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Minnesota Pollution Control Agency (MPCA)

Advising, Monitoring, and Evaluating a Minnesota Pollution Control Agency Pilot Project for
Flexible, Multi-media Permitting

Professor Alfred A. Marcus
Strategic Management Research Center (SMRC)
Carlson School of Management, University of Minnesota

Dr. Donald A. Geffen
Fellow and Independent Consultant
Strategic Management Research Center Program
in Environment, Energy, and Safety

Professor Ken Sexton
School of Public Health, University of Minnesota

Dr. Brett A. Smith
Environmental Consultant and Conservation Chairperson, Minnesota chapter of the Sierra Club
and member of the National Sierra Club's Conservation Governance Committee




ABSTRACT

We have been asked by the Minnesota Pollution Control Agency (MPCA) to participate in a pilot program to explore the benefits of flexible, multi-media permitting. The MPCA has asked us to advise in the shaping and implementation of the pilots, to monitor their progress, and to measure and analyze their outcomes. Specific facilities of three companies from widely different industries will be granted, through negotiations, multi-media permits designed to give plant managers the flexibility to achieve compliance goals in the most productive manner they chose. In addition to enhanced flexibility, this permitting approach promises to reduce transaction costs and diminish administrative burdens in exchange for the participating facilities decreasing their regulated emissions beyond that required for compliance. This alternative approach to environmental regulation promises to provide the benefits of increased environmental protection at lower cost to society, creating a win-win situation for the environment and the economy.

We expect this flexible permit approach to both lower barriers and provide incentives for innovative pollution prevention solutions. The opportunities for cost savings offered by this alternative regulatory process will foster changes in the organizational "technology" of the company that will enhance the ability of operational staff to implement innovative approaches to reduce the environmental impacts of their manufacturing and increase competitiveness.

The Common Sense Initiative for the Iron and Steel Industry intends to follow the progress of this pilot very closely and have chosen this pilot project to be part of their work plan.

Our roles and goals in this experiement will be: to maximize the incentives for pollution prevention in the permits negotiated, to make the pilots as broadly applicable to other industries as possible, to observe how each facility goes about satisfying the requirements of its permit, and to measure the economic and environmental advantages of the new approach. We will determine the extent to which pollution prevention (P2) solutions are adopted at the test facilities and what changes, if any, should be made before expanding the program to other companies and industries. We will verify, as an independent, multi-stakeholder group, that compliance requirements have been met and determine the nature and extent of individual chemical emissions. We will examine the management and organizational responses to the flexible multi-media permits at both the corporate and plant levels and try to measure the cost savings enjoyed by the company that resulted from this regulatory approach and the potential cost savings to the MPCA. Finally, we will work in constant consultation with responsible officials from the air, water, and hazardous waste divisions of the MPCA and monitor the inter-media problems that develop during the pilot project.

Our work will be done in coordination with an ongoing P2 Dialogue that we are facilitating under the auspices of the Joyce Foundation. This prestigous, multi-stakeholder group has been examining the regulatory and corporate barriers to pollution prevention. The MPCA Pilot Project originated out of our dialogue which had been proposing various incentives to promote P2. Participants of the P2 Dialogue will be a valuable resource to provide advice and to garner support among stakeholders.


PROJECT NARRATIVE

1. Project Description

The initiative we propose to further in this project is granting companies flexible, multi-media permits in exchange for their moving beyond the terms of compliance in existing environmental regulations. The Minnesota Pollution Control Agency (MPCA) is planning to conduct 3 to 4 permitting pilots as an experiment to test the benefits of this approach. We have been asked by the Agency to participate in this program to advise in the shaping and implementation of the pilots, to monitor their progress, and to measure and analyze their outcomes. Specific facilities of three companies from widely different industries will be granted, through negotiations, multi-media permits designed to give plant managers the flexibility to achieve compliance goals in the most productive manner they chose. In addition to enhanced flexibility, this permitting approach promises to reduce transaction costs and diminish administrative burdens. In exchange for these benefits, the participating facilities must agree to reduce their emissions beyond that required by compliance by amounts that are deemed suitable for that industry.

Incentives for Innovative Pollution Prevention. We believe that this alternative approach to environmental regulation promises to provide the benefits of increased environmental protection at lower cost to society, creating a win-win situation for the environment and the economy. By offering plant engineers greater flexibility to meet compliance requirements and by freeing up resources through lowered transaction and administrative costs, we expect this flexible permit approach to lower considerable barriers to and to provide considerable incentives for innovative pollution prevention solutions. We also believe that this flexible permit approach will get the attention of top management within the participating companies. This will foster changes in the organizational "technology" of the company that will enhance the ability of operational staff to implement innovative approaches to reduce the environmental impacts of their manufacturing and at the same time increase its competitive position.

The Common Sense Initiative for the Iron and Steel Industry intends to follow the progress of this pilot very closely and have chosen this pilot project to be part of their work plan.

