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Merck & Co., Inc.

Letter from David W. Carr, Jr. to Larry Simmons

Southern Environmental Law Center

201 West Main St., Suite 14
Charlottesville, VA 22902-5065
804-977-4090
Fax 804-977-1483
selcva@mindspring.com

Carolinas Office
137 E. Franklin Street, Suite 404
Chapel Hill, NC 27514-3628
919-967-1450
Fax 919-929-9421

March 13, 1997

Mr. Larry Simmons
CEQ Valley Regional Office
PO Box 1129
Harrisonburg, VA 22801-1129

Re: Merck Project XL General Variance and Proposed PSD Permit

Dear Larry:

The Southern Environmental Law Center submits the following comments on the above-referenced proposed variance and PSD permit. While we are supportive of the reductions in NOx and SO2 resulting from Merck's proposal to switch from coal-fired boilers to natural gas, we do have a number of specific concerns regarding the proposed permit and variance.

1. Unlimited Term of the Permit

Contrary to the concerns of many of the stakeholders involved in the discussions regarding the Merck XL permit, the proposed permit provides for an indefinite and unlimited duration. We have recommended, and continue to recommend, a 10-15 year initial term for the permit, with the provision for affirmative renewal by consent of the stakeholders.

2. Concern Over VOC Increases

The proposed permit would allow Merck to increase its plant-wide emissions (post-powerhouse conversion) by approximately 650 tons. Most of these increases are likely to be in volatile organic compound emissions. At present, there is inadequate information regarding the potential impacts of these VOC emissions on the local community and on the resources of the nearby Shenandoah National Park. While the current understanding is that these VOC emissions do not contribute significantly to ozone formation in the community or the Park, there is much less understanding of their direct or synergistic impact on human health in the community and their impact on the forests and other resources of the Park.

3. Impropriety of Merck's Veto Authority Over Permit Changes and Permit Review Issues

Section 6 of the draft permit provides for a five year periodic review with the potential for changes to the PSD permit. The periodic review provision is an essential element given the indefinite duration of the permit. In fact, Merck and EPA have pointed to the five-year review provision as addressing our and others concerns regarding the indefinite length of the permit.

Unfortunately, the periodic review provision is inadequate because the permit cannot be changed without Merck's consent. Moreover, changes to the PSD permit other than those described specifically in ' 6 cannot even be considered unless agreed to by Merck. Thus, not only does Merck have a permit that lasts indefinitely, but it has a veto over changes to the permit (except for changes generally applicable to all PSD permits).

4. Lack of Adequate Community and Public Interest Representation in Permit Review Process

While Merck has a veto over any permit changes, the community and public interest representatives in the stakeholder process do not. The draft permit was changed in December 1996 so that only the signatories had to consent to permit changes. This change was contrary to the understanding of the community stakeholders who had participated in the process that they would have to consent to any future changes in the permit. Thus, for example, the emissions cap could be changed without the consent of the local community stakeholders or the consent of the public interest representative.

This extinguishing of the rights of non-government stakeholders (except for Merck) is unacceptable for the following simple reason. In the normal permit review process, the government agency - the state or EPA - in consultation with the federal land manager, makes the permit decisions. Merck is proposing a process where the applicant would have a veto over any changes the government agency seeks to make, but the community and public interest representatives would have no similar rights in the process. Any new solutions to regulatory issues need to be addressed through a balanced process. Setting up this process where the industry has a veto over changes, but the public has no similar veto, is clearly unbalanced and unacceptable. See the attached December 18, 1996 letter from the Southern Environmental Law Center to Carol Browner and Richard D. Wilson of the EPA for further discussion of the lack of adequate community and public interest participation.

5. Monitoring Requirements Too Lenient

Under 4.10.2 of the draft permit, monitoring of installed control equipment is only required to operate 75% of the time, instead of the usual 90% required for other PSD permit. This permit should have the same 90% monitoring requirement.

6. Need to Address PM2.5

The discussion of particulate emissions in the PSD permit is focused on the PM10 standard. However, the best scientific evidence now shows that PM2.5 or lower is a much more important consideration in terms of health and visibility. The smaller particles present the biggest problem for breathing and visibility impairment. The state and EPA should reconsider the permit given increased concern regarding PM2.5.

7. Termination By EPA Section 8.1.7 of the permit needs to be amended to provide that EPA in addition to VADEQ can terminate the permit pursuant to its statutory authority.

8. Need for Notice to Stakeholders of Proposed Changes in the Variance The state variance needs to provide for adequate notice to stakeholders should changes to the variance be considered.

We thank you for the opportunity to comment and appreciate your consideration of the above points in making your decision. Please let us know if you have any questions.

