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Crompton Corporation (Formerly Witco Corporation)

Minutes for Meetings Used to Develop the Final Project Agreement

61323 9/26/96

August 19, 1996 Conference Call Minutes
Page 1
OSi Specialties - Project XL Minutes August 19, 1996 Conference Call on Legal Mechanisms

I. Conference Call Participants

Dennis Heintzman Witco-OSi
Okey Tucker Witco-OSi
Tony Vandenberg Witco-OSi
Brenda Gotanda Witco-Manko, Gold & Katcher
Tim Malloy Witco-Manko, Gold & Katcher
Cheryl Atkinson EPA Region III
Beth Termini EPA Region III
Michele Aston EPA Headquarters
Julie Frieder EPA Headquarters
Amey Marrella EPA Headquarters
Dale Farley WV DEP
Steve Hass WV DEP
Britt Ludwig WV DEP
Jonathan McClung WV DEP
Lucy Pontiveros WV DEP

II. No Action Assurance

A. OSi has sent letters to EPA and WV DEP requesting a no action assurance from each agency. Tim explained that OSi is concerned that if the XL Project is not implemented because project negotiations are unsuccessful that OSi may not have enough time to come into compliance with RCRA Subpart CC by the December 1997 compliance deadline. Tim noted that OSi's anticipated method of compliance would be to replace the facility's surface impoundments with open top tanks which are not subject to RCRA Subpart CC. OSi projects that it will take 18 to 20 months to complete. If XL negotiations break down and the Project is not implemented, however, OSi could be out of compliance until completion of the tank installation. Thus, OSi is seeking an assurance from the agencies that if XL negotiations are terminated, OSi will not be facing agency enforcement actions for such period as OSi would need to achieve compliance.
B. Tim expressed OSi's preference for a no action assurance in the form of an order, rather than a letter, if possible.
C. Beth stated that EPA would like to provide OSi with an assurance sooner than would be possible if EPA was going to issue something in the nature of an order. Beth stated that EPA will most likely provide OSi with a no action assurance in the form of a letter from Maria Vickers' office. Beth anticipates that the letter will be completed within a few weeks. She related that while EPA initially believed that an order would need to be issued, upon reconsideration EPA believes that this letter will provide OSi with the type of protection it seeks. Beth offered to send a copy of the letter to WV DEP (Britt or Steve) once it is drafted.
D. Okey inquired whether the state has received EPA authorization to enforce RCRA Subpart CC on behalf of the federal government. Britt responded that the state is not federally-authorized but that it has adopted the requirements of RCRA Subpart CC by reference as part of its state air quality regulations.
E. Britt stated that she thought some type of consent order issued by the state may be appropriate to provide OSi with the no action assurance it seeks on the state level. Britt added that WV DEP would likely prefer to issue an order which establishes a timetable for compliance, rather than a letter. Britt will look into whether such an enforcement order can be entered into in advance of any noncompliance. Nevertheless, WV DEP would like to review EPA's letter prior to making any decisions. Britt will contact Beth directly.

III. Legal Implementation Mechanisms

A. Overview
In undertaking this Project, OSi will be receiving a compliance deferral from the requirements of RCRA Subpart CC and its state equivalent, 45 W. Va. Code Series 25, as well as from CAA Subpart YYY. Accordingly, it will be necessary to formally implement the compliance deferral through some legal mechanism, e.g., rulemaking, enforcement order, permit, consent decree. Tim noted that OSi has a strong preference for a site-specific rulemaking because this legal mechanism offers the greatest opportunity for public comment and participation in the Project up front and, accordingly, offers the greatest protection against challenges to the Project after the parties have begun implementation.
B. RCRA Subpart CC

