Exhibit 10.2
BEFORE THE KANSAS DEPARTMENT OF HEALTH AND ENVIRONMENT
IN THE MATTER OF: |
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MGP Ingredients, Inc. |
Case No. 04-E-0034 |
1300 Main Street |
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P.O. Box 130 |
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Atchison, Kansas 66002-0130 |
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Source ID No. 0050002
CONSENT AGREEMENT AND FINAL ORDER OF THE SECRETARY
The parties hereto, the Kansas Department of Health and Environment (KDHE) and MGP Ingredients, Inc. (MGP), having agreed that settlement of this matter is in the best interests of the parties and the public health and the environment, hereby represent and state as follows:
JURISDICTION
STATEMENT OF PURPOSE
1
PARTIES BOUND
LIABILITY
FINDINGS OF FACT
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CONCLUSIONS OF LAW
SCHEDULE OF COMPLIANCE
Emission Limits
3
4
The following storage vessels are subject to NSPS Kb: T4324 and T4325.
At the time of CAO issuance, the following units, and auxiliary equipment associated with each unit, were determined not to be subject to NSPS Subpart VV because the equipment was used for the sole purpose of producing beverage alcohol: (1) DC1520 ED Column; (2) DC1530 HQ Rectifier; (3) DC1550 Demethylizer; (4) DC1590 Recycle Rectifier; (5) DC1580 and DC1581 Gin Stills; (6) DC1587 Low Proof Gin Still; (7) ADS1591 and ADS1592 Mole Sieves; (8) T1582 and T1583 Gin Still Product Tanks; and (9) T1586 Low Proof Gin Still Product Tank. At the time of CAO issuance, the DC1510 Beer Still was not subject to NSPS Subpart VV because the unit was installed in 1976 and had not been modified or reconstructed since the effective date of NSPS Subpart VV.
All equipment not specifically listed in the above paragraph is subject to NSPS Subpart VV including the following units, and auxiliary equipment associated with each unit: (1) T1560 5,000 Gallon Recovery Rectifier Feed Tank; (2) DC1560 Recovery Rectifier; and (3) ADS1571 and ADS1572 Mole Sieves.
5
ENOx = Q x EF x CF
Where: ENOX = Monthly NOX emissions (tons/month)
Q = Monthly fuel gas usage (mmscf/month)
EF = NOX emission factor (lbs/mmscf). The emission factor
6
at the time of CAO issuance was 280 lbs/mmscf.
CF = Weight conversion factor (1 ton/2000 lbs)
MGP shall maintain records of the compliance determination for the NOX limit. These records shall be updated no later than the last day of the month following the last month of each consecutive 12-month period.
As indicated in the CTP, this 184 tons per year NOX limit is an interim limit. By no later than September 1, 2008, MGP shall remove or make inoperable Boilers #6 and #7 or equip the boilers with Low-NOX burners with a NOX emissions limit of 0.04 lbs/MMBtu.
Compliance Demonstration
7
Record Keeping/Reporting
I certify under penalty of law that I have personally examined the information submitted herein and that I have made a reasonable inquiry of those individuals immediately responsible for obtaining the information and that to the best of my knowledge, the information submitted herewith is true, accurate, and complete. I am aware that there are significant penalties for submitting false information, including the possibility of fine and imprisonment.
Permitting
8
ASSESSMENT OF A CIVIL PENALTY
A check or money order in the amount of $26,000.00, made payable to the Kansas Department of Health and Environment, is to be submitted to Mr. Victor Cooper, Bureau of Air and Radiation, Kansas Department of Health and Environment, 1000 SW Jackson, Suite 310, Topeka, Kansas 66612-1366, within 30 days of execution of this CAO by the parties.
