July 20, 1995


HAND DELIVER

Thomas H. Beisswenger, Esq.
Office of General Counsel
U.S. Environmental Protection Agency
Mail Code 2366
401 M Street, S.W.
Washington, D.C.  20460

     Re:  Edison Electric Institute v. EPA, No. 93-1474 (D.C. Cir.)

Dear Tom:

     Pursuant to our recent telephone calls, identified below are
the issues remaining in the above-referenced litigation involving
the Edison Electric Institute's ("EEI") challenge to EPA's May 3,
1993 used oil technical amendments (58 Fed. Reg. 26420) (the
"1993 technical amendments") (attachment 1).  Most of the issues
can be resolved simply though the issuance of a letter to EEI
confirming our position.  However, resolution of the issue
regarding the regulatory status of used oil containing PCBs will
require a technical amendment to 40 C.F.R.  279.10(i).

     In short we request that EPA issue a technical correction to
40 C.F.R.  279.10(i) making clear that used oil containing 50
parts per million ("ppm") or greater PCBs is not subject to
regulation under Part 279.  In addition, we request written
confirmation of the following points:

     1.   Soil containing used oil that is not free flowing, and
          that is burned in a boiler or industrial furnace, is
          not used oil and is not subject to regulation under
          Part 279.

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Thomas H. Beisswenger, Esq.
July 20, 1995
Page 2


     2.   Commercial sorbent products that are used to clean up
          used oil and that are burned for energy recovery as a
          means of disposal are not "used oil" because (1) the
          oil is not free-flowing, and (2) the predominant fuel
          value of the material is the commercial sorbent, not
          the used oil.

     3.   In cases where an entity engages in multiple used oil
          activities at distinct and separate portions of a
          single facility, each distinct activity is subject only
          to those portions of Part 279 applicable to that
          activity -- e.g., the portion of the facility engaged
          in used oil generation activities is subject only to
          the Part 279 generator requirements, while the portion
          of the facility engaged in used oil burning is subject
          only to the Part 279 burner requirements.

     4.   Used oil "marketers" who have already obtained EPA I.D.
          numbers do not have to renotify EPA regarding their
          used oil marketing activities.

     5.   The application of off-specification used oil fuel onto
          a coal pile or into a coal feed hopper for purposes of
          feeding the used oil into the boiler does not convert
          the coal into used oil fuel.

     We discuss these issues below.

I.   Technical Amendment Regarding Used Oil Containing PCBs

     EEI requests that EPA issue a technical correction to 40
C.F.R.  279.10(i) making clear that used oil containing PCBs at
concentrations of 50 ppm or greater is not subject to regulation
under the 40 C.F.R. Part 279 used oil management standards.  This
point was unambiguous in the original version of 40 C.F.R. 
279.10(i) as published on September 10, 1992, and was based on
EPA's correct determination that regulation of this particular
category of used oil is not necessary under Part 279

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Thomas H. Beisswenger, Esq.
July 20,1995
Page 3


because it is comprehensively regulated under TSCA's PCB
management standards codified at 40 C.F.R. Part 761.  57 Fed.
Reg. 41566, 41569 (Sept. 10 1992).

     When EPA amended this regulation in the 1993 technical
amendments, we believe that the Agency was attempting simply to
clarify that used oil containing concentrations of less than 50
ppm PCBs is subject to Part 279 (because this category of used
oil is not subject to comprehensive regulation under the TSCA PCB
standards).  Obviously, EPA could not have intended the 1993
technical amendments to override the pre-existing, validly
promulgated regulatory exclusion from Part 279 for used oil
containing 50 ppm or greater PCBs.  Such an action would have
constituted a flagrant violation of the notice and comment
requirements of the Administrative Procedure Act ("APA").

     Nonetheless, we are concerned that the 1993 technical
amendment to section 279.10(i) could be mistakenly construed as
doing just that because, as currently written, the regulation is
silent as to whether used oil containing PCBs at concentrations
of 50 ppm or greater is subject to Part 279.  Because many state
programs are in the midst of adopting the Part 279 standards, it
is imperative that EPA amend the regulation immediately to
reaffirm that used oil containing 50 ppm or greater PCBs is not
subject to the Part 279 program.

     A.   Background of PCB Provision

     As originally promulgatled on September 10, 1992, section
279.10(i) read  as follows:

     (i)  PCB contaminated used oil.  PCB-containing used oil
     regulated under part 761 of this chapter [i.e., the TSCA PCB
     regulations] is exempt from regulation under this part
     [i.e., Part 279].