One of our roles in this experiment will be to encourage the MPCA and pilot companies to maximize the incentives for innovation in the permits negotiated. We will then observe how each facility goes about satisfying the requirements of its permit and measure the economic and environmental advantages of the new approach. We will determine the extent to which pollution prevention (P2) solutions are adopted at the test facilities and what changes if any should be made before expanding the program to other companies and industries. We will verify, as an independent, multi-stakeholder group, that compliance requirements have been met and determine the nature and extent of individual chemical emissions. We are particularly interested in examining the management and organizational responses to the flexible multi-media permits at both the corporate and plant levels. We will try to measure the cost savings enjoyed by the company that resulted from this regulatory approach and the potential cost savings to the MPCA. Finally, we will work in constant consultation with responsible officials from the air, water, and hazardous waste divisions of the MPCA and monitor the inter-media problems that develop during the pilot project.

3M and U.S. Filter have agreed to participate in the project and the MPCA has been talking with Cleveland Cliffs which is expected to be the third company in the pilot. 3M represents a chemically based high technology company with an enormous variety of products that is constantly changing. Relying heavily on developing new products, the company places a premium value on getting its products to market rapidly and is in great need of the flexibility to make frequent changes at its manufacturing facilities in order to accomplish this. The experimental permit being considered for this pilot project provides the company with the flexibility it needs to compete. 3M has designated its manufacturing complex in Hutchinson, MN for the experiment. A single multi-media permit would cover both facilities at that site:  a plant producing magnetic media and an adjoining unit producing adhesive tape products. The probable basis for negotiations will be the "Beyond Compliance" legislation being proposed by 3M for consideration by the Congress. Air emissions is the predominant outlet for pollutants at Hutchinson and the company is proposing to reduce aggregate emissions for each regulated chemical by 25% below that required under the Clean Air Act and associated federal regulations including the newly promulgated magnetic media MACT standard. 3M wants to keep emissions to all other media at or below compliance levels. In exchange, the company wishes to gain regulatory flexibility including optional ways to deal with PSD. Note that 3M wil not only have the option to decide which production units at each plant should be targeted for the most reductions but to consider emission trade-offs between plants.

U.S. Filter's hazardous waste treatment facility in Roseville, MN. would be the second manufacturing site chosen for this pilot project. The Roseville plant receives waste from both foreign and domestic sources and has the capabilities, at the facility, for storage, treatment, recovery, and transfer of liquid, semisolid, and solid waste. The proposed pilot would expand the treatment and recycling of hazardous wastes that presently are not managed. U.S. Filter is also asking for flexibility in paperwork requirements that would enhance its capability to recycle back to its clients "etchant" materials that would otherwise require disposal. In this case permitting issues will focus on hazardous waste and water emissions and involve most heavily those divisions of the MPCA. U.S. Filter has, perhaps, more moderate but nevertheless important requirements for regulatory flexibility to respond to rapid changes in the advanced technologies with which it deals. In addition, the company has important supplier relationships with its customers, numbering in the hundreds. This feature will add another important element to the experiment as we examine the potential benefits of treating U.S. Filter and its customer as a single polluting unit and seeking the most cost effective way of reducing net harmful emissions from this production system.

Cleveland Cliffs, Inc., the most likely third company chosen for the pilot, will designate an iron ore treatment facility from among several it operates in Northern Minnesota. This example will provide a test of the benefits of flexibility and multi-media permitting for an industry producing a stable product with an, up-till-now, slowly changing technology. We expect that beyond compliance goals may be modest, in the short term at least. Changes in management and operations that make the company more open to incremental but continuous P2 improvements, induced by the flexible permit and the changed relationship between the manufacturer and regulator, may be the most important outcome of this particular pilot. If these regulatory changes, and others that may arise as a result of this experiment, lead to positive environmental benefits at this basic industry plant, it would indicate that their benefits are applicable to a broad range of industries indeed.

The Pollution Prevention (P2) Dialogue. Our role in and the impetus for this pilot project came out of a pollution prevention dialogue that we are conducting under the auspices of the Joyce Foundation. A collaboration consisting of the Strategic Management Research Center (SMRC) at the University of Minnesota, the Minnesota Environmental Initiative (MEI), and the Center for Global Change at the University of Maryland have brought together a multi-stakeholder dialogue group devoted to explore innovative and collaborative solutions to pollution prevention problems. Our specific focus has been to remove barriers to, and provide incentives for, pollution prevention by businesses. The P2 Dialogue is composed of representatives from Minnesota corporations and small businesses, environmental consultants from law and engineering, the State Legislature, the Attorney General's Office, the MPCA, the Office of Environmental Assistance (OEA), the Environmental Quality Board (EQB), environmental advocacy groups, and academia. The full list of participants is provided in Appendix A. It is worth noting that some members of the Dialogue are also participants in the CSI and the Presidents Council for Sustainable Development, giving us liaison to these national efforts.

