Project XL

• permanently reduce criteria air pollutants by 20% (about 300 tons/year), by operating under a site-wide emissions cap;
• reduce sulfur dioxide (SO₂) and nitrogen oxide (NO_x) emissions by 900 tons/year (60%), and hazardous air pollutants (HAP) by 40 tons/year (55%), by converting its coal-burning powerhouse to natural gas;
• comply with all future criteria pollutant regulations either directly as written, or by reducing its site-wide cap or subcaps for certain pollutants;
• comply with all applicable requirements for HAPs;
• implement a comprehensive monitoring, recordkeeping and reporting program, which increases in stringency as emissions approach the cap; and
• perform modeling of non-HAP VOC emissions at specified thresholds to ensure protection of public health.

The project also offers important benefits for the community by improving their access to information. Merck will provide the community, as well as other stakeholders, an annual progress report that describes its environmental performance under the XL project. The community also will participate in the ongoing evaluation of the project and recommend whether changes to the project are warranted.

Although EPA has not yet formally solicited public comment on the Final Project Agreement or site-specific rulemaking, we have summarized our current thinking about your comments in the enclosure to this letter. We are glad that we already had the opportunity to discuss many of your comments with you in detail. Our response focuses specifically on the Merck XL project. You may receive separate responses from EPA Headquarters or other Regional Offices regarding your comments about the overall implementation of Project XL and other XL projects. In order to more comprehensively address the key issues you raised about the Merck XL project, we grouped your comments into four main categories: 1) emission caps for SO₂ and NO_x; 2) concern about VOC increases; 3) compliance with new regulations; and 4) monitoring, recordkeeping and reporting requirements.

Again, I thank you for sharing your comments on the Merck XL project. We would be glad to discuss our responses with you in more detail. If you have further questions, please contact me or Robin Moran (215-566-2064) or Cecil Rodrigues (215-566-2683) of my staff.

Sincerely,



W. Michael McCabe
Regional Administrator

Enclosure

cc:
Tedd Jett, Merck Stonewall Plant
John Daniel, Virginia Department of Environmental Quality
Larry Simmons, Virginia Department of Environmental Quality
Julie Thomas, National Park Service
Karen Malkin, National Park Service
Betty Sellers, Community Representative
Bill Sipe, Community Representative
Enclosure
EPA Response to NRDC's July 3, 1996 Comments
on the Merck XL Project
1. Emission Caps for SO₂ and NO_x

EPA agrees with NRDC's belief that the key environmental benefits from this project stem from reductions in SO₂ and NO_x emissions. These emission reductions will contribute to reducing acid deposition, improving visibility, and reducing local zone formation. Another key environmental benefit of this project stems from the establishment of the plantwide emissions cap. Under XL, Merck will establish a plantwide emissions cap for criteria air pollutants (except lead) at a level 20% (about 300 tons/year) below recent actual emissions. This means that Merck's total air emissions will always be at least 20% less than they are now. We believe it is important to keep in mind that the plantwide cap (about 1200 tons/year) -- Merck's new "allowable" emission limit -- is less than one-half of Merck's currently permitted allowable limit (about 2800 tons/year). To ensure that the facility can operate with room for growth under the cap, Merck will convert its powerhouse from coal to natural gas, which is expected to reduce actual criteria pollutant emissions (primarily SO₂ and NO_x) by over 900 tons/year. The conversion from coal to natural gas is one of the most significant actions an industrial facility like Merck can take to reduce emissions. The cap and the tiered monitoring system provide Merck an incentive to keep actual emissions low -- an incentive that existing regulations do not provide.

EPA has evaluated closely the issue of "subcaps" for certain pollutants. EPA's primary interest in establishing subcaps is to "lock-in" environmental benefits from the powerhouse conversion. We believe it is reasonable to establish an SO₂ and NO_x subcap at a level 25% and 10%, respectively, below recent actual emissions.

A primary consideration in establishing the subcap levels is the fact that compliance with the pharmaceutical Maximum Achievable Control Technology (MACT) standard will require incineration to achieve the required destruction efficiency for Hazardous Air Pollutants (HAP). New combustion control devices are likely to increase NOx emissions. We have considered the issue you raised of permitting such NOx emission increases outside of the subcaps, if the NOx subcap were reduced. We believe it is more consistent with the goals of the project to include all NOx emissions at the facility within the subcaps.

