ILLINOIS POLLUTION CONTRCL BOARD

January 22,

1987

NESCO STEEL BARREL COMPANY,

)

Petitioner,

V.

)

PCB 84—81

ILLINOIS ENVIRONMENTAL

PROTECTION AGENCY,

Respondent.

)

RICHARD W.

COSBY, ES~.APPEARED ON BEHALF OF

PETITIONER.

WILLIAM D.

INGERSOLL,

ESC. APPEARED ON BEHALF OF RESPONDENT.

OPINION AND ORDER OF THE BOARD

(by 3.

Theodore Meyer):

This matter comes before the Board on the June

20,

1984

petition for variance; the August

31,

1984

amended petition for

variance and the May 12,

1986

second amended petition for

variance filed by Nesco

Steel Barrel Company (“Nesco”).

Supplementary information was also supplied on April 12,

1985 and

July

3,

1986.

Petitioner

seeks variance from the requirements of

35

Ill.

Adm. Code 215.204(j),

215.212,

and 215.211(a)(l) until

December

31,

198?.

The Illinois Environmental Protection Agency (“Agency”)

filed motions

to dismiss on July

3 and September

17, 1984

and May

23 and July 10,

1986 and

filed

its recommendation to deny

variance on May 17,

1985.

Hearing was held

in Granite City on

September

18,

1986.

Petitioner’s brief

was filed

on October 30,

1986;

Respondent’s brief was filed on November

26,

1986 with

Petitioner’s reply filed

on December

4,

1986.

Nesco

is

primarily

engaged

in

the

manufacture

of

fifty—five

(55) gallon steel

industrial

shipping containers

(“drums”)

at

a

plant

located

in

Granite

City,

Madison

County,

Illinois.

This

area

is designated as non—attainment for ozone.

The barrels are

made from coiled

steel which is cut,

shaped,

cleaned, spray

coated,

and

then

assembled.

Nesco

uses

five

separate

coating

lines,

however,

only

three

are affected by this petition; the

first

ccat

lacquer

booth,

the

second

coat

lacquer

booth,

and

the

head

and

bottom

lacquer

booth.

These

lines

are

operated

without

pollution control equipment.

Petitioner

applies both exterior

and interior coatings

to the drums

in accordance with directions

from

its customers.

While

it has

some latitude with regard

to

which exterior coatings should be applied, rarely does such

latitude exist with respect

to interior coatings, since customers

75.21

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—2—

almost always specify coatings

in accordance with particular

packaging needs and/or government regulations.

The allowable emissions of volatile organic matter

(VOM)

for

these

lines are 4.3 lb/gal.

for

interior coating and 3.5 lb/gal

for exterior coating.

35 Iii. Mm.

Code 215.204(j).

Between

July 1984 and June 1985 the average VOM content of the interior

coatings applied by Nesco was

5.33

lbs/gal and

of the exterior

coatings was 4.36 lbs/gal

(May 1986 Pet.

at

15).

Based on usage

of 2,312 gallons of interior coatings and 12,573

of exterior

coatings the VOM emissions produced

for each coating type totaled

6.2 tons and 27.4 tons respectively for this same period.

While

Petitioner

originally

asserted

that

its

emissions

were

thus

approximately

35

tons

of

VOM

per

year

the

Agency

has

concluded

that

the

emissions

are

closer

to

40

tons

per

year.

Petitioner

did

not

contest

this

conclusion.

The Petitioner states that it

is unable

to comply with the

numerical emission limitations of 215.204(j)

at its lacquer

coating lines because

there are presently no commercially

available coatings with sufficiently low solvent content

to

comply with the regulations.

The existing method of control

employed by Petitioner

involves the use of high solid paints at

the main Paint

Booth and Cpen Hood Cover Paint Booth.

The high

solid paints currently average approximately 2.95 lbs VOM/gal.

In

its June 1984 petition, Reliable—Nesco,

Inc. indicated that

in

addition to its intention

to investigate the expanded use of

compliance coatings,

it also intended

to install two fume

incinerators.

Estimates for the purchase and installation of

three incinerators were

in the $100,000 range with annual

operating costs of

$135,000.

(June

25, 1984 Pet.

Exh. G).

However,

in

the

interim, Reliable—Nesco,

Inc. was sold to its

employees with the help of

a $150,000 grant from the Illinois

Department of Commerce and Community Affairs.

Because of

subsequent financial problems, Nesco now states that

it is unable

to

represent

that if the variance petition

is granted

it will

be

able

to go through with its plan

to install incinerators on its

two

interior coating

lines.

(May 1986 Pet.

at 7—8).

