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

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