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Air Force Plant Number 4 (AFP4)

Air Force Plant 4 (AFP4): August 1, 1997 Informational Meeting

 

EPA REGION 6, TNRCC, DOD/LOCKHEED MARTIN
Project XL Informational Meeting
August 1, 1997

Morning Session

 

Welcome and Introductions
Adele Cardenas (EPA Region 6) welcomed attendees. Region 6 initiated holding "informational meetings" with groups interested in pursuing Project XL proposals to introduce interested participants to each other, answer questions, and familiarize participants with the general XL process prior to submission and selection of a proposal.

Background Materials from EPA Region 6
Ms. Cardenas introduced the materials provided to all attendees at the meeting. She said that this information is available on the Project XL Internet website, as well as on Region 6's website. She noted that meeting participants would have the opportunity to review and comment on meeting minutes from this meeting in the next two weeks, and that the finalized minutes will be provided on the Project XL website.

Participants were provided with handouts with new information specifically from Region 6. Ms. Cardenas discussed this material, including Region 6's guidance on the XL Project Objectives, definition of success, and concepts underlying regulatory integration of pollution prevention. She stated in her discussion of success that her office is highly supportive of pollution prevention, and that XL participants should make every effort to incorporate pollution prevention into their Final Project Agreements (FPAs). She also emphasized the importance of technology transferability and streamlining reporting. The regulator's role is to manage interactions to promote pollution prevention.

Mr. Bruce Campbell (Lockheed Martin) asked if a company needs to comply with a new set of standards after it enters into an FPA. Ms. Cardenas answered that this depends on what terms the agreement is based on, and where the regulated entity sought regulatory relief and/or operational flexibility. EPA Headquarters' Office of General Counsel and Region 6's Office of Regional Counsel determine what terms will or will not work. Mr. Ragan Tate (EPA Region 6) stated that the FPA is an agreement between the state, the regulated entity, and EPA on how each party will interact (e.g., permitting changes, etc.). The enforceable mechanism is external to the FPA, and may involve a consent decree, changes in regulations, or changes in permits. Mr. Bill Rosenthal (Lockheed Martin) noted that flexibility is the real incentive for most companies, because it allows them to react quickly to marketplace changes.

EPA's P4 Program
Ms. Cardenas said that flexibility is the driving force behind EPA' s Pollution, Prevention, Permitting Program (P4) program, which she worked for prior to Project XL. She explained that the P4 program is a relatively low-budget, low-profile EPA program that traditionally focused on air-related issues. In this program, "chambers of pre-approved changes" are negotiated between EPA and the company to allow permit exceedances in specific situations. For example, exceedances have been negotiated for pollution prevention, testing, or limited duration research and development tests. Participating companies only need to submit a one-page document to the permitting authority explaining the reason for the exceedance and the expected emissions. The company is also responsible for submitting an actual emission report after the event. P4 programs have been conducted in Oregon, Washington, New Mexico, Georgia, and New Jersey with volunteer companies and annual contracted EPA dollars. In 1998, the P4 program will expand into "Phase III" and will begin to cover water issues. The P4 program is moving in the direction of consolidated permitting. Mr. Rosenthal asked how he could find out more about the P4 program. Ms. Cardenas recommended that he talk with Mike Trutna, the lead contact for P4 at EPA's Office of Air Quality Planning and Standards in Research Triangle Park, North Carolina. Dave Delarco, EPA Region 10, is the head of all regional P4 projects and the contractor work assignment manager.

Mr. Rosenthal asked if there was an advantage in the XL or P4 programs for companies that had not made efforts in the past to reduce their emissions. Ms. Cardenas said this is an issue of perspective. For example, the City of Albuquerque built in boiler plate language into its permits; if a company chose not to take advantage of P4, than that "chamber" was never activated. Mr. Rosenthal asked if a company has already achieved 99% emission reductions, is credit given for this past achievement. Ms. Cardenas answered that, in her past experience with the P4 program, this was not the case. Mr. Rosenthal suggested that EPA consider providing credit for significant past reductions. Ms. Cardenas observed that opportunities for further pollution prevention, even after significant efforts have already been expended in the past, can be surprisingly available. For example, Imation management had been very active in pollution prevention. However, under the P4 program, the team developed a new definition of pollution prevention that fostered the development of 150 new ideas. Ms. Cardenas complimented Lockheed Martin on its past performance at Air Force Plant Number 4, and said that EPA wants to provide more incentives for even further progress. She noted that the process of re-examining regulations in detail on a facility-specific basis (both by regulated entities and EPA) can yield very productive P2 opportunities. Companies are in the habit of complying without looking for room for pollution prevention. Mr. Tate observed that the most recent XL guidance published in the Federal Register discusses this issue under the sections on Superior Environmental Performance. Ms. Cardenas said that P4 is a very exciting program, and XL is a very challenging one, and that there is room for significant transferability between the two.

State of Texas' Involvement
Mr. Rosenthal asked how the State of Texas was involved in reinvention initiatives. Mr. Trace Finley (TNRCC) answered that the Executive Director of the TNRCC is looking into more effective ways to permit facilities, and at re-directing resources away from paperwork and permitting and into enforcement and monitoring. The agency is currently considering a proposal for general multimedia permits. Mr. Finley added that in the last five months, the TNRCC has been strongly encouraged by Region 6 to re-dedicate to these kinds of reinvention projects. Ms. Cardenas affirmed that it is extremely valuable to have states as a partner in these initiatives.

Background Materials from EPA Headquarters
Ms. Cardenas next reviewed the materials from EPA Headquarters, including the latest Project XL Federal Register notice and a factsheet explaining major changes in the notice. Ms. Cardenas also briefly summarized the status of XL projects in the region. She noted that the materials provided to participants included summaries of the national XL projects with completed FPAs. Portions of the administrative records collected for these projects are on the Internet website.

Mr. Campbell asked how close EPA was to selecting its 50 XL projects nationwide. Mr. David Bond (EPA Region 6) answered that nationwide there are four projects with final FPAs, and around three to nine projects in the "in between" stage. Mr. Gary Smith (EPA Region 6) said that early XL project proposals were somewhat disadvantaged, because guidance from EPA only became available this April. He said that new project proposals are progressing much faster and more smoothly. Ms. Cardenas added that Fred Hanson, Deputy Administrator of EPA, put forth a goal of six moths to draft and sign an FPA, but the Berry project is the only project that has achieved that deadline to date. Region 6 is hoping to streamline this process better and achieve timeframes of 6-12 months in the future.

