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State Innovation Grants

EPA 2005-2006 State Innovation Grants Competition Pre-Proposals

Project Summary Information Page

2005- 2006 State Innovation Grant Category:
Innovation in Environmental Permitting

Project Title and Location:
Industrial Footprint Project, Statewide – Washington State

State Agency Applicant:
Washington State Department of Ecology

Project Contact:
Carol Kraege Phone: (360) 407-6906
Department of Ecology Fax: (360) 407-6102
P.O. Box 47600 E-mail: ckra461@ecy.wa.gov
Olympia, WA 98504-7600

Other Federal Funding:
This work is also supported by PPIS grant NP97087201-0

Regulatory Flexibility from the Federal Government:
None anticipated during this phase of the project.

Endorsement by State Agency Director:
This project is known to and has the endorsement of the Department of Ecology Director, Jay Manning. If this proposal is selected for application, a letter of endorsement will be provided with the final application.

Budget Summary Information Page

State Project Contact:
Carol Kraege Phone: (360) 407-6906
Department of Ecology Fax: (360) 407-6102
P.O. Box 47600 e-mail: ckra461@ecy.wa.gov
Olympia, WA 98504-7600

Project Title:
Industrial Footprint Reduction Project

Expected Costs:

[Removed by EPA]

Pre-Proposal Project Narrative

Industrial Footprint Reduction Project

Introduction :

The EPA Innovation Strategy states that “environmental programs should address a broader range of issues than they typically do today. The goal should be greater environmental responsibility and natural resource stewardship across all of society, along with successful integration of environmental, economic, and social objectives.” It also states that new approaches need to emphasize results of regulatory and nonregulatory tools and that “public accountability should be provided through use of meaningful performance tools”. This proposal will test an alternative tool for measuring the effectiveness of both traditional and innovative approaches to permitting and regulation of high-profile, major point source industries with multi-media, multi-program regulatory interactions.

This grant application is the first phase of a multi-phase project. Each phase builds on the success of the one prior. If the performance measure itself is successful, we will collaborate with willing facilities to develop priority footprint reducing activities or projects. This phase will also include outreach to the local communities and partnership with EPA in developing regulatory flexibility to implement the priority activities. Phase three of the project includes implementation of the priority activities and re-measurement of the footprint. The final phase includes expansion of the environmental footprint to include social and economic measures as well.

The goal of the footprint project, ultimately, is to improve the effectiveness of state permitting and nonregulatory efforts at complex facilities by moving away from media specific compliance measures toward sustainability measures of environmental, economic and social objectives. Beginning by focusing on the measurement of the environmental footprint, we can more directly measure the effectiveness of any strategy, project or activity designed to reduce the footprint. Footprint measurement will put a spotlight on the need for companies to pursue opportunities for saving energy, water, materials and money, i.e. those areas where compliance alone is not enough. It will add rigor to the use of environmental management systems already in place. Permitting and other regulatory work can be tied more directly to real environmental improvement. The project will focus on the 8 pulp and paper mills in Washington and will produce:

Threshold Criteria

The footprint project consists of a variety of activities authorized by the Clean Air Act and the Clean Water Act. These activities include demonstration of the usefulness of the footprint measurement tool and research through an evaluation of how the footprint baseline differs between facilities, such as between those with an EMS and those without one.

The focus of the footprint project is the development of a measurement tool that encompasses air, water and waste issues in a comprehensive manner. This project will be considered a success if the footprint measurement tool is:

The footprint project builds directly on four of the five key traits identified in the Innovation Strategy.

In order to emphasize environmental results rather than the means to achieve them, we need a way to organize and present environmental data to better effect. The footprint idea was conceived as a way to use the data available in a more comprehensive and holistic way. Ultimately, we want to be able to focus state regulatory resources, and those of the regulated industries, on activities and projects that can demonstrably improve environmental performance. An example of how this tool might be used: if the many hours spent to re-issue a permit in a single media do not demonstrably improve the environment, we could use this information to redirect that staff time to activities that will improve the environment. The permit itself might be reauthorized rather than re-issued- a much less time consuming process. Resources from the company and the agency could be redirected to higher priority activities. The footprint would then be reassessed to determine the effectiveness of the planned activities and a second round of evaluation and priority setting would be done.

To address a broader range of issues than we do today, we need a measurement tool that does the same. The footprint measurement tool being tested is the draft Facility Reporting Project Pilot Test Sustainability Reporting Guidance, released March, 2005. The FRP Guidance is a tool created by CERES (Coalition for Environmentally Responsible Economies) and the Tellus Institute. The Facility Reporting Project (FRP) is a multi-stakeholder initiative to develop a generally-accepted facility-level economic, environmental and social sustainability reporting framework. It was developed as a tool for companies, rather than governments to use, but after considerable time spent researching the available sustainability reporting tools, we determined that the FRP is the most appropriate tool for this project. However, because we are limited by our authorizing environment and to gain credibility, we propose to begin by focusing on environmental measures with some economic metrics included as well. If the tool proves useful in these areas, the social aspects could be added in subsequent phases of the project.