FORCE MAJEURE, EXCUSABLE DELAY, MODIFICATION
9
DISPUTE RESOLUTION
10
BEST PROFESSIONAL JUDGMENT
OTHER CLAIMS AND PARTIES
EFFECTIVE DATE, TERMINATION
AUTHORIZATION OF SIGNATORIES TO EXECUTE THE CONSENT ORDER AND BIND THE PARTIES
/s/ Roderick L. Bremby |
/s/ David E. Rindom |
Roderick L. Bremby, Secretary |
David E. Rindom, VP of HR |
Kansas Department of Health & |
MGP Ingredients, Inc. |
Environment |
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1/11/06 |
12/21/05 |
Date |
Date |
11
ATTACHMENT 1
Control Technology Plan
For
MGP Ingredients, LLC
1300 Main Street
Atchison, Kansas 66002
contents
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1-1 |
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2-1 |
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3-1 |
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4-1 |
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5-1 |
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6-1 |
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Pollution Control Device Performance Test Schedule and Test Methods Used |
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7-1 |
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8-1 |
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This Control Technology Plan (CTP) is an integral part of the CAO. This CTP contains:
a) Identification of all units to be controlled;
b) Engineering design criteria for all proposed controls capable of meeting the emission levels required by the CAO;
c) Proposed short-term and long-term emission limits and controlled outlet concentrations for each pollutant as appropriate;
d) A schedule for expedited installation with specific milestones applicable on a unit-by-unit basis;
e) Proposed monitoring parameters for all control equipment and parameter ranges;
f) Identification of all units to be emission tested and a schedule for initial tests and retests;
g) The test methods that will be used to demonstrate compliance with the emission levels set forth in the CAO;
h) Program for minimization of fugitive dust emissions from facility operations.
1-1
2.0 EMISSION UNITS REQUIRING POLLUTION CONTROL EQUIPMENT
The following emission units, fugitive sources, and control equipment have been designated as affected units in the CAO and have emission limits requiring pollution control technology.
Unit Description |
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Control Equipment Description |
DDGS Dryer |
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Replace existing DDGS dryers with a Swiss Combi dryer equipped with Low-NOX burner(s) |
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Centrate Tank (Defined as Whole Slop Tanks and Centrifuge Vents) |
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Scrubber |
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Fermentation Units (Including the Beer Well) |
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Scrubber |
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Distillation Unit (Including Miscellaneous Process Vents) |
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Scrubber |
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Existing Boilers #6 and #7 |
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(1) Interim NOX limit; and |
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(2) Either retrofitting with Low-NOX burner(s) or removal of the boiler; and |
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(3) Discontinuation of the use of fuel oil. |
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Existing Boiler #8 |
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Retrofit with Low-NOX burner |
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Cooling Cyclone |
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Replace existing DDGS dryers with a Swiss Combi dryer equipped with Low-NOX burner(s). |
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Ethanol Truck Loadout |
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Flare, unless truck is dedicated to non-fuel use |
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Truck/Car Traffic |
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Fugitive Dust Control Program |
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Grain Unloading Systems - North and South |
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PM Control System |
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Feed Loading Systems |
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Dead Box |
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New Gas Fired Boiler (Alternative Scenario) |
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Low-NOX Burner(s) |
2-1
3.0 ENGINEERING DESIGN CRITERIA FOR POLLUTION CONTROL EQUIPMENT
Any deviation from the design criteria listed here shall be reported in the quarterly reports required under this CAO. The specific design criteria listed here are preliminary and subject to change pending development of additional data. Changes to the requirements listed in the following table shall be considered non-material modifications under this CAO, provided MGP obtains written approval of the change(s) from KDHE.
