The owner of a major cement plant at Fernley said last week that the Environmental Protection Agency believes the facility violated federal air quality laws.
Eagle Materials Inc. of Dallas, owner of the Nevada Cement Co. facility, said in a filing with the Securities and Exchange Commission that it can't predict how EPA action will play out, and it can't predict the potential financial implications.
The plant, which according to state records employs between 100 and 250 workers, is a major supplier of bulk and sack cement to northern Nevada and northern California.
Its annual production capacity is 560,000 tons of cement and 500,000 tons of clinker, used to produce Portland cement. Nevada Cement also operates quarries seven miles south of Fernley and along east of the plant.
The EPA contends that the owners of the plant undertook a series of substantial changes between 1992 and 1999 but didn't get the air quality permits that would have been required.
And as a result, the EPA says the plant has been operating out of compliance with federal and state regulations since 2002.
Ivan Lieben, an attorney with the EPA, said the agency just moved on the violations some of them dating back 18 years because it doesn't have any way of knowing what changes are occurring inside a cement plant.
But regulators have begun looking more closely at cement plants nationwide in the past two years, and it's begun asking operators of plants about what's going on inside the plant walls.
The cement industry has said that new EPA rules to limit mercury emissions and soot from cement-manufacturing facilities could cost the industry several billion dollars, and the Portland Cement Association says some plants might be forced to close.
The EPA told Eagle Materials that it might seek a financial penalty for violations at the Fernley plant. Fines could range as high from $25,000 a day for violations before 1997 to $37,500 a day for violations since early 2009.
Nevada Cement Co. "believes it has substantial meritorious defenses to the allegations," the executive of Eagle Materials Inc. said in last week's filing with the SEC.
They said they've requested a conference with EPA officials and hope to begin negotiating a settlement. If negotiations fail, the company said it's ready to "vigorously defend" its position in any enforcement action brought by the EPA.
In their filing with the SEC, Eagle Materials executives cautioned shareholders that the company could be required to make substantial capital improvements in the Fernley plant and might face higher operating costs. It also cautioned shareholders that an EPA complaint could take years to resolve.
