Enviva accelerated expansion timeline?

Published 8:35 pm Tuesday, July 30, 2019


[This is the third of a multi-part series. The fourth part investigates a claim that Enviva has already tested for HAP and VOC emissions.]

According to Patrick Anderson, legal counsel for the Environmental Integrity Project — a Washington, D.C.-based nonprofit organization that advocates for enforcement of environmental laws — the EIP, along with four other community and environmental groups, first brought concerns regarding Enviva Southampton’s emissions to the attention of Virginia’s state government in April 2018 via a letter to Gov. Ralph Northam. Anderson told the newspaper he was “positive” that it was this letter that had prompted the Virginia Department of Environmental Quality’s June 12, 2018, notice to Enviva asking for emissions testing at the Southampton facility. Tamera Thompson, manager of the DEQ’s Office of Air Permit Programs, confirmed that the DEQ had been copied on this letter, but said that the letter was not the only source suggesting that the Southampton County pellet plant might be over-polluting.

Sources throughout the southeast have shown emissions [at wood pellet plants] should be higher than what was previously thought,” Thompson said.

The attorney confirmed that his Decatur, Georgia-based firm, Powell Environmental Law, did not, as of June 25, 2019, have “concrete evidence” that Enviva Southampton’s decision to go public in December 2018 with its plans for expansion had been the direct result of the DEQ’s June 12, 2018, letter. However, the DEQ’s Sept. 30, 2018, deadline for Enviva to submit a “substantially complete permit application” to the agency for the Southampton facility’s expansion, Anderson said, suggests that even though the company claimed in July 2018 that its plans to expand the Southampton facility were in the works prior to its receipt of the DEQ’s June 12, 2018 letter, that document may have forced the company to move up its timeline for implementing the expansion.

DEQ has put them [Enviva Southampton] on a pretty tight timeline in exchange for letting them off the hook for testing,” Anderson said. “That sort of timeline is not typical in air permitting.”

It was a little quick, actually,” Thompson confirmed. “Normally, it takes a little bit longer than that. They [Enviva Southampton] understood they were under a deadline and it was a very important issue for us to get [pollution] controls on as soon as possible.”

Also atypical, according to Anderson, is the fact that Enviva Partners LP went public with its plans for expansion in Southampton County only after Enviva Southampton had already met the Sept. 30 DEQ application deadline.

As a publicly traded company, Enviva typically informs investors well in advance of planned expansions and well before applying for air permits,” Anderson said. “For instance, Enviva planned for a 2019 expansion of the Enviva Sampson plant [in Sampson County, North Carolina] as early as 2016 … and only submitted an air permit application in March of 2018. Likewise, Enviva has told investors about plans to expand the Enviva Greenwood plant in South Carolina since February 2018 … but to date, Enviva has still not applied for the necessary permit for that plant.

I’m not a financial guy, but my sense is Enviva wants to boast about potential expansions to investors as early as possible, so it’s odd that they waited in this instance until after submitting the air permit application and telling [DEQ] they had ‘immediate plans to expand’ the plant on July 2, 2018.”

Thompson made one statement that potentially corroborates Enviva Southampton’s claim that expansion plans were in the works prior to the plant’s receipt of the DEQ’s June 2018, letter. Asked to speculate on why Enviva Southampton agreed in 2014 and again in 2015 to volatile organic compound (VOC) limits that put the facility well above the Title V threshold, she said, “I can’t say exactly but my guess would be a desire to increase production or to give themselves some breathing room to make sure they were under their limits … the emission factors associated with trees can vary greatly depending on multiple factors, and the higher number would allow them [Enviva Southampton] to account for some of that variation without being concerned about going over their limits.”

However, Thompson also confirmed that the DEQ had not received “anything in writing” from Enviva Southampton prior to July 2018 suggesting that the company would be expanding its operation. She added that it was Enviva Southampton which had requested the meeting with DEQ Director David Paylor in July 2018, the purpose of which she said was for Enviva to “inform us of their intent to expand the facility.”