Ms. Cardenas noted that Region 6 is making an effort to educate its own staff about Project XL. The region has developed a draft training module, which it plans to start providing to Region 6 employees this month. The next step will be outreach to the states. Currently, only Texas and Louisiana are active in the XL program within the region, and she would like to see Oklahoma, Arkansas, and New Mexico participate as well. Mr. Scott Fetter (Lockheed Martin) said there is some hesitancy to participate because of a perceived lack of guidance on how the program works, and how long it will take. Mr. Rosenthal said that XL needs some "early wins" so that companies can see that the process works. Mr. Smith said that EPA appreciates Lockheed Martin's comments, and observed that these types of informational meetings have provided Region 6 with a lot of information from the states and every company that has attended.

Ms. Cardenas stated that XL is a resource-intensive process, and that team building, cooperation, and trust are vital factors. Participants need to be honest about what they want out of the process. Mr. Smith agreed that candor is important, and said that Region 6 is happy to tell companies' the strengths and weaknesses of their proposals and recommend changes before they are brought to EPA Headquarters for selection/non-selection. Ms. Cardenas noted that one major component of the XL process is not included here, which is the public. The biggest challenge in XL is working with the public. Mr. Milt Rindell (Air Force) asked if EPA identifies public participants. Ms. Cardenas answered that the stakeholder development process is up to the facility. However, she recommended that 30 or less direct participatory stakeholders is most feasible, but this decision is up to the company. Other stakeholders can be given "commenter" status but not be direct participants. Ms. Cardenas said that usually the state participates, as well as national and local environmental groups. Mr. Tate confirmed that the company decides who and how many stakeholders it wants to invite to participate.

Mr. Campbell asked if the Region 6 training Ms. Cardenas mentioned was only for EPA employees. Mr. Fetter observed that stakeholder participants will need to be trained. Ms. Cardenas answered that EPA does provide contract dollars for some activities. For example, technical assistance is available to educate stakeholders, train companies in stakeholder involvement techniques, and completion of meeting minutes by contractors. Facilitation of meetings is the responsibility of the company after selection. Mr. Fetter observed that the April Federal Register notice encourages the use of model plan for public participation developed by the EPA National Environmental Justice Advisory Council. He said this plan was not available on EPA's XL Internet site. Mr. Bond provided Mr. Fetter with a hard copy of this document. Lora Siegmann (ICF Incorporated) agreed to make this plan available on the EPA Headquarters Project XL site.

Groundrules Development and Facilitation Issues
Mr. Fetter asked if there was any EPA guidance on groundrules development. Ms. Cardenas said Region 6 was working on pulling together some materials on groundrules that have been developed in the past. For example, examples of groundrules developed under the P4 program are available, but the P4 program did not involve Project XL's public participation aspect. She emphasized that it is very important to have groundrules in place by the end of the first kickoff meeting, and that a strong facilitator makes this process more effective and efficient.

Mr. Fetter asked if EPA would provide a third-party facilitator. Ms. Cardenas said that a contractor facilitator can be provided for the initial kickoff meeting. Companies can negotiate with this person or with another contractor for future meetings if they choose. Mr. Fetter asked if other companies have used third party facilitators. Ms. Cardenas said yes, and suggested that Lockheed Martin might want to talk to Intel about their experience. Mr. Tate replied that Union Carbide did not use a facilitator from outside the company. Ms. Karen Scarborry (Wright Patterson) said that Lockheed Martin has trained facilitators. Ms. Cardenas said that she could provide Lockheed Martin with a list of names of people who have facilitated meetings in the other reinvention programs.

Mr. Rosenthal said he believes their project is very straightforward, and he expects the process to be smooth because they have been talking with local community groups about it over the last two years. Mr. Finley cautioned that national environmental groups may have very different perspectives from state or local groups. He recommended that the company establish in its groundrules a cutoff date for participation. Once that date is past, new groups cannot participate. Ms. Cardenas agreed that it is crucial that all participants be at the table from the start. Mr. Finley asked whether EPA expected Project XL to be consensus-based, like EPA's Common Sense Initiative. Ms. Cardenas answered no, consensus is not a requirement, it is up to the company to choose what method of agreement to adopt. Mr. Smith added that public participation is the wild card, and Mr. Tate said it is important to know your community. Mr. Rosenthal said that they know their local groups, but are not familiar with the national environmental groups. Ms. Cardenas said hostile groups may not stop a project, but they could slow one down. Mr. Tate emphasized that the key is early engagement of the broad spectrum of interested groups.

Project XL Process
Ms. Cardenas distributed a draft of Region 6's XL training module. She then discussed the roles and responsibilities of EPA regional and Headquarters staff. She said that a Headquarters staff person is assigned to every project, who then acts as a co-lead with her for projects in Region 6. An internal regional workgroup is formed for every project, and the membership is chosen based on the type of project and environmental media involved. She said that regional participants include Mr. Bond, Mr. Smith, Ben Harrison (ORC), Joyce Doubleheid (Federal Facilities), Robert Todd (Air Toxics), David Garcia (Title V), and Elvia Everson (aerospace NESHAP compliance). A number of these workgroups members would remain involved in the process and attend meetings after selection.

Mr. Fetter asked if Mr. Finley was going to be the direct participant from the TNRCC on air toxics for this project. Mr. Finley answered that he would bring in technical air toxics staff member to fill that role. Mr. Fetter said it would be important to have state air toxics people participating, and Ms. Cardenas agreed.

