Minnesota Pollution Cont,rolAgency 520 Lafayette Road North I St. Paul, MN 55155-4194 I 651-296-6300 I 800-657-3864 I 651-282-5332 TTY I www.pca.state.mn.us .March 14,2008 TO: INTERESTEDPARTIES RE: Agassiz Energy Ethanol Production Facility Enclosed for your information is a copy of the Minnesota Pollution Control Agency (MPCA) Citizens' Board (Board) Item for the proposed Agassiz Energy Ethanol Production Facility, Polk County, and a copy of the Board Agenda. The Board Item includes: . Proposed Findings of Fact, Conclusions of Law, and Order for the Environmental Assessment Worksheet; . Responses to written comments received for this project submitted; and . Request for a positive declaration on the need for an Environmental hnpact ~tatemen1. There were 82 comment letters received during the public comment period, and 10 comment letters' received after the close of the public comment period. In an effort to save postage and resources, these comment letters (along with the above documents) can be reviewed at the MPCA offices in S1.Paul and Detroit Lakes, and at the following libraries: . Minneapolis Public Library at 300NicolletMall, Minneapolis . LegislativeReference Library at 645 State OfficeBuilding, S1.Paul . CrookstonPublic Library at 110North Ash Street,Crookston . ClimaxPublic Library at 104WestBroadwayAvenue, Climax .. East Grand Forks Public Library at 422 4thStreetNW, East Grand Forks . Fertile Public Library at 101 SouthMill Street,Fertile . Fosston Public Library at 403 FossAvenueNorth . McIntosh Public Library at 115BroadwayNW The Board Packet and commentletters can alsobe viewedon our MPCA Web site at . http://www.pca.state.mn.us/aboutlboard/bdagenda.html. Requests for copies of these comment letters and Board documents may be made by contacting the S1.Paul office at 651-297-8510. The Board Item will be presented at the MPCA Committee and Board Meetings. Please refer to the enclosed Board Agenda for specific location, dates, and times. We encourage your attendance at the Committee and Board Meetings. If you have any questions regarding the enclosed Board Item or the specifics of the meeting, feel free to contact Mike Rafferty of my staffa~ 651-297-7173. Sincerely, Q~ ~. ~a-c-. ~.mes L. Warner, P.E. Division Director Industrial Division JLW:mbo Enclosures 150 YEARS St.Paul I Brainerd I Detroit Lakes I Duluth I Mankato I Marshall I Rochester I Willmar af'STATEHOODI8U.2008 ---- MINNESOTA POLLUTION CONTROL AGENCY Industrial Division Biofuels Sector Board Item Cover Sheet MEETING DATE: March 25,2008 DATE MAILED: March 14, 2008 Presenter(s): Phone Number: 651-297-7173 Supv/Mgr: Phone Number: 651-296-8399 Division Director: Phone Number: 651-296-7333 Deputy Commissioner: Leo Raud s Phone Number: 651-296-7305 Attorney: Kathleen Winters Phone Number: 651-297-8756 TITLE OF BOARD ITEM: Agassiz Energy Ethanol Production Facility - Request for Approval of Findings of Fact, Conclusions of Law, and Order and Authorization to Issue a Positive Declaration on the Need for an Environmental Impact Statement LOCATION: ErskineIKnute Polk City/Township County TYPE OF ACTION: Environmental Review RECOMMENDED ACTION: Approval of Findings of Fact and Authorization to issue a Positive Declaration ISSUE STATEMENT: An Environmental Assessment Worksheet (EAW) was prepared by the Minnesota Pollution Control Agency (MPCA) staff on the Agassiz Energy, LLC (Agassiz Energy or Proposer) proposal to construct a dry mill, 200- proof fuel ethanol production facility in Polk County, called the Agassiz Energy Ethanol Production Facility (Project or Facility). The proposed production capacity is 70 million gallons per year of undenatured ethanol (74 million gallons per year of denatured ethanol). Agassiz Energy plans to use a solid fuel (primarily coal)- fired boiler for steam generation. Agassiz Energy would process approximately 26.1 million bushels of corn per year. Agassiz Energy proposes to pump ground water at an average daily rate of 522 gallons per minute (gpm) (not to exceed a peak pumping rate of 783 gpm) from the aquifer for this Project. The total annual water appropriation would be approximately 274 million gallons per year. The Project will be a zero liquid discharge facility; no process water or non-process utility wastewater will be discharged. This Project was reviewed in an EA W as a mandatory category for ethanol production. Pursuant to Minn. R. 4410.4300, subp. 5.B, the MPCA is the governmental unit responsible for preparing a mandatory EA W to assess the potential for significant environmental effects, and to determine the need for an Environmental Impact Statement (EIS). During the EA W comment period, the' preparation of an EIS was requested. The proposed Findings of Fact, Conclusions of Law, and Order, including a