BEFORE

TH~It~J

~

otht~X

~

~

—

IN THE MATTER OF:

)

)

AMENDMENTS TO PERMITTING

)

FOR USED OIL MANAGEMENT AND

)

USED OIL TRANSPORT

)

35

ILL.

ADM. CODE

807 AND 809

)

Dorothy M. Gunn, Clerk

IL. Pollution Control Board

James R.

Thompson Center

100

W. Randolph, Ste 11-500

Chicago, Illinois

60601

(First Class)

Matthew J. Dunn, Chief

Environmental Bureau

Office of the Attorney General

James R. Thompson Center

100 W. Randolph,

12th

Floor

Chicago, Illinois 60601

(First Class)

R~CEXV~D

CLEl~1’~

~

S~P

2

8

1999

STATE OF IWNOIS

Pollution

Control Board

Robert Lawley, ChiefLegal Counsel

Department of Natural Resources

524

South Second Street

Springfield, Illinois

6270 1-1787

(First Class)

Service List

(First Class)

Joel

Stemstein, Hearing Officer

IL. Pollution Control Board

James R.

Thompson Center

100

W. Randolph, Ste 11-500

Chicago, Illinois

60601

(First Class)

PLEASE TAKE NOTICEthat I have today filed with the Office. ofthe Clerk ofthe Pollution Control Board the

~al

Comments of the Illinois

EPA, of the Illinois Environmental Protection Agency, a copy of which is herewith served

upon you.

ILLINOIS ENVIRONMENTAL PROTECTION AGENCY

By:

-

D~niel

l~

Merriman

AssistantCounsel

Division of Legal Counsel

DATE: September 24,

1999

Illinois EPA

Division of Legal Counsel

1021

North GrandAvenue

East, P.O. Box 19276

Springfield, Illinois

62794-9276

(217)

782-5544

R99-18

(Rulemaking-Land)

NOTICE

THIS FILING

IS SUBMITTED ON RECYCLED PAPER

---

BEFORE THE POLLUTION CONTROL BOARD

OF THE STATE OF ILLINOIS

IN THE MATTER OF:

)

)

AMENDMENTS TO PERMITTING FOR

)

USED OIL MANAGEMENT AND USED

)

R99-18

OIL TRANSPORT

)

35111. ADM. CODE 807 AND 809

)

SUPPLEMENTAL FINAL COMMENTS

OF THE

ILLINOIS ENVIRONMENTAL PROTECTION AGENCY

ADDRESSING ISSUES RAISED AT THE THIRD HEARING

NOW COMES the Illinois Environmental Protection Agency (“Illinois EPA”), by and

through

its

attorney,

Daniel

P.

Merriman,

and

pursuant

to

35

Ill.

Adm.

Code

103.320,

respectftilly

submits these

SUPPLEMENTAL

FINAL

COMMENTS

OF

THE

ILLINOIS

ENVIRONMENTAL PROTECTION AGENCY ADDRESSING ISSUES RAISED AT THE

THIRD HEARING (“Supplemental Comments”) in the above-captioned matter to the Illinois

Pollution Control Board (“Board”).

The Illinois

EPA contends that the proposed regulations

filed in this matter with the

Board, as modified by the proposed amendments set forth in the FINAL COMMENTS OF THE

ILLINOIS

ENVIRONMENTAL

PROTECTION

AGENCY

AND

PROPOSED

AMENDMENTS

TO

ADDRESS

ISSUES

RAISED

AT HEARING

(“Final

Comments”),

previously filed

in

this

matter on

May 7,

1999

(dated

May 6,

1999), and

incorporated

by

reference herein, constitute a necessary,workable and well-justifiedproposal.

The Illinois EPA

requests

that the Board adopt the proposal, as amended, as submitted.

Background

The history of this proposal is

succinctly stated in the January

21,

1999 Opinion and

JRECEIVED

C!

‘‘‘‘?‘~

~“r’r

SEP 28

1999

STATE OF ILLINOIS

Pollution

Control Board

THIS FILING SUBMITTED ON RECYCLED PAPER

Page

1

---

Order ofthe Board adopting the Illinois EPA’s proposedamendments to 35 Ill. Adm. Code Part

807 for first notice.

In the interest ofadministrative economy, the Illinois EPA refers to pages

one through threeofthat Opinion and Order, and incorporates by reference hereinthat recitation

of the regulatory and statutory framework behind, and the procedural history of, this proposal.

In brief, on November 2,

1998, the Illinois EPA filed a “Motion to Sever the Docket” in In the

Matter of:

Nonhazardous Special Waste Hauling and the Uniform Program, 35 Ill.

Adm. Code

809 (Pursuant to P.A. 90-2 19), docket number R98-29, and requested that the Board sever the

issues regardingpermitting certain usedoil management:faciIitiesand:usediltransp~rter~.from

the remainder ofthe proposal in that proceeding.

On December 17, 1998 the Board granted the

Illinois EPA’s

motion

and opened docket R99-18 to address the used oil issues.

The Illinois

EPA’sproposal went to first notice on January 21,

1999, and the first hearing in docket R99- 18

was

held on February

25,

1999, in Chicago, Illinois.

A second hearingwas held in Springfield,

Illinois, on March

1,

1999.

During the courseofthe second hearingon docket R99-18,

certain issues were

raisedby

members oftheregulated communityconcerning the effectofthe proposedamendments ontheir

operations.

The Illinois EPA believes that some ofthose concerns were adequately addressed

during both the first and second hearings, and incorporates by reference herein the testimony of

Illinois EPA witnesses, both written and oral, offered therein.

However,

a few issues arising

from concernsexpressed by members ofthe regulated’communityremain=edoutstanding, and the

Illinois

EPA addressed those

in its

May

7,

1999 Final Comments,

including

some proposed

language changes to the rules.

Pursuant to the Hearing Officer Order of April

12,

1999, the deadline for filing public

comments

was extended

to

May 7,

1999.

