1 BEFORE THE ILLINOIS POLLUTION CONTROL BOARD
2 VOLUME V
3
IN THE MATTER OF: )
4 )
EMISSIONS REDUCTION MARKET )
5 SYSTEM ADOPTION OF 35 ILL. ) R97-13
ADM. CODE 205 AND AMENDMENTS ) (RULEMAKING)
6 TO 35 ILL. ADM. CODE 106. )
)
7
8
9
10 The following is a transcript of a
11 rulemaking hearing held in the above-entitled
12 matter, taken
stenographically by LISA H. BREITER,
13 CSR, RPR, CRR, a notary public within and for the
14 County of
DuPage and State of Illinois before
15 CHUCK FEINEN, Hearing Officer, at the James R.
16 Thompson Center, 9-040, 100 West Randolph Street,
17 Chicago, Cook County, Illinois on the 10th day of
18 February 1997, commencing at 9:20 o'clock a.m.
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20
21
22
23
24
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1 APPEARANCES:
2
3 ILLINOIS POLLUTION CONTROL BOARD MEMBERS PRESENT:
4
5 MS. ELIZABETH ANN
6 MR. KEVIN DESHARNAIS
7 MS. KATHLEEN HENNESSEY
8 MS. MARILI MC FAWN
9 MR. JOSEPH YI
10
11 ILLINOIS ENVIRONMENTAL PROTECTION AGENCY MEMBERS
12 PRESENT:
13
14 MS. BONNIE SAWYER
15 MR. RICHARD FORBES
16 MR. BHARAT MATHUR
17 MS. SARAH DUNHAM
18 MR. CHRISTOPHER ROMAINE
19 MR. RICHARD FORBES
20 MR. GALE NEWTON
21 MR. DAVID KOLAZ
22
23 OTHER AUDIENCE MEMBERS WERE PRESENT AT THE HEARING
24 BUT NOT LISTED ON THIS APPEARANCE PAGE.
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1 I N D E X
2 PAGE
3 PROCEEDINGS:
4 PREPARED TESTIMONY OF STEVE ZIESMANN 864
5 PREPARED TESTIMONY OF BILL COMPTON 874
6 PREPARED TESTIMONY OF ALAN JIRIK 885
7 QUESTION AND ANSWER SESSION 892
8
E X H I B I T S:
9
Hearing Exhibit No. 46 892
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1 (Discussion off the record.)
2 HEARING OFFICER FEINEN: Good morning.
3 It's February 10th, not to be confused with some
4 other dates. It's February 10th, and we're
5 starting the ERMS hearing this morning. The
6 agency has stated that the video conferencing
7 which was planned for tomorrow afternoon, they
8 would like to hold until a later date.
9 We had discussed off the record
10 this morning those later dates. We have decided
11 that March 10th and 11th starting with Dr.
Caze's
12 testimony on March 10th and along with Sarah
13 Dunham for now -- that might change -- will happen
14 on that day with questions filing, and we'll use
15 the 11th as needed.
16 I will follow this up with a
17 Hearing Officer order. This morning, I believe,
18 we had scheduled to start out the morning with the
19 testimony from design team members, and they are
20 present here. So if there's no other matters,
21 let's start with that.
22 MS. SAWYER: The agency will call its
23 next three witnesses, Alan
Jirik, Bill Compton and
24 Steve
Ziesmann.
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1 HEARING OFFICER FEINEN: Can we have the
2 witnesses sworn.
3 (Witnesses sworn.)
4 MS. SAWYER: Do you have any particular
5 order you want to go in? We'll just start with
6 Steve
Ziesmann.
7 MR. ZIESMANN: My name is Steve
8 Ziesmann. I am the manager of Corporate
9 Environmental Services for Abbott Laboratories. I
10 am testifying today on behalf of Abbott in support
11 of the proposed Emission Reduction Market System.
12 I have a bachelor's of science degree in chemical
13 engineering from the University of Wisconsin,
14 Madison, and a master of science in engineering
15 from the University of Wisconsin at Milwaukee.
16 I am a licensed professional
17 engineer in the State of Wisconsin and have been
18 employed by Abbott Laboratories since 1992. I
19 have been involved with the VOM trading design
20 team since its inception several years ago. I've
21 also participated in the Illinois Environmental
22 Regulatory Work Group concerning this issue.
23 Abbott Laboratories is a global,
24 diversified company dedicated to the discovery,
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1 development, manufacture and marketing of health
2 care products and services. The company is among
3 the world's largest and most successful
4 corporations with a presence in more than 130
5 countries and worldwide sales in excess of $11
6 billion. The company is
headquartered in Lake
7 County, Illinois, and employs more than 15,000
8 people at several sites in Lake County.
9 Abbott and many other Illinois
10 companies initially became involved in developing
11 a market-based trading system when the Illinois
12 Environmental Protection Agency first proposed a
13 nitrogen oxides trading program in 1993. When it
14 became apparent that
NOx reductions would not
15 reduce ozone levels as effectively as VOM
16 reductions, several industry representatives
17 including myself agreed to participate with the
18 agency and several other groups in an effort to
19 develop a VOM trading program.
20 The result of almost three years of
21 work by that diverse committee is before you now.
22 I believe that the trading system that has been
23 developed is the best practical solution to an
24 exceedingly complex and serious problem. Abbott
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1 Laboratories recognizes that a serious air quality
2 problem exists in the greater Chicago area. We
3 also recognize that in addition to other measures,
4 substantial reductions in total VOM emissions from
5 all sources of VOM, stationary as well as mobile
6 and area sources, may be required to alleviate the
7 problem.
8 As a major stationary source of
9 VOM, Abbott realizes that we will be asked to
10 reduce emissions from our facilities. What Abbott
11 needs is the flexibility to determine where and
12 how those reductions will be achieved. In other
13 words, tell us what reductions are needed, give us
14 a goal and then let us determine our best way to
15 do it.
16 It should be pointed out that
17 Abbott, as I believe many companies have, has
18 already eliminated substantial amounts of VOM
19 emissions through compliance with current
20 regulatory requirements and pollution prevention
21 efforts. The remaining VOM emissions are
22 difficult and expensive to reduce further. I
23 believe that the proposed ERMS rules provide the
24 needed flexibility which will allow Abbott and
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1 other industries to seek out the least costly
2 sources to control and will allow the required VOM
3 reductions to be accomplished in the most
4 economical and reasonable method available.
5 Rather than speak in general terms
6 about what Abbott sees as the benefits of this
7 rule, I would like to present an example that I
8 think will fairly well speak for itself. Abbott
9 operates two major manufacturing facilities in the
10 Chicago ozone non-attainment area. Both sites are
11 considered major sources of VOM as defined by the
12 Clean Air Act. At the two sites, we have five
13 separate operating divisions and well over a
14 thousand individual emission points, emitting a
15 wide variety of
VOMs.
16 We also have the ability to
17 manufacture hundreds of different pharmaceutical
18 and health care products at these sites.
19 Complicating matters is the fact that many of our
20 processes are performed on a batch basis with many
21 of the same pieces of equipment being used for
22 different products. This situation is quite
23 different from a company that continually
24 manufactures the same product on dedicated pieces
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1 of equipment.
2 One of the reasons we have so many
3 individual emission points is a result of quality
4 control requirements. Air exhaust from multiple
5 process emission sources cannot be
manifolded
6 together because of the potential for cross
7 contamination of the products. Additionally, some
8 of the exhaust streams may be incompatible with
9 other streams thus requiring separate exhaust
10 systems.
11 This is especially true where the
12 same piece of equipment may be used to manufacture
13 different products that may generate different air
14 contaminants. This complex manufacturing
15 arrangement makes it very difficult to design and
16 efficiently operate air pollution control
17 devices. A particular piece of equipment may be
18 used for product A one week and product B the
19 next. Product A may emit one kind of contaminant
20 while product B may emit another.
21 Designing one air pollution control
22 device that can handle both types of contaminants
23 can be problematic and inefficient, if not
24 impossible. The pharmaceutical industry is also
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1 very sensitive to changing market conditions. For
2 instance, if there is a particularly bad outbreak
3 of influenza or similar virus, we may need to
4 modify production schemes to allow the production
5 of more antibiotics at a particular time than
6 originally planned.
7 Thus, what is especially needed in
8 our industry is a method for meeting all of our
9 unique production and customer demands while still
10 achieving the overall emission reduction goals
11 required to improve air quality in the Chicago
12 area. We believe that ERMS is that method.
13 Abbott has performed an analysis of the costs of
14 achieving the required emission reduction goals
15 under both the proposed trading scheme and under a
16 more "traditional" method.
17 The "traditional" method assumed
18 that each of our five separate operating divisions
19 would be responsible for achieving their own
20 reductions, presumably through reasonably
21 available control technology type controls. Since
22 we are already subject to RACT limits, we assumed
23 for our analysis that the emission level which
24 triggers RACT would be lowered, and the overall
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1 emission removal efficiency would be increased.
2 Looking at the types of equipment
3 that would potentially be impacted by this type of
4 regulation, we have estimated that the capital
5 cost required to reduce emissions at both of our
6 sites by 12 percent would be between 15 and 20
7 million dollars. This number did not take into
8 account some of the concerns presented above or
9 even the physical feasibility of installing
10 controls.
11 For the purposes of developing this
12 estimate, we assumed that different air streams
13 could be
manifolded together. In reality,
14 significant precautions would have to be included
15 to address quality control concerns, thus adding
16 to the cost. Also, we assumed the existing
17 building structures were capable of accommodating
18 the physical equipment required to control
19 emissions. By this I mean we assumed sufficient
20 space was available for new exhaust and control
21 equipment and that existing structures were
22 capable of handling the increased weight of new
23 equipment.
24 Again in an actual situation,
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1 significant extra capital could be required to
2 improve or modify existing structures. By
3 contrast, under the ERMS we have identified
4 several emission sources that might be able to
5 provide the needed reductions for both of our
6 manufacturing sites. Control devices operating at
7 around 99 percent efficiency on these sources
8 would cost between two and four million dollars.
9 Because of the location of some of these
10 particular sources, we already know that there is
11 adequate room and structural capacity to support
12 the control devices without major structural work
13 or relocation of equipment.
14 Quality control issues are likewise
15 not an issue because most of these sources are
16 dedicated to a single process. Under the ERMS,
17 Abbott would identify which sources can be
18 controlled with the least expense and disruption
19 to business. The cost to Abbott and to society of
20 achieving the same level of emission reductions
21 under the ERMS would be much less than what it may
22 have been under a traditional command and control
23 regime.
24 I would also like to stress the
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1 importance of the market aspects of this rule.
2 People are rightly concerned that the emission
3 reduction requirements of the Clean Air Act have
4 the potential to restrict or inhibit industrial
5 growth in the Chicago non-attainment area.
6 Pursuant to the ERMS rule, not only will industry
7 be required to reduce actual emissions of VOM, but
8 any future increases in emissions will have to be
9 offset by similar emission reductions.
10 However, what this rule allows is
11 the flexibility for a company to decide where it
12 can reduce emissions and the ability to trade,
13 that is, buy and sell emission reductions made
14 throughout the non-attainment area. Thus, more
15 economical emission reductions can be achieved
16 throughout the area, and industry will have much
17 needed options with which to comply with the
18 overall reduction requirements.
19 Take the case where a particular
20 company wanted to increase production but could
21 not economically control the proposed increase in
22 emissions. Provided that the emission trading
23 market proposed under this rule develops
24 sufficiently, this company should be able to
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1 purchase reductions from some other source that
2 was able to reduce emissions more economically.
3 In this way the company is allowed to grow and
4 become more productive.
5 The source that was able to reduce
6 emissions receives an economic benefit. The
7 environment is benefited by an overall reduction
8 in VOM emissions, and the cost of achieving the
9 required emission reductions is minimized.
10 Without the benefit of this rule, the company
11 might well have decided that it was simply too
12 expensive to expand operations in the Chicago area
13 due to the prohibitively high cost of controlling
14 emissions. Thus, the local economy would have
15 been deprived of the benefits of the company's
16 growth.
17 In summary Abbott Laboratories
18 supports the market-based approach to emission
19 reductions reflected in the ERMS proposal. We
20 believe that it will provide some much needed
21 flexibility and will help the State of Illinois
22 meet required emission reduction goals in an
23 efficient and practical manner.
24 MS. SAWYER: At this time we'll proceed
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1 with the testimony of Bill Compton.
2 MR. COMPTON: My name is Bill Compton.
3 I'm a senior environmental engineer with corporate
4 environmental affairs, corporate auditing and
5 compliance division, Caterpillar, Inc. I've been
6 working in the corporate environmental area of
7 Caterpillar, Inc., for 22 years and have
8 functioned for the last 15 as the primary
9 environmental regulatory and legislative liaison
10 in Illinois.
11 My specialty focus is in the broad
12 area of air quality. Prior to joining
13 Caterpillar, I was a research associate and
14 laboratory director of the Occupational Health
15 Studies Group, Department Environmental Sciences
16 and Engineering, School of Public Health,
17 University of North Carolina at Chapel Hill for
18 two years.
19 Before that, I spent almost 10
20 years at Syracuse University Research Corporation,
21 the last five as the manager of Air and Water
22 Pollution Laboratory in the Life Sciences
23 Division. I'm a member of the Illinois
24 Environmental Protection Agency's Director's
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1 Emission Reduction Market System Design Team.
2 I'm the
co-chair of the Illinois
3 Environmental Regulatory Group's Emission
4 Reduction Market System Work Group. This group
5 was established in 1995 to assure that regulatory
6 language developed to implement ERMS and enabling
7 legislation was fair and equitable to its members,
8 participated with members and provided a forum for
9 other business groups such as the Illinois
10 Chamber, Illinois Manufacturer's Association,
11 Chemical Industries Council of Illinois and the
12 Chicagoland Chamber of Commerce.
13 I am here today to testify in
14 support of the Illinois EPA proposed Emission
15 Reduction Market System for the Chicago
16 non-attainment area. Caterpillar, Inc., is
17 headquartered in Peoria, Illinois. Caterpillar is
18 the world's largest manufacturer of construction
19 and mining equipment. Caterpillar's products
20 range from track-type tractors to hydraulic
21 excavators, wheel loaders,
backhoe loaders, motor
22 graders, off-highway trucks, diesel and natural
23 gas engines and gas turbines. They are used in
24 the construction, road building, mining, forestry,
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1 energy, transportation and material handling
2 industries.
3 Caterpillar is a Fortune 50
4 industry company with more than $16 billion in
5 sales and revenues in 1995. It is one of only a
6 handful of US companies that lead its industry
7 while competing globally from a principally
8 domestic base. While 75 percent of Caterpillar's
9 assets are in the United States, more than half of
10 its sales are to overseas customers. Exports from
11 the United States reached a record 5.3 billion in
12 1995, mostly attributed to Illinois. Exports
13 account for 17,000 Caterpillar jobs in the United
14 States and nearly 34,000 jobs at Caterpillar
15 suppliers in the US.
16 Caterpillar has two manufacturing
17 plants located in the Chicago ozone non-attainment
18 area. The Aurora plant is located in the
Kendall
19 County portion of the non-attainment area. The
20 plant is primarily an assembly operation for
21 excavators and wheel loaders with some component
22 fabrication. Aurora employs approximately 3300
23 people.
24 The Joliet plant located in Will
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1 County is primarily a fabrication plant of
2 components supplied to other Caterpillar
3 facilities. They also assemble large wheel
4 loaders and excavators. Employment is
5 approximately 3400 people. Both Aurora and Joliet
6 are major sources of VOM and
NOx, and therefore,
7 covered by the proposed rule.
8 With these important business
9 assets located in the Chicago ozone non-attainment
10 area, Caterpillar over the years has been
11 particularly sensitive to ozone regulatory and
12 policy issues that affect our ability to operate
13 to business plan. During the last 27 years, we
14 have adapted to the Illinois EPA approach of
15 developing a state implementation plan for
16 stationary sources based on "command and control"
17 strategies.
18 Throughout this time period,
19 Caterpillar had to deal with the development of
20 the ever-changing SIP while at the same time
21 conducting several of the most comprehensive
22 company-wide factory modernization programs in its
23 history. Caterpillar both modernized and
24 maintained existing operations in addition to
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1 simultaneously incorporating design and
2 operational modifications to accommodate new and
3 revised regulations.
4 Fortunately, Caterpillar has been
5 able to meet most of its business plan schedules
6 by keeping emission increases below significance
7 level and avoiding time-consuming new source or
8 major modification reviews. Sufficient existing
9 internal offsets were available to net out
10 expected increases in emissions against
11 contemporaneous actual decreases due to process
12 elimination or reductions.
13 Knowing that eventually this
14 approach is self limiting, we have continued to be
15 receptive to new ideas and programs. In
16 particular, we have been most interested in
17 systems that provide the ability to plan changes
18 to operations logically, yet allow facilities to
19 do so efficiently, economically, competitively and
20 on a timely basis.
21 From the stationary facility source
22 standpoint, Caterpillar over the years has
23 investigated the myriad of programs and policy
24 statements designed to streamline permitting and
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1 make growth processes easier, more efficient and
2 flexible. Programs such as bubbling, banking,
3 trading, economic incentives, Project XL and
4 others have never quite functioned as conceived.
5 In Caterpillar's view most of these
6 proposals offer limited opportunities for use as
7 beneficial tools for the Aurora and Joliet
8 facilities. From a practical viewpoint, there are
9 no existing programs available for Caterpillar's
10 use that provide additional facility operating
11 flexibility and permitting process efficiencies.
12 From the product perspective,
13 however, the story is different. Caterpillar has
14 been participating in an existing USEPA
15 market-based program. Caterpillar took an active
16 role in the development of the Heavy Duty Engine
17 Emissions Averaging, Banking and Trading Program
18 in the 1987-89 time frame. This program
19 established precedents that (1) created incentives
20 to bring technology with lower emission rates
21 planned for a later model year into production
22 earlier; (2) allowed continued production of
23 certain older model families for which there is a
24 continued market demand; (3) is voluntary, the
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1 manufacturer decides whether or not to
2 participate; and (4) provides significant benefits
3 for both the manufacturer and the environment.
4 Since my original testimony was
5 prefiled, I've had an opportunity to update
6 program participation. Of the 10 major on-highway
7 heavy duty diesel engine manufacturers selling
8 engines in the United States, two are not
9 participating in the Averaging, Banking and
10 Trading Program. The program is administered by
11 the USEPA Engine Compliance Program Group. The
12 program officially began in 1990. Banking began
13 with the 1990 model year. Averaging and Trading
14 began with the 1991 model year.
15 Caterpillar's experience with this
16 program has been positive. Caterpillar's
17 participation has been in the medium heavy and the
18 heavy, heavy duty diesel engine categories.
19 Participation in the particulate emission portion
20 of the program began in 1990 and the nitrogen
21 oxides program in 1996. We have phased out
22 production of targeted engine series in an orderly
23 manner, met new emissions standards for new engine
24 series on or before deadlines, satisfied our
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1 customers and benefited the environment by
2 discounting and retiring credits.
3 To illustrate the last point
4 concerning environmental benefits, I have attached
5 two tables prepared by the Caterpillar Heavy Duty
6 Diesel Averaging, Banking and Trading Program
7 administrator. Table 1 is particulate emission
8 credit summary as of September 23, 1996, for the
9 years 1990 through 1996. Table 2 is a nitrogen
10 oxide emissions credit summary of the same date.
11 Since Caterpillar entered the nitrogen oxide
12 program in 1996, this table represents our best
13 estimate for this program.
14 Let me explain several terms in the
15 tables. Credits are defined to be in increments
16 of one
megagram -- and by the way, I have a typo.
17 The large M in my
prefiled testimony should be
18 lower case, which can be -- which can be
19 translated as 1.101 tons per credit. Generated
20 credits are those credits that must be created
21 which, when discounted, will result in a
22 sufficient quantity of discounted credits to cover
23 anticipated emissions from the production of
24 certain older models. The program has a built-in
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1 20 percent discount which goes to the
2 environment. Discounted credits function as the
3 model year baseline, have a three-year lifetime
4 and are eligible for banking. Credits used in
5 averaging are those withdrawn from the bank for
6 use. Credits expired are those unused credits
7 which have been allowed to expire rather than
8 being traded.
9 The particulate matter credit
10 summary in table 1 shows that a total of 2432.2
11 credits were generated from 1990 to 1996.
12 Discounting over the same time period left 1946
13 credits available for banking. The discount
14 credits amounted to 486.2 credits, that is, 535.3
15 tons, were retired to the environment. Since not
16 all of the banked emissions were used, 232
17 credits, that is, 255.4 tons, were retired from
18 the program. The benefit to the environment
19 during the 1990 to 1996 time period was the
20 removal of 767.3 credits or 844.8 tons of
21 particulate matter.
22 The nitrogen oxides emission credit
23 summary in table 2 estimates generated and
24 discounted credits for '96 and '97. Caterpillar
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1 anticipates generating over 7,770 discount
2 credits, that is, 8,554.8 tons, of nitrogen
3 dioxides which would benefit the environment. One
4 comment must be made about trading. To
5 Caterpillar's knowledge, no trades have been made
6 between engine manufacturers. This situation is
7 thought to be the result of the small number of
8 participating companies and the competitive nature
9 of the engine business.
10 I have represented these details of
11 Caterpillar's involvement in the Heavy Duty Engine
12 Average, Banking and Trading Program as an example
13 of an existing market-based program that provides
14 benefit to the environment while affording
15 flexibility. In recent years it has become
16 painfully obvious that the present "command and
17 control" SIP strategy for the Chicago
18 non-attainment problem by itself is not meeting
19 the challenge.
20 It seems a logical step that the
21 Illinois EPA investigate using a market-based
22 approach to achieve the necessary volatile organic
23 material emissions reductions that, in combination
24 with scheduled federal control measures, would
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1 satisfy the three percent rate of progress
2 requirements for 1999. The ERMS proposal
3 addresses both ROP goals and proposes a new
4 emission reduction marketing system to provide an
5 additional mechanism for VOM reduction.
6 ERMS will not resolve all of the
7 ozone non-attainment problems in the Chicago
8 area. In fact, additional reductions may be
9 required from mobile and area sources. ERMS
10 should, however, go a long way toward establishing
11 a market-based system designed to provide: (1) an
12 additional alternate means to meet VOM reduction
13 goals; (2) a system that provides users with the
14 ability to plan changes to operations logically
15 and allows facilities to do so efficiently,
16 economically, competitively, and on a timely
17 basis; and (3) a system that provides the means to
18 meet air quality goals without placing an
19 inequitable burden on stationary sources as a
20 category.
21 From Caterpillar's experience with
22 the market-based Heavy Duty Engine Emissions
23 Averaging, Banking and Trading Program and
24 participation on the ERMS design team leads us to
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1 believe that the IEPA's proposed Emission
2 Reduction Market System is directionally sound.
3 It's a step toward providing an additional degree
4 of flexibility that existing
regulatories do not
5 yet provide for stationary sources. If ERMS is
6 provided with policy, legislative and regulatory
7 restraint, it may prove itself workable. It
8 should provide a large number of existing sources
9 with an additional mechanism to use to maintain
10 compliance. It should be a welcome supplement to
11 meet ozone air quality goals and satisfy the
12 stationary source contribution to VOM reductions.
13 MS. SAWYER: Thank you, Mr. Compton.
14 Mr.
Jirik.
15 MR. JIRIK: Yes, good morning. My name
16 is Alan
Jirik. I am the director of regulatory
17 affairs for Corn Products, a division of CPC
18 International, Inc. My principal responsibility
19 is environmental management and compliance for the
20 North American operations of the corn wet milling
21 division of CPC. My specialty is in the area of
22 air quality management. Previous to joining Corn
23 Products, I was a consultant directing the air
24 quality services group of
Versar's midwest
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1 regional office. I began work in the air quality
2 field in the late 1970s, a period that spans most
3 of the historic RACT proceedings that have
4 occurred before this board.
5 I'm a member of the design team
6 that drafted the ERMS program that is the subject
7 of today's hearing. I am also a member of the Air
8 and Waste Management Association, serve as the
9 vice chair of the industrial water, waste and
10 sewage group and am a
certfied hazardous materials
11 manager. I would like to add a note not in my
12 prepared testimony that I also served as the
13 co-chair of the ERG work group that reviewed and
14 critiqued this proposed regulation. By way of
15 background, ERG is an affiliate of the Illinois
16 State Chamber of Commerce.
17 I earned my masters degree from the
18 University of Illinois at Chicago with an
19 undergraduate degree from Northern Illinois
20 University. CPC is a Fortune 500 company with
21 operations in over 63 countries worldwide. CPC
22 operates a number of facilities in the Chicago
23 area ranging from the large Corn Products
Argo
24 plant to small food service operations. Our
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1 products include well-known brands such as
Mazzola
2 corn oil,
Argo corn starch,
Entenmann's bakery
3 products,
Skippy peanut butter and
Knorr soups.
4 CPC employs approximately 1,000 people in the
5 non-attainment area.
6 As a member of the design team, I
7 was able to provide several different perspectives
8 for the benefit of the group. CPC has both large
9 and small operations in the Chicago area. In my
10 previous experience as a consultant, I dealt with
11 a wide variety of matters for a wide range of
12 industries. I attempted to bring this diversity
13 to the table during our discussions.
14 The Chicago area is non-attainment
15 for ozone. The program mandated by the federal
16 government for cities in this condition can be
17 simply stated; implement controls to reduce
18 emissions to achieve the air quality standards.
19 Implementing this simple intent has proven
20 difficult. Reductions on point source emissions
21 have been historically achieved through
22 traditional RACT. At this time the availability
23 of additional RACT control measures are extremely
24 limited, and the cost effectiveness of continuing
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1 this regulatory approach is in question. To do
2 nothing is not an option as USEPA promulgation of
3 a Federal Implementation Plan is the ultimate
4 backstop.
5 Given these circumstances, I
6 believe that the IEPA has chosen a proper time to
7 bring forward a proposal which from
CPCs
8 perspective provides a more cost effective program
9 to generate the emissions reductions mandated by
10 the federal government. The fact that this
11 program achieves the environmental benefit at
12 reduced cost is a significant plus for the ERMS
13 program being proposed today.
14 Traditional RACT rules do not
15 provide the incentive inherent in a free market
16 system. A condition of "imperfect knowledge" can
17 also occur in traditional RACT leading to greater
18 cost for equivalent environmental benefit. While
19 technology forcing has always been a concept of
20 clean air legislation, it is often hamstrung by
21 the regulatory process. Innovation is not
22 encouraged or fostered under a strict command and
23 control structure.
24 Under ERMS, there is a much higher
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1 likelihood that the lowest cost reductions will be
2 identified since industry now has an economic
3 incentive to maximize reductions. Strategies can
4 be tried, improved or even discarded as knowledge
5 of performance is developed. Under prescriptive
6 traditional RACT, this flexibility is not
7 available. Under RACT, a minor transgression of a
8 limit is a punishable offense. Industry desires
9 and strides diligently to be in compliance at all
10 times. This leads industry to seek secure
11 emission limits that can be reliably and
12 confidently complied with at all times.
13 Innovation is therefore discouraged. Traditional
14 RACT naturally generates concern in industry
15 regarding the setting of overly optimistic limits
16 and excessive worry over "what if" scenarios.
17 ERMS provides a more comfortable
18 opportunity to permit "closer to the edge," that
19 is, accept a lower limit, knowing that a shortfall
20 can be made up from the market. Additionally,
21 over performance can be rewarded by the market.
22 This allows greater flexibility in the standard
23 setting process not available under RACT. More
24 importantly, ERMS provides a reward or incentive
L.A. REPORTING - (312) 419-9292
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1 for over-compliance that is absent under today's
2 traditional RACT system.
3 Regarding toxic hot spots, the
4 constraints provided by current toxic control
5 programs are not circumvented by the ERMS.
6 Therefore, ERMS does not facilitate the formation
7 of any new accumulations of emissions. Quite the
8 contrary, each participating source under the ERMS
9 will be accountable for its actual emissions and
10 needs to have additional
ATUs for increases in
11 seasonal emissions above its allocation. As a
12 result, the ERMS will provide an economic
13 disincentive against hot spot formation not
14 present under today's regulations.
