THIRD MODIFICATION TO CONSENT DECREE

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IN THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF PENNSYLVANIA

UNITED STATES OF AMERICA, et al., ) )

Plaintiffs, ) Civil Action No. 2:11-cv-01650-DSC )

v. ) Judge David S. Cercone )

ESSROC CEMENT CORP., ) (Electronic Filing) )

Defendant. ) ___________________________________ )

THIRD MODIFICATION TO CONSENT DECREE

WHEREAS, prior to November 2011, the United States of America (“United States”) and

Essroc Cement Corporation (“Essroc”) engaged in negotiations to resolve alleged Clean Air Act

violations at Essroc’s cement production facilities in a cooperative manner, without the

transaction costs associated with protracted litigation;

WHEREAS, as a result of these negotiations, an agreement was reached and embodied in

a consent decree (the “2012 Decree”), which resolved certain claims alleged by the United States

and the State Parties against Essroc under the Clean Air Act and comparable state laws;

WHEREAS, the 2012 Decree required that Essroc implement certain consensual

compliance measures and mitigation projects at several Essroc cement production facilities and

pay civil penalties for alleged past violations;

WHEREAS, this Court entered the 2012 Decree on February 15, 2012, and has retained

jurisdiction over implementation and enforcement of the 2012 Decree;

Case 2:11-cv-01650-DSC Document 26-1 Filed 07/19/17 of 13

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WHEREAS, the Consent Decree has been previously modified two times, pursuant to

orders entered by the Court on January 4, 2016 and March 9, 2017;

WHEREAS, the First Modification to the 2012 Decree adjusted certain injunctive relief

requirements for several facilities and the Second Modification to the 2012 Decree transferred

the obligations for the Martinsburg, West Virginia facility to new owner Argos USA LLC;

WHEREAS, pursuant to the First Modification to the 2012 Decree (“First

Modification”), Essroc had an obligation to install the pollution control technology known as

Selective Non-Catalytic Reduction (“SNCR”) at Kiln 2 of the Logansport facility by March 30,

2017;

WHEREAS, Essroc has asserted that it is not feasible for it to install SNCR at Logansport

Kiln 2, due to the current configuration of the equipment at Kiln 2;

WHEREAS, Paragraph 103 of the 2012 Decree allows the Decree to be amended by

written agreement of the United States, Essroc (now renamed Lehigh Hanson ECC, Inc.

(“Lehigh Hanson ECC”)), and those State Parties that are affected by the amendment;

WHEREAS, the State of Indiana is the only Affected State with respect to operation of

the Logansport facility;

WHEREAS, Lehigh Hanson ECC, the United States, and the State of Indiana

(collectively the “Parties”) have agreed to this Third Modification to the 2012 Decree (the “Third

Modification”) to resolve the alleged infeasibility of SNCR at Logansport Kiln 2 and the

associated Consent Decree compliance issues;

WHEREAS, the Parties agrees that this Third Modification is a material modification

under Paragraph 103 of the 2012 Decree and thus requires approval of the Court;


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WHEREAS, in 2016, the ultimate corporate parent of Essroc, Italcementi S.p.A

(“Italcementi”), was acquired by Heidelberg Cement AG (“Heidelberg”);

WHEREAS, Essroc was renamed Lehigh Hanson ECC, effective May 1, 2017;

WHEREAS, Lehigh Hanson ECC represents that it is the owner of the Logansport

facility going forward and is responsible for compliance with the 2012 Decree and any

modifications to the 2012 Decree;

WHEREAS, the Parties agree, and the Court by entering this Third Modification of the

2012 Decree finds, that the amendments to the 2012 Decree set forth herein are fair, reasonable,

and in the public interest;

NOW THEREFORE, it is hereby ORDERED, ADJUDGED, and DECREED that the

2012 Decree and the First Modification in this matter are further modified as follows:

1. This Third Consent Decree Modification (“Third Modification”) shall apply to,

and be binding upon, the Parties as an amendment to the 2012 Decree.

2. Lehigh Hanson ECC will fulfill all obligations of Essroc under the 2012 Decree

and any modifications to the 2012 Decree. For the purposes of the 2012 Decree and its

modifications, Lehigh Hanson ECC consents to the Court’s jurisdiction and consents to venue in

this judicial district.

3. Lehigh Hanson ECC shall make available a copy of this Third Modification to

each principal environmental contractor retained to perform any activity required or affected by

this Third Modification.


