ILLINOIS POLLUTION CONTROL BOARD

3 NOVEON, INC.,

)

Petitioner,

)

vs.

) PCB 04-102

) (Permit Appeal - Air)

6 ILLINOIS ENVIRONMENTAL )

PROTECTION AGENCY

)

Respondent.

)

The following is the transcript of a hearing

15 held in the above-captioned matter, taken

16 stenographically by Gale G. Everhart, CSR-RPR, a notary

17 public within and for the County of Peoria and State of

18 Illinois, before Bradley P. Halloran, Hearing Officer,

19 at 426 East Park Row, Henry, Illinois, on the 5th day of

20 February, A.D. 2008, commencing at 8:30 a.m.

L.A. REPORTING

(800) 419-3376

1 PRESENT:

HEARING TAKEN BEFORE:

ILLINOIS POLLUTION CONTROL BOARD

100 West Randolph Street

James R. Thompson Center, Suite 11-500

Chicago, Illinois 60601

(312) 814-8917

BY: BRADLEY P. HALLORAN

6 APPEARANCES:

DRINKER, BIDDLE & REATH, LLP

BY: ROY M. HARSCH, ESQUIRE

Attorney at Law

191 North Wacker Drive, Suite 3700

Chicago, Illinois 60606-1698

(312) 569-1441

On Behalf of the Petitioner.

ILLINOIS ENVIRONMENTAL PROTECTION AGENCY

BY: SALLY CARTER, ESQUIRE

Attorney at Law

1021 North Grand Avenue East

P.O. Box 19276

Springfield, Illinois 62794-9276

(217) 782-5544

On Behalf of the Respondent.

ALSO PRESENT:

JEFF BRENNER

MICHAEL REED

NO MEMBERS OF THE PUBLIC WERE PRESENT

I N D E X

Page

GREETING BY HEARING OFFICER. . . . . . . . . . . . 4

OPENING STATEMENTS:

BY MR. HARSCH . . . . . . . . . . . . . . . . 5

BY MS. CARTER . . . . . . . . . . . . . . . . 8

L.A. REPORTING

(800) 419-3376

1 WITNESSES FOR THE PETITIONER:

Page

DAVID GIFFIN

Direct Examination by Mr. Harsch . . . . . 9

Cross-Examination by Ms. Carter. . . . . . 54

Redirect Examination by Mr. Harsch . . . . 63

MICHAEL R. CORN, P.E.

Direct Examination by Mr. Harsch . . . . . 65

Cross-Examination by Ms. Carter. . . . . . 76

BERNARD O. EVANS

Direct Examination by Mr. Harsch . . . . . 79

Cross-Examination by Ms. Carter. . . . . . 87

Redirect Examination by Mr. Harsch . . . . 89

9 WITNESS FOR THE RESPONDENT:

DAN PUNZAK

Direct Examination by Ms. Carter . . . . . 91

Contd. Direct Examination by Ms. Carter. . 113

Cross-Examination by Mr. Harsch. . . . . . 129

Redirect Examination by Ms. Carter . . . . 157

Recross-Examination by Mr. Harsch. . . . . 160

PETITIONER'S REBUTTAL WITNESSES:

MICHAEL R. CORN, P.E.

Direct Examination by Mr. Harsch . . . . . 161

Cross-Examination by Ms. Carter. . . . . . 165

Redirect Examination by Mr. Harsch . . . . 165

BERNARD O. EVANS

Direct Examination by Mr. Harsch . . . . . 166

Cross-Examination by Ms. Carter. . . . . . 169

19 PETITIONER'S EXHIBITS:

Identified

Admitted

EXHIBIT 1 . . . . . . . . . . 34

EXHIBIT 2 . . . . . . . . . . 50

EXHIBIT 3 . . . . . . . . . . 51

24 *Exhibits were retained by the Hearing Officer.

L.A. REPORTING

(800) 419-3376

HEARING OFFICER HALLORAN: Good morning, everybody.

2 My name is Bradley Halloran. I'm a hearing officer with

3 the Illinois Pollution Control Board. I'm also assigned

4 to this matter entitled Noveon, Inc., Petitioner, versus

5 the Illinois Environmental Protection Agency. The

6 docket reflects it's docketed as PCB 04-102. It's a

7 Clean Air Act permit program appeal for CAAPP. This

8 matter has been publicly noticed pursuant to the Board's

9 regulations and will be conducted in accordance with

10 sections 105.200 and 101.600 in the Board's procedural

11 rules.

I also note for the record that I will not be

13 making the ultimate decision in this matter. The

14 ultimate decision will be made by the Board members of

15 the Pollution Control Board. My job is to ensure an

16 orderly hearing and rule on any evidentiary matters that

17 may arise.

We have agreed that this hearing will be

19 closed because of numerous trade secret issues.

Also, I want to let the transcript show that

21 there are a couple motions filed. They were filed, I

22 believe, on January 30th. They were agreed motions.

23 One motion is to change Petitioner's name from Noveon to

24 Emerald Performance Materials, LLC. And also another

L.A. REPORTING

(800) 419-3376

1 agreed motion to voluntary dismiss certain claims.

2 Those motions are pending before the Board. There was

3 also another motion filed on January 24th, 2008, by

4 Noveon, a motion to supplement the record on appeal.

5 That motion was denied pursuant to an order I put out on

6 February 4th, 2008.

There is a signup sheet on the outside of the

8 door. If any members of the public would like to speak,

9 we could stop the hearing at an appropriate time and let

10 him or her take the floor. With that said, Mr. Harsch,

11 would you like to introduce yourself?

MR. HARSCH: Sure. My name is Roy Harsch. And as

13 of February 1st our law firm is Drinker, Biddle & Reath,

14 LLP. We dropped the Gardner, Carton pursuant to our

15 merger agreement. Same firm but changed the names. I'm

16 here today on behalf of Petitioner. Do you want me to

17 do the opening statement now?

HEARING OFFICER HALLORAN: Sally? Ms. Carter,

19 Sally, would you like to introduce yourself and then

20 Mr. Harsch can go into his opening?

MS. CARTER: Yes. Sally Carter with the Illinois

22 EPA. Thank you.

HEARING OFFICER HALLORAN: Mr. Harsch.

MR. HARSCH: Yes. This is -- the Hearing Officer

L.A. REPORTING

(800) 419-3376

1 pointed out this is a CAAPP permit appeal or Title V

2 permit appeal. And, essentially, it is a very limited

3 issue appeal. The original appeal challenged a number

4 of issues. All of them have been withdrawn with the

5 exception of the concern -- central concern of this

6 matter; and that is whether or not the plant has to

7 comply with the 2,000 part per million sulfur dioxide S02

8 limitation found at 35 Illinois Administrative Code

9 214.301.

The company maintains that it is entitled to

11 the exemption found at 35 Illinois Administrative Code,

12 section 214.382(a), which is an exemption for existing

13 processes designed to remove sulfur compounds from the

14 flue gases of petroleum and petrochemical processes.

At issue, as we understand it from the

16 record, is the application of that exemption to the

17 plant because of the amount of sulfur compounds removed

18 from the flue gas and whether or not those -- I guess

19 whether or not the process that removes the sulfur

20 compounds, the reduction that occurs in that process,

21 are accountable.

This was a very surprising issue for the

23 company as the issue was first raised with the Illinois

24 Environmental Protection Agency in 1975 by the Agency.

L.A. REPORTING

(800) 419-3376

1 Permits were ultimately granted and have been renewed

2 consistently through the last State operating permit

3 issued in 1993. Despite the efforts of the company to

4 look at the operating permit record as part of the Title

5 V application preparation process. The first time it

6 learned that the Agency had concerns was in 2001, some

7 26 or 27 years after the Agency issued the first

8 operating permit based on the application of the

9 exemption to its processes.

All of the permit conditions that are on

11 appeal and challenged have to do with the Agency's

12 determination in the CAAPP permit that the company was

13 not entitled to this exemption and, therefore, subject

14 to a 2,000 part per million S02 limit.

As you will hear today, the company has

16 proceeded to, we believe, voluntarily install further

17 sulfur removal system that Mr. Giffin will explain.

18 It's referred to as the NaSH system and the very good

19 reasons for wanting to continue this appeal

20 notwithstanding the fact that it has installed such a

21 system.

And I will have three witnesses today, direct

23 witnesses today, Dave Giffin, Mike Corn and Bernie

24 Evans.

L.A. REPORTING

(800) 419-3376

HEARING OFFICER HALLORAN: Thanks, Mr. Harsch.

2 Before I forget, I'm not sure if I stated on the record,

3 today is February 5th, 2008. It's approximately 8:35.

Ms. Carter, open?

MS. CARTER: Thank you. The Illinois EPA agrees

6 that the sole issue before the Board is whether two

7 reflux condensers that recover, according to the source,

8 no more than 23 percent of total sulfur compounds from a

9 process are entitled to an exemption from the 2,000 part

10 per million limitation of sulfur dioxide emission.

The Illinois EPA believes that the 2,000 part

12 per million limitation in 35 Illinois Administrative

13 Code 214.301 is applicable. And the exemption claimed

14 by Noveon in 35 Illinois Administrative Code 214.382

15 for, quote, "Existing processes designed to remove

16 sulfur compounds from the flue gases of petroleum and

17 petrochemical processes," end quote, does not apply.

Today we will describe the CAAPP permitting

19 process and will explain the evolution of and the bases

20 for the Illinois EPA's permitting decision in this

21 matter. In so doing, the Illinois EPA will further

22 inform the Board as to the facts that are already in the

23 administrative record and how this information supports

24 the challenged permit conditions.

L.A. REPORTING

(800) 419-3376

The Illinois EPA will be calling one witness,

2 Mr. Dan Punzak. Thank you.

HEARING OFFICER HALLORAN: Thank you, Ms. Carter.

Mr. Harsch, you may call your first witness.

MR. HARSCH: Mr. Giffin, will you please move

6 forward and start the process?

(Witness sworn.)

MR. HARSCH: Mr. Halloran, I would like to make an

9 observation if it's okay. While this is a closed

10 hearing today, we have not noticed any member of the

11 public being present at this hearing that's been

12 affected by that decision. Is that correct?

HEARING OFFICER HALLORAN: Correct. None to my

14 knowledge. Thank you, Mr. Harsch.

DAVID GIFFIN,

16 called as a witness, after being first duly sworn, was

17 examined and testified upon his oath as follows:

DIRECT EXAMINATION

BY MR. HARSCH:

Q Mr. Giffin, would you please state your name

21 and address?

A My name is Dave Giffin. I live at 336 County

23 Road 850 North, Sparland, Illinois.

Q Can you generally describe your duties at the

L.A. REPORTING

(800) 419-3376

1 plant and how long you have worked there, sir?

A Certainly. I'm the health safety

3 environmental manager for the Emerald Henry plant. I

4 have been at the Henry plant for almost 38 years in

5 June. I started in the plant in 1967 as an associate

6 engineer, except for a two-year stint with the U.S.

7 Army. I came back in 1969 as an associate engineer and

8 worked in the polymer chemicals area. I was a foreman,

9 and then I was also a technical engineer for the polymer

10 chemicals area. I happened to be assigned the process

11 that we are having discussions today as one of my

12 processes.

From there we were -- we had the technical

14 responsibilities of the process. At the same

15 time -- that was about 1972, '73 -- the Illinois air

16 regs came into being. And we started putting together

17 the air permits for the different processes. And so

18 about 1973 it was determined that we needed an

19 environmental engineer at the plant. I became that

20 environmental engineer and was responsible at that point

21 in time for all the permits for the processes for the

22 polymer chemical side of the plant as well the polyvinyl

23 chloride side of the plant, PVC side of the plant. And

24 over approximately about three to four years, until

L.A. REPORTING

(800) 419-3376

1 1977, I was the environmental engineer for the plant.

I went -- then I moved from the polymer

3 chemicals area to the PVC side of the plant because at

4 that point in time we had -- we were trying to meet the

5 vinyl chloride NESHAP's standard. And I went into that

6 area as a general foreman to help install some of those

7 control systems. I became the product manager of that

8 area in the suspension and the compounding area, then

9 became technical engineer, technical manager of the PVC

10 area, and eventually went into being the plant engineer

11 in about 1983 to '85.

1990 I became the plant health safety

13 environmental manager again, and that's the position

14 that I am holding presently.

Q You have basically been at the Henry plant

16 throughout the entire air permitting -- since the

17 Illinois Environmental Protection Act was passed in 1970

18 and the State operating permits were -- requirements

19 were adopted by the Illinois Pollution Control Board?

A I have been. I have been.

Q I know we have filed a motion to do the name

22 change, but perhaps you should explain -- could you

23 explain the ownership history of the Henry plant and the

24 PVC side of the operation as well?

L.A. REPORTING

(800) 419-3376

A Certainly. Our plant was originally owned by

2 BF Goodrich. BF Goodrich basically had three different

3 divisions. They had the aerospace division, they had

4 the chemical division, and they had the tire division.

5 And approximately middle '80s, Goodrich spun off and

6 sold the tire division. In 1993 they made a decision to

7 sell the polyvinyl chloride portion of the business, one

8 portion of the chemical group. And so -- which now is

9 called PolyOne. And that is 50 percent or half of

10 our -- the Henry plant. BF Goodrich continued to own

11 the polymer chemicals side of the plant until

12 approximately -- well, until 2001. In 2001 they made a

13 decision to sell off the rest of the chemical group.

14 And they sold that to a private investing group, I think

15 AEA Investors. When they sold the polymer chemicals

16 division, AEA then renamed it eventually Noveon. And we

17 were Noveon until May of 2004.

At that point in time Luberzol, a

19 corporation, purchased all of the Noveon division. And

20 I think that was like about 40 plants worldwide. And so

21 we became Luberzol, but yet we retained our name as

22 Noveon during that time period.

Two years later Luberzol made the decision,

24 and that would be 2000-- May of 2006, that they were

L.A. REPORTING

(800) 419-3376

1 going to sell six plants -- and our plant was one of

2 those plants -- because those plants did not fit their

3 core business plan. And so when that occurred, the

4 plant then became -- was renamed. And we were renamed

5 Emerald Performance Materials, LLC. And that pretty

6 much brings us to who we are now until the next sale I

7 guess.

Q Who was the purchaser from Luberzol?

A Sun Capital was the investment group that

10 purchased it from Luberzol.

Q That's another private equity?

A It's another private enterprise, yeah.

Q And throughout that time, has the -- have

14 there been any significant changes in the operation of

15 the chemical side of the Henry plant?

A Since the purchase of Emerald?

Q Since the original permitting in 1972?

A In 1972. As far as this process, there

19 hasn't been any significant changes with the exception

20 of the installation of the new NaSH unit.

Q Can you describe what the product is and

22 the -- generally describe the production process that

23 entails its production.

A Sure. The Emerald polymer chemicals portion

L.A. REPORTING

(800) 419-3376

1 of the plant, that basically Luberzol sold,

2 manufacturers a number of products. They manufacture

3 accelerators, antioxidants. They also manufacturer some

4 personal care products. The personal care products are

5 fairly new to the plant. The accelerators and the

6 antioxidants have been one of the primary manufacturing

7 products ever since 1972. The accelerators that we make

8 are what we call the salt and pepper chemicals that go

9 into the master batch of rubber. And most of the rubber

10 goes into the manufacturing of tires. If you didn't put

11 the accelerator into the master batch, a small amount of

12 it, it would take a long time for the rubber to cure.

13 And so when you make a tire, if you didn't have that

14 accelerator in the rubber, it would take maybe a couple

15 hours to cure rather than maybe 30 minutes. So,

16 basically, what it boils down to that everybody's tires

17 here are less expensive because they use accelerators in

18 the product.

Some of the antioxidants that we use, some of

20 them go into rubber, some of them go into plastics.

21 And, again, the antioxidants are sort of a small portion

22 of chemicals that are salted into these products to

23 prevent the oxidation of the rubber or the plastic so

24 that the rubber and the plastic have a longer life.

L.A. REPORTING

(800) 419-3376

And so for tires, going back to that analogy,

2 by adding the antioxidant into the rubber batch, it will

3 extend the life of the tire because the tire is subject

4 to heat and other forces to break down the rubber. The

5 antioxidant prevents that breakdown, and it makes the

6 tire last longer. And, again, it gets back to giving

7 you more miles to the tires that you purchase.

The personal care products that we make just

9 recently, basically they're made to -- and we sell them

10 to like Clairol or -- I'm not exactly sure our customer

11 base on it, but a number of end product personal care

12 companies that mix them into a final formulation.

Q What is the process and what is the product

14 that is the subject of today's hearing?

A I'm going to refer to your aid back there.

16 And the product that we are dealing with today is

17 actually called sodium MBT. Sodium MBT is the

18 intermediate that we use throughout the plant to make

19 the accelerators. And the first part of the process is

20 what we call the MBT crude process.

21 Mercaptobenzothiazole crude is the product that's being

22 manufactured here. That's the impure portion of the

23 product. So then we put it into a react-- once we make

24 MBT crude, then we put it into a reactor and we change

L.A. REPORTING

(800) 419-3376

1 it into a salt soluble organic. And from there we

2 purify it.

Today we are just going to deal with the MBT

4 crude portion of the process and not the purification

5 part of the process. The chart that we have shown up

6 here --

Q Can you read the trade secret document number

8 that's on the left of that chart?

A On the left?

Q Left-hand side.

A Oh, yeah. It's document number 000141.

Q That would be in the trade secret portion of

13 the record. And I'm sure Ms. Carter will help me --

MS. CARTER: Yes, I will.

Q -- keep it straight like we did in the

16 deposition?

MS. CARTER: That's no problem.

THE WITNESS: Keep me straight, too. Okay?

MS. CARTER: Okay.

A Okay. What we have is a depiction of the

21 reactor, the blowdown tank and also the raw material

22 charging system of the MBT crude process. The process

23 utilizes three chemicals, aniline, sulfur and carbon

24 disulfide.

L.A. REPORTING

(800) 419-3376

The first part of this process, which is on

2 the left-hand side of this chart, deal with those three

3 chemicals and how they are charged to the reactors. The

4 reactors are located in the middle of the chart. There

5 are three reactors. These are high pressure reactors.

6 And then as part of that reactor system, we have a

7 condenser on each of the reactors which we, in this

8 area, classify that as our sulfur reducing device. And

9 then we have the blowdown tanks where we transfer the

10 finished product, molten product, from the reactor to

11 the blowdown tanks. And from the blowdown tanks, we

12 transfer the product further into the process to convert

13 it into a water soluble organic material.

The gases that are generated during the

15 reaction and during the blowdown of these processes are

16 collected in the MBT crude blowdown tanks. And if you

17 will look at the drawing, all of the dotted lines of the

18 drawing represent vapors. The solid lines depict liquid

19 material being transferred.

So to continue on, once the vapors enter into

21 the blowdown tanks, they are vented under a controlled

22 basis to the flare system which incorporates a

23 vaporizer, a knockout pot. And then that vapor is

24 converted from hydrogen sulfide and some residual carbon

L.A. REPORTING

(800) 419-3376

1 disulfide into sulfur dioxide.

The reaction is started by charging sulfur,

3 aniline and carbon disulfide to the reactor. It's

4 heated up. The reactor is heated up to about 500

5 degrees Fahrenheit using dotherm as the heating medium.

6 Once it reaches a certain temperature, the reaction

7 itself creates a pressure and that pressure will exceed

8 1,000 psig.

The vent condenser sulfur-reducing device

10 that we have been discussing with the Agency on is a

11 system that controls the return of carbon disulfide

12 liquid back into the reactor during the reaction.

What is not shown on this chart is the

14 support system to this sulfur-reducing device which is a

15 high pressure control valve, an additional steam

16 condenser, a tank that controls the level that's in this

17 condenser. And that's what we classify as our

18 sulfur-reducing devices.

Once the reaction begins, it generates

20 hydrogen sulfide, and it generates -- it vaporizes some

21 of the carbon disulfide inside the reactor. The

22 condenser returns the carbon disulfide. The high

23 pressure control valve carefully controls and it

24 releases the H2S into the blowdown tank. And then

L.A. REPORTING

(800) 419-3376

1 eventually it goes into the flare system itself. So

2 this system knocks down the pressure from 1,000 psig to

3 about 50 pounds of pressure in the blowdown tank. And

4 then it's transferred down to the flare and then at the

5 flare it's knocked down further as far as the pressure

6 before it's converted to the sulfur dioxide.

Q On the drawing you are referring to trade

8 secret 141. The reactor is listed as MBT-C reactor,

9 numbers 1 and number 2. Also, the blowdown tanks are

10 clearly marked as well?

A That is correct.

Q Are there any other aspects of this you want

13 to describe?

A The only other aspect is that we did install

15 a sodium hydrosulfide system which we call NaSH. And

16 that has been installed in the last two years. And it's

17 operating. It basically takes this gas, instead of

18 going to the flare, we propel this gas to the NaSH

19 system, which would not be shown here, but it's off to

20 the side of this process. And it takes that gas and it

21 recovers the carbon disulfide that remains after the

22 reaction. And we capture that carbon disulfide through

23 a column system. And then we return that carbon

24 disulfide and recharge it back into the reactors at a

L.A. REPORTING

(800) 419-3376

1 later time.

The H2S gas that goes with the carbon

3 disulfide continues on through the NaSH system. We

4 purify the hydrogen sulfide and then we react it in the

5 NaSH column, distillation column. And we combine

6 hydrogen sulfide and a caustic solution, and that forms

7 what we call sodium hydrosulfide. And that's a liquid

8 with a concentration -- a NaSH concentration of

9 somewhere in the vicinity of about 45 to 47 percent

10 NaSH.

We store that NaSH in a storage tank. And

12 that then is shipped to users of NaSH, the NaSH product,

13 in a liquid form. Right now basically we are trucking

14 those -- that product to various customers. Some of

15 those customer bases include tanneries. Tanneries would

16 utilize the NaSH to tan leather. And a lot of our

17 customers are in the Chicago area, and they prefer high

18 quality NaSH. And this system has been designed to try

19 to meet that market need. The other market need that is

20 utilized by the NaSH system is mining ores, and they use

21 NaSH to recover metals from ores.

The final step of the NaSH system after it

23 goes to the NaSH distillation column, there is a NaSH

24 scrubber. And that's the final step to make sure that

L.A. REPORTING

(800) 419-3376

1 we scrub out all the hydrogen sulfide before there is an

2 emission to the atmosphere. At this point in time this

3 system operates to where there is less than 50 parts per

4 million or less of hydrogen sulfide coming out of the

5 scrubber.

Q Thank you. At the present time Henry -- who

7 else produces the MBT crude in the United States?

A We are the sole producer of MBT crude in the

9 United States. Over the past five years we have had a

10 number of competitors who have not been able to compete,

11 and they have closed down their plants. And we have

12 basically outsurvived those plants. And --

HEARING OFFICER HALLORAN: Excuse me. Yes, sir,

14 can I help you?

MEMBER OF THE PUBLIC: Is this a public hearing

16 today?

HEARING OFFICER HALLORAN: It's a public hearing.

18 It's a closed hearing because of trade secret issues.

19 And your name is --

MEMBER OF THE PUBLIC: Oh, I'm sorry.

HEARING OFFICER HALLORAN: No. No. No. What we

22 can do is --

MEMBER OF THE PUBLIC: I was on the mailing list --

HEARING OFFICER HALLORAN: Okay.

L.A. REPORTING

(800) 419-3376

MEMBER OF THE PUBLIC: William Mautin, Bill Mautin.

HEARING OFFICER HALLORAN: Oh, okay. How are you

3 doing, sir?

MEMBER OF THE PUBLIC: Good.

HEARING OFFICER HALLORAN: What I think we are

6 going to do is if you want to -- did you want to say

7 something up here, or --

MEMBER OF THE PUBLIC: I'm just here to learn the

9 status.

HEARING OFFICER HALLORAN: Okay. If you wanted to

11 say something, you could sign up outside the door. Or

12 you can say something right now, if you want, under oath

13 or otherwise.

MEMBER OF THE PUBLIC: Well, if it's a closed

15 meeting, I understand that. I'm not trying to intrude

16 or anything like that.

HEARING OFFICER HALLORAN: Oh, no. Would you like

18 to speak your piece or say anything?

MEMBER OF THE PUBLIC: No. I'm just here to

20 listen.

HEARING OFFICER HALLORAN: All right. Well --

MEMBER OF THE PUBLIC: Maybe speak my piece later,

23 but I can't stay. I always try to get the information.

HEARING OFFICER HALLORAN: I understand.

L.A. REPORTING

(800) 419-3376

1 Unfortunately, because there are trade secret issues

2 involved --

MEMBER OF THE PUBLIC: I understand.

HEARING OFFICER HALLORAN: So --

MEMBER OF THE PUBLIC: That's fine.

HEARING OFFICER HALLORAN: Thank you for stopping

7 by.

MR. GIFFIN: We are trying to keep the Chinese out

9 of our business.

MEMBER OF THE PUBLIC: There you go. That's a good

11 idea. Buy American.

MR. GIFFIN: Unfortunately, that's the way it is.

MEMBER OF THE PUBLIC: I understand, sir. I was

14 just a little confused.

HEARING OFFICER HALLORAN: Okay. Thank you so

16 much.

(Whereupon, the member of the public

left the proceedings.)

Q So all of the tire manufacturers in the

20 United States that are still left will either have to

21 buy your accelerator or other companies have to rely on

22 this product that is made overseas?

A That's my understanding at this point in

24 time; that we are the sole supplier of the accelerators

L.A. REPORTING

(800) 419-3376

1 to the North American market. And the market -- the

2 tire company will either purchase it from us or they

3 will bring it from Asia.

Q Has the MBT crude process remained unchanged

5 since it was originally installed prior to the Board's

6 adoption of the air pollution regulations in 1972?

A There have been no changes to the process.

8 It's basically what I have described here.

Q And in your discussions with the Agency over

10 past permitting issues and continues through the Title

11 V, to your understanding -- what's your understanding as

12 to the Agency's view regarding whether or not this is a

13 petroleum or petrochemical process?

A They consider this process to be a

15 petrochemical process.

Q And why is that?

A The utilization of aniline is a

18 petrochemical -- comes from a petrochemical source, and

19 that classifies it as a --

Q What is your understanding of the requirement

21 to meet the exemption found at 35 Illinois

22 Administrative Code 301?

MS. CARTER: Objection to the extent that it calls

24 for a legal conclusion.

L.A. REPORTING

(800) 419-3376

MR. HARSCH: I'm asking for his understanding.

HEARING OFFICER HALLORAN: Excuse me. Gale, could

3 you please read the question back? There was some

4 rustling of papers.

COURT REPORTER: Sure. "What is your understanding

6 of the requirement to meet the exemption found at 35

7 Illinois Administrative Code 301?"

MR. HARSCH: Response to the objection. He has

9 testified he is plant environmental engineer, has been

10 and is responsible as such, I would assume, for

11 compliance with all aspects of the air pollution

12 regulations as it applies to this facility. I think

13 it's a very valid question.

HEARING OFFICER HALLORAN: And Ms. Carter has an

15 objection because it appears to draw a legal conclusion?

MS. CARTER: Yes.

HEARING OFFICER HALLORAN: You know, I think

18 Mr. Giffin can answer if he can do so.

THE WITNESS: Sure.

HEARING OFFICE HALLORAN: It's overruled.

A Sure. The exception to the rule 301

22 basically requires that a process have some sort of a

23 sulfur-reducing device. If it has a sulfur-reducing

24 device, than it does not have to meet the 2,000 part per

L.A. REPORTING

(800) 419-3376

1 million S02 standard.

HEARING OFFICER HALLORAN: Okay. This is 35

3 Illinois Administrative Code -- what number?

MR. HARSCH: 214.382(a).

HEARING OFFICER HALLORAN: Thank you, Mr. Harsch.

Q Is carbon disulfide a sulfur compound?

A It is. It contains carbon, one molecule of

8 carbon and two molecules of sulfur. And it's designated

9 as CS2.

Q What is the recovery of this carbon disulfide

11 or sulfur compound percentage-wise that results by the

12 use of the two condensers?

A The condensers condense the carbon disulfide

14 during the reaction phase and return it back to the

15 reactor as a liquid. And we have conducted studies that

16 show that that recovery rate is 70 percent of the carbon

17 disulfide.

Q And the condenser is recovering none of the

19 hydrogen sulfide?

A None of the hydrogen sulfide is recovered.

21 The hydrogen sulfide passes through the condenser.

Q Were the condensers originally designed to

23 recover -- or to remove the sulfur compound, carbon

24 disulfide from the stacked gases?

L.A. REPORTING

(800) 419-3376

A They were designed for that, yes.

Q Based on your running this process for a

3 number of years, is it possible to run the MBT reactors

4 without the condensers?

A When I was the technical engineer of the

6 process back in 1972, I was responsible for the process.

7 We did a lot of work on the condensers to understand

8 them, including the measurements of the carbon disulfide

9 returning. During that work we certainly -- we ran

10 those condensers at different levels of control.

11 We -- in order for the condensers to operate properly,

12 we have to have a liquid water level in the shell side

13 of the condenser. When the hot gases come through that

14 condenser, the water then is boiled off, flashed off.

15 And due to the vaporization of that water, it cools the

16 carbon disulfide. So we did a lot of work on the

17 condenser as far as different levels of water in the

18 condenser, anywhere from no level all the way to about

19 two thirds level in the condensers.

And in all that work, we were able to make

21 prime material. It was just basically control the

22 amount of carbon disulfide that reached the flare and

23 was converted to sulfur dioxide.

Q During that work -- during that time period

L.A. REPORTING

(800) 419-3376

1 and then at any subsequent time period where the water,

2 for example, wasn't available to the condenser, you were

3 able to continue to operate the MBT crude --

A We were.

Q -- reactors?

A We were.

Q Moving away from the drawing, if you want to

8 sit back down.

A Thank you.

Q After you became plant environmental safety

11 director again, what was your involvement with respect

12 to the preliminary work that went into the preparation

13 of the Title V application or CAAPP application?

A I basically was responsible for coordinating

15 the -- putting together the Title V application that was

16 to be submitted in 1996. So at that time I hired

17 AquAeTer, Incorporated, an engineering firm, to assist

18 us on putting together that permit application. And so

19 we probably started that activity somewhere around 1994,

20 1995 time span and worked until we were able to submit

21 the application on time in March of 1996. Is that

22 right?

Q And did Mr. Corn from AquAeTer, was he the

24 principal person at AquAeTer you --

L.A. REPORTING

(800) 419-3376

A Yes. Mike Corn was the principal owner of

2 AquAeTer. He, along with one of his fellow engineers,

3 John Upmore, worked closely with myself and with the

4 plant engineers, the plant technical engineers, to

5 instruct the Title V application system.

Q Did you have any legal assistance?

A We did. Before we submitted the Title V,

8 part of the Title V requires us to identify all the

9 pertinent regulations that are applicable to each part

10 of the process. We felt that we wanted to make sure

11 that we understood what our requirements were. So at

12 that point in time we asked Gardner, Carton & Douglas to

13 assist us in that. And a lawyer by the name of

14 Bob -- Robert Mueller assisted us in carefully reviewing

15 all parts of our Title V permit application and also to

16 seek the appropriate regulatory applications to any part

17 of that permit.

Q Part of that effort by Mr. Mueller and

19 yourself was there a Freedom of Information Act request

20 given to the Illinois Environmental Protection Agency to

21 gain access to your operating permit files to assist you

22 in identifying the various regulatory requirements?

A Yes, we did. We did a FOIA request in

24 February of 1996 to look at the files, to make sure that

L.A. REPORTING

(800) 419-3376

1 we understood the posture of the EPA concerning our

2 processes and to understand if we were interpreting the

3 regulations appropriately.

Q Did you, in fact, subsequent to that FOI

5 filing, in fact, review the files?

A I did.

Q When you reviewed the files that were

8 provided you, was there anything in those files that

9 concerned -- or showed the Agency's concern over the

10 application of the exemption?

A We did not pick anything up specific in the

12 FOIA concerning the issue that we are discussing today

13 in the files. We did -- as we went through the files,

14 we did notice there was a number of documents that had

15 been removed from the file for Agency usage.

Q In the Title V application that was

17 originally filed, which is, I believe, trade secret

18 documents 1 through 2,115. For this specific MBT crude

19 process, what did you list for the applicable sulfur

20 dioxide emission limitations that would be applicable to

21 the flare?

A We listed the exemption regulation as the

23 applicable regulation which --

Q Did you submit any compliance plan? I'm

L.A. REPORTING

(800) 419-3376

1 sorry. I interrupted you.

A Which basically allowed the sulfur-reducing

3 device to be classified as the compliance.

Q And that was consistent with all of the

5 operating permits that had been issued since 1975

6 through 1993?

MS. CARTER: Objection. Counsel -- that's the

8 subject of his motion to supplement the record issue

9 ruled upon. What Counsel is seeking to do is to open up

10 the Illinois EPA prior permitting history which is not

11 at issue here today.

HEARING OFFICER HALLORAN: Mr. Harsch?

MR. HARSCH: Well, one, I totally disagree, with

14 all due respect, to the Hearing Officer's ruling. And

15 as we proceed in this proceeding, will probably be

16 asking him to reconsider or filing a motion with the

17 Pollution Control Board to overrule the ruling. It

18 would seem to me that the Illinois Environmental

19 Protection Agency has put this squarely at issue. They

20 have included memorandum, selectively included parts of

21 the operating permit file, excluding other parts. There

22 are countless memorandum and references to the Agency's

23 prior permitting decisions in this record, including the

24 memorandums prepared by Mr. Punzak dated 1993, legal

L.A. REPORTING

(800) 419-3376

1 analysis, My 17th, 1993, by legal counsel based on that

2 memorandum and a number of e-mails and other documents

3 regarding the continued view of the Agency of the

4 application of this exemption or lack thereof while

5 Mr. Punzak and the Agency were considering the Title V

6 application. So I think it's fair to ask the witness if

7 he -- regarding the previous operating permits that had

8 been issued by the Agency based on that exemption.

HEARING OFFICER HALLORAN: Well, if you are making

10 a motion to reconsider --

MR. HARSCH: I'm not at this time until I get the

12 proper facts established through the direct examination

13 of this --

HEARING OFFICER HALLORAN: I ruled on a motion to

15 supplement that you filed on January 24th. I ruled on

16 February 4th. That motion to supplement is denied. And

17 you stated that you might want to appeal to the Board to

18 overrule my ruling. Obviously, it's too late at this

19 point. You can do it afterwards. Had that motion been

20 made earlier, maybe the Board could have ruled on it

21 sooner. With that said, I find that the topic of your

22 direct addresses my motion -- my order to deny your

23 motion to supplement. So with that point I would grant

24 Ms. Carter's objection.

L.A. REPORTING

(800) 419-3376

MR. HARSCH: At this point then I will make an

2 offer of proof to include all of what was marked as

3 Exhibit A to my motion to supplement subsequent that it

4 should be allowed as admissible in this proceeding and

5 should have been allowed into the record.

HEARING OFFICER HALLORAN: Ms. Carter, I assume you

7 object to his offer of proof to allow Exhibit A attached

8 to his motion?

MS. CARTER: Yes, Mr. Hearing Officer. The

10 Illinois EPA objects on the same grounds they objected

11 in response to Counsel's motion to supplement the

12 record.

HEARING OFFICER HALLORAN: What I'm going to do is

14 overrule your objection. I am going to accept Exhibit A

15 that is attached to Noveon's January 24th motion to

16 supplement. It's about an inch thick, Mr. Harsch,

17 Exhibit A?

MR. HARSCH: Bound volume (indicating).

HEARING OFFICER HALLORAN: I'll -- again, I will

20 accept that as an offer of proof.

(Discussion off the record.)

HEARING OFFICER HALLORAN: We are back on the

23 record. Mr. Harsch.

MR. HARSCH: There has -- in the Agency's response

L.A. REPORTING

(800) 419-3376

1 to our motion to supplement the record that Ms. Carter

2 referred to, there is attached to it the affidavit of

3 Mr. Punzak. I would move that his affidavit copy which

4 is already in the Board records be introduced into

5 evidence as Petitioner's Exhibit 1.

HEARING OFFICER HALLORAN: Ms. Carter?

MS. CARTER: I have no objection to that.

HEARING OFFICER HALLORAN: Okay. Perfect. The

9 affidavit attached to IEPA's response to Noveon's motion

10 to supplement the record filed on January 29th is

11 admitted into evidence without objection. And it's

12 entitled Petitioner's Exhibit Number 1.

Q Mr. Giffin, would you please read paragraph 4

14 from this affidavit?

A "Based on my recent review of the permitting

16 file for operating permit number 72110935 for the

17 accelerator crude process since at least 1975 through

18 1993 the Illinois EPA issued permits authorizing the

19 source to operate the process exempt from the

20 requirements in 35 Illinois Admin Code 214.301 based on

21 the applicability of 35 Illinois Admin Code 214.382."

Q Mr. Giffin, do you agree with that statement?

MS. CARTER: Objection. Again, Counsel is going

24 into the prior permitting history. Anything beyond the

L.A. REPORTING

(800) 419-3376

1 Illinois EPA's admission is not necessary or relevant to

2 this case. What's at issue here is the Title V permit

3 matter which is under appeal.

HEARING OFFICER HALLORAN: I agree. But I think he

5 can answer whether he agrees or disagrees. Objection

6 overruled.

A Those permits were granted; that's correct.

Q It's your understanding that Mr. Punzak was,

9 in fact, the permit review engineer for the 1993 permit?

A That's correct.

Q Now I will repeat my question. Mr. Giffin,

12 is it your understanding that the Illinois Environmental

13 Protection Agency issued operating permits for the Henry

14 facility beginning in 1975 through 1993 based on the

15 exemption from the 2,000 parts per million general

16 applicable S02 limitations because of the sulfur removal

17 exemption found at 35 Illinois Admin Code 214.382(a)?

MS. CARTER: Again, objection. Counsel is still

19 probing into our underlying -- or the permit history of

20 the Illinois EPA that dates back to the early 1970s.

21 It's not at issue here today.

HEARING OFFICER HALLORAN: Mr. Harsch?

MR. HARSCH: I find it exceptional and unfathomable

24 that the Agency is trying so hard to continue to keep

L.A. REPORTING

(800) 419-3376

1 the fact that it issued permits for 26 years, some eight

2 permits based on this exclusion, out of the record and

3 has kept, as we pointed out already, kept this

4 information from Petitioner when they reviewed the

5 operating permit files and continues to this day to try

6 to exclude this information and hide it.

MS. CARTER: May I respond to that?

HEARING OFFICER HALLORAN: Yes, you may. And then

9 I will make my ruling.

MS. CARTER: Okay. The Illinois EPA takes offense

11 to the statements. That the Illinois EPA voluntarily

12 provided an affidavit stating the permitting history for

13 the past 30 years of this source. That being said, it's

14 simply not relevant to the instant permitting decision.

15 No part of those underlying permits found their way into

16 this Title V. There is no reflection in there. Thus,

17 it's not relevant to this proceeding.

HEARING OFFICER HALLORAN: Objection sustained. My

19 order of February 4th, 2008, has covered that.

Mr. Harsch.

Q Did you include a compliance plan for

22 achieving compliance with the 2,000 part per million

23 sulfur dioxide limitation in your Title V application?

A We did not.

L.A. REPORTING

(800) 419-3376

Q Did you receive a CAAPP application

2 completeness determination dated March 6th, 1996, from

3 the Agency regarding the original application filed?

A Yes, we did.

MR. HARSCH: For the record, that document is found

6 in the general public portion, document number 1507 to

7 1509. Correct, Counsel?

MS. CARTER: Yes. Yes, it is, sir.

Q When Mr. Punzak began his review of the Title

10 V application in January of 2001, did you have an

11 occasion to meet with him on January 18th, 2001, to

12 discuss the application?

A Yes, we did. There was -- we met with Dan.

14 Nathan Gray was one of the senior process engineers that

15 was working with me on the Title V. And we went to

16 Springfield and met with Dan to talk about issues

17 concerning the Title V.

Q At that meeting -- strike that.

(Pause in proceedings.)

Q I show you what is document 1464 and its

21 attachments. It's a letter dated March 21, 2001, to you

22 from Don Sutton. Are you familiar with this letter?

A Yes, I am.

Q Was this the first time that you became aware

L.A. REPORTING

(800) 419-3376

1 that the Agency had concerns regarding the application

2 of the exemption to your facility part of the Title V

3 process?

A It's the first formal communication.

Q That letter requested information regarding

6 the process, did it not?

A It did. It did.

Q And the company responded to that

9 information?

A Yes. We responded in two parts. We

11 answered, I believe, the first portion of the letter and

12 one submittal. And a second letter was submitted to the

13 Agency with the rest of the information in a second

14 letter that was sent to the Agency.

Q The first part of the letter dealt with

16 issues with -- potential issues with respect to PSD, did

17 it not?

A It did.

Q PSD is prevention of significant

20 deterioration, correct?

A Yes, it is.

Q And it's my understanding -- did the Agency

23 have the right process in mind regarding the PSD issues?

A No. There was a confusion of the MBT crude

L.A. REPORTING

(800) 419-3376

1 process and the what we call the accelerator A&E

2 processes.

Q I show you what is document 2122 from the

4 trade secret file. Is that the response regarding the

5 PSD issue?

(Pause in proceedings.)

A Yes, it is.

Q And if I show you what is document 2120 and

9 2121 from the trade secret file, is that the company's

10 response to the questions regarding the MBT crude

11 reactor and condenser?

A It is. It is.

Q What happened subsequent to the submittal of

14 that information; do you recall?

A In regard to the plant or in regard to --

Q Regards to the plant?

(Pause in proceedings.)

Q Let me rephrase the question. Did you

19 receive a formal request for additional information from

20 the Illinois Environmental Protection Agency after you

21 submitted the response to that request for information

22 that was contained in the February letter?

A I believe we did, yes. Yes.

Q I show you what is in the general portion of

L.A. REPORTING

(800) 419-3376

1 the permit record at 1459 and 1460. Would you tell me

2 what this document is?

A Yes. This is a document from Don Sutton

4 requesting additional information, specifically for the

5 MBT crude process and for indicating that they had a

6 concern about the applicability of the exemption.

Q Is this the first formal response you

8 received from the Agency regarding its determination

9 that you were not entitled to the exemption?

A Well, certainly the earlier one started

11 causing us to question that there was a potential issue.

12 This one here basically spelled it out.

Q I'm showing you document 2116 and 17 and 18,

14 which is a letter from Don -- to Don Sutton from myself,

15 dated June 14, 2001. Are you familiar with this

16 document?

A I am familiar with this document.

Q Did you assist me in the preparation of that

19 document?

A I did.

Q Is this document -- is this document the

22 formal response to Mr. Sutton's May 16th letter?

A It is.

Q In that letter we requested a meeting. Did

L.A. REPORTING

(800) 419-3376

1 that meeting with the Agency occur; do you recall?

A Yes, it did.

Q In July of 2001?

A Yes. I think we met the day after my

5 birthday.

Q And the attendance sheet is at 1420 in the

7 general permit record. At that meeting, if you recall,

8 did Mr. Punzak present his observations that other

9 manufacturers of the same material had differing types

10 of control systems?

A Yes, we did. We learned of the work that Dan

12 had done in researching other competitors in the USA.

Q And he drew your attention to facilities in

14 West Virginia and Louisiana; is that correct?

A That's correct.

Q Following that meeting, did the company agree

17 to evaluate certain add-on control systems in a general

18 manner?

A We agreed that we would go back and we would

20 investigate the control systems and the information that

21 Dan had supplied to us to begin understanding further

22 control systems that could improve the removal of sulfur

23 materials.

Q Did you abandon your position that you were

L.A. REPORTING

(800) 419-3376

1 entitled to the exemption?

A We did not.

Q Did you make a decision with respect to the

4 company's willingness to install additional sulfur

5 removal subsequent to that analysis?

A I guess that was kind of a difficult time

7 period for us because it was when Goodrich had sold us

8 to -- and we became Noveon. And so we were trying to

9 determine exactly what we could financially withstand

10 without closing the plant. And so we had another issue

11 with the water people concerning ammonia, and we were

12 trying to understand the financial involvement of that

13 before we went further with this. We did go ahead and

14 evaluate and start evaluating what we could do on a

15 parallel path, but that took quite a bit of time for us

16 to shake that out.

And our initial attempt was to look at sulfur

18 recovery utilizing the claus unit. And we went to the

19 point of going through and then doing a lot of the

20 detailed design and estimating the cost of that. The

21 unfortunate aspect of the claus unit was that the return

22 on recovering sulfur was -- there was none. Basically,

23 we were going to have to probably landfill all of the

24 sulfur that came off the system.

L.A. REPORTING

(800) 419-3376

And so the timing of that, I'm not sure

2 exactly how that fits into this, but a lot of that

3 activity went -- occurred as a result of studying what

4 other companies were doing in relationship to sulfur

5 recovery. Still, I mean, we did not abandon the fact

6 that we felt very strongly that we had a sulfur-reducing

7 device and it met the requirement of the regulation. We

8 understood that the Agency's concern was the amount of

9 sulfur, and we were trying to find a suitable way of

10 doing that and stay in business.

Q Did the company, in fact, prior to the

12 issuance of the Title V permit make a decision and

13 communicate that decision to the Agency that it was

14 willing to proceed to install additional sulfur recovery

15 system?

A Yes. I believe we did.

Q And did that schedule allow you time to

18 obtain a ruling by the Pollution Control Board on the

19 MON issue?

A It did. It did.

Q And that was so you could understand the

22 economic impact on the plant of both of these two

23 environmental issues?

A That's exactly right. And we certainly did

L.A. REPORTING

(800) 419-3376

1 appreciate the patience of the air people on this

2 because it was a very, very fragile time for us.

Q Do you recall why the company -- the owners

4 at that point in time made the decision that it would

5 agree to install additional sulfur control?

A Well, certainly looking at the -- at what Dan

7 had presented to us gave us a little more understanding

8 of what other companies were doing. We felt that there

9 was a lot of emissions of sulfur dioxide, that we needed

10 to see if there was a reasonable way of reducing that.

11 Our company supported us on that. At that point in time

12 we were owned by Noveon, AEA Investors. And we -- so we

13 began looking for a solution to -- economic solution to

14 reduce the amount of sulfur dioxide being generated. We

15 knew that the Agency had a concern about it. And,

16 basically, we -- if for a reasonable amount of

17 investment and if we could get a return that it would be

18 better to try to resolve that rather than fight it

19 legally.

Q You mentioned earlier -- strike that.

Your initial review were what's referred to

22 as a claus type system?

A Yes.

Q Does the fact that your MBT reactor process

L.A. REPORTING

(800) 419-3376

1 is a batch process impact the use of a claus process?

A Any type of recovery system that you would

3 employ is affected by the batch operation because

4 most -- well, all of the sulfur recovery devices is a

5 continuous process. And so we had to determine how to

6 smooth out the batch operation so that the feeds to the

7 new system would be continuous -- would meet a

8 continuous process dynamic. The claus unit was

9 certainly a problem from that standpoint. In addition,

10 like I had mentioned before, the claus unit, all it did

11 was recover the sulfur. And sulfur is very cheap. As a

12 matter of fact, you can't get rid of it. When we costed

13 that out, we thought it was going to cost us somewhere

14 around $3-1/2 million. When we finally got the final

15 estimate back, it was in excess of $5 million. And so

16 the company wanted us to reevaluate that from

17 a -- because there wasn't a good fit from the standpoint

18 of financials.

And so we returned and evaluated the NaSH

20 system. At about that time Luberzol had purchased us,

21 and they had operating NaSH systems within their

22 company. We evaluated their systems, and we embarked on

23 a -- designing a carbon disulfide recovery system and a

24 sodium hydrosulfide reaction system that would create

L.A. REPORTING

(800) 419-3376

1 NaSH. The revenue generated by that system would just

2 about break even as far as material cost going in and

3 cost of product being sold so that the overall financial

4 impact would not be as great as the production.

The other thing that we did find out is

6 about that point in time Flexsys from West Virginia

7 closed their plant. They had a claus unit that was for

8 sale. And as we investigated it, it was shot. They had

9 had all kinds of problems operating the claus unit.

10 So there was other inputs that we found that basically

11 convinced us that the claus unit was not a technical --

12 a good technical solution.

Q Were there any other economic factors that

14 went into your decision on putting a NaSH unit in?

A Yes. We knew that there are sulfur dioxide

16 credits and that if we were able to reduce the emissions

17 of the sulfur dioxide from our flare, that there was a

18 potential that we could qualify for sulfur dioxide

19 credits and help pay for the initial investment of $10

20 million into the NaSH system.

Q Was that the primary driving force when the

22 company proceeded with the appeal of the Agency's

23 determination regarding the legal requirement that you

24 had to meet the 2,000 parts per million limitation?

L.A. REPORTING

(800) 419-3376

A Was the sulfur dioxide credit issue the

2 primary?

Q Yes.

A Certainly it was a significant part of it.

5 So, I mean, we still hadn't changed our mind concerning

6 the regulation. We had a sulfur-recovering device, and

7 it met the language of the regulation.

Q Mr. Giffin, did the company rely on the

9 parent agency position that you were entitled to the

10 exemption for the operating permit history period

11 Mr. Punzak mentions in the deposition -- or excuse me --

12 in the exhibit, Petitioner's Exhibit 1, which is his

13 affidavit?

A If I understand your question, the

15 company -- during the different company ownerships?

Q Yes.

A Conducted due diligence. We did a due

18 diligence when we went from BF Goodrich to Noveon. A

19 very, very thorough due diligence. We probably had

20 three separate meetings with outside contractors to make

21 sure that Noveon or the AEA Investors understood the

22 risk involved in purchasing the Noveon division. And in

23 doing that, our due diligence occurred from about the

24 year of 2000, and we were sold in, I think, March of

L.A. REPORTING

(800) 419-3376

1 2001. So all that due diligence had occurred during the

2 year of 2000.

As we looked at the records and understood

4 the issues at the plant, we identified the ammonia issue

5 which is associated with our wastewater system as a

6 significant issue that was unresolved so that the

7 purchaser would understand the risk and that would be a

8 part of the negotiations.

We did not consider the sulfur-reducing

10 device issue to be an event, or we didn't consider it to

11 be an issue at that time because we didn't know about

12 it. And in the due diligence I did not mention anything

13 in relationship to the MBT crude process. And so in the

14 negotiation processes there was notifications that were

15 generated by Goodrich in the sale to Noveon for the

16 ammonia, but there were no -- to my knowledge there were

17 no indemnification for the MBT crude process.

Q And you were actively involved in the

19 preparation of those environmental disclosures?

A I was.

Q And at that point in time you had no

22 knowledge of concerns of the Agency as highlighted by

23 the 1993 memorandum which are in the record 1474, 5,

24 1477, 78, 79, which are the memos from Don Sutton and

L.A. REPORTING

(800) 419-3376

1 Dan Punzak to Robert Sharpe and Rachel Doctors and

2 Kathleen Bassi?

A No, I didn't.

Q When you submit a Title V application, do you

5 have to certify your compliance?

A Yes.

Q And you certified your compliance also -- you

8 certified your compliance in the Title V application

9 based on the application of the exemption?

A I did.

Q Following the July 12th, 2001, meeting, that

12 you testified to, did you direct me to submit an FOI

13 request to the Agency to attempt to obtain documents

14 from the Agency regarding this change in interpretation,

15 the applicability of the exemption?

A I did.

Q And you reviewed the response to that FOI

18 request, did you not?

A I did.

Q Did the Agency withhold all of the documents

21 relevant to these internal discussions regarding the

22 applicability of the exemption and their concerns

23 regarding that exemption?

A They did.

L.A. REPORTING

(800) 419-3376

MR. HARSCH: Counsel, do you want to see?

MS. CARTER: Are you looking at the September 6th,

3 2001.

MR. HARSCH: Yeah.

MS. CARTER: I have a copy of that. And the

6 attachment, I have that as well, sir.

MR. HARSCH: Mr. Hearing Officer, I would like to

8 introduce the September 6th, 2001, response from Bonnie

9 Sawyer to myself and Attachment A thereto as

10 Petitioner's Exhibit Number 2.

MS. CARTER: Just to make sure I'm clear, the

12 attachment is the list of withheld documents?

MR. HARSCH: Yes.

MS. CARTER: I have no objection.

HEARING OFFICER HALLORAN: Petitioner's Exhibit 2

16 is admitted into evidence without objection. And it's

17 the, again, September 6th, 2001, response from Sawyer to

18 Harsch and Attachment A.

MR. HARSCH: Yes.

HEARING OFFICER HALLORAN: Where is that found in

21 the record, Mr. Harsch?

MR. HARSCH: It's not, and I will have to see if

23 Sally can give me a clean copy -- since mine is marked

24 up -- that shows all of the reference to the -- where

L.A. REPORTING

(800) 419-3376

1 these various withheld documents are contained in the

2 permit record.

MS. CARTER: He anticipated me. I was going to

4 give that to you as well. It's not in the record

5 because it wasn't a part of our permitting decision, but

6 it is a part of our FOIA response.

HEARING OFFICER HALLORAN: Thank you, Counsel.

MR. HARSCH: Thank you very much.

(Pause in proceedings.)

MR. HARSCH: Just to make it easier, I'm going to

11 move that exhibit from the trade secret file 142 be

12 admitted as Petitioner's Exhibit 3, and I'm going to ask

13 Mr. Giffin a couple of questions regarding this before I

14 move it. Is that okay?

HEARING OFFICER HALLORAN: That's fine.

Q Mr. Giffin, you are familiar with this

17 document?

A I am.

Q And it's a blowup of the actual page from the

20 permit record, is it not?

A It is.

Q And is it identical to, for all practical

23 purposes from what you were talking about earlier, to

24 the bulletin-board size document 141 that you were

L.A. REPORTING

(800) 419-3376

1 referring to?

A It is.

Q Will you please mark and circle and put a

4 number 1 in it, the raw materials?

A Each one?

Q Just one big circle around them. You pointed

7 to it on the map.

A Do you want me to put "raw material" on it?

Q Fine.

A (Witness complies.)

Q And you just put "raw material" in the

12 circle. That encompasses sulfur, aniline --

A And carbon disulfide.

Q And carbon disulfide. And then would you

15 circle the -- what you pointed to as the reactors and

16 put a number 2 there?

A (Witness complies.)

Q Okay. And then put a number 3 above the

19 blowdown tanks that you pointed to. And then a number 4

20 around the flare.

A (Witness complies.)

MR. HARSCH: Since he was pointing to that,

23 Counsel, just marked it -- it's kind of hard to show the

24 points on the record. At this point I would move this

L.A. REPORTING

(800) 419-3376

1 for admission.

HEARING OFFICER HALLORAN: Ms. Carter?

MS. CARTER: I have no objection to it to the

4 extent that it's for demonstrative purposes to

5 illustrate what the witness was testifying to.

HEARING OFFICER HALLORAN: Mr. Harsch, any

7 response?

MR. HARSCH: No.

HEARING OFFICER HALLORAN: Petitioner's Exhibit 3

10 is admitted.

MR. HARSCH: At this point in time I would rest the

12 direct examination.

HEARING OFFICER HALLORAN: Thank you, Mr. Harsch.

14 Does anybody want to take a five-minute break and then

15 on with cross?

MS. CARTER: That's fine.

HEARING OFFICER HALLORAN: Okay. Great. Thank

18 you.

(Whereupon, a recess was taken in the

proceedings.)

HEARING OFFICER HALLORAN: Are you ready for your

22 cross?

MS. CARTER: Yes. Thank you.

Good morning, Mr. Giffin.

L.A. REPORTING

(800) 419-3376

THE WITNESS: Good morning, again.

MS. CARTER: Good morning.

CROSS-EXAMINATION

BY MS. CARTER:

Q When was the MBT-C reactor built?

A I think it was one of the original processes,

7 probably back in 1958 or '59.

Q And did it include the condensers at issue

9 here today?

A It did.

Q Okay. And I believe during your direct

12 testimony you stated that you have operated the MBT-C

13 reactor without the condenser; is that correct?

A Yes. We have had occasions when we had

15 tested it. And we also had occasions when it ran

16 without water in the storage tank.

Q Okay. Can you just tell me generally, did

18 anything change with the MBT-C reactor when you operated

19 it without the condenser?

A We probably didn't notice anything because we

21 don't take samples directly from the reactor. It goes

22 into the sodium MBT reactor and is solubilized in water

23 and plastic, and then it goes into a large storage tank.

24 Then we would sample the storage tank over -- maybe on a

L.A. REPORTING

(800) 419-3376

1 daily basis. And in those events we didn't see any

2 change.

Q Okay. So when you said you didn't see

4 anything changed, you were referring to the rate of

5 reaction and what you got out of it?

A No. The quality.

Q The quality?

A The quality of the product. By the actual --

9 we knew that we probably lost carbon disulfide out the

10 vent of it. And as a result there was more sulfur

11 dioxide that was generated because there is two

12 molecules of sulfur in carbon disulfide rather than

13 there is one molecule of sulfur in H2S. So there would

14 be more sulfur dioxide generated.

Q Because you are not pulling that CS2 back

16 into the reactor?

A That's correct.

Q Is why you are saying that?

A That's correct.

Q Okay. Without the condensers, would the

21 temperature change at all in the reaction?

A No. No.

Q What about the pressure; would it change?

A No. The pressure is still the same.

L.A. REPORTING

(800) 419-3376

Q Okay. Is it fair to say that generally the

2 only thing that would change would be the amount of raw

3 materials utilized?

A Yes.

Q Okay. And with that you mean the CS2, right?

A Yes.

Q And how is the temperature regulated in the

8 reactor?

A Basically, when we add the ingredients, we

10 heat the reactor up to a certain temperature and that

11 temperature may be like 480 degrees. And then the

12 reaction from that point on will cause the temperature

13 to go up, to peak up to about 500 degrees and stay

14 there.

Q And --

A So it's mildly exothermic.

Q And what about the pressure? How would that

18 regulate it in the reaction?

A The pressure is regulated by the high

20 pressure control valve that is located on the outlet of

21 the sulfur-reducing device condenser.

Q Is the condenser designed and operated to

23 target a specific compound? Is it seeking -- is the

24 purpose behind the condenser to recover CS2?

L.A. REPORTING

(800) 419-3376

A Yes. Well, its purpose is to recover CS2 and

2 also to separate the H2S from the CS2.

Q Does the condenser eliminate the components

4 here, CS2 and H2S, in the vent gases from the reactor?

A Yes. There is a -- when it -- when the high

6 pressure control valve on the condenser opens up, it

7 will vent the H2S and a certain amount of carbon

8 disulfide that's not liquefied. And they will go into

9 the blowdown tank.

Q Okay. So you are saying that the H2S is

11 vented. It's not necessarily eliminated from the

12 process, it's just vented onto the MBT-C blowdown tank

13 there; is that what you are saying?

A That's correct.

Q Okay.

A That's correct.

Q Okay.

A That's correct.

Q Is it fair to say that the condenser was

20 designed to recover CS2 for purposes of reducing the

21 amount of virgin CS2 used in the process?

A I wasn't back in that time when it was

23 installed. So I don't know exactly the reason why the

24 condenser was installed. I presume it was to reduce raw

L.A. REPORTING

(800) 419-3376

1 material usage.

Q Have you ever --

A And also to control any emissions.

Q Have you ever reviewed any sort of design

5 specifications for the MBT-C reactor and the condenser?

6 I understand that you said it was built probably in '57

7 or '58?

A Correct.

Q Have you ever seen any design specifications?

A No, I haven't.

Q Are you aware whether any exist?

A I haven't seen them myself, no.

Q Mr. Giffin, are you familiar with the term

14 "reflux condenser"?

A I am.

Q And what does that term mean to you?

A I'm not really sure.

Q You are not really sure. Okay. Would you

19 characterize yourself as a chemical engineer?

A I am not.

Q And I'm sorry if I missed this in your

22 background section; what is your undergraduate degree

23 in?

A My undergraduate degree is in zoology and I

L.A. REPORTING

(800) 419-3376

1 minored in chemistry. And I have a master's in

2 engineering administration.

Q Engineering administration. Okay. And for a

4 nonengineering type, what sort of classes do you take in

5 engineering administration just so I understand.

A Basically, math, engineering math, physics

7 chemistries, quantitative/qualitative chemistries,

8 organic chemistries. As far as design of this

9 equipment, no, the exemption of that.

Q I'm going to be referring to the trade secret

11 version of the record, the Title V permit application

12 which is pages 1 through 2,115. I'm just going to hand

13 you the first part of it, sir, so you don't have all

14 2,100 pages in front of you. If I could direct your

15 attention to page 173 of that document. And when I say

16 173, I mean the Bates-stamped version. I also see that

17 there is handwritten numbers, the application page

18 numbers on there as well, but I mean the machine one.

A Sure.

Q Do you know what I'm talking about?

A Sure.

MS. CARTER: Roy, I can give you another copy of

23 what I'm referring to.

Q Are you on that page, sir?

L.A. REPORTING

(800) 419-3376

A I am.

Q If you go down to paragraph number 8. Are

3 you there?

A I am.

Q It states, quote, "Is this a reflux

6 condenser?" Do you see that?

A I do.

Q Can you read that?

A Yes. It says, "Is this a reflux condenser?"

10 In other words, Does condensed material return directly

11 to the process from which it was generated?

Q And what's Noveon or Emerald Performance's

13 response to that question?

A We checked "yes."

Q And did you -- I believe -- did you indicate

16 in your direct testimony that you assisted in the

17 preparation of the Title V application?

A I did.

Q What year was the NaSH unit installed?

A We started installing the NaSH unit in 2006.

21 2006.

Q When were you -- when did you complete

23 construction?

A We completed construction -- well, it's

L.A. REPORTING

(800) 419-3376

1 been --

MR. HARSCH: I would like to object to the

3 question. Can you define "completed construction"

4 because it has a legal --

Q Well, what I mean by that is -- let me

6 rephrase the question.

Mr. Giffin, when was construction complete on

8 the NaSH unit and you folks commence operation after

9 completing all appropriate testing?

MR. HARSCH: Again --

A Because the testing is -- some of the testing

12 was done in July of this year.

Q Okay.

A And the actual physical installation was done

15 before that. And probably that physical installation

16 and initial startup occurred back in November of last

17 year.

HEARING OFFICER HALLORAN: Is that okay,

19 Mr. Harsch?

MR. HARSCH: Yeah. I will clarify it on redirect.

A And, I mean, we are still in the process of

22 shaking down the NaSH system. And the NaSH system -- I

23 mean, we still aren't without some problems with the

24 NaSH system. Whereas the process does operate about 85

L.A. REPORTING

(800) 419-3376

1 percent uptime at this point in time. There are months

2 that we have better months. But there are months

3 that -- we are averaging in the last six months about 85

4 percent uptime.

Q Okay. And is it fair to say when you

6 installed the NaSH unit you were aware that the Illinois

7 EPA had concluded that the source was not entitled to

8 the exemption in 214.382?

A We understood that the Agency didn't agree

10 with us.

Q I believe you should still have sitting up

12 there, sir, what has been marked Petitioner's Exhibit

13 Number 2. Do you have that, sir? It's a September 6th,

14 2001, FOIA response.

A I do.

Q And if I could direct your attention to

17 Attachment A. Are you there?

A I'm there.

Q What is generally reflected in this

20 Attachment A, sir?

A Internal communications of the Agency,

22 attorney/client communication.

Q Does it provide a general description of

24 various documents, the date of the document and then the

L.A. REPORTING

(800) 419-3376

1 reason that the document has been withheld?

A Yes.

Q Did Noveon ever appeal the Illinois EPA's

4 FOIA decision as reflected in this document?

A Not to my knowledge.

MS. CARTER: I have no further questions. Thank

7 you, Mr. Giffin.

HEARING OFFICER HALLORAN: Thank you, Ms. Carter.

Mr. Harsch, redirect?

REDIRECT EXAMINATION

BY MR. HARSCH:

Q Mr. Giffin, you mentioned that completion of

13 the physical construction and startup and testing. Can

14 you describe the operational problems in further detail

15 that you also testified to regarding the NaSH system?

A Sure. First of all, the NaSH system, the

17 carbon disulfide recovery system is a very unique

18 system. It's one of a kind. I don't think there is any

19 other unit like it in the world. So when we began

20 operating it, we understood we would possibly face some

21 challenges as far as shaking out some of the issues, the

22 operational issues. We have had -- when we vent the MBT

23 crude into the blowdown tanks, obviously you are venting

24 from 1,000 psig down to about 50 pounds of pressure. So

L.A. REPORTING

(800) 419-3376

1 there is a huge pressure job. In that venting there can

2 be some tar-like material that will accompany the gases.

