ADEQ OPERATING AIR PERMIT

ADEQ OPERATING AIR PERMIT Pursuant to the Regulations of the Arkansas Operating Air Permit Program, Regulation #26: IS ISSUED TO: Columbian Chemicals Company 713 Industrial Park Road El Dorado, AR 71730-6623 Union County CSN: 70-0014 THIS PERMIT AUTHORIZES THE ABOVE REFERENCED PERMITTEE TO INSTALL, OPERATE, AND MAINTAIN THE EQUIPMENT AND EMISSION UNITS DESCRIBED IN THE PERMIT APPLICATION AND ON THE FOLLOWING PAGES. THIS PERMIT IS VALID BETWEEN: February 18, 1998 and February 17, 2003 AND IS SUBJECT TO ALL LIMITS AND CONDITIONS CONTAINED HEREIN. Signed: Keith A. Michaels Date Modified

SECTION I: FACILITY INFORMATION PERMITTEE: Columbian Chemicals Company CSN: 70-0014 PERMIT NUMBER: 906-AOP-R1 FACILITY ADDRESS: COUNTY: 713 Industrial Park Road El Dorado, AR 71730-6623 Union CONTACT POSITION: Jim McGuffin / Robert Vigil TELEPHONE NUMBER: (870) 862-4205 REVIEWING ENGINEER: UTM North-South (Y): UTM East-West (X): Michael H. Watt Zone 15 3673.8 km Zone 15 536.5 km 2

SECTION II: INTRODUCTION Summary of Permit Activity Columbian Chemicals Company owns and operates a carbon black manufacturing facility located at 713 Industrial Road, El Dorado, Arkansas. This facility manufactures carbon black using the oil furnace process. Columbian Chemicals is proposing to install a new unit (Unit D which involves SN-08, SN-31, SN-48, SN-49, SN-60, SN-61, and SN-63) in order to increase production of carcass carbon black and also install a new dryer stack for emissions from Unit B and Unit D (SN-24). (Note: Columbian Chemicals Company was allowed to install a separate dryer stack for Unit B under Permit #906-AOP-R0. However, the facility never installed the stack.) Process Description The oil furnace process is the dominant process used today in the manufacturing of carbon black. The feedstock consists primarily of an aromatic liquid hydrocarbon. The most common source of this feedstock is Gulf Coast oil refineries. Refinery cracking unit bottoms contain the condensed-ring hydrocarbons necessary for the carbon black process and can be obtained at an acceptable cost. The first step in the production process is a cracking or pyrolysis step. The hydrocarbon feedstock is heated and injected continuously into a reactor vessel. The reactor is a specially designed furnace with injection ports located strategically around the combustion zone. The heat necessary to initiate the carbon black process in the combustion zone is provided by either the hydrocarbon feed stock or natural gas. In the reaction zone, the hydrocarbon decomposes (i.e., cracks) to form carbon black. Careful control of the process (or combustion) air is required to insure that complete combustion does not occur. The particles of carbon black generated in the reactor are carried downstream with the process gas, which is commonly referred to as tail gas. This tail gas typically consists of approximately 10 to 17 percent carbon monoxide with smaller concentrations of other compounds, such as hydrogen sulfide, carbonyl sulfide, carbon disulfide, acetylene, particulate matter, sulfur dioxide, and oxides of nitrogen. The majority of the gas consists of nitrogen and contains about 40% water vapor. A portion of the tail gas is used as fuel for the dryers and boilers located at this facility. The remainder of the tail gas is currently vented to the atmosphere. Under this permit, the tail gas will be combusted in a thermal oxidizer system. In the event of routine maintenance or equipment malfunction, as provided for more specifically later in this permit, the facility will be permitted to vent a limited amount of tail gas to the atmosphere. 3

To stop the cracking process, water is used to cool the tail gases from the reactor to approximately 1,200 to 1,500EF (650 to 800EC). The carbon black laden tail gas is further cooled to about 450EF (230EC) by heat exchange, followed by additional injection of water. The carbon black is separated from the tail gas by high efficiency fabric filters. Each of the four units at this facility is equipped with its own collection system. After the separation of the tail gas and the carbon black, the carbon black is further processed to meet customer requirements. The two reactors located at Unit A produce general tread carbon black, the reactors located at Units B and D produce carcass carbon black, and the reactor located at Unit C produces specialty carbon black. A special beading process is part of the Unit A, Unit B, and Unit D reactor processes. Carbon black is mixed with water containing the beading binding agent and is dried in one of the unit dryers. The Unit C carbon black is beaded with a bead oil to form the specialty product. Consequently, there is not a dryer associated with Unit C. This facility also includes mechanical and air conveying systems that transfer the materials from the reactor/dryer system to the product storage area. The product is stored in bulk storage containers and may be shipped to the customer using one of three methods: bulk shipment in rail cars and hopper trucks, supersacks or tote bins, and smaller bags (typically 50-lb). Prevention of Significant Deterioration With the installation of the new equipment, SO 2 emissions will increase 9,121 tons per year, NO X emissions will increase 863 tons per year, and PM 10 emissions will increase 13 tons per year. All other pollutants proposed emissions are lower than the past actual emissions because of the addition of new control equipment and changes in emission factors. The emission increases of SO 2 and NO X will exceed the PSD Significant Increase Levels, while PM 10 emissions are below the PSD threshold. 4

