ILLINOIS POLLUTION CONTROL BOARD
September
3,
1992
IN THE MATTER OF:
)
PETITION OF WE-SHRED-IT,
INC.,
)
AS92-2
FOR AN ADJUSTED STANDARD FROM
)
(Adjusted Standard)
35 ILL. ADM. CODE 848.101
)
(WASTE TIRES)
)
THOMAS W.~
LACY,
PROFFITT
& LACY, APPEARED ON BEHALF OF
PETITIONER,
DANIEL
P. MERRIMAN APPEARED ON BEHALF OF THE ILLINOIS
ENVIRONMENTAL PROTECTION AGENCY.
OPINION
AND
ORDER OF THE BOARD
(by J.C. Marlin):
This matter comes before the Board on a petition filed
February 27,
1992,
and on
a second amended petition filed on July
13,
1992,
by petitioner We-Shred-It,
Inc.,
for an adjusted
standard from the used and waste tire financial assurance
requirement associated with
35
Iii. Adm.
Code 848.101.
The
Illinois Environmental Protection Agency
(Agency)
filed a
supplemental response at a hearing held in Pana, Christian
County,
on June 29,
1992.
The Agency recommended that the
adjusted standard be denied.
We-Shred-It owns a tire shredding operation at 500 North
Hickory Street, Pana.
As will be discussed below, We—Shred-It’s
equipment mainly produces “2-inch nominal”1 shredded rubber.
Section 848.Subpart D requires financial assurance for piles of
used and waste tires.
Section 848.101 provides an exemption from
the financial assurance requirement
(and the rest of Part 848)
for “2—inch minus” shredded rubber,
a smaller size.
In this
petition, We-Shred-It
is requesting an adjusted standard to
exempt
it from the financial assurance requirement with respect
to the “2—inch nominal” product.
PROCEDURAL HISTORY
The procedural history is somewhat confusing in that the
Agency presented the operative response at the hearing.
(R.
2.)
We—Shred-It then amended its petition on the record.
(R.
5.)
The
1To qualify for the “2-inch minus” exemption,
tires must be
altered by chipping,
shredding or other processing such that
individual dimensions of height,
length and width of the tire
product are two inches or less.
“Two—inch nominal” tire product
could have one dimension exceeding two inches.
0135-0553
2
hearing officer then directed We-Shred-It to file a written
amended petition after the close of the hearing.
(R.
4.)
Thus
the procedural history runs “hearing,
response,
petition”, the
exact opposite of the normal order.
The procedural history is further confused by the partial
nature of the second amended petition.
In response to the
Board’s more information order of March
12,
1992, We—Shred—It
filed a “response to notice of deficiency”, on April
10,
1992.
The Board takes this to be the “first
amended petition”
referenced in the transcript.
(R.
5.)
While the first amended
petition appears to be comprehensive, the second amended petition
addresses only some areas,
not even including all areas which
were the subject of the discussion
in the transcript.
Thus, the
operative petition appears to consist of the first amended
petition
(the “response”),
as amended on the record,
plus the
second amended petition.
The amendments to the petition are summarized in the
transcript.
We-Shred-It originally overstated the quantity of
partially shredded tires on hand by a factor of ten, resulting in
a gross overstatement of the total tire products and estimate of
financial assurance required.
(R.
5.)
Moreover,
in the original
and first amended petition, We-Shred—It stated that it was
producing “3-inch nominal” rather than “2—inch nominal” shredded
rubber.
This was
a typographical error.
(R.
6.)
In the supplemental response filed at the hearing, the
Agency recommended that the adjusted standard be denied.
The
Agency stated that the used tire regulations were promulgated to
prevent the threat of fires and disease-carrying mosquitoes, and
to provide for financial assurance for tires or tire products
that might.be abandoned due to non-existent markets.
The Agency
stated that
it believed that,
at the present time,
the market for
“3 inch nominal” tire-derived fuel
(TDF)
was non—existent, and,
as such,
presented the necessity for financial assurance.
The Agency’s supplemental response specifically addresses
the “3 inch nominal” product.
As noted,
We—Shred—It has amended
the petition to correct a typographical error,
so that the
petition would read “2-inch”.
Consistent with that the Board
construes the Agency response as also applying to the “2—inch
nominal”.
The hearing officer also ordered We—Shred—It to file an
affidavit concerning petitioner’s exhibit
1,
a quotation (without
price)
for 280 tons of the “2-inch nominal” product for paving
underlayment.
(R.
86,
88.)
No affidavit has been filed.
The
Board will therefore strike Exhibit
1.
