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[Federal Register Volume 76, Number 194 (Thursday, October 6, 2011)]
[Notices]
[Pages 62050-62052]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-25857]

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DEPARTMENT OF ENERGY

Issuance of a Loan Guarantee to Abengoa Bioenergy Biomass of 
Kansas, LLC for the Abengoa Biorefinery Project Near Hugoton, Stevens 
County, KS

AGENCY: U.S. Department of Energy, Loan Programs Office.

ACTION: Record of decision.

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SUMMARY: The U.S. Department of Energy (DOE) announces its decision to 
issue a $134 million loan guarantee under Title XVII of the Energy 
Policy Act of 2005 (EPAct 2005) to Abengoa Bioenergy Biomass of Kansas, 
LLC (Abengoa) for construction and start-up of a cellulosic ethanol 
plant near Hugoton, Kansas (Project). The integrated biorefinery will 
use a combination of biomass feedstocks, such as corn stover and wheat 
straw, to produce cellulosic ethanol and to generate sufficient 
electricity to power the facility. The Project site comprises 
approximately 810 acres of row-cropped agricultural land. The 
biorefinery facilities will be developed on 385 acres and the remaining 
425 acres will continue in agricultural use and act as a buffer area 
between the biorefinery and the Hugoton city limits. The environmental 
impacts of the construction and operation of this project were analyzed 
pursuant to the National Environmental Policy Act (NEPA) in the Final 
Environmental Impact Statement for the Proposed Abengoa Biorefinery 
Project near Hugoton, Stevens County, Kansas (DOE/EIS-0407F) (Final 
EIS) (August 2010) and in an associated Supplement Analysis (DOE/EIS-
0407/SA-1; July 2011), prepared by the DOE Office of Energy Efficiency 
and Renewable Energy (EERE) Golden Field Office. DOE published a Record 
of Decision (ROD) on January 12, 2011 (76 FR 2096) to provide Federal 
funding under Section 932 of EPAct 2005 to Abengoa for the Project. The 
project for which DOE earlier provided funding under Section 932, with 
some modifications, is the same project for which DOE is now making a 
decision to issue a loan guarantee under Title XVII of EPAct 2005. DOE 
Loan Programs Office determined that the project analyzed in the Final 
EIS and Supplement Analysis

[[Page 62051]]

encompasses all activities covered by the loan guarantee.

ADDRESSES: Copies of this ROD and the Final EIS may be obtained by 
contacting Sharon Thomas, NEPA Document Manager, Environmental 
Compliance Division, Loan Programs Office (LP-10), U.S. Department of 
Energy, 1000 Independence Avenue, SW., Washington, DC 20585; telephone 
202-586-5335; or e-mail Sharon.R.Thomas@hq.doe.gov, or by accessing 
these documents on the DOE NEPA Web site at http://energy.gov/nepa and 
on the Loan Programs Web site at http://www.loanprograms.energy.gov.

FOR FURTHER INFORMATION CONTACT: For further information about this 
ROD, contact Sharon Thomasmailto:, as indicated in the ADDRESSES 
section above. For general information about the DOE NEPA process, 
contact Carol Borgstrom, Director, Office of NEPA Policy and Compliance 
(GC-54), U.S. Department of Energy, 1000 Independence Avenue, SW., 
Washington, DC 20585; telephone 202-586-4600; leave a message at 800-
472-2756; or e-mail askNEPA@hq.doe.gov. Information about DOE NEPA 
activities and access to DOE NEPA documents are available through the 
DOE NEPA Web site at http://energy.gov/nepa.

SUPPLEMENTARY INFORMATION:

Background

    The Abengoa Project will be constructed on a 385-acre parcel near 
Hugoton, Kansas. Abengoa has optioned an additional 425 acres 
immediately east of the biorefinery parcel, between the biorefinery and 
the Hugoton city limits, as a buffer area. The planned usage of the 
optioned parcel would be to continue its use as irrigated agricultural 
land, to test production of biomass feedstocks, and for biomass 
storage. The biomass-to-ethanol and cogeneration facility proposed by 
Abengoa would use lignocellulosic biomass (biomass) as feedstock to 
produce biofuels and electricity. Biomass, including corn stover, wheat 
straw, milo stubble, mixed warm season grasses (such as switchgrass), 
and other available materials, would be harvested as feedstock and 
fermented to produce ethanol and potentially lignin. The biorefinery's 
cogeneration facility would also produce biopower, or bioenergy, in the 
form of electricity. The cogeneration facility co-located at the site 
would use direct-firing (that is, using the biomass as a solid fuel in 
a biomass boiler) to produce steam. Steam produced in the biomass 
boiler would be used for facility processes and to produce electricity.
    Under Section 932 of EPAct 2005, Congress directed DOE to carry out 
a program to demonstrate the commercial application of integrated 
biorefineries for the production of biofuels, in particular ethanol, 
from lignocellulosic feedstocks. To implement its responsibilities 
under Section 932, DOE issued a funding opportunity announcement in 
February 2006 for the design, construction, and startup of commercial-
scale integrated biorefineries. In February 2007, DOE EERE selected 
Abengoa and five other applicants for negotiation of award. In December 
2009, Abengoa applied for a loan guarantee from the Department's Loan 
Programs Office pursuant to Title XVII of EPAct 2005.