BACT ANALYSIS For a PSD permit, the applicant must perform a BACT analysis for each new unit. The applicant must also perform a BACT analysis for each affected unit that is undergoing a physical change or a change in the method of operation. The BACT evaluation must address each pollutant subject to PSD review emitted by the unit. BACT is determined on a case-by-case basis for each source taking into account technical feasibility, energy and environmental impacts, and cost in a topdown approach. That is, after discarding the technically infeasible options, the applicant must consider the remaining technologies in order of control efficiency and document any findings which result in not using the most effective control technology. BACT analyses were conducted for the SO 2 and the NO X emissions from the new natural gas fired units (SN-31, SN-48, and SN-49), SN-23, SN-24, and SN-37. BACT Analyses for SO 2 & NO X from natural gas fired sources (SN-31, SN-48, and SN-49) The natural gas fired burners are specifically designed for the carbon black process and will not operate in excess of 500 hours in any consecutive twelve month period. Due to the low level of emissions from these burners (less than 0.01 tpy of SO 2 and 1.0 tpy of NO X per source), any controls would be economically infeasible. Therefore, BACT for sources SN-31, SN-48, and SN-49 is considered to be proper design and combustion practices. BACT Analysis for SO 2 from SN-23, SN-24, and SN-37 Under Permit #906-AOP-R0, use of a feedstock oil with a sulfur content of 3.0% by weight was determined to be BACT for this facility. Several methods of lowering the sulfur dioxide emissions from these sources were examined in the permit application. The pre-combustion control methods included lowering the sulfur content of the feedstock oil by either treating the feedstock or using a low sulfur content feedstock, and treating pre-oxidation and pre-dryer/tail gas boiler gases for hydrogen sulfide or other sulfur compounds. The post-combustion control methods examined in the permit application included treating the oxidized tail gas through flue gas desulfurization (FGD) processes and treating existing dryer and/or tail gas boiler streams individually, in addition to treating the oxidizer exhaust using flue-gas desulfurization processes. 5

Removal of sulfur from the feedstock oil was rejected because the theoretical methods for the sulfur removal would saturate the condensed ring hydrocarbons which are the basis of the carbon black process, and there are no other known methods to remove the sulfur from the oil which are commercially available and economic. The only technically feasible post combustion control technique was Non-Regenerative, Wet FGD with lime. The annual cost of this system was over $11,000,000. This option would also require an additional boiler or quench system and would generate approximately 84,000 tons of solid waste per year. No other carbon black plant has been required to install a FGD device. Post combustion control techniques were rejected due to economic unreasonableness, other environmental impacts, and lack of practical use of the equipment for that purpose. The maximum sulfur content of the feedstock oil currently in use at this facility is less than the limits for other facilities found in the RBLC database. Therefore, it has been determined that continuing to allow the facility to use feedstock oil with a maximum sulfur content of 3% by weight is the most technically and economically feasible method of controlling sulfur emissions at this facility. The facility may blend higher sulfur feedstocks with lower sulfur feedstocks to ensure that the sulfur content of the feed to the reactors is less then or equal to 3% by weight. BACT Analysis for NO x from SN-23, SN-24, and SN-37 Specific information could not be obtained on NO x control measures beyond proper combustion control or low NO x burners. Due to the peculiar characteristics of carbon black tail gas, conventional low NO x burners are not applicable for use in combusting tail gas. However, a variation has been developed such that the combustor proposed for this facility s new boilers and dryers will achieve 300 ppm by volume or less. 6

BACT Summary Emission Unit Pollutant BACT Determination SN-23 SO 2 Maximum 3% sulfur by weight in blended feedstock oil SN-23 NO X Good combustion practice Emissions of # 300 ppm by vol. on a wet basis SN-24 SO 2 Maximum 3% sulfur by weight in blended feedstock oil SN-24 NO x Good combustion practice Emissions of # 300 ppm by vol. on a wet basis SN-31 SO 2 Proper design & good combustion practice SN-31 NO x Proper design & good combustion practice SN-37 SO 2 Maximum 3% sulfur by weight in blended feedstock oil SN-37 NO x Good combustion practice Emissions of # 300 ppm by vol. on a wet basis SN-48 & SN-49 SO 2 Proper design & good combustion practice SN-48 & SN-49 NO x Proper design & good combustion practice 7

AMBIENT AIR IMPACT ANALYSIS An air dispersion modeling analysis is a required part of a PSD permit application. The air dispersion modeling analysis is used to demonstrate that the emissions resulting from a proposed modification will not cause or contribute to a violation of any applicable National Ambient Air Quality Standard (NAAQS) or surpass a PSD increment. The USEPA requires that PSD modeling be performed in two stages: the significance analysis and the full impact analysis. The full impact analysis is further divided into the NAAQS and PSD Increment Analyses. SIGNIFICANCE ANALYSIS The significance analysis considers the emission increases associated with the proposed modifications at Columbian Chemicals Company in order to determine whether or not the modifications will have a significant impact upon the area surrounding the facility. If the results of the significance analysis are above the Modeling Significance Levels (MSLs), the full impact analysis will be required for that pollutant. In addition, if the results of the significance analysis are above the Monitoring De Minimis Concentrations, PSD ambient monitoring requirements must also be addressed for that pollutant. The PSD ambient monitoring is used to establish background air quality concentrations in the vicinity of the proposed sources. The Monitoring De Minimis Concentrations establish levels at which a facility would need to conduct pre-construction ambient air quality monitoring. The results of the significance analysis are contained in the following table. Maximum Predicted Concentration in Comparison with Modeling Significance Levels and Monitoring De Minimis Concentrations Pollutant Averaging Period Modeled Concentration (µg/m 3 ) PSD Modeling Significance Level (µg/m 3 ) PSD Monitoring De Minimis Concentrations (µg/m 3 ) SO 2 3-hour >140 25 -- 24-hour >45 5 13 Annual >4.5 1 -- NO X Annual 0.49 1 14 8

AMBIENT MONITORING Columbian Chemicals was not required to address ambient monitoring for NO X due to the low concentration predicted in the significance analysis. However, the permittee was required to address ambient monitoring requirements for SO 2 because the 24-hour concentration predicted in the significance analysis exceeded the monitoring de minimis level. In lieu of conducting their own ambient monitoring, Columbian Chemicals requested, and the Department approved, the use of existing monitoring data from the Department s SO 2 monitor located in El Dorado. FULL IMPACT ANALYSIS Because the emission increases of sulfur dioxide associated with the proposed modifications are shown to have a potentially significant impact (i.e., ambient concentrations exceed MSLs), a full impact was conducted. The full impact analysis consists of a NAAQS and PSD Increment compliance demonstration. NAAQS ANALYSIS The NAAQS are maximum concentration ceilings measured in terms of the total concentration of a pollutant in the atmosphere. In the NAAQS analysis, Columbian Chemicals Company s emissions were combined with those from other nearby sources that have the potential to contribute significantly to receptors within the Radius of Impact (ROI) of Columbian Chemicals. The table below contains the results of the NAAQS analysis for sulfur dioxide. Modeled Concentration with Background in Comparison with the NAAQS Pollutant Averaging Period Modeled Concentration (µg/m 3 ) Modeled Concentration with Background (µg/m 3 ) NAAQS (µg/m 3 ) SO 2 3-hour 1 823.0 989.0 1,300 1. Highest, 2 nd Highest Concentration 2. Highest 24-hour 1 293.0 361.0 365 Annual 2 26.5 39.8 80 9

