March 7, 2001

 

Ms. Toni Booker

LDEQ-OES

Permits Division

P.O. Box 82135

Baton Rouge, LA 70884-2135

 

Via Facsimile (225) 765-0222 and First Class Mail

 

RE:                   Comments Filed on Behalf of the Louisiana Environmental Action Network (LEAN) and Albertha Hasten Regarding Agency Interest # 1409

                        Dow Chemical Company, Plaquemine Facility

 

LEAN and Albertha Hasten (hereinafter "commenters") object to Dow’s proposed permit modification.  LEAN is an incorporated, non-profit organization. LEAN members, as well as Ms. Hasten, live, work and recreate in the Plaquemine area.  Commenters oppose the proposed permit because the modification will interfere with the attainment of the National Ambient Air Quality Standard (NAAQS) for ozone in the Baton Rouge area.

 

Under the Clean Air Act, industrial growth in a non-attainment area must be treated with the strictest scrutiny.  LDEQ has failed to do so with respect to the preliminary granting of the permit in question.  Indeed, LDEQ has failed to comply with the basic requirements of the Clean Air Act in proposing to grant this permit which would exacerbate attainment difficulties in the Baton Rouge area.  Public health and welfare will suffer as a result. 

 

LDEQ must begin a new era of compliance with the Clean Air Act and attainment of minimum health standards.  The following specifically demonstrates that the proposed Part 70 operating permit modification for Dow's Plaquemine Facility located in Iberville Parish is illegal:

 

1.      The emission reduction credits (ERCs) with which Dow proposes to offset its new emissions are invalid.

 

The comments made by Mr. Todd Coomes and Ms. Suzanne Dickey on behalf of Albertha Hasten and LEAN with respect to the invalidity of the ERCs Dow wishes to credit and use for purposes of its permit modification are attached as Exhibit A and incorporated by reference.

 

2.      As all of the reductions proposed by Dow, with the exception of VOC-19, occurred more than five (5) years prior to the date of application, netting is illegal as to those reductions and cannot be used in a netting analysis of a Part 70 permit modification.

 

A reduction may only be used for purposes of netting within five years of the date it was made. L.A.C. 33:III.605.  With the exception of proposed Volatile Organic Compound Reduction #19 (VOC-19) (which does not represent enough emission reductions to proceed with Dow’s proposed Engage plant project), this five year time period has expired as to all of the reductions proposed by Dow.  Accordingly, the use of netting (beyond the reductions alleged in VOC-19) with respect to the proposed major modification would violate the Louisiana Administrative Code.  Furthermore, under Louisiana emission reduction banking regulations, Chapter 6 of Title 33, Part III of the Louisiana Administrative Code, all emission reductions used for netting or offsetting must come from emission reductions already certified by the DEQ as being valid. See L.A.C. 33:III.605 and L.A.C. 33:III 607.  Dow Chemical currently has no approved credits in DEQ's bank for use in netting or offsetting. Any netting done prior to issuance of an emission reduction credit certificate is illegal under Louisiana law.

 

3.      A new facility in the Baton Rouge non-attainment area will hinder reasonable further progress toward achieving the ozone standard.

 

The issuance of Dow's proposed permit, including the modifications to the permit, will not provide for sufficient reductions to achieve reasonable further progress towards attaining the ozone standard in the nonattainment area.  The permit, including the modifications, should be denied until such time as LDEQ has provided for sufficient reductions to achieve such progress.

 

The Clean Air Act §173(a)(1) provides that, in this case, a permit may be issued if LDEQ has determined that by the time Dow begins operation of its Engage plant, sufficient offsetting emissions reductions will have been obtained such that total emissions will present reasonable further progress toward attainment.  Reasonable further progress (in this case) means reductions in emissions of VOCs for the purpose of ensuring attainment of the applicable national ambient air quality standard.  42 U.S.C. §7501. 

