Orion Engineered Carbons signs consent decree with EPA
Orion Engineered Carbons announced that on December 22, a consent decree between Orion Engineered Carbons and the U.S. Environmental Protection Agency as well as the Louisiana Department of Environmental Quality, was lodged in the U.S. District Court for the Western District of Louisiana. Once the consent decree is entered by the court, it will resolve the EPA's claims against Orion that were a part of the EPA's National Enforcement Initiative brought against all U.S. carbon black producers. In this action EPA alleged certain violations of the U.S. Clean Air Act, in particular concerning past failures to obtain PSD and Title V permits and implement Best Available Control Technology. With Orion as one of the two remaining carbon black companies signing consent decrees, all five U.S. carbon black producers have settled with the U.S. government. Under its consent decree, Orion will further upgrade its pollution control technology in order to further reduce SO2, NOx and particulate matter emissions at its four U.S. carbon black manufacturing facilities in Ivanhoe, Belpre, Borger, and Orange. Orion estimates that the capital expenditures for these upgrades, to be incurred over approximately six years, are $110M-140M. Orion also agreed to pay a civil penalty of $800,000 and to perform environmental mitigation projects totaling $550,000. The penalty and mitigation project costs are in line with the respective reserves already established by the company for this purpose. As previously disclosed, except for certain allegations by the EPA in 2016 relating to Orion's facility in Orange, Texas, all claims made by the EPA relate to actions that occurred before Orion assumed control over its four U.S. carbon black manufacturing facilities. The facilities were acquired by Orion from a subsidiary of Evonik Industries AG in 2011. Orion's agreement with Evonik in connection with the acquisition provides for a partial indemnity against various exposures, including, but not limited to, capital investments, fines and costs arising in connection with Clean Air Act violations that occurred prior to July 29, 2011.