3 We designed into the initial part of the NaSH unit ways

4 to prevent the tar from entering the NaSH process. And

5 for the most part, I think the design has done a pretty

6 good job. But there is some residual material that does

7 get into the carbon disulfide condensing system. And we

8 are continuing to find ways to prevent the -- some of

9 the lines that will plug. And we developed washing

10 techniques on the columns to improve the uptime of the

11 NaSH system.

Obviously, with winter outside operating

13 conditions -- I mean, we are having a learning curve

14 there as well. And we have gone anywhere from -- we

15 have averaged, like I said, 85 percent uptime on the

16 unit since July. In October we operated at 98 percent.

17 And in December, with the cold weather and everything,

18 it was a lot less than 85 percent uptime because of cold

19 conditions. And so we have had our share of shakeout

20 challenges on the system. But we believe that the

21 system is designed, and we will continue to improve that

22 uptime.

Q What happens when the NaSH system plugs?

A If the NaSH system plugs, then we have to

L.A. REPORTING

(800) 419-3376

1 divert the vapor stream from the blowdown tanks to the

2 NaSH, and we divert it back to the flare.

Q Is the NaSH system what you anticipate

4 compliance with the Miscellaneous Organic NESHAP or MON?

A The NaSH is one form of that compliance. We

6 also are evaluating utilization of the flare as a backup

7 mode of compliance.

Q Is that backup mode dependent upon favorable

9 outcome in this appeal?

A Yes.

MR. HARSCH: I have no further questions.

HEARING OFFICER HALLORAN: Thank you, Mr. Harsch.

Recross, Ms. Carter?

MS. CARTER: No, thank you.

HEARING OFFICER HALLORAN: Mr. Giffin, you may step

16 down. Thank you so much.

MR. HARSCH: Mr. Corn.

(Witness sworn.)

MICHAEL R. CORN, P.E.,

20 called as a witness, after being first duly sworn, was

21 examined and testified upon his oath as follows:

DIRECT EXAMINATION

BY MR. HARSCH:

Q Mr. Corn, would you please state your name

L.A. REPORTING

(800) 419-3376

1 and address for the record?

A My name is Michael R. Corn. I live at 6615

3 Manley Lane, Brentwood, Tennessee.

Q And would you provide your educational

5 background?

A I hold a bachelor's degree in eco engineering

7 from the University of Tennessee and a master's degree

8 in environmental and water resources engineering from

9 Vanderbilt.

Q And can you briefly describe your

11 professional experience and who you are affiliated with?

A I have been working since I graduated

13 from -- or since I got out of Vanderbilt as an

14 environmental consultant since 1975. I think about 33

15 years of experience. I am currently president of

16 AquAeTer, Inc. We have offices in Nashville; Brentwood;

17 Denver, Colorado; and Hershey, Pennsylvania. We do

18 environmental consulting in air, water, wastewater,

19 solid hazardous and nuclear waste.

Q Have you testified as an expert before?

A Yes. I have testified -- in fact, I have

22 testified before -- for Noveon before on the ammonia

23 issue. Also I have testified for the City of Sauget,

24 and I have testified on several air cases in other

L.A. REPORTING

(800) 419-3376

1 states across the country.

Q Are you familiar with the Henry plant?

A I first came to the Henry plant in 1988 and

4 am familiar with the Henry plant. I have been through

5 all the processed buildings as far as the Title V permit

6 application preparation.

Q And was AquAeTer and yourself retained to

8 assist the company in the preparation of the Title V

9 application?

A Yes. We were retained, I believe, in 1995.

11 It may have been late '94. But '95 we were retained to

12 begin the preparation of the Title V permit application.

Q Did you work on a number of Title V

14 applications around the country?

A Yes. We have worked on Title V's for the

16 chemical industry, for pulp and paper, for

17 petrochemical, for wood treating, including Title V

18 permits in Illinois, other Title V's.

Q Did you have a standard procedure that you

20 followed when you were working on preparing the Title V

21 application?

A Yes. There is a standard procedure that we

23 use, and I imagine most other people would use as well.

24 You review the process information with the engineers

L.A. REPORTING

(800) 419-3376

1 that run the processes. You look at their past permits

2 to see how they permitted each process before. You look

3 at the regulatory requirements that the permit is

4 required to -- or where the permittee is required to

5 meet. And then you prepare the permit application based

6 on all the data that you put together. Obviously we

7 would try to check the calculations from the engineers,

8 an independent check of that, of their emissions, and

9 make sure that the emissions are what we believe are

10 correct.

Q As part of your preparation of the Title V

12 application, did you review all of the operating permits

13 that have been issued for this facility?

A The best of my recollection we reviewed the

15 permit -- all of the permit history. I believe the

16 first permit was issued back in 1975. I think the first

17 permit application started in '72, but was issued in

18 '75.

Q Did you review the materials that were

20 provided to Mr. Giffin and Mr. Mueller in response to

21 the FOI request when they reviewed the operating permit

22 files prior to the preparation of the application?

A Yes. We reviewed -- in fact, I reviewed

24 those as well as other staff, John Upmore. John is in

L.A. REPORTING

(800) 419-3376

1 Afghanistan, called up. But we reviewed all the past

2 history, and that's part of what you do when you are

3 doing a Title V permit.

Q Are you familiar with the regulatory

5 requirement found in 35 Illinois Admin Code 214.301,

6 which establishes the 2,000 part per million S02

7 requirement in Illinois?

A Yes. I am familiar with that.

Q And are you also familiar with the exemption

10 found in 35 Illinois Admin Code, section 214.382?

A Yes. I'm familiar with that. And that is

12 one of the things that we review during the Title V to

13 make sure that the past permitting history was -- that

14 the 382(a) was still in effect.

Q Is it possible to prepare a permit

16 application without reviewing and relying upon past

17 operating permit decisions by the regulatory agency?

A From my standpoint, it is not. And, in fact,

19 it is part of the Title V; you have to do that to go

20 through that exercise.

Q And that's a standard operating procedure, as

22 far as you know, that all consultants follow?

A All Title V's that we have prepared -- and

24 there has been probably over 20 or 30 Title V permits --

L.A. REPORTING

(800) 419-3376

1 we followed that procedure. And I know that other

2 people in other consultant firms follow that same

3 procedure.

Q Based on your review of the operating permit

5 history, your knowledge of the facility, and the two

6 regulations we have just talked about, did you fill out

7 the applicability section of the permit application?

A I did or John Upmore and I did.

Q And what did you conclude?

A We concluded that the facility was in

11 compliance with the S02 requirements of the Illinois

12 regulations.

Q And why did you conclude that?

A There are a couple of reasons we concluded

15 that. In reviewing the record both the '90 and the '93

16 permits had specified that the condensers and the flares

17 be operational when the unit is producing product. In

18 other words, the control devices had to be operational.

19 Part of the exemption is that you have to remove CS2, the

20 condensers, or remove sulfur. And the exemption that

21 was given in those permits, it was required to run that

22 condenser to meet that exemption. The flare turned

23 everything into S02 so you weren't discharging H2S as a

24 hazardous gas.

L.A. REPORTING

(800) 419-3376

Q So based on your review, you believe that

2 1990 and '93 permits treated the condenser as a control

3 device?

MS. CARTER: Objection. Now Counsel is again going

5 into the prior permitting history of the Agency.

HEARING OFFICER HALLORAN: Mr. Harsch?

MR. HARSCH: The witness has testified that it's

8 standard operating procedure to review past permitting

9 decisions of the Agency and the past permits. That it's

10 impossible to fill out a Title V application without

11 doing so, and it's a standard operating procedure. I'm

12 questioning him regarding his decisions that led to the

13 filling out of the Title V permit application.

HEARING OFFICER HALLORAN: Any further objection,

15 Ms. Carter?

MS. CARTER: I did not object to the previous

17 questions based on what the course of his review was and

18 what he considered. However, to the extent that he is

19 getting into an analysis of the Agency's prior

20 decisions, I think it's off limits. Again, those are

21 not at issue here today.

HEARING OFFICER HALLORAN: I agree with

23 Ms. Carter's objection. It seems to me it's -- whether

24 it's trying to or not -- it's trying a little bit of a

L.A. REPORTING

(800) 419-3376

1 backdoor type regarding my ruling. So the objection is

2 sustained.

Q Part of your review of the permit application

4 and preparation of the Title V permit, do you have to

5 list all of the applicable requirements?

A Yes, you do.

Q And what did you determine to be an

8 applicable requirement for this process?

A In order to meet the exemption, it had to be

10 a petrochemical process, and it had to remove sulfur.

11 And from our review, both of those conditions were met.

Q And that would also include the requirement

13 to operate the condenser?

A That's absolutely part of our decision and

15 the State's decision. To require that as a control

16 device was part of our analysis.

Q In preparation for today's hearing, you have

18 reviewed a number of documents that the Agency record

19 has been filing in this proceeding?

A Yes, sir, I have.

Q Without going through every document, have

22 you reviewed enough of the -- Mr. Punzak's review notes

23 in reviewing the Title V, the various letters that have

24 been submitted to the company to understand what you

L.A. REPORTING

(800) 419-3376

1 believe to be the basis of the Agency's determination

2 that the exemption does not apply?

A I think I understand it. I disagree with

4 that.

Q What is your understanding of the evolving

6 Agency's decision?

A That there is a -- I believe a couple of

8 things that the sulfur -- the condenser does not recover

9 enough sulfur, a certain percentage of sulfur. There is

10 nothing in the regulation that gives a percentage of

11 sulfur recovery.

The second thing, I think he is claiming that

13 a reflux condenser makes it a process and not a sulfur

14 removal process. Regardless of whether it recovers that

15 CS2, carbon disulfide, and sends it back to the process,

16 it's still recovering sulfur; and that's the requirement

17 of the regulation of the exemption. So that seems to be

18 a moot point. It's not classified in a regulatory

19 language of how much sulfur you have to recover.

Q Does the exemption in your view turn on

21 whether the device is a process device or a control

22 device, a reflux condenser, or something called a big

23 red apple?

MS. CARTER: Again, objection. Calls for a legal

L.A. REPORTING

(800) 419-3376

1 conclusion.

HEARING OFFICER HALLORAN: I'm going to overrule

3 it. If Mr. Corn can answer, he may do so.

A It does not require a specific type of

5 control equipment. Most environmental regulations do

6 not specify the type of control equipment you put on to

7 reduce emissions, just that you reduce emissions.

8 That's for a purpose. We as engineers have to put our

9 stamp on that, not the regulators.

Q So is it your opinion then that the fact that

11 it condenses CS2 and returns it back to the process makes

12 any difference?

A Based on my reading of the regulations, that

14 should not make any difference to the interpretation

15 that it removes sulfur from the flue gases.

Q Based on your familiarity with the reactor

17 and the condenser, do you agree with Mr. Giffin's

18 testimony that the reactor is not necessary to

19 control -- the condenser is not necessary to control the

20 temperature of the reaction?

A I agree with that.

Q Do you agree with Mr. Giffin's testimony that

23 the condenser is not necessary to control the pressure

24 in the reactor?

L.A. REPORTING

(800) 419-3376

A I agree with that as well.

Q In fact, do you have an opinion as to whether

3 or not the condenser is, in fact, necessary to be

4 operated so that the reactor can function and produce

5 usable product?

A My basic understanding of the process is that

7 they charge the unit with additional carbon disulfide.

8 Whether that comes from the condenser or from the raw

9 product storage tank, does not make any difference. You

10 use more carbon disulfide from the raw product storage

11 tank, obviously, but it does not make any difference

12 where you get that makeup from.

Q Is the chemistry of the reaction, does the

14 carbon disulfide serve as a solvent?

A No. All three of the chemicals that are

16 added are part of the reactants that go into -- that

17 make the -- that go up to make the product. They are

18 considered reactants.

Q You are familiar with the references and

20 direction to the company that they evaluate the

21 competitors' production in West Virginia and Louisiana,

22 the documents that were in the permit record?

A Yes, sir. I'm familiar with those.

Q Have you had occasion to review the West

L.A. REPORTING

(800) 419-3376

1 Virginia and Louisiana air pollution regulations that

2 apply to those facilities?

A I have reviewed those. They contain the

4 requirements, just like Illinois does, for the 2,000

5 part per million that's contained under, I believe it's

6 301. But they do not have a specific exemption like

7 Illinois does. That's the 382(a), I believe, that gives

8 an exemption for petrochemical processes that remove

9 sulfur with a device. And that's the difference between

10 those other two. That's the -- one of those other

11 facility's had put sulfur recovery; they did not have

12 that exemption written into their language in their

13 regulations.

MR. HARSCH: I have no further direct questions.

HEARING OFFICER HALLORAN: Thank you, Mr. Harsch.

Ms. Carter, cross?

MS. CARTER: Yes. Thank you.

CROSS-EXAMINATION

BY MS. CARTER:

Q Mr. Corn, I know you stated what you have

21 your bachelor's degree in, but I missed it. What do you

22 have it in?

A Nuclear engineering.

Q Okay. Thank you. And you have your master's

L.A. REPORTING

(800) 419-3376

1 in water resource engineering?

A Environmental and water resource engineering.

Q Okay. Thank you.

A The department is now just civil and

5 environmental.

Q I believe in your direct testimony you stated

7 you were familiar with the 35 Illinois Administrative

8 Code 214.301 and 382; is that correct?

A Yes, ma'am.

Q And when did you first become familiar with

11 these regulations?

A That was during our initial review during

13 1995 when we first started this and we discussed with

14 Mr. Giffin and Mr. Mueller the applicability of the

15 regulations because we are required to do an independent

16 review of that.

Q And beyond this source here in Henry,

18 Illinois, have you ever had experience with these

19 regulations elsewhere in the state?

A On the sulfur rule?

Q Yes, sir.

A No, ma'am, I have not.

Q Now you also stated in your direct testimony

24 that you reviewed the regulations in West Virginia and

L.A. REPORTING

(800) 419-3376

1 Louisiana; is that correct?

A Yes, ma'am.

Q Okay. When did you initially review those

4 regulations?

A Louisiana regulations, we have done work with

6 refineries down there.

Q Okay.

A That's --

Q That's your general knowledge?

A General knowledge. West Virginia's, recently

11 I reviewed those as part of the preparation for this.

Q Did you review the regulations in South

13 Carolina?

A I have not reviewed the regulations in South

15 Carolina.

Q Have you had the opportunity to research

17 similar MBT-C processes in other states while you were

18 preparing the Title V submittal for this site?

A We did not review any of the processes in

20 other states.

Q And in the process of compiling this initial

22 Title V application, did you review any design

23 specifications for the MBT-C process at issue here

24 today?

L.A. REPORTING

(800) 419-3376

A Other than we went and talked with the

2 engineers that ran the process.

Q Okay.

A In fact, Nathan Gray and I think Steve

5 Saunders (phonetic), I believe were the names. And so

6 we did not review specific design, the original design

7 specs. But we did talk with engineers about how they

8 ran the process; what was required to make the process

9 work.

MS. CARTER: No further questions. Thank you,

11 Mr. Corn.

HEARING OFFICER HALLORAN: Thank you, Ms. Carter.

Redirect, Mr. Harsch?

MR. HARSCH: No.

HEARING OFFICER HALLORAN: You may step down,

16 Mr. Corn.

THE WITNESS: Thank you, sir.

(Witness sworn.)

BERNARD O. EVANS,

20 called as a witness, after being first duly sworn, was

21 examined and testified upon his oath as follows:

DIRECT EXAMINATION

BY MR. HARSCH:

Q Mr. Evans, would you please state your name

L.A. REPORTING

(800) 419-3376

1 and where you reside for the record?

A My name Bernard O. Evans, also known as

3 Bernie Evans. I reside at West 195 South 10392 Racine

4 Drive in Muskego, Wisconsin, M-u-s-k-e-g-o. It's not

5 Indian. It's Norwegian.

Q Can you briefly describe your educational

7 background?

A I got my engineering degree from the

9 University of Illinois. My master's degree in

10 environmental engineering from the University of

11 Florida.

Q And who are you presently employed with?

A The firm I work with currently is

14 Environmental Resources Management. It's a firm of

15 about 135 offices across the world, about 3,000

16 employees. I have been with ERM about ten years.

Q What are your principal duties there?

A My responsibility with ERM is the air program

19 director for the Midwest area. I support our air

20 practice in about five states, region 5.

Q Does that include Illinois?

A Yes.

Q Who did you work with before?

A I have actually worked with the U.S.

L.A. REPORTING

(800) 419-3376

1 Environmental Protection Agency, region 6, after school.

2 I started consulting with Radian Corporation in Austin,

3 Texas, in '78. I have been consulting with the industry

4 on air matters for about 30 years.

Q As part of your background, did you

6 personally work on a number of Title V applications?

A Yes. In my background I directed the air

8 permitting area of Radian Corporation for a number of

9 years through the Eighties. And in that situation, I

10 was involved in a lot of prevention of significant

11 deterioration permits, PSD permits, construction permits

12 and operating permits and Title V applications since the

13 onset of the Clean Air Act amendments in 1990. I have

14 supported development of Title V, our CAAPP permit

15 applications, for numerous industries in maybe as many

16 as ten states.

Q Does that include a number of chemical

18 industries?

A Yes.

Q Do you currently have a -- are you

21 currently -- is your firm under contract with the

22 company to provide assistance?

A Yes. I have been working with BF Goodrich,

24 Noveon, Emerald, in a capacity as consultant since 1998.

L.A. REPORTING

(800) 419-3376

1 My role with the company over that period of time has

2 been in understanding and determining compliance

3 approaches for various NESHAPs for their chemical

4 processes. My first job was with the hazardous organic

5 NESHAP with their Charlotte facility in support of and

6 in relationship to compliance with the amino resin MACT.

7 I have worked with the firms in relationship to

8 pharmaceutical MACT, pesticide active ingredient MACT.

Q Are you currently working on a specific

10 project for the facility?

A Yes. With the Henry plant. I have been

12 working with the Henry plant since 2003 in relationship

13 to the Miscellaneous Organic NESHAP and the plan and the

14 compliance approach for that particular NESHAP.

Q Is that sometimes referred to as the MON,

16 M-O-N?

A Yes, it is. M-O-N for MON.

Q As part of your efforts, are you thoroughly

19 familiar with the process that's depicted in trade

20 secret 141?

A Yes, I am. This is the MBT crude process.

22 It is one of the effective MPCUs or miscellaneous

23 chemical processing units that's affected by the MON.

24 And we have been working with the plant to get in

L.A. REPORTING

(800) 419-3376

1 compliance with the MON for this process.

Q Let me show you what is document 1473 from

3 the general permit record file. It's a memorandum from

4 Don Sutton to Julie Armitage.

(Brief pause in proceedings.)

Q You have reviewed that document previously?

A Yes. I have seen this document.

Q Do you agree with his conclusion in the

9 second paragraph that the -- while it isn't yet

10 promulgated, the flare would probably comply with the

11 MON?

A Don's statement here is that the process may

13 be subject to the Miscellaneous Organic NESHAP which has

14 not yet been -- has been proposed. But the current

15 control device flare would probably comply with organic

16 HAP control requirements, but would still emit in excess

17 of State S02 rules.

The flare requirements for compliance with

19 the MACT would require, for this particular flare, this

20 is a nonassisted flare. So it's a nonassisted flare.

21 Requirements are that it operates all the time that

22 material is vented to the flare. It must have a flame

23 present at all times. And they have monitors to confirm

24 that the pilot's on, that there is flame present all the

L.A. REPORTING

(800) 419-3376

1 time. And it has to be designed as a nonassisted flare

2 for tip velocity and that the heat value of the gases

3 would be adequate to support flame. And this one

4 currently complies with those particular requirements.

The MACT's rules also require that the flare

6 operate with no visible plume. There are times when

7 this plume is visible. The problem with the H2S, it's

8 combusted in the process. And it does form droplets

9 that can be visible at times. The plant, if they are

10 able to use the flare for MACT compliance, will modify

11 the flare for no visible observations.

Q Would that be modified by just increasing the

13 temperature, natural gas emission?

A We may have a need for more additional

15 natural gas to support the flame.

Q Does the -- when it operates, does the NaSH

17 system comply with MON?

A Yes. That is correct. The process as it's

19 designed currently requires -- there is two ways to

20 comply with the -- several ways to comply with the MON.

21 One would be with a control device that reduces your

22 HAPS by 98 percent, or use of a recovery device that

23 reduces HAPS by 95 percent. In relationship to this one

24 with carbon disulfide condensers and the reactors are

L.A. REPORTING

(800) 419-3376

1 about 70 percent. They would have needed to have the

2 flare that would destroy the CS2 further or the NaSH

3 system which completes the conversion of the CS2 in terms

4 of back to the process as a recovery device to meet the

5 compliance with the MON.

Q If Petitioner is successful in this appeal,

7 will you be able to formulate the compliance program for

8 the facility based on the use of either the NaSH system

9 when its operational and not plugged or the flare that

10 Mr. Giffin has testified to that they direct the gas

11 system plug?

A Correct. The flare, as we just discussed,

13 would accomplish the requirements of the MON in relation

14 to compliance with the MON as an alternative to the NaSH

15 system.

Q And the successful outcome is necessary

17 because you would not be allowed to utilize the flare in

18 conformance with 35 Illinois Admin Code 214.301,

19 correct?

A Would you repeat the question?

Q The successful outcome of this appeal is

22 necessary because of the requirement of 35 Illinois

23 Admin Code, section 214.301, which would impose the

24 2,000 part per million S02 limitation absent the

L.A. REPORTING

(800) 419-3376

1 applicability of the exemption?

A Correct.

Q Have you had reason to review the exemption?

