ILLINOIS POLLUTION CONTROL BOARD
May 16, 1996
MARATHON OIL COMPANY,
)
Petitioner,
)
v .
)
PCB 94-27
(Variance -
Air)
ILLINOIS ENVIRONMENTAL
)
PROTECTION AGENCY,
)
Respondent .
)
JOSEPH WRIGHT, McBRIDE, BAKER & COLES APPEARED ON BEHALF OF
PETITIONER
.
JAMES O'DONNELL, ILLINOIS ENVIRONMENTAL PROTECTION AGENCY
APPEARED ON BEHALF OF RESPONDENT
.
OPINION AND ORDER OF THE BOARD (by R.C
. Flemal) :
This matter comes before the Board upon a petition for variance filed by Marathon Oil
Company (Marathon)
. Marathon seeks variance from the Board's particulate emissions
and
opacity regulations pertaining to its fluid catalytic cracking unit at its petroleum refinery
in
Crawford County, Illinois
. The term of the requested variance is from January
1, 1993 to
November 15, 1995 1 .
The Board's responsibility in this matter arises from the Environmental Protection Act
(Act) (415 ILCS 5/1 et seq
. (1994).)
The Board is charged there with the responsibility
of
granting variance from Board regulations whenever it is found that immediate compliance
with
the regulations would impose an arbitrary or unreasonable hardship upon the petitioner
.
(415
ILCS 5/35(a)
.) The Illinois Environmental Protection Agency (Agency) is required to
appear
in hearings on variance petitions
. (415 ILCS 5/4(f)
.) The Agency is also charged, among
1
The inclusive dates, January 1, 1993 to November 15, 1995, are requested in Marathon's
Amended Petition (Amd
. Pet .), page 3 .
The Board notes that in Marathon's initial petition
(Pet.)
at page 3, Marathon requested that variance start on January 14,
1994 . The Board
further notes that in Marathon's post hearing brief the requested term is identified both as "the
period commencing on May 13, 1993
. . .
through August 10-11, 1994" (Marathon Br
. at 5)
and as "from May 12, 1993 through and including August 10, 1994"
(Id.
at 10) .
2
other matters, with the responsibility of investigating each variance petition and making a
recommendation to the Board as to the disposition of the petition
. (415 ILCS 5/37(a) .)
Based on the record presented to it, and upon analysis of the requirements necessary
for grant of variance, the Board finds that Marathon has not carried its burden of proof to
justify grant of variance
. Accordingly, the variance request will be denied
.
PROCEDURAL HISTORY
Marathon's initial petition for variance was filed with the Board on January 14,
1994
. Along with its petition Marathon filed a motion to have two documents (permit and
permit application) declared "not subject to disclosure" pursuant to Section 7 of the Act
. (415
ILCS 5/7
.) On February 17, 1994 the Board found that Marathon had not physically included
those documents which it was requesting "not subject to disclosure"
. The Board directed
Marathon to resubmit its application, including both documents it would be requesting to be
protected, along with a motion so stating
. Marathon never submitted the specific documents to
be protected, nor did it submit an additional request to prevent disclosure
.
On March 8, 1994 the Agency filed a motion to dismiss which Marathon answered on
March 14, 1994
. The Board denied the Agency's motion on March 17, 1994, finding that
Marathon had at that time presented sufficient information as required by Section 104
.121(e)
of the Board's regulations
. The Board also construed the additions in Marathon's response as
amending the petition
. On March 18, 1994 Marathon filed a formal amended petition for
variance which the Board accepted on March 31, 1994
.
On April 25, 1994 the Agency filed its recommendation to deny Marathon's requested
variance relief
. Contrary to Marathon's claim that the Agency did not file a recommendation
as required by Section 37 of the Act
2,
the Board accepted the Agency's recommendation on
April 25, 1994
. The Agency claims that Marathon was served with the recommendation on
April 21, 1994
. (Agency Br . at 8 .)3
A hearing was held on March 2, 1996 at the Crawford County Courthouse, Robinson,
Illinois, before hearing officer Deborah Frank, and continued on the record by telephone due
to weather conditions to March 21, 1996
. Charles Samuels appeared as a witness on behalf of
Marathon and John Justice appeared as a witness for the Agency
. No members of the public
were present at the hearing .
2
See Marathon's April 11, 1996 post-hearing brief, page 2
.
3
Marathon's amended petition will be cited as (Amd
. Pet. at _ .); the Agency's post-hearing
brief will be cited as (Agency Br
. at .);
Marathon's post-hearing brief will be cited as
(Marathon Br . at
-
.);
the Agency's reply brief will be cited as (Agency Reply Br
. at _.) ; and
the transcript of the hearing will be cited as (Tr . at
_.) .
3
On April 11, 1996 Marathon filed a motion to strike Respondent's Exhibit 8
. On April
19, 1996 the Agency filed its response to Marathon's motion to strike Respondent's Exhibit 8
.
The Board hereby denies Marathon's motion to strike and affirms the hearing officer's ruling
to admit Respondent's Exhibit 8 .
REGULATIONS AT ISSUE
Pursuant to authority granted it under the Act, the Board has established limits for
various types of air emissions
. Among these are limits on particulate matter emissions and on
the opacity of visual emissions
. The particulate emission limits pertinent to the instant matter
are found at 35 Ill
. Adm. Code 212
.381, which in its entirety reads :
Section 212.381
Catalyst Regenerators of Fluidized Catalytic Converters
Sections 212
.321 and 212.322
shall not apply to catalyst regenerators of
fluidized catalytic converters
. No person shall cause or allow the emission
rate from new and existing catalyst regenerators of fluidized catalytic
converters to exceed in any one hour period the rate determined using the
following equations :
•
= 4.10 (P) °'67
for P less than or equal to 30 tons per hour
.
