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Natural Resource Defense Council Comments

NRDC is pleased to submit these additional comments on the Intel Ocotillo Site XL Project (Project) Draft Final FPA and Draft Air Permit. Because each of these documents contains cross references to the other document, NRDCs comments should be read as relating to both documents even though separate comment periods have been established for the two documents.

Issues Relating to Draft Final Project Agreement Terms

1. Methods Used to Establish the PSELs

The proposed permit takes a step backwards by replacing technology-base standards with weaker limits that are based on a crude and incomplete risk assessment. The project does not aim for state of the art technology to set standards; rather, risk-based standards are used. For even the most hazardous compounds, the proposed risk-base standard allows for limits that are roughly two orders of magnitude weaker than current technology standards. (For example, the phosphine limit is revised upward from 25 pounds to 10,000 pounds; while we understand that the current permit limits are base on inaccurate technology data, theses limits would not be increased by 400-fold if the current technology standard was applied to the new scrubber data.)

It remains unclear as to what data demonstrate that the proposed caps do, in fact, represent superior environmental performance. Under the proposal, hazardous air pollutant emissions from plant expansions or new equipment may also exceed what would be required of the new equipment had normal permitting requirements applied. In fact, the proposed air pollution caps are intended to accommodate not only the full operation of current plant equipment, but also the emissions from two additional, unbuilt manufacturing plants.

The only protection from the first two plants far exceeding normal emissions levels is the proposed requirement that there be no increase in emissions indexed per unit of production. However, this index is not a required element of the permit and has yet to be developed. This critical requirement must be an enforceable provision of the permit and must be developed with the participation of all stakeholders. Since the PSELs do not represent an appropriate permit limit in the absence of the emissions index requirement, the permit should terminate by a date certain in the absence of such a requirement.

TRI data indicate that the proposed limit on emissions of inorganic hazardous air pollutants (HAPs) may not guarantee even standard performance for the industry. In 1993, all but one facility in the semiconductor manufacturing industry reported emissions below the proposed cap on inorganic HAPs. Only three facilities in the industry released more than half of the proposed cap in 1993. While EPA has hypothesized that these data are inaccurate because of incorrect scrubber performance assumption, it does not appear that any agency has actually benchmarked other facilities, nor verified that this hypothesis accounts for the discrepancy.

If the key benefit from this agreement is "state of the art" performance, then the Project must demonstrate that the caps do, in fact, require the "state of the art." This initial analysis should be undertaken by the stakeholder group, using independent technical resources, and consist of pollution prevention analysis of the current facility and basic benchmarking relative to other facilities engaged in the same activities. The proposed emissions caps, especially the inorganic hazardous air pollutant cap, should be adjusted as appropriate, given the findings of this analysis.

2. Protection of Worker Safety

There are no provisions to ensure that process modifications under the air emissions cap would not shift risk from the environment to the workplace, thus omitting a critical component of superior environmental performance. As a result the proposal fails to meet the critical Project XL criterion that prohibits shifting risk from one population to another.

EPA has repeatedly stated its intention to include worker safety protections in this project's requirements. No such protections appear in either the permit or the FPA. The permit should contain required worker safety protections to replace the effective protection currently afforded workers by unit-specific technology standards.

3. Introduction of New Chemicals and Number of HAPs Authorized

The proposal would allow Intel to construct additional manufacturing plants of any kind. This is of concern because the project has no information or analysis regarding even the basic chemistry that may be employed in the new operations. New processes and chemicals may be added without even basic technology review. Moreover, although the proposal contains voluntary recycling goals, there are no commitments for toxics use reduction, chemical accident risk reduction, or integrating pollution prevention into product and process design.

The proposal includes a broad policy statement regarding the Strategic Chemical Council; this discussion is so broad that there is no way to determine if Intel has met this voluntary commitment. In addition, for compounds that do not have a AAAQG, even the crude risk assessment required for new chemicals is not an enforceable requirement of the permit. The permit should require the same risk assessment procedures for all new chemicals.

Given the use of fluorinated organics, it is unclear whether the HAP and Arizona lists will capture all air toxics at the facility. For example, carbon tetrachloride is regulated as a HAP, but carbon tetrafluoride - which is used at the facility and is similarly toxic - is not. Emissions of fluorinated organic compounds would likely pose a similar risk to human health and the environment as the chlorinated analogs. Fluorinated organic compounds should be controlled under the agreement as effectively as their chlorinated analogs would be controlled.

