U.S. REQUESTS MINNESOTA COURT APPROVE AMENDED CONSENT DECREE
IN CLEAN AIR ACT SETTLEMENT WITH GOPHER STATE ETHANOL

WASHINGTON, D.C. - The Department of Justice today announced that it has requested the federal district court in Minnesota approve proposed amendments to the 2002 Clean Air Act settlement with Gopher State Ethanol, in St. Paul. The original Consent Decree was lodged with the Court on October 2, 2002, as one of 12 national settlements to mandate reductions in air pollution from ethanol manufacturing plants.

When the initial consent decrees were lodged, the U.S. provided an opportunity for the public to review all the proposed settlements, including the Gopher State deal. Residents of St. Paul who live near the facility raised a number of concerns regarding certain aspects of the settlement and provided written comments on the Decree. In addition, representatives of the community attended a January 8, 2003 meeting in St. Paul with federal and state officials to voice their concerns about the plant’s operation. As a result of the public input, the Plaintiffs elected to reopen the Consent Decree to strengthen certain aspects of the deal.

The Gopher State settlement, and the other 11 Minnesota deals, are the result of a state and federal effort which teamed together representatives of the Minnesota Pollution Control Agency, the state Attorney General’s Office, the EPA and DOJ.

According to Tom Sansonetti, Assistant Attorney General, “We worked with the community and with the Gopher State facility to get this settlement right for the citizens of St. Paul.” Sansonetti added that Gopher State has been cooperative throughout this process.

According to EPA Regional Administrator Tom Skinner, an important change is a restriction on the facility’s handling of “wet cake,” a by-product of the ethanol manufacturing process. “In an urban setting, the air pollution caused by this material is a problem,” Skinner said. “People in the community were concerned, and we’ve responded by restricting Gopher State’s reliance on the methods that create this by-product.”

On June 5, 2003, the United States lodged an Amended Consent Decree with the court that includes the agreed upon restrictions, and sought comments from the public on the revised settlement. The comments received are addressed in the government’s brief, which was filed with the Court today.

The Amended Consent Decree addresses allegations made by state and federal regulators that volatile organic compounds (“VOC”) and carbon monoxide (“CO”) from feed dryers, cooling cyclones and ethanol loading operations have historically been underestimated by the ethanol industry. Recent testing of these units in Minnesota plants indicates that the emissions are well in excess of the 100 tons per year that is the threshold for “major sources” to be regulated under the Prevention of Significant Deterioration (“PSD”) provisions of the Clean Air Act. Since the facilities are now considered to be major sources, they are required to install best available control technology on all units that are significant sources of pollution throughout the plant. The facilities were mistakenly permitted as minor sources when they were built.

Under the settlement, Gopher State must operate a thermal oxidizer to reduce VOC emissions by 95% from the feed dryers, and meet, new more restrictive emission limits for nitrogen oxides (“NOx”), particulate matter (“PM”) , carbon monoxide (“CO”) and hazardous air pollutants. The primary sources of these emissions are the feed dryers, fermentation units, gas boilers, cooling cyclones, ethanol load-out systems, and fugitive dust emissions from facility operations.

On August 22, 2003, a federal judge in Urbana, Illinois approved the United States’ comprehensive settlement with grain industry giant Archer Daniels Midland (“ADM”), covering ethanol and oil seed operations at 52 plants in 16 states, including the former Minnesota Corn Processors facility. ADM is the largest ethanol manufacturer in the United States with approximately 50% of the market. The ADM Decree requires the same 95% reduction in VOC emissions from the ethanol processes that have been imposed on the small Minnesota dry mills.

Other Minnesota plants that have previously settled with the state and federal governments and are operating under Consent Decrees:

Agri-Energy, L.L.C.

(Laverne)

Al-Corn Clean Fuel

(Claremont)

Central Minnesota Ethanol Cooperative (Little Falls)

Chippewa Valley Ethanol Company (“CVEC”) (Benson)

Corn Plus (Winnebago)

Diversified Energy Co., L.L.C. (“DENCO”)

Ethanol 2000

(Bingham Lake)

Agra Resources Cooperative (“Exol”) (Albert Lea)

Heartland Corn Products (Wintrop)

Minnesota Energy (Buffalo Lake)

Pro-Corn L.L.C. (Preston)

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