Between the end of the

second

hearing and

the

THIS FILING SUBMITTED

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Page

2

---

comment

deadline, several organizations who were not present or otherwise represented at the

first and second hearings filed comments with the Board.

Due to issues oftiming, the Illinois

EPA was able to address someofthe public comments in its May 7,

1999 Final Comments, but

not all.

OnJune 18, 1999 the Board therefore ordereda thirdhearing,which was held on August

23,

1999,

in

Chicago, Illinois.

At that hearing both the Illinois EPA and representatives ofthe National Oil Recyclers

Association (“NORA”)

were

represented.

TheIllinois EPA providedpre-filed writtentestimony

ofthreeofits witnesses:

Theodore Dragovich,RE., manager ofthe Illinois EPA BureauofLand

Permit Section’sDisposal Alternatives Unit;Lawrence W. Eastep. P.E., manager ofthe Illinois

EPA Bureau of Land’s Remedial Project Management Section; and Leslie D. Morrow, human

health and ecological

risk assessor in the Illinois EPA Office of Chemical Safety’s

Toxicity

Assessment Unit, which testimony was entered into the Record as Illinois EPA Exhibit 3.

In

addition,

the

Illinois

EPA

provided

oral

testimony

from

its

witnesses

summarizing

and

supplementing theirwrittentestimony was provided, aswell asoral testimony given in response

to

questions

and comments presented at hearing by

representatives of NORA, and

in

some

instances, the Board.

Atthe third hearinga numberofissueswere raisedby NORA

in opposition

to the Illinois

EPA’s proposal.

These issues were generally addressed by the Illinois EPA in its witnesses’

written and

oral

testimony,

which

is

hereby

incorporated

by

reference

in

support

of these

Supplemental Comments.

However, certain ofthe issues raised at the third hearing by NORA

were apparently ofsufficient concernto its membership-to be addressed repetitiously thoughout

the hearing.

Although NORA’s complaints about theIllinois EPA’s proposal were many and varied,

THIS FILING SUBMITTED ON RECYCLED PAPER

Page 3

---

they each generally fell into

one of three categories.

First, NORA contended that the Illinois

EPA’s proposal to require certain used oil recycling facilities to obtain State permits, pursuant

to 35 Ill.

Adm. Code Part 807, is an unnecessary application of regulatory authority.

Second,

NORA asserted that the Illinois EPA’s proposal to require such State permits will result in the

imposition of an unduly burdensome impact on its

members.

The third and final category of

NORA’s objections was its claim that the Illinois EPA’s proposal is unfairand anti-competitive

in

its effect.

Although the Illinois EPAattempted to fullyrespond-to~NORA’

sconcerns

at

the hearing,

the repeated utterance ofthose

concerns suggests that

the Illinois EPA’s responses may also

require repetition,

and, perhaps in some instances, clar~cationor~u~ip1ementation~According1y

the following remarks are intended to

address those

concerns raised

by

NORA at the third

hearingthat the Illinois EPAbelieves bear repeating.

Since NORA’s representatives expressed

their objections and concerns in rather a “shotgun” approach, scattered throughout the hearing

record, the Illinois

EPA will attempt to address them in accordance with which ofthe general

categories of complaints, mentioned above, that they fall into, and not chronologically in the

order in which they

were presented.

In addition, NORA presented at the hearing a proposal for the imposition ofa “bright

line” standard to determine when used oil is deemed a waste, subject to regulation, and when it

is deemed a product or commodity, not subject to regulation by the Illinois EPA. Although not

a part ofthis proposal, the rulemaking, The Illinois EPA will comment below on that proposal,

as well.

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4

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NORA’S COMPLAINTS AND ILLINOIS EPA’S RESPONSES

I.

UNNECESSARY REQUIREMENT

A.

ISSUE:

EXISTENCE OF OTHER REGULATIONS

1.

NORA’s Complaint or Comment:

NORA’s argument is simply that sincemuchoftheirusedoilrecyclingathvityisalrewdy

subject to substantive regulation (e.g., the used oil management standards of35 Ill. Adm. Code

Part

739;

the underground storage tank regulations of 35 Ill.

Adm. Code Part 732, the federal

Toxic

Substances

Control

Act

of

15

U.S.C.

§~

2601

to

2692,

as

it

relates

to

used

oil

contaminated with polychlorinated biphenals,(“pcbs”);thefederalCleanWater Act of33 U.S.C.

§§

1251

to 1387,

and associated State regulations as they relate to used oil POTW discharges,

federal DepartmentofTransportationhazardousmaterial transportationregulat~cnsasthe~re1ate

to the transportation offlammable materials, etc.), and sincethe llinois.EPA

can freely inspect

to

ensure

compliance

with

those

substantive

provisions,

and

since the

government has the

enforcementability to require remediation should then~

be

it~ation,

thenadditional regulation

requiring permits

for their facilities is

completely unnecessary.

(See,

e.g.,

August 23,

1999

Hearing

Transcript (“Tr.”), pp. 30-33.)

2.

Illinois EPA’s Response:

The Illinois EPA’s proposal does not seek to impose any new or additional

substantive

standard or used oil management

requirements.

The applicable

substantive regulations

that

apply to used oil recycling facilities are the same now as they will be when the Illinois

EPA’s

proposal is adopted.

Although the current statutory and regulatory substantive provisions that

may apply to a used oil recycling facility supply the necessary authority to require remediation

ofa release ofusedoil intothe environment,

after thefact,

the

purpose ofpermitting

is to ensure

THIS FILING SUBMITTED ON RECYCLED PAPER

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Page 5

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environmentally safe operation ofa waste management facility

in the future by requiring the

applicantto address in advance the environmental irnpa:~f

its planned activities.

(By analogy,

themere factthat petroleumunderground storagetank(“UST”) regulations existthat addressthe

remediation steps once petroleum has been released into the environment from an UST should

not

be

considered a

valid

argument

against

the

Office

of State

Fire

Marshal

maintaining

regulations forthe proper installation and maintenance ofUST5.)

