Again WE're not the only "Critics"

CORN BATTLE

Ethanol Reaps a Backlash In Small Midwestern Towns Residents Fight Plants
On Water, Air Fears; Farmers Boycott Stores

By JOE BARRETT
WSJ | March 23, 2007 | Page A1

CAMBRIA, Wis. -- With empty storefronts on the main drag and corn stubble stretching for miles in the surrounding hills, this fading farm town seems like a natural stop for the ethanol express.

Not to John Mueller, though. The 54-year-old stay-at-home dad has led a dogged battle to prevent a corn mill from building an ethanol plant up the hill from the village school. Concerned about air pollution, the water supply and the mill's environmental track record, Mr. Mueller and his group, Cambrians for Thoughtful Development, have blitzed the village's 800 residents with fliers, packed public meetings and set up a sophisticated Web site.

The mill has fought back with its own publicity campaign and local corn farmers have taken to the streets in tractors to show support. Now, as the mill races to build the $70 million plant, the matter is headed to the federal courthouse in Madison, 40 miles southwest.


Nuclear plants, garbage dumps and oil refineries have long faced opposition from neighbors. Ethanol was supposed to be different. The corn-based fuel has a reputation for being good for farmers, the environment and rural economies. Ethanol, which already receives a 51-cents-a-gallon federal subsidy, figures prominently in President Bush's goal of reducing gasoline consumption by 20% over 10 years. But a backlash has been brewing in towns across the Midwest.

Fights have broken out in Indiana, Illinois, Missouri, Nebraska, Kansas and several towns in Wisconsin. Opponents complain that ethanol plants deplete aquifers, draw heavy truck traffic, pose safety concerns, contribute to air pollution and produce a sickly-sweet smell akin to that of a barroom floor.

In southwestern Missouri, a Webster County citizens' group is suing to stop a plant proposed by closely held Gulfstream Bioflex Energy LLC of Mount Vernon, Mo. The detractors say the 80-million-gallon-a-year plant would use more water than the rest of the 33,000-resident county, an "unreasonable" use of the area's underground water supply.

"This is not about water," protests Bryan O. Wade, an attorney for Gulfstream. "This is about a group of people who simply do not want an industrial facility near their homes."

Just outside Rockford, Ill., people who live near the site of a planned 100-million gallon ethanol plant have filed lawsuits against Winnebago County questioning the procedures by which it granted a rezoning to Wight Partners, a Schaumburg, Ill.-based developer. Last October, Wight filed a $3 million lawsuit against the residents, claiming they have abused the legal process merely to delay the project.

Industry officials concede that ethanol plants have had problems with smell and toxic emissions in the past, but say new technology has largely remedied that. "Generally, communities look at these plants as local economic engines," says Robert Dineen, president of the Renewable Fuels Association, a Washington trade group. The plants bring jobs and have dramatically raised corn prices and farmland values. Many ethanol plants have paid rich dividends to investors, who often include local farmers and other residents.

But experts hotly debate whether renewable fuels offer a panacea for the world's energy needs. As with ethanol derived from corn -- which slurps up water -- many alternative fuels are creating environmental problems of their own. In Indonesia, Malaysia and Canada, forests are being slashed for energy-yielding crops or other unconventional fuels. In India, environmentalists say, water tables are dropping as farmers boost production of ethanol-yielding sugar.

As the rush to build ethanol plants continues in the U.S. -- there are 114 in operation, 80 under construction and many more in planning stages -- clashes with locals are multiplying.

Cambria certainly looks like it could use an economic boost. Two canning facilities run full-tilt around harvest time but slow considerably in winter. The downtown strip features a café, two bars (one called The Dump), a bank, a barbershop and a furniture-maker. But a supper club, tattoo parlor, grocery store and sandwich shop are shuttered. Many residents work in Madison or other nearby towns.

A row of grain silos towers over the village's southern edge at the Didion Milling Inc. corn mill. There, locally grown corn is dried, ground, sifted and mixed into different products. Didion's biggest seller is a mix of corn, soy and nutrients that the U.S. ships overseas as emergency food aid. The company generated about $50 million in revenue from its government food-aid programs last year.

In November 2002, Didion sent letters inviting Cambria residents to a public meeting about its plan to build an ethanol plant. The letter said the plant would allow Didion to "buy more corn from local farmers, increase revenue for the local economy" and create new jobs. Today, the company says the 40-million-gallon plant would offer 40 jobs, with salaries averaging $38,000 a year, and increase the company's annual property tax payments to various local entities to $276,000 from $99,000 in 2006.