A Yes. We did review the exemption. When we

5 developed the permit application for the NaSH system, we

6 looked at applicability of Illinois' regulations and

7 applicability of sulfur dioxide. And we looked at both

8 301 and the exemption 382(a).

Q Based on your extensive background that you

10 testified to regarding preparation of Title V

11 applications and all the permits that you have been

12 involved in, do you agree with the Agency's

13 interpretation that the exemption at 35 Illinois Admin

14 Code, section 214.382 is not applicable to this

15 facility?

A As I read that regulation, it requires two

17 things, petrochemical operation or your refiner. It

18 also requires that you reduce sulfur. And the system as

19 it's designed is reducing sulfur in relationship to the

20 way the process operates which would be compliant with

21 that regulation.

Q Do you have an opinion as to whether it makes

23 any difference if it's characterized as a reflux

24 condenser, or a control device, a process device, or a

L.A. REPORTING

(800) 419-3376

1 big red apple, or any other clarification?

A The rule does not describe that it requires

3 any sort of device other than a recovery device. It

4 doesn't prescribe any level of recovery. As the rule is

5 written, the system would comply with that particular

6 requirement. And I would disagree with the

7 interpretation it does not.

MR. HARSCH: I have no further questions.

HEARING OFFICER HALLORAN: Thank you, Mr. Harsch.

Ms. Carter?

CROSS-EXAMINATION

BY MS. CARTER:

Q Mr. Evans, you said you have been under

14 contract with Noveon or any of its iterations since

15 1998?

A Correct.

Q When did you first become involved with the

18 Henry facility?

A 2003.

Q Do you recall the exact date of that

21 involvement?

A No. I do not.

Q Did you have any involvement in the

24 preparation and submittal of the initial Title V

L.A. REPORTING

(800) 419-3376

1 application that we have been discussing here today?

A Not for the Henry plant, no.

Q No. Okay. Did you participate in any of the

4 communications with the Agency with regard to the Title

5 V application from 1996 until November of 2003?

A Not until they entered it, no.

Q And you said that you have reviewed 214.301

8 and 382. Is that in the context of this litigation?

A No. It's in the context of the NaSH permit

10 application that was submitted for the NaSH process.

Q And is that the first time you have been

12 exposed or dealt with those regulations here in

13 Illinois?

A Yes. For chemical processes. I have looked

15 at the sulfur rule requirements for other types of

16 industry, but first time for chemical industry.

MS. CARTER: I have no further questions. Thank

18 you, sir.

HEARING OFFICER HALLORAN: Thank you.

MR. HARSCH: I have a --

HEARING OFFICER HALLORAN: Mr. Harsch?

MR. HARSCH: I don't know if it's redirect or

23 clarification or whatever.

L.A. REPORTING

(800) 419-3376

REDIRECT EXAMINATION

BY MR. HARSCH:

Q Mr. Corn testified that it was standard

4 operating procedure for a consultant to review past

5 operating permits in preparing Title V applications.

6 Based on all the Title V applications that you assisted

7 in putting together, do you agree with that testimony?

MS. CARTER: Objection. That's beyond the scope of

9 my cross, Counsel.

HEARING OFFICER HALLORAN: Mr. Harsch, I agree with

11 Ms. Carter, but Mr. Harsch --

MR. HARSCH: I agree heartily that it's beyond the

13 scope. I said it was a point of clarification that I

14 had forgotten. I'm sure I will get it in in redirect

15 after questions of Mr. Punzak.

HEARING OFFICER HALLORAN: Thank you, Mr. Harsch.

17 Objection sustained.

MR. HARSCH: That would be all my questions subject

19 to calling him back as a rebuttal witness.

HEARING OFFICER HALLORAN: Okay. Very well. You

21 may step down, Mr. Evans. Thank you so much.

Before we go off the record and discuss what

23 we are going to do for now, I do want to make note in

24 the record that around 9:10 a.m., a member of the

L.A. REPORTING

(800) 419-3376

1 public, Bill Maypin, Mautin, (emphasizing pronunciation)

2 I believe, he wanted to come in and sit and just listen

3 at the hearing. I informed him that it was closed due

4 to trade secret issues. He stated he did not want to

5 make a comment; he just wanted to sit and listen. And

6 he seemed fine with being told that it would be a closed

7 hearing. So I just wanted to make that note for the

8 record. And we will go off the record for a moment.

9 Thank you.

(Whereupon, a brief recess was taken

in the proceedings.)

HEARING OFFICER HALLORAN: It is approximately

13 11:36. We are going to do a direct for about 35

14 minutes. Mr. Harsch has informed me that the

15 Petitioners have rested their case in chief. Now it's

16 Ms. Carter and the IEPA's turn.

MS. CARTER: Thank you.

HEARING OFFICER HALLORAN: Thank you.

(Witness sworn.)

DAN PUNZAK,

21 called as a witness, after being first duly sworn, was

22 examined and testified upon his oath as follows:

L.A. REPORTING

(800) 419-3376

DIRECT EXAMINATION

BY MS. CARTER:

Q Please state your name.

A Dan Punzak.

Q Mr. Punzak, can you tell me a bit about your

6 undergraduate education?

A I have a bachelor of science degree in

8 chemical engineering from Carnegie Mellon University.

Q What type of coursework did you take to

10 obtain your chemical engineering degree?

A You take a number of general courses, physics

12 and chemistry. But then in engineering you take courses

13 like thermodynamics and kinetics where you will study

14 about reactors. And then heat transfer and various

15 other types of courses. I have also had courses in

16 organic chemistry.

Q Who are you currently employed with?

A Illinois Environmental Protection Agency.

Q And when were you first employed by the

20 Agency?

A In March of 1978.

Q And what was your first position with the

23 Agency?

A I was in the permit section.

L.A. REPORTING

(800) 419-3376

Q And what were your general duties in the

2 permit section in 1978?

A In 1978 I did more -- all types of permits.

4 It wasn't as complex as it is now. Back then I did

5 construction and operating permits. And back then you

6 had -- often had permits for individual units of

7 equipment.

Q And how long did you hold this position?

A I was in the permit section for less than a

10 year and then transferred to field operation section.

Q And what position did you hold in the field

12 operations section?

A I was a field inspector.

Q And for how long?

A A year and a half, year and three quarters.

Q Where were you assigned as a field inspector?

A I was in the LaSalle-Peru office and then in

18 the Peoria office.

Q And after you were a field inspector with the

20 Agency, what was your next position?

A I went back to the permit section.

Q And when you went back to the permit section,

23 were you responsible for all types of permits?

A Yes. A number of them. They generally limit

L.A. REPORTING

(800) 419-3376

1 it a little bit, but I was generally -- you could still

2 have a fairly broad number of permits. But, generally,

3 I tended to get permits in the fields of chemical

4 processes, printing, refineries and that type of

5 operation. I usually, for instance, didn't do power

6 plants very often or anything.

Q And today are you responsible for both

8 construction and operating permits?

A No. I'm now in the Clean Air Act Permit

10 Program or CAAPP as they have been using it. And we do

11 not do construction permits. There is a separate group

12 that does construction permits for CAAPP, CAAPP sources,

13 meaning a source that has a CAAPP permit.

Q In the CAAPP unit, do you also have a

15 particular area of industry that you routinely deal

16 with?

A I'm sort of still in the same area as before,

18 refineries, chemical plants, coding operations,

19 printing, and those type of operations.

Q And what is generally included in a CAAPP

21 permit?

A A CAAPP permit is a broad permit

23 that -- there is only one for an entire site. It

24 includes all the processes that occur there. And we

L.A. REPORTING

(800) 419-3376

1 have a section that addresses general requirements for

2 the whole plant that may apply to anything. And then

3 there is a -- then there will be a separate section

4 where each process may have its own section. And we

5 will describe the applicable rules, any monitoring,

6 record keeping, reporting, and conditions that came from

7 construction permits.

Q And prior to your employment with the

9 Illinois EPA, were you employed elsewhere?

A Yes. I was employed as a process engineer in

11 the chemical industry and also at a research institute.

Q While you have been with the Illinois EPA,

13 have you participated in any sort of training

14 activities?

A Yes. We have a number of different programs.

16 There is a number of courses that the U.S. EPA makes

17 available. There is ones they have had ever since

18 basically they started the EPA up, and they still have

19 them. They update them a little bit. But then they

20 also have courses that are appropriate for new things

21 that came along. For instance, I went to a -- something

22 on the MON rule that somebody else has already

23 described. I went to a training course on that. And

24 then they also have a training course on what they call

L.A. REPORTING

(800) 419-3376

1 CAM or Compliance Assurance Monitoring. And, basically,

2 U.S. EPA courses that we can obtain.

Q Do you maintain any professional licenses?

A Yes. I have a professional engineering

5 license in Illinois. Well, I took the test in '78 and,

6 I guess, it was in '79 by the time they issued it. But

7 I have maintained it ever since.

Q And are you familiar with Emerald Performance

9 Materials that we have been discussing here today?

A Yes, I am.

Q And how are you familiar with the facility?

A I believe once when I was an inspector, I

13 came over here and saw the site. That was like in '79

14 or '80. But back then they still had what's now PolyOne

15 as a separate company was part of BF Goodrich at that

16 time. But I was to the site at one time.

Q Are you also familiar with the source from

18 working on the CAAPP permit?

A Yes, I am.

Q Generally, just to let you know, Mr. Punzak,

21 I will be referring to the source as Emerald Performance

22 Materials rather than any of the previous iterations

23 just so there is no confusion.

A Okay.

L.A. REPORTING

(800) 419-3376

Q Are you familiar with, I believe, what was

2 discussed earlier as the MBT-C process and NaMBT

3 process?

A Yes, I am.

Q I'm going to hand you the pointer, and I am

6 going to be referring you to what's been previously

7 identified as the trade secret version of the record,

8 marked 141. And there is also a pointer if you need

9 that, sir.

You just indicated that you are generally

11 familiar with those processes. Can you tell me

12 generally how the MBT-C process works, just in real

13 general terms, first off?

A Well, they have a raw material preparation

15 area so they can feed it in. Then they have the

16 reactor. Then they have the condenser and a blowdown

17 tank and then that vents to a flare. And there is two

18 different ones here. These would be called parallel

19 operations. This one is going on and this one is going

20 on. And they can be going on at the same time, although

21 they may -- most likely would be in a different phase of

22 the process at any given time.

Q In terms of the MBT-C process, I believe you

24 identified various reactions on the left-hand side of

L.A. REPORTING

(800) 419-3376

1 that diagram there. What are the reactants that we are

2 talking about?

A We are dealing with molten sulfur, aniline

4 and carbon disulfide.

Q And how does the Illinois EPA characterize

6 the MBT-C process?

A Well, it's called a batch process. And it's

8 also a petrochemical process as earlier identified. We

9 agree with that.

Q Okay. And I do believe that Mr. Giffin

11 testified to the various line -- the legend down there

12 in the lower corner. But just to get us further

13 oriented, I see that there is various abbreviations on

14 that document. Could you identify what those

15 abbreviations are? For instance, I see there is a

16 reference to an "EU"?

A Yes. We have -- they use the term "EU" means

18 emission unit. Then we have "CU," which they call

19 control -- this is their designations of the control

20 unit. And then we have "EP" for an emission point.

Q And I believe you just indicated these are

22 the company's designations?

A Yes, they are.

Q Do they necessarily reflect the Illinois

L.A. REPORTING

(800) 419-3376

1 EPA's designations of those various units?

A No. They do not.

Q Just so we are on the same page, sir, when

4 I'm using the term "MBT-C reactor process," what does

5 that mean to you?

A Well, it's the heart of the plant here, the

7 reactor and the condenser and the blowdown tank.

Q And how did Noveon classify the MBT-C reactor

9 process in its Title V application?

A Well, as a process emission unit.

Q And I want to take this through step by step

12 in a little bit more detail here. I want to first focus

13 on the MBT-C reaction taking place in the reactors

14 there, sir. I believe you mentioned before there were

15 three reactants?

A Yes.

Q And what state are they in when they enter

18 the MBT-C reactor?

A They come in as liquids.

Q And is the reaction under any sort of

21 temperature and pressure constraint?

A Yes. They are under high temperature and

23 high pressure once the reaction builds. They have to

24 heat them up to get there, but they are under high

L.A. REPORTING

(800) 419-3376

1 temperature and pressure when they are reacting.

Q Once it enters the reactor, what leaves the

3 reactor there? I see that there is dotted lines leaving

4 the MBT-C reactor number 1?

A There is two -- well, the dotted lines mean

6 gases, and the solid lines mean liquids. And the gases

7 that are going into the condenser are some of the carbon

8 disulfide which is a raw material and then hydrogen

9 sulfide which is one of the byproducts of the reaction.

Q Does the MBT-C reactor, does it release S02?

A No, it doesn't.

Q Once the vapor leaves the MBT-C reactor,

13 where does it travel next? Where is it headed to?

A Well, it goes through the condenser and then

15 into the blow tank -- the blowdown.

Q And what's the inlet temperature at the

17 condenser?

A I believe the application identified in the

19 range of 480 to 500 degrees.

Q And then let's just talk about the CS2. What

21 happens to the CS2 when it goes through the condenser?

A Well, the condenser starts to cool the

23 material down so it enters as a vapor. But part of it

24 comes back to a liquid state and is returned back to the

L.A. REPORTING

(800) 419-3376

100

1 reactor.

Q Is that designated by the solid line then

3 heading back to the MBT-C reactor?

A Yeah.

Q Can you just tell me real generally,

6 Mr. Punzak, how the condenser works.

A When you lower the temperature of a lot of

8 materials, it's called above the boiling point or below

9 the boiling point. So if you lower the temperature to

10 below the boiling point, it returns to a liquid state.

Q And I believe you indicated what the inlet

12 temperature was to the condenser, what's the outlet

13 temperature at the condenser?

A I believe it's in the range of 300 degrees.

Q And then once the CS2, sir, travels back to

16 the reactor, what function does it serve in the reactor

17 there?

A Well, it's a raw material. It's what didn't

19 react when it first went in. So now when it's

20 condensed, it can go back into the reactor and is

21 available to react.

Q Approximately what percent of this CS2

23 recovery took place in the condenser prior to the

24 installation of the NaSH unit?

L.A. REPORTING

(800) 419-3376

101

A In the range of about 70 to 80 percent of --

Q Do the condensers remove CS2 from the

3 process?

A No. They don't remove it; they just recycle

5 it back to the reactor.

Q Now you said 70 to 80 percent of the CS2 went

7 back to the reactor. Where does the other 20 to 30

8 percent of the CS2 travel?

A It's not condensed. And it continues on as a

10 vapor and goes to the blowdown tank and, ultimately, to

11 the flare.

Q Now we have been talking about CS2. I

13 believe you mentioned before that there were two vapors

14 leaving the MBT-C reactor?

A Yes. There is also hydrogen sulfide.

Q Where does the hydrogen sulfide go once it

17 hits the condenser?

A It just travels on through. It's a vapor at

19 room temperature no matter -- unless you've got it

20 extremely cold, it would never condense. And they are

21 not attempting to condense it because it would have no

22 advantage to have it back to the reactor. It just

23 passes on through to the blowdown tank and then onto the

24 flare.

L.A. REPORTING

(800) 419-3376

102

Q So is it fair to say -- scratch that. I

2 apologize.

Are the condensers removing H2S from the

4 process?

A No. They are not.

Q And why don't the condensers remove the H2S

7 from the process?

A Well, because they don't cool it down cool

9 enough to make it into a liquid.

Q And does the condenser emit S02?

A No, it doesn't.

Q Okay. Mr. Punzak, how would you characterize

13 these two condensers CU711-0001 and 0002?

A I would classify them as reflux condensers

15 designed to recycle some of the raw material back into

16 the reactor.

Q Mr. Punzak, do you recall anything within the

18 Title V application that supports your understanding

19 that these condensers are reflux condensers?

A Yes. That was one of the questions in

21 the -- in one of the forms. And it was answered as,

22 "Yes, it was a reflux condenser."

Q Is that what is on -- do you have this

24 document in front of you, trade secret version of the

L.A. REPORTING

(800) 419-3376

103

1 record, page 1 through 2,115. The first portion of that

2 document on page 173 of the Bates-stamped version, sir,

3 is that what you were referring to there?

A I have to put my glasses on.

Q Do you have your glasses?

A Yeah.

(Pause in proceedings.)

A Yes. On page 173 in question number 8 it

9 says, "Is this a reflux condenser, i.e., does the

10 condensed material return directly to the process from

11 which it was generated?"

And the answer is yes.

Q Did the Illinois EPA ultimately receive

14 information, Mr. Punzak, from the company indicating the

15 percent of total sulfur compounds recovered from the

16 condenser on the MBT-C condenser?

A Yes, it did.

Q And what was that?

A 23 percent.

Q Now you just mentioned 23 percent. Earlier

21 you mentioned 70 to 80 percent, I believe, for the CS2

22 recovery. Why is there the difference in those numbers?

A Well, because the remainder of the sulfur is

24 present in the hydrogen sulfide which passes directly on

L.A. REPORTING

(800) 419-3376

104

1 through. But only the carbon disulfide is returned to

2 the reactor.

Q Does the condenser remove sulfur compounds

4 from flue gases?

A It just recycles one of the materials. It

6 doesn't remove them from the process.

Q Now we have been talking about all of these

8 emissions in the MBT-C reactor and then going on to the

9 MBT-C blowdown tank. Where do they all ultimately go?

A From the blowdown tank, they are in a vapor

11 state and it goes on to the flare where they are

12 combusted.

Q So what exactly is a flare designed to do?

14 You say they are combusted; what does that mean?

A It converts them from -- either to sulfur

16 dioxide and then to some other innocuous materials like

17 carbon dioxide and water.

Q And what percent of CS2 and H2S is converted

19 to S02?

A That conversion is very high. That's better

21 than 99 percent.

Q And is the flare designed to remove sulfur

23 compounds from flue glasses?

A No, it isn't.

L.A. REPORTING

(800) 419-3376

105

Q Now is this here trade secret version, page

2 141, is that the current configuration of the facility?

A No. They have now -- as previously

4 discussed, they have now added what they call a NaSH

5 system on here to take those vapors that are in the

6 blowdown tank and to send them to control devices to

7 reduce the emission.

Q Prior to the installation of the NaSH unit,

9 are you familiar with what the flaring emissions were of

10 S02 from this process?

A The actual emissions were in the range of

12 3,000 to 4,000 tons a year, but I think they listed the

13 potential as 4,922. That would be essentially operating

14 every minute of the year. And rarely do they meet that

15 high a level.

Q I'm going to hand you what has previously

17 been marked public version of the record, page 1473

18 through page 1479. It's a memorandum from Don Sutton to

19 Julie Armitage and attachments dated January 12th, 2001.

20 Do you recognize this document, Mr. Punzak?

A Yes, I do.

Q I see that this document was from Don Sutton.

23 Did you play any role in the drafting of this document?

A Yes. I actually drafted it. And Don Sutton

L.A. REPORTING

(800) 419-3376

106

1 is the manager. Memos like this are supposed to go from

2 the manager, but they are prepared by someone else like

3 me. I prepared this one.

Q And what were you generally seeking to do in

5 this memo, Mr. Punzak?

A Well, I just wanted to reaffirm that a

7 decision made in '93, that we're still going to go on

8 with this. That there is a -- that this is a reflux

9 condenser and therefore shouldn't be considered to be

10 control equipment. But we wanted to ask the company

11 some questions about that. And we just wanted

12 to -- wanted to let -- this went to -- Julie Armitage is

13 a compliance manager. We just wanted to make her aware

14 that we were going to be doing this and have their

15 confirmation that they agreed.

Q Okay. I see here in paragraph 5 your

17 reference to your belief that it is a reflux condenser

18 and not a control condenser or a control device. Can

19 you explain to me how the reflux condenser differs from

20 a control device?

A Based on various types of guidance that the

22 U.S. EPA has provided to us in regard to organic or

23 petrochemical processes, that reflux condensers are

24 referred to as a process condenser. They are designed

L.A. REPORTING

(800) 419-3376

107

1 just to operate the process, often to save raw materials

2 and not for the purposes of reducing emissions. That's

3 just an incidental, something that's incidental.

Q I see that there are a couple of memos

5 attached to this January 12th memo?

A Yes.

Q Just to make sure it's clear, does this

8 January 12th memo with attachments accurately reflect

9 how this document appears in the CAAPP permit file?

A Yes, it does.

Q I believe before, Mr. Punzak, you stated that

12 you spent a great deal of your time as a permitting

13 engineer also dealing with petroleum refineries?

A Yes, I do.

Q Can you tell me a bit about petroleum

16 refineries. Do they have emissions of S02?

A Yes, they do.

Q And do they have any sort of control devices

19 to deal with those emissions?

A Yes, they do. They have a -- basically the

21 sulfur dioxide that would come from a refinery, much of

22 it would come from burning of fuel which is contaminated

23 with hydrogen sulfide. So in a refinery what they seek

24 to do is to remove the hydrogen sulfide from the fuel

L.A. REPORTING

(800) 419-3376

108

1 before it's burned. And then they take that hydrogen

2 sulfide and convert it into sulfur.

Q Is that a multistep process in a refinery?

A Yes. It's a very complex process at a

5 refinery. First of all, I mentioned it's in the fuel.

6 So what they do is they have the fuel gas go through an

7 amine scrubber. And the hydrogen sulfide gets absorbed

8 by the amine. The amine now has this hydrogen sulfide.

9 And it is usually just heated up to dry the hydrogen

10 sulfide off. So, in effect, you have 100 percent

11 hydrogen sulfide. This concentrated stream of hydrogen

12 sulfide is sent through a multistep process involving

13 combustion and use of catalysts and so on. And you end

14 up with elemental sulfur at the end of this process. So

15 you remove the sulfur from the system.