Process Description |
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Control Device Description |
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Design Operating |
Centrate Tank |
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Scrubber |
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Gas Flow Rate: to be determined |
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Water Flow Rate: to be determined |
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Pressure Drop: to be determined |
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Fermentation Units (Including the Beer Well) |
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Scrubber |
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Gas Flow Rate: to be determined |
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Water Flow Rate: to be determined |
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Pressure Drop: to be determined |
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Distillation Units (Including Misc. Process Vents) |
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Scrubber |
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Gas Flow Rate: to be determined |
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Water Flow Rate: to be determined |
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Pressure Drop: to be determined |
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Ethanol Truck Loadout |
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Flare, unless truck is dedicated to non-fuel use |
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40 C.F.R. § 60.18 NSPS standards. Flare will be assisted by a pilot flame. |
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Grain Unloading Systems - North and South |
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PM Control System |
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To be determined |
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Feed Loading System |
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Dead box(es) |
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To be determined |
3-1
4.0 EMISSION LIMITS FROM POLLUTION CONTROL EQUIPMENT
Unless otherwise stated, all controlled emission limitations (including operating parameter ranges and limits) apply at all times except during periods of previously planned startup and shutdown periods or as otherwise provided under K.A.R. 28-19-11. These startup and shutdown periods shall not exceed the minimum amount of time necessary for these events, and during these events, MGP shall minimize emissions to the greatest extent practicable. To the extent practical, startup and shutdown of pollution control technology systems will be performed during times when process equipment is also shut down for routine maintenance. MGP shall also, to the extent practicable, control emissions during a malfunction event in a manner consistent with good air pollution control practice for minimizing emissions.
Any deviation from the requirements in 4.0 shall be reported in the quarterly reports and as required under other state and federal regulations.
Process Description |
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Control Device |
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Pollutant |
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Emission Limit(s) |
New Swiss Combi DDGS Dryer(1) |
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New Dryer |
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VOC |
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95% reduction or < 10 ppm, at MGPs election |
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New Dryer |
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CO |
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90% reduction or < 100 ppm, at MGPs election |
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New Dryer |
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PM/PM10 |
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Test and set limit pursuant to this CAO |
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Low-NOX burners |
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NOx |
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NOX emission limit < 0.08 lb/MMBtu |
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Centrate Tank |
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Scrubber |
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VOC |
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95% reduction or < 20 ppm, at MGPs election |
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Centrate Tank and Distillation Units (Including Misc. Process Vents) |
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Scrubber |
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VOC |
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95% reduction or < 20 ppm, at MGPs election |
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Fermentation Units (Including Beer Well) |
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Scrubber |
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VOC |
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95% reduction or < 20 ppm, at MGPs election |
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Existing Boilers #6, #7 and #8 (Boilers #6 and #7, if applicable) |
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Low-NOX burners |
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NOX |
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NOX emission limit < 0.04 lb/MMBtu |
(1) MGP may continue to operate and produce wet cake during periods of DDGS dryer downtime.
4-1
Process Description |
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Control Device |
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Pollutant |
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Emission Limit(s) |
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Discontinue the use of fuel oil |
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SOX |
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None |
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New Boiler (Alternative Scenario) |
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Low-NOX Burner(s) |
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NOx |
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NOx emission limit < 0.04 lb/mmBtu |
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Ethanol Truck Loadout |
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Flare, unless truck is dedicated to non-fuel use |
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VOC |
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95% reduction |
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Grain Unloading Systems - North and South |
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PM Control System |
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PM/PM10 |
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0.01 grains/dscf |
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Feed Loading System |
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Dead box(es) |
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PM/PM10 |
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20% opacity |
NOX Emission Limit for Boilers #6 and #7: By no later than 60 days after the new Swiss Combi DDGS dryer becomes operational, the owner or operator shall limit the NOX emissions from Boilers #6 and #7 to 184 tons during each consecutive 12-month period. MGP shall use the following equation to calculate the monthly NOx emissions:
ENOx |
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Q x EF x CF |
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Where: |
ENOX |
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Monthly NOX emissions (tons/month) |
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Q |
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Monthly fuel gas usage (mmscf/month) |
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EF |
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NOX emission factor (lbs/mmscf). The emission factor |
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at the time of CAO issuance was 280 lbs/mmscf. |
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CF |
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Weight conversion factor (1 ton/2000 lbs) |
MGP shall maintain records of the compliance determination for the NOX limit. These records shall be updated no later than the last day of the month following the last month of each consecutive 12-month period.