All this proposal seeks to do

is to reinstatethe permitting requirementto a subset ofused

oil management facilities that were previously required to have State permits issued pursuant to

35 Ill. Adm. Code Part 807.

Those facilities that would be subject to permit requirements under

this proposal are usedoil transferfacilities, used oil processors, used oil marketers who market

used oil other thanthat generated by their own activities from the site where generated, used oil

burners of off-specification used oil and petroleum refining facilities, as defined in 35

Ill. Adm.

Code

739.100.

Prior to the Board’s adoption ofthe used oil management standards of35

Ill.

Adm.

Code Part

739,

such facilities were permitted pursuant to

35

Ill.

Adm.

Code Part

807.

-

(See,

e.g.,

Inthe Matter of: Amendments to Permitting for Used Oil Management and Used Oil

Transport35 Ill. Adm. Code 807 and 809 (January 21, 1999), Proposed Rule, FirstNotice, R99-

18,

p.

1.)

In fact, many ofNORA’s Illinois members previously had state operating permits

issued by the Illinois EPAthat covered their management ofused or waste oil.

The exemption

ofused oil management facilities from permitting requirements that the Illinois EPA is seeking

modifyin this proposal was an inadvertent, unintended resultofthe selectionofthe Part number

applied to the used oil management standard regulations as affected by the language of35 Ill.

Adm.

Code 807.105(a).

(Id.

p.2.)

Thefederal government, in promulgating the used oil management standards in 40 CFR

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Part 279, did not intend to do away with all existing state permitting requirements. Forexample,

40

CFR

279.31(b),

relating

to

used

oil

collection

centers,

provides

that

such

used

oil

management

facilities

must

“be

registered/licensed/permitted/recognized

by

a

state/county/municipal government to manage used oil.”

In In the Matter of: RCRA Update.

USEPA Regulations (7/1/92

--

12/31/92) (Identical in SubstanceRules), (September23, 1993),

Adopted Rule, Final Order, R93-4, pp. 76-77, the Board stated that it had requested comments

asto whether, among other things, the used oil management standard regulations contemplated

the creation ofa permit process.

USEPA commented, in part, as follows:

The Administrator may require owners or operators to obtain a permit pursuant

to RCRA Section 3005(c) ifhe determines that an individual permit is necessary

to

protect

human

health

and

the

environment.

We

have

contacted

Headquarters

about

this

issue.

(They)

...

informed us

that

state

and

local

governments retain some

discretion to choose the type and extent ofoversight.

Thus what Illinois EPA is seekingto accomplish in this proposal is not prohibited by federal law

and is amply supported by ourexperience and history.

(See, e.g., Tr. pp.

15

-

20.)

The addition

ofthe permitting requirementforcertainusedoilmanagement-facilities-isTaTprospectivelapproath

to insure proper used oil management before environmental problems occur.

The permitting

process will insure that the used oil management facilities operating procedures and designare

in compliance with the appropriate environmental standards.

B.

ISSUE:

RE-REFINING

1.

NORA’s Complaint or Comment:

NORA contends that problems of the past, as illustrated

by Mr. Eastep’s’s

testimony

about the numerous lengthy and costly used oil remediation projects, are unrelated to present

THIS FILING SUBMITTED ON RECYCLED PAPER

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7

---

recycling practices, because they relate only tore-refiners,

a process that is neither economical

nor in use today, so

it is unnecessary to require NORA’s constituents,

primarily used oil fuel

blenders, to obtain permits.

(See, e.g.,

Tr. pp 30, 39,

130.)

2.

Illinois EPA’s Response:

Contraryto NORA’sassertions, re-refining is still beingperformedtoday. There aretwo

used oil re-refining

facilities in the Chicago area.

One ofthese facilities

is located in Illinois.

The other, a relatively new facility, and one ofthe largest in the country, is operated by Safety

Kleen in East Chicago, Indiana.

As recently

as five years

ago,

while looking at an expanding

market, re-refinerswere processing roughly 100 millions gallonsofusedoil annually, producing

62

million gallons

of re-refined

base

oil.

The federal

government

has

guidelines

in

place

creating a re-refined lubricating oil purchasing preference policy.

With rising consumer desire

to purchase recycled products and mandates that governments purchase recycled products, we

hope the demand for recycled lubricant oils will rise.

Therefore, it would not be appropriateto

considerthe adoption ofregulations based solely on theirapplicability to usedoil fuelblenders.

C.

ISSUE:

INDUSTRY IMPROVEMENTS

1.

NORA’s Complaint or Comment:

NORA

claims

that

used

oil

has

gotten

“cleaner”

over

time,

based

on

automobile

manufacture and gasoline refining improvements, so the potential human health and ecological

hazards ofa release ofused oil into the environment discussed in Mr. Morrow’s testimony are

no longer a concern.

(See, e.g., Tr. pp. 30, 37.)

-

2.

Illinois EPA’s Response:

NORA provided no background or basis for making this assertion.

The only thing that

we know for certain about such alleged changes is the reduction in the lead content ofgasoline.

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What

the effect ofthe lead

reduction in gasoline is on used automotive crankcase

oilhasnot

been

demonstrated in

the

Record in

this proceeding, and there remain other sources ofused oil subject

to

the used oil management standards that

may apply to

this proceeding.

Additionally, lead

is

only one of

the constituents ofconcern when managing used oil.

Accordingly, this conclusory

statement

by NORA is not something upon which the Board should base its

decision.

D:

INSPECTION AUTHORITY

1.

NORA’s Complaint or Comment:

NORA’s contention that since the Illinois

EPA has broad inspection authority, cannot

point to

any instances where used oil recyclers have refused inspections, and at the same time

has not conducted many inspections, it

can therefore not

be said that thereare any current (post-

Part 739) problems at used oil recycling facilities that warrant the exercise ofpermit authority.

(Tr. pp.

33, 58-61) In a similar vein,NORAasserts that since inspections generally occur asthe

result ofa complaint, the fact that are

few inspections must mean

that thereare few complaints.

