Permitted to Proceed

It looks like environmental permitting could be a bigger issue in the U.S. biodiesel industry than previously thought. With some producers reportedly partially eschewing the process, it's important to end any such trend before it becomes widespread. While certainly not a "how-to" article, Biodiesel Magazine talks to some industry experts about an issue that's apparently coming to a head.
By Dave Nilles | July 01, 2006
On the long list of biodiesel plant development "must haves," permitting ranks with equity drives and choosing a design/build team. But with a flurry of proposed U.S. projects evolving into a blizzard, some experts believe permitting is also becoming one of the most overlooked necessities of producing biodiesel by the book.

Recent reports-both confirmed and unconfirmed-of proposed and under-construction biodiesel plants progressing without all necessary permits would seem to verify an unsettling issue in the industry. Several sources tell Biodiesel Magazine about a former biodiesel producer that at least temporarily shut down due to permitting issues. Also, several months ago, a well-publicized incident in Washington no doubt led to heavier scrutiny of the safety and legality of some biodiesel operations.

It's apparent some facilities, whether by choice or by accident, are moving ahead without the necessary permits in hand. "There are probably more than we even care to know about," says Leland Tong, chairman of the National Biodiesel Accreditation Commission (NBAC) and consultant with Marc-IV Consulting. "A large company like REG (Renewable Energy Group) that already deals with permits on a crushing plant-they have people that specialize in permitting and away they go. But a couple of guys that weld a tank together to [produce] a couple million gallons per year-they don't worry about permits."While the current market dynamics and profit-making potential are turning project development into a frenzy, those in the know issue a clear warning.

"There's no excuse [not to have proper permitting]," American Ag Fuels COO Brett Damman says. "If you're smart enough to build a biodiesel plant, you're smart enough to get it permitted."

Fuzzy Area for Industry
Tong says that, for many, biodiesel plant permitting is an industry gray area. The relative "newness" of the industry and lack of experienced environmental engineers is contributing to the problem. Although they are becoming more familiar with it, regulatory officials are just starting to become accustomed to biodiesel production. That means the industry is, in some respects, helping the watchdogs do the watching.

"I do know this is an issue for our industry," Tong says. "I get a lot of calls from state regulatory folks about how to classify this. They don't have a general emissions profile for a biodiesel plant. There are no standard numbers that a regulator can use to classify a biodiesel plant."

Making things even more complicated are the many and varying process technologies being touted and utilized in the marketplace. Standard emissions figures are sometimes times hard, if not impossible, to come by.

A prime example of the lack of industry familiarity is evident when talking with Howard Gebhart of Colorado-based Air Resource Specialists Inc. Despite a wealth of experience with air permitting in the ethanol industry, Gebhart has yet to jump headfirst into the biodiesel fray. At this point, Gebhart hasn't seen the need to, since the ethanol industry is more active than ever, and because biodiesel isn't as complicated-or at least it shouldn't be.

Minnesota Milestones
As with many things biodiesel, the state of Minnesota was first to house a large-scale commercial facility. Naturally, the state's regulatory agencies were also among the first to deal firsthand with permitting the plants.

With offices in Minneapolis, the law firm of Lindquist & Vennum PLLP helped obtain proper permitting for the SoyMor facility, which currently produces 30 MMgy in Glenville, Minn. The plant recently became the latest to become accredited by the NBAC. Lindquist & Vennum also worked with the Minnesota Soybean Processors (MnSP) facility in Brewster, Minn., on its permits.

In a state that's seen its fair share of emissions issues with the ethanol industry, Lindquist & Vennum's Todd Guerrero tells Biodiesel Magazine the single biggest issue he faced was explaining that biodiesel isn't ethanol. "Many people thought that, like ethanol and the problems it had with odor, biodiesel would have similar odor issues," Guerrero says. "It took some explaining to local authorities that those issues weren't going to be similar to ethanol-especially the older ethanol projects."

REG Project Engineer Mark Vermeer aided the Minnesota Pollution Control Agency (MPCA) in forming guidelines for biodiesel plant permitting. Other states, such as Iowa, are becoming increasingly familiar with regulating biodiesel plants, according to Vermeer. REG has worked on several large-scale projects in Iowa, where Vermeer says it takes approximately three months to permit a facility. However, Vermeer says, in other states and/or projects with unique permitting challenges, it could take up to nine months to properly permit a plant.