PSD INCREMENT ANALYSIS PSD Increment is the maximum allowable increase in concentration that is allowed to occur above a set baseline concentration for a specific pollutant. The baseline concentration is defined for each pollutant and averaging time. It is the ambient concentration existing at the time that the first complete PSD permit application is submitted for a distinct area. PSD minor source trigger date for SO 2 has been established for Union county as August 8, 1999. Increment consuming sources were obtained using the same methodology for the NAAQS Analysis. Permitted dates of sources were evaluated to determine if the source was incrementconsuming or in the baseline. Emissions increases and decreases for all increment-affected sources located within the baseline area are modeled along with the emissions from Columbian Chemicals. The facility constructed an overall increment model. In this model, all increment consuming sources within the ROI were modeled. This was then compared to the total increment available. The highest results of the Increment Analysis for SO 2 is contained in the following table. Averaging Period Total Available Increment Analysis Results for SO 2 Maximum Modeled Increment Consumption (µg/m 3 ) Total Increment (µg/m 3 ) Percent of Increment Consumed 3-hour 288.0 512.0 56.3% 24-hour 89.2 91.0 98.0% Annual 13.9 20.0 69.5% According to 19.9.4(c)(4) of Regulation #19, if issuance of a permit would result in the consumption of more than 80% of the short-term increment or 50% of the available increment, the permittee shall submit an assessment of (a) the effects that the consumption would have upon the industrial and economic development within the area, and (b) alternatives to the consumption including alternative siting of the source or portions. The results of this analysis are included below. 10

a. Columbian Chemicals also performed increment consumption modeling using data from the facility only. This was done to show how the emissions changes at Columbian Chemicals alone would effect the available increment. The results of this modeling show that the impacts from Columbian Chemical alone are below the thresholds specified in Regulation 19.904. The data are also representative of the increment consumption that is occurring around the plant itself, and therefore would not restrict development in the site vicinity. b. In the modeling that included all increment consuming sources, the results show that the maximum consumption is occurring near other facilities that are located away from the Columbian plant. It would not be feasible to consider an alternative site to this facility, as the increment consumption would be approximately the same wherever it is located. The proposed location is in an area that will have a limited impact on growth. Class I Area Impact Analysis The PSD Regulations require that written notification be provided to the Federal Land Manager in the event that a major source or modification is located within 100 kilometers of a Class I Area. Columbian Chemicals Company is located approximately 177 kilometers from the nearest Class I Area. Therefore, neither notification to the Federal Land Manager nor a Class I Area Impact Analysis is required. Additional Impacts Review Three areas constitute the Additional Impacts Review: a growth analysis, a soils and vegetation analysis, and a visibility analysis. The growth analysis includes a projection of the associated industrial, commercial, and residential growth that will occur in the area as a result of the source. The potential impact on the ambient air due to the growth is also a part of the analysis. Columbian Chemicals does not expect an increase in industrial, commercial, or residential growth as a result of the proposed modification. If all ambient concentrations are below the secondary NAAQS then soils and vegetation should not suffer any harmful effects as a result of the proposed modification. The modeling results were all below the secondary NAAQS levels. Through modeling, it has been shown that the proposed emission rates will not have a significant impact at any off property locations. Thus, the proposed modification will not cause any 11

visibility impairment. Regulations Permit #906-AOP-R1 is the second operating permit issued to Columbian Chemicals Company under Regulation 26. Columbian Chemicals is also subject to 40 CFR Part 60, Subpart Kb New Source Performance Standards for Volatile Organic Storage Vessels, Regulations of the Arkansas Operating Air Permit Program (Title V, Regulation #26), Regulations of the Arkansas Plan of Implementation for Air Pollution Control (SIP, Regulation #19), and Arkansas Air Pollution Control Code (Code, Regulation #18). The following table is a summary of emissions from the facility. Specific conditions and emissions for each source can be found starting on the page cross referenced in the table. This table, in itself, is not an enforceable condition of the permit. EMISSION SUMMARY Source No. Description Pollutant Emission Rates Cross Reference lb/hr tpy Page Total Allowable Emissions PM PM 10 SO 2 VOC CO NO x 4 4 2,590.8 659.8 13,591.7 305.3 78.0 78.0 10,085.1 278.0 5,723.9 1,09 HAPs* Carbon - Disulfide* Carbonyl - Sulfide* Air Contaminants ** Hydrogen - Sulfide** TRS** 208.39 31.99 279.63 521 87.75 13.46 117.76 219.04 08 Feedstock Oil Tank VOC 24 12 Vapor Bag Collector Unit B PM 1.1 PM 10 1.1 4.5 4.5 25 12

EMISSION SUMMARY Source No. Description Pollutant Emission Rates Cross Reference lb/hr tpy Page 13 Vapor Bag Collector Unit A PM 1.0 PM 10 1.0 4.2 4.2 25 14 Reject Pulsaire Collector Unit B PM PM 10 0.3 0.3 27 15 Pulsaire Collector Unit A PM 2.0 PM 10 2.0 8.4 8.4 27 20 Air Conveying Pulsaire Unit C PM PM 10 0.5 0.5 2.0 2.0 27 21 Twilight Tank Baghouse (Unit A & B Start-ups) PM PM 10 0.3 0.3 30 23 Boilers, Unit A Dryers Combined Stack PM PM 10 SO 2 VOC CO NO X Carbon - Disulfide Carbonyl - Sulfide Hydrogen - Sulfide TRS 1.4 1.4 419.0 5.8 119.0 41.0 1.82 0.28 2.45 4.60 5.3 5.3 1,672.0 23.0 475.0 178.0 7.28 1.12 9.77 18.20 31 13