57 Fed. Reg. 41566, 41614 (attachment 2).  This point was
reiterated in the preamble to the September 1992 rule:

     [t]he manufacture, use, import, and disposal of
     polychlorinated biphenyls (PCBs) in used oils are controlled
     under the Toxic Substances Control Act (TSCA).  TSCA
     controls the manufacture, import, use, and disposal of oils

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Thomas H. Beisswenger, Esq.
July 20, 1995
Page 4


     containing over 50 ppm PCBs. In addition, TSCA requires
     reporting of any spill of material containing 50 ppm or
     greater PCBs, into sewers, drinking water, surface water,
     grazing lands, or vegetable gardens . . . . Note that used
     oils containing less than 50 ppm of PCBs are covered under
     RCRA.

57 Fed. Reg. at 41569 (emphasis added) (attachment 3).  This
point also was made in EPA's response to comments document:

     [u]sed oils containing greater than 50 ppm PCBs are subject
     to TSCA regulation, rather than RCRA regulation.  Thus,
     management requirements currently in place under TSCA
     supersede the newly promulgated used oil management
     standards if the used oil contains PCBs at a concentration
     of greater than 50 ppm.

EPA Public Comment and Response on Used Oil Proposed Rule: 
General Issues (Nov. 29, 1985), G. 10 (Relationship to Other EPA
Programs -- TSCA) at comment UO 004 (emphasis added) (attachment
4).

     Thus prior to the 1993 technical amendments, EPA's position
on used oil containing PCBs was unequivocal:  used oil containing
50 ppm PCBs or greater was regulated exclusively by TSCA and was
exempt from Part 279; used oil containing from 2 ppm (the level
of detection) to 49 ppm PCBs was subject to regulation under Part
279.

     In the preamble to the 1993 technical amendments, EPA voiced
concern that the 1992 version of section 279.10(i) could be
construed as overriding the pre-existing regulatory regime where
used oil containing less than 50 ppm PCBs was subject to RCRA and
to TSCA's regulations under 40 C.F.R.  761.20(e).  58 Fed. Reg.
at 26423.1  Therefore, the 1993 technical amendment apparently
was intended to

________________________

1    As a general rule, TSCA's substantive management controls
only apply to materials that contain 50 ppm or greater PCBs
(including used oil).  See 40 C.F.R.  761.1(b). Materials

(Footnote continued to next page)

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Thomas H. Beisswenger, Esq.
July 20, 1995
Page 5


clarify what had always been the case:  namely, that used oil
containing less than 50 ppm PCBs (which is not subject to TSCA's
substantive PCB management standards) is subject to the RCRA Part
279 used oil management standards and TSCA's administrative rules
at 40 C.F.R.  761.20(e) governing the marketing and burning of
used oil containing less than 50 ppm PCBs.2

     The problem, however, is that the 1993 technical amendment
eliminated any reference to the pre-existing exclusion for used
oil containing 50 ppm or greater PCBs.  Section 279.10(i) now
reads as follows:

     (i)  Used oil containing PCBs.  In addition to the
          requirements of 40 C.F.R. Part 279, marketers and
          burners of used oil who market used oil containing any
          quantifiable level of PCBs are subject to the
          requirements found at 40 C.F.R.  761.20(e).

58 Fed. Reg. at 26425 (emphasis added).  Because only used oil
containing between 2 ppm and 49 ppm PCBs is subject to regulation
under 40 C.F.R.  761.20(e) (see 53 Fed. Reg. at 24211
(attachment 5)), the new regulatory language is completely

________________________
(Footnote continued from previous page)
containing less than 50 ppm PCBs are subject only to TSCA's
administrative requirements applicable to the burning and
marketing of used oil containing between 2 ppm and 49 ppm PCBs. 
See 40 C.F.R.  761.20(e).  See also 53 Fed. Reg. 24206, 24211
(June 27, 1988) (attachment 5).  In addition to the
administrative requirements under section 761.20(e), used oil
containing between 2 ppm and 49 ppm PCBs has always been subject
to RCRA's used oil management standards; indeed, section
761.20(e) cross-references RCRA's used oil standards (prior to
promulgation of the Part 279 standards, this category of used oil
was subject to RCRA's used oil management standards under 40
C.F.R. Part 266, subpart E).

2    When EPA issued the original version of section 279.10(i)
that exempted used oil regulated under TSCA from the Part 279
standards, the Agency intended that the exclusion only cover used
oil containing 50 ppm or greater PCBs.  57 Fed. Reg. at 41569. 
However, the regulation did not draw this distinction on its
face, and EPA staff apparently was concerned that the exemption
could be viewed as also exempting used oil containing less than
50 ppm PCBs from the Part 279 program.

