ILLINOIS POLLUTION CONTROL BOARD

April

 16, 1987

AMERICAN STEEL CONTAINER

 CO.,,

PAIL SHOP,

Petitioner,

V..

)

 PCB 86—22

ILLINOIS ENVIRONMENTAL PROTECTION

)

AGENCY,

Respondent,

and

AMERICAN STEEL CONTAINER

 CO..,

DRUM SHOP,

)

Petitioner,

v..

)

 PCB 86—23

)

ILLINOIS ENVIRONMENTAL PROTECTION

AGENCY,

Respondent..

ERICA TINA HELFER APPEARED ON BEHALF OF PETITIONER; AND

LISA MORENO APPEARED ON BEHALF OF RESPONDENT..

OPINION AND ORDER OF THE BOARD

 (by J~Anderson):

On February

18,

 1986, American Steel Container

Co1

 (ASCC)

filed two petitions

 for extensions until December

31,

1987

of

prior variances from the volatile organic emissions limitations

contained

 in 35 Ill.

 Adin.,

 Code 215..204,

 2151211 and 21512121

PCB

86-22

is

 a request for extension of the variance granted

 in PCB

83—115 for operations

 of the ASCC Pail Shop1

 PCB 86—23

is

a

request for extension of the variance granted in PCB 83—114 for

operations of the ASCC Drum Shop,

 Amended petitions were filed

 in each action on April 15 and May

9,

 1986..

On January 14,

 1987, the Agency filed

 a Recommendation

in

each case that variance be denied.

 The Agency’s opinion was that

ASCC had failed

 to show satisfactory progress towards compliance

77-131

—2—

during

 the terms of the prior variances, had made a deficient

showing concerning environmental impact of its excess emissions,

and failed

 to produce satisfactory compliance plans demonstrating

that compliance would be achieved by December

31,

 1987..

Pursuant

 to Order

 of the Hearing Officer, these cases were

consolidated

 for the purposes of testimony and hearing..

 A single

hearing was held on January 20,

 1987, at which no members of the

public were present..

 Testimony was presented concerning both the

ASCC Pail Shop and the ASCC Drum Shop by ASCC President Mark

B..

Spitz and by Harish Narayen, a member of the Agency’s Field

Operation Section.

 ASCC presented

 a new compliance plan which

covers both its Pail Shop and its Drum Shop, which involves

ducting of the emissions from the Drum Shop’s spray booths and

ovens to the existing drum incinerator and using what ASCC terms

as the “bubble concept”

 or what

 is more properly the internal

offset provision of 35

 Ill..

 Adm..

 Code

 2l5..207

 to offset the

emissions from the Pail Shop against the emission reductions

to

be achieved

 in the Drum

 Shop..

ASCC filed closing briefs

 in each action on February 24 and

the Agency filed closing briefs on March 10,

 1987..

 In each of

its briefs the Agency stated that

 it continued to believe that

variance should be denied, but that

 in light of the compliance

plan presented at hearing,

 “the Agency does not maintain the same

strong opposition to the variance extension that

 it held prior to

the presentation of the compliance

 plan..”

 (Briefs,

 p..2)..

Prior

 to reaching

 the merits of this action, the Board will

initially note that the Hearing Officer correctly stated that

it

was within his authority to consolidate these actions for the

purpose of expeditiously conducting hearing, but that only the

Board can consolidate them for decision..

 Based on the fact that

the Drum Shop and the Pail Shop have contiguous locations and the

inter—relationship of the proposed compliance plans,

 the two

petitions were appropriately consolidated for hearing..

 Moreover,

the Board

 finds that consolidation of these actions for decision

is

 in the interests of administrative economy,

 and hereby so

orders on its own motion..

THE ASCC FACILITY

ASCC is located at 4445 West Fifth Avenue, Chicago,

Illinois..

 The area surrounding ASCC is primarily industrial with

residential homes within a one or two block radius

 (R..6)

 ASCC

has never received any complaints from any of its neighbors about

emissions from its facility

 (R..7)..

ASCC

 is a small privately held,

 family—owned

 company..

The

Pail Shop manufacturers new five—gallon steel

 pails..

 The Drum

Shop manufacturers new fifty—five gallon steel drums and

reconditions thirty and fifty—five gallon steel

 drums..

 ASCC’s

77-132

—3—

customers use these steel containers

 for shipment of food,

adhesives, paints, and specialty chemicals

 (R.7—8)..

 ASCC

president Mark Spitz has been employed at ASCC for

 9 years and

is

involved

 in all aspects of ASCC’s business from administration,

manufacturing, sales and personnel

 to actual physical labor

in

the plant

 (R..8—9)..

Pail Shop

The Pail Shop employs approximately twenty—five workers and

shares approximately twenty clerical workers, supervisors, sales

people, maintenance workers, and drivers with its drum shop

located

 in the building

 to the west of it

 (R..7—13)..

The average shift each day is from 7:00

 a..m..

 until 3:00

p..m..,

 five days

 a week,

 fifty—two weeks a year

 (R..l4—l5)..

The

pail shop is presently running with excess capacity

 in that

it

has the capability of running a second shift if the business

demanded

it

 (R..15)

 The maximum capacity for the facility is six

to seven thousand pails a day

 (R..15)..

The pails manufactured by ASCC are all lined

 in some form,

thirty to forty percent with a pigment lining

 and the remainder

with a rust inhibitor

 (R.26,65)..

 Each pail

 is manufactured with

pre—purchased steel, cut into the size required by the customer’s

order, and run through

 a grinder, where the edges are ground. to

make the weld easier

 (R.l9)..