EMISSION SUMMARY Source No. Description Pollutant Emission Rates Cross Reference lb/hr tpy Page 24 Units B & D Dryers Stack PM PM 10 SO 2 VOC CO NO X Carbon - Disulfide Carbonyl - Sulfide Hydrogen - Sulfide TRS 2.2 2.2 681.0 9.4 193.0 66.0 2.97 0.46 3.98 7.41 8.6 8.6 2,709.0 37.0 770.0 289.0 11.80 1.81 15.84 29.45 34 27 Tail Gas Bypass Stack PM PM 10 SO 2 VOC CO NO X Carbon - Disulfide Carbonyl - Sulfide Hydrogen - Sulfide TRS 12.8 12.8 60.0 623.0 12,868.0 28.8 197.37 30.29 264.84 492.50 2.9 2.9 13.3 139.0 2,861.0 6.4 43.88 6.73 58.88 109.49 37 28 Natural Gas Coast Stack Unit A PM PM 10 SO 2 VOC CO NO x 0.3 0.3 0.2 0.5 3.0 0.2 0.2 0.3 1.5 39 14

EMISSION SUMMARY Source No. Description Pollutant Emission Rates Cross Reference lb/hr tpy Page 29 Natural Gas Coast Stack Unit B PM PM 10 SO 2 VOC CO NO x 0.3 0.3 0.2 0.4 2.4 0.2 0.2 0.2 1.2 39 30 Natural Gas Coast Stack Unit C PM PM 10 SO 2 VOC CO NO x 0.2 0.2 0.3 1.5 0.2 0.2 0.3 1.5 39 31 Natural Gas Coast Stack Unit D PM PM 10 SO 2 VOC CO NO x 0.3 0.3 0.8 3.0 0.2 0.8 39 32 Unit B Warehouse PM 0.5 PM 10 0.5 0.5 0.5 27 33 Hopper Car Unloading Vent PM 6.9 PM 10 6.9 7.2 7.2 42 34 Unit A Warehouse PM 0.4 PM 10 0.4 0.5 0.5 27 36 Feedstock Oil Tank #7 VOC 24 15

EMISSION SUMMARY Source No. Description Pollutant Emission Rates Cross Reference lb/hr tpy Page 37 Thermal Oxidizer Stack PM PM 10 SO 2 VOC CO NO X Carbon - Disulfide Carbonyl - Sulfide Hydrogen - Sulfide TRS 4.6 4.6 1,430.0 19.7 406.0 139.0 6.23 0.96 8.36 15.60 17.9 17.9 5,690.0 78.0 1,616.0 608.0 24.79 3.80 33.27 61.90 44 39, 40, and 41 Unit B Reactor Vents PM PM 10 SO 2 VOC CO NO x 0.7 0.7 0.4 1.1 7.0 0.2 0.9 47 42 and 43 Unit C Reactor Vents PM PM 10 SO 2 VOC CO NO x 0.3 0.3 0.2 0.5 3.0 0.2 0.8 47 44, 45, 46, and 47 Unit A Reactor Vents PM PM 10 SO 2 VOC CO NO x 0.6 0.6 0.4 0.9 5.9 0.2 0.8 47 16

EMISSION SUMMARY Source No. Description Pollutant Emission Rates Cross Reference lb/hr tpy Page 48 and 49 Unit D Reactor Vents PM PM 10 SO 2 VOC CO NO x 0.5 0.5 1.2 4.7 0.2 0.2 0.3 1.2 47 61 Unit D Vapor Bag Collector PM PM 10 1.1 1.1 4.6 4.6 25 62 Air Conveying Pulsaire Unit D PM 2.1 PM 10 2.1 9.1 9.1 27 63 Warehouse PM PM 10 * HAPs included in the VOC totals are indicated by an *. Other HAPs are not included in any other totals unless specifically stated. ** Air Contaminants such as ammonia, acetone, and certain halogenated solvents are not classified as VOC or HAPs. 0.5 0.5 27 17

SECTION III: PERMIT HISTORY Cities Service Company owned and operated a carbon black manufacturing facility in El Dorado which began operation in the early 1950s. This facility was registered with the Department prior to July 30, 1969. In 1980, Cities Service Company formed Columbian Chemicals Company as a free-standing company. With the exception of replacing outdated or uneconomical equipment, the plant operations changed little until 1989. Permit #906-A was issued to Columbian Chemicals Company on January 18, 1989. This permit allowed the facility to make numerous modifications over a three year period. These modifications included replacing reactors on two units with newer state-of-the-art Columbian patented designs, replacing the bag filters and wet scrubbers on all units with newer technology bag filters, installing a new stack, and converting an existing natural gas fired boiler to use plant tail gas as its primary fuel. Permit #906-A expired on December 31, 1992. An extension on this permit was granted by the Director of the Department on December 14, 1992. This extension allowed the facility to continue operation under Permit #906-A through December 31, 1993. On November 1, 1994, this facility began operating under Consent Administrative Order (CAO) LIS-94-133. Permit #906-AOP-R0 was issued to Columbian Chemicals Company on February 18, 1998. Columbian Chemicals proposed to install a thermal oxidizer to oxidize the unused tail gas which was previously vented to the atmosphere. Following the installation and startup of the thermal oxidizer, restrictions were placed on the use of the tail gas bypass stack, SN-27. Columbian Chemicals submitted a PSD permit application for these proposed modifications addressing emissions from all modified and affected units. The following are the proposed emission changes that were included in Columbian Chemicals PSD permit application and/or required by the Department. 1. A thermal oxidizer (SN-37) will be installed to oxidize the uncombusted tail gas. This gas was previously routed through the tail gas bypass stack (SN-27). As a result of the installation of the thermal oxidizer, there will be significant increases of sulfur dioxide and oxides of nitrogen emissions. However, permitted emissions of carbon monoxide will be greatly reduced. Construction of the thermal oxidizer will begin within 18 months of the issuance of this permit. Operation of this source will begin within 33 months from the date of issuance of this permit. 18

