Ethanol Siting

Considerations For Siting And Opertaing An Ethanol Facility

Crude oil prices recently exceeded $140 per barrel. As oil prices rise, alternatives to fossil fuels become more attractive. One popular alternative is the production of ethanol for use as a blend for gasoline. Numerous ethanol production plants are operational and many more are being planned. Yet, the siting and permitting of these plants pose serious challenges.

The following challenges exist with respect to the siting of ethanol plants: a source of organic material that can be fermented to produce ethanol, environmental permitting, and zoning issues. Developers of ethanol production facilities must plan carefully in order to achieve a profitable enterprise. Many of these issues also affect each other and their synergistic effects on the enterprise must be considered.

Production of Ethanol

Ethanol is generally produced from grains, like corn, wheat or soybeans. Technology is improving for what is known as cellulosic ethanol, generated from agricultural plant wastes, industrial plant wastes or crops grown specifically for fuel production, like switchgrass. The plant material is converted to sugar. The sugar is then fermented to create alcohol. The water-alcohol mixture is then distilled to separate the water from the alcohol, creating ethanol.

Siting Ethanol Plants

Developers of ethanol facilities should consider a variety of factors when deciding where to place their facilities. The first consideration is whether the location is located close to feedstocks. Next, one must consider how close the facility will be to markets for ethanol. In addition to markets for ethanol, a developer must find a location that is also close to markets for the byproducts of the ethanol production, like animal feed and carbon dioxide. Finally, a developer must determine if the facility is close to cheap sources of energy and means of transporting ethanol to markets.

In addition to the practical considerations of running an ethanol facility, one must consider whether there is a work force for the plant. Some communities will be more accepting of a new industrial activity than others. Land acquisition costs may also drive siting decisions. All of these questions must be answered before determining the best place for constructing an ethanol plant.

Permitting Issues

The number and types of permits will depend on the state in which plant construction is to occur, but there are common issues. The production of ethanol requires significant amount of water. It also generates air emissions, wastewater, and solid wastes. Each of these items raise its own special environmental permitting concerns.

Water is an absolute necessity in creating ethanol. Some states have requirements in place concerning the withdrawal of water or the allocation of water. In states requiring that withdrawals be permitted, this is an initial process that requires consideration of the amount of ethanol the plant will produce and the amount of water available for withdrawal. Air emissions are also a concern as they include sulfur dioxide, nitrogen oxides, total suspended particulates, volatile organic compounds (VOCs), carbon monoxide, flue gases from energy production, fugitive dust, ash handling, and odors. When applying for a permit to construct, the operators must provide the following information: a general description of the proposed plant; specific emission units and air pollution control equipment for each; and uncontrolled and controlled emissions generated by all emission units. The operators must also identify all applicable emissions standards, and how it intends to minimize odor and dust emissions. After a construction permit is issued, the facility will need to obtain an operating permit. Depending on the size of the facility, the amount of emissions may make the facility a "major" source, which is a source that emits 100 tons per year of VOCs and 10 tons per year of a single hazardous air pollutant (HAP).

The facility will discharge wastewater, either from processes or as non-contact cooling water, requiring a permit under the National Pollution Discharge Elimination System (NPDES). The discharges may require some treatment prior to discharge. Where available, some discharges may be made to publicly-owned treatment works (POTW), which may also require some pretreatment. A stormwater permit may be necessary. Ethanol plants will generate some solid wastes, including hazardous waste. Regulations limit the amount and length of storage of hazardous wastes on site. The facility may be required to characterize and track hazardous wastes. In addition, ethanol facilities will generate solid wastes like bottom ash, fly ash, unreacted solids separated from fermentation effluent, and non-processable feedstocks that will need to be disposed of properly.

Some states have become familiar with siting ethanol plants and have special processes or guidance to assist prospective plant owners and operators. Other state regulators are relative novices to the process. Where states do not have processes in place for the specific siting and permitting of ethanol-producing facilities, one should expect longer timelines for approvals and the need to educate the regulators with respect to the special needs and challenges of an ethanol plant.

Conclusion

The siting of an ethanol plant presents complex issues with respect to location and permitting. Prospective plant owners and operators must consider these issues before they expend any significant sums for development. Initial planning can smooth the path towards development and ultimate operation of a successful and profitable ethanol producing facility.

Saulius Mikalonis

Giarmarco, Mullins & Horton, P.C.

Tenth Floor, Columbia Center

101 West Big Beaver Road

Troy, Michigan 48084-5280

248.457.7117

smikalonis@gmhlaw.com

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