Ms. Cardenas described the "pre-selection" process. She said that a "pre-vote" is held by telephone with Headquarters reviewers and regional staff, and then the office directors communicate with each other regarding selection (Walter Walsh coordinates that process at Headquarters). Regional staff put together a draft selection letter and technical supporting documentation. The final selection letter is signed at Chuck Fox's office at Headquarters and then mailed to the company. Ms. Cardenas said the quickest this process has proceeded has been 30 days. Mr. Fetter asked who exactly receives the letter. Ms. Cardenas said it is sent to the name on the cover letter submitted with the proposal. Mr. Rosenthal inquired if Lockheed Martin could contact Ms. Cardenas to find out the status of the selection, since the letter will be sent first to the Department of Defense (DOD). Ms. Cardenas said yes, Region 6 asks Headquarters to fax them a copy of the letter after it is signed, and she could fax it to the attendees at today's meeting. Mr. Rindahl asked if the selection letter has an expiration date, and Mr. Tate answered that this can be part of the selection letter. Mr. Bond observed that companies usually had difficulty meeting these dates in the past. Ms. Cardenas added that an expiration date was not included in the most recent project selected in Region 6, PCS Nitrogen, on the assumption that the Region would attempt to streamline the process as much as possible. Ms. Cardenas said that the slow down usually occurs when the company has to take the letter to the corporate level to obtain funding and approval before moving forward.

After a proposed project has received a selection letter, the next step is publishing the public notice. This notice must be published at least 30 days prior to the date of the public kickoff meeting. Ms. Cardenas recommended that the kickoff meeting be a two-day event, with a plant tour held on part of the first day. The rest of the first day and the second day can be devoted to how the process will work for that project, who the players will be, and developing the groundrules. Mr. Fetter and Mr. Rosenthal emphasized that their proposal is very time sensitive. Ms. Scarborry pointed out that this initiative is all about streamlining, and Mr. Rosenthal said he was trying to anticipate potential sticking points like moving paperwork through DOD. Ms. Cardenas said that was one of the reasons Ms. Doubleheid is included on the regional workgroup for this project is because she can act as a liaison with DOD.

Ms. Cardenas asked whether Lockheed Martin or the Air Force was the project lead. Air Force Plant #4 is a government-owned, contractor-operated (GOCO) facility. After some discussion, it was resolved that Mr. Fetter at Lockheed Martin should remain the primary point of contact. Ms. Cardenas noted that EPA is responsible for maintaining the administrative record for the project (e.g., minutes of meetings, public notices, all letters exchanged, etc.).

Mr. Finley asked if the state is responsible for contacting national environmental groups. He referred to the handout that mentioned a state responsibility of notifying stakeholders. Ms. Cardenas answered that the state could assist the company in this matter, but that the statement in the handout is actually referring to the state's responsibility to inform relevant State of Texas offices and employees who may have a stake in the project.

Ms. Cardenas encouraged Lockheed Martin to continue discussions with the region prior to submitting its proposal to EPA Headquarters. Mr. Fetter asked if Ms. Cardenas anticipated their proposal needing further changes prior to submission. Ms. Cardenas answered no.

Ms. Cardenas noted that EPA is working on boilerplate language for FPAs, which she hopes will be available as a handout soon. Mr. Fetter agreed that information would be useful. Ms. Cardenas said that examples of completed FPAs are available, but she suggested that the boilerplate language would be better to use as a baseline. Mr. Smith said what the region is working on are examples of useful clauses which may or may not be included in any particular FPA. Mr. Fetter asked if "minimum FPA elements" will be included. Mr. Smith said no, just suggestions, because each individual FPA develops through its own unique process with stakeholder input. Ms. Cardenas offered that there are still perhaps certain components that must be included. Mr. Smith said that any required FPA components have to do with the seven XL criteria; you would expect one or more clauses related to those specific criteria in every FPA. The FPA may also include a termination clause, but this would not be in traditional legal terms since FPAs are not contracts. Mr. Fetter mentioned the Memoranda of Agreement (MOA) between DOD and EPA, and asked if this agreement would need to be included in the FPA. Mr. Smith said this had not been discussed, but in general FPAs avoid liability issues. Mr. Fetter provided a copy of the MOA to Region 6. Mr. Tate said EPA encourages each company to build its own FPA, since it is the company's document. He clarified that the enforcement terms reside outside the FPA in the implementation process. Mr. Smith affirmed that the FPA is a protocol agreement.

NOV Discussion
Mr. Rosenthal asked what happens if the facility receives a Notice of Violation (NOV) while participating in the Project XL process. Ms. Cardenas answered that, after selection, parties are obligated to notify each other and the XL process will pause until the problem is resolved. Mr. Rosenthal said that Lockheed Martin is not aware of any such circumstances right now, but he said "hiccups" can happen. Mr. Tate said that EPA just went through this kind of a scenario with another company. Projects are not accepted into XL with outstanding violations. It is unclear what happens if a violation occurs during negotiations. Mr. Rosenthal said that resolution of the problem is key. Mr. Smith emphasized that only if a problem cannot be resolved in a timely manner will the process possibly stop completely.

Mr. Finley stressed that, as soon as a company discovers a violation, they should immediately notify their state and EPA XL contacts. He said the company needs to be proactive. Mr. Smith agreed that it is a potentially embarrassing situation for the region to go out and support a proposal to Headquarters, only to find out later that there are violations issues. Mr. Rosenthal said that there does not appear to be unanimous approval of XL within EPA, and asked if some offices would use NOVs against a facility to put a halt to the XL process. Ms. Cardenas said no. Mr. Smith suggested the facility would notice a change in the regulator if this were the case.

Mr. Rosenthal said he broached this issue because Federal facilities were used as an enforcement target ten years ago when EPA could not take on a state itself. Ms. Cardenas asked the company to raise this issue to her office if such a problem arises. Mr. Rosenthal said the specter of this problem might discourage other facilities from participating. Mr. Smith recalled a situation where EPA permit staff were vehemently opposed to an XL proposal, but they did not carry their opposition beyond Project XL. Mr. Smith said that in his experience, staff may have specific comments on specific projects, but he has not seen any examples of staff causing problems for a facility because of a dislike of Project XL overall. Mr. Tate noted that, in the first guidance on XL, it was made clear that issues discussed during negotiation of an FPA can not be used as the basis for an enforcement action.

Mr. Fetter asked if the company publishes a final FPA announcement. Ms. Cardenas and Mr. Tate answered that EPA is responsible for that function. Mr. Gary added that this does not preclude the company from its own public relations and outreach efforts.