2. Columbian Chemicals will have the option to increase production with this permit. If the facility chooses to increase production, a new stack, SN-24, will be installed. This new stack will vent emissions from the Unit B dryers. The increase in production, as stated in several specific conditions and Plantwide Condition #11 and #12, may not take place until sources SN-24 and SN-37 have been installed and are operating. 3. Continuous operation of source SN-27 will cease upon the installation of source SN-37. The permittee will be allowed to use the bypass stack under the following two conditions: a. Emergency release of tail gases as allowed under 26.7(f) of Regulation 26, for which notification must be submitted under General Provision #8 of this permit, and b. During periods of planned maintenance which must coincide with the shutdown of either Unit A or Unit B. The permittee will be required to maintain documentation demonstrating that one of the two required units was shutdown and that the hours of operation for this source were not exceeded. The net emission increase will exceed the PSD significant emission rates for oxides of nitrogen (NO x ) and sulfur dioxide (SO 2 ). A summary of the net emission increases that are above the PSD significant emission rates is contained in the following table. Pollutant Net Emission Increase (tpy) PSD Significant Emission Rate (tpy) SO 2 5277.0 40.0 NO x 768.0 40.0 The increased emissions from the thermal oxidizer will not affect any source besides SN-27 which will be taken out of service within 60 days of the installation of source SN-37 except as herein provided. All annual emissions at source SN-27 are decreasing as a result of the installation of the thermal oxidizer. The installation of the Unit B dryer stack will cause a change in the method of operation at SN-23. Three pollutants have significant increases at sources SN-24 and SN-37. However, these increases were not subject to PSD review due to reduction of these pollutants at other sources at the facility. The installation and operation of the thermal oxidizer is responsible for most of the creditable decreases in emissions. Based upon information submitted by the permittee, it is expected that sources SN-24, if the facility chooses to increase production, and SN-37 will be in operation within 33 months of permit issuance. Conditions have been placed in this permit 19

requiring that the decreases occur at the same time that the increased emissions occur. A summary of the net emission decreases is contained in the table below. Pollutant Net Emission Decrease (tpy) Actual Emissions (tpy) Permitted Emissions (tpy) CO 26,660.0 32,194 5534 TRS 913.0 1106.0 193.0 H 2 S 552.0 663.0 111.0 VOC 735.0 914.0 179.0 BACT Analysis for SO 2 from SN-23, SN-24, and SN-37 Currently, the permittee is allowed to use feedstock oil with a sulfur content of 2.9% by weight. Several methods of lowering the sulfur dioxide emissions from these sources were examined in the permit application. The pre-combustion control methods include lowering the sulfur content of the feedstock oil either by treating the feedstock or by using a low sulfur content feedstock, and treating pre-oxidation and pre-dryer/tail gas boiler gases for H 2 S and/or other sulfur compounds. The post-combustion control methods examined in the permit application include treating the oxidized tail gas through flue-gas desulfurization processes and treating existing dryer and/or tail gas boiler streams individually, in addition to treating the oxidizer exhaust using flue-gas desulfurization processes. Removal of sulfur from the feedstock oil was rejected because the theoretical methods for the sulfur removal would saturate the condensed ring hydrocarbons which are the basis of the carbon black process and there are no known methods which are commercially available and economic to remove the sulfur from the oil. The post combustion control techniques were also rejected due to cost and/or unavailability. The maximum sulfur content of the feedstock oil currently in use at this facility is less than the limits for other facilities found in the RBLC database. Therefore, it has been determined that continuing to allow the facility to use feedstock oil with a maximum sulfur content of 3% by weight is the most technically and economically feasible method of controlling sulfur emissions at this facility. The facility may blend higher sulfur feedstocks with lower sulfur feedstocks to ensure that the sulfur content of the feed to the reactors is less then or equal to 3% by weight. 20

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BACT Analysis for NO x from SN-24 and SN-37 Specific information could not be obtained on NO x control measures beyond proper combustion control or low NO x burners. Due to the peculiar characteristics of carbon black tail gas, conventional low NO x burners are not applicable to the thermal oxidizer design. However, a variation has been developed such that the combustor proposed for this facility s thermal oxidizer will achieve 300 ppm by volume or less. BACT Summary Emission Unit Pollutant BACT Determination SN-23 SO 2 Maximum 3% sulfur by weight in blended feedstock oil SN-24 SO 2 Maximum 3% sulfur by weight in blended feedstock oil SN-24 NO x Good combustion practice SN-37 SO 2 Maximum 3% sulfur by weight in blended feedstock oil SN-37 NO x Good combustion practice Ambient Air Impact Analysis The results of the significance analysis for NO x from Columbian Chemicals were below the corresponding Modeling Significance Level. Therefore, the full impact analysis of NO x was not required. In addition, the modeling results were below the corresponding Monitoring De Minimis Concentration thus no ambient monitoring is required. The results of the significance analysis for SO 2 from Columbian Chemicals were above the corresponding Modeling Significance levels. Therefore, the full impact analysis was required for SO 2. The results of the full impact analysis were below the corresponding NAAQS levels. The significance analysis for SO 2 also showed that the Monitoring De Minimis Concentration was exceeded on a 24 hour average. In lieu of pre-construction monitoring, the Department has accepted the use of existing data from an SO 2 monitor located in El Dorado. The PSD Increment Analysis showed that no PSD increments would be completely consumed or exceeded. 22

Results of Significance Analysis Pollutant Averaging Period Concentration, (µg/m 3 ) Modeling Significance Level, (µg/m 3 ) Monitoring De Minimis Concentration, (µg/m 3 ) SO 2 3 hour 24 hour Annual 122.4 33.3 4.1 25 5 1 -- 13 -- NO x Annual 0.2 1 14 Results of Full Impact Analysis Pollutant Averaging Period Concentration, (µg/m 3 ) NAAQS, (µg/m 3 ) SO 2 3 hour 24 hour Annual 780.3 342.1 60.9 1300 1 365 80 1. There is no primary NAAQS standard for SO 2 on a 3-hour average. Therefore, the secondary NAAQS standard has been used. Results of PSD Increment Analysis Pollutant Averaging Period Concentration, (µg/m 3 ) PSD Increment, (µg/m 3 ) SO 2 3 hour 24 hour Annual 123.0 34.3 4.58 512 91 20 Class I Area Impact Analysis The PSD Regulations require that written notification be provided to the Federal Land Manager in the event that a major source or modification is located within 100 kilometers of a Class I Area. Columbian Chemicals Company is located approximately 177 kilometers from the nearest Class I Area. Therefore, neither notification to the Federal Land Manager nor a Class I Area Impact Analysis is required. 23