However,

Nesco

states that

it

is continuing

in its efforts

to achieve

compliance

by

pursuing

the

use

of

high

solids

exterior

coatings.

‘Nesco believes that its program

to substantially

decrease VOM emissions from

its exterior coating line will alow

it

to comply with the limitations

for the

interior coating lines

by use of

the internal

offset provision of

35 Ill.

Adin.

Code

215.207.

During

1985,

eighteen

(18) high solids exterior

coatings were

tested on the Nesco paint lines with VOM contents

ranging

from 2.52 to

3.2 lbs/gal.

However, problems concerning

the incompatibility of the paints with other products used by

Nesco, the increase

in maintenance costs

and the generation of

unpleasant odors

still needed

to be overcome.

75.22

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—3—

Additionally,

in early 1986,

Nesco was informed

that certain

features of

its spray equipment made it difficult,

if not

impossible,

to apply high solids, low VOM exterior coatings in

a

satisfactory

manner.

Also,

certain

additional

equipment

was

necessary

in

order

to

apply

the

high

solids

coatings

successfully

with its system.

July 1986 Supp. at 1—2.

Nesco undertook these

necessary adjustments at a cost of $7,615.40.

With these

adjustments completed, Nesco was

to begin a testing program on

August

4,

1986 and

to continue testing for high solids, low VOM

exterior coatings until

all of the enamels it presently uses are

replaced with compliant exterior coatings.

Nesco intended

to

concentrate on high volume colors first so as to result in

compliance with the standards for exterior coatings and for

internal coatings by use of internal offsets by December

31,

1987.

Nesco states that other compliance options such as carbon

absorption, electrostatic spraying and powder coatings do not

appear

to be technologically feasible.

Aside

from the costs

associated with the

size of carbon adsorption units necessary to

control

its emissions, Nesco

is concerned that the pigments from

the coatings will clog the carbon

filters and that additional

problems will be generated

because of the different solvents used

in the various coatings.

Electrostatic spraying is allegedly

infeasible because of unresolved

color separation problems

especially concerning multicolor exteriors.

Finally, according

to

Nesco,

powder

coating

technology

is

not

likely

to

meet

the

minimum

requirements

of

its

customers,

assuming

it

could

be

introduced

at

the

facility.

Nesco

states

that

it

has

expended

substantial eff1orts

in its testing of high solids exterior

coatings but

as yet has met with mixed success.

Nesco contends

that to require compliance immediately with

35

Ill. Adm. Code

215.204(j) will probably mean

the end

of Nesco

as

a viable

economic

entity.

May

1986

Pet,

at

14.

The Agency does not dispute that Nesco has been

in financial

difficulty.

However,

the

Agency

argues

that

the

variance

provisions of the Environmental Protection Act were not intended

to support marginal companies by allowing the environmental

quality

of

the

air

to

subsidize

those

companies.

Additionally,

the

Agency

maintains

that

Nesco

has

failed

to

meet

its

burden

of

demonstrating that the variance will not interfere with the

attainment or maintenance of the National Ambient Air Cuality

Standards (NAACS) for ozone

in the Granite City Metro—East

area.

The Agency also objects to the Petitioner’s compliance

plan

as being “nothing more than

a dream” since

there

is no

assurance that Petitioner will

be

able

to

achieve

compliance

during

the

variance

period.

ReEp.

Brief

at

3.

The

Agency

notes

that since Section

215.204(j) has not yet been approved

as part

of the Illinois State

Implementation Plan

(SIP), technically the

proposed variance,

if granted, would not be required

to be

submitted

as

a SIP revision.

However,

the Agency argues that

75.23

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—4—

RACT

II

is

under

review

by

USEPA

and

that

the

State

“will

be

courting disaster”

if unapprovable revisions

to

RACT

II are

submitted

to

USEPA

at

this

late

date.

The

Agency

believes

this

variance is unapprovable as a SIP

revision

since

(a)

there

is

no

showing that compliance will be achieved by December

31,

1987 as

required by the Clean Air Act and (b)

there

is

no

significant

evidentiary support demonstrating that grant of the variance will

not

interfere

with

the

attainment

or

maintenance

of

the

NAACS

for

ozone

in

the

Metro—East

area.

Turning

to the question of the environmental

impact of the

variance, Nesco admittedly did no formal modeling studies

to

determine

the

impact its

40 tons of annual VOM emissions have on

the air quality of the Metro—East area.

Nesco asserts that the

utility of such studies

is questionable given

the difficulties

associated with determining one source’s contributions

to ozone

exceedances

in light of the effect other

sources of hydrocarbons,

including

motor

vehicles,

have

on

ozone

concentrations

in

the

area.

