State agency criticized for inept handling of Water Gremlin

This chart in the OLA report shows that Water Gremlin was a major source of pollution from 1993 through 2018. For many years after 2000, the company underreported emission levels.

ST. PAUL — The Minnesota Pollution Control Agency (MPCA) “could have and should have” taken actions before 2019 to properly regulate Water Gremlin, concluded a report issued last Thursday by the Office of the Legislative Auditor (OLA). 

In his 64-page report of the agency’s permitting and enforcement activities regarding the White Bear Township manufacturer, Joel Alter, OLA’s director of special reviews, said he found “significant weaknesses.”

The auditor’s office, which operates as a nonpartisan legislative watchdog, was requested by Sen. Roger Chamberlain and the Neighborhood Concerned

Citizen’s Group (NCCG) back in 2019 to investigate MPCA’s handling of Water Gremlin. That was the same year the agency entered into a stipulation agreement with Water Gremlin related to alleged longstanding violations of the company’s air quality permit. The company agreed to abide by various requirements specified in the agreement and pay a $4.5 million penalty. 

“We cannot be certain that MPCA actions would have prevented the problems identified in the agreement or enabled MPCA to intervene sooner, but there were missed opportunities on MPCA’s part,” Alter said. 

One of those “missed opportunities” went back to 1995 when Water Gremlin first applied for an air quality permit. “That was at a time when the company reported its actual emissions of trichloroethylene (TCE), a hazardous air pollutant, were 23 times a federal threshold defining a major source of pollution,” according to the report. MPCA never responded to the application. In fact, Water Gremlin did not receive its first permit until 2000, only after it submitted another application in 1999. 

“So for several years, MPCA simply did not regulate Water Gremlin’s hazardous air emissions,” Alter wrote. 

There were other missteps, as well. In 2002, MPCA approved an amended air quality permit that did not adequately control TCE. According to the report, the permit contained some “inadequate provisions” that remained in effect for many years. 

For instance, amended language did not recognize that Water Gremlin would be reusing TCE and only placed explicit limits on purchases, not overall use, of the chemical. The company was also required to conduct only one performance test to ensure new pollution control equipment was controlling at least 95% of emissions. MPCA did not require subsequent tests even after the equipment had to be repaired and rebuilt, twice. “The equipment did not meet a required level of efficiency for at least a decade,” Alter said.

The OLA director indicated that compliance and enforcement staff could have done more to properly monitor Water Gremlin and identify potential violations. Air quality inspections were conducted in 2004, 2012 and 2017, leaving an eight-year gap between first and second inspections that coincided with a period when the company was consistently out of compliance. Federal law requires facilities with potential emissions be inspected at least every five years.

“Would more inspections have made a difference? We don’t know,” Alter said. Among its recommendations, the audit report said MPCA should ensure it complies with federal requirements for inspection frequency.  

The company should have been levied a penalty for self-disclosed and publicly reported emissions in 2000 through 2002 that far exceeded the limits of the 2000 permit, Alter noted in the report. This oversight preceded the extended period of noncompliance that was addressed in the 2019 stipulation agreement. 

There were also hazardous waste violations that went undetected that Alter believed may have reflected ambiguity about agency responsibilities.

Water Gremlin, founded in 1949, is a global market leader in manufacturer of lead battery terminals. TCE, a known carcinogen, was used as a solvent in the terminal coating process until February 2019, when the company announced it was permanently discontinuing its use. The chemical is now banned in the state of Minnesota. 

Hazardous waste inspections were also addressed, particularly with regard to lead dust. In the Twin Cities, MPCA shares hazardous waste enforcement duties with counties. MPCA has a joint powers agreement with only one county, Hennepin, that explicitly defines the respective state-local responsibilities. There was no such MPCA agreement with Ramsey County, which inspected Water Gremlin for hazardous waste prior to 2019.

The auditor’s report recommended the Legislature consider amending state law to require MPCA to enter into joint powers agreements with all metro-area counties so that division of hazardous waste regulatory responsibilities is clear.