The hearing officer granted We-Shred-It
14 days after the
hearing in which to file closing arguments.
The Agency was given
01 35-Q55~
3
14 days more to file its closing comments.
(R.
89.)
We—Shred-It
filed its closing arguments on July 13,
1992.
The Agency has
filed none.
DISCUSSION
The used and waste tire rules,
as Part 848, were adopted in
R90—9A, on April 25,
1991.
They appeared on May 24,
1991, at
15
Ill. Reg.
7959.
The rules were amended in R90-9B, on February 6,
1992.
The amendments,
including the “2—inch minus” exemption,
appeared on February 21,
1992,
at 16 Ill.
Reg.
2880.
The Environmental Protection Act
(Act)
and Part 848 regulatE
used and waste tires in order to assure proper disposal and to
protect the public from disease-carrying insects and the danger
of air and water pollution from fires associated with large
accumulations of used and waste tires.
(Section 53(a)
of the
Act.)
Subpart D requires financial assurance for the removal of
tires in order to protect the public by providing funds for the
removal of tires
if the owner or operator abandons a site oris
otherwise unable to properly terminate operations.
(R90—9A,
p.
19.)
The amount of required financial assurance is based on a
removal cost estin~ateprepared by
th.e owner or operator under
Section 848.404.
The owner or operator may use a combination of
trust funds,
letters of
credit and self-insurance to meet the
requirement.
Once tires have been shredded,
much of the disease and fire
hazard has been eliminated.
Moreover,
the potential disposal
costs are greatly reduced, since shredded tires are much easier
to handle and dispose of, and may be marketable.
It would be
very unlikely that an operator would abandon a site with
marketable inventory.
In R90-9B, the Board determined that the
“2-inch minus” product was more marketable in Illinois, and that
shredders were already moving toward that standard.
The Board
therefore exempted the “2-inch minus” product from the financial
assurance requirement
(P90-96,
p.
2
-
5.)
Although the disease and fire hazard
is greatly reduced,
there is still some hazard,
and potential disposal problems,
associated with shredded tires.
Removal would be necessary
following abandonment.
To the extent the shreds are not
marketable,
at
a price exceeding the removal cost,
a source of
revenue would be needed to fund the removal.
Financial assurance
is therefore still
needed.
(R90-9B,
p.
3,
4.)
However,
it should
be in
a lower amount than for whole tires, with the reduced
handling and disposal costs reflected
in the cost estimate under
Section 848.404.
Section 28.1 of the Act allows the Board to grant an.
“adjusted standard” modifying the effect of general rules in
specific cases.
35
Ill.
Adm.
Code l06.Subpart G contains
0135-0555
4
procedures to be followed in adjusted standards matters.
The
procedures were adopted
in R88-5A,
on June 8,
1989.
There are two types of adjusted standards petitions.
If the
Board specified
a “level of justifidation” at the time it adopted
the rule of general applicability, then that level of
justification controls any adju~tedstandards filed pursuant to
that rule.
Otherwise,
the level of justification is that
specified in Section 28.1(c)
of the Act:
The
Board may grant individual adjusted standards
whenever the Board determines,
upon adequate proof by
petitioner,
that:
1.
factors relating to petitioner are substantially
and significantly different from factors relied
upon by the Board in adopting the regulation
applicable to that petitioner;~
2.
the existence of those factors justifies an
adjusted standard;
3.
the requested.standard will not result
in
environmental or health effects substantially
and significantly more adverse than the
effects considered by the Board
in adopting
the rule of general applicability;
and
4.
the adjusted standard
is consistent with any
applicable federal law.
In that Part 848 does not specify a “level of
justification”, the above language controls the level of
justification required
in this matter.
REQUESTED RELIEF
We-Shred-It has requested an adjusted standard from Section
848.101.
However, this is the exemption language.
What We—
Shred-It needs
is an adjusted standard from the Subpart D
financial assurance requirements, because
it needs to present
proof
in accordance with Section 28.1(c)
of the Act as quoted
above.
The Board accepts the petition as
a request for an
adjusted standard from the Subpart D financial assurance
requirements.
Section 848.101 also exempts the “2—inch minus” product from
all requirements of the Part.
The Board construes the instant
request as being from the Subpart D financial assurance
requirements only.
This would be consistent with the discussion
in the first amended petition
(the “response”),
at
p.
6.
0135-0556
5
SHREDDED TIRES AND USES
Several methods of reusing tires depend on shredding or
grinding the tires.
Several types of material are discussed in
the transcript:
1.
3— to 4—inch.