Kneeling on the dusty mill floor to scoop out a sample of milled corn, Dale Drachenberg, Didion's vice president of operations, says the company believes it will be able to make ethanol more efficiently than competitors. Most plants start the ethanol-making process with whole corn kernels. But Didion's mill separates the starch that's the most vital ingredient in ethanol. "It's a natural progression that will allow us to continue to grow our business," he says.

More than 70 people crowded into the village hall for the first public meeting, many of them farmers eager to sell corn to the ethanol plant. Also attending were Mr. Mueller and a few others who questioned Didion about safety, emissions, traffic and water. Later, Mr. Mueller huddled with some residents who had posed questions. Three already had formed Cambrians for Thoughtful Development. Mr. Mueller joined the group, which has about a dozen active members, and put up its Web site.

He and his wife, who works at the University of Wisconsin archives, had moved to Cambria from Madison in 2001. An elfin man with a long gray beard and pony tail, he had decided to quit his job at a lock and security company years earlier to raise his daughter, now 14. "There are just so many things I didn't want to miss with her," he says.

When Mr. Mueller heard about the ethanol plant, he says, he feared for the character of the quiet town where he'd bought a cozy house a few blocks from the school and an old mill pond. Scouring the Internet, he read about other places that had succeeded in blocking ethanol plants. It was at once encouraging and daunting. "We were just coming in from Madison," he says. "I thought we'd be the only ones asking questions."

The activists began plotting strategy at each other's homes. Sarah Lloyd, 35, a doctoral student in rural sociology who later got herself elected to the Columbia County board, says she initially thought ethanol was a good thing. But she concluded that small Midwestern towns were being asked to accept what amounts to new chemical plants in their midst in the national drive to clean up big-city auto emissions and reduce dependence on foreign oil. "We were really being asked to take one for the team," she says.

Mr. Mueller filed open-records requests with the Wisconsin Department of Natural Resources and the Environmental Protection Agency. He discovered that Didion had repeatedly run afoul of federal environmental rules. Grain processing -- like ethanol production -- is subject to such rules because it creates tiny airborne particles that can cause respiratory problems and aggravate heart conditions.

In 2000, Didion had paid $107,500 to the EPA to settle allegations that the company expanded a grain-barge loading facility without obtaining permits or controlling particulate emissions. Didion's Mr. Drachenberg says the expansion amounted to some portable equipment brought in to help meet peak demand at harvest. The company settled rather than go through costly litigation, he says.

Didion also had expanded its Cambria milling facility without proper permits, according to a 2002 notice from the DNR. By adding to storage capacity and increasing the amount of grain processed, the plant had come under tougher emissions rules, the notice said. The infraction was considered a High Priority Violation under EPA rules, carrying penalties of $25,000 per violation per day.

Mr. Drachenberg says the company had merely tried to build enough permanent silos to avoid storing grain on the ground at harvest. He says the company had an exemption from the state, but the official who had granted it left and others in the DNR interpreted it differently.

One Sunday, a few weeks after the first public meeting, the activists fanned out in the village to distribute to each home a flier listing Didion's alleged violations and asking: "Is Ethanol Production in the Village of Cambria the Development That We Want?"

This set the stage for a tense meeting the next night at the school gym, amid images of the school mascot, the Hilltopper, a pickax-wielding mountain climber. Residents and farmers packed the bleachers as speakers struggled to be heard through the faltering PA system. Chet Stringfield, then the village's president, talked excitedly about the economic opportunity the plant represented.

As the night wore on, the exchanges grew more heated, Mr. Mueller recalls. At one point, one of Didion's project contractors drew laughter with his assertion that the plant would help America defeat terrorism. "It was heartening to me that, even at that point, some people found that outrageous on the face of it," Mr. Mueller says.

That Saturday, local farmer Brian Jung fired up his eight-wheeled Steiger tractor and pointed it toward Cambria. There, he joined about 50 farmers in tractors and trucks in a parade down the main street in support of the plant. The event was organized by the wife of Republican state Rep. Eugene Hahn, who raises corn, wheat and lima beans near Cambria. For years, he has championed state legislation to support ethanol.

Mr. Hahn, 77, recalls a time when Cambria had three grocery stores and a car dealership. "That's all kind of dried up," he says. Of the people opposing the plant, he says, "it's a bedroom community to them."

