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Highwater Ethanol, LLC, Special Board Meeting Board Item ... · As part of the Contingency Plan, an additional production well would be constructed, tested, and ... wells Prod-Site

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Page 1: Highwater Ethanol, LLC, Special Board Meeting Board Item ... · As part of the Contingency Plan, an additional production well would be constructed, tested, and ... wells Prod-Site
Page 2: Highwater Ethanol, LLC, Special Board Meeting Board Item ... · As part of the Contingency Plan, an additional production well would be constructed, tested, and ... wells Prod-Site

ATTACHMENT 1

Page 3: Highwater Ethanol, LLC, Special Board Meeting Board Item ... · As part of the Contingency Plan, an additional production well would be constructed, tested, and ... wells Prod-Site
Page 4: Highwater Ethanol, LLC, Special Board Meeting Board Item ... · As part of the Contingency Plan, an additional production well would be constructed, tested, and ... wells Prod-Site

ATTACHMENT 2

Page 5: Highwater Ethanol, LLC, Special Board Meeting Board Item ... · As part of the Contingency Plan, an additional production well would be constructed, tested, and ... wells Prod-Site
Page 6: Highwater Ethanol, LLC, Special Board Meeting Board Item ... · As part of the Contingency Plan, an additional production well would be constructed, tested, and ... wells Prod-Site

Site 1 Threshold Well (OW-2D) Water Elevation

1105

1110

1115

1120

1125

1130

1135

1140

1145

1150

1 10 100 1000 10000 100000 1000000 10000000 100000000

Elev

atio

n

Top of aquifer=1107.3

25%-shutoff threshold=1117.39

50% threshold=1127.49

1.9 years 19 years

10.5 years

190 yearsTest data~465 gpm

Projection at 310 gpm

DNR Waters 8/2/07

Page 7: Highwater Ethanol, LLC, Special Board Meeting Board Item ... · As part of the Contingency Plan, an additional production well would be constructed, tested, and ... wells Prod-Site

LEGGETTE, BRASHEARS & GRAHAM, INC.PROFESSIONAL GROUND-WATER AND

ENVIRONMENTAL ENGINEERING SERVICES

8 PINE TREE DRIVE SUITE 250

ST. PAUL, MN 55112 (651) 490-1405

FAX (651) 490-1006 www.lbgweb.com

CONNECTICUT � OHIO � ILLINOIS � SOUTH DAKOTA � PENNSYLVANIA � FLORIDA � NEW JERSEY � TEXAS

WISCONSIN � NEW YORK � MISSOURI � VERMONT � MICHIGAN

August 2, 2007

Mr. Jay Frischman Department of Natural Resources Division of Waters 500 Lafayette Rd. N. St. Paul, MN 55155-4032

Re: Contingency Plan Assessment of Supplemental Groundwater Resources and

Exploration Plan Highwater Ethanol, LLC

Dear Mr. Frischman:

Executive SummaryAs part of the Contingency Plan, an additional production well would be constructed, tested, and

used for the purpose of augmenting existing groundwater supplies when DNR permit conditions trigger this need. Implementing this Contingency Plan would commence if groundwater levels at Site 1 and/or Site 2 are lowered such that they breach the DNR’s 50-percent threshold level at either sites compliance-point observation well.

The Contingency Plan presents the findings of a groundwater resource assessment conducted to identify areas in the vicinity of Lamberton where additional groundwater resources could be developed, if needed. Moreover, the assessment determined whether each identified area should be a candidate for additional assessment or eliminated from further consideration.

Eight areas were evaluated as part of the groundwater resource assessment. Considering the collective data to date, development would be best in the vicinity of TH-17 in area S-1, shown on Figure 1A. This location is approximately 2 miles south-southwest of Site 1.

The information provided in the following pages outlines the selection process and justification for each site.

Page 8: Highwater Ethanol, LLC, Special Board Meeting Board Item ... · As part of the Contingency Plan, an additional production well would be constructed, tested, and ... wells Prod-Site

Mr. Jay Frischman August 2, 2007

Purpose and ObjectiveThe purpose of this letter report is to present the findings of a groundwater resource assessment

conducted to identify an area where an additional groundwater source could be developed if needed. The assessment has been recently updated to include the information obtained from three test borings (TH-16, TH-17, and TH-18) drilled south of Site 1 on July 11 and 12, 2007.

The objective of this assessment was to identify areas in the vicinity of the plant, and production wells Prod-Site 1 and Prod-Site 2 (located at Site 1 and Site 2, respectively) where sand and gravel aquifer(s) could potentially be explored, tested, and developed by Highwater if the DNR threshold levels outlined in this Contingency Plan are breached. Based on currently available hydrogeologic information, several areas were identified as possible options. Following an initial evaluation, each area was either 1) selected for additional assessment, or 2) eliminated from further consideration. The information provided outlines the selection process and justification.

As part of the Contingency Plan, an additional production well would be constructed, tested, and used for the purpose of augmenting the groundwater supplies at Prod-Site 1 and Prod-Site 2 when DNR permit conditions trigger this need. Implementing this plan would commence if groundwater levels at Site 1 and/or Site 2 are lowered such that they breach the DNR’s 50-percent threshold level. The compliance point for monitoring this threshold level are observation well OW-2D and the 4-inch piezometer at Sites 1 and 2, respectively.

The assessment was completed by evaluating well log data obtained from the County Well Index, test borings drilled by Highwater, and identifying areas that appear to have the greatest potential yield supplemental groundwater to the plant. The selection criteria included the following:

� Aquifer thickness and lateral extent; � Static water levels and available head above the top of the aquifer; � Well specific capacity and estimated aquifer transmissivity; � Distance from existing Highwater production wells and the proposed plant; � Surface water features and other sensitive areas; and, � Lithology information obtained from test borings TH-16, TH-17, and TH-18 south of Site 1

on July 11 and 12, 2007.

General Assessment Area and HydrogeologyThe assessment area is shown on Figure 1A. This area was established based on the results of a

preliminary evaluation that showed thicker and more extensive sand and gravel aquifers south of Site 1 and east-northeast of the City of Lamberton in the vicinity of the Cottonwood River Valley.

The approximate extent of the more significant sand and gravel aquifers is shown on Figure 1A and in cross section along A-A’ through H-H’ (Figures 2A through 9A). In general, the hydrogeology in the area of interest includes outwash sands and gravels that are separated and bounded laterally by glacial till. These sands and gravels have been divided into two units; an upper shallow unit and a deep unit.These units were differentiated based on depth below grade, thickness, and lateral continuity. The shallow unit is made up of thinner layers that are laterally discontinuous. The deep unit consists of thicker, continuous layers underlain by till or bedrock. The shallow sands and gravels were not considered as potential production zones; therefore, assessment efforts were focused on the deep unit. The laterally continuous deep sand and gravel is evident on cross section.

Page 9: Highwater Ethanol, LLC, Special Board Meeting Board Item ... · As part of the Contingency Plan, an additional production well would be constructed, tested, and ... wells Prod-Site

Mr. Jay Frischman August 2, 2007

Potential Exploration AreasThe assessment focused on three general regions relative to Sites 1 and 2. Using the above

criteria, specific areas within each region were evaluated in greater detail for possible future exploration and development. The areas are identified on the map as “NE-1” and “NE-2” for the area east-northeast of the city, “Central” for the region between Site 1 and Site 2, and “S-1” through “S-5” for the area south of Site 1.

A summary of the hydrogeologic characteristics at each of the areas and justification for selecting an area for further exploration or elimination for future consideration are summarized below with additional information presented in Table 1.

Areas NE-1 and NE-2: Wells exhibit high specific capacities and estimated transmissivities, and an aquifer thickness potentially greater than 65 feet. These areas are also attractive given their proximity to the proposed plant. However, given the potential connection with the Cottonwood River and the small amount of available head or available drawdown above the DNR 50-percent threshold (less than 5 feet), NE-1 and NE-2 have been eliminated as potential exploration areas.

Central Area: The deep sand and gravel in this area exhibits a potential available head or available drawdown of approximately 25 feet above the DNR 50-percent threshold, and an aquifer thickness of approximately 45 feet. This area is also attractive given its proximity to the proposed plant and proposed piping infrastructure from Site 1. However, given the potential connection with Site 1 and potentially Site 2, cumulative well interference may adversely affect the available head or available drawdown relative to the DNR 50-percent threshold. Therefore, the Central Area has been eliminated as a potential exploration area.

Area S-1: This area exhibits low to high specific capacity and estimated transmissivity in the shallow sand. Specific capacity or transmissivity data is not available in this area for the deep sand. The recent boring TH-17 indicates a deep medium-to-coarse sand unit with a thickness greater than 40 feet. Although water levels are not yet available from the deep sand, available head or available drawdown above the DNR 50-percent threshold may be greater than 50 feet. Therefore, given the depth and coarseness of the sand, and potential available drawdown, this is the preferred area for future testing and a production well if the 50-percent threshold is met at either Sites 1 or 2.

