Washington (Platts)--3Jul2007

An environmental group sued the Bush administration late Tuesday over a
rule that is designed to regulate air pollution from ethanol plants.

     The lawsuit, filed by Natural Resources Defense Council in the US Court
of Appeals for the District of Columbia Circuit, targets a rule that the
Environmental Protection Agency finalized on May 1. EPA's rule increased the
amount of pollution that could legally be released from all types of ethanol
plants, whether they produce ethanol for motor vehicle fuel, industrial
processes or even human consumption.

     EPA said the rule was needed so that all types of ethanol plants would
receive "equal treatment" under federal emissions regulations. For example,
the rule allowed ethanol plants that manufacture liquid transportation fuel
such as E85 to increase their emissions to 250 tons/year, a significant
increase from the current level of 100 tons/year.

     NRDC did not state its specific objections to EPA's rule in its initial
court filing, as is common with lawsuits that challenge agency rules. But the
basis for the suit may well be articulated in a 15-page letter that NRDC sent
to EPA in May, during the public comment period on the then-proposed rule.

     In the letter, NRDC notes that it is a "strong supporter of clean-burning
biofuels, including high-blend ethanol fuel." However, "it is also important
to note that ethanol production and usage can harm air quality," the group
wrote. 

     NRDC excoriated EPA's decision to allow more pollution from ethanol
plants that produce transportation fuel, noting that plants of this type are
experiencing a very high growth rate because of efforts to reduce imports of
foreign oil. "So it is at this moment that EPA decides this unprecedented new
wave of plants should be dirtier," NRDC said in its letter.

     The group also accused EPA of ignoring environmental concerns and bowing
to the wishes of "industry stakeholders" who want "weaker clean air
regulations so they could build dirtier new plants."

     NRDC is expected to detail its formal legal arguments against the ethanol
rule in the coming weeks. The court will then set a deadline for EPA to
respond to the suit.

		--Brian Hansen, brian_hansen@platts.com