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4. This Third Modification shall not be construed to alter, affect, or amend the 2012

Decree (including the prior modifications) in any way other than provided herein and shall not

affect the rights under the 2012 Decree (including the prior modifications) of any State Parties

other than the State of Indiana. It is the purpose of the Parties in entering into this Third

Modification to further the objectives of the Parties as provided in the 2012 Decree.

5. Unless otherwise defined herein, terms used in this Third Modification shall have

the meaning given to those terms in the 2012 Decree, the Clean Air Act, and the regulations

promulgated thereunder.

6. Paragraph 7 of the 2012 Decree shall be modified as follows:

a. The definition of Control Technology shall be replaced with the following:

“Control Technology” shall mean Selective Non-Catalytic Reduction, Selective Catalytic Reduction, Dry Scrubber, or Water Injection;

b. The following new definition shall be added:

“Water Injection” shall mean the injection of water or steam at or near the kiln burner to reduce flame temperature for the purpose of reducing thermal NOx formation.


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7. Table 2 in Paragraph 17 of the 2012 Decree (NOx controls) shall be modified to

show changes in the controls and in the 30-Day Rolling Average Emission Limits for the units at

Logansport, and shall read as follows:

Table 2

Kiln Control Technology 30-Day Rolling Average Emission

Limit (lb/ton clinker

produced)

Date required to meet 30-Day Rolling

Average Emission Limit1

Bessemer Kiln 4

N/A Retire December 31, 2011

Bessemer Kiln 5

N/A Retire December 31, 2011

Martinsburg Kiln 1

SNCR 2.15 December 31, 2012

Logansport Kiln 1

SNCR and Water Injection

Demonstration of SNCR pursuant to Paragraphs 19 and Appendix A, Emission Limit no higher than 4.75

Schedule pursuant to Paragraph 8 of this Third Modification and Appendix A

Logansport Kiln 2

Water Injection

4.75 Schedule pursuant to Paragraph 9 of this Third Modification

Speed Kiln 1

SNCR 3.00 July 1, 2015

Speed Kiln 2

SNCR 1.95 July 1, 2015

Nazareth Kiln 1

SNCR 2.30 July 1, 2012

San Juan Kiln 3

SNCR 1.85 December 31, 2015

1 Date listed is the first day of the 30-day rolling average.


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8. Paragraph 8.b of the First Modification (which partially replaced Paragraph 19 of

the 2012 Decree) shall be replaced with the following:

Lehigh Hanson ECC shall install and operate new ammonia continuous emission monitoring systems (CEMS) at Logansport Kiln 1 by January 30, 2016. Lehigh Hanson ECC shall install and Commence Continuous Operation of SNCR technology by May 30, 2016, at Logansport Kiln 1. Lehigh Hanson ECC shall install and Commence Continuous Operation of Water Injection by November 30, 2017, at Logansport Kiln 1. Lehigh Hanson ECC will implement Appendix A of the 2012 Decree to undertake the optimization and demonstration of the SNCR and Water Injection at Logansport Kiln 1. However, the dates for implementing each phase of Appendix A will be as follows:

Par. IV. 10. – commence optimization of the Kiln 1 Control Technology – within 30 days of receipt of the approved Optimization Protocol under Par. IV. 11.

Par. IV.11. – submit new Optimization Protocol for approval – December 15, 2017

The new Optimization Protocol will identify the Optimization Phase actions for the SNCR and Water Injection systems, will include a target Ammonia Slip range for the Demonstration Phase, and will identify an Optimization Phase, not to exceed 120 calendar days, in which Lehigh Hanson ECC operates Kiln 1 and the Control Technology to minimize NOx emissions while operating within the range of Ammonia Slip specified in the protocol.