Area S-2: This area exhibits low to high specific capacity and estimated transmissivity in the deep sand. Also, recent boring TH-18 indicates very thick sand and gravels with clay lenses and a cumulative thickness of approximately 150 feet. However, the available head or available drawdown above the DNR 50-percent threshold may be less than 10 feet. Therefore, this location does not appear to be as suitable as S-1.

Area S-3: This area exhibits low to moderate specific capacity and estimated transmissivity in the deep sand. The aquifer thickness is greater than 10 feet, and the available head or available drawdown above the DNR 50-percent threshold is approximately 50 feet. Although the geologic cross sections indicate the deep sand may be 35 feet thick, the actual sand thickness is unknown. Additionally, current data indicates connection at this location with Prod-Site 1. Therefore, this location does not appear to be as suitable as S-1.

Area S-4: This area exhibits high specific capacity and estimated transmissivity in the shallow sand. Specific capacity or transmissivity data is not available in this area for the deep sand. The recent boring in this area, TH-16, indicates a deep sand unit has a thickness of approximately 40 feet. Available head or available drawdown above the DNR 50-percent threshold may be 70 feet; although, water levels are not available from the deep sand. The deep sand at this location is

Page 10: Highwater Ethanol, LLC, Special Board Meeting Board Item ... · As part of the Contingency Plan, an additional production well would be constructed, tested, and ... wells Prod-Site

Mr. Jay Frischman August 2, 2007

slightly finer grained than that found at S-1. Although this location does not appear to be as optimal as S-1, it should be considered a secondary candidate to S-1 for future testing.

Area S-5: This area exhibits low specific capacity and estimated transmissivity for both the shallow and deep sand. The buried sand thickness is approximately 50 feet. Available head or available drawdown above the DNR 50-percent threshold may be 40 feet. This location does not appear to be as suitable as S-1.

Exploration Focus Area SummaryConsidering the collective data to date, development would be best in the vicinity of TH-17 in

area S-1, shown on Figure 1A. This location is approximately 2 miles south-southwest of Site 1.

Exploration Focus Area DevelopmentIf the 50-percent contingency threshold is breached at either Site 1 or Site 2, the steps in

constructing an additional production well would include the following:

1) complete additional boring(s) within the focus area to address data gaps, if necessary (i.e., confirm geologic conditions and obtain samples of aquifer material for grain size analysis for optimal production well screen design);

2) construct a production well and observation well (note that a 4-inch observation well was installed near TH-17 on July 26, 2007); and,

3) complete aquifer testing of the production well.

Sincerely,

LEGGETTE, BRASHEARS & GRAHAM, INC.

David S. Hume Senior Associate

Michael C. Plante Senior Hydrogeologist

DSH/MCP:kw Copy: Myrna Halbach: Minnesota Pollution Control Agency

Brian Kletscher: Highwater Ethanol, LLC. Kevin Stroup: Stoneberg, Giles & Stroup, P.A.

S:\Tech\3HWETH\Backup Ground-Water Supply Eval\HWETH_Contingency_Plan 8-2-07.doc

Page 11: Highwater Ethanol, LLC, Special Board Meeting Board Item ... · As part of the Contingency Plan, an additional production well would be constructed, tested, and ... wells Prod-Site

LEGGETTE, BRASHEARS & GRAHAM, INC.

TABLE

Page 12: Highwater Ethanol, LLC, Special Board Meeting Board Item ... · As part of the Contingency Plan, an additional production well would be constructed, tested, and ... wells Prod-Site

S:\Tech\3HWETH\Backup Ground-Water Supply Eval LEGGETTE, BRASHEARS & GRAHAM, INC. justification table (8-2-07).doc

Table 1

Summary of Potential Ground-water Exploration Areas Contingency Plan

Highwater Ethanol, LLC Redwood and Cottonwood Counties, Minnesota

Region Map ID Representative Unique Well Nos. Co. Twp. Legal Desc. Justification Comments

S-1

100367

100368

TH-17(not in MN CWI)

Cottonwood Highwater

T108N, R37W S1/2, SE1/4, Sec 21 SE1/4, SW1/4, Sec 21 N1/2, NE1/4, Sec 28 NE1/4, NW1/4 Sec 28 S1/4, Sec 22; N1/4, Sec 27 S1/2, SW1/4, Sec 23 N1/2, NW1/4, Sec 26

� Low to High well specific capacity (~3 - 25 gpm/ft) – shallow sand

� Low to High T value (~7,000 - 50,000 gpd/ft) – shallow sand � Aquifer thickness ~40+ ft in deeper zone � Available head may be 50 ft above 50% threshold

� Site in area of greatest potential for future development. � Measure static to determine available head � Interfingering of sands may be connected to Site 1. � Specific capacity and transmissivity not available for deeper

sand� Centrally located between potential aquifer boundaries.

S-2

100394

652018

TH-18(not in MN CWI)

Cottonwood Highwater T108N, R37WS1/2, Sec 24 N1/2. Sec 25

� Low to High well specific capacity (~2 - 20 gpm/ft) – deep sand � Low to High T value (~4,000 - 40,000 gpd/ft) – deep sand � Aquifer thickness approximately 150 ft. � Available head may be < 10 ft above 50% threshold based on

TH-18

� Measure static to determine available head � Site in area of greatest potential for development

S-3193951

158004Cottonwood Germantown

T108N, R36WNW1/4, Sec 19 S1/2, SW1/4, Sec 18

� Low to Moderate specific capacity (~3 - 5 gpm/ft) – deep sand � Low to Moderate T value (~7,000 – 10,000 gpd/ft) – deep sand � Aquifer thickness 10+ ft � Available head ~ 50 ft above 50% threshold

� Aquifer only penetrated ~ 10 ft; total thickness unknown � Potential for thicker aquifer

S-4

100381

TH-16(not in MN CWI)

Cottonwood Highwater

T108N, R37W S1/2, NW1/4, Sec 35N1/2, SW1/4, Sec 35S1/2, NE1/4, Sec 34 N1/2, SE1/4, Sec 34

� High well specific capacity (~20 gpm/ft) – shallow sand � High T value (~40,000 gpd/ft) – shallow sand � Aquifer thickness ~ 40+ ft � Available head may be 70 ft above 50% threshold

� Site is secondary candidate to S-1 for potential development. � Farthest distance from Site 1 � Measure static to determine available head � Specific capacity and transmissivity not available for deeper

sand

South

S-5100372

624808Cottonwood Highwater

T108N, R37W S1/4, Sec 29 N1/4, Sec 32 N1/2, NW1/4, Sec 33 S1/2, SW1/4, Sec 28

� Aquifer thickness ~ 50 ft � Lower T value (~4,000 gpd/ft) – deep and shallow sand � Available head may be 40 ft above 50 % threshold

� Farthest distance from Site 1 � Measure static to determine available head � Deeper aquifer possible based on 100372 and 624808 data

Central Central

744124

TH-13(not in MN CWI)

Cottonwood Highwater

T108N, R37W S1/2, Sec 4 NW1/4, Sec 4 E1/2, NE1/4, Sec 5 NE1/4, SE1/4, Sec 5

� Aquifer thickness ~45 ft � Potential for greater available head w/ top of aquifer at ~80 ft bg � Proximity to Site 1, Site 2, and ethanol plant � Available head ~ 25 ft above 50% threshold

� Proximity to Site 1 and Site 2 may result in cumulative impacts on these wells.

� Observed drawdown at 744124 from pumping Prod-Site 1

NE-1 185573 Redwood Lamb T109N, R37W SW1/4, NW1/4, Sec 24

� Potentially high T value (~50,000 gpd/ft in City of Lamberton well, unique no. 483410)

� < 5 ft available head above 50% threshold � Aquifer thickness > 65 ft

� Potential yield unknown � Proximal to City of Lamberton well (unique no. 483410) � Measure static to determine available head � Possible option if unconfined North-

east

NE-2214482

214483Redwood Chart

T109N, R36W SW1/4, Sec 17 N1/2, NW1/4 Sec 20

� High well specific capacity (~20 gpm/ft) � High estimated T values (~50,000 gpd/ft) � Aquifer thickness > 30 ft � < 5 ft available head above 50% threshold � Relatively close to ethanol plant site

� Measure static to determine available head � Minimal available head if confined � Wildlife refuge adjacent � Proximal to Cottonwood River � Possible option if unconfined

Page 13: Highwater Ethanol, LLC, Special Board Meeting Board Item ... · As part of the Contingency Plan, an additional production well would be constructed, tested, and ... wells Prod-Site

LEGGETTE, BRASHEARS & GRAHAM, INC.

