AQ_F_1900015_20190905_ENF_SOC

BEFORE THE NORTH CAROLINA
ENVIRONMENTAL MANAGEMENT COMMISSION
STATE OF NORTH CAROLINA )
COUNTY OF CHATHAM }
IN THE MATTER OF: ) SPECIAL ORDER BY CONSENT
ARAUCO NORTH AMERICA, INC. ) SOC 2019-001
MONCURE MANUFACTURING SITE )
[FACILITY ID 1900015] )
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").
WITNESSETH:
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 03449T51 ("PERMIT") which was issued by the North Carolina
Division of Air Quality ("DAQ") on March 6, 2019.
B. The FACILITY is an affected source subject to requirements under 40 CFR Part
63 Subpart DDDD ("Subpart DDDD" or"MALT")to control hazardous air
pollutants ("HAPs") and subject to certain requirements under the Prevention of

Special Order by Consent
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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 outlined 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 WPP 1 VOC from the MPF Facility by May 20, 2019. The COMPANY did
not complete the required testing by May 20, 2019.
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 BIOFILTER was installed over the past three years
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. ARAUCO has experienced significant operational issues with the BIOFILTER
since startup in February 2018. In particular, the BIOFILTER has had to be
restarted on several occasions to assure sufficient biological growth for proper
operation. Startups have required adjustment of several factors to achieve
sufficient biological growth. The adjustments included eliminating urea injection
for 30 days under a Deferral of Enforcement issued by DAQ, slowly increasing
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fan speed to increase emission loading of the BIOFILTER, and adding bacteria
from several different sources in order to diversify the biological population.
E. More recently,the COMPANY has discovered substantial damage within the
BIOFILTER including serious deterioration of the concrete structure. Continued
operation of the BIOFILTER without remedying the damage and deterioration
could result in failure of the BIOFILTER in addition to reduced pollutant control
and ultimately total degradation of the unit.
F. As a result of the operational problems with the BIOFILTER, the FACILITY has
documented lower than expected control efficiencies for methanol, a primary
WPP1 VOC and HAP associated with the MDF Facility operations. Although the
BIOFILTER has met the initial performance demonstration requirements of
MACT Subpart DDDD based on its control of formaldehyde emissions,the
COMPANY does not believe that the BIOFILTER can meet the 50% DRE for
WPP1 VOC BACT requirement under operational conditions to date.
G. To repair and optimize performance of the BIOFILTER will require physical
internal and external modifications. Accomplishing the required work will
necessitate total shutdown of the BIOFILTER. Once the modifications are
completed, a slow ramp up to restart the BIOFILTER will be required in order to
assure improved biological activity and overall system performance. These steps
will require significant time to complete.
H. In addition to the foregoing,the BIOFILTER vendor has raised concerns about
the urea injection system used to reduce nitrogen oxide ("NOx") emissions from
the MDF Facility. In particular,the vendor believes that the urea may be
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Special Order by Consent
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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.
1. On March 8, 2019, COMPANY representatives met with DAQ staff from the
Raleigh Regional Office and Raleigh Central Office Technical Services and
Permitting Sections to discuss the destruction efficiency and reliability problems
with the BIOFILTER and the measures necessary to correct them. On May 8,
2019, ARAUCO notified DAQ that the COMPANY had made the decision to
shut down the BIOFILTER on the day of the notification for an indefinite period
of time due to concerns about employee safety, catastrophic equipment failure,
and control device downtime.
J. On June 5, 2019, DAQ issued a Notice of Violation/Notice of Recommendation
for Enforcement("NOV/NRE")to ARAUCO for operation of the MDF Facility
without the BIOFILTER in operation resulting in violations of the FACILITY'S
BACT and MACT PERMIT requirements.
K. On June 28, 2019, ARAUCO submitted its response to the June 5, 2019
NOV/NRE. The COMPANY documented progress made to date in terms of
working with contractors and consultants to address the documented structural
and performance issues associated with the BIOFILTER. The COMPANY also
provided a proposed schedule of events that would allow the MDF Facility to be
in compliance with all PERMIT requirements subject to this ORDER by August
2020.