15 Similarly, ERMS provides an
16 assurance against air shed degradation over
17 traditional command and control. Under a
18 rate-based RACT standard, actual emissions can
19 increase due to increased production. Under the
20 air shed cap of ERMS, these increases are not
21 possible. Furthermore, the 1.3 to 1 reduction of
22 actual emissions versus future allowable emissions
23 required for new sources under Title I of the
24 Clean Air Act Amendments remain in place which
L.A. REPORTING - (312) 419-9292
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1 should fully respond to concerns regarding air
2 shed degradation.
3 In my many years of experience in
4 this profession, I have observed that industry
5 performs best when allowed the freedom to
6 innovate, a founding principle of our system of
7 government. Innovation is critically needed for
8 Chicago to achieve the ozone standard. This
9 freedom is not possible under traditional RACT.
10 It is my opinion that both the people and the
11 industries of Chicago would be well served by the
12 adoption of the proposed ERMS rule.
13 MS. SAWYER: Thank you, Mr.
Jirik. At
14 this time we can take any questions for these
15 witnesses.
16 HEARING OFFICER FEINEN: Before we do
17 that, since the witnesses read in the testimony, I
18 don't think we'll enter them as -- their testimony
19 as exhibits.
20 MS. SAWYER: Okay.
21 HEARING OFFICER FEINEN: However, for
22 Mr. Compton, I would like to do that because of
23 the tables that were included.
24 MS. SAWYER: Were your tables provided?
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1 MR. COMPTON: They were.
2 HEARING OFFICER FEINEN: They were. So
3 I'd like that attached to the transcript so
4 everyone has the tables and the testimony
5 together.
6 MS. SAWYER: I would like to enter the
7 testimony of Bill Compton for the record.
8 (Document marked.)
9 HEARING OFFICER FEINEN: I'm marking
10 that Exhibit No. 46, the testimony of Bill Compton
11 that was
prefiled and was dated January 13th,
12 1997, which includes tables 1 and 2. If there's
13 no objections, we'll have that entered into the
14 record. Seeing none, I will enter that into the
15 record.
16 (Exhibit No. 46 was entered
17 into evidence.)
18 HEARING OFFICER FEINEN: Now, you can
19 proceed with questioning, if there are any
20 questions.
21 MR. TREPANIER: I have a question for
22 Mr.
Ziesmann.
23 HEARING OFFICER FEINEN: Could you speak
24 up.
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1 MR. TREPANIER: Yes. I have a question
2 for Mr.
Ziesmann. In your testimony as you read
3 it as it occurred on page 5, you mentioned that
4 there were -- that you had identified several
5 emission sources that could provide needed
6 reductions that could result in a 99 percent
7 efficiency at those sources with a cost between
8 two and four million dollars. Who are those
9 sources?
10 MR. ZIESMANN: There are several
11 sources. I don't know the particulars. The
12 control device would be a thermal oxidizer.
13 MR. TREPANIER: What's the type of
14 source?
15 MR. ZIESMANN: They are pharmaceutical
16 production tablet manufacturing sources.
17 MR. TREPANIER: Then your testimony
18 continued, and you spoke about when you were
19 stressing the importance of this rule, and you
20 spoke that industry would be required to reduce
21 actual emissions, and future emissions will have
22 to be offset by similar emission reductions.
23 When you say similar emissions
24 reduction, are you meaning that the emission
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1 reductions would be of the same reactivity or
2 toxicity? Is that your understanding of the
3 rule?
4 MR. ZIESMANN: That is not what I had
5 meant when I put that in there. When I said
6 similar, I meant in terms of volume or amount.
7 MR. TREPANIER: Then in the next
8 paragraph -- as you read your testimony, the next
9 paragraph appeared that when a company would grow
10 and be more productive and it was able to reduce
11 their emissions and receive an economic benefit,
12 that the environment would be benefited by overall
13 VOM emissions.
14 How is it that you understand a
15 corporation could receive an economic benefit from
16 reducing their pollution while the environment
17 would also receive a benefit? How will that
18 occur?
19 MR. ZIESMANN: What I was trying to
20 point out is when a trade occurs, the company that
21 made the reductions, the excess reductions
22 receives some economic benefit from a company that
23 has purchased those reductions and the overall
24 reductions throughout the air shed have been met.
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894
1 In other words, if everyone meets the 12 percent,
2 then the environment sees a benefit.
3 MR. TREPANIER: Now, was your testimony
4 then incorrect when your testimony was that a
5 company would be allowed to grow and that in that
6 case as a company is growing, that -- I understand
7 your testimony was that the company was going to
8 grow, somebody else is reducing their emissions
9 receives an economic benefit and the environment
10 is benefited?
11 MR. ZIESMANN: Correct.
12 MR. TREPANIER: How will that occur?
13 MR. ZIESMANN: Because the overall
14 reduction goals of the rule will be met. So the
15 entire air shed is seeing a reduction in VOM
16 emissions regardless of that increase in
17 production at the particular plan.
18 MR. TREPANIER: So I understand then
19 that your testimony is that the benefit to the
20 environment will come when the reduction in
VOMs
21 is commanded?
22 MR. ZIESMANN: I'm not sure what you
23 mean by commanded, but through this rule, the
24 overall reduction from industry, that's where the
L.A. REPORTING - (312) 419-9292
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1 environmental benefit comes from.
2 MR. TREPANIER: Now, your testimony --
3 and at the same place the paragraph starts, take
4 the case where a particular company wanted to
5 increase production.
6 MR. ZIESMANN: Yes.
7 MR. TREPANIER: Now, in that instance
8 where a company is increasing production, how is
9 the environment going to receive a benefit?
10 MR. ZIESMANN: The company would not be
11 able to increase their production unless they were
12 able to purchase reductions or generate their own
13 reductions that would offset the increase in
14 emissions.
15 MR. TREPANIER: Now, if the emissions
16 are merely offset, where is the benefit to the
17 environment derived?
18 MR. ZIESMANN: Because under this rule,
19 there's an overall reduction in emissions. So the
20 companies have to meet those overall reductions in
21 addition to offsetting any increase.
22 MS. MC FAWN: Are you referring to the
23 12 percent reduction?
24 MR. ZIESMANN: Yes.
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1 MR. TREPANIER: At Abbott Labs, what's
2 the variation year to year on your VOM emissions?
3 MR. ZIESMANN: I can't answer that. I
4 don't have that information.
5 MR. TREPANIER: Do you know when Abbott
6 Labs -- under this program that you studied for
7 several years and helped design, do you know when
8 Abbott Labs selects their baseline if they're
9 going to be able to use one of the three most
10 recent years to select their baseline from?
11 MR. ZIESMANN: I know they are currently
12 looking at that. All the different operating
13 divisions are meeting and determining what those
14 baselines would be. So I can't answer that at
15 this moment.
16 MR. TREPANIER: Is it fair to say that
17 you don't know what Abbott Lab's baseline would
18 be?
19 MR. ZIESMANN: In terms of actual
20 numbers or in terms of the year?
21 MR. TREPANIER: In the years.
22 MR. ZIESMANN: I do not know that at
23 this point.
24 MR. TREPANIER: Do you know in this
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1 program -- I understand there is an exception for
2 an unusual year. If in the past few years that
3 are offered to select two of the three, if an
4 unusual year, I understand, occurred in that time,
5 a corporation could select a year of going back as
6 far as 1990?
7 MR. ZIESMANN: Yes.
8 MR. TREPANIER: Do you know how that
9 exception developed?
10 MR. ZIESMANN: I'm not sure I understand
11 your question.
12 MR. TREPANIER: The purpose. What was
13 the purpose of that?
14 MR. ZIESMANN: This may be a question
15 that the agency --
16 MS. SAWYER: I think that is, and we did
17 present testimony on that. You would be better
18 asking that question to Chris Romaine.
19 HEARING OFFICER FEINEN: Why don't we
20 ask it this way. As a design team member, do you
21 know why that section was put in or if any
22 discussions took place about that section?
23 MR. ZIESMANN: Yes. In my opinion or my
24 understanding of it, that is to address any cyclic
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1 economic upturns or downturns from a particular
2 company.
3 MR. TREPANIER: Has Abbott Labs
4 experienced that? Does Abbott Labs fall within
5 that circumstance?
6 MR. ZIESMANN: I don't think so,
7 although as I mentioned, we have several different
8 operating divisions who have their own budgets or
9 their own markets, and within any of those
10 operating divisions, they may have had up or down
11 years. So it's difficult to say as an overall
12 company what our base year will be.
13 MR. TREPANIER: I appreciate you
14 addressing my question. In this matter of the
15 program addressing the cyclic emitters, goes with
16 a history of cyclic emissions -- I'm sorry, I've
17 forgotten the question. That's all my questions.
18 Thank you.
19 HEARING OFFICER FEINEN: Let's point out
20 that we do have a new court reporter today, and
21 her name is Lisa. If you could state your name
22 before you actually question so she can get the
23 names and faces, that would probably help her
24 out.
L.A. REPORTING - (312) 419-9292
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1 Are there any questions for the
2 panel?
3 MR. TREPANIER: If I could, I did just
4 recall. In addressing the cyclic emitters, is it
5 your understanding that a corporation, a polluter,
6 that has up and down in their economics, as you
7 said, you know, a good year, you know, maybe they
8 had a good year in '92, maybe they had a poor year
9 in '95, is it your understanding then that they
10 could substitute '92 for '95?
11 MR. ZIESMANN: It is my understanding.
12 I'm not sure what the showing they would have to
13 make in order to do that, but I believe that's
14 what the purpose of that provision is for.
15 MR. TREPANIER: Do you think that other
16 corporations are going to be able to discern what
17 showing is going to be required from them if in
18 this case you on the design team don't have that
19 information?
20 MR. ZIESMANN: Well --
21 MS. SAWYER: Objection, that's
22 speculative.
23 HEARING OFFICER FEINEN: Is there
24 another way you can phrase the question?
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1 MR. TREPANIER: Do you know -- is there
2 something in the rule that you helped to design
3 that gives an indication to those who are
4 potentially affected by the rule of what showing
5 they're going to need to make to -- or you know,
6 what indication is there in the rule to an emitter
7 to let them know when it's going to be okay for
8 them to substitute an out year?
9 MS. SAWYER: I think that this question
10 would be better asked of the agency's witnesses.
11 If you want to just speak to your understanding,
12 that's fine, Steve, but really the question would
13 be better answered by an agency witness.
14 MR. TREPANIER: If I could, I'll preface
15 it in your understanding, if that will make the
16 question answerable.
17 HEARING OFFICER FEINEN: He's asking a
18 design team member, not as the agency.
19 MS. SAWYER: I just wanted to point out
20 that I think you would get your better answer
21 asking that of the agency.
22 MR. ZIESMANN: It's my understanding
23 that those types of showings will be almost a
24 case-by-case incidence in what it would take to
L.A. REPORTING - (312) 419-9292
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1 prove up and an outlying year.
2 MR. TREPANIER: So as far as you know,
3 there's not something in this rule that's telling
4 the people, the emitters?
5 MR. ZIESMANN: The provision establishes
6 the ability to use those outlying years. I'm not
7 sure beyond that what it says exactly an industry
8 would have to do to show that.
9 MR. TREPANIER: Thank you.
10 HEARING OFFICER FEINEN: There's a
11 question over here.
12 MR. SAINES: Rick
Saines, S-A-I-N-E-S,
13 for the ERMS Coalition. Good morning. My first
14 question really is for each individual panel
15 member. I guess we can start with Mr.
Jirik and
16 go to Mr. Compton and Mr.
Ziesmann.
17 In addition to the
prefiled
18 testimony, could each of you just describe more
19 fully what your role was as part of the design
20 team and what specifically you did to contribute
21 to the rule?
22 MR. JIRIK: I guess I'll start. As I
23 stated in my testimony, what I attempted to bring
24 to the table was a very wide range of experience,
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1 having practiced in the Chicago area in a variety
2 of job functions, to provide really the best
3 possible outcome for the Chicago area. Actually I
4 made a conscious effort not to represent a CPC
5 position, somewhat purposefully, and if not, made
6 a hard determination of the numerical outcome.
7 Basically understanding that if
8 we're doing RACT, we're doing something very
9 prescriptive, and the worst you're going to do
10 under this rule is the same thing you're going to
11 do under RACT. So I tried to bring an objectivity
12 and a diversity of experience to the table for the
13 benefit of the group from an industry perspective,
14 what is concerning us, what experience we have had
15 dealing with regulations in the attempt to craft a
16 well-founded, cost effective rule that would
17 achieve what the
feds are requiring of us.
18 MR. COMPTON: Would you restate the
19 question, please.
20 MR. SAINES: Yes. I'm just asking what
21 each individual member has contributed to the rule
22 specifically in terms of their input into
23 designing the rule.
24 MR. COMPTON: Well, from my perspective,
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1 I addressed that in my testimony. There are two
2 things. I was asked if I would like to
3 participate, and I said, why not. I've been at
4 the environmental game now, if you want to call it
5 a game, for 33 years. I've been involved in
6 almost all types of regulatory activities within
7 the State of Illinois for my employment with
8 Caterpillar. I work for a company who is involved
9 in an existing trading and banking program that
10 works.
11 I think that with that perspective
12 and having some insight on how that program works,
13 that there are parallels there that could be used
14 during the development of the design program. So
15 as a result, I felt that both the company and
16 myself had something to offer in putting the
17 design team proposal together.
18 MR. ZIESMANN: I guess my input was to
19 try and bring Abbott's perspective to the rule
20 from the standpoint of Abbott's somewhat unusual
21 production process. All of our production is on a
22 batch basis. We're not a continual manufacturer
23 that is running an assembly line.
24 We run a lot of different products
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1 on different pieces of equipment for differing,
2 varying lengths of time. So it was important to
3 Abbott to make sure that whatever rule was
4 developed would address our concerns from that
5 standpoint.
6 MS. SAWYER: Can I ask just a follow-up
7 question on this line, and whoever wants to answer
8 it, that's okay. Essentially when you worked with
9 the agency on the design team, you actually helped
10 review copies of the proposed rule and gave input
11 on specifics on the proposed rule. Could someone
12 possibly expand on that process.
13 MR. JIRIK: We participated in the
14 review function looking at any number of drafts.
15 There were very detailed discussions around the
16 table from a variety of perspectives, as some of
17 the other references were to economics and
18 environmental and EPA.
19 I think what I saw -- and I will do
20 a broad characterization. What I saw the industry
21 sector bringing was some of the reality of trying
22 to run a plant, trying to manufacture things, put
23 them in commerce and how do rules affect that.
24 How does one really go about implementing rules
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1 that are going to be fairly stringent and in the
2 real world environment? And I saw that we had
3 good discussions in that area. One can craft
4 words with unintended consequences. I think we
5 tried to look at the implementation stage from an
6 industrial standpoint to say, now, what does this
7 really mean and how would one really go about
8 doing this?
9 MR. COMPTON: One observation I had
10 about the functioning of the design team that as
11 we proceeded -- and Al said that we were very open
12 in our discussions primarily because we couldn't
13 have accomplished anything if we didn't establish
14 a dialogue, but one thing that I really recognize
15 was the respect for the integrity of all the
16 points of view that were being expressed around
17 the table, and we would discuss these things and
18 argue them out -- not argument, argument, but
19 understanding argument -- until we felt that we
20 had come to a resolution or a consensus.
21 In some cases we would leave an
22 argument and come back to it six or seven months
23 later to address it again if everyone didn't quite
24 feel comfortable that their position was
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1 understood. So from my perspective, I think that
2 we were individually able to maintain the
3 integrity of viewpoints as we went through this
4 process.
5 MR. SAINES: Just another follow-up. I
6 guess it's the same sort of format. I guess we
7 can start with Mr.
Jirik and go on down the line.
8 As members of the design team when you were
9 working with the agency in developing the rule,
10 what were your positions or what is your current
11 understanding rather of the proportionate share
12 aspect of the rule?
13 In other words, what is your
14 understanding of how the rule is going to affect
15 stationary sources after 1999 in terms of the
16 proportionate share issue?
17 MS. SAWYER: Objection. I'm not sure I
18 understand this question. You're asking them how
19 the rule is going to affect sources after 1999?
20 MR. SAINES: This related to the
21 proportionate share issue in that the rule is
22 supposed to assure that stationary sources will
23 not be affected greater than their proportionate
24 share.
L.A. REPORTING - (312) 419-9292
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1 My question goes to members of the
2 design team as they were creating this rule what
3 their understanding was as to how stationary
4 sources are going to be affected after 1999
5 because we heard testimony that there will in fact
6 probably be additional reductions that are going
7 to be needed.
8 MS. SAWYER: This isn't about their
9 testimony then?
10 MR. SAINES: This is about their
11 understanding of the rules as members of the
12 design team.
13 MS. SAWYER: The rules that go to 1999?
14 I thought the question was about beyond 1999.
15 MR. SAINES: The rules state that there
16 may be further reductions needed, and the rules,
17 also the statute, mandates that the rules assure
18 that stationary sources do not get affected beyond
19 their proportionate share. So it's the rule as
20 it's being promulgated that we're interested in.
21 MS. SAWYER: Your question relates to
22 air quality policy that the agency develops. They
23 were involved in developing some of the underlying
24 principles of the rule, but in terms of the air
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1 quality stuff, that's really an agency question.
2 MS. MC FAWN: Maybe I can help out
3 here. I have a question, and it might be relevant
4 at this point. Mr. Compton, you testified that
5 you found that the ERMS should provide a system
6 that provides the means to meet air quality goals
7 without placing inequitable burden on stationary
8 sources as a category, and I was going to ask you
9 to elaborate on that a little bit. Maybe that
10 will address your point.
11 MR. SAINES: That in fact will. Thank
12 you.
13 MS. MC FAWN: If you can, Mr. Compton.
14 MR. COMPTON: Up to a point. I can
15 address the category issues because Caterpillar is
16 affected from a proportionate share issue in
17 several instances, primarily from an engine
18 emission or a mobile emission source. So I can
19 look at proportionate share as Caterpillar meeting
20 its goals twice through this process.
21 Hard to put a number on the engine
22 emission reduction size which is a federally
23 mandated program, but if I look at my table here,
24 I'll find probably that for the particulate
L.A. REPORTING - (312) 419-9292
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1 standpoint and a projected
NOx standpoint that we
2 are doing our share in the Chicago area, if I
3 could apportion the number of engines that are
4 either sold or operated in this particular area.
5 If I take a look at it and try to
6 address Board Member
McFawn's question from a
7 category standpoint, there are maybe only so much
8 that some particular sources can do in order to
9 easily or let's say meet their emission limits and
10 yet have an economic goal or cut toward the end
11 where they can actually do something within --
12 without an inordinate cost.
13 I think that a lot of the smaller
14 companies in this particular viewpoint as a
15 category would probably have some relief in an
16 emission trading program that would balance a
17 small number of credits that they may have to
18 obtain versus the large expense that they may
19 incur, something similar to what Mr.
Ziesmann was
20 talking about. I will answer, just based on what
21 I saw happening during the design team, that we
22 listened with great interest the information that
23 was provided on the different source categories
24 for mobile area and the stationary.
L.A. REPORTING - (312) 419-9292
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1 I don't think that we came to any
2 understanding during that particular phase of
3 apportionment. We accepted the apportionment as
4 it was presented to us knowing that that would be
5 worked out during the regulatory language process
6 which is what we have going on today. So I'm not
7 so certain that I could really address what the
8 fairness of an apportionment would be except to
9 say that when we focused on stationary sources
10 that they were being treated fairly from a
11 procedural standpoint and from an administrative
12 standpoint.
13 MR. SAINES: Let me just make sure I
14 understand your answer. So you're saying that at
15 the time that the rule was being promulgated and
16 you guys were each putting in your inputs and
17 creating the draft that we have before us, the
18 issue of proportionate share was not finalized?
19 It was not clear between --
20 MR. COMPTON: Based on my remembrance
21 and the proportionate share issue, I think, was
22 one that was waged in the legislation.
23 MR. JIRIK: May I?
24 MR. COMPTON: Yes, go ahead.
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1 MR. JIRIK: If I can further,
2 proportionate share in my understanding is
3 something between the three sectors. All three
4 sectors are accomplishing things, have
5 accomplished things and will accomplish things.
6 The final program, as testified to by others, is
7 yet to be determined, and it's my understanding
8 that proportionate share will be determined in the
9 final program to achieve attainment.
10 The fact that this stops in 1999 at
11 12 percent does not require in my personal view
12 the discussion of proportionate. Proportionate
13 was more relevant when this was an unending
14 leverage down to achieve attainment, and that was
15 the basis of the original legislation. When this
16 rule changed to a stop point three years out
17 mandating another board proceeding before anything
18 further occurs, in my view guaranteed
19 proportionate share making it a moot issue.
20 MR. SAINES: Again if I could just make
21 sure I understand your answer then. You're saying
22 that you think the proportionate share will be the
23 issue in 1999 after this rule has come to an end
24 or the three-year period has lapsed, and if
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1 necessary, further reductions are needed, your
2 understanding is that will be the point at which
3 proportionate share will be addressed?
4 MR. JIRIK: My understanding is that was
5 the intent of the insertion of that language into
6 the legislation, that you are stating a
7 legislative intent very accurately.
8 MR. SAINES: Thank you.
9 HEARING OFFICER FEINEN: Further
10 questions?
11 MR. NEWCOMB: This is Christopher
12 Newcomb, N-E-W-C-O-M-B.
13 Was the design team involved in
14 drafting the best available technology exclusion?
15 HEARING OFFICER FEINEN: You might have
16 a section number for that?
17 MR. NEWCOMB: That's 205.405.
18 MR. JIRIK: Well, it was the subject --
19 if I may, it was the subject of discussion between
20 the team and the agency. Much of the technical
21 work, however, was conducted by the agency, and I
22 think it would be proper to refer the question to
23 them. So we did discuss it. We did communicate
24 concepts, issues, particularly from our
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1 perspective, of items the agency would want to
2 consider technically, but again, if you're
3 interested in the nuts and bolts of how that came
4 to be, you would have to refer it to the agency.
5 MR. NEWCOMB: My questions would, if I
6 continue them, be actually more directed to as the
7 industrial sector representatives on the design
8 team, were there individual companies interested
9 in providing through these rules an exclusion
10 based on best available technology for certain
11 sources that may be finally affected by the rule?
12 MS. SAWYER: Could you clarify that a
13 little bit more.
14 MR. NEWCOMB: Were the individual
15 companies that you each worked for possibly
16 interested in having exclusions available for
17 certain sources and that exclusion would have been
18 based on best available technology?
19 MS. SAWYER: Are you asking --
20 MR. NEWCOMB: I'm asking them each
21 individually. Is there something complicated
22 about that?
23 MS. SAWYER: Yeah. I guess I'm looking
24 for clarification. Are you asking whether they
L.A. REPORTING - (312) 419-9292
914
1 cared -- whether their concern was as an
2 individual company seeking a BAT exemption or
3 whether they wanted it in there as a concept for
4 companies in general to take advantage of?
5 MR. NEWCOMB: Clearly their involvement
6 in the design team was not for their individual
7 companies. They're doing this on a -- for
8 participating in public forum. So no, I wouldn't
9 be expecting them to answer for their individual
10 companies.
11 MS. SAWYER: I just wanted to clarify.
12 Do you understand?
13 MR. JIRIK: If you go first.
14 MR. ZIESMANN: I guess I'm a little
15 unclear as to what you're asking, but we did
16 discuss the concept of having exclusions through
17 BAT. Did we actually participate in writing those
18 rules? No. We reviewed them after the agency had
19 drafted them, but I don't think any of us were
20 involved in drafting of the language, if that is
21 your question.
22 MR. NEWCOMB: I guess that answers part
23 of my question. Would you have any comment then
24 on what you saw the intent of the BAT exclusion to
L.A. REPORTING - (312) 419-9292
915
1 be?
2 MR. ZIESMANN: Could you expand on
3 that. What we saw as the intent of the
4 exclusion?
5 MR. NEWCOMB: Right.
6 MR. ZIESMANN: My understanding of the
7 intent of that exclusion is for certain sources
8 that cannot practically reduce emissions from
9 those particular sources.
10 HEARING OFFICER FEINEN: Are there any
11 other questions?
12 MR. TREPANIER: I want to follow up the
13 agency's question to Mr.
Jirik. You had said that
14 around the table -- what I understood you said,
15 around the table there was all the viewpoints or
16 many viewpoints were brought to that table
17 including the environmental. How was that seat
18 filled?
19 MR. JIRIK: EDF.
20 MR. TREPANIER: Was there another
21 environmental voice at the table?
22 MR. JIRIK: I think everyone has an
23 environmental conscience and spoke with that
24 regard. In terms of a nationally known group, I
L.A. REPORTING - (312) 419-9292
916
1 was not aware of any.
2 MR. TREPANIER: Any local groups?
3 MR. JIRIK: I did understand that there
4 were discussions with local groups, but I --
5 MR. TREPANIER: At the table, I'm
6 speaking. When you say on the design team, is
7 what you're saying EDF had brought the
8 environmental perspective?
9 MS. SAWYER: I think we've answered this
10 question on numerous occasions.
11 HEARING OFFICER FEINEN: If you can
12 answer it to the best of your knowledge, then
13 that's how he can answer it. I don't know if he
14 can answer beyond what he's already answered.
15 MR. TREPANIER: I think I have gotten
16 the answer. Thank you.
17 HEARING OFFICER FEINEN: Any other
18 questions? Any questions from the board?
19 MS. MC FAWN: Maybe the record contains
20 this information, but it doesn't come to mind.
21 Who else were members of the design team outside
22 of the agency?
23 MS. SAWYER: We did -- I think
24 Mr.
Kanerva did explain that, but --
L.A. REPORTING - (312) 419-9292
917
1 MS. MC FAWN: These three gentlemen and
2 who else?
3 MR. COMPTON: From EDF there were two.
4 You want industry?
5 HEARING OFFICER FEINEN: Everybody.
6 MR. COMPTON: Everybody.
7 MS. MC FAWN: Well, the three of you,
8 the agency and who else?
9 MR. COMPTON: There was the other
10 industry business representative was Bob
Ermundson
11 (phonetic) from Amoco. From EDF there was --
12 MR. JIRIK:
Edison.
13 MR. COMPTON: There was Commonwealth
14 Edison by Bob McLochlan (phonetic). From EDF Joe
15 Goffman and Nan Dudik, who is an economist. There
16 was a consultant to the agency to the design team
17 by the name of John
Calcagny (phonetic). Then
18 there was Paul Bellevue, and they were represented
19 by Phil
O'Connor, Kay O'Case (phonetic) and
20 Jerry -- help me out here, Alan --
Keenan. Let's
21 see.
22 MS. MC FAWN: Who is Mr.
Keenan with?
23 MR. COMPTON: Mr.
Keenan is an economist
24 with Palmer Bellevue, and generally the EPA staff.
L.A. REPORTING - (312) 419-9292
918
1 MS. MC FAWN: Thank you.
2 MR. SAINES: Mr.
Jirik, you did testify
3 that CPC has a number of large and small sources
4 potentially affected by the ERMS rules. As
5 representatives of industry, did you consider your
6 small sources to be representative of the rest of
7 the potentially affected sources that are
8 somewhere in the, you know, 10 to 15 to 20 ton per
9 season range? Because I think from the testimony
10 it's clear that the three -- you three individuals
11 represent rather large industrial organizations.
12 So I guess my question is do you think there was a
13 fair representation of some of the smaller sources
14 that are going to be potentially affected by these
15 rules on the design team?
16 MR. JIRIK: CPC does have some smaller
17 operations in the area. As my testimony stated, I
18 also worked for a number of those as a consultant
19 prior to coming to CPC. And again, as I noted in
20 my testimony, I tried to function as a resource,
21 not as a big company representative bringing forth
22 -- maintaining
confidentialities but bringing
23 forth the wealth of experience dealing with the
24 tiniest of operations to things that are very huge
L.A. REPORTING - (312) 419-9292
919
1 and bring an objective resource to the table to
2 the benefit of the process. So I did not attempt
3 to forward personal or individual items, but
4 rather represent what I have obtained through
5 personal experience as a wide range of experience,
6 both large and small.
7 MR. COMPTON: When I went through the
8 design team report with the tables that are
9 presented in the back, this is generally what I
10 was looking for. I found -- and I'll just give
11 you what I recall right off the top of my head.
12 For our Joliet facility, we probably are in the
13 down, I would say, 30 percent from the bottom of
14 the list.
