ILLINOIS POLLUTION CONTROL BOARD
February 7,
1973
OLIN
CORPORATION
)
)
)
#72—253
v.
)
ENVIRONMENTAL
PROTECTION
AGENCY
)
GEORGL
E.
DULLWINKEL
AND
EDWARD
L.
OVERTREE,
ON
BEHALF
OF
OLIN
CORPORATION
JAMES
I.
RUBIN
AND
STEVEN
BONAGUIDI,
ASSISTANT
ATTORNEYS
GENERAL,
ON
BEUIUr
OF
ENVIRONMENTAL
PROTECTION
AGENCY
OPINION
AND
ORDER
OF
TIlE
BOARD
ON
PETITION
FOR
RECONSIDERATION
AND
REHEARING
(BY
SAMUEL
T.
LAWTON,
JR.):
On
November
28,
1972,
the
Board
entered
an
Opinion
and
Order
in
this
cause written by Mr. Parker,
no longer a member of the Board.
On January 19,
1973, we received a petition for reconsideration and
rehearing and motion to supplement the record filed by petitioner,
Olin Corporation, alleging various infirmities in the Opinion and
Order based upon the legal status of the Board, and purported errors
of
law
and
fact
in
the
Opinion
and
Order
;s
rendered
•
The
motion
to
supplement
the
record
requested
that
certain
depositions
be
taken
and
that
additional
new matter
be
incorporated
in
the
record.
On
January
22,
1973,
the Attorney General of Illinois, representing the Environmental
Protection Agency, filed a response to the petition and motion, which
although not agreeing with all contentions made by petitioner, Olin
Corporation, nevertheless requested that the reconsideration and re-
hearing and supplementation of the record be granted.
On January 29,
1973,
the Agency filed a motion to modify the opinion and a specifica-
tion asserting several provisions which the Agency felt should be
altered or deleted,
to which Olin on January 31,
1973, filed a response
in
agreement.
Subsequent thereto, Olin submitted a proposed opinion
and order for reconsideration which it felt would remedy the errors
alleged in its original petition to which the Agency filed a response,
agreeing in !?art and disagreeing in part, with the proposed form of
Of)tflLOfl
as submitted by Olin.
At the Board meeting of February
6,
1973, counsel for both parties
anpeared and the entire subject was considered at length.
A ~roposed
revision was suggested by Mr. Lawton and
the
matter continued to this
date.
At today’s meeting,
petitioner submitted a further modification
of
the order provision and a stipulation between the parties that
if
the
o;-inion
and
order
were
modified
as
oroposed
by
Mr.
Lawton,
all
pending
court
proceedings
with
respect
to
this
matter
would
be
dismissed.
We adont
the
Oninion
and
Order
as
set
forth
below.
1—45
By Petition filed June 21, 1972 and supplemented August
7,
1972, Olin Corporation seeks
a variance from certain of the
Water Pollution and Air Pollution standards presently in effect,
and with effective dates in the future,
as concerns its Joliet
plant which produces phosphate-based and fluorine—based products.
The plant employs about
500 and has an annual payroll of about
six million dollars
(R.
4 5-46,
second portion, August 16, 1972)
Olin’s requests for relief from air standards were withdrawn prior
to the adoption of this Opinion and Order and are thus moot.
It will be helpful at the outset to briefly review the nature
of Olin’s Joliet operations.
Olin’s phosphate-based products are
made by reacting phosphate rock with sulfuric acid to form phospheric
acid
(and by-product calcium sulfate hydrate, known as gypsum), and
then forming various sodium phosphates by reaction of
the phosphoric
acid with soda ash or caustic
soda.
The principal phosphate-based
product
is sodium tripolyphosphate, most of which
is used in laundry
detergents.
About 75
of Olin’s Joliet plant phosphate production
is used in detergents
(Petition,
page 3).
A by-product~called
“Fly-Grade” fertilizer
is made from phosphate muds filtered from the
sodium phosphate solutions during processing.
The fluoride based products include hydrofluoric acid and alumi-
num and sodium fluorides.
They are produced by reacting fluorspar
with sulfuric acid to form hydrofluoric acid
(and by-product anhydrous
calcium sulfate), which,
in turn,
is reacted with other materials,
for example, with alumina to form aluminum fluoride.
The by-product calcium sulfates from both product lines have
no significant market value and are disposed of by piling.
A water
slurry of calcium sulfate is pumped to a “gypsum pond”, where the
insoluble calcium sulfate settles out.
After re-cycling
to the
process for re-use, the excess supernatant liquid and surface runoff
sometimes overflows to the Des Plaines River.
By way of further background, Olin adopted a water pollution
abatement program in May of 1971 in response to the Agency’s request.
That program was designed to bring all effluent waste streams into
compliance with then current effluent standards by the end of 1973.
