Document:

Exhibit 10.1

UNITED STATES DISTRICT COURT

CENTRAL DISTRICT OF ILLINOIS

	
  UNITED STATES OF AMERICA,

  	
  )

  	
   

  
	
   

  	
  )

  	
   

  
	
  Plaintiff, and

  	
  )

  	
   

  
	
   

  	
  )

  	
   

  
	
  STATE
  OF ILLINOIS,

  	
  )

  	
   

  
	
   

  	
  )

  	
   

  
	
  Plaintiff-Intervenor,

  	
  )

  	
  Civil
  Action Number: 05-1395

  
	
   

  	
  )

  	
   

  
	
  v.

  	
  )

  	
   

  
	
   

  	
  )

  	
   

  
	
  MGP
  INGREDIENTS OF ILLINOIS, INC.,

  	
  )

  	
   

  
	
   

  	
  )

  	
   

  
	
  Defendant.

  	
  )

  	
   

  

 

CONSENT DECREE

 

TABLE OF CONTENTS

	
  I.

  	
   

  	
  JURISDICTION AND VENUE

  	
   

  	
  3

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  II.

  	
   

  	
  APPLICABILITY

  	
   

  	
  3

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  III.

  	
   

  	
  FACTUAL
  BACKGROUND

  	
   

  	
  4

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  IV.

  	
   

  	
  COMPLIANCE PROGRAM
  SUMMARY

  	
   

  	
  4

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  V.

  	
   

  	
  COMPLIANCE
  PROGRAM

  	
   

  	
  6

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  A.

  	
  INSTALLATION OF
  CONTROLS

  	
   

  	
  6

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  B.

  	
  PERMITTING AND
  MODIFICATIONS

  	
   

  	
  7

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  C.

  	
  EMISSION LIMITS

  	
   

  	
  8

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  D.

  	
  DEMONSTRATION OF
  COMPLIANCE

  	
   

  	
  8

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  E.

  	
  RECORDKEEPING
  AND REPORTING

  	
   

  	
  9

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  VI.

  	
   

  	
  CIVIL PENALTY

  	
   

  	
  10

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  VII.

  	
   

  	
  STIPULATED PENALTIES

  	
   

  	
  11

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  VIII.

  	
   

  	
  RIGHT OF ENTRY

  	
   

  	
  13

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  IX.

  	
   

  	
  FORCE MAJEURE

  	
   

  	
  14

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  X.

  	
   

  	
  DISPUTE RESOLUTION

  	
   

  	
  17

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  XI.

  	
   

  	
  GENERAL PROVISIONS

  	
   

  	
  19

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  XII.

  	
   

  	
  TERMINATION

  	
   

  	
  23

  	
   

  

 

 i

CONSENT DECREE

WHEREAS,
Plaintiff, the United States of America (hereinafter “Plaintiff’ or “the United
States”), on behalf of the United States Environmental Protection Agency
(herein, “U.S. EPA”), has, simultaneously with lodging of this Consent Decree, filed
a Complaint alleging that Defendant, MGP Ingredients of Illinois, Inc. (“MGP”
or “Defendant”) commenced construction of major modifications to a major
emitting facility in violation of the Prevention of Significant Deterioration (“PSD”)
requirements at Part C of the Clean Air Act (the “Act”), 42 U.S.C. §§ 7470-7492,
and the regulations promulgated thereunder at 40 C.F.R. § 52.21 (the “PSD Rules”);

WHEREAS,
Plaintiff further alleged that Defendant commenced construction of major
modifications to a major emitting facility and thereafter operated the facility
without first obtaining the appropriate preconstruction permits and installing
the appropriate air pollution control equipment required by 40 C.F.R. § 52.21
and the Illinois State Implementation Plan (“SIP”) approved pursuant to 42
U.S.C. § 7410;

WHEREAS,
Plaintiff further alleged that potential air emissions from the Defendant’s
facility were underestimated by MGP for purposes of determining the applicable
permit requirements;

WHEREAS,
the State of Illinois, (“Plaintiff-Intervenor” or “Illinois”), has,
simultaneously with lodging of this Consent Decree, filed a Complaint in
Intervention, alleging that MGP was and is in violation of PSD requirements and
the Illinois SIP, by failing to obtain the appropriate pre-construction permits
and state permits, and by failing to install appropriate pollution control
technology, in violation of applicable federal and state laws, including
Sections 9(b) and 9.1 of the Illinois Environmental Protection Act;

 

WHEREAS,
MGP has operated a grain processing facility in Pekin, Illinois (the Facility)
since at least 1980;

WHEREAS,
MGP has made various modifications to its grain processing facility, including
changes in 1988 and 1993, pursuant to permits 88010011 and 93080045,
respectively, issued by the Illinois Environmental Protection Agency (“IEPA”),
which resulted in significant increases in its production capacity;

WHEREAS,
on June 3, 2002, the U.S. EPA met with representatives of the ethanol plants in
Illinois, including MGP, to discuss VOC testing and test results, VOC
emissions, and related compliance issues;

WHEREAS,
on April 2, 2003, MGP met with U.S. EPA and IEPA and agreed to negotiate with
U.S. EPA and Illinois for the installation of controls on the Facility to address
the alleged violations of the PSD requirements;

WHEREAS,
MGP has worked cooperatively with U.S. EPA and IEPA regarding the alleged
violations;

WHEREAS,
the Defendant does not admit the facts or violations alleged in the Complaints;

WHEREAS,
the United States and Plaintiff-Intervenor (collectively “Plaintiffs”) and the
Defendant have agreed that settlement of this action is in the best interest of
the parties and in the public interest, and that entry of this Consent Decree
without further litigation is the most appropriate means of resolving this
matter; and

WHEREAS,
Plaintiffs and the Defendant consent to entry of this Consent Decree without
trial of any issues;

 2
 

 

NOW,
THEREFORE, without any admission of fact or law, and without any admission of
the violations alleged in the Complaints, it is hereby ORDERED AND DECREED as
follows:

I. JURISDICTION
AND VENUE

1.             The
Complaints state claims upon which relief can be granted against the Defendant
under Sections 113 and 167 of the Act, 42 U.S.C. §§ 7413 and 7477, and 28
U.S.C. § 1355. This Court has jurisdiction of the subject matter herein and
over the parties consenting hereto pursuant to 28 U.S.C. § 1345 and pursuant to
Sections 113 and 167 of the Act, 42 U.S.C. §§ 7413 and 7477. Venue in this
District is proper under Section 113(b) of the Act, 42 U.S.C. § 7413(b), and
under 28 U.S.C. § 1391(b) and (c).

II. APPLICABILITY

2.             The
provisions of this Consent Decree shall apply to and be binding upon the
Plaintiffs and upon the Defendant as well as the Defendant’s officers,
employees, and those agents who are charged with implementing the terms of this
Consent Decree, and the Defendant’s successors and assigns. In the event
Defendant proposes to sell or transfer the Facility before termination of this
Consent Decree, it shall advise each proposed purchaser or
successor-in-interest in writing of the existence of this Consent Decree, and
shall send a copy of such written notification by certified mail, return
receipt requested, to the U.S. EPA before such sale or transfer, if possible,
but no later than the closing date of such sale or transfer. The Defendant
shall provide a copy of the Consent Decree and the Control Technology Plan
required in Paragraph 9 of this Consent Decree to the proposed purchaser or
successor-in-interest. In the event the Defendant sells or otherwise assigns
any of its right, title, or interest in its facility, prior to termination of
the Consent Decree, the conveyance shall not release the Defendant from any
obligation 

 3
 

 

imposed by this Consent Decree unless the party to whom the right,
title or interest has been transferred agrees to enter into a written agreement
with the U.S. EPA to fulfill the remaining obligations of this Consent Decree.

III. FACTUAL
BACKGROUND AND APPLICABLE DEFINITIONS

3.             (a).          MGP
is a “person” as defined in Section 302(e) of the Act, 42 U.S.C. § 7602(e), and
the federal and state regulations promulgated pursuant to the Act.

(b).          MGP owns and operates
a grain processing facility in Pekin, Illinois (the Facility), for the manufacture
of various products from flour and grain, including fuel and beverage ethanol.
The Plaintiffs allege that in the course of MGP’s manufacturing activities
significant quantities of particulate matter (“PM”), particulate matter at or
below 10 microns (“PM10”),
carbon monoxide (“CO”), volatile organic compounds (“VOCs”), nitrogen oxides (“NOx”)
and other pollutants are generated, including hazardous air pollutants (“HAPs”)
listed under Section 112(b)(1), 42 U.S.C. § 7412(b)(1) of the Act. The primary
sources of these emissions are the feed dryers, fermentation tanks,
distillation units, and load-out of ethanol into trucks.

(c).          Plaintiffs
allege that the Facility is a “major emitting facility,” as defined by Section 169(1)
of the Act, 42 U.S.C. § 7479(1), and the federal and state regulations
promulgated pursuant to the Act.

(d).          Unless
otherwise defined herein, terms used in this Consent Decree shall have the
meaning given to those terms in the Act, and the federal and state regulations
promulgated pursuant to the Act.

IV. COMPLIANCE
PROGRAM SUMMARY

4.             MGP
shall implement a program of compliance at the Facility to meet the emission
levels required under this Consent Decree for emissions of VOC, PM, PM10, 

 4
 

 

CO, and NOx. MGP’s compliance program is summarized below in Paragraphs
5 through 10, and implemented through Paragraphs 11 through 14 and 17 of this
Consent Decree.

5.             MGP
shall implement a program to control and minimize fugitive particulate matter
emissions from the Facility as set forth in the approved Control Technology
Plan required under Part V of this Consent Decree and which is Attachment 1 to
this Consent Decree.

6.             MGP
shall demonstrate compliance with the required emission levels on a
unit-by-unit basis as set forth in the approved Control Technology Plan.

7.             MGP
shall demonstrate compliance with the emission limits established under this
Consent Decree by the use of performance testing, parametric monitoring,
recordkeeping and reporting, where appropriate, as set forth in the approved
Control Technology Plan.

8.             MGP
shall maintain records to demonstrate compliance with New Source Performance
Standards (“NSPS”), Part 60, Subparts Kb and VV as provided in the listed NSPS
standards.

9.             In
conformance with the time schedules specified in the approved Control
Technology Plan, MGP shall complete and submit for IEPA action, appropriate
application(s) to allow the construction of new and modified control equipment,
and revise its operating permit for the Facility to include the compliance
requirements of this Consent Decree.

10.           Upon
execution of the Consent Decree, MGP shall comply with the provisions of 40
C.F.R. Part 52 where such part is applicable to MGP’s operations.

 5
 

 

V. COMPLIANCE
PROGRAM REQUIREMENTS

A.                                   INSTALLATION
OF CONTROLS AND APPLICABLE EMISSION LIMITS

11.           MGP
shall implement a plan for the installation of air pollution control technology
(“Control Technology Plan”) to meet the following emission limits for the
identified units in subparagraphs (a) through (e). MGP’s Control Technology Plan,
which has been approved by Plaintiffs, is Attachment 1 to this Consent Decree:

a.             Feed Dryers: 95 percent
reduction of VOC or emissions no higher than 10 parts per million (“PPM”) VOC,
90 percent reduction of CO emissions or emissions no higher than 100 PPM CO,
and 0.01 grain/dry standard cubic foot for filterable PM.

b.             Fermentation Units: 97.5
percent reduction of VOC or if the inlet is less than 200 PPM VOC, then 20 PPM
or lower VOC.

c.             Distillation Units: 97.5
percent reduction of VOC for scrubber 561 and 95% percent reduction of VOC for
scrubber 501.

d.             Non-Dedicated Ethanol Loadout:
95 percent reduction of VOC or emissions no higher than 10 parts per million (“PPM”)
VOC from the loading of transport vessels in which the interior has not been
cleaned prior to use at MGP or are not dedicated to ethanol transport.

e.             New Source Performance Standards
(NSPS): Identify and implement applicable NSPS requirements codified at 40
C.F.R. Part 60. The following NSPS apply: NSPS Subpart Kb (Volatile Organic Liquid
Storage Vessels); and NSPS subpart VV (Synthetic Organic Chemicals
Manufacturing Industry Leak Detection, Monitoring and Repair Requirements).

