I am forwarding to you a summary of the June 19 meeting on grandfathered emissions prepared by Jim Kennedy of DuPont. As you know, I work very closely with Jim and respect his views. I agree with the points made In this summary, and I am especially concerned about (1) the process [individual companies working "around" the TNRCC] and (2) health effects review. The combination of these two could conceivably lead to a proposal from this group that still would not allow us to permit our grandfathered facilities.
I received a call from John Howard this morning, and he, of course, wants Dow and the other chemical companies to stay in the process. I had already discussed our concerns with him immediately following the June 19 meeting. I told him I would try to keep an open mind, but would be very uncomfortable in being involved in the development of an industry proposal that might ultimately preclude Dow's implementation.
As Jim states in his summary, we plan to confer with the chemical companies and TCC on how to work this issue. Let me know if you want me to handle differently.
Subject: GRANDFATHERED MEETING
From: NAME: JIM E. KENNEDY
TEL: (713) 358-1241; FAX:358-1258
Jon, Ed, Steven, Bernie, and Mark--
Attached are my internal notes from the meeting yesterday in case they are of any value to you.
I attended the meeting at Exxon yesterday. There were
approximately 40 people in attendance--I would guess representing
15-20 companies. Most were from the oil & gas industry, although
Texas Utilities and Simpson Paper were represented, and Bernie
Allen (Dow), Steven Cook (LyondelI Petrochemical), Mark Bryson
(Alcoa), and myself were there from the chemicals industry.
Exxon and Amoco made the presentations, with occasional contributions from Marathon. It was a very strange meeting to me in that the approach of the presenters was pretty much like, "This is the way it's going to be - do you want to get on board or not?" The feeling of at least three of the chemicals folks there seemed to be "Not". I'll try to explain. Conoco will, I'm sure, make their own decision as to whether or not they will participate. A "declaration" letter will be mailed out with the meeting minutes/materials. Please let me know who in Conoco would like to get copies of this information.
- The draft concept paper (attached) was developed by a very small (2-3) group of companies from upstream oil & gas. Amoco presented the paper to the group at the meeting as something that has been agreed to at high levels and was not subject to change. After a number of protestations from around the table, Exxonn moderated that stance somewhat by saying that good ideas for change/additions could be considered. Amoco basically said that they had better be real good ideas.
- The belief was clearly communicated at the meeting that this industry group was going to be in the leadership role In transforming the concepts into a program that would be approved by the Governor's Office. The term "TNRCC" did not even appear in the overheads that were used in the meeting. There were references to TNRCC participation ranging from "participate with us" to "call them in as a resource". My input was that this is neither a desirable nor a realistic approach. HB3019 clearly gives responsibility for development of this program to the TNRCC and I believe that the commissioners take that legislative mandate quite literally. I told the group that I believe that TN RCC will be in the lead on this very soon. Clearly, the "insiders" from oil & gas believe that the Governor's Office will "persuade" the TNRCC to accept whatever program is developed between the industry group and the Governor's Office. I don't believe that will be the case.
- There was some discussion about public input and support. The concept put forward was that the industry group and the Governor's Office would develop the program, then take it to some broad-based group, including public representatives, who would then tweak it a little bit and approve it. I told them that this was dreaming in today's environment--to think that industry could put together a detailed program on this hot subject, then take it to such a group and expect any kind of buy-in. If support from the "public" is a goal, they will have to be involved much earlier in the process. This thought was pretty much dismissed--I believe mainly because the leadership doesn't have any real value for public involvement.
- The structure of this group is clearly set up for individual company participation, rather than participation as representing a trade association. I believe this would be very uncomfortable for chemicals. Our culture is that individual companies don't like to get In the "lone ranger" position on high-profile, high-impact Initiatives. We are going to have to get our heads together and decide how the chemicals industry is going to work this Initiative. That certainly will be influenced by the signals we get from the TNRCC around "process".
- The concept paper has no "meat" with respect to actual emissions reductions. One of the leaders actually stated that emissions reductions was not a primary driver for the program. I know for a fact that in the mind of at least one TNRCC commissioner, emissions reductions IS the primary driver for the program.