The idea for the pilot project was originated by three participants in our P2 Dialogue -- Lisa Thorvig, Air Division Manager for the MPCA, and Tom Zosel and Dave Wefring of 3M, and was stimulated by several dialogue meetings that examined the barriers and solutions to P2 arising from governmental regulation and the nature of Minnesota businesses. With support from the Joyce Foundation, the P2 Dialogue is continuing to meet and will play an important advisory role in the pilot project. Funding by the Joyce Foundation and contributions of time from faculty members at the University of Minnesota constitutes a substantial leveraging of funds across the partnering organizations.

2. Objectives

Principal Objectives:

  1. To help make this experiment in flexible, multi-media environmental regulation as productive as possible in achieving the following goals:
  2. maximize the incentives for pollution prevention

    make the polots as broadly applicable to other industries as possible so that they can be reproduced and diffused.
  3. To determine the degree and the extent of the benefits resulting from the pilot and track what takes place at each of the participating companies. Particular attention will be paid to:
    estimate the extent to which pollution prevention solutions have been implemented.

    determine how legal, regulatory, managerial, technical, and other barriers to pilot success have been overcome.
  4. estimate the cost benefits enjoyed by the manufacturers as a result of the permitting process.

    observe long term effects, that is whether pilot companies continue to make improvements once their beyond compliance goals are reached.
  5. To work towards making the pilot project, if successful, a permanent option for as many companies and industries as possible, both in Minnesota and nationally. In order to accomplish this, we will:

    provide the MPCA and participating companies with the project team's and the P2 Dialogue's diverse expertise as a resource.
    be a litmus test for potential public opposition and supply remedies for valid objections.
    garner support among interested stakeholders.
    prepare reports and develop a speakers program from members of the P2 Dialogue.
    submit an article for publication in a leading business journal.

Subordinate Objectives:

  1. To develop an understanding and analysis of how management responds to the challenge of a changed regulatory structure and the opportunities presented by it.
  2. To develop an understanding and analysis of how production engineers at the pilot facilities respond to the opportunities for technological innovation presented by the flexible permits.

Anticipated Obstacles to Our Achieving These Goals:

3. Results or Benefits Expected

In discussing the benefits of this project we must distinguish between those coming from the MPCA Pilot Project itself and those coming from the principals participation in that project and for which funding is being requested. We shall primarily devote our discussion to the latter sum of benefits although a few comments first about the benefits of the pilot project itself must be made. The MPCA will proceed with this pilot whether or not the Principals and the P2 Dialogue participate. Valuable experience will be gained by the MPCA and the participating companies as to the advantages and drawbacks of an alternate, more flexible multi-media regulatory approach. They will learn whether or not we can attain environmetnal protection at lower cost and get some idea of how this was accomplished. Our conversations with several people at the MPCA indicate, however, that the agency does not possess the resources or expertise to fully assess, understand, and disseminate information about the results of their experiment. These officials argued that if the project is to lead to real positive change in the way we achieve our environmental goals, a more complete and informed analysis of the project by an independent multi-stakeholder group would be needed.

The benefits we expect to arise as a result of our efforts include the following:

Maximize incentives for pollution prevention (P2) in the permitting process.

The flexible permits envisioned by the MPCA have, in principle, built in several incentives for P2. However, the devil is in the details. The project principals and volunteers from the P2 Dialogue will participate in the permit negotiations to ensure that these incentives remain or are enhanced. We see as the main incentives offered by the pilot permits to be:

  1. The price the pilot companies will have to pay for obtaining a flexible permit is to agree to reduce their facility's aggregate emissions by some percentage below the level permitted by law. Many plants are now operating with pollution controls such that the cost of reducing emissions further by employing end-of-pipe technologies increases rapidly, prohibitively so. P2 approaches therefore, when feasible, become economically attractive. In other words, "beyond compliance" requirements will stimulate more P2. We want to help the MPCA set these beyond compliance limits at levels that are reasonable for each industry and yet will still encourage P2.
  2. The permits envisioned for the Pilot Project will only set limits on aggregate emissions to the air and water by the entire facility rather than requiring "best available control technology" for every production "unit" at the plant. This flexibility increases the options the manufacturer has for employing P2 solutions. The requirement that every unit at the plant meet emission standards often rules out innovative production process changes. Furthermore, since compliance in the experiment is to be assured by either instrumental monitoring or mass balance analyses, there is no need for using BACT end-of-pipe equipment to guarantee compliance. The notion that some part of a manufacturing facility may be "violating" emissions standards can easily give rise to public opposition, especially from environmental advocates or government officials and legislators. The principals, working with the P2 Dialogue, can raise public awareness to the benefits of this "violation" and gain the support of these stakeholder communities who are represented in the Dialogue.
  3. The experimental permits will be multi-media and will give the manufacturer a more integrated understanding of the facility's environmental problems. This should discourage, in many cases, end-of-pipe remedies that merely shift the problem from one media to another and encourage P2 solutions which reduce emissions to all media.
  4. By offering the opportunity of achieving environmental goals at lower cost, this pilot will get the attention of the pilot companies' top management team. If this alternate regulatory structure can change the role of the company's environmental managers and engineers from that of policeman to one of partners in production and operations, great long term environmental and economic benefits will accrue. The principals want to work to retain this benefit in the pilot and, by means of interviews, determine how successful this incentive has been to improve the relationship between top management and environmental management as well as between the latter and plant operators.