NEPA Review

    In August 2008, DOE published in the Federal Register its Notice of 
Intent to Prepare an Environmental Impact Statement and Notice of 
Wetlands Involvement for the Abengoa Biorefinery Project near Hugoton, 
KS (73 FR 50001), starting a 45-day public scoping period during which 
DOE held a public scoping meeting in Hugoton, Kansas. In April 2009, 
DOE re-opened public scoping and published in the Federal Register its 
Amended Notice of Intent to Modify the Scope of the Environmental 
Impact Statement for the Abengoa Biorefinery Project near Hugoton, KS 
(74 FR 19543). The amended notice informed the public about changes in 
the Project relevant to the scope of the ongoing EIS. DOE conducted a 
30-day public scoping period and held a second public scoping meeting 
in Hugoton, Kansas. On September 23, 2009, DOE published in the Federal 
Register its Notice of Availability for the Draft Environmental Impact 
Statement for the Abengoa Biorefinery Project Near Hugoton, Stevens 
County, KS (DOE/EIS-0407D) (74 FR 48525) (Draft EIS). On September 25, 
2009, the U.S. Environmental Protection Agency (EPA) listed the Draft 
EIS in its weekly notice of availability (74 FR 48951).
    DOE conducted a public hearing in Hugoton during the 45-day public 
comment period on the Draft EIS. DOE prepared a comment-response 
chapter for the Final EIS (Chapter 10) that includes each public 
comment received on the Draft EIS and DOE's response.
    DOE issued the Final EIS, and EPA listed the Final EIS in its 
weekly notice of availability on August 20, 2010 (75 FR 51458). DOE 
issued a ROD, published on January 12, 2011 (76 FR 2096), to provide 
Federal funding under Section 932 of EPAct 2005 to Abengoa for the 
Project (identified in the Final EIS and ROD as the Proposed Action).
    Since issuance of the ROD, Abengoa has proposed a modification to 
the Proposed Action. Under the original Proposed Action, the 
biorefinery would process approximately 2,500 dry short tons per day of 
feedstock and produce up to 19 million gallons of denatured ethanol per 
year and 125 megawatts of electricity, 75 of which would be sold 
commercially. Under the Modified Proposed Action, the biorefinery would 
process approximately 1,000 dry short tons per day of feedstock and 
produce up to 25 million gallons of denatured ethanol per year and 20 
megawatts of electricity for use at the facility, none of which would 
be sold to the grid. In July 2011, pursuant to DOE NEPA regulations (10 
CFR 1021.314), DOE issued a Supplement Analysis for the Final 
Environmental Impact Statement for the Proposed Abengoa Biorefinery 
Project near Hugoton, Stevens County, Kansas (DOE/EIS-0407/SA-1) that 
examined the potential environmental impacts of the Modified Proposed 
Action and addressed whether they were within the range of the 
potential environmental impacts analyzed in the Final EIS. Based on the 
Supplement Analysis, DOE determined on July 7, 2011, that the Modified 
Proposed Action would not constitute a substantial change in actions 
previously analyzed and would not present significant new circumstances 
or information relevant to the environmental concerns and bearing on 
the previously analyzed actions or impacts, within the meaning of 40 
CFR 1502.9(c) and 10 CFR 1021.314. Accordingly, DOE determined that a 
supplement to the FEIS was not required. On August 19, 2011, DOE 
announced its decision to offer a conditional commitment to Abengoa to 
provide a $134 million loan guarantee to support the financing of the 
Project (Modified Proposed Action).

Alternatives Considered

    In the Final EIS, DOE considered three alternatives, including the 
Project as identified in the Final EIS as the Proposed Action (selected 
by DOE in the January 2011 ROD), an Action Alternative, and the No 
Action Alternative. These alternatives were described in detail and 
fully analyzed in the Final EIS.
    The DOE decision to select the Proposed Action (provide Federal 
funding under Section 932 of EPAct 2005 for the Project) includes best 
management practices and mitigation measures identified in Chapter 6 of 
the Final EIS, Best Management Practices

[[Page 62052]]

and Mitigation, and summarized in the January 2011 ROD. These practices 
and mitigation measures, and additional mitigation measures identified 
in the Supplement Analysis for the Modified Proposed Action, will be 
implemented for the Project. Mitigation measures beyond those specified 
in permit conditions will be addressed in a mitigation action plan 
(MAP) that DOE will prepare pursuant to 10 CFR 1021.331. The MAP and 
annual monitoring reports will be available on the DOE NEPA Web site 
(http://energy.gov/nepa) and the DOE Golden Field Office Web site 
(http://www.eere.energy.gov/golden/Reading_Room.aspx).
    DOE's decision in this ROD is whether or not to issue a $134 
million loan guarantee to Abengoa to support construction and start-up 
of the Project. Accordingly, DOE's alternatives are (1) to issue a loan 
guarantee to Abengoa for the Proposed Action alternative selected in 
the January 2011 ROD and subsequently modified (the Modified Proposed 
Action described in the Supplement Analysis), and (2) No Action 
Alternative, i.e., no loan guarantee.

