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Eighty-three Percent of Uncontrolled Ethanol Production Capacity Now Under Federal Consent Decrees

WASHINGTON, D.C. – MGP Ingredients of Illinois, Inc. (MGP)—an ethanol producing company—has reached a settlement to resolve claims that it violated the Clean Air Act (CAA), which will result in a reduction of over 1,700 tons of air pollutants a year at its ethanol production plant in Pekin, Illinois, the Department of Justice, the U.S. Environmental Protection Agency (EPA), and the State of Illinois announced today. With today’s settlement, approximately 83 percent of the ethanol production capacity nationwide will be under consent decrees requiring new pollution controls.

In lawsuits filed today with the proposed settlement, the United States and the State of Illinois allege that MGP violated the Clean Air Act and federal and state rules by failing to obtain the appropriate permit before a major modification project at its Pekin facility and failed to install pollution controls that would have been required under the permit. The settlement requires MGP to install air pollution control equipment that will reduce emissions of VOC’s (volatile organic compounds) by 95 percent and CO (carbon monoxide) by 90 percent, and will also reduce emissions of several other pollutants to below significance levels. The estimated cost of the controls will be between $1 million-$2 million. In addition, MGP will pay a civil penalty $171,800—half to the United States and the other half to the State of Illinois.

“We are pleased that this agreement will bring MGP’s Pekin ethanol plant in compliance with the Clean Air Act and minimize its emissions of air pollutants,” said Assistant Attorney General Sue Ellen Wooldridge, of the Justice Department’s Environment and Natural Resources Division. “This settlement continues the progress we are making with the ethanol industry through the combined enforcement efforts of federal and state governments.”

“This settlement is part of our ongoing initiative to ensure that the Nation’s ethanol production plants comply with air pollution regulations, while continuing to provide fuel that, blended with gasoline, will result in reduced carbon dioxide emissions in the winter months,” said Thomas V. Skinner, Administrator of EPA’s Region 5 office in Chicago.

Ethanol production facilities are a significant source of criteria air pollutants, including VOC’s, CO, NOx (nitrogen oxides) and PM (particulate matter), as well as a number of compounds that EPA has designated Hazardous Air Pollutants. In addition to contributing to ground-level ozone (smog), VOC’s can cause serious health problems such as cancer and other effects; CO is harmful because it reduces oxygen delivery to the body’s organs and tissues. The primary sources of these emissions are the feed dryers, fermentation units, distillation units, ethanol load-out operations, and fugitive dust from plant operations, including roads.

“Ethanol holds great potential as a significant resource for central Illinois, but it is critical that producers act responsibly to protect the environment and the air we breathe,” said Rodger A. Heaton, U.S. Attorney for the Central District of Illinois. “This agreement reflects continuing efforts to hold ethanol producers accountable for the integrity of the production process in central Illinois and throughout the United States.”

“It is important that we enhance and increase our production of homegrown energy sources,” said Illinois Attorney General Lisa Madigan. “However, our progress in Illinois cannot come at the expense of strict compliance by industry with the environmental laws that protect the air we breathe.”

To achieve a 95 percent reduction in VOC emissions, MGP will replace its current feed dryers with a new type of dryer, called a Swiss-Combi dryer that incorporates a thermal oxidizer. The thermal oxidizer is a demonstrated control technology for VOC's and will also reduce PM and CO emissions from the feed dryers. In addition, the plant will be held to stringent limits applicable to these pollutants. MGP must demonstrate compliance after installation of the controls and meet the required emission limits over the next three years.

In addition, MGP is required to propose an appropriate monitoring program as part of the federally enforceable permits required under the terms of the settlement. Such monitoring shall include parametric, periodic and continuous monitoring as determined appropriate by the Illinois Environmental Protection Agency (IEPA), subject to the approval by the EPA of all monitoring provisions.

Today’s consent decree builds on past success with other members of the grain industry, including: the September 1, 2005 settlement with Cargill, Inc.; recent settlements with AGP Corn Processing, Inc. in Nebraska, Golden Triangle in Missouri, U.S. Energy in Kansas, Ace Ethanol in Wisconsin; the 2003 settlement with Archer Daniels Midland; and the 2002 settlements with 12 Minnesota ethanol dry mills.

Illinois, through the Illinois Environmental Protection Agency (IEPA), joined with the Justice Department and the EPA in the settlement negotiations to resolve the company’s alleged violations and to bring the facility into compliance.

The consent decree was lodged in federal district court in Illinois and is subject to a 30-day comment period and final approval by the court.