Jump to main content.

Project XL Logo

Anheuser-Busch Companies

Stakeholder Implementation Plan Summary etc.

March 8, 1996

Via FEDEX 641-382-5250

Mr. William J. (Bill) Patton
Special Assistant
Region IV, USEPA
345 Courtland Street, Room 312
Atlanta, GA 30365

Dear Bill:

We appreciate your efforts in providing the necessary EPA leadership required to make Anheuser-Busch's (A-B's) Project XL a success. This signals support and understanding of certain important A-B Project XL concepts, particularly the consolidation of existing permits and the establishment of a multi-media baseline. While we appreciate the significant effort you undertook in proposing a phased tasks approach, references to involving JEA in negotiations and in issuance of permits is in no way a part of our project. Our project involves A-B commitments respecting utilization of third party utilities. It does not require commitments by nor the imposition of new restrictions on such third parties.

We are concerned that it is not feasible to meaningfully separate the project elements as you have proposed. In particular, permit consolidation in and of itself will not accomplish any of the anticipated project XL benefits, either as to flexibility or improved performance. The ability to show the utility of the A-B Project XL proposal in a first demonstration project is dependent on the expanded bubble multi-media concept.

Since December we have been engaged in the following tasks (copies are attached).

Mr. William J. (Bill) Patton
March 8, 1996
Page 2

While not yet in a form which we can deliver to you, our XL team is developing baseline data and relative impacts of several demonstration projects. This information will be discussed in detail with FDEP Northeast District at our scheduled meeting on Wednesday, March 13. We will separately raise the inherent authority issue with Florida DEP.

The absence of any clear delineation by EPA of its actual authority to enter into a binding FPA that does not unreasonably expose agreement participants to unacceptable legal risks is a key factor significantly impacting the feasibility of EPA's stated goal of achieving FPA execution by May 3, 1996. Both the basis for EPA's authority as well as the delineation of the mechanisms which will best represent the proper exercise of EPA's and DEP's authority are critical for the successful drafting of an agreement that will survive challenge by those adverse to this process.

A-B's duties to its shareholders compel it, as a matter of its fiduciary obligation, to thoroughly examine and understand these risks before an FPA can be finalized. Since this issue is common to all project XL proposals, rather than placing the burden of this research on each project participant, EPA can dramatically enhance the achieveability of its goal of May 3 execution of the FPA by securing and providing the opinion of EPA' s General Counsel as to the inherent authority of EPA to enter into agreements of the nature contemplated in Project XL. We have discussed the complexity of this research with our own outside counsel, and the preliminary budget for this work is in the range of $90-$135,000. In addition, the work will require a minimum of a month to complete. The cost burden is one which we did not anticipate in our budget for Project XL and as such we, as well as other Project XL participants, need EPA's assistance in answering these threshold legal questions. We will separately raise the inherent authority issue with Florida DEP.

While EPA had advised Project XL applicants that EPA could not assure applicants full insulation from third party challenges, EPA's proposed solution of relying entirely on stakeholders involvement to avoid third party conflict is insufficient to provide reasonable assurances to project participants. Only recently have the significant risks of this project become clearer due to a number of factors including our own improved understanding of the issue in the context of the statutory framework; the significant conflict publicly communicated in the CSI stakeholder process; our recent awareness of challenges by both public interest groups and EPA to the Amoco Yorktown, Virginia demonstration project and reported anticipated challenges to EPA's recent water trading initiative.

Our concern over finding a solution to the EPA inherent authority question has been further heightened by EPA's recent testimony to congress asserting that no authorized legislation is necessary for either Project XL or other EPA Reinvention Projections. This appears to be inconsistent with earlier statements by EPA representatives that specific legislation would be a key means of buttressing EPA's authority and hence establishing a reasonable basis for Project XL participant reliance. We trust such assertions were not made absent sound legal advice and hope that the basis for these assertions will be shared with us and other XL sponsors.

Mr. William J. (Bill) Patton
March 8, 1996
Page 3

We remain committed to the Project XL policy development goals. We are confident that the model we are proposing will more than satisfy the eight EPA Project XL criteria for success, which if implemented will demonstrate a superior model for environmental policy in the future.

We are continuing to work on our Project XL development and look forward to the detailed discussion that will lead to the signing of a Final Project Agreement. We also want to achieve the May 3rd date and know we will have EPA's cooperation in achieving our mutual goal of documenting the total project in that timeframe.



Larry W. Keith
Director, Environmental Engineering and Development
Corporate Environmental Affairs

cc: Ernest Frey - FDEP (via Fedex 641-382-5246) - w/att.
Jim Manning - RESD - w/att.
Cynthia Cummis (USEPA) - w/att.

Local Navigation

Jump to main content.