12.           MGP
shall implement the approved Control Technology Plan in accordance with the
schedule set forth in that plan. MGP’s approved Control Technology Plan is
incorporated by reference herein and made directly enforceable by Plaintiffs
under this Consent Decree.

 6
 

 

B.                                     PERMITTING
AND MODIFICATIONS

13.           Permitting:
By no later than 180 days following the start-up of the last piece of control
equipment required in the approved Control Technology Plan, MGP shall complete
and submit for IEPA action an appropriate application to revise its operating
permit to include all the compliance requirements of this Consent Decree and
the emission limits and emission level reductions specified in Part V (“Installation
of Controls and Applicable Emission Limits”) of this Consent Decree.

14.           Upon
execution of this Consent Decree, MGP shall comply with the provisions of 40
C.F.R. Part 52 where such part is applicable to MGP’s operations.

15.           In
determining whether a future modification will result in a significant net
emissions increase, MGP cannot take credit for any emission reductions required
by this Consent Decree and the approved Control Technology Plan for netting
purposes as defined by 40 C.F.R. § 52.21(b)(3). VOC emission reductions up to
98 percent of the uncontrolled feed dryer emissions may not be used for any
emissions offset, banking, selling or trading program. In addition, any
emission reductions required under this Consent Decree and the applicable NSPS
of VOC at units other than the feed dryers, and any emission reductions under
this Consent Decree of PM, PM10, NOx, or CO may not be used for any
emissions offset, banking, selling or trading program.

16.           For
purposes in establishing whether a future modification (after the
implementation of the measures specified in the approved Control Technology
Plan) will result in a significant net emissions increase, MGP shall use, as
its baseline for establishing actual emissions, the average rate of the actual
emissions of the pollutant after full implementation of, and demonstration of
compliance with, the emission limits set by this Consent Decree and the
provisions of the approved Control Technology Plan.

 7
 

 

C.                                     EMISSION
LIMITS

17.           Emission
Limits for VOC, CO and PM: Beginning no later than 180 days following the
start-up of each piece of control equipment required in its approved Control
Technology Plan, whenever the associated emission unit(s) is/are in operation,
MGP shall operate the control equipment within the operating parameters set
forth in the approved Control Technology Plan and MGP’s operating permit(s).

D.                                    DEMONSTRATION
OF COMPLIANCE

18.           MGP
shall demonstrate continuous compliance with the emission limits established
under this Consent Decree by the use of parametric monitoring, recordkeeping
and reporting, as set forth in the approved Control Technology Plan.

19.           By
no later than 180 days following the initial start-up of each piece of control
equipment required in the approved Control Technology Plan, except the feed
dryer, MGP shall demonstrate through emissions testing of each emissions unit,
as specified in the approved Control Technology Plan, conducted in accordance with
an IEPA and U.S. EPA approved test protocol, that it has met the required
destruction efficiency and/or emission limit. If the approved Control
Technology Plan indicates such testing is already complete, the test does not
need to be repeated within the 180 day period. By no later than 180 days
following the initial start-up, or within 60 days of achieving maximum
production rate, whichever occurs first, of the feed dryers as required in the
approved Control Technology Plan, MGP shall demonstrate through emissions
testing of each feed dryer emissions unit modified or constructed pursuant to
the approved Control Technology Plan, as specified in the approved Control
Technology Plan, conducted in accordance with an IEPA and U.S. EPA approved
test protocol, that it has met the required destruction efficiency and/or
emission limit. MGP shall retest the 

 8
 

 

feed dryers modified or constructed pursuant to the approved Control
Technology Plan for VOCs, CO, PM, and PM10 no less than annually for the two years
following the effective date of this Consent Decree, and after that, by permit
requirement. MGP shall retest all other units in accordance with the provisions
of its Title V permit that address performance testing.

20.           MGP
shall retain at the Facility all control technology performance criteria
monitoring data and records required under the approved Control Technology
Plan, and shall make any such data and records available to the Plaintiffs upon
demand as soon as practicable.

E.                                      RECORDKEEPING
AND REPORTING REQUIREMENTS

21.           Beginning
with the first full calendar quarter following lodging of this Consent Decree,
MGP shall submit written reports within 30 days following each calendar quarter
to IEPA and U.S. EPA that itemize Consent Decree requirements and the approved
Control Technology Plan requirements, the applicable deadlines, the dates the
tasks were completed, unit emissions data and data to support MGP’s compliance
status with the terms of this Consent Decree. Reports shall be sent to the
addresses identified in Paragraph 56 (“Notice”).

22.           MGP
shall preserve and retain all records and documents in its possession or
control, or which come into its possession or control, that are submitted to
Plaintiff or Illinois as part of the reporting and compliance requirements
under this Part, and all underlying data used and/or relied upon for those
submittals, for a period of three years following the termination of this
Consent Decree, unless other regulations require the records to be maintained
longer.

 9
 

 

23.           All
notices, reports or any other submissions from MGP shall contain the following
certification and may be signed by an owner or operator of the company
responsible for environmental management and compliance:

“I certify under penalty of law that I have personally
examined the information submitted herein and that I have made a diligent
inquiry of those individuals immediately responsible for obtaining the
information and that to the best of my knowledge and belief, 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.”

VI. CIVIL
PENALTY

24.           Within
thirty (30) calendar days of entry of this Consent Decree, the Defendant shall
pay to the Plaintiffs a civil penalty pursuant to Section 113 of the Act, 42
U.S.C. § 7413, in the amount of One Hundred Seventy-One Thousand and Eight
Hundred Dollars ($171,800).

25.           Of
the total penalty, $85,900, shall be paid to the United States by Electronic
Funds Transfer (“EFT”) to the United States Department of Justice, in
accordance with current EFT procedures, referencing the USAO File Number and
DOJ Case Number 90-5-2-1-08180, and the civil action
case name and case number of the District of Illinois. The costs of such EFT
shall be MGP’s responsibility. Payment shall be made in accordance with
instructions provided to MGP by the Financial Litigation Unit of the U.S.
Attorney’s Office in the District of Illinois. Any funds received after 11:00 a.m.
(EST) shall be credited on the next business day. MGP shall provide notice of
payment, referencing the USAO File Number and DOJ Case Number 90-5-2-1-08180
and the civil action case name and case number, to the Department of Justice
and to U.S. EPA, as provided in Paragraph 56 (“Notice”). The total remaining
amount, $85,900 in civil penalties, shall be paid to the Plaintiff-Intervenor
the State of Illinois, in the form of 

 10
 

 

a certified check payable to the Illinois
Environmental Protection Agency and delivered to:

Illinois Environmental Protection Agency 

Fiscal Services Section

1021 North Grand Avenue East

P.O. Box 19276

Springfield, IL 62794-9276

Defendant’s
Federal Employer’s Identification Number (“FEIN”) is 48-0911013 and shall
be set forth on each certified check or certified fund transfer.

26.           The
Defendant shall pay statutory interest on any over due civil penalty or
stipulated penalty amount at the rate specified in 31 U.S.C. § 3717. Upon entry
of this Consent Decree, this Consent Decree shall constitute an enforceable
judgment for purposes of post-judgment collection in accordance with Rule 69 of
the Federal Rules of Civil Procedure, the Federal Debt Collection Procedure
Act, 28 U.S.C. § 3001-3308, and other applicable federal and state
Authority. The Plaintiffs shall be deemed judgment creditors for purposes of
collection of any unpaid amounts of the civil and stipulated penalties and
interest.

27.           No
amount of the $171,800 civil penalty to be paid by MGP shall be used to reduce
its federal or state tax obligations.

VII. STIPULATED
PENALTIES

28.           The
Defendant shall pay stipulated penalties in the amounts set forth below to the
Plaintiffs, to be paid 50 percent to the United States and 50 percent to the
State for the following:

(a).          for
each day of failure to meet a deadline, including any modified deadline agreed
to in writing by the Plaintiffs, for installation of control technology set 

 11
 

 

forth in the Control Technology Plan or applying for a
revised operating permit under Paragraph 13:

	
  1st through 30th day after
  deadline

  	
   

  	
  $

  	
  800

  	
   

  
	
  31st through
  60th day after deadline

  	
   

  	
  $

  	
  1,200

  	
   

  
	
  Beyond 60th day

  	
   

  	
  $

  	
  2,000

  	
   

  

 

(b).          for
failure to conduct a compliance test as required by Paragraph 19, per unit per
day:

	
  1st through 30th day after
  deadline

  	
   

  	
  $

  	
  250

  	
   

  
	
  31st through
  60th day after deadline

  	
   

  	
  $

  	
  500

  	
   

  
	
  Beyond 60th day

  	
   

  	
  $

  	
  1,000

  	
   

  

 

(c).          for
failure to demonstrate compliance with emission limits set forth in the
approved Control Technology Plan or emission limits set pursuant to Part V Section
C (“Emission Limits”): $500 per day per test for each pollutant.

(d).          for
each failure to submit reports as required by Part V Section E (“Recordkeeping
and Reporting Requirements”) of this Consent Decree, per day per report or notice:

	
  1st through 30th day after
  deadline

  	
   

  	
  $

  	
  250

  	
   

  
	
  31st through
  60th day after deadline

  	
   

  	
  $

  	
  500

  	
   

  
	
  Beyond 60th day

  	
   

  	
  $

  	
  1,000

  	
   

  

 

(e).          for
failure to pay or escrow stipulated penalties, as specified in Paragraphs 32
and 33 of this section, $500 per day per penalty demand.

(f).           for
failure to notify the Plaintiffs pursuant to Paragraph 2 of MGP’s sale or
transfer of the Facility, $250 per day.

 12

 

29.           MGP
shall pay stipulated penalties upon written demand by the Plaintiffs no later
than thirty (30) days after Defendant receives such demand. Stipulated
penalties shall be paid to the Plaintiffs in the manner set forth in Part VI (“Civil
Penalty”) of this Consent Decree.

30.           Should
MGP dispute its obligation to pay part or all of a stipulated penalty, it may
avoid the imposition of the stipulated penalty for failure to pay a penalty due
to the Plaintiffs by placing the disputed amount demanded by the Plaintiffs,
not to exceed $20,000 for any given event or related series of events at any
one plant, in a commercial escrow account pending resolution of the matter and
by invoking the Dispute Resolution provisions of Part X within the time
provided in Paragraph 29 for payment of stipulated penalties. If the dispute is
thereafter resolved in Defendant’s favor, the escrowed amount plus accrued
interest shall be returned to the Defendant. Otherwise the Plaintiffs shall be
entitled to the escrowed amount that was determined to be due by the Court plus
the interest that has accrued on such amount, with the balance, if any,
returned to the Defendant.

31.           The
Plaintiffs reserve the right to pursue any other remedies for violations of
this Consent Decree to which they are entitled. The Plaintiffs will not seek
stipulated penalties and civil or administrative penalties for the same
violation of the Consent Decree. Either Plaintiff may, in its unreviewable
discretion, waive all or any portion of a stipulated penalty due to it under
this Consent Decree.

