Legal Perspective

Permitting Agencies Gain Biofuels Expertise
By Todd Guerrero and Katherine Roek | March 15, 2007
As biofuel production facilities continue to expand, the need for developers to understand the applicable environmental and land use permitting requirements is imperative. It is equally important that state agencies begin to familiarize themselves with the technical and environmental issues associated with biofuels, which remains a relatively new industry in most states. Permitting biofuel production facilities, such as biodiesel and ethanol, involves air emission, water appropriation, water discharge, land use and other issues. Often, these different issues are addressed by different divisions within state and local agencies, and often within different state agencies altogether.

Generally, construction of biofuels facilities can't begin until all material permits are obtained. For instance, an air permit is a necessary precursor to construction, but not surprisingly, each state has a different process for obtaining air (and other applicable) permits.

Given the increasing support for renewable fuels, some agencies are beginning to recognize the need to better understand the biofuels industry and its environmental impact, and are accordingly beginning to develop permitting programs specifically tailored to the industry. Some states, particularly in the Midwest because of its strong biofuels growth, are in the process of creating a uniform review process for biofuels permit applications.

One such agency is the Minnesota Pollution Control Agency (MPCA)-the agency charged with overall environmental permitting in the state. The MPCA has created a team of biofuels permit engineers, each with a focus on a different area of the permitting process. This review team is committed solely to processing all of the necessary environmental permits for biofuels projects.

The MPCA's biofuels team was created in response to the significant increase in the number of ethanol projects proposed in Minnesota, to ensure that personnel with experience and expertise in ethanol and other biofuels would be reviewing each project. The team would also provide the public with better communication regarding the permitting process. The program seeks to facilitate communication and coordination among those state agencies that have at least some permit authority over biofuels plants. For example, in Minnesota, the MPCA has authority to review applications for air permits and storm water discharge, while the Minnesota Department of Natural Resources is charged with reviewing applications for groundwater appropriation. Local agencies are often charged with regulating land use and zoning review for projects. The MPCA's biofuels program seeks to coordinate and facilitate each of these areas to ensure that the cumulative environmental impact of a proposed plant is efficiently and effectively evaluated.

Other states, including Illinois, Missouri, and Michigan, have also recognized the need to better facilitate the permitting process for biofuels projects. Each state has created guidance documents that developers have found useful when considering whether or not to build a renewable fuel facility. The Illinois Environmental Protection Agency's "Building an Ethanol Plant in Illinois" document provides comprehensive information on the state's permitting requirements for biofuels facilities and also provides a list of the financial incentives available to developers.

The Missouri Department of Natural Resources' "Developing Biofuel Production in Missouri" document addresses both ethanol and biodiesel, and provides business development considerations, information on environmental permitting and additional resources important to developers considering biofuels facilities.

Michigan's Department of Labor and Economic Growth formed its Ethanol Coalition of Michigan, a coalition uniting farm commodity organizations, fuel suppliers, universities, businesses, government agencies and individuals working to promote the production and use of ethanol in the state. It also created the Michigan Biomass Energy Program to encourage increased production and use of Michigan's biomass resources.

The biofuels industry continues to experience growing pains, and the permitting process is certainly no exception. Fortunately, state and local permitting agencies, after hearing from biofuels developers and other stakeholders and applying their knowledge from other industries, are beginning to hone their expertise and develop programs designed specifically for biodiesel and ethanol. This is an important step in the right direction for biofuels.

Todd Guerrero and Katherine Roek are members of the Agribusiness & Energy Practice Group of Lindquist & Vennum PLLP, a leading provider of legal assistance on biofuels projects throughout the country. For more information, visit www.lindquist.com or call (612) 371-3211.

This article is only a general summary for informational purposes and does not constitute legal advice. Consult a qualified and experienced legal advisor for your specific situation or particular questions.
 
 
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