The Environmental Protection Agency's "Major Emitting Facility" Definition and Its Effect on Ethanol Facilities: A Review of the Amended Rule and Its Potential Pitfalls and Successes in South Dakota

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Fuel ethanol is seen by many as an environmentally-friendly solution to decreasing America's dependence on foreign oil. The Environmental Protection Agency (EPA) is tasked with implementing federal permitting requirements for the construction of fuel ethanol facilities under the Clean Air Act. (1) Prior to 2007, the EPA treated fuel ethanol facilities unequally in comparison to ethanol facilities for human consumption, despite the fact that production processes at these facilities are substantially similar. In 2007, the EPA promulgated a new rule that placed both fuel ethanol facilities and ethanol facilities for human consumption an equal fruiting for permitting purposes, sing the allotted emission threshold for fuel ethanol facilities to that of ethanol facilities for human consumption. Although the permitting requirements have been implemented on a federal level, it is up to the states to adopt these regulations in their own permitting schemes. Due to the growing role fuel ethanol plays in South Dakota's economic development, South Dakota's adoption of the EPA's most recent changes is of vital importance for increased production of fuel ethanol and decreased American dependence on foreign oil.

I. INTRODUCTION

In September of 2005, a letter was written to the Environmental Protection Agency (EPA) informing it of what was called the "differential treatment" of ethanol facilities under the Clean Air Act.' At the time, under the Clean Air Act ethanol facilities used for the production of fuel ethanol were considered chemical process plants, whereas ethanol facilities that generate products for human consumption were not. (2) The only difference between the facilities' production processes is that in fuel ethanol facilities, a small amount of gasoline is added to the ethanol at the end of the process rendering it unfit for human consumption. (3) Upon review of the treatment of ethanol facilities under the Clean Air Act, in March of 2006, the EPA requested public comment on a new rule that would remove fuel ethanol facilities from the "major emitting facility" category, thereby altering their emission requirements under the Clean Air Act's Title V, Prevention of Significant Deterioration (PSD), and New Source Review (NSR) programs to that of ethanol facilities for human consumption. (4)

The EPA reviewed comments submitted by interested groups such as the Office of Air Quality and Planning Standards, and with the support of various members of Congress (5) enacted a new rule that removed fuel ethanol facilities from the "major emitting facility" source category under the Clean Air Act. (6) This rule change gave fuel ethanol facilities the same emission requirements as ethanol facilities used for human consumption. (7) The EPA's rule change in ethanol classifications was a victory for corn growing, ethanol producing states. (8) As the manager of Millennium Ethanol in Marion, South Dakota, explained, "[t]he rule change will offer developing ethanol plants the ability to engage in a streamlined permitting process and expedited construction." (9) One of the motivations for this change in the rule is the goal for this country to have decreased dependence on foreign oil. (10) A second motivation for the EPA is its goal to place fuel ethanol facilities on equal footing with ethanol facilities used for human consumption, which stems from the facilities' production processes being substantially similar. (11)

Because the rule change has the potential to allow producers to expand existing ethanol facilities, as well as construct new facilities with greater output capacities, some environmentalists are concerned that ethanol producers will abuse the increased emission thresholds by using less environmentally-friendly methods to produce ethanol. (12) Spurred by these concerns for environmental responsibility, the Natural Resource Defense Council (NRDC) recently filed suit against the EPA, claiming that the rule change was based on "faulty analyses" and that the public was not given opportunity to comment on the finalized rule. …