ILLINOIS POLLUTION CONTROL BOARD

November 18,

1993

WE SHRED IT, INC.,

)

Petitioner,

)

v.

)

 PCB 92—180

(Variance)

ILLINOIS

ENVIRONMENTAL

PROTECTION AGENCY,

Respondent,

COUNTY OF CHRISTIAN,

Intervenor.

JAMES L. PROFFITT OF PROFFITT

 & LACY

APPEARED

ON BEHALF OF

PETITIONER;

DANIEL

 MERRIMAN APPEARED

BEHALF

RESPONDENT;

and

DAVID

MARTIN

 APPEARED

BEHALF

INTERVENOR

THE

COUNTY

CHRISTIAN.

OPINION

 AND ORDER

THE

BOARD

(by

J.

Theodore

Meyer):

This matter is before the Board on petitioner We Shred It,

Inc.’s

 (WSI) third amended petition for variance.1

WSI

originally initiated this proceeding with a petition for variance

filed on November 17,

 1992.

 WSI filed its third amended petition

on March 15,

 1993.

 WSI seeks a variance from the financial

assurance requirements of the Board’s used and waste tire

regulations, codified at 35 Ill.Adm.Code 848.400 through

 848.415.2

 WSI originally requested a variance for three years,

but has subsequently agreed to seek a shorter variance.

 (Tr. at

18-20.)

 On March 25,

 1993, the Board granted the County of

Christian’s motion to intervene.

On November 4,

 1993, the Illinois Environmental Protection

The third amended petition will simply be cited as

“Pet

at

.“

~

 also originally sought a variance from “certain

management standards”

 in 35 Ill.

 Adin. Code 848.202(d).

 (Pet. at

1.)

 However, WSI withdrew that request at hearing

 (Tr. at 22,

24), and the recommendation filed by the Illinois Environmental

Protection Agency discusses only the request for variance from

the financial assurance regulations.

2

Agency

 (Agency)

 filed a motion for leave to file its

recommendation instanter.

 The Agency states that it was unable

to file its recommendation earlier due to the press of business,

and notes that the recommendation reflects an agreement between

the parties.

 The motion for leave to file instanter is granted.

The Agency’s recommendation is the result of negotiations

between it and WSI, and has the approval of intervenor the County

of Christian.

 The agreement was discussed at the July 15,

1993

public hearing in this matter, held in Pane, Illinois.

The

Agency recommends that the variance be granted until January 15,

1995 (eighteen months after the date of agreement of the

parties), subject to certain conditions.

For the following reasons, the Board finds that WSI has

presented adequate proof that immediate compliance with the

financial assurance requirements of 35 Ill.

 Adin. Code 848.Subpart

D would result in the imposition of an arbitrary or unreasonable

hardship.

 Accordingly, the variance is granted, subject to

conditions set forth in the attached order.

BACKGROUND

WSI recycles, processes,

 and disposes

used and waste

tires.

 WSI accepts whole and quartered car and truck tires at

its facility in Pana, Christian County,

 Illinois.

 Tires are

sorted at the facility, and a small fraction are resold for

recapping or as used tires.

 Most of the tires, however, are

shredded.

 (Pet. at 2.)

 The shredded tires are marketed as tire-

derived fuel

 (TDF), artificial playground turf,

 landscape

material and landfill, roadbed material.

 (Pet. at 3.)

As of July 15,

 1993, there were three categories of tires at

WSI’s facility.

 First,

 there were approximately 1500 to 1600

whole tires, which represents about four to five days of tire

collection.

 (Tr. at 8-9.)

 The second stockpile consisted of

chopped or “primary~shred”tires.

 (Tr. at 9; Rec. at 2.)

A

“primary—shred” tire is a tire that has been cut into either four

or eight pieces, so that it does not accumulate water.

 (Tr. at

10.)

 Thomas J. Funk,

 a shareholder in WSI, testified at hearing

that there are approximately 200 tons of material in that

stockpile of primary-shred tires.

 (Tr. at 10.)

 By comparison,

when WSI filed its March 15,

 1993 third amended petition, WSI had

approximately 2800 tons of primary—shred tires.

 (Pet.

 at 2.)