Q And what percentage of sulfur is -- scratch

17 that.

What percentage of H2S is converted to sulfur

19 in a sulfur recovery system typically in petroleum

20 refineries?

A The modern ones today are usually at around

22 98 percent. But the ones -- I believe when they adopted

23 these rules, they weren't quite that high. They were

24 maybe in the range of 90 to 95 percent in the final part

L.A. REPORTING

(800) 419-3376

109

1 of it. In addition to the sulfur coming out, there was

2 a final combustion device. And at that time the

3 emissions could be over 2,000 parts per million. So I

4 believe that's why the exemption was provided then for

5 the sulfur recovery units, the combustion device on the

6 sulfur recovery unit.

Now, like I said, the modern ones are up to

8 98 percent, and the final combustion device has a limit

9 of 250 parts per million.

Q Okay. Do sulfur recovery units at petroleum

11 refineries generally differ from the condenser at issue

12 at the MBT-C process?

A Well, in addition to the much higher percent,

14 it's a very -- I mentioned it's a very complex system of

15 first removing the hydrogen sulfide from the fuel and

16 then taking hydrogen sulfide and converting it into

17 sulfur.

Q I see, without going into the particulars,

19 there are two memos attached to the 2001 memo?

A That's correct.

Q Okay. Without calling for a legal conclusion

22 as to the particular of the analysis included in the May

23 13th, 1993, memo, did you consider the original

24 intention behind 35 Illinois Administrative Code 214.382

L.A. REPORTING

(800) 419-3376

110

1 in your original decision?

MR. HARSCH: I object. It calls for a legal

3 conclusion of the witness.

MS. CARTER: All I asked the witness, Mr. Hearing

5 Officer, was whether or not he relied upon it.

HEARING OFFICER HALLORAN: Objection overruled.

7 You may answer if you are able.

A Yes. I did reply upon it.

Q Okay. Thank you.

HEARING OFFICER HALLORAN: About three or four

11 minutes, Ms. Carter, and then we'll --

MS. CARTER: I saw that. I was going to squeeze

13 one more in if that's okay.

HEARING OFFICER HALLORAN: One more witness or one

15 more --

MS. CARTER: No. One more set of questions.

Q I am going to hand you, sir, what has

18 previously been marked public version of the record,

19 page 1469 through page 1471. It's a February 22nd,

20 2001, request for additional information for the CAAPP

21 permit application. Do you recognize this document?

A Yes, I do.

Q And did you draft this document?

A Yes, I did. You can tell that from the third

L.A. REPORTING

(800) 419-3376

111

1 page of it where they have initials down there. The

2 middle initials are DGP which was my initials.

Q And, generally, what are you doing in this

4 request for additional information?

A Well, this was sent to what would be BF

6 Goodrich at the time and is now Emerald and was asking

7 for more information about the MBT-C process.

Q If I could direct your attention to what's

9 been labeled paragraph 2 on page 2 on page 1470. Are

10 you there, sir?

A Yes.

Q And what does just paragraph 2 state?

A Well, it informs the company that we are

14 reevaluating whether the MBT-C process is in compliance

15 with the sulfur dioxide regulations.

Q And subsequent to that statement, do you ask

17 certain questions of the source?

A Yes, I do.

Q And, generally, what types of questions were

20 you asking of the source?

A Well, the first, A, I just wanted to know

22 about more of the process because I was aware the carbon

23 disulfide could be a solvent for sulfur. But I did ask

24 them. And they said it's a raw material.

L.A. REPORTING

(800) 419-3376

112

Q Okay.

A Then I asked them -- we had an efficiency

3 of -- that the form said for carbon disulfide recovery,

4 but I asked what it was for overall efficiency for

5 sulfur and then what percentage of the S02 is

6 attributable to an CS2 and hydrogen sulfide and then

7 whether the purpose of the condenser was to reduce

8 carbon disulfide usage.

Q And why did you ask that last question,

10 Mr. Punzak?

A Well, just to ask for verification that they

12 said in the application that it was a reflux condenser.

MS. CARTER: Okay. Mr. Halloran, I can break now.

HEARING OFFICER HALLORAN: Okay. That would be

15 great. We will take a break until 12:55, then we will

16 come on back and start again. Thank you.

(Whereupon, a luncheon recess was

taken in the proceedings.)

HEARING OFFICER HALLORAN: Good afternoon. We are

20 back on the record. I want to thank everybody for being

21 so prompt from their lunch break. It's approximately 1

22 and the IEPA has their first witness. We are going to

23 continue direct. Thank you.

MS. CARTER: Thank you.

L.A. REPORTING

(800) 419-3376

113

CONTINUED DIRECT EXAMINATION

BY MS. CARTER:

Q Mr. Punzak, I'm going to hand you what has

4 previously been marked page 2120 through page 2121 of

5 the trade secret version of the administrative record.

6 If you could just identify this document for me.

A Well, prior to that, we discussed a request

8 for additional information that Illinois EPA had sent to

9 the company. And this is their response to our letter.

Q And what did you find to be significant in

11 this response?

A Well, the total sulfur efficiency of the

13 condensers is 23 percent. And they are targeting only

14 the carbon disulfide.

Q And that's referenced in what paragraph, sir?

A That's paragraph 2. And then in -- this is

17 2. That was in B. And then in D it says, "The

18 condenser operates to conserve the loss of carbon

19 disulfide during the reaction."

Q What did this information lead you to

21 conclude?

A This led us to conclude that this system

23 should not qualify for the exemption in 214.382(a).

Q And why so?

L.A. REPORTING

(800) 419-3376

114

A Because it's -- when it's for carbon

2 disulfide they tend to use the word "remove," but we

3 consider it to be recycling of the material. That it's

4 not being removed from the system at all; it's just

5 being recycled back to the reactor. It's a reflux

6 condenser.

Q And was the information in this letter

8 ultimately conveyed to management at the Illinois EPA?

A Yes, it was.

Q Hopefully, if I can find it, I'm going to

11 hand you what has previously been marked page 1461 of

12 the administrative record public version. If you could

13 identify this document for me.

A Let me take time to review it.

Q That's great, sir.

(Pause in proceedings.)

A Well, this is the notes I entered. And it

18 said that after we received that response, I -- the

19 decisions as to whether a rule applies is done by what

20 we call a compliance decision group. It consists of

21 several of the top managers in the division of air. And

22 so I had gone to them and described the response from

23 the company. And the CDG said that should not qualify

24 for the exemption provided. And, therefore, we decided

L.A. REPORTING

(800) 419-3376

115

1 to send a compliance plan -- request a compliance plan

2 from the company.

Q And did the Illinois EPA ultimately request a

4 compliance plan from the company?

A Yes, we did.

Q Now I'm going to hand you, sir, what has

7 previously been marked page 1459 through page 1460 of

8 the administrative record public version. Can you

9 identify this for me?

A This is request for additional information to

11 the company where we ask for a -- well, we give

12 technical information. We send a letter to you. And we

13 got your response on the date, and then we -- the most

14 important part, we say, "Does not qualify for the

15 exemption." We decided it didn't qualify for the

16 exemption.

And there were two basic reasons in the third

18 paragraph there. One was the 23 percent. That it's

19 such a low percentage compared with what we would expect

20 from a real true sulfur removal system like they have at

21 a refinery. But then also we say that the 23 percent is

22 questionable because based on my experience as a

23 chemical engineer and guidance from the U.S. EPA, reflux

24 condensers are not -- are considered to be process

L.A. REPORTING

(800) 419-3376

116

1 condensers and shouldn't be given any credit in terms of

2 efficiency as a control device.

Q What U.S. EPA guidance were you generally

4 referring to, sir?

A Well, there have been several that we use.

6 One is just general information on available types of

7 control technologies. And then another one had to do

8 with the -- the MON that was previously mentioned.

9 That's short for Miscellaneous Organic NESHAP. It's a

10 set of new federal regulations referred to as -- NESHAP

11 is an acronym for National Environmental Standards for

12 Hazardous Air Pollutants.

Q So I believe you just indicated that you

14 referred to general definitions in the MON. Did you

15 refer to definitions elsewhere as well?

A Yes. We have control technology information

17 we receive from the U.S. EPA.

Q I'm going to hand you what has previously

19 been marked public version of the record page 2136

20 through page 2510. If you could identify this document

21 for me, sir?

A This is a document that the U.S. EPA

23 publishes called Control of Volatile Organic Compound

24 Emissions from Batch Processes. And then it has a

L.A. REPORTING

(800) 419-3376

117

1 subtitle then, Alternative Control Techniques. And I

2 would like to say that the word volatile organic

3 compound is used by the U.S. EPA. In Illinois EPA

4 regulations we use the definition of -- we call it

5 volatile organic material. But they are effectively the

6 same.

Q Is this one of the guidance documents that

8 you were referring to, sir?

A Yes, it is.

Q If I could direct your attention to page 2236

11 of this document.

A Okay.

Q Are you there, sir?

A Yes.

Q Particularly, the second paragraph. Halfway

16 through the paragraph beginning with "note." Can you

17 read that out loud?

A Well, let me just read the first half of the

19 sentence.

Q Okay. You go ahead, sir. Get yourself some

21 context.

(Pause in proceedings.)

A Okay. Beginning with where it starts "note,"

24 it says, "Note that condensers servicing reactors and

L.A. REPORTING

(800) 419-3376

118

1 distillation columns often function in refluxing

2 material. This refluxing is an integral part of the

3 process. And, therefore, these condensers are often not

4 considered to be emission control devices. Such

5 applications often using secondary condensers which

6 operate at still lower temperatures and function

7 primarily as control devices."

Q What is the significance of this passage to

9 the two MBT-C condensers at issue here today?

A Well, they were identified as reflux

11 condensers. And they -- previous discussions they were

12 set to return materials to the reactor. So they make

13 this definition, and this process does not have any

14 secondary condenser on it.

Q And you mentioned secondary condenser. And

16 this process not having a secondary condenser on it,

17 sir. Can you explain to me a little bit about the

18 secondary condenser reference in this passage. What are

19 they are referring to that way?

A Well, you could have a secondary condenser

21 which would have a coolant at an even lower temperature.

22 And you would be able to get out more of the material.

23 In this case it may condense more of the carbon

24 disulfide. And, in fact, their new system -- well, it's

L.A. REPORTING

(800) 419-3376

119

1 not a condenser. It does do that, but it would still

2 only get it up where it would never get the hydrogen

3 sulfide because hydrogen sulfide, unless you -- it's

4 simply, for all practical purposes, not condensable.

5 And you wouldn't have any reason for wanting to condense

6 it because it would be difficult to dispose of, has no

7 value or anything.

Q Just to make sure that the record is clear,

9 What sort of process exists at Emerald?

A We said it's batch organic chemical process,

11 which this mentions that.

Q I am going to hand you, sir, what's been

13 previously marked trade secret version of the record

14 page 2116 through page 2118. If you could identify that

15 document for me, please?

A Well, we sent the company a request for this

17 compliance plan because we felt that they were out of

18 compliance. And this is their response saying that they

19 disagreed with us.

Q If I could direct your attention to page

21 2117, the third full paragraph on that page. Is that

22 really the paragraph where they express their concerns

23 with the Illinois EPA's position?

A Yes. That's probably the most important

L.A. REPORTING

(800) 419-3376

120

1 paragraph addressing their position.

Q Do they make a statement with regard to the

3 Illinois EPA's reliance on information pertaining to VOM

4 emitting units?

A Yes. They say we shouldn't be allowed to use

6 guidance documents for pollutants other than sulfur.

Q Do you have an opinion with regard to this

8 statement provided in this paragraph?

A Yes. I have an opinion that this is a

10 petrochemical process, which carbon disulfide, one of

11 the materials used, is a volatile organic material. So,

12 therefore, I believe it's very relevant to be able to

13 use documents addressing volatile organic material

14 control equipment.

Q Mr. Punzak, did the initial Title V

16 application reference CS2 as a VOM?

A Yes, it did.

Q If I could direct your attention to the trade

19 secret version of the Title V application that is

20 sitting in front of you. Beginning with page 1, I think

21 it runs to page 2115 trade secret. But, particularly,

22 page 173 on that document.

A Yes.

Q Are you there, sir?

L.A. REPORTING

(800) 419-3376

121

A Yes.

Q Where is the statement there that we just

3 referred to with regard to CS2?

A Well, on the last line relative to the table,

5 it has "Efficiency" and then parentheses "VOM

6 reduction." And then it has a colon there and they

7 filled in CS2 which is carbon disulfide. So they are

8 recognizing carbon disulfide as a volatile organic

9 material.

Q I'm going to hand you what has been

11 previously marked public version of the record, page

12 1841. If you could identify that document for me, sir?

A This is an e-mail I sent to Dave Giffin. And

14 I state that this document we have previously talked

15 about, the MON, the Miscellaneous Organic NESHAP, has

16 been published by the U.S. EPA and the Federal Register.

17 And so I wanted to explain how they defined process

18 condensers in there. And that's what -- the last

19 paragraph gives the definition from that, and then they

20 say examples of process condensers include reflux

21 condensers.

Q And as a chemical engineer, Mr. Punzak, why

23 did you generally refer to these definitions that we

24 have been talking about in the MON and in that VOM

L.A. REPORTING

(800) 419-3376

122

1 guidance document?

A Because this process will be subject to the

3 MON. It was discussed by the company this morning about

4 how they will -- that they recognize that it does apply

5 to them.

Q And you have been talking a great deal about

7 the definition of process condenser relevant to your

8 conclusion with this condenser being appropriately

9 characterized as a reflux condenser. Why is that

10 relevant?

A Because if it's a reflux or process

12 condenser, it should, in effect, be given zero percent

13 efficiency in terms of control equipment that it's

14 designed for the purpose of recycling material.

Q And because it is a process condenser, is it

16 a control condenser then?

A No. It is not a control condenser.

Q Did you consult with other regulators in

19 other states about similar MBT-C processes that they

20 might regulate?

A Yes, I did.

Q And what states did you consult with?

A West Virginia, Louisiana and South Carolina.

Q And I'm going to hand you what's previously

L.A. REPORTING

(800) 419-3376

123

1 been marked public version of the record, page 1552

2 through page 1553. Can you just identify this for me,

3 sir?

A This is two e-mails I received from a Robert

5 Keatley with the Department of Environmental Protection

6 in the state of West Virginia. And he tells us how much

7 hydrogen sulfide potential could be emitted. And then

8 how much sulfur dioxide is finally emitted.

Q So is it fair to say, then, that West

10 Virginia regulated an MBT process similar to Emerald?

A Yes, it is.

Q And you were talking about the emissions that

13 were provided by West Virginia?

A Yes.

Q The numbers that were provided, were they

16 significant to you in any way?

A Yes. They -- on the second page of the

18 two-page memo, they said they emitted 126 tons of S02.

19 And they did identify this as a sulfur recovery unit.

20 And I calculated, based on the amount of H2S that was

21 there, that this indicates an efficiency of 97 to 98-1/2

22 percent, somewhere in that range.

Q Did you also, sir, I think you mentioned you

24 consulted with regulators in Louisiana?

L.A. REPORTING

(800) 419-3376

124

A Yes.

Q I'm going to hand you what has previously

3 been marked public version of the record, page 1510

4 through page 1539. If you could take a moment to flip

5 through that document for me, sir?

(Pause in proceedings.)

A Okay. This is a copy of a permit for

8 the -- they call it a thiazole unit, but that is the

9 same as mercaptobenzothiazole. And they call it a part

10 70 operating permit. But part 70 is just one particular

11 part of Title V permit that we sometimes refer to this

12 CAAPP permit, sometimes called a Title V permit or a

13 part 70 permit. On page 1512 or the third page as you

14 are going through them, it states, "Vents from the

15 reactors and MBT recovery steps are routed to the sulfur

16 recovery unit and then to the incinerator followed by

17 the scrubber which operate under the SRU incinerator

18 permit."

Q Did you also consult with regulators in South

20 Carolina?

A Yes.

Q I am handing you what has previously been

23 marked public version of the record, page 1421 through

24 page 1451. If you could take a moment again and flip

L.A. REPORTING

(800) 419-3376

125

1 through that entire document. And once you have done

2 that if you can generally tell me what's contained in

3 that document.

A Well, this is a collection of several

5 different papers. When I was doing this research on

6 other states, I had asked somebody in our library to do

7 some of it. So some of the pages at the back or some of

8 the information the librarian found. I gave her the

9 chemical name and the initials and so on, and she found

10 various types of identifications of the materials and

11 locations where it's manufactured.

And the first four or five pages are just

13 information about if we wanted to go to Louisiana and

14 get a page on how we would go through their FOIA type

15 system, but we actually didn't use that. But then on

16 page 1426 I have some names of some people from the

17 environmental people in South Carolina. It's HEC for

18 Health and Environmental Control down there. And I

19 didn't get a whole lot, but I did mention here that the

20 process down there had an off gas scrubber.

Q And based on all this information that you

22 gathered from West Virginia, Louisiana and South

23 Carolina -- actually, scratch that. Let's back up for a

24 second.

L.A. REPORTING

(800) 419-3376

126

Can you describe for me what an off gas

2 scrubber is?

A An off gas scrubber is a device that absorbs

4 the material. For instance, their NaSH system that we

5 had previously described, that would be called an off

6 gas scrubber.

Q Now based on all the information that you

8 gathered from West Virginia, Louisiana and South

9 Carolina, what did all this information generally

10 indicate to you?

A That all of these states had systems that

12 were much more -- had a much higher control efficiency

13 than the system operated by Emerald. And, in

14 particular, when they use the term -- theirs were sulfur

15 recovery system and not sulfur recycling systems. Or

16 the one was a scrubber, but that's usually very high

17 efficiency also.

Q And, Mr. Punzak, as a matter of course, does

19 the U.S. EPA typically review draft Title V permits

20 prior to issuance by the Illinois EPA?

A Yes. When we -- when a permit goes to public

22 notice, we put it on the U.S. EPA website. And the

23 U.S. EPA has access to that. And they review the

24 permit. They can either do it during the public notice

L.A. REPORTING

(800) 419-3376

127

1 phase or else then they are after the public notice

2 phase during which the companies can comment. There is

3 another thing called a U.S. EPA review period. And they

4 could comment during that period also.

Q Did the U.S. EPA provide comment on the draft

6 permit for the Emerald Performance facility?

A Yes, they did.

Q I'm going to hand you what has previously

9 been marked public version of the record page 1842

10 through page 1843. If you could take a moment and then

11 identify this document for me.

(Pause in proceedings.)

A These are some comments I received from

14 Stacey Coburn of the U.S. EPA. This is at region 5 in

15 Chicago where they do these reviews. And this is her

16 comments on that draft permit. The one that's really

17 relevant to this is in number 1. It does say MON would

18 be applicable to the process.

Q But did the U.S. EPA have any comments on

20 214.301 or 382 at issue here today?

A No. They did not.

Q Mr. Punzak, when you put together a Title V

23 permit and it's ready for issuance, do you typically put

24 together any sort of notes, analysis notes?

L.A. REPORTING

(800) 419-3376

128

A Yes, I do.

Q And what do you generally include in your

3 analysis notes?

A Generally, it's in any controversial issues,

5 like any comments that were made during the -- either

6 the public notice period or U.S. EPA notice period.

7 While these are significant ones, if they are just

8 typos, I don't usually put them in there. But any

9 significant comments made by either the company, the

10 public or the U.S. EPA, I will mention them and say how

11 we address them.

Q I'm going to hand you what's previously been

13 marked 1235 through 1237 of the administrative record.

14 Are these your analysis notes for this matter?

A Yes, they are.

Q Did you provide any discussion of the

17 Illinois EPA's ultimate conclusion with regard to the

18 applicability of 214.382?

A Yes. Again, in the fifth paragraph or the

20 last paragraph on the bottom of the first page,

21 beginning on the bottom first page, I reiterate what we

22 have been saying here that reflux condensers would not

23 be considered control equipment -- or process condensers

24 would not be control equipment. And, therefore, they

L.A. REPORTING

(800) 419-3376

129

1 shouldn't qualify for any type of control for this

2 process. And I state -- this is definitely in terms of

3 my background this will definitely be reflux condensers

4 as identified by the company.

MS. CARTER: If I could have just a moment,

6 Mr. Halloran?

HEARING OFFICER HALLORAN: Yes, Ms. Carter.

(Off the record.)

Q Mr. Punzak, based on all this information and

10 analysis that we discussed here today, what did the

11 Illinois EPA ultimately conclude?

A That the condensers that they operate on

13 their systems should not -- are reflux condensers and

14 should not qualify as a system that could qualify for

15 the exemption in 214.382(a).

MS. CARTER: Thank you. I have no further

17 questions for this witness.

HEARING OFFICER HALLORAN: Thank you, Ms. Carter.

Mr. Harsch, cross?

CROSS-EXAMINATION

BY MR. HARSCH:

Q Mr. Punzak, would you please read 214.382(a)

23 out loud?

A Okay. "Section 214.301 shall not apply to

L.A. REPORTING

(800) 419-3376

130

1 existing processes designed to remove sulfur compounds

2 from the flue gases of petroleum and petrochemical

3 processes."

MR. HARSCH: And, I believe, that's how the rule

5 still stands today, is it not, Counselor?

MS. CARTER: I believe so.

Q Does the term "pollution control device"

8 appear in that rule?

A No. It does not.

Q Does the word "reflux condenser" appear in

11 that rule?

A No. It does not.

Q Do the words "process condenser" appear in

14 that rule?

A No. It does not.

Q I think you testified on direct that this is

17 a petrochemical process; the Agency accepts that?

A Yes.

Q And it's clearly an existing process at the

20 time that the Board wrote these rules?

A Yes.

Q Carbon disulfide is a sulfur compound?

A Yes, it is.