FIGURES

Page 14: Highwater Ethanol, LLC, Special Board Meeting Board Item ... · As part of the Contingency Plan, an additional production well would be constructed, tested, and ... wells Prod-Site

1.5-Mile Test Well RadiusSite 1

100388

158015

100372

100373

100382

100381

100354

723191

678932

696410

249515

214483

145285

138756

652018

589688

483410

464481

420679

247916 247900

247898

247897

247896

247895

247893

247892

247891

247681

247593

241033

241032

232475

221751

221729

221728

221727

221726

189532

189508

158021

158016

158004

145294

145241

143796

108222

100375

100368 100367

100361

100359

0396

100393

1416

145177

185585

185573

193951

17W0008731

17W0008729

17W0008549

17W0008546

17W0008547

17W0008730

17W0008728

17W0008725

17W0009001

17W00086

17W00090

247899

247894

240792

232474

214484

214482

111764

100373

100394

133198

185583

17W0008724

17W000866817W0008727

17W0008726

W0008555

17W0008550

702362

I

145241

158004

744124

D

C652048

E678950

1.5-Mile Test Well RadiusSite 2

N108222

2'' OBS731327

4'' Test Well731325

OW-2D744120

OW-2S744121

Prod-Site 1731324

4'' PZ744090

185583

TH #13

Prod-Site 2744096K

E

DP-1

L1

Outfall

TH #8

TH #14

TH #7

710984

100355

100354

100382

100381

193958

17W0008947

17W0008510

17W0008509

17W000868317W0008682

17W0008951

17W0008952

17W000895317W0008948

17W0008949

17W0008950

17W0008556

35

193960

193954

A

A'

D

C

C'

D'

E'

E

F

F'

G

G'

H

H'

B B'

100368 100367

652018100394

145294185558100372

158015

100388

483410

696410

185573

247893

214483214482

214482

Northern extent of aquifer may be approximately 1 mile north.

?

S-1 S-2

S-3

S-4

Central

NE-2

NE-1

S-5

?

?

?

?

?

460997

744096

514699 531271

445361

619689

640758

145283

611218

255185589673

624808

627563

652048

462087

TH #16

TH #17TH #18

LAMBERTON, MINNESOTAHIGHWATER ETHANOL, LLC

FILE: DATE: FIGURE:G3REDWOOD02S.MXD 07/24/2007 1A

Prepared By:LEGGETTE, BRASHEARS & GRAHAM, INC.

Professional Ground-Water andEnvironmental Engineering Services

8 Pine Tree Drive, Suite 250St. Paul, Minnesota 55112

(651) 490-1405

EXPLORATION ASSESSMENT AREAS

Source: USGS 1:24K Topographic Quadrangles and MN CWI.

Well LocationNo CWI Log Available

MN CWI Well, Located by TRS and Quarter Section

MN CWI Well, GPS Located DNR/MGS

Approximate Extent of Buried Sand

Test Hole Boring

Potential Exploration Areas 0 5,000Feet

Hydrogeologic Cross-Section Location

Page 15: Highwater Ethanol, LLC, Special Board Meeting Board Item ... · As part of the Contingency Plan, an additional production well would be constructed, tested, and ... wells Prod-Site

SAND & CLAYINTERBEDDED

WELL SCREEN

LEGEND

POTENTIOMETRICSURFACE

CRETACEOUS-AGEBEDROCK (SHALE& SANDSTONE)

SAND & GRAVEL

CLAY

GEOLOGIC CONTACT(DASHED WHEREINFERRED)

(1/10/07)(1/10/07)

(2/22/07)

*GEOLOGIC OR WELL LOG NOT AVAILABLE

(1982)

(10/26/06)(1/10/07)

(10/26/06)

(1/10/07)

OW

-2D

7441

24

A'SOUTHEAST

ANORTHWEST

850

900

950

1000

1050

1100

1200

HORIZONTALSCALE IN FEET

50000

1150

C D*

E

2-IN

CH

OB

S. W

ELL

PR

OD

- SI

TE 1

N

1580

04

1452

41

(1976)

(1979)

(1979)

FLOWINGARTESIAN(1/10/07)

FLOWINGARTESIAN

(4/3/06) & (1/10/07)

?

?

?

?(NA) (NA)

PELL C

REEK (PELL

-EAST)

DUTCH CHARLIE

CREEK

PELL C

REEK

DP-1TH #14

E*TH #8

PROD - SITE 2

4"PZ

L1*

K*

1855

83

(10/26/06)

(1/10/07)

TH #13

4/28/93 1177.616/03/93 1178.0810/14/93 1178.69

4/28/93 1183.806/03/93 1183.7610/14/93 1189.98

C-C'

G-G'F-F'

F-F'

H-H'E-E'

(6/22/04)

CENTRAL

S-3

OW

-2S

HIGHWATER ETHANOL, LLCCOTTONWOOD AND REDWOOD COUNTIES, MINNESOTA

SITES 1 AND 2

HYDROGEOLOGIC CROSS-SECTION A-A'

DATE:FILE: JULY 2007 FIGURE:03HIE01B.dwg

LEGGETTE, BRASHEARS & GRAHAM, INC.Prepared By:

Professional Ground-Water and Environmental Engineering ServicesNorthpark Corporate Center8 Pine Tree Drive, Suite 250St. Paul, Minnesota 55112

(651) 490-1405 2A

SOURCE: MN CWI AND HIGHWATER BORING LOGS. WATER LEVELS FROM MN CWI WELL LOGS, RECENT MEASUREMENTS,AND 1993 WATER LEVELS FROM MN DNR SWRA (AT 100368, 100372, 145241, & 158004). SEVERAL GEOLOGIC CONTACTSINTERPRETED FROM ADJOINING OR TIED CROSS SECTIONS.

Page 16: Highwater Ethanol, LLC, Special Board Meeting Board Item ... · As part of the Contingency Plan, an additional production well would be constructed, tested, and ... wells Prod-Site

4834

10

6964

10

1855

73

2478

93

2144

83

1150

1100

1050

1000

950

900

8500 3000

HORIZONTALSCALE IN FEET

VER

TIC

AL

SCAL

EIN

FE

ET A

MSL

END OF BORINGELEVATION 581'

BWEST

B'EAST

BEDROCKCRETACEOUS

GRANITE

??

?

?

(1992) (2003)

(1978)

(1972)

NE-1

NE-2

COTTONWOODRIVER

(1982)

DATE:

HIGHWATER ETHANOL, LLCLAMBERTON, MINNESOTA

FILE: JULY 2007 3AFIGURE:

NORTHERN REGION

03HIE01D.dwg

HYDROGEOLOGIC CROSS-SECTION B-B'

LEGGETTE, BRASHEARS & GRAHAM, INC.Prepared By:

Professional Ground-Water and Environmental Engineering ServicesNorthpark Corporate Center8 Pine Tree Drive, Suite 250St. Paul, Minnesota 55112

(651) 490-1405

WELL SCREEN

LEGEND

POTENTIOMETRICSURFACE

CRETACEOUS-AGEBEDROCK (SHALE& SANDSTONE)

SAND & GRAVEL

OPEN HOLEOH

GEOLOGIC CONTACT(DASHED WHEREINFERRED)

CLAY (MAY CONTAINMINOR SAND & GRAVEL)

SOURCE: MN CWI AND HIGHWATER BORING LOGS. WATER LEVELS FROM MN CWI WELL LOGS, RECENT MEASUREMENTS,AND 1993 WATER LEVELS FROM MN DNR SWRA (AT 100368, 100372, 145241, & 158004). SEVERAL GEOLOGIC CONTACTSINTERPRETED FROM ADJOINING OR TIED CROSS SECTIONS.

Page 17: Highwater Ethanol, LLC, Special Board Meeting Board Item ... · As part of the Contingency Plan, an additional production well would be constructed, tested, and ... wells Prod-Site

1003

6810

0368

1300

1250

1200

1150

1100

1050

1000

0 3000

HORIZONTALSCALE IN FEET

VER

TIC

AL

SCAL

EIN

FE

ET A

MSL

950

CWEST

C'EAST

?

E-E'

(1976)

(1976)

(2/28/01)

(1978)

(1979)

S-1

S-2

4/28/93 1243.296/03/93 1244.7310/14/93 1243.21

4/28/93 1183.806/03/93 1183.7610/14/93 1189.98

A-A'Test

Hol

e 17

900

G-G'

F-F'

H-H'

(6/30/07)

Test

Hol

e 18

(i)

DATE:

HIGHWATER ETHANOL, LLCLAMBERTON, MINNESOTA

FILE: JULY 2007 4AFIGURE:

SOUTHERN REGION

03HIE01D.dwg

HYDROGEOLOGIC CROSS-SECTION C-C'

LEGGETTE, BRASHEARS & GRAHAM, INC.Prepared By:

Professional Ground-Water and Environmental Engineering ServicesNorthpark Corporate Center8 Pine Tree Drive, Suite 250St. Paul, Minnesota 55112

(651) 490-1405

WELL SCREEN

LEGEND

POTENTIOMETRICSURFACE

CRETACEOUS-AGEBEDROCK (SHALE& SANDSTONE)

SAND & GRAVEL

GEOLOGIC CONTACT(DASHED WHEREINFERRED)

CLAY (MAY CONTAINMINOR SAND & GRAVEL)

SOURCE: MN CWI AND HIGHWATER BORING LOGS. WATER LEVELS FROM MN CWI WELL LOGS, RECENT MEASUREMENTS,AND 1993 WATER LEVELS FROM MN DNR SWRA (AT 100368, 100372, 145241, & 158004). SEVERAL GEOLOGIC CONTACTSINTERPRETED FROM ADJOINING OR TIED CROSS SECTIONS.

