ILLINOIS POLLUTION CONTROL BOARD

July

13,

1989

IN THE MATTER OF:

THE SITE—SPECIFIC PETITION

)

R 88-19

OF ROADMASTER CORPORATION

PROPOSED RULE.

FIRST NOTICE

OPINION AND ORDER OF THE BOARD

(by

B.

Forcade):

This matter

is before the Board on

a petition for a site—

specific rulemaking filed July

19,

1988 by Roadmaster Corporation

(“Roadmaster”).

Roadmaster seeks relief from the Board’s RACT

II

limitations on the maximum permissible volatile organic matter

(“VOM”) emissions from two flow coater units at its manufacturing

facility near Olney,

in Robinson County,

Illinois.

A public hearing occurred on October

25,

1988 at Olney.

Roadmaster supplemented the record on November

3,

1988,

and

Roadmaster and the Environmental Protection Agency

(“Agency”)

submitted a stipulation on November

7,

1988.

The Department of

Energy and Natural Resources submitted its negative declaration

that an economic impact study was unnecessary on December

7,

1988, and the Environmental and Technical Committee submitted its

concurrence on January

5,

1989.

Roadmaster submitted

a post—

hearing brief on January

20,

1989.

The Agency submitted

a

response brief

on March 10,

1989.

Background

Roadmaster manufactures bicycles,

toy wagons,

tricycles,

exercise equipment, and various

related items at its

17 acre

Olney,

Illinois, factory.

It began

in 1982 after

a purchase of

this facility from

AMF

by the present owners.

Roadmaster

competes in both the U.S and foreign markets.

It

is the only

surviving manufacturer

of bicycles

in Illinois.

It

is one

of

only four remaining domestic producers of bicycles and one

of

ten

wagon producers.

Other manufacturers either moved their

operations overseas

to remain competitive or went out of

business.

In

fact, Roadmaster came into existence when

AMF

planned the closure of

this plant

in

1982.

AMF

lost $8 million

on this operation

in 1981 and $10 million in

1982.

Roadmaster

has stabilized tricycle output and increased toy wagon output

since taking over the facility.

Ex.

4

&

29;

R.

28—49

&

123—24.

Roadmaster produces about 685,000

tricycles and 315,000 wagons

each year.

Its share of

the domestic tricycle market increased

from 60 percent

in 1986

to

67 percent

in 1988.

Its share of the

domestic wagon market increased from 20 to

30 percent

in this

same period.

101—221

---

—2—

The Roadmaster plant employs over 900 workers

(99 percent

from Illinois)

and

is the largest employer

in Richland County.

It

is the largest single location employer

in eleven contiguous

counties.

According

to Stanley Wieber,

the Director of the

Richiand County Development Corporation, 500 local

jobs were lost

in recent years

to plant closings, 760 persons are unemployed,

and 600 local residents need jobs.

7,800 people are unemployed

in adjacent counties.

Richiand County has a population of

17,500.

Roadmaster employs about 12.5 percent of

the local

labor

and 67 percent of the manufacturing labor.

R.

34—35,

39,

43

&

131—34.

Roadmaster participates in highly competitive markets for

its products.

It sells to mass merchants,

such as discount

department stores and sporting goods stores,

where there

is

little clerical help for

a customer.

Therefore,

the product must

sell itself and appearance is important.

Paint

is important to

the appearance.

Also, Roadmaster must have the lowest possible

price because the market

is very price—sensitive.

Imported goods

have gained an increased share of the bicycle market,

from about

20 percent in 1982 to 60 percent

in

1988.

This has placed a

downward pressure on prices for bicycles and rendered the profit

margin thin.

Roadmaster believes

that although the ultimate

consumer might recognize the quality of

its products,

the retail

merchant would not.

These buyers base their decisions on

price.

Roadmaster maintains that a price increase of as little

as

4 or

5 cents would affect sales; an increase of

13 cents would

halve them.

Roadmaster’s average price

for

a tricycle

is about

$13.

Further, Roadmaster

is a capital—consumptive company.

Its

capital spending for the period 1983 through 1987 has averaged

154 percent of net profits.

Its capital spending priorities,

in

decreasing order, are

(1)

for production equipment and repairs,

(2)

for new tooling

for product improvements and new products,

(3)

for cost reductions, and

(4)

for maintenance.

