticides, must be sold at lower, non-organic prices, and tainted fields must be removed from organic production for three years. Ultimately, the co-op paid the organic farm damages for lost production.

An agricultural co-op stored and sold bulk fertilizers, pesticides, and herbicides. A state regulatory agency’s inspection of the facility found several fresh spills of liquid and dry fertilizers around the property. Subsequent soil sampling found widespread concentrations of nitrates, sulfates, chlorine, fluoride, and other toxins above action levels in soil and groundwater. The facility was issued a discharge notification and was required to develop a corrective action plan for site cleanup. The company paid over $600,000 in site remediation costs.

An agricultural co-op had numerous grain storage and handling facilities. Until the mid-1980s, a fumigant containing carbon tetrachloride was used on-site to treat the grain and prevent pests. Investigations at the site detected that soil and groundwater were contaminated with carbon tetrachloride and other volatile organic compounds. Contaminated groundwater migrated from the site, causing a 4.5-mile-long plume to impact nearby private supply wells. The site has been listed on the National Priorities List for Superfund cleanup.

Property Types

Agricultural Cooperatives

Environmental Exposures May Include: