government

AN XL PROJECT GOES SMOOTHLY EPA9s oft-criticized Project XL hits success with OSi Specialties by being small, focused

David J. Hanson C&EN Washington

U nder pressure to give the U.S. manufacturing industry some re­lief to burdensome regulations,

the Environmental Protection Agency set up Project XL in March 1995 as a way of increasing environmental protection and saving time and money for industry. In exchange for "superior environmental performance," EPA would be flexible with enforcement of some regulations.

It has been rough going for Project XL. Although more than two years have passed since its establishment, the agency has been able to complete only five XL agreements. Companies trying to participate have been faced with many roadblocks, not the least of which has been some inflexibility by EPA and sometimes smothering stake­holder involvement. But the latest XL agreement, with OSi Specialties, may hold some clues for improving the pro­cess for other companies.

OSi Specialties, a subsidiary of Witco Corp., has a single facility, a $450 mil-lion-per-year organo-silicone operation in Sistersville, W.Va., on the Ohio River. The plant produces a family of chemicals used in products ranging from electronic equipment, space technology, and auto­motive production to paints, polishes, and cosmetics.

According to OSi Environmental Technology Manager Okey G. Tucker, the plant became interested in doing an XL project because it had recently com­pleted another environmental regulatory project that had actually benefited the environment very little.

A few years ago, OSi was forced to in­stall pollution control devices on one of its process units in Sistersville to remove methyl chloride and ethyl chloride from wastewater. The control consisted of stripping the chemicals from the water and simply venting them into the air. "We would be transferring maybe 10 lb per day of these chemicals from the wa­

ter to the air," Tucker says. "It cost us close to $2 million to do that."

By 1995, OSi was coming under the regulatory gun with respect to air emis­sions from surface impoundments it was using for its wastewater. Under the Re­source Conservation & Recovery Act (RCRA), specifically subpart CC, these im­poundments cannot release hazardous air pollutants. The regulation required that OSi put a cover over the impoundments and recover 95% of the emissions. The company was facing a December 1997 deadline for a commitment to do this. But because of the difficulty in covering the large impoundments, OSi could achieve compliance with the law by simply replac­ing the impoundments with aboveground storage tanks. According to Tucker, it would cost OSi about $2.5 million to build these tanks, and there would be no envi­ronmental benefit achieved at all.

The situation was compounded be­cause by 2002, even surface tanks are ex­pected to be required to have emission controls under regulations required by the Miscellaneous Organic National Emis­sion Standards for Hazardous Air Pollut­ants, or MON, which is part of the Clean Air Act. So OSi needed a way to defer this control cost while at the same time cutting pollution enough to satisfy EPA.

The company also faced having to

comply with a section of the Clean Air Act if it tried to recover any hazardous chemicals from its waste stream. This section, subpart YYY, is ambiguous on whether OSi would fall under the re­quirements, but it could require the com­pany to install expensive at-source con­trols and place a cover over its entire sewer system at an additional cost of $2.5 million. Faced with these regulatory problems, the company believed it could get some relief from the XL program.

"We looked around the plant for some other way to reduce pollution and found a source that we felt was a more promising idea," Tucker says. OSi has a process unit called a methyl capper, a two-step reactor that combines polyeth­ylene oxide and polypropylene oxide ethers with excess methyl chloride to produce a methyl "capped" polyether. The unused methyl chloride is vented into the atmosphere. Tucker says there are no air pollution control regulations on this unit because it was in operation at the time the regulations were made and its pollution was grandfathered into the system. It releases an estimated 277,000 lb of methyl chloride annually.

The initial XL proposal to EPA would have put emission controls on the meth­yl capper unit to reduce methyl chloride emissions. This would be in turn for a deferral of the RCRA regulations that would have forced the company to build tanks for its surface impoundments. "In May 1996, after two or three revisions to the proposal based on suggestions from and discussions with EPA, the agency ac­cepted our proposal to go forward with an XL project," Tucker says.

The company's initiative for regulato­ry relief from EPA was reinforced when Witco Corp. acquired OSi near the end of 1995, just as the company was prepar-

Air pollution and sludge are cut under OSi deal

Lb per year

Total air emissions under XL Air emissions from

capper unit Air emissions from

water treatment unit Organic discharges

from capper unit Sludge generated

by capper organics

Current

417,300

277,000

140,300

790,000

1,177,300

With XL

108,300

6,300

102,000

389,000

610,000

Without XL

417,300

277,000

140,300

940,000

1,425,000

Reduction due to XL

309,000

271,000

38,000

551,000

815,000

Note: Air emissions reductions are from thermal oxidizer on capper unit that destroys excess methyl chloride. Organic and sludge reductions are achieved by capturing methanol by-product from capper unit that currently goes into the plant's wastewater treatment unit. Source: Witco

18 DECEMBER 8, 1997 C&EN

ing its first proposal. Tucker says Witco was supportive of the project and pro­vided OSi with valuable legal counsel. Witco Chief Executive Officer E. Gary Cook even traveled to the plant to per­sonally sign off on the final agreement.

Witco Senior Attorney James A. Nortz says the decision by Witco to go ahead with the project was based on its eco­nomic potential. "We were pleased that OSi had been able to come up with a good idea for an XL proposal," Nortz says. "But if it hadn't made economic sense, we wouldn't have done it."

