Project XL

1. Water: EPA would like Flint River to commit to enforceable limits, which exceed BAT or the limits to be proposed in the upcoming tier 1 incentives program now being considered for incorporation into the anticipated cluster rule as follows: 1) non-detect levels of dioxin at the bleach plant; 2) BAT for furan; and 3) less than 0.12 kilograms AOX/metric ton measured at end of pipe as a long-term average. Flint River would commit to a binding percent reduction for BOD and TSS of 12% and a 10% reduction in water use.
2. Hazardous Air Pollutants: Flint River needs to achieve emissions levels equivalent to or better than those which would be achieved through application of the MACT standard by a date not to exceed 3 years from the date of the MACT Cluster Rule promulgation. The MACT standard will be promulgated as part of the cluster rule; promulgation is anticipated for fall 1996. EPA will allow flexibility in how Flint River achieves this emissions level, but may need to place certain conditions on the trading arrangement. The trading details, such as eligible units from which to include reduction offsets and the baseline for these offsets, should be negotiated between EPA, the company and the state. Further details on compliance and trading constraints are enumerated in the attached MACT counter proposal.
3. Criteria Air Pollutants: The Agency envisions separate PSD applicability caps for the power boiler and the rest of the facility. The rest-of-the-facility cap, similar to the Plant-wide Applicability Limit "PAL" program contemplated in the proposed New Source Review reform rulemaking, would be set at current actuals (1993-1995 average) + the PSD significance levels for criteria pollutants and TRS. The rest-of-facility-pollutant caps would be decreased by 10% by the end of MIM Phase IV. For PSD applicability purposes, any modifications or operational changes which remained under the rest-of-facility cap would require only notification of the permitting authority. However, all changes under the cap must demonstrate compliance with all applicable ambient standards and PSD increments.

The power boiler cap would be set at current actuals (1993-1995 average) ratioed up to full capacity by an acceptable full capacity multiplier (actual number to be determined.) Any changes in utilization of the power boiler which remained under the cap would not trigger permitting review requirements so long as boiler does not undergo physical change. If a physical change occurs to the boiler, the normal PSD process would be followed. The pollutant caps for the power boiler will be decreased by 10% by the end of MIM Phase IV.

The establishment of the caps would be premised on the following: 1) an air quality analysis has been completed which demonstrates protection of the NAAQS and the PSD increments; 2) the power boiler has previously undergone a BACT analysis; and 3) conventional "netting" would not be allowed between the caps. In other words, steam usage reductions from the power boiler under MIM Phase IV would only count under the power boiler cap. Likewise, steam usage reductions from the recovery boiler would count only under the facility cap. Final agreement on the design and mechanics of the dual cap arrangement will require further discussion of additional elements such as emissions calculations methods; MRR requirements, duration of PAL levels and provisions for revising/updating the terms.
4. Black Liquor Spill Prevention: EPA supports the adoption of best management practices that result in equivalent control to what is required by the cluster rule.
5. State and non-regulatory: EPA would like to see, by the end of MIM phase IV, the attainment of binding performance commitments for plant-wide solid waste reduction of 10%, energy conservation/steam use reduction of 12%, and odor control.

2) FLEXIBILITY FOR EXPERIMENTATION
To allow flexibility for experimentation, EPA will provide directly or encourage the state to provide flexibility in the following areas:

1. Water: EPA will recommend to Georgia that Weyerhaeuser not receive more stringent limits in the permit issued on August 31, 2002 [and possibly 2007] unless such limits are necessary to achieve applicable water quality standards (based on new information received by GAEPD after issuance of Flint River's August 1997 NPDES permit). EPA will require Flint River to meet a nondetect dioxin limit at the bleach plant. EPA will also negotiate less frequent monitoring requirements for dioxin, furan and AOX. EPA will support the agreements between Weyerhaeuser and the State of Georgia regarding color and nutrient limits (subject to consistency with 301(b)(1)(c) of the CW), and assimilative capacity and fish tissue study requirements imposed by Georgia environmental regulations.
2. Hazardous Air Pollutants: EPA will allow the Company to achieve MACT within the source to be defined by MACT by off-setting greater control of HAPs at some points not requiring control by MACT rule against less control of HAPs at other points to be enumerated for control in the MACT. As described above, the details of such a trading program and the baseline will be further negotiated.
3. Criteria Air Pollutants: EPA will forgo PSD review for physical modifications at the facility so long as the modification does not involve a physical change to the power boiler and the resulting emissions are below the established caps (described above).
4. Solid Waste: EPA will defer to the state to resolve issues related to landfill fees and liquids requirements.
5. Monitoring and Reporting: EPA is willing to negotiate monitoring frequency and certification commitments for all parameters so as to ensure accountability to EPA, the state and the public in a manner that reduces unnecessary paperwork burden.