•
= (55 .0(P)011 )-40 .0
for P greater than 30 tons per hour
.
where :
•
= allowable emission rate in pounds per hours, and
•
= catalyst recycle rate, including the amount of fresh catalyst added,
in tons per hour
.
When data for the facility at issue are entered into the pertinent equation of Section
212
.381, the emission limit calculates to approximately 84 pounds per hour (lb/hr)
. (Tr
. at
14.)
This value is not at dispute .
Opacity limits are found in the Board's regulations at 35 Ill
. Adm. Code 212 .123 .
Section 212
.123 reads in its entirety:
Section 212
.123
Limitations for All Other Sources
a)
No person shall cause or allow the emission of smoke or other
particulate matter, with an opacity greater than 30 percent, into the
atmosphere from any emission source other than those sources subject to
Section 212
.122 .
4
b)
Exception :
The emission of smoke or other particulate matter from any
such emission source may have an opacity greater than 30 percent but
not greater than 60 percent for a period or periods aggregating 8 minutes
in any 60 minute period provided that such more opaque emissions
permitted during any 60 minute period shall occur from only one such
emission source located within a 305 m (1000 ft) radius from the center
point of any other such emission source owned or operated by such
person, and provided further that such more opaque emissions permitted
from each such emission source shall be limited to 3 times in any 24
hour period
.
The pertinent part of Section 212
.123 is subsection (a),
which establishes that opacity
may not exceed 30%
. It is undisputed that this limit is applicable in this instant circumstance
.
The Board is authorized under the Act to grant variances, which are temporary
exemptions from compliance with specific Board regulations, at 415 ILCS 5/35(a)
:
The Board may grant individual variances beyond the limitations prescribed
in this Act, whenever it is found, upon presentation of adequate proof, that
compliance with any rule or regulation, requirement or order of the Board
would impose an arbitrary or unreasonable hardship .
BACKGROUND
Marathon seeks variance with respect to emissions from its petroleum refinery located
near the City of Robinson, Crawford County, Illinois
. The refinery has a capacity of 175,000
barrels of crude oil per day
. It is located on a 900-acre tract that contains 25 process units and
7 support units
; the refinery has a storage tank capacity of 6
.1 million barrels
. (Marathon Br .
at 2
.) Marathon employs 570 persons with an annual payroll of $40 million
.
One of the units that Marathon operates is a fluid bed catalytic cracking unit (FCCU)
that is used to crack heavy gas oil material into lighter, more valuable fractions
. (Tr
. at 9-10 .)
The unit starts with olefins, consisting of "cat gasoline, light cycle oil, and slurry"
. (Id. at
10.)
Most of the olefins are used in this refinery to produce alkylite gasoline, in the amount of
12,000 barrels a day .
(Id.)
The remainder of the olefins are used to make oxygenates for
reformulating gasoline . (Id.)
The two main process vessels in the FCCU are the reactor and the regenerator
. A very
fine aluminous silica catalyst is circulated from the regenerator to the reactor through a riser
.
Cracking takes place in the reactor and riser
. (Tr. at 11 .)
According to Marathon, the air emissions from the FCCU are controlled by air
pollution control devices, specifically cyclones for controlling the particulate matter and a "CO
Boiler" for controlling carbon monoxide
. (Amd. Pet. at 1
.) However, the Agency disagrees
5
with this characterization, and argues that these devices only partially control air emissions
.
(Rec . at 1 .)
Marathon installed a new catalyst in the FCCU in about January 1993
. A stack test to
determine whether the FCCU complied with particulate emission limits was performed by
Marathon on May 12, 1993
. The test measured a particulate emissions rate of 100
.7 lb/hr
(Amd
. Pet. at Attachment A.),
which exceeds the 84 lb/hr limitation established pursuant to 35
Ill . Adm . Code 212
.381 .
On June 2, 1993 the Agency sent a compliance inquiry letter (CIL) to Marathon citing
apparent violations of the air emission regulations
. (Tr . at 43 ; Agency Exh
. 1 .) The
Agency's letter also asked the reasons for the excess opacity emissions reported by Marathon
on April 20, 1993
. (Agency Br . at 2.)
Marathon and the Agency agreed that the stack would be retested
. The tests were
conducted on August 4 and 5, 1993
. These tests produced particulate emissions rates of 100
.4
and 129.6 lb/hr . (Amd. Pet
. at Attachment A.)
Marathon admits that these measurements
constituted violations of the particulate emissions standard
. (Id.)
In addition, fifteen opacity
(visible emissions) tests were conducted that exceeded the 30% allowable opacity
4.
Marathon
admits that these measurements constituted violations of the opacity standard
. (Amd . Pet. at
Attachment A .)
Marathon hypothesized that the high emissions were caused either by mechanical
damage to the two stage cyclonic control device or by the catalyst itself (possibly soft catalyst
or low attrition resistant catalyst)
. (Tr . at 16; Marathon Br . at 3
.) Marathon began collecting
its own data and instituted investigations by General Electric Cyclone, who manufactured the
cyclones, and Universal Oil Products
. The outside tests revealed that the mechanical devices
were operating properly
. (Marathon Br. at 3 .)
On October 29, 1993 5
Marathon submitted a compliance program to the Agency and
notified the Agency that it would be changing-out the catalyst and, because the change-out
would require significant time, would also be investigating mechanical changes to the FCCU
.
(Tr . at 18 ; Marathon Exh. 4
.) Marathon commenced the catalyst change-out in December
1993
; completion did not occur until September 1994
. (Tr
. at 21-22 .)
4
Six-minute average opacity measurements ranged from a low of 31
.3 % to a maximum of
46 .9%
. (Amd. Pet. at Attachment A.)
