Permit Pending

The complicated and overlapping process of obtaining the proper permits to build and operate a biodiesel plant can be confusing at best. To make the process more manageable some projects rely on regulatory professionals, who can offer experience, foresight and perspective to avoid costly delays and fines.
By Anduin Kirkbride McElroy | April 06, 2007
"We are a year late on opening this biodiesel plant," read a January update on the Web site of Piedmont Biofuels, a 1 MMgy biodiesel production facility and cooperative in Pittsboro, N.C. "One of our major miscalculations has been the speed of permitting."

Stories of permitting mishaps are partly the reason why this aspect of plant development is approached with apprehension. Registration, permitting and zoning are not just one process, but many processes that must be timed correctly and coordinated with project engineering and financing. In fact, even though Piedmont is a small producer, and likely falls under less arduous regulatory procedures than a plant that would use more water and emit more pollutants, it still lists 25 approval processes that it had to go through in order to legally produce biodiesel.

Piedmont listed its permits on its Web site in hopes that its experience would help others. "We would say that permits are a small percentage of the tuition we have paid along the way, and that anyone wanting to save a fortune on their biodiesel endeavors should give us a call," the Web site read. Piedmont noted that it had been repeatedly contacted on the subject.

Biodiesel plant developers are seeking advice on permitting beyond North Carolina, however, which is why the Registration, Permitting and Zoning session was one of the best attended at the National Biodiesel Conference & Expo in San Antonio. The session featured perspectives from an official at a state department of environmental quality, an environmental permitting consultant and a director from a company with multiple biodiesel plants.

One of the issues with permitting is that there's no standard checklist. What permits a biodiesel plant must acquire and what regulations it must abide by depend on the size of the plant and the location. One person who attended the session voiced a concern that many others agreed with. "I wake up in the middle of the night scared that we're missing some permit that we need to be applying for," he said.

Figure 1

One of the first steps in the permitting process is to contact all of the federal, state and local regulatory agencies early and often, Brad Albin, director of plant sales and construction for Renewable Energy Group (REG) told session attendees. "At least have some of those early discussions, and every time you drive by their office you want to stop by and say hi," he said. Albin's presentation detailed many of the permits and reviews that most biodiesel production facilities must go through (see graphic below).

"It's very important to have a sense of urgency on these things and get them done early on in the process," Albin said. By getting them done early and performing due diligence, which he said is becoming increasingly severe, potential problems can be identified before they become costs. For example, Albin suggested thorough testing when it comes to the well water permits. "If you make mistakes on this end, you're going to spend a lot of money that you didn't have to, or you'll find out that in your budget, you didn't have a lot of the money that you needed," he said.

Albin recommended having a realistic project timeline, resource requirements and budget. Meeting regulations and laws, which Albin said isn't an option, will save money by avoiding delays and fines, thus keeping the project on time and on budget.

Regulators also suggest that project leaders be organized and have most questions answered before a permit is applied for, said Howard Haines, bioenergy program manager at the Montana Department of Environmental Quality. "It really helps if you have a clear knowledge of exactly what you want to do," he said. "Most of the time, there's a spot that fits that. Air and water folks really need to know where you're putting your plant before you start making big plans."

Additionally, Haines recommended having a plan for other details, such as the storage, handling and disposal of methanol and other hazardous air pollutants (HAPs), glycerol, wastewater, as well as any odor issues. Haines recognized that variables can crop up in any plan while the financing and permitting are being sorted out. Thus, he recommended being honest with the regulatory agencies about the limits and options of one's business plan. It's also important to identify key actions in case of various unknowns.

Sometimes, problems with permitting may stem from a lack of experience on the part of the local regulatory agencies. "The good news is, all the regulations to make biodiesel are there," Haines said. "The bad news is they're all for large plants (over 30 MMgy). There hasn't been enough time since the idea of making biodiesel on a small scale for the local regulators to come up with a process."

Haines described the permitting process almost as if it's a marketing or education campaign. "You need to talk to the local folks who know all the regulations," he suggested. "You're going to have to explain it to them because they may not understand." Don't assume anything and write down everything, he said.

Albin agreed. "Don't believe anything until you get it in writing," he said. "A lot of these folks will tell you anything you want to hear-not because they're trying to be mean, but sometimes because they just don't know."

Those at Piedmont Biofuels can commiserate. "Since biodiesel is still relatively new, it tends to require a regulatory education every time, and regulators who are unsure have a tendency to pass you along to the next agency," the Web site read. "Communication from one level of government to the next tends to be slow, which means getting permits tends to bog [the project] down."

Though some regulators may need to be educated about the biodiesel process, they can also be one of the best sources of information on the process. "You don't have to reinvent the wheel," Haines said. "Know where to get help. The one thing I would really recommend is to contact the fire marshal."

The education campaign must also be brought to the public. Some suggested starting dialogue with community groups before the first permit has been applied for. "When people start hearing about alcohols and acids and bases, normally people and reporters don't know what to think about that, and they can definitely impact public opinion and the local officials," Haines said. "Be sure you know how to address the press and make sure they can get as full a story as possible."

Usually, permits must be acquired and reviews completed before ground is broken, or in the case of an operating permit, before production commences, Albin said. The navigation of all of these processes can be facilitated with the aid of experienced consultants. "Pick consultants who know what they're doing and have done biodiesel in the past," Albin said. Another suggestion is to hire a local permitting expert. "They know the local regulations," an audience member said. "More importantly, they know the guys to pull permits from. It helps in terms of speed and accuracy."

Environmental consultants, such as Peter DeRossi of the environmental and engineering consulting firm Foth & Van Dyke and Associates Inc., can help with the important and complicated permits involving air quality and pollution control. DeRossi's job is to identify and obtain the necessary environmental permits. The air quality and pollution control permits stem from the federal Clean Air Act requirements. "As biodiesel facilities become larger, it's more likely that they will encounter the plethora of federal air quality regulations that would cover both hazardous air pollutants and traditional air pollutants," DeRossi said.

Biodiesel facilities must control emissions from methanol and hexane, if applicable, which are classified as federal HAPs. "These materials are quite volatile, and they will want to escape from any number of locations," DeRossi said, citing transfer operations, tank emissions, equipment leaks and process emissions as possible locations. A 45 MMgy plant is likely to be considered a major source, and often a company will be assumed to be a major source unless proven otherwise with data, he said. Thresholds that determine if a facility is a major source vary by location and the surrounding businesses. The location may also have different attainment levels for different pollutants. Whether it's considered a major or minor source of emissions, a construction air permit must be acquired before construction starts on a new facility or the expansion of an existing facility, DeRossi said.

There are several other federal environmental regulations that biodiesel facilities must comply with, which an environmental permitting expert can navigate. DeRossi recommended involving technical and legal expertise early in the project planning, and ensuring that these consultants work closely with the process technology supplier.

Permitting is not about luck, Albin said. "It's finding the right people to work with, a lot of hard work and attention to detail," he said.

Anduin Kirkbride McElroy is a Biodiesel Magazine staff writer. Reach her at [email protected] or (701) 746-8385.
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