Crompton Corporation (Formerly Witco Corporation)

Minutes for Meetings Used to Develop the Final Project Agreement

OSi Specialties - Project XL October 1, 1996 Conference Call Minutes

I. Conference Call Participants

Jesse Barnhart Witco-OSi

Dennis Heintzman Witco-OSi
Dale Koontz 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
Britt Ludwig WV DEP (for portion of call)

II. Status of Legal Issues

A. No Action Assurance

1. Britt informed the Workgroup that there are no new developments with respect to the no action assurance at the state level as WVDEP is waiting to see a draft of EPA's assurance before proceeding further.

2. Beth stated that she would send a copy of the draft consent order to Britt for her review. Beth explained that EPA has drafted a complaint, a consent agreement, and an order settling the matter upon filing. She added that West Virginia has been included only in the consent agreement portion of the package and asked whether the state would need to file a complaint as well. Britt stated that she did not believe that it would be necessary, but agreed to check on this. Britt said that she would call Beth this afternoon to follow up on this matter.

3. Beth stated that after she receives comments from EPA Headquarters on the no action assurance consent agreement/order that she will contact Tim to review it with him. She added that EPA recognizes that obtaining the no action assurance is a priority for OSi and she expects to get it to Tim tomorrow or the next day. She will not await comments from the state prior to sending it to Tim for review.

B. Implementation Mechanisms

1. Beth asked Britt how the state would proceed if EPA decided to grant to OSi a CAA § 111(j) waiver in order to implement the portion of the Project deferring compliance with CAA Subpart YYY. Britt inquired about the form that the waiver would take, whether it would be in the form of a rule or an order. Beth explained that a § 111(j) waiver is more akin to a rulemaking than to an order. Tim added that such a waiver requires notice and comment similar to a traditional rulemaking. Britt responded that if the waiver is in the form of a rulemaking, then WVDEP will simply adopt EPA's rulemaking in its own rule. If, however, it would take the form of an order, then WVDEP would most likely adopt it in either a consent order or a permit.

2. Tim asked Beth whether EPA's delegation of NSPS authority could include the § 111(j) waiver such that the two could be linked together. Beth replied that she would look into the possibility.

3. Beth asked Britt whether the Governor of the West Virginia has delegated authority to consent to a § 111(j) waiver. Britt suspects that if such authority has been delegated, it would likely have been delegated to Eli McCoy, Director of WVDEP. Britt agreed to look into the matter. She added that if the Governor has not delegated such authority, that he would likely consent to such waiver for this Project.

III. Performance Standards

A. Okey informed the Workgroup that the conference call to discuss performance standards for the Project was held yesterday and that OSi will be drafting language to include in the Final Project Agreement ("FPA") which incorporates the issues raised during yesterday's conference call.

B. Michele added that during yesterday's conference call, the performance standards subgroup agreed upon the general direction for most aspects of the standards and that EPA has asked OSi to generate some specific requirements. In addition, OSi will brainstorm ideas on ways to measure the benefit obtained from the methanol recovery and will get back to EPA on what type of commitments they can make and how to measure performance of those commitments.

C. Dennis stated that OSi will likely be able to commit to operating the condenser at all times while the methyl capper is operating, but that the company will have to asses what they can commit to as far as the ultimate fate of the methanol is concerned.

D. Beth stated that one of the goals of XL is to eliminate the transfer of pollutants from one medium to another and reminded OSi that it would not be appropriate to simply remove a pollutant from air emissions and deposit it in the facility wastewater. She cautioned that other companies participating in the XL process have had trouble with this. Tim inquired as to what problems other companies have encountered. Beth stated that an article is to be published in the Environmental Law Reporter on this issue in October and offered to send a copy to Tim and to Okey.

E. Tim and Okey clarified that it is not the intent of OSi to simply collect methanol from the capper emissions and transfer it to the wastewater. Rather, OSi intends to recycle or reuse the collected methanol. However, in certain circumstances, a portion of the collected methanol may have to be subject to bio-treatment downstream of the surface impoundments. This would result in sludge generation, but would not affect emissions reductions achieved by use of the condenser. Tim added that this will be clearly fleshed out in the performance standards

IV. Final Project Agreement

A. Tim and Brenda have sent out a redlined copy of FPA Draft #2 which reflects the revisions received from the Workgroup. Tim asked if anyone else had any other revisions to the FPA.

B. Beth and Michele stated that they would like to add to the FPA a default provision which would cause the Project to terminate upon the compliance date of the MON if no actions are taken with respect to reevaluation of the Project.

C. Tim expressed concern that such a provision could allow for termination of the Project if the agencies fail to promptly consider OSi's request for reevaluation or if discussions on reevaluation are otherwise delayed. Beth responded that EPA would not intentionally delay consideration of reevaluation to allow the default provision to kick in. Tim requested that, in the event a default or termination is required, that the agencies agree to include a timeline in the FPA to ensure the evaluation process proceeds promptly. Tim stated that the purpose of the reevaluation provision in the FPA is to ensure that there is a process in place so that the issue of reevaluation will be properly addressed. Tim will try to incorporate some language into the FPA which addresses both the concerns of EPA and OSi.