5
The Board notes an apparent error in Marathon's brief, in which the date that Marathon
submitted the compliance program to the Agency is given as October 29, 1995
. In
consideration of the rest of the record, the Board concludes that 1993 is likely to be the correct
year (see, e .g ., Marathon's Exhibit #4)
.
6
Marathon accordingly now attributes the increased emissions to the use of its new
catalyst, the AKZO catalyst . (Amd. Pet . at 2
.) As compared to the prior GXO catalyst, the
AKZO catalyst is softer and finer-grained, and thereby more prone to particulate loss
. (Tr. at
17 ; Marathon Br . at 3 .)
On December 16, 1993 Marathon notified the Agency that its particulate emissions
during November 1993 averaged 156
.7 lb/hr, where 85 .4 lb/hr is allowable
. (Agency Br . at
3
.) On January 13, 1994 Marathon notified the Agency its particulate emissions during
December 1993 averaged 169
.1 lb/hr . (Id.)
On December 16, 1993 the Agency denied Marathon's application for an operating
permit based upon particulate emissions from the FCCU . (Tr
. at 21-22 ; Marathon Exh. 5 .)
On March 2, 1994 Marathon received a "Notice of Violation" from the United States
Environmental Protection Agency (USEPA) concerning particulate emissions and opacity
emissions from the FCCU
. The USEPA filed a lawsuit on March 29, 1996 in the United
States District Court for the Southern District of Illinois
. (Marathon Br . at 5 .)6
Marathon performed three more emissions tests in March 1994
. During two of these,
particulate emissions were within standard measurements (63
.5 and 72
.6 lb/hr) . (Tr. at 22 .)
However, in the third, which was conducted with the soot blower in operation, the measured
emissions (91
.3 lb/hr) were over standard measurements . (Id.)
In approximately May 1994 (Tr
. at 23-25) or July 1994 (Marathon Br
. at 4) Marathon
installed sonic soot blowers to replace the prior steam soot blowers
.
Marathon conducted the final stack tests for mass omissions and opacity on August 9
and 10, 1994
. Marathon asserts that these tests demonstrated compliance and moreover, that
Marathon has been in compliance since that time . (Tr
. at 27; Marathon Br . at 4.)
Marathon was issued a general operating permit for the FCCU by the Agency on
September 22, 1994 . (Tr
. at 27 ; Marathon Exh . 7.)
6
Marathon requests the Board take "judicial notice that Counts I and II of the complaint
allege violations of the mass emission limitations during the May and August 1993 tests and
opacity limitations during the August 1993 tests", however, Marathon does not include a copy
of the USEPA complaint
. The Board will, however, take appropriate judicial notice of the
USEPA Notice of Violation, Exhibit #B of Marathon's Amended Petition, which indicates the
notice is based upon tests conducted on May 12, August 4 and 5, 1993
.
7
HARDSHIP
Marathon essentially claims two hardships that it will, or has, experienced if it is not
granted variance relief
. First, Marathon argues that even though it does not know when the
period of noncompliance commenced, once it was discovered Marathon's only choice was to
begin the process of getting a new catalyst and beginning the change-out process
. (Amd . Pet.
at 3
.) According to Marathon, the other choice was to "shut down the unit and in all
probability, the refinery itself", as the FCCU is "essential to the operation of a petroleum
refinery that produces gasoline"
. (Id.)
Marathon claims that a modern petroleum refinery
would not be economically feasible without a functioning FCCU (Tr
. at 13 ; Marathon Br . at
2) and shutting down the FCCU "would have resulted in an economic disaster for Marathon
and the community" (Marathon Br
. at 6) . At hearing Mr
. Samuels, of Marathon, testified that
if the FCCU is down for any length of time without pre-planning, "it almost certainly means a
crude unit shutdown" . (Tr. at 13
.) Part of the reason is that if the FCCU is down there will
be a shortage of intermediate storage capacity for all of the gas oils, where approximately
45,000 barrels of total gas oil feed per day are used in the FCCU
.
Instead of shutting down the FCCU, Marathon asserts it worked diligently toward its
compliance plan as submitted to the Agency and even surpassed the projected compliance
dates
. (See Marathon's compliance plan in Marathon Exh . #4
.) Therefore, Marathon's first
claimed hardship is that it would have had to shut down the FCCU and in all probability the
refinery if it was forced to immediately comply with the regulations at issue when it
discovered it was out of compliance in 1993
.
The Agency argues that the major particulate loss was attributable to the softer catalyst
in the FCCU and that Marathon both knew of the soft nature of this catalyst and had the ability
to use other catalysts . (Agency Br . at 5
.) The Agency states that Marathon should have
initiated an "immediate program" to correct the situation when it received the May 1993 test
results which showed noncompliance
. (Id. at 6.)
But instead, Marathon "waited several more
months and retested the FCCU in August 1993" . (Id.)
According to the Agency, "Marathon
did not act to remedy the softer catalyst until December of 1993, eight months after it knew of
the softer catalyst, and reported the excess opacities and seven months after it failed the first
particulate matter emissions test" .
(Id.)
The Agency interprets Marathon's noncompliance as
a self-imposed hardship, not rising to the level of an arbitrary or unreasonable hardship
. (Id.)
Marathon's second claim of hardship arises out of an enforcement action by the
USEPA
. Marathon clearly states that "[tjhere should be no mistake as to why Marathon seeks
a variance. It is because the U
.S
. EPA has chosen to enforce the Board's regulations, despite
the fact that IEPA has declined to do so
." (Marathon Br . at 6
.) However, Marathon does
acknowledge that the "IEPA has not offered a release and could, if it chose, file an
enforcement action tomorrow"
. (Marathon Br . at 8 .)