NORA further asserts then that the fact that there are few complaints, must mean that are few

problems occurring at used oil recycling facilities.

(Tr. p. 33.)

2.

Illinois EPA’s Response:

The conclusion reached by

NORA that

the

fact that there have been relatively

few

regulatory

inspections

of

used

oil

management

facilities

must

mean

that

there

are

correspondingly

few environmental

problems associated

with

managing used

oil

does not

necessarily follow.

First, complaints usually

occur when a facility’s

operations

are impacting

offsite areasthrough visual contaminationor odors.

Inspections in responseto odorcomplaints

maybe limited to emissions from tanks and process equipment. Therefore, seriousproblems are

usually present before a complaint would prompt a Bureau ofLand inspection.

Additionally,

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the Illinois EPA stated at the hearing its beliefthat there were other administrative reasons why

there have been relatively fewinspections ofused oil recycling facilities, not the least ofwhich

is limited resources.

(E.g., Tr. 59

-

60.)

Because these facilities are not inspected routinely, we

do not have a very good picture ofany additional environmental damage thesefacilities may be

creating, but the factthat these facilities are not inspected routinely does not establish that there

is no such damage.

II.

UNDULY BURDENSOME

A.

ISSUE:

MORE

STRINGENT THAN FEDERAL STANDARDS

1.

NORA’s Complaint or Comment:

NORA contends that Illinois EPA’ s present proposal creates more stringent substantive

obligations than are imposed under the used oilmanagement standards of35Ill. Adm. Code Part

739 (E.g., Tr. pp. 36.)

-

2.

Illinois EPA Response:

As previously stated, this proposal relates to permitting

usedoil transfer facilities, used

oil processors, used oil marketers who market used oil other than that generated by their own

activities

from the

site where

generated,

used oil burners of off-specification

used oil

and

petroleum refining facilities,

as defined in 35

Ill. Adm. Code 739.100.

It does not propose any

modifications oradditions to existing used oilmanagement standards.

There is no logical basis

to compare a procedural permitting regulationwith a substantive operating standard.

It would

be analogous to stating, forexample, that 35 Ill. Adm.

Code Part 705

is more stringent than Part

724.

Even if this proposal did seek to impose substantive standards

that are more stringent

than the existing

used oil management

standards,

however,

35

Ill.

Adm.

Code Part

739

is

a

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RCRA pass-through provision ofthe federal used oil management standards of40 C.F.R. Part

279.

Under Section

3009 of RCRA,

42

U.S.C.

§

6929,

States are prohibited

from

imposing

requirements that are

less

stringent thanthe federal counterpart, but theyare not prohibited from

imposing requirements that are more stringent.

B.

ISSUE:

FEAR OF PROHIBITIVEREGULATION

1

NORA’s Complaint or Comment:

-

NORA repeatedly

argued that if this

proposal

is

adopted,

Illinois

EPA will impose

extensive, intrusive and prohibitive permit

conditions that will have an adverse impact on its

members

ability to

stay

in

business.

For example,

without anything

on

which

to

base

its

subjective fears, NORA suggested that the Illinois EPA might impose the requirement to do a

full TCLP

analysis of every batch of used oil received at the recycling facility.

(Tr. p

56.)

Moreover,

based

on

Mr.

Eastep

‘

s

comments

that

were

plainly

prefaced

that

they

were

observations from his perspective as a remediator,NORA assumed that the Illinois EPAwould,

if giventhe opportunity

in a permit, require site remediation prior to issuance ofthe permit (Tr.

p.

65),

would impose its own design standards

for tanks (Tr. pp. 66-69), and require additional

tests for such constituents as sulphur and bottom sediment and water (“BS &

W”).

(Tr. p. 89.)

NORA’s comments exhibited a belief that the Illinois EPA, once granted the

-

ability to require

permits, would have unbridleddiscretion in imposingwhateverrequirements it desired on each

recycling facility.

2.

Illinois EPA’s Response:

At the hearing the Illinois EPA repeatedly reminded NORA that should its proposal be

granted, the Illinois EPA’s permitting authority could not be

exercised in a vacuum.

(E.g., Tr.

pp.

47

-

51.)

This proposal

does not

include

additional

used oil recycling management

or

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operational standards.

The applicable management and operational standards that exist today

are the

same ones that

will exist

when the proposal

is

adopted.

In general,

the terms

and

conditions of the

permit

would

relate

to

the methods

by

which

the

operator,

in

its

permit

application, proposed to meet the applicable standards.

Both

Section

39(a)

of the Illinois

Environmental

Protection

Act

(“Act”), 415

ILCS

5/39(a), and 35 Ill. Adm. Code 807.206 restrict the Illinois EPA’s ability to impose conditions

to those

conditions necessary to avoid violations of the Act and the regulations promulgated

thereunder,

and

that

are

not

inconsistent

with

existing

regulations.

While

providing

the

flexibility to tailor site-specific permit conditions, neither theAct norPart 801 afford the Illinois

EPA with unbridled discretion.

Additionally, if the Illinois EPA imposes a condition that the

facility operator believes is

unwarranted and

unduly

burdensome, the permit review process

affordedby Section 40(a) ofthe Act grants theBoard the final say on thereasonableness and the

necessity

thereof.

The Illinois

EPA has no ability or desire to

impose prohibitive conditions on used oil

recyclers.

At the hearing, Mr. Dragovich testified to the position ofthe Illinois

EPA on this

issue:

A reviewofthe facilities that have now notified USEPA or Illinois EPA oftheir

usedoilactivity indicatesthat most facilities, which would be requiredunder this

proposal to obtain a Part 807 permit, previouslyoperated under a Part 807 permit.

Facilities that previously operated under a part 807 permit and those facilities that

are designed

and

operated

according

to

appropriate industry

standards

could

comply with the Part 807 regulations.

The

requirement to

obtain

an

Part

807

permit

would

not

be

unduly

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burdensome to a well-run facility which is

currently operating under Part 739.

