Biodiesel Suffers Image Setback

Source: Seattle Times
[Apr 21, 2006]

It's an industry praised by environmentalists and heavily funded by state lawmakers. But it turns out that the promise of locally produced biodiesel also comes with the potential for pollution — and one of the state's first large-scale refineries is already running into trouble.

The state Department of Ecology has warned the operators of a biodiesel-crushing plant in Creston, Lincoln County, a small town near Spokane, that the company has committed an "egregious" violation of state air-quality laws by emitting toxic methanol vapors without a permit.

State investigators also say they have found spills of vegetable oil or biodiesel at the site. Now they are demanding that the owners of the company, Air Energy, show that they can properly handle the plant's industrial waste.

The situation has prompted the plant's landlord, a public-development agency in Lincoln County, to order an immediate halt to biodiesel production, saying it has serious concerns about contamination at the site.

And it comes just as biodiesel backers in the state are trying to show they can create a clean and profitable new industry.

As many as 10 biodiesel plants are being planned around Eastern Washington, including an unrelated project being pursued by the former leaders of Seattle's failed monorail project. And the state has offered million of dollars to jump-start the fledgling industry.

"We've got to be squeaky-clean; we've got to do it right, and we've got to be very, very transparent," said Jim Armstrong, the director of communications for the Spokane County Conservation District who has been a leading promoter of biodiesel.

"We can't build an industry on not getting permits."

John Graff, one of Air Energy's co-founders, could not be reached for comment. An investor, Gary Trautman, who runs a Moses Lake-based insurance company, declined comment, saying he didn't know the details of the operation. Biodiesel, used as a substitute for regular diesel fuel, is made by mixing vegetable oil or fat — often soybean oil — with methanol and a caustic chemical such as lye. In Creston, and many other operations, water is used to remove glycerin, methanol and other chemicals, creating wastewater that must be disposed of.

But Air Energy never got a state permit to release methanol vapor generated during the refining, according to a letter to Graff from an Ecology Department air-quality manager, Gregory Flibbert, who inspected the plant last week.

Because Air Energy has already been told it needs a permit, it was "egregious" that it has been operating without one, Flibbert wrote to Graff.

The state plans to issue a formal notice of violation, said Ecology Department spokeswoman Jani Gilbert.

Also last week, a team of Ecology Department investigators found oil or grease spills on the ground at the factory, around its equipment, and in a dry well fed by factory drains, said Gilbert.

The department is asking the company to clean up the spills and show that it has a way to handle industrial wastewater. If the company doesn't cooperate, then "we would have to consider other enforcement options," said Gilbert.

Meanwhile, the alleged pollution at the plant is just the latest chapter in a yearlong feud between Graff and the Northwest Lincoln County Regional Public Development Authority, the agency that paid for the building where Air Energy is operating. The agency has been trying to evict Graff and his businesses, and the legal dispute is in arbitration.

After the latest inspections, the development agency said it never officially sanctioned a biodiesel refinery there in the first place. The facility had been set up to be an animal-feed factory.