VIII. RIGHT
OF ENTRY

32.           Any
authorized representative of the U.S. EPA or IEPA, or an appropriate federal or
state agency, including independent contractors, upon presentation of proper
credentials, shall have a right of entry upon the premises of MGP’s facility
identified 

 13
 

 

herein at Paragraph 3(b) at any reasonable time for the purpose of
monitoring compliance with the provisions of this Consent Decree, including
inspecting facility equipment, and inspecting and copying all records
maintained by Defendant pursuant to this Consent Decree. Nothing in this
Consent Decree shall limit the authority of U.S. EPA and IEPA to request and
obtain records and information maintained by MGP, and conduct tests and
inspections under Section 114 of the Act, 42 U.S.C. § 7414, and any other
applicable state or federal law.

IX. FORCE
MAJEURE

33.           If
any event occurs which causes or may cause a delay or impediment to performance
in complying with any provision of this Consent Decree, Defendant shall notify
the Plaintiffs in writing as soon as practicable, but in any event within
twenty (20) business days of when Defendant first knew of the event or should
have known of the event by the exercise of due diligence. In this notice
Defendant shall specifically reference this Paragraph of this Consent Decree
and describe the anticipated length of time the delay may persist, the cause or
causes of the delay, and the measures taken or to be taken by Defendant to
prevent or minimize the delay and the schedule by which those measures will be
implemented. Defendant shall adopt all reasonable measures to avoid or minimize
such delays.

34.           Failure
by Defendant to provide notice to Plaintiffs of an event which causes or may
cause a delay or impediment to performance shall render this Part IX voidable
by the Plaintiffs as to the specific event for which the Defendant has failed
to comply with such notice requirement, and, if voided, is of no effect as to
the particular event involved.

 14
 

 

35.           Plaintiffs
shall notify the Defendant in writing regarding the Defendant’s claim of a
delay or impediment to performance as soon as practicable, but in any event
within thirty (30) days of receipt of the Force Majeure notice provided under
Paragraph 33. If the Plaintiffs agree that the delay or impediment to
performance has been or will be caused by circumstances beyond the control of
the Defendant, including any entity controlled by the Defendant, and that the
Defendant could not have prevented the delay by the exercise of due diligence,
the parties shall stipulate to an extension of the required deadline(s) for all
requirement(s) affected by the delay by a period equivalent to the delay
actually caused by such circumstances. The Defendant shall not be liable for
stipulated penalties for the period of any such delay.

36.           If
the Plaintiffs do not accept the Defendant’s claim that a delay or impediment
to performance is caused by a force majeure event, to avoid payment of
stipulated penalties, the Defendant must submit the matter to this Court for
resolution within twenty (20) business days after receiving notice of the
Plaintiffs’ position, by filing a petition for determination with this Court.
Once the Defendant has submitted this matter to this Court, the Plaintiffs
shall have twenty (20) business days to file a response or responses to said
petition. If the Defendant submits the matter to this Court for resolution and
the Court determines that the delay or impediment to performance has been or
will be caused by circumstances beyond the control of the Defendant, including
any entity controlled by the Defendant, and that the Defendant could not have
prevented the delay by the exercise of due diligence, the Defendant shall be
excused as to that event(s) and delay (including stipulated penalties), for a
period of time equivalent to the delay caused by such circumstances.

 15
 

 

37.           The
Defendant shall bear the burden of proving that any delay of any requirement(s)
of this Consent Decree was caused by or will be caused by circumstances beyond
its control, including any entity controlled by it, and that the Defendant
could not have prevented the delay by the exercise of due diligence. The
Defendant shall also bear the burden of proving the duration and extent of any
delay(s) attributable to such circumstances. An extension of one compliance
date based on a particular event may, but does not necessarily, result in an
extension of a subsequent compliance date or dates.

38.           Unanticipated
or increased costs or expenses associated with the performance of the Defendant’s
obligations under this Consent Decree shall not constitute circumstances beyond
the control of the Defendant, or serve as a basis for an extension of time
under this Part. However, failure of a permitting authority to issue a
necessary permit in a timely fashion is an event of Force Majeure where the
Defendant has taken all steps available to it to obtain the necessary permit
including but not limited to:

(a).          submitting
a timely and complete permit application;

(b).          responding
to requests for additional information by the permitting authority in a timely
fashion; and

(c).          prosecuting
appeals of any disputed terms and conditions imposed by the permitting
authority in an expeditious fashion.

39.           Notwithstanding
any other provision of this Consent Decree, this Court shall not draw any
inferences nor establish any presumptions adverse to either party as a result
of Defendant delivering a notice of Force Majeure or the parties’ inability to
reach agreement.

 16
 

 

40.           As
part of the resolution of any matter submitted to this Court under this Part IX,
the parties by agreement, or this Court, by order, may in appropriate
circumstances extend or modify the schedule for completion of work under this
Consent Decree to account for the delay in the work that occurred as a result
of any delay or impediment to performance agreed to by the Plaintiffs or
approved by this Court. Defendant shall be liable for stipulated penalties for
its failure thereafter to complete the work in accordance with the extended or
modified schedule.

X. DISPUTE
RESOLUTION

41.           The
dispute resolution procedure provided by this Part X shall be the exclusive
means of resolving any disputes arising under this Consent Decree, including
but not limited to emission limits established in Part V Section C (“Emission
Limits”), except as otherwise provided in Part IX regarding Force Majeure.

42.           Any
party may invoke the dispute resolution procedure required herein by giving
written notice to the other parties advising of a dispute pursuant to this Part
X. The notice shall describe the nature of the dispute, and shall state the
noticing party’s position with regard to such dispute. The party receiving such
a notice shall acknowledge receipt of the notice and the parties shall
expeditiously schedule a meeting to discuss the dispute informally not later
than fourteen (14) days from the receipt of such notice.

43.           Disputes
submitted to dispute resolution shall, in the first instance, be the subject of
informal negotiations between the parties. Such period of informal negotiations
shall not extend beyond thirty (30) calendar days from the date of the first
meeting between representatives of the Plaintiffs and the Defendant, unless the
parties’ representatives agree to shorten or extend this period.

 17
 

 

44.           In
the event that the parties are unable to reach agreement during such informal
negotiation period, the Plaintiffs shall provide the Defendant with a written
summary of their position regarding the dispute. The position advanced by the
Plaintiffs shall be considered binding unless, within thirty (30) calendar days
of the Defendant’s receipt of the written summary of the Plaintiffs position,
the Defendant files with this Court a petition which describes the nature of
the dispute, and includes a statement of the Defendant’s position and any
supporting data, analysis, and/or documentation relied on by the Defendant. The
Plaintiffs shall respond to the petition within thirty (30) calendar days of
filing.

45.           Where
the nature of the dispute is such that a more timely resolution of the issue is
required, the time periods set out in this Part X may be shortened upon motion
of one of the parties to the dispute.

46.           Notwithstanding
any other provision of this Consent Decree, in dispute resolution, this Court
shall not draw any inferences nor establish any presumptions adverse to either
party as a result of invocation of this Part X or the parties’ inability to
reach agreement. The final position of the Plaintiffs shall be upheld by the
Court if supported by substantial evidence in the record as identified by all
the Parties.

47.           As
part of the resolution of any dispute submitted to dispute resolution, the
parties, by agreement, or this Court, by order, may, in appropriate
circumstances, extend or modify the schedule for completion of work under this
Consent Decree to account for the delay in the work that occurred as a result
of dispute resolution. Defendant shall be liable for stipulated penalties for
its failure thereafter to complete the work in accordance with the extended or
modified schedule.

 18
 

 

XI. GENERAL
PROVISIONS

48.           Effect
of Settlement. This Consent Decree is not a permit; compliance with its
terms does not guarantee compliance with any applicable federal, state or local
laws or regulations. To the extent that the terms of this Consent Decree
conflict with the terms of any air quality permit, the terms of this Consent
Decree shall control during the effective period of the Consent Decree.

49.           Resolution
of Claims. Satisfaction of all of the requirements of this Consent Decree
constitutes full settlement of and shall resolve all past civil and
administrative liability of the Defendant to the Plaintiffs for the violations
alleged in the United States’ and Plaintiff-Intervenor’s Complaints and
occurring through the lodging date of this Consent Decree.

50.           Reservation
of Specific Claims. The release of liability granted by this Consent Decree
under Paragraph 49 above specifically excludes pending claims in the State of
Illinois regarding alleged violations at the Pekin facility which are addressed
by Illinois administrative case number PCB 97-179, and
Plaintiff-Intervenor expressly reserves its rights to proceed with those
claims.

51.           Other
Laws. Except as specifically provided by this Consent Decree, nothing in
this Consent Decree shall relieve Defendant of its obligation to comply with
all applicable federal, state and local laws and regulations. Subject to
Paragraphs 31, 49 and 50, nothing contained in this Consent Decree shall be
construed to prevent or limit the United States’ or Illinois’ rights to obtain
penalties or injunctive relief under the Act or other federal, state or local
statutes or regulations, including but not limited to, Section 303 of the Act,
42 U.S.C. § 7603.

 19
 

 

52.           Third
Parties. Except as otherwise provided by law, this Consent Decree does not
limit, enlarge or affect the rights of any party to this Consent Decree as
against any third parties. Nothing in this Consent Decree should be construed
to create any rights, or grant any cause of action, to any person not a party
to this Consent Decree.

53.           Costs.
Each party to this Consent Decree shall bear its own costs and attorneys’ fees
through the date of entry of this Consent Decree.

54.           Public
Documents. All information and documents submitted by the Defendant to the
Plaintiffs pursuant to this Consent Decree shall be subject to public
inspection, unless, identified at the time of submission and properly supported
by the Defendant in response to any challenge, as subject to legal privileges
or as business confidential by the Defendant in accordance with 40 C.F.R. Part 2
and applicable state law.

55.           Public
Comments - Federal Approval. The parties agree and acknowledge that final
approval by the United States and entry of this Consent Decree are subject to
the requirements of 28 C.F.R. § 50.7, which provides for notice of the lodging
of this Consent Decree in the Federal Register, an opportunity for public
comment, and consideration of any comments. The United States reserves the
right to withdraw or withhold consent if the comments regarding this Consent
Decree disclose facts or considerations which indicate that this Consent Decree
is inappropriate, improper or inadequate. The Defendant and the
Plaintiff-Intervenor consent to the entry of this Consent Decree.

56.           Notice.
Unless otherwise provided herein, notifications to or communications with the
United States, U.S. EPA, IEPA or the Defendant shall be 

 20
 

 

deemed submitted on the date they are postmarked and sent either by
overnight receipt mail service or by certified or registered mail, return
receipt requested. Except as otherwise provided herein, when written
notification to or communication with the United States, U.S. EPA, IEPA or the
Defendant is required by the terms of this Consent Decree, it shall be
addressed as follows:

As to the United States:

Chief

Environmental Enforcement Section

Environment and Natural Resources Division 

U.S. Department of Justice

P.O. Box 7611, Ben Franklin Station

Washington, DC 20044-7611

As to the U.S. EPA:

Director, Air Enforcement Division 

U.S. Environmental Protection Agency 

Ariel Rios Building

1200 Pennsylvania Avenue, N.W. 

Mail Code 2242-A

Washington, DC 20004

Region 5:

Compliance Tracker

Air Enforcement Branch, AE-17J

U.S. EPA, Region 5 

77 W. Jackson Blvd. 

Chicago, IL 60604

As to MGP Ingredients of Illinois, Inc.:

Robert Taphorn

MGP Ingredients of Illinois, Inc.

1301 S. Front Street 

Pekin, IL 61555

and

 21
 

 

(Counsel for MGP)

Amy L. Wachs

Husch & Eppenberger, L.L.C.