3) COMMITMENT TO INNOVATION BEYOND PHASE IV
To foster technological innovation toward MIM, EPA would like the Company to commit to conducting feasibility studies to explore loop-closing technologies across the various media.

1. Bleach plant flow: EPA supports the decrease and ultimate elimination of discharges into the environment that can affect human health and the physical, biological, and chemical integrity of the Flint River. EPA believes that closing the loop on the bleach plant provides the greatest environmental benefit, due to the elimination of discharge, but realizes that such technology may not be an option for Weyerhaeuser, due to business pressures, technological constraints, and consumer demand. EPA desires a commitment from Weyerhaeuser to conduct feasibility studies to achieve full bleach plant closure. To demonstrate its commitment toward movement in the direction of minimum impact, EPA wants the Company to commit now to an enforceable, but reviewable, stretch goal for reduction of bleach plant flow to 5 m3 by the year 2011. Interim milestones, coincident with FPA review schedules, could be established to indicate progress in that direction. These milestones would be either performance-based or based on other metrics that are agreement to the parties such as completion of certain phases of study. EPA would like the company over the next two years to test technologies and processes to reduce toxics and bleach plant flow at various levels (including full closure) in pursuit of innovative options to decrease water and air pollution and produce acceptable product quality. EPA assumes that developmental studies and mill trials will continue through a substantial portion of the life of the FPA. It is EPA's goal that results of initial testing would identify near-term interim milestones for flow reduction that would be committed to by the company. It is EPA's hope that the bleach plant flow stretch goal can remain enforceable. If, however, by the completion of feasibility study and analysis, the signatories determine that the stretch goal is not feasible, then the signatories will negotiate another commitment that would provide superior environmental performance.
2. Hazardous Air Pollutants: EPA would like the company to commit to an in-depth feasibility study focused on achieving beyond MACT emission reductions so that stretch goals and interim milestones could be established for HAP emission reductions. EPA feels the study should include quantifying emission reductions associated with reducing the HAP content of recycled process wastewaters and condensates and HAP emission reductions associated with bleach plant effluent reduction and closed mill technology.
3. Solid waste reduction/land application: EPA supports the company's intent to pilot a number of pollution prevention and waste minimization activities including lime mud recovery [up to 75,000 tons per year reduction], by-product use [10,000 tons per year], and process solid waste optimization [4000 tons per year]. EPA would like the company to join the sludge land disposal stewardship program.
4. Sustainable Forest Management: EPA expects that, at the beginning of MIM phase V, the FPA signatories will identify metrics and establish binding performance commitments sustainable forestry practices.
5. Energy Use: EPA expects that, at the beginning of MIM phase V, FPA signatories will establish binding performance commitments for continued reduction in energy use.
6. Environmental Management System: EPA supports Weyerhaeuser's commitment to implementing ISO 14001 EMS. The Agency would like to see certification as well.

Nature of Final Project Agreement

1) LEGAL MECHANISMS
EPA believes that Final Project Agreements are documents that set forth the clear intent of the parties to the Agreements, but do not create legal obligations. Changes in legally enforceable rights and obligations would be effectuated through rulemaking and permit revisions, as appropriate. The FPA would describe in detail the rules and/or permit changes that are anticipated. EPA considers the rulemaking process and permit revision process to be the mechanisms that will provide that certainty and legal enforceability the Company and EPA seek in connection with this issue. Moreover, EPA considers use of the site specific rulemaking process and permit revision process, as mechanisms to implement terms of an FPA, to be completely consistent with previous guidance issued by the Agency in connection with Project XL (Principles for Development of Final XL Project Agreements, December 1, 1995, EPA Memorandum mentions the possibility that in a given project, enforceable commitments will be set forth in documents other than the Final Project Agreement.)