Help make the pilot as broadly applicable to other industries as possible.

The Dialogue has already exerted its influence to move the MPCA in this direction and it now looks as if at least three companies chosen for the Pilot will have quite different characteristics. Not all industries are capable of taking their manufacturing facilites as far belwo compliance as 3M is proposing to do. The MPCA recognizes this but the P2 Dialogue wants to ensure that reasonable flexibility will exist in setting beyond compliance targets for different industries. The Dialogue will play an important role in gaining public understanding and acceptance of this feature.

Assuming the pilot meets with success, the principals and members of the P2 Dialogue will see to it that its results get as broad a dissemination as possible and that momentum develops to include more and more companies and industries as participants in this alternate regulatory system.

Use the diverse expertise and experience of P2 Dialogue participants as a resource for the MPCA.

Our Dialogue has diverse multi-industry representation. The consultants participating have business clients that range from the Fortune 500 to medium and smaller companies. Another participant is both a small manufacturing firm owner and active in environmentally related public policy issues. We will use these valuable resources to help keep the flexible permitting experiment as broadly attractive and applicable as possible. The permits will require a long term plan for achieving beyond compliance goals. Many of the Dialogue participants are P2 experts and can influence the pilot companies into utilizing more P2 solutions.

Businesses need long term environmental goals, stability, and predictability of environmental regulations in order to plan and make investments to reduce pollution at the source. Our P2 Dialogue diffuse they type pollution prevention regulating innovation we are following.

4. Approach

Work Plan

Our work plan naturally divides into three phases: the shaping phase of the project during which time the permits are designed through negotiations between the MPCA and the participating companies with the principals and P2 Dialogue playing an advisory role; the monitoring phase when the pilot project companies carry out the required modifications at the pilot facilities and the principals and volunteers from the P2 Dialogue monitor and study the changes and outcomes; and the analysis and dissemination phase when the principals analyze and report on their findings.

Before describing each phase of activity in more detail, let us outline the structure we have established to facilitate the role of the P2 Dialogue in support of the pilot project.

The Dialogue's Role in the Pilots.

The Pollution Prevention Dialogue has devoted time to discussing and fostering the MPCA beyond compliance pilot projects, and the MPCA has asked it to participate in the pilots in an advisory and consultative role.  The MPCA chose the Dialogue not only because the Dialogue helped to foster the pilots but because the Dialogue has broad stakeholder representation with varied and considerable expertise and contains important decision makers in the community.

To carry out the advisory role, the Dialogue has formed a Pilot Project Committee (PPC) composed of members from each of the stakeholder groups:

Gary Weisbrod
Brian Lim
Jon Bloomberg
Dennis Willis
Lee Paddock
Carol Wiessner
Sr. Dir. Environmental Health & Safety, Deluxe Corporation
Environmental Services Manager, H.B. Fuller Company
Attorney, Oppenheimer Wolff & Donnelly
VP Operations, Capsule Environmental Engineering
Director Environmental Policy, MN Attorney General's Office
Staff Attorney, MN Center for Env. Advocacy



Lisa Doerr Program Director, Citizens for a Better Environment
Lisa Thorvig
Division Manager, Air Quality Division, MPCA (Lisa Thorvig will both represent regulators on the committee and serve as liaison between the MPCA and the Pilot Project Committee.)

All the principals are participants of the P2 Dialogue as well. Brett Smith and Ken Sexton are members of the Dialogue itself and Don Geffen and Alfred Marcus have been organizing and facilitating the meetings.

The Dialogue will rely on the PPC to monitor and advise the MPCA about the pilots. The PPC will periodically consult with the Dialogue for feedback which it will relay back to the MPCA and participating companies. We have structured the process of accomplishing this in a way to make efficient use of the P2 Dialogue volunteer's time. At least one of the principals and volunteers from the PPC will participate in negotiating meetings during the shaping phase or in plant visits and interviews during the monitoring phase. We envision a voluntary rotating of responsibility by the PPC members. The attendees of each meeting or visit will then report on their observations to the entire PPC at periodically held meetings. The report itself will be written by the participating principals subject to approval by the other attendees. The PPC will then discuss the report and make recommendations and suggestions for improvements. The principals will then write a report and summary of these deliberations and submit several of these to the P2 Dialogue at meetings scheduled once every one or two months for this purpose. Final consensus recommendations of the Dialogue will then be taken by the principals back to the MPCA and pilot companies for their consideration.

