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Crompton Corporation (Formerly Witco Corporation)

Witco Draft FPA Available for Public Comment

PROJECT XL

FINAL PROJECT AGREEMENT



Between OSi Specialties, Inc.
A Subsidiary of Witco Corporation and U.S. Environmental Protection Agency and West Virginia Division of Environmental Protection For The OSi Specialties Plant in Sistersville, West Virginia

DRAFT FINAL

FINAL PROJECT AGREEMENT
OSI SPECIALTIES CONTENTS

I.     Purpose
II.    Project Description
III.   Project XL Criteria
IV.    Performance Standards
V.     Allowable Exclusion/Allowable Increase
VI.    Implementation
VII.   Modification
VIII.  Duration and Reevaluation of Project
IX.    Termination
X.     Dispute Resolution
XI.    Rights Retained
XII.   Transfer of Project Benefits and Responsibilities
XIII.  FPA Signatories and Contact Persons
XIV.   Notice

APPENDICES


Appendix A     Wastewater Collection and Treatment System Flow Diagram
Appendix B     Capper Flow Diagram
Appendix C     Regulatory Analysis
Appendix D     Emissions Analysis
Appendix E     Public Involvement Plan
Appendix F     Cost Estimates
Appendix G     EPA Prioritized Chemical List for Waste Minimization/Pollution Prevention Study

I.     Purpose

    A.     Purpose of the XL Program 

This Final Project Agreement ("FPA") states the intention of the U.S. Environmental Protection Agency ("EPA"), the West Virginia Division of Environmental Protection ("WVDEP") and OSi Specialties, Inc., a wholly owned subsidiary of Witco Corporation, ("OSi") to carry out a pilot project as part of EPA's "Project XL" program to test innovative approaches to environmental protection.  Project XL is an EPA initiative to test the extent to which regulatory flexibility, and other innovative environmental approaches, can be used to achieve both superior environmental performance and reduced economic burdens.

    B.     Purpose of This Final Project Agreement

This FPA is intended to be a joint statement of the plans and intentions of EPA, WVDEP, and OSi (collectively "the parties") with regard to the project approved for implementation at the Sistersville, West Virginia plant of OSi (the "Project").  This FPA is intended to clearly state the plans of the parties and to reflect the firm commitment of each party to carry out the Project.

This FPA is not, however, intended to create legal rights or obligations and is not an enforceable contract or a regulatory action such as a permit or rule.  Nevertheless, some provisions of this FPA will be implemented through rulemaking, consent orders and/or permitting, the terms and conditions of which will be legally enforceable.  All parties to this FPA will strive for a high level of cooperation, communication, and coordination to assure successful, effective, and efficient administration of the FPA and the Project.


II.  Project Description

    A.   Facility Description

         1.   General Background

OSi is a specialty chemical manufacturer.  At its chemical manufacturing plant near Sistersville, West Virginia (the "Facility"), OSi produces a broad range of silicone and silane products.  The Facility is located along the east side of the Ohio River in Long Reach, West Virginia, approximately six miles south of Sistersville, West Virginia on State Route 2.  It is located in a rural setting near the border of Tyler and Pleasants Counties, and is situated on approximately 1300 acres of land.  The operating units are situated centrally within the Facility and encompass approximately 50 acres.

    Preliminary aggregate figures from the 1990 Census conducted by the United States Bureau of the Census show a total population of 9,796 for Tyler County and 7,546 for Pleasants County.  Both counties are characterized as rural and have populations with an average age of approximately 35 years.  Only one residence on the West Virginia (east) side of the Ohio River is within a mile radius of the Facility.  This residence is more than 3,000 feet from the northern boundary of the operating units at the Facility.  Several other residences are located approximately 4,000 to 5,000 feet from the Facility on the Ohio (west) side of the Ohio River.  The town of Ben's Run is located approximately 6,000 feet southwest of the Facility.  There are no schools, hospitals or retirement centers within 8 miles of the Facility.  There are three small industrial facilities located within one mile of the Facility to the southwest.

    The surface rock formations in the area of the Facility are of sedimentary origin.  They consist primarily of sandstones, siltstones, claystones, shales, and coals.  The Facility is underlain by alluvium composed primarily of silty sand with some gravel.  Depths to bedrock vary from approximately 45 to 80 feet.  The bedrock is composed primarily of sandstones, siltstones, claystones, coal and shales of the Monogahela Series.

    Just to the north of the operating units at the Facility is Sugar Camp Run.  Sugar Camp Run is a small intermittent stream that flows generally westward to the Ohio River.  In the upper hillside areas, immediately adjacent to Sugar Camp Run, and generally to the east of the operating units, vegetation consists of typical tree species, such as black willow, American sycamore, black locust, and sugar maple.  The ground vegetation consists primarily of jewelweed, horsetail, crown vetch, and grasses.  The alluvial flood plain adjacent to the Facility is generally meadow-like.  Most of this area contains few trees, but does contain grasses, crown vetch, dandelions, goldenrod, etc.

    Benthic population (flies, beetles, worms) are found in portions of Sugar Camp Run in varying degrees, depending on the intermittent water flow in the run.  A variety of fish and wildlife habitats exist in the periphery of the Facility.  Typical wildlife include:  mammals such as mice and rabbits; birds such as crows, killdeer, sparrows, and turkeys; fish such as the darter and minnows; reptiles such as turtles and snakes; and amphibians such as salamanders, frogs, and toads.  According to the WV Division of Natural Resources, Wildlife Resources Section, Natural Heritage Program, no known occurrences of any endangered or threatened species occur within the vicinity of the Facility.

    Groundwater levels in the floodplain area appear to be controlled by the elevations of the Ohio River and fluctuate directly with the river. Water levels along the hillside at the eastern border of the facility are controlled by the slope of the bedrock, seasonal rainfall, and permeability of the soils.  Groundwater flow is generally from northeast to the southwest.  The aquifer is recharged by the floodplain to the north, the hillside to the east, possibly the bedrock formations below, and during high river stage by the river to the west.  The operating units are above the 100-year flood elevation.  Depth to groundwater near the operating units is approximately 50 feet.

         2.     Plant Manufacturing Areas

    The Facility is divided into four manufacturing groups as follows:

              a.     The Silanes Department manufactures organofunctional silanes and intermediates.

              b.     The New Product Development Department manufactures various organofunctional silanes and intermediates.  Equipment in this area is also used by on-site research and development for new product development and is operated by manufacturing personnel.

              c.     The Polymers I Department manufactures silicone fluids and silane esters.

              d.     The Polymers II Department manufactures silicone surfactants, emulsions, antifoams, and oils.  Included in this department is the polyether methyl capper unit, which, under this Project, will be the focus of emissions control and sludge reduction efforts.  The capper unit is described more fully in Section II.A.5. below.

         3.     Environmental Protection/Energy Systems Department (EP/ES Department)

    The EP/ES Department is responsible for treatment and disposal of plant wastes as well as supplying plant utilities.  Included in the EP operating areas are the Facility's hazardous waste incinerator, No. 2 hazardous waste landfill, wastewater treatment facility (including the dewatering unit and hydrolysis reactor), groundwater recovery well, hazardous waste container storage pads, drum flushing station, clean sewer skimmer, and Facility septic system.  The ES area includes the Facility boiler house, four wells which supply water to the Facility, air compressors which supply plant air, and a nitrogen unit operated by a contractor.

         4.     Process Sewer System

    The process sewer system collects wastewater streams (including process water such as scrubber water and vacuum jets, and intermittent waste streams from clean-up operations) from the Facility's manufacturing units and transports the wastewater via a collection system to the wastewater treatment unit located in the EP area.  The process sewer system transports the wastewater through several treatment steps including primary and secondary neutralization, primary clarification, equalization, biological treatment, secondary clarification, and air stripping for removal of any residual alkyl halides.  This wastewater collection and treatment system treats approximately 5.5 million gallons of wastewater per day, discharging the treated effluent into the Ohio River through a 30-inch high density polyethylene line under a National Pollutant Discharge Elimination System ("NPDES") permit.  (A wastewater collection and treatment system flow diagram is attached at Appendix A.)

    As part of this system, wastewater from the incinerator's air pollution control equipment (which is a listed hazardous waste under the Resource Conservation and Recovery Act ("RCRA")) is mixed with the other Facility process wastewater, and the mixture is managed in one of two lined, permitted minimum technology requirement ("MTR") surface impoundments (the "surface impoundments").  In addition, the surface impoundments receive leachate from the on-site hazardous waste landfill which is also a listed hazardous waste under RCRA.  These surface impoundments are each approximately 1 million gallons in size.  As a result of the treatment and disposal of the hazardous wastes mentioned above, the surface impoundments are considered to be hazardous waste management units.  Federal and state hazardous waste management requirements will apply to these impoundments so long as the wastewater is considered hazardous waste.

         5.     Proposed Methyl Capper Unit Controls and Methanol Collection System

    The polyether methyl capper unit (the "capper unit") operates continuously and performs a two-step reaction.  A process flow diagram of the capper unit is attached at Appendix B.  First, polyether (polyethylene oxide/polypropylene oxide polymers) and sodium methylate in methanol are fed into the first stage "devolatilizer" in which methanol is stripped from the product.  This first step results in additional methanol, plus a sodium salt of the polyether which is then processed in the second step of the reaction.  A portion of the stripped methanol is condensed, collected in a tank, and is either disposed of in the wastewater treatment unit ("WWTU") or incinerated.  Under this Project, the collected methanol will be transferred to tank trucks or rail cars for reuse or recycling.  Absent the Project, the condensed methanol could continue to be disposed of in the WWTU or incinerated.

    In the second step, the sodium salt of the polyether is routed to the methyl chloride contactor, in which methyl chloride is added to produce the methyl capped polyether, which is the intended product.  Under this Project, excess methyl chloride and dimethyl ether generated in the reaction will be collected from various vents and will be routed via a closed-vent system to a thermal incinerator.  The incinerator will be capable of achieving a minimum 98% destruction efficiency of the organic compounds in the vent stream.  This incineration will produce hydrogen chloride gas as a by-product, which will be controlled with a water scrubber that discharges to the process sewer.  Absent the Project, no thermal incinerator or other control device for the process vent stream from the capper unit would be required.

    B.     Overview of the Project

    Under this Project, OSi will reduce air emissions and waste that would otherwise be generated by its capper unit in two distinct ways.  First, air emissions of organic compounds (methyl chloride, dimethyl ether, and methanol) from process vents associated with the capper unit will be reduced by 98% by the installation and operation of a currently unrequired control device.  Second, discharges of condensed methanol from the capper unit's recovery equipment to the wastewater treatment system will be minimized.  OSi will direct 95% of the recovered methanol toward recycling or thermal recovery/treatment, and will restrict traditional bio-treatment of the methanol in wastewater treatment units.  It is OSi's goal to direct as much of the methanol to reuse or recovery as is feasible.  OSi will thereby reduce loading on, and secondary air emissions from, the on-site wastewater treatment system, and will decrease sludge generation and subsequent disposal of sludge in the on-site hazardous waste landfill.  Based on estimates of historical performance of the methanol condenser, OSi anticipates that approximately fifty percent of the methanol generated by the capper unit will be recovered.  In total, the Project is anticipated to reduce annual air emissions by approximately 309,000 pounds and annual sludge generation by approximately 800,000 pounds, as compared to 1995 emissions and sludge generation.

