AQ_F_1900015_20200910_ENF_SOC

BEFORE THE NORTH CAROLINA
ENVIRONMENTAL MANAGEMENT COMMISSION
STATE OF NORTH CAROLINA
COUNTY OF CHATHAM
SPECIAL ORDER BY CONSENT
IN THE MATTER OF: SOC 2020- 0 0 1
ARAUCO NORTH AMERICA,INC.
MONCIJRE MANUFACTURING SITE
[FACILITY ID 19000151
This SPECIAL ORDER BY CONSENT (hereinafter referred to as the "ORDER") is made
and entered into pursuant to North Carolina General Statute 143-215.110 by and between ARAUCO
North America, Inc. (hereafter referred to as "ARAUCO" or "COMPANY") and the
ENVIRONMENTAL MANAGEMENT COMMISSION, an agency of the State of North Carolina
(hereinafter referred to as the"COMMISSION").
WTI`NESSETH:
I. The COMMISSION and ARAUCO hereby stipulate and agree to the following:
A. ARAUCO North America, Inc. ("ARAUCO" or "COMPANY") operates a
manufacturing site (hereafter referred to collectively as the "FACILITY") that
includes a Medium Density Fiberboard Manufacturing Facility ("MDF Facility")
in Moncure, Chatham County, North Carolina. The FACILITY currently operates
under Air Permit 03449T53 ("PERMIT") which was issued by the North Carolina
Division of Air Quality("DAQ") on June 16,2020.
B. The FACILITY is an affected source subject to requirements under 40 CFR Part
63 Subpart DDDD ("Subpart DDDD" or "MACT") to control hazardous air

pollutants ("HAPs") and is subject to certain requirements under the Prevention of
Significant Deterioration ("PSD") program. The MACT requirements for the
FACILITY are summarized in Section 2,2.A.1. of the PERMIT, and Section
2.2.B.2, of the PERMIT outlines the Best Achievable Control Technology
("BACT") under the PSD program. These requirements include a condition for
50% Destruction/Removal Efficiency ("DRE") for Wood Products Protocol 1
Volatile Organic Compounds ("WPPI VOC") from the MDF Facility. Section
2.2.B.2.b. requires the COMPANY to demonstrate compliance with the 50% DRE
for WPPI VOC by May 20, 2019, unless an alternate date is approved by the
DAQ. The COMPANY did not complete the required testing by May 20, 2019,
but instead entered into a Special Order by Consent (SOC 2019-001) as described
below.
C. Air pollutants from the MDF FACILITY are controlled by a series of emission
control devices including a Biofilter (Permit ID No. CD-18) (hereafter referred to
as the "BIOFILTER"). The BTOFILTER was installed over a three-year period as
prescribed under the terms of a prior Special Order by Consent between the
COMMISSION and ARAUCO (SOC 2015-02). The BIOFILTER replaced a prior
control device, which was a Photo-catalytic Gas Treatment (PGT) system
intended to oxidize and thereby destroy volatile organic emissions, including the
HAPs formaldehyde and methanol.
D. The BACT condition of 50% DRE for WPPI VOC in the PERMIT was based on
a PSD modification application submitted by the COMPANY in January 2017. In
this application, the COMPANY relied on the BIOFILT'ER manufacturer
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guarantee in its presentation of the BACT analysis for VOC emissions for the
MDF FACILITY and its representation that the BIOFILTER would have a DRE
of 50% for VOC emissions from the MDF FACILITY.
E. ARAUCO has experienced significant operational issues with the BIOFILTER
since startup in February 2018. Additionally, the COMPANY discovered
substantial damage within the BIOFILTER including serious deterioration of the
concrete structure. As a result of BIOFILTER operational problems, the
FACILITY has documented lower than expected control efficiencies for
methanol, a primary WPPI VOC and HAP associated with the MDF Facility
operations.