Specific dates set forth were April, 1972 for removing sodium silicate
solution from the discharge to the main plant sewer,
July,
1972 for
installing a recycle system for solids discharged from the sodium
tripolyphosphate
“C” production, October, 1972 for removing solids
discharged to the sewer from the chlorinated trisodium phosphate
operation, April, 1973 for controlling solids discharged to the
sewer
from boiler blowdown and scrubber effluent from the vacuum
ash handling system, and the end of 1973 for completion of redesign
or modification of the gypsum pond impoundment facilities
(See
Ex. A
to petition).
Olin is presently following this program and
has expended $326,000 of an estimated total
$3,610,000 for pollution
control projects
(pp.
2,
7 of Petition,
R.
227-230).
—2—
7
—45
Olin’s petition
says
(pp.
7-8)
it is presently required by a
Federal Court order entered October 27, 1971 in a Refuse Act proceeding
to
implement
a compliance program “substantially as set forth”
in
the May,
1971 program.
The record is silent as to what relationship
the new compliance program,which
is the subject of this proceeding,
bears
to this Court Order,
or as
to whether any order entered by
this Board granting permission to Olin to depart from the May,
1971
program would become effective in the absence of Federal Court
approval.
Olin contends
in the instant variance proceeding, the petition
for which was filed approximately 13 months after adoption of the
May, 1971 water pollution abatement program, that business uncer-
tainties concerning the future for detergent phosphates
“have preci-
pitated
a reassessment of the situation”
(Petition,
page 2).
Olin
says that Procter
& Gamble, Olin’s largest phosphate customer,
is
publicly cornniitted to removal of phosphates from its detergent
products when a suitable replacement is available
(Petition,
page 11),
and contends
there is a possibility that Federal legislation may be
forthcoming
which will ban or limit phosphate use in detergents,
“which
could cause the abrupt demise of Olin’s phosphate business and its
Joliet plant”
(Petition,
page 11).
Olin states that the Federal
government’s
“final decision on phosphates and their replacements...
will not be forthcoming in less than two years”,
to permit time
for further experimentation and study, and argues that it should not
be required to spend
“approximately $4.0 million dollars necessary
to achieve compliance with the newly adopted standards before their
effective dates,
in light of the best information available concerning
the extremely fluid market condition and legislative situation that
only time will clarify”
(Petition,
page 12).
Instead,
Olin proposes a new compliance plan (Exhibit~Q to the
Petition)
to be substituted for the May,l971 plan.
The new plan is
presented in alternative form,
covering two possibilities if deter-
gent phosphates continue and three,
if they do not.
The two are:
continuation of the present plant operations
(Alternate B, cost 3.08
million dollars*) or relocation of the phosphoric acid manufacturing
operations
(to strengthen the business) and continuance of all other
present operations at Joliet
(Alt.
A, cost 2.25 million dollars).
The other three possibilities are:
continuation of an industrial
(i.e.
non-detergent) phosphate business and the fluoride products
(Alt.
C,
cost 1.73 million dollars),
continuation of the fluoride products
only
(Alt.
D,
cost $400,000),
or
a complete shutdown of the plant
*Costs from Appendix I to Petition; note that Alt. B stands corrected
by Supplemental Request for Relief.
7—47
(Alt.
E,
cost $65,000).
In the case of each of the five alternatives,
the engineering work
is not to be started until mid-1974, and the
work will not be completed until late or
the end of 1975 when all
standards are expected to be met.
Olin points out that in addition to these five alternatives,
it
has already committed itself and is proceeding to expend an additional
$810,000
to provide certain improvements prior the end of 1973 when
the effluent standards become effective.
These projects,
labelled
1-1 through
1—4 and Alt.
II on
Ex.
Q to the Petition,
include
a
collection system for process wastes
($300,000),
a clarifier
($150,000)
for plant sewer effluent
(which will remove about 95
of the suspended
and settleable solids per Supplemental Exhibit F), gypsum pond re-
cycling improvements
($140,000)
which will reduce occasions of storm
water—induced gypsum pond overflow, and hydrofluoric acid tail gas
($20,000)
and retort emission ($200,000)scrubbers.
These projects
are often referred to in the record as Olin’s
“Interim Control Pro-
gram’.
As noted,
this $810,000 program
is already underway,
a
“good
deal of
that money has already been spent”
(R.
168),
and this portion
of the work will go forward whether or not the variance sought
is
granted or denied
(R. 168; Petitioner’s
Supplemental Information on
Effectiveness of Compliance Program,
pp.
4-5).
The specific variances sought by petition, all for periods of
one year but which Olin would anticipate extending further, are as
follows:
As respects water pollution,
Olin requests a variance from
the effluent standards of Rules 401-403, and from Rule 408 which will
become effective December 31,
1973,
as well as from the implementation
plan provisions of Rules 903,
914 and 1002,
to permit Olin’s discharge
of effluents containing excessive amounts of arsenic, cadmium, copper,
fluoride, iron
(total and dissolved),
lead, manganese, mercury,
oil,
pH,
zinc,
total suspended solids and total dissolved solids.
