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STATE OF MINNESOTA MINNESOTA POLLUTION CONTROL AGENCY

IN THE MATTER OF THE DECISION ON THE NEED FOR AN ENVIRONMENTAL IMPACT STATEMENT FOR THE PROPOSED HEARTLAND CORN PRODUCTS DENATURED ETHANOL STORAGE TANK ADDITION WINTHROP, MINNESOTA SIBLEY COUNTY

FINDINGS OF FACT CONCLUSIONS OF LAW AND ORDER

FINDINGS OF FACT

Pursuant to Minn. ch. 4410, the Minnesota Pollution Control Agency (MPCA) staff prepared and distributed an Environmental Assessment Worksheet (EAW) for the proposed Heartland Corn Products (Project). Based on the MPCA staff environmental review, the EAW, comments and information received during the comment period, and other information in the record of the MPCA, the MPCA hereby makes the following Findings of Fact, Conclusions of Law, and Order.

Project Description

Existing Facility and Proposed Project

1. Heartland Corn Products (HCP) currently owns and operates an ethanol production facility locatedsouth of State Highway 19, approximately one mile east of the city of Winthrop in Sibley County.The facility consists of a West Plant and an East Plant. The East Plant was originally constructed in1994 and the West Plant was constructed in 2005. The facility has a combined maximum productioncapacity of 120 million gallons/year of 200 proof ethanol. The West Plant tank farm currently has adenatured ethanol storage tank capacity of 4 million gallons consisting of two 2-million gallon tanks.These tanks are numbered #2504 and #2507 in the facility’s current Above Ground Storage Tankpermit. The Project will increase the West Plant denatured ethanol tank storage volume with theaddition of a new 2-million gallon storage tank, proposed to be Tank #2508. This will increase thetotal denatured ethanol storage tank volume in the West Plant containment area from 4 milliongallons to a total of 6 million gallons. The existing West Plant containment area capacity is over 3million gallons which provides for 110% containment of any one spill. The additional storagecapacity will improve rail car and truck loading operations. The Project does not include any otherchanges to current ethanol production or operations.

2. The construction of the 2-million gallon tank will not begin until the tank containment area isexpanded. The expansion of the containment area will disturb approximately 0.5 acres of existingfacility property to the west of the existing West Plant containment area. The expanded tankcontainment area will be large enough for the new tank and a possible future tank, although thereare not currently plans for a future tank. This additional area also allows for minimal disturbance tothe existing containment area synthetic liner and berm during construction activities. The existingsynthetic liner will be extended into the expanded containment area planned to the west.Containment volume will be greater than 3 million gallons with 12 inches of free board and will be

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On the Need for an Environmental Impact Statement Findings of Fact Heartland Corn Products Conclusions of Law City of Winthrop, Sibley County And Order

maintained before, during, and after the proposed new tank installation, as required by Federal rules, 40 CFR pt. 112. Existing piping for the current storage tanks will be extended to the new tank.

3. The tank construction will be scheduled for November 2014, and is estimated to take four to sixweeks. The tank will be field erected within the tank containment area on a gravel filled metal ringto allow for drainage away from the tank above the synthetic liner. Construction will involveexcavation for the placement of the tank foundations, expanded berm, construction of the tank,and installation of ancillary piping for the transfer of denatured ethanol to and from the new tank.Construction activities will be contained within the boundaries of the existing facility and willgenerate minimal, if any, waste. No hazardous waste will be generated.

4. The new tank will have an internal floating roof to control working and breathing emission losses.The potential emissions from this tank will be 0.21 tons/year of volatile organic compound (VOC)emissions. The tank will store one third of the facility’s denatured ethanol production which iscurrently stored in the two existing denatured ethanol storage tanks. These tanks are also 2 milliongallons in size. The air emissions from the existing two denatured ethanol storage tanks will beproportionally reduced by reducing their combined throughput by one third. Product throughputwill be divided between the new tank and the two existing tanks. The throughput and overallemissions remain the same.

Permitting History

5. HCP currently has an air emissions permit (No. 14300014), and has applied for a minor air emissionpermit modification from the MPCA; the permit modification does not require public notice. OnSeptember 23, 2014, the minor amendment application was deemed complete by the MPCA AirPermitting Program.

