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Crompton Corporation (Formerly Witco Corporation)

Minutes for Meetings Used to Develop the Final Project Agreement

OSi Specialties - Project XL September 24, 1996 Conference Call Minutes

I. Conference Call Participants

Dennis Heintzman Witco-OSi
Okey Tucker Witco-OSi
Tony Vandenberg Witco-OSi
Dale Koontz Witco-OSi
Brenda Gotanda Witco-Manko, Gold & Katcher
Tim Malloy Witco-Manko, Gold & Katcher
Cheryl Atkinson EPA Region III
Jim Cashel EPA Region III
Beth Termini EPA Region III (for part of the call)
Michele Aston EPA Headquarters
Britt Ludwig WV DEP
Jonathan McClung WV DEP

II. Summary of Discussions

A. Minutes Approved

The Workgroup reviewed and approved the minutes of the XL conference calls held on August 19, August 27, and September 10, 1996, as well as the minutes from the meeting held on September 5 and 6. Copies of the minutes will be sent out to everyone on the distribution list.

B. Project Duration and Reevaluation

1. The Workgroup reviewed and discussed the draft provision for the Final Project Agreement ("FPA") concerning project duration and reevaluation. Brenda explained that this section recognizes EPA's expectation that when the Miscellaneous Organic NESHAP ("MON") becomes effective, the superior environmental benefits of the Project may no longer be realized. At the same time, this section recognizes the uncertainties of future regulatory requirements and, therefore, establishes a procedure for reevaluation of the Project after the close of the public comment period following proposal of the MON.

2. The Workgroup agreed that this provision incorporates all of the issues previously raised by members of the Workgroup. Further, it will serve to encourage the parties to the FPA to identify and act upon additional opportunities to achieve superior environmental performance during the course of this Project. The reevaluation provision and the revisions to the language which were suggested during the conference call are appended hereto as Attachment 1. Beth noted that she may have additional comments on the language.

3. Cheryl noted that EPA is considering modifying the Project XL acceptance criteria to require applicants to make a more detailed initial proposal. She suggested that any provision for reevaluation of this Project should reflect those anticipated changes. Brenda noted that the draft FPA provision provides that EPA will reevaluate the Project in light of the Project Reevaluation Report and any criteria applicable to the XL projects at the time of reevaluation. The Workgroup agreed that such statement reflects the expectation that if there are changes to the XL criteria that those changes will be applicable to reevaluation of this Project. Michele Aston added that to the extent the anticipated changes to the XL criteria require more documentation, it is very likely that there will be substantial documentation for this Project as OSi intends to submit a Project Reevaluation Report and EPA will have had significant opportunity to review the Project during its implementation and operation.

4. Cheryl inquired whether OSi had specific plans for Project enhancement at this time. Okey explained that OSi intends to undertake a pollution prevention/waste minimization assessment to evaluate other opportunities to achieve superior environmental benefits, but has not, to date, developed any particular Project enhancement.

5. Brenda noted that this reevaluation provision will be inserted into the FPA as new Section VI and will be located between the section on Modification and the section on Termination. Brenda and Tim volunteered to contact Beth Termini, Julie Frieder, and Chris van Löben Sels for their comments on this provision.

6. Chris van Löben Sels did not participate in this conference call, however, he provided comments on the reevaluation provision to Brenda after the conference call. He stated that he would like to see both OSi and EPA do more to broaden this portion of the FPA and suggested that the FPA should contain more detail describing the efforts that OSi will take to enhance the Project and the regulatory flexibility that EPA will provide to OSi in exchange. For example, he suggested that the FPA should describe the precise nature of the waste minimization assessment which OSi will perform. In conjunction with this further refinement of OSi's plans, Chris stated that EPA should agree in the FPA to extend OSi's MON compliance deadline for a certain period of time. In short, he would like to see the exact parameters of the revised agreement worked out at the present, rather than at the time of reevaluation. He explained that this would benefit both EPA and OSi, in that EPA would have a more firm commitment on the action that OSi will undertake and, in exchange, OSi could rely on a date certain for its MON compliance deadline.
C. Performance Standards

1. Okey prepared and circulated an outline of ideas for use in developing performance standards. However, several representatives of EPA stated that they had not yet had an opportunity to address performance standards internally, and would need additional time to develop their expectations for appropriate performance standards applicable to this Project. There was some discussion as to whether the agencies would want to see detailed technical requirements or broad standards in the FPA. No decisions were made at this time.

2. Okey noted that the methanol recovery equipment associated with the Project will be new to OSi and, therefore, it will be very difficult for OSi to provide EPA with particular efficiency percentages until the equipment is up and running. Cheryl noted that EPA will need to have some way to measure how well OSi is performing.

3. Tim suggested that the Workgroup begin by identifying each Project component and the goal of each such component and then determine how to translate each goal into a measurable standard. Jim suggested that perhaps an efficiency ratio could be used to assess performance of the methanol recovery equipment (i.e., pound methanol recovered per pound of production).

4. Dennis suggested that a subset of the Workgroup should hold a conference call to work out the details of the performance standards. Everyone agreed that this would be the most efficient means of developing the standards.

5. EPA noted that in another XL project, the working group considered periodic reporting by the company to show that it was achieving superior environmental results as the Project progressed. EPA noted, however, that it would need to discuss this possibility internally prior to further consideration.

6. The following people will form a subgroup to work on developing the performance standards: Cheryl Atkinson, Jim Cashel, Michele Aston, Britt Ludwig, Okey Tucker, and Dennis Heintzman. A conference call of this subgroup will be held Monday, September 30, from 9:30 to 12:00. Brenda will contact Christopher van Löben Sels to invite his participation in this subgroup.
D. Implementation Mechanisms

1. Tim inquired about the status of the Project's legal implementation mechanisms. Beth stated that EPA is considering a new possibility for legal implementation of the CAA Subpart YYY portion of the Project. She explained that EPA is considering the possibility of granting OSi a waiver under CAA § 111(j) which provides authority to EPA to grant waivers of CAA requirements where a facility implements innovative technological systems of continuous emission reduction.

