1. March 2006 AQC H2S Study Update DAQ Progress Report on Hydrogen Sulfide Study at Paper Mills Presentation Summary - Rule requirements for monitoring study - Conduct and reporting of study - DAQ review for approval - Study purpose: Replace prior uncertain data with quality- assured data from actual monitoring

2. March 2006 AQC H2S Study Update Rule Requirements for Emission Study April 2005 effective date reducing hydrogen sulfide (H 2 S) Acceptable Ambient Level (AAL) from 2.1 to 0.12 mg/m3 (1,500 ppb to 83 ppb) Included exemption of wastewater treatment systems (WWTS) at paper mills Required paper industry to conduct WWTS study estimating H 2 S & total reduced sulfur (TRS) compounds emissions Study report to DAQ in November 2005 DAQ report to EMC in January 2006

3. March 2006 AQC H2S Study Update Rule Requirements For Dispersion Modeling Use estimates from study in dispersion modeling If dispersion modeling shows predicted H 2 S level below AAL, no further action required. Submit favorable modeling data to DAQ by July 1, 2006, with DAQ reporting results to EMC by September 1, 2006. If modeling shows H 2 S AAL exceeded, industry submit ambient air monitoring plan to assess actual H 2 S levels typical of mill operations by September 30, 2006 for DAQ approval.

4. March 2006 AQC H2S Study Update Scope of Phase I Study Minimum scope: Estimate air emissions at typical paper mills for H 2 S and TRS Implemented scope: -Measure air emissions at 3 paper mills for H 2 S, TRS, and methane -Measure water composition and flow -Combine air and water data for mass balance -Develop model to predict air emissions -Synthesize emissions for one mill

5. March 2006 AQC H2S Study Update Air Emission Monitoring Identified method from similar 1989 mill study Method consists of measuring downwind plume: - At 10+ horizontal locations -At 4 vertical elevations -Using mobile sampling cart and tethered balloon -6 and 30 ft high weather stations Considered sophisticated and advanced approach

6. March 2006 AQC H2S Study Update Ambient Air Sampling Equipment

7. March 2006 AQC H2S Study Update

8. Phase I Study Schedule 1 st SiteWeyerhaeuser-PlymouthApril 2005 2 nd SiteWeyerhaeuser-New BernMay 2005 3 rd SiteInternational Paper - Roanoke Rapids August 2005 Report PreparationSept - October 2005 Report submittalNovember 2005

9. March 2006 AQC H2S Study Update DAQ Involvement in Study Started in May 2004 Team of DAQ chemists, engineers, and dispersion modelers With 2 NCSU professors Hired expert analyst with experience in same method with same sulfur compounds Collaborated with US EPA chemists and engineers

10. March 2006 AQC H2S Study Update DAQ Review for Approval Sampling and math procedures approved However, given key QA criterion not routinely met, found most analytical data unacceptable EPA found analytical data questionable, … hopes more suitable study conducted in future Feasible Phase II study data collected and modeled in time for July 2006 milestone

11. March 2006 AQC H2S Study Update Unacceptable Analytical QA Results

12. March 2006 AQC H2S Study Update Phase II Study Plan Industry submitted Phase II Plan in February 2006 DAQ approved plan with one minor change Re-measure emissions at Plymouth & Roanoke Rapids - Synthesize emissions for other 2 mills Key analytical QA data good in Pre-Phase II work Perform dispersion modeling for all 4 mills to predict hydrogen sulfide levels at property lines Plan to submit emission study and dispersion modeling results by July 2006

13. March 2006 AQC H2S Study Update Acceptable Analytical Results

14. March 2006 AQC H2S Study Update Phase II Study Schedule 1 st SiteWeyerhaeuser- PlymouthMarch 2006 2 nd SiteInternational Paper - Roanoke Rapids April 2006 Emission Estimates and Dispersion Modeling Report Submittal July 2006