Issue Date: April 30, 2007
EPA Boosts Ethanol
A CHANGE in federal regulations for ethanol biorefineries is expected to make it faster and easier for plant owners to obtain construction and operating permits. At the same time, the modification, recently made by the Environmental Protection Agency, is also likely to increase pollution from any new or expanding ethanol plant.
The change, EPA officials say, is necessary to harmonize conflicting regulations that cover U.S. corn distilleries as well as to encourage greater ethanol production.
From now on, ethanol biofuel plants will be regulated under the same standards as distilleries that produce alcohol for human consumption. Previously, the biorefineries had been covered by regulations for "chemical process plants." With the change, newly built ethanol plants or expanded facilities will be able to emit 250 tons annually of any pollutant from a class of six regulated pollutants before hitting a threshold that triggers tougher air pollution controls. The previous limit was 100 tons per year of volatile organic compounds, nitrogen oxides, particulates, lead, sulfur oxides, and carbon monoxide.
EPA spokesman John Millett says the agency considers ethanol biofuel plants to be essentially identical to distilleries of whiskey and other alcoholic beverages and should be regulated as such. One difference, however, is that distilleries are much smaller than biofuel distilleries. Figures from the Corn Refiners Association show that plants processing corn for drinking alcohol use about 6% the amount of corn used by biofuel ethanol plants.
The regulatory change comes as the biofuels industry continues to grow by leaps and bounds without any help from EPA. The Renewable Fuels Association predicts that ethanol-generating capacity in the U.S. will expand from 5.8 billion gal per year to 12 billion gal over the next few years, driven by high oil prices, tax subsidies and incentives, and private investments.
Despite the apparent health of the industry, EPA documents say the rationale for the change was driven by the fear that the 100-ton-per-year pollution threshold could stymie industry growth and "hamper our nation's efforts toward energy independence." In background documents, the agency acknowledges that it has received conflicting information about the impact of current regulations on plants that produce ethanol both for biofuels and for human consumption. An analysis of the impact the change can have on emissions has not been done.
ORIGINALLY, EPA intended the change to apply only to plants making ethanol from corn, but the agency has expanded the rule to include plants making ethanol from other sources, including cellulosic materials, which are expected to be the feedstock of the future.
EPA says it believes the 250-ton threshold will result in bigger plants that are more efficient and consequently will spew less pollution per gallon of ethanol produced. Industry stakeholders agree. For instance, in a statement, Broin Companies, a biorefiner that recently changed its name to Poet, said the change will end "an arbitrary impediment" and result in greater efficiency and fewer emissions per gallon.
Environmental groups, such as the Natural Resources Defense Council (NRDC), and several state regulators disagreed, however. The National Association of Clean Air Agencies (NACAA), an organization of state regulatory officials, says the rule change will likely result in new plants being designed to avoid regulation by sizing them so that they emit at just below the 250-ton limit. The effect is likely to be higher overall emissions from the plants and lower air quality in rural communities, NACAA warns, which could lead to future complaints by local citizens.
Clark Smith, who oversees compliance with air permitting standards for the Nebraska Department of Air Quality, in part agrees. "The total air emissions may go up as the plants get bigger," he says, "but the controls are not likely to change."
He notes that emissions covered by other laws remain in effect, particularly those that limit hazardous pollutants, which are not included in the rule change. These existing limits will require biorefineries to install pollution control equipment anyway, he says. "I am not sure EPA and industry will get the relief they anticipated," he adds, referring to both the production incentive and cost-saving intentions of the rule change.
John D. Walke, an NRDC attorney, notes that EPA has had past problems with ethanol plants.
In 2002, EPA and Minnesota regulators took action against the state's 12 ethanol plants for air violations and required that new pollution control equipment be installed to bring the plants below the 100-ton threshold. A year later, EPA and the Department of Justice took action for air pollution violations against 52 Archer Daniels Midland plants that processed primarily corn but also other oilseed products. ADM settled and agreed to cut more than 63,000 tons of air pollution at a cost of $340 million.
Two years later, EPA and Justice reached a settlement with Cargill to cut 30,000 tons of pollution from 27 processing plants. Nine of the plants processed corn ethanol.
In background documents, however, EPA says it does not expect a rollback in emissions reduction and stands by its position that the 100-ton limit presented "potential obstacles for growth in the industry."
The agency even adds the caveat that if it failed to anticipate some deleterious effects of the rule change, "the potential for other environmental benefits and the desire to support our nation's energy policy objectives outweigh any potential negative environmental consequences."
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