2. Concern About VOC Increases

Several of your comments present concerns about the public health and environmental effects of potential VOC emissions from the facility. Indeed EPA shares your concerns and have strived to ensure that the project appropriately addresses them.

A key aspect of the XL project is that Merck will fully comply with all applicable regulatory requirements for HAPs under Title III of the Clean Air Act. Thus, any VOCs that are also HAPS will be controlled to the levels specified in future MACT standards. In addition, compliance with the MACT standards will provide co-control of non-HAP VOCs. For example, if a process vent stream contains HAPs and non-HAP VOCs, all constituents will be controlled to the MACT standard.

We have focused particularly on addressing the community's concern about the health effects of non-HAP VOC emissions. The project addresses the community's concerns in two key ways. First, Merck will provide stakeholders with information on its non-HAP VOC emissions, by amount and constituent. EPA will then provide the stakeholders with a listing and copies of current health effects studies that have been conducted relating to those VOC constituents. Second, to ensure that VOC emissions from the Merck facility are protective of public health, Merck will conduct site-wide modeling of non-HAP VOC emissions whenever total VOC emissions reach certain levels. Merck will compare its concentration of non-HAP VOCs with the Significant Ambient Air Concentration (SAAC) established in Virginia's air toxics regulation, which is based on a percentage of OSHA threshold level values (TLV). If this modeling predicts an exceedance of the SAAC, Merck will take appropriate actions to ensure that the non-HAP VOC concentrations are protective. The community representatives have indicated to EPA that these two aspects of the project help address their concerns about VOC emissions.

Your comments question whether the level of potential VOC emissions under the plantwide cap would be necessary or appropriate compared with VOC emissions of other pharmaceutical facilities. EPA is attempting to evaluate the information referenced in your letter, although we believe that any such comparison should consider the vast differences among facilities in the pharmaceutical industry. Such a comparison should be of actual emissions, not worst-case allowable emissions under the plantwide cap. It is an "apples to oranges" comparison to compare actual VOC emissions of other facilities with the worst-case allowable VOC emissions under Merck's plantwide cap, because sources are required to operate below their allowable (permitted) emissions. Merck will provide an annual report to all project stakeholders containing information on its plantwide emissions, including VOCs. This report will enable the interested public to make their own comparisons and judgements about Merck's environmental performance.

Finally, you correctly point out that this project is premised on the assumption that the area is NOx-limited for ozone formation purposes, meaning that ozone formation is dependent on concentrations of NOx rather than VOCs. It is important to continually evaluate the NOx-limited assumption of the area, and the stakeholders will do so as part of the project's five-year review.

3. Compliance with New Regulations

Many of your comments relate to how the project will ensure compliance with new criteria pollutant regulations. Compliance with future regulations is critical to ensure ongoing environmental benefit. Under the project, Merck must comply with future regulations, but has an option to reduce the site-wide cap or subcaps by an equivalent amount of emissions. The determination of the cap adjustment will be approved by the administering agency (either EPA or Virginia Department of Environmental Quality).

EPA absolutely agrees with NRDC that Project XL should be a model for public participation. In the proposed site-specific rulemaking for this project, EPA plans to establish public participation procedures for permit revisions. For example, if there is a substantial adjustment to the cap or subcaps, the permitting authority should process a permit revision and provide an opportunity for public comment.

4. Monitoring, Recordkeeping and Reporting Requirements

We are pleased that NRDC recognizes the benefits of the project's "tiered" monitoring, recordkeeping and reporting (MRR) requirements -- that is, the MRR requirements increase as Merck's actual emissions approach the plantwide cap. The tiered MRR requirements provide another incentive for Merck to keep actual emissions low. EPA has spent a considerable amount of time evaluating the MRR provisions, since verification of Merck's emissions is critical to this project. It is important to note that even the tier I MRR requirements are more stringent than the requirements of Merck's current permits.

Your comments describe a statistical sampling method which you recommend be used as an additional "trigger" for stepping up to a higher tier of MRR requirements. While we do not believe that this specific approach must be incorporated into the project, we do agree with the basic goal that as the facility's emissions approach the cap, greater certainty of compliance must be assured. The project accomplishes this goal by requiring the use of better emissions estimation techniques and more frequent reporting as emissions approach the cap.

You raise another important comment about the availability of Merck's emissions information (12-month rolling total emissions). The project improves the public's access to information about Merck's environmental performance. Merck will provide an annual report to all project stakeholders that contains information about the site's actual emissions and other information about the site's operation under the project.