Mr. Rindahl asked what the status was of the Vandenberg XL Project. Ms. Cardenas said that project was close to signing its FPA. Mr. Fetter said he thought they had gone through two or three draft FPAs, but were still not ready for public notice. Mr. Rindahl noted that the Vandenberg project began in October 1995. Mr. Fetter replied that their project is relatively complicated and involves Title V relief.

Afternoon Session

DOD/Lockheed Presentation
Mr. Rosenthal thanked everyone who participated in the tour of Air Force Plant #4 the previous day. He then proceeded with a presentation of the ENVVEST project. First, he displayed a map of the over mile-long site, showing how raw materials are brought in to the plant from the south and finished airplanes are brought out from the north. This plant was originally designed to build WWII bombers. The plant has 16 plant booths, which are primarily dry filter single stage booths, but there are some waterwall booths in the big plant hanger.
Background on Air Force Plant #4
In 1984, the corporate president assessed the plant, and decided that the only feasible business solution to address the problem of environmental regulations and liability was to set a zero discharge goal. A formal environmental resources management program was instituted. The program initially focused on determining a baseline for hazardous waste generation at the site, and then examined TRI emissions after that program began in 1987. Eventually, the program expanded its baselines to include a multimedia approach and a partnership with Air Force for research and development. In 1991, a formal hazardous material management program office was established. Mr. Tate asked how many staff are provided to this office. Mr. Rosenthal answered 13, with two currently on loan to Kelley Air Force Base.

Mr. Rosenthal said the Lockheed Martin has adopted a goal-oriented approach to pollution prevention, advocating the use of metrics to measure progress. More than 70 completed projects have been accomplished. He noted that many of these projects have been extremely research intensive, and have often involved source reduction. In some cases Lockheed Martin has patented the products of this research. The program's initial successes were focused on easier wins (e.g., PCBs removal), and is now focusing on more major scale initiatives like cleanup of old underground storage tanks, which require a major investment on the part of the Air Force. After U.S. Today announced that this plant was the highest military emitter of volatile organic carbons (VOCs) in 1992, the plant redoubled efforts to reduce VOCs with a new goal of completely eliminating ozone-depleting chemicals (ODCs) by March 1995. At this time, there are still some ODCs in air conditioning units, but the Air Force is working on that area as well. The plant has achieved a 99% reduction in TRI chemicals, a 99% reduction in "EPA 17" compounds (a voluntary EPA program), and has achieved significant gains in "keeping score."

Mr. Jim Colon (EPA Region 6) asked what were the primary materials of focus. Mr. Rosenthal answered that wipe solvents and vapor degreasers were large components of this reduction, but other of the 70 projects contributed as well. The plant has also achieved a 98% reduction in water contaminant discharges (primarily chrome, which is the major contaminant of concern for their discharges), and has eliminated all non-core processes for the fabrication of airplanes at this plant. Thus, the plant has reduced VOC emissions and overall air emissions, achieved a 90% reduction in manifested wastes, and recycles 48% of the nonhazardous materials it generates. Areas targeted for future reduction include: EPA 33/50 Chemicals; manifested wastes (e.g., heavy metal sludge with chrome in it); NOx from boilers; and chrome. An advantage for the plant is that Lockheed is a large technological company able to transfer information throughout the industry.
The ENVVEST Proposed Project

Mr. Rosenthal summarized that the basic point of the "ENVVEST" project is to trade compliance activities for a gain in pollution prevention. He said the company wants to shift focus from an end-of-life control to pollution prevention. The company believes this will produce cheaper and cleaner results.

The company selected chrome as one of the foci for this project because it is widely used in aerospace government facilities, it represents the largest remaining EPA 17 chemical in use at Air Force Plant #4, and it is a workplace hazard. The chrome NESHAP requires mist suppression, maintenance of workplace standards, and significant monitoring and reporting activities. The aerospace NESHAP mandates two-stage air filters, as well as inspection, monitoring and reporting activities. The cost expected to initially comply with the chrome NESHAP is $167,000, with a recurring cost of $42,000. The cost expected to comply with the aerospace NESHAP is $2 million, with a recurring cost of $214,000. Control costs for these rules are high, with the aerospace NESHAP expected to be $7.5 million per ton (based on a ten year amortization), and the chrome NESHAP at $427,000 per ton.

Lockheed Martin proposes to replace the sulfuric acid anodize/low chrome seal process to eliminate the need to comply with the chrome NESHAP for this process. This step is expected to eliminate 11 pounds of air emissions and 13,850 pounds of waste per year in sludge. Lockheed Martin is not requesting any regulatory relief for this step. The company also proposes to eliminate or reduce the use of chrome-containing coatings used at the plant with the best, most technically feasible alternatives. Using this approach would eliminate 90 pounds of air emissions and 1,040 pounds of waste per year. Mr. Fetter clarified that the "fall out" from painting is what contributes to the production of large volumes of sludge waste. Finally, Lockheed Martin also proposes to replace its tri-acid cleaning tank and replace the use of chromic acid with ferric sulfide, which would eliminate 90 pounds of air emissions and 3,600 pounds of waste per year. The company has already closed one tank, and is ready to test this approach. This tank is not currently regulated but contributes to emissions at the site.

In exchange for eliminating these sources of chrome, Lockheed Martin plans to request an exemption (for the existing facility) from the requirement of the aerospace NESHAP to install two-stage filters across entire plant. The $1.6 million capital investment saved would instead be used to complete replacement of old boilers at the plant. This approach would eliminate 800 tons of potential NOx emissions from the plant annually. Mr. Fetter explained that the TNRCC uses "potential to emit" to set permit conditions, but that Lockheed Martin pays for "actual emissions." Mr. Fetter said Lockheed Martin has calculated a potential emissions reduction of 800 tons per year, and an actual emissions reduction of at least 100 tons per year. Mr. Finley observed that the old boilers are "grandfathered" and not permitted, but the new boilers would be, and Mr. Fetter agreed.
Discussion of ENVVEST Project

Ms. Cardenas asked which pollutants were the drivers behind Plant 4's classification as a major source. Mr. Fetter said that MIBK and toluene throw the plant into the major category.

Mr. Rosenthal stated that he felt that the next significant issue at the Federal level will be global warming, and the proposed new boilers would reduce greenhouse gases. Mr. Fetter said that the current boilers have actual emissions of 23,000 tons of CO2 per year, based on consumption of natural gas fuel, and that the new boilers would have potential emissions of 400 tons per year with actual emissions ranging from 200-300 tons per year.

