Appendix — Harrison v. PPG Industries, Inc.

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APPENDIX

Iu the Supreme Court of the United States

OCTOBER TERM, 1979

No. 78-1918

ADLENE HARRISON, REGIONAL ADMINISTRATOR,

AND DOUGLAS COSTLE, ADMINISTRATOR OF

ENVIRONMENTAL PROTECTION AGENCY,

PETITIONERS

—U

PPG INDUSTRIES, INC.

ON WRIT OF CERTIORARI TO THE UNITED STATES

COURT OF APPEALS FOR THE FIFTH CIRCUIT

PETITION FILED: JUNE 25, 1979

PETITION GRANTED: OCTOBER 1, 1979

In the Supreme Court of the United Stairs

OCTOBER TERM, 1979

No. 78-1918

ADLENE HARRISON, REGIONAL ADMINISTRATOR,

AND DOUGLAS COSTLE, ADMINISTRATOR OF

ENVIRONMENTAL PROTECTION AGENCY,

PETITIONERS

—v.—

PPG INDUSTRIES, INC.

ON WRIT OF CERTIORARI TO THE UNITED STATES

COURT OF APPEALS FOR THE FIFTH CIRCUIT

TABLE OF CONTENTS OF APPENDIX

Page

Relevant Docket Exntries ..............-------s-s-essssssssnsssssnenenenensnenenenens 1

Petition for Review Filed by PPG Industries, Inc., in the

Court of Appeals ............---:-s-sscssssssesseeseseseensesesnenensasnenensnatansss 2

EPA letter, Milan C. Miskovsky (Attorney ) (Determination

of Applicability of New Source Performance Standards)

from William H. Megonnell, April 17, Seen te. 83° u..... 4

EPA memo to Kevin Healy (Determination of Applicability

of New Source Performance Standards) from Jean E.

Vernet, March 2, 1976 [p. 2-3] .....---------s-:sessssesestseesserestees 6

Letter to T. O. Taylor, PPG Industries, Inc., from Thomas

P. Harrison, EPA, and enclosure, May 3, 1976 [p. 4-7].... 8

Letter to Thomas P. Harrison, II, EPA, from T .G. Taylor,

PPG Industries, Inc., and enclosures, May 14, 1976 [p.

RO) ces ccennccsccnssscnscastoniesensesennsnncenesnnnettinnnnacsnsaniouneemnscmnsonanseanenees 12

EPA memo to Paul Farenthold from Jim Veach, May 25,

1976 [p. 20) .......--csscscecesesseeesesnsnesneneesesssenensessntssasensaenenensens ie 23

—_——_

* The entire administrative record was included as a single ex-

i hibit in the record on direct review, with the separately numbered

pages indicated here in brackets. The administrative record is

included in entirety, except as noted.

See - 2s

ii TABLE OF CONTENTS OF APPENDIX

Undated hand written notes [p. 21] ............---.-------:sessseeseeeeeeeeees

Letter to T. G. Taylor, PPG Industries, Inc., from Thomas

P. Harrison, II, and enclosure, June 2, 1976 [p. 22-23) ....

Letter to Thomas P. Harrison, II, EPA, from T. G. Taylor,

PPG Industries, Inc., and enclosures, June 28, 1976 [p.

| a necéeithusisssuliaaniedeabaliteesieudttuinaadpuntiocaaiabtceiaariaiat

Letter to T. G. Taylor, PPG Industries, Inc., from oO. W.

Lively, EPA, October 5, 1976 (2 —

Letter to O. W. Lively, EPA, from T. G. Taylor, PPG In-

dustries, Inc., and enclosure, November 12, 1976 [p. 45-

BO) nn .nn.nw--nnncoeensenenaesnennnenceessncsensenssnensvennsnnsenseussanssnssasansenaeewanseneene

Letter to T. G. Taylor, PPG Industries, Inc., from oO. W.

Lively, December 22, 1976 [p. 51-52) ........-------------------e-e0+

EPA memo, to O. W. Lively (Determination of Applicability

of New Source Performance Standards) from Edward E.

Reich, December 29, 1976 [p. 53-54) -.........-----.------1----e--000->

List of attendees at meeting with sketch attached, March 10,

1977 [p. 56-66) -......n.-.n.n-n--.c.ccenceseceseceenenenensnsnessneasnensensnensasenees

Letter to Howard G. Bergman, EPA, from George P. Cheney,

Jr., PPG Industries, Inc., with enclosures, April 18, 1977

[p. 57-73] ...n.n.n.n.neceeneecccnscseseeseseseenencnensncnsnsonsssnensnsatnenensnsnsnsssesenes

EPA memo, to Ed Reich from Howard Bergman, April 14, .

1977 [p. TA] -..-----c-----2o-e-c-ea-nnssncsnseennenceeaseencsnssncsssnssnscenensenenaces

Letter to Howard Bergman, EPA, from Charles F. Lettow

(Counsel for PPG Industries, Inc.) with enclosure, April

29, 1977 [p. 75-86) ......-....-.----..s-c-ceneeccnnsncsncncecessecsscsnneneanenssnees

EPA memo to Howard G. Bergman from Director, Division

of Stationary Source Enforcement, May 5, 1977 [p. 87-

| ema

Letter to George P. Cheney, Jr., PPG Industries, Inc., from

John C. White, EPA, June 8, 1977 [p. 89-90] .................-.-

Letter to Edward E. Reich, EPA, from Charles F. Lettow

(Counsel for PPG Industries, Inc.), July 18, 1977 [p. 91-

Onn nennnnnncnenccncecsnecenenesessesesaiessnsennn nnn

Letter to Charles F. Lettow (Counsel for PPG Industries,

Inc.) from Edward E. Reich, EPA, August 3, 1977 [p. 93]..

EPA memo by Doug Farnsworth, August 17, 1977 [p. 94]...

Letter to Charles F. Lettow (Counsel for PPG Industries,

Inc.) from Edward E. Reich, EPA, August 18, 1977 [p. 95-

| ana UU UTNE ann ee

Letter to Adlene Harrison, EPA from James E. Wyche, PPG

Industries, Inc., September 6, 1977 [p. 97] ..........-----------+--

Order allowing certiorari ...............-.........ccccssscssssscsnsesssssenscess

bate staat 2

RELEVANT DOCKET ENTRIES

[Title of Court Omitted in Printing]

PPG INDUSTRIES, INC.

Vv.