15 There are a large number for
16 Aurora. We are probably somewhere around 50
17 percent down in the list. For me, this represents
18 medium to small, and I think that Mr.
Kanerva had
19 pointed that out in his testimony how many
20 hearings ago. So even though we may be a large
21 industry, our total emissions from the affected
22 sources are medium to small.
23 MR. SAINES: Thank you. Would you like
24 to comment, Mr.
Ziesmann?
L.A. REPORTING - (312) 419-9292
920
1 MR. ZIESMANN: No, I have nothing to add
2 to that.
3 HEARING OFFICER FEINEN: I have a
4 question, and I don't know if all three of you can
5 answer it, but I was hoping at least Mr.
Ziesmann
6 and Mr. Compton can answer it. If you were
7 thinking of bringing a new source into the
8 non-attainment area for Abbott Labs or
9 Caterpillar -- and I don't know if Mr.
Jirik can
10 deal with a fictional company, answer this
11 question, too -- how do you see the ERMS proposal
12 working with new source review and the advantages
13 of ERMS or disadvantages of ERMS?
14 MR. ZIESMANN: Well, I believe that
15 Chris Romaine has talked about the new source
16 review provisions. What we would see the
17 advantage is
is that it creates a market for
18 available offsets and the ability to trade for
19 those more readily or bring in a new source.
20 MR. COMPTON: From my viewpoint, if I
21 had a major modification which I would consider
22 for each of these plans, I would look at new
23 source review initially as a step in itself to
24 determine whether or not it would be possible to
L.A. REPORTING - (312) 419-9292
921
1 do what we wanted to do, especially in finding the
2 offsets at 3.-- at 1.3 to 1.
3 Then I would determine whether or
4 not -- and maybe not in this order, but I would
5 determine whether or not LAER would be reasonable
6 and whether or not economically we would even want
7 to pursue new source review for a particular type
8 of modification. So before I would integrate it
9 with the ERMS type of proposal, I would want to
10 make very sure that I wanted to pursue new source
11 review on those locations right from the
12 beginning.
13 MR. JIRIK: I'll take a try at the
14 question. From today's perspective, absent this
15 rule, we have Title I mandating 1.3 to 1 offsets.
16 The offsets are being driven by a LAER process.
17 We do not have a lot of market information. We do
18 not have the freedom and the innovation which I
19 testified to. It's very difficult to go out and
20 about and identify where you get these. So today
21 it is a fairly difficult proposition. Plus the
22 generation of the necessary reductions to the air
23 shed are not being done in the most economical
24 way.
L.A. REPORTING - (312) 419-9292
922
1 So we have a disincentive to the
2 employment base of Chicago because we are not
3 attainment. To the extent that is magnified by
4 additional cost inefficiencies under command and
5 control, you have a further negative to the
6 overall economy. Some of the positives you might
7 see under an ERMS program is greater market
8 information, greater stimulation of the innovation
9 that would attempt to generate reductions through
10 new and improved technologies, and at worst,
11 you're going to be where you were, but you have a
12 tremendous upside to be better off. So you're
13 generating comparable environmental benefit at a
14 reduced cost to the benefit of the economy in the
15 Chicago region, if all of the economics and the
16 fundamentals of the market are as the economists
17 have led me to believe were made.
18 HEARING OFFICER FEINEN: Any follow-up
19 questions? Any further questions? Then we'll
20 take a 10-minute break at this point, and we'll
21 start in with questions after break.
22 (Recess taken.)
23 (Discussion off the record.)
24 HEARING OFFICER FEINEN: We want to
L.A. REPORTING - (312) 419-9292
923
1 start this morning out with going through
2 questioning starting out with Tenneco. The agency
3 has prepared a table of contents which has been
4 passed out to most people in the audience.
5 There's more copies on the back of the table.
6 At the end of a question, if we
7 feel the need, we will move it into the record as
8 an exhibit. Please state the question that you're
9 asking as we go through so we can keep the record
10 clear, and let's begin with the Tenneco questions.
11 MR. FORCADE: Good morning. My name is
12 Bill
Forcade from Jenner & Block representing
13 Clinical Plastics Company. With me today is
14 Mr. James
Wakeman from Clinical Plastics. We will
15 be asking questions from the
prefiled questions we
16 submitted on January 27th, 1997.
17 According to the table of contents
18 circulated by the agency, we will move first to
19 subpart A, general provisions, Section 205.130,
20 definitions.
21 Question 1, does the definition of
22 "emission unit" in 35 Illinois Administrative
23 Code 211.1950 apply to the ERMS proceeding?
24 MR. ROMAINE: Yes, it does.
L.A. REPORTING - (312) 419-9292
924
1 MR. FORCADE: Question No. 2, will the
2 agency add a definition for "emissions reduction
3 generator" to this section?
4 MR. ROMAINE: We are not planning to add
5 such a definition. We believe the provisions for
6 emission reduction generators are adequately
7 described in Section 205.480.
8 MR. FORCADE: I believe now we're going
9 to Section 205.150, emissions management periods.
10 Question No. 3, if a new source wants to locate in
11 the Chicago ozone non-attainment area and no
12 allotment trading units are available for purchase
13 on the market or in the new source portion of the
14 alternative compliance market account, what
15 options are available to this facility?
16 MR. ROMAINE: I think I first want to
17 clarify. Are we talking here about a new
18 participating source that would potentially have
19 10 tons of VOC emissions and is required to get a
20 CAAPP permit?
21 MR. FORCADE: Yes.
22 MR. ROMAINE: That's important because
23 sources that are not minor could come into the
24 area without having to participate in the trading
L.A. REPORTING - (312) 419-9292
925
1 program. If a source -- a new participating
2 source of this type initially can't find
ATUs, it
3 basically has to look harder. The other things
4 that this does have available to it, it can also
5 go to look for reductions from emission reduction
6 generators or consider inner sector reductions.
7 I think it's important to remember
8 that this is really a situation that a new major
9 source coming into the area at this point is
10 subject to. A new major source is one with 25
11 tons per year. That's equivalent to 10 tons per
12 season. Under the new source review rules, those
13 new sources that come into the area have to offset
14 their emissions.
15 If those sources aren't able
16 initially to find offsets, then they have to look
17 harder. They don't really have the option under
18 our new source review rules to actually be
19 effective through the ERG and inner sector
20 process. That's another option that's available
21 through the trading program. More importantly,
22 the trading program does create a commodity for
23 ATUs and creates this marketplace that will
24 certainly, we believe, facilitate satisfying the
L.A. REPORTING - (312) 419-9292
926
1 offset requirement for a major new source.
2 MR. FORCADE: Is it true that a new
3 participating facility that is not able to acquire
4 ATUs will not be allowed to locate in the Chicago
5 ozone non-attainment area?
6 MR. ROMAINE: That's correct. At
7 present if you have a new major source coming into
8 an area that can't have the necessary offsets to
9 do what's necessary to obtain those offsets, it
10 will not get a construction permit.
11 MR. FORCADE: If there are no
ATUs
12 available for purchase on the market or in the new
13 source portion of the ACMA over the 10-year
14 period, is it true that no new major emission
15 sources of VOM will be allowed to locate and
16 operate in the Chicago ozone non-attainment area?
17 MR. ROMAINE: I'm not sure what the
18 significance of the 10-year period is. You're
19 really asking me to speculate about a situation
20 that I don't believe will occur. As I've said, I
21 think the trading program will make the situation
22 much better for proposed new major sources because
23 ATU will be a defined commodity, and a market will
24 exist for such proposed sources to look for ATU
L.A. REPORTING - (312) 419-9292
927
1 credits.
2 HEARING OFFICER FEINEN: At this point
3 we're going to switch over to questions from Dart
4 Container, questions 19 and 20, 21, 22 and 23, if
5 Mr.
Newcomb feels necessary to ask those
6 questions.
7 MR. NEWCOMB: This is Christopher
8 Newcomb for Dart Container. I have with me today
9 Michael
Powell, also from Dart Container. It's my
10 view that question 19 and question 20 have already
11 been answered as well as 21. Therefore, I'm not
12 going to ask them.
13 However, question No. 22, if a
14 source wishes to increase its production and
15 emissions by an amount that would trigger new
16 source review, in other words, the source will
17 make a major modification, and the source can
18 obtain sufficient
ATUs from the market or from
19 closing another participating source and meeting
20 the offset requirements, why should the source
21 still be required to demonstrate it will implement
22 technology meeting the LAER standard?
23 MR. ROMAINE: The requirements of new
24 source review are established by the Clean Air
L.A. REPORTING - (312) 419-9292
928
1 Act. The Clean Air Act provides that new major
2 sources must generally both meet a LAER
3 requirement and provide offsets. It's not an
4 either/or situation. It begins with internal
5 offsets. It begins with sources in this case where
6 they're going out to the marketplace to get their
7 offsets or
ATUs, they have to meet both
8 requirements.
9 MR. NEWCOMB: Question No. 23, wouldn't
10 the agency benefit from not requiring LAER, which
11 is L-A-E-R, under the above scenario since the
12 source will still be subject to further emissions
13 reductions and LAER would exempt the source from
14 further reductions?
15 MR. ROMAINE: I think there are a couple
16 of points. First of all, the agency doesn't get
17 any particular benefit. The benefit here we're
18 talking about is the benefit to the air quality of
19 the State of Illinois, and I guess I'm trying to
20 think about the scenario that you're talking
21 about. In some respects, however it works out, as
22 I said, is irrelevant because the Clean Air Act,
23 the Congress has said this is the way it's
24 supposed to be, but your suggestion is there is to
L.A. REPORTING - (312) 419-9292
929
1 be a circumstance where LAER would exempt a source
2 from further reductions, and that's presuming that
3 the source has already been subject to LAER at the
4 time the baseline has been determined.
5 If the baseline has already been
6 determined, the LAER requirement doesn't really
7 affect any provision for further reductions. The
8 further reductions would in fact come through the
9 offset requirement, and LAER would provide
10 whatever it would provide in terms of providing
11 very good control for the particular new project,
12 particular unit that is the subject of the major
13 modification or the new major source.
14 HEARING OFFICER FEINEN: Thank you.
15 According to the agency's outline under subpart A,
16 general provisions, Section 205.150, emissions
17 management periods, Mr.
Trepanier has questions 4,
18 5, 11, 12A and 17.
19 MR. TREPANIER: I note that questions 4
20 and 5 are general questions, and they are covered
21 under the -- they are also listed in the agency's
22 outline under general questions so I'll defer 4
23 and 5.
24 Question 11, are the new source
L.A. REPORTING - (312) 419-9292
930
1 offsets required under the Clean Air Act currently
2 in force year-round?
3 MR. ROMAINE: The Clean Air Act doesn't
4 specify that offsets must be enforced year-round
5 or are an annual requirement. The Clean Air Act
6 requires that offsets be sufficient to represent
7 reasonable further progress. Historically, we've
8 applied it year-round. However, since ozone is a
9 seasonal phenomenon, requiring seasonal offsets is
10 consistent with the Clean Air Act as such offsets
11 would be sufficient to represent reasonable
12 further progress toward attainment.
13 MR. TREPANIER: I don't feel you've
14 answered my question. My question is
is this the
15 current practice, the word currently? Is it the
16 current practice to require these offsets
17 year-round?
18 MR. ROMAINE: Yes.
19 MR. TREPANIER: And question 12A, would
20 the ERMS proposal change this current Clean Air
21 Act practice?
22 MR. ROMAINE: Yes.
23 MR. TREPANIER: Question 17, does the
24 agency believe that no new sources subject to the
L.A. REPORTING - (312) 419-9292
931
1 proposed rule will be sited in Chicago prior to
2 2003?
3 MR. ROMAINE: When you are saying no new
4 sources subject to the rule, are you referring to
5 major sources or just no sources whatsoever being
6 located in the Chicago area?
7 MR. TREPANIER: Subject to the proposed
8 rule.
9 MR. ROMAINE: Well, certainly there will
10 be new major sources or there will be new sources
11 in the Chicago area. New sources are built every
12 day in the Chicago area. Those new sources will
13 have to address this rule and in a general sense
14 subject to it. The further question is will there
15 be major new sources subject to the rule sited in
16 Chicago prior to 2003. I think that's possible.
17 It doesn't look like it's going to
18 be a very large number based on our historical
19 experience with major new sources. Major new
20 sources will be very infrequent, and we have not
21 seen one that actually involves building a major
22 new source from the ground up. Most of the major
23 projects that we've dealt with and handled major
24 projects we've dealt with have been in fact major
L.A. REPORTING - (312) 419-9292
932
1 modifications.
2 MS. SAWYER: Mr.
Trepanier, the
3 questions that we have listed here as 4 -- the
4 first two that you said, 4 and 5, we are referring
5 to 4 and 5 of your handwritten questions on the
6 last two pages of your submittal.
7 MR. TREPANIER: Okay.
8 MS. SAWYER: In some places there was a
9 little confusion because some questions were
10 numbered and others weren't.
11 MR. TREPANIER: Thank you. I'd like
12 this question I just asked, No. 17, as
13 specifically addressed to Mr.
Forbes as earlier
14 this question was deferred to Mr.
Forbes, I
15 believe, when I was questioning table 2 of the
16 Illinois EPA's air quality strategy presentation,
17 and there on line 1, under point -- designating
18 the point sources, there were numbers shown in the
19 parentheses.
20 There's numbers in parentheses for
21 1996, 1999 and the year 2002. And my question,
22 I'm questioning the 92 that's in the parentheses
23 for both 1999 and the year 2002. Does these
24 numbers, being 92 both in '99 and in '02, indicate
L.A. REPORTING - (312) 419-9292
933
1 that the agency believes that there will be no new
2 sources subject to the rule sited in the
3 non-attainment area during those years.
4 MR. FORBES: No, that particular number
5 reflects the point in the regulation that any new
6 major source is not provided an allotment, that it
7 must seek
ATUs from the market. Essentially, the
8 pool of emissions is identified and is not allowed
9 to grow for major new sources. That's what that
10 92 in both those occasions is intended to reflect.
11 MR. TREPANIER: Now, I want to continue
12 the questioning about these numbers. I noticed
13 that the 92 is 12 percent -- a 12 percent
14 reduction from the 105 listed under 1996.
15 Does that 105 in 1996 indicate the
16 agency's expectation of what point sources are
17 subject to this rule?
18 MR. FORBES: What those two sets of
19 numbers reflect were just as you described. It's
20 intended to represent that 105 is the number of
21 emissions associated with participating sources
22 affected by the rule, and that they are required
23 to achieve in aggregate a 12 percent reduction,
24 thus resulting in the 92 tons per day figure.
L.A. REPORTING - (312) 419-9292
934
1 MR. TREPANIER: I understand from the
2 previous testimony that sources that have a
3 construction permit in 1999 would be -- and then
4 begin operations sometime after 1999 would be
5 granted allotments, an allotment amount, that the
6 cap would be expanded to allow for sources that
7 have a construction permit in 1999 and then begin
8 emitting after 1999.
9 MR. FORBES: In those circumstances in
10 that transition period, they're allowed three
11 years to establish what their actual emission
12 level is, and
ATUs reflective of that would be
13 granted, if that's your question.
14 MR. TREPANIER: Yeah, that's the
15 answer. Thank you. Now, the 92 that's reflected
16 in 1999 and the 92 reflected in your year 2002,
17 does that assume that no sources will take that
18 option that was just described to have determined
19 the amount of their emissions after 1999 and then
20 receive the allotments?
21 MR. FORBES: The condition or the
22 situation that you've described has been addressed
23 in the numbers in the total emissions estimated
24 for 1999. However, because it's uncertain as to
L.A. REPORTING - (312) 419-9292
935
1 who might be in those circumstances, that specific
2 emission increase was not allocated to the 92, but
3 it is reflected in the total emissions projected
4 for 1999. In other words, there is a small amount
5 of growth anticipated. The agency is not certain
6 as to which exact sectors those would occur,
7 whether there will be minor new sources, minor
8 modifications or transitional sources that come in
9 with a construction permit in that transition
10 period, but a certain amount to account for that
11 small amount or that type of growth has been
12 included in the total emissions.
13 MR. TREPANIER: What's the basis of your
14 belief that there would be a small amount?
15 MR. FORBES: I would say based on the
16 historical number of major new construction
17 permits that have been received by the agency and
18 because of the limited time that we're talking
19 about here from 1997 through, I believe, 1998 when
20 applications would be received. Because of that,
21 I'm assuming that the number would be relatively
22 small.
23 MR. TREPANIER: What is the exact date
24 when the application would have to be received for
L.A. REPORTING - (312) 419-9292
936
1 a source to -- these are the transitional sources
2 that you referred to?
3 MR. FORBES: Yes.
4 MR. TREPANIER: Is a transitional source
5 someone who has an application pending or who has
6 a construction permit in 1999, issued in 1999?
7 Could you describe that.
8 MR. FORBES: Construction permit by
9 January 1, 1998.
10 MR. TREPANIER: Is January 1, 1998, the
11 last time that a source could -- is that the
12 cutoff period that at that point someone would
13 have to have a construction permit if they wanted
14 to get into this program,
grandfathered in or
15 somehow be an original holder of
ATUs?
16 MR. FORBES: Yes.
17 MR. TREPANIER: You said that those
18 sources that do during this year seek and obtain a
19 construction permit for their source, that the
20 agency has accounted for those -- that potential
21 increase in the amount of VOM emissions that this
22 program is going to allow. Where is that
23 accounted for? Where is that reflected?
24 MR. FORBES: I believe I already
L.A. REPORTING - (312) 419-9292
937
1 answered that. As I mentioned, it's not reflected
2 in the 92 number because it's uncertain as to how
3 many and if any such occurrences of that nature
4 will happen, but we have afforded a growth amount
5 for all the point source category. So that would
6 be reflected in the estimated total emissions for
7 1999.
8 MR. TREPANIER: Is that the -- I'm
9 noticing that in table 2 on the first line that
10 the number under column 1999 is 160. In the year
11 2002, the number is 161. Is that where that
12 potential increase in emissions for point sources
13 is accounted?
14 MR. FORBES: Just a moment, I need to
15 look at the table.
16 HEARING OFFICER FEINEN: I would just
17 like to say that I'm giving you a little leeway
18 here, but you're starting to ask some questions
19 that you already have written out here. I mean, I
20 think you're going into questions --
21 MR. TREPANIER: I'm asking my next
22 question already.
23 HEARING OFFICER FEINEN: Yeah, you've
24 had -- like on the handwritten question No. 1 is
L.A. REPORTING - (312) 419-9292
938
1 dealing with Exhibit 6 and talking about the 105,
2 and No. 2 is dealing with 92. So when we get to
3 these questions, maybe we'll say you've already
4 asked and answered them, but let's finish this
5 line, but remember when I get to these, I'm
6 probably going to state you already asked these.
7 So let's finish this up, and if you're ready,
8 Mr.
Forbes, go ahead.
9 MR. FORBES: To answer your question, it
10 would be reflected in the total number of 160 in
11 1999.
12 MR. TREPANIER: Now, that 160, if I
13 understand your testimony, is that an emitter will
14 need to have three years of emission history prior
15 to establishing their baseline so that's going to
16 occur for these sources -- that must occur for
17 these sources after 1999, does it not?
18 MR. FORBES: It doesn't have to, but it
19 possibly would.
20 MR. TREPANIER: They have to have three
21 years of emission history prior to establishing
22 the baseline?
23 MR. FORBES: Right, but it depends on
24 when they come in for a construction permit. It's
L.A. REPORTING - (312) 419-9292
939
1 possible that -- well, more than likely it would
2 be after 1999.
3 MR. TREPANIER: Does the agency's
4 summary of the attainment ROP scenario account
5 then for those who are coming in with their
6 baselines after 1999?
7 MR. FORBES: Well, essentially the
8 growth that you're interested in -- that your line
9 of questioning is going after, in our
10 assessment -- because we do not know and can't
11 specifically identify those circumstances, how
12 many, to what degree, what the magnitude of those
13 -- that particular growth would be, we have
14 included and identified emissions in that group.
15 Now, if that particular growth
16 happens to be associated with a CAAPP source, a
17 source that's subject to the program, they would
18 move over into the ERMS program, and they would be
19 afforded those emissions in the trading program
20 and assessed a 12 percent reduction. If that
21 growth is associated with growth but not for a
22 source that's in that circumstance, they simply
23 will have whatever the emissions are that you've
24 estimated for their growth.
L.A. REPORTING - (312) 419-9292
940
1 So what I'm saying is that this is
2 a conservative estimate, that if that circumstance
3 occurs, that the -- we will get an additional 12
4 percent benefit that we have not identified in
5 these numbers because we simply don't know what
6 that quantity is, but the emissions from that have
7 been accounted for in our planning analysis here.
8 That's in the 160 that you see projected under
9 1999.
10 MR. TREPANIER: The 160 reflects the
11 agency's best knowledge on what -- on new point
12 sources that are going to begin emissions sometime
13 after the year 2000?
14 MR. FORBES: 160 never reflects existing
15 emissions and new sources that are projected to
16 exist with control in 1999. So whatever growth
17 and additional emissions we can project are
18 included in the 160 number before 1999.
19 MR. TREPANIER: Then as we covered
20 earlier, those who have their construction permit
21 by January 1, '98, they are not included in the
22 1999 number, is that correct?
23 MR. FORBES: They may or may not because
24 we don't know the circumstances. We have afforded
L.A. REPORTING - (312) 419-9292
941
1 a quantity of increased emissions due to such
2 construction activity, the best that we're able to
3 estimate such growth. That growth is included in
4 the 160 number that you see. Again, as I stated,
5 that number, we're not sure whether that's
6 associated with a source that would be coming in
7 because it doesn't exist now and hasn't applied
8 for such a permit, whether that particular
9 situation will be an ERMS affected source or
10 whether it would simply be minor source growth not
11 subject to the program, but that quantity of
12 growth in emissions is included in the 160
13 number.
14 MR. TREPANIER: How much is that
15 number? What is the number the agency is
16 anticipating is the amount of growth that's going
17 to occur?
18 MR. FORBES: Off the top of my head, I
19 can't answer that. I will have to, you know, do
20 some -- go back and check. I don't have that
21 number off the top of my head.
22 MR. TREPANIER: Will the agency provide
23 that information?
24 MR. FORBES: Sure, yes.
L.A. REPORTING - (312) 419-9292
942
1 MR. TREPANIER: I'm going to now ask
2 question 1 from the first page of my handwritten
3 questions regarding Exhibit No. 6. Does the
4 agency's projection --
5 MS. SAWYER: Wait a second. Are we
6 going in this order now?
7 HEARING OFFICER FEINEN: No, let's go
8 off the record for a second.
9 (Discussion off the record.)
10 MR. TREPANIER: Has the state received
11 an exemption from the Clean Air Act's new source
12 review offset requirement?
13 MR. ROMAINE: No, we haven't. We have
14 received something called a
NOx waiver. That's
15 more broad than that. That really excuses nitrous
16 oxide emissions from control requirements as a
17 precursor to ozone, but there has not been
18 anything beyond that specifically exempting
19 Illinois from the offset requirement of the new
20 source review rules.
21 MR. TREPANIER: Question 5, could a unit
22 meeting LAER still increase its allowable
23 emissions by increasing production?
24 MR. ROMAINE: Yes, meeting LAER can
L.A. REPORTING - (312) 419-9292
943
1 increase its emissions by increasing production,
2 but it cannot exceed its allowable level or amount
3 of emissions as would be established in its new
4 source review permit. The circumstance here
5 hasn't been described so I can't really speculate
6 on what the implications might be for the source's
7 baseline emissions or allotment.
8 MR. TREPANIER: That's what my question
9 is actually going to. This question 5 I'm talking
10 about in this one, this source, this unit that's
11 meeting LAER is in the ERMS program, operating in
12 the ERMS program. Can it still increase its
13 allowable emissions by increasing production?
14 MR. ROMAINE: It can't ever increase its
15 allowable emissions. Its allowable emissions will
16 be set by the LAER limit. It has to comply with
17 that. It will have to operate within its
18 allotment of
ATUs. Actually the source that
19 includes that will have to operate within its
20 allotment of
ATUs.
21 If in fact there is an increase in
22 production from an LAER unit so then there's more
23 emissions that it received an allotment for, it
24 will have to obtain
ATUs from other emission units
L.A. REPORTING - (312) 419-9292
944
1 at the source or go to market to make up the
2 deficiency.
3 HEARING OFFICER FEINEN: Let's go back
4 then to subpart B, applicability, Section 205.205,
5 Tenneco's questions.
6 MR. FORCADE: These questions reflect
7 our understanding of Section 205.205 that if a
8 source elects to be exempted from the ERMS program
9 under Section 205.205(a), the source will not be
10 able to exceed 15 tons per season. Question No. A
11 we believe has been asked and answered.
12 Question No. B, the first sentence,
13 we believe has been asked and answered. The
14 second sentence, if a source elects this
15 exemption, will the source be required to comply
16 with the full ERMS program?
17 MR. ROMAINE: The future treatment and
18 status of the source would be addressed on a
19 case-by-case basis in the actual enforcement
20 action.
21 MR. FORCADE: Will the source be
22 required to purchase
ATUs for the emissions over
23 15 tons?
24 MR. ROMAINE: Again what that source has
L.A. REPORTING - (312) 419-9292
945
1 to do in the future would be addressed as part of
2 the enforcement action.
3 MR. FORCADE: Question C, may such a
4 source decide at a later date to give up the
5 15-ton exemption and participate in the ERMS?
6 MR. ROMAINE: There's nothing in the
7 proposal that would prohibit such a change in
8 strategy by a source. To avoid enforcement, it
9 would be appropriate to take that change
10 prospectively.
11 MR. FORCADE: If a source did decide to
12 follow this procedure, what is the procedure for
13 doing that?
14 MR. ROMAINE: As I said, they do it
15 prospectively ideally to avoid an enforcement
16 action. We would then take them through the
17 process as if they had been an original
18 participating source. So we require that they
19 submit an ERMS application.
20 We would establish a baseline
21 emissions from their operation and emissions in
22 1994 and 1995 or '96 or other substitute seasons.
23 We would then issue an allotment to that source
24 appropriately reduced by 12 percent, and this
L.A. REPORTING - (312) 419-9292
946
1 would all be accomplished as part of the
2 modification of the source's Title V permit.
3 MR. FORCADE: Would this source then be
4 an existing participating source or a new
5 participating source?
6 MR. ROMAINE: This source would be
7 considered an existing participating source.
8 MR. FORCADE: That would be true even if
9 the facility had not originally elected to be an
10 ERMS source and later opted into the program by
11 amending its Title V?
12 MR. ROMAINE: Repeat that follow-up
13 question, please.
14 MR. FORCADE: The questions that I had
15 in question 4 were premised on a source which had
16 elected to be exempted and then subsequently
17 changed his mind, and how could it get into the
18 program if it originally selected the exemption,
19 the 15-ton per season exemption, and if they
20 hadn't elected that exemption, if they later
21 decided they wanted to voluntarily participate in
22 the ERMS program, what is the procedure for doing
23 so?
24 Will they be required to modify
L.A. REPORTING - (312) 419-9292
947
1 their Clean Air Act permit? Will they be required
2 to obtain
ATUs, and if so, will they be issued
3 baseline
ATUs? But it's premised on a source that
4 originally elected a 15-ton limit under 205.205(a)
5 and later changes its mind and wishes to
6 participate in the ERMS program.
7 MR. ROMAINE: That's correct. That's
8 what I was responding to. I was responding to a
9 situation where somebody had that choice as an
10 existing source of either fully participating or
11 pursuing exemption.
12 MR. FORCADE: Going on to question 5 in
13 that same section, I have effectively identical
14 questions relating to a source that elects to be
15 exempted from the ERMS under 205.205(b) by
16 reducing its emissions by 18 percent by 1999, and
17 I believe the question A has been answered, and I
18 believe that the first part of question B has been
19 asked and answered.
20 If a source elects the exemption
21 precluding emissions over 18 percent, will the
22 source be required -- and later does have
23 emissions over 18 percent, will the source be
24 required to comply with the full ERMS program?
L.A. REPORTING - (312) 419-9292
948
1 MR. ROMAINE: That would be addressed in
2 the context of that specific enforcement action.
3 MR. FORCADE: Will the source be
4 required to purchase
ATUs for the emissions over
5 15 tons?
