Minnesota Pollution Control Agency

Contact: Ralph Pribble, 651-757-2657 St. Paul, Minn. -- Minnesota Energy Inc. will pay a civil penalty totaling $1,150,000 for a variety of alleged violations at the company's ethanol-production facility in Buffalo Lake. Occurring from 2006 to 2008, the violations were discovered during Minnesota Pollution Control Agency staff inspections of the facility, and through review of operational records the company is required to submit to the MPCA under its environmental permits. $250,000 of the penalty will be paid in cash, with the remaining $900,000 taking the form of a supplemental environmental project (SEP). The SEP calls for the company to sell a water well that it had developed in anticipation of expansion and five acres of adjacent land to the city of Buffalo Lake for $900,000 less than market value. Many violations are alleged in the agreement, particularly the failure to properly operate an air-emissions control system called a "thermal oxidizer" that was required by a 2003 consent agreement with the U.S. Environmental Protection Agency. The unit had many operational problems and shutdowns in 2006-2008. Other alleged violations include failure to inspect and maintain other production and pollution-control equipment; failure to report shutdowns and breakdowns of air-pollution-control equipment; failure to monitor and sample emissions and wastewater discharges according to permit requirements; exceeding permitted wastewater discharge limits; failure to develop a stormwater management plan and manage stormwater as required by permit; and other recordkeeping and reporting violations. Under the SEP in the penalty agreement, the company will sell a well that produces drinking water low in arsenic to the city of Buffalo Lake, whose existing water supply is high in arsenic. The well and associated five acres are about seven miles north of the city. The company agreed to sell the well and land to the city for $900,000 less than market value. SEPs commonly are a component of environmental penalties, and may include environmental improvements to the facility or other projects to benefit the environment. Projects must be approved by the MPCA. In addition to paying the civil penalty, the company agreed to resolve the violations through corrective actions, including specific plans on how it will ensure compliance with permit limits and prevent reoccurrence of the violations in the future. Those requirements have been met. When calculating penalties, the MPCA takes into account how seriously the violations affected the environment, whether they were first-time or repeat violations, and how promptly they were reported to appropriate authorities. Penalties also attempt to recover the calculated economic benefit gained by failure to comply with environmental laws in a timely manner. For a comprehensive list of enforcement actions by the MPCA, refer to the agency's Web site at hhref="/newscenter/enforcement.html.