    The parties recognize that pollution prevention is an integral part of modern environmental management.  While enormous strides in environmental protection have been made through the use of "end of pipe controls," pollution prevention strategies can often achieve further, substantial environmental performance in a more cost-effective manner.  In the past, OSi has implemented a number of pollution reduction opportunities at the Facility, and is committed to implementing source reduction where possible and cost-effective.  In an effort to formalize its continuing source reduction efforts, OSi will, as part of the Project, implement a comprehensive waste minimization/pollution prevention project (the "WMPP Project").  Consistent with EPA's Hazardous Waste Minimization National Plan, the reduction of persistent, bioaccumulative and toxic constituents in the Facility's waste streams will be one focus of the WMPP Project.

    The WMPP Project will include a study of plant operations in an effort to identify existing and future pollution prevention and waste minimization opportunities.  OSi will retain an outside consultant to work with plant and corporate personnel to conduct this study.  As set forth in Section IV, OSi expects to implement those waste minimization and/or pollution prevention opportunities which are technically and economically feasible.  Through the use of an Advisory Committee, OSi will involve EPA, WVDEP, and appropriate stakeholder representative(s) in the study and implementation phases of the WMPP Project.

    As an incentive for undertaking all of the above measures, EPA and WVDEP (the "Agencies") intend to propose and (subject to review of public comment) implement a limited deferral of certain air emission control requirements applicable to the Facility's wastewater collection and treatment system under Subpart CC of Parts 264 and 265 of the federal hazardous waste program and the state equivalent.  If the Project is not implemented, OSi would address the RCRA Subpart CC standards by replacing the surface impoundments with open top tanks.  As described in more detail in Section II.C.1.a., the tanks would not be subject to the RCRA Subpart CC requirements, and their level of air emissions would be the same as that of the surface impoundments.  Moreover, absent the Project, methanol discharges to the process sewer as waste would continue, and OSi would be under no obligation to undertake the WMPP Project.  Thus, this means of addressing the existing RCRA Subpart CC control requirements would result in no decrease in air emissions from the wastewater collection and treatment system, and would have no effect on sludge generation.  Capital costs associated with complying with the RCRA Subpart CC requirements in this manner are approximately $2,500,000.  The capital costs OSi will incur as a result of this Project are approximately $600,000.

    Also, in limited circumstances, OSi would obtain a deferral of the application of separate proposed air emission control requirements expected to be codified at 40 C.F.R. Part 60, Subpart YYY of the Clean Air Act ("CAA") regulations.  As discussed in Section II.C.1.b., OSi believes that these provisions might apply to the Facility if OSi undertakes certain waste minimization activities.  As proposed, these regulations could require emission controls on the wastewater collection and treatment system.  OSi estimates the cost associated with implementation of such controls to be approximately $2,500,000.  This additional cost would likely prevent the implementation of a number of waste minimization activities.  The Project provides for a limited deferral of the CAA Subpart YYY provisions where certain criteria are met by OSi.

    C.     Identification of Regulatory Flexibility

    This section describes the nature of the regulatory flexibility to be obtained through this Project.  First, it summarizes the legal authorities that are relevant to or impacted by the Project.  Second, it highlights how the Project affects the otherwise potentially applicable requirements.  Last, it describes the manner in which the regulatory flexibility will be implemented.

         1.     Relevant Federal and State Regulations

    The major federal and state regulations which are relevant to this Project are set forth below.  Further description of these and other relevant federal and state regulations is included in the Regulatory Analysis attached at Appendix C.

              a.    Air Emission Standards for Hazardous Waste Tanks, Surface Impoundments, and Containers

    The federal hazardous waste regulations pertinent to this Project implement Section 3004(n) of the Resource Conservation and Recovery Act ("RCRA").  These regulations establish requirements for the control of air emissions from hazardous waste tanks, surface impoundments and containers and are set forth at 40 C.F.R. Parts 264 and 265, Subpart CC.  West Virginia has incorporated these federal regulations into its air quality regulations at 45 C.S.R. 25.  (These federal and state regulations will be collectively referred to in this FPA as "RCRA Subpart CC.")  Under RCRA Subpart CC, OSi would be required to meet certain standards to control air emissions from its two surface impoundments, a number of hazardous waste tanks and containers, and certain transfer systems between some of those units.

    With respect to the OSi surface impoundments, RCRA Subpart CC would require the installation of some type of air emissions control equipment.  Alternatively, OSi could replace its two surface impoundments with two aboveground tanks which are exempted from the RCRA regulatory program because they would be part of a wastewater treatment system permitted under the NPDES program to discharge to the Ohio River.  See 40 C.F.R. ' 264.1(g)(6).  Because these tanks would be exempt from RCRA permitting, the tanks would not be subject to the RCRA Subpart CC requirements.  OSi's evaluation of these alternatives has shown the most economical option to address RCRA Subpart CC would have been the replacement of the surface impoundments with aboveground tanks for a cost of approximately $2,500,000.  The replacement of the surface impoundments would have no significant effect on air emissions from the wastewater treatment system at the Facility due to the expected configuration of the tanks.

    RCRA Subpart CC also sets forth management standards intended to control organic emissions from containers and tanks.  OSi is not seeking regulatory relief with respect to the hazardous waste containers and tanks within the scope of this Project, and will comply with the RCRA Subpart CC requirements, to the extent applicable thereto.

              b.     New Source Performance Standards for Volatile Organic Compound Emissions From the Synthetic Organic Chemical Manufacturing Industry's ("SOCMI") Wastewater

    On September 12, 1994, EPA proposed new source performance standards under Section 111 of the CAA to control volatile organic compound emissions from wastewater generated by certain SOCMI process units.  As proposed, these standards would generally apply to new or modified process units that (i) produce as a product, co-product, by-product, or intermediate any of a specific list of substances ("Subpart YYY Substances") and (ii) generate a wastewater stream with volatile organic concentrations above a threshold amount.  The standards, which will be set forth at 40 C.F.R. Part 60, Subpart YYY, are limited to emission points in the wastewater collection and treatment system to which the process unit discharges.  Although no state equivalent has been proposed, the parties expect that the state will incorporate the final standards by reference into the state air quality rules.  (These anticipated federal and state regulations will be collectively referred to in this FPA as "CAA Subpart YYY.")

    If CAA Subpart YYY is promulgated as proposed and if it becomes applicable to the Facility as a result of process changes or additions, OSi may be required to place air emission controls on portions of the wastewater collection and treatment system, including the surface impoundments (or replacement tanks), the individual drain systems and process sewers, and other units.  OSi anticipates, based upon a rough estimate of the scope of work, that capital costs to comply with CAA Subpart YYY as currently proposed would be approximately $2,500,000.

    It is important to note that OSi does not currently produce, nor does it expect to produce in the future, any of the CAA Subpart YYY Substances as primary products.  Based on the proposed rule, OSi anticipates that the most likely potential trigger of CAA Subpart YYY applicability to a source at the Facility would be the recovery and subsequent reuse of a byproduct (such as methanol or acetic acid) from the waste stream of a new or modified process unit.  If such a triggering event were to occur at any time during the Project, the cost associated with CAA Subpart YYY compliance would undermine the economic basis of such recovery/reuse, and the Project itself.  In essence, the benefit to OSi of the deferral obtained under the Project (i.e., delay in compliance with RCRA Subpart CC surface impoundment control requirements) would provide no practical relief given the similar requirements under CAA Subpart YYY.  This would occur even if the increase in volatile organic emissions from the wastewater system resulting from the addition or modification is relatively small.

    The parties acknowledge the competing considerations to be balanced in working through the relationship between the Project and the potential future applicability of CAA Subpart YYY.  The Project will result in approximately 300,000 pounds per year reduction of volatile organic emissions.  In addition, the Project includes a waste minimization/pollution prevention ("WMPP") study that may, among other results, include one or more WMPP activities designed to recover, for productive use, constituents that would otherwise enter waste streams or be released into the environment.  If such WMPP activities involve a new or modified process and include one or more CAA Subpart YYY Substances, the proposed CAA Subpart YYY indicates that the associated wastewater treatment system could be subject to air emission control requirements.

    The parties consider the WMPP initiatives to be a significant contribution to the superior environmental performance offered by the Project.  To avoid discouraging the Facility from undertaking WMPP activities, the parties have agreed that it is reasonable to offer a deferral from CAA Subpart YYY applicability triggered by a WMPP activity.  If CAA Subpart YYY would not otherwise be applicable to the new construction, reconstruction or modification at the Facility, but the inclusion of a WMPP activity causes CAA Subpart YYY to be applicable, the EPA and WVDEP expect to defer applicability of CAA Subpart YYY to that new construction, reconstruction, or modification, for the minimum Project term as defined in Section II.D.  Given the possibility that the final CAA Subpart YYY rule could differ significantly from the proposal, the parties acknowledge that after publication in the Federal Register of the final rule, further evaluation of the deferral provisions of Section V of the FPA may be appropriate.

              c.     National Emission Standards for Hazardous Air Pollutant Emissions From Miscellaneous Organic Chemical Processes

    EPA plans to promulgate national emission standards for hazardous air pollutants ("NESHAPs") applicable to miscellaneous organic processes (the "MON") under Section 112 of the CAA by November 15, 2000.  The MON is expected to apply to organic chemical processes which are covered by Standard Industrial Classification major group code 28 (Chemical Manufacturing) and which are not covered by another NESHAP.  EPA anticipates that the MON will establish air emission standards applicable to the capper unit and wastewater collection and treatment system at the Facility.  EPA expects the standards to establish control requirements for emissions of hazardous air pollutants from process vents, transfer operations, storage tanks, equipment leaks and wastewater collection and treatment systems.  EPA further believes that the MON will include process vent control requirements similar to the proposed control for the capper unit process vent emissions to be implemented under the Project.  Accordingly, EPA expects to receive superior environmental benefits from the Project only until such time as compliance with the technical requirements of the MON is required (the "MON compliance date").  Therefore, this FPA provides for reevaluation of the Project following the proposal of the MON.  (See Section VIII.)