Lastly, the proposed HAP emissions caps provide more flexibility than the facility would likely require as long as the facility is providing "state of the art" environmental performance. For example, the list of 189 HAPs that Intel could trade under the cap includes 48 halogenated organics. However, Intel currently does not use chlorinated organics at the facility and, for the 1993 TRI, no Intel facility reported releases of halogenated organics to any medium. Intel should be encouraged to continue such progress, not invited to return to use of halogenated organics. The list of hazardous air pollutants allowed by the permit should be shortened to reflect Intel's progress in toxics use reduction and emission levels consistent with state-of-the-art performance. Intel should provide stakeholders with a pollution prevention analysis demonstrating the need for adding new chemicals to the facility.

4. Risk Assessment for Hazardous Air Pollutants

The agreement proposes to replace current limits on specific hazardous air pollutants with a HAP emissions cap that would allow the facility to trade currently permitted emissions of less toxic hazardous air pollutants (HAPs) for emissions of more toxic hazardous air pollutants - thus, process changes and expansions could significantly increase risks from HAP emissions. This flatly ignores the orders-of-magnitude differences between the toxicity of the compounds of the HAP list. As such, the proposal sharply departs from requiring superior environmental performance.

The proposed risk assessment contains basic flaws. The proposed risk assessment uses Arizona's one-hour air quality criteria to verify the protectiveness of annual emissions limits - a highly questionable comparison. Since the facility is only required to meet the limits on an annual bases, HAP emissions could cause an exceedance of the one-hour guideline for days, weeks, possibly months, as long as by the end of the year the total emission did not exceed the annual limits.

Risk assessment is poorly equipped to allay concerns regarding the trading and overall level of HAP emissions. State-of-the-science risk assessment tools cannot be used to accurately characterize aggregate risk from a mixture of exposures. As such, the proposed analysis is unable to compare the risk from one mixture of HAPs to that from another mixture.

Although the primary risk to the community for many compounds is chronic exposure, the risk assessment may not protect against chronic risk for some or all contaminants, since the results are judged against short-term exposure - and in some cases, occupational - standards.

The proposed risk assessment appears to ignore risks from indirect exposure and from HAPs that bioaccumulate, which is the primary concern for many of the HAP compounds.

Contrary to the Executive Order on environmental justice, the risk assessment assumes no background exposure - that the background concentrations of HAPs is zero.

We urge the project participants to reconsider using risk assessment as the primary means of measuring superior environmental performance. A complete pollution prevention assessment of the facility, including benchmarking to other plants, should begin an ongoing process that drives continuous improvement at the current FAB and creates drivers for pollution prevention breakthroughs in subsequent operations.

5. Modification and Duration of the Permit Limits

The primary environmental benefits from this agreement stem from Intel's commitment to a single emissions cap for the life of the agreement - that is, Intel would not exercise its existing rights to apply for new permits that would allow additional emissions - in exchange for broad pre-approval and no technology review for plant expansions and modifications. However, these benefits may not come to pass, since Intel may terminate the agreement to ask more for lenient permits, after having utilized its right to expand the plant without prior approval. In addition, there is no deadline for compliance with the normal regulatory system after termination of all or part of the Project XL agreement.

The air permits issued pursuant to the agreement should contain a provision that terminates the permits upon Intel's application for new permits to increase the total allowable emissions and the facility, at which point the facility shall apply for permits for all operations at the facility, under the standards that would have been applicable at the time of construction or most recent modification. Termination of the agreement and permits should include a sufficient time frame for the transition to the standard regulatory system and deadline for completion of the transition. Further, the agreement should provide for a recapture of excess emissions that might occur during any post-agreement transition period.

In addition, the Project XL arrangement should include the safeguards now applicable to voluntary acceptances of stringent limits, such as "netting out" to avoid new source review. As such, impermissible "tiering" should be prohibited. Any equipment built or modified under the Project XL emissions cap should be ineligible for any new, post-XL permits that would increase allowable emissions limits unless a bona fide modification justified a new permit.

6. Termination of the Project

The termination/withdrawal provisions provide that Intel and Arizona DEQ are the only stakeholders involved in selecting an alternative dispute resolution method. Terminating or modifying the agreement does not provide for full participation by the community stakeholders.

Alternative dispute resolution methods should be selected by a consensus of the stakeholders. The Community Advisory Panel should participate in the modification, withdrawal, and transition processes as a Party; this participation should include the rights of the CAP to request alternative dispute resolution for a modification.

7. Enforcement

This agreement does not establish concrete procedures and penalties for violations, thus decreasing incentives for compliance. The agreement should include specific penalties for noncompliance with the emissions cap. We would suggest the two-pronged approach of the acid rain trading program - a set fine per ton of exceedance and a lowering of the emissions cap for the next 12 months by the number of tons of exceedance.

