AQ_F_1900015_20170613_ENF_Enf-FND

STATE OF NORTH CAROLINA NORTH CAROLINA
ENVIRONMENTAL MANAGEMENT COMMISSION
COUNTY OF CHATHAM
FILE NO.DAQ 2016-036
IN THE MATTER OF: )
ARAUCO PANELS USA LLC )
FOR VIOLATION OF: )
AIR PERMITS 03449T43/T44/T45; )
CIVIL PENALTY ASSESSMENT
15A NCAC 2D .1111; )
15A NCAC 2D .0512; )
15A NCAC 213 .0515; )
15A NCAC 2D .0521; )
15A NCAC 2D .0530; and
15A NCAC 2Q .0317
Acting pursuant to North Carolina General Statutes (G.S.) 143-215.114A,I,Michael Abraczinskas,Director of the
Division of Air Quality(DAQ),make the following:
I. FINDINGS OF FACT:
A. Arauco Panels USA LLC (formally Uniboard USA LLC and ATC Panels, Inc.) operates a particleboard
(PB) mill and a medium density fiberboard (MDF) mill under one air permit in Moncure, Chatham
County,North Carolina. This facility has a facility ID number of 1900015.
B. Arauco Panels USA LLC was issued the following permits for the construotion/operation of air emission
sources and/or air cleaning devices: 1)Air Permit No.03449T43 on January 22,2014,with an expiration
date of December 31, 2018; 2)Air Permit No. 03449T44 on May 27,2015,with an expiration date of
April 30,2020; and 3)Air Permit No. 03449T45 on July 1,2016,with an expiration date of June 30,
2021. These were the effective permits during the time periods in which the violations occurred.
C. Said permits contain Stipulation 2.1.C.Lf. (regarding the MDF mill),which reads as follows:
c. "The Permittee shall install, operate, and maintain instrumentation on the venturi scrubbers(ID Nos. CD02-
1, CD14-1 and CD16-1)to continuously monitor the following parameters and maintain the parameters in
the associated operating ranges..."
Two separate incidents occurred at the facility during 2016 involving 30+hours during which venturi
scrubbers were not operated in the normal and proper manner pursuant to 15A NCAC 2D .0515 causing
the recirculating liquid flow rates and pressure drops to move out of compliance ranges. These two
incidents represent 30 separate violations of the hourly standard established under 15A NCAC 2D .0515.
D. Said permits contain Stipulation 2.1.C.2.c. and Stipulation 2.1.E.5.c. (regarding the MDF mill and the PB
mill respectively). The pertinent section of the stipulation reads as follows:
c. ..... If visible emissions from this source are observed to be above normal, the Permittee shall either:
i. take appropriate action to correct the above-normal emissions as soon as practicable and within the
monitoring period and record the action taken as provided in the recordkeeping requirements below, or
ii. demonstrate that the percent opacity from the emission points of the emission source in accordance with 15A
NCAC 2D.2601 (Method 9)for 12 minutes is below the limit given in condition a. above.
If the above-normal emissions are not corrected per(i)above or if the demonstration in(ii)above cannot be
made, the Permittee shall be deemed to be in noncompliance with 15A NCAC 2D.0521 ..."
A review of the monitoring records(from June 19,2015 to February 12,2016)in conjunction with an
additional incident noted in the 2016 Annual Compliance Certification(ACC)indicate that thirty-eight

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DAQ 2016-036
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(38)separate"above-normal"visible observations where the above-mentioned follow-up procedures were
not followed after a plant employee documented visible emissions above the normal range. These
incidents represent 38 separate violations of 15A NCAC 2D .0521.
E. Air Permit Nos. 03449T44/T45 contain Stipulation 2.23.1.c. (regarding the MDF Energy System—ES-
02-A)with the relevant portion of the stipulation reading as follows:
c. "The Permittee shall maintain a urea/water solution (45%urea concentration by volume)injection rate of
0.24 gpm (3-hour block average)(ID No. CD02-A). This injection rate may be revised administratively
pending DAQ review."
The urea-injection rate monitoring records indicate that between November 6,2015 and October 28,
2016,there were 336 three-hour block averages of flow rates that fell below the minimum level of 0.24
gpm,representing 336 separate violations of 15A NCAC 2Q .0317.
F. Said permits contain Stipulation 2.LE.2.c. (regarding PB mill)with the relevant portion of the stipulation
reading as follows:
c. ..... internal inspection of the bagfilters, every 12 months, noting the structural integrity and the condition of
the filters ..."
The facility records for CY 2015 related to the internal inspections of four different bagfilters were not
available at the time of the inspection. In addition,the facility's 2°d half 2016 semiannual report and 2016
ACC documented two additional incidents when bagfilters were not inspected within the required 12-
month period. Each of these six incidents represent a separate violation of 15A NCAC 2D.0512.
G. Said permits contain Stipulation 2.LB.Lb. (MDF mill)with the relevant portion of the stipulation reading
as follows:
b. ..... annual(for each 12 month period following the initial inspection)internal inspection of the bagrilters
noting the structural integrity and the condition of the filters ..."
The facility's 2°a half 2016 Semiannual Report and 2016 ACC documented an incident when a bagfilter
(CD-10)was not inspected within the required 12-month period. This incident represents a separate
violation of 15A NCAC 213 .0512.
H. Air Permit Nos. 03449T43/T44 contain Stipulation 2.1.E.6.q.ii. (regarding the PB plant dryers)with the
relevant portion of the stipulation reading as follows:
q. ..... annual(for each 12 month period following the initial inspection)internal inspection of the particleboard
dryers(ID Nos. 1410, 1420,and 1430)for structural integrity ..."
The facility's 2"half 2016 Semiannual Report and 2016 ACC indicate that there are no records for CY
2015 documenting annual internal inspections on the ES-1420 CL dryer or the ES-1430 SL dryer. Each-
of these missing records represents a violation of 15A NCAC 2D .0530.
I. Air Permit 03449T45 contains Stipulation 2.1.E.61.(regarding PB mill wet ESP)with the relevant portions
of the stipulation reading as follows:
f. `... The Permittee shall be deemed in noncompliance with 15A NCAC 02D.0530 if:
i. ... the voltage or current readings are not monitored or recorded, ...
ii. ... the voltage or current fall below the lower limits ...
iii. ... the water injection rate falls below 7.8 gpm(3-hour block average)."

