TO INTERESTED PARTIES: RE: Chippewa Valley Ethanol Company Expansion

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1 TO INTERESTED PARTIES: RE: The Minnesota Pollution Control Agency (MPCA) has approved the,, and Order for the Environmental Assessment Worksheet (EAW) on the proposed Project, Swift County. The Findings of Fact,, and Order document concludes that this project does not have the potential for significant environmental effects. The decision for a Negative Declaration completes the state environmental review process under the revised Environmental Quality Board rules, Minn. R , subp. 7. This project can now proceed to permitting. We want to express our appreciation to those of you who submitted comments on the EAW. Your comments and responses to them have been incorporated into the,, and Order and will assist MPCA staff in drafting permits for the proposed project. Sincerely, Beth G. Lockwood Supervisor, Environmental Review Unit Operations and Environmental Review Section Regional Environmental Management Division BGL:gs Enclosure

2 STATE OF MINNESOTA MINNESOTA POLLUTION CONTROL AGENCY IN THE MATTER OF THE DECISION ON THE NEED FOR AN ENVIRONMENTAL IMPACT STATEMENT FOR THE PROPOSED CHIPPEWA VALLEY ETHANOL COMPANY EXPANSION BENSON TOWNSHIP, SWIFT COUNTY, MINNESOTA FINDINGS OF FACT CONCLUSIONS OF LAW AND ORDER Pursuant to Minn. R (1999), the Minnesota Pollution Control Agency (MPCA) prepared an Environmental Assessment Worksheet (EAW) for the proposed ethanol plant expansion project. Based on the MPCA environmental review, comments, and information received during the comment period, and other information in the record of the MPCA, the MPCA hereby makes the following,, and Order: FACILITY HISTORY Overview Chippewa Valley Ethanol Company proposes to expand its existing ethanol production facility. The facility is approximately one mile west of the city of Benson. The site is adjacent to the Benson airport, off County Road 20. Currently, the plant processes approximately 8.3 million bushels of corn per year. This produces 22.4 million gallons per year (MGY) of undenatured ethanol. Production of Distiller s Dried Grain with Solubles (DDGS), used as an animal feed, is 67,615 tons per year (TPY). Previous Environmental Review In 1994, an EAW was prepared for the construction of the facility and a Negative Declaration was made. Permitting History Permits issued by the MPCA include those governing air emissions, industrial storm water discharges, cooling water discharges and storage tanks. The first air emission permit for the facility was issued on September 9, The total facility air emission permit was reissued and a number of air permit modifications were made since The Industrial Storm Water Discharge Permit was issued in 1996, after construction was completed. On May 1, 1995, the initial National Pollutant Discharge Elimination System/State Disposal System (NPDES/SDS) Permit for cooling water discharge was issued. The NPDES/SDS Permit was reissued and several modifications have been made since The initial permit for above ground storage tanks (AST) was issued July 26, 2000, and modified on November 1, Compliance/Enforcement History While the facility has had several compliance actions regarding air emission stack tests, they have all been resolved or are in the process of being resolved. The facility had a gasoline spill of approximately 4,500 gallons, which was remediated. No past compliance actions are believed to affect the proposed project. TDD (for hearing and speech impaired only): (651) Printed on recycled paper containing at least 30% fibers from paper recycled by consumers