ADLENE HARRISON, REGIONAL ADMINISTRATOR,

AND DOUGLAS COSTLE, ADMINISTRATOR OF

ENVIRONMENTAL PROTECTION AGENCY

DATE PROCEEDINGS

October 4, 1977 Petition for Review

November 10, 1977 Order granting motion of Continental

Oil Company to Intervene

December 7, 1977 Certified list of administrative record filed

May 10, 1978 Case Argued

January 8, 1979 Opinion and judgment entered

January 22, 1979 Respondents’ motion for extension of time

to file petition for rehearing granted to February 5, 1979

February 5, 1979 Respondents’ petition for rehearing and

rehearing en banc

February 26, 1979 Order denying petition for rehearing and

rehearing en banc

March 6, 1979 Judgment as mandate issued

IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

No.

PPG INDUSTRIES, INC.

Box 1000

Lake Charles, Louisiana 70601, PETITIONER

Vv.

ADLENE HARRISON, as Regional Administrator,

Environmental Protection Agency

Region VI

1201 Elm Street

First International Building, Suite 2800

Dallas, Texas 75270

and

Douc.Las M. CosTLE, as Administrator,

ENVIRONMENTAL PROTECTION AGENCY

401 M Street, S.W.

Washington, D.C. 20460, RESPONDENTS

PETITION FOR REVIEW

PPG Industries, Inc., hereby petitions the court for re-

view of the orders and determinations of the Environ-

mental Protection Agency (a) that two “waste heat”

boilers, which are component parts of “Power Plant C”

in the chemical manufacturing plant of PPG Industries,

Inc. at Lake Charles, Louisiana, are subject to pro-

visions of Standards of Performance for Fossil Fuel

Fired Steam Generators, 40 C.F.R. § 60.40, et seq.; (b)

that, pursuant to the Standards of Performance for Fossil

Fuel Fired Steam Generators, PPG Industries, Inc. may

fire in its waste heat boilers only a fuel which contains

a sulfur content equal to or less than a sulfur level to

be specified as a result of performance tests conducted in

compliance with the Standards; and (c) that, pursuant

to the Standards, PPG Industries, Inc. must install and

operate continuous opacity monitors in the stacks of the

boilers in Power Plant C and also may be required to

monitor and report on the sulfur content of the fossil

fuel burned in the boilers. These orders and determina-

tions were issued and entered on June 8, 1977, August

8, 1977, and August 18, 1977. They have not been pub-

lished in the Federal Register.

Respectfully submitted,

/s/ Oliver P. Stockwell

OLIVER P. STOCKWELL

Attorney for Petitioner

Stockwell, Sievert, Viccellio,

Clements & Shaddock

One Lakeside Plaza

P.O. Box 2900

Lake Charles, Louisiana 70601

(318) 436-9491

/s/ George P. Cheney, Jr.

GEORGE P. CHENEY, JR.

Attorney for Petitioner

PPG Industries, Inc.

One Gateway Center

Pittsburgh, Pennsylvania 15222

(412) 484-2145

/s/ Charles F. Lettow

CHARLES F. LETTOW

Attorney for Petitioner

Cleary, Gottlieb, Steen & Hamilton

1250 Connecticut Avenue, N.W.

Washington, D.C. 20036

(202) 223-2151

Dated: October 4, 1977

[Certificate of Service Omitted in Printing]

April 17, 1972

Key Letter

Mr. Milan C. Miskovsky

Debevoise & Liberman

Shoreham Building

Washington, D.C. 20005

Dear Mr. Miskovsky:

Your March 24 letter requested our advice regarding

applicability of the Standards of Performance for New

Stationary Sources (40 C.F.R. Part (8), particularly the

nitrogen oxide standards, to a General Electric combined

combustion turbine and steam generating plant purchased

by a member of General Public Utilities Corporation for

addition to the existing Gilbert electric generating sta-

tion in New Jersey.

The combustion turbine facility clearly is not subject

to the present Federal regulations, and both the combus-

tion effluent and thermal energy from the turbine may

be discharged to the atmosphere without being limited

by the standards. There would be no logic, then, in per-

mitting an owner or operator who chooses to use the

exhaust heat, which otherwise would be wasted, in a

waste heat recovery steam generator unit, with or with-

out supplemental fuel.

Accordingly, we agree that both the heat input and the

emission contribution of the combustion turbine will be

excluded in determining whether the steam generating

plant complies with the standards. Compliance will be

judged only on the amount of heat and combustion ef-

fluents added by supplemental fuel used in the waste heat

recovery steam generator, which is the affected facility.

We appreciate the concise explanation and clarity of

your letter. Please communicate with us whenever we

may be of assistance.

WILLIAM H. MEGONNELL

Director, Division of Stationary

Source Enforcement

Sealed ae

ec: Region II—w/cy incg

Don Goodwin ” ”

Bob Baum ee oor

Bob Walsh (ils

[Illegible material notations omitted in printing; italicized

material is handwritten marginal notation]

UNITED STATES ENVIRONMENTAL

PROTECTION AGENCY

DATE: 2 Mar. 1976

SUBJECT: Determination of Applicability—

Chevron Oil Co., Perth Amboy, New Jersey

FROM: Attorney-Advisor, Enforcement Proceedings

Branch

Division of Stationary Source Enforcement

TO: Kevin Healy, Attorney

General Enforcement Branch _

Enforcement Division, Region .I

As per our telephone conversation of February 29,

1976, the following confirms our discussion of the appli-

cability of New Source Performance Standards to new

petroleum refining and storage facilities of Chevron Oil

Co., to be located in Perth Amboy, New Jersey.

BACKGROUND

Chevron plans to construct new petroleum refining and

storage facilities in Perth Amboy, New Jersey. A con-

tract for construction of the off-plot facilities (storage

tanks and vessels) was entered into in February of 1973.

A construction contract for the on-plot (refining facilities,

e.g. catalytic cracking units) was entered into on June

15, 1973. The source did an environmental impact study

of the proposed facilities sometime prior to February

1973.

It must be noted that the applicability date for NSPS

for petroleum refineries and storage vessels for petroleum

liquids is June 11, 1973 (date of FR proposal for these

standards). Where construction of facilities was com-

menced after that date, the facilities are subject to the

applicable standard.

DISCUSSION

Clearly, the planned storage vessels at the Chevron

facility are not subject to NSP since their construction

da Citas ce Cada AREA LG tM at >

was contracted for prior to June 11, 1973 (i.e., in Feb-

ruary 1973). The refining facilities, considered sepa-

rately, would be subject to NSPS since the construction

contract was entered into on June 15, 1973, four days

after the proposal date of the standard. The company

has claimed an exemption for the refining facilities based

on the contract date for the storage vessels, arguing that

the entire new construction is so integrated as to make

the contract date for the off-plot facilities the “com-

merce construction” date for the on-plot facilities.