F. In 2019, the COMMISSION and ARAUCO entered into another Special Order by
Consent.(SOC 2019-001) to allow the COMPANY to shut down the BIOFILTER
to make required repairs and to identify and implement modifications to improve
biological activity and overall system performance ("Remedial Work"). Pursuant
to the terms of SOC 2019-001, the COMPANY contracted with the BIOFILTER
manufacturer to undertake numerous trial scenarios and pilot studies to maximize
the BIOFILTER performance and address the operational issues which were
preventing the achievement of the manufacturer's performance guarantee of 50%
VOC destruction.
G. On December 4, 2019, ARAUCO completed the Remedial Work required under
SOC 2019-001. The BIOFILTER repairs and modifications to address the
deterioration of the concrete structure have been effective to date.
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On February 27, 2020, the COMPANY performed investigatory testing to
evaluate the VOC DRE of the BIOFILTER after the Remedial Work. Although
the BIOFILTER has met the initial performance demonstration requirements of
MALT Subpart DDDD based on its control of formaldehyde emissions, the
COMPANY and the BIOFTLTER manufacturer have now determined that the
BIOFILTER cannot be modified to meet the 50% DRE for WPPI VOC, This
investigatory testing indicated that formaldehyde DRE was greater than 90%, but
the methanol DRE was minimal.
I. Pursuant to SOC 2019-001, the deadline for conducting a compliance test to
demonstrate compliance with all applicable PERMIT requirements was June 1,
2020; however, this interim compliance date was extended to September 29, 2020
in a letter to the COMPANY from the DAQ dated May 29, 2020. All
requirements of SOC 2019-001 will be superseded by those outlined herein once
the new ORDER is executed by the DAQ per Paragraph XV.
J. Based on additional investigation of the performance issues associated with the
BIOFILTER following the February 2020 investigatory testing, ARAUCO has
concluded that the biological activity required to meet the Methanol destruction
condition is not possible due to the high temperatures of the off-gases from the
process units and that that biological treatment of the methanol emissions is not
feasible for the MDF Facility. ARAUCO has not conducted another performance
Lest on the BIOFU-TER to demonstrate compliance with the PERMIT
requirements, taking the position that such testing would be futile based on the
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COMPANY's determination that the BIOFILTER cannot meet the manufacturer's
guaranteed efficiency for destruction of methanol emissions.
K. By agreeing to enter this ORDER,the COMPANY acknowledges that the MDF
Facility is operating in violation of Section 2.2.B.2. of the PERMIT due to the
BIOFILTER's inability to meet the 50% DRE for WPPI VOC, Upon execution
of this ORDER,the DAQ will issue a Notice of Violation to the COMPANY for
violating the WPP I VOC DRE requirement in the PERMIT on a continuous basis
since December 4,2019, the date the Remedial Work required under SOC 2019-
001 was completed.
L. In addition to the foregoing, the COMPANY has raised concerns about the urea
injection system used to reduce nitrogen oxide("NOx")emissions from the MDF
Facility. In particular, the COMPANY believes that the urea may be interfering
with the operation and performance of the BIOFILTER and that modification or
elimination of the urea injection system may be necessary to assure proper
operation of the BIOFILTER. Modification or elimination of the urea injection
system would require additional permitting actions on the part of the COMPANY
and the DAQ
M. hi order to present an updated BACT analysis and to establish BIOFILTER
operating requirements based on this updated BACT analysis, the COMPANY
requested to enter into this ORDER with the COMMISSION.
N. During the period of this ORDER, all pollution control equipment at the
FACILITY, other than the BIOFILTER that is required by the current air permit
shall continue to operate in compliance with applicable requirements.
