Coaching Compliance

When Mike Gustafson took a job at Corn Plus in the summer of 2011, he became the environmental, health, and safety manager at an 18-year-old ethanol plant still in recovery. After two decades in the compliance business, the longtime EH&S consultant joined the management team of the Winnebago, Minnesota, facility knowing the plant wasn’t just old, but working to resolve a number of issues. By 2010, Corn Plus faced a series of challenges, including financial stress from increasing corn prices, regulatory issues, and a recent change of senior management.  Ultimately, the farmer-owned cooperative decided that rather than sell the plant or simply shut its doors, it would invest an additional $21 million in upgrades to keep the facility competitive. That also meant it had to work through the environmental,  legal and enforcement actions it was facing.   

Today, the dust has mostly settled at Corn Plus and Gustafson’s job is beginning to resemble that of a typical EH&S manager. “Until now, my role has been to fix, recover, replace and repair, rather than only hold compliance,” he says. “We’ve made progress, and I’m not just putting out fires now.”
Gustafson’s initial assignment at Corn Plus bears little resemblance to the experiences of EH&S managers at newer, larger ethanol plants. It does, however, illustrate the range and variability of the profession. Tyler Schwarck, for example, has had a less adventurous tenure running EH&S at Absolute Energy LLC in St. Ansgar, Iowa. Splitting his time between safety and environmental compliance, Schwarck oversees employee training, plant audits, and just about every regulatory issue the 125 MMgy ethanol facility faces. On any typical day, Schwarck says, he might be found on the phone with the Iowa Department of Natural Resources, in a briefing about a new technology trial, or walking the plant floor examining rigging, hoses and fire extinguishers.   

Down at E Energy Adams in southeast Nebraska, Joe Oswalt also has to manage big issues while keeping an eye on the little things. “We’re constantly on the watch for potential hazards,” he says, describing what he looks for when he walks through the 60 MMgy facility. “Is all of our motor and conveyor guarding in place? Are there any ‘slip, trip and fall’ hazards present—hoses laying out, slick floors or strung out extension cords?”

Like Schwarck, Oswalt wears many hats. E Energy Adams has managed multiple capital projects over the past two years, including a grain storage expansion this year, so Oswalt’s focus has been weighted toward environmental permitting lately. He is, of course, responsible for the ethanol plant’s overarching environmental and safety compliance, including the requirements of state agencies like the Nebraska Department of Environmental Quality and federal agencies including the U.S. EPA and the Occupational Safety and Health Agency. Additionally, because Oswalt has spent a portion his career working in the rail industry, he manages E Energy Adams’ rail safety and logistics program.

Back in Minnesota, Corn Plus is doing better these days and Gustafson says his EH&S responsibilities are, in fact, becoming more orthodox. But he’s still got his hands full. “There’s OSHA and EPA, DNR, DOT and Homeland Security … emergency response, fire brigade, confined space rescue, HAZWOPER and HAZMAT,” he rattles off. “Where would you like to start?” 

Staying on top of it all is a challenge made easier by teamwork and interplant communication. Oswalt is part of an EH&S managers’ group in Nebraska that meets on a semiregular basis, and Gustafson says he communicates regularly with fellow EH&S managers in Minnesota.

Most ethanol producers outsource their environmental permitting work. Likewise, dozens of them work with ERI Solutions Group, which administers safety programs and plant safety audits (see Q&A on page 40). Working with the Kansas-based firm allows plants like Absolute and Corn Plus to operate with a streamlined EH&S structure.

E Energy Adams handles its safety training in-house these days. At the plant, Oswalt administers computer-based safety training regularly, as well as twice-a-year classroom sessions. “Those semiannual meetings are face-to-face, all-day training meetings where I get up in front of the team and talk about plant issues driven by anything that’s happened over the last six months,” he explains. 

Team Approach
Even with the help of outside companies, EH&S managers must lean heavily on their in-house staff to achieve their safety and compliance objectives. At Absolute, Schwarck’s safety committee assists him with facility audits, for example. “It’s helpful to have those extra eyes on the plant,” he says.
Every ethanol plant is, in fact, required to have a safety committee that includes a variety of personnel, and just a few managers. “You want open dialogue,” Gustafson says. “Sometimes the more management that is on a committee like that, the less effective it is.”

Oswalt agrees, explaining that E Energy Adams has both exempt and non-exempt employees on its safety committee. “We typically have two managers and three to four hourly employees,” he says. “Every department has a team member on the safety committee—production, maintenance, lab and EH&S, as well as the administrative group.”

Increasingly, ethanol plant safety committee members have real, on-the-floor compliance responsibilities. Oswalt wants the members of his plant’s safety committee to carry out specific monthly safety audits at E Energy Adams. “If you can engage people, you should,” he says. 

Gustafson agrees. “I can’t be here 24/7, so I need their help with inspections, monitoring and data collection,” he says. “It needs to be a part of their job, too.”

Motivation Matters
EH&S managers say ethanol plants with enviable safety cultures find ways to incorporate EH&S into everyone’s job and then incorporate prudent incentives for compliance-driven behavior. Most prefer to use carrots over sticks, Schwarck says, adding that Absolute has a record of very few safety related incidents since its startup in 2007. “We’ve created a culture that keeps people engaged with safety, rather than enforcing by sheer discipline,” he says. “You can be a cop or a coach in this profession. I’ve chosen to be more of a coach.” 

Despite Corn Plus’ turbulent past, Gustafson says, the plant has an impeccable safety record. The facility has exceeded 1,600 days without a lost day due to accident or injury. “That’s nearly four and a half years,” he says, explaining that Corn Plus is in the top five plants that ERI tracks in that category.
Gustafson and Schwarck agree that when a plant goes long periods of time without experiencing safety related issues, it has a reinforcing effect. “It boosts morale and prolongs what you’re achieving,” Schwarck says. “Your team will want to maintain that record and everyone essentially helps enforce it.”     