The Agency believes "Marathon has failed to met
(sic)
its burden of demonstrating that
denial of variance would impose an arbitrary or unreasonable hardship"
. (Agency Br . at 4.)
8
The Agency stated that it "ardently maintains that Petitioner has not satisfactorily presented
evidence, in the Petition, Amended Petition or at hearing, supporting its position that
Marathon would suffer an arbitrary or unnecessary hardship"
. (Ag
. Br . at 10-11 .)
ENVIRONMENTAL IMPACT
Marathon claims it conducted Air Quality Modeling to determine whether the air
quality in the surrounding area was adversely affected during the periods in question
.
Marathon puts forth Petitioner's Exhibit #3 to show results which "confirmed that there was
no adverse affect on air quality"
. (Marathon Br . at 5
.) Marathon argues to require it to shut
down the FCCU in the "absence of adverse environmental consequences would certainly have
caused Marathon (and probably the community as well) an arbitrary and unreasonable
hardship"
. (Marathon Br . at 6-7.)
Petitioner's Exhibit #3 is entitled, "Atmospheric Dispersion Modeling of Particulate
Emissions from the CO Boiler at the Robinson, Illinois Refinery"
. According to the authors,
Certified Consulting Meteorologist, "[t]his report details modeling analyses that were
performed to determine ambient concentrations of both PM-10 and total particulate due to
emissions from the CO boiler" . (Marathon Exh
. #3 at 2.)
The Agency challenges Marathon's contention that Exhibit #3 constitutes proof of no
adverse affect on air quality
. The Agency contends that the Exhibit #3 is a flawed study
involving unwarranted premises and procedures
. (Agency Br
. at 6-7 ; Agency Reply Br
. at 2-
3
.) The Agency concludes that Marathon has "not addressed the injury to the public or to the
environment and therefore has not proven any arbitrary or unreasonable hardship exists"
.
(Agency Reply Br . at 3 .)
DISCUSSION
The purpose of a variance has been stated many times by the Board and the courts
. In
Monsanto Company v
. Pollution Control Board
(June 1, 1977), 67 111
.2d 276, 10 Ill . Dec . 231,
367 N .E.2d
684, 688, the Supreme Court, in determining whether variances can be
permanent, stated that the Act's ultimate goal is for all polluters to be in compliance and that,
"[t]he variance provisions afford some flexibility in regulating speed of compliance, but a total
exemption from the statute would free a polluter from the task of developing more effective
pollution-prevention technology The
Appellate Court citing to
Monsanto in City of
Mendota v
. Pollution Control Board (3rd Dist
. 1987), 112 Ill . Dec
. 752, 757, 514 N .E .2d
218, stated "[t]he variance provisions of the Act are intended to afford some flexibility in
regulating the speed for compliance
." Finally the Appellate Court in
Celotex Corporation v
.
Illinois Pollution Control Board
(4th Dist 1978), 65 Ill
. App . 3rd 776, 22 Ill . Dec
. 474, 382
N .E
.2d 864, 866, phrased the purpose as "[t]he issues in a variance proceeding focus upon
whether compliance should be excused for a period of time
."
9
The Board in following Monsanto
and the other cases stated "[a] further
feature of a variance is that it is, by its nature, a temporary reprieve from
compliance with the Board's regulations, and compliance is to be sought
regardless of the hardship which the task of eventual compliance presents an
individual polluter." (American River Transportation v
. Illinois Environmental
Protection Agency (August 24, 1995), PCB 95-147 .)
Thus, as the courts and the Board have found, the purpose of a variance is to provide
for a period of time to allow individuals to come into compliance with otherwise applicable
rules and regulations when immediate compliance would cause an arbitrary or unreasonable
hardship . The purpose, therefore, is not to avoid compliance, but rather only to allow for
time for compliance to be achieved .
The Board and the courts have given interpretation to what justification is necessary in
deciding when immediate compliance with the applicable rules and regulations would cause an
arbitrary or unreasonable hardship . In Marathon,
the 5th District Appellate Court, in
reversing the Board, observed
:
When deciding whether to grant or deny a variance request, the Board is
required to balance the hardship of continued compliance on the business
against the adverse impact the variance will have on the environment .
The party requesting the variance has the burden of establishing that the
hardship resulting from denial of a variance outweighs any injury to the public
or the environment from a grant of the variance
. * * * Specifically if the one
requesting the variance demonstrates only that compliance will be difficult, that
proof alone is insufficient basis upon which to grant the variance
. The
petitioner must go further and show that the hardship it will encounter from the
denial of the variance will outweigh any injury to the public or environment
from the grant of the variance
.
(Marathon Oil Company v
. IEPA 242 Ill .App .3d 200, 610 N .E .2d 789, 793
(5th Dist).)
The Board itself has further observed :
The Board must emphasize that under the Act variances are not to be granted
merely because the petitioner has shown that it cannot comply with regulations
despite its efforts to achieve compliance
. Rather, a shield from an enforcement
action is only given to a petitioner who would suffer an arbitrary or
unreasonable hardship
. * * * Certainly, most persons would view any defense
to an enforcement action as a hardship
. But it does not automatically follow
that such a defense is an arbitrary or unreasonable hardship . (Village of Sauget
v
. IEPA (November 3, 1988), PCB 88-18, 93 PCB 281
.)
Hardship
Replacing the FCCU . Marathon argues that maintaining or achieving compliance with
the current standards would have created a hardship which outweighed the adverse impact on
the environment, because it would have had to close down the FCCU, and essentially its
operations, to come into compliance
.
The Board has previously found that the time required to construct facilities and
achieve compliance does not in itself create an arbitrary or unreasonable hardship associated
with immediate compliance . (Olin Corporation v
. IEPA (February 7, 1991), PCB 89-72, 118
PCB 221 .) The mere existence of violations, which cannot be cured immediately, does not
prove the hardship of immediate compliance for which a variance should be granted
. (Id .