 The steel

 is then seamed by a

welder

 and sent through a beater

 flanger, where the top edges are

rolled down and hoops are formed around the pail to strengthen

it

(R..20).

 The pail

 is then inverted and the bottom

 is placed on

and seamed by the welder

 to the side of the pail

 (R..20)..

 Once

this

 is done, the pail

 is turned upright, and sent to the air

welder, where two ears are put onto the side walls

 (R..20)..

 Then

each pail

 is sent

to

 a testing location where

it

 is submerged in

water

 and tested

 for leaks

 (R.20)

 If the pails do not contain

leaks, they are sent to the internal spray booth where,

 depending

upon customer

 requirements, the pail would be lined with either

a

rust inhibitor or

 a pigmented lining system

 (R..20)..

 If lined,

the pail would proceed through the curing oven before being sent

on through the exterior spray booth, through the exterior curing

oven, and

 to a station where the handles are put on the pails

(R.20—2l)..

 Finally, the pails are palletized

 and loaded on

trailers for shipment

 to ASCC’s customer

 (R.,2l)..

The pail shop has one interior and one exterior spray booth

and one interior and one exterior curing oven

 (R..21)..

 The paint

spray system used

 is made by

 a company called Kraco

 (R..49)..

All new pails are manufactured by customer order

and

specifications; ASCC does no warehousing or manufacture for

inventory

 (R..30)

 In order

 to accomplish efficient production,

77-133

—4—

ASCC has attempted to maintain

 a minimum size of production of

a

thousand pail units

 (R..30)..

ASCC must meet customer specifications for coating and

lining with respect to mar resistance, chemical resistance and

FDA approval, as well

 as whether

 the lining should be straight

phenolic, modified phenolic, straight epoxy, modified epoxy, or

clear

 epoxy

 (R.30—32,66—68)..

 If ASCC did not satisfy these

customer requirements,

 it could lose business as well as

subjecting itself to product liability claims

 (R..3l—33).

ASCC Drum Shop

The Drum Shop employs approximately fifty workers and, as

noted above, shares approximately twenty clerical workers,

supervisors,

 sales people, maintenance workers, and drivers with

its pail shop located

 in the building

 to the east of

it

 (R..7—l3)

The drum shop runs two shifts each day, the first from 7:00

a.m.. until 3:30

 p.m.. and the second from 3:30

 p.m..

 to 8:30

 p..m.

five days

 a week, fifty—two weeks a year

 (R..l4—15)..

 The first

shift

 runs reconditioned drums;

 the second shift runs

reconditioned tight lead drums and new drums

 (R..14—15)..

 The drum

shop is presently running with excess capacity in that it has the

capability of running

 a third shift

 if the business demanded

it

(R,l5).

 The maximum capacity

 for the facility is

 sixteen to

eighteen hundred drums

 a day

 (R..l5).

The plant runs approximately 50

 each of open head and tight

head drums, thirty to forty percent of which are lined

 (R.5,62—

63)..

 Each new drum is manufactured with pre—purchased steel,

which has been phosphatized at the mill so that unlined drums do

not need

 an additional coating

 (R..62—63)..

 The steel

 is cut into

the size required by the customer’s order, and run through a

grinder, where

 the edges are ground

 to make the weld easier

(R..6l)..

 The steel

is

 then seamed by

 a welder on the sides and

bottom

 (R..61)..

 If the drum

is

 to be lined with

 a pigmented

lining system,

it

 is sent

 to the internal spray booth where,

depending upon customer requirements, the drum would

 be lined

with some type of pigmented lining system

 (R..17—lB)..

 If lined,

the drum would then proceed through the interior curing oven

before being sent on

 to a testing

 location..

 Each drum,

 lined or

unlined,

 is sent to a testing location where

 it is submerged

in

water and tested

 for leaks

 (R..17)..

 If the drums do not contain

leaks,

 they are

 then sent through the exterior spray booth,

through the exterior curing oven, and, finally,

 the top is placed

on the drums and they are loaded on trailers for shipment

to

ASCC’s customer

 (R..17—l9)..

Reconditioned drums are processed similarly.

 First,

however,

 the drum would be placed on a conveyor

 to the rear of

the plant where

 the head

 is removed

 (R..16)..

 The drum proceeds

77-134

—5--

along

 the conveyor

 to the incinerator where

 the drum is heated

in

a gas fired burner

 to remove any contents and

 to remove any

materials from the outside of the drum (R..16—17).

 The drum

is

then sent through a horizontal or vertical wheel abrader, where

steam

 is shot into the drum to further clean

it

 (R..17)..

 After

cleaning,

 the drum is lined with a rust inhibitor

 (R.l7)..

 If the

drum is

 a tight head drum and not

 to be further lined,

 it would

proceed

to

 a seamer which welds

 a new head back on the drum;

if

the drum is an open head drum and not to be further lined,

 a used

head

 is put on the drum

 (R..17)..

 If the drum is to be lined with

a pigmented lining system, the procedure is much the same as with

new drums

 (R.17—l8)..

 Following these procedures,

 each drum is

sent to a testing location where

 it is submerged

 in water and

tested for leaks

 (R..l7)..

 If the drums do not contain leaks, they

 also proceed

 through the

 stages of exterior coating, curing and

loading as do the new drums

 (R..17—19)..

The drum shop has one

 interior and one exterior spray booth

and one interior and one exterior curing oven

 (R..19)..

 The paint

spray system used

 is made by a company called Nordsum

 (R..49)..

All new drums

 are manufactured by customer order and

specifications; ASCC does no warehousing or manufacture for

inventory

 (R..30)..

 In order

 to accomplish efficient production,

ASCC has attempted

 to maintain

 a minimum size of production of

one hundred drum lots

 (R..30).,

ASCC must meet customer specifications for coating and

lining with respect to mar

 resistance, chemical resistance and

FDA approval, as well

 as whether

 the lining should be straight

phenolic, modified phenolic, straight epoxy, modified epoxy, or

clear

 epoxy

 (R.30—32,66--68).

 If ASCC did not satisfy these

customer requirements,

 it could lose business and be vulnerable

to severe product liability claims

 (R..31—33)

MARKET PRICES AND CONDITIONS

In general, the market

 for steel shipping containers is

under severe competitive pressures with too much capacity and not

enough demand

 (R..26)..

 In addition, manufacturers from New Jersey

and Cleveland are shipping their product into the Chicago market,

 contributing to the already flooded supply of pails

 (R..29).

The pail industry has not had

 a price increase

 in almost

five years

 (R.,26).

 The present market price

for

 a new pail,

depending on the type

 is between $l..90

 and $2.50 per pail

(R..26)..

 This price

 is down approximately $0.50 per pail from the

price per pail three years ago

 (R..28).,

Similarly, the new and reconditioned drum industry has not

had a price

 increase

 in almost five years

 (R..26)..

 The present

market price

for

 a new drum,

 depending on the type,

 is between

77-135

—6—

$14.00

 and $20..00 per drum

 (R.25)..

 The present market price for

a reconditioned drum,

 depending on the type,

 is between $9.00 and

$15.00 per drum (R.25).

 These prices are down approximately

$0.50

 to $1.00 per drum from the price per drum three years ago

(R..28)

Moreover, the competition

 in the marketplace

 is further

complicated by manufacturers of non—steel shipping containers..

ASCC faces competition from like—manufacturers as well as

competition from manufacturers of fiber containers, tote tanks,

plastic containers,

 bulk containers,

 and wagons

 (R.36)..

 These

non—steel types of shipping containers, particularly tote tank

and plastic containers, have been a severe depressant on the

pricing structure of steel pails

 (R..27).,

 ASCC states that the

growth outlook for steel containers

 is fair

 to bleak

in

comparison to non—steel containers

 (R..27)..

 As an example, ASCC

has lost between ten and twenty percent of

 its market share

to

non—steel shipping containers

 (R..27)..

ASCC FINANCIAL CONDITION

Adding

 to the effect of the general market conditions on

ASCC’s business and the decreased prices which can now be charged

for its product,

 is the increased costs that ASCC has had

 to bear

over the past three to five years..

 Direct labor costs

 in the

form of salaries for laborers have increased by two to three

percent

 in the last five years, electric, gas and water utility

bills have significantly increased,

 liability insurance has

increased six

 fold since

 five years

 ago, and waste disposal costs

have climbed four hundred percent

 in the same time period

(R.37)..

 ASCC’s cost of materials such as steel and coatings have

also increased each year

 (R..68—69)..

On the other

 hand, ASCC’s income from sales has decreased

over the years and its return on investment

 is categorized by

 Mr..

Spitz as “nebulous”

 (R..36—37)..

 Overall, the company’s after—tax

profit has decreased each year from that of the year before

(R.38)

PAST COMPLIANCE EFFORTS

ASCC has explored use of powder coatings, electrostatic

application, water-based coatings, use of methylene chloride,

afterburners, vapor recovery, and carbon absorption as means of

attaining compliance

 (R..5l—56)..

 However,

 its investigation has

primarily been concentrated

in

 a testing program for high solids,

low VOC exterior coatings

 (R..38—50).

 ASCC has hoped

 to find

exterior coatings sufficiently low in VOC content and suitable

for its customer’s requirements, thereby allowing for offset of

the VOC content of its interior linings, pursuant

 to Section

2l5..207.,

77-136

—7—

In

 this regard, ASCC has looked at and tested high solid

coatings from at least six to twelve different companies,

including W.

 C.. Richards, Pioneer, Whittaker, Vaspar, Federal

Paint and Shields Coatings

 (R..38—39)..

 In order

 to handle these

high solids paints, which are much more viscous than the paints

otherwise used by ASCC, ASCC was required to purchase new heaters

and pumps at

 a cost of approximately $12,000.00

 (R..48—49)..

 Trial

runs of these coatings have been primarily with black and white

 paint; colors such as blue,

 green,

 red and orange are not readily

available

 in high solids, low VOC contents

 (R..38--39)..

Between April

1,

 1985 and the date of the hearing

 in this

matter, ASCC had performed test runs on various paints, the

results of which are documented

 in detail

 in the Quarterly

Reports submitted

 to the Agency pursuant to the Board’s prior

variance orders,

 (Exhibit D to Amended Petition for Variance;

Attachments B and C to Agency Variance Recommendation of IEPA;

Exhibits

 to May

 9 Supplement to Amended Petition for Variance)

These test have been run on the drums manufactured by ASCC rather

than the pails because the company believes that any findings

from the

 tests run on the drums are easily convertible

 to use

for

the pails..

 ASCC further believes that testing of the drums is

“synonymous” with testing of the pails;

 Mr.. Spitz stated that

paints that test well or poorly on the drums would test the same

on the pails

 (R..43—44,75)..

In general, ASCC has continually found over the years that

high solids, low VOC content coatings are unacceptable due to

poor drying, lack of abrasion and mar resistance,

 and poor gloss

to the

 finish

 (‘R.41—42)

 Additionally, the high solids coatings

were twice as thick as other enamels, providing problems

in

application as well as costs

 (R..41—42)..

 Based upon the tests run

by ASCC,

 the high solid coatings do not meet industry standards

for requirements

 for appearance and use

 (R.43).

Further, high solids coatings costs $12

 to $15 per gallon as

compared

 to $5

 to $6 per drum (gallonage unspecified)

for

coatings presently used by ASCC..

 The enamel presently used coats

approximately two to three truck loads

 of product per drum..

Thus,

 in order

 to break even and bear this increased cost,

 ASCC

asserts

 it must be able

 to coat four to six truckloads of product

per drum with high solids coatings

 (R..42)..

 However, ASCC has not

been able to achieve this result in practice

 (R.70)..

 ASCC has

found, therefore,

 that

 in addition to all the application,

appearance, and customer approval problems

 it has experienced,

the actual costs of using high solids coatings would be fifty to

one—hundred percent higher than the cost of using

 its present

coatings

 (R..47—48,76)..

 The increased cost cannot be passed on to

its customers,

 and ASCC asserts

 it cannot operate at a profit

if

such costs cannot be passed on

 to customers

 (R..48).

77-137

—8—

ASCC has done very little testing on interior coatings.

Mr.

Spitz stated that until approximately six months ago “there was

nothing that met the VOC requirements” and therefore,

 “there

wasn’t any sense in doing any testing of something that didn’t

meet the VOC levels”

 (R..45),

 Whittaker, however, has recently

begun marketing

 a water—based interior coating with 3.8 to

 4..0

lbs/gal VOC content (R.45).

 ASCC ran fifteen gallons of this

product through its system and sprayed about six drums with

 it..

It took some MEK

 (methyl ethyl ketone)

 rubs after the drums were

cured

 to see if the lining system adhered

 to the steel.

The

initial

 findings of the lining were “not bad”

 (R,45,64—65)..

However, ASCC states that the problem was

 in the fact that the

coating

 is water—based

 (R..40,45,65)..

In this regard, ASCC has found numerous problems with water—

based coatings and linings..

 ASCC has previously tested water—

based exterior coatings and found the gloss,

 adhesion, and mar

resistance to be unsatisfactory and the product tends

 to spin

around when loaded on the trucks

 (R..71).

More significantly, however, water—based coatings are

completely incompatible with the present solvent system in use at

ASCC..

 In order

 to use water—based coatings or linings, ASCC

would need

 to completely revamp its lining and coating system

(R..40)..

 Unless the entire line

 is purged before and after

running

 a water—based paint,

 the entire system may become

contaminated

 (R..40,46)..

 The cost of converting its system

 is one

that ASCC asserts

 it cannot bear

 (R..45).

 Thus, ASCC believes

that until the paint companies are able

 to offer water—based

coatings and linings

 in the full range of product, such as clear

phenolic, pigmented phenolic, epoxy pigmented phenolic,

 clear

epoxies,

 and rust inhibitors,

 use of one of these water—based

products alone places ASCC at a tremendous risk of contamination

(R.40,45—46)

Equally important to ASCC is the fact that the manufacturers

of water—based products are unwilling or

 unable to guarantee the

product and thereby provide the necessary assurances regarding

product liability (R.40,45—46)..

 ASCC asserts that it

 is not, nor

should

 it be,

in

 a position

 to bear that cost burden either

(R,45)

As mentioned above, ASCC has

 in the past explored other

methods of complying with VOC regulations.

All

 of the past

efforts have proved fruitless.

 Powder coating machines produced

totally unfavorable results,

 including the failure of the coating

material

 to resist harsh chemical exposure required of the

 containers and the unacceptable obliteration of poison labels or

customer use directions appearing on the containers

 (R..49—54,

Exhibit A to Amended Petition for Variance)..

 The cost of

electrostatic application

 is asserted to be prohibitive due

to

high installation and maintenance costs relative

 to the marginal

77-138

—9—

removal of emissions..

 In addition, this technique

 is essentially

infeasible

 for exterior coating because of the multi—color

application..

 Also,

 interior coating could not be applied with

electrostatics because the joint between the bottom and the side

of the container will cause “grounding out” and the paint will

not penetrate into the corner joint (R.49—54; Exhibits A and

 B to

Amended Petition for Variance)..

 The use of methylene chloride or

l,l,l—trichloroethane is not possible since direct exposure of

these materials to the necessary baking

 temperatures produces

hydrochloric acid,

 and possibly phosgene gas, which are toxic and

corrosive..

 Entirely new ovens would be required

 in order

to

switch to these solvents (R.49—54; Exhibit A to Amended Petition

for Variance).

 Vapor recovery

 is not feasible due

 to the various

blends of solvents needed

 for the wide variety of coatings and

carbon absorption

 is not feasible because of the high volume of

air used by the process equipment and insufficient space for such

a system (R.49—54; Exhibits A

and

B

 to Amended Petition for

Variance)..

 While all of these methods were explored prior

 to the

granting of the initial

 variances, ASCC knows of no factors,

conditions or reasons why these findings or results would have

changed

 since that time,

 other

 than the distinct possibility that

utility and capital costs would have increased

 (R..54)..

ASCC has also considered

 the use of afterburners

 in order

to

attain compliance with VOC regulations..

 The company hired

Charles Licht,

 in 1983,

 to prepare cost figures for the

installation of afterburners

 (R.,54—55)..

 According to his

estimates, ASCC would have had to make

 a capital expenditure of

$900,000 to

 install afterburners to control its coating lines and

would face a cost of $611,250 per year for

 the cost of natural

gas alone

 (R..55;

 Exhibit B to Amended Petition

 for Variance).