         2.     Alternative Compliance Provided by the Project

    Under this Project, OSi would not be required to comply with RCRA Subpart CC with respect to the surface impoundments or, in limited circumstances described in Section V, with CAA Subpart YYY during the minimum Project term, as defined in Section II.D.  Instead, under this Project, OSi will:

              a.     install and operate emission controls on the process vents of the existing capper unit which will significantly reduce Facility emissions beyond levels anticipated to be achieved by OSi's planned compliance with RCRA Subpart CC,

              b.     initiate reuse/recycling of methanol recovered from the existing capper which reduces (a) methanol emissions from the wastewater collection and treatment system, and (b) the loading of methanol in the wastewater treated at the wastewater treatment plant.  The reduction in methanol loading will decrease the amount of sludge generated and disposed of in the on-site hazardous waste landfill, and

              c.     conduct a pollution prevention/waste minimization study of processes and operations at the Facility, and, to the extent technically and economically feasible as defined in Section IV.F., make good faith efforts to implement opportunities identified during the study.

    It is possible that future process changes may result in the applicability of CAA Subpart YYY (as currently proposed) to the wastewater collection and treatment system.  The parties to this FPA agree that the "allowable exclusion/allowable increase" CAA Subpart YYY deferral contained in this Project will apply to future SOCMI process unit construction, reconstruction or modification that would trigger CAA Subpart YYY, provided that EPA and WVDEP determine that the "allowable exclusion" or "allowable increase" meets the criteria set forth at Section V herein.

    OSi and (subject to review of public comment received on the proposed implementation mechanisms) the Agencies have determined that the regulatory flexibility described above constitutes an appropriate incentive for the expected reduction in air emissions, the sludge generation, and performance of the WMPP Project.

    D.     Project Implementation/Duration

    OSi's implementation of the Project is conditioned upon the issuance by the Agencies of the implementation mechanisms described in Section VI (e.g., the EPA site-specific RCRA rule and the WVDEP Consent Order) consistent with the provisions of this FPA.  The parties to the FPA agree to the following implementation schedule:

         1.     By April 1, 1998, OSi will complete installation and initial start-up of a thermal incinerator on the capper unit's process vents.  By July 14, 1997, OSi expects to have entered into a contract for the purchase of the thermal incinerator.  By December 15, 1997, OSi expects to have received on-site the thermal incinerator.  By January 15, 1998, OSi expects to have initiated on-site installation of the thermal incinerator.

         2.     OSi will continue methanol recovery and commence methanol reuse/recycling as set forth in this FPA within 10 days of the signing of this FPA by all parties.

         3.     Within forty-five (45) days of signing of the FPA by all parties, OSi will select a Study Team to perform the WMPP Study.  OSi will implement the WMPP Project in accordance with the timeframes set forth in Section IV.F. of this FPA.

    The parties expect that this Project will be in operation until the date on which any emission controls applicable to the capper unit and the wastewater collection and treatment system under the MON are required to be operated (the "minimum Project term") unless reevaluation under Section VIII of this FPA allows otherwise.

    E.     Enforceability

    This FPA is not intended to create legal rights or obligations and is not an enforceable contract or a regulatory action such as a permit or rule.  This applies to both the substantive and the procedural provisions of the FPA.  Thus, for example, the FPA establishes procedures that the parties intend to follow with respect to termination under the FPA.  However, while the parties fully intend to follow these procedures, they are not legally obligated to do so.  Because it is not legally enforceable, the FPA is not an agency "action" that could be reviewable; in addition, no action or omission by any party to the FPA could give rise to any claim against the party for penalties, damages or other compensation based solely on the claim that the action or omission was at variance with a provision or provisions of the FPA.


III.       Project XL Criteria

    A.    Environmental Results

    The Project will attain reductions in air emissions (primarily methyl chloride) over the term of the Project superior to those reductions that would otherwise be obtained through compliance with RCRA Subpart CC absent the Project.  OSi's XL Project will require a baseline for measurement and evaluation of future results.  Two scenarios (based on 1995 production rates for the unit) have been developed to establish this preliminary baseline and as a comparison method to demonstrate the superior environmental performance of this Project.  The first scenario represents the environmental results expected under this XL Project.  The second scenario represents the environmental results expected without implementation of the Project.  The values presented are best engineering estimates and should be viewed only as estimates and not expected absolute values.  These values are used for evaluation only, and will not constitute performance standards for the Project.  The values could increase or decrease depending upon production requirements, waste minimization projects under Section IV.F., and possible use of the allowable exclusion/allowable increase procedures under Section V.  The emissions estimates for each scenario will be updated in each annual report using then-current data.

         1.    With Project XL

               OSi is granted its XL Project and installs a vent incinerator, to which certain process vents of the capper unit are routed for air emissions control.  Collected methanol is reused/recycled and is neither discharged to the WWTU nor incinerated.  (Management of the methanol in this manner does not trigger CAA Subpart YYY controls because, among other reasons, the capper unit has not been modified or reconstructed.)  There are no air emission controls (RCRA Subpart CC or CAA Subpart YYY) installed on the WWTU.  At the expected end of the Project (assumed to be 2002, the year in which it is expected that the MON may require control of capper unit emissions), any required emission controls will be placed on the capper unit and the WWTU and voluntary methanol collection could continue.

         2.    Without Project XL

               OSi is not granted its XL Project and continues to operate its capper unit without a vent incinerator.  OSi's two surface impoundments are replaced with two open top tanks.  Because these tanks would be exempt from RCRA permitting (under 40 C.F.R. Sections 264.1(g)(6) and 265.1(c)(10)), the tanks would not be subject to the RCRA Subpart CC requirements .  OSi continues to collect and reuse or dispose of methanol from the capper unit.  Additional controls on either the capper unit or WWTU will not be required until the expected MON compliance date, assumed to be 2002, at the earliest.

    The following table, Table 1, depicts, in summary form, the estimated air emission and waste discharges from the two different scenarios.
TABLE 1

	Baseline	With XL	Without XL	Reduction Due to XL
Air Emissions from Capper Unit (lb/yr)	277,000	6,300	277,000	271,000
Air Emissions from WWTU (lb/yr)	140,300	102,000	140,300	38,000
Total Project Related Air Emissions (lb/yr)	417,300	108,300	417,300	309,000
Organic Capper Discharges to WWTU (lb/yr)	790,000	389,000	940,000	551,000*
Sludge Generated From Capper Methanol (lb/yr)	1,177,300	610,000	1,425,000	815,000*

* In these cases, the "Reduction Due to XL" is calculated by subtracting the "With XL" column figure from the "Without XL" column figure because it is anticipated that the "Baseline" column figures will not be representative of future operations.  In 1995, the baseline year, 790,000 pounds of methanol and other organics were sent to the WWTU, and 150,000 pounds of methanol were incinerated on-site.  However, due to operational factors, OSi expects that absent the Project most of the methanol from the capper unit would be discharged to the WWTU in years after 1996.

    Absent the Project, OSi's method of addressing RCRA Subpart CC with respect to the surface impoundments would result in no decrease in air emissions.  In contrast, under the Project, incinerator vent controls on the capper unit would reduce annual Facility air emissions associated with the process by an estimated 309,000 pounds.  A more detailed discussion and presentation of estimated emissions with and without this Project is contained in the Emissions Analysis attached at Appendix D.

    The Project will also include important pollution prevention components consisting of OSi's commitment to perform methanol recovery and to undertake the WMPP Project.  By recovering the methanol, OSi will reduce the loading of methanol in the wastewater treated at the wastewater treatment plant, as well as reducing the amount of sludge that would be generated and disposed of in the on-site hazardous waste landfill absent Project XL.  Without Project XL, an estimated 940,000 pounds of organics (over 90 percent of which is methanol) could be discharged to the wastewater treatment plant annually, generating 1,425,000 pounds of hazardous waste sludge.  In contrast, the Project will result in an estimated net decrease in organics loading by 551,000 pounds annually, reducing sludge generation by 815,000 pounds.  Moreover, OSi intends to identify and implement other waste minimization/pollution prevention opportunities through the WMPP Project.

    As noted previously, it is likely that the MON will apply in the future to require some level of control of emissions from the capper unit and the wastewater collection and treatment system.  That event would not diminish the superior environmental performance obtained prior to the compliance date of the MON under this Project.  The total emission reductions and pollution prevention achieved as a result of implementation of the Project during the minimum Project term will be significant.  As noted previously, absent the Project, OSi would address RCRA Subpart CC by replacing the two surface impoundments with two open top tanks not subject to RCRA Subpart CC.  Even if OSi were to comply with RCRA Subpart CC by covering the surface impoundments, the resulting air emission reductions of approximately 45,000 pounds would be less than one-sixth of the air emission reductions expected under this Project.  Thus, the Project is expected to result in a positive overall environmental impact for organic air emissions reductions during the minimum Project term.

    B.     Stakeholder Support

    OSi has undertaken an extensive program to measure and maintain stakeholder support for the Project.  This program is described in detail in the Public Involvement Plan prepared for this Project, which is attached at Appendix E.  OSi focused on a number of stakeholder groups, including the local community, workers at the plant (both salaried and union), and local, state and national environmental groups.  Support for the Project has been consistent, as indicated by the letters of support and news clippings which will be included in the FPA's administrative record file.

    Stakeholder involvement during the Project development stage was cultivated in several ways.  The methods included communicating through the media (newspaper and radio announcements), directly contacting interested parties, and offering an educational program on the regulatory programs impacted by the Project.

    As the Project moves from the development stage to implementation, the stakeholder involvement program will shift its focus to ensuring that (1) stakeholders are apprised of the status of Project construction and operation, and (2) stakeholders have access to information sufficient to judge the success of the Project.  Anticipated stakeholder involvement during the term of the Project will likely include another general public meeting to present the final draft FPA, periodic status reports, availability of data and other information generated during the Project, and appointment of an OSi Project XL contact at the Facility to serve as a resource for the community.  For example, the Project reporting protocols will call for notification of interested parties of the availability of semiannual and annual Project reports.

    C.     Monitoring, Reporting, Evaluation

    Monitoring, reporting, and evaluation information will be made available to EPA, WVDEP, and stakeholders as provided in Section IV.H. of this FPA.  The performance standards for this Project, set forth in Section IV of this FPA, encompass clear objectives and requirements which will allow EPA and the public to evaluate the success of this Project.

    D.     Cost Savings and Paperwork Reduction

    Project XL will result in significant cost deferrals to OSi.  As indicated in the cost savings table attached at Appendix F, the capital costs associated with compliance with RCRA Subpart CC are approximately $2,500,000, to be incurred by the end of 1997, resulting in no decrease in air emissions from the two surface impoundments.  These costs include $2,000,000 for the replacement of the two surface impoundments with two open top tanks exempt from RCRA regulation and approximately $500,000 for RCRA closure of the surface impoundments.  Compliance with CAA Subpart YYY, if applicable, could be achieved by fitting the replacement tanks with covers and emission controls and by sealing and controlling the wastewater collection and treatment system.  CAA Subpart YYY compliance costs, if incurred, could add up to an additional $2,500,000, resulting in a reduction in annual air emissions of approximately 130,000 pounds from the WWTU and collection system.