;
Decatur Sanitary District v . IEPA (March 22, 1971), PCB 71-37, 1 PCB 359, 360
.)
Additionally, the Board has articulated that a petitioner's hardship must not be self-
imposed by the petitioner's inactivity or own decision-making
. EPA v . Lindgren Foundry Co .
(September 25, 1970), PCB 701-1, 1 PCB 11
; Ekco Glaco Corporation v
. IEPA and IPCB 542
N .E. 2d 147 (1st Dist . 1989)
; Willowbrook Motel, 481 N
.E .2d at 1036 . For example, in
denying the request for variance relief in Community Landfill Corporation v
. IEPA, the Board
found that the twenty two month lapse of time between the deadline for filing petitioner's
significant modification permit application and petitioner's filing for variance relief, was a
self-imposed hardship . ((September 21, 1995), PCB 95-137 .) In PCB 87-41, Ekco Glaco v
.
IEPA, the Board found that "Ekco Glaco's problems arise from the delay caused by decisions
it has made in attempting to secure compliance and its failure to commit to a particular
compliance option . The Board cannot find that those problems constitute an arbitrary or
unreasonable hardship ." Ekco Glaco, PCB 87-41 at 4, aff'd in Ekco Glaco Corp
. v . IEPA and
IPCB 542 N .E. 2d 147 (1st Dist . 1989) . The Appellate Court affirmed the Board's denial of
an extension of variance in Ekco notwithstanding Ekco's argument that the denial would lead
to a shut-down of its new pan and used pan facilities, which would adversely impact Ekco and
its local customers .
Marathon did not petition for a variance in May 1993 when it first discovered that its
FCCU was out of compliance, nor did it petition for a variance when that noncompliance was
confirmed by further testing in August 1993
. Marathon did not petition the Board for variance
relief until January 1994, eight months after it discovered the FCCU was out of compliance
.
According to Marathon, it "acted with due haste and (sic) to correct excess emissions while
performing Air Quality Modeling to assure that no harm befell the community and that Air
Quality Criteria were not exceeded, all the while communicating its actions to the IEPA"
.
(Marathon Br
. at 6 .)
Albeit Marathon's claims, the Board does not believe that the record demonstrates that
Marathon diligently sought timely relief nor made sufficient efforts to quickly comply
.
Marathon could have reasonably anticipated it would continue to be out of compliance and a
variance would be needed after retesting in August 1993 . The Board cannot allow Marathon
10
11
eight months of noncompliance while it attempts to construct a new FCCU, without at the
same time attempting to secure regulatory protection . Marathon should have petitioned the
Board for a variance during the time period it was attempting to achieve compliance
.
Marathon's indecision for eight months as to how to correct the noncompliance through
either changing or fixing the catalyst was a hardship Marathon brought on itself . Marathon's
failure to timely file for variance relief was a self-imposed hardship which does not constitute
an arbitrary or unreasonable hardship warranting variance relief .
USEPA Enforcement . Marathon seeks a variance because the USEPA has chosen to
enforce the Board's regulations . (Marathon Br. at 6 .) Although Marathon does not explicitly
so state, it certainly implies that this threat of enforcement is an arbitrary or unreasonable
hardship justifying variance relief . While the threat of future enforcement may be a hardship
envisioned by the Act and this Board, the hardship of an ongoing enforcement resulting from a
past violation is not in itself a hardship upon which variance relief may be granted
.
The purpose of variance relief is to afford some flexibility in regulating the speed in
which one must come into compliance with the rules and regulations . Marathon argues that
"the need for a variance is really the need for the ability to operate without being prosecuted" .
(Marathon Br . at 7 .) However, it is not the purpose of a variance to provide an after the fact
enforcement shield for past non-compliance . Since the Board's inception it has held that "one
cannot qualify for a variance simply by ignoring a compliance date and thereafter applying for
a variance" because this behavior "would lead to the preposterous proposition that the very
existence of violation is a ground for excusing it"
. (Decatur SD, PCB 71-037, 1 PCB 360
(March 22, 1971) .) This aspect of variance relief is evident in the Board's reluctance in
granting retroactive variances
.
First, the Board recognizes that the threat of future enforcement action is a hardship for
which any alleged violator would seek protection . However, the threat of enforcement alone
cannot constitute an arbitrary or unreasonable hardship, otherwise any threat of future
enforcement would justify a variance . It is clearly absurd for the Board to find that the threat
of an enforcement action is itself sufficient grounds to protect against the bringing of that
enforcement action . Such finding would eviscerate the entire concept of enforcing the Act
.
Indeed, the Board has clearly found that it is not the purpose of a variance to legitimize
past failure to comply with rules and regulations . (Modine Manufacturing Company v
. IEPA
(December 22, 1987), PCB 85-154, 84 PCB 735 .) As has been clearly stated, "(t)he Board
does not believe that a pending enforcement action, before this Board or before a court, is
sufficient reason to grant a variance" . (The Village of Sauget v . IEPA,
(February 6, 1992)
PCB 91-252 ;
The Village of Sauget v . IEPA, (January 24, 1991), PCB 90-181 .) A
retroactive variance to protect against enforcement is contrary to the nature of a variance
. The
purpose of a variance is to provide a temporary reprieve, during which compliance is pursued
.
All regulated entities must operate in compliance, the mere fact that compliance is difficult or
costly does not in itself rise to the level of arbitrary or unreasonable hardship .