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Thomas H. Beisswenger, Esq.
July 20, 1995
Page 6


silent as to the regulatory status of used oil with
concentrations of 50 ppm or greater PCBs.  This silence could be
mistakenly construed as overriding EPA's unequivocal
determination in 1992 that used oil containing 50 ppm or greater
PCBs is not subject to Part 279.  Such an interpretation,
however, would be completely at odds with the Agency's
pre-existing determination and would, in effect, mean that EPA
had eliminated a substantive regulation without going through the
requisite notice and comment required under the APA.  EEI does
not believe this was the Agency's intent.

     B.   Recommended Solution

     In view of the confusion surrounding this issue, EEI
requests that EPA amend section 279.10(i) to restore the
regulation to its original contours.  Specifically, EEI requests
that EPA correct 40 C.F.R.  279.10(i) to read as follows:

     (i)  PCB contaminated used oil.  Used oil containing PCBs at
          concentrations of 50 parts per million (ppm) or greater
          that is regulated under Part 761 is not subject to
          regulation under this Part.  Used oil containing PCBs
          at concentrations of less than 50 ppm is subject to the
          requirements of this Part, and marketers and burners of
          such used oil are subject to the requirements at 40
          C.F.R.  761.20(e).

     EEI respectfully requests that this technical correction be
made as soon as possible so that state-approved used oil programs
do not perpetuate this confusion.

II.  Management of Materials Containing Used Oil That is Not
     Free-Flowing                                           

     EEI requests clarification regarding EPA's "no free-flowing
oil" concept.  The 1993 technical amendment clarified that
materials containing used oil from which used oil has been
removed to the extent possible such that "no visible signs of
free-flowing oil remain in or on the material" are not used oil
and are not subject to the Part 279 used oil management
standards.  58 Fed. Reg. at 26425 (codified at 40 C.F.R. 
279.10(c)(1).  Expressly excluded from this provision are
materials "containing or otherwise contaminated with used oil
that are burned for energy recovery."  Id.  279.10(c)(2)
(emphasis added).  In other words, materials that contain or are

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Thomas H. Beisswenger, Esq.
July 20, 1995
Page 7


contaminated with used oil that are burned for energy recovery
are regulated as used oil fuel, even if the used oil contained in
the material is not "free-flowing."  This provision raises two
issues on which EEI seeks clarification.

     A.   Status of Soils Contaminated with Used Oil

     Utilities frequently manage soil containing trace amounts of
used oil by burning the soil in utility boilers because
combustion is the most practical and effective way to manage such
non-hazardous materials.  The soils do not contain free-flowing
used oil and are not burned for energy recovery, but rather are
burned in the boiler because this offers the most cost-effective
management option for these materials.  Because the soils are not
burned for energy recovery, they fall within the general
exclusion from the definition of used oil under  279.10(c)(1)
for materials that do not contain free-flowing used oil.

     We understand that the Agency concurs with this position. 
EEI therefore requests that EPA confirm in writing the following
points:

     1.   Soil containing used oil that is not free-flowing
          (e.g., soil that contains used oil from a spill) and
          that is not burned in an industrial boiler or furnace
          is not used oil and is not subject to regulation under
          40 C.F.R. Part 279; and

     2.   Soil containing used oil that is not free-flowing and
          is burned in an industrial boiler or furnace, is not
          used oil and is not subject to Part 279 because the
          used oil contained in the soil is not being burned for
          energy recovery.

     B.   Status of Sorbent Materials Containing Used Oil

     A related issue involves the burning of sorbent materials
used to clean up used oil spills.  After the cleanup process is
complete, these sorbent materials -- e.g., commercial booms/pads
-- are often burned in utility boilers.  As part of the marketing
of these products, the sorbents are intentionally manufactured
using ingredients (e.g., polypropylene) that have a fuel value
greater than 5,000 Btu/lb so that they can be

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Thomas H. Beisswenger, Esq.
July 20, 1995
Page 8


burned as fuel after the cleanup is complete.3  This option makes
economic and environmental sense because it allows companies
engaged in spill response activities to recycle the cleanup
materials in their boilers as a supplemental fuel, thus avoiding
excessive land disposal costs and the uncertainties associated
with any off-site management of waste materials.

     EEI is concerned, however, that sorbent materials managed in
the above manner could inadvertently be classified as "used oil
fuel" under the 1993 technical amendments simply because they are
being recycled as a fuel, even though the predominant fuel value
of the material is the commercial sorbent, not the used oil. 
Indeed, this scenario is no different from the contaminated soil
issue discussed above, except that here the material containing
the used oil is a commercial sorbent that is intentionally
manufactured to have a fuel value so that it can be burned for
energy recovery when disposed.