    In contrast, the cost of installing emission controls on the existing capper unit will be $600,000 and will result in the annual reduction of about 860,000 pounds of organic compounds discharged to the air and water.  These figures reflect the capital costs of the equipment, but do not include the additional costs of operation and maintenance, which are also expected to be higher absent the Project.  In addition, decreased sludge generation will extend the useful life of the existing on-site landfill.

    E.     Innovation/Multi-Media Pollution Prevention

    The Project will test an innovative alternative to traditional regulation.  Having quantified the anticipated benefits to be achieved under OSi's expected approach for addressing RCRA Subpart CC at the Facility, OSi identified more cost-effective measures which result in superior reductions of Facility air emissions.  Thus, under the Project, OSi will install and operate controls on a currently unregulated emissions source in exchange for a deferral with respect to the otherwise applicable control requirements on another emission source.  In addition, the Project provides a cross-media benefit in that OSi will also reduce sludge generation.  This approach will achieve a superior reduction in air emissions and waste generation at the Facility in exchange for relief from the RCRA Subpart CC and, in limited circumstances, potential relief from CAA Subpart YYY air emission requirements.  See the Emissions Analysis at Appendix D for a more complete discussion of these estimated reductions.  Further, OSi will perform the WMPP Project to identify and implement opportunities for waste minimization and pollution prevention at the Facility.

    The Project will reduce organic compound emissions in two ways:  (a) control of emissions from capper unit process vents and (b) reduction of secondary emissions from the wastewater collection and treatment system.  Recovery of methanol is also an innovative approach to pollution prevention.  It significantly reduces loading of methanol to wastewater, reduces secondary emissions, and reduces the volume of sludge land-disposed.  The Project is also innovative in that it allows OSi to proceed with pollution prevention efforts that may be otherwise economically infeasible given the anticipated cost to OSi of compliance with CAA Subpart YYY, which may be triggered by such pollution prevention efforts.

    F.     Transferability

    The 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.

    The Project also integrates two pollution prevention concepts, waste minimization and recycling, with the broader goal of achieving superior environmental results through an innovative regulatory approach.  Application of these concepts recognizes that modifications to existing regulation can be used effectively to achieve meaningful pollution prevention.

    G.     Feasibility

    The available organic compound emission control technology and methanol recovery equipment that OSi expects to use under the Project are state-of-the art, and the expected performance is considered reasonable and attainable.  In addition, the emissions reductions to be gained are from proven technology.  OSi has the resources necessary to implement the Project and intends to apply those resources to the Project.

    H.     Shifting of Risk Burden

    OSi will follow applicable state and federal requirements (including OSHA standards) to ensure worker safety during construction and implementation of the Project.  Representatives of the workers' union have been present during FPA negotiations, and will be closely involved in the development and implementation of the Project.

    OSi has analyzed Executive Order No. 12898 on Environmental Justice, and concluded that the Project will result in no unjust or disproportionate environmental impacts.  The Project will result in reductions in air emissions which benefit all persons working in or living near the Facility.  Moreover, no person or population has been excluded either from participation in the development of this FPA or from the enjoyment of the benefits of the Project on the basis of their race, color, national origin, or level of income.


IV.     Performance Standards

    The following performance standards will be incorporated in, and become legally effective and enforceable through, the legal mechanisms used to implement the Project:

    A.    Installation of Capper Unit Control Device and Methanol Recovery Operation

         1.     Initial start-up of a thermal incinerator on the capper unit's process vents -- from the first stage vacuum pump, from the flash pot and surge tank, and from the water stripper (see flow diagram in Appendix B) -- will be completed by April 1, 1998.  For these purposes, the term "start-up" shall have the meaning set forth at 40 C.F.R. ' 63.2.

         2.     Methanol recovery and reuse/recycling will commence within 10 days of signing of the FPA by all parties.

         3.     Notification of the actual date of initial start-up and commencement will be provided to EPA and WVDEP as soon as practicable, but in no event later than 15 days after such events.

    B.   Operation of the Capper Unit Process Vent Incinerator

         1.   Performance Standard

              a.    Except as provided under Section IV.B.4. herein, the process vent thermal incinerator will reduce emissions of total organic compounds ("TOC") from the process vent streams identified in Section IV.A.1., above, by 98 weight-percent or to a concentration of 20 parts per million by volume, on a dry basis, corrected to 3 percent oxygen, whichever is less stringent.  Compliance will be determined as follows:

                    (1)   Prior to conducting the initial performance test, compliance is demonstrated by operating the thermal incinerator at or above a minimum temperature of 1600E F.

                    (2)   After the initial performance test, compliance is demonstrated by operating the thermal incinerator at or above the minimum temperature established during the initial performance test described in Section IV.B.2.a.(1), below.

                    (3)   The process vent thermal incinerator will be in operation at all times during which the capper unit is being operated to manufacture product.

              b.    OSi will install, calibrate, and maintain all air pollution control and monitoring equipment required under Paragraph IV.A.1. and IV.B.2.b. according to the manufacturer's specifications, or other written procedures that provide adequate assurance that the equipment will reasonably be expected to control and monitor accurately, and in a manner consistent with good air pollution control practices during all periods when emissions are generated.

         2.   Performance Testing and Monitoring

              a.    Initial Performance Test

                    (1)   Within sixty (60) days after vent incinerator initial start-up, OSi will conduct a performance test to determine the minimum temperature at which compliance with the emission reduction requirement specified in Section IV.B.1. is achieved.  This determination will be made by measuring TOC (minus methane and ethane) in the emissions from the thermal incinerator using the procedures set forth in the relevant provisions of 40 C.F.R. ' 63.116, although the parties recognize that these regulatory requirements are not directly applicable.

                    (2)   The initial performance test will be conducted consistent with 40 C.F.R. ' 63.116, although the parties recognize that these regulatory requirements are not directly applicable, and any additional requirements as may be specified by WVDEP.

              b.    Monitoring

                    Upon initial start-up, OSi will install, calibrate, maintain and operate according to manufacturer's specifications and in a manner consistent with good air pollution control practices the following equipment:

                    (1)   A temperature monitoring device equipped with a continuous recorder.  The temperature monitoring device shall be installed in the firebox or in the duct work immediately downstream of the firebox in a position before any substantial heat exchange is encountered.

                    (2)   A flow indicator that provides a record of vent stream flow to the incinerator at least once every fifteen minutes.  The flow indicator will be installed in the vent stream from the process vent at a point closest to the inlet of the incinerator.

                    (3)   If the closed-vent system includes bypass devices that could be used to divert the gas or vapor stream to the atmosphere before entering the control device, each bypass device shall be equipped with either a bypass flow indicator as specified in paragraph (b)(3)(i) or a seal or locking device as specified in paragraph (b)(3)(ii) of this Section.  For the purpose of complying with this paragraph, low leg drains, high point bleeds, analyzer vents, open-ended valves or lines, spring-loaded pressure relief valves, and other fittings used for safety purposes are not considered to be bypass devices.

                         (i)   If a bypass flow indicator is used to comply with paragraph (b)(3) of this Section, the bypass flow indicator shall be installed at the inlet to the bypass line used to divert gases and vapors from the closed-vent system to the atmosphere at a point upstream of the control device inlet.

                         (ii)  If a seal or locking device is used to comply with paragraph (b)(3) of this Section, the device shall be placed on the mechanism by which the bypass device position is controlled (e.g., valve handle, damper levels) when the bypass device is in the closed position such that the bypass device cannot be opened without breaking the seal or removing the lock.  Examples of such devices include, but are not limited to, a car-seal or lock-and-key configuration valve.  OSi shall visually inspect the seal or closure mechanism at least once every month to verify that the bypass mechanism is maintained in the closed position.

                    (4)   For purposes of this Section, the term "flow indicator" means a device which indicates whether gas flow is present in the vent stream, and, if required by the permit for the thermal incinerator, which measures the gas flow in that stream.

                    (5)   For purposes of this Section, the term "continuous recorder" means a data recording device that records an instantaneous data value at least once every fifteen minutes.

         3.   Recordkeeping

              OSi will keep an up-to-date, readily accessible record of the following:

              a.     Data measured during the initial performance test regarding the firebox temperature of the incinerator and the percent reduction of TOC achieved by the incinerator, and/or such other information required in addition to or in lieu of that information by the WVDEP in its approval of equivalent test methods and procedures.

              b.     Continuous records of the equipment operating procedures specified to be monitored under Section IV.B.2.b., as well as records of periods of operation during which the firebox temperature falls below the minimum temperature established under Section IV.B.1.a.

              c.     Records of all periods during which the vent stream has no flow rate to the extent that the capper unit is being operated during such period.

              d.     Records of all periods during which there is flow through a bypass device.

         4.   Start-up, Shutdown, Maintenance and Malfunction

              a.     OSi will develop and implement a Start-up, Shutdown and Malfunction Plan consistent with the provisions set forth below and any additional requirements set forth by WVDEP in the operating permit for the thermal incinerator issued under 45 C.S.R. 13.  The plan shall describe, in detail, procedures for operating and maintaining the thermal incinerator during periods of start-up, shutdown and malfunction and a program of corrective action for malfunctions of the thermal incinerator.

              b.   The purpose of the plan is to:

                   (i)   ensure that the thermal incinerator is operated in a manner consistent with good air pollution control practices,

                   (ii)  ensure that OSi is prepared to correct malfunctions as soon as practicable after their occurrence in order to minimize excess emissions, and

                   (iii) reduce the reporting burden associated with periods of start-up, shutdown and malfunction.

              c.    During periods of start-up, shutdown and malfunction, OSi shall maintain the process unit and the associated thermal incinerator in accordance with the procedures set forth in the plan.

              d.    The plan will contain recordkeeping requirements relating to periods of start-up, shutdown or malfunction, actions taken during such periods in conformance with the plan, and any failures to act in conformance with the plan during such periods.

              e.    During periods of maintenance or malfunction of the thermal incinerator, OSi may continue to operate the capper unit, provided that operation of the capper unit without the thermal incinerator shall be limited to no more than 240 hours each calendar year.

              f.    To satisfy the requirement to have a plan, OSi may use its operating procedures manual, or any other plan developed for other reasons, provided the alternative plans meet the standards set forth above for the start-up, shutdown and malfunction plan.

    C.   Operation of the Closed-Vent System

         1.   Performance Standards

              a.   At all times when the process vent thermal incinerator is operating, the process vent streams identified in Section IV.A. from the capper unit will be routed to the thermal incinerator through a closed-vent system.  For these purposes, a closed vent system is defined as a system that is not open to the atmosphere and that is composed of piping, connections and, if necessary, flow-inducing devices that transport gas or vapor from the capper unit process vent to the thermal incinerator.

              b.   The closed-vent system will be designed for and operated with no detectable emissions, which for these purposes is defined as an instrument reading of less than 500 parts per million by volume above background as determined under EPA Reference Method 21.

         2.   Compliance Date

              OSi will comply with the performance standard set forth in Section IV.C.1.a. on and after the date on which the initial performance test referenced in Section IV.B.2.a. is completed, but no later than sixty (60) days after the initial start-up date.

