Environmental Law: Air Quality Compliance

By Krista McIntyre | January 01, 2008
Ethanol plant owners and operators are subject to environmental laws, including complex air quality regulations that govern the quantity and quality of air emissions generated at the plant. Air quality regulations are adopted by state and federal environmental protection agencies. Failure to comply can result in significant monetary penalties. In 2002 the U.S. EPA implemented an enforcement initiative against ethanol producers in Minnesota. Settlements with producers got the attention of the industry and state agencies. Since then, permit agencies have imposed tighter limitations and sought more robust compliance demonstrations in permits. This article summarizes the air quality regulations that apply to ethanol plants.

In the midst of project development activities for a new plant, owners and operators must initiate the regulatory process to obtain a pre-construction air quality permit. An owner or operator is required to obtain the permit prior to commencement of construction or initiation of on-site activities of a permanent nature. Depending on the level of proposed air emissions from the plant, the permitting process can take four to 18 months. Although many permit agencies have experience with ethanol plants, every permit is different and negotiable. While permit agencies strive to balance environmental protection with operating flexibility, permits require monitoring, record-keeping and reporting that can overburden plant staff. The primary objective for the owner or operator in this process is to obtain a valid permit reflecting the proposed operation of the plant and allowing sufficient operational flexibility.

The owner or operator will be subject to air emissions requirements based on the proposed operating specifications. Any material changes from the design presented in the application could trigger additional review. The owner or operator will also be required to obtain an operating permit. In some instances the pre-construction permit transforms into the operating authorization after certification of compliance. In other instances, a second permit application and review is required. In both cases, the operating permit will reflect the terms and conditions of the original pre-construction permit. In both cases, the terms and conditions are enforceable. Operating permits typically have a finite term and the owner or operator will be required to apply for renewal in a timely manner. Additional permit review may be triggered by subsequent physical or method of operation changes.

The terms and conditions included in permits derive from air quality rules that 1) protect public health by ensuring that the amount of pollution allowed from any single source does not adversely impact ambient air quality to which the general public is exposed, or 2) reflect technology standards adopted for categories of operating equipment, or 3) regulate the emissions of hazardous air pollutants determined by EPA to present significant risk to the environment and public health. Other rules control esthetic impacts, such as dust or odor generation.

To demonstrate compliance, owners and operators are typically required to conduct emissions testing, monitor production or emissions rates, maintain records and submit reports to the permitting agency. Owners and operators are required to certify compliance and disclose noncompliance. State and federal agencies have authority to inspect the plant and require the permit holder to comply, install additional pollution controls and assess penalties for noncompliance. Repeat violations increase the severity of the regulatory response.

The obligation to obtain an air quality permit is only the first of many responsibilities for environment compliance at ethanol plants. Early investments made by owners and operators in negotiating the permit, understanding its contents and implementing systems to ensure compliance will pay off. Owners and operators that develop a clear understanding of the regulations, establish a constructive relationship with regulators and train employees on environmental compliance will be the wiser for the effort.

Krista McIntyre is a principal at Stoel Rives LLP. Reach her at kkmcintyre@stoel.com or (208) 387-4239.

This article is only a general summary for information purposes and does not constitute legal advice. Consult a qualified and experienced legal advisor for your specific situation or particular questions.