Storage vessels and refining facilities (e.g. catalytic

cracking units, catalyst regenerators) are separate “af-

fected facilities” within the definitions of 40 CFR Part

60. As such, they must be considered separate from each

other for the purpose of NSPS applicability. Note that

the definition of “construction” in 40 CFR § 60.2(g)

means “fabrication, erection, or installation of an ch

fected facility.” Thus, the date for commencement of

construction, where the contract for construction rather

than actual physical changes to the site is used, applies

separately to each of Chevron’s contracts. The earlier

contract date for the storage vessels cannot be used to

“orandfather” the refining facilities as exempt from

NSPS compliance. The date of the environmental impact

study is irrelevant.

Because other information was unavailable to us, this

affirmative applicability determination applies only to the

“commencement of construction” issue, and does not

speak to the process or design capacity requirements of

40 CFR Part 60.

/s/ Jean E. Vernet

JEAN E. VERNET

MAY 3 1976

CERTIFIED MAIL—

RETURN RECEIPT REQUESTED #789717

Mr. T. O. Taylor

Technical Manager

Industrial Chemical Division

PPG Industries, Inc.

P.O. Box 1000

Lake Charles, Louisiana [Tllegible]

Dear Mr. Taylor:

On February 26, 1975 Conoco Oil Company notified

this office that, as fuel supplier to PPG Industries, Conoco

would have to switch from supplying natural gas to

fuel oil for PPG’s fossil fuel fired steam generators at

the Lake Charles, Louisiana plant. On March 21, 1975 a

meeting was held in Dallas that was attended by rep-

resentatives of PPG, Conoco, the Environmental Protec-

tion Agency, and a representative of the Louisiana Air

Control Commission. At this meeting the effects of the

fuel switch in regard to the applicability of the New

Source Performance Standards were discussed. On Jan-

uary 19, 1976 we wrote you requesting information on

the status of the fuel switch. In a letter dated February

2, 1976 you informed us that the Louisiana Air Control

Commission approved PPG’s fuel oil permit application

on July 9, 1975.

Under the provisions of the Clean Air Act, as amended,

42 U.S.C. 1857 et seq., the Administrator of the En-

vironmental Protection Agency has promulgated Stand-

ards of Performance for New Stationary Sources [40

CFR Part 60]. Among the new and modified stationary

sources to which Standards of Performance apply are

fossil fuel-fired steam generating units [40 CFR Part

60, Subpart D, a copy of which is enclosed].

Facilities covered by Standards of Performance are

subject to notification and recordkeeping requirements

[40 CFR 60.7, a copy of which is enclosed].

A fuel switch from natural gas to fuel oil is probably

a modification within the meaning of 40 CFR 60.14 (a

copy of which is enclosed) unless the exception of 40

CFR 60.14(e) (4) applies. It is necessary for you to

provide us information that will demonstrate whether or

not the fuel switch is a modification and whether or not

you come within the scope of 40 CFR 60.14(e) (4). Ac-

cordingly, pursuant to the authority granted in Section

114 and subject to the sanctions of Section 113 of the

Clean Air Act (copies of which are enclosed) you are

hereby required to complete Enclosure 1 to this letter.

The completed Enclosure 1 is required to be submitted

within twenty (20) days from the receipt of this letter

to the Environmental Protection Agency at the follow-

ing address:

U.S. Environmental Protection Agency

Region VI

1600 Patterson Street

Dallas, Texas 75201

Attn: Enforcement Division

Any change in the information so reported must be

reported to the same office within five days after such

change occurs. This continuing requirement to provide

notification of change in the information covered by this

letter remains in effect until expressly terminated in

writing by this office.

In accordance with Section 114(c) of the Clean Air

Act and the Freedom of Information Act, 5 U.S.C. Sec-

tion 552, information provided to the Environmental

Protection Agency in this report will be available to the

public, except that upon a showing satisfactory to the

Agency by any person that a specified portion (other

than emission data), if made public, would divulge

methods or processes entitled to protection as trade secrets

of such person, the Agency will consider such informa-

tion confidential in accordance with the purposes of 18

U.S.C. Section 1905. However, any such confidential in-

formation may be disclosed to other officers, employees,

or authorized representative of the United States con-

cerned with carrying out the Clean Air Act or when

relevant in any proceeding under the Clean Air Act. If

you feel that you can justify confidential treatment for

any of the information supplied, you should provide a

fully detailed explanation for each specific item of in-

formation at the time that you respond to this letter.

Whether or not you regard part of the information re-

quested as confidential, you are required to furnish it

in response to this letter.

Questions regarding your compliance with the New

Source Performance Standards should be addressed to

Mr. James Veach, Attorney, Enforcement Division, at

(214) 749-2142.

Sincerely yours,

Original Signed By

THOMAS P. HARRISON, II

Director

Enforcement Division (6AE)

Enclosures

1. Enclosure 1

2. 40 CFR 60.7

3. 40 CFR Part 60, Subpart D

4. 40 CFR 60.14

5. Sections 113 and 114 of the Clean Air Act

ec: Mr. James F. Coerver

Technical Secretary

Louisiana Air Control Commission

P.O. Box 60630

New Orleans, Louisiana 70160

bee: Bill McNally, (6AEA)

6AEL: JVeach:ma:X2142:R1135 :4/29-76

JV 4/29

6AEL JC 6AEA [Illegible]

Collings Doyle

When info on increase in pollutants comes back we may

still have to call/write whether company caiculations/

projects whether an increase will occur.

bec: George Stevens, DSSE

[italicized portions appears as handwritten

notations in record]

ee ee P

Bi Miaciridicirmernirs 2

Enclosure 1

Required Information to be Submitted

Provide the following information for each fossil fuel-

fired steam generating unit of more than 250 million

British thermal units per hour heat input, the construc-

tion or modification of which was commenced after Au-

gust 17, 1971.

1. List each steam generating unit that has changed

or will change from burning natural gas to burning fuel

oil and the date of each change.

2. If any of the steam generating units listed in

number 1, above, were designed prior to August 17,

1971, to accommodate the use of fuel oil, provide docu-

mentation of such designed use for each such unit.

3. List the changes that were or will be made to each

steam generating unit that allows it to burn fuel oil,

and the date such changes were or will be begun on each

such unit.

4. Provide all available information and documentation

on the change in emission of any pollutant from each

unit as a result of the fuel switch from natural gas to

fuel oil.

[PPG Emblem]

PPG INDUSTRIES, INC.