     EEI therefore seeks clarification from EPA that such sorbent
materials are not "used oil" because (1) the oil is not
free-flowing, and (2) the used oil is not being burned for energy
recovery.  Confirmation of this point is important to EEI members
because the recycling of spill cleanup sorbent materials as a
supplemental fuel has proven to be a cost-effective and
environmentally sound management option that should not be
discouraged.

________________________

3    Indeed, certain commercial cleanup products are marketed as
having a fuel value ranging from 10,000 Btu/lb to 20,000 Btu/lb
precisely because it makes environmental and practical sense to
burn these products for energy recovery after they have been used
to absorb spilled materials.

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Thomas H. Beisswenger, Esq.
July 20, 1995
Page 9


III. Multiple On-Site Used Oil Management Operations

     EEI requests confirmation regarding the application of the
Part 279 management standards to multiple used oil operations at
distinct portions of the same facility.

     The regulations contemplate that a used oil handler might
conduct activities regulated by more than one segment of the
management standards.  See, e.g., 40 C.F.R.  279.20(b)
(generators who conduct transportation, processing or burning
activities must comply with the appropriate subpart); 57 Fed.
Reg. at 41601 (under the definition of marketer in Part 279, "it
is logically impossible for a facility to be only a marketer of
used oil fuel").  Where an entity operates multiple facilities
that carry on different used oil activities in geographically
distinct locations, it is not difficult to determine which
portions of Part 279 apply to each facility.  Thus, for example,
an entity may generate off-specification used oil fuel in
Facility A and transport the used oil from Facility A to a
geographically distinct Facility B, where it is burned for energy
recovery.  The entity clearly is subject only to the generator
standards at Facility A and the burner standards at Facility B.
Additionally, if the entity self-transports the used oil in
amounts greater than 55 gallons, it is also subject to the used
oil transporter standards.

     In some cases, however, an entity operating a large,
integrated facility in a single geographical location may conduct
several different used oil handling activities within discrete
portions of the facility.  For example, the entity might generate
off-specification used oil in Portion A, and transfer the used
oil to Portion B of the same facility, a distinct and separate
operation where the used oil is burned for energy recovery. 
Where Portion A and Portion B are separate, distinct portions of
the same facility, they are no different from the geographically
distinct facilities in the above example.  Thus, Portion A is
subject only to the generator standards, and Portion B is subject
only to the burner standards.  The only substantive difference in
the second example is that the transfer of the used oil from
Portion A to Portion B is not subject to the used oil transporter
requirements.  See  279.40(l) (transporter standards do not
apply to on-site transportation of used oil).  EEI requests that
EPA confirm that distinct and separate used oil activities
conducted at the same facility are evaluated independently for
purposes of determining applicable Part 279 standards.

     EEI also requests confirmation regarding the requirements
for EPA I.D. numbers at large facilities conducting multiple used
oil operations.  Specifically, if a

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Thomas H. Beisswenger, Esq.
July 20, 1995
Page 10


entity is processing used oil in one distinct portion of its
facility and burning off-specification used oil in another
distinct portion of its facility, EEI believes that the facility
can use a single EPA I.D. number for the entire facility.

IV.  Notification Obligation of Used Oil Marketers

     EEI requests clarification regarding the notification
obligation of used oil marketers.  Pursuant to 40 C.F.R. 
279.73, a marketer "who has not previously complied with the
notification requirements of RCRA section 3010 must comply with
[the notification] requirements and obtain an EPA identification
number."  Identical language appears in the other notification
provisions of Part 279 (i.e., sections 279.42 (transporters),
279.51 (processors/re-refiners) and 279.62 (burners)).  The
preamble to the final rule indicates that transporters,
processors/re-refiners and burners who already have notified EPA
of their hazardous waste management or used oil activities and
received an EPA I.D. number need not renotify the Agency.  57
Fed. Reg. at 41590 (transporters), 41594 (processors), 41599-600
(burners) (attachments 6-8).