ASCC knows

 of no factors which would have caused these figures to

decrease since they were prepared and,

 in fact, believes they

would have increased due

 to increased energy and capital

equipment costs as well as recent tax law changes affecting

depreciation schedules

 (R..55—56)..

 Nevertheless, ASCC could not

operate and continue

 in business with the cost associated with

using an afterburner

 to control VOC emissions

 (R.56)..

PROPOSED COMPLIANCE PLAN

Given the alleged lack of otherwise reasonably available

control technology and the slow progress of the paint formulators

towards reformulation, ASCC has recently initiated another

program to achieve compliance with VOC regulations..

 While the

actual plan would be implemented in ASCC’s Drum Shop, the success

of the plan would necessarily impact on the Pail Shop and its

attainment of compliance..

Specifically, the main goal

 of the plan

 is to vent the fumes

from the spray booths and the exterior ovens

 in the Drum Shop to

the drum incinerator..

 This would involve redesign of the

77- 139

—10--

interior spray booths and installation of some 300—400 feet of

ductwork and possibly air pumps..

 Estimated costs of this work

are anticipated

 to be between $50,000 and $75,000

 (R..56—61,72—

79)..

 ASCC is working

 in conjunction with Allied—Hastings Barrel

and Drum Service,

 Inc..

 in exploring and implementing this plan.

(The Board notes that the plan was discussed and Allied—Hastings

was granted variance

 in the Board’s Opinion and Order

 in Allied—

Hastings Barrel

 and Drum Service,

 Inc.. v.

 IEPA,

 PCB 86—21,

February 19,

 1987..)

ASCC has already hired

 an expert consultant to prepare

a

feasibility study and begin planning the installation of the

necessary ductwork, and fully expects this project to be

completed by December

31,

1987

 (R..58—59,72).

 Moreover,

 it is

believed that this approach would reduce VOC emissions in the

Drum Shop to

 a minuscule level

 (R..76).

 Therefore, by utilization

of the “bubble concept” described

 in the VOC regulations, ASCC

hopes

 to likewise bring its Pail Shop into compliance

(R..44,60,75—76)..

 ASCC believes that compliance by this means

is

especially likely because ASCC pail production today is

significantly less than five years ago and

 is expected

to

continue

 to fall,

 thereby reducing the VOC emissions from the

pail plant even lower than the level

it

 is at today

 (R.43—44).

ASCC asserts that advantages of this compliance plan are

obvious..

 The drum incinerator

 is already in place and

 in use

(R.l6,2l—23),

 its temperature

 is constantly monitored (R.22), and

the emissions from the incinerator go through an afterburner

which

 is likewise constantly monitored and regulated at a minimum

of 1400 degrees Fahrenheit

 (R..22)..

 Finally,

 installation of new

equipment would be limited to ducting and pumps to move the fumes

to the incinerator, the cost of which

 is not expected

 to be even

one—tenth the cost of an afterburner

 (R..57—58).

ASCC EMISSIONS AND ASSERTED ENVIRONMENTAL EFFECT

As aforementioned,

 the ASCC facility

 is located

 in Air

Quality Control Region No..

 67, Cook County,

 an area designated as

non—attainment for the national ambient air quality standard for

ozone..

Pail Shop Emissions

The VOM emissions from ASCC’s coating operations are

regulated pursuant to 35 Ill.

 Adm.. Code 215.204(j)..

 The VOM

emissions attributable

 to the exterior coating of pails are

governed by 35

 Ill..

 Adm.. Code 215..204(j)(3), which provides that

VOM emissions from the application of extreme performance

coatings to miscellaneous metal parts and products are not to

exceed 3.5 lb/gal

 (.42 Kg/l), excluding water, delivered to the

coating applicator..

 The VOM emissions attributable to the

interior coating of pails are governed by 35

 Ill..

 Adm.. Code

77-140

—11—

215..204(j)(l), which provides that VOM emissions from the

application of clear coatings to miscellaneous metal parts and

products are not to exceed 4.3 lb/gal (.52 Kg/l), excluding

 water, delivered

 to the coating applicator..

35

 Ill..

 Adm.. Code

215.211 establishes December 31,

 1983 as the date for compliance

with 35

 Ill.

 Adm..

 Code 215.204(j).

Pursuant

 to Condition

 3 of the PCB 83—115 variance, by

December

 31, 1984,

 the ASCC Pail Shop was ordered to reduce the

VOM content of its exterior and interior coatings

 to 4.2

lbs./gal. and

 5..6

 lbs./gal..,

 respectively..

 However, ASCC’s

quarterly reports indicate that this goal was not achieved:

Coating

 Average VOM Content in lbs../gal..

1984

1985

1986

Exterior

 4.42

 4.48

 4.32

Interior

 6.30

 6.39

 6.32

Although, as noted above, the limitations of Section

2l5..204(j), are expressed

 in lbs/gal, the Agency computes

emissions in lbs/yr or tons/yr for purposes of the State

Implementation Plan..

 The Pail Shop’s actual and “allowable”

emissions between 1982 and 1986 were calculated as

 follows:*

1982

1984

1985

1986

“Allowable” Emissions

lbs VOM/yr

 45,066

 32,001

 31,858

 33,037

tons VOM/yr

 22.5

 16.0

 l5..93

 16.52

Excess Emissions

lbs VOM/yr

 81,472

 41,595

 43,423

 48,731

tons VOM/yr

 40.74

 20.8

 21..7

 24.37

Percentage VOM Reduction

 64.7

 56.5

 57.7

 59..60

(required for compliance

with Section 215.204(j)

 The Board notes that the figures set forth on page

 7 of the

Agency’s Recommendation in PCB 86—22 are

 so patently incorrect as

to be obvious typographical errors..