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The facility's 2"a half 2016 Semiannual Report and 2016 ACC indicate that there were 14 incidents during
CY 2016 when the 3-hour block averages of the wet ESP voltage, current or water flow were not within
acceptable limits. The facility reports also indicate that there are 119.3-hour blocks of data missing for
the WET ESP secondary voltage/current values during CY 2016. Each of these incidents when the
minimum parameters were not met(14 incidents)and when the data was not recorded(119 incidents)
represent a distinct violation of 15A NCAC 2D .0530.
J. Air Permit Nos. 03449T43/T44 contain Stipulation 2.1.E.9.e. (regarding the Wellons heater-PB mill)with
the relevant portions of the stipulation reading as follows:
e. "The Permittee shall submit a Notification of Compliance Status. The notification shall...
... The notification must be signed by a responsible official and sent before the close of business on the 60th
day following the completion of the initial tune up and one time energy assessment(whichever is later)."
The Notification of Compliance Status(NOCS)was received on February 22,2016(15 days after the due
date). This incident of a late NOCS represents a one violation of 15A NCAC 2D .1111.
K. Air Permit Nos. 03449T43/T44 contain Stipulation 2.1.E.9.g.(regarding the Wellons heater-PB mill)
with the relevant portion of the stipulation reads as follows:
g. "The Permittee shall conduct a tune-up of the process heater annually as specified below ..."
The facility's 2" half 2016 Semiannual Report and 2016 ACC indicate that the Wellons was not tuned up
during CY 2015 per the requirements in this stipulation. This missed tune-up represents one violation of
15A NCAC 2D .1111.
L. A Notice of Violation/Notice of Recommendation for Enforcement(NOV/NRE)was issued to Arauco on
October 12, 2016 summarizing the violations addressed in this section that were known at that time.
M. A response letter to the October 12, 2016 NOV/NRE was received in the RRO on November 4, 2016.
N. An additional NOV/NRE was issued to Arauco on April 20,2017 summarizing the balance of violations
addressed in this section which were reported to DAQ in the facility's 2"half 2016 Semiannual Report
and 2016 ACC.
O. A response letter to the April 20,2017 NOV/NRE was received in the RRO on May 15,2017. In the
response letter,the comments concerning Item#4b included additional incomplete three-hour block
averages of wet ESP data during November 2016. Further discussion with the facility indicated that the
NOV/NRE response letter was inaccurate and that there had not been any incidents of incomplete three-
hour block averages of monitoring data during November 2016. Arauco confirmed this error in an email
from John Bird to Steven Carr dated June 7,2017.
P. Prior Air Quality Enforcement History:
• NOV was issued on October 23, 2015 due to the shutdown of the MACT-related air pollution
control equipment at the facility. DAQ and Arauco agreed to terms on a Special Order by Consent
(SOC 2015-002) that would allow the company to replace their existing air pollution equipment
with equipment based on more suitable technology. At this point, $72,000 has been received by
DAQ from the facility related to SOC fees. The SOC is still open.
• DAQ and Arauco agreed to terms on a SOC (SOC 2013-002) that would allow the company to
replace the existing Wet ESP (CD-PB-WESP) serving the PB mill with a new wet ESP that was
supposed to help reduce both particulate and visible emissions associated with the particleboard
dryers. The company decided to repair the existing unit instead of replacing it. An upfront penalty