(R.
45..)
2.
2—inch nominal.
(R.
6,
35,
41,
45,
56,
57,
61,
66,
75,
78, 82.)
3.
2—inch minus.
(B.
28,
34,
35,
45,
48,
61,
64,
66,. 70,
71,
72,
75,
79.)
4.
1—inch minus.
(R.
45,
53,
55.)
5.
Crumb rubber.
(R.
36,
72.)
The difference between the “nominal” and “minus” grades lies
in the third dimension.
While the “2-inch nominal”
is two inches
or less in two dimensions,
the third dimension could be larger.
The record does not contain information on the range
of sizes in
the third dimension.
On the other hand,
each piece of the “2—
inch minus” material could occupy
a two inch cube.
Although it
is evidently more difficult to produce the 2-inch minus material,
its smaller size and greater uniformity allow more potential
applications.
The current main market for shredded tires is tire—derived
fuel
(TDF),
in
which shredded tires arG~mixedwith coal for
burning in large boilers with proper air pollution control
equipment.
(R.
24,
35,
45,
61,
64,
67,
77.)
The 2—inch nominal
material tends to jam coal moving equipment.
(R.
35,
67.)
At
present, users of TDF cannot accept the 2—inch nominal product.
One potential user whose equipment appears to .accept the 2—inch
nominal material failed the air pollution control tests when
burning the TDF.
(B.
46.)
Shredded tires have a number of other uses.
These include:
landscape material
(R.
51,
72,
79);
playground turf
(R.
65);
landfill road stabilizer
(R.
56);
and, road base.
(R.
57,
67,
70,
77.)
The latter two appear to be potential uses for, the 2—
inch nominal material.
(R.
56,
57.)
Although the first amended petition had broad claims of
marketability, petitioner abruptly dropped most of its claims at
hearing, after it became apparent that these related to sales of
smaller size product,
some of which was produced off—site.
(R.
64,
66,
72,
81.)
Most sales have been for experimental purposes.
(R.
35,
45,
61,
67.)
0135-0557
6
The We-Shred-It plant nianager was unable to quote a price to
a large potential buyer.
Moreover, sales would require the
approval of the board of directors of We—Shred-It.
(R.
59. 60~.
SHREDDING AND SORTING EQUIPMENT
We—Shred-It bought its tire shredder for $242,000
in
January, ‘1991.
(second amended petition, par.
3,
B.
33.)
At the
time it purchased the shredder,
it acted in good faith,
in
expectation that a market would develop for the 2-inch nominal
product.
(B.
41,
67,
76.)
Indeed, We-Shred-It suggests that the
Agency misled it into purchasing what turned out to be the wrong
size of equipment, such that the State should be estopped from
denying the adjusted standard
(second amended petition and
argument.)
Moreover, We-Shred-It questions why the Agency did
not award grants to make the 2-inch nOminal product work in the
coal moving equipment.
(R.
75.)
It would be possible for We-Shred-It to convert its shredder
to make the 2-inch minus product, by installing new knives and
spacers, at a cost in the vicinity of $30,000, plus four—days
labor.
(R.
68,
69.).
We-Shred-It intends to purchase equipment
which would process the 2—inch nominal to crumb rubber.
(R.
55,.
70,
72.)
We-Shred-It does not give a time schedule for these
conversions.
Moreover, We—Shred—It has machinery which is
capable of processing the 2-inch nominal to 2—inch minus product.
(R.
61,
78.)
COMPLIANCE COSTS
As discussed above,
cost information was presented in the
April
10,
1992,
first amended petition
(the “response to claim of
deficiency”.)
Although this information was amended in the
transcript
(R.
5), the revised figures were not included in the
second amended petition.
Moreover, the figures presented in the
transcript were not complete.
Although the revised tonnages were
given,
petitioner left off with:
“Following that,
of course
-—
and this serially relates to the first amendment
--
a lot of
numbers will change”.
(B.
5.)
The Board believes that the
following represents the costs,
as amended:
Partially shredded tires
1716 tons
2—inch nominal material
1752
Total tires
3468 tons
Loading
($10/ton)
.
$34,680
Transportation
(173
trips
at $46)
7,960
Landfill tipping
($15/ton)
52,020
0t35-0558
7
Total cost
$94,660
If We—Shred-It were to meet the financial assurance
requirement through the use of a trust fund,
it would be obliged
to deposit2 at least 20
of this amount,
$18,930/year, over the
next five years.
The above costs are similar to the numbers
in the Agency’s
supplemental response, which arrived at a cost estimate of
$79,000.