Mr. Rosenthal said that Lockheed Martin is conducting research and development on these initiatives right now. Lockheed Martin is getting ready to start construction of the sulfuric acid anodizer, and expects to qualify this new equipment in 1998. Construction is anticipated to begin in November and to be complete by April. The qualification process will run from April to December 1998, after which the company plans to shut down the old anodizer.

Mr. Rosenthal emphasized that it is difficult to persuade the Air Force to use new coatings, because the current F-16 coatings meet established performance criteria very well. However, a significant benefit is anticipated from transferability of these new coatings within the industry.

Lockheed Martin is looking towards the F-22 program and the Joint Strike Fighter (JSF) program procurement. The majority of benefits from these new coatings will be realized in these new programs after the F-16 program is over. Mr. Tate asked if Lockheed Martin anticipates eliminating chrome sources at the plant after the year 2002. Mr. Rosenthal answered that the company is working on researching replacements for all chrome-containing coatings in use at the plant, but in this proposal is only referring to eliminating two of these coatings. The remaining chrome-containing coatings at the plant would still be regulated under the chrome NESHAP. Mr. Fetter added that the two coatings targeted by the company are the two that are most commonly used in the industry at large. He said that the other five chrome-containing coatings are more specialized for the F-16.

Mr. Fetter said that the cost estimates in their proposal are based on 1994 production levels. In 1994, the plant produced approximately 100 F-16s, which is a good example of the highest level that could be expected. Mr. Fetter said they thought using a high-production year would be a good baseline for comparison purposes.

Mr. Tate complimented Lockheed Martin, and said EPA tries to encourage proposals to include emission and cost baselines, but many do not include this kind of analysis. Mr. Rosenthal said that the company would be happy to share how they calculated their numbers and the emission summary for 1997-2001 relative to the 1994 baseline. Mr. Fetter stated again that the numbers presented today are based on 1994 production levels, and that a potential worst case might be no F-16 orders in 2001. Mr. Rosenthal said that the company's goal is to sustain the plant until the start of the JSF program. Ms. Cardenas asked what would happen if Lockheed Martin won that procurement. Mr. Fetter answered that Air Force Plant #4 would need to be refacilitated at that point, and its old equipment stock replaced. He stressed that if this scenario occurs, there will be new sources at the plant, and that the company is only requesting relief in the ENVVEST proposal for its existing sources.

Mr. Rosenthal said that the reductions in chrome wastes are what excites the company. Mr. Colon asked what factors would be needed to be upgraded for the JSF program. Mr. Rosenthal answered that the Air Force wants the JSFs to be built for the same cost as the F-16s. Because the JSF will be built radically different than the F-16s, the existing facility would need to be completely rearranged. Lockheed Martin and Boeing are currently in the concept design phase of the JSF. The final materials and composition will not be decided until after the selection for second phase, the engineering and material design contract.

Mr. Fetter said that selection for the JSF will not occur until 2001-2006 or 2007, and high rates of production would not be anticipated until 2008. Basically, the high-rate filters would be in place and protecting the environment through a very low-rate production period until production increased later on. Ms. Barbara Driscoll (EPA OAQPS) asked if production of F-16s is zero in 2000 but Lockheed Martin is still working on coatings with no new orders, what is the point. Mr. Fetter said Lockheed Martin will continue to invest in research and development because the company still needs to market itself. Ms. Scarborry added that there are other new programs and customers to market. Mr. Rosenthal said that other foreign countries may be interested; for this proposal, Lockheed Martin only used numbers for what is on the books currently. Mr. Rosenthal said that, regardless of other potential customers, the company does not expect to exceed 1994 production levels.

Mr. Rosenthal displayed a chart depicting costs and emissions with and without ENVVEST. Yearly air emission reductions are higher with ENVVEST than without, and similar reductions are achieved regarding sludge production and NOx emissions. The regulatory relief Lockheed Martin is asking for will enable the company to re-direct funds from installation, monitoring, and recordkeeping under the aerospace NESHAP. Mr. Rosenthal noted that it took a long time to move this project through DOD, and that the timeframe left for implementation of this proposal is now very short. Lockheed Martin needs an immediate extension agreement in place by November to be compliant by the existing compliance date. Lockheed Martin has already submitted this extension request to Region 6. It was clarified by EPA that, by mandate, MACT extensions can only be provided for one year. Lockheed Martin confirmed that the extension would only cover the plant from September 1998 to September 1999. After that point, the company hopes to have an FPA in place and signed by fall 1998. Mr. Rosenthal emphasized that this proposal will be an excellent opportunity for pollution prevention and cheaper, cleaner results, but that timing is critical.

Mr. Michael Goo (EPA Headquarters) suggested that an FPA could be in place sooner than the fall of 1998, and then perhaps the legal mechanism could follow quickly. Mr. Fetter said he understood that the legal mechanism would also need to be signed by that date, but Mr. Rosenthal said it was very helpful to have that clarification made. Mr. Fetter asked if these two efforts could be conducted in parallel. Mr. Goo said yes, they could talk about that further.

Mr. Campbell asked who would regulate the permit in Texas. Mr. Fetter noted that Title V is not in place yet in Texas. Ms. Cardenas answered that an agreement could be negotiated between the company, EPA, and the state to issue a permit before Title V is in place, and then the company could negotiate with Texas regarding the transition once Texas' Title V program is fully approved. Mr. Fetter asked if the permit for the whole facility should be negotiated or just for the affected processes. Ms. Cardenas said that the company could choose to negotiate for just a part of the facility, but that it would make better sense to negotiate the whole plant's permit so that the whole plant is on the same permit schedule. Mr. Campbell asked if it would be a state permit or an interim permit in this situation. Ms. Cardenas answered that the company would go through the permit process as if the state had full Title V approval from EPA. Mr. Goo suggested that an extension might need to be written in to the state's full program. Mr. Finley said his area is policy, but he will call someone in the air office.