6. HCP has an aboveground storage tank permit (AST#54981). An aboveground storage tank permitmodification was applied for; this permit modification also did not require public notice.

7. HCP has a National Pollutant Discharge Elimination System/State Disposal System (NPDES/SDS)Industrial Stormwater Permit (MN0062561); there are no modifications required to the permit forthis Project.

8. The Project will not disturb more than an acre of land; therefore, a NPDES/SDS constructionstormwater permit is not required.

Previous Environmental Review

9. The MPCA has not prepared an EAW or an Environmental Impact Statement (EIS) for HCP in thepast. An EAW was not prepared for HCP’s initial construction and use of the facility in 1995 as itinvolved the storage of less than 1 million gallons of hazardous materials, the threshold for amandatory EAW.

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Procedural History

10. Construction of a 2-million gallon storage tank trips the threshold in Minn. R. 4410.4300, subp. 10. b.Storage facilities which states “For construction of a facility on a single site designed for or capableof storing 1-million gallons or more of hazardous materials…” The MPCA is the designatedresponsible governmental unit (RGU).

11. Pursuant to Minn. R. 4410.4300, subp 10.b., an EAW was prepared by MPCA staff on the proposedProject. Pursuant to Minn. R. 4410.1500, the EAW was distributed to the Environmental QualityBoard (EQB) mailing list and other interested parties on September 15, 2014.

12. The MPCA notified the public of the availability of the EAW for public comment. A news release wasprovided to media in Sibley County, as well as other interested parties, on September 15, 2014. Thenotice of the availability of the EAW was published in the EQB Monitor on September 15, 2014, andthe EAW was made available for review on the MPCA website athttp://www.pca.state.mn.us/news/eaw/index.html.

13. The public comment period for the EAW began on September 15, 2014, and ended on October 15,2014. During the 30-day comment period, the MPCA received a comment letter from theMinnesota Historical Society, the Minnesota Department of Natural Resources, and one letter andone email from citizens. A list of the comment letters received and copies of the letters are includedas Appendix A to these Findings.

14. The MPCA prepared written responses to the comment letters received during the 30-day publiccomment period. The responses to the comments are included as Appendix A to these findings.

Criteria for Determining the Potential for Significant Environmental Effects

15. Under Minn. R. 4410.1700, the MPCA must order an EIS for projects that have the potential forsignificant environmental effects. In deciding whether a project has the potential for significantenvironmental effects, the MPCA must compare the impacts that may be reasonably expected tooccur from the project with the criteria set forth in Minn. R. 4410.1700, subp. 7. The followingfactors shall be considered:

A. Type, extent, and reversibility of environmental effects.

B. Cumulative potential effects. The responsible governmental unit (RGU) shall consider thefollowing factors: whether the cumulative potential effect is significant; whether the contribution from the project is significant when viewed in connection with other contributions to the cumulative potential effect; the degree to which the project complies with approved mitigation measures specifically designed to address the cumulative potential effect; and the efforts of the proposer to minimize the contributions from the project.

C. The extent to which the environmental effects are subject to mitigation by ongoing public regulatory authority. The RGU may rely only on mitigation measures that are specific and that

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can be reasonably expected to effectively mitigate the identified environmental impacts of the project.

D. The extent to which environmental effects can be anticipated and controlled as a result of other available environmental studies undertaken by public agencies or the project proposer, including other EISs.

The MPCA Findings with Respect to Each of These Criteria Are Set Forth Below

Type, Extent, and Reversibility of Environmental Effects

16. The first criterion that the MPCA must consider when determining if a project has the potential forsignificant environmental effects is the “type, extent, and reversibility of environmental effects”Minn. R. 4410.1700, subp. 7. A. The MPCA findings with respect to this criterion are set forth below.

17. The types of impacts that may reasonably be expected to occur from the Project include thefollowing:· surface water impacts· groundwater impacts· air quality impacts

18. A written comment received during the comment period raised the additional issue of noiseimpacts from the facility. Refer to Item 29 below.