   

    The requirements for reasonable further progress are included in, but not limited to, Clean Air Act Section 173(a)(1)(A).  This section is referenced by Sections 172(c)(5) and 182(a)(2)(C).  This permitting provision first requires an emissions reduction below the baseline value, and emissions reductions in accordance with Section 182(c)(10) for serious ozone nonattainment areas.  In addition to the minimum requirements of 182(c)(10), Section 173(a)(1)(A) requires that emissions reductions represent reasonable further progress as defined in Section 171.  Section 171 requires adequate emissions reductions "for the purpose of ensuring attainment of the applicable national ambient air quality standard".

 

The lack of real reductions from Dow, along with the increase in emissions from the new Engage plant, ensure that attainment of the ozone standard for Baton Rouge is still a long way off.  At the start of 2001, Baton Rouge had four of its eleven monitors in noncompliance for the ozone standard and a design value of 135. According to EPA data, in 1996, DOW contributed 54% of all VOCs and 59% of all NOx in Iberville Parish.  Exhibit B.  This permit cannot be issued until Dow has made sufficient emissions reductions.  The need to go beyond §182(c)(10) becomes even more important now that EPA has recognized that LDEQ has not operated its banking system in accordance with the CAA or EPA policy. 

 

4.  Dow's permit application fails to comply with requirements of the Louisiana Constitution, misrepresents relevant information, and is incomplete.

 

A.        Dow's IT analysis is flawed as a result of its failure to properly conduct a site assessment, weigh the environmental impacts of the Engage project against its social and economic benefit, and consider the adverse environmental effects of the Engage project.

 

            The Louisiana Constitution mandates environmental protection and conservation of natural resources.  Article IX, Section 1 of the Constitution provides:

 

The natural resources of the state, including air and water, and the healthful, scenic, historic, and esthetic quality of the environment shall be protected, conserved, and replenished insofar as possible and consistent with the health, safety, and welfare of the people. The legislature shall enact laws to implement this policy. 

 

In 1984, the Louisiana Supreme Court interpreted this constitutional provision as it applies to state agencies in Save Ourselves, Inc. v. Environmental Control Commission, 452 So. 2d 1152 (La. 1984).  The court noted that the legislature implemented the public trust mandate of the Constitution through enactment of the Louisiana Environmental Affairs Act.  Id. at 1154.  The purpose of the act is, among other things, maintenance of clean air for the protection of the public welfare and property of the people.  La. R.S. 30:2002.  Maintenance of a healthy and safe environment requires regulation and control utilizing statewide policies and programs to preserve, protect and enhance the quality of the environment in Louisiana.  La. R.S. 30:2003.  DEQ is the primary agency in the state responsible for environmental protection and regulation.  La. R.S. 30:2011.  The Secretary of DEQ acts as the primary public trustee of the environment and must consider and follow the Constitution and statutory law in making any determination about the granting or denial of permits.  La. R.S. 30:2014.

 

In Save Ourselves, the Supreme Court examined the interrelationship of constitutional, statutory, and regulatory requirements in the context of environmental protection.  452 So. 2d at 1156.  The constitutional-statutory scheme requires that the agency act with diligence, fairness, and faithfulness to protect the public interest in the state’s resources.  Id. at 1157.  “[T]he rights of the public must receive active and affirmative protection at the hands of [DEQ].”  Id.  Later, the Supreme Court explained that “[t]he statutory framework places on the DEQ Secretary the burden of exercising responsible discretion to determine each permit application's substantive result.”  In the Matter of American Waste and Pollution Control Co., 93-3163, p. 9 (La. 9/15/94); 642 So. 2d 1258, 1262 (emphasis added).  As the First Circuit noted,

 

[T]he agency cannot assume that its duty is merely to adhere to its own regulations rather than to the constitutional and statutory mandates.  The agency has a duty to see that the environment will be protected to the fullest extent possible consistent with the health, safety and welfare of the people.  In the Matter of Dravo Basic Materials Co., 604 So. 2d 630, 640 (La.App. 1 Cir. 1992)(citing Save Ourselves).