Mr. Fetter asked if there were other options for enforcement besides Title V. Mr. Tate said that Region 6 and Headquarters had not yet discussed other options. Mr. Goo said he personally did not have strong feelings about this issue yet, and mentioned that general options included the permit approach; a site-specific rulemaking; or a national rulemaking. He said he assumed the company would not prefer an option with enforcement discretion, and that there are legal issues with the rulemaking approaches. Mr. Fetter agreed that the company would not be comfortable with a site-specific rule, and would prefer a Title V or state NSR permit. Mr. Goo said that would probably be EPA's preference too, but perhaps there would be further complexities to consider. Mr. Tate said that counsel from Headquarters and Region 6 would be conducting a conference call to discuss this issue this week.

Mr. Goo said that it is problematic for EPA that the chromic acid cleaning tank is not regulated. He said it is a strong Agency policy not to bundle regulated entities with unregulated entities. Mr. Fetter said he thought that was what new initiatives like Project XL were for. Mr. Goo said that this was a statutory issue and that there are therefore legal obstacles and risk to discuss between the region and Headquarters. Mr. Fetter asked what the statutory problem was, and Mr. Goo answered that Section 112i of the Clean Air Act states that after the effective date of a standard, a source has to comply; e.g., if you are a paint booth, you have to comply with MACT. Mr. Fetter asked if this applied to a production source and cleaning tank that is part of aggregate production at a facility. Mr. Goo answered that it is hard to make that argument since EPA is not regulating that tank specifically. Mr. Fetter said that the aerospace MACT regulates specific types of sources. Mr. Goo provided the extreme example that it is not possible to bubble emissions from two different facilities, similarly it would be difficult to bubble emissions from two different sources, one of which is not regulated. He said they could explore the legal opportunities to bring the tank into the regulated source category. Mr. Rosenthal asked if there is an alternate MACT option similar to the alternative RACT option. Mr. Goo answered yes, but that this would have to occur through the formal rulemaking process. Mr. Fetter said that would not be fast enough. Mr. Goo clarified that the rulemaking could occur through the XL, not the usual, process, such as the site-specific rulemaking for the Merck project. Mr. Rosenthal asked how that project was moving. Ms. Cardenas answered that the rulemaking was proposed, comments are being addressed, and then the rule will be finalized. Mr. Goo said that the permit approach may hold the most promise, but it involves its own particular features including the citizen right to protest, etc. Lockheed Martin thanked EPA for the information, and offered to email Mr. Goo the ENVVEST presentation.

Mr. Goo asked if it were possible that chrome emissions would decrease in 1998, but then increase slightly in 1999 before more reductions are achieved in 2001. Mr. Fetter agreed that might be possible. Mr. Goo remarked that it made sense not to invest in capital improvements to the plant when the whole plant might shut down in 2001, but in the overall sense there is also no long-term environmental reductions achieved, either. Mr. Goo asked if the new coatings would be used on the JSF. Mr. Rosenthal said definitely, if Lockheed Martin wins the contract.

Mr. Tate asked that, since the cost and emissions reductions are based on 1994 production levels, does this mean that these numbers are overstated for 2000, when production drops off. Mr. Fetter and Mr. Rosenthal answered yes. Mr. Tate asked if these numbers could be adjusted for current levels. Mr. Fetter said yes, but that this would just reduce the numbers proportionately, and that if the company won any other contracts the numbers would have to be adjusted again. Mr. Rindahl noted that the company is working on three foreign contracts right now, and Ms. Scarborry agreed that these were highly likely candidates for future production orders or in-depth retrofits of existing vehicles.

Ms. Driscoll asked for clarification on Wright Patterson's role. Mr. Rindahl said they are the owners of GOCO facilities. Ms. Driscoll asked if they could promote use of these chrome-free products. Mr. Rindahl answered yes, they have five or six crossfeeds right now with industry and academia, and part of their job is to make sure industry and the Air Force are talking to each other. Ms. Driscoll asked how far this technology could be transferred beyond the facility, and she stressed that EPA would want a commitment from the Air Force regarding facilitating this transfer. Mr. Rindahl said that as long as the technology was not proprietary, the Air Force could distribute it. Mr. Fetter said that the coating technology would not be proprietary. Mr. Rindahl said that if successful chrome-free coatings are developed, then the Air Force will work to change its technical orders; this is what happened with ozone-depleting chemicals. Mr. Rindahl added that there is a joint group with the Navy that is also looking at chrome (not in coatings), and that the National Defense Center for Environmental Excellence in Johnstown, Pennsylvania is also researching coating alternatives.

Ms. Driscoll asked if Lockheed Martin was optimistic about implementing these new coatings. Mr. Fetter answered that research and development is certainly underway, but the operational testing is still ahead. Ms. Driscoll asked what a typical time frame might be for implementation. Mr. Rosenthal said that he has heard from two to five years, and Mr. Fetter agreed that it is a complicated, step-by-step process to qualify a new product for the Air Force. Ms. Driscoll said that it would nice to see the project discuss the transferability issue more, and Mr. Fetter said he would provide more information. Mr. Tate recommended that the company fold this "commitment to keep on working towards this transferability goal" into its FPA.

State and Source Objectives

Ms. Cardenas explained that the next part of the meeting would be a discussion of the objectives of the state and source (i.e., company) regarding this project. She said this exercise will need to be repeated at the kickoff meeting to include the perspectives of stakeholders.

Mr. Fetter summarized Lockheed Martin's objectives as follows: an enforceable agreement, including implementation mechanisms, by October 1998; an extension agreement by September 1997; a diversion of compliance funding to pollution prevention for the older boilers; a straightforward, simple process; and a reduction in chrome waste production.

The Air Force's objective is chrome alternatives transferability. Mr. Tate suggested that the fact that the Air Force has crossfeeds set up enhances the transferability issue, and Ms. Scarborry said that it is up to the government to make sure technology is transferred. Mr. Smith emphasized that Lockheed Martin needs confirm for EPA that the technology is potentially transferable, but does not need to be the entity managing the transfer. Mr. Fetter agreed the company could do that. Mr. Rindahl said that chrome has occupational health implications, and therefore another Air Force objective would be to reduce occupational health problems. Mr. Surendra Joshi (Air Force) agreed, especially in light of the OSHA chrome initiative.