Issues Relating to Draft Air Permit

1. Duration of the Plant Site Emissions Limit (PSEL)

The central enforceable commitment that the XL project offers in return for the broad pre-approval of new installations at the site is that the total emissions at the site will not exceed the levels specified in the PSEL set forth in section 14 of the draft permit. Since the new equipment allowed to be constructed without prior review under this approach will operate for many years longer than the life of the FPA or the permit, provisions must be included to assure that the PSEL cannot be exceeded during the operating life of that equipment. Without such a provision, the permittee could install equipment without prior review, operate the site for a relatively short period (perhaps coinciding with production ramp-up) under the PSEL and then seek approval to increase the total emissions from the site above the PSEL by permit revision or at the time of permit renewal.

It is our understanding that Intel has committed in the stakeholder process to be bound by an obligation never to exceed the PSEL from the Ocotillo site at any point in the future. The draft permit and FPA fail to establish this requirement and need to be revised. Section 16 of the draft permit authorizes pre-approval of modifications that do not cause the PSEL to be exceeded. However, the section further provides:

      "Facility changes that do not meet the requirements of this Permit Condition shall be processed in accordance with [Maricopa County Air] Rule 200 400."

It is our understanding that the referenced section authorizes permit revisions and renewals. Thus, this sentence could authorize Intel to apply for a permit revision for a facility expansion project that would exceed the PSEL. Further, Section J.2 of the FPA provides that the FPA terminates on or before December 31, 2001 and further provides that permit renewal need only implement "applicable requirements."

It is necessary both to clarify the above language and to include an affirmative statement in the permit as well as a separate binding legal agreement that in return for receiving the permit allowing the pre-approved modifications in section 16 of the permit Intel waives any rights it might have to apply for a permit revision or renewal or for any additional permit that would allow emissions from the Ocotillo site to exceed the PSEL in section 14. Without such an express waiver Intel (or a successor operator of the site) would retain the right to seek permit changes that could increase emissions above the PSEL after the pre-approved equipment was operating. (Intel's ability to renegotiate existing permits was pointed out at the May 14, 1996 Executive Session Meeting of the Project XL Team. See Meeting Minutes #9).

Accordingly we urge that a binding waiver of any rights to seek an increase above the PSEL be established for Intel and any successor operator of the Ocotillo site.

2. Level and Form of PSELs

NRDC believes the separate 10 ton annual limits for organic and inorganic hazardous air pollutants (HAP) have not been shown to be protective of public health as gauged by the Arizona Ambient Air Quality Guidelines (AAAQG). The screening model run used to demonstrate compliance with the AAAQG at the 10 ton per year PSEL level appears to be premised on the wholly unrealistic assumption that the 10-ton allowable limit would be released at a uniform rate of 0.288 grams/second through the entire year. In fact, if the site's annual emissions were 10 tons annually there would inevitably be many hours of the year when the emission rate would exceed the assumed average rate of 0.288 grams/second. Both variations in process operations and in control device removal efficiencies will cause hourly release rates to vary significantly above and below any annual average rate. Since the hourly and 24-hour concentrations of concern are related to peak hourly and daily release rates, it is inappropriate to model these concentrations with annual average values as emission inputs.

We note that there are no short-term (hourly or daily) limits on HAP emissions in the permit. In order to provide a reasonable assurance that the short-term AAAQG are protected, the permit needs to include maximum hourly and daily limits that are demonstrated to result in concentrations less than the AAAQG for those periods.

Other assumptions in the screening model deserve attention. First, the model assumes a distance of 479 meters (about 1500 feet) from the release point. This is significantly greater than the 1000 feet setback agreed to in the FPA. Apart from the difference in distance, since the distance from the release point to the fence is critical to the resulting fenceline concentration, a minimum required distance should be included as an enforceable permit term. The setback is not subject to the uncertainty of the other nonenforceable "challenge" goals of the FPA and therefore no technical argument for making it voluntary exits.

The assumed stack height is 31.2 meters. This height should be verified. If it is correct it should be specified as a minimum in the permit since it is an essential element of limiting a fenceline concentration.

The modelled stack temperature is stated as 273o K. This is an implausible temperature and is probably an error in units. The correct temperature should be identified.
Once these modeling issues have been addressed, the appropriate short-term limits on HAPs and release point parameters should be set in the permit to protect short-term AAAQG.

