U.S. FILES AMENDED CONSENT DECREE IN RESPONSE TO PUBLIC COMMENTS

-Amended Settlement Enhances Pollution Controls In Response To Public Input -

WASHINGTON, D.C. – The Department of Justice, the Environmental Protection Agency and the state of Minnesota today filed an amended civil settlement with Gopher State Ethanol L.L.C. concerning air emissions from its ethanol production plant in St. Paul, Minnesota. The settlement with Gopher State was originally lodged with the U.S. District Court in St. Paul on October 2, 2002, at the same time as settlements with eleven other Minnesota ethanol producers for alleged Clean Air Act violations.

During a government-prescribed public comment period, several citizens and public interest groups suggested changes to the Gopher State settlement. As a result of negotiations between the governments and Gopher State following review of the public comments, the amended settlement filed today includes strengthened pollution controls.

Public comments by citizens who live near the plant noted particular concern that Gopher State's production of "wet cake" (a by-product used for animal feed) was resulting in odor and other problems. The amended settlement filed today addresses this concern and other comments by:

•prohibiting wet cake production through July 10, 2003, except in the event of a dryer system upset, breakdown or malfunction.

•requiring that during periods of upset, breakdown or malfunction after July 10, 2003, wet cake production may only take place if emissions will not exceed the source-wide emission caps. Gopher State must quantify its emissions using a method agreed to by EPA and MPCA. If Gopher State's wet cake emissions have not been quantified, wet cake production is limited to the completion of the ethanol in process at the time of the upset, breakdown or malfunction and no fermentation can be initiated until the dryer control technology is fully operational.

•requiring Gopher State to install a baghouse for additional control of particulate matter and volatile organic compounds from the cooling cyclones.

•expressly stating that the settlement does not relieve Gopher State Ethanol of its obligations under other agreements or other applicable federal, state and local laws or ordinances, such as odor-control ordinances.

Following lodging of the amended settlement today, there will be an additional 15-day period for public comment.

"This amended settlement demonstrates the Department of Justice's willingness to listen and give serious consideration to public comments on our environmental settlements," said Thomas L. Sansonetti, the Assistant Attorney General for the Environment and Natural Resources Division. "Whether or not we always agree, we listen to the public and especially to those who will be most directly affected."

"The amendments to the consent decree for Gopher State Ethanol reflect Minnesota's commitment to environmental protection and our commitment to the concerns of the community," said Sheryl Corrigan, Commission of Minnesota's Pollution Control Agency.

The original settlement required Gopher State to install pollution controls expected to cost approximately $2 million and comply with stringent limits on plant-wide emissions of six key air pollutants, including particulate matter, sulfur dioxide, nitrous oxide, carbon monoxide, and volatile organic compounds, as well as meeting limits on hazardous air pollutants.

Ethanol is primarily a product of industrial corn and widely used as an automobile fuel by itself or blended with gasoline. Because of its high oxygen content, ethanol allows automobile engines to better combust fuel, resulting in reduced tailpipe emissions.

The Clean Air Act, as amended in 1990, directed EPA to issue regulations that require gasoline to be "reformulated" in order to burn cleaner. EPA's reformulated gasoline program is helping to reduce pollution in areas with the worst air quality problems. Reformulated gas is made in a way that prevents it from evaporating as quickly as conventional gasoline, and contains a chemical oxygen, know as oxygenate, to improve combustion. Ethanol is a type of oxygenate and a renewable fuel.

Despite ethanol's environmental benefits as a gasoline additive, the process of manufacturing ethanol can result in noxious emissions into the air. During ethanol manufacturing, dry mills burn off gasses that emit volatile organic compounds and carbon monoxide, both of which pose dangers to human health and the environment. EPA Regional Administrator, Tom Skinner, who heads the Chicago office that oversees environmental compliance in Illinois, Indiana, Michigan, Minnesota, Ohio, Wisconsin and 35 tribal reservations, met with representatives from the ethanol industry on June 3, 2002, to discuss recent emission test results, recommended test methods and the proposed pollution control technology. Minnesota is the first of the states to take action based on the new information.

In complaints filed with the 12 Minnesota settlements in October 2002, the government alleges that the facilities were operating in violation of the Clean Air Act's New Source Review (NSR) provisions. The Clean Air Act's NSR program requires a source to install pollution controls and undertake other pre-construction obligations to control air pollution emissions. The settlements reached with the 12 Minnesota ethanol plants, including Gopher State, will greatly reduce air emissions such as volatile organic compound emissions by 2,400-4,000 tons per year and carbon monoxide emissions by 2,000 tons per year. The settlements also will result in annual reductions of nitrogen oxides by 180 tons, particulate matter by 450 tons, and hazardous air pollutants by 250 tons. In addition to emission control requirements valued at about $2 million per plant, each facility agreed to pay a civil penalty ranging from $18,000 - $42,000.

Eight of the 12 settlements were signed by the Court on March 7, 2003, while two others were signed on March 11, 2003. One other settlement, with Diversified Energy Co., L.L.C. in Morris, Minnesota, also received comments, and the governments' responses were filed with the Court on March 27, 2003.

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