190 Carondelet Plaza

Suite 600

St. Louis, MO 63105

As to Plaintiff-Intervenor the State of Illinois:

Julie K. Armitage

Illinois Environmental Protection Agency 

Compliance and Enforcement Section, Manager 

1021 North Grand Avenue East

Springfield, Illinois 62794

and

(Illinois Attorney General’s Office)

Jane McBride

Assistant Attorney General 

Office of the Attorney General 

500 South Second Street

Springfield, IL 62706

57.           Change
of Notice Recipient. Any party may change either the notice recipient or
the address for providing notices to it by serving all other parties with a
notice setting forth such new notice recipient or address.

58.           Modification.
There shall be no modification of this Consent Decree without written agreement
of all the parties. There shall be no material modification of this Consent
Decree without the written agreement of the parties and by Order of the Court.
Prior to complete termination of the requirements of this Consent Decree
pursuant to Paragraph 60, the parties may, upon motion to the Court, seek to
terminate provisions of this Consent Decree.

59.           Continuing
Jurisdiction. The Court retains jurisdiction of this case after entry of
this Consent Decree to enforce compliance with the terms and conditions of this

 22
 

 

Consent Decree and to take any action necessary or appropriate for its
interpretation, construction, execution, or modification.

XII. TERMINATION

60.           This
Consent Decree shall be subject to termination upon motion by any party after
the Defendant has satisfied all requirements of this Consent Decree and has
operated the control technologies identified in the approved Control Technology
Plan in compliance with the emission limits established under this Consent
Decree for 12 months. At such time, if the Defendant believes that it is in
compliance with the requirements of this Consent Decree, and has paid the civil
penalty and any stipulated penalties required by this Consent Decree, then the
Defendant shall so certify to the Plaintiffs, and unless the Plaintiffs object
in writing with specific reasons within forty-five (45) days of receipt of the
certification, the Court shall order that this Consent Decree be terminated on
Defendant’s motion. If the United States or Illinois objects to the Defendant’s
certification, then the matter shall be submitted for resolution under Part X (“Dispute
Resolution”) of this Consent Decree. In such case, the Defendant shall bear the
burden of proving that this Consent Decree should be terminated.

So
ordered in accordance with the foregoing this 19th day of April, 200[6].

	
  

  	
  /s/ Michael M. Mihm

  
	
  

  	
  United States District Court Judge

  
	
   

  	
  Central District of Illinois

  

 

 23

 

U.S. and the State of Illinois v. MGP, Ingredients of
Illinois, Inc.

FOR PLAINTIFF, UNITED STATES OF AMERICA:

	
  s/: Sue Ellen Wooldridge

  Sue Ellen Wooldridge

  Assistant Attorney General

  Environment and Natural Resources Division

  U.S. Department of Justice

  10th & Pennsylvania Avenue, N.W.

  Washington, DC 20530

  	
  Date December 5, 2005

  
	
   

  	
   

  
	
  s/: William D. Brighton

  William D. Brighton

  Assistant Chief

  Environment and Natural Resources Division

  U.S. Department of Justice

  1425 New York Avenue, N.W.

  Washington, DC 20005

  	
  Date December 14, 2005

  

 

 

U.S. and the State of Illinois v. MGP, Ingredients of
Illinois, Inc.

	
  RODGER A. HEATON

  United States Attorney

  Central District of Illinois

  	
   

  
	
   

  	
   

  
	
  s/: GERARD A. BROST

  BY: Gerard A. Brost

  Assistant U.S. Attorney

  Peoria Division

  One Technology Plaza

  211 Fulton Street, Suite 400

  Peoria, Illinois 61602

  	
  Date December 21, 2005

  

 

 

U.S. and the State of Illinois v. MGP, Ingredients of
Illinois, Inc.

FOR U.S. ENVIRONMENTAL PROTECTION AGENCY:

	
  s/: Granta Y. Nakayama

  Granta Y. Nakayama

  Assistant Administrator 

  Office of Enforcement and Compliance Assurance

  U.S. Environmental Protection Agency

  Ariel Rios Building

  1200 Pennsylvania Avenue, N.W.

  Washington, DC 20460

  	
  Date December 14, 2005

  

 

 

U.S. and the State of Illinois v. MGP, Ingredients of
Illinois, Inc.

FOR THE PLAINTIFF-INTERVENOR, THE STATE OF ILLINOIS

	
  s/: Thomas Davis

  Illinois Attorney General’s Office

  Thomas Davis, Chief

  Environmental Bureau

  Office of the Attorney General

  500 South Second Street

  Springfield, IL 62706

  	
  Date September 27, 2005

  
	
   

  	
   

  
	
  s/: William Ingersoll

  William Ingersoll

  Illinois Environmental Protection Agency

  Chief Legal Counsel

  1021 North Grand Avenue East

  Springfield, Illinois 62794

  	
  Date October 19, 2005

  

 

 

U.S. and the State of Illinois v. MGP, Ingredients of
Illinois, Inc.

FOR DEFENDANT, MGP INGREDIENTS OF ILLINOIS, INC.:

	
  s/: David L. Wilbur

  David L. Wilbur,

  General Manager

  MGP Ingredients of Illinois, Inc.

  	
  Date September 22, 2005

  

 

 

 

CONTROL TECHNOLOGY PLAN

June 30, 2005

 

 

TABLE OF CONTENTS

	
  1.0

  	
   

  	
  INTRODUCTION

  	
   

  	
  1-1

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.0

  	
   

  	
  EMISSION
  UNITS REQUIRING POLLUTION CONTROL EQUIPMENT

  	
   

  	
  2-1

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.0

  	
   

  	
  ENGINEERING
  DESIGN CRITERIA FOR POLLUTION CONTROL EQUIPMENT

  	
   

  	
  3-1

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.0

  	
   

  	
  PROPOSED
  EMISSION LIMITS FROM POLLUTION CONTROL EQUIPMENT

  	
   

  	
  4-1

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  4.1

  	
  Alternate
  Operating Scenarios

  	
   

  	
  4-3

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  4.2

  	
  Interim Operating
  Scenario

  	
   

  	
  4-4

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.0

  	
   

  	
  POLLUTION
  CONTROL EQUIPMENT INSTALLATION SCHEDULE

  	
   

  	
  5-1

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6.0

  	
   

  	
  PROPOSED
  MONITORING PARAMETERS FOR POLLUTION CONTROL DEVICES

  	
   

  	
  6-1

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.0

  	
   

  	
  POLLUTION
  CONTROL DEVICE PERFORMANCE TEST SCHEDULE AND TEST METHODS USED

  	
   

  	
  7-1

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  8.0

  	
   

  	
  FUGITIVE
  DUST EMISSION CONTROL PROGRAM

  	
   

  	
  8-1

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  9.0

  	
   

  	
  PAVED ROADWAY SITE PLAN

  	
   

  	
  9-1

  	
   

  

 

 i

 

1.0 INTRODUCTION.

MGP Ingredients of Illinois, Inc. has entered into a
consent decree with the United States and the State of Illinois that requires
MGP Ingredients of Illinois, Inc. to implement a program of compliance at the
corn dry mill ethanol plant it operates in Pekin, Illinois. MGP Ingredients of
Illinois, Inc. prepared and submitted this Control Technology Plan (CTP) as an
integral part of the consent decree. This CTP fulfills the requirements of the
consent decree and has been reviewed and approved by the US Environmental
Protection Agency (USEPA) and the Illinois Environmental Protection Agency
(IEPA) as part of the consent decree.

The CTP includes the following items:

·                                          Identification
of all units to be controlled;

·                                          Engineering
design criteria for all the controls capable of meeting the emission levels
required by Part V of the Consent Decree;

·                                          Emission
limits and controlled outlet concentrations for each pollutant as appropriate;

·                                          A
schedule for expedited installation with specific milestones applicable on a
unit-by-unit basis;

·                                          Monitoring
parameters for all control equipment and parameter ranges;

·                                          Identification
of all units to be emission tested under Paragraph 11 of the Consent Decree and
schedule for initial tests and retest;

·                                          The
test methods that will be used to demonstrate compliance with the emissions
levels set forth by the Consent Decree;

·                                          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 consent decree
and have emission limits requiring pollution control technology.

	
  Unit Description

  	
   

  	
  Control Equipment Description

  
	
   

  	
   

  	
   

  
	
  Prefermentation Tank #400

  	
   

  	
  Fermentation Scrubber #405

  
	
   

  	
   

  	
   

  
	
  Fermentation Tank #410

  	
   

  	
   

  
	
  Fermentation Tank #420

  	
   

  	
   

  
	
  Fermentation Tank #430

  	
   

  	
   

  
	
  Fermentation Tank #415

  	
   

  	
  Fermentation Scrubber #451

  
	
  Fermentation Tank #425

  	
   

  	
   

  
	
  Fermentation Tank #435

  	
   

  	
   

  
	
  Fermentation Tank #440

  	
   

  	
   

  
	
  Beerwell Tank #445

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Distillation

  	
   

  	
  Distillation Scrubber #501

  
	
   

  	
   

  	
   

  
	
  De-Gasser

  	
   

  	
  Degasser Scrubber #561

  
	
   

  	
   

  	
   

  
	
  DDGS Dryer #6000

  	
   

  	
  Internal Thermal Oxidizer

  
	
   

  	
   

  	
   

  
	
  DDGS Dryers #660

  	
   

  	
  Thermal Oxidizer/Replace dryer(s) with add-on
  thermal

  
	
  DDGS Dryers #650

  	
   

  	
  oxidizer or with dryer equipped with an internal
  thermal oxidizer such as the Swiss Control Eco-Dry System

  
	
   

  	
   

  	
   

  
	
  Ethanol Truck Loadout

  	
   

  	
  Vapor Combustion Unit

  
	
   

  	
   

  	
   

  
	
  Rail & Barge Loadout

  	
   

  	
  Dedicated Fleet

  
	
   

  	
   

  	
   

  
	
  Valve, Flange, and Seal Fugitive Emissions

  	
   

  	
  LDAR Program under 40 CFR 60 Subpart VV

  

 

 2-1

 

3.0
ENGINEERING DESIGN CRITERIA FOR POLLUTION CONTROL EQUIPMENT

After identifying the affected units that require
installation of air pollution control technology, MGP Ingredients conducted a
design and engineering review of each unit to select the pollution control
technology that would achieve the emission level reductions identified in the
consent decree.

	
  Process Description

  	
   

  	
  Control Device

  Description

  	
   

  	
  Operating

  Parameters

  
	
  Prefermentation

  	
   

  	
  Packed Bed Scrubber — Scrubber #405 (existing)

  	
   

  	
  Water flow rate > 30 GPM

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Fermentation

  	
   

  	
  Packed Bed Scrubber — Scrubber #451 (existing)

  	
   

  	
  Water flow rate > 45 GPM

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Distillation

  	
   

  	
  Packed Bed Scrubber — Scrubber #501 (existing)

  	
   

  	
  Water flow rate > 3 GPM

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Degasser

  	
   

  	
  Packed Bed Scrubber — Scrubber #561 (existing)

  	
   

  	
  Water flow rate > 17 GPM

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  DDGS Dryer #6000

  	
   

  	
  Internal Thermal Oxidizer (existing)

  	
   

  	
  > 1500°F

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  DDGS Dryers #650 & #660

  	
   

  	
  Thermal Oxidizer(s) or New dryer(s) with thermal
  oxidizer(s) or internal thermal oxidizer (proposed)

  	
   

  	
  > 1500°F

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Dedicated Fleet

  	
   

  	
  Submerged Loading (existing)

  	
   

  	
  Not Applicable

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Ethanol Truck Loadout

  	
   

  	
  Vapor Combustion Unit (existing)

  	
   

  	
  Presence of Pilot Flame

  

 

 3-1
 

 

The following flow diagram presents the affected units
and associated control technology as determined by the results of engineering
design criteria.