Mr. Finley said that the TNRCC/state objectives are: reducing NOx emissions in an ozone nonattainment area; supporting more flexibility for regulatory entities; working cooperatively with industry and Region 6 on a successful project (i.e., relationship building); and being responsive and responsible.

Mr. Rindahl asked where public acceptance would fit. The group agreed that public acceptance is everyone's objective, and that this is a part of the partnering process.

Participation

TNRCC will partner with Region 6, the GOCO facility, and the community. TNRCC expects the support of its technical staff and executive-level managers. Mr. Finley emphasized that if EPA agrees, Texas will support the project.

Executive-level support is also expected from Lockheed Martin and the Air Force. Both DOD and the Air Force support the ENVVEST project and the XL process, as indicated by the attendance at this meeting. Mr. Rosenthal said Lockheed Martin is excited about the project because it is a good business decision with other strong benefits; however, if the burden to implement the project outweighs the benefits then there will be a problem. Dr. Thom Rennie (Air Force) said this project has high-level support at the Department of Defense.

Stakeholder Involvement Plan

Lockheed Martin's Stakeholder Involvement Plan was distributed to attendees. Mr. Fetter said that a plant union representative has agreed to participate, and the Fort Worth Environmental Council has committed participation of at least one member, who will keep the rest of the Council informed. The company is trying to involve the Sierra Club in Austin, and is hoping that publishing a notice of the project in two newspapers will bring in other participants. No citizen groups are on board at this time. TNRCC and EPA will be involved.

Mr. Finley asked if any national organizations were contacted. Mr. Fetter said he thought the local organizations would be a bridge to their national chapters. Mr. Finley said that may not work, as happened with 3M's project. He said he recommended inviting national groups that may be interested. Mr. Rosenthal asked if EPA or TNRCC recommended any other national groups other than the Sierra Club or the Environmental Defense Fund. The TNRCC recommended calling the Office of Regulatory Reinvention for national contacts. Mr. Rindahl suggested the National Pollution Prevention Roundtable, which has a national network. Mr. Finley said Lockheed Martin could send letters to national groups based in D.C. (e.g., the NRDC, EDF, and Sierra Club) and offer them a seat at the table. Dr. Rennie offered to facilitate this process. State environmental contacts should still be invited, including Mr. Kramer. Dr. Rennie and Mr. Finley will contact Mr. Andrew Neblit, the head of pollution prevention in Texas, for further stakeholder contacts.

Ms. Cardenas said that assistance is available for the stakeholder development process. She said that EPA can provide contractor assistance for developing the plan, and training is also available to train the stakeholder group on team building and processes. For the initial meeting, contractor assistance can be provided for facilitation. Mr. Fetter agreed that a third party facilitator would be needed to maintain objectivity. Ms. Cardenas added that EPA has already received proposals from organizations bidding to provide technical assistance to projects (one-time use, $25,000 per project).

Mr. Rosenthal asked how contractor assistance works. Ms. Cardenas answered that EPA already has contract mechanisms in place, and a company would need to go through her if it wanted assistance. She said she would facilitate with the contractor to set up meetings, etc. Mr. Rosenthal said he would like to pursue that option. Ms. Cardenas suggested pursuing this point further after selection. Mr. Rindahl noted that Lockheed Martin is ahead of the curve, having already developed a plan, and Ms. Cardenas agreed. Mr. Bond said that EPA prefers this method of having a stakeholder involvement plan as soon as possible.

Mr. Fetter said the public notice he drafted is not through internal review yet. He will work further on the on project summary. He asked where the notice would be located in a newspaper. Ms. Cardenas answered that it would go in the same place as an announcement of a permit notice. Mr. Fetter said they generally put a short notice in the public section to get a reader's attention, and then put more detail in the legal section. Ms. Siegmann said she would fax Mr. Fetter a sample public notice.

Timeline and Project Scheduling Issues

Mr. Fetter stressed that Lockheed Martin would like an approval letter by the end of August. Mr. Bond and Ms. Cardenas agreed this would be ideal, but noted that the last letter took three weeks to be signed. Lockheed Martin's intent is to publish the public notice in the newspapers as soon as they receive a fax of the selection letter. Mr. Rosenthal said he was worried about expending resources if the company is not granted its one year extension; Ms. Everson has 90 days (until October 30) to let Lockheed Martin know if their request is administratively complete. Region 6 will coordinate this issue.

Ms. Cardenas provided an example of an agenda for a 2-day meeting, which included a half day meeting and tour at facility on the first day. Lockheed Martin discussed the logistics of providing a tour, and Mr. Smith suggested using a videotape. Dr. Rennie said he thought there was not enough time left for that. Dr. Rennie asked whether the meeting should be held at an EPA site, and Ms. Cardenas said that the meeting should be held at or near the facility. Mr. Rosenthal wondered if it would be feasible to require stakeholders to RSVP if they planned on attending the tour, to make the tour more manageable.

The group outlined the following project timeline:

Receipt of an acceptance letter before Labor Day, September 1, 1997.
Coordination with EPA regarding the NESHAP extension, which was submitted in mid-July 1997; EPA's response due in 90 days in October 1997.
Public notice published as soon as possible after selection; the 30-day period after publishing the notice would end on approximately October 1, 1997.
Kickoff meeting sometime in early October (e.g., October 2-15).

Mr. Tate emphasized that stakeholder groups are not Federal Advisory Committee Act (FACA) groups, and therefore cannot provide advice to EPA. Therefore, legally, EPA cannot "control" stakeholder groups by providing boilerplate language, agendas, etc. Mr. Tate said it was possible that a resolution on the NESHAP extension might not be available until after the kickoff meeting; however, discussions with air toxics staff indicate that this extension is fairly common.

Mr. Fetter stated that he expected direct stakeholders would meet approximately every other week. Mr. Rosenthal asked if the point of the first meeting was to introduce the whole crowd to the project, and then winnow down to a core group of participants. He also asked if the initial group develops the ground rules. Mr. Fetter said he thought, after studying Intel's process closely, that the direct participants developed ground rules, and that the next big formal public meeting is held when the draft FPA is available. Ms. Cardenas suggested characterizing the different components of the project into subgroups. Mr. Fetter said he hoped that their simplified proposal would not require subgroups. Ms. Cardenas said that she was referring to functional subgroups, and that in the P4 program subgroups were formed around pollution prevention, outreach/communication, and regulatory flexibility. These subgroups accomplished work between meetings and produced results.