L. Given the expected extended period of noncompliance with PERMIT
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requirements due to the BIOFILTER being shut down or bypassed while being
repaired and modified, the COMPANY requested to enter into this ORDER with
the COMMISSION.
M. This ORDER authorizes operation of the MDF Facility without operating the
BIOFILTER for the time periods specified herein for the COMPANY to modify,
restart the BIOFILTER, and optimize performance in order to meet the
requirements of the PERMIT.
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.
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 signed by the effective date of this ORDER,the COMPANY shall
sign the necessary contract(s) for remedial work on the DEVICE within 30 days
after execution of this SOC.
B. If not already commenced as of the effective date of this ORDER,the
COMPANY shall commence the remedial work according to the specifications in
the contract(s)no later than 15 days after signing the necessary contract(s).
C. The COMPANY shall complete the remedial work as provided in the contract(s)
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by December 31, 2019.
D. The COMPANY shall submit a test protocol for the BIOFILTER at least 60 days
prior to the compliance test date.
E. The COMPANY shall conduct engineering evaluation, shakedown, and
compliance testing to demonstrate compliance with all applicable PERMIT
requirements and submit a test report within 180 days after completion of the
remedial work.
F. The COMPANY shall submit no later than 14 days after the deadline for
completing each milestone required in Paragraph II written certification to the Air
Quality Regional Supervisor, Raleigh Regional Office,Division of Air Quality,
when such milestone has been performed.
III. The COMPANY agrees to pay the following civil penalties:
A. The COMPANY agrees to pay the COMMISSION a civil penalty in the amount of
$22,750. This amount shall be due and payable within 30 days of the effective date
of this ORDER.
B. The COMPANY agrees to pay the COMMISSION stipulated penalties in the
amounts of $7,500 per month for the period of time from shutdown of the
BIOFILTER until a test report demonstrating compliance with all applicable
PERMIT requirements is submitted to DAQ. The stipulated penalties shall be paid
in two payments. The first payment is due by January 15, 2020 and shall cover all
months the MDF Facility was out of compliance with PERMIT requirements in
calendar year 2019. The second payment is due within 15 days after the date that
the final BIOFILTER test report required by Paragraph II.E. of this ORDER is
submitted to DAQ and will cover all months the MDF Facility was out of
compliance in calendar year 2020. Partial months shall count as whole months
when determining the amount of stipulated penalties to be paid.
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IV. In the event that the COMPANY fails to comply with any deadline 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 Requirements Stipulated Penalties
Failure to comply with any deadline $500 per day for the first 5 days and
specified in Paragraph II $1000 per day thereafter
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.
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
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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, 143-215.11413 and 215.114C.
VII. 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
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.
VIII. In the event the COMMISSION or the DAQ find that reports, plans, specifications, or
permit applications required by Paragraph II 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
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supplement its submissions to make such submissions complete and appropriate.
IX. All notices and reports required by this ORDER shall be delivered to:
Ray Stewart, Regional Air Quality Supervisor
N.C. Dept. of Environmental Quality
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 XVI. This ORDER shall not affect the COMPANY's obligation to
comply with any Federal, State, or local laws or regulations.
XI. 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.
XIII. 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
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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(ii) 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 This ORDER is effective on execution by the Division of Air Quality and shall expire on
December 31, 2020, or on the date that the Division of Air Quality notifies ARAUCO in
writing that the test results submitted in accordance with Paragraph II.E. of this ORDER
are acceptable to demonstrate compliance with the applicable PERMIT requirements for
the MDF Facility, whichever date comes first.
This the day of T, t�L^� , 2019.
ARAUCO O -1-1 AM ' ICA, INC. APPROVED AND ACCEPTED
BY: BY:
ve Carroll For the Environmental
Manufacturing Director Management Commission
Moncure,N.C.
DATE:
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