 3-2

 

4.0
PROPOSED EMISSION LIMITS FROM POLLUTION CONTROL EQUIPMENT

The consent decree specifies the emission reductions
or emission limits allowable for each affected unit. After evaluating the
pollution control technology engineering and design, MGP Ingredients of
Illinois, Inc. agrees to meet the following emission limits.

Unless otherwise stated, all controlled emission
limitations apply at all times except during periods when the process equipment
is not operating or if the construction or operating permit contains
alternative limits for startup, shutdowns or malfunction, at which point the
permit provisions shall prevail.

Any deviations from the requirements of section 4.0,
4.1 and/or 4.2 shall be reported in quarterly reports and as required by state
or federal regulations.

 4-1
 

 

 

	
  Process Description

  	
   

  	
  Control Device

  Description

  	
   

  	
  Pollutant

  	
   

  	
  Emission Rate

  
	
  Prefermentation

  	
   

  	
  Packed Bed Scrubber #405

  	
   

  	
  VOC

  	
   

  	
  95% reduction or not to exceed 20 ppm if inlet
  concentration is less than 200 ppm

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Fermentation

  	
   

  	
  Packed Bed Scrubber #451

  	
   

  	
  VOC

  	
   

  	
  97.5% reduction

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Distillation

  	
   

  	
  Packed Bed Scrubber #501

  	
   

  	
  VOC

  	
   

  	
  95% reduction or not to exceed 

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  20 ppm if inlet concentration 

  
	
  Degasser

  	
   

  	
  Packed Bed Scrubber #561

  	
   

  	
  VOC

  	
   

  	
  is less than 200 ppm

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  DDGS Dryer #6000

  	
   

  	
  Internal Thermal Oxidizer /

  	
   

  	
  CO

  	
   

  	
  90% reduction or emissions no higher than 

  
	
   

  	
   

  	
  Replacement Dryer(s) with 

  	
   

  	
   

  	
   

  	
  100 PPM

  
	
   

  	
   

  	
  Internal Thermal Oxidizer 

  	
   

  	
   

  	
   

  	
   

  
	
  DDGS Dryers #650 & #660

  	
   

  	
  or Thermal Oxidizer*

  	
   

  	
  PM

  	
   

  	
  0.01 gr/dscf

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  VOC

  	
   

  	
  95% reduction of VOC or emissions no higher 

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  than 10 ppm

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  NOx

  	
   

  	
  0.15lb/mmbtu*

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Ethanol Truck Loadout

  	
   

  	
  Vapor Combustion Unit

  	
   

  	
  VOC

  	
   

  	
  95% reduction of VOC

  

 

*The NOx limit of 0.15 lb/mmbtu applies to a feed
dryer with an internal thermal oxidizer, as present in the DDGS Dryer #6000 and
proposed by MGP to replace existing DDGS. Dryers #650 and #660. If MGP decides
to replace DDGS Dryer #650 and #660 with new dryer(s) equipped with add-on
thermal oxidation (or retrofit add-on thermal oxidizers to the existing
dryers), the NOx limit for the dryer burner is 0.04 lb/mmbtu. For this purpose,
compliance may be determined for the dryer without the oxidizer, i.e., NOx
emissions in the ductwork prior to the oxidizer and only the heat input to the
dryer burner, or at MGP’s option, for the dryer as a whole, i.e., NOx at the
stack and the actual heat input to the burners in the dryer and the thermal
oxidizer.

 4-2
 

 

4.1 Alternate Operating Scenarios

The facility may continue to operate and produce wet
cake during periods of dryer control device downtime.

If thermal oxidizer for existing dryers DDGS Dryer 660
and DDGS Dryer 650 is installed there will be no more than 50 hours per year
for bake-out of the Regenerative Thermal Oxidizer (RTO) with each individual
bake-out lasting no longer than 12 hours while the dryers are in operation.
Off-line RTO regeneration while the associated dryers are shutdown is not
included in these operating limitations. MGP may petition USEPA and IEPA to
adjust these operating limitations for a specific RTO based on operating
experience with the RTO and the dryers on which the RTO is installed. Changes
to these regeneration hour limitations shall be considered non-material
modifications under paragraph 57 of the Consent Decree, provided MGP obtains
written approval of the change(s) from USEPA and IEPA.

 4-3
 

 

4.2          Interim Operating Scenario

If MGP continues to pursue installation of a
replacement dryer, Dryers 650 and D660 will continue to operate during
construction of the new dryer. Once the new dryer is installed Dryers D650 and
D660 will continue to operate as standby dryers for a period of one (1) year
from the official start up date of the new dryer. At this time, MGP will
physically disable D650 and D660 by removing the fuel and preventing wet feed
supply to the dryers.

MGP will operate Dryers D650 and D660 in their present
configuration to minimize PM emissions to the greatest extent reasonably
possible.

MGP will not operate D650 and D660 in conjunction with
the new dryer and the existing Swiss-combi dryer to facilitate increased feed
production by the plant beyond 851 tons per day. Total feed production by the
plant during the day when existing feed dryers D650 and D660 operate shall not
exceed 851 tons per day. MGP will maintain daily records documenting compliance
with the above mentioned limit.

 4-4

 

5.0 POLLUTION CONTROL EQUIPMENT INSTALLATION SCHEDULE

The following table presents the schedule for
procurement, installation and startup of new control equipment specified by
this plan for DDGS Dryers D650 and D660. MGP’s preferred approach for these
dryers, which it is currently pursuing, is installation of a replacement feed
dryer with an internal thermal oxidizer. The schedule also addresses other
approaches to the dryers, i.e., replacement of dryers with new dryers equipped
with add-on thermal oxidizers or retrofit of thermal oxidizers to the existing
dryers.

	
  

  	
   

  	
  Replacement Dryer

  with Internal

  Thermal Oxidizer or

  Thermal Oxidizer

  
	
  Apply for Construction Permit

  	
   

  	
  June 1st 2004

  
	
   

  	
   

  	
   

  
	
  Construction Permit Issuance

  	
   

  	
  Actual Date (a)

  
	
   

  	
   

  	
   

  
	
  Order Equipment

  	
   

  	
  Permit Date plus 90 days (b)

  
	
   

  	
   

  	
   

  
	
  Commence On-Site Construction

  	
   

  	
  Permit Date plus 12 months (b)

  
	
   

  	
   

  	
   

  
	
  Startup

  	
   

  	
  Permit Date plus 23 months (b)

  

 

a).            Actual
date of issuance of the Construction Permit, or the date the permit becomes
effective, if the permit is not effective when issued. MGP shall take
reasonable efforts to support the expeditious issuance of the Construction
Permit by the Illinois EPA. The expected date for this to occur is July 15,
2005.

b).           Specific
dates will be set based on actual date a construction permit is issued or
becomes effective, if the permit is not effective when issued. The project is
expected to be complete by December 31, 2007, or later, depending on the
issuance date of the construction permit.

 5-1

 

6.0 PROPOSED MONITORING PARAMETERS FOR POLLUTION CONTROL
DEVICES

	
  Unit/Control

  Description

  	
   

  	
  Parameter

  Monitored

  	
   

  	
  Operating Range

  	
   

  	
  Monitoring

  Frequency

  
	
  Prefermentation/ Scrubber #405

  	
   

  	
  Water flow rate

  	
   

  	
  > 30 GPM

  	
   

  	
  Daily when operating

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Fermentation/ Scrubber #451

  	
   

  	
  Water flow rate

  	
   

  	
  > 45 GPM

  	
   

  	
  Daily when operating

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Distillation/ Scrubber #501

  	
   

  	
  Water flow rate

  	
   

  	
  > 3 GPM

  	
   

  	
  Daily when operating

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Degasser/ Scrubber #561

  	
   

  	
  Water flow rate

  	
   

  	
  > 17 GPM

  	
   

  	
  Daily when operating

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  DDGS Dryer #6000/ Internal Thermal Oxidizer

  	
   

  	
  Temperature Combustion Chamber

  	
   

  	
  > 1500°F

  	
   

  	
  Daily when operating

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  DDGS Dryer #650 & #660/Thermal Oxidizer or
  Eco-Dry System with Internal Thermal Oxidizer

  	
   

  	
  Temperature Combustion Chamber

  	
   

  	
  > 1500°F

  	
   

  	
  Daily when operating

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Ethanol Truck Loadout/Vapor Combustion Unit

  	
   

  	
  Flame Present

  	
   

  	
  Per 40 CFR 60.18(f)(2)

  	
   

  	
  Daily when operating

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Valve, Flange, and Seal Fugitive Emissions

  	
   

  	
  As described in 40 CFR 60 Subpart VV: Standards of
  Performance for Equipment Leaks of VOC in the Synthetic Organic Chemicals
  Manufacturing industry

  	
   

  	
  A described in 40 CFR 60 Subpart VV: Standards of
  Performance for Equipment Leaks of VOC in the Synthetic Organic Chemicals
  Manufacturing industry

  	
   

  	
  As described in 40 CFR 60 Subpart VV: Standards of
  Performance for Equipment Leaks of VOC in the Synthetic Organic Chemicals
  Manufacturing industry

  

 

 6-1

 

7.0 POLLUTION CONTROL DEVICE PERFORMANCE TEST SCHEDULE AND
TEST METHODS USED

The following schedule and methods will be used to
demonstrate initial compliance with the emission limits contained in Section 4.0
of this Control Technology Plan.

	
  Process

  Description

  	
   

  	
  Unit/Control

  Device

  Description

  	
   

  	
  Proposed

  Performance

  Test Date

  	
   

  	
  Pollutants

  	
   

  	
  Proposed

  Methods Used

  
	
  Replacement Dryer with Internal Thermal Oxidizer or
  DDGS Dryers #650 & #660

  	
   

  	
  Internal Thermal Oxidizer or Thermal Oxidizer

  	
   

  	
  Performance tests 60 days after full production or
  no later than 180 days after initial start-up of thermal oxidizer or
  replacement dryer with internal thermal oxidizer

  	
   

  	
  Total VOC

  	
   

  	
  Methods 1, 2, 3A, 4, 18, 25, or 25A if less than 50
  ppm

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  PM/PM10

  	
   

  	
  Methods 1, 2, 3A, 4 5

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  CO

  	
   

  	
  Methods 1, 2, 3A or 3B, 4, 10

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  HAPS

  	
   

  	
  Methods 1, 2, 3A, 4, 18, for specified HAPS

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  NOx

  	
   

  	
  Methods 1, 2, 3A or 3B, 4, 7E

  

 

 7-1
 

 

All testing for the Prefermentation, Fermentation, Distillation
and Vapor Combustion processes are complete. No testing is required for the
Degasser at this time. In the event at some future date testing is required for
one of these units, the parties agree that the following methods shall be used
for that future testing.

	
  Process

  Description

  	
   

  	
  Unit/Control

  Device Description

  	
   

  	
  Pollutant

  	
   

  	
  Proposed

  Methods

  Used

  
	
  Prefermentation

  	
   

  	
  Scrubber #405

  	
   

  	
  Total VOC

  	
   

  	
  Method 1, 2, 3A, 4, 18, 25, or 25A if less than 50
  ppm

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Fermentation

  	
   

  	
  Scrubber #451

  	
   

  	
  Total VOC

  	
   

  	
  Method 1, 2, 3A, 4, 18, 25, or 25A if less than 50
  ppm

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Distillation

  	
   

  	
  Scrubber #501

  	
   

  	
  Total VOC

  	
   

  	
  Method 1, 2, 3A, 4, 18, 25, or 25A if less than 50
  ppm

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Degasser

  	
   

  	
  Scrubber #561

  	
   

  	
  Total VOC

  	
   

  	
  Method 1, 2, 3A, 4, 18, 25, or 25A if less than 50
  ppm

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Vapor Combustion Unit

  	
   

  	
  Flare

  	
   

  	
  Total VOC

  	
   

  	
  Proper Operation Per 40 CFR 60.18 as applicable

  

 

 7-2

 

8.0
FUGITIVE DUST EMISSION CONTROL PROGRAM

Asphalt paving on specified unpaved roadways as shown
on attached site plan will be completed by December 15, 2005. Paved and unpaved
roadways are to be inspected on a weekly basis and observations conducted for emissions
of fugitive dust and inspections recorded. Paved roads are to be swept, flushed
or otherwise treated to minimize fugitive dust as needed based on inspections.
Water and/or dust suppressant agent is to be applied to unpaved roadways to
minimize fugitive dust as needed based on inspections.