Q What happens to the carbon disulfide that is

L.A. REPORTING

(800) 419-3376

131

1 condensed in the condenser and sent back to the reactor?

A Well, it's available for reaction.

Q So it is tied up and reacts --

A Yes.

Q -- with the other raw materials?

A Yes.

Q So that carbon disulfide that's removed from

8 a condenser and sent back to the reactor doesn't emit to

9 the atmosphere; is that correct?

A Yes. If it reacts, that's correct.

Q In your direct testimony you were given trade

12 secret document 2120 which is the letter that the

13 company sent to you in response to the request for more

14 information, is it not?

A Yes.

Q And if I recall your direct testimony you

17 said that those answers were significant because it told

18 you that the overall total sulfur recovery was 23

19 percent?

A That's correct.

Q That's the first time you were aware of that?

A Yes. That was one of the questions I asked.

23 I only had the 70 percent for CS2. I didn't have an

24 overall sulfur efficiency.

L.A. REPORTING

(800) 419-3376

132

Q That's funny. I show you the memo that I

2 think you testified you wrote, April 13th, 1993,

3 document 1477 and 79, and I draw your attention to the

4 fourth paragraph. It seems to me that you were aware

5 back in 1973 (sic) that the overall recovery was in that

6 range; is that correct?

MS. CARTER: Okay. I'm going to object again.

8 Counsel is going back 30 years in prior permitting

9 history with the witness. The prior permitting

10 decisions are not at issue here today.

HEARING OFFICER HALLORAN: Mr. Harsch?

MR. HARSCH: The witness just testified that was

13 the first time he was aware of it. And this is a

14 document that he prepared in 1993. It's part of the

15 permit record. And I'm showing that he was aware of it

16 way back then.

MS. CARTER: Can I respond to that?

HEARING OFFICER HALLORAN: Sure.

MS. CARTER: Mr. Punzak was not employed with the

20 agency in 1973.

MR. HARSCH: '93. '93.

MS. CARTER: I want to make sure that's correct.

MR. HARSCH: He was a permit review engineer in

24 1993.

L.A. REPORTING

(800) 419-3376

133

MS. CARTER: Yes, he was, sir.

HEARING OFFICER HALLORAN: I thought you said you

3 were going to check to see if it was '73 or '93.

MS. CARTER: No. He said it was '93. I thought he

5 said '73. He said '93. I apologize.

HEARING OFFICER HALLORAN: Oh, okay. So Mr. Harsch

7 is asking Mr. Punzak regarding prior permit decisions.

THE WITNESS: Yes. This is a memo I prepared in

9 '93.

HEARING OFFICER HALLORAN: Regarding this permit at

11 issue?

MS. CARTER: No. It was not. I apologize. It was

13 regarding a 1993 State operating permitting decision is

14 what these memos pertain to. They just happen to be

15 attached to our 2001 memo, and that's how they found

16 their way into the record. We provided a complete copy

17 of it for the record.

MR. HARSCH: Mr. Hearing Officer, it is an integral

19 part of the permit record in this proceeding. It is

20 attached to and is the basis of the technical

21 information contained in the memorandum to which it is

22 attached. It has been included in the permit record by

23 the Agency, and I'm showing -- the question asked if he

24 was not aware of the overall sulfur dioxide recovery

L.A. REPORTING

(800) 419-3376

134

1 prior to his receipt of the document, which is trade

2 secret 2120, which was his direct testimony.

I believe I'm allowed to utilize anything in

4 this permit record to question the Agency witness. And

5 I can clearly use prior documents prepared by this same

6 witness if I want to try to impeach or otherwise correct

7 the direct testimony of the witness.

MS. CARTER: May I respond to Mr. Harsch?

HEARING OFFICER HALLORAN: Sure.

MS. CARTER: My concern with this is that he is

11 actually going into Mr. Punzak's 1993 State operating

12 permitting decision. That's what he's going into which

13 is not at issue here today.

HEARING OFFICER HALLORAN: That's the way I

15 understood it. How is that any different than the

16 motion to supplement that was filed on January 24th?

MR. HARSCH: I asked in that motion to include all

18 of the relevant documents from the permit -- operating

19 permit file that the Agency chose not to include in this

20 record. Many of those same documents were, in fact,

21 attached -- if I could ask these direct questions -- by

22 Mr. Punzak when he prepared that memorandum. And yet

23 they only filed, as part of the permit record, that

24 memorandum. This case involves the Agency's

L.A. REPORTING

(800) 419-3376

135

1 interpretation of a regulation and the reinterpretation

2 of that regulation during the CAAPP permitting process.

HEARING OFFICER HALLORAN: I understand that,

4 Mr. Harsch.

MR. HARSCH: And this is a --

HEARING OFFICER HALLORAN: How is that different

7 from the motion to supplement that was filed on January

8 24th regarding --

MR. HARSCH: I'm not trying --

HEARING OFFICER HALLORAN: -- prior permit?

MR. HARSCH: Excuse me. I'm not trying to put

12 those prior permits in the record. I'm referring to a

13 document that is in this permit appeal record, submitted

14 by the Agency and apparently relied upon by the Agency

15 in this proceeding. I'm not going to the actual permits

16 themselves.

And, I believe, that this document is

18 referenced in the document that Mr. Punzak has testified

19 that he prepared in January of 2001 to which this one

20 and the memorandum by the Agency lawyer, Rachel Doctors.

21 The two memorandums are attached. And that memorandum

22 talks about relying on the past decisions. The witness

23 has testified that this is his first time that he was

24 aware of it. This document prepared by the witness is

L.A. REPORTING

(800) 419-3376

136

1 in direct contrast to that statement.

HEARING OFFICER HALLORAN: And that record is filed

3 with the Board?

MR. HARSCH: Yes. It's document 1477, 78 and 79 in

5 the permit record.

MS. CARTER: Mr. Hearing Officer?

HEARING OFFICER HALLORAN: Sure.

MS. CARTER: Thank you. As I indicated in my

9 response to Mr. Harsch's motion to supplement, these two

10 memorandum that he keeps talking about are merely

11 attachments to the 2001 memorandum. That's the only

12 reason -- they pretty much -- they found their way into

13 the record because they were attachments to this. And

14 as Mr. Punzak testified in his direct testimony, this is

15 exactly how this document appeared in the Title V permit

16 file for this source. Mr. Harsch makes it sound as if

17 we were cherry-picking. We did not cherry-pick our

18 record. We did not do that at all. And Mr. Harsch,

19 when he is going into what he prepared or relied upon

20 back in 1993, is going directly to the permitting

21 decision at that time. My concern is, if he then goes

22 into that and he is allowed to go into that, that I am

23 going to have to go back on redirect, unfortunately, and

24 have to have him explain what happened back in 1993

L.A. REPORTING

(800) 419-3376

137

1 which I don't find to be appropriate at all because none

2 of this -- none of the analysis that took place from

3 1973 to 1993 by the Agency found itself into the Title V

4 permit which indicates we did not rely upon it. If we

5 had relied upon, then 214.382, we would have found that

6 they are entitled to it, and we wouldn't even be here

7 today.

HEARING OFFICER HALLORAN: I agree with Ms. Carter.

9 It's --

MR. HARSCH: You are going to rule that I --

HEARING OFFICER HALLORAN: I am sorry, Mr. Harsch?

MR. HARSCH: You are going to rule that I cannot

13 use --

HEARING OFFICER HALLORAN: Mr. Harsch, I haven't

15 finished my ruling. I have given you the floor for a

16 number of minutes. Okay?

MR. HARSCH: Yes, sir.

HEARING OFFICER HALLORAN: And what I'm going to do

19 I find it's pretty much similar to what your motion to

20 supplement is. It is a prior permit decision. And the

21 IEPA has represented they did not rely on it. So I am

22 going to sustain Ms. Carter's objection. Now what do

23 you want to do?

MR. HARSCH: Well, I take issue with respect to

L.A. REPORTING

(800) 419-3376

138

1 your ruling, sir.

HEARING OFFICER HALLORAN: Well, you normally do,

3 Mr. Harsch. But --

MR. HARSCH: And I believe that I'm entitled to ask

5 a witness to show a prior statement by a witness in

6 another document that contradicts his direct sworn

7 testimony and point that out.

HEARING OFFICER HALLORAN: And you have been. It's

9 on the record.

MR. HARSCH: The question wasn't the permit

11 decision. The question was, was he aware of it

12 previously?

HEARING OFFICER HALLORAN: And what Ms. Carter's

14 argument is if I allow this, even in a small latitude,

15 then she will have to go back and redirect --

MR. HARSCH: Well, we are going to have probably a

17 fair amount of it as we go through it because I'm going

18 to show that they did, in fact, look at that record as

19 we go through that.

HEARING OFFICER HALLORAN: Okay.

Q Mr. Punzak, if you look at the various

22 guidance documents that you generally testified to, the

23 one for the MON and the one for Control of Volatile

24 Organic Compounds, those documents were all prepared

L.A. REPORTING

(800) 419-3376

139

1 substantially after the Board's adoption of the rule in

2 question, were they not?

A Yes, they were.

Q And the 2136 document Control of Volatile

5 Organic Compounds from Batch Processes, it's dated

6 February --

A 1994.

Q And the paragraph that you read on page 2236,

9 would you please read this sentence from the same

10 paragraph?

A Beginning with what word?

Q Right there (indicating).

A This?

Q Yeah.

A "This refluxing is an integral part of the

16 process and, therefore, these condensers are often not

17 considered to be emission control devices."

Q Are often considered, correct?

A Yes.

Q So they sometimes are?

A Well, I have --

Q Doesn't say never, does it?

A It does not say never.

Q When you were reviewing with West Virginia

L.A. REPORTING

(800) 419-3376

140

1 and Louisiana, South Carolina, did you look at the

2 underlying air pollution regulations that those states

3 had?

A No. I did not.

Q So you don't know if those states had a

6 similar exemption to the Illinois exemption?

A No. I do not.

Q You have no idea, then, what the applicable

9 air pollution regulation was that might have triggered

10 the control equipment or processes that those companies

11 had installed?

A No. I don't.

Q You referred to the petrochemical processes

14 and the degree of control that they have on flue gas --

A Yes.

Q -- for sulfur control?

Were you referring to subpart J of NSPS rules

18 that U.S. EPA adopted?

A Well, that's where the -- for the ones -- not

20 for the older ones, but for the newer ones once the NSPS

21 came in that's the 250 parts per million came from that

22 rule, yes.

Q And that was adopted well after the Board's

24 original enaction of the rule in question?

L.A. REPORTING

(800) 419-3376

141

A Yes. But that's why they were over --

2 because that hadn't been adopted, they were allowed to

3 be over 2,000 prior to that.

(Pause in proceedings.)

Q I will show you 1473. That's a memorandum

6 you prepared when you started your permit review; is

7 that correct?

A Yes.

Q At the time you prepared this document and

10 attached to this document the 1993 memorandums that were

11 attached to it, did you read those memorandums at that

12 time when you were preparing this document?

A Well, that was seven years ago. I most

14 likely did, but I can't know for sure that I did seven

15 years ago.

Q Did you consult with the operating permit

17 records in the past permitting decision when you wrote

18 this memorandum?

A I knew I was contradicting the

20 interpretations the Agency had given in the past.

Q Did you have the operating permit records at

22 your desk?

A You're asking me to recall something that I

24 simply don't know for sure.

L.A. REPORTING

(800) 419-3376

142

Q Mr. Punzak, are you aware of the guidance for

2 U.S. EPA permit? I think it was called Permit Writers

3 Handbook. U.S. EPA wrote to assist permit review

4 engineers in reviewing CAAPP permit applications and

5 writing permits?

A I knew there was such a document, yes.

Q At the time you read it?

A Well, again, I can't recall when I -- we

9 probably had maybe a training course on it, but I can't

10 remember every detail of every page in that document.

Q Do you recall the guidance in there to

12 consult the past operating and construction permits and

13 incorporate the appropriate permit conditions,

14 especially those having to do with new source review?

A Yes. I know that we are supposed to review

16 all construction permits issued to see whether those

17 conditions should be inserted into the Title V permit.

Q And the same statement is made with respect

19 to operating permit condition?

A If they seem appropriate. I mean, sometimes

21 we change things. For instance, sometimes in operating

22 permits in the past we'll just say you can operate under

23 malfunction or breakdown and now we are putting in a

24 complex. So, therefore, it's a totally irrelevant one

L.A. REPORTING

(800) 419-3376

143

1 line sentence when I know we are going to put in

2 something much more complex and they had to reapply for

3 malfunction and breakdown.

Q I understand. But you have to read the past

5 permits to make those determinations, don't you?

MS. CARTER: Objection. Asked and answered.

HEARING OFFICER HALLORAN: Mr. Harsch?

MR. HARSCH: I didn't ask the question in that

9 format.

MS. CARTER: You have asked the question before.

MR. HARSCH: No, I haven't.

HEARING OFFICER HALLORAN: Overruled. You may

13 answer if you are able.

A I don't necessarily look at every single

15 permit.

Q Wasn't the purpose of the letter asking for

17 more information that was submitted in February 22nd of

18 2001, the first paragraph question with respect to PSD a

19 hope by you and others in the Agency that PSD might have

20 been triggered and you wouldn't have to address the

21 issue of the applicability of the exemption?

A No. I'd have to read -- do you want me to

23 reread that document or something because when I started

24 preparing for this, I thought the question 1 wasn't

L.A. REPORTING

(800) 419-3376

144

1 relevant to this hearing so I haven't even reviewed it.

(Pause in proceedings.)

Q 1469.

(Pause in proceedings.)

Q Wasn't the purpose of question number 1 to

6 see if there was a PSD issue that could then avoid

7 having to make the decision with respect to the

8 applicability of the exemption?

A Well, I don't know if it was directly

10 related. It may have. If they did have to address PSD,

11 it may have taken care of it. But I wasn't thinking of

12 the exemption on that question when I prepared it.

Q I show you a document which is a memo you

14 prepared to Rachel Punzak dated February 2nd, 2001.

A I think it's Rachel Doctors.

Q Rachel Doctors, excuse me. Thank you. Which

17 is 1574.

MS. CARTER: What page, Mr. Harsch?

MR. HARSCH: 1543.

MS. CARTER: 1543.

Q Last couple sentences of the last full

22 paragraph.

A Okay. Do you want me to read it?

Q Sure.

L.A. REPORTING

(800) 419-3376

145

A "If we can show that they have made changes,

2 we may be able to use the PSD rules to require control

3 and not have to get into the semantics of whether the

4 condenser is a control -- a recovery device. I could

5 have asked them questions about this at the same time I

6 was asking for information about the recovery control

7 device."

Q And you subsequently asked those questions.

9 They answered. Turned out that PSD wasn't an issue?

A Right.

Q And you had to get into the issue?

A Yes.

(Pause in proceedings.)

Q At the time of the permit decision, can you

15 tell me who is Joyce Embrey (phonetic)?

A Joyce Embrey?

Q Yes.

A It seems like I remember the name, but I

19 can't think now unless I have something to refresh me.

Q Document 1542, memorandum, e-mail, I guess,

21 January 30th, 2001, to Joyce Embrey?

A I still can't think.

Q Was she possibly somebody in Illinois Air

24 Toxic?

L.A. REPORTING

(800) 419-3376

146

A Illinois Air Toxic?

Q Yes.

(Pause in proceedings.)

Q It's been a long time.

A Yeah. It's been seven years ago. Maybe let

6 me read it.

(Pause in proceedings.)

A She could have been, but I can't recall.

Q She was an Agency employee at any rate?

A Yeah. It looks like she is an Agency

11 employee, but I can't recall.

Q Well, now that you have read the document in

13 its entirety, would you read the last sentence?

A "However, as I explained in my memo to the

15 CGG even if there were a MACT, it would probably only

16 address whether the HAP material, for example, CS2 was

17 destroyed by 98 percent, not that the destruction" --

18 oh, wait a minute.

Q The last sentence.

A Oh, okay. "I have the State operating permit

21 file at my desk to make a copy for you."

Q So at the time you were reviewing the initial

23 CAAPP application that the company submitted, it appears

24 you did, in fact, have the State operating permit files

L.A. REPORTING

(800) 419-3376

147

1 at your desk and you were offering to make copies for

2 other Agency employees; is that correct?

A It appears that way.

Q I show you 1543. It's your memo to Rachel

5 Doctors of the same February 2001.

A Okay.

Q In that memorandum you're offering -- you're

8 discussing your '93 analysis and offering to bring it up

9 and discuss it with her?

A Well, this is where I said we decided to

11 delay our decision on BF Goodrich until the MACT was

12 issued.

Q If I draw your attention to the first -- I'll

14 read it. "I will be bringing up to your desk shortly

15 several documents related to the above subject. One is

16 my analysis notes from 1993 in which we decided to delay

17 our decision on BF Goodrich until the MACT was issued."

That analysis would have been contained in

19 the operating permit records that you had at your desk

20 at that time, correct?

A I think -- I think I may have put it in my

22 calculation sheet, but I'm not 100 percent sure.

Q If the operating permit record was at your

24 desk, you were offering to make copies of it for other

L.A. REPORTING

(800) 419-3376

148

1 Agency people to review as part of the Title V

2 application. In this memorandum two days later you are

3 talking about reviewing documents from your permit

4 decision in 1993 when you were the permit review

5 engineer for the operating permit, correct?

A Yes.

Q And you're pulling documents, your review

8 notes and discussing those with Agency people. Explain

9 to me how you are not relying on those documents as part

10 of your review of the CAAPP application if you can?

A Well, I was relying on the -- some of the

12 memos, not necessarily every single permit file.

Q So you were relying on part of the documents

14 but not all of the documents from the past operating

15 permit files?

A Well, I knew I had contradicted some of the

17 past decisions. So, therefore, why go into the details

18 when I already knew that I was -- my decision was

19 different than other Agency employees had made.

Q The Agency decision in 1993 was to issue an

21 operating permit, was it not?

MS. CARTER: Objection. Again, Mr. Harsch, I think

23 you are crossing the line into our prior permitting

24 decision.

L.A. REPORTING

(800) 419-3376

149

MR. HARSCH: I think the Agency has crossed the

2 line.

HEARING OFFICER HALLORAN: Well, you know,

4 Mr. Harsch, I think you have your record regarding --

MR. HARSCH: Mr. Hearing Officer, in light of the

6 fact that you think I have now made that record, I would

7 like you to now revisit your prior ruling that I can't

8 ask questions regarding the memorandum that he clearly

9 talks about reading, having at his desk, sharing with

10 other Agency employees at the time they were considering

11 the permit application.

HEARING OFFICER HALLORAN: I guess we can -- it

13 would be great if I would have copies in front of me. I

14 have been sitting here for four or five hours and I have

15 not received one document as a copy.

Ms. Carter?

MS. CARTER: Yes, sir. Thank you. As I have

18 stated before, what's been attached is merely these two

19 memos from the file. We didn't dispute the fact

20 obviously in 2001 these memos were pulled. And they

21 were included as attachments. There was never a

22 statement, though, by the witness that he specifically

23 pulled or relied upon the other permitting decisions

24 that were a part of this file. He just pulled these.

L.A. REPORTING

(800) 419-3376

150

1 And I hate to go any further than this, because I'm

2 going into the prior permitting issue to even say this

3 now, but I'm going to have to respond. Back in 1993 Dan

4 Punzak was the engineer for the State operating permit

5 that was issued to the facility.

He knew when he was going in, obviously, in

7 2001 that those files existed because he had made a

8 decision back in 1993. So he just knew -- he knew it

9 was in contrast as he has been stating here. So it's

10 part of, I guess, not only the Agency's institutional

11 knowledge, but his personal institutional knowledge from

12 his prior acts what it was.

That's all he had to do was pull those two

14 memos, attach it to this and there you have it.

15 Honestly, that's how I construe it. I mean, it's part

16 of his institutional knowledge from his prior act. But

17 I don't want to go any further into what he decided in

18 '93, and where he got the '93, and how come it differs

19 from the CAAPP permitting decision and the CAAPP

20 application that came in '96.

HEARING OFFICER HALLORAN: And that's how I

22 construed the motion and the response in my February 4th

23 order.

Mr. Harsch?

L.A. REPORTING

(800) 419-3376

151

MR. HARSCH: It's clear that the witness admits

2 that he had the operating permit file; he was making

3 copies of it, offering it to other Agency employees. At

4 the time of your ruling making his initial

5 determinations on the Title V permit application. He is

6 discussing and pulling from that certain documents

7 regarding the past Agency review notes, his review notes

8 in '93.

I think it is clear that the Agency's permit

10 review engineer had available to himself and was

11 consulting it, the operating permit records from the

12 prior operating permits. The fact the Agency chose not

13 to put them in the record to me is not controlling as to

14 the ability to question the Agency witness with respect

15 to those prior permit documents, operating permit

16 documents regarding interpretations and the various

17 memos and such that are there, he was reviewing at the

18 time he made the decision. They should be part of the

19 record.

HEARING OFFICER HALLORAN: As an aside, was

21 Mr. Punzak deposed?

MS. CARTER: Yes.

HEARING OFFICER HALLORAN: You may continue,

24 Ms. Carter.

L.A. REPORTING

(800) 419-3376

152

MS. CARTER: Okay. Thank you, Mr. Halloran. I

2 would just like to, I guess, reiterate the fact that

3 merely because you pull two documents from the file does

4 not mean that you went and looked back to 30 years of

5 permitting history. I guess, I'm still missing the

6 point, though, because the Agency admitted and was more

7 than willing to provide to the Board the affidavit of

8 Mr. Punzak when we indicated. We had a contrary

9 position for 20-some years. And we don't dispute that

10 fact. I don't see how it gets Mr. Harsch anywhere or

11 anything further on his case in chief to go back into

12 all of those underlying decisions and the rationale of

13 all those underlying decisions because it didn't

14 obviously form a basis of our review.