PROJECTED ON TOCROSS SECTION

(i)

Page 18: Highwater Ethanol, LLC, Special Board Meeting Board Item ... · As part of the Contingency Plan, an additional production well would be constructed, tested, and ... wells Prod-Site

1003

88

1580

15

1003

72

1003

81

1855

58

1452

94

1350

1300

1250

1200

1150

1100

10500 3000

HORIZONTALSCALE IN FEET

VER

TIC

AL

SCAL

EIN

FE

ET A

MSL

DWEST

D'EAST(1978)

(1980)

(1976) (1977)(1981)

(1978)

S-4

6248

08 (i

)

(1999)

4/28/93 1224.176/03/93 1224.1510/12/93 1228.48

TES

T H

OLE

16

S-5

DATE:

HIGHWATER ETHANOL, LLCLAMBERTON, MINNESOTA

FILE: JULY 2007 5AFIGURE:

SOUTHERN REGION

03HIE01D.dwg

HYDROGEOLOGIC CROSS-SECTION D-D'

LEGGETTE, BRASHEARS & GRAHAM, INC.Prepared By:

Professional Ground-Water and Environmental Engineering ServicesNorthpark Corporate Center8 Pine Tree Drive, Suite 250St. Paul, Minnesota 55112

(651) 490-1405

WELL SCREEN

LEGEND

POTENTIOMETRICSURFACE

CRETACEOUS-AGEBEDROCK (SHALE& SANDSTONE)

SAND & GRAVEL

GEOLOGIC CONTACT(DASHED WHEREINFERRED)

CLAY (MAY CONTAINMINOR SAND & GRAVEL)

SOURCE: MN CWI AND HIGHWATER BORING LOGS. WATER LEVELS FROM MN CWI WELL LOGS, RECENT MEASUREMENTS,AND 1993 WATER LEVELS FROM MN DNR SWRA (AT 100368, 100372, 145241, & 158004). SEVERAL GEOLOGIC CONTACTSINTERPRETED FROM ADJOINING OR TIED CROSS SECTIONS.

PROJECTED ON TOCROSS SECTION

(i)

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1003

54

1003

81

1003

82

1003

73

1350

1300

1250

1200

1150

1100

1050

0 3000

HORIZONTALSCALE IN FEET

VER

TIC

AL

SCAL

EIN

FE

ET A

MSL

E'SOUTH

(1975)

(1977)

(1977)(1976)(1976)

(1979)

S-4

S-3S-2

(1/10/07)

?

ENORTH

4/28/93 1177.616/03/93 1178.0810/14/93 1178.69

H-H'A-A'

1000

950

S-1

DATE:

HIGHWATER ETHANOL, LLCLAMBERTON, MINNESOTA

FILE: JULY 2007 6AFIGURE:

SOUTHERN REGION

03HIE01D.dwg

HYDROGEOLOGIC CROSS-SECTION E-E'

LEGGETTE, BRASHEARS & GRAHAM, INC.Prepared By:

Professional Ground-Water and Environmental Engineering ServicesNorthpark Corporate Center8 Pine Tree Drive, Suite 250St. Paul, Minnesota 55112

(651) 490-1405

WELL SCREEN

LEGEND

POTENTIOMETRICSURFACE

CRETACEOUS-AGEBEDROCK (SHALE& SANDSTONE)

SAND & GRAVEL

CLAY

GEOLOGIC CONTACT(DASHED WHEREINFERRED)

PROJECTED ON TOCROSS SECTION

(i)

SOURCE: MN CWI AND HIGHWATER BORING LOGS. WATER LEVELS FROM MN CWI WELL LOGS, RECENT MEASUREMENTS,AND 1993 WATER LEVELS FROM MN DNR SWRA (AT 100368, 100372, 145241, & 158004). SEVERAL GEOLOGIC CONTACTSINTERPRETED FROM ADJOINING OR TIED CROSS SECTIONS.

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1250

1200

1150

1100

1050

1000

950

0 3000

HORIZONTALSCALE IN FEET

VER

TIC

AL

SCAL

EIN

FE

ET A

MSL

900

7231

91

1003

73

F'SOUTH

FNORTH

(1/10/07)(6/22/04)

(1/10/07)

(8/24/76)

S-1

DATE:

HIGHWATER ETHANOL, LLCLAMBERTON, MINNESOTA

FILE: JULY 2007 7AFIGURE:

SITE 1 AND SOUTHERN REGION

03HIE01D.dwg

HYDROGEOLOGIC CROSS-SECTION F-F'

LEGGETTE, BRASHEARS & GRAHAM, INC.Prepared By:

Professional Ground-Water and Environmental Engineering ServicesNorthpark Corporate Center8 Pine Tree Drive, Suite 250St. Paul, Minnesota 55112

(651) 490-1405

WELL SCREEN

LEGEND

POTENTIOMETRICSURFACE

CRETACEOUS-AGEBEDROCK (SHALE& SANDSTONE)

SAND & GRAVEL

CLAY

GEOLOGIC CONTACT(DASHED WHEREINFERRED)

SAND & CLAYINTERBEDDED

SOURCE: MN CWI AND HIGHWATER BORING LOGS. WATER LEVELS FROM MN CWI WELL LOGS, RECENT MEASUREMENTS,AND 1993 WATER LEVELS FROM MN DNR SWRA (AT 100368, 100372, 145241, & 158004). SEVERAL GEOLOGIC CONTACTSINTERPRETED FROM ADJOINING OR TIED CROSS SECTIONS.

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1300

1250

1200

1150

1100

1050

1000

0 5000

HORIZONTALSCALE IN FEET

VER

TIC

AL

SCAL

EIN

FE

ET A

MSL

950

Test

Hol

e 7

4620

87

900

GNORTH

G'SOUTH

S-1

S-5

CENTRAL

DATE:

HIGHWATER ETHANOL, LLCLAMBERTON, MINNESOTA

FILE: JULY 2007 8AFIGURE:

CENTRAL AND SOUTHERN REGION

03HIE01D.dwg

HYDROGEOLOGIC CROSS-SECTION G-G'

LEGGETTE, BRASHEARS & GRAHAM, INC.Prepared By:

Professional Ground-Water and Environmental Engineering ServicesNorthpark Corporate Center8 Pine Tree Drive, Suite 250St. Paul, Minnesota 55112

(651) 490-1405

WELL SCREEN

LEGEND

POTENTIOMETRICSURFACE

CRETACEOUS-AGEBEDROCK (SHALE& SANDSTONE)

SAND & GRAVEL

CLAY

GEOLOGIC CONTACT(DASHED WHEREINFERRED)

SOURCE: MN CWI AND HIGHWATER BORING LOGS. WATER LEVELS FROM MN CWI WELL LOGS, RECENT MEASUREMENTS,AND 1993 WATER LEVELS FROM MN DNR SWRA (AT 100368, 100372, 145241, & 158004). SEVERAL GEOLOGIC CONTACTSINTERPRETED FROM ADJOINING OR TIED CROSS SECTIONS.

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1300

1250

1200

1150

1100

1050

1000

0 3000

HORIZONTALSCALE IN FEET

VER

TIC

AL

SCAL

EIN

FE

ET A

MSL

950

1437

96

1580

04HNORTH

H'SOUTH

*

(1/10/07)

S-3S-4

DATE:

HIGHWATER ETHANOL, LLCLAMBERTON, MINNESOTA

FILE: JULY 2007 9AFIGURE:

SOUTHERN REGION

03HIE01D.dwg

HYDROGEOLOGIC CROSS-SECTION H-H'

LEGGETTE, BRASHEARS & GRAHAM, INC.Prepared By:

Professional Ground-Water and Environmental Engineering ServicesNorthpark Corporate Center8 Pine Tree Drive, Suite 250St. Paul, Minnesota 55112

(651) 490-1405

WELL SCREEN

LEGEND

POTENTIOMETRICSURFACE

CRETACEOUS-AGEBEDROCK (SHALE& SANDSTONE)

SAND & GRAVEL

CLAY

GEOLOGIC CONTACT(DASHED WHEREINFERRED)

* BEDROCK LOGGED AS LIMESTONE

OPEN HOLEOH

SOURCE: MN CWI AND HIGHWATER BORING LOGS. WATER LEVELS FROM MN CWI WELL LOGS, RECENT MEASUREMENTS,AND 1993 WATER LEVELS FROM MN DNR SWRA (AT 100368, 100372, 145241, & 158004). SEVERAL GEOLOGIC CONTACTSINTERPRETED FROM ADJOINING OR TIED CROSS SECTIONS.