3 PROPOSED PROJECT DESCRIPTION Proposed Project The proposed expansion project would increase corn usage to approximately 18.3 million bushels. Ethanol production would increase to 49.5 MGY. DDGS production would increase to 149,417 TPY. In addition to process modifications, a thermal oxidizer would be added to the dryer stack. The thermal oxidizer would control emissions of volatile organic compounds and particulates, which is expected to also reduce odors. Environmental Concerns Typical environmental concerns from ethanol production facilities include odors, water use, air emissions, ground water protection (tanks and spill containment) and visual impacts from stacks or steam plumes. Permitting Requirements Required permits are listed in Paragraph 24 below. Construction for the proposed facility will not start until all permits are issued. These permits will mandate that the facility operates in compliance with all applicable regulatory requirements. The MPCA Air Permit, AST Permit, and Industrial Storm Water Permit would include provisions regulating the design, construction, and operation of the proposed facility. These permits include monitoring and/or specific actions to prevent or minimize potential environmental impacts. Additional Concerns Described in Comment Letters Commentors raised concerns about odor from the facility. PROCEDURAL HISTORY 1. Pursuant to Minn. R subp. 5.B., an EAW was prepared by MPCA staff on the proposed project. Pursuant to Minn. R (1999), the EAW was distributed to the Environmental Quality Board (EQB) mailing list and other interested parties on January 18, 2002, and is hereby incorporated by reference. 2. The MPCA notified the public of the availability of the EAW for public comment. A news release was provided to interested parties on January 11, In addition, the EAW was published in the EQB Monitor on January 21, The EAW was available for review on the MPCA Web site at on January 18, The public comment period for the EAW and draft permit began on January 21, 2002, and ended on February 20, The MPCA received one comment letter from a citizen during the 30-day public comment period. 4. The MPCA prepared responses to all EAW comments received during the 30-day public comment period. Comment letters received have been hereby incorporated by reference in Appendix A. MPCA responses to comments are hereby incorporated by reference in Appendix B. 2

4 CRITERIA FOR DETERMINING THE POTENTIAL FOR SIGNIFICANT ENVIRONMENTAL EFFECTS 5. Under Minn. R , subp. 1 (1999), the MPCA must order an Environmental Impact Statement (EIS) for projects that have the potential for significant environmental effects that are reasonably expected to occur. In deciding whether a project has the potential for significant environmental effects, the MPCA must compare the impacts that may be reasonably expected to occur from the project with the criteria set forth in Minn. R , subp. 7 (1999). These criteria are: A. the type, extent, and reversibility of environmental effects; B. cumulative potential effects of related or anticipated future projects; C. the extent to which the environmental effects are subject to mitigation by ongoing public regulatory authority; and D. the extent to which environmental effects can be anticipated and controlled as a result of other available environmental studies undertaken by public agencies or the project proposer, including other EISs. THE MPCA FINDINGS WITH RESPECT TO EACH OF THESE CRITERIA ARE SET FORTH BELOW Type, Extent, and Reversibility of Environmental Effects 6. The first criterion that the MPCA must consider, when determining if a project has the potential for significant environmental effects that are reasonably expected to occur, is the "type, extent, and reversibility of environmental effects" Minn. R , subp. 7.A (1999). The MPCA findings with respect to each of these factors are set forth below. 7. Reasonably expected environmental effects of this project to air quality: A. Criteria Pollutant Emissions B. Hazardous Air Pollutant Emissions C. Odors 8. The extent of any potential air quality effects that are reasonably expected to occur: A. Criteria Pollutant Emissions An analysis of the potential changes in the emission of air pollutants has been performed in conjunction with Chippewa Valley Ethanol Company s application for an air permit amendment. Preliminary estimates of air emissions that were submitted to the MPCA by Chippewa Valley Ethanol Company indicate that the plant would remain a minor source for Title V air permitting purposes. The facility has cyclones and fabric filters to control air 3