 In this and the succeeding

table,

 the Board has used the figures as set forth

 in Attachment

A to the Recommendations, which are the figures referenced by the

Agency in the

 text..

 The calculations

for

 1984 are based on

ASCC’s first Quarterly Report, which covered the period August

20, 1984 through September

 30, 1984,

 the only data submitted

for

the year 1984.

 The ASCC prorated this data over 365

 days..

The

calculations

 for 1986 are based on the information contained

in

the Quarterly Reports covering January

 1 through September 30,

1986, prorated over 365

 days..

77-141

—l2—

Drum Shop Emissions

The VOM emissions from ASCC’s coating operations are

regulated pursuant to 35

 Ill...

 Adm.. Code 215.204(j)..

 The VOM

emissions attributable

 to the exterior coating of drums are

 governed by 35

 Ill..

 Adm. Code 215..204(j)(3), which provides that

VOM emissions from the application of extreme performance

coatings to miscellaneous metal parts and products are not to

exceed 3.5 lb/gal

 (0..42 Kg/i)

 excluding water, delivered to the

coating applicator.

 The VOM emissions attributable to the

interior coating of drums are governed by 35 Ill. Adm. Code

2l5.204(j)(l), which provides that VOM emissions from the

application of clear coatings to miscellaneous metal parts and

products are not to exceed 4.3 lb/gal

 (0,52 Kg/l),

 excluding

water, delivered to the coating applicator..

35

 Ill.. Adm. Code

215,211 establishes December

31,

 1983 as the date for compliance

with 35 Ill.

 Adm.. Code

 215..204(j)..

Pursuant to Condition

 3 of the PCB 83—114 variance, by

December

31,

 1984,

 the ASCC Drum Shop was requested

 to reduce the

VOM content of its exterior and interior coatings to 4.2

lbs./gal. and

 5..0 lbs./gal..,

 respectively..

 However, ASCC’s

quarterly reports indicate that this goal was not achieved:

Coating

 Average VOM content

 in lbs./gal..

1985

1986

Exterior

 4.34

 4.38

Interior

 4..8l

 4.84

The Drum Shop’s actual and allowable emissions between 1982 and

1986 were calculated

 by the Agency as follows:

1982

1984

1985

1986

“Allowable”

 Emissions

lbs VOC/yr

 98,076

 142,761

 114,366

 125,144

tons VOC/yr

 49.04

 71.4

 57..l8

 62..57

Excess Emissions

lbs VOC/yr

 111,093

 73,052

 62,848

 72,790

tons VOC/yr

 55.6

 36..53

 31.4

 36..4

Percentage VOC Reduction

 53..i

 33.85

 35..5

 36..77

(required for compliance

with Section 215.204(j)

ASCC Assertions

As indicated above, ASCC calculates its excess VOC emissions

for the Drum Shop in 1986 to be

 36..4 tons/yr..,

 and for the Pail

Shop to be 24.37

 tons/yr..

 (Pet..

 Exh..

 lA and 1B)

 The discrepancy

between ASCC’S calculations and those of the Agency was not

77.142

—13—

addressed

 in this record;

 at hearing, ASCC used the larger

figures

 in eliciting testimony concerning environmental impact.

ASCC asserts that the environmental effects of its excess

emissions

 is minimal given the “generally low level

 of excess

emissions”, particularly as contrasted with those from other

sources: ASCC notes that the Drum Shop’s 36.4 tons per year and

the Pail Shop’s 24.37 tons per year

 of excess VOC emissions are,

respectively,

 equal

 to 0,050

 and 0.036

 of the hydrocarbons

emitted by mobil

 (vehicular)

 sources on a summer weekday in

Chicago

 (R,90—95)..

ASCC asserts that the records of the IEPA’s ozone monitoring

stations show that ASCC’s

VOC

emissions are not interfering with

Illinois’

 attainment of the ambient air quality standard for

ozone..

 The IEPA’s Air Quality Bulletins for the 1983,

 1984 and

1985 ozone seasons show

 a clear downward trend at the monitoring

stations closest to ASCC in the number of days the ozone air

quality standard was exceeded (Petitioner’s Exhibits

 2,3 and

4)..

 ASCC notes that at the monitoring station closest to ASCC,

located at 1820

S.

 51st

St.

 in Cicero,

 the number of days where

the ozone was greater

 than 0.12 ppm went down from four in 1983

to zero in 1986

 (R..87—89).

Agency Recommendation

As earlier stated,

 the Agency’s reasons for recommending

denial of variance are contained in

 its Recommendation and its

brief, which the Board construes as an amended Recommendation..

In its post—hea~ringbrief, as to the proposed compliance plan,

the Agency has stated that

 it believes the re—ducting

 of Drum

Shop emissions to be “a promising concept for achieving

compliance

 in the Drum Shop”..

 As to the feasibility of achieving

compliance in the Pail Shop through offset of any excess emission

reductions from the Drum Shop, the Agency has taken no position

as ASCC has presented no data concerning control efficiency of

the proposed Drum Shop

 system..

Agency concerns regarding past efforts at compliance and

environmental effect of ASCC’s excess VOC emissions have remained

constant.

 As demonstrated by the foregoing emissions tables,

ASCC did not achieve the reductions in VOC content of its

coatings required in the PCB 83—114 and PCB 83—115 variances..