See
Petition for Variance,
Par. VIII,
(3)
and
(4),
Ex.
I to the Petition,
and Petitioner’s Answer to Recommendation of Illinois Environmental
Protection Agency,
paragraphs
14,
21.
Public hearings were held on the petitions on August
14 and 16,
1972.
The record also includes a deposition taken on August 21,
1972.
Two separate wastewater discharges
flow from Olin’s Joliet plant
to the Des Plaines River.
One is the main plant sewer effluent,
a
combination of process and sanitary wastewater, and surface runoff.
The other is the overflow from the gypsum pond, which discharges
into the River approximately one mile downstream of the main plant
sewer discharge
(R.
233).
The two discharges differ in the nature
and quantity of contaminants, and Olin’s abatement proposals are
different for each.
We thus take them up separately for discussion.
—4—
7
—
48
The main plant sewer discharge amounts to about 1300 GPM
(Supp.
Ex.
A).
The
present
discharge
fails
to
meet
the
December
31,
1973 effluent standards of Rule 408 for arsenic
(0.5 vs. 0.25 mg/i
standard),
fluoride
(20. vs.
2.5 mg/i standard), and lead (0.2 vs.
0.1 mg/l standard)
--
all per Supplemental Exhibit F.*
As indicated
earlier, Olin is presently proceeding to install a clarifier (Pro-
ject 1-2) which will reduce the total suspended solids from 370.
to
15.
**
mg/l prior to the end of 1973,
and the total suspended solids
are expected to remain at or within the Rule 408 standard after that
date
(Supp.
Ex. F).
The gypsum pond overflow discharge to the River is presently
about 38,900 pounds per day
(Supp.
Ex.
B)
.
Olin expects this to
be reduced to 11,130 pounds per day on days of overflow
(Supp.
Ex.
B)
following completion in mid-1973 of the gypsum pond recycle
improvements
(Project 1—3) currently under way.
Olin apparently
arrived at the 11,130 pounds per day figure by estimating
(no
supporting data)
that 10
spillage would occur from the pond during
period of heavy rainfall or rapid spring thaws
(Supp.
Ex. B).
The contaminants and their concentrations which will still,
according to the estimate,
fail to meet December 31,
1973 standards
are arsenic
(0.5 vs.
0.25 mg/i standard),
cadmium
(0.35 vs. 0,15
mg/i standard),
copper
(1.2 vs.
1.0 mg/i standard), fluoride
(1100.
*
Supplemental Exhibit F shows Olin’s current total dissolved
solids as 1200. mg/i and projected full compliance as 1630.
mg/i,
each to be compared with a standard of 1250.-3500.mg/l
(standard allows 750 mg/i over background of 500 mg/i, and
permits a maximum of 3500.
mg/I where process stream recycle
is practiced,
as
is said by Olin to be the case here).
Thus,
Olin’s data indicates there will be no need for a variance
for
total dissolved solids, and this part of the variance request
is dismissed as moot.
**
Number appearing in Supplemental Exhibit F corrected from 5.
to 15. by Olin’s representatives present during Board discussion
of case on November 21,
1972.
(See also pp.
2-3 of Petitioner’s
Withdrawal of Certain Requests for Relief and Correction of
Record, filed November 27, 1972).
—5—
7 —49
vs.
2.5* mg/i standard),
total iron
(55.
vs.
2.0 mg/i standard),
dissolved iron
(55. vs. 0.5 mg/i standard),
manganese
(7.4 vs.
1.0 mg/i standard),
mercury
(0.0007 vs. 0.0005 mg/i standard),
oil
(35. vs.
15. mg/i standard),
pH
(2.1—2.6 vs. 5-10 standard),
zinc
(6.0 vs. 1.0 mg/i standard), total suspended solids
(30.
vs.
15.
mg/i standard), and total dissolved solids
(14,100 vs. 3500. mg/i
standard)
--
all per Supplemental Exhibit
E.
Insofar as water pollution abatement is
concerned,
the net
result,
then,
as of the end of 1973 of Olin’s $810,000 expenditures
currently underway ($590,000 of which
is
for water pollution abatement)
is that the concentration of total suspended solids in the main
plant sewer effluent will be substantially reduced, hut the con-
centration
of other contaminants will remain the same
as
now.
And
the total mass overflow from the gypsum pond will be reduced by
a factor of about 2/3, while the contaminants and their concentra-
tions remain the same as presently.
This means that after December
31,
1973,
Olin’s discharges per the proposed Exhibit Q compliance plan
will still exceed the Rule 408 standards for 14 parameters,
the
departures being especially large for fluorides,
iron, manganese,
zinc and total dissolved solids.
Curiously enough,
it turns out that what Olin seeks here does
not involve any phosphate water quality or effluent standards,
for
there are no such standards for the relevant section of the Des
Plaines River.
While Illinois has adopted phosphate limitations
applied to reservoirs or lakes
(cf.
Secs.