6 MR. ROMAINE: I think you mean the --
7 MR. FORCADE: I'm sorry, 18 percent.
8 MR. ROMAINE: Again that would be
9 addressed in the enforcement action as to what is
10 the appropriate remedy for what's occurred.
11 MR. FORCADE: And what will the cost of
12 these
ATUs be?
13 MR. ROMAINE: We don't know.
14 MR. FORCADE: May a source which has
15 previously selected the 18 percent reduction
16 exemption and decides at a later date to give up
17 that exemption and participate in the ERMS, what
18 is the procedure for doing so?
19 MR. ROMAINE: Again we could review an
20 application for them to change their status under
21 the ERMS. They would have to come forward and
22 tell us that they want to have their status
23 changed. In this case it would be much more
24 straightforward because they would have already
L.A. REPORTING - (312) 419-9292
949
1 had their baseline emissions established. What we
2 would do then is add in the additional provisions
3 for this source as if it were a participating
4 source and begin issuing
ATUs to the source at the
5 18 percent reduction level.
6 MR. FORCADE: Am I correct that they
7 would receive for
ATUs their baseline emissions
8 less 18 percent rather than less 12 percent?
9 MR. ROMAINE: That is correct. The rule
10 -- going back to -- we have given the choice,
11 this option to provide X reductions to avoid the
12 full rigor of the trading program. If such a
13 source subsequently changed its mind, we have to
14 provide a provision where they could then come
15 back in and switch simply to a 12 percent
16 reduction. The relevant provisions of the rule
17 say they have to provide an 18 percent reduction
18 in emissions beginning in 1999.
19 MR. FORCADE: Would such a source be
20 called a new participating source or a
21 participating source at that point?
22 MR. ROMAINE: Again starting the
23 program, made this choice, it would always be a
24 participating source.
L.A. REPORTING - (312) 419-9292
950
1 HEARING OFFICER FEINEN: That
2 concludes -- oh, we have a follow-up.
3 MR. SAINES: Yes, please, thank you.
4 Rick
Saines. With respect to question 4B, second
5 sentence, I believe that you stated -- the
6 question is, will the source be required to comply
7 with the full ERMS program? And I believe the
8 answer was that it would be addressed on a
9 case-by-case basis as part of the enforcement
10 action?
11 MR. ROMAINE: That's correct.
12 MR. SAINES: When you say "enforcement
13 action," are you referring to -- is that
14 necessarily indicating that it will not be covered
15 as an emission excursion under the ERMS rules? Is
16 it going to be considered an enforcement action as
17 a violation of a CAAPP permit?
18 THE WITNESS: There is no provision for
19 these types of situations to be considered
20 excursions under the trading program. There is no
21 automatic excursion fee associated with exceeding
22 either the 15-ton per year limit or an 18 percent
23 limit. They would have to be addressed on a
24 case-by-case enforcement action as a violation of
L.A. REPORTING - (312) 419-9292
951
1 a relevant condition in the Title V permit.
2 MR. SAINES: So what you're saying was
3 perhaps part of that enforcement action will be
4 further compliance with ERMS, but that's not the
5 extent to which the enforcement action will
6 cover? The enforcement action may include
7 participation in ERMS, but the enforcement action
8 is a completely separate action that is outside
9 ERMS?
10 MR. ROMAINE: That's correct, and I
11 guess to elaborate, it could be decided -- it was
12 at one time a violation, and we continue safely
13 back as exempted sources and they corrected the
14 problem, or we may decide in a case that it is
15 appropriate for them to again participate in the
16 ERMS.
17 MR. SAINES: Just one initial
18 follow-up. With respect to question C, I think
19 the question was whether a source could decide at
20 a later date to give up the exemption and
21 participate, and you indicated that you believe
22 there's nothing that prohibits that in the ERMS
23 rules, but to avoid an enforcement action, the
24 source must do it prospectively.
L.A. REPORTING - (312) 419-9292
952
1 When you say prospectively, do you
2 mean before the initial baseline determinations
3 are established?
4 MR. ROMAINE: No, I did not. I meant
5 before they actually exceed the 15-ton per year
6 limit or the 18 percent reduction limit.
7 MR. SAINES: Okay, thank you.
8 HEARING OFFICER FEINEN: Mr.
Trepanier.
9 MR. TREPANIER: On the same question
10 regarding these exempted sources -- sources that
11 take a 15-ton exemption. In the instance that
12 there was an emitter at 10 tons new, who takes the
13 exemption for 15 tons and gets to a point where
14 they would like to emit 16 tons, is the -- I'm
15 going to withdraw the question.
16 HEARING OFFICER FEINEN: Going on to
17 questions that were filed on January 16th, 1997,
18 question 8.
19 MS. FAUR: Good morning. I am Cindy
20 Faur from Sonnenschein, Nath & Rosenthal. We have
21 been monitoring these hearings for Minnesota
22 Mining and Manufacturing Company, Sequel
23 Corporation (phonetic) and Sun Chemical Company,
24 and our
prefiled questions are being posed for
L.A. REPORTING - (312) 419-9292
953
1 several of our clients.
2 This is
prefiled question No. 8
3 from our January 16th filing. I had asked this
4 question previously, and it was deferred to the
5 panel. The proposed rule provides a source with
6 two means of exempting out of the ERMS system.
7 The source can either accept a 15 tons per season
8 emission limitation or submit an ERMS application
9 in which it proposes to accept a baseline which
10 reflects an 18 percent reduction in VOM
11 emissions. Please elaborate on the selection of
12 the 18 percent for the emission reduction
13 requirement in this exemption.
14 MR. ROMAINE: A little bit of
15 background. This exemption from the trading
16 program was requested on behalf of certain types
17 of sources. The agency agreed to the exemption if
18 the source would provide a substantial reduction
19 source-wide. We settled on 18 percent as one and
20 a half times the 12 percent reduction generally
21 being required from a market perspective. The
22 agency's preference is that sources participate in
23 the market, the trading program and make surplus
24 reductions available to the general market and to
L.A. REPORTING - (312) 419-9292
954
1 other sources.
2 The 18 percent level assures that
3 sources carefully consider whether they pursue
4 this exemption. However, from an air quality
5 perspective, the 18 percent exemption does enhance
6 the trading program's ability to provide a rate of
7 progress required for 1999 which is our
8 fundamental purpose for the program. So we did
9 accept the source's request and accommodate them.
10 MS. FAUR: As a follow up, was there
11 consideration of a 14 percent reduction or a 16
12 percent reduction for this exemption?
13 MR. ROMAINE: I think other numbers were
14 thrown at us. We decided 18 percent was a good
15 number.
16 HEARING OFFICER FEINEN: Moving on to
17 the questions from Dart Container in the same
18 Section 205.205.
19 MR. NEWCOMB: Chris
Newcomb on behalf of
20 Dart. These questions have all been asked and
21 answered by previous questions.
22 HEARING OFFICER FEINEN: Thank you. I
23 guess moving on to subpart C of the outline
24 Section 205.310, ERMS applications, Tenneco.
L.A. REPORTING - (312) 419-9292
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1 MR. FORCADE: Yes. Section 205.310, our
2 question No. 6 has been asked and answered.
3 Question No. 7, will sources be allowed or
4 required to submit information prepared under
5 other programs such as the Clean Air Act
6 Permitting Program? Under Section 205.310(b),
7 what information may be referenced and not
8 resubmitted?
9 MR. SUTTON: Well, if you've already
10 provided this information, and a great deal of
11 this information has already been accumulated in
12 the Title V permit. If it is in the Title V
13 permit and you can cross reference it, that is
14 acceptable to us.
15 MR. FORCADE: So the answer is any
16 information we can cross reference to the Title V
17 need not be submitted in the ERMS application?
18 MR. SUTTON: That's correct.
19 MR. FORCADE: Under Section
20 205.310(b)(1)(C), in order to adjust the baseline
21 for voluntary over-compliance under Section
22 205.320(d), what information must a facility
23 provide to the agency in its ERMS application in
24 order to meet the requirement that the facility
L.A. REPORTING - (312) 419-9292
956
1 submit, quote, "sufficient information for the
2 agency to determine the appropriate adjustment,"
3 closed quote?
4 MR. ROMAINE: In general we're looking
5 for the source to provide the information to
6 establish the baseline. We want them to put in
7 order what they think the baseline is and for us
8 to be in a position to review it and the
9 particular question of voluntary over-compliance
10 what we need to see is that the source has in fact
11 reduced its VOM emission rate after 1990, and in
12 fact, has reduced it beyond the levels of 1996
13 applicable requirements.
14 MR. FORCADE: As a follow-up, would this
15 require an emission unit by emission unit
16 emissions quantification, a regulatory
17 applicability analysis for each such unit and an
18 evaluation of the date and implementation of those
19 regulations at the state level?
20 MR. ROMAINE: Some of the information
21 you mentioned would have to be provided already in
22 their CAAPP application. I guess we're
23 speculating now what would be required in a
24 particular circumstance and the particular
L.A. REPORTING - (312) 419-9292
957
1 circumstance depending on how changes have been
2 made at a source. In fact, it might be necessary
3 to go down and look at unit by unit when specific
4 changes have been made to the units and what are
5 the result for the emissions of those units.
6 In other cases, several units may
7 in fact be capable of being addressed as a group.
8 Changes to those units may have been made as a
9 group. The applicable regulations applies as a
10 group. So it may not be necessary to break down
11 emissions by unified analysis, but we will
12 continue looking at the group of emission units as
13 a whole.
14 MR. FORCADE: I believe question No. 9
15 has been asked and answered.
16 Question No. 10 has a series of
17 subparts. It begins, what aspects of the ERMS
18 other than the initial ERMS application require
19 significant modification of a Clean Air Act permit
20 which can take up to nine months to process?
21 Question A, will increases to a
22 source's seasonal emissions or the subsequent
23 purchase of
ATUs require any modification of the
24 Clean Air Act permit?
L.A. REPORTING - (312) 419-9292
958
1 MR. SUTTON: It will not require a
2 modification of a CAAPP permit if that increase
3 doesn't violate an underlying requirement of the
4 CAAPP permit itself. What I'm saying is if you
5 had -- for some other reason your Title V permit
6 accepted a monthly limitation, you would not be
7 able to exceed that in your CAAPP permit, but the
8 seasonal allotments that you get basically define
9 the boundaries of which you have your own
ATUs or
10 need to purchase
ATUs.
11 MR. FORCADE: Will decreases to a
12 source's seasonal emissions or the subsequent sale
13 of
ATUs require any modification of a CAAPP
14 permit?
15 MR. SUTTON: No.
16 MR. FORCADE: Will selling or purchasing
17 ATUs require any modification of a CAAPP permit?
18 MR. SUTTON: No.
19 MR. FORCADE: Will a one-year transfer
20 from one facility to another require permit
21 modification?
22 MR. SUTTON: No.
23 MR. FORCADE: Will a 10-year transfer of
24 ATUs from one facility to another require a permit
L.A. REPORTING - (312) 419-9292
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1 modification for either facility?
2 MR. SUTTON: It would not require one.
3 At the time -- the permits themselves have a
4 five-year life. If we're in fact looking at
5 something that long range, we may want to address
6 that when we review those permits, just reflect
7 the balance. That wouldn't necessarily require
8 modification.
9 MR. FORCADE: Then as a follow-up, would
10 a permanent transfer of
ATUs from one emission
11 unit -- one facility to another facility require a
12 Clean Air Act permit modification?
13 MR. SUTTON: Let me ask a clarifying
14 question. Would this involve a shutdown?
15 MR. FORCADE: No.
16 MR. SUTTON: Then I would say not.
17 MR. FORCADE: But I have a whole series
18 of questions about shutdowns later. If a source
19 elects to be exempted from the ERMS under Section
20 205.205(a) because it agreed to limit emissions to
21 15 tons per season, will this require a
22 modification of a CAAPP permit?
23 MR. SUTTON: Yes, it would. What was
24 the question again? You said they were currently
L.A. REPORTING - (312) 419-9292
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1 exempt and wanted to become
un-exempt or back into
2 the program?
3 MR. FORCADE: No. This would be the
4 process of becoming exempt, would that facility
5 then have a 15 ton per year cap or limit, seasonal
6 emissions limit placed on their permit?
7 MR. SUTTON: If the company elects to
8 take the 15-ton exemption, that will become a
9 permit condition in their Title V permit, that
10 15-ton limit per season.
11 MR. ROMAINE: Just jump in. We're
12 trying to do all these CAAPP permits to initially
13 address the training program so there wouldn't be
14 a modification of the CAAPP permit required.
15 That's just the way their initial CAAPP permit
16 would be issued.
17 MR. FORCADE: If a source elects to be
18 exempted from the ERMS under Section 205.205(b)
19 because it agreed to reduce emissions by 18
20 percent, will this require a modification of a
21 permit?
22 MR. ROMAINE: And it has to be
23 discussed, yes, it would.
24 MR. FORCADE: And it would correctly
L.A. REPORTING - (312) 419-9292
961
1 include a numerical emission limitation equivalent
2 to an 18 percent reduction over baseline emissions
3 as a seasonal limit?
4 MR. ROMAINE: I think the question I
5 thought was if the source decided to give up this
6 exemption.
7 MR. FORCADE: No. If a source elects to
8 be exempted from the ERMS program, in other words,
9 if it requests --
10 MR. SUTTON: If you seek that exemption
11 based on the 18 percent, that number would be
12 reflected -- the 18 percent reduction, your total
13 VOMs per season would be reflected in your Title V
14 permit as a permit condition.
15 MR. FORCADE: As a numerical?
16 MR. SUTTON: Yes.
17 MR. FORCADE: I believe I'm still
18 continuing. Referring to Section 205.310(g)(3),
19 which provides for the requirements for ERMS
20 applications for new participating sources, please
21 explain how new participating source should
22 determine how it will obtain
ATUs for the next
23 three seasons?
24 A, can a source meet this
L.A. REPORTING - (312) 419-9292
962
1 requirement by merely stating to the agency that
2 it will purchase
ATUs on the open market or ACMA,
3 whichever is available?
4 MR. ROMAINE: No. The rule specifically
5 requires that the source provide its plan to
6 obtain
ATUs. A simple commitment of this type
7 would not necessarily constitute a plan. We would
8 expect some further evaluation of the
9 circumstances and some approach that would
10 demonstrate a likelihood of success.
11 MR. FORCADE: Must a source meet this
12 requirement by entering into a contract to
13 purchase
ATUs from another source?
14 MR. ROMAINE: No. That might be an
15 acceptable approach, but there's no specific
16 requirement that they have a contract. They could
17 also enter into an option agreement. They might
18 get an offer to sell
ATUs from some other source.
19 They may be able to describe some proposed changes
20 they may make from other sources to obtain
ATUs
21 that are within their control.
22 They might simply show they already
23 have sufficient
ATUs being built up in their
24 transaction account. They might show that they've
L.A. REPORTING - (312) 419-9292
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1 set aside adequate funds to purchase
ATUs at the
2 prevailing rates with some sort of reasonable
3 reserve. So there are a whole range of options
4 that a source in this circumstance can pursue. We
5 can't really specify which one -- we don't specify
6 which one has to be followed. They simply have to
7 provide us a plan that shows they will have those
8 offsets available and the necessary
ATUs to
9 satisfy the offsets requirement when they become
10 due.
11 MR. FORCADE: If I'm understanding you
12 correctly, the source must do something more than
13 say they intend to purchase
ATUs on the open
14 market, but they do not necessarily need to go so
15 far as submitting a signed contract for those
ATUs
16 to the agency. Could you elaborate a little bit
17 on what in the middle -- what type of
18 documentation the agency would need in order to
19 satisfy the requirements for
ATUs for three
20 seasons?
21 MR. ROMAINE: Well, as I said, we want a
22 plan, and the plan is more than simply a bald
23 statement saying, we'll get
ATUs, but one showing
24 that they've thought about a specific way to get
L.A. REPORTING - (312) 419-9292
964
1 ATUs or a number of options, and they think they
2 can carry some or all of those options to
3 completion.
4 MR. FORCADE: One of the options you've
5 mentioned was the sufficient method of capital to
6 purchase
ATUs on the open market. Would the
7 facility need to supply a letter of credit to the
8 agency?
9 MR. ROMAINE: I don't think we would
10 expect that. We would simply want to make sure
11 they have contemplated what amount of resources
12 would be necessary for that expenditure, that they
13 haven't clearly underestimated the amount of money
14 that will be required. So when the time comes to
15 purchase the
ATUs, they will have enough money to
16 purchase the required amount.
17 MR. FORCADE: Would a statement that we
18 anticipate the cost of
ATUs for three years to be
19 X dollars and we have adequate financial reserves
20 to pay that be enough to satisfy the agency?
21 MR. ROMAINE: That's speculative, but
22 it's conceivable it would.
23 MR. FORCADE: Under this section, is the
24 new source required to obtain any of the
ATUs
L.A. REPORTING - (312) 419-9292
965
1 before the reconciliation period?
2 MR. ROMAINE: No. They are required to
3 provide the
ATUs at the end of the reconciliation
4 period like other participating sources or new
5 participating sources.
6 MR. FORCADE: For a Clean Air Act permit
7 source which is not required to participate in
8 ERMS, what procedure will it be required to follow
9 in order to comply with ERMS and CAAPP if it
10 becomes a new participating source under ERMS?
11 For example, a source emits seven
12 tons per season operating one shift. The source
13 is not required to participate in the ERMS. If
14 the source expands to three shifts in 2001 and
15 emits 21 tons per season, what requirements must
16 it meet under the ERMS and will it be required to
17 obtain
ATUs?
18 MR. ROMAINE: First by way of
19 clarification, you've described a source that is
20 in existence when the trading program starts up so
21 this source would never become a new participating
22 source. It's always a participating source. As a
23 participating source, it would be entitled to an
24 allotment. The question is what allotment it
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1 would be entitled to, and that really depends on
2 how it expands its operations and how its permit
3 is set up. So I think the description you've
4 provided here doesn't mention that this is a major
5 modification.
6 MR. FORCADE: I'm sorry, is that a
7 question?
8 MR. ROMAINE: We have established two
9 routes really that a source that isn't a
10 participating source that has an increase in
11 emissions becomes a participating source, there's
12 one route established for sources that have major
13 modifications. There's another source for sources
14 that do not undergo major modifications.
15 MR. FORCADE: I think the analysis using
16 an expansion of shifts was predicated on the idea
17 that that would be exempt in Illinois from the new
18 source review requirements.
19 MR. ROMAINE: In that circumstance, the
20 source would receive an allocation of
ATUs after
21 it has gone through that first season where it
22 became -- went over the 10-ton per season
23 applicability criteria.
24 HEARING OFFICER FEINEN: Let the record
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1 reflect that Mr. Romaine is responding to question
2 12A.
3 MR. ROMAINE: So they would have to
4 submit an ERMS application. It would have to
5 provide emission data for that key season where it
6 exceeded the applicability threshold, and then
7 ATUs would be allocated to that source for the
8 following season.
9 MR. FORCADE: Would those
ATUs be
10 allocated premised on a baseline of seven tons per
11 season or on a baseline of 21 tons per season?
12 MR. ROMAINE: We set up the program.
13 (Conference off the record.)
14 MR. ROMAINE: It would be based on the
15 first season in which they exceeded 10 tons per
16 season. In this case it's described. The first
17 season would be 2001 where it emitted 21 tons
18 during the season.
19 MR. FORCADE: So the baseline would be
20 predicated on assuming a constant emission, would
21 be predicated on 21 tons less 12 percent?
22 MR. ROMAINE: That's correct, assuming
23 it doesn't qualify for an exclusion.
24 HEARING OFFICER FEINEN: Any additional
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1 follow-up to that from Tenneco? If not, then I
2 think we're moving on to
Sonnenschein's questions
3 2 and 7E for the questions that were filed on
4 January 16th, 1996.
5 MS. FAUR: This is
prefiled question
6 No. 2, and it concerns the integration of the ERMS
7 requirements into the CAAPP application.
8 Does the agency intend to
9 incorporate the ERMS requirements into the CAAPP
10 -- or the CAAPP permit prior to public notice of
11 the permits, or will certain sources be required
12 to participate in additional notice periods to
13 integrate the ERMS requirements into their CAAPP
14 permits?
15 MR. SUTTON: Well, our intent is to
16 review the ERMS applications concurrently with the
17 CAAPP applications and only put them through
18 notice period once to avoid that.
19 MS. FAUR: This is question 7E of our
20 prefiled questions. Many sources have requested
21 plant-wide applicability limits or facility-wide
22 CAAPPs for operational flexibility in their CAAPP
23 applications. These facility-wide
CAAPPs were
24 based upon maximum operating capability of the
L.A. REPORTING - (312) 419-9292
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1 facility to avoid lengthy permit modifications
2 based on product and business demands changing
3 over time.
4 The proposed rule, however,
5 requires sources to determine their baseline based
6 on average actual emissions regardless of whether
7 these emissions reflect current business trends or
8 product mix for the facility. To what extent can
9 facility-wide
CAAPPs be reconciled with the
10 emission reduction and baseline determination
11 requirements of the proposed rule? If the agency
12 determines that a facility-wide CAAPP or
13 plant-wide applicability limit may not be relied
14 upon for ERMS purposes, will it refund the
15 source's filing fee based on those higher emission
16 levels?
17 MR. ROMAINE: That's a lot of questions,
18 but the simple answer is no money back.
19 MS. FAUR: That's what I thought.
20 HEARING OFFICER FEINEN: Please, when
21 you read your questions, go a little bit slower so
22 the court reporter can keep up with you. That was
23 a little fast there.
24 MR. ROMAINE: In terms of going through
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1 some of the points, though, this question concerns
2 the permitted annual emission levels proposed by
3 sources in their Title V applications. These
4 emission levels aren't really plant-wide
5 applicability limits, which is a term that relates
6 to non-attainment new source review. Rather these
7 proposed levels in the Title V permit are the
8 source's estimate for their permitted maximum
9 emissions and what the source wants to be
10 permitted for in terms of what they then pay for
11 their permit fees.
12 When a source is permitted in this
13 way, it doesn't allow unrestricted operation up to
14 that level. A permitted emission level only
15 allows operational flexibility to operate that
16 source up to that emission level in certain fairly
17 limited circumstances. One, there can't be other
18 more stringent limits that apply and constrain the
19 operation. You can't physically modify that
20 source or modify particular emission units that
21 trigger new source review, and you certainly can't
22 add new emission units that would require
23 construction permits.
24 So the permit emission level is
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1 sometimes misunderstood in terms of believing it's
2 unlimited operating flexibility, and that's just
3 not the case. It may provide some flexibility,
4 but the key thing to think about is it does define
5 what you pay for your fees, and then I think
6 you've also made some comments about how the
7 baseline determination process is made. We
8 certainly think that the selection of two seasons
9 out of '94, '95 and '96 does accommodate business
10 trends and product mix, and we've gone beyond that
11 to say on a case-by-case basis, you can go out to
12 '90, '91, '92, '93 or '97, and that certainly
13 further accommodates atypical conditions to make
14 sure that sources have baselines that they should
15 be able to live within and we consider
16 representative.
17 That's what gets me to the question
18 itself, and a source can certainly revise the
19 proposed permitted emission levels that it's put
20 in its Title V application. For example, if a
21 source sees that it will be reducing its VOM
22 emissions to comply with the trading program and
23 really no longer needs that old previous permitted
24 emission level, they will be able to take
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1 advantage of it. They can certainly come in and
2 propose a lower permitted emission level in its
3 Title V application. It can come in and revise
4 its Title V application with that new information,
5 and that would then determine what it would pay in
6 the future for -- future permitted fees, but as I
7 said, it would not alter what it owed in the past,
8 and I guess I would also caution, though, that if
9 I were a source, I'd think about that very
10 carefully because the trading program by itself
11 doesn't limit a source's emissions.
12 The trading program only requires
13 the source to hold allowance trading units for
14 whatever is emitted, and it's whatever is emitted
15 during the seasonal allotment period. So the
16 trading program doesn't put any restrictions on
17 annual emissions from a source. If a source came
18 in and said, I'm going to accept a lower permitted
19 emission level, then they would in fact be
20 restricted how they operate on an annual basis.
21 So I think I've covered all the points that you
22 touched on your question, but I think you have a
23 follow-up.
24 MS. FAUR: Just to clarify, if I'm
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1 understanding your response, if a source had
2 requested operating limits which would reflect
3 their maximum operating limit on a piece of
4 equipment or like the equipment in the facility in
5 their CAAPP application, they could still receive
6 a CAAPP application with that limitation in it and
7 have an emission baseline for the ERMS program
8 that differed from that actual permitted emission
9 level?
10 MR. ROMAINE: That is correct.
11 HEARING OFFICER FEINEN: We're moving on
12 then to Mr.
Trepanier's question No. 30.
13 MR. TREPANIER: What time and resources
14 will be necessary to analyze the ERMS applications
15 to your knowledge and expectation?
16 MR. SUTTON: Well, we currently have 40
17 permit analysts in the bureau of permits section
18 we have hired and trained primarily to handle the
19 Title V permits. Again just point of
20 clarification, the source itself will have to put
21 together its ERMS application and document and
22 justify the basis for that application.
23 Our function then is to review the
24 information submitted to us which is consistent
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1 with how we currently do things. So we see that
2 ERMS application review fitting in nicely with the
3 Title V application review because it has --
4 covers the same sources and the same types of
5 units, and so we feel that we have the resources
6 and the people available to do that.
7 MR. TREPANIER: I understand that you
8 can't answer the question directly. Can you make
9 an estimate of what the time is going to be
10 necessary to analyze these applications?
11 MR. SUTTON: The rule itself tells me I
12 have to do a preliminary baseline determination
13 within 120 days of receipt. We've already assumed
14 that we'll have to put together an application to
15 assist people to file. We also assume that we'll
16 probably have to be available to meet with people
17 to discuss their baseline determinations.
18 We offer that assistance as we had
19 when we allowed people to come in and talk to us
20 about putting their CAAPP applications together.
21 Once it's submitted, we assume that we can
22 complete that review. We have not done a detailed
23 analysis of how much additional manpower that it
24 might take. My boss has told me that I've got
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1 plenty of people to do that. Actually in reality,
2 I think we can handle it with the staff we have,
3 and as Title V applications are proceeding, we
4 should be able to pull it off.
5 MR. TREPANIER: I'm trying to reach the
6 information on what kind of an investment we're
7 going to be making in processing these ERMS
8 applications. Is that the 40 analysts? Is that
9 the best estimate you can do?
10 MR. SUTTON: Yes. Now, let me ask one
11 point of clarification. We also have to review
12 800 CAAPP permit applications which is the
13 underlying reason why we hired the 40 analysts and
14 the underlying reason why people pay us fees to do
15 the Title V processing. I guess I'd also like to
16 elaborate if in fact we did not have ERMS
17 available and had to go to command and control, my
18 section would also be responsible for reviewing
19 construction permits for that command and
20 control. So I see this as a trade off of
21 resources, not as an additional new source.
22 MR. TREPANIER: Is it your anticipation
23 then that your section will not be reviewing
24 construction permits once the ERMS applications
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976
1 are being submitted?
2 MR. SUTTON: No, we will continue to
3 review construction permits, but if we had to go
4 to across the board, as we've historically done,
5 with coming up with the command and control rule
6 and say, now you have anywhere from 18 months to
7 three years to put that in place, those dictate --
8 historically have dictated the additional use of
9 control equipment which we require them to
10 permit.
11 Under this particular program,
12 there will continue obviously to be construction
13 permits but not to the scale that would have been
14 driven by command and control type approach.
15 MR. ROMAINE: Let me jump in, Don, as
16 well, that one of the other things about Title V
17 applications is they're supposed to be a
18 comprehensive listing of the applicable
19 requirements applying to a source. If we
20 continued on command and control rules, we would
21 be periodically reopening people's applications
22 and modifying them to add in additional command
23 and control requirements.
24 So we would have a fairly
L.A. REPORTING - (312) 419-9292
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1 substantial burden in having to -- I don't know.
2 Each time the command and control rule applies to
3 one of our 200 sources or 250 sources changed, we
4 would be involved in permit modification that
5 would simply be a
sizeable undertaking if we
6 continued under command and control regulations.
7 MR. TREPANIER: What time and resources
8 are expected to be necessary to make the
9 case-by-case determination during the allocation
10 process for the level of control present on an
11 emission unit for which the polluter is seeking an
12 exclusion based on BACT or BAT?