Industrial Chemical Division

P.O. Box 1000

Lake Charles, La. 70601

T. G. TAYLOR

Technical Manager

May 14, 1976

Certified Mail—Return Receipt Requested

Mr. Thomas P. Harrison, II

Director—Enforcement Division (6AE)

U.S. Environmental Protection Agency

Region VI

1600 Patterson Street

Dallas, TX 75201

Re: Enclosure I, Thomas P. Harrison to T. G. Taylor,

May 3, 1976

Dear Mr. Harrison:

We believe that all answers and documentation to the

four questions raised in your Enclosure I are found in

PPG’s application to the Louisiana Air Control Com-

mission dated May 26, 1975, for fuel oil burning in our

complex. A copy of this document was forwarded to you

last year by the LACC. For your convenience, however,

those sections containing answers to your Enclosure I

questions are reproduced and included herein.

The fuel oil permit application covers two situations. The

first situation is that we must convert some of our exist-

ing combustion equipment from gas to oil feed due to

supply problems. Since all of the equipment to be con-

verted was originally designed for fuel oil feed and in

operation prior to 1971, the fuel switch is a modification

within the meaning of 40 CFR 60.14. This conversion

is now partially completed.

The second situation covered by our permit is the con-

struction of a new power facility to combust either gas

or oil. This new facility was designed and equipment

was ordered in 1970. Numerous problems delayed the

start of construction until late last year.

[handwritten and illegible marginal notes omitted]

The monitoring devices required of a new emission source

are being incorporated into the design of this facility.

Startup of this unit is still a year in the future; conse-

quently, you have not directly received information on

the unit.

Sincerely yours,

/s/ T. G. Taylor

Technical Manager

edh

Enclosure 1

Required Information to be Submitted

Provide the following information for each fossil fuel-

fired steam generating unit of more than 250 million

British thermal units per hour heat input, the construc-

tion or modification of which was commenced after Au-

gust 17, 1971.

1. List each steam generating unit that has changed

or will change from burning natural gas to burning fuel

oil and the date of each change.

2. If any of tlie steam generating units listed in

number 1, above, were designed prior to August 17, 1971,

to accommodate the use of fuel oil, provide documentation

of such designed use for each such unit.

3. List the changes that were or will be made to each

steam generating unit that allows it to burn fuel oil, and

the date such changes were or will be begun on each such

unit.

4. Provide all available information and documenta-

tion on the change in emission of any pollutant from

each unit as a result of the fuel switch from natural

gas to fuel oil.

Reply to Enclosure 1

(1) Units 5, 6, 7, 8 and 9 at Powerhouse A, and Units

2 and 3 at Riverside Powerhouse will be modified to

accept fuel oil as well as natural gas. Units 1 and 2

at Powerhouse C will be constructed to combust nat-

ural gas and/or fuel oil. This information is con-

tained on pages 2 and 2A.

(2) All Powerhouse A and Riverside boilers were origi-

nally designed for either gas or fuel oil operation.

Predicted performance data and certified construc-

tion drawings are presented in Appendix IV with

Exhibits A-F.

Note: Powerhouse A boiler heat releases are less

than 250 MM Btu/hr. each.

(3) The fuel oil system for all boilers is still under con-

struction. Page 5 contains a brief description of the

oil system; page 2A shows the chronology. Exhibit

V explains the mode of operation of the new units.

SK-7333 is a schematic of the oil system.

(4) The EIQ submitted in association with the permit

application and dated 3/17/75 presents the new

emission data predicted from each boiler as a result

of fuel oil combustion. A page 6 from the EIQ is

presented for each unit.

Show ownership and use of adjoining property on map

section or list below.

List any residential areas near the plant or establishment

and give distance from the plant or establishment:

See Exhibit I Plant Layout/Land Allotment

Location of Power Plant Stacks

Fuel Oil Permit

PPG Drawing 32A-6022-F.0.

» el

3. LOUISIANA AIR CONTROL COMMISSION EMIS-

SION INVENTORY QUESTIONNAIRE.

A completed Emission Inventory Questionnaire (copy

attached) is required. If a new 6 page questionnaire for

this location has been previously submitted, give date of

submission February 1975. A completed “revised” Emis-

sion Inventory Questionnaire must also be submitted with

this application. The Emission Inventory Questionnaire

must be completed showing the entire emissions of the

facility after modifications and/or additions, with max.

concentration calculations under worst ambient air condi-

tions.

Estimated starting date of construction: Power Pits. A,

B, C (See Pg. 2A)

Estimated date operation will begin: See Page 2A.

Old Facility: Power Pits. A & B Operating

Addition: No

New Facility:

Addition: Yes

“Give a brief description of proposed action and attach

such information as flow diagrams, schematic diagrams,

drawings, ete. needed to convey an understanding of the

processes involved in the plant or establishment.”

Power Pit. C

Due to the notice of curtailment of our natural gas con-

tract by one of our suppliers, PPG is required to use

fuel oil for a major percentage of their fuel needs. Seven

boilers now in operation using natural gas will be con-

verted to burn fuel oil. The chlorine expansion, Permit

290, has two new boilers that will burn fuel oil and/or

natural gas. Therefore, nine boilers will be converted for

the burning of fuel oil. They are as follows: (1) Power

Pit. A—Nos. 9, 8, 7, 6, 5. No. 5 boiler will be a spare

for outages of boilers #9 through 6. Stack numbers are

the same as boiler numbers. (2) Power Plt. B (River-

side)—Nos. 8 and 2. The No. 8 boiler stack is being

raised to the same height as No. 2, 150 ft. Stack num-

SS PHD tn vee

bers are 12 and 11, respectively. (3) Power Plt. C—Nos.

1 and 2 with stack Nos. 6-73 and 5-73, respectively. The

schematic showing boiler arrangements is as follows:

Exh. II—Routing of fuel oil fed to boilers; Exh. IJJ—

Plan View of Boilers Plt. A; Exh. IIJ-A—Plt. B; Exh.

III-B—Plt. C; Exh. IV—Boiler elevation and _ stack

heights Plant A, Boilers 1 thru 9; Exh. IV-A and IV-B—

Boilers 2 and 3; Exh. 1V-C—Boilers 1 and 2.

Five on-the-line fuel oil tanks are being installed, four

for No. 6 and one for blending low sulphur fuel oil with

the No. 6 fuel oil to maintain ambient air at acceptable

SO, environmental levels. The fuel oil will be burned at

a nominal rate of 9,692 BPD.

Power Estimated Starting Estimated Date

Plants Date of Construction Operation Will Begin

Power Pit. A

Boiler +9 December 1, 1975 January 26, 1976

Boiler +8 January 26, 1976 March 15, 1976

Boiler +7 March 15, 1976 May 3, 1976

Boiler +6 May 8, 1976 June 21, 1976

Boiler #5 June 21, 1976 August 9, 1976

#5 Boiler will be a spare for outages of Boilers +9 through

+6.

