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Published December 15, 2010, 11:17 AM

Lawsuit opposes permit for Michigan ethanol plant

TRAVERSE CITY, Mich. — Environmentalists sued Michigan regulators Tuesday over an air quality permit issued for a planned refinery in the Upper Peninsula that will produce ethanol fuel from wood chips.

TRAVERSE CITY, Mich. — Environmentalists sued Michigan regulators Tuesday over an air quality permit issued for a planned refinery in the Upper Peninsula that will produce ethanol fuel from wood chips.

The Sierra Club lawsuit contends the Department of Natural Resources and Environment violated federal law by granting the permit in September to Frontier Renewable Resources LLC, which is preparing to build the plant near Kinross. It will use a biochemical method of breaking down wood into sugars that ferment and become ethanol. Plans calls for construction to begin next spring, with ethanol production getting under way in 2013.

The company says its ethanol will emit significantly less carbon — the greenhouse gas most responsible for climate change — than fossil fuels such as gasoline while helping reduce the nation's dependence on foreign oil. It will employ about 70 workers, plus an additional 150 during construction.

Environmentalists say it will use more energy through burning natural gas than it will produce in ethanol.

"The public is being asked to spend . our dollars on a project that's going to lose energy and create very few jobs for the resources consumed," said Marvin Roberson, a forest policy specialist with the Sierra Club's Michigan chapter.

Frontier is a partnership of Mascoma Corp. of Lebanon, N.H., and J.M. Longyear, a Marquette-based company that owns about 73,000 acres of forest in the Upper Peninsula. The venture has received $49.5 million in state and federal grants to build the plant and support research and development of its product, known as cellulosic ethanol.

Steve Hicks, CEO of J.M. Longyear, said he hadn't had time to review the Sierra Club suit but described the DNRE review of the company's application as "very thorough and rigorous."

The plant would use about 560,000 tons of pulpwood a year from public and private lands within a 150-mile radius of Kinross, grinding the logs into chips for the conversion to liquid fuel. Critics say that's a poor use of forest resources, but the company says it would take less than 1 percent of the live timber stock within its supply area.

The lawsuit, filed in Ingham County Circuit Court, says the state permit authorizes the Frontier plant to pump carbon monoxide, sulfur dioxide, nitrogen oxides, dust and other pollutants into the atmosphere.

It contends the DNRE erred by evaluating the permit application under standards meant for facilities that are minor polluters, based on Frontier's estimate that it will give off 95 tons of carbon monoxide a year — just short of the 100-ton threshold at which tougher requirements and reviews kick in.

That total was based on an expected annual output of 40 million gallons of ethanol. But the company's site plan makes clear it intends to double production to 80 million gallons, which would push carbon dioxide emissions well past the regulatory threshold and boost other pollution as well, the lawsuit says.

It says the Frontier permit meets the U.S. Environmental Protection Agency's definition of a "sham permit" — one granted under conditions the applicant plans to change shortly after beginning operations.

The suit also contends the permit was granted illegally because regulators allowed Frontier to use data from corn ethanol production when developing its estimates of air pollution from its wood ethanol plant. The company, which invented and patented its process, claimed there was no comparable data from industrial-scale wood ethanol generation even though Mascoma has a demonstration cellulosic ethanol plant in New York, the suit says.

Hicks said Frontier may expand to 80 million gallons at some point and will have to seek a revised permit if it does.

Agency spokeswoman Mary Dettloff also declined comment on the lawsuit. An agency fact sheet said DNRE staffers had concluded the project "would comply with all applicable state and federal air quality requirements."

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