2. Beth explained that she would like to discuss the legal issues concerning this waiver in more detail with Tim after the call. She will contact him later this week.
E. Order Regarding RCRA Subpart CC Compliance

1. Beth stated that EPA is still working on the consent order, which will provide OSi with additional time to comply with RCRA Subpart CC in the event that FPA negotiations terminate. She will contact Tim this week to discuss drafting issues.

2. Dennis emphasized OSi's strong desire to obtain the order as soon as possible because of the significant time frame involved with achieving compliance with RCRA Subpart CC.

3. Michele noted that EPA will need a firm commitment from OSi on when the new capper unit will go on-line before EPA can sign the FPA. Michele also stated that she would like to have a good estimate of that date as soon as possible for her management briefings.

III. Schedule

A. Performance Standard Conference Call
The performance standards subgroup will hold a conference call on Monday, September 30 from 9:30 to 12:00.

B. Workgroup Conference Call
The entire Workgroup will hold its next conference call on Tuesday, October 1 at 8:30 a.m.

C. Face-to-Face Meeting
The Workgroup will hold a face-to-face meeting in Charleston, West Virginia on October 16 and 17. Conference rooms have been scheduled from 8:30 to 4:30 both days at WVDEP, Office of Waste Management. The exact time of the meeting will be determined in accordance with flight schedules of the participants.


Insert to FPA

VI. Duration and Reevaluation of Project

As set forth in this FPA, this Project will achieve superior environmental performance to that which would otherwise be achieved through traditional regulatory compliance. EPA anticipates, however, that the environmental benefits arising from this Project will no longer be realized when the technical requirements of the Miscellaneous Organic NESHAP ("MON") is promulgated are effective. Specifically, EPA expects that the MON will require emission controls on the capper unit similar to those which OSi will voluntarily implement under this Project as well as some level of control on the waste water collection and treatment system. As of this time, the MON has not yet been proposed and its requirements are not yet known. In recognition of this uncertainty, the parties to the FPA agree to reevaluate the environmental benefits presented by this Project after the close of the public commont period following proposal of the MON.

The parties to this FPA recognize that a dynamic, rather than static, FPA encourages the parties to identify additional opportunities for superior environmental benefits during the course of this Project. For example, as noted in Section ___, OSi expects to conduct a waste minimization study to identify existing and future strategies for pollution prevention and reduction. Project reevaluation provides the parties with a fluid process, during the course of the Project, to identify these and other Project enhancements to achieve superior environmental results at the Facility. Accordingly, the parties may determine during reevaluation that implementation of those enhancements supports continuation of the expanded Project past the effective date of the MON. In addition, the parties recognize the possibility that, during the course of the Project, regulatory changes may occur which may negate some of the anticipated benefits of the Project for OSi. While OSi would expect to continue its involvement in the Project and thus potentially increase the level of superior environmental performance achieved by the Project, it anticipates that EPA and WVDEP would consider the impact of the regulatory changes during the reevaluation. In particular, if during the course of the Project either RCRA Subpart CC or CAA Subpart YYY, or both, are determined to be inapplicable to the Facility, OSi would expect to continue operation of its emission controls and methanol recovery operation. In that instance, EPA and WVDEP would consider the unanticipated enhanced superior environmental benefits achieved by OSi during the reevaluation.

To facilitate reevaluation, OSi intends to prepare a Project Reevaluation Report and to submit it to EPA and WVDEP within 90 days following the close of the comment period on the MON proposal. The Project Reevaluation Report will include the following:
1. an analysis of the superior environmental benefits achieved under the Project set forth in this FPA;
2. a proposal for Project enhancement and/or continuation, including a description of any Project enhancements expected to be implemented;
3. the future anticipated benefit expected to be achieved by enhancements and/or continuation of the Project or from other projects developed during the course of the Project (e.g., new projects may arise out of the waste minimization study);
4. a comparison of the environmental benefits originally anticipated to flow from the Project and any unanticipated additional benefits resulting from the Project;
5. any new statutory or regulatory requirements applicable to the Project components;
6. an analysis of whether (a) superior environmental benefits to be achieved in the future from proposed enhancements and (b) unanticipated superior environmental benefits achieved during the course of the Project provide appropriate incentives for Project continuation; and
7. an analysis of EPA's criteria for selection or modification for Project XL.

EPA and WVDEP will reevaluate the Project in light of the Project Reevaluation Report and any criteria applicable to XL Projects at the time of reevaluation. EPA and WVDEP will reevaluate the Project to assess among other things: (1) the superior environmental benefits that have been achieved as anticipated in the FPA; (2) the extent to which any proposed enhancements would provide additional environmental benefits; (3) whether the Project resulted in unanticipated environmental benefits; (4) whether the Project should be continued in light of the proposed enhancements and/or the unanticipated superior environmental benefits; and (5) whether continuation of the Project satisfies the XL Criteria in effect at the time of reevaluation.

After OSi's submission of the Project Reevaluation Report, all parties to the FPA will meet to discuss the agencies' reevaluation of the Project. If the agencies and other stakeholders support continuation of the Project, the parties will take steps necessary to amend the FPA and all other appropriate documents (e.g., permits, regulations, etc.) any [legal implementation measures] under this Project, as necessary to continue the Project. If the parties determine that continuation of the Project is not warranted, then termination procedures regarding the MON or other provisions may be invoked.

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