Safety is a part of E Energy Adams’ individual performance appraisals, too, but the plant’s management has deliberately kept some distance between safety and pay. “Completing 100 percent of your safety training is a requirement here, but we don’t have a defined incentive program for safety,” he says, explaining that OSHA discourages overt compliance enticements because they can stymie incident reporting.

Whatever E Energy Adams is doing is working. The plant has gone five years without a reportable or recordable incident. “Whenever we reach another year, we do something for the employees,” Oswalt says, explaining that safety milestones should be acknowledged, even celebrated, but not turned into a cornerstone of a plant’s approach to safety. “It’s not what drives our program,” he says.

Rigid Regulations
As onerous as plant safety regulations can be, it is rarely a problem for most U.S. ethanol plants. “The nice thing about the ethanol industry is that we’re not one of OSHA’s high-risk industries,” Oswalt says. “They don’t spend a lot of time in our facilities. Ethanol plants are pretty safe.”

Environmental regulation, on the other hand, weighs more heavily on producers. “We have more exposure with the state and the federal environmental agencies just because of what we do,” Oswalt explains. “We have boilers. We have dryers. We have fermentation scrubbers. We have baghouses. We have a lot of things that fall under those environmental controls. We’ve been here for seven years and I have seen pretty much every inspection you can think of on the environmental side.”

EH&S managers say the agencies that define and enforce the ethanol industry’s environmental regulations knew relatively little about the industry during its construction boom six to eight years ago. Some ethanol plants even worked with state agencies to create the baseline environmental standards that are today’s tough regulations. In fact, EH&S itself, became a prevalent ethanol plant management position during the pinnacle of the industry’s expansion. As the ethanol industry grew, Schwarck says, regulators began to realize that it needed its own regulations. “Before that, regulators classified ethanol plants like grain elevators,” he says. “Those agencies really didn’t know what we did or how we did it. We worked with them, and in some ways we educated them.”

In his consulting days, Gustafson wrote some of the ethanol plant inspection forms initially used by the Minnesota Pollution Control Agency (MPCA). “They didn’t know what to look for,” he explains. “Their eyes weren’t really calibrated to the industry.”

Oswalt worked with the state, too, inviting Nebraska regulators into E Energy Adams to learn about the components of ethanol plants that are subject to environmental permitting. “At least then, when they’re writing permit language about a baghouse or a thermal oxidizer, they could picture what it was,” he says. “Our hope was that education would lead to better permits.”  

The openhandedness that ethanol producers have afforded the agencies that regulate them hasn’t necessarily been reciprocated the way many had hoped. Nebraska environmental regulations for ethanol plants, for example, became more stringent than the federal EPA’s rules. That has perplexed Oswalt and other EH&S managers in the state. “It’s hard to understand why that is,” he says, explaining the wide regulatory variation among the four states within EPA’s Region 7—Nebraska, Kansas, Iowa and Missouri.

In Minnesota, Gustafson says, the MPCA’s rules and enforcement activity are also more aggressive than producers think they need to be. For example, he says, the agency views administrative missteps in the same light as actual pollution. “Sometimes it seems to me that the MPCA almost treats missing a flow meter reading as just as serious a matter as an actual spill or emission," he says. "We treat our record keeping responsibilities seriously, of course, but we get concerned that our regulator sometimes loses perspective.”

When inspections do occur, they are usually unscheduled. Oswalt says federal regulators rarely make impromptu plant visits, but the Nebraska DEQ does them frequently. “They won’t tell you they’re coming,” he explains. “They’ll show up on your doorstep and say, ‘We’re here to do an air permit audit today.’”

EH&S managers say having your records in order makes surprise inspections less stressful. “If you can’t produce what the auditors are looking for, expect them to take a more in-depth look at your facility,” Oswalt says. 

When regulators visit ethanol plants, they tend to come in pairs. “You’ll typically see two auditors,” Oswalt says. “One will focus on your regulatory paper trail and the other will go out and walk the plant, looking at equipment—your baghouses, your thermal oxidizer, your [continuous emissions monitoring equipment]. They’re looking for red flags.”

Schwarck says surprise inspections aren’t a problem for producers who don’t cut corners. “Review permits, slow down and do things the right way,” he advises.

Oswalt says producers who don’t put compliance first will usually pay a price later on. “Getting a fine is more than a checkmark next to your name for being bad,” he says. “It can jeopardize lending on your next big project. Banks look at regulatory compliance, and they don’t like bad actors. You need to be driven by your permitting.” 

When in doubt, Schwarck says, talk to regulators and be candid with them. “Use your state regulatory agency as a resource,” he says. “Just be honest with them.” For Schwarck, establishing an open dialogue usually starts with a simple phone call to the Iowa DNR field office in Mason City. “A lot of times, I’ll call and simply ask a question,” he says. “My experience with that has almost always been very good. The more willingness you show to be compliant, the more they are usually willing to help you achieve your goals.”

Gustafson, who is also the ethics officer at Corn Plus, has plenty of experience communicating with state agencies. Negotiating with regulators was essentially his full-time job when joined Corn Plus three years ago. Once, he and another Corn Plus executive went straight to the top officer of the MPCA with a blunt request. “We told him that we perceived that the agency had a predisposed mindset about Corn Plus, and that they needed to respect our new management and our focus on environmental compliance and give us a chance to prove ourselves," Gustafson says. “You know what, it helped.”


Author: Tom Bryan
Editor In Chief, Ethanol Producer Magazine
[email protected]
701-746-8385