203(c)
and 206(c)
of
Water Pollution Regulations), the State
(1.
e.
our
Board) was not
convinced of a need for such standards as applied
to this section
of the Des Plaines River
(see
p.
7 of Opinion in re Effluent Criteria,
etc.,
January
6,
1972).
There is no evidence in the record that Olin’s
*
Curiously enough,
this 2.5 mg/i fluoride standard was “accepted”
by the Board in lieu of an initially proposed 1.0 mg/i standard
after Olin1s Joiiet people testified that they had been able to
attain levels of
2 or 2.5 mg/i on their effluent
(PCB Opinion,
R70-8,
p.
15, January
6,
1972;
p.
106 of hearing transcript,
October
6,
1971)
—6—
7
—
50
phosphate discharges cause violation of any of
these standards down-
stream at the site of any reservoir or lake which might be fed by
the River.
And there is no evidence showing that Olin’s discharges
of phosphates
to the River cause or tend to cause water pollution, quite
apart from any violation of
standards,
which would or might violate
the Environmental Protection Act
(Sec. 12(a)).
We note with interest that Olin’s new compliance
plan, Exhibit Q
to the Petition, includes a Project B—7 which calls for virtually
completely sealing off the gypsum pond effluent so that it cannot
reach the River at all.
The estimated cost is $400,000 and the proposed
compliance schedule calls for this work to be started in mid-1974
and completed some 16 months later
(in late 1975)
.
If Project B—7
were to be implemented,
the
River
contamination
from
the
gypsum
pond
overflow would be completely eliminated except during severe storm
periods.
Also,
Project B—l includes one small
item,
HF Emergency
Pond Repair at
a cost of $6,000, which will advantageously prevent
fluoride from entering the process sewer system during infrequent
upset conditions
(see Petitioner’s Supplemental Information on Effective-
ness of Compliance Program,
pp.
5-6).
Evidence concerning the effect on the river of the two discharges
was based on calculations made of summary data for 1971 taken at
the Brandon Road Bridge located upstream of Olin’s plant
(Ex.
L to
petition)
as well as data submitted acquired in April, 1972 from
sampling downstream near
the 1-55 bridge (Smith’s Bridge)
(Ex. M
to petition).
We note from a map that Smith’s Bridge is located at
least five miles downstream from the two Olin discharges into the
river.
Such measurements made five miles downstream of
the point
of entry of the effluent are not adequate to show the effect of Olin’s
discharge on the Des Piaines River.
In support of its petitions,
Olin argues that compliance with
the standards would impose an arbitrary or unreasonable hardship
upon it because it would have to spend money on pollution abatement
in the face of uncertainty as
to whether the detergent phosphate market
will continue at all.
Olin’s record proofs
in support of its argu-
ment include several Procter
& Gamble newspaper advertisements and
written statements, and several statements concerning the Federal
Government’s attitude.
One Procter
& Gamble advertisement,
dated
March
25,
1970
(Ex. 0 to Petition),
states in part:
“What
Is Procter
& Gamble’s Position In Regard To
Phosphates
in Detergents?
Procter
& Gamble is engaged in an
‘all out’ effort
to reduce
-—
and eventually
to eliminate
-—
the
phosphate content of its detergents.
—7—
7—51
We have not waited for
‘proof’
that the elimination
of phosphates
from our products will have any signi-
ficant
effect
one
way
or
the
other
on
lakes
and
streams.
Scientific opinions on this matter do differ.
But it
may take years to develop the necessary proof one way
or
the other,”
(Page
2 of
Ex.
0)
Another, dated July
7,
1972
(Petitioner’s Ex.
13) say~
“The Chicago City Council has passed a law making it
illegal to sell detergents containing phosphates after
June 30,
1972.
We would like to explain our Company’s
position in regard
to this action.. .we have reluctantly
concluded that the only responsible thing for us
to do
is
to withdraw all our laundry detergents from Chicago.”
In a letter dated August 10, 1972 to Mr.
Rubin,
the Assis-
tant Attorney General representing the Agency in this proceeding,
Mr.
N.
W. Ventress,
Division Counsel of Procter
& Gamble, stated
in part:
“At this
time,
it
is impossible to supply you precise
information on the projected needs of phosphates
in deter-
gents for our Company in the years ahead for two basic
reasons:
1.
We cannot yet say when our efforts to find a
satisfactory replacement for phosphates
in detergents
will be completed.
2.
It
is entirely possible that some additional
legislative bodies
in this country may decide to restrict
phosphates
in detergents in some way.”
***
“Procter
&
Gamble has placed a high priority on a search
for a phosphate replacement in detergents and
it
is
the
Company’s largest single research item.
This
is
a very
complex problem which involves, among other things, ex-
tensive safety tests from both human and environmental
standpoints.
We are confident we will find a replacement,
but cannot give you a schedule.
As you may know,
in 1970
we thought we had a suitable substitute in NTA and were
actively moving
to gain experience with it.
However, at the
request
of
the U.
S. Government, we are not using
NTA
until
further tests have been completed.
