Regional Reports: Region 5

Laurence A. McHugh
Barnes & Thornburg
South Bend, Indiana
Lmchugh@btlaw.com

Ethanol Plant Initiative (Region 5)

On March 15, 2002, Region 5 recommended to Minnesota that it not issue any synthetic minor permits to any ethanol production facility. Relatively recent testing performed in Kansas, Indiana, Illinois and Minnesota, using a modified EPA Reference Method 25A, revealed that VOC emissions from certain facilities, especially distiller's dried grains and solubles dryers, were many times greater than previously thought. These tests have revealed annual VOC emission levels of between 120 and 1,000 tons per year. On April 24, 2002, Region 5 sent a letter to twenty-three ethanol producers in the region, and the industry trade association, Renewable Fuels Association, requesting their attendance at a meeting on May 6. The meeting was to discuss resolution of NSR violations "on terms most favorable to the industry." The meeting was subsequently postponed and is currently scheduled for June 3, 2002. A number of sources have either installed, or are in the process of installing, thermal oxidizers to reduce VOC emissions. This issue arises in the context of a significant expansion in ethanol production capacity, fueled in part by recent legislation (H.R. 4) that would boost ethanol production to 5 billion gallons per year, and phase out the use of methyl tertiary butyl ether (MTBE), currently the most popular additive in oxygenated gasoline.

MACT Hammer (Indiana)

In late March, the Indiana Department of Environmental Management (IDEM) mailed (and posted at www.in.gov/idem/air/permits/112j/), a packet of information to all Part 70 sources which are major sources of HAPS. The packet included an explanation of the section 112(j) MACT "hammer," a list of potentially affected source categories, a list of categories for which EPA expected to issue final MACT standards by May 15, 2002, and a Part 1 MACT application form and instructions. The application forms must be filed with IDEM, Region 5, and the local agency if you are in an area with one. Indiana has adopted the two part application approach based on EPA's revised rules. IDEM has also provided for applicability determinations for those sources which are uncertain as to whether they are subject to the hammer. The application for a determination need only be requested in the cover letter. IDEM will render a decision and notify you whether you need to submit Part 2 of the application.

Kathy Bailey
Bailey Law Group, PC
Washington, DC
Kbailey@baileylawgroup.com

AEP Settlement in Cheshire, Ohio

On April 16, 2002, the Village of Cheshire, Ohio accepted the offer of American Electric Power to purchase all the property in the village and relocate all the residents. AEP installed a new SCR unit at the Gavin plant in Cheshire last year and the residents began to experience elevated SO2 and sulfuric acid levels. Sulfuric acid "clouds" from the plant frequently touched down in and around the village.

As part of the agreement, residents of Cheshire will release AEP from claims for health or property damage. Most residents plan to move as soon as possible. AEP has not finalized plans for the use of the property but has announced it intends to expand the plant.