This 184 tons per year NOX limit is an interim limit. By no later than September 1, 2008, MGP shall remove Boilers #6 and #7 or equip the boilers with Low-NOX burners with a NOX emissions limit of 0.04 lbs/MMBtu.
4-2
5.0 POLLUTION CONTROL EQUIPMENT INSTALLATION SCHEDULE
MGP shall install, shake down, and start up the following air pollution control equipment (or optimize existing equipment) and begin complying with the emission limits required by the CAO by the following dates:
Unit Description |
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Control Equipment |
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Date |
New Swiss Combi DDGS Dryer |
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Replacement of existing DDGS dryers with a Swiss Combi dryer equipped with Low-NOX burners capable of meeting emission limits in CAO. The existing DDGS dryers shall be removed or made in operable. |
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October 1, 2006 |
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Centrate Tank |
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Scrubber |
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8 months after the issuance of the CAO |
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Fermentation Units (Including Beer Well) |
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Scrubber |
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8 months after the issuance of the CAO |
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Distillation Units (Including Miscellaneous Process Vents) |
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Scrubber |
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8 months after the issuance of the CAO |
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Existing Boilers #6 and #7 |
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Low-NOX Burner(s), remove boilers or make boilers inoperable |
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September 1, 2008 |
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Interim NOX limit as described in Section 4.0 of CTP |
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30 days after the date the existing DDGS dryers are removed or made inoperable. |
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Discontinue the use of fuel oil |
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Upon issuance of the CAO |
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Existing Boiler #8 |
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Low-NOX Burner and FGR |
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July 1, 2006 |
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New Boiler (Alternative scenario) |
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Low-NOX Burner(s) |
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Upon start up of the boiler |
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Ethanol Truck Loadout |
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Flare |
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8 months after the issuance of the CAO |
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Grain Unloading Systems - North and South |
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PM Control System |
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16 months after the issuance of the CAO |
5-1
Unit Description |
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Control Equipment |
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Date |
Feed Loading System |
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Dead Box |
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12 months after the issuance of the CAO |
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Truck Traffic Fugitive Dust Program |
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Road Sweeper |
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4 months after issuance of the CAO |
In accordance with the CAO, beginning April 1, 2007, MGP shall limit VOC emissions from the facility to less than 95 tons per year. Also beginning April 1, 2007, MGP shall limit emissions of each individual HAP to less than 9.0 tons per year and the combination of all HAPs to less than 24.0 tons per year. During the first 11 months, beginning April 1, 2007, the facility will maintain the following source-wide emission limits in Tons Per Year:
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Mo 1 |
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Mo 2 |
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Mo 3 |
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Mo 4 |
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Mo 5 |
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Mo 6 |
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Mo 7 |
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Mo 8 |
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Mo 9 |
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Mo 10 |
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Mo 11 |
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Source-wide VOC |
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12 |
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24 |
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36 |
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45 |
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56 |
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64 |
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72 |
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80 |
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84 |
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88 |
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92 |
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Individual HAP |
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1.6 |
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3.2 |
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4.0 |
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4.8 |
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5.6 |
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6.4 |
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7.2 |
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8.0 |
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8.2 |
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8.5 |
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8.8 |
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Total HAPs |
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3.0 |
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6.0 |
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9.0 |
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12 |
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14 |
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16 |
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18 |
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20 |
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22 |
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23 |
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5-2
6.0 MONITORING PARAMETERS FOR POLLUTION CONTROL DEVICES
The CAO requires that monitoring parameters be established for affected pollution control devices. Beginning no later than 60 days following startup of a control device described below, MGP agrees to the following monitoring parameters for each of the affected pollution control devices. All monitoring data collected above shall be recorded and maintained on-site. Any deviations of monitoring frequency, record keeping and range shall be reported in the quarterly reports and as required under other state and federal regulations.