SECTION IV: EMISSION UNIT INFORMATION

SN-08 and SN-36 Feedstock Oil Tanks Source Description The feedstock oil tanks store the raw materials which are used at this facility. The carbon black feedstock is similar to residual #6 fuel oil. The material stored in these tanks has a vapor pressure less than 0.5 psia. Source SN-36 has a volume of 2384.8 m 3 (630, 000 gallons). Source SN-08 has a volume of 757.1 m 3 (200,000 gallons). Therefore, under 40 CFR 610b(c), these sources are exempt from most of the requirements of 40 CFR Part 60, Subpart A, and 40 CFR Part 60, Subpart Kb. The only requirements are the notification and record keeping requirements. Specific Conditions 1. Pursuant to 19.501 et seq of the Regulations of the Arkansas Plan of Implementation for Air Pollution Control (Regulation #19) effective February 15, 1999 and 40 CFR Part 52, Subpart E, the permittee shall not exceed the emission rates set forth in the following table. Compliance with this condition will be demonstrated by equipment limitations. SN Pollutant lb/hr tpy 08 VOC 36 VOC 2. Pursuant to 19.705 of Regulation 19, A.C.A. 8-4-203 as referenced by 8-4-304 and 8-4-311, and 40 CFR 70.6, the permittee shall not store any materials at sources SN-08 and SN-36 which have a true vapor pressure in excess of 0.5 psia. 3. Pursuant to 19.705 of Regulation 19 and 40 CFR Part 52, Subpart E, the permittee shall maintain records of the dimensions of sources SN-08 and SN-36 on site. These records shall be made available to Department personnel upon request. 25

SN-12, SN-13, and SN-61 Vapor Bag Collectors Source Description These baghouses control the particulate emissions from the dryers located at Units A, B, and D. (Unit C does not have a dryer.) SN-12 is located at Unit B while SN-13 is located at Unit A and SN-61 is located at Unit D. Sources SN-12 and SN-13 were both installed or last modified in 1988. Source SN-61 is being installed under this permit. These sources are permitted to run at capacity for 8,760 hours per year. Therefore, no throughput records are required to be kept for these sources. Specific Conditions 4. Pursuant to 19.501 et seq of Regulation #19 and 40 CFR Part 52, Subpart E, the permittee shall not exceed the emission rates set forth in the following table. Compliance with this condition will be demonstrated by Specific Condition #6, Plantwide Condition #13, and equipment limitations. SN Pollutant lb/hr tpy 12 PM 10 1.1 4.5 13 PM 10 1.0 4.2 61 PM 10 1.1 4.6 5. Pursuant to 18.801 of Regulation #18 and A.C.A. 8-4-203 as referenced by 8-4-304 and 8-4-311, the permittee shall not exceed the emission rates set forth in the following table. Compliance with this condition will be demonstrated by Specific Condition #6, Plantwide Condition #13, and equipment limitations. SN Pollutant lb/hr tpy 12 PM 1.1 4.5 13 PM 1.0 4.2 61 PM 1.1 4.6 26

6. Pursuant to 18.501 of Regulation #18 and A.C.A. 8-4-203 as referenced by 8-4-304 and 8-4-311, the permittee shall not cause to be discharged to the atmosphere gases which exhibit an opacity greater than 5%. The opacity shall be measured in accordance with EPA Reference Method 9 as found in 40 CFR Part 60 Appendix A. Compliance with this condition will be demonstrated by Plantwide Condition #15. 27

SN-14, SN-15, SN-20, SN-32, SN-34, SN-62, and SN-63 Conveying, Reject, Equipment Vent, and Warehouse Bag Collectors Source Description At Unit A, carbon black is pneumatically conveyed from the main unit bag collector to the conveying pulseaire bag collector (SN-15) above the dense tank. The conveying pulseaire bag collector also receives carbon black rejected from the product screens, discharge from the warehouse bag collector, and venting from the dense tank and downstream mechanical conveying equipment. The Unit A warehouse bag collector (SN-34) vents some mechanical conveying equipment, the unit s bag packaging system, and the venting during the loading of hopper cars and trucks. Carbon black discharged from the collector is returned to the conveying pulseaire bag collector. At Unit B, powder carbon black is mechanically conveyed by a series of screw conveyors and a bucket elevator from the main unit bag collector to the dense tank and does not require a conveying pulseaire bag collector. Also at Unit B, a reject pulseaire bag collector (SN-14) is located above the dense tank to receive carbon black rejected from the product screens, discharge from the warehouse bag collector, venting from the dense tank, and downstream mechanical conveying equipment. The Unit B warehouse bag collector (SN-32) vents some mechanical conveying equipment, the unit s bag packaging system, and the venting during the loading of hopper cars and trucks. Carbon black discharged from the collector is returned to the reject pulseaire collector. At Unit C, powder carbon black is pneumatically conveyed from the main unit bag collector to the conveying pulseaire bag collector (SN-20) above the dense tank. Alternatively, carbon black from Unit C may be directed to Unit A, combining with the Unit A production for beading and drying. The conveying pulseaire bag collector also receives carbon black rejected from the product screens and venting from the dense tank, downstream mechanical conveying equipment, and loading railroad hopper cars and trucks. At Unit D, powder carbon black will be pneumatically conveyed from the main unit bag collector to the conveying pulseaire bag collector (SN-62) above the dense tank. The conveying pulseaire bag collector will also receive carbon black re-run from the start-up tank and venting from the dense tank. Unit D will have an equipment vent collector (SN-63) located above the start-up tank to handle venting of downstream mechanical conveying equipment (from dryer to storage tank) and venting from loading railroad hopper cars and trucks. Collected carbon black will be discharged into the Unit D start-up tank. 28

