Plans underway to ship ethanol from Port of Milwaukee on Lake Michigan

Lee Bergquist
Milwaukee Journal Sentinel
Runners fill the bike path on the lakefront as a ship makes its way into the Port of Milwaukee.


MILWAUKEE - A Wisconsin-based petroleum distributor is planning to construct a $3 million pipeline at the Port of Milwaukee that will allow the company to ship bulk supplies of ethanol over the Great Lakes.

The project by U.S. Oil to ship the flammable colorless liquid would represent the first shipments of a fuel or fuel additive from the port in years. The company's plans brought sharp questions from members of the Milwaukee Common Council on Wednesday and representatives of an environmental group.

The Common Council's Public Works Committee approved an amendment to a lease agreement with the company that calls for the lease of an additional 0.89 acres of port property. The measure next heads to the full council.

The land would be used to construct a pipeline of approximately 1,000 feet that would connect U.S. Oil's  tank yard at the port to the port's liquid cargo pier.

Petroleum products have been shipped in and out of the port over the decades, but not in recent years, according to Lawrence Sullivan, chief engineer for the port. Sullivan started to work at the port in 1966 and he said in an interview that he cannot recall when the shipping of products like gasoline and heating oil ended. 

But the specter of a new round of fuel shipments — in this case, corn-based ethanol that will go primarily for the export market — is raising questions. 

It comes as public concerns have risen in Milwaukee and in other cities over a surge in crude oil shipments via rail and the potential for rail cars to derail and explode. 

A rail car accident in November 2015 sent ethanol into the Mississippi River when 32 cars derailed —- one of a string of accidents and derailments that have occurred in Wisconsin and the Upper Midwest as the oil industry uses rail to augment pipelines to move crude. 

Ald. Nik Kovac wanted assurances from U.S Oil officials that they would not be shipping crude out of the port at some point in the future. He noted that officials from the company were quoted in a media report several years ago that they were interested in shipping oil out of Milwaukee. 

Richard H. Sawall, director of business development for Appleton-based U.S. Oil, said the company considered that three or four years ago, but has no such plans now. 

Crude oil is not currently shipped on the Great Lakes. One worry about crude is that it is heavier than ethanol and can sink. 

Sawall said his company, a unit of U.S Venture Inc., also based in Appleton, plans to use the pipeline to transport ethanol from Wisconsin-based distillers and export it by barge to Canada because of a surplus of ethanol in the Midwest. 

U.S. Oil operates a large petroleum terminal on the city's northwest side. It bought the 530,000-barrel capacity site at 9125 N. 107th St. from Marathon Petroleum Corp. in 2015. 

It currently ships ethanol on the Great Lakes from a facility in Green Bay.

In Milwaukee, Sawall said the company has an air permit from the Wisconsin Department of Natural Resources to house ethanol in its storage tanks at the port. It does not have an air permit to store crude oil, he said. 

Ald. Jim Bohl sought to clarify how the ethanol would be shipped, and he tried to assess from the company  the potential safety threat of an increased volume of tanker truck traffic.

Company officials said safety plans are in place and its activities include oversight from the U.S. Coast Guard in Milwaukee and other government agencies.

In the event of an accident, the company said some, but not all, of the spilled contents can be recovered; but that one potential environmental hazard of a spill is the loss of dissolved oxygen near a spill. Aquatic species consume dissolved oxygen. 

Eric Hansen, a member of Citizens Acting for Rail Safety, said U.S. Oil's plans represent a large new influx of ethanol —- and potentially crude oil at some point in the future. 

He said he believes the public should have more information on the volume of ethanol to be shipped and the route tanker trucks will take to the port.

"Is this the future we want for our harbor?" asked Hansen.