The Agency envisions the Flint River FPA as a 15 year agreement that may be accompanied by other, legally enforceable documents. It is the Agency's experience to date that some FPAs may establish all the terms of a projects; in other instances, a FPA may establish some terms but also set out a plan of action to pursue other mechanisms that will establish the remainder of the terms.

With respect to the Flint River FPA, the Agency expects that in conjunction with the company and the state, we will need to convene a series of meetings to resolve important, outstanding legal matters including the necessity to revise other affected documents or permits (i.e., State Implementation Plan, PSD permit). As soon as the parties reach agreement on the terms in the FPA, EPA will write a site specific rule. EPA has set a target of completing such rules within 2 1/2 months of beginning the rulemaking process. The draft FPA and EPA's comments on the draft FPA suggest a variety of commitments. Only those commitments which are incorporated (or referenced) into a legally enforceable document such as a permit or a site specific rule, will be binding. Other commitments will rest only on good faith.

EPA's position on the nature of the FPA (and the use of the rulemaking process and the permit revision process as mechanisms to implement the terms of the FPA) is also consistent with the concept of reviewing the project's implementation periodically.

2) PERIODIC FPA REVIEW
The signatories should develop a FPA review schedule and define the terms under which the FPA is reopened, reviewed, modified, reaffirmed or terminated. As a start, EPA expects re-openers to occur bi-annually to re-examine air and water commitments in light of the company's progress and considering findings of the feasibility studies. It is expected that at the time of review, a number of options would be available including: 1) revision of existing commitments; 2) establishment of new commitments; 3) establishment of new or revised interim milestones toward achieving commitments; 4) off-ramping if commitments are not achievable. The off-ramp option will be designed to allow the Company to come into compliance with all appropriate regulatory requirements. The Agency expects to further develop the basic elements of and process for invoking an "off ramp" option before signing a FPA.

3) DISPUTE RESOLUTION AND FORCE MAJEURE ISSUES
The issues of dispute resolution and force majeure were discussed at the April 4, 1996, meeting with the Company. EPA understands that the Company will be providing additional language concerning these issues (see the Company's April 23, 1996 Response to Comments). EPA remains ready to review and evaluate any such language, in connection with further discussions with the Company. In particular, with respect to issues related to dispute resolution, EPA remains ready to consider approaches that reflect:

- the nature of the Final Project Agreement itself and
- the possibility that certain issues may arise that may not necessarily be resolved through informal negotiations.

4) TERMINATION OF FPA IN 15 YEARS
EPA, the company and the state will develop termination and or extension procedures and processes.

Stakeholder Involvement in FPA Implementation

EPA expects local stakeholders to play an ongoing role throughout implementation, monitoring and evaluation of the Flint River FPA. It is expected that the facility will avail stakeholders of pertinent information to enable informed and meaningful participation throughout the life of the FPA. Informed local stakeholder involvement is, we believe, essential to the success and credibility of all Project XL pilots, and we will do what is needed to achieve meaningful collaboration between "Project XL applicants and the affected community," (Fred Hansen letter, November 1, 1995).

EPA commends Weyerhaeuser for committing to an "information open-door policy." EPA encourages Flint River to work with its stakeholder group to develop a workable implementation plan that through openness, inclusivity, and collaboration accountability is guaranteed.

EPA further recognizes Weyerhaeuser for holding an information exchange with individuals from national nongovernmental organizations on May 12, 1996. The Agency supports ongoing efforts by the Company to meet with, inform and engage diverse stakeholders who are in the business of environmental protection. Through these efforts we can gain a broad base of support to further test innovative environmental management strategies, that may look different than the old way of doing business, but will deliver superior results.