The excess emissions from the Pail Shop were significantly

reduced between 1982 and 1984,

 but rose from the 1984 level

in

both 1985 and

 1986..

 The excess emissions from the Drum Shop were

also significantly reduced between 1982 and 1984;

 while further

reductions were made in 1985,

 in 1986 excess emissions closely

approached the 1984

 level..

Concerning environmental effect of these excess emissions,

the Agency takes strong

 exception to ASCC’s comparison of its

77-143

—14—

emissions to the total motor vehicle emissions for the six

counties in the Northeastern Illinois region.

 The Agency notes

that using this approach,

 a source emitting 500

 tons per year of

excess emissions could argue that its emissions had no impact,

 since

 they amount to “only” 0.76

 of total emissions from mobile

sources.

 While the Agency agrees that monitored emissions for

ozone exceedances has decreased,

 it points out that the ozone

standard has not been attained——that is, the average number of

exceedances

 for the past three years has not been less than or

equal

to

1..

The Agency’s primary concern

 is that Allied—Hastings’

description of the relationship between its excess emissions and

overall hydrocarbon emissions

 is insufficient to prove that its

excess emissions will not interfere with attainment of the ozone

standard

 in Cook County.

 The Agency asserts that the company has

made no real reductions

 in its own emissions to correspond

 to the

decrease

 in monitored exceedances of ozone..

The company’s alleged failure to make this demonstration

leads

 to the Agency’s concern about consistency of grant of

variance with federal law,

 The Agency notes that 35

 Ill..

 Adm..

Code 215.204(j)

is

 a part of the RACT II rules which are awaiting

USEPA approval as a part of the State Implementation Plan

(SIP)..

 Any variance

 in effect at the time the SIP is approved

would be required

 to be submitted to USEPA

 for approval as part

of the

 SIP..

 The Agency doubts that ASCC has made

 a strong enough

 demonstration to allow for approval by USEPA consistent with the

Clean Air

 Act..

Notwithstanding

 its negative Recommendation, the Agency has

suggested various conditions

 in the event the Board determines to

grant the requested variances.

 Bearing

 in mind the Clean Air

Act’s December

31,

 1987 compliance deadline and the inter-

relationship of emission reduction

 in the Drum Shop with

achievement of compliance

 in the Pail Shop through emissions

offset, the Agency suggests that ASCC

 1) make a firm decision

concerning implementation of the re—ducting approach no later

than June 30,

 1987,

2)

 that the Drum Shop apply for

a

construction permit no later than July

31,

 1987,

3)

 that the

Pail Shop apply for

 a permit pursuant to Section 215.207 no later

than August 15, 1987,

 and 4)

 that monthly progress reports be

submitted detailing the efforts made toward compliance as well

as

data necessary to evaluate compliance by use of an offset..

BOARD CONCLUSION

The Board agrees with the Agency’s contention that

comparison of a stationary source’s excess VOC emissions with the

emissions of mobile sources

 in the six—county Northeastern

Illinois area is not determinative of lack of environmental

effect;

 the Board and the courts have rejected similar analytical

77-144

—15--

approaches made by petitioners seeking to hook—on

 to overloaded

sewage treatment plants who have asserted that their

 added flows

would represent but

 a fraction of 1

 of the total flows

 to the

plant..

 See, e.g. Willowbrook Development

 Corp..

V.

 IPCB,

 92 Ill.

App..

 3d 1074,

 416 N.E..

 2d 385

 (2nd

 Dist..

 1981).

 However, given

the acknowledged difficulty of determining the contribution of

any one source

 to ozone exceedances in the general area

 in which

ASCC

 is located, submittal of extensively modeling studies would

contribute little to this record..

 See Allied—Hastings, supra, at

p..

8.

 ASCC’s environmental showing has been adequate..

ASCC has also adequately explained its failure

 to run

separate tests

 for complaint coatings

 in the Pail Shop:

 i.e..,

that customer requirements for pails are similar

 to those for

drums, and that coatings were tested

 in the Drum

 Shop..

 ASCC’s

testimony concerning

 the depressed condition of the steel

container industry as well

 as other conditions which affect the

company’s economic situation is unrebutted.

On the other

 hand, ASCC has not,

 as the Agency correctly

notes, made the progress towards emission reductions which

 it had

anticipated

 in 1983; the average VOM content for some coatings

used

 in both the Drum and Pail

 Shops has risen fractionally since

1984,

 The Board also notes that the PCB 83—114

 and PCB 83—115

variances expired on December

31,

 1985 at which time the

facilities’

 operating permits expired

 This record does not

indicate when or whether

 renewal operating permits were applied

for, although the Board

 notes that the Agency could not have

lawfully issued

 a permit absent extension of variance beyond

December 31,

 1985..

 The Board also notes that ASCC did not apply

for extension of the prior variances until close to two months

after they had expired,

 although

 it was clear as early as January

1,

 1985 that

 it was having little success

 in discovering suitable

replacement coatings.

However,

 considering

 the “promising” nature of the

compliance plan proposed, ASCC’S excess emissions level and

economic situation,

 the Board concludes that denial

 of variance

would impose an arbitrary or

 unreasonable hardship.

 Variances

are granted

 to both the Drum Shop and the Pail Shop through

December 31,

 1987 from 35

 Ill.. Adm. Code 215.211,

 2l5..2l2 and

 215.204(j)

 These variances will

 be subject to conditions

similar

 to those suggested by the Agency, to which ASCC has not

objected..