Roadmaster’s

annual capital budget

is about

$500,000.

Ex.

29;

R.

30—46

& 124—

29.

Roadmaster

has a few painting lines, which apply a variety

of coatings and colors.

Before RACT II, Roadmaster’s annual VOM

emissions were 446 tons per year

(“TPY”).

RACT II allows

Roadmaster

to emit

a maximum of about

100 TPY.

Roadmaster

converted most of

its painting to high—solids coatings and

reduced its VOM emissions by 315 TPY

(91 percent of the excess

emissions),

to about

131 TP~,at

a cost of over $100,000.

Those

coatings that Roadmaster has converted are now below the 3.5

pounds of VOM per gallon allowed by the Board’s rules.

See

35

Ill. Adm. Code 2l5.204(k)(2).

However, Roadmaster was

unsuccessful

in bringing its black and white flowcoaters into

compliance,

and the

9 TPY reductions

for the other coatings below

that which

is allowable under RACT

II do not offset

the 40 TPY

excess flowcoater

emissions.

Roadmaster’s black flowcoat paint,

used on its wagon underparts, contains about

5.74 lb/gal VOM, and

101—2

22

---

—3—

its white paint, used on its tricycle wheels and cranks, contains

5.36 lb/gal.

Roadmaster conducted two tests of compliant

coatings at

a cost of over

$10,000,

but these tests

proved

unsuccessful.

Ex. l0—l3~ R.

59—69.

Roadmaster uses flowcoating for its cost efficiency.

It

allows only minimal waste, and

it is an automated process.

The

painting units are large:

about

150 feet long,

30 to

40 feet

wide, and

10 to

12 feet high.

The system, which was designed

in

1962,

sprays paint over the parts, allowing paint to flow over

the part and drain

for reuse.

After coating the parts,

Roadmaster dries and cures the paint

in ovens.

Roadmaster

introduces

its black

flowcoated parts

in one oven together with

electrostatically coated, high solids—painted wagon parts.

It

similarly introduces

the white flowcoated parts

into another oven

together with electrostatically coated tricycle parts.

Roadmaster tested white and black waterborne flowcoat paints

in

1986 and 1987.

Initial

tests of black paint

showed promise, but

problems arose with water contamination of the coatings on the

simultaneously—run electrostatically—coated parts;

a loss of

gloss and unbaked areas

resulted.

Blistering of white waterborne

paints occurred,

and the white paint would not adhere to spokes,

so Roadmaster could not

find a compliant white flowcoat paint.

Further, assuming Roadmaster could find both acceptable black and

white waterborne flowcoatings,

it still could not run waterborne

coatings

at different times

from its electrostatic coatings.

water vapor

would

linger

in

the ovens and cause

the same problems

experienced in running them simultaneously.

Further,

additional

handling,

storage, energy, lost efficiency, and parts damage

costs arise.

Ex.

6—9;

R.

56—59

& 275.

Roadmaster explored three basic presently-available

compliance alternatives:

conversion to high solids black and

white paint, conversion of black

to waterborne and white

to high

solids, and the use of add—on controls

(thermal oxidizers).

Roadmaster

found

that add-on controls were the least costly

alternative.

Alternative No.

1 involved the removal

of the

existing flow coaters and installation of new equipment

for the

electrodeposition of high solids paint.

The capital cost of this

alternative

is $374,400,

and

the annual operating cost

is

$76,518.

The total annualized cost

of the first alternative

is

$142,787.

This alternative has

a lower coating

transfer

efficiency than flowcoattng,

and

it would require additional

labor

for touch—up of inadequately painted parts.

Alternative

No.

2 would require removal

of the

white

flowcoater, similarly to

Alternative No.

1,

but the conversion of the black

line

to

a

waterborne paint.

This would

require an additional bake oven.

Its capital cost is $397,200,

its operational cost is $63,653,

and

its overall annualized cost

is S133,957.

Alternative No.

3

would require installation of some type of thermal oxidizer and

ducting

to vent air from the paint areas.

These areas are widely

scattered throughout Roadmaster’s plant.

1fl1-~223

---

—4—

Roadmaster examined the alternatives of a standard

incinerator,

a standard incinerator with heat

recovery,

a

catalytic incinerator, and a regenerative—type system for

Alternative No.