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fee of$10,000 was received from the facility. The SOC was closed on February 27, 2015 due to a
successful visible emissions test performed(in 2014)on the related exhaust stack.
• NOWNRE was issued on March 12, 2013 due to monitoring/inspections violations and the
improper operation of air pollution control equipment. A civil penalty of$23,574 was assessed for
the documented violations. Arauco paid this civil penalty in full.
• NOWNRE was issued on May 3, 2012 due to monitoring and recordkeeping violations. This
NOWNRE was combined with the April 12, 2012 NOWNRE into one enforcement package.
• NOWNRE was issued on April 12, 2012 due to visible emissions violations and bypassing a
control device during a stack test. A civil penalty of $20,774.00 was assessed for violations
documented in both the May 3, 2012 and April 12, 2012 NOWNRE's. Arauco paid this civil
penalty in full.
Q. The costs of investigation or inspection in this matter totaled$750.00.
Based upon the above Findings of Fact,I make the following:
H. CONCLUSIONS OF LAW:
A. Air Permit Nos. 03449T43/T44/T45 are required by and issued pursuant to G.S. 143-215.108.
B. Arauco was in violation of Permit Stipulations 2.1.C.l.f., 2.1.C.2.c., 2.1.E.5.c., 2.2.B.l.c, 2.1.E.2.c.
2.1.B.Lb.,2.1.E.6.q.ii.,2.1.E.61, 2.1.E.9.e.,and 2.LE.9.g. as detailed in Findings of Fact above.
C. G.S. 143-215.114A provides that a civil penalty of not more than twenty-five thousand dollars
($25,000.00) per violation may be assessed against a person who violates or fails to act in accordance
with the terms, conditions, or requirements of a permit required by G.S. 143-215.108 or who violates any
regulation adopted by the Environmental Management Commission.
D. G.S. 143-215.3(a)(9)provides that the costs of any investigation or inspection may be assessed against a
person who violates any term or condition of any permit issued pursuant to G.S. 143-215.108 or who
violates any regulation adopted by the Environmental Management Commission.

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Based upon the above Findings of Fact and Conclusions of Law, I make the following:
III. DECISION:
Arauco is h+e�reby assessed a civil penalty of:
/$ 3� Ll 0 for thirty (30) violations of Air Permit Nos. 03449T43/44/45 Permit Stipulation
2.1.C.Lf., specifically for not operating venturi scrubbers in a proper manner pursuant
to 15A NCAC 2D .0515.
$. / �4) for thirty-eight (38) combined violations of Air Permit Nos. 03449T43/44/45 Permit
Stipulations 2.1.C.2.c. and 2.1.E.5.c., specifically for not following required
procedures after"above-normal'visible observations were logged.
$ 2 2 t e O for three hundred thirty-eight (336) violations of Air Permit Nos. 03449T44/T45
Permit Stipulation 2.2.B.l.c., specifically for failing to maintain the minimum urea
injection rate to the Energy System—ES-02-A.
$ S v o for nine (9) combined violations of Air Permit No. 03449T43/44 Permit Stipulations
2.1.E.2.c., 2.1.B.l.b., and 2.1.E.6.q.ii., specifically for not having the required CY
2015 annual inspection performed or not having inspection records available.
$ 12/ 8 0� for one hundred nineteen (119) violations of Air Permit No. 03449T45 Permit
Stipulation 2.1.E.61, specifically for missing 3-hour blocks of voltage/current
p monitoring data related to the wet ESP operation.
for fourteen (14) violations of Air Permit No. 03449T45 Permit Stipulation 2.1.E.61,
specifically for not meeting the minimum voltage/current/water injection rate related
to the wet ESP operation.
$ 2/ 000 for one (1) violation of Air Permit Nos. 03449T43/44 Permit Stipulation 2.1.E.9.e.,
specifically for not having the required CY 2015 tune-up performed on the Wellons
process heater(ES-3201).
$ 0 for one (1) violation of Air Permit No. 03449T43/44 Permit Stipulation 2.1.E.9.g.,
specifically for the late submission of the required Notification of Compliance Status
for the completed tune-up/energy assessment related to the Wellons process heater
(ES-3201).
s- 66 , 72D TOTAL CIVIL PENALTY, which is 0.5 percent of the maximum penalty
authorized by G.S. 143-215.114A.
$ 750.00 Investigation costs
$ 67. 970 TOTAL AMOUNT DUE

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Pursuant to G.S. 143-215.114A in determining the amount of the penalty,I considered the factors listed in G.S.
143B-282.1(b)and 15A NCAC 2J .0106,which are the following:
1) The degree and extent of harm to the natural resources of the State,to the public health, or to private
property resulting from the violation(s);
2) The duration and gravity of the violation;
3) The effect on ground or surface water quantity or quality or on air quality;
4) The cost of rectifying the damage;
5) The amount of money saved by noncompliance;
6) Whether the violation was committed willfully or intentionally;
7) The prior record of the violator in complying or failing to comply with programs over which the
Environmental Management Commission has regulatory authority; and
8) The cost to the State of the enforcement procedures.
7 -46'A
F)ai a Michael Abraczinskas,Director
Division of Air Quality