—8—
7
—
52
We wish we could be more precise but with the many
uncertainties concerning phosphate legislation, im-
proved municipal treatment facilities for handling
phosphates and changing attitudes in the scientific
community as well as by those in government and the
consuming public, there is no way to be more definitive
at this time.”
As
for the Federal government’s position,
Olin points to
statements made April
26,
1971 by Surgeon General Steinfeld and
b~’Mr. Russell
E. Train before the Federal Trade Commission
(Pet.
Exs.
8,
9).
The Surgeon General said in part:
“Mr.
Chairman,
it is a pleasure to appear before the
Federal Trade Commission concerning a proposed rule
that would require that all detergent packages dis-
play a list of the principal ingredients and a warning
if phosphates were used.”
* **
“In respect to efforts
to displace phosphates from
detergents,
it should be realized that tests conducted
thus far indicate that some of the currently used sub-
stitutes for phosphates are clearly toxic or caustic
and pose serious accident hazards,
especially to children.
Other substitutes not yet fully tested may also be toxic
and/or caustic.
Intensive research on this problem
currently is underway by both Government and industry.
Much
is unknown, particularly of the long term biological
effects of components of detergents.
Of course, some of
the substitutes may not be harmful, but we must be certain
of this before large scale exposure of society to them
is permitted.”
***
“The U.
S. Public Health Service therefore urges the
Federal
Trade
Commission
to
defer
making
a
decision
regarding labelling at this time.”
Reference
is
also made to a
U.
S.
Department of Health, Education
and Welfare news release dated May
5,
1972
(Ex. N to Petition), which
reads
in part:
“Use of NTA in laundry detergents was discontinued
voluntarily
by
the
soap
and
detergent
industry
late
in 1970,
pending study of its effects on health.
—9—
7
—
53
Acting on the conclusions of the Committee, which has
just completed its review of the subject, Dr. DuVal
announced
that
the
Department
of
Health,
Education
and
Welfare
would
continue
to
oppose
use
of
NTA
in
laundry
detergents.
This policy will remain in effect until
studies are completed on:
——
NTA’s possible carcinog9nic effects and
--
NTA’s possible mutagenic effects.”
***
“HEW attaches a high priority to compietion of
its
examination of the questions remaining on the possible
health effects of NTA.
Assistant Secretary DuVal has
asked the Woods Committee to design experiments needed
to answer these questions.
The experiment designs should
be available in the next few weeks and will become a basis
for prompt initiation of the needed studies.”
In the most recent newspaper pronouncement, submitted by Olin*
as an additional exhibit after the hearing,
the ~.kron,Ohio Beacon-
Journal quoted Dr. Steinfeid as saying on September 12,
1972:
“It will be 18 months to two years before results are
known..
.
there is no question NTA affected development of
the fetus in pregnant animals.”
Petitioner Olin’s Brief asserts the significance of the above
to be as follows
(pp.
7—8,
12—13):
“On the one hand,
Russell
E.
Train, Chairman of the
Council on Environmental Quality and Jesse L. Stein-
feld,
the United States Surgeon General, urge caution
in condemning phosphates out of hand because of the
possible adverse health effects of presently known
substitutes
(Petitioner’s Exhibits
8 and 9).
On the
other,
the largest single producer in the soap industry
has publicly committed itself to removing phosphates
from its products
(Petitioner’s Exhibits
12,
13,
i5 and 16)
This company, Procter
& Gamble,
is also Olin’s largest
single customer,
accounting for between 30
and 40
of
its 1971 Joliet plant output.
The Joliet plant
is Olin’s
*
See
letter to Board Clerk from Olin’s counsel dated October
2,
1972.
—10—
7—54
only facility capable of making laundry phosphates.
A continued market for laundry phosphates
is crucial
to the economic viability of the Joliet plant.”
***
“To commit the necessary funds to bring the Joliet
plant into compliance on the dates required would not
be a rational business decision.
Olin’s Vice-
President, William Oppo.ld, stated as much.
The only reasonable business decision which Olin can
make in the present climate is to withhold the neces-
sary investment.
In the absence of a variance,
this
means
that the plant must close at the end of 1973.”
Olin does not explain why the market uncertainty is any more
critical now than it was back at the time of Procter
& Gamble’s
March, 1970 announcement,
or later in
May
of 1971 when Olin adopted
its water pollution abatement program (which it
is now bound to
follow pursuant to Federal Court order)
.
The May,
1971 program,
which makes
express reference to the uncertain market for detergent
phosphates, included commitments by Olin to spend what had to be
substantial sums on pollution abatement
(see Ex. A to Petition),
and we are provided with no evidence as
to why the apparently continuing
market uncertainty now suddenly renders the abatement expenditures
unreasonable.
There are also other aspects of Olin’s proofs that make us
wonder if the sky is really falling.
Olin’s brief argues that in
the absence of a variance “the plant must close at the end of 1973”
(See above).
Yet,
no witness so testified.