Cheryl Atkinson, an environmental en­gineer with EPA at Region m in Philadel­phia who has worked with EPA headquar­ters and OSi on this XL project from the start, says when companies start these kinds of projects, they usually don't realize how much time it will take. "The original proposal has to go to headquarters where it is screened," she says. "Then it goes to the region where more people look at it to see if it is worth going forward with. I think the company can get a litde frustrat­ed with this because it takes about a year before we are finally getting ready to sit down and talk." She adds that Project XL is still an experiment and that EPA is very cautious about approving any changes in its regulations.

The OSi proposal stated that the com­pany was going to replace the old cap­per unit with a new, larger process unit, and that the emissions controlled from this capper would more than make up for the smaller emissions from the sur­face impoundments. The company was also going to recover methanol, which is produced by the capper as a by-product of the process, and make it available for recycling or reuse. According to Tucker, the numbers were straightforward, and the company expected the negotiations with EPA to proceed smoothly.

But a change in corporate plans al­most scuttled the whole deal. OSi decid­ed that the market didn't warrant ex­panded production and the company de­cided to keep its' old unit.

"We thought that was going to be the end of it," Atkinson says. "But OSi said that no, it still had the old unit and want­ed to try some other things. At the time, it seemed like an insurmountable hurdle, but in time we worked it through."

"By November 1996, when we looked to be close to a final agreement, we decid­ed not to build the new capper and that changed our project," Tucker confirms. "So we had to step back and find other ways for pollution reduction and waste

minimization [to occur] in place of the original plan." He says EPA pressed for more commitments for pollution reduc­tion, and the company finally came up with a proposal to have a complete study of the waste streams generated at the plant, and an evaluation of any additional pollution prevention opportunities that were economically feasible. This then be­came part of the XL project.

The new plan called for the company to install by April 1998 a thermal oxidiz­ing unit, essentially an incinerator, on the existing methyl capper unit that would destroy the excess methyl chloride cur­rently being vented into the air. The company also would recover by-product methanol from the unit and offer it for reuse. The reduction in methanol that was going to the company's wastewater treatment unit also would result in a de­crease in the amount of sludge generated there. That, too, was seen as a plus. And an outside consultant would do an evalu­ation of the plant's waste streams.

One of the primary components of any Project XL negotiation is input from the surrounding community. This stake­holder participation is supposed to make the final plans acceptable to all people who might be affected by the changes proposed. In some complicated Project XL negotiations, the stakeholder involve­ment can just about bring the process to a halt because of competing interests.

But the OSi project did not have these problems. "We are located in a very rural setting," Tucker says. "It's a small county in West Virginia, and we don't have a lot of neighbors." The company tried to gen­erate some public interest in the project, but got little reaction. There were news­letters mailed and numerous advertise­ments in newspapers and on local radio stations announcing several public meet­ings. But when the meetings were held, essentially no one came.

EPA pushed OSi on this matter as strongly as it could, according to Atkin­son, because the agency strongly be­lieves that stakeholder participation is necessary for a successful XL project. "I think the community was just not too in­terested," concludes Atkinson, "because they thought it seemed like a good idea. There was one local environmental group that showed a little interest, but it concluded [the project] was a good idea and said to go for it."

The OSi project had some advantages over other XL projects. Foremost, it was a straightforward plan for reducing emis­sions that involved few regulations.

"From a technical perspective, this is a pretty tight project," Atkinson says. "The one regulation [OSi is] asking for exemp­tion from is clear and not controversial. And for that exemption, they are putting on a control device. I think it's really that simple."

Tucker agrees with this assessment. "I think it was because we did not try to do a lot of the plantwide permitting that many of the XL projects are attempting," he says. "I think that is what a lot of the environmental groups have trouble with. And they understood the regulations clearly enough to know that we could put in the surface tanks and not be re­quired to control any emissions."

The advantage of this project to OSi is in the deferral of the RCRA regulations for at least five years and the likelihood that it would be in compliance with future regu­lations under the Clean Air Act because of the methanol recovery. Tucker indicates that by spending about $600,000 now to have the thermal oxidizer built into the capper unit and recycling the methanol to another user, the company expects to save about $800,000 in the long term, based on capital cost estimates.

Despite the relative ease of this XL project, OSi still thinks EPA has made the process more difficult than it has to be. "There are so many agency people in­volved," Tucker says. "We had people from the air group, the RCRA group, the water group, and from the Office of Gen­eral Counsel. The people themselves have been good to work with, but the regulatory process seems to have a stran­glehold on them. We also had a lot of personnel changes during the negotia­tions. We would reach some agreement with an EPA person and then have to deal with someone new coming in with different ideas." Tucker says the EPA people are sometimes very protective of the regulations and seem to have little to offer in the way of flexibility. "EPA is not really ready to reinvent regulations. This is really more regulatory reapplication."

In the long run, this huge commit­ment of time and people on the part of EPA could lead to Project XL's end. Wit­co attorney Nortz says he is astounded by the time and personnel devoted to this project and doubts the government can keep up this kind of commitment in the face of such relatively small environ­mental improvements. "It is enormously burdensome for the government to do this," Nortz says. "Unless they can think of a more efficient way to do it, I'd be surprised if the program survives."^

DECEMBER 8, 1997 C&EN 19