These difficulties have been previously recognized by the

Agency

in other variance proceedings concerning similar VON

emission sources.

See ~

Trilla

Steel Drum Corp.

v.

IEPA,

PCB

86—9, Agency Variance Recommendation at

10.

The Board has

previously

acknowledged

the

lack

of

a

precise

understanding

of

the dynamics of hydrocarbon transport and ozone

formation.

However, Nesco

has provided information demonstrating that

at the

monitor closest

to Nesco’s facility ozone exceedances have

dropped from six

(6)

in 1983 to

zero

(0)

in

1985.

The Board

finds that considering that Nesco’s total VOM emissions are 40

tons/yr that grant of the variance will have

a minimal

environmental

impact on

the

air quality in the Metro—East area.

However,

the

Board

does

share

the

Agency’s

concern

that

Nesco’s

may

be

over—optimistic

in

its belief that

it will

be able

to achieve compliance by use of internal offsets.

However,

it

was only just recently that Nesco was able

to begin

its testing

program

for

over—compliant

exterior

coatings

in

earnest

because

of the adjustments necessary to

its spray equipment

——

adjustments which Nesco was unaware were necessary through no

fault of its own.

While

the Board believes Nesco should be

allowed

to continue with this testing program,

it also believes

that Nesco must be required

to render

a decision concerning

the

viability of this compliance plan

in sufficient time

to provide

for the installation of add—on controls by January

1,

1988 should

the use of internal offsets appear

to be infeasible.

Therefore,

the Board will require Nesco to determine whether

to

install

add—

on control equipment by August

31, 1987 unless

it appears with

reasonable certainty that

it can achieve compliance without such

controls

by

December

31,

1987.

The Board concludes that Nesco has demonstrated

that the

denial of variance would

cause

an arbitrary or unreasonable

hardship and accordingly will grant the requested variance

subject

to conditions.

75-24

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—5—

ORDER

Nesco Steel Barrel Company,

Inc.

is hereby granted variance from

35

Ill.

Adm.

Code 215.204(j),

215.211 and 215.212 until December

31, 1987, subject to the following conditions.

1.

By August 31,

1987, Nesco shall commence the

installation of add—on control equipment unless it

appears with

a reasonable certainty that such controls

will be unnecessary to achieve compliance with 35 Ill.

Adm. Code 215.204(j)

by December

31,

1987.

2.

By February 22,

1987 and every month thereafter,

Nesco

shall submit

to the Agency written reports detailing all

progress made

in

achieving compliance with Section

215.204(j).

Said reports shall

include

information

compiled on

a monthly basis on coating materials usage;

amount of reformulated coating

in

use; actual and

allowable VOM emissions,

the quantity of VON reductions

during the reporting period;

and actual operating

hours.

Such reports

shall also describe the progress

made

in developing

and testing reformulated exterior and

interior coatings, including product quality and

customer

acceptance;

and shall

include any other

information requested by the Agency.

The reports shall

be sent to the following address:

Environmental Protection Agency

Division of Air Pollution Control

Control Programs Coordinator

2200 Churchill Road

Springfield,

Illinois 62706

3.

Within 45 days of the date

of this Order, Nesco shall

execute

a Certificate of Acceptance and Agreement

to be

bound

to

all

terms and conditions of the variance.

Said

Certification shall be submitted

to the Agency at the

address

in paragraph

2 and

to

the Illinois Pollution

Control Board

at:

Illinois Pollution

Control board

State of Illinois Center

100 West Randolph Street

Suite 11—500

Chicago, Illinois 60601

The 45—day period

shall

be held

in abeyance during

any

period that this matter

is being

appealed.

The form of

said certification shall

be

as follows:

75.25

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—6—

CERTIFICATION

I,

(We), _____________________________, having read the

Order

of the Illinois Pollution Control Board

in PCB 84—81 dated

January

22, 1987, understand

and accept said Order, realizing

that such acceptance renders all terms and conditions

thereto

binding and enforceable.

Petitioner

By:

Authorized Agent

Title

Date

IT

IS SO ORDERED.

Board Member

B.

Forcade dissented.

I,

Dorothy

N.

Gunn,

Clerk

of

the

Illinois

Po11uti~m Control

Board,

hereby certify that the a~veOpinion and Order was

adopted on the

v~”

day of

_______________,

1987, by

a vote

of ~—/

//

1’

/

~7\~

~L~/

~/27

~

Dorothy

N.

G~’in, Clerk

Illinois Pollution Control Board

75-26