(Tr. pp.

13

-

14.)

With respect to NORA’ sfears that the Illinois EPAwill use its conditioning authority to impose

design standards

on the facility, Mr Dragovich again accurately expressed the Illinois EPA’s

policy:

A performance standard offers

a

lot

of flexibility, but

ultimately the

facility

operator is going to

have their own design standards

and operating

procedures

that they’ve developed over time that they’re going to show

—

demonstrate

—

will meet the performance standard.

So it does involve performance

—

I mean,

itdoes involve operating standards and design standard.s,but no.t~e-~1ect~.by

the Agency.

So we’re not going to establish design standards.

(Tr. p. 69.)

Nonetheless, NORA continued to take issue

—

not on what the Illinois EPAhas proposed

—

but

rather on what NORA hassupposed

—

that the Illinois EPAmight do.

For example,when asked

at the hearing for an opinion about the sample permit application forms supplied by the Illinois

EPA, NORA’s general counsel, Mr. Harris stated:

.the actual permit

application that you see before you is I don’t think overly

intrusive,

but based

on the

information generated

from

that

or ideas-that the

Agency has, it could be extraordinarily burdensome

(Tr. p.

141.)

As previously stated, Illinois EPA has neither the authority nor the inclination to

impose burdensome obligations beyond the existing environmental standards.

III.

UNFAIR, ANTI-COMPETITIVE EFFECT

A.

ISSUE:

WASTE OIL RECOVERYACT

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1.

NORA’s Complaint or Comment:

At the hearingNORA’s contended that the Illinois EPA’s proposal to require permits of

certain used oil management facilities

was

in violation of Section

9 ofthe Illinois Waste Oil

Recovery

Act

(“WORA”),

815

ILCS

440/9

(Tr.

pp.

37,

41.)

That provision

requires

State

officials to

“act

within their authority

to

encourage

the use of recycled oil and prohibit any

discriminatory action which would be a discouragement to the use ofrecycled oils.”

2.

Illinois EPA’s Response:

Illinois EPA believes that its proposal to require facilities that handle large amounts of

used oil to

return to

the

former requirement of operating

under

a

Part

807

permit

is

not

a

discriminatory action

that discourages the use ofrecycled oils, and thus it is not in violation of

Section

9 ofWORA.

No

additional

management or operating

standards

are included in this

proposal.

This proposal doesnot address the “use”ofrecycled oil. It does not prohibit orrestrict

the use ofburning used oil fuel for energy recovery nor does it prohibit orrestrict the use or re-

refined used oil for lubrication.

All it does is propose a permit requirement to help assure that

used

oil

processors,

blenders,

re-refiners

and

the

like

meet

the

current,

existing

used

oil

management standards.

Under

Section

9

of WORA,

State

officials

are bound

to

act within their authority.

Section

4 of WORA includes as one of the purposes of WORA, in addition to

encouraging

recycling of used oil, the

goal ofprotecting the health and welfare of the people of Illinois.

In

accordance with the obligation to encourage use of recycled oil the Illinois EPA has proposed

that used oil aggregation points and collection centers

—

previously subjectto Part 807 permit

requirements

—

not be included in the proposedpermit requirement.

The Illinois EPA believes

that this proposal is the best alternative to both encourage the recycling ofused oil and protect

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the environment from the mismanagement of used oil.

B.

ISsuE:

UNFAIR

COMPETITION

1.

NORA’s Complaint or Comment:

NORAasserts that theIllinois EPA’sregulatory proposal will imposeregulatory burdens

that will undermine an Illinois used oil recycler’s abilityto compete with marketers ofvirginoil

products (e.g., Tr. pp. 30, 47), and out-of-State used oil recyclers.

(E.g.,

Tr. pp.

38, 54.)

2.

Illinois EPA’s Response:

Althoughrepeatedly making the claim,NORAhasnever explainwhy usedoilburnerfuel

is inherently at a competitive disadvantage over virgin fuel oil.

(See Tr. p. 53.)

The addition of

the permitting

requirement for certain used oil

management

facilities

in the

Illinois

EPA’s

proposal is a prospective approachto insure proper used oil management before environmental

problems occur.

The permitting

process will insure that the used oil management

facilities

operating procedures and design are in compliance witirtheappropriate

existing

environmental

standards.

The Illinois

used oil recyclers

that

make up NORA’s membership

are currently

subject to those standards and claim to be in compliance.

Assumingthat theusedoil recyclers arecurrently in compliancewith-existing substantive

standards, there should

be no

changes in their operating

costs

as a result of adoption ofthis

proposal.

Iftheir facilities are well runthere should be no additional burden ofcomplying with

the terms

and conditions

of a

permit.

If they are competitive with

marketers of virgin oil

products now, they should remain so if this proposal is adopted.

It is interesting to

note that at

the third hearing, the Illinois

EPA repeatedly asked NORA why the regulatory “burden” ofa

permit is prohibitiveand would runrecyclers outofbusiness~ow,

whenpreviouslythe majority

ofthe members operated, apparentlysuccessfully, under State permits.

(Tr. pp.

55-56,

97, 132.)

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No answer was ever obtained.

With

regard to

its

claim that

a

permit

requirement would

result in

Illinois

used

oil

recyclers beingplaced ata competitive disadvantage-without-of-Stateusedoil recyclers, NORA

cited the hypothetical

example of an Illinois

used oil recycler that wanted to use a

Chicago

commercial storage facility to store used oil that would be subject to a permit requirementunder

theIllinois EPA’s proposal.

The Chicago facility did not want to obtain a permit so it chose not

to

do business with the recycler. NORA contrasted this situation with an Indianarecycler that

took identical to a commercial facility in East Chicago, Indiana, with no permit requirement, and

concluded:

So

it

means

that

the

Illinois

recycler

can’t

use

that

Chicago

commercial

facility probably

and

any

other

one,

but

an

out-of-state

recycler,

in

fact

can

use the

East

Chicago

facility.