Shaping phase

The MPCA and each participating company will have a series of meetings in order to fashion the permit for each pilot project facility. One or two of the principals will either attend the meetings or, what is more likely and preferable, attend a special one hour briefing by the parties of the negotiations. Don Geffen, who is making the largest time commitment to this project, will attend a majority of these sessions. The principals will also work with the PPC of the P2 Dialogue to ensure its participation. In between these meetings, the principals will maintain contact with the individuals at the MPCA and pilot companies to both follow the course of the permitting process and to make suggestions for changes.

The major activities by the principals during this phase will include reporting and analyzing the ongoing negotiations, facilitating participation by the PPC and P2 Dialogue, and performing research to follow up on issues and ideas that develop. The diverse backgrounds and experience of the principals and the members of the PPC will provide a valuable resource for this process.

As can be seen in the accompanying resumes and budget, we are including on the team a Ph.D. graduate student from the Civil Engineering Department of the University of Minnesota, Marc von Keitz who plans to write his Ph.D. thesis on the engineering challenges and responses to the permit experiment. Mr. von Keitz hopes to work closely with plant engineers during the planning and operating phases of the pilot project. Marc will provide valuable advice during the shaping phase as to elements of the permit that can impede or enhance the engineering options available to the plant operators. In this respect we will also benefit from the presence of a consulting environmental engineer on the PPC.

Monitoring Phase: During this phase we intend to determine the degree and the extent of the benefits resulting from the pilot and track what takes place at each of the participating companies. To accomplish this the principals will:

  1. seek access to operating data at the participating pilot facilities that will be used to determine their levels of emissions including any data from monitoring instruments,
  2. carry out on-site visits to each facility and conduct interviews of production managers and workers including an analysis of the way management has organized the production process to compare it against a benchmark of best practices,
  3. examine the extent to which P2 efforts were considered or applied to reduce emissions.

If the P2 Dialogue spins off a working group on innovations in activity based accounting, etc., we would combine both these efforts during this part of the Pilot Project.

Managerial and organizational issues will be examined by relying on interviews with plant managers and their associates and additional interviews, where appropriate, with central management including the VPs for plant production and environmental, health, and safety. We will also seek interviews with the participating companies' C.E.O.s to determine whether or not the changed regulatory environment had led to a changed attitude and relationship between top management and environmental managers and engineers. In doing so we will determine the answers to the following questions:

There are also important managerial issues at the MPCA. We will endeavor to monitor how the agency adapts to the challenge of multi-media permitting. What are the barriers, if any, to cooperation among the air, water, and hazardous waste divisions of the MPCA. What organizational changes do we recommend to better implement this second, more flexible track for environmental regulation? Our frequent meetings with MPCA officials from all three divisions will help us to monitor any intra-agency problems that should arise.

Engineering issues will be investigated by relying on in-plant interviews and visits. The Ph.D. thesis work of von Keitz will be very helpful in this regard. We will employ an environmental engineering consultant, with knowledge of each particular industry and production processes employed, to make on-site visits and analyze the engineering and production changes that have been made to satisfy the requirements of the permit. We are interested not only in the technological innovations that evolve but the organizational changes that take place in the production process. Our analysis will emphasize the extent to which P2 was employed as solution to the environmental problems at the plants.

We will also monitor the environmental outcomes of the permits. Has each facility met its emission requirements? Can we quantify the health and environmental benefits of the changes? Are there any adverse local neighborhood impacts due to the "bubble" approach for setting emission standards? The data required for this will come from the facilities own monitoring equipment or mass balance analysis. If necessary however, we would provide our own monitoring equipment to verify the pilot companies' data.

Analysis and dissemination phase.

Most of this phase of the project will take place during the second year although elements of both analysis and dissemination will occur throughout the two years of the project. We will review all our reports and monitoring data and the reports and analysis by the environmental engineering consultant. Elements of Marc von Keitz's thesis will also be used. Our focus will be on measuring the degree of success of the Pilot Project and how it can be improved. We will examine how adaptable it is to other industries, how much are costs reduced, and what the environmental and health benefits are.

We want to determine how legal, regulatory, managerial, technical, and other barriers to the pilot's success have been overcome. The initial barriers will be legal and regulatory. Beyond these legal and regulatory hurdles, there are a number of managerial and technical hurdles which will have to be overcome at the participating companies. We will document and track how these hurdles are handled and overcome. Short case studies will be proposed which can be disseminated via publication and conference presentation.

We will employ several ways to disseminate our analysis of the pilot project: directly through publication of articles, circulating reports, and making presentations at conferences, seminars, and meetings; and indirectly through the efforts of participants in the P2 Dialogue who will be a part of the project. The latter method of dissemination could be a particularly powerful way of accomplishing this because of the diversity and prestige of the group.