On the contrary,
the
Olin witnesses have projected production and sales
into the future
at the same levels as currently
(R.
153—155,
198,
213).
We also question whether Olin has timely kept the Board informed
as
to
its intentions and its own changes
in the posture of its case.
The original petition for variance asserted that even the $810,000
initial expenditures, labelled as Interim Control Program, would not
be made unless the variance were granted
(p.
1 of Ex. Q to Petition)
No expression
to the
contrary came from Olin prior to the public
hearing or during presentation of evidence at the hearing until
the
Assistant Attorney General received an affirmative answer when he
asked Olin’s Vice-President on cross-examination whether Olin intended
to make the $800,000 plus expenditures whether or not the variance
was granted
(R,
168).
After the hearing, Olin acknowledged that the
$810,000 initial expenditures are to be excluded from the variance
—11—
7
—
55
sought*.
This reduces the “approximately 4.0 million dollars”
cost figure of the original Petition
(p.
12)
by
almost a full million
dollars.
Unfortunately,
the
record does not reflect the extent to
which this changes
the
results
of Olin’s cash flow analyses
(e.g.
see R.
175),
and we find it difficult to evaluate the record on
cash flow
in
the
absence of this information.
Still another aspect of Olin’s case
is bothersome.
Olin’s
cost figures appear for the most part
to be internally generated.
As approximations they appear to be rounded off to the nearest five
or ten thousand dollars
(see Ex. Q to Petition).
There
is
no record
evidence that Olin obtained firm ciuotations from equinment suenliers
and contractors.
In the one case shown in the record in
which
Olin
received some type of cost estimates from
a contractor,
the
numbers
were
characterized
by the Olin witness as
a “top-of—the—head
guess’
(R.
4,
August
16,
1972)
and
later
were
revised
downwardly
substan-
tially.
Olin’s
market
uncertainty
argument
is
interesting,
and
~~.ears
to be one of first impression for our :~oard.
One problem we
have
with it
is with the quality and extent of
the proofs submitted,
We
start with the fact that to date Olin’s Joliet Plant uhosrthate sales
have not decreased
(R.
102,
115-116),
even though various municir,ai-
ities have passed ordinances limiting phosphates
(e.
p.
see Ex.
P
to Petition).
And,
if Olin’s sales continue at present
levels
there
is no problem because Olin can recoup the pollution abatement expen-
ditures in terms of cash
flow within about five years,
which
Olin
considers
a
reasonable
period
of time
(R.
175)
.
If,
on
the other
hand,
Olin’s
Joliet
plant
sales
drop
off
incrementally
in the next
few
years
by
1
per
year,
the
cash
recovery
period
extends
to
eight
years.
For an incremental sales
decrease
of 3
per year
Lhnrc
would
be no recovery at all**(R, 158).
It does appear that sales information will soon become available
for the year 1973.
The record shows
that Olin’s phosphate sales
contracts with
its
customer Procter
&
Gamble are entered into on a
calendar year basis, and that these contracts typically are negotiated
and signed
in November or December of each year
(R.
130)
.
This means
that the contract for 1973 should be negotiated
in the next
few weeks.
Once Procter
& Gamble makes known
its
estimated purchase requirements
by way of this current contract negotiation,
it may be possible for
Olin to make a more secure prediction of its future sales,
And with
this information in hand,
we
will have
a more current, and therefore
better yardstick to use in assessing Olin’s hardship.
*
Petitioner’s Supplementai
Information on Effectiveness of
Compliance Program dated October
23,
1972,
pp.
4-5.
**
As
indicated,
however,
these cash flows were not calculated for
the
downwardly revised and corrected abatement expenditures, and
thus have limited value
here.
—12—
7
—
56
Returning
to the nature of Olin’s proofs as far as
the market
is
concerned, we
note
that
Olin
does not contend that it will be
affected any differently by Illinois’ pollution control
laws
than
will its competitor Stnuffer Chemical Company, which also has a
detergent phosphate plant in Illinois, and which shares last place
with Olin insofar as market portions are concerned
(R.
114,
146)
Cue of
the
most difficult nuestions of proof to resolve
is
that
nresented
by
Olin’s
heavy
reliance
on
newspaper
ads
and
press
re-
leases
as proof of market uncertainty.
The only information in
the
record
on
Procter
&
Oamble
‘
s intentions
is
that found in the
detergent
nomnany’s
public
statements
(F.
129).
Olin
did
not
pre-
sent a sinqlc witness
from Procter
&
Gamble to testify about that
company’s
rurchase
jntent
Lons,
and ~lidnot present anyone from the
f~ed.~ralgovernment
to testify about th~ongoing research on phos—
ohstes or
their reniacements.
We
have
very
litde
comnetent
evidence
as
to
the
two
year
mini-
mum
Lmu
period
that:
Olin
says
may
be
necessary
before
a
market
deci-
can
ee made.
Arid
even
if
we
accept
the
newspaoer reports as
t~roof, the time
~riod
is
onen
ended.