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THEREFORE,the COMMISSION and the COMPANY,desiring to resolve and settle the
compliance issues between them, have agreed to enter into this ORDER with the following terms
and conditions:
II. The COMPANY, desiring to operate in a safe and environmentally sound manner in
accordance with the rules and regulations of the COMMISSION does hereby agree to
perform the following activities:
A. If not already submitted as of the effective date of this ORDER, the COMPANY
shall, within 30 days, submit a PSD permit application to the DAQ with an
updated BACT analysis for the MDF Facility with BACT limits expressed in
WPP I VOC pounds per oven-dried ton processed by the MDF Facility.
B. The COMPANY shall operate the MDF Facility with the BIOFILTER to meet the
requirements of MACT, except for limited periods of time required for the
COMPANY to modify, restart, and/or optimize performance of the BIOFU_TER
in order to prepare for and meet the requirements of a revised PERMIT.
C. Within seven (7) days of any instance in which the COMPANY operates without
the BIOFILTER fully operational for the reasons described above in paragraph
II.B., the COMPANY shall submit a report to DAQ documenting the time period
during which the BIOFILTER was not fully operational and the reason therefore.
D. The COMPANY shall submit a test protocol at least 60 days prior to conducting
the BIOFILTER performance testing required by Paragraph D below.
E. The COMPANY shall conduct engineering evaluation, shakedown, and
compliance testing of the BIOFILTER to demonstrate compliance with all
applicable revised PERMIT requirements and submit a test report within 180 days
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after the DAQ's issuance of a revised PERMIT with updated BACT emission
limits with BACT limits expressed in V0PI VOC pounds per oven-dried ton
processed.
111. The COMPANY agrees to pay the following civil penalties:
A. The COMPANY agrees to pay the COMMISSION $60,000 to settle the final
stipulated penalties payment per Paragraph ITLA in SOC 2019-00L This amount
shall be due and payable within 30 days of the effective date of this ORDER.
IV In the event that the COMPANY fails to comply with any deadline or requirement as set
out in this ORDER or fails to achieve final compliance with any applicable requirement
in this ORDER, the COMPANY agrees that, unless excused under Paragraph V, the
COMPANY will pay the COMMISSION according to the following schedule:
Deadlines and Requi,,ernents St i ulated Penalties
Failure to comply with any deadline $500 per day for the first 5 days and
or requirement specified in Paragraph $1000 per.day thereafter
H
Stipulated Penalties:
Failure within thirty (30) days of receipt of the Director's written demand to pay the
penalties will be grounds for a collection action, which the Attorney General is hereby
authorized to initiate. By entering this ORDER, the COMPANY waives any and all
defenses and agrees that the sole issues in such action are whether or not thirty (30) days
has elapsed and/or whether or not the COMPANY is excused pursuant to Paragraph V of
this ORDER. The COMPANY shall pay all costs, including agency and attorney fees,
associated with collection of a delinquent stipulated penalty.
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V. The COMPANY's obligation to comply with the requirements set forth in this ORDER
for which a stipulated penalty may be assessed, may be delayed or excused only to the
extent that noncompliance is caused by circumstances beyond control of the COMPANY,
as determined by the DAQ Director ("DIRECTOR"). Contractor delays or failure to
obtain funding will not be considered events beyond the COMPANY's control. If any
such delaying event occurs, the COMPANY shall notify the DAQ in writing within ten
(10)days of encountering or discovering the delaying event, describing in detail the event
or delay, the precise cause(s) of the event or delay, the measure(s) taken and to be taken
by the COMPANY to prevent or minimize the event or delay, and the schedule by which
those measures will. be implemented. If the DIRECTOR determines that noncompliance
with this ORDER was caused by circumstances beyond the control of the COMPANY.
the COMMISSION and the COMPANY jointly may stipulate and agree to a written
modification of this ORDER. Any modification shall be subject to the requirements of
15A NCAC 2D .2201 et seq. Extension of any compliance date pursuant to this
Paragraph shall not extend any subsequent deadlines established in the ORDER unless
the subsequent deadline necessarily is dependent upon completion of the earlier deadline.