A final task of the project is actually beyond the scope of this current two year project. It is to observe the long term effects of the flexible permits. Do the pilot companies continue to improve environmental performance once their beyond compliance goals are reached? This objective will require periodic company visits and interviews over a number of years. Nevertheless, detemrining the long term benefits of the pilot project is an important aspect of the experiment and will be pursued by at least some of the participants if possible.

Facilities Available and Non-Federal Sources of Funds and Facilities to Carry Out the Project

The Strategic Management Center of the University of Minnesota Carlson School of Business will provide the managerial center for the project and some of the resources of the Center, predominantly some of Professor Marcus' time will be contributed to the project. The Universities School of Public Health and the Civil Engineering Department are two other university facilities whose resources will be applied to our work. Ken Sexton, Professor at the School of Public Health plans to contribute a good part of his time to the project and Marc von Keitz's thesis advisor, by advising Mr. von Keitz, will be making a contribution as well.

The P2 Dialogue, which is going to work with us in an advisory capacity, will be continuing during the pilot project and will be funded by a grant from the Joyce Foundation. Although some of its activities will be unrelated to the pilot project, there will be quite a bit of overlap, especially if it develops other projects, such as a pilot project on activity based accounting, that can be tied in to our efforts.

Schedule of Accomplishments

June 1, 1995
  • participating companies and plant sites selected
July 10 to
October, 1995
  • permits are negotiated with the advice of the principals and the P2 Dialogue as an advisory group
October to
December, 1995
  • 30-60 day period of public comment on compliance documents advisory group supports permits if needed
July through
December, 1995

  • principals meet with permit negotiators; prepare reports for discussion at meetings of the PPC; prepare reports and recommendations for periodic meetings of the P2 Dialogue; meet with permit negotiators to consider recommendations of the P2 Dialogue; principals collect data determining baselines of plant operations prior to modifications
  • principals prepare report on process of overcoming regulatory barriers
January through
December of 1996
  • implementation phase for the pilot companies -- this time period is only an educated guess and may take longer for at least one of the facilities
  • principals and the PPC monitor the progress of the implementation; principals interview management and process engineers; Marc von Keitz works with engineers; principals and PPC make periodic progress reports to the P2 Dialogue
January through
July, 1997




  • beginning of operations of pilot project facilities; principals monitor operations, review data on emissions at each facility and verify accuracy if needed; continue interviews of management and plant engineers; Marc von Keitz assesses success of engineering changes; engineering consultant makes on-site visits and reports on outcomes; Geffen and Marcus determine reductions in operating expenses induced by regulatory changes; principals work with the PPC and P2 Dialogue providing them with progress reports and seeking feedback as to improvements in the regulatory process
March through
July, 1997

  • principals prepare analysis and reports of the pilot project's outcomes with assessment of benefits, disadvantages, and needed modifications, working with members of the PPC; analysis and conclusions presented to the P2 Dialogue for comments and suggestions; final report incorporates these inputs from PPC and P2 Dialogue
May through
July, 1997
  • dissemination phase begins -- principals prepare papers for publication, P2 Dialogue members make presentations to their respective stakeholder groups, etc.
June - July 1997
  • P2 Dialogue, facilitated by the principals, write a final report for release to the public; designated spokespersons give media interviews to disseminate conclusions
1996 -- 1997
  • principals and P2 Dialogue volunteers work with MPCA to find additional companies to join beyond compliance/regulatory flexibility program
July, 1997
  • principals submit final report to EPA on what has been learned from this regulatory experiment and what changes, if any, are recommended

Project Participants Responsibilities

Professor Alfred Marcus is the Project Manager and will be responsible for the overall coordination of the project. Professor Marcus' primary focus in the project will be the management, organizational, and regulatory issues involved. He will conduct interviews of the pilot companies' top management and plant operating management and analyze them. Professor Marcus will help facilitate meetings with the Pilot Project Committee (PPC) and the P2 Dialogue and play a major role in the preparation and presentation of reports and papers about the project. Dr. Marcus will work closely with a Ph.D. student in the Carlson School of Management in carrying out his role. The project will be the basis for the Ph.D. student's dissertation.

Dr. Donald Geffen will work closely with Professor Marcus and with the other participants involved in the more technical aspects of the project. Dr. Geffen will conduct interviews of the pilot companies' top management and plant operating management and participate in their analysis. He will facilitate many of the meetings with the Pilot Project Committee (PPC) and the P2 Dialogue and play a major role in the preparation of reports and papers about the project. Geffen, applying hisscientific and technical background, will take responsibility for operating data collection and analysis. He will work with Ken Sexton and Marc von Keitz to see that their contribution is integrated into the total effort.