Specific Conditions 7. Pursuant to 19.501 et seq of Regulation #19 and 40 CFR Part 52, Subpart E, the permittee shall not exceed the emission rates set forth in the following table. Compliance with this condition will be demonstrated by Specific Conditions #9, #10, and #12, Plantwide Condition #13, and equipment limitations. SN Pollutant lb/hr tpy 14 PM 10 0.3 15 PM 10 2.0 8.4 20 PM 10 0.5 2.0 32 PM 10 0.5 0.5 34 PM 10 0.4 0.5 62 PM 10 2.1 9.1 63 PM 10 0.5 8. Pursuant to 18.801 of Regulation #18 and A.C.A. 8-4-203 as referenced by 8-4-304 and 8-4-311, the permittee shall not exceed the emission rates set forth in the following table. Compliance with this condition will be demonstrated by Specific Conditions #9, #10, and #12, Plantwide Condition #13, and equipment limitations. SN Pollutant lb/hr tpy 14 PM 0.3 15 PM 2.0 8.4 20 PM 0.5 2.0 32 PM 0.5 0.5 34 PM 0.4 0.5 62 PM 2.1 9.1 63 PM 0.5 29

9. Pursuant to 18.501 of Regulation #18 and A.C.A. 8-4-203 as referenced by 8-4-304 and 8-4-311, the permittee shall not cause to be discharged to the atmosphere gases which exhibit an opacity greater than 5%. The opacity shall be measured in accordance with EPA Reference Method 9 as found in 40 CFR Part 60 Appendix A. Compliance with this condition will be demonstrated by Plantwide Condition #15. 10. Pursuant to 19.705 of Regulation 19, 40 CFR 70.6, A.C.A. 8-4-203 as referenced by 8-4-304 and 8-4-311 and 18.1004 of Regulation 18, the permittee shall not exceed the limits set forth in the following table at the designated sources in any consecutive twelve month period. SN Process Rate Units (PRUs) 32 100,604 34 138,518 11. Pursuant to 19.705 of Regulation #19 and 40 CFR Part 52, Subpart E, the permittee shall maintain records which demonstrate compliance with Specific Condition #10. The records shall be updated on a monthly basis. These records shall be kept on site, provided to Department personnel upon request, and may be used by the Department for enforcement purposes. An annual total and each month s individual data shall be submitted to the Department in accordance with General Provision #7. 12. Pursuant to 19.702 of Regulation 19 and 40 CFR Part 52, Subpart E, the permittee shall test source SN-62 for PM 10 using EPA Reference Method 201A within 60 days of achieving maximum production but no later than 180 days after initial start-up. This test is being required because the net emissions increase of PM 10 is close to the PSD Significant Increase Level. This test is not required of all new sources which will be permitted to emit PM 10 due to their low level of emissions. 30

SN-21 Twilight Tank Bag Collector Source Description Units A and B share a twilight tank (start-up tank) which is divided into two compartments. On occasion, carbon black being reprocessed would be dense phase conveyed to the twilight tank, venting the air through the twilight tank bag collector (SN-21). Normally, the bag collector functions as a vent for the tank. Specific Conditions 13. Pursuant to 19.501 et seq of Regulation #19 and 40 CFR Part 52, Subpart E, the permittee shall not exceed the emission rates set forth in the following table. Compliance with this condition will be demonstrated by Specific Condition #15, Plantwide Condition #13, and equipment limitations. Pollutant lb/hr tpy PM 10 0.3 14. Pursuant to 18.801 of Regulation #18 and A.C.A. 8-4-203 as referenced by 8-4-304 and 8-4-311, the permittee shall not exceed the emission rates set forth in the following table. Compliance with this condition will be demonstrated by Specific Condition #15, Plantwide Condition #13, and equipment limitations. Pollutant lb/hr tpy PM 0.3 15. Pursuant to 18.501 of Regulation #18 and A.C.A. 8-4-203 as referenced by 8-4-304 and 8-4-311, the permittee shall not cause to be discharged to the atmosphere gases which exhibit an opacity greater than 5%. The opacity shall be measured in accordance with EPA Reference Method 9 as found in 40 CFR Part 60 Appendix A. Compliance with this condition will be demonstrated by Plantwide Condition #15. 31

SN-23 Unit A Dryers and Boilers Source Description No physical modification is occurring at this source with the issuance of this permit. However, some of the permitted emission rates are changing due to the use of new emission factors. Currently, this source vents emissions from the boilers and Unit A and B dryers. After the installation of source SN-24, the emissions from the Unit B dryers and boilers will be routed through the new stack. Emissions from this source are the result of the combustion of tail gas. The dryers and boilers are permitted to operate at capacity for 8,760 hours per year. Specific Conditions 16. Pursuant to 19.501 et seq of Regulation #19 and 40 CFR Part 52, Subpart E, the permittee shall not exceed the emission rates set forth in the following table. Compliance with this condition will be demonstrated by Specific Conditions #19, #21, and equipment limitations. Pollutant lb/hr tpy PM 10 VOC CO 1.4 5.8 119.0 5.3 23.0 475.0 17. Pursuant to 18.801 of Regulation #18 and A.C.A. 8-4-203 as referenced by 8-4-304 and 8-4-311, the permittee shall not exceed the emission rates set forth in the following table. Compliance with this condition will be demonstrated by Specific Conditions #19, #21, and equipment limitations. Pollutant lb/hr tpy PM Carbon Disulfide Carbonyl Sulfide Hydrogen Sulfide TRS 1.4 1.82 0.28 2.45 4.60 5.3 7.28 1.12 9.77 18.2 32