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ATTACHMENT 3

TDD (for hearing and speech impaired only): (651) 282-5332

Printed on recycled paper containing at least 30% fibers from paper recycled by consumers

STATE OF MINNESOTA

MINNESOTA POLLUTION CONTROL AGENCY IN THE MATTER OF THE DECISION ON THE NEED FOR AN ENVIRONMENTAL IMPACT STATEMENT FOR THE PROPOSED HIGHWATER ETHANOL FACILITY PROJECT REDWOOD COUNTY LAMBERTON, MINNESOTA

FINDINGS OF FACT CONCLUSIONS OF LAW AND ORDER

FINDINGS OF FACT

The above-entitled matter came before the Minnesota Pollution Control Agency (MPCA) Citizens’ Board (Board) at a regular meeting held in St. Paul, Minnesota on June 26, 2007, to determine the need for an Environmental Impact Statement (EIS) for the Highwater Ethanol, LLC, fuel ethanol project (Project) to be located in Lamberton, Minnesota. Pursuant to Minn. R. 4410.1000 – 4410.1600 (2007), the MPCA staff prepared an Environmental Assessment Worksheet (EAW) for the proposed Project. The Project was initially proposed as a dry mill 200-proof fuel ethanol production facility with a maximum capacity of 75 million gallons per year. During the 30-day comment period on the EAW, the preparation of an EIS was requested by one commenter. One of the concerns raised in the EIS request was related to the potential for significant environmental effects on the source aquifer. At the June 26, 2007, meeting the MPCA Board determined that the information necessary to making a reasoned decision was lacking, and as a result, provided Highwater Ethanol, LLC (Proposer) with an opportunity to obtain additional information prior to making a decision on the need for an EIS. The MPCA Board specifically identified the information needed to make a reasoned decision regarding the potential for significant environmental effects on the source aquifer. The MPCA staff received the information on August 2, 2007. As a result of the additional information collected, the Proposer decided to reduce the maximum production capacity of the proposed facility to 55 million gallons per year; thus reducing the amount of ground water needed to supply the facility. The MPCA staff determined that the additional information submitted is sufficient to determine the need for an EIS. Based on the MPCA staff environmental review, comments, and information received during the comment period, and other information in the record of the MPCA, the MPCA hereby makes the following Findings of Fact, Conclusions of Law, and Order:

PROPOSED PROJECT DESCRIPTION Proposed New Construction Highwater Ethanol, LLC, proposes to produce ethanol, an alcohol used as a fuel additive or extender. Ethanol is produced by fermenting corn. The basic steps in ethanol production include feedstock, fermentation, distillation, recovering the alcohol, and recovering residual materials. The proposed production capacity is 55 million gallons per year (MMGY) of 200-proof ethanol. The proposed Project would process approximately 20 million bushels of corn per year. The proposed Project would also produce 157,000 tons per year of distillers dried grains with solubles, and up to 105,000 tons per year of wet distillers’ grains with solubles (wetcake) for use as animal feed. The Proposer proposes to pump ground water at a maximum of 410 gallons per minute (gpm) from two ground-water sources (Site 1 – 310 gpm and Site 2 - 100 gpm), with an annual total appropriation expected at 179 MMGY. The Project will discharge a maximum 37,000 gallons per day (gpd) of utility wastewater, comprised of noncontact cooling tower blowdown and reverse osmosis reject water, to an unnamed tributary creek of the Cottonwood River. The Project will use a treatment and recycle system to reduce the amount of fresh

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Highwater Ethanol Facility Project Findings of Fact On the Need for an Environmental Impact Statement Conclusions of Law Lamberton, Minnesota And Order

2

ground water appropriated for the facility and the amount of water discharged. Permitting requirements are listed in Finding 35. These permits will mandate that the proposed facility operate in compliance with all applicable regulatory requirements. The proposed Project location is approximately 0.8 miles west of the city of Lamberton. The ethanol facility production process would typically operate 24 hours per day, 7 days per week with periodic maintenance shutdowns scheduled throughout the year. Environmental Concerns Typical environmental concerns for ethanol production facilities include the potential for air emissions, odors, noise, water usage impacts, and surface-water discharge impacts. Additional Concerns Described in Comment Letters One comment letter requested the preparation of an EIS. The concerns identified in the EIS request were related to water availability, potential regional haze impacts to Class I areas, energy needs of the Project and its impact on greenhouse gas emissions, and cumulative effects of a new discharge in the Minnesota River Basin. No other comment letters contained a request for an EIS. Other commenters identified concerns about construction impacts in areas with highly erodible soils and wetlands, the need for more detailed information on the stormwater detention pond and methods for pipeline installation, and the need to evaluate any future new sources of water found through the permitting process. The MPCA must make a decision on the need for an EIS based on the Environmental Quality Board (EQB) rules found in Minn. R. 4410 and which are listed in Finding 10. The MPCA’s findings on the four EIS criteria are given in Findings 11 through 41.

PROCEDURAL HISTORY

1. Pursuant to Minn. R. 4410.4300, subp. 5B, an EAW was prepared by MPCA staff on the proposed project. Pursuant to Minn. R. 4410.1500 (2007), the EAW was distributed to the EQB mailing list and other interested parties on April 20, 2007.

2. The MPCA notified the public of the public comment period. A news release was provided to Redwood County and neighboring counties, as well as other interested parties on April 23, 2007. In addition, the EAW was published in the EQB Monitor on April 23, 2007, and was made available for review on the MPCA Web site at http://www.pca.state.mn.us/news/eaw/index.html on April 23, 2007.

3. The public comment period for the EAW began on April 23, 2007, and ended on May 23, 2007.

During the 30-day comment period, the MPCA received five comment letters from government agencies, one comment letter from a non-profit environmental group, and received no comment letters from citizens. The comment letter from the non-profit environmental group, Minnesota Center for Environmental Advocacy (MCEA), included the request for an EIS.

4. The MPCA prepared responses to all comments received during the 30-day public comment period.

Comment letters received are hereby incorporated by reference as Appendix A to these findings. The MPCA responses to comments received are hereby incorporated by reference as Appendix B to these findings.

5. The EAW came before the MPCA Board at its regularly scheduled meeting on June 26, 2007, for a

determination of whether the Project has the potential for significant environmental effects. The

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Highwater Ethanol Facility Project Findings of Fact On the Need for an Environmental Impact Statement Conclusions of Law Lamberton, Minnesota And Order

3

Project Proposer, MCEA, MPCA staff, and the Minnesota Department of Natural Resources (DNR) staff provided testimony at the meeting.

6. After considering the record before it and taking testimony from the Project Proposer, the MCEA,

and the MPCA and DNR staff, the MPCA Board concluded that it lacked information necessary to making a reasoned decision. The MPCA Board invoked Minn. R. 4410.1700, subp. 2a, Item B and held the matter over to a future meeting to allow the Proposer additional time to collect reasonably obtainable information that the MPCA Board concluded was lacking. The additional information requested by the MPCA Board consisted of: 1) completion of, and the resulting information on, a 30-day aquifer test at Site 1 for the Project to assess the impacts of long-term aquifer sustainability; and 2) the contingency plan for the Project to be implemented if the aquifer from which water is drawn reaches a 50 percent threshold.

7. On June 28, 2007, the MPCA staff notified interested persons that the Project Proposer will present

the additional information requested by the MPCA Board at a Special Meeting in August 2007. 8. On August 2, 2007, the MPCA received additional information from the Proposer via a letter

prepared by DNR staff addressing the MPCA Board’s information requests. The additional information was reviewed by the MPCA staff and DNR staff.

9. On August 6, 2007, the MPCA staff notified the MPCA Board and interested persons that

consideration of the Highwater Ethanol Facility Project draft EAW would be on the agenda at a Special Meeting scheduled on August 14, 2007. The MPCA staff posted the additional information gathered for the draft EAW on the MPCA Web site on August 7, 2007.

CRITERIA FOR DETERMINING THE POTENTIAL FOR SIGNIFICANT ENVIRONMENTAL EFFECTS

10. Under Minn. R. 4410.1700 (2007), the MPCA must order an EIS for projects that have the potential

for significant environmental effects that are reasonably expected to occur. In deciding whether a project has the potential for significant environmental effects, the MPCA must compare the impacts that may be reasonably expected to occur from the Project with the criteria set forth in Minn. R. 4410.1700, subp. 7 (2007). These criteria are:

A. the type, extent, and reversibility of environmental effects; B. potential cumulative effects of related or anticipated future projects; C. the extent to which the environmental effects are subject to mitigation by ongoing public

regulatory authority; and D. the extent to which environmental effects can be anticipated and controlled as a result of other

available environmental studies undertaken by public agencies or the Project Proposer, including other EISs.

THE MPCA FINDINGS WITH RESPECT TO EACH OF THESE CRITERIA ARE SET FORTH BELOW

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Highwater Ethanol Facility Project Findings of Fact On the Need for an Environmental Impact Statement Conclusions of Law Lamberton, Minnesota And Order

4

Type, Extent, and Reversibility of Environmental Effects 11. The first criterion that the MPCA must consider when determining if a project has the potential for

significant environmental effects that are reasonably expected to occur, is the "type, extent, and reversibility of environmental effects" Minn. R. 4410.1700, subp. 7.A (2007). The MPCA findings with respect to each of these factors are set forth below.

12. Reasonably expected environmental effects of this Project to air quality:

A. Air emissions B. Odors C. Noise

13. The extent of any potential air quality effects that are reasonably expected to occur:

A. Air emissions An analysis of the potential emissions of air pollutants has been performed for the 75 MMGY capacity facility initially proposed in conjunction with the Proposer’s application for an Air Permit. No changes to the system design for the revised production capacity of 55 MMGY is required. The proposed 55 MMGY facility will employ air pollution control equipment and be subject to permit limits to be a non-major (synthetic minor) source with respect to the Prevention of Significant Deterioration and Part 70 federal air emission permit program. The Air Permit will limit production to 55 MMGY.