 8-1

 

 

[SITE MAP]

 

 

 

 

[9.0 paved roadway site plan]Exhibit 10.2

BEFORE THE KANSAS DEPARTMENT OF HEALTH AND ENVIRONMENT

	
  IN THE MATTER OF:

  	
   

  
	
  MGP Ingredients, Inc.

  	
  Case No. 04-E-0034

  
	
  1300 Main Street

  	
   

  
	
  P.O. Box 130

  	
   

  
	
  Atchison, Kansas 66002-0130

  	
   

  

 

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

1.                                       The
KDHE is a duly authorized agency of the State of Kansas created by an act of
the legislature.

2.                                       The
Secretary of the KDHE (Secretary) has general jurisdiction over matters involving
the environment and the public health and safety of the people of Kansas,
K.S.A. 65-101 et  seq., including general jurisdiction of
matters involving air quality pursuant to the Kansas air quality act, K.S.A. 65-3001
et  seq.

3.                                       MGP
is a Kansas corporation licensed to do business in the state of Kansas in
accordance with Kansas laws and is subject to K.S.A. 65-3001 et  seq.

4.                                       The
Secretary has authority and jurisdiction to issue this Consent Agreement and
Final Order of the Secretary (CAO) and to enforce same. In any action by KDHE
to enforce the terms of this CAO, MGP agrees not to contest the authority or
jurisdiction of the Secretary to issue this CAO. The terms of this CAO shall be
construed by the law of the state of Kansas.

STATEMENT OF PURPOSE

5.                                       In
entering into this CAO it is the mutual objective of KDHE and MGP to: (1) resolve
all claims against MGP for all identified violations of the Kansas air quality
act, K.S.A. 65-3001 et  seq. and regulations adopted
thereunder, addressed in this CAO; (2) establish a schedule by which MGP will
achieve regulatory compliance; and (3) assess an appropriate civil penalty for
those violations cited in the CAO.

 1
 

 

PARTIES BOUND

6.                                       This
CAO shall apply to and be binding upon the parties, their agents, successors,
and assigns and upon all persons, contractors, and consultants acting under or
for either the KDHE or MGP or both.

7.                                       The
parties agree to undertake all actions required of them by the terms and
conditions of this CAO.

8.                                       Notwithstanding
the terms of any contract, MGP is responsible for compliance with this CAO and
for insuring that its contractors and agents comply with this CAO.

9.                                       The
activities conducted under this CAO are subject to approval by KDHE. MGP shall
provide all necessary information consistent with this CAO requested by KDHE.

LIABILITY

10.                                 Nothing
in this CAO shall be construed as an admission of any fact or an acknowledgment
of any liability by any party. Nothing herein shall be legally binding or have
any effect on the position of the parties on any matter that may be included in
any other agreements negotiated between them. Neither the State of Kansas, nor
any agency thereof shall be held out as a party of any contract entered into by
MGP in carrying out activities pursuant to this CAO.

FINDINGS OF FACT

11.                                 MGP
owns and operates an ethanol production facility in Atchison. MGP receives corn
and milo which is then milled, mixed with water and starch water, cooked, and
fermented. After fermentation, the raw material is distilled to produce ethanol.
Distillation separates the liquid ethanol from the corn meal, which MGP may dry
or sell as wet mash for animal feed. KDHE alleges that the ethanol plant was
modified in such a manner that may have resulted in a significant net emission
increase in accordance with 40 C.F.R. Part 52 or the Prevention of Significant
Deterioration (PSD) regulations. KDHE adopted the PSD regulations at K.A.R. 28-19-350.
KDHE further alleges that MGP failed to obtain a PSD permit authorizing the
modification.

12.                                 KDHE
alleges that the emissions of volatile organic compounds (VOCs) from the
distilled dried grain with solubles (DDGS) dryers had been historically
underestimated.

13.                                 KDHE
further alleges that MGP may have failed to comply with K.A.R. 28-19-720,
which adopts by reference 40 C.F.R. Part 60 Subparts Db, Kb and VV; and K.A.R.
28-19-750, which adopts by reference 40 C.F.R. Part 63 for the
equipment described in paragraph 23 of this CAO.

 2
 

 

CONCLUSIONS OF LAW

14.                                 MGP
is a person within the meaning of K.S.A. 65-3002(i).

15.                                 The
Secretary is authorized to issue orders for compliance with air quality
statutes and regulations as set forth in K.S.A. 65-3011.

16.                                 K.S.A.
65-3025(c) states it is unlawful for any person to violate any provision
of an approval or permit issued and any rule or regulation promulgated under
the Kansas air quality act.

17.                                 K.S.A.
65-3018(a) provides that the Secretary, upon finding a person has
violated any provision of K.S.A. 65-3025, may impose a penalty not to
exceed $10,000 per day which shall constitute an actual and substantial
economic deterrent to the violation for which it is assessed.

18.                                 K.A.R.
28-19-350(a), Prevention of
significant deterioration of air quality, applies to the
construction of major stationary sources and major modifications of stationary
sources as defined in 40 C.F.R. 52.21 in areas of the state designated as
attainment areas or unclassified areas for any pollutant under the procedures
prescribed by section 107(d) of the federal clean air act.

19.                                 K.A.R.
28-19-350(b) adopts by reference 40 C.F.R. 52.21, as in effect on July
1, 2000.

20.                                 K.A.R.
28-19-720, New source
performance standards, adopts by reference 40 C.F.R. Part 60,
Subparts Db, Kb and VV.

21.                                 K.A.R.
28-19-750, Hazardous air
pollutants; maximum achievable control technology, adopts by
reference 40 C.F.R. Part 63.

22.                                 Based
on the above finding of facts and conclusions of law, the Secretary alleges
that MGP may have violated K.A.R. 28-19-350, K.A.R. 28-19-720,
K.A.R. 28-19-750 and K.S.A. 65-3025.

SCHEDULE OF COMPLIANCE

Emission Limits

23.                                 MGP
shall implement a plan for the installation of air pollution control technology
(Control Technology Plan or CTP) capable of meeting the following emission
level reductions for the identified units in subparagraphs (a) through (1). MGP’s
CTP, which has been approved by MGP, is Attachment 1 to this CAO.

a.                                       DDGS
Dryer: The existing DDGS dryers shall be removed or made inoperable and
replaced with a new Swiss Combi dryer. The new Swiss Combi dryer shall meet the
following requirements. Either 95% reduction of VOC emissions or emissions no
higher than 10 parts per million (PPM) 

 3
 

 

of VOC, at MGP’s
option; either 90% reduction of carbon monoxide (CO) emissions or emissions no
higher than 100 PPM of CO, at MGP’s option; and reduction of particulate matter
(PM) and PM with an aerodynamic diameter less than or equal to a nominal 10
micrometers (PM10)
based on operation of the new dryer system as specified in Paragraph 26 and the
approved CTP and as established after initial performance testing pursuant to
Paragraph 31 of this CAO. The dryer shall be equipped with Low-NOX burners with an emission limit equal to or
less than 0.08 lb/MMBtu. MGP may continue to operate and produce wet cake
during periods of DDGS dryer downtime.

b.                                      Centrate
Tank (Defined as Whole Slop Tanks and Centrifuge Vents): Either 95%
reduction of VOC emissions or emissions no higher than 20 PPM of VOC, at MGP’s
option.

c.                                       Fermentation
Units (Including the Beer Well): Either 95% reduction of VOC emissions or
emissions no higher than 20 PPM of VOC, at MGP’s option.

d.                                      Distillation
Units (Including Miscellaneous Process Vents): Either 95% reduction of VOC
emissions or emissions no higher than 20 PPM of VOC, at MGP’s option. Insignificant
process vents are not required to meet this VOC limitation.

e.                                       Existing
Boilers (Boilers #6, #7 and #8): MGP shall comply with the oxides of
nitrogen (NOX) limits
specified in Paragraphs 27 and 28 of this CAO. In addition, beginning on the
date the CAO is issued MGP shall discontinue the use of fuel oil in Boilers #6
and #7.

f.                                         Ethanol
Loadout (Truck): Install equipment for the total capture of VOCs and
operate a closed loop system vented to a flare for the destruction of captured
VOCs. Emissions from trucks dedicated to non-fuel use do not need to be muted
to a closed vent system and flare, provided MGP provides documentation to the
satisfaction of KDHE that the trucks are dedicated to non-fuel use. Fuel, for
the purpose of this CAO and the attached CTP, shall be defined as a petroleum
based product such as gasoline. Denatured ethanol and pure ethanol shall be
defined as non-fuels.

g.                                      Ethanol
Loadout (Railcar): All railcars shall be dedicated as non-fuel use only.

h.                                      New
Source Performance Standards (NSPS): Identify and implement applicable NSPS
requirements codified at 40 C.F.R. Part 60. The following NSPS apply: NSPS
Subpart Db (Industrial-Commercial-Institutional Steam Generating Units); NSPS
Subpart Kb (Volatile Organic Liquid Storage Vessels); and NSPS Subpart VV
(Equipment 

 4
 

 

Leaks of VOC
in the Synthetic Organic Chemicals Manufacturing Industry).

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.

i.                                          Fugitive
Dust Control PM/PM10: The
program described in the approved CTP shall be implemented to minimize fugitive
dust emissions from the facility operations.

j.                                          Additional
Requirements for Hazardous Air Pollutants (HAPs): Beginning April 1, 2007,
MGP shall continually operate the facility so as not to exceed source-wide
allowable emissions of 9.0 TPY for any single HAP or 24.0 TPY for all HAPs
based on a 12-month rolling sum, rolled monthly, and recorded monthly, or
comply with applicable sections of 40 C.F.R. Part 63. For the first eleven
months, beginning April 1, 2007, compliance with the 12-month rolling sum
will be demonstrated based on the schedule to meet applicable emission caps as
set forth in the approved CTP. If, based on emissions testing as set forth in
the approved CTP, additional control measures are required to meet the 9.0 or
24.0 TPY emission caps, such control measures shall be implemented and included
in the permit application required under Paragraph 39, or comply with
applicable sections of 40 C.F.R. Part 63.

k.                                       New
Gas Boiler (Alternative Scenario): In lieu of retrofitting existing boilers
with Low-NOX burner(s), MGP may elect to install a new
boiler and permanently disconnect the existing boiler(s) that will not be
retrofitted with Low-NOX burner(s). The new boiler shall be installed
with Low-NOX burner(s) and a NOX emission limit equal to or less than 0.04 lb
NOX/MMBtu shall
apply to the new boiler.

 5
 

 

l.                                          Grain
Unloading and Feed Loading Source Dust Control: Install a PM control system
on the north and south grain unloading systems that limits emissions of PM to
less than or equal to 0.01 grains/dscf. Install a “dead box” to reduce the
velocity of feed to the loadout containers.