13 MR. SUTTON: Again as a point of
14 clarification, the applicant themselves has to put
15 together the application and be able to defend
16 it's election. So it has to make the case for me,
17 and I review the information submitted to them.
18 We currently do a similar type review as part of
19 our BACT reviews for PSD type applications. We
20 have generally done that by having an analyst
21 assigned to that.
22 If he has problems, he then has a
23 peer group he can take it to basically which is
24 made up of senior permit analysts or unit
L.A. REPORTING - (312) 419-9292
978
1 supervisors to then collectively say what
2 experience they have as far as seeing similar type
3 of approaches in the past. So for example,
4 somebody makes a BAT determination. An analyst
5 has somebody he can go to and say, they made a
6 fairly good showing, is this consistent with what
7 we've done in other areas, and they can then as a
8 group decide that it is consistent or not or ask
9 for additional information.
10 We again have not done an
11 independent evaluation of exactly how much
12 resources it would cost to do that, but we feel
13 that again it would be covered as part of -- since
14 we're currently going through the Title V permits
15 and we have to determine what rules apply to those
16 sources now -- and again, the obligation was on
17 the source to provide that. But we have to
18 confirm source properly identified all applicable
19 regulations and what monitoring, reporting and
20 recording would be done with those modifications.
21 That's already been identified in
22 the Title V permit that they have sought. So as
23 part of their BAT, I would suggest they would then
24 go through the source and say, we obviously are in
L.A. REPORTING - (312) 419-9292
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1 compliance, and we feel that we've got a high
2 level of compliance and can build on that CAAPP
3 application. So this is an extension of the CAAPP
4 application review that they've already
5 anticipated.
6 HEARING OFFICER FEINEN: Seeing no
7 follow-up, I guess we'll move up.
8 MR. SAINES: I have one follow-up
9 question, and it relates to Tenneco's question
10 No. 12. It's my understanding that the answer to
11 the question concerning a source that first
12 becomes subject to the rules of 2001 is that they
13 will receive an ATU allotment based on one-year's
14 worth of emissions stated, that first year that
15 they exceed the 10-ton limit. Was that the answer
16 there?
17 MR. ROMAINE: That's correct. This is
18 an existing source that had been under 10, first
19 goes above 10-ton, receives a limit in 2001.
20 MR. SAINES: Could the agency elaborate
21 on why this particular source will be given
ATUs
22 based on one year emission data, whereas sources
23 where three years' worth of emission data is not
24 existing prior to the rule first being
L.A. REPORTING - (312) 419-9292
980
1 promulgated, they get three years worth of
2 emission data to which
ATUs will be allotted?
3 MR. ROMAINE: This was an approach that
4 was selected to deal with sources that originally
5 had emissions less than 10 tons so they were not
6 originally affected by the trading program. We
7 were concerned that allowing additional periods of
8 time would allow even higher baseline emissions so
9 we wanted to get them into the program as quickly
10 as possible once they have gone above the 10-ton
11 per season emission level.
12 MR. SAINES: Thank you.
13 MR. TREPANIER: Continuing the
14 questioning on 12A, why did the agency not require
15 that emitter who is now going above 10 tons to
16 purchase
ATUs for those greater emissions that are
17 not accounted for on the original CAAPP?
18 MR. ROMAINE: Again it was simply the
19 approach taken to a source that was initially
20 outside of the program, a source that had been
21 attempting through the years to keep its emissions
22 completely below 10 tons per year.
23 When there is a major change at
24 that source that brings them into the program, a
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1 decision was made that we would give them that one
2 year where they exceed the 10 tons as the basis
3 for their entry into the program.
4 MR. TREPANIER: Is there a certain way
5 that the agency is going to determine if somebody
6 was an existing -- how is the agency going to
7 determine if somebody was an existing emitter
8 under 10 tons? Would a one-ton emitter be able to
9 get an increase to 22 tons and get a 22-ton
10 allotment in the year 2002?
11 MR. ROMAINE: Well, the example you've
12 described probably involves a major modification.
13 So the major modification would be treated
14 differently. This is one that in fact has an
15 increase in emissions that would not be a major
16 modification, and in terms of what we've said,
17 that source, if it in fact has an increased
18 emissions, goes from being less than 10 tons per
19 year or season to more than 10 tons per season
20 would receive an initial allotment based on that
21 season in which it exceeds 10 tons. Of course,
22 its allotment would then be reduced by 12 percent
23 unless it qualifies for an exclusion.
24 MR. TREPANIER: You couldn't foresee
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1 going from one ton to 22 tons, but you could see
2 someone going from 7 tons to 21 tons?
3 MR. ROMAINE: You're asking me to
4 speculate. That's the example I responded to, and
5 it's conceivable. It seems surprising to me that
6 a source would go from one shift to just three
7 shifts that quickly. Usually changes occur more
8 gradually at manufacturing plants, but it's
9 conceivable.
10 HEARING OFFICER FEINEN: Any
11 additional?
12 MR. TREPANIER: If they could do that,
13 there would be an impetus to do that, wouldn't
14 there, if they wanted to sell those 22 tons of
15 allotments?
16 MR. ROMAINE: Well, that's correct.
17 That would be one factor. On the other hand, it's
18 very expensive to run a manufacturing plant
19 without having a market for the product you
20 produce. The first impetus is in fact there is a
21 demand for the product that encourages me to
22 produce more material for sale. The impact on the
23 trading program would be minor compared to that.
24 MR. FORCADE: I'm ready to go on to our
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1 next section.
2 MR. DESHARNAIS: Mr. Romaine, I was just
3 asking if you could additionally clarify how these
4 emissions would be included in the overall CAAPP
5 established based on 1990 emissions?
6 MS. SAWYER: I'm not exactly sure what
7 you're asking.
8 MR. DESHARNAIS: It seems to me that
9 these emissions that you're talking about is a
10 source that expands -- is in existence and then
11 becomes subject to the ERMS trading program.
12 Their baseline is going to be determined after the
13 initial baseline was established for the whole
14 CAAPP trading program. It seems that these are
15 emissions which are higher than what we were
16 taking into account for them in 1990.
17 MR. ROMAINE: Well, they certainly would
18 be higher than what we're taking account for them
19 in 1996, the start of the trading program, you're
20 correct, and the additional emissions could affect
21 what has been called to us the cap on the total
22 flow of emissions, and whatever effect that has
23 would have to be evaluated when we did our
24 periodic review of whether we were achieving our
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1 rate of progress planned requirements.
2 MR. DESHARNAIS: Would this type of
3 expansion be included in allowance made for
4 growth?
5 MR. FORBES: Yes, this minor source of
6 growth has been accounted for.
7 MR. DESHARNAIS: Thank you.
8 HEARING OFFICER FEINEN: Before we break
9 for lunch, I want to finish up the next section
10 which is Section 205.315, CAAPP permits for ERMS
11 sources, and then we'll break for lunch before we
12 go on to baseline emissions because I think that
13 might take a while.
14 MR. FORCADE: Moving on to question 13
15 on page 7 of our submission, Section 205.315, it's
16 difficult to determine what VOM emissions
17 limitations and other ERMS related conditions will
18 be contained in a Title V permit for an ERMS
19 source. Will the agency provide the text for a
20 hypothetical Title V ERMS permit for a simple
21 source which would show the ERMS terms and
22 conditions?
23 MR. SUTTON: Let me start out as a point
24 of clarification. The Title V permit will convey
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1 the underlying state and federal requirements for
2 compliance. It will also convey a method of
3 determining your actual emissions during your
4 season, but those will not be limits. Those will
5 just define how you account for your actual
6 emissions so that you can tell the compliance how
7 many
ATUs you need. You either got enough or not
8 enough at the end of the season.
9 Those particular limitations will
10 actually be carried forward from what you present
11 as part of your baseline determinations. So the
12 methods you've used historically to come up with
13 your actual emissions, our plans are to take that
14 and carry that forward as a record keeping vehicle
15 in your Title V permit. So it's somewhat
16 dependent on what the source presents to me. Does
17 that get at where you're heading?
18 MR. FORCADE: Partially. I was looking
19 more towards the sort of general language that
20 would be employed in ERMS terms and conditions in
21 a permit. Since we have not seen one, it's
22 difficult to understand how the agency intends to
23 implement it, and I was just curious if there had
24 been any samples or drafts what an ERMS permit
L.A. REPORTING - (312) 419-9292
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1 would look like that we could see the kind of
2 language the agency would put in for terms and
3 conditions so we would have a better understanding
4 of how the agency intended to address this in
5 Title V permits.
6 MR. SUTTON: Well, obviously our intent
7 is to hold off and do this after the ERMS
8 applications come in and putting them out to
9 notice. We have actually not drafted one to that
10 point yet.
11 MR. FORCADE: That would be at the close
12 of public comment here, wouldn't it be?
13 MR. SUTTON: More than likely. One of
14 the other areas that we're heading into, though,
15 as far as going back to -- we are planning on
16 drafting some Title V permits for sources that
17 aren't in the ERMS trading program, but let's say
18 on the metro east area on under 219, and so there
19 will be some drafts available of those. So you
20 can get what some of underlying CAAPP permits
21 might look like, but it won't reflect what the
22 ERMS portion will look like.
23 MR. FORCADE: The area of confusion I'm
24 having is I've seen CAAPP permits from other
L.A. REPORTING - (312) 419-9292
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1 states. I've seen draft CAAPP permits in
2 Illinois. I've never seen any ERMS language, and
3 therefore I don't know what it is, and I was
4 asking if there was any of that, but I think we
5 can move on to the next question.
6 The following question is an
7 attempt to determine what limits might be
8 contained in a Title V ERMS application-- permit,
9 excuse me. Facility P is a single simple paper
10 coating line that operates at 50 percent of its
11 maximum capacity with actual emissions of 10 tons
12 of VOM per year, 50 tons per season -- I'm sorry,
13 10 tons per month, 50 tons per season and 120 tons
14 per year.
15 Facility P meets the reasonably
16 available control technology standard for VOM by
17 using a coating with a VOM content of 2.3 pounds
18 per gallon. Facility P's existing permit contains
19 only the 2.3 pound per gallon limit and daily and
20 annual production limits equivalent to 20 tons per
21 month which is its potential to emit and which is
22 twice its actual emissions. After the ERMS is
23 implemented in Title V, will the Title V contain
24 the 2.3 pound per gallon limit?
L.A. REPORTING - (312) 419-9292
988
1 MR. ROMAINE: Yes. You've described
2 this as a RACT requirement. RACT requirements
3 will certainly be carried over to the Title V
4 permit.
5 MR. FORCADE: Will the Title V permit
6 contain a daily VOM emissions limit equivalent to
7 20 tons per month?
8 MR. ROMAINE: Again this would depend on
9 what is the basis for the current limits in that
10 source's permit. So if I assume that these
11 requirements follow conditions of the construction
12 permit that are federally enforceable that were
13 established for the purpose of new source review,
14 then those conditions would certainly be carried
15 over.
16 If in fact, those are simply
17 conditions that appeared in the source's operating
18 permit for which there is no regulatory
19 requirement, one of the things that would occur in
20 the Title V permit would be to clean up the
21 existing operating permits, and if in fact there
22 were conditions without a regulatory basis for
23 them, we would not continue those conditions into
24 the Title V permit. Conditions in operating
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1 permits are certainly suspect on their face
2 because those aren't federally enforceable unless
3 it's a federally enforceable state operating
4 permit. So again, we would have to look at it on
5 a case-by-case basis to see exactly what is the
6 underlying reason that those conditions appear in
7 the first place.
8 MR. FORCADE: The third question is,
9 will the Title V permit contain an annual VOM
10 emissions limit equal to 240 tons? Would that be
11 the same answer?
12 MR. ROMAINE: That would be the same
13 answer.
14 MR. FORCADE: Will the Title V permit
15 contain a seasonal VOM emissions limit equivalent
16 to 50 tons?
17 MR. ROMAINE: No, it would not.
18 MR. FORCADE: If not, will it contain
19 any seasonal VOM emissions limitation?
20 MR. ROMAINE: No, it would not. This
21 has been described as just an ordinary
22 participating source. The Title V permit for an
23 ordinary participating source would not limit its
24 emissions on a seasonal basis. It would simply
L.A. REPORTING - (312) 419-9292
990
1 describe what the baseline emissions were and what
2 the allotment of
ATUs to the source were as a
3 result.
4 MR. SUTTON: And it would also establish
5 what method you would use to reconcile that number
6 at the end of the season.
7 MR. FORCADE: Will the Title V permit
8 contain a 1999 VOM emissions limitation equivalent
9 to 50 tons reduced by 12 percent?
10 MR. ROMAINE: No, it would not.
11 MR. FORCADE: If the source purchases or
12 sells ATU, will the seasonal VOM emissions
13 limitation in the permit be adjusted upward or
14 downward? Am I correct in assuming that the
15 answer is no because there will be no seasonal
16 limitation?
17 MR. ROMAINE: That's correct.
18 HEARING OFFICER FEINEN: Okay. Moving
19 on to Dart Container's question No. 5 unless
20 there's any follow-up to that. Dart Container,
21 question No. 5.
22 MR. NEWCOMB: Christopher
Newcomb for
23 Dart Container. I think to some degree this may
24 have been covered by previous questions, and since
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1 there's only one question, I'll go ahead and throw
2 it out.
3 Why hasn't the agency proposed
4 greater flexibility for participating sources to
5 modify the operations without administrative
6 proceedings formally changing the permit terms in
7 order to encourage greater reductions similar to
8 the wide flexibility allowed under the Clean Air
9 Act's Title IV SO2 trading program and consistent
10 with one of the principal goals of the CAAPP
11 Title V program?
12 MR. SUTTON: Well, I guess in response,
13 I think we feel we have done that. So that's the
14 purpose we are proposing the program is to allow
15 that flexibility.
16 MR. NEWCOMB: The goal of that question
17 when I first
draftd it was that under the SO2
18 trading program, there seemed to be wide
19 flexibility for sources to modify their operations
20 without necessarily undergoing administrative
21 proceedings to modify their permits, and I didn't
22 see that same flexibility necessarily afforded
23 here, but as I said when I started this, to some
24 degree this may have been asked and answered
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1 because Mr. Romaine has said that the agency is
2 tied to the requirements under the Clean Air Act
3 NSR modifications and such, and I want to make
4 sure that is in fact the correct answer here.
5 MR. SUTTON:
Uh-huh. I guess the one
6 point we'd like to make -- and I guess this is a
7 kind of a follow-up to those previous questions --
8 is that there obviously will be annual limitations
9 and limitations carried forward to this program
10 that you just mentioned. But as far as the
11 season, we will establish the
ATUs that are
12 allotted to you and the method for you to
13 reconcile at the end of the season what your
14 actual emissions were, but there is -- for the
15 participating source, there is no limit during the
16 season that you can use if you can go out and buy
17 those as long as you're still in compliance with
18 the general underlying permit. So that's the
19 flexibility we see that is provided.
20 MR. NEWCOMB: Understood.
21 MR. ROMAINE: I think the other
22 distinction that has to be made is in terms of
23 emission determination methods. Under the acid
24 rain program, affected power plants are all
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1 subject to extremely rigorous emission
2 determination methods. All of them, I believe,
3 are subject to continuous emission monitoring
4 which means the emission determination method is
5 sufficient to address any change in operation of
6 those units.
7 Our program does not mandate any
8 specific form of emission determination methods.
9 Emission determination methods will be set on a
10 case-by-case basis in a source's CAAPP permit.
11 That means there may be circumstances where the
12 emission determination methods would have to be
13 changed or reviewed before we allowed particular
14 changes in operations to be reflected in the
15 source's emissions. So I think part of the area
16 where we need more oversight is really in terms of
17 the emission determination methods, but that's
18 because we've given a lot of flexibility up front
19 to sources to come up with particular methods that
20 they think are appropriate for their operations.
21 HEARING OFFICER FEINEN: Can we go off
22 the record for a second.
23 (Discussion off the record.)
24 MR. TREPANIER: A question of the
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1 agency, when do you anticipate you want to inform
2 sources of their allotment of
ATUs? And this
3 would be the initial -- the initial communication
4 on this.
5 MR. SUTTON: Well, the sources have to
6 file, if this rule gets adopted, an ERMS
7 application by January 1st of 1998, and we have up
8 to 120 days to give them a preliminary
9 determination as a baseline after that submittal.
10 HEARING OFFICER FEINEN: For the
11 record's purposes, that was a question directed
12 from Mr.
Trepanier in the
prefiled questions.
13 It's under his questions for Mr.
Sutton. It
14 starts out on, "page 9, when do you anticipate."
15 MR. TREPANIER: Then from my
prefiled
16 questions, the final page, the third question,
17 will there be public notice and review of ERMS
18 applications?
19 MR. SUTTON: There will not be
20 independent public notice of ERMS applications.
21 However, they will be incorporated into the
22 overall Title V permit which there will be a draft
23 permit put out for public notice and comment. So
24 it will be incorporated as part of the overall
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1 CAAPP permitting process which includes public
2 notice.
3 MR. TREPANIER: Can you give me a little
4 more clear indication when -- when the emitter
5 puts in their application, is there a certain
6 period of time that's going to elapse prior to the
7 public notice?
8 MR. SUTTON: Yes, there probably will
9 be. We have the 120 days to do the
10 determination. We plan on doing our CAAPP permit
11 reviews for these particular sources even ahead of
12 that date to help assist in developing the
13 preliminary ERMS applications. So once we have
14 the determination done, our goal is to take that
15 and then with the knowledge we've already gained
16 on the CAAPP review, finalize that particular
17 CAAPP permit putting the two pieces together and
18 then putting it out as a draft permit to public
19 notice.
20 I would hope we could get that done
21 within another three to four months after that
22 120-day period. So it may -- sometime, well, this
23 is on the record so you got this. Sometime
24 obviously prior to '99 you want to make sure, and
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1 hopefully within the calendar year 1998 we would
2 like to have the CAAPP permits issued for these
3 sources, at least put out the notice.
4 MR. TREPANIER: So I understand that the
5 public notice and opportunity to review these ERMS
6 applications and the proposed baseline of the
7 polluters is going to occur after the emitters are
8 notified of how many
ATUs they're going to
9 receive?
10 MR. SUTTON: Yes.
11 MR. TREPANIER: And prior to the
12 issuance of those
ATUs?
13 MR. SUTTON: Yes, that's our hope, to
14 have the actual CAAPP permit with the preliminary
15 baseline determination issued prior to the 1999
16 season when they need them.
17 MR. TREPANIER: Does the agency intend
18 to utilize that opportunity during the public
19 review of these ERMS applications to consider
20 input regarding a proper setting of these
21 baselines or the proper number of allotments that
22 a polluter should receive?
23 MR. SUTTON: I would assume so.
24 MR. TREPANIER: So there may be a
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1 review, there may be revisions from that 120-day
2 notice of the number of
ATUs, and when the
ATUs
3 are actually issued, there's an opportunity for
4 revision there?
5 MR. SUTTON: Well, as in all cases when
6 we put the draft permit out for public notice, the
7 entire permit itself is available for public
8 scrutiny. If somebody enlightens us that in fact
9 there has been an error made in that, then we
10 would go back to the company, explain the process
11 and make the adjustments.
12 HEARING OFFICER FEINEN: I believe we're
13 going to go to the questions from the coalition.
14 The question is on page 12. It's question 10 or
15 section 10. I don't know how you --
16 MR. SAINES: This is our revised
17 prefiled questions, section 10 pertaining to
18 Section 205.315, and the question implicates three
19 examples. I'll just read the question, and if you
20 need clarification, I will be happy to provide
21 it.
22 If a participating source loses:
23 (1) an appeal of its baseline emissions
24 determination; (2) an appeal of the methods it
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1 must use to determine emissions; or (3) an appeal
2 of a BAT determination, how will the agency handle
3 the reconciliation of
ATUs for seasons which have
4 passed and for which compliance was based upon the
5 total allotment or methods?
6 MR. ROMAINE: The rule provides that a
7 source is allotted ATU based upon its proposal
8 during the
pendency of the appeal. So any
9 consequences for the future can be addressed as
10 part of the appeal itself, but there are no
11 consequences while the appeal is pending.
12 MR. SAINES: Let me ask for
13 clarification. Are you saying that if the source
14 loses the appeal, there may be consequences that
15 are not reflected in the proposed ATU allotment?
16 In other words, they won't get the
ATUs that they
17 proposed, they will get a lesser ATU amount?
18 MR. ROMAINE: That is correct, beginning
19 from the point at which that decision is made. It
20 would not apply retroactively.
21 MR. SAINES: It would not apply
22 retroactively. So it would not be considered an
23 emissions excursion for the season that has passed
24 during the
pendency of the appeal?
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1 MR. ROMAINE: That's correct. The
2 reason -- hopefully all things will be taken so it
3 will be clearly out of sight of the season and
4 there would never be a decision that occurred in
5 the middle of August.
6 MR. SAINES: Thank you.
7 HEARING OFFICER FEINEN: I have one
8 follow-up question. If there's no others, then
9 we'll break for lunch, and this is to anyone at
10 the agency.
11 Would Section 40.2 of the Act apply
12 to the CAAPP permitting program that includes the
13 ERMS?
14 MS. SAWYER: Yeah, I believe so. That's
15 the ERMS permit appeal procedures.
16 HEARING OFFICER FEINEN: That's the
17 Clean Air Act permit appeal, appeal procedure?
18 MS. SAWYER: Yes.
19 HEARING OFFICER FEINEN: Thank you. Any
20 other follow-up questions? Seeing none, let's
21 break for lunch and be back in an hour, 10 to 2:00
22 or 2:00 o'clock. 2:00 o'clock let's be back.
23 Thank you.
24 (Lunch recess taken.)
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1 HEARING OFFICER FEINEN: We're back
2 after lunch break. We're going to start out with
3 Section 205.320, baseline submissions, the
4 questions from Tenneco starting out with questions
5 15.
6 MR. FORCADE: Thank you, Mr. Chairman.
7 Mr. Hearing Officer, this is reading from page 8
8 of our pre-submitted questions, Section 205.320,
9 baseline emissions. Referring to Section 205.320,
10 in its statement of reasons, the agency states
11 that, "a source's baseline emissions is
12 established based upon actual production level and
13 its allowable rate of emissions."
14 What is the meaning of "allowable
15 rate of emissions"? Does "allowable rate of
16 emissions" include any of the following:
17 Emissions within mandatory numerical limits set by
18 federal statutes and regulations?
19 MR. ROMAINE: Yes. That term would
20 include numerical emission limits set by federal
21 statutes or rules. Essentially, I think what the
22 statement of reasons meant when it used the term
23 allowable rate of emissions was applicable
24 requirements effective in 1996. So it would be
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1 requirements that will be effective in 1996 that
2 will be relied upon for the rate of progress plan
3 that would be reflected in a source's Title V
4 program.
5 MR. FORCADE: Would it include emissions
6 within limits set by new source review permitting
7 or new source review avoidance permitting?
8 MR. ROMAINE: Yes, it would.
9 MR. FORCADE: Would it include emissions
10 within mandatory numerical limits set by Illinois
11 statutes and regulations?
12 MR. ROMAINE: Yes, it would.
13 MR. FORCADE: Would it include any other
14 limitations, and if so, please identify all such
15 bases for an "allowable rate of emissions."
16 MR. ROMAINE: There may be some other
17 enforceable provisions that would also be
18 considered applicable requirements effective in
19 1996. I can't think of any off the top of my
20 head.
21 MR. FORCADE: Does "allowable rate of
22 emissions" include historical permit conditions
23 which do not have a regulatory basis, but which
24 the facility did not appeal at the time because it
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1 did not impair past operations?
2 MR. ROMAINE: This is an area where the
3 Title V permit process plays a role. If the
4 absence of an underlying regulation is recognized
5 during the Title V permitting process, then that
6 limitation could be effectively eliminated. This
7 activity is sometimes referred to as permit
8 hygiene, but one of the activities that USEPA
9 expects to occur during Title V permitting is to
10 clean up conditions in previous state permits and
11 to eliminate conditions that are no longer
12 needed. Conditions that do have in fact
13 justification associated with them would then be
14 carried over into the Title V permit so that the
15 Title V permit would be a comprehensive listing of
16 all the applicable air pollution control
17 requirements for a source.
18 MR. FORCADE: Question No. 16,
19 continuing the above quotation, the agency states
20 that, "and if this is higher than the actual
21 emissions rate it is achieving, the source is
22 allowed to use its surplus emissions to meet its
23 emissions reduction target in the ERMS or may sell
24 any surplus
ATUs on the market."
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1 Will a source be allowed to include
2 in its baseline or receive
ATUs for emissions
3 limited by permit conditions which do not have a
4 regulatory basis, but which the facility did not
5 appeal because it did not impair past operations?
6 MR. ROMAINE: Well, I think I first want
7 to qualify this answer by saying there is the
8 requirement that voluntary over-compliance as
9 recognized by the ERMS occur due to some change or
10 improvement made after 1990, but in terms of the
11 specific question, there would be nothing
12 preventing a source from including those emissions
13 in its baseline as a general matter, but I guess
14 if you're asking whether the source can receive
15 over-compliance recognition in its baseline, then
16 you would have to go into the issue of whether in
17 fact it was a regulatory basis for that
18 limitation.
19 If the limitation were changed that
20 there were no longer a regulatory basis or
21 recognizing that there is no longer a regulatory
22 basis, then the source could not rely upon that
23 limitation to establish voluntary over-compliance.
24 In that case the source would have to use its
L.A. REPORTING - (312) 419-9292
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1 actual emissions to determine baseline emissions.
2 MR. FORCADE: Moving on to question 17,
3 Section 205.320 provides that baseline emissions
4 will be increased for voluntary over-compliance
5 that occurred after 1990 and results in emissions
6 lower than 1996 requirements.
7 Under this subsection, what does
8 "applicable requirements effective in 1996" mean,
9 and would it be the answer to the previous
10 question repeated again?
11 MR. ROMAINE: Yes, it would.
12 MR. FORCADE: I believe then you have
13 also answered question B, and we withdraw it.
14 On the number C, does "applicable
15 requirements effective in 1996" exclude maximum
16 achievable control technology or MACT?
17 MR. ROMAINE: No. MACT requirements
18 could in fact be applicable 1996 requirements.
19 MR. FORCADE: I believe you've answered
20 D. Does "applicable requirements effective in
21 1996" include facilities or units for which the
22 state has not promulgated any regulations? For
23 example, how will the agency determine the
24 baseline for: A warehouse used to store products
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1 emitting VOM; (2) a landfill emitting VOM; or (3)
2 an industrial laundry that did not use VOM but
3 emitted VOM from rags and clothing which it
4 received?
5 MR. ROMAINE: I think the answer to the
6 general question is if particular emission units
7 are not subject to any applicable requirements,
8 the baseline emissions would be based on a unit's
9 actual emissions. The specific examples that
10 you've mentioned, I'm not sure that there aren't
11 applicable requirements for these operations.
12 Certainly new source review could
13 apply to these operations, and the USEPA has gone
14 out in an interpretive memo confirming that new
15 source review is certainly applicable to whiskey
16 storehouses, for example. USEPA has also proposed
17 new source -- actually adopted new source
18 performance standards that apply to new landfills
19 emitting VOM. So if there were units for which
20 there were no applicable regulations and go back
21 to actual emissions, I'm not sure you can
22 generalize with these particular examples, though.
23 MR. FORCADE: As a brief follow-up,
24 could you give me a little more elaborate
L.A. REPORTING - (312) 419-9292
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1 explanation about that memo on warehouses,
2 approximately what time frame or where I might
3 find it?
4 MR. ROMAINE: I think it's a
5 determination that was made for Indiana in the
6 last couple of years.
7 MR. SUTTON: It was definitely Indiana.
8 MR. ROMAINE: I believe that's the type
9 of information that USEPA would make available
10 through its TTN information system.
11 MR. FORCADE: And under question F, does
12 "allowable rate of emissions" include emissions
13 within permit limits which do not have a
14 regulatory basis but which the facility did not
15 appeal because it did not impair past operations?
16 MR. ROMAINE: As I tried to explain
17 before --
18 MR. FORCADE: Same answer?
19 MR. ROMAINE: Yes.
20 MR. FORCADE: 18, will fugitive
21 emissions be included in the baseline?