         3.   Monitoring

              a.   At the time of the performance test described in Section IV.B.2.a., OSi will inspect the closed-vent system to determine compliance with Section IV.C.1.b.  The initial inspection will be performed using the procedures and methods set forth at 40 C.F.R. ' 63.148(c), although the parties recognize that these regulatory requirements are not directly applicable.

              b.   Subsequent annual inspections will be performed for visible, audible, or olfactory indications of leaks.

              c.   If at any time a defect or leak is detected in the closed-vent system, OSi shall repair the defect or leak as follows:

                   (i)  OSi shall make first efforts at repair of the defect no later than five (5) calendar days after detection, and repair shall be completed as soon as possible but no later than forty-five (45) calendar days after detection.

                   (ii) OSi shall maintain a record of the defect repair in accordance with the requirements specified in paragraph 4, below.

         4.   Recordkeeping:  OSi will keep up-to-date, readily accessible records of the inspections and repairs referenced above at the Facility.

    D.   Operation of the Methanol Recovery Operation

         1.   Performance Standard

              The condenser associated with the methanol recovery operation will be in operation at all times during which the capper unit is being operated to manufacture product.

         2.   Monitoring

              a.   OSi will perform measurements necessary to determine the following information needed to demonstrate the percentage recovery by weight of the methanol contained in the influent gas stream to the condenser:

                   (1)  such information as is necessary to permit the calculation of the annual amount of methanol generated by operating the capper unit, and

                   (2)  the annual amount of methanol recovered by the condenser associated with the methanol recovery operation.

              b.   OSi will install, calibrate, maintain and operate according to manufacturer specifications, a temperature monitoring device with a continuous recorder for the condenser associated with the methanol recovery operation, as an indicator that the condenser is operating.

              c.   OSi will record the dates and times during which the capper unit and the condenser are operating.

         3.   Recordkeeping

              OSi will keep up-to-date, readily-accessible records of the parameters specified to be monitored under Section IV.D.2. at the Facility.

    E.   Disposition of Methanol Collected by the Methanol Recovery Operation

         1.    Performance Standard

              On an annual basis, a minimum of 95% by weight of the methanol collected by the methanol recovery operation (the "collected methanol") will be utilized for reuse, recovery, or thermal recovery/treatment (as defined below) to the extent described below.  No more than 5% of the methanol collected by the methanol recovery operation will be subject to bio-treatment on an annual basis.

              a.   "Reuse" includes the substitution of collected methanol (without reclamation subsequent to its collection) for virgin methanol as an ingredient (including uses as an intermediate) or as an effective substitute for a commercial product.  To the extent reuse of all of the collected methanol destined for reuse, recovery, or thermal recovery is not economically feasible, the residual portion shall be sent for recovery as defined in paragraph b., below, except as provided in paragraph b.

              b.   "Recovery" includes the substitution of collected methanol for virgin methanol as an ingredient (including uses as an intermediate) or as an effective substitute for a commercial product following reclamation of the methanol subsequent to its collection.  To the extent that reuse or recovery of all the collected methanol destined for reuse, recovery, or thermal recovery is not economically feasible, the residual portion shall be sent for thermal recovery treatment, as defined below.

              c.   "Thermal recovery/treatment" includes the use of collected methanol in fuels blending or as a feed to any combustion device to the extent permitted by federal or state law.

              d.   "Bio-treatment" includes the treatment of the collected methanol through introduction into a biological treatment system, including the treatment of the collected methanol as a waste stream in an on-site or off-site wastewater treatment system.  Introduction of the collected methanol to the on-site wastewater treatment system will be limited to points downstream of the surface impoundments, and will be consistent with the requirements of federal and state law.

         2.   Monitoring

              OSi will perform such measurements as are necessary to determine the pounds of collected methanol directed to reuse, recovery, thermal recovery/treatment and bio-treatment, respectively, on a monthly basis.

         3.   Recordkeeping

              OSi shall keep up-to-date, readily accessible records at the Facility of the amounts of collected methanol directed to reuse, recovery, thermal recovery/treatment and bio-treatment necessary for the measurements required under Section IV.D.2., above.

    F.   Waste Minimization/Pollution Prevention ("WMPP") Project

         1.   Performance of WMPP Project 

              OSi will perform a WMPP Project in accordance with the standards and schedules set forth below.  The goal of the WMPP Project is to identify and implement (1) source reduction opportunities (as defined in EPA's Hazardous Waste Minimization National Plan, November 1994 (EPA 530/R-94/045) ("National Plan")) that reduce the amount of any hazardous substance, pollutant, or contaminant entering a waste stream or otherwise released into the environment (including fugitive emissions) prior to recycling, treatment, or disposal and reduce the hazards to public health and the environment associated with the release of such substance, pollutant, or contaminant and (2) for those waste streams that OSi concludes cannot be reduced at the source, environmentally sound recycling opportunities (as defined in the National Plan).  One focus of the WMPP Project will be the reduction of the constituents identified on the list attached at Appendix G, to the extent that such constituents are found in wastestreams at the Facility.  In performing the WMPP Project, OSi will utilize a Study Team and an Advisory Committee.

              a.   Selection of the Study Team

                   Within forty-five (45) days of signing of the FPA by all parties, OSi will select a Study Team to perform the study phase of the WMPP Project.  At a minimum, the multi-functional Study Team will consist of OSi personnel from appropriate plant departments (including both management and employees) and an independent contractor.  The contractor will have appropriate experience and training in waste minimization/pollution prevention in the chemical manufacturing industry.

              b.   Functions of the Study Team

                   The Study Team will perform the following functions:

                   (1)  review Facility operations and waste streams,

                   (2)  review prior WMPP efforts at the Facility,

                   (3)  develop criteria for the selection of waste streams to be evaluated for the WMPP Project,

                   (4)  based on those criteria, identify and prioritize the waste streams to be evaluated during the study phase of the WMPP Project, and

                   (5)  perform the WMPP Study as described below.

              c.   Establishment of the Advisory Committee

                   The Advisory Committee will consist of a representative from EPA, a representative from WVDEP, the Facility's Plant Manager, the OSi Director of Safety, Health and Environmental Affairs, and a stakeholder representative(s).

                   (1)  EPA and WVDEP will notify OSi of the identity of their respective representatives no later than 10 days after signing of the FPA by all parties.

                   (2)  The stakeholder representative(s) will be selected by mutual agreement of EPA, WVDEP and OSi within 30 days after signing of the FPA by all parties.

              d.   Functions of the Advisory Committee

                   The Advisory Committee will meet within 30 days after selection of the stakeholder representative(s), and will meet periodically thereafter as necessary to perform its assigned functions.  The members of the Advisory Committee will perform the following functions:

                   (1)  review and comment upon the Study Team's criteria for selection of waste streams, and the Study Team's identification and prioritization of the waste streams to be evaluated during the WMPP Project,

                   (2)  review and comment upon the Study Team progress reports and the draft WMPP Study Report, and

                   (3)  periodically review the effectiveness of WMPP opportunities implemented as part of the WMPP Project, and, where appropriate, WMPP opportunities previously determined to be infeasible by OSi but which had potential for feasibility in the future.

              e.   Periodic Reports of the Study Team

                   Ninety (90) days after signing of the FPA by all parties and every ninety (90) days thereafter until submission of the final WMPP Study Report, the Study Team will submit a progress report to the Advisory Committee detailing its efforts during the prior ninety (90) day period.

         2.   The WMPP Study and the WMPP Study Report

              a.   The WMPP Study will consist of a technical, economic, and regulatory assessment of opportunities for (1) source reduction and (2) environmentally sound recycling for waste streams identified by the Study Team.

              b.   The Study will:  (1) evaluate the source, nature, and volume of the waste streams, (2) describe all the WMPP opportunities identified by the Study Team, (3) provide a feasibility screening to evaluate the technical and economical feasibility of each of the WMPP opportunities, (4) identify any cross-media impacts or any anticipated transfers of risk associated with each feasible WMPP opportunity, and (5) identify the projected economic savings and projected quantitative waste reduction estimates for each WMPP opportunity identified.

              c.   Within twelve (12) months of signing of the FPA by all parties, OSi will prepare and submit to the members of the Advisory Committee a draft WMPP Study Report which, at a minimum, includes the results of the WMPP Study, identifies WMPP opportunities OSi determines to be feasible, discusses the basis for excluding other opportunities as not feasible, and makes recommendations as to whether the WMPP Study should be continued.  The members of the Advisory Committee will provide any comments within thirty (30) days.

         3.   Implementation of WMPP Opportunities

              OSi will perform the implementation phase of the WMPP Project, as follows:  Within thirty (30) days after receipt of comments from the members of the Advisory Committee, OSi will issue a final WMPP Study Report which identifies those WMPP opportunities OSi determines to be feasible and includes an implementation schedule for each such WMPP opportunity.  OSi will make reasonable efforts to implement all feasible WMPP opportunities in accordance with the priorities identified in the implementation schedule.

              a.   For purposes of this FPA, a WMPP opportunity is feasible if, in OSi's judgment, it is technically feasible (taking into account engineering and regulatory factors, product line specifications and customer needs) and economically practical (taking into account the full environmental costs and benefits associated with the WMPP opportunity and the company's internal requirements for approval of capital projects).  For purposes of the FPA, "An Introduction to Environmental Accounting as a Business Management Tool," (EPA 742/R-95/001) will be used as one tool to identify the full environmental costs and benefits of each WMPP opportunity.

              b.   As part of implementing each WMPP opportunity, OSi will, after consulting with the other members of the Advisory Committee, develop appropriate protocols and methods for determining the following:

                   (1)   the overall volume of wastes reduced,

                   (2)   the quantities of each constituent identified in Appendix G reduced in the wastes, and

                   (3)   the economic benefits achieved.

              c.   Nothing in this Section IV.F. is intended to prevent or restrict OSi from evaluating and implementing any WMPP opportunities at the Facility in the normal course of its operations or from implementing, prior to the completion of the WMPP Study, any WMPP opportunities identified by the Study Team.

    G.   Record Retention

         Each record that will be kept under this Section IV will be retained by OSi for the minimum Project term unless a longer retention period is required under other laws or permits.

    H.   Reporting

         1.   "One-Time" Reporting

              a.   OSi will provide the EPA and WVDEP Project XL contacts with copies of notices regarding the initial performance test of the thermal incinerator and the written results of the test which meet the substantive requirements of 40 C.F.R. '' 63.7(b), (g)(1) and 63.117(a)(4)(i)-(ii), although the parties recognize that these regulatory requirements are not directly applicable..

              b.   No later than ten (10) days after each milestone date set forth in Section VI.A. of this FPA, OSi will notify EPA and WVDEP as to whether each such milestone has been completed.

              c.   Within sixty (60) days of signing of the FPA by all parties, OSi will notify EPA and WVDEP of the names and qualifications of the members of the Study Team referenced in Section IV.F.

