STATEMENT OF BASIS. For the issuance ofdraft Air Permit # 1140-AOP-R4 AFIN: PERMITTING AUTHORITY:

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STATEMENT OF BASIS For the issuance ofdraft Air Permit # 1140-AOP-R4 1. PERMITTING AUTHORITY: Arkansas Department ofenvironmental Quality 5301 Northshore Drive North Little Rock, Arkansas 72118-5317 2. APPLICANT: Anthony Timberlands, Incorporated 930 Cabe Street Malvern, Arkansas 72104 3. PERMIT WRITER: Shawn Hutchings 4. PROCESS DESCRIPTION AND NAICS CODE: NAICS Description: Sawmills NAICS Code: 321113 5. SUBMITTALS: 1/27/2009 6. REVIEWER'S NOTES: Anthony Timberlands, Inc. currently operates a pine sawmill located at 930 Cabe Street in Malvern, Hot Spring County, Arkansas. This permit is the renewal Title V permit for the facility. Changes in this permit include removing SN-17 the Chemical Dip Vat, and adding Roadway emissions, Logo Painting, and an Diesel Pump as SN-20, 21, and 22. Permitted emissions ofpm and VOC lowered 25.7 tpy and 2.5 tpy respectively. HCI emissions increased 5.6 tpy. 7. COMPLIANCE STATUS: The following summarizes the current compliance ofthe facility including active/pending enforcement actions and recent compliance activities and issues. There are no known enforcement issues with the facility.

Permit #: 1140-AOP-R4 Page 2 of6 8. PSD APPLICABILITY: a. Did the facility undergo PSD review in this permit (i.e., BACT, Modeling, etc.)? N b. Is the facility categorized as a major source for PSD? N Single pollutant ~ 100 tpy and on the list 0/28 or single pollutant ~ 250 tpy and not on list? Ifyes, explain why this permit modification is not PSD? 9. SOURCE AND POLLUTANT SPECIFIC REGULATORY APPLICABILITY: Source Regulation (NSPS, NESHAP or PSD) 18 and 19 PM CAM 22 HAPs MACTZZZZ 10. EMISSION CHANGES AND FEE CALCULATION: See emission change and fee calculation spreadsheet in Appendix A. 11. MODELING: Criteria s Emission Rate (lb/hr) NAAQS Highest Standard Averaging Time Concentration (llg/ m3 ) (llg/ m3 ) %of NAAQS PM10 25.8 150 24-Hour 90.0 60% CO 44.7 10,000 8-Hour 52 >1% 40,000 I-Hour 84 >1% Rolling 3-month Period over 3 Pb 0.004 0.15 years (not to be 0.0004 I-month >1% exceeded in any 3 month period) Non-Criteria s: 1st Tier Screening (PAER) Estimated hourly emissions from the following sources were compared to the Presumptively Acceptable Emission Rate (PAER) for each compound. The Department

Permit #: 1140-AOP-R4 Page 3 of6 has deemed the PAER to be the product, in Ib/hr, of0.11 and the Threshold Limit Value (mg/m\ as listed by the American Conference of Governmental Industrial Hygienists (ACGIH). TLV PAER (lb/hr) = (mg/m 3 ) 0.11 x TLV Proposed Ib/hr Pass? Acrolein 0.2 0.022 0.4 N Anthracene 0.2 0.022 0.00002 Y Arsenic 0.01 0.0011 0.00162 N Benzene 1.6 0.176 1.8001 N Cadmium 0.01 0.0011 0.00046 Y Chromium 0.005 0.00055 0.00048 Y Ethylbenzene 434.2 47.76 0.9 Y Fluorene 0.2 0.022 0.00{)42 y Formaldehyde 0.37 0.04 1.034 N Hexane 176.2 19.4 1.1 Y Hydrogen Chloride 2.98 0.33 1.4 N Manganese 0.1 0.011 0.12002 N Methanol 262 28.8 8.19 y Mercury 0.025 0.00275 0.00042 Y MTBE 180.34 5.76 4.2 Y Phenathrene 0.2 0.022 0.00002 Y Phenol 19.25 2.12 0.004 y Pyrene 0.2 0.022 0.00042 Y Styrene 85 9.35 0.14 Y Toluene 75.4 8.29 6.9 Y Xylene 434.19 47.7 4.2 Y 2 nd Tier Screening (PAIL) AERMOD air dispersion modeling was performed on the estimated hourly emissions from the following sources, in order to predict ambient concentrations beyond the property boundary. The Presumptively Acceptable Impact Level (PAIL) for each compound has been deemed by the Department to be one one-hundredth ofthe Threshold Limit Value as listed by the ACGIH. For Benzene the permittee submitted modeling based on the REL established by the California State Office ofenvironmental health Hazard Assessment, which has acute (6hr) and chronic (l yr) standards. PAIL (llg/m3) = 1/100 of Modeled Concentration Threshold Limit Value (ug/m3) Pass? Acrolein 2 0.16 y Arsenic 0.1 0.0007 Y