22 MR. ROMAINE: Yes, unless the emission
23 units are in fact significant activities.
24 MR. FORCADE: What is the agency's
L.A. REPORTING - (312) 419-9292
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1 authority for regulating fugitive emissions under
2 ERMS?
3 MR. ROMAINE: The proposed rule will be
4 a board rule, and therefore, our authority isn't
5 in question. The authority of the board is
6 addressed by Title I, Title II and Title VII of
7 the Environmental Protection Act. We believe that
8 the board has ample authority to regulate fugitive
9 emissions. The board has adopted regulations, for
10 example, that apply to leaking components, apply
11 to cooling towers, apply to architectural
12 coatings.
13 So we don't see any particular
14 restriction on the board's ability to go after
15 particular emission units simply because the
16 emissions can be characterized as fugitive in
17 nature.
18 MR. FORCADE: Are fugitive emissions by
19 definition inherently more difficult to capture
20 and control than point source emissions?
21 MR. ROMAINE: I wouldn't make that
22 generalization. Certainly there are some
23 emissions that we consider fugitive that are
24 relatively easy to control. For example, a
L.A. REPORTING - (312) 419-9292
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1 leaking component can be controlled by repairing
2 the leak. So identify a leak, you go and repair
3 it. Other types of fugitive emissions can be
4 controlled by changing process materials to lower
5 emitting VOM materials.
6 I think even though it's sort of --
7 there's this great distinction between fugitive
8 emissions and non-fugitive emissions, it really
9 came about in the federal program for purposes of
10 applicability. So the federal regulations do make
11 the distinction between fugitive emissions and
12 non-fugitive emissions in certain cases to
13 determine whether a source is a major source.
14 However, once a source is found to be major, no
15 distinction continues in terms of the fugitive
16 emissions versus the non-fugitive emissions. Once
17 a source is major, all emissions at the source
18 have to be accounted.
19 MR. FORCADE: Brief follow-up, are
20 fugitive emissions by definition inherently more
21 difficult to capture than point source emissions?
22 MR. ROMAINE: Yes, that's the inherent
23 definition of fugitive emissions. It's something
24 that either is not passing through a stack or
L.A. REPORTING - (312) 419-9292
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1 could not reasonably pass through a stack, vent,
2 chimney or other equivalent opening.
3 MR. FORCADE: Based on that, does the
4 ERMS disproportionately impact facilities with
5 large amounts of fugitive emissions?
6 MR. ROMAINE: I don't believe so. Since
7 it's a market program, it attempts to treat all
8 sources identically and allows individual sources
9 flexibility to determine the best strategy for
10 their particular circumstances, whether to reduce
11 the VOM emissions themselves, and if so, how and
12 which units or whether to go to the marketplace to
13 obtain credits from other sources.
14 HEARING OFFICER FEINEN: I guess
15 Sonnenschein's questions from January 16th,
16 question 7D and 7F.
17 MS. FAUR: Question 7D is addressed by
18 the questions we filed on January 30th. So we
19 will withdraw that, and we are withdrawing 7F
20 because I believe it has been answered in the
21 testimony.
22 HEARING OFFICER FEINEN: Thank you.
23 MS. FAUR: So moving on to the January
24 30th
prefiled questions, this is -- they're all
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1 based on a scenario -- a consolidation scenario
2 for facilities coming in to the -- or trying to
3 consolidate operations into the Chicago
4 non-attainment area.
5 If a company has multiple
6 facilities in the Chicago area, all of which are
7 major sources of VOM, have the appropriate permits
8 and are in compliance with all applicable
9 requirements, what happens in the following
10 situations: Question 1, two or more facilities
11 are consolidated into a single facility after 1996
12 or after the initial baseline information is
13 developed.
14 1A, may the allowable emissions
15 from the closed facilities be transferred to the
16 remaining facilities, i.e., can the baseline
17 emissions of the facilities within the
18 non-attainment area that are part of the
19 consolidation to be aggregated to avoid the
20 complicating factors of new source review, please
21 assume the emission increase at the resulting
22 facility is less than 25 tons PTE.
23 MR. ROMAINE: A couple of different
24 clarifications that I need to have. You've said
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1 that both of these sources are major sources, but
2 you've said that the consolidation does not result
3 in a major increase.
4 MS. FAUR: Right, right. They're
5 consolidating operations, but the actual increase
6 will result in less than a 25-ton increase at the
7 consolidated source.
8 MR. ROMAINE: I think there are really
9 several options that a source has in that
10 circumstance when they're dealing with
11 consolidations that occur after 1996. If the
12 sources have not yet received allotments of ATU,
13 one option would be to continue through the
14 process till they receive CAAPP permits reflecting
15 how those two facilities have operated and then
16 consolidate in terms of ATU.
17 Another option would be not to
18 pursue the CAAPP permit for the facility that will
19 be ceasing operation at some point, but instead to
20 address its change as an emission reduction
21 generator. I think that would be possible. And
22 then if the baseline hasn't yet been determined
23 but there will actually be transfer of operations,
24 it's conceivable that consolidation might be able
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1 to be addressed as a pending project.
2 In fact, there will be certain
3 emission units that will now be present at the
4 consolidated source that have not yet operated for
5 three seasons at that new location. Again
6 assuming that that can be accomplished with a
7 construction permit issued prior to January 1st,
8 1998. So there are several different options that
9 would be available, and the source would have to
10 decide which is the preferable option for their
11 particular needs and timing.
12 MS. FAUR: Could you explain the second
13 option, the option not to pursue a CAAPP
14 application, but to treat the facility to be
15 consolidated as an emission reduction generator?
16 How would that work permitting? Would they get
17 like a FESOP or something for the interim period?
18 MR. ROMAINE: You're asking whether the
19 facility that will be gradually phasing out its
20 operations needs to obtain an interim permit that
21 would address its changing operations? I guess
22 perhaps. That again would depend on the
23 particular circumstances whether the consolidation
24 will happen all at once so they can simply
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1 withdraw the permit at some point in time, whether
2 there will be a gradual change.
3 If in fact the two facilities will
4 now be operated or owned by a single entity, its
5 conceivably necessary enforceable provisions might
6 be addressed in the CAAPP permit for the source
7 that will remain in operation. Again flexibility
8 and certainly the ERG process is designed to
9 provide flexibility to accommodate a variety of
10 circumstances for non-participating sources that
11 wish to have emission reductions that are
12 converted into
ATUs.
13 MS. FAUR: This is 1B. With respect to
14 BAT requirements, would an agreement to install
15 BAT at the surviving source affect the issues?
16 MR. ROMAINE: No, it wouldn't. The BAT
17 really affects the requirement to reduce baseline
18 emissions by 12 percent when setting an
19 allotment. The issue you've posed is how to
20 combine the baseline emissions or address the
21 consolidation which is really a prior issue as
22 compared to whether you have to do a 12 percent
23 reduction or not.
24 MS. FAUR: Question 2B, a company has
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1 two facilities, one within the Chicago
2 non-attainment area and another facility within
3 100 kilometers upwind of the Chicago area. If the
4 upwind facility is consolidated into the facility
5 in the non-attainment area, can the emissions from
6 the upwind facility be included in the baseline
7 for the surviving or consolidated facility within
8 the Chicago non-attainment area? Would the
9 response to this question differ if this
10 consolidation occurred in either one of these
11 three years, 1997, '98 or '99?
12 MR. ROMAINE: There is no provision for
13 participating in this program by sources outside
14 the non-attainment area. So some of the options
15 we discussed about pursuing a CAAPP permit or an
16 ERG process would certainly not be available in
17 this circumstance. The only option that would be
18 available conceivably is whether there in fact is
19 physical changes that will occur in the facility
20 in the Chicago area so that some of those changes
21 must be addressed through the provisions of
22 pending projects, but it really doesn't provide
23 for any sort of transfer of baseline emissions
24 from outside the non-attainment area into the
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1 non-attainment area.
2 It would simply be a determination
3 that because of changes that are ongoing at that
4 facility in the Chicago area, we have to
5 accommodate a pending project.
6 MS. FAUR: Just a follow-up, if based on
7 the results of -- of
OTAG's results or
USEPA's
8 policy on use of emission reductions in an
9 attainment area -- in a non-attainment area, could
10 this program be then changed or revised to include
11 this?
12 MR. ROMAINE: The program can certainly
13 be revised at some point in time, but that's all
14 very speculative in terms of what would ultimately
15 be allowed by USEPA. I'm not sure that they are
16 going to be that lenient about allowing credits
17 from outside non-attainment areas. It would also
18 have implications for how the program deals with
19 the offset.
20 If those type of emissions
21 reductions might not be capable of being used as
22 emission offsets, we might have to come up with
23 some other provisions in the trading program at
24 that point to properly distinguish between
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1 reductions inside the non-attainment area and
2 reductions outside the non-attainment area.
3 MS. FAUR: That leads into the next
4 question, which is question 3. A company has two
5 facilities, one within the Chicago non-attainment
6 area and another facility more than 100 kilometers
7 upwind of the Chicago area. If the company were
8 to consolidate operations into the non-attainment
9 area from the upwind facility, could the source in
10 the non-attainment area include emissions from the
11 upwind source in its baseline, provided that
12 OTAG's findings or other accepted modeling
13 demonstrated that there was an impact from the
14 upwind facility on the Chicago area?
15 MR. ROMAINE: As I said, that's not the
16 scope of the current proposal. That's future, and
17 you can only speculate what would be done in the
18 future rulemaking after those changes occur.
19 MS. FAUR: Question B, which I assume
20 the answer is going to be that it's speculative.
21 Would the emissions from the upwind source be
22 credited to the facility in the non-attainment
23 area using a one-to-one ratio? If not, what ratio
24 would be appropriate?
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1 MR. ROMAINE: Who knows what's even
2 necessary, if even possible.
3 HEARING OFFICER FEINEN: Do you want to
4 go ahead and ask question C, too.
5 MS. FAUR: Could this upwind source be
6 considered an emission reduction generator under
7 the program?
8 MR. ROMAINE: Not under the current
9 program.
10 MS. FAUR: Thanks.
11 HEARING OFFICER FEINEN: Any
12 follow-ups? We'll move to Mr.
Trepanier's
13 questions, No. 13, 14, 15, 16, 27A and B and then
14 some questions from the handwritten portion of his
15 prefiled questions.
16 MR. TREPANIER: Thank you. Could a
17 facility starting operations after 1999 receive an
18 original allocation of
ATUs?
19 MR. ROMAINE: Yes, if they qualify as a
20 pending project with a construction permit issued
21 prior to January 1st, 1998. I assume you're
22 referring here to adding emission units to a
23 particular facility?
24 MR. TREPANIER: Would that differ if the
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1 question is referring, as it does, to an entire
2 facility, a facility starting operation? Is it a
3 different answer?
4 MR. ROMAINE: I don't think so. There's
5 a possible inconsistency that says facilities that
6 don't begin operation till after May 1st, 1999,
7 would receive -- would not receive an allotment of
8 ATUs, but I think the pending project provisions
9 would overrule that subsequent provision. That
10 provision was put in to make it clear that for new
11 sources that come along in the future, they will
12 not receive an allocation of allotments as
13 existing sources.
14 MR. TREPANIER: What is a pending
15 project?
16 MR. ROMAINE: A pending project is a
17 project which has received a construction permit
18 prior to January 1st, 1998, but which has not yet
19 been operational for three complete seasons.
20 MR. TREPANIER: In theory, how long
21 could a project remain pending?
22 MR. ROMAINE: Well, I guess it depends
23 how you look at it. In terms of the number of
24 seasons or years that project operated, it would
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1 be at most three complete seasons and whatever
2 part of a partial season. So three and a half
3 years. It could be a while before that pending
4 project actually comes into operation.
5 Conceivably, they would have a year
6 to begin construction under the construction
7 permit. Construction can take two or three
8 years. Then it could take three and a half years
9 so if you add those up, conceivably it would not
10 begin receiving allotments for six or seven years.
11 MR. TREPANIER: The one year allowed to
12 get the project into construction and the two to
13 three years to actually construct it, are those
14 requirements in the law or regulation?
15 MR. ROMAINE: No, they are not. The
16 requirement that facilities proceed with
17 construction permit within a fixed period of time
18 is something that is addressed as one of the
19 conditions of construction permits. Our standard
20 conditions generally says that construction has to
21 begin within 12 months for major projects. If the
22 issue is specifically brought to our attention, we
23 may allow 18 months for construction to commence.
24 The amount of time that the project
L.A. REPORTING - (312) 419-9292
1020
1 will take to be constructed is actually a
2 consequence of what the project is. If it's a
3 straightforward, simple project, construction may
4 only take a couple of months. If it's a more
5 complicated project requiring a lot of
6 fabrication, installation, erection of equipment,
7 then the construction schedule for that project
8 might take a couple of years.
9 MR. TREPANIER: That construction
10 schedule, is that something that's included in the
11 construction permit?
12 MR. ROMAINE: That's not our normal
13 practice, no.
14 MR. TREPANIER: What investment or risk
15 is required to have a project pending?
16 MR. ROMAINE: One of the provisions
17 again that is reflected in that standard condition
18 is that the source company has to commence
19 construction within a year. Commencement of
20 construction requires that the source either begin
21 actual on-site construction or that they undertake
22 a significant commitment to a project, that they
23 enter into a contract or other binding agreement
24 for actual on-site construction.
L.A. REPORTING - (312) 419-9292
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1 So these are things that have been
2 addressed over the years and developed through
3 USEPA policy, a lot of which has been the
4 consequence of specific enforcement actions by
5 USEPA, probably in the 1970 to 1980 time frame
6 where these disagreements between sources and the
7 USEPA were resolved.
8 MR. TREPANIER: Is there somewhere that
9 you can point me or to the board that would give
10 us an indication on what the rule or the law --
11 what the rule is regarding how long a project
12 could remain pending and what investment is
13 required?
14 MR. ROMAINE: Well, in terms of this
15 rule, they have to get a construction permit.
16 They have to commence construction permit pursuant
17 to that permit. That's where these provisions
18 requiring certain activities binding obligations
19 come in. I don't know if those are found in the
20 board's rules except perhaps under part 203. I
21 would have to review those to see if those
22 provisions for commencement of construction have
23 been brought in the board's rules from the federal
24 program.
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1022
1 MR. TREPANIER: I'll go on to question
2 14. What limit if any exists on when the last
3 original allocation of
ATUs to a project pending
4 in 1999 could occur?
5 MR. ROMAINE: I don't think there is any
6 legal limit. There is simply the practical
7 considerations in terms of the fact the project
8 has to be begun within a certain period of time.
9 They have to construct it consistent with a
10 reasonable construction schedule for that project,
11 and then they can only operate it for three
12 complete seasons before they have to start
13 receiving and operating pursuant to allowance
14 trading units.
15 MR. TREPANIER: Question 15, is the cap
16 on total emissions known?
17 MR. ROMAINE: I don't believe it is. A
18 cap on total emissions is something that we will
19 actually be determining as we go through the
20 permitting processes with individual sources,
21 review what they put forward as their baseline
22 emissions and go through the process of deciding
23 whether they're entitled to exclusions or not.
24 Only at that point in time will we come to a much
L.A. REPORTING - (312) 419-9292
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1 better definition on what the cap to total
2 emissions will be.
3 MR. TREPANIER: Question 16, in light of
4 questions 13 to 15, when could the cap last be
5 expanded or raised without further rulemaking?
6 MR. ROMAINE: Well, in terms of those
7 questions, I guess the way I really look at it is
8 the cap isn't expanding. I look at the cap as
9 shrinking. We know pursuant to the construction
10 permits what the maximum emissions that will ever
11 be authorized for these pending projects will be.
12 As the pending projects come on
13 line and we see what their actual emissions are,
14 we will know how much further below those
15 potential emissions the projects actually are.
16 MR. TREPANIER: To clarify, you are
17 saying that every pending project in this
18 construction permit will have a limitation on VOM
19 emissions?
20 MR. ROMAINE: It should. If it doesn't,
21 it somehow slipped through and will be addressed
22 as part of the initial allocation for that source,
23 to describe what is the nature of the pending
24 project that has been recognized at that source
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1 and what is the potential implications of that
2 pending project for the total baseline emissions
3 and the allotment for that source.
4 MR. TREPANIER: Further clarification,
5 could one of these pending projects have a LAER
6 type of a restriction where their emissions are
7 based on whatever production level they're able to
8 achieve?
9 MR. ROMAINE: Well, again I think
10 hypothetically it is, but I'm wondering why the
11 concern is whether that facility would ever have
12 lowest achievable emission rate. Lowest
13 achievable emission rate would in fact -- it was
14 part of a major project, and if a pending project
15 is in fact a major project, it would come into the
16 program having to supply
ATU's at the 1.3 to 1
17 offset ratio.
18 It also wouldn't be a pending
19 project in a sense. It would have to be beginning
20 to provide those
ATUs when it began operation.
21 Where the pending project transition provision
22 allows a pending project to be excused from
23 holding
ATUs for three complete seasons, it's
24 really only referring to minor projects that don't
L.A. REPORTING - (312) 419-9292
1025
1 have an offset obligation to satisfy.
2 MR. TREPANIER: Is it your understanding
3 then that as of January 1st, 1998, the maximum
4 cap will be known?
5 MR. ROMAINE: I think, no, I don't. We
6 will know pretty closely what the maximum cap
7 would be. The other uncertainty which you touched
8 upon in your earlier questions is the handful of
9 existing sources which are not currently
10 participating sources but at some future time
11 become participating sources. I think that would
12 be the only other uncertainty we have out there in
13 terms of the total cap.
14 MR. TREPANIER: Going to my last
15 question in this section, and that's on my last
16 page of questions, pre-submitted questions
17 handwritten.
18 HEARING OFFICER FEINEN: Question 27A
19 and B?
20 MR. TREPANIER: Thank you. I missed
21 that. Question 27A, when a new unit or
22 modification that was a pending project emits
VOCs
23 after 1999, how long until the source is required
24 to hold
ATUs for the associated emissions?
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1026
1 MR. ROMAINE: If it's not a major
2 project, just a minor pending project, if that's
3 the case, the source will have to begin holding
4 ATU for that pending project after the project has
5 been operational for three complete seasons.
6 MR. TREPANIER: Part B, won't this allow
7 emissions to exceed the 1999 cap?
8 MR. ROMAINE: I don't think so. As Dick
9 has said, he's accounted for growth in emissions
10 as part of his current evaluation of the need for
11 12 percent reduction in emissions. The 12 percent
12 calculation goes beyond the 9 percent that we need
13 to achieve RFP so we have some provisions in the
14 proposal, both how it's set up for 12 percent and
15 how it's been evaluated that we believe have
16 adequately accounted for pending projects.
17 MR. TREPANIER: I understand that my
18 questions regarding accounting for the growth have
19 been deferred to later on. I will go on to the
20 handwritten questions on the last page of my
21 pre-submitted questions.
22 What assurance is there that the
23 target level of VOM emissions from point sources
24 will be met if the cap is not known?
L.A. REPORTING - (312) 419-9292
1027
1 HEARING OFFICER FEINEN: If the question
2 -- I don't know if this really goes along with
3 the baseline emissions. If it does, go ahead and
4 answer it.
5 MS. SAWYER: Which question are you
6 asking right now, Mr.
Trepanier?
7 MR. TREPANIER: On the last page, it's
8 the third to the last question on that page.
9 MS. SAWYER: "What assurance," is that
10 the one you are asking?
11 MR. TREPANIER: Yes.
12 MS. SAWYER: I think those questions
13 were ones we had put in the later section.
14 HEARING OFFICER FEINEN: Question 11 is
15 how does the rule -- is that we interpret the rule
16 as being the baseline emissions operate to
17 establish a cap? Is that how the agency is
18 interpreting Mr.
Trepanier's question, No. 11?
19 MS. SAWYER: Yes.
20 MR. TREPANIER: I'll ask that question.
21 How does the rule operate to establish the cap?
22 MR. ROMAINE: Well, the rule sets forth
23 a process whereby sources will submit ERMS
24 applications. Those ERMS applications work
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1028
1 through the information to a source's baseline
2 emissions. Then the rule further provides how
3 those baseline emissions will or will not be
4 further reduced depending upon whether a
5 particular emission unit qualifies for exclusion.
6 So what the rule does, it sets up a process
7 whereby this total cap on the pool of emissions is
8 established.
9 HEARING OFFICER FEINEN: Any follow-up
10 to that question?
11 MS. MIHELIC: You stated earlier about
12 the pending project. You kept saying if it was a
13 minor pending project. What if you construct a
14 new facility, you get a construction permit issued
15 before January of next year and it's a major
16 project, a major facility, would you still get
17 ATUs for that project?
18 MR. ROMAINE: So you're describing a
19 situation where a source will have had to provide
20 offsets in order to obtain a construction permit?
21 MS. MIHELIC:
Uh-huh.
22 MR. ROMAINE: I think that source would
23 qualify as a pending project, but we would not
24 expect it to get two shots at the apple. We would
L.A. REPORTING - (312) 419-9292
1029
1 expect it to either get its allotment based on
2 being a pending project or to get an allotment
3 based on the offsets that it's provided.
4 MS. MIHELIC: Could you explain that a
5 little bit. I didn't understand what you mean by
6 offsets based on what's provided.
7 MR. ROMAINE: Let me consult with them.
8 (Conference off the record.)
9 MR. ROMAINE: In most cases I think I
10 would expect that the offsets that would be
11 provided for such a source that would be
12 recognized in January or its construction permit
13 issued by January 1st, 1998, would in fact qualify
14 as
ERGs. So it's quite possible that there would
15 be a mechanism that those offsets could be
16 directly recognized through the ERG process.
17 I don't think we've closed that
18 loophole, if it is a loophole. So the question I
19 think you may have raised perhaps an inconsistency
20 where perhaps we have defined something as a
21 pending project where in fact they should be
22 providing offsets up front, and they should not
23 get to double dip and then again be treated as a
24 pending project.
L.A. REPORTING - (312) 419-9292
1030
1 MS. MIHELIC: Let me try and ask a
2 clarifying question here. I'm a facility who is
3 existing, and I have a pending project coming in
4 that I'm going to construct a new source of, let's
5 say, 30 tons. I provide 1.3 to 1 offsets. Can
6 anybody do the math? So I would have to provide
7 30 some tons of offsets for that, 1.3 to 1, 40?
8 30 tons of offsets, correct, is that what you're
9 saying? In this construction permit, you would
10 require them to show they have 40 tons of offsets
11 somewhere?
12 MR. ROMAINE: That's correct.
13 MS. MIHELIC: What then would I be
14 getting an allotment for
for that new source?
15 MR. ROMAINE: Can we move on to a
16 further question so I have a longer chance to
17 consult with Bonnie, and go on to the next
18 question. That would be more efficient.
19 HEARING OFFICER FEINEN: Do you think
20 you'll remember the question for tomorrow
21 morning?
22 MS. MIHELIC: Sure. The follow-up
23 question would be -- and we can put it on the
24 record, and I'll try to write these down -- would
L.A. REPORTING - (312) 419-9292
1031
1 the source be required to first offset -- it's
2 going to have to come up with 40 tons offset. Is
3 it then going to have its ATU allotment reduced by
4 12 percent when it gets its allotment, and then
5 would the 40 tons that came from the source be
6 taken away from the allotment if it came from the
7 other emissions at the source?
8 MR. ROMAINE: Add that to the list of
9 the previous question.
10 MS. MIHELIC: Okay. I think I can
11 remember this question, and it may go along with
12 the questions we have filed today that you have
13 deferred till tomorrow. We can follow up with
14 those questions there. They've asked us to defer
15 those questions until tomorrow.
16 HEARING OFFICER FEINEN: Follow-up?
17 Ms.
Hodge?
18 MS. HODGE: I have one more question on
19 Section 205.320. My name is Katherine
Hodge, and
20 I'm with the law firm of
Hodge & Dwyer here today
21 for the Illinois Environmental Regulatory Group.
22 And I have a somewhat related question relating to
23 baseline emissions determination.
24 What if a source acquires emission
L.A. REPORTING - (312) 419-9292
1032
1 reduction credits for use as offsets prior to the
2 effective date of the ERMS program and these
3 emission reduction credits were required for a
4 project for which a construction permit will not
5 be issued prior to January 1, 1998, how will these
6 emission reduction credits be incorporated into
7 the source's ERMS baseline?
8 MR. ROMAINE: This is a circumstance
9 where the source obtained its emission reductions,
10 I guess, prior to 1997 before we get into the
11 trading program?
12 MS. HODGE: That's correct.
13 MR. ROMAINE: The only way that we've
14 contemplated that such a source would be able to
15 get credits would be if it gets a construction
16 permit in place by January 1st, 1998. We haven't
17 contemplated a way to recognize those offset
18 credits that were secured prior January 1, 1997.
19 MS. HODGE: So right now there's no
20 provision in this proposed rule to address this
21 situation?
22 MR. ROMAINE: No, there isn't.
23 MR. TREPANIER: I'd like to follow up my
24 earlier question. How does the rule operate to
L.A. REPORTING - (312) 419-9292
1033
1 establish the cap? Your response that there would
2 be applications and then the applications would be
3 used to set the baseline, I thought there was
4 more. From your testimony, you said that it's
5 uncertain that even after these applications are
6 in on what the caps will be. What else beyond
7 these ERMS applications is going to be used to
8 establish the cap?
9 MR. ROMAINE: Well, where the certainty
10 comes in for the pending projects is whether the
11 total cap will in fact be lower than the potential
12 maximum cap that would ultimately occur if
13 everybody emits at their potential emission level
14 from the pending project.
15 MR. TREPANIER: On the pending projects,
16 is the potential level known for all pending
17 projects?
18 MR. ROMAINE: The potential level would
19 be known because they have to have a construction
20 permit in place by January 1st, 1998, at the time
21 they submit their ERMS application.
22 MR. TREPANIER: And then other emitters
23 might join this program later. Does the rule
24 allow for that? Does that affect the baseline? I
L.A. REPORTING - (312) 419-9292
1034
1 mean, does that affect it when an emitter joins
2 the program a year later, say, in the year 2003?
3 MR. ROMAINE: Could you clarify what you
4 mean by another emitter joining the program.
5 MR. TREPANIER: It could be in a
6 situation, as this question came earlier from a
7 representative from Tenneco, that the operation
8 went from one shift to three shifts.
9 MR. ROMAINE: Yes, there could be some
10 additional growth in the total cap as sources that
11 previously were below the 10-ton per year
12 applicability or 10-ton per season applicability
13 threshold happen to increase their emissions above
14 10 tons per season.
15 MR. TREPANIER: Now, is there any other
16 way that the cap could be increased without a
17 further ruling?
18 MR. ROMAINE: We can't think of any
19 other circumstance where it would change to
20 changes in population of sources where new sources
21 would come into the program.
22 MR. TREPANIER: Are you addressing that
23 question specifically regarding a change to the
24 cap? I know you just mentioned about new sources
L.A. REPORTING - (312) 419-9292
1035
1 coming in, but are you answering my question?
2 MR. ROMAINE: One other issue that could
3 occur is if in fact somebody finds a more accurate
4 determination method, it is conceivable that on a
5 case-by-case basis as a result of a new, more
6 accurate determination method, there also might be
7 a revision to the ATU being allocated to a source
8 which could be interpreted as a change to the
9 total cap.
10 MR. TREPANIER: On this same page, there
11 is one more question that follows this one. I
12 believe that it's on this topic, but I defer to
13 Bonnie if she would want to put that elsewhere.
14 This is the question that begins,
15 what forecast or analysis is available upon the
16 likely extent of allotments exceeding the 1996
17 base year in aggregate?
18 MR. FORBES: I'll answer that, that
19 question. We don't have any forecasts or analysis
20 of the kind that you're asking to predict the
21 likelihood of such an occurrence primarily because
22 the agency doesn't believe that it's a likely
23 possibility for the reasons that we've already
24 stated.
L.A. REPORTING - (312) 419-9292
1036
1 MR. TREPANIER: Maybe if I can clarify.
2 You misunderstood my question. I understand the
3 program allows the emitters to choose their
4 highest polluting years. It's just common sense
5 that when the emitters choose their highest
6 emitting years that we're going to have an average
7 that's higher than the 1996 average. Is it the
8 agency's position that that's not going to
9 happen?