Additionally, an Air Emissions Risk Analysis (AERA) was completed for the Project that was initially proposed for a 75 MMGY production rate. A new AERA is not required for the revised 55 MMGY production rate. The AERA process was developed by the MPCA to evaluate potential human health risks from a facility’s air emissions. The AERA is a conservative estimate of risk, representing a worse-case scenario. Air dispersion modeling was conducted by the MPCA staff to predict ambient air concentrations at and beyond the Project boundary. The AERA indicated that the maximum modeled concentrations for acute (short-term) and chronic (long-term) non-cancer exposures result in risks that are at or near risk thresholds or health guidelines for the 75 MMGY design. These areas of maximum modeled impact are located just beyond the northern property boundary of the Project, but not at any residence. With the change in production to 55 MMGY, MPCA staff expects the modeled concentrations to decrease and the exposure risks to be lower. The pollutant concentrations are expected to dissipate rapidly with distance from the emissions source; and, therefore, potential risks at locations farther from the facility are predicted to be below health risk thresholds.

B. Odors

Fermentation tanks and the Distillers Dry Grains with Solubles are typically the main contributors to odor at ethanol facilities. The Proposer will use a thermal oxidizer, which will destroy at least 97 percent of the organic compounds that are responsible for the odor emitted from the fermentation process. With this level of control, it is expected that the Project will not result in a significant impact from odor emissions.

C. Noise

Noise monitoring completed at various ethanol facilities has indicated that cooling towers, hammer mills, and conveyor systems/motors are generally the highest noise sources. Based on

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Highwater Ethanol Facility Project Findings of Fact On the Need for an Environmental Impact Statement Conclusions of Law Lamberton, Minnesota And Order

5

this monitoring, it is anticipated that the level of noise generated by the proposed Project will not exceed the noise standards provided in Minn. R. ch. 7030 at any residence.

14. The reversibility of any potential air quality effects that are reasonably expected to occur:

The MPCA finds that any potential effect that is reasonably likely to occur from this Project would be reversible. None of the expected air pollutants are persistent, and would dissipate quickly if the sources of the pollutant ceased operating. Additionally, as discussed above, the expected effects on air quality are minimal. The proposed lower production rate at 55 MMGY for the facility would result in lower air emissions than the Project initially evaluated at 75 MMGY. There is no reason to believe that this Project is reasonably expected to cause a significant negative effect on air quality.

15. Comments received that expressed concerns regarding potential effects to air quality:

One comment letter expressed concerns about air emissions and the EAW’s failure to provide an analysis of the potential environmental effects from all the pollutants emitted from the proposed Project. As discussed above in Findings 13 and 14, the analysis indicates that the effects on air quality that are reasonably expected to occur are not significant.

16. The MPCA finds that the environmental review is adequate to address the concerns because:

All potential impacts to air quality that are reasonably expected to occur from the proposed Project were considered during the review process and methods to prevent or mitigate these impacts have been developed.

17. The MPCA finds that the Project, as it is proposed, does not have the potential for significant

environmental effects based on the type, extent, and reversibility of environmental effects reasonably expected to occur as a result of its air emissions.

18. Reasonably expected environmental effects of this Project to water resources:

A. Ground-water supplies B. Surface-water discharges

19. The extent of any potential water quality effects that are reasonably expected to occur:

A. Ground-water Supplies As revised, the proposed Project would appropriate a maximum of 410 gpm of ground water from two separate well fields (Site 1 - 310 gpm and Site 2 – 100 gpm) that are located in confined sand and gravel aquifers. The total annual appropriation will be 179 million gallons per year. As part of the water appropriation application process, the DNR required the Proposer to conduct an inventory of all water wells within a 1.5-mile radius of each well site and a series of aquifer tests to evaluate potential impacts on the source aquifer, surrounding water supply wells, and any nearby surface-water features. These tests were originally completed in April 2006 and January/February 2007 for Site 1 and during November 2006 and January/February 2007 for Site 2. As requested by the MPCA Board, a full 30-day aquifer test was performed at Site 1 by Leggette, Brashears & Graham, Inc., on behalf of Highwater Ethanol, LLC. The 30-day aquifer

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Highwater Ethanol Facility Project Findings of Fact On the Need for an Environmental Impact Statement Conclusions of Law Lamberton, Minnesota And Order

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test at Site 1 was conducted at a rate of 465 gpm from June 30, 2007, through July 30, 2007. The DNR was consulted throughout the process to ensure good data was collected. At the end of the test, the test water levels were within three inches of the 50 percent threshold and would reach the 25 percent threshold in 12.5 years. The 30-day aquifer test allowed for the use of regression analysis to estimate water levels at lower pumping rates. The Project Proposer used the aquifer test data and the regression analysis to modify their Project production rate from 75 MMGY to 55 MMGY and a new pumping rate of 310 gpm at Site 1. The Department of Natural Resources reviewed the regression analysis, concurred with the data as plotted, and agreed that the pumping rate was sustainable for the new Project production rate of 55 MMGY. At the pumping rate of 310 gpm, the 50 percent threshold would be reached in 10.5 to 17 years. The Department of Natural Resources indicated in its Memorandum to the MPCA on August 2, 2007, that there is sufficient water available for the Project.

The results of the aquifer tests showed the potential for well interference on two irrigation wells near Site 1 and one shallow domestic well near Site 2. These interference problems have been managed through the standard DNR Division of Waters well interference and water conflict process. The Proposer has obtained signed agreements from the well owners preventing future pumping from the irrigators. The Proposer will also either replace the shallow domestic well with a deeper one or provide for rural water hookup. Observation wells and monitoring will be used to track pumping effects upon the source aquifer, neighboring users, and nearby surface waters. The DNR Division of Waters uses a two-tiered aquifer threshold approach to manage water use and protect the aquifer’s long-term viability. The first threshold is set at an elevation representing 50 percent of the pre-pumping available head to act as an early warning to the appropriator(s). If water levels in the aquifer drop to the 50-percent threshold, the Proposer will commence the process of bringing an additional water source online. The second threshold is set at 25 percent of the pre-pumping available head. If water levels drop to the 25-percent threshold level, pumping must cease from the appropriate production well. Appropriation from the aquifer could not recommence until the static water level has returned above the 50-percent threshold. The issuance of a DNR Water Appropriation Permit is predicated on DNR staff’s expectation that the aquifer will not be significantly affected by the Project. As directed by the MPCA Board, the contingency plan was submitted by the Project Proposers for review by the DNR staff and MPCA. The contingency plan consists of an evaluation of potential areas that could be developed as source water in the event the 50 percent safe yield threshold is breached at either well site. The contingency plan presents the findings of a ground-water resource assessment on eight areas near the proposed facility where additional ground-water resources could be developed, if needed. The most likely area for development and as a source of ground water, if needed, was selected using soil borings and well logs. Cross sections were developed to reflect the assessment and substantiate the selection of area S-1 for further development if needed. Thus, an aquifer has been identified as a water source, if needed. The pumping rate of 410 gpm of ground water from two separate well fields (Site 1 -310 gpm and Site 2 – 100 gpm) reduces the likelihood that a production well will be needed in area S-1. Additionally, the Water Appropriation Permit will contain monthly monitoring reports to allow for tracking and implementation of the contingency plan, if needed. The DNR staff reviewed the contingency plan submitted on August 2, 2007, and found the plan to be adequate.

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Highwater Ethanol Facility Project Findings of Fact On the Need for an Environmental Impact Statement Conclusions of Law Lamberton, Minnesota And Order

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B. Surface-water Discharges

The proposed Project will be covered under the National Pollutant Discharge Elimination System (NPDES)/State Disposal System (SDS) Permit program. An individual NPDES/SDS Permit will address the utility wastewater discharge and ongoing industrial stormwater discharge. An NPDES/SDS General Stormwater Permit for Construction Activities will be required prior to commencing any construction at the site of the proposed facility. Mitigation for the construction activities includes the implementation of best management practices (BMPs), such as the installation of erosion control devices to eliminate or reduce erosion and keep sediments from leaving the site.

Construction of the Project will result in approximately 18.4 acres of new impervious surfaces in the form of buildings, roadways, and parking lots. The NPDES/SDS Permits will require the development of a Stormwater Pollution Prevention Plan (SWPPP) for the facility. The SWPPP will identify all sources of stormwater contamination for the Project and insure the implementation of BMPs, such as minimizing the amount of materials exposed to precipitation through indoor storage and materials handling. Mitigation includes the construction of a stormwater pond to treat suspended sediments and other contaminants in the stormwater before it is conveyed from the site. These are standard practices that have been tested and proven to be effective for managing stormwater at other sites.

The facility will discharge utility wastewater consisting of noncontact cooling tower blowdown comprised of treated water. As revised at the 55 MMGY production capacity, this wastewater will be discharged at a maximum flow rate of 37,000 gpd to an unnamed tributary creek at a point approximately 1.8 miles upstream of its confluence with the Cottonwood River. Both the unnamed creek and the Cottonwood River experience very low flow at times. During these base flow conditions inflow represents a large percentage of the stream flow and water chemistry.