1. Beth and Michele believe that EPA, too, is leaning toward issuance of a site-specific rulemaking to deal with the RCRA rules implicated by this Project. Beth noted that they have looked at other XL Projects and that site-specific rulemaking seems to be the best overall option. Michele added that such a rule should not be difficult to draft, especially considering that much of what needs to go into the rule will be set forth in the Final Project Agreement ("FPA").
2. Britt explained that on the state level, the agency does not issue rules directly, but rather it proposes rule changes which must then go to the legislature for approval.
3. Dennis noted that OSi has spoken with several West Virginia legislators, including Donna Boley, who have indicated that if we can get a rule to the legislature by October that there is a good chance that it could make it through legislative process in the upcoming session.
4. Michele suggested that perhaps EPA should write the federal rule and then have WV DEP adopt EPA's rule by reference in West Virginia. Britt explained that while the state can adopt federal rules by reference, that proposals for such adoption must still go through the whole legislative process in West Virginia.
5. Dale Farley, Chief of Air Quality for WV DEP, noted that the legislature normally requires rules to be submitted for consideration in June and that they do not emerge from the legislature until April of the next year. A rule could get promulgated on a faster track if it is considered an emergency rulemaking.
6. Dennis noted that Donna Boley had explained to OSi that the legislative calendar this year is somewhat delayed because this is an election year. Donna had indicated to Dennis and Okey that the legislature will be sworn in sometime in January but that they won't really begin to consider proposals until February. She also noted that the filing deadline for legislative consideration in the next session is the end of August. If a rule is filed late, it may nevertheless get through if a legislator is willing to pick it up and help it through the process. Don McNaughton has indicated his willingness to assist OSi in moving an XL rulemaking through the legislature.
7. WV DEP stated that they would prefer to adopt EPA's rulemaking by reference, rather than writing their own rule because West Virginia typically adopts federal rules by reference. Tim noted that this would delay state rulemaking for a whole year and he inquired about the possibility of emergency rulemaking. Tim also inquired about possible mechanisms that WV DEP could use to protect OSi prior to promulgation of a state rule and he suggested as possibilities either an order or an emergency rulemaking.
8. Dale believes that WV DEP may be able to issue an order for the interim period before final rulemaking but he said that he would need to look into it. He added that an emergency rulemaking may also be possible. He believes that among the acceptable reasons for undertaking an emergency rulemaking are: (1) the need to meet a statutory mandate at the federal level and/or (2) an urgent need to protect public health.
9. As far as the formal site-specific rulemaking is concerned, Dale reiterated WV DEP's preference to incorporate by reference the regulation which EPA will draft and promulgate, rather than writing a separate rule for West Virginia. This preference is consistent with West Virginia's regulatory scheme which primarily consists of adopting federal rules by reference. Until such time as a federal rule can be adopted by reference, WV DEP can, most likely, grant OSi an order to provide it with protection from enforcement.
10. WV DEP questioned whether the state would be subject, automatically, to EPA's new rule since the state has adopted RCRA by reference. Tim replied that he doesn't believe subsequent changes to the RCRA rules are automatically included in the state regulations.
11. Tim asked EPA how long they anticipate it will take to draft and promulgate the federal rule. EPA replied that the process should move along relatively quickly, both the drafting and approval stages. Amy added that perhaps EPA could issue a direct final rule. If there are no adverse comments, then the rule could take effect at the close of the comment period. If, however, there are adverse comments, EPA would have to follow standard procedures for publishing a proposed and final rule and for docketing. To move the process along, EPA could publish a proposed rule at the same time that it publishes the direct final rule so that in the event that adverse comments are received, the proposal will already be out for comment.
12. Julie noted that EPA has developed an expedited process for XL rulemaking which is envisioned to take approximately 2 months. The rule would not need to undergo OMB review, but it will be subject to a public comment period. Julie offered to send Tim, Dennis and Okey some EPA guidance on the process. She also noted that the rule can adopt the FPA by reference and the FPA need not be published separately for public comment.
13. Tim inquired about the level of participation that OSi would have in the rulemaking. EPA made clear that they would be responsible for drafting the rule, but that OSi will be able to see and comment upon draft language as the rule is being prepared so that it can have input into the process.
C. CAA Subpart YYY

1. EPA stated that it could not issue a site-specific rule with respect to proposed CAA Subpart YYY because EPA does not have the authority to exempt a facility from a rule that is not yet in effect. Further, EPA added no deadline has been established for final promulgation of CAA Subpart YYY.
2. There was some discussion among the group concerning the question whether CAA Subpart YYY was currently effective in its proposed form since NSPS can often affect facilities from the time rule is proposed. Tim and Tony opined that the rule could not be effective until it is finalized. Amy agreed with Tim and Tony but volunteered to verify this for the group.
3. Tim asked whether EPA could simply incorporate provisions regarding OSi into the final CAA Subpart YYY rulemaking. EPA stated that they would need to discuss this internally and then get back to OSi on this issue.
D. Miscellaneous Organic NESHAP
1. Michele stated her position that the FPA must terminate with the issuance of the Miscellaneous Organic NESHAP ("MON"). She explained that her program office approved OSi's project proposal on the understanding that it would terminate at issuance of the MON as they believe that the MON will negate the superior environmental benefit gained from the Project as it will require emission controls on the capper which are not now required and which OSi is implementing voluntarily under the Project.
2. The group agreed to defer further discussion on this issue until a later time.

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