24.                                 MGP
shall install air pollution control technology capable of meeting the emission
level reductions for the Swiss Combi DDGS dryer, centrate tank, the
fermentation units, the distillation units, existing boilers, ethanol truck and
railcar loadout (with the exception of vehicles dedicated to non-fuel use) and
grain unloading and feed loading systems in accordance with the schedule in the
approved CTP. Beginning no later than 180 days following the start-up of each
piece of control equipment required in the CTP for these units, MGP shall
operate each unit only in accordance with the operating parameters set forth in
the CTP. MGP may utilize existing control equipment to meet the limits set
forth in the CAO.

25.                                 By
no later than October 1, 2006, MGP shall replace the existing DDGS dryers with
a DDGS dryer capable of meeting the emission limits set forth in paragraph
23(a).

26.                                 PM
and PM10 Emission Limit for DDGS Dryer: By no later
than 90 days following the initial performance test of the DDGS dryer as
required in Paragraphs 23(a) and 31, MGP shall propose PM and PM10 emission limits for the DDGS dryer based on
the data collected from initial performance testing and other available
pertinent information. MGP shall immediately comply with the proposed emission
limit. KDHE will use the data collected and other available pertinent
information to establish limits for PM and PM10. KDHE shall provide written notice to
MGP of the established limit and the established limit shall be incorporated
into and enforceable under this CAO. If the limit established by KDHE is more
stringent than the limit proposed by MGP, then MGP shall have 60 days from the
date of written notice to comply with the established limit, unless within the
60 day period, MGP contests the KDHE proposed limit, by invoking the Dispute
Resolution process as described in this CAO. Until a limit is established under
the Dispute Resolution process herein, MGP shall comply with the emission limit
it proposed under this Paragraph.

27.                                 NOX Emission Limit for Boilers #6 and #7: By
no later than 30 days after the existing DDGS dryers are removed or made
inoperable, 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                =                     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.

28.                                 NOX Emission Limit for Boiler #8:
By no later than July 1, 2006, MGP shall equip Boiler #8 with a Low-NOX burner and the boiler shall be subject to a NOX emissions limit of 0.04 lbs/MMBtu.

29.                                 Source-wide
VOC Emission Cap: MGP shall accept source-wide allowable emission caps for
the facility equivalent to 95 TPY for VOCs for a period of twenty-four months
or until termination of this CAO whichever is later. Beginning April 1, 2007,
MGP shall continually operate the Facility so as not to exceed the source-wide
allowable emission caps of 95 TPY for VOCs based on a 12-month rolling
sum, rolled monthly, and recorded monthly. For the first eleven months, beginning
April 1, 2007, compliance with the 12-month rolling sum will be
demonstrated based on a schedule to meet applicable emission caps as set forth
in the approved CTP.

Compliance Demonstration

30.                                 MGP
shall demonstrate continuous compliance with the emission limits established
under this CAO by the use of performance testing, parametric monitoring,
recordkeeping and reporting, or initial and periodic compliance testing, as
appropriate, as set forth in the approved CTP. Until termination of the CAO,
MGP shall (1) conduct annual performance tests on the DDGS dryer and (2) conduct
performance tests on all other units in accordance with the frequency set forth
in Attachment 2. All such tests shall be conducted using the methods set forth
in 7.0 of the approved CTP to demonstrate compliance with the emission limits
therein unless this requirement is waived in writing by KDHE.

31.                                 By
no later than 180 days following the start-up of the last piece of control
equipment or by no later than 180 days after the installation of the new DDGS
dryer, as required in the approved CTP, whichever is later, MGP shall
demonstrate through an initial performance test that it has met the required
destruction efficiency and/or emission limit of each emissions unit as
specified in the approved CTP.

32.                                 All
performance testing protocol shall be submitted to KDHE for review at least
thirty (30) days prior to testing. The performance testing shall be conducted
in accordance with EPA promulgated methods and any other test protocols approved

 7
 

 

by the parties. Within sixty (60) days of the test
date, test results shall be submitted to KDHE.

Record Keeping/Reporting

33.                                 Beginning
with the first full calendar quarter following lodging of this CAO, MGP shall
submit written reports within 30 days following each calendar quarter to KDHE
that itemize CAO requirements and the approved CTP requirements, the applicable
deadlines, the dates the tasks were completed, unit emissions data and data to
support MGP’s compliance status with the terms of this CAO. Reports shall be
sent to Mr. Victor Cooper, Bureau of Air & Radiation, 1000 SW Jackson, Suite
310, Topeka, Kansas 66612. Emissions data may be submitted in electronic
format.

34.                                 MGP
shall maintain records to demonstrate compliance with New Source Performance
Standards (NSPS), 40 C.F.R., Part 60, Subparts Db and Kb; and MGP’s fugitive
dust management program as described in the approved CTP.

35.                                 MGP
shall maintain records to demonstrate compliance with the source wide VOC cap
required under paragraph 29.

36.                                 MGP
shall maintain control technology performance criteria monitoring data and
records as set forth in the approved CTP, and shall make them available to KDHE
upon demand as soon as practicable.

37.                                 MGP
shall preserve and retain all records and documents now in its possession or
control, or which come into its possession or control, that support the
reporting and compliance requirements in this CAO for a period of three years
following the termination of this CAO, unless other regulations require the records
to be maintained longer.

38.                                 All
notices and reports from MGP required under this CAO shall contain the
following certification and may be signed by an owner or operator of the
company responsible for environmental management and compliance:

“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

39.                                 By
no later than 180 days after the execution of this CAO, MGP shall apply for a
federally-enforceable construction permit. MGP shall include in its application
the emission limits, monitoring and record keeping requirements of the approved

 8
 

 

CTP and this CAO as applicable. These emission limits,
monitoring and record keeping requirements shall remain applicable to the
source for the life of its operation or until changed through a permit
modification.

40.                                 By
no later than 180 days following start-up of the last piece of control
equipment or replacement of the dryer, whichever is later, MGP shall apply to
KDHE for modification to its federally enforceable permits to incorporate those
emission limits, monitoring parameters, and record keeping set forth in this
CAO that have not already been incorporated into the appropriate permits as
required in Paragraph 39. MGP does not waive any rights it has to appeal or
otherwise contest any permit requirements that it did not specifically include
in its applications required under Paragraphs 39 and 40.

ASSESSMENT OF A CIVIL PENALTY

41.                                 Pursuant
to K.S.A. 65-3018 and K.S.A. 65-3025, it is the intent of KDHE to
assess a civil penalty in this matter. In consideration of the facts
surrounding this event, KDHE has concluded that MGP shall pay a civil penalty
in the amount of $26,000.00 for the alleged violations of K.A.R. 28-19-350,
K.A.R. 28-19-720, K.A.R. 28-19-750 and K.S.A. 65-3025.

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.

42.                                 Failure
or refusal to comply with this CAO, or any portion thereof, shall subject MGP
to the imposition of further civil penalties and court action to enforce the
terms of the CAO. MGP reserves the right to contest such penalties and court
action.

FORCE MAJEURE, EXCUSABLE DELAY, MODIFICATION

43.                                 The
following shall constitute the governing terms for force majeure, excusable
delay and modification of the CAO.

a.                                       MGP
shall perform the requirements under this CAO within the time limits set forth
herein unless, the performance is prevented or delayed solely by events which
constitute a force majeure. For purposes of this CAO a force majeure is defined
as any event beyond the control of MGP which could not be overcome by due
diligence and which delays or prevents performance by a date required by this
CAO. Such events do not include increased costs of performance or changed
economic circumstances. Any delay caused in whole or in part by action or
inaction by state authorities shall be considered a force majeure and shall not
be deemed a violation of any obligations required by this CAO.

 9
 

 

b.                                      MGP
shall have the burden of proving all claims of force majeure. Failure to comply
by reason of force majeure shall not be construed as a violation of this CAO.

c.                                       MGP
shall notify KDHE in writing within seven days after becoming aware of an event
which MGP knew, or should have known, constituted force majeure. Such notice
shall estimate the anticipated length of delay, its cause, measures to be taken
to minimize the delay, and an estimated timetable for implementation of these
measures. Failure to comply with the notice provision of this section shall
constitute a waiver of the MGP right to assert a force majeure claim and shall
be grounds for KDHE to deny MGP an extension of time.

d.                                      Within
seven days of the receipt of written notice from MGP of a force majeure event,
KDHE shall notify MGP of the extent to which modifications to this CAO are
necessary. In the event that KDHE and MGP cannot agree that a force majeure
event has occurred, or if there is no agreement on the length of the extension,
the dispute shall be resolved as set forth in a paragraph numbered 44 Dispute
Resolution.

e.                                       Any
modifications to any provision of this CAO shall not alter the schedule for
performance or completion of other tasks required by this CAO unless
specifically agreed to by the parties in writing and incorporated into this
CAO.

f.                                         This
CAO may be amended by mutual agreement of KDHE and MGP. Such amendments shall
be in writing, shall have as their effective date the date on which they are
signed by both parties and shall be incorporated into this CAO.

DISPUTE RESOLUTION

44.                                 The
parties recognize that a dispute may arise between them regarding
implementation of the action to be taken as herein set forth or other terms or
provisions of this CAO.

a.                                       If
such dispute arises, the parties will endeavor to settle it by informal
negotiations between themselves. If the parties cannot resolve the issue
informally within a reasonable period of time, either of the parties may notify
the other in writing stating its position with regard to the dispute and the
reasons therefor. A party receiving such a notice of dispute will respond in
writing within five (5) business days stating its position. KDHE or MGP shall
then have an additional five (5) business days period to respond. If the
parties are still unable to reach an agreement, the matter shall be referred to
the KDHE Director of Environment, who shall decide the matter and provide a
written statement of his decision which shall be incorporated into the CAO.

 10
 

 

b.                                      This
dispute resolution procedure shall not preclude any party from having direct
recourse to court if otherwise available by applicable law.

BEST PROFESSIONAL JUDGMENT

45.                                 The
requirements of this CAO represent the best professional judgment of KDHE at this
time based on the available information. If circumstances change significantly
so that data indicates an immediate threat of danger to the public health or
safety or the environment or a significantly different threat other than the
alleged deficiencies addressed herein, then KDHE reserves the right to modify
dates or requirements herein as it deems reasonably necessary and MGP reserves
the right to appeal any such modifications or additional requirements.

OTHER CLAIMS AND PARTIES

46.                                 Nothing
in this CAO shall constitute or be construed as a release for any claim, cause
of action or demand in law or equity against any person, firm, partnership, or
corporation not a signatory to this CAO for any liability it may have arising
out of or relating in any way to the subject violations alleged in this CAO.

EFFECTIVE DATE, TERMINATION

47.                                 This
CAO shall become effective when signed by the Secretary of the Department of
Health and Environment.

48.                                 This
CAO will be terminated upon written notice by KDHE to MGP that all provisions
of the CAO have been completed. Such notice shall not be unreasonably withheld.

AUTHORIZATION OF SIGNATORIES TO EXECUTE THE CONSENT ORDER
AND BIND THE PARTIES

49.                                 The
parties hereto have affixed their signatures on the dates inserted below to
acknowledge their agreement to this CAO. The signatories to this CAO certify
that they are authorized to execute and legally bind the parties they represent
to this CAO.