We have said we had a different position.

16 That goes to his detrimental reliance argument. What

17 more is needed? And why do we have to open up 30 years

18 of permitting history? I don't see how it's relevant

19 because the Agency made a mistake for 20 years, we now

20 have to go back in and evaluate the Agency's mistake for

21 20 years. That's not at issue.

HEARING OFFICER HALLORAN: I agree, Ms. Carter.

23 Mr. Harsch has made his record. I will stand on my

24 ruling. You may proceed.

L.A. REPORTING

(800) 419-3376

153

(Pause in proceedings.)

HEARING OFFICER HALLORAN: Do you need a minute?

MR. HARSCH: I'm trying to wrap up here.

Q Mr. Punzak, you mentioned the carbon

5 disulfide additional controls installed as part of the

6 NaSH system. You referred to that pollution control

7 system in response to a question from Ms. Carter?

A It could -- since it is secondary, it could

9 be considered that. But, on the other hand, it is

10 eventually reusing materials. So it could be -- I would

11 have to evaluate it in more detail to determine which

12 one it was.

Q You anticipated my questions here.

(Pause in proceedings.)

Q I know we got into this during your

16 deposition that when the company I proposed lead in

17 reference in the Title V permit was finally issued to

18 the requirement that the Agency had made, the company

19 was felt that -- they felt the company was subject to

20 2,000 part perfect million S02 limitation, in one of your

21 notes you referred to the possibility if you did that

22 that the company would renege on its agreement to move

23 forward and install sulfur control, correct?

A I used that term. Yes. I did use it. I

L.A. REPORTING

(800) 419-3376

154

1 meant that they could potentially. I didn't mean that I

2 really seriously thought they would. I just meant that

3 we would have no basis for our rule.

Q There was a potential. There was nothing

5 leading you to believe the company would, in fact, do

6 that?

A No.

Q And as the permit review engineer and a

9 member of the team, you were aware of -- and the Agency

10 was aware of the financial condition of the company at

11 that time?

A Yes, we were. That's why -- you know,

13 originally this stuff took place in 2001 and we

14 negotiated with them for like two years before we

15 eventually agreed on their system.

Q I'm not sure how major of a point it is, but

17 in document -- the various documents that you received

18 from the other states regarding the other producers, one

19 of those that you read had to do with the -- for the

20 Louisiana facility. It starts out document --

A Okay.

Q -- 1510. Do you know if the Louisiana

23 facility uses toluene in their process?

A No, I don't.

L.A. REPORTING

(800) 419-3376

155

Q 1512 description. First sentence.

A Oh, okay. It says here "It's produced by a

3 series of reactions of aniline, carbon disulfide and

4 other reactants in toluene."

Q That's a different process than what is

6 utilized by the company, is it not?

A Yes. But they still go to a sulfur recovery

8 unit.

Q But it's inside?

A That's what it says.

Q Mr. Punzak, given the constraints of the

12 Title V permit as issued, would the Title V permit as

13 issued constrain the company's ability to utilize the

14 flare when the NaSH system is unavailable because of the

15 plugging problems that Mr. Giffin has testified about as

16 a compliant means for MON?

MS. CARTER: Objection. I will have to object at

18 this point to the relevancy of his question.

HEARING OFFICER HALLORAN: Sure. Go ahead.

Gale, could you read the question back,

21 please?

COURT REPORTER: Sure. "Mr. Punzak, given that

23 constraints of the Title V permit as issued, would the

24 Title V permit as issued constrain the company's ability

L.A. REPORTING

(800) 419-3376

156

1 to utilize the flare when the NaSH system is unavailable

2 because of the plugging problems that Mr. Giffin has

3 testified about as a compliant means for MON?"

HEARING OFFICER HALLORAN: And your objection?

MS. CARTER: My objection is that I don't see the

6 relevancy of it. He is talking about the MON. And I

7 believe the applicability of it is at issue here today.

8 And I don't see what bearing it has to Title V that was

9 issued back in 2003.

HEARING OFFICER HALLORAN: I will give him a little

11 latitude. Objection overruled.

If you can answer, please do so.

THE WITNESS: Can I ask you to reread it again?

COURT REPORTER: Sure.

Q I will try to restate it. You were present

16 when Mr. Giffin testified to continued operational

17 problems that they have had with the NaSH unit due to

18 plugging?

A Yes.

Q And when the plugging occurred, they diverted

21 the gas stream to the flare?

A Yes. We put that into the construction

23 permit that they could do that.

Q And my question is, Since I think you

L.A. REPORTING

(800) 419-3376

157

1 testified to -- that the NaSH unit complies with the

2 MON, if the NaSH unit is not available for --

3 Mr. Evans's testified to that -- is not available due to

4 plugging problems, does the permit, Title V permit as

5 written, preclude the company's ability to use the flare

6 to comply with the MON?

A Well, I believe we said that you could divert

8 to the flare to finish a batch. But you can't start a

9 new batch. So they could go in and clean out the

10 plugging or something like that. So, I mean, just

11 prevent -- you know, you have gases, you have to do

12 something with them. So we put in there that they could

13 go to the flare.

Q But it would preclude it from an operational

15 standpoint other than eliminate that one bad gas from

16 that one batch?

A Yes, it would.

MR. HARSCH: No more.

HEARING OFFICER HALLORAN: Thank you, Mr. Harsch.

Ms. Carter, redirect?

MS. CARTER: Yes. Thank you.

REDIRECT EXAMINATION

BY MS. CARTER:

Q Mr. Punzak, why were you looking to the

L.A. REPORTING

(800) 419-3376

158

1 processes in West Virginia and Louisiana and South

2 Carolina? Why were you gathering that additional

3 information?

A I just wanted to know if they were -- the

5 processes were controlled there and what type of system

6 they had. If it was anything similar to what we had in

7 our state or whether it was a system that got much

8 better than 23 percent or a low percentage control, but

9 whether they had a high percentage control equipment

10 operating.

Q Mr. Punzak, did you generally rely upon the

12 definitions in the MON and VOM just as background

13 information?

A Well, I just wanted to see that they

15 confirmed my chemical engineering understanding of those

16 types of condensers.

Q And I believe you referred back to this

18 control of VOC document that's in front of you, sir. Do

19 you have that in front of you?

A Yes, I do.

Q It's public version of the record 2136

22 through 2510?

A Yes.

Q On page 2236?

L.A. REPORTING

(800) 419-3376

159

A Okay.

Q Just a moment. Mr. Harsch questioned you

3 about the statement, quote, "This refluxing is an

4 integral part of the process and, therefore, these

5 condensers are often not considered to be emission

6 control devices."

Mr. Punzak can you describe -- I'm sorry.

8 Did you finish reading that?

A Yes.

Q Can you describe a time when a reflux

11 condenser, you know, such as the one that's at issue

12 here would be considered a control device?

A Well, when they mentioned here that if you

14 had a secondary condenser, the low temperature. But if

15 we could show that even the primary condenser had

16 something that was beyond the -- a normal condenser

17 operates say at -- the cooling fluid is at 70 degrees or

18 higher or something. If you could show that the primary

19 one was operating with a brine cooler and was at 20 or

20 30 degrees, then we might be able to consider that to be

21 a control.

MS. CARTER: I have nothing further. Thank you.

HEARING OFFICER HALLORAN: Thank you, Ms. Carter.

Mr. Harsch, recross?

L.A. REPORTING

(800) 419-3376

160

RECROSS-EXAMINATION

BY MR. HARSCH:

Q Mr. Punzak, if the company were to use a

4 different cooling medium, I guess -- following up on the

5 last question -- and recovered 100 percent -- or

6 recycled 100 percent of the carbon disulfide by

7 condensing it all and diverting it back to the reactor,

8 wouldn't your analysis still be the same?

A No. But that would be done with presumption

10 that all the material that was capable, in this case the

11 hydrogen sulfide.

Q I'm talking only about the carbon disulfide.

A No. In this case even if all the carbon

14 disulfide was returned, we would probably still say that

15 this system was not designed for that.

MR. HARSCH: No further questions.

HEARING OFFICER HALLORAN: Thank you, Mr. Harsch.

MS. CARTER: May we have a five-minute recess?

HEARING OFFICER HALLORAN: Sure. Are you done with

20 Mr. Punzak?

MS. CARTER: I am done with Mr. Punzak.

HEARING OFFICER HALLORAN: Okay. You may step

23 down, Mr. Punzak. Thank you.

(Whereupon, a brief recess was taken

L.A. REPORTING

(800) 419-3376

161

in the proceedings.)

HEARING OFFICER HALLORAN: It's approximately 2:30.

3 Ms. Carter, you just finished with your first witness?

MS. CARTER: Yes. And that is my only witness,

5 sir.

HEARING OFFICER HALLORAN: Okay. So you rest.

Mr. Harsch, rebuttal?

MR. HARSCH: Mr. Corn.

(Witness previously sworn.)

MICHAEL R. CORN, P.E.,

11 called as a witness, having been previously duly sworn,

12 was examined and testified upon his oath as follows:

DIRECT EXAMINATION

BY MR. HARSCH:

Q You have sat here and you have been

16 previously sworn. You are still sworn. You sat here

17 and listened to the testimony of Mr. Punzak and various

18 questions. Does anything change your opinion with

19 respect to the applicability of the exemption as it

20 applies to the Henry plant?

A No. Nothing has changed. The rule reads the

22 same as I stated this morning in my testimony.

Q In the guidance that Mr. Punzak recited using

24 the condensers are not to be counted as pollution

L.A. REPORTING

(800) 419-3376

162

1 control equipment. Is that your understanding with

2 respect to the subsequently adopted Pollution Control

3 Board -- or excuse me, pollution regulations that were

4 enacted in the late Seventies through the Eighties with

5 respect to VOC control, for example?

A I'm sorry. Repeat that question, please.

Q Is this the guidance that was written by U.S.

8 EPA for control of VOC's or VOM's in the ozone

9 noncontainment area generally?

A Yes, sir, it was. It included in there that

11 flares can be used for control of those emissions.

Q And does it involve a concept that the

13 condenser is not going to be counted; it has to be an

14 integral part of the process?

A Integral part of the process means that the

16 condenser makes the process continue. In this case this

17 condenser, they can provide the carbon disulfide even

18 from the virgin tank or from the recycle. So it's not

19 an integral part of the process. Typically we think of

20 reflux condensers as a distillation step where they are

21 using a solvent. And the solvent has to be -- you have

22 to keep adding it to make the process go along.

A lot of the definition of reflux condensers,

24 it keeps the reactor vessel from drying out. And that's

L.A. REPORTING

(800) 419-3376

163

1 the true case of a reflux. When we checked off reflux,

2 it asked, Does it recycle it back to the process?

We have answered yes on that.

Q And, in fact, the permit application page

5 that was cited had room for additional verbiage to

6 describe the process?

A Yes, it did.

Q And on that page, in fact, the process was

9 described as a process to reduce sulfur?

A That's my recollection. I would have to look

11 back at it exactly, but that's my recollection.

MS. CARTER: Page 173?

MR. HARSCH: 173, I guess.

Q And the box I am referring to is -- box 7

15 briefly describes (indicating) --

A Okay.

Q That's where you describe that it was -- what

18 happened --

A Aniline, CS2 and elemental sulfur compound

20 reacting pressurized reactor vessel. For approximately

21 two hours the reactor begins venting while the reaction

22 is occurring. The gases pass through a condenser and

23 most of the CS2 returns to the reactor vessel.

Q And this only occurred -- since this is a

L.A. REPORTING

(800) 419-3376

164

1 batch step, is it not, a batch process?

A Yes, sir, it is.

Q This only occurs after the reaction?

A The reaction is going on. It may not be

5 completed, but, yes, after the reaction.

Q So it's not continuous throughout the entire

7 time?

A No. It's not continuous.

Q Would not be analogous then to a distillation

10 step where you are running a distillation column the

11 entire time?

A Distillation column is different than what

13 this process is.

Q Do you have any comments or opinions

15 regarding the integral part of the process for the

16 facility that was using the toluene to make a similar

17 product?

A Toluene in that -- and I'm totally familiar

19 with that process, but it sounds like the toluene was

20 used as a solvent there where they had to keep that

21 solvent in the reaction continuously. And that would be

22 considered in the truest form a reflux condenser.

MR. HARSCH: I have no further.

HEARING OFFICER HALLORAN: Thank you, Mr. Harsch.

L.A. REPORTING

(800) 419-3376

165

HEARING OFFICER HALLORAN: Cross, Ms. Carter?

MS. CARTER: Just a moment, sir. I'm ready now.

CROSS-EXAMINATION

BY MS. CARTER:

Q Mr. Corn, did you see a document from Emerald

6 stating that the condensers were designed to reduce

7 sulfur compounds?

A I have never seen a document like that, no.

Q And is carbon disulfide needed in the reactor

10 at all times to produce the MBT-C?

A I think you will have to ask Mr. Giffin that

12 or someone else from the plant. My understanding is

13 that is part of the reactant. And it's one mole CS2, one

14 mole of aniline and one mole of sulfur is required.

MS. CARTER: Nothing further. Thank you.

HEARING OFFICER HALLORAN: Thank you, Ms. Carter.

Redirect, Mr. Harsch?

REDIRECT EXAMINATION

BY MR. HARSCH:

Q Mr. Corn, if you know, are all the reactants

21 added at one time to this batch operation at the

22 beginning?

A That's my understanding, but I'm not sure. I

24 know that the carbon disulfide is added in excess to the

L.A. REPORTING

(800) 419-3376

166

1 reaction.

MR. HARSCH: No further.

HEARING OFFICER HALLORAN: Thank you, Mr. Corn.

MR. HARSCH: Mr. Evans.

(Witness previously sworn.)

BERNARD O. EVANS,

7 called as a witness, having been previously duly sworn,

8 was examined and testified upon his oath as follows:

DIRECT EXAMINATION

BY MR. HARSCH:

Q Mr. Evans, based on -- you sat here and you

12 listened to Mr. Punzak respond to the questions I asked

13 about guidance from U.S. EPA on permit drafters, what

14 permit drafters look at. Do you have any experience

15 with respect to the guidance I'm referring to and what

16 permit drafters do, in fact, look at when they are

17 reviewing Title V permit applications in terms of past

18 operating permit and construction permit records?

MS. CARTER: And I will have to object to this

20 question as being beyond the scope of my questioning of

21 Mr. Punzak, because it's beyond the scope. It's not

22 appropriate for Mr. Harsch to be raising it in his case

23 in rebuttal when I never raised such issues in my case.

HEARING OFFICER HALLORAN: Mr. Harsch?

L.A. REPORTING

(800) 419-3376

167

MR. HARSCH: I think it's fair game. I asked the

2 questions of Mr. Punzak, and I don't think I got

3 necessarily an adequate straight answer.

MS. CARTER: The question was never posed to

5 Mr. Punzak what a consultant reviews or consults when

6 they are putting together a Title V.

MS. HARSCH: Excuse me. That was not the question.

MS. CARTER: Okay.

MR. HARSCH: The question was what his experience

10 was in terms of guidance from U.S. EPA permit drafters

11 and what permit review engineers, in fact, look at as it

12 relates to operating -- past operating permits and past

13 construction permits.

MS. CARTER: Again, it's beyond the scope of my

15 questioning to Mr. Punzak.

HEARING OFFICER HALLORAN: I will overrule. I will

17 allow a little latitude. It's a tweener, but you may

18 answer if you are able.

A In my experience and in my past as a

20 consultant with Radian Corporation, we also work with

21 the federal government, U.S. EPA, and we help write

22 Title V guidance documents in relationship to how to

23 review and develop a Title V permit application or

24 permit relationship in response to the application.

L.A. REPORTING

(800) 419-3376

168

Our typical approach is you want to

2 incorporate all the conditions that exist in operating

3 permits. The whole purpose of the Title V CAAPP permit

4 is to bring together all those conditions into a single

5 document that was more easily understood by the plant in

6 relationship to what has got to be applied and more

7 easily understood by the inspector from the federal

8 government or the state agency in relationship to how do

9 you review compliance of a facility. So the whole

10 purpose is to bring those operating conditions into a

11 single document.

Q So that would require review of the prior

13 operating --

A Yes.

Q -- and construction permit files?

A Yes, it would.

Q And in your experience after you left Radian

18 and working on the other side as a consultant industry

19 and preparing those applications, has it been your

20 experience that that was normally done by permit review

21 engineers?

A Yes. I have got clients in the state of

23 Illinois where the Title V permit application covering

24 all those operating permits stapled together constitutes

L.A. REPORTING

(800) 419-3376

169

1 their operating permit.

HEARING OFFICER HALLORAN: Ms. Carter?

MS. CARTER: Thank you.

CROSS-EXAMINATION

BY MS. CARTER:

Q Mr. Evans, are State operating terms

7 federally enforceable in the State of Illinois?

A State operating terms?

Q Yes.

A They would have those that would have been

11 associated with federally enforceable conditions

12 developed by the State would be. Some State permit

13 conditions are not federally enforceable.

Q Okay. So when you say that are relevant to

15 federally enforceable terms, does that include things

16 like PSD?

A PSD, permit terms and conditions, yes.

Q Okay. Are operating permit terms applicable

19 requirements?

A They are applicable requirements, yes.

Q And what about construction permitting terms?

22 Are they applicable requirements?

A Construction permits would have been

24 incorporated into the Title V.

L.A. REPORTING

(800) 419-3376

170

Q And what are those commonly referred to as?

2 Is there a name, a jargon that the U.S. EPA utilizes

3 when they are referring to construction permitting

4 terms?

A Not that I recall.

Q Is there something called a T1 condition?

A Title I?

Q Yes.

A Yes. There are those.

Q And is a T1 condition a construction

11 permitting term?

A Yes. It would have been NSPS terms, PSD

13 terms within Title I.

Q And do the Title V permits that are issued in

15 the State of Illinois, do they typically or do they

16 incorporate T1 conditions?

A Yes. They actually list them separately as

18 T1 conditions.

Q So much so are Title V permits actually

20 referred to as Title V and Title I permits in the State

21 of Illinois?

A I believe that's correct, yes.

MS. CARTER: Okay. I have nothing further. Thank

24 you.

L.A. REPORTING

(800) 419-3376

171

HEARING OFFICER HALLORAN: Thank you.

Mr. Harsch?

MR. HARSCH: Nothing further.

HEARING OFFICER HALLORAN: You may step down, sir.

5 Thank you.

Any other witnesses in rebuttal, Mr. Harsch?

MR. HARSCH: No, sir.

(Discussion off the record.)

HEARING OFFICER HALLORAN: We are back on the

10 record. Counsel from both parties decided to waive

11 their closing. They are going to reserve it and put it

12 in their post hearing brief. Counsels from both parties

13 are going to contact me, hopefully no later than this

14 Thursday, regarding a post hearing briefing schedule.

Before I forget, I want to note that I find

16 no credibility issues with the witnesses.

Yes, Ms. Carter?

MS. CARTER: I apologize for this. I just want to

19 raise that Mr. Harsch had raised an issue that he was

20 inadvertently missing certain pages from his version of

21 the public copy of the record. I did not know if the

22 Board was missing those same pages and if it needed an

23 additional copy of them?

HEARING OFFICER HALLORAN: Do you have those there?

L.A. REPORTING

(800) 419-3376

172

MS. CARTER: Yes, I do.

HEARING OFFICER HALLORAN: I can take them.

MS. CARTER: I don't know if you guys are or not.

4 I just want to make sure --

MR. HARSCH: I don't know. I never looked at the

6 record.

MS. CARTER: Okay. I just wanted to double check.

8 I apologize.

HEARING OFFICER HALLORAN: No. No. That's fine.

MS. CARTER: Thank you. And it's a public version

11 of the record those pages.

HEARING OFFICER HALLORAN: This is marked up, or --

MS. CARTER: That's how it is in the record.

14 That's how it is in the record, sir.

HEARING OFFICER HALLORAN: With that said, drive

16 safely, God speed and thank you so much.

Mr. Harsch?

MR. HARSCH: I don't believe there has been any

19 other member of the public to show up here.

HEARING OFFICER HALLORAN: Thank you for noting

21 that. No. Other than Bill Mautin. Again, it is

22 explained on the record. We told him it was a closed

23 hearing due to trade secret issues, but if he wanted to

24 make a comment he was more than welcome. He decided he

L.A. REPORTING

(800) 419-3376

173

1 didn't want to. He just wanted to sit and listen, then

2 he left. He seemed okay with that. There hasn't been

3 any members of the public enter since.

MS. CARTER: We are going to provide you with a

5 briefing schedule. Do we have an idea of when we might

6 see a transcript?

HEARING OFFICER HALLORAN: It's eight -- pursuant

8 to contract, eight business days from tomorrow.

MS. CARTER: Okay. That will help us. Thank you.

(Whereupon, the proceedings concluded

at 2:50 p.m.)

L.A. REPORTING

(800) 419-3376

174

1 STATE OF ILLINOIS )

)

2 COUNTY OF PEORIA )

CERTIFICATE OF REPORTER

I, GALE G. EVERHART, CSR-RPR, Notary Public in and

7 for the County of Peoria, State of Illinois, do hereby

8 certify that the foregoing transcript, consisting of

9 pages 1 through 173, both inclusive, constitutes a true

10 and accurate transcript of the original stenographic

11 notes recorded by me of the foregoing proceedings had

12 before Hearing Officer Bradley P. Halloran, in Henry,

13 Illinois, on the 5th of February, 2008.

Dated this 13th day of February, 2008.

_______________________________

GALE G. EVERHART, CSR-RPR

Illinois License No. 084-004217

L.A. REPORTING

(800) 419-3376