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UNITED STATES SETTLES WITH 12 MINNESOTA ETHANOL COMPANIES

Release Date: 10/02/2002
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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY

FOR IMMEDIATE RELEASE
WEDNESDAY, OCTOBER 2, 2002
WWW.USDOJ.GOV
WWW.EPA.GOV
WWW.PCA.STATE.MN.US

ENRD (202) 514-2007
EPA (202) 564-7873
MPCA (651) 296-6977
Region 5, Minneapolis (312) 353-8254

UNITED STATES SETTLES WITH 12 MINNESOTA ETHANOL COMPANIES
Controls Will Reduce Air Pollution by Thousands of Tons Annually

WASHINGTON, D.C. – The Department of Justice, the U.S. Environmental Protection Agency and the state of Minnesota today announced comprehensive civil settlements with 12 ethanol plants in Minnesota for alleged Clean Air Act violations. The settlements are the first agreements to mandate reductions in air pollution from the ethanol manufacturing industry.

The government alleges that the facilities were operating in violation of the Clean Air Act’s New Source Review (NSR) provisions. The Clean Air Act’s NSR program requires a source to install pollution controls and undertake other pre-construction obligations to control air pollution emissions.

The agreements announced today will ensure each plant installs air pollution control equipment to greatly reduce air emissions such as volatile organic compounds (VOCs) by 2,400-4,000 tons per year and carbon monoxide (CO) emissions by 2,000 tons per year. In addition to contributing to ground-level ozone (smog), VOCs can cause serious health problems such as cancer and other effects; CO is harmful because it reduces oxygen delivery to the body's organs and tissues. The settlement also will result in annual reductions of nitrogen oxides (NOx) by 180 tons, particulate matter (PM) by 450 tons and hazardous air pollutants by 250 tons.

“This is a success story for everyone involved and a sign of continued progress with the ethanol industry. These companies are to be commended for working cooperatively with state and federal officials to achieve compliance with the New Source Review requirements of the Clean Air Act,” said Tom Sansonetti, Assistant Attorney General for the Justice Department’s Environment and Natural Resources Division.

“The Minnesota plants are leading the way by installing the appropriate controls and greatly reducing their emissions. These settlements will set the standard in the ethanol manufacturing industry and we hope others will follow quickly,” said John Peter Suarez, EPA’s Assistant Administrator for Enforcement and Compliance Assurance.

Ethanol is primarily a product of industrial corn and is used as an automobile fuel alone or blended with gasoline. Ethanol’s high oxygen content allows automobile engines to combust fuel better, resulting in reduced tail pipe emissions. During the ethanol manufacturing process, dry mills burn off gasses which emit volatile organic compounds and carbon monoxide into the air.

Under the settlements, the plants will install thermal oxidizers that reduce VOC emissions by 95 percent from the feed dryers and meet new, more restrictive emission limits for NOx, PM, carbon monoxide and hazardous air pollutants. In addition to emission control requirements valued at about $2 million per plant, each facility will also pay a civil penalty ranging from $29,000 - $39,000.

The state of Minnesota, through the Minnesota Pollution Control Agency (MPCA) and the state Attorney General’s Office teamed with the United States in the settlement negotiations to resolve the companies’ alleged violations and to bring the facilities quickly into compliance.

“The bottom line of this settlement is cleaner, healthier air for Minnesota,” said MPCA Commissioner Karen Studders. “The ethanol industry, by implementing the new technology to reduce its air emissions, is demonstrating that it shares the same concern to protect our environment.”

The following Minnesota facilities that have the combined capacity to produce more than 400 million gallons of ethanol per year, which is 17 percent of the national production, agreed to install state-of-the-art air pollution control technology at their dry corn mills:

Agra Resources Cooperative (Exol), Albert Lea
Agri-Energy, L.L.C., Luvern
Al-Corn Clean Fuel, Claremont
Central Minnesota Ethanol Cooperative, Little Falls
Chippewa Valley Ethanol Company (CVEC), Benson
Corn Plus, Winnebago
Diversified Energy Co., L.L.C., (DENCO), Morris
Ethanol 2000, Bingham Lake
Gopher State Ethanol, St. Paul
Heartland Corn Products, Winthrop
Minnesota Energy, Buffalo Lake
Pro-Corn L.L.C., Preston

EPA Regional Administrator Tom Skinner met with representatives from the ethanol industry on June 3, 2002, to discuss recent emission test results, recommended tests methods and the proposed pollution control technology. Skinner heads the Chicago EPA office that oversees environmental compliance in Illinois, Indiana, Michigan, Minnesota, Ohio, Wisconsin and 35 North American tribes.

The Clean Air Act, as amended in 1990, directed EPA to issue regulations that require gasoline to be reformulated in order to burn cleaner. EPA’s reformulated gasoline (RFG) program is helping to reduce air pollution in areas with the worst air quality problems. Reformulated gas is made in a way that prevents it from evaporating as quickly as conventional gasoline, and contains a chemical oxygen, know as oxygenate, to improve combustion. Ethanol is a type of oxygenate and a renewable fuel.

Last week, the Sierra Club announced its intention to sue two Midwest ethanol producers to force Clean Air Act Compliance. The settlement today with Ethanol 2000 in Minnesota addresses concerns raised by the Sierra Club and will bring about full compliance at that facility.

The consent decrees were lodged in federal district court in Minneapolis and are subject to a 30-day comment period.

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