Marathon's hardship as a result of the ongoing USEPA enforcement action is not the
type of hardship envisioned by the Act that would warrant variance relief. The variance
provisions are not to be utilized as an after the fact defensive mechanism for alleged past
violations and are to be utilized only when immediate compliance with rules and regulations
would create an arbitrary or unreasonable hardship .
Retroactive Variances
Marathon's amended petition for variance was filed on March 18, 1994 . Marathon is
requesting a retroactive variance from January 1, 1993 through November 15, 1995 . (see
footnote 1 .) Marathon argues that, "(i)f circumstances that justify a shield from prosecution
exist, there is no logical reason why past circumstances are any less compelling than future
circumstances" . (Marathon Br . at 7 .)
The Board has stated :
"[m]oreover the Board is displeased with a request for a variance
which has a term, but for a few days, which is after the fact .
While the Board allows that there may be circumstances where
the latter condition might validly arise, it also believes that after-
the-fact grants of variance are generally inconsistent with the
intent of variance relief as enunciated by the Environmental
Protection Act. At the minimum, it is not the intent of a variance
to legitimatize past failure to comply with rules and regulations ."
(Modine Company v. IEPA (December 22, 1987), PCB 85-154, 84 PCB 735 .)
The Board has determined that in the absence of unusual or extraordinary
circumstances, the Board renders variances as effective on the date of the Board order in
which they issue . LCN Closers, Inc . v. IEPA (July 27, 1989), PCB 89-27, 101 PCB 283,
286 ; Borden Chemical Co . v . IEPA (December 5, 1985), PCB 82-82, 67 PCB 3, 6 ; City of
Farmington v . IEPA (February 20, 1985), PCB 84-166, 63 PCB 97, 98 ; Hansen-Sterling
Drum Co. v. IEPA (January 24, 1985), PCB 83-240, 62 PCB 387, 389 ;
Village of Sauget v .
IEPA (December 15, 1983), PCB 83-146, 55 PCB 255, 258 ; Olin Corp . v. IEPA (August 30,
1983), PCB 83-102, 53 PCB 289, 291 . Although the Board does not generally grant variances
retroactively, retroactive variances have been granted upon specific justification . Deere &
Company John Deere Harvester East Moline Works v . IEPA (September 8, 1988), PCB 88-
22, 92 PCB 91 (citations omitted) . The Board stated that the reasoning behind the general rule
is to discourage untimely filed petitions for variance, i.e.,
variances filed after the start of the
claimed arbitrary or unreasonable hardship creating the desire for a retroactive start ; and
because the failure to request relief in a timely manner is a self-imposed hardship
. (Fedders-
USA v . IEPA (April 6, 1989), PCB 86-47, 98 PCB 15, 19, DMI, Inc . v. IEPA (February 23,
12
13
1987) PCB 88-132, 96 PCB 185, 187 and American National Can Company v . IEPA (August
31, 1989), PCB 88-203, 102 PCB 215, 218 .)
As the appellate court discussed in Monsanto, "[t]he Board can provide relief from the
hardship of immediate compliance and yet retain control over a polluter's
future conduct by
granting a temporary variance" . (Monsanto Co
. v. Pollution Control Board 67 Ill.2d 276, 288
(1977) (emphasis added)
.) The very concept of a retroactive variance would eliminate the
Board's ability to retain any control over the polluter's activity during the term of the
variance .
The Monsanto court further examined the Board's authority to grant a variance and any
conditions attached thereto . The court found that the Board's authority to decide whether a
regulation imposes an arbitrary or unreasonable hardship on an individual polluter which
would justify variance, is essentially a quasi-judicial decision . (67 Ill .2d 276, 289 (1977)
.)
However, the Board's authority to impose conditions upon that variance is not quasi-judicial,
but "in a word, rule-making power, in the sense that its focus is on future conduct and its
efficacy depends upon agency expertise"
. (Id . at 290.) The Board's power in this regard is
"tantamount to the quasi-legislative power to make prospective regulations and orders" . (Id.)
In the instant matter Marathon is requesting an entirely retroactive variance which would
preclude the Board from attaching any conditions which may be necessary to effectuate the
policies of the Act . Not only is the very essence of a variance one to provide prospective
relief, but that same legislative intent of future policy making is also present in the conditions
attached to any variance .
However, the Board has granted variances with "retroactive" inception dates under
certain circumstances
. The Board has made a variance retroactive to the date on which the
Board would have rendered a decision where there was a procedural delay of the proceeding
through no fault of the petitioner, or as the result of confusion over interpretation of federal
regulations . (See Allied Signal, Inc . v . IEPA (November 2, 1989), PCB 88-172, 105 PCB 7,
12; Morton Thiokol Inc ., Morton Chemical Division v . IEPA (February 23, 1989), PCB 88-
102, 96 PCB 169, 181 and Union Oil Company of California v . IEPA (February 20, 1985),
PCB 84-66, 63 PCB 75, 79 .) The Board has also applied a shorter period than the statutory
time for decision to back-date a variance where we have otherwise viewed the petition as
timely filed prior to the date on which the petitioner required the relief . (Monsanto Company
v . IEPA (April 27, 1989), PCB 88-206(B), 98 PCB 267, 273 .) These types of retroactive
variances are entirely consistent with the Board's general principle of not granting retroactive
variances . In these cases, the Board did little more than confer the starting date of the latest
date on which the Act would have required a Board decision, i .e., the 120-day decision
deadline, were it not for a waiver of that deadline .
