Forum: Rails deployment No such file to load -- config/environment

I'm trying to start my Rails 2.3.5 application on Ubuntu 10.10 in
production with
- ruby 1.8.7 (2010-04-19 patchlevel 253) [i686-linux], MBARI 0x8770,
Ruby Enterprise Edition 2010.02
- nginx/0.7.67
- passenger 2.2.15

I receive the following error:
no such file to load -- /root/rails_apps/test/config/environment
(error page on http://178.79.131.147/)

My nginx.conf is:

user  root;
worker_processes  1;
..........
http {
..........
 server {
        listen       80;
        server_name  localhost;
        passenger_enabled on;
........