         2.   Semiannual Reporting

              Beginning in 1999, on January 31 of each year, OSi will provide the following information to the EPA and WVDEP Project XL contacts with respect to the preceding six month period ending on December 31:

              a.   instances of operating below the minimum operating temperature established for the thermal incinerator under Section IV.B.1.a., if not corrected within 24 hours of onset,

              b.   any periods during which the capper unit was being operated to manufacture product while the flow indicator for the vent streams to the thermal incinerator showed no flow,

              c.   any periods during which the capper unit was being operated to manufacture product while the flow indicator for any bypass device on the closed vent system to the thermal incinerator showed flow,

              d.   information required to be reported during that six month period under the preconstruction permit issued under 45 C.S.R. 13,

              e.   any periods during which the capper unit was being operated to manufacture product while the condenser associated with the methanol recovery operation was not in operation,

              f.   the amount (in pounds and by month) of methanol collected by the methanol recovery operation during the six month period,

              g.   the amount (in pounds and by month) of collected methanol utilized for reuse, recovery, thermal recovery/treatment, or bio-treatment, respectively, during the six month period.

              h.   the calculated amount (in pounds and by month) of methanol generated by operating the capper unit,

              i.   the status of the WMPP Project, including the status of developing the WMPP Study Report.  Beginning in the year after OSi submits the final WMPP Study Report and continuing in each subsequent Semiannual Report, OSi will report on the progress of the implementation of feasible WMPP opportunities identified in the WMPP Study Report.  The Semiannual Report will identify any cross-media impacts or impacts to worker safety or community health issues that have occurred as a result of implementation of the feasible WMPP opportunities.

         3.   Annual Project Report

              Beginning in 1999, on July 31 of each year, OSi will provide an Annual Project Report to the EPA and WVDEP Project XL contacts containing the following information:

              a.   the categories of information required to be submitted under Section IV.H.2.a.-h., above, for the preceding 12 month period ending on June 30,

              b.   an updated Emissions Analysis for January through December of the preceding calendar year in a form substantially equivalent to the Emissions Analysis set forth in Appendix D of this FPA, including a comparison of the volatile organic emissions associated with the capper unit process vents and the wastewater treatment system (using EPA's Water 8 model or other model agreed to by the parties) under Project XL with the expected emissions from those sources absent Project XL during that period,

              c.   a discussion of OSi's performance in attaining the Performance Standards for the Project, specifically identifying any areas in which OSi either exceeded or failed to achieve any such standard,

              d.   a description of any unanticipated problems in implementing the Project and any steps taken to resolve them,

              e.   a WMPP Implementation Report that contains the following information:  (1) a summary of the WMPP opportunities selected for implementation, (2) a description of the WMPP opportunities initiated and/or completed, (3) reductions in volume of waste generated and amounts of each constituent reduced in wastes including any constituents identified in Appendix G, (4) an economic benefits analysis, (5) a summary of the results of the Advisory Committee's review of implemented WMPP opportunities and reevaluation of WMPP opportunities previously determined to be infeasible by OSi but which had potential for future feasibility and (6) any changes necessary to the original FPA in accordance with Section VIII (Duration and Reevaluation of the Project),

              f.   an assessment of the nature of, and the successes or problems associated with, OSi's interaction with the federal and state agencies under the Project,

              g.   an update on stakeholder involvement efforts, and

              h.   an evaluation of the Project as implemented against the Project XL Criteria and the baseline scenario.

         4.   Final Project Report

              Within 180 days after the termination of the Project, OSi will provide a written Final Project Report covering the term of the Project, to the EPA and WVDEP Project XL contacts, containing the categories of information required to be submitted for the Semiannual Report and Annual Project Report.

         5.   Availability of Reports

              a.   OSi will retain a complete copy of each of the documents to be submitted to EPA and WVDEP under this Section IV.H. at the Facility for the minimum Project term.  OSi will provide stakeholders and interested parties with a written notice of availability (to be mailed to all persons on the Project mailing list and to be provided to at least one local newspaper of general circulation) of each such document, and provide a copy of each document to any such person upon request, subject to the provisions of 40 C.F.R. Part 2, W.Va Code ' 22-5-10, and 45 C.S.R. 31 relating to the protection of confidential business information.

              b.   Any reports or other information submitted to EPA or WVDEP may be released to the public pursuant to the Federal Freedom of Information Act (42 U.S.C. ' 552 et seq.) and the West Virginia Freedom of Information Act (W. Va. Code ' 29B-1-1 et. seq.), subject to the provisions of 40 C.F.R. Part 2, W.Va Code ' 22-5-10, and 45 C.S.R. 31 relating to the protection of confidential business information.

         6.   OSi will make all supporting monitoring results and records kept by OSi under this Section IV.H. available to EPA and WVDEP within a reasonable amount of time after receipt of a written request from those Agencies, subject to the provisions of 40 C.F.R. Part 2, W.Va Code ' 22-5-10, and 45 C.S.R. 31 relating to the protection of confidential business information.

         7.   Each report submitted by OSi under this Section IV.H. will be certified by a Responsible Corporate Officer, as defined in 40 C.F.R. ' 270.11(a)(1).


V.   Allowable Exclusion/Allowable Increase

    A.   General Provisions

         1.   The provisions for Allowable Exclusions and Allowable Increases contained in this Section will only apply if CAA Subpart YYY, which at present is only a proposed rule, is made final and becomes applicable to the wastewater collection and treatment system at the Facility as a result of a Qualifying Change.

         2.   A "Qualifying Change" is a physical or operational change to a process unit which is intended to minimize waste generation or reduce or prevent pollution (a "WMPP Activity") and which causes CAA Subpart YYY to apply to the wastewater collection and treatment system at the Facility.

              a.   For new process units, the physical or operational change may include changes made to or incorporated into the physical design or planned operation of the process unit prior to or during construction.

              b.   The WMPP Activity may be either a WMPP opportunity identified in the WMPP Study, discussed in Section II.B. of this FPA, or any other WMPP opportunity to be implemented by OSi during the minimum Project term.

         3.   EPA and WVDEP expect to grant OSi Allowable Exclusions and/or Allowable Increases, as set forth below, to defer applicability of CAA Subpart YYY for the minimum Project term for all Qualifying Changes; provided, however that OSi demonstrates, pursuant to Section V.D. below, that all applicable criteria are satisfied.

         4.   No deferral of CAA Subpart YYY will be granted under this Section until the vent incinerator is installed on the capper unit and is operating in accordance with the FPA.

         5.   A baseline emissions level ("the Baseline") will be used for purposes of determining changes in emission rates under this Section.

              a.   The Baseline for Qualifying Changes to existing process units will be the calculated level of emissions (expressed in pounds/year) of any volatile organic compound from wastewater generated by the affected process unit that occurs absent the Qualifying Change.

              b.   The Baseline for Qualifying Changes to new process units, whether made prior to or during construction, will be the estimated level of emissions that would occur absent the Qualifying Change.

              c.   In determining the emission levels under a. or b., above, OSi will not be using "potential to emit" as defined for purposes of the Clean Air Act.

    B.   Allowable Exclusions

         1.   Availability of Allowable Exclusions 

              Where OSi implements a Qualifying Change to a process unit at the Facility, EPA and WVDEP expect to defer applicability of CAA Subpart YYY for the Qualifying Change (in accordance with Section IV.G.7. (Implementation)) for the minimum Project term provided that the Qualifying Change satisfies the Allowable Exclusion Criteria set forth below.  Such a Qualifying Change, which meets the Allowable Exclusion Criteria, need not satisfy the criteria for Allowable Increases.

         2.   Allowable Exclusion Criteria

              A request for an Allowable Exclusion may be granted only where OSi demonstrates in accordance with Section IV.G.4. (Verification) that the following criteria are satisfied:  

              a.   The change is a Qualifying Change;

              b.   The Qualifying Change will not cause an increase in actual emissions of any volatile organic compound (measured in pounds/year) over the Baseline from the wastewater generated by the affected process unit; and

              c.   The Qualifying Change will not cause a net adverse environmental impact, including cross-media impacts.

              d.   OSi will be in substantial compliance with the provisions of the FPA and its implementing mechanisms.

    C.   Allowable Increases

         1.   Availability of Allowable Increases

              Where OSi implements a Qualifying Change to a process unit at the Facility, EPA and WVDEP expect to defer applicability of CAA Subpart YYY for the Qualifying Change (in accordance with Section V.G. (Implementation)) for the minimum Project term, provided that the Qualifying Change satisfies the Allowable Increase Criteria set forth below.

         2.   Allowable Increase Criteria

              A request for an Allowable Increase may be granted only where OSi demonstrates in accordance with Section V.D. (Verification) that the following criteria are satisfied:

              a.   The change is a Qualifying Change;

              b.   Except as provided in (1) and (2), below, the Qualifying Change will not cause an increase in actual emissions of volatile organic compounds (measured in pounds/year) over the Baseline from the wastewater generated by the affected process unit.

                  (1)   The Qualifying Change can result in an increase in actual emissions of Listed VOCs (as defined below) from the wastewater collection and treatment system provided that the total aggregate increase in the annual rate of emissions of Listed VOCs from the wastewater collection and treatment system attributable to (a) currently effective Allowable Increases and (b) the requested Allowable Increase, will not exceed 15,000 pounds/year over the Baseline.

                  (2)   Listed VOCs means acetic acid, ethyl chloride (chloroethane), dimethyl ether, ethanol, methanol, methyl chloride (chloromethane), isopropanol, and toluene;

              c.   The Qualifying Change will not cause a net adverse environmental impact, including cross-media impacts; and

              d.   OSi will be in substantial compliance with the provisions of the FPA and its implementing mechanisms.

    D.   Verification

         1.   OSi will notify EPA and WVDEP of each prospective Qualifying Change, and the underlying WMPP Activity, for which it seeks an Allowable Exclusion or an Allowable Increase, and will demonstrate  as set forth herein that it has met the applicable criteria set forth above.

         2.   When seeking an Allowable Exclusion or Allowable Increase, OSi will submit to EPA and WVDEP documents to support the granting of an Allowable Exclusion or Allowable Increase, which include:

              a.   a protocol setting forth (1) the measures to be followed by OSi after implementing the Qualifying Change to demonstrate that the applicable criteria are met during the operation of the Qualifying Change for the Project term and (2) corrective measures to be taken in the event of a failure to meet an applicable criterion (the "Protocol"); and

              b.   documentation which supports OSi's conclusion that there will be no net adverse environmental impact, including cross media impacts, as a result of granting the requested Allowable Exclusion or Allowable Increase.