The Board has also granted retroactive variance where there are unavoidable, special,
or extraordinary circumstances . American National Can Company v . IEPA (August 31,
1989), PCB 88-203, 102 PCB 215 (variance effective 11 days after filing, where petitioner
diligently sought compliance and there was no reason to anticipate the need for a variance until
14
it was too late to timely file) ; Minnesota Mining and Manufacturing Company v
. IEPA
(August 31, 1989), PCB 89-58, 102 PCB 223, 226 (variance effective day after filing, where
petitioner learned of error that resulted in non-compliance only shortly before filing) ;
Fedders-
USA v . IEPA
(April 6, 1989), PCB 86-47, 98 PCB 19 (variance effective date of filing, where
extended proceeding for prior variance ended only a short time before filing)
; Pines Trailer
Corporation v . IEPA
(June 30, 1988), PCB 88-10, 90 PCB 485, 488 ; Bloomington/Normal
Sanitary District v . IEPA (March 10, 1988), PCB 87-207, 87 PCB 21, 22 (variance effective
nine days after filing, where there were unexpected construction delays and the petitioner
made a good faith effort at compliance) ; Classic Finishing Company, Inc . v. IEPA (June 20,
1986), PCB 84-174(B), 70 PCB 229, 233 (variance effective date of filing first amended
petition, where there was a change in company ownership, an ongoing compliance effort that
resulted in updatings of the petition and eventual compliance before the date of the Board
decision, and due to nature of the materials involved and the technology-forcing nature of the
underlying regulation) ; Chicago Rotoprint Company v . IEPA
(February 20, 1985), PCB 84-
151, 63 PCB 91 (variance effective 35 days after filing, where need for variance was not
known earlier) . The Board has also occasionally applied an effective date that antedates the
filing of the petition under extreme such circumstances . Deere & Company, John Deere
Harvester East Moline Works v . IEPA (September 8, 1988), PCB 88-22, 92 PCB 94 (variance
effective 20 days prior to filing, where petitioner diligently sought relief and good faith efforts
appeared to have resulted in compliance prior to the Board decision)
; Midwest Solvents
Company of Illinois v . IEPA (April 5, 1991), PCB 84-5, 57 PCB 369, 371 (variance effective
nine days before filing, where the petitioner was diligent in seeking relief and the delay in
filing arose through procedural confusion over the extension of a prior provisional variance) .
Other cases underscore the fact that the timelines of filing is a primary factor in consideration
of the "special circumstances
."
Timliness of filing is a primary factor in considering "special circumstances" . First, in
considering "special circumstances" the Board has routinely refused to apply a retroactive
variance where either the petitioner filed late without explanation or where the delay resulted
through some fault of the petitioner . LCN Closers, Inc . v . IEPA (July 27, 1989), PCB 89-27,
101 PCB 283 ; DMI, Inc. v . IEPA (February 23, 1989), PCB 88-132, 96 PCB 185 ; Borden
Chemical Company v . IEPA (December 5, 1985), PCB 82-82, 67 PCB 3 ; City of Farmington
v
. IEPA
(February 20, 1985), PCB 84-166, 63 PCB 97 ; Hansen-Sterling Drug Co . v
. IEPA
(January 24, 1985), PCB 83-240, 62 PCB 387 ; Village of Sauget v . IEPA (December 15,
1983), PCB 83-146, 55 PCB 255 ; Olin Corp . v . IEPA (August 30, 1983), PCB 83-102, 53
PCB 83 . Second, a "principal consideration in the granting of retroactive relief is a showing
that the petitioner has diligently sought relief and has made good faith efforts at achieving
compliance"
. Deere & Company John Deere Harvester East Moline Works v . IEPA
(September 8, 1988), PCB 88-22, 92 PCB 91 . The Board is not inclined to grant retroactive
relief, absent a showing of unavoidable circumstances, because the failure to request relief in a
timely manner is a self-imposed hardship . (American Can Co . v. IEPA (August 31, 1989),
PCB 88-203, 102 PCB 215 .
15
Marathon must provide proof of "special circumstances" beyond the minimal arbitrary
or unreasonable hardship to be granted a retroactive variance . An arbitrary or unreasonable
hardship cannot also constitute a "special circumstance" that would justify retroactive relief .
If that were acceptable, all variances would simply apply retroactively upon request . (Modine
Manufacturing Corp . v. IEPA (July 25, 1991), PCB 88-25, 124 PCB 157 .) The Board finds
that Marathon has made no showing of special circumstances to warrant a retroactive grant of
variance . As stated earlier, the Board finds that Marathon's delay in filing and subsequent
request for retroactive variance relief, are self-imposed hardships
.
The Board will not consider the time period from June 29, 1994 (120 days after filing
amended petition on March 18, 1994) through November 15, 1995, as a request for
prospective variance relief . Marathon made no argument in the record to indicate that it was
not at fault, or that the Agency was entirely the cause of the Board rendering its decision in
accordance with decision waivers after 120 days . To the contrary, in Marathon's post-hearing
brief it referenced three of its motions to continue to explain the various reasons why the
"action languished" . (Marathon Br . at 1 .) None of these motions explain or argue that this
matter was delayed through no fault of petitioner . For instance, Marathon's March 21, 1994
motion to continue states, "(i)f Marathon is forced to proceed on May 16, 1994 as scheduled,
it will be forced to assume the catalyst change will fall (sic) to achieve compliance and assume
that physical change to the unit will be needed" . Marathon does not provide any additional
arguments in its brief to explain the delay in this matter . The Board notes the Agency filed
various motions to extend the time in which to file the Agency recommendation . However,
Marathon never filed any responses in opposition to these motions, but rather voluntarily
waived the Board's decision deadline .
Therefore, the Board finds it unnecessary to make any findings as to whether "special
circumstances" exist which would allow a retroactive inception date . Accordingly, the Board
will not make exception to its normal practice whereby if the requested variance is granted, it
will be effective on the date of the Board order in which the grant is made .