The third stockpile at WSI’s facility consists of

approximately 2700 tons of tires shredded into “two-inch nominal”

tire chips.

 (Tr. at 9.)

 “Two-inch nominal” tire chips are

approximately two inches on at least two of its dimensions,

but

is longer than two inches on the third dimension.

 (Tr. at’23.)

WSI’s tire shredding equipment, purchased in January 1991,

produces these “two-inch nominal” tire chips, but apparently will

3

not produce “two-inch minus” tire chips.

 (Pet.

 at 10;

 Tr. at 10-

11.)

 “Two—inch minus” tire chips have individual dimensions of

height,

 length, and width of two inches or less.

(35

Ill.Adm.Code 848.101(a).)

 Despite WSI’s efforts to market its

“two—inch nominal” tire chips, there is an insufficient

 market

for this size to allow WSI to reduce its current stockpile.

A

market does exist for “two—inch minus” tire chips.

 (Tr. at 12.)

WSI

is planning to purchase additional machinery which will

produce “two-inch minus” tire chips.

 (Tr. at 12-13.)

REGULATORY FRAMEWORK

WSI

 seeks a variance from the financial assurance

requirements

the

Board’s

used

and

waste

tire

regulations.

Those financial assurance rules, set forth at 35 Ill.

 Adnt. Code

848.Subpart D, require owners or operators of tire storage sites

and tire disposal sites to provide financial assurance equal to

or’greater than the current estimate of removing all used and

waste tires from the site.

 The rules establish provisions for

the form of financial assurance, upgrading of that assurance,

release of financial institution, and application of proceeds and

appeal.

 (35 Ill. Adm. Code 848.400—848.415.)

 However, the rules

do not apply to altered tires which have been chopped,

 shredded,

or processed to a “two-inch minus” standard.

 (35 Ill. Adm. Code

848.101.)

In determining whether any variance is to be granted, the

Environmental Protection Act requires the Board to determine

whether a petitioner has presented adequate proof that immediate

compliance with the Board regulations at issue would impose an

arbitrary or unreasonable hardship.

 (415 ILCS 5/35(a)

 (1992).)

 Furthermore, the burden is upon the petitioner to show that its

claimed

hardship

outweighs

the

public

interest

attaining

compliance

with

regulations

designed

 to protect the

public

(Willowbrook Motel

Pollution

Control

Board

(1st

Dist.

1977),

135

Ill.App.3d

343,

481

N.E.2d.

 1032).

 Only with such showing

can

the

claimed

hardship

rise

 to the level of arbitrary or

unreasonable hardship.

A further feature of a variance is that it is, by its

nature, a temDorary reprieve from compliance with the Board’s

regulations (Monsanto Co.

 v. Pollution Control Board

 (1977),

67

Ill.2d 276,

 367 N.E.2d 684),

 and compliance is to be sought

regardless of the hardship which the task of eventual compliance

presents an individual polluter

(a.).

 Accordingly, except in

certain special circumstances, a variance petitioner is required,

as a condition to grant of variance, to commit to a plan which is

reasonably calculated to achieve compliance within the term of

the variance.

4

COMPLIANCE

PLAN

WSI seeks a variance from the financial assurance

regulations so that it can use the funds which would be dedicated

to fulfilling the financial assurance provisions in order to

purchase equipment to reduce its stockpiles of “primary—shred”

and “two—inch nominal” altered tires to “two—inch minus” tire

chips.

 That equipment will cost $120,875.

 (Tr. at 12—13.)

 When

WSI’s stockpiles are reduced to “two-inch minus” tire chips, the

financial assurance provisions of Part 848 will no longer apply

to WSI’s operation, because tires which are altered to a “two—

inch minus” standard are exempt from regulation by Part

848.

(35

Ill. Adm. Code 848.101.)

 Mr. Funk testified that there are

indications of markets for the “two-inch minus” tire chips for

TDF, landscape material (called RubbeRock),

 and playground

material (called SofTurf).

 (Tr.

 at 12-15,

 see also Pet. at 7—8.)

WSI

is also exploring the use of its product in water

purification at water treatment plants and for leachate

collection systems filters at landfills.

 (Pet. at 7.)