REG has mostly worked on large greenfield sites, which Vermeer says are typically easier to permit than brownfield locations. Now that some greenfield sites are growing to 30 MMgy and above, the permitting issues are also increasing.

The MPCA's Rich Sandberg says the Glenville and Brewster plants are now covered by the U.S. EPA's prevention of significant deterioration (PSD) requirements, which necessitate the application of best available control technologies (BACT). Certainly not uncommon, PSD requirements are based on the nature of emissions from a facility. "Size plays into it," Sandberg says. "It's not uncommon at all. With the refining of biofuels and biodiesel, the issue is that the boilers frequently will trip some of these requirements."

Sandberg also says MnSP is considering using biodiesel in its boilers. "We see value in that because of the low sulfur content in biofuels versus distillate fuels," Sandberg says. There are some unknowns with it, such as NOx emissions, Sandberg admits. "The anticipation is that it won't go up," he says. "But we don't have a lot of data."

When Minnesota's three biodiesel plants went up, there wasn't a lot of data on plant emissions. Now that's beginning to change. It shows the evolution of biodiesel plant permitting. "It wasn't extremely difficult to work through this," Sandberg says. "The facility had to come up with its own information. We had to find the rules and regulations that apply to this facility."

Managing Methanol

In many smaller-scale biodiesel plants, the methanol handling and/or recovery systems are a significant permitting focal point. In large-scale producers, permitting typically focuses on the boilers used to provide process heat. Like the difference in plant size, there are also differences in plant design.

"There are variations in so many different process designs," says Jake Stewart of Biodiesel Industries. "If you're not recovering all of your methanol, and have a vacuum recovery system, you'll have more problems with air emissions. If you're losing methanol, you're losing money. That's a scenario that's a loss-loss on permitting and from an economic standpoint."
Methanol, Guerrero confirms, has been one of the biggest sticking points experts have encountered in permitting biodiesel plants. "It's the one that gets the regulators' and local officials' attention," he says. "There has to be a containment plan in place to make sure methanol isn't spilling out."
While methanol's explosiveness and evaporative characteristics are a concern, it isn't the only regulated liquid in a biodiesel plant. As with other industrial facilities handling significant amounts of liquids, oil feedstocks, biodiesel, chemicals and coproducts are subject to Spill Prevention, Control and Countermeasures Plans (SPCCPs).

Expanding and Communicating
American Ag Fuels in Defiance, Ohio, is currently expanding its plant. The company's plans include a methanol distillation system. Currently, the plant sends its excess methanol to an outside entity, which purifies the alcohol and returns it to the facility.

As COO, Damman brings unique permitting experience to the project from his experience as a code official. He gives several key pieces of advice to start-up companies. He says working with a knowledgeable engineering firm to understand the code issues is crucial, and he suggests that project developers establish a preliminary layout of the project, based on code requirements. "You can't do it without getting your nose in the code," Damman says.

American Ag officials followed such a plan. After holding an initial meeting with regulatory officials to discuss the preliminary plan, they invited officials to an on-site meeting once the plans were fully developed. Those meetings were crucial to the company's success in obtaining its permits. Reaching out to officials and neighbors is something American Ag and others stress.

"We approach it as you're dealing with the people that are going to be the most affected by the project," Guerrero says. "From our perspective, we encourage developers to know who their neighbors are. It's important in the city and in rural greenfield projects. You have neighbors in both spots. Work with them."
Stewart agrees. "Having a good communicative relationship with the local permitting officials is absolutely critical," he says.

Most permitting experts agree that it's for a potential project's benefit to contact an engineering firm that understands the state and local codes.
The good news is that regulatory agencies are becoming increasingly familiar with the biodiesel process and its emissions profile. Hopefully, the rest of the biodiesel industry will follow suit and avoid the issues that afflicted fuel ethanol in its formative years. "Generally, the industry has learned many things from the ethanol industry-and how to approach permitting is one of them," Guerrero says.

Dave Nilles is a Biodiesel Magazine staff writer. Reach him at [email protected] or (701) 373-0636.
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