VI. This ORDER resolves the violation(s) described in Paragraph I of this ORDER. Any
violation of Air Quality Standards by the COMPANY that is not resolved by this
ORDER remains subject to appropriate enforcement action pursuant to N.C.G.S. §§ 143-
215.114A, 215,114B and 215.114C.
VIL The COMPANY agrees to waive any rights it may have to seek judicial review to
challenge this ORDER or to seek a stay of enforcement of this ORDER in connection
with any Judicial review of the State Implementation Plan. The COMMISSION
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acknowledges that this waiver does not prohibit the COMPANY from seeking,
modification of this ORDER if any regulatory standards upon which this ORDER is
based are changed subsequent to its execution. In such cases, the COMPANY may
petition that the ORDER be modified to reflect those regulatory changes.
V111. In the event the COMMISSION or the DAQ find that reports, plans, specifications, or
permit applications required by Paragraph 11 are in any respect deficient or if additional
information is necessary to comply with the requirements of North Carolina General
Statutes 143-215.107 et seq., any regulations promulgated thereunder, or any other
applicable laws or regulations, the COMPANY shall be notified by the DAQ as soon as
possible. The COMPANY shall be afforded an opportunity to modify, amend or
supplement its submissions to make such submissions complete and appropriate.
IX. All notices and reports required by this ORDER shall be delivered to:
Regional Air Quality Supervisor
N.C.Dept.of Environmental Quality—Raleigh Regional Office
3800 Barrett Drive
Raleigh,North Carolina 27609
All payments required from the COMPANY by this ORDER shall be delivered to:
Enforcement Group-Payments
NCDEQ-DAQ
1641 Mail Service Center
Raleigh,North Carolina 27699-1641
X. This ORDER constitutes full and final settlement and satisfaction of all matters addressed
herein and any and all claims or prospective claims that the COMMISSION has or may
have for violations of regulations described in Paragraph I hereof, as of the date this
ORDER is approved by the COMMISSION and continuing until this Order expires as
provided in Paragraph XV. This ORDER shall not affect the COMPANY's obligation to
comply with any other Federal, State,or local laws or regulations.
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X1. Final approval and entry into this ORDER are subject to the requirements that the
COMMISSION give notice of proposed consent decrees to the public, and that the public
have at least thirty (30) days within which to comment on the ORDER.
XII. Should any provision of this ORDER be declared by a court of competent jurisdiction to
be inconsistent with Federal or State law and therefore unenforceable, the remaining
provisions hereof shall remain in full force and effect.
XTII. Except as otherwise set forth herein, this ORDER is not and shall not be interpreted to be
a permit or modification of an existing permit under Federal, State or local law,and shall
not be construed to waive or relieve the COMPANY of its obligations to comply in the
future with any permit.
XIV. In the event of termination of operations and closure of the FACILITY, the COMPANY
shall notify the DIRECTOR in writing, within five (5) business days of the earlier of(i)
the date of any Workers Adjustment and Retraining Notification Act (WARNA)
notification, or (i]) FACILITY closure, Receipt of said notification from the COMPANY
by the DIRECTOR shall terminate any obligations of the COMPANY pursuant to this
ORDER, including those pertaining to stipulated penalties, and this ORDER shall
become null and void in its applicability to the COMPANY. The COMPANY
acknowledges its responsibilities pursuant to this ORDER from the date of final approval
and entry of this ORDER, through the date of receipt by the DIRECTOR of notification
of closure required by this Paragraph.
XV. SOC 2019-001 shall terminate upon the effective date of this ORDER. This new ORDER
is effective upon execution by the Division of Air Quality and shall expire on the 180'h
day after the Division of Air Quality issues a revised PERMIT with updated BACT
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emission limits for WPP1 VOC from the MDF Facility or on December 31, 2021,
whichever date comes first.
ATTESTED:
ARAUCO NORTH AMERICA, INC.
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APPROVED AND ACCEPTED:
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BY:
For the Environmental Management Coml ' sion
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