Ms. Cardenas cautioned that the company will need assurances from direct participants that they will come to all meetings, and that substituting will not be tolerated. Mr. Rindahl asked if this kind of commitment is what made the Texas Instruments project work, and Ms. Cardenas said yes, that was part of the resource commitment. Dr. Rennie asked if EPA Region 6 staff at this meeting would come to the kickoff meeting. Ms. Cardenas answered yes, and that other staff might also attend. Ms. Cardenas said she was not sure how active Ms. Everson would be, and Mr. Fetter said he hoped she would be involved. Dr. Rennie suggested considering an initial meeting on a Saturday, after which the group could when to hold its regular meetings. Ms. Cardenas said that another issue that might come up is paying for stakeholder travel to meetings. Ms. Cardenas recommended that whatever DOD/Lockheed decides, they should be prepared to answer that question. Mr. Rosenthal said that they would try to hold their meetings locally.

Ms. Cardenas noted that the handout packet includes a process diagram as a general guideline to the steps in the XL process. This guideline has an optimistic timeline of seven months. Mr. Fetter asked if there is a 30-day comment period after the draft FPA is completed, and Mr. Bond said yes. Dr. Rennie observed that there is not much time left for modifying this plan, and that he expects it will be a process of leading stakeholders through the proposal. Ms. Cardenas said that the process will need to include developing assurances and an enforcement mechanism. She recommends holding objective-driven meetings with stakeholders. Mr. Tate agreed, and said this is especially important when you are drafting language with a group of people. Mr. Fetter said he plans to have a draft FPA available at the initial meeting. Mr. Smith suggested building into the groundrules acceptable limits for the editing and revision process. Ms. Cardenas also recommended having legal review throughout the process. Mr. Fetter said he assumed this was covered by EPA's participation. Ms. Cardenas said that state and company legal participation should also be included, and Mr. Fetter agreed.

Dr. Rennie asked if EPA or Texas were aware of any community negativism. Mr. Fetter said that is a risk in any public process. Mr. Rosenthal said he is aware of at least two groups (i.e., Kramer/Mary Kellogg and EDF) who have drafted letters. He said it was not inconceivable that a competitor might try to object, but unlikely.

Mr. Fetter asked who manages communications with commenters and the public. Ms. Cardenas answered the stakeholder group participants will need to decide what works best. She recommended using a "lead contact" approach for government participants. Mr. Finley offered to facilitate putting materials on the TNRCC website. Ms. Siegmann said that ICF maintains EPA Headquarters' Project XL website, and places materials for all projects on that site. Mr. Rosenthal asked if ICF was available for taking notes at other meetings. Ms. Cardenas said that meeting notes support would be available for the kickoff meeting, and that this support could be negotiated for other meetings.

Mr. Smith asked if Lockheed Martin planned to give the meeting facilitator voting status since s/he is called a co-chair. Mr. Fetter said no, and may change that language to refer to this person as just the facilitator. Mr. Smith asked if the company had built in a way to take questions from the general public. Mr. Fetter said they will have a microphone in a public auditorium. Ms. Cardenas said the stakeholder involvement plan looked good.

Next Steps

Ms. Cardenas said EPA's goal is to have pre-selection among Headquarters reviewers by next week, followed by a memorandum being conducted from the office director to the division director. Next, the selection letter will be drafted and sent for concurrence. The Headquarters technical review call will follow next week's Office of General Counsel call. Dr. Rennie asked if Ms. Cardenas could call Mr. Fetter after those calls, and she said if OGC agreed she would.

Ms. Driscoll suggested that the cost and emission numbers should be available to EPA reviewers when the project is discussed. Ms. Cardenas said that these numbers can be discussed after a project is selected, because selection is based on the XL criteria. She said that this proposal is already sufficient regarding the criteria, but that any other information Lockheed Martin could provide EPA would help. Mr. Fetter summarized that Lockheed Martin will provide EPA with an overview of the pollution prevention contract, as well and more details on how they calculated emissions from the anodized and cleaning tank processes. Ms. Cardenas also asked for more details on the RCRA savings. Mr. Rosenthal said that the facility will still produce a RCRA sludge, but it will contain one less contaminant, and Dr. Rennie suggested this might be too confusing to explain to stakeholders.

Ms. Cardenas suggested that Mr. Fetter consider how long it would take to complete a facility-wide Title V permit. Mr. Fetter said that process has already started, and that they have competed the source characterization part. Mr. Fetter wondered about submitting an incomplete permit. Mr. Rosenthal asked about the possibility of an NSR permit with a chromium cap from Texas just for the relevant sources, but Ms. Cardenas said that Title V will eventually cover that situation. Ms. Cardenas and Mr. Finley said that they will discuss these issues with state permit staff. The Lockheed Martin staff agreed to discuss this issue after the EPA counsel phone call.

Attendees
Name Representing Phone Number Fax Number
Bond, David EPA Region 6 214/665-6431 214/665-7446
Campbell, Bruce Lockheed Martin 817/763-7348
Cardenas, Adele EPA Region 6 214/665-7210 214/665-3177
Colon, James EPA Region 6 214/665-7457
Driscoll, Barbara EPA OAQPS 919/541-0164
Fetter, Scott Lockheed Martin 817/777-3791 817/763-7476
Finley, Trace TNRCC 512/239-5886
Goo, Michael (participated by phone) EPA HQ (OGC) 202/260-2808
Joshi, Surendra Air Force (ASC/EMC) 937/255-7716, x415 937/255-9985
McConkey, Diane (participated by phone) EPA HQ (OGC) 202/260-9311
Rennie, Thom Air Force (REO) 214/767-4678 214/767-4661
Rindahl, Milt Air Force (AFMC) 937/257-8469 937/656-1650
Rosenthal, Bill Lockheed Martin 817/777-6919 817/763-7476
Scarborry, Karen DCMDW (AFP#4) 817/763-4833
Smith, Gary EPA Region 6 (OECA) 214/665-7319
Tarbell, Randy Air Force (REO) 214/767-4677 214/767-4661
Tate, Ragan EPA Region 6 (ORC) 214/665-8020

 


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