18. Pursuant to 19.501 et seq and 19.901 et seq of Regulation 19 and 40 CFR Part 52, Subpart E, the permittee shall not exceed the emission rates set forth in the following table at source SN-23. The emission rates are based upon the capacity of the equipment. Compliance with this condition will be demonstrated by Specific Conditions #20 and #21, Plantwide Condition #11, and equipment limitations. Pollutant lb/hr tpy SO 2 NOX 419.0 41.0 1,672.0 178.0 19. Pursuant to 18.501 of Regulation #18 and A.C.A. 8-4-203 as referenced by 8-4-304 and 8-4-311, the permittee shall not cause to be discharged to the atmosphere gases which exhibit an opacity greater than 5%. The opacity shall be measured in accordance with EPA Reference Method 9 as found in 40 CFR Part 60 Appendix A. Compliance with this condition will be demonstrated by Plantwide Condition #15. 20. Pursuant to 19.501 et seq and 19.901 et seq of Regulation 19 and 40 CFR Part 52, Subpart E, the permittee shall not emit NO X in concentrations exceeding 300 ppm by volume. Compliance with this condition will be demonstrated by Specific Condition #21 and equipment limitations. 21. Pursuant to 19.702 and 19.901 et seq of Regulation 19 and 40 CFR Part 52, Subpart E, the permittee shall annually conduct the following tests using the indicated test method unless another method is approved by the Department at least 15 days prior to the test taking place. Pollutant SO 2 NO X EPA Reference Method 6C 7E TRS 15 33

22. Pursuant to 19.703 and 19.901 et seq of Regulation 19, 40 CFR Part 52, Subpart E, and A.C.A. 8-4-203 as referenced by 8-4-304 and 8-4-311, the Department reserves the right to require CEMS for sulfur dioxide and total reduced sulfur at source SN-23 if the compliance tests show that the mass balance method of calculating the amount of sulfur being emitted is inaccurate. The Department will provide the permittee the CEMS standards in the future if necessary. Inaccurate is defined, for the purposes of this specific condition, as a deviation of more than 5% from the tested emission rate. 23. Pursuant to 19.703 and 19.901 et seq of Regulation 19, 40 CFR Part 52, Subpart E, and A.C.A. 8-4-203 as referenced by 8-4-304 and 8-4-311, the permittee may propose an alternate method of demonstrating continual compliance for sulfur dioxide, oxides of nitrogen, and total reduced sulfur emissions to include monitoring flue gas temperature, oxygen content (in accordance with 40 CFR Part 60, Appendix B, Performance Specification 3), and the sulfur mass balance method. This method must demonstrate acceptability through the concurrent measurements during the first two compliance tests of this source. The first compliance test was performed prior to the issuance of this permit. 34

SN-24 Unit B and Unit D Dryer Stack Source Description Source SN-24 will vent the emissions from the Unit B and Unit D dryers. Emissions from this source will be the result of the combustion of tail gas. Specific Conditions 24. Pursuant to 19.501 et seq of Regulation #19 and 40 CFR Part 52, Subpart E, the permittee shall not exceed the emission rates set forth in the following table. Compliance with this condition will be demonstrated by Specific Conditions #27, #29, and equipment limitations. Pollutant lb/hr tpy PM 10 VOC CO 2.2 9.4 193.0 8.6 37.0 770.0 25. Pursuant to 18.801 of Regulation #18 and A.C.A. 8-4-203 as referenced by 8-4-304 and 8-4-311, the permittee shall not exceed the emission rates set forth in the following table. Compliance with this condition will be demonstrated by Specific Conditions #27, #29, and equipment limitations. Pollutant lb/hr tpy PM Carbon Disulfide Carbonyl Sulfide Hydrogen Sulfide TRS 2.2 2.97 0.46 3.98 7.41 8.6 11.80 1.81 15.84 29.45 35

26. Pursuant to 19.501 et seq and 19.901 et seq of Regulation 19 and 40 CFR Part 52, Subpart E, the permittee shall not exceed the emission rates set forth in the following table at source SN-24. The emission rates are based upon the capacity of the equipment. Compliance with this condition will be demonstrated by Specific Conditions #28 and #29, Plantwide Condition #11, and equipment limitations. Pollutant lb/hr tpy SO 2 681.0 NO X 66.0 2,709.0 289.0 27. Pursuant to 18.501 of Regulation #18 and A.C.A. 8-4-203 as referenced by 8-4-304 and 8-4-311, the permittee shall not cause to be discharged to the atmosphere gases which exhibit an opacity greater than 5%. The opacity shall be measured in accordance with EPA Reference Method 9 as found in 40 CFR Part 60 Appendix A. Compliance with this condition will be demonstrated by Plantwide Condition #15. 28. Pursuant to 19.501 et seq and 19.901 et seq of Regulation 19 and 40 CFR Part 52, Subpart E, the permittee shall not emit NO X in concentrations exceeding 300 ppm by volume. Compliance with this condition will be demonstrated by Specific Condition #29 and equipment limitations. 29. Pursuant to 19.702 and 19.901 et seq of Regulation 19 and 40 CFR Part 52, Subpart E, the permittee shall conduct the following tests using the indicated test method unless another method is approved by the Department at least 15 days prior to the test taking place. The tests must be completed within 60 days of achieving maximum production but no later than 180 days after the initial start-up. Annual testing shall be performed for SO 2, NO X, and TRS. Pollutant SO 2 EPA Reference Method 6C CO 10 NO X 7E TRS 15 Opacity 9 36

30. Pursuant to 19.703 and 19.901 et seq of Regulation 19, 40 CFR Part 52, Subpart E, and A.C.A. 8-4-203 as referenced by 8-4-304 and 8-4-311, the Department reserves the right to require CEMS for sulfur dioxide and total reduced sulfur at source SN-24 if the compliance tests show that the mass balance method of calculating the amount of sulfur being emitted is inaccurate. The Department will provide the permittee the CEMS standards in the future if necessary. Inaccurate is defined, for the purposes of this specific condition, as a deviation of more than 5% from the tested emission rate. 31. Pursuant to 19.703 and 19.901 et seq of Regulation 19, 40 CFR Part 52, Subpart E, and A.C.A. 8-4-203 as referenced by 8-4-304 and 8-4-311, the permittee may propose an alternate method of demonstrating continual compliance for sulfur dioxide, oxides of nitrogen, and total reduced sulfur emissions to include monitoring flue gas temperature, oxygen content (in accordance with 40 CFR Part 60, Appendix B, Performance Specification 3), and the sulfur mass balance method. This method must demonstrate acceptability through the concurrent measurements during the first two compliance tests of this source. 37