5 emissions, and will add a thermal oxidizer as part of the proposed project. The proposed thermal oxidizer would control volatile organic compounds (VOC) and particulate emissions from the dryers. B. Hazardous Air Pollutant Emissions The facility will be a non-major source for Hazardous Air Pollutants (HAP) under the federal Part 70 permit program. HAP emission sources at the Chippewa Valley Ethanol Company facility include fuel combustion equipment, dryers, and tanks. C. Odors Ethanol production typically results in a noticeable odor. The MPCA does not regulate odors. Nuisance odor is an issue that must be resolved through the local unit of government. A thermal oxidizer will be installed to control VOC and particulate emissions from the dryers. Based on results from another ethanol facility that installed a thermal oxidizer, odors are not expected to increase as a result of the proposed expansion and may be reduced. D. Visual Impacts The facility has proposed to raise the DDGS dryer stack by five feet, to 75 feet. This is not expected to result in a significant change to visual impacts. 9. The reversibility of any potential air quality effects that are reasonably expected to occur: Any potential air quality effects are expected to be reversible. Any air emissions that are released to the atmosphere would not be recovered. However, there is no record evidence indicating that this project is reasonably expected to cause a significant negative effect on air quality. 10. Comments received that expressed concerns regarding potential effects to air quality: Comments received expressed a concern about odors. As discussed above in Paragraphs 8 and 9 and Response to Comments (Appendix B), the MPCA's staff analysis indicates that the effects on air quality that are reasonably expected to occur are not significant. 11. The MPCA finds that the environmental review is adequate to address the concerns because: All potential impacts to air quality that are reasonably expected to occur from the proposed expansion of this facility have been considered by MPCA staff during the review process and methods to prevent these impacts have been developed. 12. The MPCA finds that the project, as it is proposed, does not have the potential for significant environmental effects based on the type, extent, and reversibility of environmental effects reasonably expected to occur as a result of its air emissions. 4

6 13. Reasonably expected environmental effects of this project to water quality: A. Surface-water runoff; B. Ground-water supplies; C. Tanks. 14. The extent of any potential water quality effects that are reasonably expected to occur: A. Surface-Water Runoff Storm-water runoff from the facility is treated using a detention pond. Detention ponds are accepted technology for reducing solids and/or nutrients from water that has flowed over buildings, pavement, or landscaping. The construction associated with the proposed project would be in or near the current building area. Therefore, no significant change is expected to either increase the quantity of storm-water runoff or decrease the quality of the receiving waters. B. Ground-Water Supplies Currently, Chippewa Valley Ethanol Company uses 75 MGY of ground water. While all process water is recycled and reused, some water is lost at the dryer. Additional water is therefore needed for the ethanol process, boilers, and the cooling tower. Water consumption for the facility is expected to increase to 165 MGY after the proposed expansion. Two additional wells, with 150 gallons per minute pumping rates, would need to be added to meet the water supply demands for the proposed expansion. Ground-water supplies in the area are believed to be adequate to supply the proposed project. A pump test is required as part of the permit application process to determine the adequacy of the resource. Any well interferences or water use conflicts would need to be addressed before the water appropriation permit could be issued. Although no water usage conflicts are expected, domestic water use takes priority over other uses per Minn. Stat. 103G.261. The DNR also has a well interference resolution process available to address usage conflicts, which includes a questionnaire and an evaluation by the DNR Area Hydrologist. Final review by the DNR is pending for the water appropriation permit. The DNR permit includes required annual reporting of the monthly water usage. There is no record evidence indicating that this project is reasonably expected to cause a significant negative effect on ground-water supplies. C. Tanks All storage tanks are located above ground in a lined, diked area. Each tank has a fire valve, a level gauge, overfill protection, an emergency vent, and a pressure vacuum vent. With the plant expansion, the facility will add a new 600,000-gallon ethanol storage tank that will have its own lined, diked area. The new ethanol storage tank would be designed with secondary containment designed to contain the contents of the largest above-ground storage tank as well as runoff from a significant (25-year storm) rainfall event. Underground lines will be designed 5