Sincerely,

David W. Carr, Jr.
Staff Attorney

DWC/tw
Enclosure

cc: Betty Sellers
Bill Sipe
Bill Grant, Sierra Club
Bob Belton, Trout Unlimited
Don Barger, NPCA
David Hawkins, NRDC
Nancy Summers
Julie Thomas, NPS
Karen Malkin, NPS
Robin Moran, EPA

Southern Environmental Law Center

201 West Main St., Suite 14
Charlottesville, VA 22902-5065
804-977-4090
Fax 804-977-1483
selcva@mindspring.com

Carolinas Office
137 E. Franklin Street, Suite 404
Chapel Hill, NC 27514-3628
919-967-1450
Fax 919-929-9421

Ms. Carol Browner
Administrator U.S. Environmental Protection Agency
401 M Street S.W.
Washington, D.C. 20460

Mr. Richard D. Wilson
Deputy Assistant Administrator U.S. Environmental Protection Agency
401 M Street S.W.
Washington, D.C. 2046

December 18, 1996

Re: Merck XL Permit -- Lack of Adequate community and Public Interest Representation

Dear Ms. Browner and Mr. Wilson:

Over the past year, I have provided input to the Merck XL project. I am writing to bring to your attention a substantial flaw in the proposed Merck XL permit regarding the participation rights of community and public interest participants. I have been trying to address this concern by working with the participants over the past month, but I now understand that EPA Region III and the other project signatories plan to sign the Final Project Agreement (FPA) without the public representation issue being resolved. I request that the issue be resolved prior to EPA proceeding further with this project.

For many months, the draft permit has provided that Rockingham County can nominate up to three community representatives for a stakeholder position in the future five-year reviews of the permit. Those community representatives would have to be approved by the full consent of the project signatories which include the government representatives and Merck. These community representative stakeholders would then need to consent to any changes in the permit, as changes could be made only by consent of the stakeholders. (Merck PSD Permit 11/15/96)

This five year review is an especially important protection for the public and agencies because Merck has insisted that the permit have an indefinite life. While I have always strenuously objected to this unlimited duration feature, the response from Merck and EPA has been to prove for five year reviews of the permit with direct stakeholder involvement. Basically, in exchange for acceding to a permanent permit, the stakeholders got a five year review process. (Section 6 of the permit.)

In September 9, 1996, I formally recommended that the draft permit be modified to explicitly provide for a public interest stakeholder that would be nominated by the signatories and agreed to by full consent of the signatories including Merck. Merck has unilaterally resisted that change and contended that the only stakeholders should be those nominated by Rockingham County. While I fully support having three community representatives that are nominated by Rockingham County as stakeholders, I believe it is important to have a public interest representative that can provide a perspective different from the community, and independent of local concerns such as jobs and the tax base. This is particularly so given the adverse impacts of air pollution on Shenandoah National park, which is only 2 kilometers from the Merck plant, and the widespread public concern for the Park's resources.

In response to my continued request to provide for a public interest stakeholder with a true voice in the permit review process, Merck has now proposed a revision of the permit that makes a bad situation worse. Merck is now offering a public interest representative slot, but has taken away the community representatives' and the newly proposed public interest representative's rights in the permit review process. Instead of permit changes requiring the consent of the stakeholders, Merck is now saying that permit changes need only the consent of all signatories. Therefore, under the latest draft permit (that now accompanies the FPA) the community representatives will lose the rights that the current participants and signatories have been expecting them to have.

This extinguishing of the rights of non-government stakeholders (except for Merck) is unacceptable for the following simple reason. In the normal permit review process the government agency, the state or EPA, in consultation with the federal land manager makes the permit decisions. Merck is now proposing a process where the applicant would have a veto over any changes the government agencies seek to make, but the community representatives and the public interest representative would have no concomitant rights in the process. Any new solutions to regulatory issues need to be addressed through a balanced process. Setting up a process where the industry applicant has a veto over changes, but the public has no similar veto is clearly unbalanced and unacceptable.

I am sure that Merck and even some government representatives will emphasize that the current proposal gives the community and the public interest representative seats at the table in the discussions. However, without a definite right to participate in the decision and object to changes that could damage the community or the environment, the opportunity for participation is meaningless.

We trust that EPA headquarters, in reviewing this project and in trying to restore balance between the public's interest and industry's interest in the XL program, will provide for an protect the community's and public's participation rights. Without assurances of that balance, the XL program, like this proposed permit, would be seriously flawed.

This issue is fairly straightforward and should be addressed before this permit goes out for public comment. If not, it will send the wrong signal to the public regarding the openness of the XL program which already has many skeptics in the public interest and environmental community.

Frankly, I think it would be a shame to taint what I view as a solid project, which provides for substantial overall emission reductions, with this unreasonable and unnecessary restriction on the public's participation rights.

Sincerely,

David W. Carr, Jr.
Staff Attorney

DWC/cwn

cc: George Frampton, Assistant Secretary for Fish and Wildlife and Parks, Department of the Interior
Karen Malkin, NPS Air Quality Division
Michael McCabe, EPA Region III Regional Administrator
Robin Moran, EPA Region III
Joe Correa, Rockingham County
Betty Sellers
Bill Sipe


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