The community split. Farmers, frustrated with the opposition, started an informal boycott of village businesses. "I think the overall feeling, when Cambria was so against everything, a lot of guys they just didn't participate in town," says Mr. Jung. The local Chamber of Commerce decided to back the plant only after serious debate.

Meantime, Mr. Mueller and his fellow activists filed suit in Columbia County Circuit Court to nullify a variance Didion had received on building-height restrictions. And they garnered enough signatures to persuade the village council to put a referendum on the plant on that April's ballot.

Didion shot back with several direct-mail appeals to residents, including one that accused opponents of "trying to scare the people of Cambria and to divide our community."

Cambria voters passed a referendum to bar ethanol from the town or its surroundings, 263 to 136, effectively killing Didion's chances of building in the town.

Plans for a plant were on hold until last April. By then, President Bush had exhorted the country to wean itself from its "addiction" to oil, and scores of new ethanol plants had sprouted across the Midwest. Didion announced that it would again seek to build a plant, this time on a small parcel it had acquired directly across the road from its previous site -- and just outside Cambria's border.

The new site remained close enough to the mill that Didion could trundle its corn starch over by truck or conveyer belt, out of Cambria's regulatory reach. For Mr. Mueller, the new application brought "a sinking feeling -- like the beginning of a recurring nightmare."

This time, despite continuing objections from Mr. Mueller's group and Cambria officials, Didion's rezoning applications to Columbia County and Courtland Township sailed through. "It was unanimous that we thought that this would be a good thing," says Courtland supervisor JoAnn Wingers, whose family farms 1,500 acres of corn and soybeans near Cambria.

As for the opponents, she says, "If we could go back at least 50 years, that's how they'd like us to stay farming. The economy doesn't allow that. We're trying to be progressive and economically beneficial to the entire area."

Didion broke ground on the plant in October, and was soon embroiled in more controversy. On Dec. 20, the state issued a notice saying Didion hadn't abided by a new air permit covering both the mill and the ethanol plant. "There was a misunderstanding between my engineer, the DNR and Didion," Mr. Drachenberg says, over how much Didion could use the corn drier at the grain mill before the ethanol plant came online.

The company has applied for a revised permit and scaled back work to comply with the current permit.

The opponents have not given up. On Feb. 12, lawyers for Mr. Mueller's group served Didion 60 days notice that they would file a federal lawsuit in Madison under the Clean Air Act, citing the history of alleged environmental violations at the mill, including the one noted in December.

Christa Westerberg, a Madison attorney who represents Cambria and other Wisconsin citizens' groups battling ethanol plants, says Didion's latest troubles are "part of this pattern of doing whatever it takes to get the permit, then either don't live up to it or try to get it changed." If successful, the lawsuit could lead to Didion paying millions in penalties and require them to get new permits. Whether that stops the ethanol plant "depends on how Didion reacts," she says.

Mr. Drachenberg, who lives near Madison, says Didion plans to have its ethanol plant operating by November. He says the company is in compliance with all federal rules and has worked to resolve any issues when they came up. He was surprised at the intensity of the opposition four years ago, he says, and, "I'm still surprised."

"Here we found a place where we were welcome and since that time we've proven to be good neighbors, good members of the community."
-- Jeff Robertson, CEO of United Wisconsin Grain Producers LLC, which runs an ethanol plant three miles north of Cambria, Wis.

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"It's a complementary business to the business that we currently have [in Cambria]."
-- Dale Drachenberg, vice president of operations for Didion Milling, which wants to build an ethanol plant near its existing milling operations in Cambria

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"We have specific problems with the management company … and also with the location, which is, we feel, entirely too close to our schools and residences."
-- John Mueller of Cambrians for Thoughtful Development, a group opposing plans for expansion by a local milling company

* * *
"The citizens group has sent a '60-day notice of intent to sue' letter … and will seek penalties and a court order requiring the company to comply with the Clean Air Act."
-- David Bender, an attorney with the Madison, Wis., law firm Garvey McNeil & McGillivray, which is representing residents of Cambria in a complaint against Didion Milling under the Clean Air Act

* * *

"The ethanol plant was rejected in part because the plant would have had a negative effect on the village's water supply."
-- Christa Westerberg, of Garvey McNeil & McGillivray

* * *

"We support the ethanol plant … the more businesses we have in a small community like this, the more potential we have for drawing more business."
-- Enos Bontrager, owner of Pride Furniture in Cambria and president of the Cambria-Friesland Chamber of Commerce