7 to prevent leaks and will include a suitable leak detection system. Product transfer areas are located on impervious material and are bermed to contain potential releases at the tank connection and at the transfer vehicle. Regulated tanks located indoors are designed, and will be managed, to minimize the possibility of a release reaching surface or ground water. 15. The reversibility of any potential water quality effects that are reasonably expected to occur: The MPCA staff believes that any potential effect that is reasonably likely to occur from this project would not be irreversible. Though not expected to occur, spills would be managed according to the proposer s Storm Water Pollution Prevention Plan, which includes containment and clean-up provisions. Impacts from a short-term release would be of finite duration and the environment would ultimately be expected to return to current conditions once the source of the impact is removed. Ground-water supplies in the area appear to be adequate; therefore, no long-term significant impacts are expected. There is no record evidence indicating that this project is reasonably expected to cause a significant negative effect on surface or ground-water quality. 16. Comments received that expressed concerns regarding potential effects to water quality: No comments were received regarding water quality. 17. The MPCA finds that the environmental review is adequate to address the concerns because: All potential impacts to water quality that are reasonably expected to occur from the proposed expansion of this facility have been considered by MPCA staff during the review process and a method to prevent these impacts has been developed. 18. The MPCA finds that the project as it is proposed does not have the potential for significant environmental effects on water quality based on the type, extent, and reversibility of environmental effects reasonably expected to occur. Cumulative Potential Effects of Related or Anticipated Future Projects 19. The second criterion that the MPCA must consider, when determining if a project has the potential for significant environmental effects that are reasonably expected to occur, is the "cumulative potential effects of related or anticipated future projects." Minn. R , subp. 7.B. (1999). The MPCA findings with respect to this criterion are set forth below. 20. The EAW, public comments, and MPCA follow-up evaluation did not disclose any related or anticipated future projects that may interact with this project in such a way as to identify any potential cumulative environmental impacts that are reasonably expected to occur. 6

8 21. Public comments concerning cumulative impacts: Based on MPCA staff experience, available information on the project, including the EAW, the air emission permit application, and information presented by the commentors, the MPCA does not reasonably expect significant cumulative effects from this project. 22. In considering the cumulative potential effects of related or anticipated future projects, the MPCA finds that the reasonably expected effects from this project will not be significant. The Extent to Which the Environmental Effects Are Subject To Mitigation by Ongoing Public Regulatory Authority 23. The third criterion that the MPCA must consider, when determining if a project has the potential for significant environmental effects that are reasonably expected to occur, is "the extent to which the environmental effects are subject to mitigation by ongoing public regulatory authority," Minn. R , subp. 7.C (1999). The MPCA findings with respect to this criterion are set forth below. 24. The following permits or approvals will be required for the project: Unit of Government Permit or Approval Required Status A. MPCA Air Emissions Permit To be modified; application submitted NPDES Industrial Storm Water General Permit NPDES/SDS Discharge Permit (for Non-contact Cooling Water) Above-ground Liquid Storage Tank Permit To be modified; application to be submitted To be updated/reissued; application to be submitted To be modified; application to be submitted B. DNR Water Appropriation Permit To be modified; application to be submitted C. Swift County Conditional Use Permit Application to be submitted Building Permit Application to be submitted 7

9 25. A. MPCA Air Emission Permit The project is subject to regulatory control and mitigation of air impacts through the MPCA process associated with the issuance of an Air Emission Permit for the facility. Operational and emission limits, including requirements for use of control equipment, in the permit would help prevent or minimize the potential for significant environmental effects. The air permit will be available for a 30-day public comment period prior to the permit being issued. NDPES/SDS Industrial Storm Water Permit The MPCA is delegated to administer this NPDES/SDS Industrial Storm Water Permit, and it will require specific conditions be adhered to for construction and operation of the facility, and for overall compliance with water quality requirements. The facility will need to revise its Storm Water Pollution Prevention Plan. NPDES/SDS Discharge Permit (for Non-contact Cooling Water) The facility s NPDES/SDS Permit must be updated by the MPCA to reflect project changes. The NPDES/SDS Permit stipulates the maximum discharge flow and pollutant loading allowed from the facility after sufficient study to demonstrate that the pollutant flow and loading will not diminish water quality. AST Permit The project is subject to regulatory control and mitigation of impacts through the MPCA process associated with the issuance of an Above Ground Storage Tank Permit for the facility. Operational limits and construction requirements in the permit would help prevent or minimize the potential for significant environmental effects. The proposed permit will be placed on public notice for 30 days to allow the opportunity for interested parties to submit comments. B. DNR Water Appropriation Permit This permit is required for the facility s ground water usage as it exceeds the mandatory 10,000 gallon per day or one MGY threshold. The DNR administers this permit and requires monthly usage monitoring and annual reporting to ensure that surrounding communities and industries water supplies will not be affected by draw-down of the aquifer. B. Swift County A county conditional use permit is required prior to construction. 26. The MPCA finds that ongoing public regulatory authority will address any significant potential environmental effects that were identified as reasonably expected to occur. 8