Power Plt. B

(Riverside)

Boiler #8 September 29, 1975 December 1, 1975

Boiler +2 December 1, 1975 February 2, 1976

Power Plt. C

Boiler #1 January 1, 1976

Boiler #2 July 1, 1977

February 1, 1977

August 1, 1978

List the air pollution abatement measures that will be

utilized to control the emissions from the sources for the

plant or establishment. If no facilities are contemplated,

list the steps which will be taken to prevent the emission

of sufficient quantities of pollutants to result in undesir-

able levels. Give the source and then the abatement

method for each source. Please include information such

as drawings, manufacturer literature, specification, ca-

pacities ad efficiencies needed for evaluation of such con-

trol equipment and techniques used in controlling each

source. Please include date that each estimated date

operation will begin. Any information about the method

used for abateing the source will facilitate the evalua-

tion of the application.

The new burners and soot blowers to be installed in the

designated boilers will incorporate the latest technology

to consume the liquid fuels as cleanly and efficiently as

possible. The system is designed for 9,692 BPD of fuel

oil. The typical rate of burning will be lower, resulting

in lower SO, emissions than indicated in Appendix I—

Ambient Air—Max. Conen. of Pollutants with 1 Wt. %

S Fuel Oil. Expected plan of boiler operations is given

in Appendix II. Boiler sizes are shown as Appendix III

as MM BTU/Hr.

In order to continuously meet the primary standards for

SO., the following will be done:

1. Monitor ground level SO, concentration as required

by the LACC.

2. Extend the stack of our existing No. 3 boiler at River-

side from 100’ to 150’.

3. Install storage capacity and equipment so that fuel

oil blending can be accomplished to provide environ-

mental acceptance of fuel oil during adverse SO,

levels of 365 ug/m* in ambient air. Blending will be

accomplished using a low sulphur fuel oil with the

No. 6 oil.

4, Supplier’s letter of intent of February 5, 1975, to fur-

nish fuel oil that can be blended with 1 wt.% S fuel

oil whenever monitors detect that an emergency SO,

condition exists, is Exhibit V.

5. We plan to design foundations and structure of new

boiler stack at Power Plant C—#1 and #2 so that

they may be extended.

LACC-AFAOE-Rev. 1/20/73

APPENDIX V

POWER PLANT C

COMBINED FLUE GASES FROM GAS TURBINE

AND WASTE HEAT BOILER BURNING

GAS OR OIL

PPG Industries asks that the calculation of emissions

rate from its two boilers at Power Plant C, now under

construction, be done for normal operating conditions

when determining compliance with EPA regulations.

Following are the reasons for the request:

Abstract

PPG Industries is constructing a combined cycle power-

steam generating plant at its Lake Charles, Louisiana,

chemical complex. Under normal operation, the flue gas

from a gas turbine generator exhausts directly into a

waste heat boiler where additional fuel is fired. The flue

gases from both units are inseparably mixed and emitted

through a single stack to the atmosphere. Both units

have heat releases greater than 250 MM BTU/hour. PPG

is requesting that it be allowed to consider the total heat

release from both units when determining the emissions

rate from the stack to the atmosphere. PPG has acquired

a permit from the Louisiana Air Control Commission to

construct this plant; however, the permit is based on

total gas firing, a requirement that can apparently no

longer be met by our fuel suppliers.

Equipment Definition

PPG Industries is constructing a combined cycle power

plant to furnish its Lake Charles, Louisiana, chemical

complex with both electrical power and process steam.

Predicted maximum output after project completion in

1979 will be the following:

149 megawatts electrical power

466,000 pounds/hour 400 psig steam

730,000 pounds/hour 175 psig steam

Ramu AS Hess = ee ee

2 -

‘

Equipment configuration will be two GE gas turbine gen-

erators in parallel, each discharging its hot turbine ex-

haust gases in its respective waste heat boiler. Additional

fuel is supplied to the waste heat boilers to provide suffi-

cient heat for steam generation to feed a backpressure

turbogenerator. It is from this steam turbine that 175

and 400 pound process steam is obtained. No steam is

condensed to produce electrical power. The gas turbines

are designed to burn natural gas; the waste heat boilers

can burn either gas or oil. The total heat input to one

gas turbine plus one waste heat boiler is 1312.7 MM

BTU/hour, of which 714.4 MM BTU/hour is supplied by

the gas turbine.

Operation

Normal operation is described under Equipment Defini-

tion; however, each unit may operate individually at a

sacrifice to overall economy. The on-stream factor of all

units operating continuously is 95%. Thus, any operat-

ing configuration other than with both gas turbines, both

waste heat boilers, and the waste heat generator on line

is defined as an upset condition.

Compliance with EPA Regulations

Paragraphs 60.42, 60.43, and 60.44 of the Federal Reg-

ister * (Vol. 39, No. 116—Friday, June 14, 1974) set

forth the current emission regulations (particulate, SO.,

and NO.) being applied to boilers with heat released

greater than 250 MM BTU/hour and burning fossil fuels.

As previously described, our proposed combined cycle

generating station fires natural gas in a gas turbine

generator which is not normally vented to the atmos-

phere. The hot flue gases are used to supply part of the

combustion air and heat input to the waste heat boiler.

These gases, then, combine with the flue gases from the

supplemental fuel fired in the waste heat boiler and are

vented together in a single stack. In view of this situa-

tion, we are asking that the emission regulations be ap-

plied to the total heat input to the system—not just the

supplemental fuel heat input at the wase heat boiler.

* Attached.

’ |

. § .

’

ITEM NO, $ EMISSION INVENTORY QUESTIONNAIRE (Revised 11/74) Face o of 9 (su...

ahis page Ls to he used to record the data from one stack (or cther emission poir: only, — The

as many times as there ave individual emission points, and use one page for each poirt. Noce that the

nurters indfeate explanatory notes on pages 4 and 5.,

Foint scurce I Deseriptive mane Of the equiprent served Heighe of stack] Steck dlazeter, Stack gss es

ID nurvery by this stack % above grades temperature

6-73 Peweornouse C No. 1 Boiler ORL. ft 15.75 ft

Stack pas Flew | Stack gas} If thls stack serves a "poiler",, give |% of annual chrbughpuc of

sate st oreecss | exit the type(s) of Fuel used and the hear | pollucants through this emic-

congitions, not’ lwelociey ingus (ieee, fuel rate x heating value)| ston cotac (rozels 10%.)

