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Ethanol producer settles with DNR

By Sean Ryan
sean.ryan@dailyreporter.com

Utica Energy LLC’s decision to settle wastewater charges is the latest example of a growing problem between ethanol producers and Wisconsin regulators.

Utica Energy, which operates an ethanol plant in the town of Utica, will pay the state $280,000 to settle charges that the company illegally discharged polluted wastewater from its plant into a tributary of Sawyer Creek.

Stephen Kravit, an attorney representing Utica Energy, said no industrial chemicals or compounds were in the water the company discharged. He said there is a chance some metallic particles were picked up from the tanks that cooled the water.

“We have cooperated in every possible way to address and solve this problem,” Kravit said. “The solution is a permanent one.”

It’s the second settlement between Utica Energy and the Wisconsin Department of Justice. The company paid $75,000 to settle a state environmental lawsuit in June 2008.

The state also filed an environmental lawsuit against ethanol producer Ace Ethanol LLC, which runs a plant in Stanley. Ace settled with state and U.S. attorneys in March 2004.

The Wisconsin Department of Natural Resources, which regulates the wastewater permits for the ethanol plants, has had some trouble with them, said Tom Mugan, chief of the DNR wastewater section.

“I think that is just kind of a new industrial category — or relatively new anyway,” he said. “And the operators of these systems and the DNR had fairly little idea what to expect in terms of what problems can come up.”

The speed at which the industry grew created permitting problems, said Josh Morby, executive director of the Wisconsin Bio Industry Alliance. The first ethanol plant was built in Wisconsin 2002, and now nine plants in the state produce 500 million gallons a year, he said.

“The industry has had some growth challenges,” he said. “The same way the DNR doesn’t know how to deal with the industry, the industry is having challenges trying to deal with the DNR.”

Original permits issued to the plants were not stringent enough, Mugan said, forcing DNR regulators to revise permits and require ethanol producers change their means of disposing of wastewater. Instead of dumping it into a waterway, the plants must truck the water to treatment plants, dump it into a sewer system or spread it on land.

Utica Energy’s permit was revised in 2008, but the DNR discovered multiple violations of the new permit, according to the state lawsuit. Water from the company’s ethanol plant had too much bacteria. When the water was dumped into Sawyer Creek, oxygen levels were depleted, which threatened aquatic life.

The settlement announced Friday requires Utica Energy spend $200,000 to build a pipe so the company can send its wastewater to a treatment plant in Oshkosh.

Mugan said the DNR looked favorably upon the ethanol plants when they were first permitted because the ethanol was supposed to help the environment by cutting down on gas burned in cars.

“We looked at the big picture and thought that it was a good idea,” he said, “and we thought we had all the bases covered.”

Morby said ethanol producers constantly are working through regulatory issues with the DNR, and the three lawsuits do not reflect how permitting issues are usually resolved. He said the goal of most producers is to do away with the need to discharge wastewater.

“There are plants now,” Morby said, “that are putting together processes to have zero discharge.”

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