 

The Save Ourselves decision, also referred to as the “IT Requirements,” requires the following analysis: 

 

1)         Whether the potential and real adverse environmental effects of the proposed project have been avoided to the maximum extent possible.

 

Sections 1, 2, and 3, supra, address this requirement.  As Dow's ERCs are invalid and reasonable further progress would be hindered by the proposed modification, adverse environmental impacts have not been avoided, even minimally.  Increasing emissions in a nonattainment area without reducing any emissions is a guaranteed way to prevent improvement in air quality and, in turn, harm the environment.  Additionally, the fact that Dow has circumvented the implementation of LAER (which would require better controls on Dow’s emissions than are currently in place), while not making any real reductions, demonstrates that Dow has not taken even minimal steps to avoid adverse environmental effects. 

 

Finally, on its face, Dow’s permit application does not sufficiently answer this question.  Dow did not identify adverse environmental effects of its project (whether an increase in emissions of a criteria pollutant, an increased risk of spills, an increased risk of release, etc…).  Dow failed to list, specifically, what types of chemicals, what quantities of chemicals, and what characteristics of chemicals it will be producing.  While Dow stated that the amount of hazardous waste generated by the Engage plant would be “minor,” it did not identify how much hazardous waste will be generated.  Dow further stated that it “may” secure project wastes in existing or solid waste landfills.  However, it failed to identify the alternative(s).  Dow failed to identify the air as a pathway for the release of hazardous materials from the Engage plant that could endanger local residents or living organisms.  No percentage was listed by Dow concerning the likelihood of such a release.  Dow failed to address the short term effects of both the Engage plant construction and the resultant emissions.  Dow concluded that the long term impact of its project would be “minimal.”  However, LDEQ has no basis to agree with that conclusion on the face of the permit application.  Again, Dow did not say whether the project would increase ozone levels or risk the release of hazardous materials.  Indeed, the fact that there will be increased truck, barge, and train traffic to supply the proposed expansion suggests that Dow’s conclusion with respect to long term effects is highly suspect.       

 

2)         Whether a cost benefit analysis of the environmental impact costs balanced against the social and economic benefits of the project demonstrate that the latter outweighs the former.

 

Dow dismissed this inquiry as inapplicable.  Apparently, Dow felt that expanding an existing unit somehow exempts LDEQ from the requirements of the Louisiana Constitution.  This simply is not the case.  The Engage plant is a major modification to an existing facility in a nonattainment area and must meet the IT requirements.  Given Dow's failure to address this issue, there is no reason for LDEQ to approve the permit modification.  Dow has provided no basis for which the State of Louisiana could conclude that the Engage project has economic benefits, and, as discussed in Section A above, the environmental impacts of the Engage plant will undoubtedly be both negative and severe.

 

3)         Whether there are alternative projects or alternative sites or mitigating measures which would offer more protection to the environment than the proposed project without unduly curtailing non-environmental benefits to the extent applicable.

 

            Dow never considered alternative sites when addressing this issue.  In its application, it repeatedly notes the benefits of the site it has chosen (notably, part of an existing facility), but never discusses other sites or their inadequacies.  Given Dow's failure to address this issue, there is no reason for LDEQ to approve the permit modification.  Without having considered alternative sites, Dow has given LDEQ no basis to conclude that other projects/sites would not provide more protection to the environment.

B.         Dow's permit application misrepresents and/or omits relevant information.

 

Dow has failed to include or misrepresented numerous pieces of relevant information in its application.  First, Dow failed to include in its netting analysis an increase in VOC emissions of 119.91 tpy from its Power II plant, which occurred in 1999.  Second, Dow failed to include in its netting analysis increased emissions from its polyethelene C plant.  Accordingly, this makes Table 4-2 of the application inaccurate.  Pursuant to LAC 33:III.517, a permit shall contain, among other things, information regarding emissions from the sources of all regulated air pollutants, including:  the identity and location of each point of emissions, the size and height of the outlets of such emissions, the temperature of such emissions, the rate of emissions of each pollutant, in tons per year and in such terms as are necessary to establish compliance consistent with applicable test methods, the composition and description of the air pollutants being emitted from each point.  Dow’s omission clearly violates §517 of the Louisiana Administrative Code and, under such circumstances, its permit application must be denied. 