3.

Roadmaster found that a standard incinerator

and a regenerative—type incinerator were the most cost

effective.

For a standard incinerator with a primary heat

exchanger, the capital cost is $394,500, the annual operating

cost

is $57,900, and the overall annualized cost

is $127,727.

For a regenerative—type unit,

the capital cost

is $499,000,

the

operating cost is $48,993, and the overall annualized cost

is

$137,316.

Roadmaster used the standard incinerator with primary

heat recovery for estimation of its cost

of compliance under

Alternative No.

3.

Not included in this estimate is the cost of

a plant shutdown for its installation nor the cost of

a second

unit,

should a single unit

prove inadequate to fully reduce the

VOM emissions.

Ex.

14—22;

R.

77—105.

Based on the minimum $127,724 annualized cost of compliance,

using an incinerator with

a primary heat exchanger, and an

estimated VOM emissions reduction of 40.1 TPY, Roadmaster

estimates its cost of abatement at $3,185 per ton of yaM.

Ex.

22;

R.

84.

This estimated cost of compliance

is higher than the

estimated normal RACT II cost of

$1,708 per ton (1987 dollars)

for

a miscellaneous metal parts and products surface coater

located in an attainment area.

See Ex.

23

&

24;

R.

106—07.

Calculated on a per unit of tricycles and wagons basis,

Roadmaster estimates

that this would require a 12.8 cent price

increase.

Ex.

28;

R.

123—24

& 127.

Roadmaster asserts that this

expenditure would consume about

25 percent of its capital budget

and/or result

in a loss of half its current business.

R.

39

&

126—27;

see Ex.

29.

Crawford County is an attainment area for ozone.

See 40 CFR

81.314

(1988).

The neareast non—attainment areas are East St.

Louis

(120 miles

west),

Indianapolis (150 miles northeast), and

Chicago (230 miles north).

The Effingham,

Illinois, monitoring

station

(40 miles northwest)

indicated no ozone excursions from

1984 through 1987.

The Marion,

Illinois, station

(80 miles

southwest and now closed)

showed none for 1984 through 1986.

Ex.

25;

R.

112.

In support of its request

for relief, Roadmaster highlights

the

fact that its largest domestic competitor,

Huffy Corporation

at Celina,

Ohio,

recently obtained a site—specific exception for

its VOM emissions.

Roadmaster believes that this relief confers

a competitive advantage on Huffy.

R.

37.

Celina, Ohio,

is an

attainment

area, and the Ohio rule does not allow an increase

in

emissions,

so the

U.S’.

Environmental Protection Agency approved

it as

a revision

to Ohio’s State Implementation Plan.

Ex.

26

(a

copy of

52

Fed. Reg.

10241—32

(Mar.

31,

1987)); Nov.

3,

1988

Supplement

to Record

(copy

of Ohio Adm. Code 3745-2l-09(U)(2)(j)

(The Huffy Corporation site—specific exception)).

Roadmaster

1’~1—224

---

—5—

also highlights a site—specific VOM exception the Board proposed

for John Deere Harvester—Moline for

its flowcoating operations

in

R87—1.

R.

118; see Ex.

27

(copy of R87—l May 19,

1988 Proposed

Opinion and Order,

now codified as

35

Ill. Mm. Code 215.206(c)).

For the foregoing reasons, Roadmaster requests that the

Board adopt a site—specific rule granting

it an exception for the

VON emissions from its black and white flowcoaters.

Roadmaster

requests a ceiling of

5.9 pounds of VOM per gallon of paint,

which would allow running exclusively black paint with a modest

margin for variation

(0.16 lb/gal).

R.

64.

Roadmaster also

requests that the Board base the rule on weekly averaging,

to

account

for daily and seasonal variations.

R. •63.

Roadmaster

maintains that this requested relief does not embrace new

flowcoaters, but only the existing units

——

to allow their

continued present operation.

R.

70.

This

is the extent of

relief

that the State of Ohio granted Huffy.

R.

151—52.

The

weekly average basis derives from the relief

the Board granted

Deere.

R.

118.