aL standasd #6 Fue el Oil etyse{s) of Fuel [Dee= | “ar- June | sepe-

y : eta ee oiU/ine Ase fuel Feb ay Aus Nov

393,17 £27 /nin 31 ft/sec b pru/hr 2nd fuel, if any (25%) 25 7 25% 25%

hone of Follucion!Conrrel Average. [Maximum | Annual Einnission Acc, chenge | Concenteacion in

pollecant conczrol [aquipcent | emisstonlemission| emission jescimatien! or delece §ases enitrag the

equiomeatiercicteacy race ° [rata rate n2tnod 7 cece 3 steck g

i oe ee ee Ts los/he tons/yyr

Brriteubutn matcer | COO $5.3 oes Pn 6. 5 Add ! AN2slsti f24

gulfer dlectite |. tev | 630.0; Tus. a “2347, Q 6 Change _! 158 poe (wey

aizzoren diextds | 000 | _ | 457.8] 647.8 2925. 0. 6 Chance _|

nvr acasoeas a SE ys | RS 5 _f Fitl in this

catben mancucida { _Cv0 PE Re _ 23.6 23.4 103.3 : 4 Chance _! column only as

+ . J PRS _ . as 1. Teguiced by |

‘ieee. J oe eee eR : Sis 8 mates 3 nese 9, ;

es J i Lae ot aR |

af See | . : ITS : ecg

» : t

Tl sats stack fs stem equiewent vntie’? burns gurl, Give “slew cne Fuel er crs2-35 sacericis enaczing sete to

iaeve the 4 of the socal fuel used by the Cqulpsentd; the unit seeviad by chis seszee.es °

which is used, either diveccly or indireetiy, Fer | “" CAnaysi 0 |. Mesfaun

SNER Biting (or cooling) at the planc. (Chee., rig of Zuel/ process material T3232 _ hourls rsce

to Heat ex cool the alz ia a room) Uf thts scack #6 Fuel Oil : 35,382 ive _6.5M cal /ne

£5 not frei a fuel buzaing equipmenc, o¢ if fusi | ea fne

{s. burned but none of the heat is intended to heat lyr neo

or ccol aiz in a romn, enter a zero delow: : fi ae =

; Ive =

0 % "spece heat" : ivr /y- 3

eae -t——™

5 ENISSION INVENTORY QUESTIONNAIRE (Revised 11/74) " Paee 6 of 9 (sud

This pase 45 to te used to reevrd the data from one akack Cor other emission pointe) only, Ves

’

: as many tires as there are individual emission polnts, and use one pase for each pot. Note that my

mucters iniicate exploncetery notes on pages 4 and §.

Foint scurcs | Descriptive mene of the equipment served tefghe of stack | Stack diaz meters | Steck gas exis

iD nurter, by this stack . above grades temperature

5-73 - Fewerssus2 C No. 2 doiler 70 fe} 15.75 ft 3000-

---oo

o—

a .

————

' nurse Yq,

| S

Siack gas flew | Stack gas] If this stack serves a “boiles"),, give | % of annual chreughpuc of Normal oversee)

rate at preeess | exit the tyse(s) of fuel used end che hese | pollucants throush chis emis-| ing cine of

concitions, not l*veioctzy | ineut (f.e., fucl vate x heating value)| ston poine (rozels 100%) this oofar

aL standard oS 2: | ne 2 of fuel [Dees] “are 1 oune- ) Sepe-| nretdaveteas |

O°6.5.- WU CVs ue Ase fuel Foo way | acy 1 Nov G2y ‘vauklys

552,117 Ce?/mia 5) ft/seep 106 AYUsne 2d Fuel, if any |25%(25 2% | 25 % 25% | 241 2 15?

bandied

wame of Foilucion|Gontrel Average. [Maximuc | Annual Fisission Adc, change | Concentcation 1A

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Jequipmaat{etiictancy] race rate rate nmstaod 4 cece g steck g

672 3g LI bali J lbs/he | tons/ye |

e [particulars master | Ceo | 3.0 105.9] Zits ‘ee | Add 202 or/sta fe4

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UAE ACATINIS 19 Ley we. | I fi | 1 Fill in this

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ENVIRONMENTAL PROTECTION AGENCY

4.5.2.

JUN 02 1976

Mr. T. G. Taylor

Technical Manager

PPG Industries, Inc.

P.O. Box 1000

Lake Charles, Louisiana 70601

Dear Mr. Taylor:

Your letter and attachments of May 14, 1976 were re-

ceived by the Enforcement Division on May 24, 1976. A

thorough evaluation of the information contained in your

response to our inquiry has been made. The conclusion

reached by our staff is that your submission is insuffi-

cient in three areas to clearly demonstrate that the fuel

conversion of the boilers in powerhouses A, B and C

are exempt from NSPS.

On May 26, 1976 Mr. Paul Fahrenthold of my staff

discussed the specific items needed to complete our evalua-

tion with Mr. C. A. Burns of your staff. Mr. Burns

requested that the items requested of him be confirmed

by letter.

Therefore, we now require that you supply the follow-

ing information, as an extension of our letter to you of

May 8, 1976, which was issued under the authority of

Section 114 of the Clean Air Act, as amended.

Information which you submitted to us alleges that

boilers No. 5 thru 9 of Powerhouse A have a heat input

of less than 250 X 10° BTU/hr. The pages of the EIQ

you submitted to the State of Louisiana wherein these

boilers are listed as emission points specifies the value of

219.6 X 10° BTU/hr for each unit. We require that you

provide us a copy of a file document indicating the

capacity of the units as guaranteed or certified by the

boiler manufacturer.

0.K.—Gol.

O.K.—may be reserved Gol.

According to your letter of May 14, 1976, the two boilers

which are part of the combined-cycle power plant of

Powerhouse C were ordered in 1970, prior to the promul-

gation of NSPS for fossil fuel fired steam generators.

Documentation from the equipment supplier or your pur-

chasing department is required to establish the fuel fir-

ing capacity of the boilers and their exact purchase date.

Mr. Burns responded to our request as to the fuel used

in Riverside (Powerhouse B) boiler No. 1 by stating

that the unit would continue to be fired by natural gas.

Based on the information you have submitted we have

concluded that Riverside units No. 2 and 8 were designed

to use oil as well as natural gas as fuel. The drawings,

6B-8019 and 6B-8088, which you submitted as evidence

of your use of oil in these boilers are confusing in that

they show a fuel oil system originally installed in 1943

and modified in 1950, but do not clearly label which

boilers of the Riverside station are being fed by the fuel

oil system. Please explain which boilers were/are being

fed by the fuel oil system shown in the drawings, and

confirm Mr. Burns’ statement that Riverside Boiler No.

1 uses only natural gas as fuel.

O0.K.—Gol.

At this time we feel that the supplemental information

requested above will be adequate to allow a determina-

tion to be made as to the applicability of NSPS to the

above boilers.

Should you feel that additional discussion will expedite

a timely response to our request, please call Paul Fah-

renthold of my staff at (214) 749-2142.