At the July 15,

 1993 hearing in this matter, WSI discussed

the terms of the agreement reached between it and the Agency.

Those terms are included in the Agency’s recommendation.

 (Rec.

at 5-7.)

 During the term of the variance, WSI will properly

dispose of the “primary-shred” tires, either by landfilling,

 hauling to another place for disposal, or reducing the “primary-

shred” to a complying or marketable product.

 (Tr. at 16—17.)

WSI will also properly dispose of the “two-inch nominal” tire

chips, either by reprocessing the material to “two—inch minus”

size or through removal to a disposal site.

 (Tr. at 18—19.)

If

WSI fails to comply with these provisions by the expiration of

the variance, WSI will comply with the financial assurance

provisions.

 (Tr. at 18,

 19.)

HARDSHIP

WSI

contends

that

failure

grant

 the requested variance

would result in an arbitrary or unreasonable hardship.

WSI

states that it is in a business which is newly formed and rapidly

evolving, and that technologies are novel and uhift with the

market for products.

 WSI notes that it purchased its existing

shredder (which reduces tires to the “two-inch nominal” size)

prior tr~the Board’s adoption, in docket R90-9, of the used and

waste ti~.arules in April 1991 and February 1992.

 In sum, the

regulations exempting “two-inch minus” tire chips had not been

adopted when WSI purchased the shredder which produces “two-inch

nominal” tire chips.

 (Pet. at 14—15.)

 WSI maintains that if

required to comply with the financial assurance rules,

 it would

be required to place one—fifth of its total assurance costs

(estimated at $98,000 to $136,000)

 in a trust fund.

 One—fifth of

the lower of the figures is approximately $20,000, or about 70

5

of WSI’s anticipated profit for 1992.

 (Pet. at 16—17.)

WSI

contends that compliance with the regulations would leave it in

an extremely precarious financial position.

 WSI further argues

that grant of. variance would assist in the development of TDF and

TDF-related products and markets.

 (Pet. at 17.)

The Agency does not directly disagree with WSI’s arguments.

However, the Agency’s estimates for total closure costs are lower

than WSI’s, with the Agency estimating that total closure costs

would range between $43,500 and $75,000.

 The Agency states that

if WSI chose to utilize the trust fund method of assurance, the

costs of compliance would range from $8,700 to $15,000

per year,

or from $17,400 to $30,000

 (two annual pay-in periods) to be in

complete compliance.

 (Rec. at 3—4.)

ENVIRONMENTAL IMPACT

WSI

argues

that

the

grant

the

requested

variance

would

have a minimal or nonexistent impact on human,

plant, and animal

life in the affected area.

 (Pet. at 8-9.)

 The Agency agrees,

stating that because of the nature of the variance request, the

issue of possible contamination is less serious than the

 potential’ financial loss to Illinois if WSI became insolvent or

otherwise

out

business.

The

Agency

estimates

that

the

potential harm to the public from grant of variance is the

potential closure cost of $43,500 to $75,000.

 However, assuming

that WSI complies with the conditions agreed upon by the parties

and contained in the Agency recommendation, the Agency does not

believe that there are significant risks to the public or the

environment from a grant of the requested variance.

 (Rec.

 at 4.)

CONSISTENCY

WITh

 FEDERAL LAW

The Agency states that it is not aware of any federal law

which would conflict with the Board’s authority to grant WSI’s

variance request.

 (Rec.

 at 4.)

CONCLUSION

Based upon the record, the Board finds that immediate

compliance with the financial assurance provisions of our used

and waste tire regulations would impose an arbitrary or

unreasonable hardship on WSI.

 WSI is involved in an evolving

field, and was caught in that evolution when purchasing its “two-

inch nominal” tire shredder before the Board’s rules exempting

“two-inch minus” tire chips from Part 848 were adopted.

The

Board finds that granting a short variance from the financial

assurance rules will not cause direct environmental harm,

and

that the potential economic risk to the State of Illinois, should

 WSI go out of business,

 is small.

 That small risk is outweighed

by the public interest in furthering methods of tire disposal

other than landfilling.

 The Board will grant WSI a variance from

6

Ill.

 Adm.

Code

848.Subpart

subject

the

conditions

set

forth in the Agency recommendation and incorporated below.