Is

there not

a

discriminatory effect as a result ofthis proposed regulation?

(Tr. pp.

92-93.)

Despite assertions like this, NORAneverdid explainjustwhat thealleged discriminatory

effect on the Illinois recycler was, and why the Illinois recycler could not merely take its used

oil across the border to the Indiana facility forcommercial storage, a practice that is common in

the industry.

In contrast to NORA’s claims that the present proposal will put them

at a competitive

disadvantage with out-of-State recyclers,

being permitted as an existing facility in Illinois may

actuallyprovideNORA’s members with a competitive advantage.

Operating under a permitted

status may actuallyenhance their competitiveposition.

Forexample, at thethirdhearing, Board

Member McFawn posed the following question to a member ofNORA:

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Do you think the presence of a permit

and holding a permit

would somehow

make those potential customers that much less

inclined?

Mr. Rundell:

I think the stigma of a material being a waste at one time and the

potential ofthat liability carrying forward makes it difficult to market.

(Tr. p.

126.)

Mr. Rao then pointed out that both the “stigma” of used oil being a waste and the

potentialforliability exist today, independentlyofthe Illinois EPA’sproposal to requirepermits.

(Tr. p.

128.)

Withrespectto the potential liability issue, a usedoilrecyclingfacilitythat transfers what

it claims

to

be

on-specification used oil

fuel not

under

manifest

to

an

unpermitted Illinois

facility, runs the risk ofpotential

liability in the event that the used oil turns out actually to be

off-specification or on-specification used oil that still meets the statutory definition ofspecial

waste

due

to the presence of other contaminants.

The receiving facility is also at risk.

Ifthe

recycling facility is permitted, and the permit includes a description oftherecydlingprocess:and

the particular waste stream involved,

and further when in that particular process the used oil

ceases to

be waste

and

is no

longer regulated,

it would seem that both

a recycler who

is

in

compliance with thepermit and thereceiving facility would be in a muchenhanced positionwith

respect to any potential liability.

Mr. Lenz, a NORA member, explained at the third hearing that his major concern was

not a requirement to obtain a permit for his own facility, but ratherthe fearthat the Illinois EPA

would require used oil fuelburners to be permitted.

He agreed with Member McFawn that “if

anything, thepermit might make you more legitimate.”

(Tr. pp.

128, 129.)

Mr.Harris, NORA’s

general counsel, also admitted that “the factofhavinga permit in and ofitselfdoesn’t create any

particular burden

....“

(Tr.

p.

129.)

He reiterated, however, that one ofthe major concerns of

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NORA was fear that Illinois EPA might intrude into the activities ofthe burner, which might

then resultin adverse market conditions forused oil fuelblenders.

(Tr. pp.

128-132.) However,

as both Mr. Rao and Mr. Dragovichpointed out, under the proposal, burners ofon-specification

used oil as fuel are not subject to permit requirements.

(Tr.

143,

145.)

One additional

example where

having a permit

may actually result in

a

competitive

advantage to an Illinois recycler, when compared to an out-of-State recycler attempting to do

business

in

Illinois,

is

the

manifesting

requirements

of

35

Ill.

Adm.

Code

809.301

and

809.302(a).

Illinois permitted facilities are eligible forthe use a multi-stop manifest.

However,

sincethe multi-stop manifest is tied to a permit, an out-of-State recycleris ineligible foramulti-

stop manifest, but is

still subject to the manifest requirements~.

cited above.

Therefore, it is far

more convenient fora permitted recycler with a multi-stop manifest capability to make used oil

pick ups from individual generators than it

is for an unpermitted recycler who must obtain a

separate manifest from each generator.

NORA’S COUNTER PROPOSAL

NORA’s Position

Representatives ofNORA proposed that there should be a bright line to delineate when

used oil is

a special waste and when it is a commodity.

NORA contends that Illinois

EPA’s

desire

to

require permits

for some

used oil management

facilities

is

primarily,

or solely,

a

concern about used oil that has very

little,

or no, economic value, and thus

is less likely to be

stored and managed properly.

(Eg., Tr. p. 40.) Accordingly,NORA hasproposedthat only used

oil that has no or little

value be regulated

as a special

waste

and

deemed

subject to

permit

requirements. They suggested two different methodsto determine thisbrightlir1e

Qneproposed

method deems used oil that does not meet the used oil fuel specification of 35 Ill. Adm. Code

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739.111

(“off-spec”), orused oil that does meet the regulatory used oil fuel specification (“on-

spec”)butthat also contains, by volume, 10

or greater bottom sediment and water (“BS&W”),

to

be

subject to

permit requirements and

managed as

a

special waste.

Accordingly, under

NORA’s proposal, management ofon-spec usedoilwith less than 10

BS&Wby volumewould

be

deemed permit exempt.

(See,

e.g., Tr. pp.

40-41.)

NORA suggested that an agreed upon

minimum

BTU

value could just as easily be substituted

for the BS &

W test to

determine a

bright

line

between a waste

and

a

commodity.

The second

method

is

based

on

an ASTM

specification for boiler fuel for asphalt plants.

Illinois EPA’s Response

The issue that NORA was attempting to address

is not directly related to

the present

regulatory

proposal.

It arises from the fact that at some point during the process ofrecycling

used oil it moves from being a

special waste,

subject to regulation as used oil, to a valuable

commodity, and at that point it is no longer subject to regulation.

Initially, NORA arguedthat

the used oil fuel specification of35 Ill. Adm.

Code 739.111

should be the bright line.

35 Ill. Adm. Code 739.111

sets out certain specifications for used oil that is burned for

energyrecovery, orfuelproducedfrom usedoil by processing, blending, orothertreatment.

The

specifications set forth maximum allowable levels ofarsenic, cadmium, chromium, lead, flash

point and total halogens.

This used oil fuel specification generally does not apply to mixtures

of used oil and

characteristic or listed

hazardous

waste

that

still

exhibit

a

hazardous waste

characteristic, used oil contaminated with pcbs and used oil containing more than

1,000 ppm

total halogens.