It
could
stretch
on
inter—
miiiabtv.
What
hanpens
i;f
at
the
end
of
1973
Olin’s
market
uncertainty
argument
is
repeated
in
rueriort
of
renewed
variance
netitions.
This
L:cnIrd’s
orders
could
end
un
functioning
as
licenses
to
pollute.
From
the
above
we
draw
the
Loliowing
conclusions
insofar
as
~hc
waLer pollution
asrects
of
the
~atitioris
are
concerned.
As
fry-
me
qynsum
nond
effluent,
we
dO
not
believe
Olin
has
proven
the
canals
i
tu
hardship
to
justify
grant
of
a
variance.
By
spending
S4U0,~03
(Project
B—7)
in
addition
to
mdc
$810,000
presently
committed,
uf~lueot
could
be
eliminated
virtually
entirely.
The
gyosum
pond
F
~uon
nonn~ins
a
±arge
numjjnr
of
contaninants
in
concentrations
hj~
:‘~
the
Rule
408
standards,
some
far
in
excess
of
standards,
mining
fluorides,
acidity
and
dissoived
solids,
and
Olin
has
failed
inn
~i
s’:. nively
that
continued
discharges
will
have
no
adverse
ry
510
;SSS
Plaines
River.
By
doing
away
with
the
gypsum
pond
nfl’
~c:r,
iron
(total
and
dissolved)
,
manganese,
mercury,
zinc,
e:’miun
and
acidity
would
all
he
eliminated
as
rroblems,
since
these
ox inmate
solely
with
the
gypsum
pond
effluent.
If
it.
was
reasonable
for
Olin,with
full
knowledge*
of
the
so-
COl~Cd~r~e
rtain
market
conditions
for
detergent
phosphates,
to
commit
$2.o,00r
for roilution abatement to achieve some improvements,
then
it:
is
reasosmlc’
for Olin to spend
an
additional
$400,000
to achieve
even
greater
imerovements
resulting
from
near
complete
blockage
of
the
g/pium
pond.
lOc same can be said for the $6,000 expenditure to
*
Since at least as early as March
25,
1970
(Ex. 0 to Petition)
—13—
7
—
57
prevent fluoride upsets within the plant
(part of Project B-I).
Despite whatever case Olin can be said to have made on the market
uncertainty issue, Olin has not established that it should save these
$400,000 and $6,000 expenditures.
The main plant sewer presents a different situation because the
contamination levels are less than in the case of the gypsum pond,
and the costs of removing the contaminants to meet standards would be
relatively high,
e.
g. Project B-6,
an effluent treatment plant,
would have to he completed at an additional cost of
$850,000*.
This
cost could be prohibitively high in relation to the benefits obtained,
if the detergent phosphate market is going
to disappear soon.
Thus,
the record shows that after installation of the clarifier,
which will reduc~total suspended solids by over 95,
the main plant
sewer
effluent
departures
from
the
December
31,
1973
effluent.
standards
will
be
relatively
small.
The
0.5
mg/I
arsenic
level
exceeds
the
0.25
mg/i
standard
by
a factor of two, but is still within the
0.05
to
0.5
mg/i
range
achieved
by
standard
processes,
according
to
Weston
(See Opinion of the Board In
Re:
Effluent Criteria,
#R70-8,
p.
12,
January
6,
1972).
The lead level
(0.2 mg/i)
also will be twice the
standard, but still very low;
it should be kept in mind that
the
stan-
dard was set mainly on the basis of the technical feasibility of
reaching it rather than harm to the environment.
Fluoride remains
a problem at
20 mg/i vs.
a
2.5 mg/i standard, but even this does not
look as bad when compared with Patterson’s recommended (albeit not
adopted)
10.0 mg/i standard (See Opinion,
supra,
p.
15).
Then,
too,
there
is the dilution effect in the Des Plaines River,
if adequate
proofs of lack of harm to the River can be made.
The Agency argues that Olin’s petitions should be denied because
(a)
“uncertain market conditions are not grounds for the grant of
a
variance”
(Respondent’s Brief,
p.
4),
and
(b)
for the reason that Olin
would obtain an unfair competitive advantage over its Illinois competi-
tor, Stauffer Chemical, should Olin not have to spend the money necessary
to comply with the regulations while Stauffer presumably is required
to and does meet its obligation
of
compliance.
We have little doubt
that the real likelihood of a substantial market completely disappearing
in a very short period of time,
if proven persuasively, and with like
proof
that. there would be no alternative use for the related production
facilities,
is one of the factors to be considered by this Board along
with others in evaluating whether
“an arbitrary or unreasonable hard-
ship” has been shown to exist pursuant to Section
35 of the Act.
As
indicated above, however, we are concerned here with the quality of the
proofs submitted by Olin as to the market as well as the possible ad-
verse effects of the main plant sewer effluent upon the River.
The
~
$1,000,000 less the $150,000 cost of the clarifier.