10 MR. FORBES: Well, in a sense we're
11 chasing our tail because we've said that we don't
12 know what -- you're really asking about the cap.
13 We don't know what the cap is until we actually
14 have baselines determined. The agency's analysis
15 has attempted to use the most available
16 information, the most currently available
17 information in terms of estimating where
18 participating sources are, what their emissions
19 would be, which is based on 1994 annual emission
20 report data.
21 So to the best of our ability, we
22 believe that the information we provided
23 represents what actual emissions are or currently
24 are and that in the adjustments they are going to
L.A. REPORTING - (312) 419-9292
1037
1 be within the range we've included in our
2 analysis.
3 MR. TREPANIER: Okay. I'd like to --
4 I'd like to clarify your position, the agency's
5 position on the likelihood that these allotments,
6 the first allotments that are given out will
7 exceed what the emission levels -- what the actual
8 emission levels are in 1996. I'm looking for to
9 what degree does the agency believe, you know,
10 that these allotments -- the fact that they're
11 allowing emitters to choose their highest
12 polluting years, what does the agency believe that
13 that's going to -- the number of allotments that
14 that's going to allow, how much above what was
15 actually emitted in 1996 is that going to
16 allow?
17 (Discussion off the record.)
18 MS. SAWYER: Mr.
Trepanier, could you
19 repeat your question.
20 MR. TREPANIER: The question as written,
21 what forecast or analysis is available upon the
22 likely extent of allotments exceeding the 1996
23 base year in aggregate? And I could give an
24 example, if that would be of assistance.
L.A. REPORTING - (312) 419-9292
1038
1 MR. FORBES: Well, I think to the best
2 of our understanding of the various provisions of
3 the rule and the fact that actual emissions for
4 baseline determination do have to be adjusted to
5 reflect all of the various 15 percent rate of
6 progress requirements which likely weren't in
7 place when those actual emissions occurred between
8 the early '90s, that that will tend to bring
9 allotments down.
10 We believe that there is some
11 uncertainty as to what actual adjustment sources
12 we'll see, but in any case, we believe that those
13 emissions cannot exceed what actual existing
14 emissions were at that time period. No specific
15 analysis has been done, to answer your question.
16 MR. TREPANIER: Could I give an example,
17 and maybe you could address that on this question.
18 MR. FORBES: I think we've answered your
19 question.
20 MR. TREPANIER: Maybe if you can apply
21 what you had just told me because you told me a
22 lot, and then you said there was no analysis. I
23 don't know that I understood your answer, but if
24 in the example case, a polluter has a three-year
L.A. REPORTING - (312) 419-9292
1039
1 emission history and they select their first two
2 years and their emissions were at 10 on both of
3 those years, and on the most two recent years,
4 their emissions have been at 8.
5 Now, in this instance the
6 application of my question would be how much
7 beyond their actual emissions in '96 would they be
8 given allotments?
9 MR. FORBES: I think, if I understood
10 your example, it would be based on 10. If they
11 made a case that their emissions were
12 representative at that level, I think that's what
13 you said. Their current level was 8, but they
14 indicated that based on the criteria in the rule
15 that it would be 10, then their allotment would be
16 based on 10, but the other adjustments that have
17 to be made there are that if the 10 does not
18 reflect an emission rate that meets the more
19 stringent requirements that apply in 1996 -- and
20 there are many that apply through the 15 percent
21 plan --, then that has to be further adjusted
22 reflective of those tighter emission standards.
23 So it may not actually be 10. It
24 could be 6 once that adjustment has been made, and
L.A. REPORTING - (312) 419-9292
1040
1 then the other thing that has to be accounted for
2 is if there's any over-compliance. Because of all
3 of these uncertainties, it's not possible to know
4 -- and that goes back to my answer, that a
5 specific analysis has not been made because we
6 don't know what all the choices are that
7 particular source is going to make. We can't be
8 certain as to which year they will use and whether
9 further adjustments have to be made to reflect
10 those tighter emission standards in the 50 percent
11 plans.
12 MR. TREPANIER: I understand -- and
13 correct me if I'm wrong -- but I understand that
14 in your analysis of this rule, you didn't look in
15 to see -- make up any forecast like, say, on those
16 top 50 emitters or the 8 or 12, how this may work
17 out when the polluters select their most polluting
18 years and how much that's going to be in the
19 aggregate on average greater than what is their
20 actual average emissions on any given year of all
21 the polluters.
22 MR. FORBES: I think I've answered your
23 question. We didn't do an analysis so I can't add
24 any more to that. Because of the uncertainties
L.A. REPORTING - (312) 419-9292
1041
1 that we've indicated, it's not possible to get an
2 accurate reflection of what the base year
3 emissions would be.
4 HEARING OFFICER FEINEN: I think right
5 now would probably be a good place to take a
6 break. We're between sections, and we'll come
7 back in 10 minutes. I'm hoping to get to subpart
8 D today. Thanks, let's go off the record for a
9 10-minute break.
10 (Recess taken.)
11 HEARING OFFICER FEINEN: I'll talk real
12 quick about tomorrow. Things are being deferred
13 till tomorrow. So we'll start off the day with
14 those questions. I don't know what would be
15 better, but we'll talk about that tomorrow. Let's
16 not lose sight of the fact that we have a whole
17 day tomorrow of questioning, and it would be nice
18 if we could get through the
prefiled questions
19 tomorrow. I don't know if that will be possible,
20 but I would hope that would be the goal, and
21 tonight maybe you can think about what questions
22 have been asked and whether or not you need to ask
23 your questions.
24 Now I think we can start with
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1 questions on Section 205.330, emissions
2 determination methods, Tenneco.
3 MR. FORCADE: Question No. 19, how
4 should fugitive emissions be measured in order to
5 be incorporated into the baseline?
6 MR. ROMAINE: We would expect that
7 fugitive emissions will be determined by practices
8 that are currently being used to determine
9 fugitive emissions. They can be determined, for
10 example, by emission factors or material balances
11 or in some cases there are estimation models that
12 predict emissions based on relevant process
13 parameters.
14 MR. FORCADE: I then go on to the next
15 section now.
16 HEARING OFFICER FEINEN: I think Dart
17 Container has a question, No. 12.
18 MR. NEWCOMB: This has been asked and
19 answered actually even by Tenneco.
20 HEARING OFFICER FEINEN: Thank you.
21 Let's move on then to Section 205.337, changes in
22 emissions determination methods and sampling,
23 testing, monitoring and record keeping practices.
24 Tenneco questions, 21A, B, C, D and E, 22A, B, C,
L.A. REPORTING - (312) 419-9292
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1 D and 23, which reminds me, when you're talking
2 about CAAPP permitting, please refer to it as
3 CAAPP permitting and not just CAAPP so the court
4 reporter can keep track on cap on air emissions
5 and CAAPP permitting. Thank you.
6 MR. FORCADE: This is question No. 20 on
7 page 11 relating to changes in emission
8 determination methods.
9 If under Section 205.337(b) the
10 agency agrees to change a facility's permit to
11 incorporate a change in the emissions
12 determination methods, will the agency also adjust
13 the facility's baseline?
14 MR. ROMAINE: This would have to be
15 considered on a case-by-case basis during the
16 permitting process while that modification is
17 being reviewed. Certainly if the new method is
18 significantly different, it might require that
19 there be an adjusted baseline.
20 HEARING OFFICER FEINEN: Could I ask a
21 quick follow-up to that? When you're reviewing
22 the modification, what kind of criteria are you
23 going to be looking at to accept or deny?
24 MR. ROMAINE: You're asking what
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1 criteria we'd look at in terms of accepting a
2 proposed change determination method?
3 HEARING OFFICER FEINEN: Yes.
4 MR. ROMAINE: As stated in that section,
5 there are three circumstances that we thought of.
6 One, that a change in determination method is
7 necessary to address some manner of change and
8 operation of a source that hadn't been properly
9 addressed up front.
10 The next circumstances, if there's
11 some relatively minor change that doesn't really
12 affect the overall determination method so it
13 still provides reasonably good, accurate data, and
14 the final circumstance if in fact the new method
15 provides better, more accurate data.
16 HEARING OFFICER FEINEN: Is that
17 section -- is that decision of the agency
18 appealable?
19 MR. ROMAINE: It certainly would be. It
20 would be part of a permit modification so any
21 action that we finally take would be
appealable.
22 HEARING OFFICER FEINEN: Thank you.
23 MR. FORCADE: Question No. 21, assume
24 that the United States Environmental Protection
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1 Agency has changed an emissions determination
2 method for a particular source based on better
3 understanding of the source. Based on this
4 change, for example, a new emissions factor, a
5 facility now discovers that it has past actual
6 emissions -- that past actual emissions always
7 have been underestimated and that it has more
8 emissions than were originally calculated for the
9 baseline years, even though the process,
10 operations and real emissions have never changed.
11 Will the agency readjust the
12 facility's baseline? If yes, what is the
13 procedure for doing so?
14 MR. ROMAINE: Certainly that possibility
15 exists. It would be evaluated on a case-by-case
16 basis if and when we processed a permit
17 modification that would allow or recognize that
18 new determination method that USEPA has come up
19 with. Any change would occur in the context of
20 the permitting. If the permit was never changed,
21 we would simply state where we were, the status
22 quo.
23 MR. FORCADE: If I could explore that
24 just a bit further. I believe when it comes to
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1 our case, we'll try and provide some information
2 that calculating emissions is sometimes quite
3 difficult and the values change. You say that if
4 indeed a facility, by simply changing an emissions
5 factor pursuant to USEPA, that you might change
6 the baseline, but you haven't provided
guidances
7 as to when you would and when you would not, and
8 this could represent a rather significant change
9 in the number of
ATUs that a facility might have
10 to purchase or other changes.
11 Could you expand a little bit on
12 what conditions would have to exist in order for
13 you to change the emissions baseline if you knew
14 that the historic emissions and the present
15 emissions were the same, it was only the
16 quantification methodology that had changed?
17 MR. ROMAINE: I think that's the point
18 that we're getting to. If the emissions haven't
19 changed, then the goal would be to keep the
20 allocations to accurately and properly reflect
21 what those emissions are as most accurately
22 understood.
23 We wouldn't want to simply
24 perpetuate the old emission estimation method and
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1 the inaccurate data, if in fact that is inaccurate
2 data so a source is entitled to more
ATUs because
3 it was in fact emitting more, and its baseline
4 emissions should reflect that and its allocation
5 should reflect that.
6 MR. FORCADE: Pursuing that just a
7 little bit further, if I might. Assume that
8 happened in the second or third year of operation
9 of the ERMS program, would the facility have to go
10 back and repurchase additional old
ATUs to cover
11 the increased emissions?
12 MR. ROMAINE: No. The way we've set up
13 the program, as I've said, everything is status
14 quo until the permit actually changes. So any
15 change in this would only occur after there is a
16 detailed application for revision submitted. It
17 would be opportunity for review and input by us,
18 the affected source and the public, and
19 opportunity for review by the board if it was
20 deemed appropriate.
21 If the source had in fact had
22 sufficient
ATUs in previous seasons consistent
23 with whatever methodology specified in the permit
24 for determination of emissions, the source would
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1 satisfy its obligations for those previous
2 seasons. So we're only talking about future
3 changes to the way a particular source is handled
4 once the permit modification is in fact effective.
5 MR. FORCADE: Where the method of
6 emissions determination is premised on internal
7 data accumulation and it changes, is the facility
8 required to submit any additional information to
9 the agency to justify the change in emissions
10 estimation methodology, and if so, what
11 information?
12 MR. ROMAINE: Well, they certainly would
13 be required to submit appropriate information to
14 justify the revision to the Title V permit. So it
15 would be an application for revised Title V permit
16 as that is addressed by the Title V program. What
17 we would need is in fact information to flesh out
18 a new determination method and figure out what its
19 implications are for both future emissions from
20 the particular emission units and what its
21 implications would be for the baseline emissions
22 of the facility.
23 If we didn't have that information,
24 we would not be in a position to properly revise
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1 the permit, and I think we would simply have to
2 stay where we were.
3 MR. FORCADE: Will the agency account
4 for the changed emissions factor in any other
5 way?
6 MR. ROMAINE: Yes, and if in fact this
7 changes what we believe to be the total emissions
8 in the area and what reductions we're getting, if
9 change is significant, it might require us to
10 update or revise our rate of progress
11 demonstration.
12 MR. FORCADE: Going to question 22, if
13 in the above question the new emissions factor
14 causes a decrease in seasonal emissions, will the
15 agency adjust the facility's baseline?
16 MR. ROMAINE: Similar answer, it would
17 have to be evaluated on a case-by-case basis.
18 MR. FORCADE: And I'm assuming then the
19 answer to B would be the same relating to issuing
20 ATUs for the facility?
21 MR. ROMAINE: That's correct.
22 MR. FORCADE: And would the facility
23 continue to receive its prior allotment of
ATUs
24 before the change?
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1 MR. ROMAINE: If the decision were made
2 to change the allotment, it would then begin to
3 receive its
ATUs based on the new allotment. If
4 the decision were made not to change the allotment
5 or if in fact there were other, I guess,
6 compensating changes, even though where we
7 distributing emissions at the source, there are
8 more emissions at one emission unit than another
9 than previously thought, then the total result is
10 the same, then conceivably there would be a
11 decision there would be no need to actually change
12 the allotment of
ATUs at the source.
13 MR. FORCADE: And question No. 23, will
14 the agency use the same procedure under Section
15 205.337 to modify methods of determining VOM
16 emissions if the change in emissions determination
17 method is mandated by USEPA or the agency?
18 MR. ROMAINE: I'm not exactly sure where
19 the question is leading to. The first point is
20 that we don't usually develop new determination
21 methods. We don't come up with new emission
22 factors or formulated estimating emissions. USEPA
23 does that, and then the other thing is I don't see
24 anything as we've set up this rule that provides
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1 that USEPA that can mandate that a source change
2 its emission determination method.
3 They've sort of provided the
4 ability to change determination methods at the
5 option of the source as needed when new, more
6 accurate determination methods come along or in
7 fact they see some way to improve it or finally if
8 they just need to accommodate new circumstances at
9 the source.
10 MR. FORCADE: Do you anticipate that
11 USEPA will adopt a compliance assurance monitoring
12 rule and that Illinois will implement it?
13 MR. ROMAINE: That's two questions. If
14 USEPA adopts a compliance assurance monitoring
15 rule, we will follow it.
16 MR. FORCADE: Would you assume that if
17 USEPA adopts a compliance assurance monitoring
18 rule that it may require monitoring particular
19 emissions units that would in fact result in a
20 mandated different method of determining emissions
21 that may be present in their Title V permit
22 application or permit?
23 MR. ROMAINE: That is certainly possible
24 in terms of those applicable requirements. So if
L.A. REPORTING - (312) 419-9292
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1 certain applicable requirements exist, USEPA may
2 in fact come up with more refined methods to
3 determine compliance with those requirements. I
4 don't believe those provisions would necessarily
5 transfer over into a trading program of this type
6 where the issue is simply quantification of
7 emissions.
8 MR. SUTTON: Can I interject. Also, the
9 method they've taken as far as adoption of that
10 rule currently is to put that in at the reopening
11 of the permit versus forcing a reopening. So it
12 may actually go five years before that shows up in
13 a permit.
14 MR. FORCADE: To short circuit the
15 question then, you see nothing coming out of the
16 compliance assurance monitoring rule which would
17 result in a change between emissions estimations
18 techniques and possible actual monitoring data
19 that would reflect a change in the amount of
20 baseline emission
ATUs issued to a facility other
21 than prospectively in the future?
22 MR. ROMAINE: We agree.
23 MR. FORCADE: Good.
24 HEARING OFFICER FEINEN: Moving on then,
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1 Dart Container's questions 13 and 14.
2 MR. NEWCOMB: Once again, Bill
Forcade
3 has done these exact questions. They're identical
4 to the questions that Tenneco brought up so
5 they're withdrawn.
6 HEARING OFFICER FEINEN: Moving on then
7 to Mr.
Trepanier's question No. 25 which seems to
8 be similar to the question that I asked, but feel
9 free if you want to ask it again.
10 MR. TREPANIER: My question in regards
11 to what will be guiding the agency officials when
12 they're presented with a polluter's proposal to
13 completely retool VOM calculation methodology, and
14 given that there was an answer earlier, if you
15 could just elaborate on your third-party of your
16 response that when a new method would be more
17 accurate.
18 MR. ROMAINE: Well, one of the goals of
19 the trading program generally stated, a secondary
20 goal perhaps, is to improve the accuracy with
21 which sources determine emissions, that under the
22 current program under the command and control
23 program, there really isn't always a push to come
24 up with the most exact quantification of emissions
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1054
1 if you adequately comply with your initial
2 emission limits.
3 If you comply with the emission
4 limits, fine. Quantification then becomes a
5 secondary aspect of your operation, but we do want
6 to use the trading program to the extent possible
7 to reward sources if in fact they find out they
8 have more accurate estimates of emissions. So we
9 would try to facilitate through permit
10 modifications more accurate determination methods
11 when they're presented to us.
12 They require some explanation of
13 why the determination method has changed. Is it a
14 result of plant specific data versus a general
15 emission factor? Is it a result of further
16 evaluation by USEPA? Has there been a detailed
17 technical evaluation to compare a new test method
18 to an older test method and a finding that it is a
19 more consistent method or more accurate method?
20 So it would be looking for those
21 type of information to show that a particular
22 determination method that a source is new
23 proposing to use more accurately reflects its
24 emissions to the atmosphere, and we would
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1 certainly then, to the extent possible, rely on
2 that determination method as it is a more accurate
3 indicator of what that source's actual
4 contribution is toward air quality.
5 MR. TREPANIER: If their allotments are
6 changed, they would then receive additional
7 allotments, would those be available for sale
8 immediately, or would the source need to work
9 under their new allotments for three years before
10 they could close and sell all their allotments?
11 MR. ROMAINE: The new determination
12 would begin to be relied upon immediately,
13 presuming it would not change during the course of
14 the season. I think that would be rather
15 complicated. We would have to set this thing up
16 to identify which season the change occurs. The
17 source could then begin to rely upon the new
18 determination method.
19 MR. TREPANIER: I might ask one more.
20 Is there anything that you would see that would
21 cause an emitter to come in and ask that they have
22 a new methodology that they believe would reduce
23 the amount of their allotments they received?
24 MR. ROMAINE: I would think that would
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1 be less likely than the other case, but there
2 might be some circumstance where somebody comes up
3 with an estimation method that shows lower
4 emissions.
5 MR. TREPANIER: Thank you.
6 HEARING OFFICER FEINEN: Any other
7 follow-up? I guess we're moving on then to
8 subpart D, seasonal emissions management, Section
9 205.400, seasonal emissions allotment, Tenneco's
10 questions 24, 25A, B, C, D and E, question 27A and
11 B and question 27A, B, C.
12 MR. FORCADE: Moving to our questions on
13 page 13 under Section 205.400, question 24, will
14 individual
ATUs issued by the agency have some
15 sort of identification such as an identification
16 number, the year of issuance and the expiration
17 date?
18 MR. KOLAZ: Yes, it will.
19 MR. FORCADE: We believe question 25 has
20 been asked and answered.
21 Actually if I could, the very last
22 sentence on subpart E of example 25 involves the
23 relationship between
ATUs that have been sold with
24 ATUs that have been retired and would they both
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1057
1 have the same expiration date?
2 MR. KOLAZ: You're referring to --
3 MR. FORCADE: This would be question 25,
4 sub E, the very last sentence, will the five tons
5 of
ATUs expire on the same date if Facility Q sold
6 the
ATUs prior to December 31st, 1999?
7 MR. KOLAZ: The answer to that is that
8 the actual act of selling the
ATUs would not in
9 itself change the expiration date.
ATUs issued
10 for the 1999 season will expire at the end of the
11 year 2000 season if they're not retired prior to
12 that time.
13 MR. FORCADE: Regardless of the sale
14 date?
15 MR. KOLAZ: Regardless of the sale date.
16 MR. FORCADE: We believe 26 has been
17 asked and answered, and we believe question 27 has
18 been asked and answered.
19 HEARING OFFICER FEINEN: We'll proceed
20 with Tenneco's questions under Section 205.405,
21 exclusions from further reductions, Tenneco's
22 questions 28, 29, 30, 31, 32 and 33 and 34.
23 MR. FORCADE: These relate to questions
24 beginning on page 15 for No. 28 regarding
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1058
1 exclusions for further reductions. Under Section
2 205.405, consider the following scenario: USEPA
3 develops a MACT standard for industry A in
4 February 1998. Under the MACT standard, USEPA
5 proposes specific numerical emissions controls on
6 emission unit B.
7 Further, USEPA makes a specific
8 determination that MACT is equivalent to no
9 controls on unit C, and USEPA makes a decision not
10 to propose emission controls on emissions unit D,
11 and I would point out that this hypothetical is in
12 fact the pulp and paper MACT that I'm discussing.
13 Question No. 1, will VOM emissions
14 from units B, C and D be included in an existing
15 facility's baseline in the ERMS application
16 submitted on January 1st, 1998?
17 MR. ROMAINE: Yes.
18 MR. FORCADE: Will the facility be
19 required to submit any additional information
20 after its application? If yes, what information
21 must be submitted?
22 MR. ROMAINE: I can't say that it
23 wouldn't have to submit additional information if
24 the initial submission is incomplete. However, a
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1059
1 key question here seems to be focused at the MACT
2 exclusion. The question for the MACT exclusion is
3 whether an emission is subject to and meeting a
4 MACT emissions standard established pursuant to
5 Section 112 of the Clean Air Act when the baseline
6 emissions are determined.
7 So the question is are these
8 emission units meeting MACT standards as of
9 January 1, 1998, when the ERMS application is
10 submitted? If they are and that information is
11 presented in the application, that would be
12 sufficient. If they aren't, then they aren't, and
13 that information would be sufficient.
14 MR. FORCADE: Assuming that they are
15 meeting the standard, after the existing facility
16 implements MACT for unit B, is it correct that
17 unit B will meet Section 205.405(a)(1)?
18 MR. ROMAINE: Did you say that these
19 emission units are meeting MACT?
20 MR. FORCADE: That's my -- after the
21 existing facility implements MACT, after the
22 facility achieves MACT, that unit.
23 MR. ROMAINE: I guess as you phrased the
24 question, I guess I'm still concerned because
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1 either they meet MACT as of January 1st, 1998, or
2 they don't. There wouldn't be further changes to
3 implement MACT. So if as of January 1st, 1998,
4 they are meeting the MACT standard and that's
5 what's described in the ERMS application, then
6 they would qualify for the exclusion based on
7 compliance with the MACT requirement.
8 MR. FORCADE: And if they do not but
9 they subsequently come into compliance would they
10 meet the exclusion in 205.405(a)(1)?
11 MR. ROMAINE: No, they would not.
12 MR. FORCADE: Why?
13 MR. ROMAINE: Because the exclusion is
14 determined as of the date of the ERMS application
15 when the emission baseline is evaluated.
16 MR. FORCADE: And am I correct then that
17 that emission unit would have to have a 12 percent
18 additional reduction in order to qualify for -- I
19 mean, it would receive
ATUs representing a 12
20 percent reduction in emissions?
21 MR. ROMAINE: That's correct.
22 MR. FORCADE: After the existing
23 facility implements MACT for unit C where MACT has
24 no controls, is it correct that unit C will meet
L.A. REPORTING - (312) 419-9292
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1 Section 205.405(a)(1)?
2 MR. ROMAINE: The way you presented this
3 example, it appears that you've described unit C
4 as complying with the MACT standard that you
5 stated here that you've made a -- USEPA has made a
6 specific determination that the practices followed
7 by emission unit C constitute MACT. That would
8 mean that emission unit C is complying with MACT
9 as of January 1st, 1998. Accordingly, it would
10 not be set to a 12 percent reduction.
11 MR. FORCADE: Would that be true even
12 though the MACT standard was not published until
13 February 1998?
14 MR. ROMAINE: You pose an interesting
15 question there in terms of timing. I don't see
16 anything that would prevent a source from coming
17 in and demonstrating or supplementing their ERMS
18 application and showing that as of January 1st,
19 1998, they're complying with MACT and
20 supplementing the application with information on
21 the final MACT standard as effective February
22 1998.
23 MR. FORCADE: At that point they would
24 be qualifying for exclusion under 205.405(a) and
L.A. REPORTING - (312) 419-9292
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1 would not be subject to the 12 percent reduction?
2 MR. ROMAINE: Well, I guess timing
3 that -- clearly that information could be
4 reflected in the initial baseline determination
5 for that particular unit that would not be relied
6 on some subsequent or future action by USEPA, but
7 that information could be obtained while the
8 application was being reviewed.
9 MR. FORCADE: After the existing
10 facility implements MACT for unit D where MACT has
11 no controls, is it correct that unit D will meet
12 Section 205.405(a)(1)?
13 MR. ROMAINE: As you described the
14 circumstances of unit D, you have not described
15 unit D as subject to a MACT requirement. You've
16 said that the USEPA has not done anything in terms
17 of establishing MACT to that particular emission
18 unit. If an emission unit is not subject to and
19 not meeting a MACT standard, then it does not
20 qualify for the exclusion. As you set up the
21 example, a 12 percent reduction from baseline
22 emissions would be required for unit D.
23 MR. FORCADE: I think you just put your
24 finger on the area of confusion I'm hoping to
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1 explore in these hearings. You addressed the MACT
2 exclusion as though USEPA is always clear and
3 precise and final in all of its actions. In
4 reviewing the MACT regulations, we have not always
5 found that to be quite true. There are a number
6 of times where USEPA does not specifically
7 identify every unit and say, this is a MACT
8 standard. So I'm trying to explore what criteria
9 the agency will use in making determinations for
10 the MACT exclusion.
11 If I correctly understand you so
12 far, you've said if USEPA puts out a specific
13 numerical limitation, that that would qualify as a
14 MACT standard, and if USEPA puts out a specific
15 narrative statement in the preamble to the effect
16 that MACT is equivalent to no controls, that that
17 would also constitute a MACT standard. Is there
18 some lesser statement that would also qualify or a
19 conclusion that that represents a MACT control,
20 and therefore, the exclusion 205.405?
21 MR. ROMAINE: Well, I think you've
22 answered the question in part that USEPA, if they
23 are in fact unclear exactly what they're doing in
24 a MACT rulemaking, may in fact leave room for some
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1 case-by-case evaluation whether in fact a
2 particular emission unit is subject to MACT and
3 emission standards comply with that MACT emission
4 standard, and that would have to be evaluated and
5 reviewed as part of the evaluation of the ERMS
6 application.
7 MR. FORCADE: Following up on that last
8 question where you determine that it does not
9 constitute RACT, and therefore, there is a 12
10 percent reduction, would that not yield an ERMS
11 program that is more restrictive than RACT for
12 that particular unit -- I'm sorry, excuse me, more
13 restrictive than MACT for that particular unit?
14 MR. ROMAINE: I guess I will back up and
15 say I wasn't saying that the unit wasn't subject
16 to MACT. The way you've described the situation
17 to me, you've described it as if USEPA has not
18 proposed MACT for a particular emission unit. If
19 you're going to tell me it is subject to meeting
20 MACT, it would qualify for the exclusion. If
21 there's no MACT, I don't see how it could be more
22 stringent than MACT.
23 MR. FORCADE: Am I correct that MACT
24 represents a categorical standard and subjects the
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1 facility to all emission limitations for that
2 category of emissions grouping?
3 MR. ROMAINE: MACT is certainly a
4 categorical standard. Within categories, USEPA
5 has quite often allowed a menu of options to
6 comply with the MACT requirement. A source has to
7 fully comply with a particular menu or choices
8 that it's decided to go for.
9 MR. FORCADE: Question No. 29,
10 continuing the above example, USEPA does not
11 develop a MACT standard until the year 2005.
12 Before MACT is developed for unit B, unit B's
13 baseline emissions are 100 tons per season. After
14 MACT is implemented for the facility to achieve
15 compliance, how many
ATUs will the facility
16 receive for unit B, 100 tons of
ATUs or 88 tons of
17 ATUs?
18 MR. ROMAINE: As you've set up this
19 example, this source would never receive 100 tons
20 of
ATUs. Beginning in the 1999 season, it would
21 begin receiving 88 tons of
ATUs for unit B. This
22 is because there is no MACT standard until the
23 year 2005. Clearly it could not qualify for a
24 MACT exclusion if the MACT standard isn't
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1 developed in the year 2005.