Control Device |
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Parameter |
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Operating Range |
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Monitoring |
Scrubbers |
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Liquid Flow Rate |
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Varies based on design of the individual scrubbers |
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Continuously |
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Pressure Drop |
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2 to 8 inches of water |
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Daily |
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Flare |
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Presence of a Flame |
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A device (including but not limited to a flame sensor interlock with truck pumping, a thermocouple, a ultraviolet beam sensor or infrared sensor) capable of detecting presence of a flame |
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Continuously during ethanol truck loading |
6-1
7.0 POLLUTION CONTROL DEVICE PERFORMANCE TEST SCHEDULE AND TEST METHODS USED
The following schedule and methods will be used to demonstrate compliance with the emission limits contained in this CTP and the CAO. MGP shall conduct the following performance testing pursuant to the schedule under paragraphs 30, 31 and 32 of the CAO. The dryer shall be tested annually, and all other units in the CTP according to the schedule set forth in Attachment 2, unless specifically waived in writing by KDHE.
Emission
Unit/Control |
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Pollutant(s) Tested |
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Test Method |
Swiss Combi DDGS Dryer/New Dryer equipped with a Low-NOX burner |
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Total VOC, speciated VOCs and HAPs, NOX, CO, PM/PM10 |
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Method 1, 2, 3, 3A, or 3B, 4, 5/202, 7E, 10, 18 (as Total VOC Mass) and 25 or 25A; another EPA promulgated method; in accordance with a test protocol approved by the parties. |
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Centrate Tank, Fermentation Units (Including Beer Well), and Distillation Units (Including Misc. Process Vents)/Scrubbers |
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Total VOC, speciated VOCs and HAPs. |
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Method 1, 2, 3, 3A, or 3B, 4, 18 (as Total VOC Mass) and 25 or 25A; another EPA promulgated method; in accordance with a test protocol approved by the parties. |
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Existing Boilers and New Boiler (Alternative Scenario)/Low-NOX burner(s) |
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NOX and CO |
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Method 7E and 10; another EPA promulgated method; in accordance with a test protocol approved by the parties. |
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Truck Loadout/Flare |
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VOCs and Visible Emissions |
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Per 40 CFR 60.18 for open flame flare. For enclosed flame flare, as applicable, Method 1, 2, 3, 3A, or 3B, 4, 18 (as Total VOC Mass) and 25 or 25A; another EPA promulgated method; in accordance with a test protocol approved by the parties. |
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Grain Unloading Systems - North and South/PM Control System |
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PM/PM10 |
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Method 5; another EPA promulgated method; in accordance with a test protocol approved by the parties. |
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Feed Loading Systems/Dead Box |
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PM/PM10 |
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Method 9; another EPA promulgated method; in accordance with a test protocol approved by the parties. |
7-1
8.0 FUGITIVE DUST EMISSION CONTROL PROGRAM
The objectives of the Fugitive Control Program are to prevent and minimize the release of avoidable fugitive emissions as required by the CAO. The Program describes the procedure MGP will use to control emissions, to determine when emissions are at levels requiring corrective action, and to reduce excessive emissions to acceptable levels.
MGP has existing paved roads (all normal traffic routes) that are used for truck and car traffic at the ethanol plant. MGP will implement the following actions to minimize fugitive dust emissions:
1. MGP will perform weekly visual inspections of the roads.
2. MGP will document the inspection was performed and describe any corrective action taken.
3. MGP will sweep the roads within 48 hours of when fugitive emissions are observed that are caused by car/truck traffic on the roads.
4. In the event that sweeping is not possible due to weather conditions; MGP will use water or mechanical means of removal, if possible, to minimize fugitive dust emissions.
8-1
ATTACHMENT 2
PERFORMANCE TEST FREQUENCY CRITERIA
Proposed Testing Frequency for equipment with concentration or emission limits:
X = Pollutant emissions rate or concentration established during a performance test. Test results used to determine X ideally span three tests or more.
Performance Test Results |
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Performance Test Frequency |
If X > 90% of the most stringent limit |
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The next performance test must be conducted within 12 months. |
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If 60% < X < 90% of the most stringent limit |
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The next performance test must be conducted within 36 months. |
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If X < 60% of the most stringent limit |
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The next performance test must be conducted within 60 months. |