Professor Ken Sexton will help with the analysis of emissions data both to establish the facilities' base lines and to determine the benefits of the new permit. Professor Sexton will be interested in the health effects of the new approach to regulation and will provide that important aspect of our project both during the shaping and monitoring phases. He will assist in preparing reports and papers.

Dr. Brett Smith will participate as an advisor in the permit negotiations with particular emphasis on the incentives for pollution prevention that can be built into the permits. He will help track the implementation of P2 solutions at each facility and will provide analysis and reports of these efforts. Dr. Smith will be of assistance in examining the economic benefits of the pilot and will play a role in the preparation of reports and papers.

Sharon Hansen is the Administrator for the Strategic Management Research Center.  She will assist in our work with the P2 Dialogue by arranging for meetings and maintaining contacts with members. Ms. Hansen will assist in managing the data that will be collected for this project including base line plant operating data and post permit emissions and operating data.

Marc von Keitz will be conducting research towards obtaining his Ph.D. in Engineering at the University of Minnesota. He will work with plant engineers at the pilot facilities. Mr. von Keitz will study existing production technologies to develop a base line and follow the engineering and operational modifications that evolve in response to the flexible permit. He will work with Dr. Smith in analyzing the extent to which pollution prevention innovations are stimulated by the experimental permits and assist in preparing reports on their findings. Marc von Keitz's participation in the project provides us with a firm grounding in production engineering and important ties to engineering faculty at the university.

Environmental Engineering Consultant. We would like to hire an environmental engineering consultant from one of the Twin Cities leading consulting firms to provide us with an independent before and after analysis of the operations at each of the pilot facilities. Unfortunately since one of the pilot facilities is not yet determined and there may be an additional candidate added, we are unable to make a final commitment as to the best choice to perform this assessment. Consequently such services have not been put into the budget but we would like to have the option of coming back to you for additional funds to cover the cost of the consultant's services. Our estimate is that approximately $10,000 each year would be sufficient.

Data Collection Procedures

As noted throughout the Project Narrative, we will be collecting data about plant operations at each of the pilot project company sites and from corporate headquarters. We will review all the data presented to the MPCA for verification that these pilot plants are operating in compliance with the experimental permits. Mass balance analysis will play an important role in determining emission levels so that we will seek, if necessary additional production data to help understand and confirm the data reported to the MPCA. If we observe inconsistencies with any of the plant's operating data or monitoring equipment data we will work with plant engineers to resolve them. There is a small probability, as we now envision this project, that we will need to make independent measurements of emissions, using our own monitoring equipment. We have not now budgeted for such equipment but may have to request additional funds to do so for the second fund year.

We are also very much interested in measuring the changes in operating expenses, including compliance expenses, waste disposal and treatment expenses, insurance expenses, etc., as a result of the flexible multi-media permit replacing the older style set of single media, unit by unit permitting. We will obtain operating cost data from the participating companies and follow up with interviews of key operating personnel.

Data collection, therefore, should be relatively straightforward. Problems may arise involving proprietary issues but we expect to resolve these by signing confidentiality agreements and exercising some care on how this data is kept and reported. Inherent to measurements of operating costs at almost any manufacturing facility in the United States, present accounting methods do not easily lend themselves to the kind of facility by facility analysis we intend to pursue. Since we expect the pilot project companies to be equally interested in this relatively new accounting approach, we do not regard this problem as insoluble.

5. General Project Information

The Nature of the Data To Be Collected

We have discussed the nature of the data we will be collecting in previous sections, most notably the last few paragraphs above. The reader is referre to these previous discussions.

Interrelationships of This Project With Other Programs

The grantees (Geffen and Marcus) are involved with several other programs which are enriched and will enrich in turn the project in question. One is a program of research (funded by the Management Institute for Environment and Business or MEB) examining the impact of environmental regulations on developing new technologies in the Metal Finishing and Electric Power industries. In addition to generating this flexible permitting pilot project, Geffen and Marcus will be continuing to work with the P2 Dialogue which is currently exploring the corporate barriers to pollution prevention and is seeking other pilot projects to promote changes within businesses to lower these barriers. One such project being considered would explore the feasibility of adopting some form of activity based accounting at the plant level to better account for the complete environmental costs of production. Should such a pilot materialize, it would provide an excellent opportunity to combine the two pilot projects to apply accounting innovations -- an important "technology" innovation, to the flex-permit pilot facilities. Funding for the P2 Dialogue is by the Joyce Foundation.

Professor Marcus has also been collaborating on a project, funded by the Great Lakes Protection Fund, examining innovation among small manufacturers that can lead to pollution prevention improvements. Special emphasis is on the metal finishing industry. Finally, the pilot project will provide Professor Marcus with valuable information that will enrich his teaching program at the Carlson School of Management.

Professor Sexton's research interests focus on human and ecological harm effects of toxic materials. His work and experience in this area will greatly enhance our program. His work on the pilot project will provide him with concrete "real life" examples that can provide valuable insights to his research program.