The text

that Roadmaster proposes

is as follows:

Notwithstanding

the

limitations

of

Section

215.204(j)(3),

the

Roadmaster

Corporation,

Olney,

Illinois,

shall

not cause or permit the

emission of volatile organic material from its

existing

black

and

white

flowcoating

opera-

tions

to

exceed

a

weekly

average

of

5.9

lb/gal.

The Agency stipulates that the requested relief would allow

Roadmaster

to emit

39.5 TPY

in excess of the existing rule.

This

stipulation expresses concurrence that the minimum annualized

cost of compliance

is $127,727,

by using

an add—on incinerator

with

a primary heat exchanger, and the minimum cost of control

is

$3,234 per ton of VOM eliminated.

The Agency stipulates that the

Board should grant

the requested relief with conditions,

and

Roadmaster stipulates

to the following conditions:

A.

That

Roadmaster

contact

a

reasonable

number of

paint vendors

each year in the

continued search

for

a

compliant coating

which

can

be

used

successfully

in

its

present

flowcoating/oven

operations,

including

the

contacting

of

any

paint

vendors which the Agency has a reasonable

belief have a compliant coating which can

be

successfully

used

in

Roadmaster’s

present flowcoating/oven operations;

B.

If

any

vendor

provides

Roadmaster

with

laboratory test results which demonstrate

a substantial

likelihood that

a paint can

be

successfully

used

in

the

Roadmaster

101—225

---

—6—

flowcoater

and

oven,

Roadrnaster

will

do

production tests of that paint;

C.

Roadmaster

will

submit

an

annual

report

to

the

Agency

each

year

which

will

include

a summary of

its compliance with

the

foregoing

conditions

contained

in

Paragraphs A and B above; and

D.

If

Roadmaster

locates

a

compliant paint

that

it

can

successfully

use

in

its

present

flowcoating

operation

and

oven,

which

is

economically

reasonable,

Roadmaster agrees to switch to the use

of

complaint paint

within

a

reasonable time

after

the

location and testing of such

a

paint.

The Board proposes

a

rule that grants

the requested relief

with conditions substantially similar to those stipulated by the

Agency and Roadmaster.

The record supports several conclusions

favoring such relief.

First, Roadmaster

is

located in an attain-

ment area for ozone,

so RACT

II compliance

is not required by

federal

law.

Second,

the estimated VOM emissions in excess of

the present

rule would not likely cause or contribute to a

violation of the NAAQS

for ozone.

Finally,

requiring Roadmaster

to achieve compliance with the existing

rule would

impose an

economic hardship on Roadmaster.

Therefore,

site—specific relief

from the generally—applicable RACT

II rules

is warranted for

Roadmaster.

However,

the Board

is sensitive to the concerns underlying

the Agency’s request for conditions.

It

is possible that further

diligence on

Roadmaster’s part over time might disclose a com-

pliant coating

that would allow Roadrnaster

to achieve compliance

witri

the general RACT II limitations at

a reasonable cost and

without unacceptable degradation of product quality.

For this

reason,

the Board proposes the suggested conditions with modifi-

cations.

The first modifications relate to the style of

a few

phrases.

The

rule must comport with requirements of the Illinois

Administrative Code.

Phrases such as “reasonable number,”

“reasonable belief,” “successfully used,”

“substantial

likelihood,” and “economically reasonable” may be found to lack

the specificity required by the Illinois Administrative Code.

The Board strongly encourages

the participants

to provide

alternate,

and more s~ecific, language

to replace these

phrases.

In some instances,

the Board has selected more specific

language and invites comment on the chosen language.

The second

modification

is to add a sunset provision to the proposed

rule.

The Board believes such

a provision

is appropriate where the

101—226

---

—7—

technology of complaint coatings

is developing rapidly and the

rule involved requires the regulated entity to undergo an ongoing

search for complaint coatings.

The Board believes

a five—year

life is appropriate.

Roadmaster can petition for a change

in

this sunset date as the deadline approaches if

it has not found

a

compliant coating.