Lehigh Hanson ECC shall propose, within 90 days of the end of the Demonstration Period (Section V of Appendix A), or January 30, 2019, whichever date comes first, a 30-Day Rolling Average Emission Limit for NOx, pursuant to Appendix A, which is applicable to Logansport Kiln 1, that is no less stringent than 4.75 lb/ton of clinker and that represents the optimal performance and Continuous Operation of the SNCR technology and the Water Injection technology. Within 30 Days after proposing a 30-Day Rolling Average Emission Limit for NOx at Logansport Kiln 1 under Appendix A, Lehigh Hanson ECC shall achieve and thereafter maintain compliance with the proposed 30-Day Rolling Average Emission Limit for NOx at the Kiln. U.S. EPA shall review the proposed 30-Day Rolling Average Emission Limit pursuant to Appendix A and Section XI (Review and Approval of Submittals). Pursuant to Paragraph 24 of Appendix A, if EPA’s review results in an alternative final 30-day Rolling Average Emission Limit, Lehigh Hanson ECC shall comply with the alternative final 30-day Rolling Average Emission Limit within 30 days of EPA’s notice. During the optimization and demonstration of the SNCR on Logansport Kiln 1, Lehigh Hanson ECC shall attempt to control ammonia injection based on the amount of ammonia slip measured by the ammonia CEMs.


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9. The requirement from the First Modification to install and operate SNCR at

Logansport Kiln 2 is eliminated. Paragraph 8.c of the First Modification (which partially

replaced Paragraph 19 of the 2012 Decree) shall be replaced with the following:

Lehigh Hanson ECC shall install and commence Continuous Operation of Water Injection technology at Logansport Kiln 2, by November 30, 2017. Lehigh Hanson ECC shall then achieve and thereafter maintain compliance with a 30-Day Rolling Average Emission Limit for NOx at Kiln 2 of 4.75 lb/ton of clinker.

10. EPA and the State of Indiana hereby waive any stipulated penalties assessed or

to be assessed, and any other relief under the 2012 Decree, for violations of Paragraph 8.c of the

First Modification and/or violations related to the requirement to install SNCR technology at

Logansport Kiln 2.

11. Paragraph 13 of the First Modification shall no longer be effective. Paragraph

105 of the 2012 Decree shall be in effect as originally entered by the Court.

12. This Third Modification shall be lodged with the Court for a period of not less

than 30 Days for public notice and comment. The United States reserves the right to withdraw or

withhold its consent if the comments regarding this Third Modification disclose facts or

considerations indicating that the Third Modification is inappropriate, improper, or inadequate.

Lehigh Hanson ECC consents to entry of this Third Modification without further notice and

agrees not to withdraw from or oppose entry of this Third Modification by the Court or to

challenge any provision of the Third Modification, unless the United States has notified Lehigh

Hanson ECC in writing that it no longer supports entry of the Third Modification.

13. The undersigned representatives are fully authorized to enter into the terms and

conditions of this Third Modification. This Third Modification may be executed in several

counterparts, each of which will be considered an original.


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ORDER

Before the taking of any testimony, without adjudication of any issue of fact or law, and

upon the consent and agreement of the Parties, it is:

ORDERED, ADJUDGED and DECREED that the foregoing Third Modification to the

Consent Decree is hereby approved and entered as a final order of this Court.

Dated and entered this _______day of __________________, 2017.

United States District Judge

The Honorable David S. Cercone


The Undersigned Party Enters into this Third Modification to Consent Decree in the case of

United States ofAmerica v. Essroc Cement Cnrrnratinn, Civil Action No. 2:11-cv-01650-DSC.

FOR THE UNITED STATES OF AMERICA

Date: ~ ~~ -7 d ~ 7ruce S. GelberDeputy Assistant Attorney GeneralEnvironment and Natural Resources Division

~— ~

Thomas A. BensonSenior AttorneyEnvironmental Enforcement SectionEnvironment and Natural Resources DivisionEnvironmental Enforcement SectionP.O. Box 7611Washington, DC 20044-7611Phone: (202) 514-5261Fax: (202)616-6584Email: thomas:[email protected]

Soo C. SongActing United States AttorneyWestern District of Pennsylvania

By: s/Paul E. Skirtich ~bv permissionsPaul E. SkirtichAssistant United States AttorneyU.S. Post Office &Courthouse700 Grant Street, Suite 4000Pittsburgh, PA 15219(412) 894-7418PA ID No. 30440

G~


The Undersigned Party Enters info this Third Modification to Consent Decree in the case of United

States ofAmerica v. Essroc Cement Corporation, Civil Action No. 2:11-cv-01650-DSC.

Robert A. KaplanActing Regional AdministratorUSEPA Region 5

Date: ZT. Leverett Nelson cRegional CounselUSEPA Region 577 W. Jackson Blvd.Chicago, IL 60604-3507

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THIRD MODIFICATION TO CONSENT DECREE

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