summary of significant issues and the response to comments received on the EAW, are attached. Based on the MPCA staff environmental review, comments, and information received during the comment period, and other information in the record of the MPCA, the proposed Findings of Fact, Conclusions of Law, and Order conclude that insufficient information exists to make a reasoned decision about the potential for, or significance of, environmental impacts, and that the lacking information can be reasonably obtained. Pursuant to Minn. R. 4410.1700, subp. 2a, item A, the Printed on recycled paper containing at least 30% fibers from paper recycled by consumers. Telephone Devicefor Deaf(TDD): 1-800-657-3864; Local 651-282-5332 This material can be made available in other formats. including Braille, large type or audio tape, upon request. - ------- MPCA staff recommends that the Project Proposer complete an EIS scoped to supply additional data to characterize the degree to which the surface and ground-water systems are connected in the area of the proposed Project for determining the potential for significant environmental effects on surface waters, including wetlands, from the Project’s ground-water pumping. The MPCA staff also recommends additional data be collected during the EIS regarding the performance of active carbon technology at fluidized-bed combustors using coal with dry-sorbent injection/fabric filters to adequately determine the feasibility that this technology can be applied in reducing mercury emissions to 4.0 pounds per year to meet conditions expected by the MPCA’s Mercury Total Maximum Daily Load (TMDL) Implementation Plan. Because MPCA staff is recommending a positive declaration on the need for an EIS on other grounds, the feasibility study that would be required by permit should be included in the scope of the EIS. Finally, the draft EAW does not contain carbon dioxide emissions data to understand the potential contribution to greenhouse gases (GHGs) from the proposed coal-fired Project. The MPCA has recently made a decision to include GHGs in future environmental review; however, this EAW was drafted and placed on public notice prior to that decision. Because MPCA staff is recommending a positive declaration on the need for an EIS on other grounds, it is consistent with MPCA’s recent decision on GHGs to develop GHG emissions data as part of the recommended EIS. ATTACHMENTS: 1. Findings of Fact, Conclusions of Law, and Order – Attachment 1 2. List of Comment Letters Received on the EAW – Appendix A 3. Responses to Comments on the EAW – Appendix B 2 MINNESOTA POLLUTION CONTROL AGENCY Industrial Division Biofuels Sector Agassiz Energy Ethanol Production Facility Request for Approval of Findings of Fact, Conclusions of Law, and Order and Authorization to Issue a Positive Declaration On the Need for an Environmental Impact Statement March 25, 2008 ISSUE STATEMENT An Environmental Assessment Worksheet (EAW) was prepared by the Minnesota Pollution Control Agency (MPCA) staff on the Agassiz Energy, LLC (Agassiz Energy or Proposer) proposal to construct a dry mill, 200-proof fuel ethanol production facility in Polk County, called the Agassiz Energy Ethanol Production Facility (Project or Facility). The proposed production capacity is 70 million gallons per year of undenatured ethanol (74 million gallons per year of denatured ethanol). Agassiz Energy plans to use a solid fuel (primarily coal)-fired boiler for steam generation. Agassiz Energy would process approximately 26.1 million bushels of corn per year. Agassiz Energy proposes to pump ground water at an average daily rate of 522 gallons per minute (gpm) (not to exceed a peak pumping rate of 783 gpm) from the aquifer for this Project. The total annual water appropriation would be approximately 274 million gallons per year. The Project will be a zero liquid discharge facility; no process water or non-process utility wastewater will be discharged. This Project was reviewed in an EAW as a mandatory category for ethanol production. Pursuant to Minn. R. 4410.4300, subp. 5.B, the MPCA is the governmental unit responsible for preparing a mandatory EAW to assess the potential for significant environmental effects, and to determine the need for an Environmental Impact Statement (EIS). During the EAW comment period, the preparation of an EIS was requested. The proposed Findings of Fact, Conclusions of Law, and Order, including a summary of significant issues and the response to comments received on the EAW, are attached. Based on the MPCA staff environmental review, comments, and information received during the comment period, and other information in the record of the MPCA, the proposed Findings of Fact, Conclusions of Law, and Order conclude that insufficient information