The proposed discharge is not subject to nondegradation review because the maximum design discharge of 37,000 gpd does not meet the definition of a “significant discharge” that would require a full nondegradation demonstration. New or expanding discharges that are found to be “significant” by definition under Minn. R. 7050.0185 are subject to additional review and possible additional requirements to prevent significant degradation and to maintain existing water uses. Smaller discharges that are less than 200,000 gpd and relatively devoid of toxic pollutants are not considered to be significant discharges that would require additional review under the nondegradation rule. Although not considered “significant” under the state nondegradation rules, the Project, as proposed, must still comply with all applicable facility

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Highwater Ethanol Facility Project Findings of Fact On the Need for an Environmental Impact Statement Conclusions of Law Lamberton, Minnesota And Order

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standards and water-quality based effluent limitations needed to maintain existing, beneficial uses in the receiving water and to downstream waters connected to or affected by the receiving water.

As indicated above, the proposed utility wastewater discharge will be regulated through an NPDES/SDS Permit issued by the MPCA. Proposed effluent limitations and requirements for the discharge to the unnamed creek were evaluated by MPCA staff for the 75 MMGY-capacity facility as set forth in the EAW document. Technology-based or water-quality based effluent limitations were established for five-day carbonaceous biochemical oxygen demand, total suspended solids, pH, temperature, total residual chlorine, specific conductance, bicarbonates, hardness, sodium, and total dissolved solids. The projected phosphorus discharged will be offset by required trading under the Minnesota River Basin General Phosphorus Permit. Chronic whole effluent toxicity testing will be required in the NPDES/SDS Permit to evaluate the potential for toxicity from the aggregate effects of major ions and water treatment additives. In addition, the NPDES/SDS Permit will require effluent monitoring for chlorides, boron, sulfates, and total salinity. If any of these monitored substances show a reasonable potential to exceed water quality standards, the NPDES/SDS Permit will be modified to provide a limit. These control measures will ensure that any effects on surface-water quality from the discharge will not be significant. A detailed water-quality evaluation was conducted for the initially proposed 75 MMGY facility as part of the NPDES/SDS Permit application and summarized in the EAW. MPCA staff re-evaluated the utility wastewater discharge at the revised 55 MMGY production capacity to determine the changes needed to the NPDES/SDS Permit to ensure the protection of water quality standards and the receiving waters. The evaluation of the new proposal shows an improvement is expected in the discharge quality.

20. The reversibility of any potential effects on water resources that are reasonably expected to occur:

The MPCA finds that any potential effect that is reasonably likely to occur from this Project would be reversible. In the event that significant aquifer drawdown is observed, and the 25-percent threshold is met, the well pumping will be stopped per the DNR Water Appropriation Permit, allowing recharge of the impacted aquifer. The recent 30-day aquifer test showed recovery of the aquifer when pumping is stopped. An analysis of the revised Project’s discharge has been conducted by MPCA staff. As discussed in Finding 19, above, with the implementation of mitigation measures and ongoing regulatory authority, the expected effects on water resources are minimal. There is no reason to believe that this Project is reasonably expected to cause a significant negative effect on water resources.

21. Comments received that expressed concerns regarding potential effects to water resources:

The MPCA received comment letters expressing concern about the impacts of the Project on nearby surface waters from the ground-water appropriation and from the facility’s stormwater and utility wastewater discharges. As discussed in Findings 19 and 20 above, mitigative measures will be taken to minimize any adverse impacts to surface waters. One comment letter argued that the MPCA failed to do a nondegradation review on the utility wastewater discharge from the facility. As discussed above in Findings 19 and 20, an appropriate level of review has been conducted by the MPCA staff, and the effects on water quality that are reasonably expected to occur are not significant. One comment letter expressed concern about the need to identify wetlands that could potentially be impacted by construction of the Project, rail spur, and associated pipelines. Prior to construction, the Proposer will complete wetland delineation for these areas to determine the

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existence of any wetlands that could be impacted by construction activities. The Proposer will work through the Wetland Conservation Act process with the appropriate agencies to ensure that the construction and operation of the proposed Project will not have adverse impacts on wetlands.

22. The MPCA finds that the environmental review is adequate to address the concerns because:

All potential impacts to water quality that are reasonably expected to occur from the proposed Project were considered during the review process and a method to prevent these impacts exists.

23 The MPCA finds that the Project, as it is proposed, does not have the potential for significant

environmental effects on water resources based on the type, extent, and reversibility of environmental effects reasonably expected to occur.

24. Reasonably expected environmental effects of this Project from traffic.

A. Traffic B. Rail Traffic

25. The extent of any potential traffic effects that are reasonably expected to occur:

A. Traffic The proposed Project, as revised, is expected to result in 188 average daily vehicle trips, mostly between 8:00 a.m. and 5:00 p.m. This results in an increase of approximately seven percent of the total average daily traffic. The Proposer will work with the Minnesota Department of Transportation (MNDOT), Redwood County, and Lamberton Township to complete any road upgrades that may be necessary to address the increase in traffic.

B. Rail Traffic

The Project will result in the construction of a new rail spur consisting of five tracks along the northern side of the existing Dakota, Minnesota, and Eastern (DM&E) Railroad; and an increase of rail traffic in the area of the facility. The Proposer will work with Redwood County, the city of Lamberton and the DM&E Railroad to determine if a stop sign or other upgrades will be needed as a result of increased rail traffic in the area.

26. The reversibility of any potential traffic effects that are reasonably expected to occur:

The MPCA finds that any potential effect that is reasonably likely to occur from this Project would be reversible. As discussed in Finding 25 above, the expected effects from traffic are minimal. There is no reason to believe that this Project is reasonably expected to cause a significant negative effect from traffic.

27. Comments received that expressed concerns regarding potential effects from traffic:

One comment letter was received regarding the need for measures to insure road/rail crossing safety. As discussed in Finding 25 above, upgrades will be used at rail crossings as appropriate to protect the public.

28. The MPCA finds that the environmental review is adequate to address the concerns because:

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All potential impacts from traffic that are reasonably expected to occur from the proposed Project were considered during the review process and a method to prevent these impacts exists.

29. The MPCA finds that the Project, as it is proposed, does not have the potential for significant

environmental effects from traffic based on the type, extent, and reversibility of environmental effects reasonably expected to occur.

Potential Cumulative Effects of Related or Anticipated Future Projects

30. The second criterion that the MPCA must consider, when determining if a project has the potential

for significant environmental effects that are reasonably expected to occur, is the "potential cumulative effects of related or anticipated future projects," Minn. R. 4410.1700, subp. 7. B. (2007). The MPCA findings with respect to this criterion are set forth below.

31. The EAW, public comments, and MPCA follow-up evaluation disclosed related or anticipated future projects that may interact with this Project in such a way as to identify any potential cumulative environmental effects that are reasonably expected to occur. As discussed in the EAW, Response to Comments, and information provided in this finding, all existing sources were evaluated. The MPCA staff determined that there are no new projects planned in the foreseeable future.

A. Cumulative Effects Analysis on Air Emissions

The Proposers completed an AERA for the initially proposed 75 MMGY facility to examine the potential for human health impacts. A revised AERA is not required for the change in facility production and any risks would be expected to be less with the reduction in production capacity. There are no other permitted sources of air pollutants of concern near the area of the proposed facility site and there are no other projects proposed in the vicinity. The Project does not have the potential for significant cumulative effects from air emissions.

B. Cumulative Effects Analysis on Ground-water Appropriation:

The aquifer test protocol required by DNR includes an evaluation of all existing water appropriations from the same or connected aquifers. In addition to including all existing sources in the evaluation, the Proposer consulted local units of government to determine if there are any future projects being proposed. To the MPCA’s knowledge, there are no future projects currently proposed now or in the foreseeable future for the area. The DNR’s permit application process is used to determine if the Project will create well interference or water conflict issues with other users, impact nearby surface-water bodies, or damage long-term aquifer sustainability. The DNR has a process for protecting other users of the aquifer, including the use of an interference management process, yield restrictions in the DNR Water Appropriation Permit, and curtailed production, if necessary.

C. Cumulative Effects Analysis on Surface-water Discharges

The MPCA staff conducted a search of its permit database to inventory existing point source discharges within the Cottonwood River watershed. The closest upstream discharger to the Project site is a small municipal wastewater treatment (stabilization pond) facility at Revere, located about 7.9 miles upstream on Pell Creek, which is tributary to the Cottonwood River. The unnamed creek that will receive the facility discharge joins the Cottonwood River about 3.1 miles downstream from the Pell Creek confluence. The closest downstream discharger to the Project site is the city of Lamberton Wastewater Treatment Facility. This stabilization pond

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facility has a controlled discharge to Dutch Charley Creek at a point about 8.4 stream miles upstream of its confluence with the Cottonwood River. Dutch Charley Creek enters the Cottonwood River about 4.5 miles downstream from the unnamed creek that will receive the facility discharge. No additional point source water discharges are proposed in the vicinity of the proposed Project. The Project does not have the potential for significant cumulative effects from surface-water discharges. Most of the permitted dischargers in the Cottonwood River watershed are municipal wastewater treatment facilities (16) located on various tributaries to the Cottonwood River. The aggregate design flow for all permitted discharges in the watershed is about 10.6 million gallons per day. At a revised maximum design flow of 37,000 gpd for the 55 MMGY facility, the proposed new discharge from the Project would represent an incremental increase of less than one percent in the total discharge volume currently permitted within the Cottonwood River watershed. Given that the proposed discharge is a relatively small volume, no significant cumulative effects on water quality of the Cottonwood River are anticipated.