3. Production-Unit Indexing of Annual PSELs

The FPA contains Intel's commitment to "not increase" its emissions beyond levels proportional to its production increases, FPA II.A.3.b. The principle of production-indexing is critical to the ability of this project to demonstrate environmental superiority. Since the PSELs represent a large increase in current existing actual and allowable emissions from the Ocotillo site, the only possible rationale to support a claim of environmental superiority is that the site's emissions per standardized unit of production will be required to improve under the project. To accomplish this objective, the permit (not just the FPA) would contain a condition requiring a limit on emissions per unit of production. Moreover, to demonstrate improvement rather than just maintenance of the status quo, the permit requirement should specify a schedule for steady and significant reductions in emissions per unit of production over time. Such a provision would provide a solid foundation on which to build a claim of superior environmental performance.

4. Malfunctions

Section 7 of the permit specifies circumstances in which emissions in excess of permit requirements are allowed. This provision is inappropriate to apply to the 12 month rolling average PSELs in the permit. The provision is designed to deal with short-term unavoidable upsets and should not be allowed to excuse exceedences of the 12-month PSELs. If short-term limits are included as we urge then this provision may be appropriate for such limits only. Regardless of whether short-term limits are included, the provision should be redrafted so that it does not apply to the 12-month PSEL.

5. Severability

Section 12 of the draft permit provides that all provisions of the permit are severable. Such severability is not appropriate for the permit provisions that are integral to the agreement. Sections 14-21 of the permit are all integral, linked issues - pre-approved modifications in return for PSELs and related limits and record-keeping and reporting requirements. Accordingly, it would not be appropriate for the pre-approval provisions to remain in force if the emission limit, recordkeeping or reporting provisions were invalidated.

6. Site Definition

The permit should contain a clear and detailed definition of the site to which the PSELs apply.

7. New Chemicals

The FPA commits Intel to analyze new chemicals, including those for which AAAQG have not been set, FPA II.3a. The permit, 14.d, requires such analyses only for chemicals for which AAAQG have been set. The permit should be redrafted to track the commitment in the FPA, covering all new chemicals that present potential health or environmental concerns.

8. Control Requirements

Section 15 of the permit specifies minimum removal efficiencies for VOC and inorganic HAPs. However, there are exemptions when concentrations are less than 100 ppm and 10 ppmv, respectively. No minimum removal is specified in such conditions. The permit should clarify the removal obligations during such low-concentration situations. As discussed below, the emission calculation, recordkeeping and reporting requirements and methods should be stated to reflect these removal efficiency requirements.

9. Monitoring Control Equipment Performance

As set forth in Appendix B of the permit, compliance with the PSELs is to be demonstrated through a calculation that includes a term representing control device removal efficiency. In addition, section 15 of the permit sets minimum required removal efficiencies. In order to provide reliable calculations of the 12-month emissions as well as to enable determinations of compliance with the removal efficiency requirements, it is critical that records be maintained that demonstrate actual removal efficiencies on an ongoing basis. The permit provisions do not contain adequate requirements to achieve this objective. Either direct emissions monitoring of the control devices or emissions-correlated parametric monitoring should be specified as an enforceable requirement of the permit. Startup performance testing is no substitute for continuing monitoring of control device performance during operation. Without this monitoring, actual annual emissions could easily be several times higher than calculated estimates based on performance test removal efficiency assumptions.

Moreover, it is unclear whether the proposed mass balance scheme would include HAPs and VOCs produced by chemical reactions in the manufacturing process. Mass balance calculations should determine the input of all HAPs and VOCs to the control devices.

10. Recordkeeping and Reporting

Required frequency of reporting under the permit should be a least quarterly. While the FPA contains a commitment to quarterly reporting, it is not clear that this requirement would be enforceable without incorporation into the permit. Since Intel is publicly committed to preparation and publication of quarterly reports, there should be no objection to embodying this commitment in the permit. This commitment is one that Intel knows it has the capacity to fulfill and therefore should not be treated as a voluntary "challenge" goal.

Section 18 of the permit provides that reports shall be made as set forth in section IIG of the FPA, which in turn references the report forms included in Exhibit 1 to the FPA. The Exhibit 1 forms contain much helpful information but should include some additional detail. First, the reports should include emission reports for individual HAPs in addition to the aggregate summaries for organic and inorganic HAPs. The FPA IIA.4 commits to individual HAP reporting, although only for HAPs above 1000 pounds per year. We believe this is too high a cutoff for individual HAP reporting and urge a lower level of 50 to 75 pounds per year. In addition, we urge that the reports also break out individual species of VOCs since some of these chemicals are of health concern even though not now listed on EPA's HAP list.

Second, more supporting information on emission calculations should be in the reports to insure a transparent process. As mentioned above, the PSEL calculations depend significantly on control device removal efficiencies. The reports should contain sufficient data on monitored control device efficiencies to enable review of the calculated emission results. Deviations from the minimum removal efficiencies in Section 15 of the permit should also be included in the consolidated reports.

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