The

variance

 will expire on January 15,

1995.

 That

date

 is eighteen

months

after

the

date

 of agreement of the parties.

This opinion constitutes that Board’s findings of fact and

conclusions of law in this matter.

ORDER

We Shred It,

 Inc.

 (WSI)

 is hereby granted a variance from 35

Ill. Adm. Code 848.Subpart D (Sections 848.400 through 848.415),

subject to the following conditions:

1.

 This variance terminates on January 15,

 1995.

2.

 As to WSI’s “primary-shred” altered tire stockpile, by May

15,

1994,

WSI

shall

either:

a.

 completely eliminate its currently existing stored

stockpile of’ “primary-shred” altered tires by:

1.

 removal and proper off—site disposal; or

2.

 complete reduction by processing into exempt tire—

derived

fuel

(TDF)

 product which’ has been chopped,

shredded or processed such that the individual

dimensions

height,

 length and width of the tire

product are two inches or less (an industry

standard

known

as “two—inch minus”), pursuant to

35 Ill.

 Adin.

 Code 848.101; or, alternatively,

b.

 with respect to any remaining “primary—shred” altered

tires stored at the site on or after May 15, 1994, WSI

shall, as of that date,

 fully comply with the financial

assurance requirements of 35 Ill. Ada. Code 848.400-

848.415, as now existing or hereafter amended.

3.

 As to its “two-inch nominal” tire chip pile, by January 15,

1995,

WSI

shall:

a.

 completely eliminate its currently existing stored

stockpile of altered tires previously processed by

chopping into “two—inch nominal” size pieces by:

1.

 removal and proper off—site disposal; or

2.

 removal off—site by sale as a “product” for use as

TDF, landscaping materials, or any other lawful

use;

3.

complete

reduction

reprocessing

into

exempt

7

material

which

has

been

 chopped, shredded or

processed such that the individual dimensions of

height,

length

and

width

the

tire

product

are

two inches or less (an industry standard known as

“two-inch minus”), pursuant to 35 Ill.

Ada.

 Code

848. 101.

b.

 No later than July 15, 1994,

 WSI shall reduce the

existing stockpile of its “two-inch nominal” altered

tires by approximately one-half, and shall eliminate

the

remaining

 amount by January 15,

 1995.

c.

 With respect to any remaining ‘two-inch nominal” sized

shredded tire pieces stored at the site on or after

January 15,

 1995, WSI shall, as of that date,

 fully

comply with the financial assurance requirements of 35

Ill. Ada. Code 848.400—848.415,

 as now existing or

hereafter amended.

4.

 With respect to any used, waste, or altered tires received

or generated at the site on or after July 15,

 1993, WSI

shall

fully

comply

with

all

applicable

provisions

Ill.

Ada Code Part 848.

5.

 Within forty-five days of the date of this order, WSI shall

execute and forward to:

Daniel

 P. Merriman

 Division of Legal Counsel

Illinois Environmental Protection Agency

P.O. Box 19276

2200

Churchill

Road

Springfield, Illinois 62794—9276

a certificate of acceptance and agreement to be bound to all

terms and conditions of the granted variance.

 The 45—day

period shall be held in abeyance during any period that this

matter is appealed.

 Failure to execute and

forward

the

certificate within 45-days renders this variance void.

The

form of certificate is as follows.

I

 (We),

hereby accept and agree to be bound by all terms and

conditions

 the order of the Pollution Control Board in

PCB 92-180, dated November 18,

 1993.

Petitioner

Authorized

Agent

8

Title

Date

IT IS SO ORDERED.

Section 41 of the Environmental Protection Act (415 ILCS

5/41

 (1992)) provides for the appeal of final Board orders.

The

Rules of the Supreme Court of Illinois establish filing

requirements.

 (See also 35 Ill.Adm.Code 101.246 “Motions for

Reconsideration”.)

I, Dorothy M. Gunn,

 Clerk of the Illinois Pollution Control

Board, hereby certif

 that the above o inion and order was

adopted on the

___________

 day of

__________________,

 1993, by

avoteof

_________.

Dorothy

M.,4ini~,

Clerk

Illinois

~9Llution

Control

Board