Environmental Impact
Throughout the record Marathon concludes, without sufficient supporting
documentation, that there was no adverse affect on air quality . (Pet. Br . at 5.) Marathon does
not present any data in addition to Exhibit #3 for the Board to determine the environmental
impact during the time its FCCU was out of compliance . In this regard, the Board notes that
the emissions data used in the dispersion modeling is not representative of the monitored
emission levels during the noncompliance period
. The stack monitoring information in the
record indicates that from May 1993 to March 1994 the total particulate emissions rate ranged
from 63
.5 lb/hr to 169 .1 lb/hr . Instead of using the highest monitored emissions rate to
determine the environmental impact, Marathon used a total particulate emissions rate of 70
.96
lb/hr, which was measured on March 9 and 10, 1994 . Actually, the total particulate emissions
rate used in the modeling is less than the 84 lb/hr limitation established by the Agency
pursuant to 35 Ill . Adm . Code 212 .381
.
16
Also, the Board notes that Marathon has not justified some of the other assumptions
made in the modeling exercise . Specifically, Marathon has not justified the emission factors
used to calculate the
PM10
emissions rate used in the modeling and excluding sulfate
particulates from the total PM 10 used in the modeling .
In addition, Marathon only asserted compliance (Marathon Br . at 4) and did not put
forth any environmental data showing that the FCCU is currently in compliance with the
applicable environmental regulations, and if it is, data as to when compliance was achieved .
Therefore, the Board is left without perspective regarding not only the magnitude of the
noncompliance, but also its duration .
Another issue which casts doubt upon Marathon's impact on the environment is its own
compliance assertions
. Marathon is requesting a variance from January 1, 1993 through
November 15, 1995 . (Amd. Pet . at 3 .) However, Marathon's original stack tests showing
noncompliance were done on May 13, 1993, and the remediation plan was completed on
August 10-11, 1994
. Marathon claims that "[t]here is no reason to doubt that the FCCU
remains in compliance with the appropriate particulate limits from and after the August 1994
tests" . (Marathon Br. at 5
.) The Board is therefore left to question why Marathon would seek
relief for a time period it claims to be in compliance
. Marathon claims it was in compliance in
August 1994, but is requesting a variance for another five months. In the alternative, if
Marathon does in fact believe the FCCU could have been in noncompliance during this five
month period, Marathon has not demonstrated that affect on the environment
.
After careful review of Marathon's Exhibit #3 study, and the lack of other evidence
demonstrating the impact on the environment during the time period in question, the Board
finds that Marathon has failed to show what impact immediate compliance would have had on
the environment. (see City of Mendota v
. Pollution Control Board and Illinois Environmental
Protection Agency 161 III.App .3d 203, 514 N .E.2d 218 (3d Dist
. 1987) where appellate court
held that petitioner failed to meet its burden of showing an arbitrary or unreasonable hardship
where petitioner submitted evidence to the Board regarding its
hardship resulting from the no-
bypass rule
; however it failed to submit evidence regarding the impact granting the variance
would have on the environment
. The appellate court found without this environmental
evidence the Board could not find that the regulation worked an
arbitrary or unreasonable
hardship on the petitioner .)
Given Marathon's failure to make at least a prima facie case that it would suffer an
arbitrary or unreasonable hardship by complying with the Board's regulations, coupled with
Marathon's lack of reliable data evaluating its effect on the environment, the Board is not
required (see Marathon Oil Company v
. Environmental Protection Agency 242 I11 .App.3d
200, 610 N .E.2d 789 (5th Dist. 1993)), nor able, to examine the adverse impact the variance
would have on the environment
.
17
CONSISTENCY WITH FEDERAL LAW
The Agency states that granting the variance would be consistent with federal law only
if the USEPA approves the variance as a SIP revision
. However, the Agency assumes that the
USEPA will not grant a revision to the Illinois SIP when the subject matter of that revision is
the subject matter of an enforcement action which was referred to the Department of Justice .
(Agency Br . at 8.)
Pursuant to Section 104 .122(a) of the Board's regulations, Marathon was required to
indicate whether the Board may grant the requested relief consistent with the Clean Air Act
(42 U.S.C . 7401 et . seq
.) and the Federal regulations adopted pursuant thereto . (35 Ill . Adm .
Code 104 .122(a) .) Marathon argues that Section 35 of the Act requires that a variance be
"consistent" with federal statutes, "not that it must please USEPA" . (Marathon Br . at 9 .)
Marathon disagrees with the Agency's speculation that the USEPA will disapprove the
variance because the emissions "did not cause or contribute to a violation of ambient air
quality standards" . (Marathon Br. at 8-9 .)
CONCLUSION
The Board finds that Marathon has failed to meet its burden of showing that immediate
compliance with the Board regulations at issue would pose a hardship that rises to the level of
an arbitrary or unreasonable hardship
. Accordingly, there is no justification for grant of
variance.
Moreover, even if Marathon's hardship could be found to be arbitrary or
unreasonable, Marathon has failed to show any unusual or extraordinary circumstances that
would justify granting this variance retroactively
.
This opinion constitutes the Board's findings of fact and conclusions of law in this
matter .
ORDER
The request for variance filed by Marathon Oil Company in this matter is hereby
denied.
IT IS SO ORDERED .
Board Member J . Theodore Meyer dissented .
Section 41 of the Environmental Protection Act (415 ILCS 5/41 (1992)) provides for
the appeal of final Board orders within 35 days of the date of service of this order . The Rules
of the Supreme Court of Illinois establish filing requirements . (See also 35 111 . Adm . Code
101
.246 "Motions for Reconsideration"
.)
18
I, Dorothy M
. Gunn, Clerk of the Illinois Pollution Control Board, hereby certify that
the above opinion and order was adopted on the & " '
day of
1996 by a vote of 6, - /
Ok
Dorothy M
.
unn, Clerk
Illinois Po
on Control Board