19. With respect to the extent and reversibility of impacts that are reasonably expected to occur fromthe Project, the MPCA makes the following findings.

Surface water

20. There are no surface water bodies on the Project site. The nearest shallow marshes are locatedapproximately 550 feet from the Project site (one to the south and one to the northeast). There are some additional shallow marsh areas located approximately 1,000 feet or more north of the Project site. There are three areas located on the HCP property that are seasonally flooded; the closest of these areas is approximately 250 feet east-northeast of the Project site. The proposed Project is not anticipated to result in any significant adverse surface water quality impacts.

21. The Project will generate additional stormwater runoff from the new 0.5 acres of tank containmentarea once construction is complete. This area adds a small amount of impervious surface to the21.8 acres of existing impervious surface at the site. Any additional stormwater will be collected inthe tank containment area. This water will be pumped into the nearby stormwater pond located tothe south of the tank containment area after any accumulation occurs.

22. The site is graded and contoured for stormwater to drain to the site stormwater pond. Thestormwater pond is not lined and allows infiltration. Overflow from the stormwater ponddischarges to Sibley County Ditch No. 42 under the existing facility NPDES/SDS permit MN0062561.

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The NPDES/SDS permit requires the facility to test the stormwater pond anytime there is any overflow or at a minimum of once per year in April. Part of the testing protocol requires testing for ethyl alcohol and gasoline range organics (GRO) by a certified independent laboratory; to-date, ethyl alcohol and GRO have not been detected in samples collected from the stormwater pond.

Groundwater

23. The proposed Project involves the storage of large volumes of hazardous materials. The hazardousmaterials, if released to the environment via a leak or spill, have the potential to impactgroundwater.

24. The water table in the immediate vicinity of the Project site is located within the Quaternary aquiferat approximately 60 feet below the surface. Bedrock beneath the Project site occurs atapproximately 300 to 400 feet below the surface. The Project is not located within a MinnesotaDepartment of Health Wellhead Protection Area. Water for processing and for sanitary uses isobtained from two off-site wells located four miles to the east of the facility site.

25. Project design, permitting, planning, and operating procedures significantly minimizes potentialimpacts to groundwater from the Project site. All materials at the Project site are handled andstored in aboveground tanks with piping safety equipment to avoid over filling and over pressurizingduring material delivery or transfer. Containment areas currently surround the existing tanks andwill be constructed around the new tank.

26. Three observation wells were advanced at the facility in 2004 when the facility was seeking anadequate source for an on-site water supply for the West Plant facility construction in 2005. Two ofthe observation wells have since been sealed, with the exception of observation well #649183. Thisis a 2-inch well that is 380 feet deep with a static water level in 2004 of 214.5 feet. The well islocated at the far eastern edge of the property, approximately 4,000 feet from the proposeddenatured ethanol tank site. The well is not currently required to be monitored; however, theMinnesota Department of Natural Resources asked that the well be maintained for futuremonitoring if additional information is needed on groundwater depths. The well has not beentested for ethyl alcohol or GRO and was intended for water depth measurements.

Air Quality

27. Air emissions generated from the transferring, processing, and storage of chemicals at the Projectsite have the potential to impact air quality.

28. The proposed Project tank would have a potential of 0.21 tons per year of VOC emissions. Theseemissions will primarily be ethanol with a small percentage of the emissions from denaturant.Currently, all denatured ethanol produced is stored in existing tanks prior to shipment. Theproposed tank will correspondingly reduce product throughput, thus emissions, from the existingtanks. Therefore, the increased VOC emissions for the new tank will result in a correspondingdecrease in emissions for the existing tanks. There is no production increase associated with theProject. A minor air permit amendment application has been submitted to the MPCA. The tank is

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required to have a floating roof to minimize VOC emissions in accordance with the facility’s existing air permit. The emissions from the new tank will not result in additional emissions from the facility.