The used oil fuel specification provides that once used oil that

is to be burned

for energy recovery has been shown not to exceed any specification and the personmaking that

showing complies with the requirement to

determine that the oil fuel meets specification

by

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appropriate

analysis

and

retains

copies of the

analysis for three years

(35

Ill.

Adm.

Code

739.172), complies with the requirednotice provision (35 Ill. Adm. Code 739.173), and retains

the required shipment record for delivery to the burner(3 5 Ill. Adm. Code 739.174(b)), the used

oil is no longer subject to regulation under the Part 739 used oil management standards.

Meeting

the

fuel

specification

could,

potentially,

result

in

the

material

becoming

inherently commodity-like and therefore

no

longer deemed a

waste,

and thus not

subject to

further environmental regulation, if it actually burned for energy recovery.

On the other hand,

what NORA apparently initially misapprehended, is that in some cases, even though no longer

regulatedas “used oil” under Part 739, thematerial may still meet the definition ofspecial waste

under

Illinois

law

if

it

contains

contaminants

other

than those

listed

in

the used

oil

fuel

specification that renderit unsuitable as a commodity~(Tr. p.

115.)

(See, also 415 ILCS 5/3.53,

5/3.45(c) and 5/3.17.)

In addition, the specification for used oil fuel may not be appropriate for

re-refined

used oil lubricants.

Moreover,

the practice

in the

industry

sometimes

results

in

accumulation storage ofused oil until market conditions produce a buyer, that may ormay not

be a used oil fuel burner.

At the hearing, NORA conceded, however, a logical nexus between used oil that

is of

such poor quality or of such low oil

content that it

is

not recyclable,

thus

suitable

only for

disposal, and the lackoffinancial incentives to manage the oil responsibly, andthusagreedthat

such usedoil should be subject to enhanced regulatory controls. (See, e.g., Tr. pp. 40,

109,

166.)

While this category ofused oil is indeed a concernto the Illinois EPA, itis not the Illinois EPA’s

only concern.

The testimony of Larry Eastep amply illustrated that Illinois’

experience with

serious environmental contamination from facilities managing usedoil was a resultoftheir poor

operational practices, not

the poor quality of their used

oil.

The historical record does not

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support

the proposition that only low economic value used oil has been, or is capable of being

released into the environment.

Neither

of

NORA’s

proposals

to

create

a

bright

line

between

special

waste

and

commodity

was

supported

with

technical

information

which

would

establish

that

used oil

meeting these limits would,always be a commodity. Accordingto NORA’s owntestimony, used

oil near the

10

BS&W limit is of questionable economic value and may not be

usable in that

condition.

(Tr.

pp.

40,

109,

166,

173.)

The second

proposal, the ASTM

standard, even if

appropriate for boilers at asphaltplants, is probably not appropriate forlubricants or some other

fuel

uses.

Any regulatory proposal

for a bright line for identifying when used

oil is a commodity

should also consider all aspects ofthe usedoil recycling industry.

Such a proposal is not within

the scopeofthis proceeding, and the Illinois EPAwas and is unpreparedto recommend adoption

of NORA’s proposal

without further

study.

The

10

BS &

W was admittedly

an arbitrary

figure.

(Tr. p.

166.)

Given the statutory definitions ofwaste and special waste,

establishing a

bright line like NORA desires might even require an amendment to the

Act.

The Illinois EPA is not suggesting that NORA does not have a legitimate concern.

This

is particularly true as it relates to the practice ofNORA’s concern accumulating used oil in off-

site commercial

storage

facilities

to

store

on-spec

used oil that

may or may

not

meet

the

definition ofspecial waste.

(Eg., Tr. pp. 70-81, 169-175.) NORA’s obvious concern stems from

its assertion that no third-party, off-site commercial storage facility will willingly submitto the

permitting process just to rent interim storage space to used oil recyclers.

(E.g.,

Tr. pp.

41.)

Accordingly, the recycling facility must be able to make the determination that its on-spec used

oil is also not a special waste, before transporting it to an off-site commercial storage facility or

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risk potential

liability for violating

Section

2 1(d) ofthe Act, 35

Ill. Adm. Code 809.301 and 35

Ill. Adm. Code

809.302(b).

Section

21(d) of the Act

generally prohibits

any

person from

conducting

any

waste

storage, waste treatment, or waste disposal operation, for wastes not generated on-site by such

person’s own activities, withouta permit issued by the Illinois EPA.

35 Ill.Adm.Code

809.30 1

prohibits the transportationofnon-hazardous special waste withouta special waste manifest and

35

Ill.

Adm.

Code 809.302(b) prohibits the delivery ofany

non hazardous

special waste to a

facility that does not have “a current, valid operating permit” issued by the Illinois

EPA.

NORA’s

opposition

to

the

Illinois

EPA’s

proposal

on

this

grounds

is

misplaced,

however, because under the current statutory definitions and regulations, usedoil recyclers and

storage facilities must make this determination today, independent ofany permit requirements.

This regulatory proposal was

an attempt

to address which facilities

need permits

and which

facilities

need to

ship

their waste

under

manifest.

Addressing

when a used oil becomes a

commodity

is

beyond

the

scope of this

proposal.

Other

portions

of the

general

public

or

regulated community which may have had no objections to the concept ofrequiring permits for

usedoilmanagementfacilities mayhave an interest isthis-separateissue. Therefore, the Agency

does not recommend adopting

as part ofthese proceedings, either proposal for establishing a

bright line for determining that used oil is no longer a solid waste.

COSTS OF COMPLIANCE

As previously stated, assuming that the usedoil recyclers subjectto permittingunder-this

proposal are currently in compliance with existing substantive used oil management standards,

there should be no significant changes in their daily operating costs as a result of the adoption

ofthis proposal.

Iftheir facilities are well run there should be no additional financial burdenof

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complying with the terms

and conditions of a permit.

While Mr.