 

Third, Dow’s 4.1.3 statement in its application is incorrect.  As discussed above, Dow should be using LAER as it has not identified enough valid ERCs to justify reductions at a 1.3:1 ratio.  Finally, it is evident that the total emission numbers in Tables 3-1, 3-2, 3-3 and 3-4 of Dow’s permit application do not tally with the emission numbers in Table 4-1.  Pursuant to LAC 33:III.517(B), a permit applicant must certify the truth, accuracy, and completeness of its application.  Dow has not complied. 

 

C.        Dow's permit application is incomplete as it did not provide a completed compliance certification.

 

            The Clean Air Act and the Louisiana Administrative Code requires permit applicants to complete and submit a certification of compliance along with their application.  See L.A.C. 33:III.507 and L.A.C. 33:III.517.  Implicit in any certification is a signature attesting to the validity of the statement being made.  This is evidenced by the signature line at the end of Dow’s compliance certification.  However, a representative of Dow Chemical never signed its certification form.  This is a violation of express permitting requirements, and a permit cannot be granted under such circumstances.   

 

5.   Dow’s application fails to comply with §173 of the Clean Air Act and corresponding provisions of the Louisiana Administrative Code.

 

A.                 Dow has failed to comply with §173 of the Clean Air Act.

 

Pursuant to the Clean Air Act, a permit may only be issued to Dow for its major modification in a nonattainment area if five requirements are met.  42 U.S.C. §4503.[1]  First, Dow must demonstrate that it has sufficient offsets to proceed with its project and, at the same time, not hinder reasonable further progress.  Id.  Second, Dow must show that it has complied with LAER.  Id.   Third, Dow must prove that all of its other facilities are in compliance.  Fourth, Louisiana must be adequately implementing its SIP.  Id.  Fifth, an alternative sites, sizes, processes, and control techniques analysis must demonstrate that the Engage project’s benefits outweigh its environmental and social costs.  Id. 

 

For the reasons set forth in Sections 1 and 3, above, Dow has not demonstrated that it has sufficient offsets to ensure reasonable further progress in the Baton Rouge nonattainment area.  As discussed in Section 4(A)(1) above, Dow has not complied with LAER.  It has deliberately circumvented implementation of such controls without meeting the requirements for doing so.  Either in its application or by way of attachment, Dow has not shown that its other facilities are in compliance.  As discussed in Section 6 below, EPA has determined that LDEQ has failed to properly implement its SIP.  Finally, as discussed in Sections 4(A)(2) and 4(A)(3) above, an alternative sites analysis was never conducted with respect to the Engage project and the adverse environmental effects of the modification significantly outweigh its economic benefits, if any.  Dow has clearly violated the Clean Air Act through its failure to meet any of the aforementioned requirements. 

 

B.         Dow has failed to comply with the following provisions of the Louisiana Administrative Code ("LAC"):

 

1)         Section 504(C)

Section 504(C) requires the owner or operator of a proposed major stationary source or major modification to submit specific and necessary information to the Office of Environmental Services, Permits Division, in order to "perform any analysis or make any determination required under this regulation." See LAC Title 33, Part III, §504(C).

The minimum information the owner/operator is required to give by law is listed in §504(C)(1-3).

a)         504(C)(1)

Section 504(C)(1) requires the owner/operator to give "a description of the nature, location, design capacity, and typical operating schedule of the major stationary source or major modification, including specifications and drawings showing the design and plant layout." §504(C)(1).