Public Comment on Impacts Related to Noise

29. Some noise from the heavy construction equipment will be generated during grading andconstruction, although the facility’s location is such that the expected sound contribution at nearbysensitive receptors (residents north of Minnesota Highway 19) will not significantly contribute toexisting traffic and plant noise levels. Noise from construction activities, which are estimated totake less than 90 days, will only occur during daylight hours. Once constructed, no noise isassociated with operation of the storage tank. One citizen commented about the noise thatemanates from the plant’s regular operations after 9:00 pm; however, facility operations are notpart of this Project. Monitoring of facilities is conducted if the MPCA receives complaints. As of thisdate, noise complaints have not been received by the MPCA for this facility. Noise pollution isregulated under Minn. R. ch. 7030. Complaints may be filed with the MPCA at the following link:http://www.pca.state.mn.us/index.php/about-mpca/assistance/citizen-complaints.html or bycontacting the MPCA at 651-296-6300 or 800-657-3864 in Greater Minnesota.

MPCA Findings

30. With respect to the reversibility of any potential effects related to surface water, groundwater andair quality, the MPCA finds that the potential effects that are reasonably expected to occur fromthis Project would be reversible. The expected effects to these media due to construction andoperation, are minimal as long as proper Best Management Practices are ensured.

31. The MPCA finds that information presented in the EAW and other information in the environmentalreview record is adequate to address the concerns related to surface water, groundwater and airquality. The impacts to these media that are reasonably expected to occur from the proposedProject have been considered during the review process and methods to prevent significant adverseimpacts have been developed.

32. The MPCA finds that the Project, as it is proposed, does not have the potential for significantenvironmental effects based on the type, extent, and reversibility of impacts related to surfacewater, groundwater and air quality that are reasonably expected to occur from the Project.

Cumulative Potential Effects

33. The second criterion that the MPCA must consider when determining if a project has the potentialfor significant environmental effects is the “cumulative potential effects.” In making thisdetermination, the MPCA must consider “whether the cumulative potential effect is significant;whether the contribution from the project is significant when viewed in connection with othercontributions to the cumulative potential effect; the degree to which the project complies withapproved mitigation measures specifically designed to address the cumulative potential effects; andthe efforts of the proposer to minimize the contributions from the project.” Minn. R. 4410.1700subp.7.b. The MPCA findings with respect to this criterion are set forth below.

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34. The EAW, public comments, and MPCA follow-up evaluation did not disclose any related oranticipated future projects that may interact with this Project in such a way as to result in significantcumulative potential environmental effects.

35. The EAW addressed the area of air quality for cumulative potential effects for the proposed Project.The proposed tank will correspondingly reduce product throughput, thus emissions, from theexisting tanks. Therefore, the increased VOC emissions for the new tank will result in acorresponding decrease in emissions for the existing tanks, and not result in significant cumulativepotential environmental effects.

36. The EAW also addressed the potential for an increase in train traffic. Since the permitted productionrates before and after the Project will remain the same, additional train traffic will not occur as noadditional production will occur related to the Project, resulting in no significant cumulativepotential environmental effects.

37. Based on information on the proposed Project obtained from the permit application processes andpresented in the EAW, and in consideration of potential effects due to related or anticipated futureprojects, the MPCA does not expect significant cumulative effects from this Project.

38. The MPCA finds that the Project does not have the potential for significant environmental effectsrelated or cumulative potential effects.

The Extent to Which the Environmental Effects Are Subject to Mitigation by Ongoing Public Regulatory Authority

39. The third criterion that the MPCA must consider when determining if a project has the potential forsignificant environmental effects is "the extent to which the environmental effects are subject tomitigation by ongoing public regulatory authority. The RGU may rely only on mitigation measuresthat are specific and that can be reasonably expected to effectively mitigate the identifiedenvironmental impacts of the project." Minn. R. 4410.1700, subp. 7(C). The MPCA findings withrespect to this criterion are set forth below.

40. The following permits or approvals will be required for the Project:

Unit of Government Permit or Approval Required MPCA Minor air emission permit modification MPCA Aboveground storage tank permit modification Local Fire Marshall Aboveground storage tank (modification)/plan review City of Winthrop Building permit

41. Building Permit. The proposer is required to obtain all required building and conditional use permitsrequired by local units of government to ensure compliance with local ordinances.