The Board proposes the following language for

the rule,

new subsection

35 Ill. Adm. Code 215.206(d):

Notwithstanding

the

limitations

of

Section

215.204(j)(3),

the

Roadmaster

Corporation,

Olney,

Illinois,

shall not cause or permit the

emission of volatile organic material from its

existing

black

and

white

flowcoating

opera-

tions

to

exceed

a

weekly

average

of

5.9

lb/gal;

Roadmaster

shall

fulfill

all

of

the

following conditions:

1)

Roadmaster

shall

contact

at

least

three

paint

vendors

each year

in

a

continuing

search

for

a

compliant

coating

that

it

can

successfully

use

in

its

existing

flowcoating/oven

operations,

including

any paint vendors suggested by the Agency

in

a

writing

delivered

to

Roadmaster

by

certified mail;

2)

If

any

vendor

provides

Roadmaster

with

laboratory test results which demonstrate

a

substantial

likelihood that Roadmaster

might

successfully

use

a

paint

in

its

existing

flowcoater

and oven,

Roadmaster

will

conduct

production

tests

of

that

paint;

3)

Roadmaster

will

submit

a

report

to

the

Agency

by

March

1

of

each

year

that

includes

a summary

of

its efforts during

the

preceding

calendar

year,

as

those

efforts relate

to Roadmaster’s compliance

with

the

foregoing

conditions

contained

in subsections

(1)

and

(2),

above;

4)

If Roadmaster

locates

a

compliant

paint

that

it

can

successfully

use

in

its

existing flowcoating operations at a cost

of

less

than

$100

per

gallon

(in

July

1989

dollars),

Roadmaster

shall

convert

its present flowcoating operations to the

use

of

that

paint

within

180 days

after

the

final

successful

testing

of

such

a

paint; and

101—227

---

—8—

5)

Subsection

215.206(d)

shall

expire

on

January

1,

1995, at which time Roadmaster

shall

comply

with

the

provisions

that

generally apply

to VOM emissions.

The Board invites comments on this proposed rule.

Specifically,

the Board invites comments on the propriety and

viability of various of the conditional requirements:

1.

Is

three

a

“reasonable

number

of

paint

vendors,”

as intended by the Agency?

2.

Is

there

a

more

definite

way

to suc-

cinctly

define what test results “demon-

strate

a

substantial

likelihood

that

Roadmaster might successfully use a paint

in its existing flowcoater and oven”?

By

the use of this phrase, the Board intends

that

successful

use

is

contingent

on

Roadmaster

finding an economical

coating

that

gives

an acceptable coating quality

without giving other unacceptable adverse

results.

However,

the

Board

recognizes

the potential for ambiguity in the chosen

proposed

language

and

would

welcome

any

suggestion of more objective language.

3.

Similarly,

is

there

a more definite way

to

succinctly define

what constitutes

“a

compliant

paint

that

it can successfully

use”?

The Board directs attention

to the

above comment

in this regard.

4.

Is

there

a

more

appropriate

price

per

gallon

or

other

trigger

for

determining

when

Roadmaster

must

convert

production

to

a compliant paint?

The Board randomly

selected

the

$100

per

gallon

threshold

without

any

indication

in

the

record

of

what

constitutes

a

reasonable

price

for

paint.

The Board selected this mechanism

to add definition

to the phrase “economi-

cally

reasonable,”

as

suggested

by

the

Agency.

It

is

possible

to construe such

a

rule bearing the word “reasonable” as a

Board delegation of its standards—setting

authority

to

the Agency,

in

derrogation

of

the Act

provisions

that

reserve

this

authority

to

the

Board.

See

1l.

Rev.

Stat.

ch.

111—1/2, pars.

1004

& 1005.

101—228

---

—9—

5.

Is

the

use

of

a

sunset provision appro-

priate?

lf

so,

was

the

selected

five

year

limitation

on

the

rule,

until

January

1,

1995,

appropriate?

ORDER

The Board hereby proposes the following rules

for First

Notice publication and directs the Clerk

of

the Board to file

them with the Office of the Secretary of State.

