S.D. producers receive fines for CAA violations

By Kris Bevill | September 23, 2010
Posted Oct. 4, 2010

On Sept. 31, the U.S. EPA and the U.S. Department of Justice settled disputes with two of Poet LLC's South Dakota facilities as well as Dakota Ethanol LLC over claims that the plants had violated portions of the Clean Air Act. The 79 MMgy Poet plant at Big Stone City, the 53 MMgy Poet plant at Groton, and the 48 MMgy Dakota Ethanol plant near Wentworth were charged with violations associated with emissions and testing requirements for volatile organic compounds (VOCs). In consent decrees signed in a South Dakota district court, the facilities agreed to pay the penalties associated with the claims, but did not admit to the allegations.

According to Albion Carlson, an environmental scientist with the technical enforcement program for Region 8 of the EPA, some of the violations stemmed from operator oversight. All three facilities were fined for failing to maintain internal floating roofs that are supposed to be placed directly on the surface of ethanol in storage tanks. At the Poet and Dakota Ethanol facilities, the floating roofs were allowed to rest on A-legs as the tanks were being drained, which could potentially allow for vapors to escape into the atmosphere. "It was just an operating requirement that wasn't followed," he said. Carlson said it's vital to keep a lid on the liquid due to ethanol's quick evaporation rates. "When these roofs are sitting directly on top of the liquid like they're supposed to, it inhibits the volatilization of VOCs," he explained.

In addition to the floating roof violations, Poet's Big Stone facility was charged with exceeding certain VOC emissions limits, conducting invalid testing to demonstrate VOC compliance and failing to install required monitoring devices. As part of the settlement agreement, Poet Plant Management has agreed to pay $150,000 within 30 days, to remedy erroneous operations and adopt EPA-approved methods for measuring VOC emissions.

Poet said the alleged floating roof violations at its plants occured in 2004 and the alleged stack test violation at Big Stone occurred in 2007. The issues have since been resolved. "The plants in question are operating within permitted levels, and we have passed subsequent air emission tests," said Matt Merritt, Poet media relations specialist. "The EPA has also adopted a more precise method, which Poet supports, for measuring these mass VOC emissions, and we are working closely with the South Dakota Department of Environment and Natural Resources to amend our permits to accommodate the new method. At Poet, we work hard to ensure we are good stewards of the land, and we are proud of our environmental record."

Dakota Ethanol also exceeded VOC emissions limits, conducted inappropriate compliance testing and failed to conduct required VOC stack testing in a timely manner, according to the EPA. Dakota Ethanol will pay $75,000 and will also adhere to EPA-measurement methods and correct any deficiencies at the plant.

Carlson said violations such as those allegedly committed at the three South Dakota facilities were at one time typical violations for the industry. That began to change when the EPA implemented its ethanol plant enforcement initiative in 2002. "This is one of the reasons that the ethanol initiative was first formed," he said. "There was concern that VOCs weren't being measured properly." The EPA began investigating the "suspected pattern of noncompliance" related to prevention of significant deterioration and new source review permit requirements, and has since reached settlements with some of the country's largest ethanol producers. Archer Daniels Midland Co. has been the largest settlement to date. In 2003, it agreed to spend approximately $340 million to overhaul environmental compliance measures at 52 of its grain processing plants in 16 states, according to the EPA.

The testing that has been agreed to by Poet and Dakota Ethanol is no more stringent than what ethanol plants across the country are subject to, according to Carlson. The facilities will be expected to measure emissions from fermentation tanks, distillation systems, dryers and cooling systems in accordance with Clean Air Act requirements. Poet must implement these measures at all five of its South Dakota plants. "In the past in South Dakota, methods were used that didn't accurately measure the amounts of VOCs emitted," Carlson said, indicating that state regulators were perhaps lax in their enforcement of the regulations. Requiring these plants to measure VOCs using EPA-approved methods will merely bring them up to speed with the rest of the industry, he said.