The Proposer is required to implement temporary and permanent stormwater controls for the Project site. The Proposer is proposing to construct a stormwater detention/retention pond to treat stormwater at its facility. The pond will discharge through an underground pipeline to Dutch Charley Creek, which eventually drains to the Cottonwood River. The stormwater pond will discharge at a controlled rate, therefore, further minimizing potential impacts to the receiving waters. Due to these stormwater controls, no adverse impacts are expected when the discharge is considered in combination with potential future development in the Industrial Park.

32. Public comments concerning cumulative effects:

The MPCA received several comment letters expressing concerns about potential cumulative effects from the proposed Project. A. Air Emissions

The MPCA received one comment letter that expressed concerns about cumulative impacts from increased emissions of nitrogen oxides (NOx) on Class I areas in northern Minnesota and greenhouse gas emissions from the Project. The MPCA is currently studying the effects of NOx emissions on regional haze and developing a plan to satisfy the federal Clean Air Act requirements. The MPCA staff believes that the amount of NOx emissions from this single natural-gas fired facility will not be a significant contributor to regional haze in northern Minnesota. The MPCA has information on the greenhouse gas emissions expected from an individual ethanol facility. This facility is not expected to be a significant source of carbon dioxide (CO2) emissions. With respect to the commenter’s concerns about the effect of CO2 emissions on global warming, the MPCA is developing holistic strategies for addressing climate change on a statewide basis. The MPCA believes that the scope of the cumulative impact analysis conducted by staff on air emissions from this facility is appropriate for an EAW.

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B. Ground-water Supplies The MPCA received comment letters expressing concerns about competing needs from future residential growth or limited ground-water resources in the area of the Project. The DNR’s aquifer test protocol includes all existing water appropriations from the same or connected aquifer. In addition to including all existing sources in the evaluation, the DNR’s assessment for the EAW includes future known uses. The MPCA believes that the DNR’s analysis of the Project considers the cumulative effects of known future residential use.

C. Surface-water Discharges

One comment letter stated that the EAW fails to address the cumulative effects of a new discharge on the Minnesota River Low Flow Dissolved Oxygen Total Maximum Daily Load (TMDL) equation that is fixed for all point source dischargers in the Minnesota River Basin. The Minnesota River Low Flow Dissolved Oxygen TMDL Report establishes the phosphorus reduction required in the basin to insure the dissolved oxygen standard is met during low flow conditions. The TMDL is based on an extensive study of the cumulative effects of all sources of phosphorus to the Minnesota River. Compliance with the TMDL, which has been approved by the U.S. Environmental Protection Agency (EPA), ensures that the cumulative phosphorus load to the Minnesota River will be reduced such that the river meets all applicable water quality standards.

For the purpose of this specific TMDL Report, low flow was determined to be 61 days during August and September. The Minnesota River Basin General NPDES Permit for phosphorus was created with the understanding that new facilities will be entering into the system; and thus, trading would be required. The trading provisions require the seller of phosphorus credits to obtain lower phosphorus reductions than required to meet the permit conditions before a trade can be made. Thus, the commenter’s assertion that new dischargers will be approved without foresight is not accurate. Additionally, while the phosphorus reduction is only required on a seasonal basis, the Proposer has taken a voluntary year-round limit, which will achieve a higher level of reduction than required by the TMDL.

33. Based on MPCA staff experience, available information on the Project, and information presented

by the commenters, the MPCA does not reasonably expect significant cumulative effects from this Project. In considering the potential cumulative effects of related or anticipated future projects, the MPCA finds that the reasonably expected effects from this Project will not be significant.

The Extent to Which the Environmental Effects Are Subject to Mitigation by Ongoing Public Regulatory Authority 34. The third criterion that the MPCA must consider, when determining if a project has the potential for

significant environmental effects that are reasonably expected to occur, is "the extent to which the environmental effects are subject to mitigation by ongoing public regulatory authority," Minn. R. 4410.1700, subp. 7. C. (2007). The MPCA findings with respect to this criterion are set forth below.

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35. The following permits or approvals are required for the Project:

Unit of Government Permit or Approval Required Status MPCA Air Emissions Permit Submitted MPCA NPDES/SDS Permit Submitted MPCA NPDES/SDS General Permit MNG420000

(Minnesota River Basin General Phosphorus Permit Phase 1)

To be submitted

MPCA Above Ground Storage Tank Permit Submitted MPCA NPDES/SDS General Permit for Discharge of

Stormwater During Construction Activities To be submitted

MPCA Section 401 Water Quality Certification of U.S. Army Corps of Engineers Section 10 Permit

Submitted

DNR Water Appropriations Permit Submitted DNR Utility Crossing License To be submitted U.S. Army Corps of Engineers

Section 10 of the Rivers and Harbors Act of 1899 Permit for work in navigable waters

To be submitted as needed for water pipelines

Unit of Government Permit or Approval Required Status EPA Spill Prevention Control and Countermeasure Plan To be completed State Historical Preservation Office

Concurrence on Findings of Cultural Resource Impacts

Completed

MNDOT Utility Permit on Trunk Highway Right-of-Way (Form 2525)

Submitted

Redwood County Building Permit To be submitted Redwood County Utility Permit To be submitted Cottonwood County Conditional Use Permit for a High Capacity Well To be submitted Cottonwood County Utility Permit To be submitted

36. The above listed permits include general and specific requirements for mitigation of environmental

effects of the Project. 37. The MPCA finds that ongoing public regulatory authority will address any significant potential

environmental effects that were identified as reasonably expected to occur.

The Extent to Which Environmental Effects can be Anticipated and Controlled as a Result of Other Available Environmental Studies Undertaken by Public Agencies or the Project Proposer, Including Other EISs 38. The fourth criterion that the MPCA must consider is “the extent to which environmental effects can

be anticipated and controlled as a result of other available environmental studies undertaken by public agencies or the Project Proposer, including other EISs.” Minn. R. 4410.1700, subp. 7. D. (2007). The MPCA findings with respect to this criterion are set forth below.

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39. The following documents were reviewed by the MPCA staff as part of the potential environmental impact analysis for the proposed Project. This list is not intended to be exhaustive. The MPCA also relies on information provided by the Proposer, commenters, staff experience, and other available information.

A. EAW; B. Air Emission Permit Application and Draft Permit, Technical Support Document for the Air

Emission Permit; C. AERA and air modeling information; D. NPDES/SDS Permit Application and Draft Permit, Effluent Limit Review Summary and

Supporting Documents; E. Letter from David Leuthe, Regional Hydrologist, DNR Waters Division to Highwater Ethanol,

LLC, dated March 15, 2007; F. Letter from Highwater Ethanol, LLC, dated July 30, 2007, reducing the Project size from 75

MMGY to 55 MMGY, and G. DNR memorandum, dated August 2, 2007, transferring the information from the 30-day aquifer

test and modeling, and the contingency plan submitted by the Project Proposer in response to the MPCA Board request for additional information.

40. There are no elements of the Project that pose the potential for significant environmental effects

that cannot be addressed in the Project design and permit development processes, or by regional and local plans.

41. Based on the environmental review, previous environmental studies, and MPCA staff expertise on

similar projects, the MPCA finds that the environmental effects of the Project that are reasonably expected to occur can be anticipated and controlled.

CONCLUSIONS OF LAW

42. The MPCA has jurisdiction in determining the need for an EIS for this Project. The EAW, the

permit development process, the facility planning process, responses prepared by MPCA staff in response to comments on the Project EAW, and the evidence in the record are adequate to support a reasoned decision regarding the potential significant environmental effects that are reasonably expected to occur from this Project.

43. The MPCA has sufficient information to make a reasoned decision on the need for an EIS.

44. Areas where the potential for significant environmental effects may have existed have been

identified and appropriate mitigation measures have been incorporated into the Project design and permits. The Project is expected to comply with all MPCA standards.

45. Based on the criteria established in Minn. R. 4410.1700 (2007), there are no potential significant environmental effects reasonably expected to occur from the Project.

46. An EIS is not required.

47. Any findings that might properly be termed conclusions and any conclusions that might properly be termed findings are hereby adopted as such.

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ORDER

The Minnesota Pollution Control Agency determines that there are no potential significant environmental effects reasonably expected to occur from the Highwater Ethanol Facility project and that there is no need for an Environmental Impact Statement.

IT IS SO ORDERED

__________________________________________ Commissioner Brad Moore Chair, Citizens’ Board Minnesota Pollution Control Agency __________________________________________ Date