ADM, EPA settle clean air dispute targeting 50% of US fuel ethanol production

By OGJ editors
WASHINGTON, DC, Apr. 14 -- The US Department of Justice and the Environmental Protection Agency on Apr. 9 settled a clean air rule dispute with Archer Daniels Midland, the US's largest fuel ethanol producer, over 4 of its 7 corn milling facilities. The four plants collectively represent more than 50% of total US ethanol production.

EPA estimates that ADM will spend $340 million over a 10-year period. About $213 million will be for capital improvements such as air pollution control equipment. ADM also will fund extensive environmental audits at all facilities that will assist the company and regulators in tracking compliance with the consent decree. In addition, ADM will pay a civil penalty of $4.6 million to be shared with the coplaintiffs, and will spend $6.3 million on supplemental environmental projects. Much of that supplemental money will help fund EPA's new clean school bus demonstration program that retrofits older diesel engines with more efficient, cleaner-burning systems.

Joint effort
US enforcement officials said the settlement is the result of an "unprecedented" joint effort between the federal government and 14 state and county entities.

Under the settlement, ADM will implement what DOJ and EPA officials characterized as "sweeping environmental improvements" at plants nationwide that will eliminate more than 63,000 tons/year of air pollution. The ethanol plants in question were accused of emitting excess amounts of nitrogen oxides, carbon monoxide, particulate matter, sulfur dioxide, volatile organic compounds (VOCs), and hazardous air pollutants (HAPs).

ADM's ethanol facilities represented about 90% of the pollution violations, according to US officials. Forty-eight oilseed plants also violate clean air rules but do so to a far less degrees than the four ethanol-corn processing facilities in question, DOJ and EPA noted.

Under the settlement, US officials said ADM will install state-of-the-art controls on a large number of units, shut down some of the oldest, dirtiest units, and take emission limits on others. Additionally, ADM's oilseed operations will accept new, more stringent emission limits for VOC and HAP emissions.

The settlement follows similar action taken between federal regulators and 12 Minnesota ethanol plant operators last October (OGJ Online, Oct. 3, 2002). DOJ officials predict more fuel ethanol producers in other states will be settling soon or they risk tough clean air penalties.

In this latest settlement, the US and its coplaintiffs maintain ADM failed to accurately estimate its emissions from hundreds of process units; the agriprocessor also allegedly expanded other units without the installation of required air pollution-control technology, violating the Clean Air Act's New Source Review program and related statutes.

Coplaintiffs include the states of Arkansas, Indiana, Illinois, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, South Carolina, and Texas; the Iowa counties of Linn and Polk, as well as the Nebraska county of Lancaster.

The consent decree was lodged with the federal district court in the Central District of Illinois. It will be subject to a 30-day public comment period before it can be entered by the court.

The agreement is yet another example of the proactive approach that fuel ethanol producers are taking with EPA to bring the industry into full compliance, said a spokesman for the Renewable Fuels Association, a fuel ethanol producer trade group based in Washington, DC.

"It's an outgrowth of proactive engagement," said RFA spokesman Monte Shaw. "We wanted to step up to the plate and get it done."

A spokesman for the Oxygenated Fuels Association, which represents merchant producers of methyl tertiary butyl ether, cautioned that the recent consent degrees are evidence that policymakers should rethink plans to guarantee market share for fuel ethanol as a clean fuel additive.

"People need to keep in mind that there are stationary source issues with ethanol," said OFA spokesman Frank Maisano.

Last year the Sierra Club announced its intention to sue two Midwest ethanol producers to force Clean Air Act compliance (OGJ Online, Sept. 30, 2002). The settlement with Ethanol 2000 in Minnesota effectively addressed concerns raised by the environmental group on one Minnesota plant. But Sierra Club still has issues with New Energy Corp. of South Bend, Ind., and environmentalists say other plants may still be sued.

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