MPCA responds to review

Included in the report was a response letter from MPCA Commissioner Laura Bishop acknowledging 

“inadequacies related to Water Gremlin’s air quality permit when issued in 2002, inadequacies that allowed emissions exceedances to go undiscovered for too long.” 

She termed Water Gremlin’s violations “egregious,” adding the agency “acted swiftly and decisively to hold the company accountable. Water Gremlin’s operations and compliance remain a focus of the agency today,” Bishop assured.

She noted that since becoming commissioner in 2019, she has instituted improvements in the permitting and compliance and enforcement programs to ensure the agency further limits such egregious violations by regulated parties. 

“Water Gremlin has a duty to accurately report its emissions and its failure to accurately report emissions from 2002-2017 prevented MPCA from taking action sooner,” she wrote. “Water Gremlin also had a duty to certify the accuracy of the information it provides to the agency when applying for a permit or permit amendment. In its 2002 permit amendment, Water Gremlin stated its emissions would not change. This statement was inaccurate. A pillar of environmental regulation is accurate and truthful reporting by regulated parties; any time a party fails to accurately report information, it is problematic and hinders the ability of regulators to achieve their missions.” 

The commissioner said the agency is committed to keeping communities safe from pollution. To demonstrate, MPCA is devoting significant resources and engaging with local community to develop a major air permit amendment that will address community concerns and incorporate all necessary requirements to ensure the facility operates in compliance.

House hearing follows report

In testimony before a House environment and natural resources committee Feb. 11, Bishop said the agency could use more funding. She does not have enough staff to review more than 2,000 air quality permits in the queue. 

When asked by a committee member if the lack of oversight reported by the auditor’s office represented a broader issue, Bishop said she considers Water Gremlin “an anomaly.”

Committee members called the report “unsettling”’ and “disturbing.” Nisswa representative Josh Heintzeman told Bishop the “buck stops with your office. Even under your leadership, this has been a persistent problem,” he told her. “It doesn’t appear this is being taken seriously.” Bishop said the agency is “taking recommendations to heart.”

Rep. Fue Lee (59A-DFL) asked Alter who is protecting the public if MPCA is not doing its job? 

“Inspection requirements are federally enforceable,” Alter replied. “I don’t know the consequences if the agency doesn’t do the inspections. By bringing this to the public’s attention, we are trying to hold MPCA’s feet to the fire. They may be embarrassed but that’s the way it is.”

Committee member Jamie Becker-Finn (42B -DFL) said there was an effort four years ago to severely underfund MPCA and make permitting more lax for polluters. “We have responsibilities as legislators to get priorities straight,” she pointed out.  

Following the Feb. 11 report, Water Gremlin environmental, health and safety director, Mary Gail Scott, issued this statement: “Water Gremlin has been working with state and county officials and made significant changes in facilities, staff and processes to provide a safe and environmentally sustainable operation.” 

NCCG co-founder Leigh Thiel said the OLA report is gratifying to the citizen’s advocacy group. “It’s exciting to see work you’ve done start to materialize into something that has generated so much discussion at the state level,” she said. “I think of other communities who don’t have people doing this, and that scares me.”

The White Bear Township resident, who lives close to Water Gremlin, added the report made her realize there is “a huge crack between MPCA and businesses.” 

Thiel explained: “It strikes me that Water Gremlin self-reported some of these issues in 1995. The report said they were emitting hazardous air pollutants at 23 times above the federal threshold and MPCA didn’t catch that. Water Gremlin had a choice at that point. They could choose to fix themselves to come into compliance, but they chose to jump into that crack and live there away from oversight as long as they could.” 

Thiel said NCCG is still meeting monthly with stakeholders and is still focused on the major air permit, which is yet to be approved. She finds that delay frustrating. “Water Gremlin needs to be regulated by a major permit versus a stipulation agreement from 2019. It’s been almost two years and we have yet to see meaningful change.” 

(1) comment

ROSANNE Thompson

The state is responsible and needs to repay the community for their misconduct. Not enough staff is not a good enough response. People are suffering because of their errors, they need to make it right.

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