     The preamble to the final rule is silent on whether entities
that already have EPA I.D. numbers need to notify the Agency if
they are conducting marketing activities.  The preamble explains
that section 279.73 was a recodification of the notification
provision for marketers previously codified at 40 C.F.R. 
266.43.  57 Fed. Reg. at 41601, Table VI.6 (attachment 9).  The
notification provision of former Part 266 required marketers who
had obtained an EPA I.D. number to renotify the Agency if they
undertook used oil marketing activities.  See 50 Fed. Reg. 49164,
49195 (November 29, 1985) (attachment 10).  In the 1992 rule, EPA
originally indicated that the marketer provisions from Part 266
were recodified to Part 279 "Without modification."  The 1993
technical amendments indicated, however, that certain changes
were made to the marketer provisions, although it was unclear
whether any changes were made to the marketer notification
provisions.  See 58 Fed. Reg. at 26422.

     EEI believes that a reasonable reading of section 279.73 is
that marketers -- like transporters, processors and burners --
who have already obtained EPA I.D. numbers are not required to
renotify the Agency of their marketing activities.  Some states,
however, have taken the position that Part 279 does not modify
the former requirement in Part 266 for marketer re-notification. 
EEI, therefore, requests

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Thomas H. Beisswenger, Esq.
July 20, 1995
Page 11


that EPA confirm that entities with existing EPA I.D. numbers do
not need to renotify the Agency if they are conducting marketing
activities.

V.   Application of Used Oil to Coal Piles

     Finally, EEI seeks clarification regarding the regulatory
consequences of applying off-specification used oil fuel to coal
piles or into coal feed hoppers.  This practice is conducted by a
number of electric utilities because applying used oil to coal,
which is then fed into a boiler, is often the most practical
method for injecting the used oil into the boiler.  EEI raises
this issue because it is concerned that, under the circumstances
described above, an overly literal reading of 40 C.F.R. 
279.10(d)(1) (which provides that "mixtures of used oil and fuels
or other fuel products are subject to regulation as used oil")
could be construed as converting the coal pile or feed hopper to
"used oil fuel," with all the attendant consequences of the used
oil storage requirements (e.g., storage in tanks or containers
with secondary containment).

     Such a reading of the regulations would be nonsensical.  It
would be virtually impossible to attempt to manage an entire
electric utility coal pile in a container or tank simply because
small amounts of used oil have been applied to the coal pile
prior to the coal being inserted into the boiler.4  One EEI
member reports that its coal piles range in size from five to 50
acres and have a maximum height of four stories.  We expect that
these numbers are representative of coal piles throughout the
industry.

     Aside from being completely unworkable, this interpretation
is wholly unnecessary from an environmental perspective.  First,
the primary intent of section 279.10(d)(1) is to ensure that used
oil that is mixed with other fuels is burned only in qualified
boilers and that such mixing is not used as a means to evade the
Part 279 requirements.  Off-specification used oil fuel that is
applied to a coal pile or feed hopper prior to its injection into
a boiler is managed in accordance with all applicable used oil
burner requirements, including ensuring that the boiler is
qualified to burn off-

________________________

4    EEI notes that this issue is being raised only in the
context of "off-specification" used oil fuel being applied to a
coal pile because "specification" used oil that is burned for
energy recovery is not subject to the 40 C.F.R. Part 279
standards.  See 40 C.F.R.  279.11.

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Thomas H. Beisswenger, Esq.
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specification used oil fuel.  Furthermore, prior to its
application onto the coal pile, the used oil is stored in
accordance with the applicable Part 279 storage requirements. 
Thus, the used oil is burned in a qualified device, and there is
no intent to evade applicable used oil management standards.

     Further, this practice is conducted by electric utilities in
a protective manner.  While there is no uniform used oil to coal
ratio, based on discussions with EEI member companies, the amount
of used oil that could potentially be applied to a coal pile is
minute and inconsequential when compared to the total volume of
the coal pile.  Even for these extremely small volumes, the coal
acts as an effective sorbent of oil and therefore makes it highly
unlikely that any material volume of such oil would pose a
run-off concern.  Even assuming such effects could be identified,
any possible run-off would be adequately addressed by a
facility's coal pile runoff controls, which are often
incorporated into a facility's NPDES permits.  Finally, where
such application takes place, it occurs on the active portion of
the coal pile where the coal is generally inserted into the
boiler within a week, if not on the same day.  Again, this
practice minimizes any possibility of run-off.

     In short, EEI seeks confirmation only of the position that
the mere application of used oil onto a coal pile or into a feed
hopper does not convert the entire pile or hopper into used oil
fuel, thus subjecting the pile or hopper to the used oil fuel
storage requirements. 

                         *   *   *   *   *

     Please call me after you have had an opportunity to review
the above issues.  We look forward to resolving this litigation
as soon as possible.

                              Sincerely yours,



                              Douglas H. Green
                              Counsel to the Edison Electric Institute

cc:    Eileen T. McDonough, Esq.