The difference
is that,
although the Agency assumed a
slightly larger quantity of tire material
(4000 tons),
it used a
smaller loading charge:
$50 per load,
or,
for a 20—ton load,
$2.50 per ton.
Using the Agency’s loading cost for 3468 tons,.
the cost estimate would be as follows:
Partially shredded tires
1716 tons
2—inch nominal material
.
1752
Total tires
3468 tons
Loading
($2.50/ton.)
$
8,670
Transportation
(173 trips at $46)
7,960
Landfill tipping ($15/ton)
52,020
Total cost
$68,650
20
of this cost estimate would be $13,730/year.
CONCLUSION
In order to obtain an adjusted standard, the petitioner must
demonstrate that factors relating to petitioner are
“substantially and significantly different” from factors relied
upon by the Board in adopting the regulation applicable to that
petitioner.
Section
28.1(c) (1)
of the Act
We-Shred—It has not
2The annual contribution to the trust fund is not the same
thing as the cost of compliance for two reasons.
First, We—
Shred—It might be able to obtain
a letter of credit, under
Section 848.413,
for a small fraction of the cost estimate.
Second,
assuming the trust fund was used, We—Shred—It would be
entitled to a release of that money up to the point of
abandonment.
Although there would be some cost associated with
tying up this capital,
it would not be the entir-e amount.
Also,
We-Shred-It would have the option of reducing the inventory of
larger chips,
thereby reducing the cOst estimate, and potentially
resulting in a refund
from’ the trust fund
(Section 848.404 and
848.410(f).)
UI 35-0559
8
demonstrated any factors which are “substantially and
significantly different” than those considered in R90—9A or B.
Indeed, the Board looked at this very facility when considering
exempting the 2-inch minus product in R90-9B.
In fact, We—Shred-
It stated in R90-9B that it was getting equipment to make 2-inch
minus product.
(R90-9 Opinion,
p.
4.)
We-Shred-It has not argued
that anything has changed.
The large discrepancies between the costs alleged in the
petitions and the costs adduced at hearing leave the record
insufficient to support the grant of an adjusted standard.
We—Shred-It has failed to establish that a market. exists for~
the 2—inch nominal product.
There appear to have been only a few
sales, mostly for experimental purposes, rather than in the
ordinary course of business.
Individual sales are subject to
approval by the board of directors.
We-Shred-It was unable to
quote a market price for the 2-inch nominal product.
Additionally, We-Shred-It has failed to explain or make
clear its long-term plan.
It has the ability to make 2-inch
minus material, yet it remains unclear
if future production will
be in this form.
Likewise,
it is unclear whether or not
converting the existing pile of 2-inch nominal to 2—inch minus
product is viewed as a viable option.
We—Shred-It’s claims of estoppel and good faith reliance on
Agency advice are not relevant to the justification for an
adjusted standard.
We—Shred-It has failed to sustain its burden of proof
in
this adjusted standard proceeding.
The adjusted standard will
therefore be denied.
This denial does not preclude We-Shred-It
from filing a new petition for adjusted standard,
if
circumstances should change.
Moreover, petitioner is not
precluded from filing a variance petition, to allow time to
comply with the rules3.
This Opinion constitutes the Board’s findings of
f.act and
conclusions of law in this matter.
ORDER
The adjusted standard from
35
Ill. Adm.
Code 848.101,
requested by petitioner,
We-Shred-It,
Inc.,
is hereby denied.
3pursuant to Title IX and
35
Ill. Adm. Code 104, the Board
may grant a temporary variance upon a showing of “arbitrary or
unreasonable hardship”.
The petitioner must have a plan to come
into compliance with the generally applicable rule.
The Board
may grant a variance for up to five years.
0135-0560
9
IT IS SO ORDERED.
Section 41 of the Environmental Protection Act,
Ill. Rev.
Stat.
1991,
ch.
111 1/2,
par.
1041,
provides for appeal of final’
orders of the Board within 35 days.
The Rules of the Supreme
Court of Illinois establish filing requirements.
(But see also
35 Ill. Adm. Code 101.246, Motions for Reconsideration,
and
Castenada v.
Illinois Human Rights Commission
(1989),
132 Ill.2d
304,
547 N.E.2d 437.)
I, Dorothy M. Gunn,
Clerk of the Illinois Pollution Control
Board, hereby certif~that the above opinion
nd
rd r was
adopted on the
_____________
day of __________________________
1992 by a vote of
7—c
.
Dorothy
M. Gu~, Clerk
.
Illinois Pollution Control Board
0135-0561