	
  /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

  	
   

  
	
   

  	
   

  
	
  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

	
  1.0

  	
   

  	
  Introduction

  	
   

  	
  1-1

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.0

  	
   

  	
  Emission
  Units Requiring Pollution Control Equipment

  	
   

  	
  2-1

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.0

  	
   

  	
  Engineering
  Design Criteria for Pollution Control Equipment

  	
   

  	
  3-1

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.0

  	
   

  	
  Emission
  Limits From Pollution Control Equipment

  	
   

  	
  4-1

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.0

  	
   

  	
  Pollution
  Control Equipment Installation Schedule

  	
   

  	
  5-1

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6.0

  	
   

  	
  Monitoring
  Parameters for Pollution Control Devices

  	
   

  	
  6-1

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.0

  	
   

  	
  Pollution
  Control Device Performance Test Schedule and Test Methods Used

  	
   

  	
  7-1

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  8.0

  	
   

  	
  Fugitive
  Dust Emission Control Program

  	
   

  	
  8-1

  	
   

  

 

 

1.0
INTRODUCTION

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

  	
   

  	
  Control Equipment Description

  
	
  DDGS Dryer

  	
   

  	
  Replace existing DDGS dryers with a Swiss Combi
  dryer equipped with Low-NOX burner(s)

  
	
   

  	
   

  	
   

  
	
  Centrate Tank (Defined as Whole Slop Tanks and
  Centrifuge Vents)

  	
   

  	
  Scrubber

  
	
   

  	
   

  	
   

  
	
  Fermentation Units (Including the Beer Well)

  	
   

  	
  Scrubber

  
	
   

  	
   

  	
   

  
	
  Distillation Unit (Including Miscellaneous Process
  Vents)

  	
   

  	
  Scrubber

  
	
   

  	
   

  	
   

  
	
  Existing Boilers #6 and #7

  	
   

  	
  (1)    Interim NOX limit; and

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (2)    Either retrofitting with Low-NOX burner(s)
  or removal of the boiler; and

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (3)    Discontinuation of the use of fuel oil.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Existing Boiler #8

  	
   

  	
  Retrofit with Low-NOX burner

  
	
   

  	
   

  	
   

  
	
  Cooling Cyclone

  	
   

  	
  Replace existing DDGS dryers with a Swiss Combi
  dryer equipped with Low-NOX burner(s).

  
	
   

  	
   

  	
   

  
	
  Ethanol Truck Loadout

  	
   

  	
  Flare, unless truck is dedicated to non-fuel use

  
	
   

  	
   

  	
   

  
	
  Truck/Car Traffic

  	
   

  	
  Fugitive Dust Control Program

  
	
   

  	
   

  	
   

  
	
  Grain Unloading Systems - North and South

  	
   

  	
  PM Control System

  
	
   

  	
   

  	
   

  
	
  Feed Loading Systems

  	
   

  	
  “Dead Box”

  
	
   

  	
   

  	
   

  
	
  New Gas Fired Boiler (Alternative Scenario)

  	
   

  	
  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

  	
   

  	
  Control Device Description

  	
   

  	
  Design Operating

  Parameters

  
	
  Centrate Tank

  	
   

  	
  Scrubber

  	
   

  	
  Gas Flow Rate: to be determined

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Water Flow Rate: to be determined

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Pressure Drop: to be determined

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Fermentation Units (Including the Beer Well)

  	
   

  	
  Scrubber

  	
   

  	
  Gas Flow Rate: to be determined

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Water Flow Rate: to be determined

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Pressure Drop: to be determined

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Distillation Units (Including Misc. Process Vents)

  	
   

  	
  Scrubber

  	
   

  	
  Gas Flow Rate: to be determined

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Water Flow Rate: to be determined

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Pressure Drop: to be determined

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Ethanol Truck Loadout

  	
   

  	
  Flare, unless truck is dedicated to non-fuel use

  	
   

  	
  40 C.F.R. § 60.18 NSPS standards. Flare will be
  assisted by a pilot flame.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Grain Unloading Systems - North and South

  	
   

  	
  PM Control System

  	
   

  	
  To be determined

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Feed Loading System

  	
   

  	
  Dead box(es)

  	
   

  	
  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

  	
   

  	
  Control Device

  Description

  	
   

  	
  Pollutant

  	
   

  	
  Emission Limit(s)

  
	
  New Swiss Combi DDGS Dryer(1)

  	
   

  	
  New Dryer

  	
   

  	
  VOC

  	
   

  	
  95% reduction or < 10 ppm, at MGP’s
  election

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  New Dryer

  	
   

  	
  CO

  	
   

  	
  90% reduction or < 100 ppm, at MGP’s
  election

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  New Dryer

  	
   

  	
  PM/PM10

  	
   

  	
  Test and set limit pursuant to this CAO

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Low-NOX burners

  	
   

  	
  NOx

  	
   

  	
  NOX emission limit < 0.08 lb/MMBtu

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Centrate Tank

  	
   

  	
  Scrubber

  	
   

  	
  VOC

  	
   

  	
  95% reduction or < 20 ppm, at MGP’s
  election

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Centrate Tank and Distillation Units (Including
  Misc. Process Vents)

  	
   

  	
  Scrubber

  	
   

  	
  VOC

  	
   

  	
  95% reduction or < 20 ppm, at MGP’s
  election

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Fermentation Units (Including Beer Well)

  	
   

  	
  Scrubber

  	
   

  	
  VOC

  	
   

  	
  95% reduction or < 20 ppm, at MGP’s
  election

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Existing Boilers #6, #7 and #8 (Boilers #6 and #7,
  if applicable)

  	
   

  	
  Low-NOX burners

  	
   

  	
  NOX

  	
   

  	
  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

  	
   

  	
  Control Device

  Description

  	
   

  	
  Pollutant

  	
   

  	
  Emission Limit(s)

  
	
   

  	
   

  	
  Discontinue the use of fuel oil

  	
   

  	
  SOX

  	
   

  	
  None

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  New Boiler (Alternative Scenario)

  	
   

  	
  Low-NOX Burner(s)

  	
   

  	
  NOx

  	
   

  	
  NOx emission limit <
  0.04 lb/mmBtu

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Ethanol Truck Loadout

  	
   

  	
  Flare, unless truck is dedicated to non-fuel use

  	
   

  	
  VOC

  	
   

  	
  95% reduction

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Grain Unloading Systems - North and South

  	
   

  	
  PM Control System

  	
   

  	
  PM/PM10

  	
   

  	
  0.01 grains/dscf

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Feed Loading System

  	
   

  	
  Dead box(es)

  	
   

  	
  PM/PM10

  	
   

  	
  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

  	
  =

  	
  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

  
	
   

  	
   

  	
   

  	
  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.

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

  	
   

  	
  Control Equipment

  	
   

  	
  Date

  
	
  New Swiss Combi DDGS Dryer

  	
   

  	
  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.

  	
   

  	
  October 1, 2006

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Centrate Tank

  	
   

  	
  Scrubber

  	
   

  	
  8 months after the issuance of the CAO

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Fermentation Units (Including Beer Well)

  	
   

  	
  Scrubber

  	
   

  	
  8 months after the issuance of the CAO

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Distillation Units (Including Miscellaneous Process
  Vents)

  	
   

  	
  Scrubber

  	
   

  	
  8 months after the issuance of the CAO

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Existing Boilers #6 and #7

  	
   

  	
  Low-NOX Burner(s), remove boilers or make boilers
  inoperable

  	
   

  	
  September 1, 2008

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Interim NOX limit as described in Section 4.0 of CTP

  	
   

  	
  30 days after the date the existing DDGS dryers are
  removed or made inoperable.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Discontinue the use of fuel oil

  	
   

  	
  Upon issuance of the CAO

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Existing Boiler #8

  	
   

  	
  Low-NOX Burner and FGR

  	
   

  	
  July 1, 2006

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  New Boiler (Alternative scenario)

  	
   

  	
  Low-NOX Burner(s)

  	
   

  	
  Upon start up of the boiler

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Ethanol Truck Loadout

  	
   

  	
  Flare

  	
   

  	
  8 months after the issuance of the CAO

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Grain Unloading Systems - North and South

  	
   

  	
  PM Control System

  	
   

  	
  16 months after the issuance of the CAO

  

 

 5-1
 

 

 

	
  Unit
  Description

  	
   

  	
  Control Equipment

  	
   

  	
  Date

  
	
  Feed Loading System

  	
   

  	
  “Dead Box”

  	
   

  	
  12 months after the issuance of the CAO

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Truck Traffic Fugitive Dust Program

  	
   

  	
  Road Sweeper

  	
   

  	
  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:

	
   

  	
   

  	
  Mo 1

  	
   

  	
  Mo 2

  	
   

  	
  Mo 3

  	
   

  	
  Mo 4

  	
   

  	
  Mo 5

  	
   

  	
  Mo 6

  	
   

  	
  Mo 7

  	
   

  	
  Mo 8

  	
   

  	
  Mo 9

  	
   

  	
  Mo 10

  	
   

  	
  Mo 11

  	
   

  
	
  Source-wide VOC

  	
   

  	
  12

  	
   

  	
  24

  	
   

  	
  36

  	
   

  	
  45

  	
   

  	
  56

  	
   

  	
  64

  	
   

  	
  72

  	
   

  	
  80

  	
   

  	
  84

  	
   

  	
  88

  	
   

  	
  92

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Individual HAP

  	
   

  	
  1.6

  	
   

  	
  3.2

  	
   

  	
  4.0

  	
   

  	
  4.8

  	
   

  	
  5.6

  	
   

  	
  6.4

  	
   

  	
  7.2

  	
   

  	
  8.0

  	
   

  	
  8.2

  	
   

  	
  8.5

  	
   

  	
  8.8

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total HAPs

  	
   

  	
  3.0

  	
   

  	
  6.0

  	
   

  	
  9.0

  	
   

  	
  12

  	
   

  	
  14

  	
   

  	
  16

  	
   

  	
  18

  	
   

  	
  20

  	
   

  	
  21

  	
   

  	
  22

  	
   

  	
  23

  	
   

  

 

 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

  Description

  	
   

  	
  Parameter

  Monitored

  	
   

  	
  Operating Range

  	
   

  	
  Monitoring

  Frequency

  
	
  Scrubbers

  	
   

  	
  Liquid Flow Rate 

  	
   

  	
  Varies based on design of the individual scrubbers 

  	
   

  	
  Continuously 

  
	
   

  	
   

  	
  Pressure Drop

  	
   

  	
  2 to 8 inches of water

  	
   

  	
  Daily

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Flare

  	
   

  	
  Presence of a Flame

  	
   

  	
  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

  	
   

  	
  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

  Device

  	
   

  	
  Pollutant(s) Tested

  	
   

  	
  Test Method

  
	
  Swiss Combi DDGS Dryer/New Dryer equipped with a
  Low-NOX burner

  	
   

  	
  Total VOC, speciated VOCs and HAPs, NOX,
  CO, PM/PM10

  	
   

  	
  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.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Centrate Tank, Fermentation Units (Including Beer
  Well), and Distillation Units (Including Misc. Process Vents)/Scrubbers

  	
   

  	
  Total VOC, speciated VOCs and HAPs.

  	
   

  	
  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.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Existing Boilers and New Boiler (Alternative
  Scenario)/Low-NOX burner(s)

  	
   

  	
  NOX and CO

  	
   

  	
  Method 7E and 10; another
  EPA promulgated method; in accordance with a test protocol approved by the
  parties.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Truck Loadout/Flare

  	
   

  	
  VOCs and Visible Emissions

  	
   

  	
  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.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Grain Unloading Systems - North and South/PM Control
  System

  	
   

  	
  PM/PM10

  	
   

  	
  Method 5; another EPA
  promulgated method; in accordance with a test protocol approved by the
  parties.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Feed Loading Systems/”Dead Box”

  	
   

  	
  PM/PM10

  	
   

  	
  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

  	
   

  	
  Performance Test Frequency

  
	
  If X > 90% of the most stringent limit

  	
   

  	
  The next performance test must be conducted within
  12 months.

  
	
   

  	
   

  	
   

  
	
  If 60% <
  X < 90% of the most
  stringent limit

  	
   

  	
  The next performance test must be conducted within
  36 months.

  
	
   

  	
   

  	
   

  
	
  If X < 60%
  of the most stringent limit

  	
   

  	
  The next performance test must be conducted within
  60 months.

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