Dow’s permit application fails to demonstrate compliance with this provision.

            b)         504(C)(2)

Additionally, §504(C)(2) requires the owner/operator to furnish "a detailed schedule for construction of the major stationary source or major modification . . . " §504(C)(2)

Dow’s permit application fails to demonstrate compliance with this provision.

            c)         504(C)(3)

Furthermore, §504(C)(3) mandates that the owner/operator give "a detailed description of the planned system of emission controls to be implemented, emission estimates, and other information necessary to demonstrate that the LAER or any other applicable limitation will be maintained."

Dow Chemical never gave such detailed description, as required by law in its permit application.

2)         Section 504(D)

Section 504(D) governs the source requirements for nonattainment new source review.  This section requires the owner/operator of a facility, prior to any new major construction, to obtain a permit from LDEQ. §504(d). This section sets forth those mandatory prerequisites to the granting of a permit in §504(D)(1),(2),(4) and (5-7).

a)         504(D)(1)

§504(D)(1) requires that all existing sources owned or operated by the applicant in the state be in compliance with "all applicable state and federal emission limitations and standards, the Federal Clean Air Act, and all conditions in a state or federally enforceable permit, or schedule for compliance.” §504(D)(1)

Dow Chemical has not submitted information about its compliance in accordance with 504(D)(1).

b)         504(D)(2)

§504(D)(2) requires the owner/operator to design the new source "such that the LAER will be met and maintained for each pollutant emitted with is subject to regulation." §504(D)(2). This LAER "must be applied to each new emissions unit and to each existing emissions unit at which an emissions increase will occur as the result of the proposed modification." §504(D)(2).

Dow Chemical has avoided LAER by opting to offset at the higher 1.3 to 1 ratio, provided for under the Louisiana Administrative Code. However, as Dow's offsets are not valid, it should be subject to the requirements of §504(D)(2).  Because it has not demonstrated LAER, Dow’s permit should be denied.

            c)         504(D)(4)

§504(D)(4) also requires a showing from the new source that "the total tonnage of the emissions increase that would result from the proposed construction or modification shall be offset by an equal or greater reduction as applicable, in the actual emissions of the regulated pollutant from the same or other sources in accordance with Subsection F.9 of this Section." §504(D)(4).  Furthermore, this provision notes that "a higher level of offset reduction may be required in order to demonstrate that a net air quality benefit will occur." §504(D)(4).

Dow does not have any valid emission reductions available for offsetting.  Because Dow cannot offset this increase in pollution, the permit should be denied.

            d)         504(D)(5)

§504(D)(5) requires a showing that "[e]mission offsets shall provide net air quality benefit, in accordance with offset rations listed in Table 1, in the area where the national ambient air quality standard for that pollutant is violated." §504(D)(5).

Dow has not met this requirement.

            e)         504(D)(6)

§ 504(D)(6) requires the new source to meet all applicable federal and state emission requirements. §504(D)(6).

Dow has not met all applicable emission requirements, pursuant to new source performance standards or national emission standards.

            f)          504(D)(7)

§504(D)(7) requires the owner/operator of any new source to look to alternative sites. §504(D)(7). Dow Chemical has failed to demonstrate in the public record that it analyzed alternative sites and demonstrated that benefits of locating in the nonattainment area significantly outweigh the environmental and social costs imposed.  

3)         Section 504(F)

Section 504(F) governs emission offsets. This section requires that "[a]ll emission offsets approved by the department shall meet the . . . criteria [listed in 504(F)(1-10)]." §504(F).  Dow has not met at least five of these criteria.

a)         504(F)(3)

§504(F)(3) requires all emission reductions claimed as offset credits to be "federal enforceable prior to commencement of construction of the proposed new source or major modification." §504(F)(3). Furthermore, the section states that "all emission reductions claimed as offset credit shall occur prior to or concurrent with the start of the operation of the proposed major stationary source." §504(F)(3).

Dow has not met this requirement.  

            b)         504(F)(4)

§504(F)(4) requires that these emission reductions claimed as offset credits to "be sufficient to ensure Reasonable Further Progress (RFP), as determined by the administrative authority." §504(F)(4).

