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Crompton Corporation (Formerly Witco Corporation)

EPA's Decision to Continue Witco's Project as Modified


Date: January 29, 1997

To: Jon Kessler

From: L. Nancy Birnbaum

Through: The OSi XL Team from EPA/WV DEP: Cheryl Atkinson, Britt Ludwig, Sherri Stevens, Beth Termini, Maria Parisi-Vickers, Michele Aston, Amey Marrella, Lucy Pontiveros, Jonathan McClung

Subject: OSi Specialties' XL Project

We had a conference call on Thursday, November 17, 1996, with the OSi XL team--OSi, the West Virginia Department of Environmental Protection, EPA's Region III, and EPA headquarters. OSi informed us that, as a result of the current business environment, there will be decreased demand for OSi's product. Thus, OSi has decided that it is not in the company's best interest to build a new methyl capper in Sistersville, WV because the market for methyl capped polyethers would not sustain the increased production. They would like to do the XL project using their existing capper unit instead. As a result, we are providing this evaluation of the modified proposal using the XL criteria to determine whether we should proceed with the project.

Because we believe that the new project meets the criteria for inclusion in Project XL (see below), we recommend a decision to continue with the project and request that Jon Kessler provide us with a decision memorandum to this effect.

As you will recall, the OSi project involved the building of a new methyl capper unit with a methanol recovery system and a thermal incinerator. These pollution control devices would result in a reduction in air emissions of almost 300,000 pounds per year from 1998 to 2002 and 3,500 pounds per year thereafter. In addition, sludge resulting from wastewater treatment would be reduced by over 6 million pounds per year for the life of the new capper. In exchange for these benefits, OSi requested deferrals of RCRA subpart CC (40 CFR parts 264, 265, subpart CC) and CAA subpart YYY (40 CFR part 60, subpart YYY). RCRA subpart CC requires that the company install an emissions control system on its surface impoundments; alternatively, it could build tanks that are exempt from the regulation. The company has stated that, absent the XL project, it would be in the company's best interest to build the tanks. CAA subpart YYY would require air emission controls on portions of OSi's wastewater collection and treatment system. YYY would be triggered because of OSi's offer to recover the methanol in the new capper. Therefore, absent the project, OSi simply would not have not installed a methanol recovery system on the new capper.

Since OSi is now planning to revamp its current capper unit, the project has changed
significantly. However, the OSi XL team believes, based on the information we have received thus far, that the project is still viable.

For the new project, OSi has promised to install additional pollution control devices on its current capper unit. These controls would reduce the current air emissions of 417,000 pounds per year by over 300,000 pounds per year from 1998 to 2002. Because the project would not involve the construction of a new unit, the equipment installation will likely occur sooner than originally proposed. By reusing and recycling recovered methanol, OSi would also reduce the sludge generated by the capper by about 500,000 pounds per year. OSi would also conduct waste minimization studies for the entire facility and agree on criteria for the implementation of the results of the studies. With regard to the regulatory flexibility needed for the project, a deferral of RCRA subpart CC would be required. In addition, we are negotiating with the company regarding a limited deferral of CAA subpart YYY that would allow the company to recover other chemicals rather than disposing of them through its wastewater treatment system.

Comparison of Environmental Benefits and Emissions Reductions
Original XL Proposal with New Capper Unit Modified XL Proposal using Existing Capper Unit
air pollution reductions300,000 lbs per year300,000 lbs per year
sludge reductions6 million lbs per year500,000 lbs per year
methanol recovery3.8 million lbs per year500,000 lbs per year
waste minimization studyyesyes, more extensive
regulatory flexibilityRCRA CC, CAA YYYRCRA CC, CAA YYY
cost savings$5 millionup to $5 million

In your review of the environmental benefits it is important to keep in mind that the new capper unit would have doubled OSi's production capacity and would have replaced an aging system prone to mechanical problems with a new state-of-the-art unit. Although OSi has not provided us with any details, it is planning to upgrade the reliability of the existing unit.

Though the environmental benefits from the project are reduced, we believe that the project is still viable. The environmental benefits from the project are still significant. In fact, the reduction in air emissions will likely be greater than under the original proposal because the emission reduction equipment may be installed sooner. In addition, we have completed five revisions of the draft FPA and our negotiations have continued to be productive. And, most importantly, an evaluation of the eight XL criteria using the terms of the new project supports continuation with the project:

1. Environmental results. While the emission reductions are not as substantial as those of the original project, they do meet the requirements for superior environmental performance. As mentioned above, the new project would result in reductions in air emissions of 270,000 pounds per year from 1997 to 2002. In addition, the project would eliminate about 550,000 pounds of sludge and allow methanol to be reused. OSi would also conduct a waste minimization study to locate other areas where environmental benefits could be achieved.

2. Stakeholder support. OSi has a public involvement plan in place and plans to involve stakeholders in the changes to the project. For the prior project, stakeholder support was consistent. We do not anticipate a change in stakeholder support for the project.

3. Monitoring, reporting & evaluation. Monitoring, reporting and evaluation will remain the same as under the previous project.

4. Cost savings and paperwork reduction. The XL project would eliminate the need to convert
the surface impoundments to tanks with a cost savings of $2.5 million. The additional equipment
to be installed through the project would cost about $500,000, thereby saving OSi about $2 million.

5. Innovation/multi-media pollution prevention. OSi's approach under the XL project would achieve a superior reduction in air emissions and waste generation than compliance with the regulations would. The recovery of methanol is also an innovative approach to pollution prevention and will significantly reduce the loading of methanol in the wastewater and the volume of sludge generated. The project is innovative in that it allows OSi to proceed with pollution prevention efforts that may be otherwise economically infeasible given the costs.

6. Transferability. The voluntary reduction of emissions from otherwise unregulated sources in exchange for relief from regulation of other sources is easily transferable to other facilities. A large universe of facilities exist that have either "grandfathered" sources or new sources that are not subject to extensive control. This project could be an example to such facilities of what is possible, as well as a proving ground for a broader industry-wide approach to flexible, performance-based regulation.

7. Feasibility. OSi has the resources to implement the project and the technology to be used is
state of the art.

8. Shifting the risk burden. This criteria is the same as under the previous project.

We do wish to note however that we are not pleased with making such substantial changes to the project so late in the process. We do not believe that the changes involved a "bait and switch" and it appears that we will obtain greater reductions in air emissions by gaining an earlier start date for the project.

For your information, we have sent a letter to OSi and Witco, its parent company, requesting that:

1. Witco sign the FPA;
2. OSi notify all stakeholders about the changes to the project;
3. OSi submit the changes to the project in writing; and
4. OSi and Witco commit to bringing the incinerator on line one year earlier than the original proposal.

cc: David Gardiner
Lisa Lund

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