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Kochlnd

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122009

FLINT

HiLLs

STATEOFWNOIS

-—-.RESOURCES

PoUutioncontrol8oa,d

August

12,

2009

VIA FACSIMILE

Mr.

Timothy

Fox

Hearing

Officer

illinois

Pollution

Control

Board

James R.

Thompson

Center

100

W.Randolph

Suite

11-500

Chicago,

Illinois

60601

RE:

Response

to

IERG’s

Motions

In

the

Matter

of:

NOx

Trading

Program:

Amendments

to

35

Iii.

Adm.

Code

Part

217,

R06-22

Dear

Mr.

Fox:

On

August

6,

2009,

the

Illinois

Pollution

Control

Board

(“Board”)

issued

an

order

requesting

responses

to

the

Illinois

Environmental

Regulatory

Group’s

(“IERG”)

Motion

for

Emergency

Rule

and

Motion

for

Expedited

Action

on

IERG’s

Alternative

Proposal

(collectively

“Motions”)

filed

with

the

Board

on

August

3,

2009

in

the

above-referenced

matter.

As

an

owner

and

operator

of

an

emission

unit

subject

to

current

regulations

at

35

111.

Admin.

Code Part

217

Subpart

U,

Flint

Hills

Resources,

LP

(“Flint

Hills”)

supports

IERG’s

Motions

and

urges

the

Board to

adopt an

emergency

rule

for

the

2009

control

period

and adopt

the

alternative

proposal

to

bring

budget units

into

the

Clean Air

Interstate

Rule

(“CAIR”)

NOx

Ozone

Season

Trading

Program.

Flint Hills

owns and

operates

a

boiler

(CB-706)

located

at

its

Joliet

Facility

that

is

covered

by

the Subpart

U

NOx

Budget

Trading

Program,

but

has

never

received

an

allocation

of

NOx allowances.

Comments

of

IERO,

In

the

Matter

of

NOx

Trading

Program:

Amendments

to

35111.

Adm.

Code Part

217, R06-22

at

3

(Ill.Pol.Control.Bd.

Mar.

13,

2006)

(rulemaking

cited

hereafter

as

“R06-22”).

In

fact,

the

Illinois

Environmental

Protection

Agency

(“Agency”)

acknowledged

the

inadvertent

exclusion

of

Flint

Hills

from

Subpart

U

in

its

Statement

of

Reasons

by

proposing

to

“add

Flint Hills..

.

and,

to

provide

an

allocation

of

6 allowances.”

—4111

East

37th

Street

North

—

Wichita,

Kansas

67220

—

P.O.

Box

2917

—

Wichita,

Kansas

67201-2917

—

---

316+828+8405

Kochnd

11:10:02a.m.

08—12—2009

3/3

Mr.

Timothy

Fox

August

12,

2009

Page2

Statement

of

Reasons,

R06-22

at

9.

Because

it

has

taken

years

to

revise

Subpart

U

Appendix

E,

Flint

Hills

requests

an

additional

eight

allowances

to

better

reflect

the

facility’s

current

operating

scenario,

which

has

changed

since

this

rulemaking

was

initially

proposed.

Currently,

owners

and

operators

of

emission

units

subject

to

Subpart

U,

such

as

Flint

Hills,

have

not

received

allocations

of

NOx

allowances

for

the

2009

ozone

season,

nor

for

any

subsequent

years.

It

is

our

understanding,

however,

that

the

current

version

of

Subpart

U

is

a

valid

and

enforceable

regulation

in

Illinois

that

requires

subject

sources

to

hold

NOx

allowances

for

each ton

of

NOx

emitted

during

the

ozone

season’by

November

30

of

the

applicable

year,

but

the

United

States

Environmental

Protection

Agency

(“USEPA”)

is

no

longer

issuing

allowances

for

the

NOx

Budget

Trading

Program,

as

would

be

required

to

satisfy

the

requirement

to

hold

NOx

SIP Call allowances.

It

is

our

understanding

that

NOx

allowances

could

potentially

be

obtained

through

the

purchase

of

CAIR

NOx

allowances.

However,

it

is

uncertain

whether

those

CAIR

allowances

would

be

legally

sufficient

to

satisfy

the

Subpart

U

requirement

to

hold

NOx

SIP

Call

allowances.

Even

if

sufficient,

sources

will

not

be

able

to

demonstrate

compliance

with

the

requirement,

due to

the

inability

to

obtain

CAIR

compliance

accounts

from

the

USEPA

Clean

Air Markets

Division

(“CAMD”),

absent

a

federally

approved

trading

program

in

Illinois.

We

are

concerned

that, through

no

fault

of

our

own,

we

may

be

placed

in

a

position

where

it

would

be

difficult

or

impossible

to

comply

with

Subpart

U

requirements

and

our

Clean

Air

Act

Permit

Program.permit,

if

immediate

action

is

not

taken

to

remedy

the

above

described

circumstances.

It

is

in

the

best

.interest

of

business

in

Illinois

to

adopt

rules,

such

as

the

emergency

rule

and

alternative

proposal

described

in

the

Motions,

that

require

NOx

allowances

to

be

distributed

for

the

2009 ozone

season,

as

well,

as

subsequent

control

periods.

Accordingly,

Flint

Hills

requests

that

the

Board

grant

IERG’s

Motion

for

Emergency

Rule in

order

to

require

that

2009

NOx

allowances

be

distributed

to

impacted

sources,

and

grant

IERG’s

Motion

for

Expedited

Action

on

IERG’s

Alternative

Proposal

in

order

to

bring

NOx

SIP

Call

budget

units

into

the

CAIR

NOx

Ozone

Season

Trading

Program

for

the

20l0

control

period

and

beyond.

Sincerely,

•

Eric

ysen

•

Vice

President,

EH&S

Flint

Hills

Resources,

LP

—

4111

East

37th

Street

North

—

Wichita,

Kansas

67220

—