Akzo Nobel Chemicals

Akzo Chemical: Memo from David Gardiner to Bob Perciasepe and Bill Muszynski

MEMORANDUM

DATE:

SUBJECT: Decision Regarding Akzo Nobel's Project XL Proposal

FROM: David Gardiner, Assistant Administrator

TO: Bob Perciasepe and Bill Muszynski

Akzo Nobel in Burt, New York, submitted an XL proposal to EPA in April. The review of the proposal has resulted in opposite positions between Region 2 -- which would prefer to select the XL proposal -- and the Office of Water (OW) -- which would prefer to grant relief to Akzo via an alternative mechanism. Because this difference of opinion remains unresolved in August, I will move forward to provide Akzo with a response to their XL proposal.

I have decided not to select the Akzo Nobel proposal as an XL project, but I recommend that OW and Region 2 work together to provide relief via a consent decree or other mechanism. Based on the XL technical reviews for this proposal, it does not appear that the project would provide the superior environmental benefits required by Project XL. However, I understand that OW, Region 2, and my staff in OPPE concur that the project would result in a far "cheaper and smarter" approach that warrants some type of regulatory relief outside of the XL program.

I will convey this decision to Akzo in writing by next Thursday, August 15. If OW and Region 2 should mutually agree on a different approach before the close of business on Wednesday, August 14, I will incorporate that information into my final decision on Thursday.

Attached for your information is a short background piece that outlines your offices' respective positions as we understand them. Please have your staff contact Jon Kessler at 202-260-3761 or Lisa Hunter at 202-260-4744 to convey any comments or the results of any successful discussions that you may have prior to our notification to Akzo next week. Thank you.

Attachment

Decison Point for Akzo XL Proposal -- 8/2/96

Issue
The review of the Akzo Nobel Project XL proposal has resulted in opposite positions between the Office of Water and Region 2, the two offices potentially most affected by the project. The Region believes that Akzo's proposal meets Project XL criteria and that requested regulatory relief would most appropriately be granted via Project XL. OW asserts that this proposal does not rise to the level of an XL project and may offer too little transferability. OW thus has proposed a consent decree as an alternative mechanism by which to grant relief to Akzo.

Background
AKZO is requesting relief from sewage-sludge standards for POTWs in order to continue to discharge its effluent wastewater, containing dimethyl phthalate, to the Town of Newfane's POTW. Without such relief, requirements will compel AKZO to build its own wastewater treatment facility at an estimated cost of $750,000. The POTW was designed specifically to handle Akzo's waste. However, EPA regulations will not allow Akzo to rely on the POTW's treatment of dimethyl phthalate because the POTW land-applies the remaining sludge and EPA has not established a safe level of dimethyl phthalate in POTW land-applied sewage sludge.

Region 2's Preferred Approach
Region 2 strongly believes that enough facilities face similar difficulties that this issue shoudl be tested under Project XL. They believe that data collected could result in modification(s) of the pretreatment and/or sludge regulations which could impact various industries and POTWs across the United States.

The Region also believes that the project will result in superior environmental benefits. In addition to the harm avoided by preventing the construction of a treatment facility near sensitive ecosystems, AKZO has committed to dedicate its savings on capital expenditures to pollution prevention schemes. For instance, Akzo would investigate the substitution of a non-regulated compound for dimethyl phthalate in its processes that could significantly reduce the amount of dimethyl phthalate in AKZO's wastewater effluent and reduce its SARA 313 emissions. Further, cost savings for AKZO and Newfane would be significant by preventing construction of a new facility and diminishing the effectiveness and affordability of the current facility.

OW's Alternative
In contrast, OW has stated that Akzo's problem is very site-specific and does not believe the proposal presents enough transferability to rise to the level of an XL project. In addition, they believe the environmental benefits are uncertain due to the difficulty in successfully substituting substances in chemical processes. However, since data demonstrates that Newfane's POTW seems to be effectively handling Akzo's waste and a duplicate facility would be costly, OW agrees that relief for Akzo is reasonable. OW, however, has typically handled such exceptions by offering a consent decree to provide enforcement discretion for several years until standards and other regulatory fixes can be accomplished.¹ Since standard-setting for each potentially land-applied substance is not currently a high OW priority, a consent decree would be a straightforward, traditional manner of providing relief to Akzo without undertaking an XL project.

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¹ It should be noted that OW staff once suggested that Akzo, as part of an XL project, conduct the studies necessary to set safe standards for dimethyl phthalate in land-applied sewage sludge. Akzo expressed willingness to consider this.

Akzo Nobel Chemicals

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