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Merck & Co., Inc.

Letter from Tedd Jett to Jon Kessler

August 25, 1995

Mr. Jon Kessler
Office of Policy, Planning and Evaluation
United States Environmental Protection Agency
West Tower 1013, Mail Code 2111
401 M Street, SW
Washington, DC 20460

RE: Merck Project XL Application

Dear Mr. Kessler:

To supplement the information included in our August 4, 1995 Project XL application, Merck & Co., Inc. wishes to take this opportunity to clarify and expand on the initial submittal.

Avoiding increased risk

Merck recognizes that any plantwide emission cap negotiated in Project XL would require limits that provide reasonable assurance that increased risk to the environment or individuals does not result from the project. The project, as Merck currently envisions it, will likely involve interpollutant trading. A portion of the emission reductions achieved by the project would be reserved as credits for possible emission increases to accommodate the future growth of the Stonewall Plant. The reductions would be largely composed of SO2, NOx, HCl, and to a lesser extent VOCs while most future increases would likely be composed of VOCs. Since the relative risks of the various criteria pollutants are not well established, Merck recognizes that a trading plan that assures reduced risk will be difficult to define. Trading on a basis other than "pound for pound" would probably make sense for certain pollutants and is expected to be a subject of negotiation if Merck is selected to pursue a final project agreement.

Environmental benefits

The Merck project will provide environmental improvement both in terms of reduced human health risk as well as protection of the adjacent Class 1 area. For example, if a powerhouse emission reduction project is chosen, the environment will benefit by a reduction of hazardous air pollutants (hydrochloric acid and hydrogen fluoride), substantial decreases in SO2, and considerable NOx reductions. Since ground level ozone formation in rural areas is generally NOx limited, nearby NOx reductions might result in decreased ozone formation in the Class 1 area and elsewhere.

Apart from emission reductions derived from pollution reduction projects, a plantwide emission cap could provide a regulatory mechanism to provide incentives for pollution prevention which will minimize actual emissions for the plant over the long term. We believe this approach is needed in an increasingly competitive worldwide market.


The baseline emissions for the project would be recent actual emissions during periods of representative production activities, and would be subject to negotiation. We would not mean to imply that 1987 TRI emissions would comprise a reasonable baseline. We would expect that the baseline would be subject to adjustment in the future to reflect new requirements, including the pharmaceutical MACT.


Merck understands the need for accountability in a project of this type, and would commit to establish monitoring and reporting protocols sufficient to provide high assurance that emission reductions are real and permanent and that any established cap is not exceeded.

Stakeholder support

The Merck project has received strong interest from the VADEQ and the National Park Service. Due to the benefits derived from emission reductions associated with the project and the anticipated enhanced economic viability of the Plant due to the increased operational flexibility afforded by a plantwide cap, we expect strong local support. A meeting with our local community advisory panel will be held in the near future to discuss our possible participation in Project XL.

I hope this letter will help to clarify our proposal. If I can provide any further clarification or additional information, please don't hesitate to contact me.


Tedd H. Jett, P.E.
Stonewall Plant Environmental Manager

cc: Steve Harper (by FAX)

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