ILLINOIS POLLUTION CONTROL BOARD
March
24,
1.983
CONTINENTAL GRAIN COMPANY,
)
A Delaware corporation,
)
Petitioner,
)
V.
)
PCB 80—71
)
ILLINOIS ENVIRONMENTAL
)
PROTECTION AGENCY,
)
Respondent.
ROY M.
HARSCH, MARTIN, CRAIG, CHESTER & SONNENSCHEIN, APPEARED
ON BEHALF OF THE ENVIRONMENTAL PROTECTION AGENCY;
WILLIAM
3.
BARZANO, JR., ASSISTANT ATTORNEY GENERAL, APPEARED
ON BEHALF OF THE CONTINENTAL GRAIN COMPANY.
OPINION AND ORDER OF THE BOARD
(by J.D. Dumelle):
This matter comes before the Board upon an April
10,
1980
appeal of the Illinois Environmental Protection Agency’s (Agency’s)
March
6,
1980 denial of Continental Grain Company’s operating permit
application.
Hearing was held on February
22, 1983, at which both
parties but no members of the public appeared.
The only witnesses
who appeared testified on behalf of Continental.
The Agency relies
upon the permit record filed in this matter.
The facts are undisputed.
Continental owns and operates
a grain elevator in Hennepin for which it requested an operating
permit from the Agency on December 17,
1979.
The Agency denied
that permit
application on March
6, 1980 on the basis that Rule
203(d)(8)(B)(iv)(c)(1)
of Chapter
2:
Air Pollution, might be
violated.*
Its reasoning was that the cited rule requires
Continental
to install pollution control equipment which is
capable of providing particulate removal efficiency of not less
than 90.
*
The Board notes that both parties refer to Rule 203(d)(9)
throughout the record.
However,
the proper rule
is Rule 203(d)(8)
and the Board views this simply
as a mutual mistake.
That the
citation is incorrect is much less a comment upon the attorney’s
diligence than it
is on the cumbersome structure of the present
rule.
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—2—
Continental, however, argues that it is exempt from the
application of that rule pursuant to Rule 203(d)(8)(D)
as an
existing grain handling operation, and that the A9ency’s interpre-.
tation that Continental
is a modified grain handling operation
under Rule 203(d)(8)(F) which would require such removal
is
incorrect.
The applicability of Rule 203(d)(8)(F) turns on whether
there has been an increase in annual grain through-put
(AGT)
of more than “30
of the annual grain through—put on which the
operation’s original construction and/or operating permit was
granted.”
Continental submitted information to the Agency which demon.-
strated that the AGT on which the original permit was based was
not representative of normal conditions.
The original AGT was
indicated to be 5.0 million bushels per year, but Continental
now contends that it should have been indicated as 8.58 million
bushels per year.
If that higher number were to be accepted, the
December
17,
1979 application would not demonstrate any increase
in the AGT, Continental would be exempt from the control equip-
ment requirements of Rule 203(d)(8)(B)(iv)(c)(1), and the permit
should have issued,
Pursuant to Rule 201, AGT is to be determined by adding
grain receipts and shipments for the three previous fiscal
years and dividing the total by
6,
“unless otherwise shown by
the owner or operator.”
The AGT indicated on the original permit
was apparently derived through the averaging procedure.
However,
Continental now contends that
it
should have made the alternative
showing.
The Agency, on the other hand,
essentially contends that
Continental
is bound by its 5.0 million bushel
figure.
Richard Kobetz, a former Continental employee who now does
some consulting work for them, testified that the
5 million
figure “was based on the fiscal years
‘72,
‘73 and
‘74, during
which time the elevator had undergone a boycott of truck traffic,
because the truck dump platform that they had was too short”
(R.
17).
Based upon the AGT data shown in Continental Exhibit
No.
2, which shows AGT figures for 1967—1979, he estimated that
about 8.5 million bushels per year more accurately reflects
the long term AGT
(R.
21),
He further testified that the original
figures “were even further tainted...because of abnormally low
grain production and soybean production”
in at least one or two
of the years used to develop the original AGT
(R. 27—28)~
Elmer Dransfelt,
a retired Continental employer, reiterated
the reasons for depressed shipments and receipts
in the early
seventies,
but also pointed out that the construction of the
J&L Steel Mill increased Continental’s draw area
(R.
58—61).
The
reason is that some truckers will reduce their grain hauling
fee to the area when they would otherwise be making an empty
run to pick up steel
(R.
60).
He also testified that a tug
service which started
in the middle seventies has allowed
Continental
to handle more grain
(R.
71).
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Those are the facts,
and based on those facts the Board must
determine whether Continental is bound by the AGT figure on
the original permit or whether it can at this late date make
an alternative showing,
and if it can, whether these
facts are
sufficient to establish the higher AGT figure.
Rule 201 clearly allows the use of either of two alternative
procedures for determining the AGT.