TITLE 35:

ENVIPDNMENTAL PROTECTION

SUBTITLE B:

AIR POLLUTION

CHAPTER

I:

POLLUTION CONTROL BOARD

SUBCHAPTER

C:

EMISSIONS STANDARDS AND LIMITATIONS FOR

STATIONARY SOURCES

PART 215

ORGANIC MATERIAL EMISSION STANDARDS AND LIMITATIONS

SUBPART F:

COATING OPERATIONS

Section

215.202

215.204

215.205

215.206

215.207

215.208

215.209

215.210

215.211

215. 212

215.213

Compliance Schedules

Emission Limitations for Manufacturing Plants

Alternative Emission Limitations

Exemptions

from Emission Limitations

Compliance by Aggregation of Emission Sources

Testing Methods for

Solvent Content

Exemption from General Rule on Use of Organic Material

Alternative Compliance Schedule

Compliance Dates and Geographical Areas

Compliance Plan

Special Requirements for Compliance Plan

Section 215.206

Exemptions from Emission Limitations

a)

The limitations

of

this Subpart shall not apply

to:

1)

Coating plants

whose emissions of

volatile organic

material as limited by the operating permit will

not exceed 22.7 Mg/year

(25

T1’year),

in the absence

of air

pollution control equipment;

or

2)

Sources used exclusively for chemical or physical

analysis or determination of product quality and

commercial acceptance provided that:

A)

The operation of the source

is not an integral

part of

the production process;

101—229

---

—10—

B)

The emissions from the source do not exceed

363 kg

(800 ibs)

in any calendar month;

and

C)

The exemption

is approved

in writing by the

Agency.

3)

Interior body spray coating material for three—

piece steel cans used by National Can Corporation

at

its Rockford can manufacturing plant

in Loves

Park, Illinois, provided that:

A)

The emission of volatile organic material from

the interior body spray coating line shall not

exceed 0.70 kg/l

(5.8 lb/gal)

of coating

material, excluding water,

delivered to the

coating applicator;

and

B)

The emission of volatile organic material

shall comply with the provisions of Section

215.204 by use of the internal offset

provisions of Section 215.207 computed on a

weekly weighted average basis.

b)

The limitations of Section 215.204(j)

shall not apply to

the Waukegari,

Illinois,

facilities of the Outboard

Marine Corporation,

so long as the emissions of volatile

organic material

related to the surface coating of

miscellaneous metal parts and products at those

facilities do not exceed

35 tons per year.

c)

Notwithstanding the limitations of Section

2l5.204(k)(2), the John Deere Harvester—Moline Works

of

Deere

& Company, Moline,

Illinois, shall not cause or

permit the emission of volatile organic material from

its existing green and yellow flocoatiny operations

to

exceed

a weekly average of

6.2 lb/gal.

~J

Notwithstanding the limitations of Section

2l5.204(j)(3), the Roadmaster Corporation, Olney,

Illinois,

shall

not cause or permit the emission of

volatile organic material from its existing black and

white flowcoating operations to exceed a weekly average

of 5.9 lb/gal;

Roadmaster

shall fulfill all of the

following conditions:

~j

Roadmaster

shall contact at

least three paint

vendors each year

in

a continuing search for

a

comp1ia’n~c~±nthat it can successfully use_in

any

paint

vei~Jcrs

sucjgested

by

the

Agency

ma

writing delivered

to Roadmaster

by certified mail

101—230

---

—11—

~J

If any vendor provides Roadmaster with laboratory

test results which demonstrate a substantial

likelihood that Roadmaster might successfully use a

paint

in its existing flowcoater and oven,

Roadmaster will conduct production

tests of that

paint

~j

Roadmaster will submit a report to the Agency by

March

1 of each year that includes a summary of its

efforts during

the preceding calendar year, as

those efforts relate to Roadmaster’s compliance

with the foregoing conditions contained

in

subsections

(1)

and

(2), above

~J

If

Roadmaster

locates a compliant paint that

it can

successfully use in its existing flowcoating

operations

at

a cost of less than $100 per gallon

(in July 1989 dollars), Roadmaster

shall convert

its present

flowcoating operations

to the use of

that paint within 180 days after the final

successful

testing of such

a paint;

and

~J

Subsection

215.206(d)

shall

expire on January

1,

1995, at which time Roadmaster

shall comply with

the provisions that generally apply to VOM

emissions.

(Source:

Amended at

Ill. Reg.

_____

,

effective

____________

)

IT IS SO ORDERED.

I,

Dorothy M.

Gunn,

Clerk of the Illinois Pollution Control

Board,

hereby certify that the above First Nptice Opinion and

Order was adopted on the

/~‘z/~

day of

~

1989,

by a vote of

7—v

.

Dorothy

M.,,çkinri, Clerk

Illinois ~‘9’1lutionControl Board

101—231