Pennit #: 1140-AOP-R4 Page 4 of6 PAIL (flg/m j ) = 1/100 of Modeled Concentration Threshold Limit Value (flg/m 3 ) Pass? Benzene 1,300 (6-hr) 76.6 y 60 (l-yr) 2.2 y Fonnaldehyde 15 2.4 Y Hydrogen Chloride 29.8 0.6 Y Manganese 1 0.05 Y 12. CALCULATIONS: SN Emission Emission Factor Control Factor Control Source Equipment (lb/ton, lb/hr, Equipment (AP-42, testing, etc.) Efficiency etc.) 01, Total throughput reduced by Dependant 09 control efficiency upon source Cyclone 80% 02 and AP-42 Tables 1.4-1, 2, and 3 Varied None 03 10, 13, ADEQmemo 0.5Ib/ton Cyclone Not used 14 11, 12, Varied see NCASI factors for drying kilns 16 application None Comments 15 Tanks program Equation none 18 AP-42 wood residue and combustion in boilers Table Varied Multiclone 19 1.6-1 through 16-4 20 AP-42 for roadways Equation None 21 Painting usages None 22 AP-42 Diesel combustion engmes Varied None 13. TESTING REQUIREMENTS: The pennit requires testing ofthe following sources. SN s Test Method Test Interval Justification NO 18 and 19 x 10 To verify One time CO 7E compliance with

Permit #: 1140-AOP-R4 Page 5 of6 SN s Test Method Test Interval Justification 14. MONITORING OR CEMS limits on a wood gasification boiler. The permittee must monitor the following parameters with CEMS or other monitoring equipment (temperature, pressure differential, etc.) SN Parameter or Method Frequency Report (YIN) to be Monitored (CEM, Pressure Gauge, etc.) none 15. RECORDKEEPING REQUIREMENTS: The following are items (such as throughput, fuel usage, VOC content, etc.) that must be tracked and recorded. SN Recorded Item Permit Limit Frequency Report (YIN) 15 Fuel usage 18 and 19 Wood waste fuel per year 150,000 gallons diesel and 50,000 gallons gasoline per 12 months Monthly 33,950 tons per year Monthly Y 21 Logo Painting 0.4 tpy Monthly Y 22 Hours 22 16. OPACITY: ZZZZ required records 500 total operation 50 non-emergency 100 maintenance and readiness None records of maintenance, etc. Monthly Monthly SN Opacity Justification for limit 01,09, 10, 13, 14, 18, 19 Y Y Y Compliance Mechanism 20% Department Guidance Daily readings 02,03 5% Department Guidance Natural Gas

Pennit #: 1140-AOP-R4 Page 6 of5 SN Opacity Justification for limit Compliance Mechanism Combustion Only Comply with ZZZZ 22 20% Department Guidance maintenance requirements 17. DELETED CONDITIONS: Fonner SC I Justification for removal No conditions were deleted 18. GROUP A INSIGNIFICANT ACTIVITIES Source Name Group A Category Emissions (tpy) HAPs PM/PM lo S02 VOC CO NO x Single Total Diesel Tank for A-3 0.1 lb/yr Pump 19. VOIDED, SUPERSEDED, OR SUBSUMED PERMITS: List all active pennits voided/superseded/subsumed by the issuance ofthis pennit. Pennit # 1140-AOP-R3 20. CONCURRENCE BY: oncurs with the pennitting decision.

APPENDIX A - EMISSION CHANGES AND FEE CALCULAnON

Fee Calculation for Major Source Anthony Timberlands, Incorporated Permit #: 1140-AOP-R4 Revised 03-01-10 $/ton factor Permit Type 22.07 Modification Annual Chargeable Emissions (tpy) Permit Fee $ 463.60126 1000 Minor Modification Fee $ Minimum Modification Fee $ Renewal with Minor Modification $ Check iffacility Holds an Active Minor Source or Minor Source General Permit IfHold Active Pennit, Amt oflast Annual Air Pennit Invoice $ Total Permit Fee Chargeable Emissions (tpy) Initial Title V Permit Fee Chargeable Emissions (tpy) r 500 1000 500 o -22.09874 HAPs not included in VOC or PM: Chlorine, Hydrazine, HCI, HF, Methyl Chloroform, Methylene Chloride, Phosphine, Tetrachloroethylene, Titanium Tetrachloride Air Contaminants: All air contaminants are chargeable unless they are included in other totals (e.g., H2S04 in condensible PM, H2S in TRS, etc.) Check if Permit Fee Annual Chargeable Old New Change in Chargeable Chargeable (tpy) Emission Permit Permit Emissions Emissions Emissions PM p 172.3 146.6-25.7-25.7 146.6 PM lo r 117 100.5-16.5 S02 P 7.6 7.7 0.1 0.1 7.7 VOC P 220.2 217.5-2.7-2.7 217.5 CO r 193.4 193.6 0.2 NOx P 85.6 86.2 0.6 0.6 86.2 Lead r 0.01 0.01612 0.00612 Acrolein r 0.59 1.2 0.61 Anthracene r 0 0.00002 0.00002 Arsenic r 0.01 0.00806-0.00194 Benzene r 0.62 1.5006 0.8806 Cadmium r 0 0.0018 0.0018 Chromium r 0.01 0.0016-0.0084 Ethylbenzene r 0 0.1 0.1 Fluorene r 0 0.001024 0.001024 Formaldehyde r 2.78 2.3762-0.4038 Hexane r 0 0.5 0.5 Hydrogen Chloride p 0 5.6 5.6 5.6 5.6

Check if Permit Fee Annual Chargeable Old New Change in Chargeable Chargeable (tpy) Emission Permit Permit Emissions Emissions Emissions Manganese r 0.24 0.60008 0.36008 Methanol r 12.7 12.6-0.1 Mercury P 0 0.00126 0.00126 0.00126 0.00126 MTBE r 0 0.2 0.2 Phenathrene r 0 0.00002 0.00002 Phenol r 0.01 0.016 0.006 Pyrene r 0 0.001221 0.001221 Styrene r 0.28 0.6 0.32 Toluene r 0 0.60086 0.60086 Xylene r 0 0.20004 0.20004 cumene r 0.4 0-0.4 DGME r 3.7 0-3.7 POM r 0.01 0-0.01