This [meeting] was a result of the June letter sent by DEQ,” Thompson said.

Yana Kravtsova — vice president of environmental affairs and chief compliance officer for Enviva Partners LP, the parent company of Enviva Southampton — claimed on Thursday, July 25, that Enviva “has been planning for the transition to higher softwood pellet production and expansion of the Southampton plant since 2017.” Then, on Friday, July 26, the vice president added, “In 2016 and 2017, we began to consider plans for an expansion of Southampton and its sister facility in Northampton [County], North Carolina, as well as other existing facilities, and began a planning process involving conceptual and detailed engineering and design work, supply chain analysis, cost evaluation and numerous other factors.” However, she confirmed Thompson’s assertion that the company had waited until the summer of 2018 to inform the DEQ of its plans.

A shift from hardwood to softwood requires regulatory approval, as does expanding production, Kravtsova explained. Decisions such as these, she said, require “careful planning and years of development.” Asked why Enviva — if it had been planning to expand the Southampton plant since 2016 or 2017 — chose to wait until mid-2018 before beginning the regulatory approval process for said expansion, Kravtsova said that this was when Enviva “reached a stage where we had a viable solution” sufficiently detailed to present to the DEQ. This apparently coincided with the DEQ’s June 2018 letter asking for hazardous air pollutant (HAP) and VOC testing at the Southampton facility.

The timing of our initial engagement with [Virginia’s] DEQ to discuss a permit modification is consistent with their expectations that a permit holder have a concrete proposal of what they want to build before initiating the permitting process,” Kravtsova said.

Asked when Enviva had first notified its investors of the planned expansion in Southampton County, Kravtsova said Enviva’s expansion plans for its Southampton County plant were communicated to investors as part of the company’s “earnings release and investor conference call for the third quarter of 2018, which occurred on Nov. 9, 2018.”

She then disagreed with Anderson’s assertion that this was atypical, stating, “The timing of this was fully consistent with normal and expected practices for public company announcements of projects of this nature and has been part of our ongoing public guidance for Enviva.”

When asked how much of the planned $75.7 million expansion would go toward new pollution controls versus actually expanding production, Maria Moreno, a spokeswoman for Enviva Partners, said she did not believe this could be broken down, as “one’s related to the other.” Kravtsova, when asked this question, said, “As Enviva scales up to meet growing global demand for the sustainable biomass we produce, we continuously seek ways to increase our production through both process improvements and new capital investments in increased capacity. Our plans for the Southampton facility involve both a capital investment in production equipment and environmental controls and a process change to increase the percentage of softwood used to make our pellets.”

Ann Regn, a spokeswoman for the DEQ, confirmed that her agency is working with Enviva on a new air quality permit that will allow for the Southampton County facility’s expansion, and also require additional air pollution controls. According to Thompson, these controls will include a total of four regenerative thermal oxidizers, as well as other pollution mitigation equipment.

Regarding the DEQ’s arrangement with Enviva to delay the testing requirement in exchange for the company’s incorporating these pollution controls into its planned expansion of the Southampton County plant, Regn said the DEQ’s subsequent discussions with Enviva representatives following the agency’s June 2018 letter revealed Enviva’s “willingness to upgrade/install controls beyond what is currently listed and required by their existing permit.”

We believe this approach will place restrictions on air pollution based on our analysis and extensive air quality modeling for the area,” Regn said. “We also believe it will fully address the air quality impact of the facility and provide improved control of air pollution.”

Regn added that the permitting process will include public comments. A public notice advertising an informational meeting regarding Enviva Southampton’s permit process was advertised in the Sunday, July 21, edition of The Tidewater News. This meeting will be on Tuesday, Aug. 6, at 6 p.m., in Conference Hall A of the Regional Workforce Development Center at Camp Community College. 100 N. College Drive, Franklin.

The stated purpose of the meeting is for DEQ officials to describe the project requested by the permit application and provide information on how the public can comment on the application and proposed draft permit during the upcoming public comment period.