         3.   For each requested Allowable Increase, OSi will submit to EPA and WVDEP the following additional supporting data and information to show that it has met the applicable criteria:

              a.   A waste emissions summary table which reflects any changes in emissions resulting from the Qualifying Change for which the Allowable Increase is sought including:  (1) any changes to the information provided in Table 1 of this FPA, (2) the total of all emissions increases (measured in pounds/year) obtained through Allowable Increases previously granted, and (3) the expected emissions increases resulting from the Allowable Increase being sought;

              b.   A summary of methods and calculations for estimating the emissions from the wastewater collection and treatment system subject to the Allowable Increase; and

              c.   A reevaluation of the Project against the Project XL Criteria, highlighting any changes to the Project's superior environmental benefits as a result of granting the Allowable Increase.

         4.   All information submitted under this provision will be certified by a Responsible Corporate Officer, as defined in 40 C.F.R. ' 270.11(a)(1).

         5.   EPA and WVDEP will review the information submitted by OSi to verify that OSi has met the applicable criteria set forth above.  EPA and WVDEP will use their best efforts to make their verification determination within thirty (30) days of a complete submission by OSi of the information required under 1. through 3., above.  EPA and WVDEP will notify OSi of their determination promptly thereafter in writing including any changes which may be necessary in the proposed Protocol.

    E.   Continuing Obligation to Satisfy Criteria

         1.   In order to retain its Allowable Exclusion(s) and/or Allowable Increase(s) throughout the minimum Project term, OSi will demonstrate (in accordance with the Protocol referenced in Section V.D.2.a.) that it continues to meet the applicable criteria set forth above throughout the minimum Project term.

         2.   In the event that, after obtaining an Allowable Exclusion or Allowable Increase, OSi fails to meet the applicable criteria set forth under Section V.B.2. or V.C.2., as appropriate, OSi will take steps to correct the failure as specified in the Protocol for that Allowable Exclusion/Allowable Increase.  If the failure is not corrected as specified in the Protocol, the deferral of CAA Subpart YYY for such Qualifying Change will terminate.  Thereafter, OSi will only operate such Qualifying Change if such operation either complies with, or is not subject to, the provisions of CAA Subpart YYY.

    F.   Discontinuation of a Qualifying Change

         1.   OSi will provide EPA and WVDEP advance notice of the discontinuation of any Qualifying Change to which an Allowable Exclusion or Allowable Increase applies under Section V of this FPA.

         2.   Upon discontinuing any such Qualifying Change, there will be no obligation on the part of OSi to comply with CAA Subpart YYY where such obligation is based solely upon OSi's previous implementation of the discontinued Qualifying Change.

    G.   Implementation

         1.   In order to implement the Allowable Exclusions or Allowable Increases which defer the applicability of CAA Subpart YYY, as set forth in this Section, EPA expects to propose for public comment and subsequently promulgate (subject to review of public comment) a site-specific rule, or rules, under 40 C.F.R. Part 60 that would defer the application of CAA Subpart YYY to the wastewater collection and treatment system at the Facility for each Allowable Exclusion and Allowable Increase granted for the minimum Project term.

         2.   EPA will use its best efforts to propose such rule(s) within one-hundred and twenty (120) days of verifying OSi's demonstration pursuant to Section V.D.5., above.  The parties recognize that, depending upon the complexity of the request and other factors, the time required to propose the rule may be shorter or longer.

         3.   In addition, for any request being implemented after WVDEP obtains authorization from EPA to enforce the provisions of CAA Subpart YYY, WVDEP and OSi will negotiate and execute (and modify to include subsequent Allowable Exclusions/ Allowable Increases) a Consent Order under the authority of W. Va. Code ' 22-5-4(a)(5).  It is expected that the Consent Order will defer the application of CAA Subpart YYY to the wastewater collection and treatment system at the Facility for each Allowable Exclusion and Allowable Increase granted.  Subsequently, WVDEP expects to propose for public comment and subsequently promulgate (subject to review of public comment) a site-specific rule, or rules, adopting the deferral(s) granted under this Section V by WVDEP and EPA.

         4.   WVDEP and OSi expect to execute any such Consent Order within forty-five (45) days of verifying OSi's first demonstration pursuant to Section V.D.5. above.  WVDEP and OSi expect to execute any necessary modifications to such Consent Order to incorporate additional deferral(s) within forty-five (45) days of verifying OSi's demonstration pursuant to Section V.D.5. above for such subsequent deferral(s).

         5.   The parties agree that following implementation of any Allowable Exclusion(s)/Allowable Increase(s), each party will take such steps as are necessary to incorporate recognition of such deferral into the Facility's Title V permit or other relevant permits.

    H.   Reopener

         In recognition of the uncertain nature of the environmental benefits and costs associated with WMPP Activities which increase the rate of emissions of:  (1) Listed VOCs above the threshold level set forth in Section V.C.2.a.(1) above; or (2) Non-Listed VOCs, the parties to this FPA agree to evaluate the appropriateness of granting an Allowable Increase for such WMPP Activities as a "reopener" to the FPA according to the reopener provisions set forth below.

         1.   During the minimum Project term, OSi may seek to reopen and modify this FPA in order to include Allowable Increases for WMPP Activities which go beyond the scope presently contained in the FPA.  To do so, OSi will submit a proposal for a reopener under this Section to EPA and WVDEP for their consideration.  EPA and WVDEP will review and evaluate the appropriateness of each such Allowable Increase reopener proposal submitted by OSi.  

         2.   In determining whether to reopen and modify the FPA in accordance with any reopener proposal(s) submitted by OSi under this Section, EPA and WVDEP will base their decision upon the following:  (a) whether the proposal meets the Project XL Criteria in effect at the time of the proposal, (b) the environmental benefits expected to be achieved by the WMPP Activity contained in the proposal, (c) the increased level of emissions from wastewater included in the proposal, (d) the environmental benefits achieved as a result of other WMPP Activities covered by Allowable Exclusions and/or Allowable Increases granted under the Project and (e) any net adverse environmental impacts expected to occur as a result of the WMPP Activity.

         3.   All parties to the FPA will meet within ninety (90) days following submission of any reopener proposal by OSi to EPA and WVDEP (or within such shorter or longer period as the parties may agree) to discuss the Agencies' evaluation of the reopener proposal.  If, after appropriate stakeholder involvement, the Agencies support reopening of this FPA to incorporate the proposal, the parties will (subject to any required public comment) take steps necessary to amend the FPA.  Concurrent with the amendment of this FPA, EPA and WVDEP will take steps consistent with Section V.G. to implement the proposal.

         4.   This reopener provision is not intended to provide for reevaluation of aspects of the Project other than the Allowable Increase provisions of Section V.  For all other reevaluations, see Section VIII (Duration and Reevaluation of the Project).


VI.  Implementation

    To implement the Project, the parties intend to take the following steps:

    A.   OSi expects to install and operate by April 1, 1998, an air emission control device on its capper unit, which device will be designed and operated to be capable of reducing the total organic compounds in the controlled vent streams' emissions by 98% by weight.  By July 14, 1997, OSi expects to have entered into a contract for the purchase of the thermal incinerator.  By December 15, 1997, OSi expects to have received on-site the thermal incinerator.  By January 15, 1998, OSi expects to have initiated on-site installation of the thermal incinerator.

    B.   Within 10 days of the date of signing of the FPA by all parties, OSi expects to continue collection of methanol generated by the capper unit and to utilize the collected methanol for reuse, recovery, or thermal recovery/treatment (or, in limited circumstances for bio-treatment) consistent with the provisions of Section IV.E. of this FPA.

    C.   Within forty-five (45) days of signing of the FPA by all parties, OSi will select a Study Team to perform the study phase of the WMPP Project.  Thereafter, OSi will complete the WMPP Study and implement the feasible WMPP opportunities identified in the study, in accordance with the provisions of Section IV.F. of this FPA.

    D.   WVDEP and OSi expect to negotiate and execute by June 30, 1997 a consent order under the authority of W. Va. Code ' 22-4-5 (the "Consent Order").  It is expected that the Consent Order will defer application of the RCRA Subpart CC portions of 45 C.S.R. 25 to the surface impoundments at the Facility until the MON compliance date.  The deferral will be conditioned upon OSi's substantial compliance with the requirements of the Consent Order.  The Consent Order will provide for a post-Project compliance period consistent with Section IX.C. and for transfer procedures consistent with Section XII.  The requirements of the Consent Order will be consistent with the performance standards and reporting requirements set forth in Section IV of this FPA.

    E.   EPA expects to propose for public comment and subsequently promulgate (subject to review of public comment) by September 4, 1997, a site-specific rule amending 40 C.F.R. Parts 264 and 265 so as to defer application of RCRA Subpart CC to the surface impoundments at the Facility until the MON compliance date.  It is expected that the site-specific rule will incorporate the material requirements of the WVDEP Consent Order as conditions of the deferral.  It is expected that the site-specific RCRA rule will provide for a post-Project compliance period consistent with Section IX.C. and for transfer procedures consistent with Section XII.

    F.   EPA and WVDEP expect to undertake the implementation measures set forth in Section V in the event that they determine that an OSi request for an Allowable Exclusion/Allowable Increase meets the applicable criteria set forth in that Section.

    G.   Except as provided in the rules, consent orders, permit provisions or other implementation mechanisms that may be adopted to implement the Project, the parties do not intend that this FPA will modify or otherwise alter the applicability of existing or future laws or regulations to the Facility.

    H.   The parties expect to take such actions as are necessary to reflect the deferrals expected to be granted under (1) the RCRA site-specific rule, (2) any NSPS site-specific rules that may be proposed pursuant to Section V of this FPA, and (3) the Consent Order (all subject to review of public comments received on any implementation mechanisms requiring public comment), in the Facility's RCRA Part B permit as part of the reissuance of that permit in the normal course, and the Facility's Clean Air Act Title V operating permit and any other permits when issued in the normal course.

    I.   By signing this FPA, EPA and WVDEP acknowledge and agree that they have the respective authorities and discretion to enter into this FPA and to implement the provisions of this Project, to the extent appropriate.


VII. Modification

    The FPA may be modified by mutual agreement of all parties at any time during the minimum Project term.  The parties recognize that certain modifications to the Project may necessitate modification of any existing implementation mechanisms or may require development of new implementation mechanisms.  In that case, EPA and WVDEP expect to work together with OSi to identify and pursue any modifications or additions to the implementation mechanisms required, in accordance with procedures applicable to the modification of the relevant implementation mechanism.  To the extent that the parties agree to make a material modification of the Project, appropriate notice of such modification, and an appropriate opportunity to participate in the process will be provided to stakeholders and interested parties.