 However,

 the Board will accelerate

 the compliance

timetable, as it agrees with Mr. Spitz’

 assessment that “to be

in

compliance by the end of the year.......depending upon the type of

installation put

in

the

 Drum Shop, ASCC

 would have to have it

going

 by summer or early fall at the latest”

 (R.72)..

 Early

construction is particularly necessary given the need to compile

control data

 from the Drum Shop

 in order

 to determine what

emissions reductions,

 if any, will be required

 in the Pail Shop

even

 if “bubbling”

 is feasible.

 In the event this accelerated

77-145

—16—

compliance timetable is technically infeasible, ASCC may apply

for

 an adjustment by way of motion for reconsideration..

The company will also be required to reapply for operating

permits

for

 the existing facilities,

 as well as to timely apply

for

all

needed

permits

construct

and

operate

the

proposed

emissions

ducting

system..

The Opinion constitutes the Board’s findings of fact and

conclusions

law

this

matter..

ORDER

American

Steel

Container

Co..,

(ASCC)

Drum

Shop

and

American

Steel

Container,

Pail

Shop

are

each

hereby

granted

variance

from 35 Ill.

 Adm.. Code 215.211, 215.212 and 215.204(j),

subject

 to the

 following conditions:

A..

 This variance will expire on December

31,

 1987 or at

such earlier time as compliance is achieved with VOC

limitations;

before

July

1987,

ASCC

shall

either

apply

to the Agency for

 a construction permit to effectuate

re—ducting of VOC emissions from the existing coating

lines and spray booths to the existing incinerator

in

the Drum Shop, or

2)

 advise the Agency that

 it does not

intend to pursue compliance by this method;

C..

 Installation of necessary equipment to accomplish any

re—ducting

shall

completed

expeditiously

practicable but

 in no event later

 than 90 days after

the

date of issuance of the construction permit;

D..

 As expeditiously as

 is practicable, but no later

 than 60

days of the date of this Order, ASCC shall apply

for

permits to operate its existing Drum Shop and Pail

Shop.

 Upon completion of installation of the equipment

described

subparagraph

above,

ASCC

shall

timely

apply

for

any

necessary

modifications

these

operating

permits,

 including

 any application for

 an emissions

offset

permit

pursuant

Section

215.207;

E..

 Until

 such time as ASCC demonstrates that both the Drum

Shop

and

the

Pail

Shop

are

compliance

with

the

VOC

emission

limitations

either

individually

jointly

way

offset,

ASCC

shall

continue

testing

for

compliant

interior and exterior coatings, and shall report results

the

Agency

provided

subparagraph

(F)(3)

below;

F..

1)

 Beginning July 1,

 1987, and every month thereafter,

 ASCC shall submit written reports to the Agency

77-146

—17—

detailing

all

progress

made

achieving

compliance

with Section 215.204(j);

2)

 To the extent these compliance activities

 involve

testing for replacement coatings,

 said reports

shall include information on the names of

replacement coating and the manufacturers

specifications including percent solids by volume

and weight, per cent VOC by volume and weight,

percent water

 by volume and weight, density of

coating,

 and recommended operating parameters;

detailed

description

each

test

conducted

including

test

protocol,

number

runs,

and

complete

original

test

results;

the

quantities

and

VOC

content

all

coatings

utilized

during

the

reporting

period;

the

quantity

VOC

reduction

during

the

reporting

period;

and

any

other

information

which

may

specified

the

Agency

writing;

the

extent

these

compliance

activities

involve

offset

emissions

the

Drum

Shop

and

the

Pail

Shop,

said

reports

shall

include

data

concerning

daily

coating

material

usage,

daily

actual

and

allowable

emissions,

and

any

other

information

which

the

Agency

shall

specify

writing

necessary

enable

evaluate

compliance

activities

pursuant

Ill..

Adm..

Code

215.204(j)

and

215..207;

The

reports

shall

sent

the

following

addresses:

Environmental Protection Agency

Division

Air

Pollution

Control

Programs

Coordinator

2200

Churchill

Road

Springfield,

62706

Environmental

Protection

Agency

Division

Air

Pollution

Control

Region

Field

Operations

Section

1701

South

First

Avenue

Suite

600

Maywood,

60153

During

the

term

this

variance,

the

average

VOC

content

for

internal

and

external

coatings

the

Drum

Shop

and

Pail

Shop

shall

not

exceed

the

levels

for

1986

set

forth

the

foregoing

Opinion.

77-147

—18—

Within

days

the

date

this

Order,

ASCC

shall

execute

Certification

Acceptance

and

Agreement

bound

all

terms

and

conditions

the

variance..

Said

Certification

shall

submitted

the

Agency

each

the

addresses

specified

 in paragraph

4..

 The 45 day period shall

 be held

in

abeyance

during

any

period

that

this

matter

being

appealed..

The

form

said

Certification

shall

follows:

(We),

_______________________,

 having read the Order of

the

Illinois

Pollution

Control

Board

PCB

86—22

and

PCB

86—23

(consolidated),

dated

April

16,

1987,

understand

and

the

said

Order,

realizing

that

such

acceptance

renders

all

terms

and

conditions

thereto

binding

and

enforceable.

Petitioner

By:

Authorized

Agent

Title

Date

ORDERED.

Forcade

dissented..

Dorothy

M..

Gunn,

Clerk

the

Illinois

Pollution

Control

Board,

hereby

certify

that

the

above

Opinion~and

Order

was

adopted

the

/~Z~

day

_______________________,

1987

byavoteof

_____________.

~

 //~~

Dorothy

 M.. dunn,

 Clerk

Illinois

Pollution

Control

Board

77-148