Integration of environmental management across media and facilities requires a measurement tool that can do the same thing. Laws and regulations often impose substantial administrative and financial burdens in areas of little environmental significance, while emergent, important environmental issues remain unaddressed. Due to its multi-media, one-stop permitting responsibilities, Ecology’s Industrial Section is uniquely positioned to identify significant opportunities for environmental improvement at the major industries we regulate – opportunities the industries are often unwilling to pursue because their priorities are instead directed by a prescriptive set of laws and regulations that may or may not target the most important environmental issues at their facilities. We expect to increase our effectiveness by making better use of the large amount of multi-media data submitted as part of compliance efforts. For this project, we propose to focus on the 8 major chemical pulp mills currently operating in Washington. We will develop baseline footprints for each individual pulp mill and for the sector as a whole. If the project is successful, it will be applied to other complex facilities or sectors as well.

There is no single scientific tool that can be used to determine what environmental impacts are the most important at a given facility. If the baseline footprint proves to be sufficiently robust, we plan to use it to initiate discussion with both facilities and communities to identify priority projects and activities to reduce the footprint. Such an effort would necessarily involve collaboration with the company and input from the community.

The footprint project is included in the 2006-2007 PPA as part of our work with Region X on Cross Program Issues. The project also supports two other PPA priorities: Permit Streamlining- New Approaches in Permitting and Sustainability-Support Ecology’s Beyond Waste Plan.

The core of this project is to test the effectiveness of the sustainability measurement tool as a way to connect our work (or the work of the company) more directly to environmental results. For example, consider the case of one Washington pulp mill where strict compliance with a new MACT rule would have resulted in the removal of 60 pounds of hazardous air pollutants at an estimated cost of $4 million. However, the mill was able to demonstrate that implementation of a $400,000 project on an unregulated unit at the mill would result in removal of 240 pounds of similar toxic emissions. Ultimately it was the fact that the mill had sued EPA that led to regulatory flexibility in this case. If a footprint tool had been available, we (the state, EPA and mill staff) could have looked at the entire mill for opportunities to reduce HAPs and perhaps have avoided the large transaction costs that were experienced by both parties. A compliance only focus, in this case, would have left 180 more pounds of HAPs in the air each year than is currently occuing.

The footprint tool will also be used to assess the effectiveness of the various EMSs in use at the pulp mills. At this time, one mill has a completed EMS (and is a Performance Track member) and three mills are developing EMS’s with a goal of becoming ISO 14001 certifiable. The EMS process allows large variations between mills regarding what they measure. An impartial measure will help us determine the effectiveness of the mills voluntary efforts. Ecology is interested in dovetailing the interests of the company (identified in their own EMS) with the needs of the watershed, the air shed or the community at large. A robust footprint measure will facilitate this.

Finally, we propose to use the footprint measure to develop a series of sector measures which will facilitate comparison between mills. We will be able to see if the mills with EMS’s in place are more effective in reducing their footprint than the mills without.

Improvement in Results from Project Implementation Currently, state and federal laws and regulations drive priorities for environmental management and expenditures through a one-size-fits-all process. The footprint tool, if successful, will be used to facilitate collaboration with the companies to derive custom fit environmental priorities for each facility and possibly for the pulp and paper sector. In this phase of the project we will be developing a tool to provide a more holistic, quantifiable measure of environmental performance. If successful, the tool can be used in the future to evaluate the success of any regulatory or voluntary action taken.

Measuring Improvement and Accountability Facility and sector specific indicators will be developed as part of this work. However, there are some measures that will be included in all baseline footprints. These include energy use, water use and greenhouse gas production. In addition, we expect to generate a product to non-product ratio for each facility. Subsequent applications of the footprint tool to measure the success of footprint reducing activities will also include these measures. (see Threshold Criteria, above) The baseline measurement is the product of this project. It will be developed using the FRP Pilot Draft Sustainability Reporting Guidance as a starting point. Ecology will use publicly available data to develop the first draft baseline footprints for 8 chemical pulp and paper mills in Washington. Washington law makes it difficult to keep proprietary information confidential, so it is important to develop a measurement tool that can be populated with readily available data. There are a few environmental indicators in the FRP that we will not have access to, but believe that the tool can still be successfully applied. The timeline for this project is as follows:

September, 2005 Select a contractor to assist with data analysis

March, 2006 Complete draft baseline footprints for 8 individual pulp mills

April, 2006 Meet with individual pulp mill representatives to discuss data gaps

July, 2006 Complete assessment of the usefulness of the baseline footprint tool

September, 2006 Complete sector footprint

December, 2006 Complete comparison report of mills with and without an EMS. Complete final report on usefulness of the FRP measurement tool.

Transferring Innovation

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