Yours very truly,

Original Signed By

THOMAS P. HARRISON, II

Director, Enforcement Division

Air Compliance Branch

[Routing and concurrence notation omitted in printing;

italicized portions are handwritten marginal notes]

SAS dart xtc Mla corer:

~ -

ae a

[PPG Emblem]

PPG INDUSTRIES, INC.

Industrial Chemical Division

P.O. Box 1000

Lake Charles, La. 70601

June 28, 1976

[Received June 31, 1976]

4.5.2.

m/Crocker For evaluation—John pls. refer to my letter

to PPG for the quote needing clarification.

Mr. Thomas P. Harrison, III, Director

Enforcement Division

Air Compliance Branch

U.S. Environmental Protection Agency

Region VI

1600 Patterson

Dallas, TX 75201

Dear Mr. Harrigcon:

The following explanation and attachments are fore-

warded as an extension of our May 14, 1976, letter. We

believe this, in combination with our present application

to the Louisiana Air Control Commission, will provide

sufficient documentation to answer all the questions you

have raised concerning our fuel oil conversion and power

expansion project.

(a) Re: Heat release of Powerhouse'A boilers:

Attachments A and B show the capacity and fuel

consumption of the Powerhouse A boilers as a

result of the last modification completed in 1955.

The boilers are run continuously at 175 M#/Hr.

steam rate and consume slightly less fuel than the

predicted 231 MM BTU/Hr. on B.

28 29

(b) Re: Power expansion: ;

graph e, item 4 (CFR Vol. 39, No. 200—Tuesday, Oc-

Attachments C and D are the purchase orders to tober 15, 1974) since they were all designed for oil and

G.E. for the gas turbine generator and to Com- installed prior to 1971. At this time, we are not project-

bustion. Engineering for the waste heat boiler. ing the need to fire the No. 1 unit on oil and have so

The reason for the great disparity in dates of stated in our permit application. If, in the future, we

order is that the project was temporarily placed find it necessary to fire the No. 1 unit on oil, at least

on hold in 1971 until long-term arrangements some of the paperwork will have been done in order to

could be ironed out with one of our fuel suppliers. expedite its operation.

The waste heat boiler order was cancelled; how-

ever, the gas turbine order was not because it was Sincerely yours,

a long-delivery item.

Attachment E is the cover letter of the equipment /s/ T.G. Taylor

manual sent out to the general contractors bidding T. G. TAYLOR

on the expansion on February 16, 1971. . Technical Manager

Attachment F is the section of the bidding manual TGT/;

specifying the waste heat boiler and fuels. /yma

Attachment G is the predicted performance of the ce: J.C, Coerver

waste heat boiler. | R. J. Samelson/G. P. Cheney

Attachment H is the predicted performance curve J. R. Farst

of the gas turbine purchased from G.E. J. E. Wyche

C. AR. Burns

The Riverside Powerhouse consists of three units,

each installed at a different time. Drawing 6B-

8088 shows the fuel oil installation pertaining to

the first unit constructed in 1948. The boiler on

this unit has 4 burners which are schematically

shown on the drawing. In 1950, additional fuel oil

equipment was added to the original system to ac-

commodate installation of the No. 2 unit. The

boiler for this unit has 6 burners, which are sche-

matically shown on the drawing. In 1969, the No.

3 unit was installed. The boiler for this unit has 6

burners, which are schematically shown on draw-

ing 6B-11019.

The fuel oil systems, depicted in the above 3

drawings are presently in the process of being

modernized.

In our permit to the LACC, we asked for exemption of

all three Riverside units under paragraph 60.14 subpara-

[Italicized portion is handwritten notation]

ALL QUOTATIONS AND SALES ARE SUBJECT TO THE

CONDITIONS PRINTED ON THE BACK OF THIS PAGE

Established 1890

A. M. LOCKETT & COMPANY

LIMITED

Contracting Mechanical Engineers

Complete Steam Power & Pumping Plants

New Orleans 7, La.

BRANCH OFFICES

HOUSTON

DALLAS

June 9, 1955

B&W Boiler Contracts F-414 and R-512

Mr. Russell Clark, ¢/o

Columbia Southern Chemical Corp.

P.O. Box 900

Lake Charles

Louisiana

Dear Mr. Clark:

This will confirm your telephone conversation with Frank

Gault concerning the possible increase in capacity of your

existing boilers to possibly 175,000 lbs. of steam per

hour. While the Babcock & Wilcox Company would not

wish to assume any contractual obligation on these old

boilers, we are pleased to advise you as follows:

Based on circulation, the boilers should be able to obtain

a capacity of 175,000 lbs. of steam per hour. The limit-

ing factor is the capacity of the cyclone separators. The

maximum capacity of the cyclones with the horizontal

type scrubbers over them that are in your boilers is rated

by us at 95000 Ibs. of steam per hour each when you

are operating at 620 psig. Unfortunately in the drum

that you have we cannot put the newer type inclined

scrubbers as there isn’t enough room.

31 - 72

We would suggest that you attempt to obtain the 175,000

Ibs. of steam per hour from your boilers. While doing

this you could make carryover tests to determine how

much carryover there will be. If you cannot obtain the

quality of steam you need, it is possible for us to add

four more cyclone separators in each drum; but we feel

that before you invest any money in additional equip-

ment you should try to see if you can get your 175,000

lbs. of steam per hour with satisfactory steam quality.

This Was Done

We are sending you a proposal on a duplicate unit for

No. 9; and you will note in the proposal we are setting

it up for 150,000 Ibs. of steam per hour as the old ones

are. Of course, the additional cyclones could be put in

initially on the new unit at slight additional cost.

We are also checking into the air heater situation about

which you spoke to our Mr. Gault.

Yours truly,

A. M. LOCKETT & CoMPANY, LTp.

/s/ F. Robert Mendow

F. R. MENDOW

Chief Engineer

FRM :mk

ec: FCGault—Lake Charles

[Italicized notation appears as handwritten

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ESSE’:

LAKE CHARLES PLANT

PPG INDUSTRIES, INC.

INSTRUCTIONS TO BIDDERS

RE: Specification K-2365

Construction of New Power Plant

At Lake Charles, Louisiana

February 16, 1971

1. DUE DATE

! Bidder shall submit his proposal as soon as possible

but not later than April 2, 1971.

i 2. PROPOSAL

: Bidder’s initial proposal shall consist of the accom-

panying Proposal Prices and Proposal Data Forms,

properly filled out. Ten (10) extra copies of these

} forms are enclosed for Bidder’s use.

3. PRICE INFORMATION

The main price shall appear only where called for in

the Proposal Prices and shall not appear elsewhere

in the proposal. Any alternate prices shall be given

on a separate price page and shall not be included

with Bidder’s technical or other nonprice data.