Eastep suggested that it would

be a good idea,

35 Ill. Adm. Code Part 807 does not requirefacilities otherthan sanitary landfills

to post financial assuranceforclosure and post-closurecare costs.

Therefore,the only significant

cost

factor

to

the

regulated

community

associated

with

this

proposal

would

be

the

costs

associated with preparing and

submitting a permit

application.

Such costs

can vary widely

depending on the complexity ofthe facility and its operations, and the amount ofdata about its

facility and equipment that already exists.

Generally, a well run facility should already possess

much of the data required for preparation of the application,

thus further reducing the

costs

involved.

Existing

facilities under

the proposal

would generally not require a

development

permit,

and if the facility

already has

an existing

solid

waste

management permit

for other

regulatedactivities, aperrnitmodification should be sufficie-nttoTperrnit:theused oil management

units.

It is again interesting to note that at the third hearing, the Illinois EPA repeatedly asked

NORA whythe regulatory “burden” ofobtaining and possessing a permit would be prohibitive

and

would run used oil recyclers

out of business now, when previously the majority

of the

members operated, apparently successftilly, under State permits.

(Tr.

pp.-

55-56,

97,

132.)

No

answer was ever obtained.

MISCELLANEOUS MATTER

At the third hearing, Board

Member McFawn asked that the Illinois

EPA send her

a

method oflocating a report cited in Mr. Dragovich’s

testimony which referenced statistics on

used oil.

The US

EPA web site that pertains to used oil is found at the following un

address::

epa.gov\epaoswer\osw\topics.htm.

Thecurrent Office ofSolid Waste used oil contact is Mike

Svizzero, whose telephonenumberis 703-308-0046. Mr. Dragovich has contacted Mr. Svizzero

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and requested a copy of

the specific report.

To date, the Illinois EPA has not received a copy of

the report.

CONCLUSION

This concludes the Illinois EPA’s Supplemental Comments

in this matter.

The Illinois

EPA has attempted in these Supplemental

Comments to address what it understands to be the

principle areas of concern raised during the third hearing.

The Illinois EPA stands

behind its

proposal, as amended

in the Final Comments of May 7,

1999.

WHEREFORE,

the Illinois EPA hereby submits

its

Supplemental Comments

for the

Board’s consideration and respectfully requests that the Board adopt the Illinois EPA’s proposal

in its

entirety, including Errata Sheet Number

1

and the additional

amendments addressed in

these comments.

Illinois

Environmental

Protection Agency

By:___

Daniel

P. Merriman

Assistant Counsel

Division ofLegal Counsel

Dated:

September 24,

1999

1021

N. Grand Ave. East

P.O. Box

19276

Springfield,

Illinois 62794-9276

(217) 782-5544

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CERTIFICATE OF SERVICE

The undersignedhereby certifies that I have served the attached SUPPLEMENTAL FINAL

COMMENTS OF THE ILLINOISENVIRONMENTALPROTECTIONAGENCYADDRESSING

ISSUES RAISED AT THE THIRD HEARING on behalfofthe Illinois Environmental Protection

Agency upon the persons to whom

it is directed, by placing a copy in an envelope addressed to:

Dorothy M. Gunn, Clerk

Pollution Control Board

James R. Thompson Center

100

West Randolph St., Ste.

11-500

Chicago, Illinois 60601

(First Class)

Robert

Lawley,

ChiefLegal Counsel

Department of Natural Resources

524 South Second Street

Springfield, Illinois 62701-1787

(First Class)

Service List (attached)

(First Class)

Matthew

J. Dunn, Chief

Environmental Bureau

Office ofthe Attorney General

James R. Thompson Center

100 West Randolph St.,

12th Floor

Chicago, Illinois 60601

(First Class)

Joel Sternstein, Hearing Officer

Illinois Pollution Control Board

James R. Thompson Center

100 West Randolph

St., Ste.

11-500

Chicago, Illinois 60601

(First Class)

and mailing it from the Springfield, Illinois on September 24,

1999, with sufficient postage affixed.

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---

SEP-22-99

08:16

FROM:

ID:

PP~CE

2

SERVICE LIST

(R99~I8)

Matthew J Dunn, Chief

Environment Burenu

Office

of

the Attorney General

100 West Randolph St.,

12th Floor

Chicago~,

IL

60601

Dorothy M. Gunn. Clerk

IL Pollution

Control Board

100

We:st Randolph Street

Suite

11—500

Chicago.

IL

60601

Cynthia Hilton, Executive Director

Assoc.

of

Waste Hazardous Materials Transporters

2200

Miii

Road

Alexandria,

VA 22314

Jeffrey Jeep

EMCO Chemical Distributors,

Inc.

2100 Commonwealth Avenue

North Chicago, IL 60064

Jennifer

Marsh

Chemical 1.ndustiy

Council ofIllinois

9801

West Higgins

Suite

515

Rosemont, IL

60018

Sanjay K. Sohtt

Illinois Environmental Regulatory Group

215

East Adams Street

Springfield,

IL 62701

\‘icki Thomas

JCAR

Wrn,

0,

Stratton

Bldg., Room

700

Springfield.

IL 62706

Kimberly A Geving, Assistant

Counsel

Illinois E.P.A.

Division of I..egal Counsel

1021

North Grand

Avenue East

Springficld, ii. 62704-9276

Christopher

iiarri

s,

General Counsel

National Oil Recyclers Association

1439

West Babcock

Bozeman, MT

5971 5

Katherine D. ilodge

Hodge &

l)wyer

808

South

Second

Street

Springfield,

IL 62704

Robert Lawley, Chief Legal

Counsel

Dept:

of’Natural

Resources

524 South

Second Street

Springfield, IL

62701-1787

Paul Pike

(MC-602)

Ameren Services

P.O.

Box 6614’)

St.

Louis, MO 63

166

Joel

J. Stcrnstein,

I

learing Officer

Illinois Pollution

Control

Board

100 West

Randolph Street

Suite

11-500

Chicago,

IL 60601