42. The above-listed permits include general and specific requirements for mitigation of environmentaleffects of the Project. The MPCA finds that the environmental effects of the Project are subject tomitigation by ongoing public regulatory authority.

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The Extent to Which Environmental Effects can be Anticipated and Controlled as a Result of Other Available Environmental Studies Undertaken by Public Agencies or the Project Proposer, Including Other EISs

43. The fourth criterion that the MPCA must consider is “the extent to which environmental effects canbe anticipated and controlled as a result of other available environmental studies undertaken bypublic agencies or the project proposer, including other EISs,” Minn. R. 4410.1700, subp. 7(D). TheMPCA findings with respect to this criterion are set forth below.

44. The following documents were reviewed by MPCA staff as part of the environmental impactanalysis for the proposed Project.

· data presented in the EAW· permit modification applications

45. This list is not intended to be exhaustive. The MPCA also relies on information provided by theProject proposer, persons commenting on the EAW, staff experience, and other availableinformation obtained by staff.

46. The environmental effects of the Project have been addressed by the design and permitdevelopment processes, and by ensuring conformance with regional and local plans. There are noelements of the Project that pose the potential for significant environmental effects

47. Based on the environmental review, previous environmental studies by public agencies or theProject proposer, and staff expertise and experience on similar projects, the MPCA finds that theenvironmental effects of the Project that are reasonably expected to occur can be anticipated andcontrolled.

48. The MPCA adopts the rationale stated in the attached Response to Comments (Appendix A) as thebasis for response to any issues not specifically addressed in these Findings.

CONCLUSIONS OF LAW

49. The MPCA has jurisdiction in determining the need for an EIS for this Project. The EAW, the permitdevelopment process, and the evidence in the record are adequate to support a reasoned decisionregarding the potential significant environmental effects that are reasonably expected to occurfrom this Project.

50. Areas where the potential for significant environmental effects may have existed have beenidentified and appropriate mitigation measures have been incorporated into the Project design andpermits. The Project is expected to comply with all MPCA standards.

51. Based on a comparison of the impacts that are reasonably expected to occur from the Project withthe criteria established in Minn. R. 4410.1700 subp. 7, the Project does not have the potential forsignificant environmental effects.

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APPENDIX A

Minnesota Pollution Control Agency

Heartland Corn Products Denatured Ethanol Storage Tank Addition Environmental Assessment Worksheet

LIST OF COMMENT LETTERS RECEIVED

1. Kevin Mixon, Regional Environmental Assessment Ecologist, Minnesota Department of NaturalResources, October 9, 2014.

2. Sarah Beimers, Manager, Minnesota Historical Society, October 3, 2014.

3. Chuck Schmidt, private citizen, October 2, 2014.

4. Dale Malheim, private citizen, October 6, 2014.

RESPONSES TO COMMENTS ON THE EAW

1. Comments by Kevin Mixon, Regional Environmental Assessment Ecologist, Minnesota Departmentof Natural Resources, October 9, 2014.

Comment 1-1: The Minnesota Department of Natural Resources stated that they had no comments or concerns at this time.

Response: No response required.

2. Comments by Sarah Beimers, Manager, Minnesota Historical Society, October 3, 2014.

Comment 2-1: The Minnesota Historical Society concluded that there are no properties listed in the National of State Registers of Historic Places, and no known or suspected archaeological properties in the area that will be affected by the Project.


3. Comments by Chuck Schmidt, private citizen, October 2, 2014.

Comment 3-1: Mr. Schmidt commented that he wanted to the Project to go forward.


4. Comments by Dale Malheim, private citizen, October 6, 2014.

Comment 4-1: Mr. Malheim commented that he did not have any problems with the tank being constructed. He did have concerns about noise generated from the facility.

Response: As of this date, noise complaints have not been received by the MPCA for this facility. Noise pollution is regulated under Minn. R. ch. 7030. Complaints may be filed with the MPCA at the following link: http://www.pca.state.mn.us/index.php/about- mpca/assistance/citizen-complaints.html or by contacting the MPCA at 651-296-6300 or 800-657-3864 in Greater Minnesota.

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