VIII. 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 MON become effective as described in II.C.1.c.  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 wastewater 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 comment 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.  Project reevaluation provides the parties with a fluid process, during the course of the Project, to identify 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 compliance date of the MON.  In addition, the parties recognize the possibility that, during the course of the Project, regulatory changes (other than the promulgation of the MON) 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 during the reevaluation EPA and WVDEP would consider the impact of the regulatory changes on the value of the Project to OSi.  In particular, if during the course of the Project regulatory or Facility changes occur such that RCRA Subpart CC is determined to no longer be applicable to the Facility or to no longer require air emission controls, OSi would expect to continue operation of its emission controls, methanol recovery operation and WMPP Project.  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 environmental performance achieved under the Project as 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,

    4.   a comparison of the environmental benefits originally anticipated to result from OSi's performance commitments under the Project and the benefits actually achieved under the Project,

    5.   any new statutory or regulatory requirements applicable to the Facility as they may relate to the Project,

    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 support 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, any criteria applicable to XL Projects at the time of reevaluation, and any other relevant information available to the Agencies.  EPA and WVDEP will reevaluate the Project to assess, among other things:  (1) whether continuation of the Project satisfies the XL Criteria in effect at the time of reevaluation, (2) the environmental results that have been achieved, (3) the extent to which any proposed enhancements would provide additional environmental benefits, and (4) whether the Project has resulted in unanticipated environmental benefits.

     All parties to the FPA will meet within ninety (90) days following OSi's submission of the Project Reevaluation Report (or within such shorter or longer period as the parties may agree) 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, orders, etc.) under this Project, as necessary to continue the Project.  If either agency determines that continuation of the Project is not warranted, then that agency may terminate its involvement in the Project in accordance with Section IX.


IX.   Termination

    A.   Expectations Concerning Termination

    Because this FPA is not a legally binding document, any party may withdraw from the FPA at any time.  However, it is the desire of the parties that this FPA should remain in effect through the expected minimum Project term, and be implemented as fully as possible. Accordingly, it is the intent of the parties that this Project will not be terminated unilaterally during the expected minimum Project term established in Section II.D. of this FPA unless one of the conditions set forth below occurs:

         1.   Substantial failure (taking into account its nature and duration) by any other party to (a) comply with the provisions of the implementation mechanisms for this Project, or (b) act in accordance with the provisions of this FPA;

         2.   The capper unit is permanently removed from methyl capped polyether production service at the Facility;

         3.   Discovery of the failure of any other party to disclose material facts during development of the FPA;

         4.   Failure of the Project to provide superior environmental performance consistent with the expectations of this FPA;

         5.   Enactment or promulgation of any environmental, health or safety law or regulation after execution of the FPA which renders the Project legally, technically or economically impracticable; or

         6.   Decision by an agency to reject the proposed assumption by a future owner or operator of the Facility of OSi's rights and obligations under the Project.

Unless the Agencies determine, consistent with the provisions of Section VIII of this FPA, that continuation of the Project past the minimum Project term is warranted, this FPA will be terminated as of the end of the minimum Project term.

    EPA and WVDEP do not intend to withdraw from the FPA based on non-compliance by OSi with the implementation mechanisms, unless such non-compliance constitutes a substantial failure to comply with the implementation mechanisms, taking into account its nature and duration (a "Material Noncompliance").  Non-compliance that is not a Material Noncompliance may be addressed, where appropriate, through existing enforcement authorities available to the Agencies.  As set forth in Section XI, OSi retains all rights to defend against any such enforcement actions.

    B.   Termination Procedures

         1.   Any party desiring to terminate is expected to provide written notice of its intent to terminate to the other parties at least sixty (60) days prior to termination.

         2.   If requested by any one party during the sixty (60) day period noted above, the dispute resolution proceedings provided in Section X herein, may be initiated to resolve any dispute relating to the intent to terminate.  If, following any dispute resolution or informal discussion, the party still desires to terminate, the terminating party will provide written notice of final termination to all other parties to the FPA.

         3.   If either agency terminates its participation in the FPA, the remaining agency will consult with OSi to determine whether the FPA should be continued in a modified form consistent with applicable federal and state law or terminated.

         4.   The termination procedures set forth in this Section IX.B. apply to the decision to terminate participation in the FPA.  Procedures to be used in modifying or rescinding the legal mechanisms used to implement the Project will be governed by the terms of those legal mechanisms and applicable law.

    C.   Post-Project Compliance Period

         1.   In the event of any termination not based upon the end of the expected minimum Project term, there will be a RCRA Subpart CC Interim Compliance Period to provide sufficient time for OSi to come into compliance with the regulations deferred under the Project.  By the end of the RCRA Subpart CC Interim Compliance Period, OSi will either:  (a) replace each surface impoundment with a tank which would be subject to the exception from permitting set forth at 40 C.F.R. Sections 264.1(g)(6) or 265.1(c)(10), or (b) comply with the applicable standards set forth in Subpart CC of 40 C.F.R. Part 264 or 265 for surface impoundments.  During the RCRA Subpart CC Interim Compliance Period, WVDEP and EPA will continue to defer the applicability of the RCRA Subpart CC portions of 45 C.S.R. 25 and RCRA Subpart CC, respectively.  During such period, OSi will continue to operate the emission controls on the capper unit, unless the termination occurred as a result of conditions described in Section IX.A.2.  The RCRA Subpart CC Interim Compliance Period is eighteen (18) months from the date on which EPA, WVDEP or OSi provides written notice of final termination of the Project in accordance with Section IX.B.2. of this FPA.  It is OSi's intent to accomplish either (a) or (b) above as soon as is practicable as will be set forth in an implementation schedule similar to that required under 40 C.F.R. ' 265.1082.  This schedule will be developed by OSi within thirty (30) days of notice of final termination.  In no event will OSi exceed the 18-month RCRA Subpart CC Interim Compliance Period.  In the event of termination based upon the end of the minimum Project term, OSi will achieve compliance with RCRA Subpart CC, to the extent applicable, by the end of the minimum Project term, unless the Project is modified in accordance with Section VII (Modification).

         2.   Following the promulgation of a final MON rule, OSi may request a meeting with EPA and WVDEP to discuss the timing and nature of any actions that OSi will be required to take to come into compliance with regulatory requirements that have been deferred under this Project.  The parties expect that they will meet within thirty days of receipt of OSi's written request for such a discussion.  At and following such meeting, the parties expect that they will engage in reasonable good faith discussions to identify the extent to which RCRA Subpart CC will apply to the Facility after termination of the Project.  The parties do not expect that OSi will be required to be in compliance with any requirements deferred pursuant to this Project under RCRA Subpart CC or CAA Subpart YYY prior to the end of the expected minimum Project term.


X.   Dispute Resolution

    Any dispute that arises with respect to the meaning, application, implementation, interpretation, amendment, termination or modification of the FPA will, in the first instance, be the subject of informal discussions.  To initiate informal discussions, any party which believes it has a dispute with any other party will simultaneously notify all of the parties, in writing, setting forth the matter(s) in dispute.

    If the dispute cannot be resolved by the parties within thirty-five (35) days of receipt of such notice (or such longer time as agreed to by the parties to the dispute), then one or both of the parties may invoke non-binding mediation by setting forth the nature of the dispute, with a proposal for its resolution, in a letter to the EPA Region III Administrator, with a copy to all parties.  The EPA Regional Administrator or the disputants may request an informal mediation meeting.  The disputants may request an opinion from the Regional Administrator in lieu of or in addition to the mediation meeting.  Any opinion, verbal or written, expressed by the Regional Administrator will be non-binding.

    Nothing in this Section X will be construed to alter the parties' expectations regarding the ability to terminate or withdraw from the FPA set forth in Section IX herein.


XI.   Rights Retained

    A.   Except as expressly provided in the legal implementation mechanisms described in Section VI, nothing in the FPA shall be construed to affect or limit either OSi's legal rights or the Agencies' rights to seek legal, equitable, civil, criminal or administrative relief regarding the enforcement of present or future applicable federal and state code, rules, or regulations with respect to the Facility or OSi.

    B.   Although OSi does not intend to challenge agency actions implementing the Project (including any rule amendments or adoptions, permit actions, or other action) that are consistent with this FPA, OSi nonetheless reserves its right to appeal or otherwise challenge any and all agency actions implementing the Project.  Nothing in this FPA is intended to limit OSi's right to administrative or judicial appeal or review of any modification or termination of those legal mechanisms in accordance with the applicable procedures for such review.


XII. Transfer of Project Benefits and Responsibilities

    It is expected that the implementation mechanisms will allow for the transfer of OSi's rights and obligations under the Project to any future owner or operator upon request of OSi and such owner/operator, provided that the following conditions are met:

    A.   OSi will provide written notice of any such proposed transfer to EPA and WVDEP at least forty-five (45) days prior to the effective date of the transfer.  The notice is expected to include identification of the proposed transferee, a description of the proposed transferee's financial and technical capability to assume the obligations associated with the Project, and a statement of the transferee's intention to sign the FPA as an additional party.

    B.   Within thirty (30) days of receipt of the written notice, it is expected that the Agencies will determine whether the transferee has demonstrated adequate financial and technical capability to carry out the Project and a willingness to sign the FPA.  It is expected that the implementation mechanisms will provide that, so long as the demonstration has been made to the satisfaction of the Agencies, and upon consideration of other relevant factors, the FPA will be modified to allow the proposed transferee to assume the rights and obligations of OSi.


XIII. FPA Signatories and Contact Persons

    A.   The signatories to this FPA will be the Group Vice President, OSi; the EPA Regional Administrator for Region III; and the Director of WVDEP.  These signatories have the authority to execute this agreement on behalf of the respective parties to this FPA which they represent.

    B.   Each party has designated a representative to serve as its contact person for inquiries concerning the Project.  These representatives are as follows:

         1.   For OSi:       Okey Tucker
                             OSi Specialties, Inc.
                             Witco Corporation OrganoSilicones Group
                             1500 South State Route 2
                             Friendly, WV  26146

         2.   For EPA:       Cheryl Atkinson (3HW00)
                             U.S. EPA, Region III
                             841 Chestnut Street
                             Philadelphia, PA  19107

         3.   For WVDEP:     John H. Johnston
                             West Virginia Division of
                               Environmental Protection
                             Office of Air Quality
                             1558 Washington Street East
                             Charleston, WV  25311-2599

    C.   If any party desires to change the contact person designated above, the party will provide notice of such change and the name of the new designee to all other parties, stakeholders and interested persons.


XIV. Notice

    Notices contemplated by this FPA will be sent by controlled overnight delivery or certified mail, return receipt requested to the following (or to such other person as the receiving party designates in writing):

    A.     For EPA:     Cheryl Atkinson (3HW00)
                        U.S. EPA, Region III
                        841 Chestnut Street
                        Philadelphia, PA  19107

    B.     For OSi:     James A. Nortz, Esquire    
                        Witco Corporation
                        One American Lane
                        Greenwich, CT  06831-2559

                        and

                        Mr. Dennis R. Heintzman
                        OSi Specialties, Inc.
                        Witco Corporation OrganoSilicones Group
                        1500 South State Route 2
                        Friendly, WV  26146

    C.     For WVDEP:   John H. Johnston
                        West Virginia Division of
                          Environmental Protection
                        Office of Air Quality
                        1558 Washington Street East
                        Charleston, WV  25311-2599

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