- The chemicals and refining companies represented expressed a very high level of concern about the health effects review aspect of the concept. This is something that was overlooked by the crafters, primarily I believe because they were not thinking of large, complex facilities when the concept paper was developed. The concerns in this area center around:
- - The TNRCC would most certainly want to review the potential health effects for a large, multi-source grandfathered facility in a collective manner-not one source at a time. Because of the extremely conservative nature of the technical health effects review process, these facilities would not pass muster on paper.
- - This concern was answered by the leaders of this group by saying that TNRCC management had agreed to implement a different, less rigorous health effects review procedur for grandfathered facilities than they use for new facilities. Chemicals industry input was that if TNRCC management said that, they will have to eat their words before this process reaches its end point. Such a position is indefensible to the public, and would most certainly be vigorously opposed by the Toxicology & Risk Assessment group at the TNRCC.
TEXAS VOLUNTARY INITIATIVE TO
PERMIT GRANDFATHERED FACILITIES
Industry Meeting, 6119/97, Working Draft.
- This initiative will result in the permitting of grandfathered facilities through an extensive voluntary program over the next ten years. The program will contribute to air quality improvement in Texas.
- The volluntary program will have significant benefits to the people of Texas, government, and businesses.
- - Air quality improvement through resulting emission reductions and a clearer definition of facility emissions limits.
- - A more accurate emissions inventory to better predict attainment of air quality standards.
- -Allow companies to more efficiently demonstrate compliance.
- -Improve public confidence that health and environment protection needs are being met.
- Streamlined review procedures will be utilized to provide appropriate protection of public health, but will still be simple arid flexible enough to encourage broad participation.
- The process to permit grandfathered facilities will be developed by an agency industry workgroup. The workgroup will determine what implementing regulations, if any, are necessary.
- Participants would commit to provide a list of facilities to be considered for permitting within six months of entry into the program. A mutually acceptable plan for submitting permit applications, mat considers efficient use of resources, will be established within twelve months after submittal of the list of facilities.
- The program will recognize the different sizes and potential health impacts of grandfathered facilities.
- -A reasonable de minimis emission level that represents no significant health impact will be determined and those facilities will be deemed permitted and no longer considered grandfathered.
- -Facilities would not be included in the program if business considerations such as impending sale, shutdown, or other similar considerations warranted.
- Streamlined health impact review procedures will be utilized to Identify facilities that meet exsisting TNRCC control requirements and, as such, will be permitted. It is expected that such permitting can begin quickly after program entry and be completed within a few years. The following categories will be used to identify those grandfathered facilities that quality for permits under the streamlined impacts review process:
- -Those that meet conditions of standard exemptions or standard permits either as is or with minor facility modification.
- -Those that are determined to be protective of human health based on a simple screening analysis.
- -Those that are determined to be analogs or "look-a-likes" when compared to facilities with reasonably recent permits.
- -Those that comply or those that will comply with MACT requirements.
- A more detailed analysis, using modeling and or monitoring data, to assess health impacts would be conducted for those facilities which do not meet the streamlined review criteria.
- -It is anticipated that in most cases, the TNRCC and the facility operator will reach agreement on adequacy of current controls or appropriate control action to address identified health impacts.
- -Such agreement will be based on sound science, supportable cost and benefit considerations, and demonstrated need.
- -Where agreement cannot be attached that the facility is contributing to a health impact that warrants emission controls, the facility would be removed from consideration in the voluntary program.
- TNRCC will work with industry consistent with these program concepts to promote greater participation which ultimately results in an improved emissions management program for the state.
- -Certain incentives, such as a recognition program for participants, may be appropriate to encourage participation.
- -While this program is expected to generally Improve air quality and some control upgrades may be volunteered, the primary mechanisms for addressing ambient air quality non attainment issues will continue to be the RACT rules and the permitting of new sources and modifications to existing sources.
- -The voluntary program will create no additional authority beyond TNRCC's current authority to enforce the TCAA.
- -The program will recognize and require emission reductions on the same schedule and in the same manner as required under state and federal rules.
- -To better depict the status of facilities permitted in Texas, the TNRCC would modify its database to reflect the significant number of facilities permitted by rule and authorized by standard exemption.