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Dow Chemical Company, Freeport Texas

Letter from Richard Olson to Jon Kessler

The DowChemical Company
Midland, Michigan 48674

2030 Dow Center

August 9, 1996

U.S. Environmental Protection Agency
401 M Street, S.W. - Mail Code 4101
Attention: Jonathon Kessler
Regultory Reinvention Pilot Projects
FRL-5197-9, Water Docket
Washington, DC 20460


Dear Jon:

This is in response to your July 19 letter and our meeting on August 7 regarding The Dow Chemical Company's (Dow) Project XL application. We appreciate the time and thoughtful effort EPA is putting into the review of our remaining XL application. The August 7 meeting was especially useful to clarify what EPA needs to come to a positive decision on Dow's Texas Boiler Industrial Furnace (BIF) XL Project. This meeting exceeded our expectations in clarifying the remaining obstacles to preliminary approval. We now understand that the two potential barriers to this project's approval are: 1) our ability to address the two underlying concerns which gave rise to the questions in your July 19th letter and 2) the conflict between our proposed permit schedule and the permit schedule in Region VI's new combustion strategy. My understanding of the two underlying concerns are: 1) what are the environmental benefit of the project and 2) what regulatory flexibility does the project require.

We are in the process of developing the specific responses to the issues which gave rise to the questions posed in the letter. Some of the information is readily available and some is not. It seems that the intent of the request is to better understand the environmenal benefits of the project. We are creating a summary to more clearly identify the environmental benefits and regulatory flexibility necessary for a successful conclusion of our XL project application.

We appreciate your efforts responding to our Confidential Business Information (CBI) concerns. It is our intent to keep the information process open and minimize the amount of material which will be claimed as CBI. This will be done by removing unneeded CBI from our submittals as well as continuing to internally review potential CBI so we only make a CBI claim for information which could cause potential business harm if freely disclosed. We trust that the presentations we have made have provided EPA with much greater detail on the project which will allow Dow to achieve the project's environmental goals. We would be willing to provide this type of detail to others involved in the process if it would be effective in convincing EPA of this project's benefits.

Although we are encouraged by the potential environmental and economic benefits which may accrue from the regulatory flexibility offered by Project XL, there is a significant concern that the XL process itself may not be as efficient as the existing regulatory process. Given the uncertainty associated with new processes such as XL, it must be significantly more efficient to grant any incentive to XL applicants. some of the frustrations with the current regulatory framework are the amount of paper and transactional costs. The XL process should be more efficient than the existing system, or it looses value. however, we recognize that this is a new idea and we are willing to make some investment in the process in hopes of long term improvements.

The detail and amount of information requested in your letter causes us concern, we will make a good faith effort to provide appropriate information to answer the underlying concerns you identified in our meeting. We will also specifically identify the regulatory flexibility we seek as the other part of the XL process.

We will contact you in the near future with additional information. I am personally excited and committed to work towards a positive outcome on XL, one that provides superior environmental performance and economic benefit in an efficient fashion.


Ric Olson

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