D. Beth stated that she also would like to see some other termination provisions included in the FPA. For example, she stated that she wants a provision which states that the FPA will terminate if OSi does not construct the new capper unit. Brenda noted that the FPA contains a provision which provides for termination if there is a material continuing failure by any party to implement the provisions of the FPA and suggested that failure to install the capper would certainly fall within the scope of that provision. Beth replied that because such a requirement is so central to the Project, she would like to have it listed separately. However, she added that she did not want to include a "laundry list" of items in the termination provisions. Tim suggested that the Workgroup should consider the scope of termination provisions further and revisit this issue in a future conference call.

E. Beth stated that she would also like to have the agreed upon date of installation of the capper unit included in the FPA.

F. Tim stated that OSi has, from the start, advocated the inclusion of a minimum project term in the FPA. He explained the necessity of such a provision because this Project, unlike ISO 14000 or permitting projects, requires a significant capital investment up front. Therefore, OSi does not want parties to the FPA to be able to pull out at any time. Julie asked what is the proposed period of the minimum project term. Tim advised that OSi will be able to answer that question shortly as it is just about finished completing its economic analysis for the Project.

G. Beth requested that the FPA be revised to include language in the beginning of the document which describes OSi's plans to undertake a waste minimization opportunity assessment. She noted that presently this issue is not addressed until Section VI of the FPA. She would like to have discussion of it in the first paragraph of the Overview section.

H. Beth also requested that the FPA include a clear statement that there will not be simultaneous operation of the old and new capper units.

I. Beth stated that Cheryl had requested the inclusion in the FPA of a description of the demographics of the area where the facility is located and the environmental setting. Cheryl had suggested noting that it is a facility of 40 acres in a rural community. Also, she suggested that the description should state the number of residents in the area and should describe the Ohio River and its watershed. She wants the public to get a better feel for the facility and believes that this can be accomplished by adding the requested descriptions of the facility and the landscape. Okey will consider preparing such a description for inclusion in Section II of the FPA.

J. Beth requested that the FPA also include a requirement for an annual or periodic evaluation of the Project and its ability to meet XL criteria. Okey noted that an annual report is planned which would include an update of the spreadsheet covering air emissions, wastewater, and sludge generation. He also noted that EPA had requested more frequent recordkeeping and reporting in the first year of the Project and stated that OSi would be looking into this.

V. Schedule

A. Final Project Agreement

1. Beth and Julie requested to have a revised copy of the FPA faxed to them as soon as possible as they will try to circulate it and have comments back from Headquarters by October 15 so that they can be near closure in time for the face-to-face meeting in Charleston on October 15 and 16. Brenda will send a copy of FPA #2 to Julie today and the next version will be sent out as soon as possible. Tim will contact Beth to let EPA know what OSi can provide to them and when.

2. Julie suggested that OSi look at other FPAs to assess whether there are any other provisions which have not yet been included in this FPA but which would be appropriate to include. She noted that the Intel FPA is available on the Internet and that the Weyerhauser FPA is nearly ready to go for public comment. She will fax a copy of the Weyerhauser FPA to Tim today.

3. Dennis, Okey, Tim, and Brenda will meet on Thursday October 3 to draft performance standards and will circulate these as soon as possible thereafter. Tim will advise Beth as to the status of this work on Friday.

4. Julie requested that OSi include an accountability measure in the performance standards as well as monitoring, reporting, and recordkeeping requirements.

5. Michele stated that she would be providing some language on risk for the FPA.

B. Implementation Mechanisms

1. Julie noted that EPA is attempting to draft the RCRA rule so that it can go out for public comment simultaneously with the FPA. However, the implementation mechanism for CAA Subpart YYY may not be ready by that time. EPA is hoping to have the FPA signed by October 30. Tim stated that OSi had expected to have all the legal implementation mechanisms attached as appendices to the FPA. OSi will need to discuss internally EPA's proposal to sign the FPA prior to drafting the legal implementation mechanisms.

2. Tim asked Beth where EPA is on the outstanding issues related to the § 111(j) waiver. Beth stated that EPA has not yet drafted the waiver language. She noted, however, that EPA believes that this Project should satisfy the requirements for technological innovation. Further, she stated that while they have not yet decided upon a duration, it appears that they will go with an initial four year term plus a three year extension. Tim asked if Beth would be getting an opinion from OGC on use of the seven year term. Beth stated that OGC is currently looking at the issue. She suggested that perhaps Tim would like to participate in a conference call with OGC on this issue. Tim agreed that this would be a good idea. Beth said that she would touch base with Amey on this issue.

3. Tim asked Beth whether EPA was only considering the § 111(j) waiver at this point and no longer investigating issuance of a strict site-specific rulemaking. Beth advised that EPA is currently focusing on the § 111(j) waiver because it appears to accomplish the goal with the least possible litigation risk. She added that if EPA determines that the waiver does not accomplish the intended goal that EPA will then consider site-specific rulemaking. She stated that EPA has had general conversations regarding site-specific rulemaking but has not done an in-depth analysis of potential problems in this case. She stated that EPA will need to have further internal discussions.

4. Beth stated that Michele has some additional information concerning § 111(j) waivers. Beth will set up a conference call between herself, Tim, Amey, and Michele.

C. Conference Call

The next Workgroup conference call will be held on Tuesday October 8 at 1:30 p.m.

D. Face-to-Face Meeting

The face-to-face meeting in Charleston is scheduled to begin at 1:00 p.m. on October 16. The meeting will run through the afternoon of October 16 and will resume on October 17 at 8:30 a.m. The Workgroup hopes to finalize the remaining FPA issues at that meeting and to address further scheduling.

Crompton Corporation (Formerly Witco Corporation)

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