Dr. Smith is actively involved in pollution prevention activities and currently serves on the Office of Environmental Assistance's Pollution Prevention Task Force. He will be teaching a course in P2 at Hamline University in St. Paul. These ongoing programs will be of great use to the pilot project which, in turn, benefit from ties to the OEA to help maximize the P2 efforts in the project and from greater dissemination coming from these relationships.



APPENDIX A

Pollution Prevention Dialogue Participants

Business Community

Jill Curran
Pam Graika
Vint Johnson*
Steve Larson
Brian Lim
Sherry Munyon
Paula Prahl
Anita Ryan
Richard Svanda
Gary Weisbrod
Tom Zosel
Facilities Administrator, Rivertown Trading Company
Director of Environment, NSP
Environmental Manager, Deluxe Corporation
Environmental Coordinator, Cargill, Inc.
Env. Services Manager, H.B. Fuller Company
Dir. of Env. Policy & Transp., MN Ch. of Commerce
Honeywell, Inc.
Owner, St. Paul Brass & Aluminum Foundry
Director, Environmental Management, Josten's
Sr. Dir. Env., Health & Safety, Deluxe Corporation
Manager, Pollution Prevention, 3M
659-3796
330-5996
483-7119
742-7276
481-4886
292-4661
951-3232
698-2745
830-3247
778-4361
778-4805

Environmental Engineering and Legal Communities

Jon Bloomberg
Dan Bostrom*
Charles Dayton
Mark Haveman
Bill Koch*
Grant Merritt
Ross Ohman
Larry Sibik*
James Torgerson
Dennis Willis
Eric Yost
Attorney, Oppenheimer Wolff & Donnelly
Sr. Chemical Engineer, Barr Engineering
Attorney, Leonard, Street & Deinard
Program Director, WRITAR
Attorney, Leonard, Street & Deinard
Attorney, Merritt, Furber & Timmer
President, Ohman Greacen Associates, Cons. Eng.
Manager, Process Development, Capsule Env. Eng.
Director of Environmental Consulting, RE/SPEC, Inc.
VP Operations, Capsule Environmental Engineering
Chemist, Barr Engineering
223-2500
832-2796
335-1665
379-5995
335-1500
330-0960
633-1318
636-2644
486-9771
636-2644
832-2600

Government Communities

Barbara Freese*
Don Frerichs
Edward A. Garvey
Ann Glumac**
Joan Kersting*
Rod Massey*
Kevin McDonald
Steven Morse
Kevin O'Donnell
Lee Paddock
Lisa Thorvig
John Wells
Attorney, MN Attorney General's Office
Asst. Minority Leader, MN House of Representatives
Director, MN Office of Environmental Assistance
Deputy Commissioner, MPCA
Legislative Assistant, MN Senate
Section Manager, Air Quality Division, MPCA
P2 Coordinator, MN Off. of Environmental Assistance
Chair Fin. Div., Env./Nat. Res. Cmte., MN Senate
Team Leader, Source Red., MN Off. of Env. Assist.
Dir. Env. Policy, MN Attorney General's Office
Division Manager, Air Quality Division, MPCA
Coordinator MN Sustain. Dev. Initiative, EQB
297-8753
296-4378
215-0228
296-7305
296-4167
296-7512
215-0242
296-5649
296-3417
296-6597
296-7331
297-2377

Environmental Organizations Community

Lisa Doerr
David Fox Brenton*
Carol Greenwood
Ted Moores
Brett Smith
Dick Werthy*
Carol Wiessner
Program Director, Citizens for a Better Environment
Global Action Plan/Eco Teams, MN
Writer for Advisory Board, Seward Profile
Executive Director, Global Action Plan MN
Conservation Chair, MN Chapter of the Sierra Club
Seward Profile
Staff Attorney, MN Center for Env. Advocacy
824-8637
824-7394
724-8430
824-7394
920-9569

223-5969

Academic Community

Ira Adelman**
Ian Greaves
Walter Maier
Ken Sexton
Marc von Keitz
Professor, Dept. of Fish & Wildlife, Univ. of MN
Professor, School of Public Health, Univ. of MN
Professor, Dept. of Civil Eng., University of MN
Professor, School of Public Health, Univ. of MN
Dept. of Civil & Mineral Eng., University of MN
624-4228
626-0900
625-3016
626-4244
626-9536

Facilitators

Toby Dayton
Don Geffen
Leslie Legg
Alfie Marcus
Sandra S. Smith
Minnesota Environmental Initiative
SMRC, University of Minnesota
SMRC, University of Minnesota
Professor, SMRC, University of Minnesota
Smith Communications
334-3388
377-5704
626-1050
624-2812
473-7658

__________________
* Alternates
**Withdrew from Dialogue

**Ms.Glumac has resigned from her position as Deputy Comissioner


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