The method chosen by
Continental was in accordance with that rule, and the Agency
granted the permit on the basis of
a 5,0 million bushel
AGT.
Certainly the AGT figure could have had a significant impact on
the Agency’s permitting decision since the amount of particulates
discharged bears a significant relationship to the AGT.
Thus,
the Board does not have any way of knowing whether the Agency
would have granted the original permit
if the
8 million figure
were used, and if it would not have,
Continental could not now be
requesting its renewal,
This reasoning is consistent with the
language of Rule 203(d)(8)(F) which relates the increase in AGT,
for purposes of determining whether the facility has been modified,
to the
figure upon which the original permit was based.
To allow
that number to be changed after the permit has expired makes little
sense.
However, even if the Board were to hold that such a modifica.-
tion could be made,
it could not find that Continental’s alterna-
tive showing was sufficient,
Mr. Kobetz based his AGT analysis
in part on data which was not even available at the time of the
original permit.
Continental applied for the original permit
on May
3, 1976 and yet Continental’s Ex. No,
2 includes data
through March 31,
1979.
Clearly, data after 1976 must be disre-
garded in determining the AGT.
Further,
if that data is dis-
regarded,
it is difficult to justify the “estimate of what AGT
might have been”
as presented in the graph in that exhibit.
The evidence presented for using an alternative figure are
not convincing in other respects as well.
It
is not particularly
unusual that there are good crop years and poor crop years and yet
Continental apperently discounts only bad crop years.
The years
of 1972—1974
(which include the “bad year”
of 1974 and which are
the years the original AGT was based upon)
averaged 182.3 million
bushels of corn and 20,5 million bushels of soybeans
in the plant’s
draw area
(the area from which
it obtains shipments of grain).
These compare to 1968—1976 averages of 193.0 million and 18.3
million bushels, respectively,
The total corn and soybeans,
there.-
fore,
averaged 202.8 million bushels during 1972—1974 and 211.3
during 1968—1976,
a difference of less than 5.
The effect of the ~boycott~’is unguantifled, and probably
unquantifiable in that the record suggests that the “boycott”
was not so much an organized protest which shut down operations
as
it was a decrease in the number of truckers who were willing
to wait the length of time which was necessary for unloading
due to the short scale
(H.
56-58).
This view is further supported
by the graph of the AGT~swhich
shows a general decline in the
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AGT until
a longer scale was built followed by a dramatic increase
thereafter.
The increase in scale size, perhaps aided by the construction
of J&L Steel,
appears to be the cause for increased AGT’s
in the mid to late seventies.
However, these sorts of changes
are precisely the reason for including the 30
limitation on
exempt status under Rule 203(d)(8)(F).
The exemption for existing grain-handling operations
from
the control requirements of Rule 203(d)(8)(D) is to retain the
status quo with respect to those operations which are controlling
their emissions as effectively as possible with their existing
equipment and which the Agency has no reason to believe are
contributing to a pollution violation.
This avoids the added
expense of retrofitting the control equipment where that added
cost appears unjustified in light of the environmental impact.
However,
if the equipment is modified in such a way as to reduce
the cost of retrofitting, the balance of cost versus environmental
impact shifts.
A similar shift takes place when the AGT increases
in that the environmental
impact becomes greater,
That is the
reason for the 30
limitation of Rule 203(d) (8) (F).
When Continental enlarged its scale,
the Agency apparently
made the determination that such modification was not the sort
of modification which reduced the cost of retrofitting.
However,
the evidence supports the view that such modification has led
to an increase in the AGT of considerably greater than 30
and, therefore,
has clearly increased the environmental impact.
Continental presented some evidence that the modification
was made simply to keep customers that it had been losing
(R. 65),
but Mr. Dransfeldt admitted that they would not turn away new
customers
(R.
66), and regardless of intent, Continental’s
AGT for each year since the scale was enlarged has been at least
35
greater than any year prior to that time.
(See Cent.
Ex.
2).
The Board
finds that Continental’s increase in AGT resulted
from a business decision to increase the amount of grain it was
handling and that the increase was greater than 30.
Therefore,
Continental no longer qualifies for the Rule 203(d)(8)(D) exemp-
tion and its permit application was properly denied.
This Opinion constitutes the Board’s findings of fact and
conclusions of law in this matter.
ORDER
The Board affirms the Illinois Environmental Protection
Agency’s March
6,
1980 denial of an operating permit for
Continental Grain Company’s grain handling facility in Hennepin.
IT IS SO ORDERED.
51-322
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I,
Christan L.
Moffett, Clerk of the Illinois Pollution
Control Board, do hereby cer~t~.fythat the above c~pinionand
Order was adopted
oxi the
~-I”
day of_________________
1983 by a vote of
.S~O
.
CS~$L~
Christan L. Mof ~
Clerk
Illinois Pollutiàfi—’Control Board
51-323