2 Since its baseline is already set,
3 the adoption of a MACT standard in the year 2005
4 doesn't change anything, if this source were to
5 continue to receive 88 tons worth of
ATUs for unit
6 B before 2005 and after 2005.
7 MR. FORCADE: Moving on to subsection C,
8 before MACT is developed for unit D, unit D's
9 baseline emissions are 100 tons per season. After
10 MACT is developed and implemented, how many
ATUs
11 will the facility receive for unit D, 100 tons of
12 ATUs or 88 tons of
ATUs? And I would remind you
13 that unit D is the one where USEPA makes a
14 specific determination that MACT equals no
15 controls.
16 MR. ROMAINE: That was unit C.
17 MR. FORCADE: No, I'm moving on to
18 question C.
19 MR. SUTTON: Wasn't unit E the one?
20 MR. FORCADE: I'm sorry, yeah, unit C.
21 I apologize.
22 MS. MC FAWN: You want to ask question
23 B, is that right?
24 MR. FORCADE: Oh, yeah, B. I'm sorry, I
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1 skipped down too many. My apologies.
2 MR. ROMAINE: As I said, we're dealing
3 with something that's occurring in 2005.
4 Circumstances in 2005 don't change the initial
5 allotment, and as described here, the source's
6 initial allotment would be 88 and would continue
7 to be 88.
8 MR. FORCADE: And in that case even
9 though USEPA has made a determination that MACT
10 equals no control, would it be correct to say that
11 the ERMS program is more restrictive than MACT for
12 that unit?
13 MR. SUTTON: I would like to point out
14 the intent of the MACT program on the federal
15 level is to control
toxics, not necessarily
VOMs.
16 MR. FORCADE: I'm going to suggest that
17 this is a VOM which is also a HAP.
18 MR. ROMAINE: I guess I can't draw that
19 conclusion. In one case we're looking at the
20 effect of the ERMS program to achieve the rate of
21 progress requirements in 1998 -- I guess 1999.
22 We're looking at whether MACT can be factored into
23 that determination as part of the application in
24 1998. It can't be. It would appear the
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1 circumstance that you're looking at here is
2 something where you think this is a very well
3 controlled emission unit.
4 Since we can't rely on MACT in the
5 1998 time frame, what is necessary here is for
6 this source to pursue exclusion based on best
7 available technology. Best available technology
8 would be an option that could be applied and at
9 this period of time to avoid having to make that
10 12 percent reduction. In that sense I guess I'm
11 not in a position to make any sort of broad
12 conclusions that the trading program is more or
13 less stringent than MACT in this particular case.
14 This source can show BAT, best
15 available technology, when it comes in for its
16 application, and all the answers I've given you
17 change around. Even though it wouldn't qualify
18 for the MACT exclusion, all these units would make
19 the best available technology exclusion, and none
20 of them would have to provide reduction and have
21 100
ATUs going into the system and continuing on.
22 MR. FORCADE: I believe we answered the
23 question No. C relating to unit D where you said
24 that if a -- if USEPA has deferred adopting a
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1 particular standard that that would not constitute
2 RACT, is that correct?
3 MR. ROMAINE: That's correct.
4 MR. FORCADE: For example D, if an
5 existing facility in industry A implements MACT
6 for the entire facility, is it true that the
7 entire facility will not be subject to the 12
8 percent emissions reduction?
9 MR. ROMAINE: Yes, providing that the
10 timing requirements are satisfied that it is in
11 fact meeting MACT as of 1998 when the baseline
12 determination is made.
13 MR. SUTTON: Be careful how you answer
14 that, Chris, because this is in this context of
15 something happening in 2005. So if it occurs in
16 2005 --
17 MR. FORCADE: This was a subsection of
18 the question started in subsection 5.
19 MR. SUTTON: You have to rethink your
20 answer.
21 MR. ROMAINE: Well, I'm rethinking my
22 answer. It would not have any effect if the
23 facility does not begin implementing MACT for the
24 entire facility in 2005. In order to qualify for
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1 the exclusion, it would have to show it has MACT
2 as of the time frame of the initial baseline
3 determination, or alternatively, that it has best
4 available technology.
5 MR. FORCADE: To reiterate, if there is
6 a standard adopted in 2005 such as no controls
7 which the facility in 2005 can show it was meeting
8 in 1998, would that facility be or that unit be
9 subject to
ATUs being increased under 205.405?
10 MR. ROMAINE: Not with any provisions to
11 increase the allotment to the sources in those
12 circumstances.
13 MR. FORCADE: If you don't make the
14 demonstration in your 1998 application, you don't
15 get it?
16 MR. ROMAINE: That's correct.
17 MR. FORCADE: Question No. 30, referring
18 to Section 205.405(1), assume that a facility has
19 operations that emit hazardous air pollutants
20 which are VOM. MACT requires capture and control
21 of 98 percent of the emissions. If a similar
22 facility is not subject to MACT because it does
23 not emit hazardous air pollutants but meets the 98
24 percent standard, will this facility be required
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1 to reduce emissions by 12 percent under the ERMS?
2 MR. ROMAINE: It would not qualify for
3 the MACT exclusion. You've suggested here that
4 this facility has a very high level of control. I
5 would suggest that you would want to pursue the
6 best available technology exemption and use that
7 route to try and be excluded from the further
8 reduction of 12 percent. I can't say at this
9 point whether it would qualify or not.
10 MR. FORCADE: Referring to Section
11 205.405 (b) and (d) and the definition of best
12 available technology in Section 205.130, what is
13 the source of the agency's definition for BAT?
14 MR. ROMAINE: The definition of BAT is
15 developed from the definition of best available
16 control technology for the Federal Prevention of
17 Significant Deterioration Program. That
18 definition is found in section 169.3 of the Clean
19 Air Act as well as the Federal Prevention of
20 Significant Deterioration rules.
21 MS. MC FAWN: I'm sorry?
22 MR. ROMAINE: That is the source. It
23 has been adapted, however, to become a new term,
24 best available technology for the specific
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1 purposes of trading program.
2 MS. MC FAWN: Let me just note that he's
3 on question 31.
4 MR. FORCADE: Oh, yes, I'm sorry, I'm on
5 31. Is BAT a new standard and unique in
6 Illinois?
7 MR. ROMAINE: Yes, it is.
8 MR. FORCADE: Under the Clean Air Act,
9 MACT is the level of control of emissions from the
10 top 12 percent of controlled sources. Is BAT less
11 stringent or more stringent than MACT?
12 MS. SAWYER: We did go through and
13 answer all these questions the other day.
14 MR. FORCADE: Well, if I could for just
15 a second, the answers that I received during the
16 earlier questions were that, well, generally BAT
17 would be here and BAT would be there. That had
18 enough wiggle room that I wasn't quite sure where
19 I was going, and I think I need to explore
20 whether, as I address these questions, BAT will
21 always be less stringent or more stringent than
22 those, and if not, when would it not be?
23 That question was not asked in the
24 earlier round of questions. Since this is a
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1 fundamentally new technological standard which no
2 one can really define or point me to an existing
3 example of, I think it is appropriate to explore
4 it in some detail because it is a relatively
5 significant term, and I would ask the liberty to
6 ask these questions again because it is a new and
7 unique standard that you're asking the board to
8 adopt.
9 HEARING OFFICER FEINEN: Mr. Romaine,
10 are you prepared to answer those questions?
11 MR. ROMAINE: Yes.
12 MR. FORCADE: Under the Clean Air Act,
13 MACT is the level of control of emissions for the
14 top 12 percent of controlled sources. Is BAT less
15 stringent or more stringent than MACT?
16 MR. ROMAINE: Before answering the
17 question, I need to check my Clean Air Act to make
18 sure that MACT is the level of control of
19 emissions from the top 12 percent of controlled
20 sources. I think you're probably condensing some
21 things.
22 MR. FORCADE: Yes, there's also an
23 exclusion that says where there's less than a
24 certain number of sources, it's --
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1 HEARING OFFICER FEINEN: Let's go off
2 the record for a second.
3 (Discussion off the record.)
4 HEARING OFFICER FEINEN: Let's go back
5 on the record.
6 MR. ROMAINE: I apologize. I do not
7 keep the provisions in my head, and this is
8 actually part of the language that defines MACT
9 for existing sources. This isn't the complete
10 description of MACT for new and existing sources.
11 In fact, though, what the Clean Air Act says is
12 that MACT shall be no less stringent.
13 What this language about 12 percent
14 for these various provisions really have to do
15 with something called the MACT floor or in some
16 cases the MACT ceiling, but it's something that by
17 statute is the upper bound, and MACT, as
18 determined for category, is to be as stringent or
19 more stringent than this upper bound.
20 That behind me, I guess in the
21 previous discussion, I tried to describe these
22 series of emission limits as a continuum. I did
23 not try to make a distinction between control of
24 volatile organic material versus control of
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1 hazardous air pollutants. I was trying to answer
2 them abstractly for a particular pollutant which
3 level of control is most stringent, next most
4 stringent in sequence.
5 I think the key point in evaluating
6 MACT is that MACT is an emission standard
7 determined by rulemaking for a category of
8 sources, a category of emission. I think that
9 inherently means that MACT has more flexibility in
10 it to accommodate a range of different emission
11 units with a range of different control levels,
12 and it says here MACT, for existing units if you
13 have sufficient sources, is not the top one
14 percent, not the top two percent.
15 So accordingly, I would say that
16 BAT would inherently be more stringent than MACT
17 because BAT is a determination that is made for
18 one emission unit, and a case-by-case
19 determination for that one emission unit is
20 evaluating what is the maximum level of emission
21 reduction that is specifically achievable for that
22 emission unit. That presumes, however, that in
23 this continuum for particular emission units,
24 there are significant differences.
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1 I think I said before you may be
2 dealing with a particular emission unit where all
3 these different emission levels get very
4 compacted, and it is hard to separate perhaps any
5 distinction between what might be considered MACT
6 and best available technology or best available
7 control technology or in fact lowest achievable
8 emission rate. Everybody seems to coalesce and
9 say it's 99 and a half percent control and total
10 enclosure.
11 MR. FORCADE: Well, I appreciate that.
12 Would you mind if I explored it a little bit more
13 because I'm still utterly confused as to what BAT
14 represents.
15 Assuming you had a paper coating
16 line -- standard paper coating line and you were
17 to survey the paper coating lines in Illinois to
18 see what level of technology they had imposed, and
19 if you determine that your emissions unit met the
20 emissions control that the top 12 percent, 6
21 percent and 3 percent respectively of a controlled
22 sources met, could you tell me which of those
23 would meet MACT or BAT and which would not?
24 MR. ROMAINE: No.
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1 MR. FORCADE: Okay. I guess I'll move
2 on to the next question.
3 MR. ROMAINE: The BAT does not have a
4 ceiling. There is nothing that says that BAT has
5 to be at least as stringent as the top 12 percent
6 of best performing sources, the top 50 percent of
7 performing sources. BAT is a case-by-case
8 determination.
9 MR. FORCADE: I can understand that.
10 The concern I'm having is you're asking the board
11 to adopt a standard. I'm trying to explore so
12 that the board will be informed precisely what
13 that standard means. When I ask you questions,
14 does it mean this, that or that, and you say no,
15 then I don't know how effectively to either
16 support or oppose the adoption of BAT in public
17 comments because I don't know what it means or
18 what I'm being asked to support or oppose.
19 So I'm simply trying to explore
20 this, and if you can give me additional guidance,
21 it will be very helpful for me, but I will move on
22 to the next question attempting to ferret the
23 lowest achievable emission rate, if we could.
24 Is BAT less stringent or more
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1 stringent than the lowest achievable emission
2 rate?
3 MR. ROMAINE: Looking at the continuum,
4 BAT would definitely be considered less stringent
5 than the lowest achievable emission rate.
6 MR. FORCADE: Would it be safe then if a
7 facility went to the RACT, BACT, LAER
8 clearinghouse and found a recent LAER decision for
9 its type of operations that it would have a high
10 probability that similar controls would achieve
11 BAT in Illinois?
12 MR. ROMAINE: Yes, and I highlight two
13 points you made, similar emission unit, recent
14 determination.
15 MR. FORCADE: Yes. Question D, is BAT
16 less stringent or more stringent than RACT?
17 MR. ROMAINE: BAT is certainly more
18 stringent than RACT.
19 MR. FORCADE: Is B --
20 MR. ROMAINE: RACT is a categorical
21 standard. It is not a case-by-case determination.
22 MR. FORCADE: Is BAT less stringent or
23 more stringent than best available control
24 technology?
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1 MR. ROMAINE: I think this is the level
2 of control that BAT comes closest to, but I think
3 it is slightly -- in this continuum it would be
4 considered less stringent.
5 MR. FORCADE: BAT would be considered
6 less stringent, is that correct?
7 MR. ROMAINE: That's correct.
8 MR. FORCADE: Would it be considered
9 less stringent in all circumstances?
10 MR. ROMAINE: Again we're talking about
11 hypothetical situations. So if you have a BACT
12 determination for a particular unit and now you
13 have a BAT determination for that same unit, I
14 would think that the BAT information would be at
15 most the same level of BACT or less stringent.
16 MR. FORCADE: What is the economic limit
17 for best available technology in the economic
18 consideration?
19 MR. ROMAINE: We consider that the
20 appropriate economic, I guess, yardstick for the
21 availability of control measures is really the
22 $10,000 per ton cost that we've put in for the
23 ACMA.
24 MR. FORCADE: Therefore, would it be
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1 correct to say that if an applicant submitted
2 control technology to you that was at the $10,000
3 per ton level or higher and you agreed with that
4 analysis, that that unit would constitute BAT in
5 your opinion?
6 MR. ROMAINE: That's certainly a strong
7 possibility. Going through, I guess, reviewing
8 the other factors, the question is, first of all,
9 are there a similar emission units out there that
10 is in fact doing more to control emissions that
11 should be relied upon as precedent. I assume that
12 in the example that you presented to us there
13 would be no other similar emission unit. The
14 other thing I'm assuming is that this unit always
15 is very well controlled so that further control
16 measures would in fact entail something at or
17 above the cost that we've set for the ACMA, and
18 that, as you said, we've agreed with that economic
19 evaluation that it is in fact a standard
20 evaluation of costs as we performed for evaluation
21 control measures.
22 MR. FORCADE: Will BAT in all cases
23 apply standards that are equal to or more
24 stringent than new source performance standards
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1 established under Section 111 of the Clean Air
2 Act?
3 MR. ROMAINE: Not necessarily. The new
4 source performance standard only applies to newer
5 modified emission units. If an emission unit in
6 fact is subject to a new source performance
7 standard, it would, of course, have to meet that
8 emission standard. If in fact an emission unit is
9 existing so it's not subject to the new source
10 performance standard, then that would not be a
11 relevant standard for that particular situation.
12 MR. FORCADE: In that situation what
13 floor will be used for sources which are not
14 controlled by any standard?
15 MR. ROMAINE: The best available
16 technology definition does not include a floor or
17 a ceiling provision for existing sources or
18 existing emission units of that type.
19 MR. FORCADE: Is it possible that best
20 available technology for an existing source could
21 equal no controls?
22 MR. ROMAINE: That's certainly possible.
23 MR. FORCADE: What circumstances would
24 have to exist for that to occur?
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1 MS. SAWYER: Could you be a little bit
2 more specific on that question. What
3 circumstances, that's probably too broad. I don't
4 think Chris can comment on that.
5 MR. FORCADE: What economic cost and
6 availability and technical impediments would have
7 to exist for the agency to support a conclusion
8 that best available technology for an existing
9 operational unit was equivalent to no controls?
10 MR. ROMAINE: The evaluation of best
11 available technology does include consideration of
12 both process measures and add-on control
13 measures. So we would have to have gone through
14 an evaluation that concludes that no further
15 process measures could be applied to that emission
16 unit but other emission units are not using
17 greater, more effective process measures, and that
18 looking at the level of emissions that then is
19 being achieved with the process measures that are
20 being used, that add-on control is not being used
21 by other similar sources and that add-on control
22 would impose costs that would be discussed at or
23 above the level associated with purchasing of
ATUs
24 from the ACMA, the yardstick we've come up as
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1 evaluating economic impact.
2 MR. FORCADE: You injected something
3 there about purchasing from the ACMA. Is that
4 different than $10,000 a ton that you were using
5 as a benchmark?
6 MR. ROMAINE: Well, the point I was
7 trying to make, when you do come down looking at
8 costs and best available control technology
9 evaluation or best available technology
10 demonstration is that you need something to
11 compare them to, and it is difficult to come up
12 with specific numbers.
13 What we have established in this
14 program is an alternative way to obtain allowance
15 trading units, and that is the ACMA. So we would
16 certainly consider the ACMA as something that
17 compares the other alternative in lieu of having
18 to put in further control measures. So the ACMA
19 really becomes the economic yardstick to evaluate
20 economic impacts of possible controls.
21 MR. FORCADE: Am I correct that under
22 the ACMA, the cost of
ATUs will be either twice
23 the market average or $10,000 a ton?
24 MR. ROMAINE: Yes. However, we're
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1084
1 talking about making initial determinations for
2 best available control technology. At the time
3 the baseline determination is made, provisions in
4 the ACMA dealing with cost of
ATUs based on market
5 prices would not be available when these
6 determinations are being made.
7 MR. FORCADE: It would be $10,000?
8 MR. ROMAINE: That would be the
9 magnitude we would be looking at, yes.
10 MR. FORCADE: In its statement of
11 reasons, the agency states that in determining
12 BAT, it, "will consider existing features of the
13 emissions unit." What factors will the agency
14 consider? And this is subsection I of question 31
15 on page 18.
16 MR. ROMAINE: We would consider the
17 existing features that affect making changes to
18 that emission unit to further control emissions so
19 we could look at the existing space constraints,
20 the existing configuration of equipment. We look
21 at other related processes that would be present
22 at the source that might have to be changed or
23 upgraded.
24 In terms of add-on control, we
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1 would look at similar issues in terms of how does
2 the site location affect the ability to put new
3 measures in place, what additional steps would be
4 required, if necessary, to change the structure of
5 the facility to support controls? We would be
6 looking at any existing features of that emission
7 unit that would affect the ability to further
8 control emissions.
9 MR. FORCADE: Question No. 32, in its
10 statement of reasons, the agency states that, "in
11 no event shall application of BAT result in
12 emissions of VOM which will exceed the emissions
13 allowed by any applicable standard established
14 pursuant to Section 111 of the Clean Air Act" --
15 I'm omitting some here -- "or the level of
16 emissions achieved in practice by the best
17 controlled similar new units." The second phrase
18 is not found in the definition of BAT in 205.130.
19 Is the phrase, "the level of
20 emissions control achieved in practice by the best
21 controlled similar new units," from the above
22 quotation the agency's interpretation of the
23 meaning of BAT as defined in Section 205.130?
24 MR. ROMAINE: No, it is not. Apparently
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1 when that portion of the statement of reasons was
2 being prepared, somebody inadvertently looked at a
3 previous draft of the proposal that included that
4 language. At one point in time, we were pursuing
5 putting a ceiling into the best available
6 technology definition. We have, however, dropped
7 it out of our proposal so that is simply a
8 mistake.
9 MR. FORCADE: I think that answers
10 question B, but I would like to explore in
11 question C, "the level of emissions control
12 achieved in practice by the best controlled
13 similar new units." Exploring in the final section
14 of this question, what number of similar units do
15 you believe would have to exist before you would
16 consider a technology to represent something less
17 than BAT?
18 MR. ROMAINE: Can you repeat the
19 question, please.
20 MR. FORCADE: Assuming you have an
21 emissions unit, 100 of them across the United
22 States, and the most stringent control is employed
23 by only one unit or two units or five units or
24 fifty units. At what level does the number of
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1 controlled sources become so large that the
2 technology would not represent best available
3 technology?
4 MR. ROMAINE: Again I'm having trouble
5 structuring my response to the way you've posed
6 the question. We do not have a mandatory
7 comparison to any particular number of units. We
8 have said, though, that if there is a similar unit
9 out there that is using more effective control
10 measures, a combination of processes or add-on
11 control, then that would be a means to say that a
12 particular emission unit does not have best
13 available technology.
14 The key point then is what is
15 considered similar. So you would have to look at
16 is that other unit that has more control newer,
17 larger? Was it developed at a later period of
18 time where additional controls were available that
19 were not available when the emission unit that's
20 being evaluated was considered? So if you go to
21 that evaluation and conclude it wasn't similar,
22 then that would not be a binding precedent.
23 But if we come up with a precedent
24 out there that shows a similar unit in similar
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1 circumstances has better control, then we would
2 not deem the emission in question to have the best
3 available technology. It would have to equal or
4 better than other similar emission units, assuming
5 in fact there is one, and assuming that in fact
6 other emission units have reasonably been
7 identified.
8 MR. FORCADE: So am I correct then if
9 there is one unit in the world that is similar and
10 is controlling this, that you will not assign BAT
11 to a less stringent control technology?
12 MR. ROMAINE: I think we've also said
13 that we had not planned to go outside the
14 Continental US. That's enough to worry about.
15 MR. FORCADE: If there was one in the
16 United States employing that technology even
17 though hundreds of others do not, the only BAT
18 determination you would support would be that one
19 level of control?
20 MR. ROMAINE: That is correct. It is a
21 similar emission unit; similar emission unit, same
22 size, same circumstances is doing better, then we
23 would say there's no reason why the particular
24 emission unit at hand shouldn't achieve that more
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1 stringent level of control, but again, it depends
2 on is it similar. So we wouldn't necessarily say
3 that single unit by itself is sufficient. If it's
4 a similar unit, then why not.
5 MR. FORCADE: Assuming that factual
6 scenario, what kind of economic showing would the
7 applicant need to make to convince you that a
8 lower standard would satisfy BAT? If there were
9 two similar units but the one that was controlled
10 was the only unit in the United States, there were
11 hundreds of uncontrolled units, what kind of
12 economic showing would the applicant have to
13 make?
14 MR. ROMAINE: As we have set this up,
15 there wouldn't be an economic showing that the
16 source could make. If it's similar, it's been
17 done. Now, if you're telling me that their
18 circumstances are different so that there are
19 different economic impacts, then it's not
20 similar.
21 We would have to go to the economic
22 evaluation to see whether in fact that particular
23 level of control that is being used by this other
24 comparable but not exactly similar emission unit
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1 could also be applied and should be considered
2 achievable for the emission unit at hand.
3 MR. FORCADE: Would that hold true if
4 the single unit that was constructed in the United
5 States with that technology was expending
6 substantially in excess of $10,000 per ton?
7 MR. ROMAINE: There's nothing that we've
8 set up in this proposal that would preclude that
9 being a justification to say that in fact that
10 other similar unit should not be considered as
11 definitive for setting the best available
12 technology.
13 MR. FORCADE: And the lower standard
14 might apply because it was in excess of $10,000?
15 MR. ROMAINE: That's correct.
16 HEARING OFFICER FEINEN: I think we have
17 some follow-up to your questioning, and I think
18 we're going to stop today. I know we're going to
19 stop today.
20 MS. HODGE: Chris, you talked about
21 similar sources and different circumstances.
22 Wouldn't you agree that one facility, perhaps the
23 one employing this new technology, is a brand new
24 facility; an existing facility was constructed
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1 several years ago with maybe somewhat less
2 efficient control equipment, wouldn't you agree
3 that that would be different circumstances that
4 the agency would consider in its BAT
5 determination?
6 MR. ROMAINE: It certainly would be.
7 Those could not be construed as similar emission
8 units. There are very specific differences that
9 you set up in terms of the timing of those two, of
10 the development and construction of the two
11 emission units.
12 MS. HODGE: Thank you.
13 MR. SAINES: Thing is along the same
14 lines. My understanding of that definition is
15 that part of the determination -- case-by-case
16 determination will take into account economic
17 factors. So I guess for purposes of
18 clarification, in making the determination whether
19 or not a unit is similar or not, isn't economics
20 of the particular unit something that the agency
21 is going to consider in terms of whether or not it
22 is actually similar, and you can then compare it
23 to that one source that's out there that's
24 installing controls?
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1 MR. ROMAINE: I think you've described a
2 circumstance where it appears that even though
3 there may be superficial similarities between
4 emission units that in fact you believe that there
5 are differences between the two emission units.
6 Presumably one way to evaluate those differences
7 would be to do an economic of the impact of cost
8 of control, and that would highlight why those two
9 emission units that might superficially be
10 considered similar should really be considered
11 different, and accordingly, wouldn't rely on one
12 as a precedent for the other.
13 My attorneys also pointed out that
14 I may have appeared to suggest that simply a cost
15 of $10,000 would be sufficient, that is, the exact
16 ACMA cost would be sufficient to avoid for the
17 controls or to show that best available technology
18 is being satisfied. That was not my intent. My
19 intent was simply to show that is the point we
20 could look at. The cost, of course, would have to
21 be more expensive than ACMA because otherwise
22 people would go to the ACMA to fulfill their
23 emission obligation. So it's greater than ACMA.
24 MR. SAINES: One additional follow-up
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1 question. It relates to your characterization of
2 BAT being more stringent than M-A-C-T or MACT.
3 One of the justifications you used to make that
4 statement was that BAT determinations are made on
5 a case-by-case basis rather than on a categorical
6 basis.
7 My understanding -- that doesn't
8 necessarily follow then that BAT will be more
9 stringent than MACT. I'm concerned that through
10 these questionings, it's sort of been suggested
11 that it is more stringent than MACT in every
12 case. I would think that a case-by-case
13 determination would yield situations where BAT
14 could in fact be less stringent than MACT in a
15 given instance. Wouldn't that be -- isn't that
16 true when you consider economics as well?
17 MR. ROMAINE: I guess the point I was
18 trying to make was that because BAT is a
19 case-by-case determination, it should be a more
20 accurate determination of what is achievable in
21 terms of the emission reductions; that certainly
22 under a MACT standard, there may be emission units
23 that could do much better than the MACT standard
24 due to their particular circumstances, but MACT
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1 does not require those emission units to do
2 better.
3 It simply says, here's the
4 general. If you do well enough at this level,
5 that's good enough, you've met the general
6 categorical requirement. You could perhaps come
7 up with a scenario where the way MACT is
8 established creates a very stringent standard for
9 a particular emission unit; that one that in fact
10 has exorbitant costs for that particular emission
11 unit just because of where it is as sort of an
12 outlyer for the entire category, but the way the
13 USEPA has set up that categorical rulemaking, they
14 set up a MACT standard that doesn't really fit
15 it. I think that would be an exception to what I
16 was trying to describe in a conceptual approach as
17 to how you would spread out these different
18 emission standards under a continuum.
19 MR. SAINES: But it is possible that BAT
20 could be considered less stringent in a given
21 situation?
22 MR. ROMAINE: Conceivably such a
23 circumstance might exist.
24 MR. SAINES: Thank you.
L.A. REPORTING - (312) 419-9292
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1 HEARING OFFICER FEINEN: Okay. I think
2 we'll stop here today and continue tomorrow. I
3 just want to let everyone know that the dates that
4 we're tentatively looking at now for hearings is
5 April 21st, 22nd, 23rd and 24th, but of course,
6 after this hearing and before tomorrow, hopefully
7 we'll have a better -- after today's hearing and
8 tomorrow, we'll hopefully have a better target or
9 a higher percentage surety that that's going to be
10 the day.
11 MR. FORCADE: Are we off the record?
12 HEARING OFFICER FEINEN: No. We'll
13 continue tomorrow, and if there's some questions
14 deferred, that we'll start with, and I think we'll
15 go back to questioning from Tenneco. Off the
16 record, please.
17 (Discussion off the record.)
18 (Whereupon, this hearing was
19 continued until February 11,
20 1997, at 9:00 o'clock a.m.)
21
22
23
24
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1 STATE OF ILLINOIS )
) SS:
2 COUNTY OF COOK )
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4
5 LISA H. BREITER, CSR, RPR, CRR, being
6 first duly sworn, on oath says that she is a court
7 reporter doing business in the City of Chicago;
8 that she reported in shorthand the proceedings at
9 the taking of said hearing and that the foregoing
10 is a true and correct transcript of her shorthand
11 notes so taken as aforesaid, and contains all of
12 the proceedings had at said hearing.
13
14
15
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LISA H. BREITER, CSR, RPR, CRR
17
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