10 The Extent to Which Environmental Effects can be Anticipated and Controlled as a Result of Other Available Environmental Studies Undertaken by Public Agencies or the Project Proposer, Including Other EISs. 27. The fourth criterion that the MPCA must consider is "the extent to which environmental effects can be anticipated and controlled as a result of other available environmental studies undertaken by public agencies or the project proposer, including other EISs." Minn. R , subp. 7.D (1999). The MPCA findings with respect to this criterion are set forth below. 28. The following documents were reviewed by MPCA staff as part of the potential environmental impact analysis for the proposed construction of the Chippewa Valley Ethanol Company facility. This list is not intended to be exhaustive. The MPCA also relies on information provided by the project proposer, commentors, staff experience, and other available information. EAW data; Permit application, related application submittals, and draft permits. 29. There are no elements of the project that pose the potential for significant environmental effects that cannot be addressed in the project design and permit development processes, or by regional and local plans. 30. Based on the environmental review, previous environmental studies, and the MPCA staff expertise on similar projects, the MPCA finds that the environmental effects of the project that can reasonably be expected to occur can be anticipated and controlled. 9

11 CONCLUSIONS OF LAW 31. The MPCA has jurisdiction in determining the need for an EIS for this project. The EAW, the permit development process, responses prepared by MPCA staff in response to comments on the Chippewa Valley Ethanol Company EAW, and the evidence in the record are adequate to support a reasoned decision regarding the potential significant environmental effects that are reasonably expected to occur from this project. 32. Areas where the potential for significant environmental effects may have existed have been identified and appropriate mitigation measures have been incorporated into the project design and permits. The project is expected to comply with all MPCA standards. 33. Based on the criteria established in Minn. R (1999), there are no potential significant environmental effects reasonably expected to occur from the project. 34. An EIS is not required. 35. Any findings that might properly be termed conclusions and any conclusions that might properly be termed findings are hereby adopted as such. ORDER The MPCA determines that there are no potential significant environmental effects reasonably expected to occur from the Chippewa Valley Ethanol Company Plant Expansion project and that there is no need for an Environmental Impact Statement. IT IS SO ORDERED Karen A. Studders, Commissioner Minnesota Pollution Control Agency Date 10

12 APPENDIX A Minnesota Pollution Control Agency Chippewa Valley Ethanol Company Plant Expansion Environmental Assessment Worksheet LIST OF COMMENT LETTERS RECEIVED ON OR BEFORE FEBRUARY 20, Harry Lee, Citizen, Benson Minnesota

13 APPENDIX B Minnesota Pollution Control Agency Chippewa Valley Ethanol Company Plant Expansion Environmental Assessment Worksheet (EAW) SUMMARY OF COMMENTS AND RESPONSES TO COMMENTS ON THE EAW Odor Summary of Comment: The commentor is very concerned about odor from the existing facility. He indicates that his family has to use air conditioning and not hang out the laundry due to the smell. Additionally, his wife s allergies appear to be aggravated by odor. He believes something should be done to reduce odor impacts. Response: The MPCA staff appreciates the comment. As part of this modification, the facility will install air emission control equipment. This control equipment, a thermal oxidizer, will be installed on the dryers. The dryers are one of the main sources of odors at ethanol production facilities. The thermal oxider would reduce emissions of volatile organic compounds and particulates (dust). This, in turn, is hoped to improve the odor situation. Another ethanol plant that recently installed the same type of control equipment has had reduced odors. If, however, odor remains a concern, the MPCA encourages the commentor to call the MPCA switchboard, toll-free, (800) and ask for the Air Quality Complaint line. The direct number for the Air Quality Complaint line is (651)