WEYERHAEUSER FLINT RIVER XL PROJECT
COUNTER PROPOSAL - MACT
MAY 22, 1996
WEYERHAEUSER PROPOSAL:

The company has proposed to meet MACT through equivalent emission reductions of HAPs in-lieu-of meeting specified MACT requirements. This flexibility is sought because the company believes it can achieve those emissions levels more cost effectively. The company would then use the savings they estimate to be as high as $20 million to invest in projects which further the minimum impact manufacturing (MIM) vision for environmental management.

EPA COUNTER PROPOSAL:

EPA believes that this facility has the potential to achieve realistic environmental benefits far superior than what would be accomplished through normal compliance with the applicable MACT standard. Therefore, EPA is agreeable to the flexibility sought by Weyerhaeuser Flint River as it relates to the proposed MACT regulation, given the following general conditions:

Weyerhaeuser will achieve or exceed HAP emissions levels that would be achieved through application of the MACT by a date not to exceed 3 years from date of MACT Cluster Rule promulgation. The MACT standard will be promulgated as part of the cluster rule; promulgation is anticipated for Fall 1996.

Weyerhaeuser is allowed to trade only HAPs for HAPs.

HAP emissions offsets are only allowed within the source to be defined by the MACT standard.

Control of the cylinder mould, cylinder mould vacuum pump, and cylinder mould filtrate tank is to be considered part of MACT for the purpose of determining the equivalent HAP emission reduction to be achieved.

Once all parties agree to the ground rules of the trading scheme, Weyerhaeuser will submit a HAP emissions level control plan to EPA and the state (date to be negotiated with the company) detailing the target equivalent emission levels to be achieved and what steps will be taken to achieve them (i.e., equipment control, pollution prevention, process changes). EPA envisions that credits would not be provided from HAP reductions resulting from existing enforceable requirements. EPA would consider providing HAP credits resulting from ongoing reductions from past voluntary actions taken by a specified date.

HAP emissions reductions for determining equivalency and trading are based on approved EPA testing methodology.

Compliance assurance monitoring as specified by MACT standard and as defined by the Clean Air Act General Provisions will apply.

Start up, shut down, & malfunction to be defined by the MACT standard will be required.

Weyerhaeuser will commit to an in-depth feasibility study focused on achieving beyond MACT emissions reductions and quantifying HAP emission reductions associated with reducing the HAP content of recycled process wastewaters and condensates and HAP emissions reductions associated with bleach plant flow reductions and closed mill technologies. Certain conditions for the study will be negotiated such as start date, duration, independent review, progress reports, feedback process to incorporate findings into FPA etc.

 

Stretch Goals and Interim Milestones for Weyerhaeuser's Project XL

PARAMETER	DATE STRETCH GOALS IS ESTABLISHED	DATE INTERIM MILESTONES ARE ESTABLISHED	REVIEW SCHEDULE
Bleach Plant Flow	today: 5 m3 by 2011	today: to be negotiated (could be management or performance based)	1998 and every two years thereafter
Conventional Pollutants	1998: establish minimum impact stretch goal	today: BAT or Tier 1 for all parameters by end of Phase IV;	every two years
Dioxin	today: limit of ND at bleach plant; no limit at end of pipe; voluntary reductions in sludge (agree to join voluntary sludge stewardship program)		to be negotiated; if a change in bleaching process occurs so that there is no potential to generate dioxin, limits and review could further change
HAPs	1998	today: MACT equipment control and trading plan (plan submittal date negotiable) what about P2?	every two years
Criteria Pollutants	today: facility-wide, power boiler caps apply immediately; reduce caps by 10% by end of Phase IV	90% caps become enforceable at end of Phase IV	if no violation of cap, no review
Solid Waste	1998	today: 10% reduction by end of Phase IV; others in 1998	every two years
Energy Conservation/ Steam use	1998	today: 10% reduction by end of Phase IV; others in 1998	every two years
Forest Practices	1998	1998	every two years

The following timing is assumed:
-- MIM Phase IV ends 12/1997; MIM Phase V begins in 12/1997
-- The first phase of the feasibility study concludes in 1998, thus the reference to 1998 in the table