Pushing Back on Violations

Minnesota's new Ethanol Initiative Compliance Team will work face-to-face with producers on a first-of-its-kind program to rein in the state's growing number of fines.
By Luke Geiver | May 21, 2010
In 2008 the Minnesota Pollution Control Agency issued fines to Minnesota ethanol facilities totaling $25,450. The total for 2009: $2,326,410. Yes, more than $2 million. Sparked by the drastic spike in fines, the MPCA has taken an unprecedented approach to lowering the fine totals, creating a task force to work with Minnesota ethanol facilities to improve their compliance performance.

With 22 permitted ethanol plants producing more than 1 billion gallons of ethanol per year, Minnesota ranks as the fourth largest ethanol producing state. An MPCA Citizens Board met in February seeking an answer to why the large sum of fines was issued to more than half of Minnesota's facilities. There was no clear conclusion. Peder Larson, an attorney working with the Minnesota Coalition of Ethanol, spoke at the meeting, explaining the changes to the industry as one possible reason for the fines. "This has been a drastically expanded industry," Larson said at the meeting, adding that there is no other industry in Minnesota that has expanded more since 2005 than the ethanol sector.

Jeff Connell, MPCA compliance and enforcement manager, also attempted to explain what caused the huge uptick in fines. "We couldn't put our finger on a systematic reason for the noncompliance," Connell said. Now, without a clear resolution to resolve the compliance issues, the new task force, unofficially called the Ethanol Initiative Compliance Team, will search for a cause, while creating what the team says is crucial for a reduction in future finesan open line of communication between the MPCA and Minnesota ethanol producers.

Team Members
The new outreach program will consist of three individuals from within the agency. With various backgrounds ranging from compliance enforcement, prevention assistance and vehicle emissions testing, the members, Rocky Sisk, Sarah Kilgriff and Kim Grosenheider say they have a lot of valuable experience to draw from for the new program. "We hope these facilities can become a hundred percent compliant," Sisk says. He previously worked with salvage yards, assisting with compliance issues. Kilgriff earned her environmental science degree from the University of Minnesota College of Natural Resources, and Grosenheider completed her master's degree working on beneficial uses of coal fly ash.

Even with extensive backgrounds, the team has virtually nowhere to look for an example on how an ethanol compliance program should be run. Many states have alternative fuels divisions in their individual pollution control agencies, but Sisk says this compliance program is the first of its kind, although he notes there are similar programs to learn from, such as those aimed at the metal plating and mining industries. Sisk says the most important place to go for guidance is the ethanol industry itself.

Team Tasks
To reach a better compliance level, the team plans to provide a number of tools and services to any ethanol producer wanting assistance, many of which were suggested by the ethanol industry. The team has already created and sent out the first edition of "The Grist: News for Minnesota's ethanol industry." Kilgriff says the creation of the newsletter has been the easiest part of the program so far. Based on suggestions from members of the ethanol industry, Kilgriff and the team will include topics of interest to the industry. Kilgriff says he hopes that recipients of the letter will suggest topics for the future, making the subject matter more useful. The first issue describes the purpose of the letter while future editions will touch on topics such as spill reporting, and enforcement.

Along with the newsletter, the team will organize monthly webinars on a wide range of ethanol-related topics. Initially, members from the MPCA will present during the sessions, but Grosenheider says she hopes eventually people from the ethanol world will present too. "We also want people to share their experiences in a forum," Grosenheider said. "People in the industry want to hear from their peers."
The newsletter, webcasts and forum discussions are all something the team thinks will help producers understand and find answers to various problems they face. But, if that isn't enough, the team will perform face-to-face visits and on-site audits for any producer who requests assistance. Although the thought of producers inviting the EPA in for an audit may seem unlikely, rendering the program ineffective, Sisk says there are already plants signed up. "Producers want to make sure they are reporting information the right way, to the right agency, at the right time and frequency." Understanding the complexities of each permit along with other aspects of compliance is something Grosenheider says can be difficult. "You can't understand it looking at this stuff an hour a year," she said, "It takes time and we can help."

An obvious concern related to the on-site visit is the chance that a team member finds a compliance issue or violation. "Every state is different and every region of EPA is different," says Patricia Sharkey an environmental lawyer for McGuireWoods LLP. "The differences between California, Alabama and Minnesota are large." Sharkey, based in Illinois, says the on-site visits need to be clarified as the plants take on a large risk volunteering for the visits. The Minnesota program sounds like a beneficial option and has a good chance of success, she says. "I think it is a good thing to provide outreach and training for the facilities."

Sisk, who says part of the on-site visits will include training on how to comply with air and water permits, thinks that Minnesota is a state that wants to work with the producers. "Our intention is to work with the facilities. We can't guarantee unconditional immunity if we see something blatantly wrong," Sisk says. "We've told producers that. But, unless we see an imminent threat to human health and the environment, we won't take action." Instead, Sisk actually expects to find minor problem areas, and it's these areas where he hopes to help the plant both understand and fix. "We have a lot of discussion on where to draw the line in the sand. We expect that line to be pretty far out there."

Final Objectives
The team hopes to achieve 100 percent compliance among ethanol facilities, but Kilgriff adds that gaining the trust of producers is also important. In the past, Kilgriff worked as an enforcement officer, but hopes her work on the team will highlight her new role as more of a compliance assistance officer. Connell says by working with the producers, the team can also help provide much needed training that is currently absent at some facilities. Sisk points out that the ethanol task force can also help plants find ways to become more flexible with permits. "Maybe they can modify permits," Sisk says. "If they think something is wrong we will work with them on the permit to see if there is something to modify or find a way to help solve a problem." The team is not taking over all permitting duties in the state, however, he adds.

During the MPCA Citizens Board meeting, the problems of permitting along with gaining trust was an issue brought up that the team hopes to ease. With the creation of the ethanol task force, all three members hope to run the program for one year and do whatever they can to cut back on the compliance issues. Kilgriff notes that one of the other main concerns of the producers is how the MPCA operates and enforces, an area she thinks will be better understood through this program promoting communication and trust building.

Larson, speaking for the Minnesota Coalition of Ethanol, thinks the program will help people outside of the ethanol industry understand the high number of fines, and even spoke out against those who think ethanol plants knew they were in violation during 2009, or are simply incapable of operating a plant. Referring to a report from Minnesota Public Radio that featured a speaker who claimed officials put some "cowboy" in charge who doesn't know how to comply at an ethanol plant, Larson responded. "The doors of ethanol facilities are open. I'd like you (referring to the speaker) to talk with them about how they comply," Larson said. "Then you can judge whether they are "cowboys" or people who want to do the right thing."

"Most plants didn't know they were doing things wrong. The violations did not occur out of malice," Sisk says describing the 2009 situation.

Pleased with the implementation of the program, Larson also spoke about the trend in fines. "Don't expect this trend to be representative of anything that goes into the future." As for the team from Minnesota, they hope to do everything they can to comply with Larson's prediction. EP

Luke Geiver is an associate editor of Ethanol Producer Magazine. Reach him at (701) 738-4944 or lgeiver@bbiinternational.com.