—14—
7
—
58
Agency’s
ooin’t
about
Olin’s
gaining
an
advantage
over
its
competitor
tauffer,
though
also
not
completely
proven
in
this
record,
gives
us
some
pause
--
and,
in effect, urges us to require Olin
to
meet
strict standards of oroof of
hardship.
Our conclusion insofar as
the main plant sewer is concerned,
then,
is that Olin
may
be able to prove its case if given more time in which
to gather meaningful factual information as to the detergent phosphate
market,
costs
of
compliance,
and
the
lack of adverse effects on the
River.
Accordingly,
we
believe
Olin
should
be
given
an
extension
of time within which
‘to file its permit application
and
project
completion
schedules.
This
will have the advantage that Olin will
during
‘the
next
few
weeks
learn
what
its
sales
will
be
for 1973,
and will also hopefully during the next several months be able to
develop more cornoetent evidence as to the future for detergent phos-
phates,
as to its compliance costs,
and the effects of the main plant
sewer effluent upon the River.
Olin
is currently under an obligation, pursuant to Sections 903
and
914
of
the
Water
Pollution
Regulations,
to
file
an
application
for
an
operating
permit
for
its
wastewater
treatment
works no later
than
early
October
of
1972
(i.
e.
at least 90 days before December 31,
1972)
.
And
Olin was obliged by Section 1002(b) (i) of the Regulations
to file a Project Completion Schedule with the Environmental Protection
Agency no
later than July
1, 1972*.
We
believe,
and the Order below
so provides, that Olin should be given until June 1,
1973 to file
its application for an operating permit under Sections 903 and
914,
and to file its project completion schedules pursuant to Section 1002.
Olin may thereafter, on or before March
1,
1973, petition the
Board
for a further extension of time if Olin believes it can meet
require—
men’ts of proof consistent with this opinion.
There is one last residual matter involving our interim order
entered September
6, 1972
in which we designated certain Olin ex-
hibits as not subject to disclosure to the public.
At the time of
that order, we indicated that prior to deciding this case on the
merits, we would advise Petitioner
if the non—disclosure status must
be lifted in order to allow our rendition of a final order.
As
it
turns out, we have not,
in rendering this decision on the merits,
had to rely upon the exhibits covered by the prior non-disclosure
order, and upon Petitioner’s request an order will be entered re-
turning these exhibits to Petitioner’s custody.
This opinion constitutes the findings of fact and conclusions
of law of the Board.
*
There is no indication
in the record that Olin has complied with
either of these requirements during pendency of these proceedings.
-15—
7
—
59
IT
IS
THE
ORDER
of
the
Pollution
Control
Board:
1.
Olin’s Petition for Variance as respects its main plant
sewer effluent is granted until June
1,
1973 insofar as
the requirements of Sections 903 and 914 relating
to
operating permits, and Section 1002 relating to
the
project completion schedules are concerned,
but only
to
the extent that they apply to
the Rule
408 standards
for
arsenic,
fluoride
and
lead,
provided
that:
(a)
Olin’s main plant sewer effluent discharged
to
the Des Plaines River after December 31, 1973 not ex-
ceed 0.5 mg/i arsenic,
20.
mg,/l fluoride, and 0.2
mg/l lead.
(b)
Olin continues with and completes
in timely
fashion
and
in
any
event before December 31,
1973,
its
$810,000
“Interim
Control
Program”
presently
underway.
(c)
Olin
proceeds
immediately
to
carry
out
and
completes
within
16
months
from
the
date
of
this
Order,
Project
B-7
calling
for
expenditures
of
$400,000
to
seal
off
the
gypsum
pond
effluent,
and
completes
that
portion
of
Project
B-i
calling
for
an
expenditure
of
$6,000
to
repair
the
HF
emergency
pond
prior
to
December
31,
1973.
2.
Olin’s
petitions
for
variance
in
all
other
respects
are
mooted or denied in accordance with the above opinion.
3.
The
Environmental
Protection
Agency
is
hereby
authorized
to
accept
Olin’s
permit
applications
and
completion
schedules
embodying
the
foregoing
and
is
further
author-
ized
to issue such permits and approve such
schedules
in
due course if such permits and schedules are
otherwise
in
order.
4.
On or before March
1,
1973,
Olin shall have leave to
petition the Board for an extension of this variance con-
tingent upon sufficient proof of the continuing uncertainty
of the detergent phosphate market and its economic effect
on Olin’s Joliet plant,
the costs of compliance with this
Board’s regulations, and the effect on
the concentrations
of regulated constituents
in
the
waters of the State of
Olin’s discharge beyond
a reasonable mixing zone from
the
point of entry,
in accordance with
this Opinion.
I, Christan Moffett, Clerk of the Illinois Pollution Control Board,
certify that the above Opinion and Order of
the Board
o~Petition
for Reconsideration and Rehearing was adopted on
the
7
~‘
day of
_____________,
1973, by a vote of
..~
to
~
—16—
7
—
60