Environmentally Preferred Alternative

    Issuance of a loan guarantee for the Project would result in both 
beneficial and adverse potential environmental impacts. Potential 
beneficial impacts include those associated with reductions in 
greenhouse gas emissions and a decrease in water withdrawals; adverse 
impacts include those associated with a substantial increase in 
transportation activity and minor impacts from air emissions. On 
balance, DOE regards the No Action Alternative, which would result in 
no change in existing environmental conditions, as the environmentally 
preferred alternative.

Decision

    On January 12, 2011, DOE announced the issuance of a ROD to provide 
Federal funding under Section 932 of EPAct 2005 to Abengoa for the 
Project. DOE's decision in this ROD is to select alternative (1) 
identified above: To issue a loan guarantee for construction and start-
up of the Project (the Modified Proposed Action as described in the 
Supplement Analysis). Under alternative (2), the No Action Alternative, 
DOE would not issue a loan guarantee for the Project, and it is 
unlikely that Abengoa would implement the Project as currently planned. 
While the direct and indirect environmental impacts of the Project 
would be avoided under the No Action Alternative, the benefits that 
would be gained from the development, demonstration, and commercial 
operation of an integrated biorefinery that uses lignocellulosic 
feedstocks would not be realized. In addition, no benefits would be 
realized from the reduction of air pollutants and emissions of 
greenhouse gases by displacing gasoline with biofuel.
    Approval of the loan guarantee for the Project meets DOE's purpose 
and need pursuant to Title XVII of EPAct 2005 (42 U.S.C. 16511-16514) 
for eligible projects under Section 1703 of Title XVII, which 
authorizes the Secretary of Energy to make loan guarantees for projects 
that (1) avoid, reduce, or sequester air pollutants or anthropogenic 
emissions of greenhouse gases and (2) employ new or significantly 
improved technologies as compared to commercial technologies in service 
in the United States at the time the guarantee is issued. Issuance of 
loan guarantees for projects under Section 1703 of Title XVII of EPAct 
2005 facilitates the acceleration of the commercialization of 
innovative, environmentally-friendly technologies that will have an 
impact on ensuring clean, affordable, and reliable supplies of energy. 
The purpose and need for DOE's loan guarantee action is to comply with 
DOE's mandate under Title XVII of EPAct 2005 by selecting projects that 
meet the goals of the Act.
    In addition, the Project is also eligible for a loan guarantee 
under Section 1705 of Title XVII (implemented pursuant to Section 406 
of the American Recovery and Reinvestment Act of 2009 (ARRA)). Eligible 
Section 1705 projects include renewable energy projects and related 
manufacturing facilities, electric power transmission projects, and 
leading edge biofuels projects. The primary purposes of ARRA are job 
preservation and creation, infrastructure investment, energy efficiency 
and science, assistance to the unemployed, and state and local fiscal 
stabilization. Issuances of loan guarantees for eligible projects under 
Section 1705 are designed to address the current economic conditions 
facing the nation. To qualify under Section 1705, projects must 
commence construction by September 30, 2011.

Mitigation

    This ROD incorporates all practicable means to avoid or minimize 
environmental harm. The Project that will be supported by issuance of 
the DOE loan guarantee includes all mitigation conditions applied by 
DOE for this Project in its Final EIS, January 2011 ROD, and Supplement 
Analysis. In the Supplement Analysis, DOE concluded that additional 
mitigation measures are warranted to reduce potential impacts from 
accidental releases of anhydrous ammonia. Mitigation measures beyond 
those specified in permit conditions will be addressed in a MAP that 
DOE will prepare pursuant to 10 CFR 1021.331. The MAP will explain how 
the mitigation measures will be planned, implemented, and monitored. 
DOE will ensure that commitments in the ROD are incorporated into DOE's 
loan guarantee agreement with Abengoa. The MAP and annual monitoring 
reports will be available on the DOE NEPA Web site (http://energy.gov/nepa) and the DOE Golden Field Office Web site (http://www.eere.energy.gov/golden/Reading_Room.aspx).
    DOE's loan guarantee agreements require the applicant to comply 
with all applicable laws and the MAP, including mitigation measures 
contained therein. An applicant's failure to comply with applicable 
laws and the MAP would constitute a default. Upon the continuance of a 
default, DOE would have the right under the loan guarantee agreement 
between it and the applicant to exercise usual and customary remedies. 
To ensure that the applicant so performs, the DOE Loan Programs Office 
proactively monitors all operative loan guarantee transactions.

    Issued in Washington, DC, on September 20, 2011.
Jonathan M. Silver,
Executive Director, Loan Programs Office.
[FR Doc. 2011-25857 Filed 10-5-11; 8:45 am]
BILLING CODE 6450-01-P
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