Dow has not met this requirement.  Its claimed emission reduction credits are not sufficient to ensure reasonable further progress.  The Baton Rouge area failed to meet  the 1999 deadline for attainment of the ozone standard and continues to experience numerous days of air quality below national health standards.

c)         504(F)(5)

§504(F)(5) rejects the use of offset credits for emission reductions to the extent that they have been previously relied upon by the EPA in "issuing any permit or in demonstrating attainment or reasonable further progress." §504(F)(5).

Dow has not met this requirement.  

d)         504(F)(7)

§504(F)(7) requires the owner/operator of a new source or major modification to provide the Office of Environmental Services, Permits Division with specific information. §504(F)(7).

Dow has not provided the Permits Division with this information.  

            e)         504(F)(10)

§504(F)(10) prohibits the use of "emission reductions otherwise required by the Federal Clean Air Act or by state regulations [for] the purposes of satisfying the offset requirement." §504(F)(10).

Dow has violated this express prohibition. 

 

6.   LDEQ should not be granting any permits, much less Dow's facially invalid permit modification, at this time as Louisiana's SIP has not been adequately implemented. 

 

A permit may be granted under Title V of the Clean Air Act only if "the Administrator has not determined that the applicable implementation plan is not being adequately implemented for the nonattainment area in which the proposed source is to be constructed or modified."  CAA §173(a)(4). EPA has twice stated that LDEQ’s plan is illegal.  In a 5th Circuit court document, EPA stated that Louisiana "[did] not calculate the number of ERCs in the ERC bank in accordance with [the Agency's] expectations" and it "is difficult to access data documenting the amount of valid CAA offset credits in Louisiana's bank and that there are insufficiencies in the banking database."  Exhibit C at 4.  Further, because Louisiana designated its ERC bank as the SIP contingency measure required by the Clean Air Act, “the parties agree[d] that EPA’s approval of Louisiana’s contingency measure plan should be remanded to the EPA . . . .”  Exhibit C at 5.  Finally, in a recent response by EPA to a public petition opposing a Borden Chemical permit approval, EPA acknowledged that “[i]n the course of discussing t[he] petition with LDEQ, it came to light that LDEQ has applied its regulations in a manner that does not comport with EPA’s interpretation of the state’s permitting and banking regulations regarding the applicability of a ‘surplus when used’ requirement.”  Exhibit D at 24.   These acknowledgements constitute EPA’s express and public determination that LDEQ has failed to properly implement its SIP.  LDEQ must not grant any Title V permits until EPA determines that the deficiencies have been corrected and Louisiana's SIP is being properly implemented.  

 

7.   Dow failed to obtain a permit prior to commencing construction and should not be allowed to benefit from its ongoing violation.

 

Prior to constructing any new major stationary source or major modification a permit shall be issued obtained from the Louisiana Department of Environmental Quality in accordance with the requirements of the Louisiana Administrative Code.  L.A.C. 33:III.504(D).  According to Dow's permit application, construction of the Engage plant was to begin on January 1, 2001.  To date, Dow's permit modification has not been granted.  Commenters have learned from Dow’s representative, David Graham, that Dow, sometime after its proposed construction date, prepared its property for the laying of the Engage plant foundation.  Apparently, this involved “clearing land” and “performing groundwork.”  “Begin actual construction” is defined, in part, as “the installation of building support and foundations and the laying of underground pipework.”  See L.A.C. 33:III.504(G).  Accordingly, Dow has begun construction and has been out of compliance for up to three months.  This is a violation of the Clean Air Act, subjecting Dow to noncompliance penalties under CAA §120.  Allowing Dow to modify its Title V operating permit when it has willfully ignored a condition of construction would be contrary to the law and policy of the Clean Air Act.    

 

 

Respectfully Submitted for Albertha Hasten by:

                                         

Arthur Murray, Law Student

Tulane Environmental Law Clinic

 

 

 

Respectfully submitted for Albertha Hasten and LEAN through undersigned counsel,

 

 

 

Suzanne S. Dickey, Supervising Attorney

Tulane Environmental Law Clinic