4. BID DOCUMENTS

A. The following are attached hereto and comprise

the Bid Documents:

a. Specification K-2365, including all drawings,

| standards and supplements referenced there-

in.

b. Exhibit A—General Terms and Conditions.

e. Specimen Contract Agreement.

B. Bidder shall notify PPG Industries immediately |

of any apparent omissions or conflicts noted in 4

the Bid Documents, and which affect any prices.

If any conflict appears between job sepcifica-

tions and standard specifications, the job specifi-

cations shall apply.

C. Any contract or purchase order resulting from

these Bid Documents will incorporate the terms

and provisions of said documents. It will be as-

sumed that Bidder agrees to the provisions of

said documents, unless exceptions are specifically

and clearly listed in his bid. All such exceptions

must be listed together and specifically identi-

fied as Exceptions. Bidder’s printed terms and

conditions are not considered specific exceptions.

5. INTENT OF CONTRACT DOCUMENTS

A. The intent of the Specifications is to provide

general conceptual guidance to establish opera-

tional requirements or standards. The Contrac-

tor is expected to develop, from engineering

data and economic studies, the plans and specifi-

cations for, and construct a modern, efficient

power plant consistent with the requirements es-

tablished in the Contract Documents.

B. It is the intent that Bidder’s proposal shall be

based on furnishing all domestic materials.

Local or Louisiana suppliers should be used

where competitive. If Bidder wishes to offer

any materials or equipment of foreign manu-

facture, he shall designate these as such and

list the savings to PPG Industries in each such

category.

6. EXAMINATION OF SITE

A. Contractor shall have visited the job site during

Bid Period to familiarize himself with condi-

tions under which the WORK is required to be

done.

B. Contractor shall carefully examine the site of

WORK and the adjacent premises, and shall

conduct the necessary investigations to inform

himself thoroughly as to the facilities for han-

dling the equipment at the site and difficulties

involved in the completion of all work

C. Contractor’s plea of ignorance of existing or

foreseeable conditions which will create difficul-

ties or hindrances in execution of WORK is not

acceptable as excuse for any failure on part of

Contractor to fulfill in every detail all require-

ments of Specification and/or drawings. Fur-

thermore, Contractor’s plea of ignorance not ac-

ceptable as basis for any claim whatsoever for

additional or extra compensation.

D. Bidders are requested to attend a prebid confer-

ence and tour of the project rite. Please call Mr.

F. E. Landry or Mr. W. Stagg at PPG Indus-

tries no later than March 5 at area code 318

Phone 882-1200 for further information regard-

ing the time and meeting place.

7. ADDENDA

Addenda to the Contract Documents may be issued

prior to the date of opening of the bids to clarify

the documents or to reflect modifications in the de-

sign or Contract terms. Each addendum issued by

PPG Industries will be distributed to each person or

organization to whom a set of the Contract Docu-

ments has been issued. The recipient will acknowl-

edge receipt of each addendum by signing and re-

turning the receipt form distributed with the adden-

dum. All addenda issued by PPG become a part of

the Contract Documents.

. LICENSING OF CONTRACTORS

Bidders are advised that Act 233 of 1956 of the

State of Louisiana requires that all Contractors and

Subcontractors on. any contract amounting to $30,-

CCCs

10.

000 or more, must be licensed under said Act before

performing any work thereon, and must comply with

the terms and provisions of said Act. The Contract

covering the work hereunder will contain a require-

ment to this effect and that any such licensing costs

shall be borne by Contractor.

PROPOSAL DISTRIBUTION

Proposal must be made out in septuplicate and sent

to:

PPG Industries, Inc.

One Gateway Center

Pittsburgh, Pa. 15222

Attention: Mr. D. C. Rhodes

Purchasing Manager, Central Engineering

1209 Allegheny Towers

The envelope, addressed as below, must be sealed

and identified as follows:

PROPOSAL—CONFIDENTIAL

LAKE CHARLES PLANT

Specification K-2365

Construction for 1973 Power Expansion at

Lake Charles, Louisiana

QUESTIONS DURING BID PERIOD

All questions should be directed to Mr. F. E. Landry

or Mr. W. Stagg at PPG Industries in Lake Charles,

Louisiana, Area Code is 318, Phone 882-1200. Post

Office Box Number is 1000.

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Oct. 5, 1976 NSPS

CERTIFIED MAIL—RETURN RECEIPT REQUESTED #819271

Mr. T. G. Taylor

Technical Manager entered CDS 10-6-76

PPG Industries, Inc. GOB

P. O. Box 1000

Lake Charles, Louisiana 70601

Dear Mr. Taylor:

Your letter and attachments of June 28, 1976 have been

received and reviewed. Based on the information in that

letter and your earlier submittal of May 14, 1976, we

have determined that the Standards of Performance for

New Stationary Sources [40 C.F.R. Part 60] apply only

to the two waste heat steam generators of Powerhouse

C located at the Lake Charles, Louisiana plant.

The applicability of the New Source Performance Stand-

ards (NSPS) is determined solely by the facts applicable

to the specific facilities for which NSPS regulations have

been issued. It is not considered relevant for NSPS pur-

poses that the gas turbines for Powerhouse C were or-

dered in 1970. The purchase order you submitted on the

waste heat steam generator showed that the unit was

ordered on October 14, 1974. Because the contractual

obligation to construct the steam generators was after

the date of the proposed regulations for fossil fuel fired

steam generators, August 17, 1971, the waste heat steam

generators numbered 1 and 2 of Powerhouse C are sub-

ject to the provisions of the Standards of Performance

for Fossil Fuel Fired Steam Generators, 40 C.F.R. Part

60, Subpart D (a copy of which is enclosed).

The two waste heat steam generators are subject to the

notification and recordkeeping requirements of 40 C.F.R.

60.7 and the performance tests requirements of 40 C.F.R.

60.8 (copies of which are enclosed).

If you have any questions concerning this matter, you

may contact Mr. Gary Bernath of my staff by letter or

by telephone at (214) 749-7675,

Sincerely yours,

ORIGINAL SIGNED BY

O. W. Lively

Acting Director

Enforcement Division (6AE)

Enclosure a/s

cc: Mr. James Coerver

Technical Secretary

Louisiana Air Control

Commission

P. O. Box 60603

New Orleans, Louisiana 70160

bee: DSSE, Washington, D. C.

6AEL.JVeach :maX2142 :9-30-76’

JC JF GOB JD

6AEL 6AEA 6AEA 6AEA

Collins Bernath Fahrenthold Doyle

10/1/76 10/1/76 10/1/76 10/4/76

[Italicized material appears as handwritten

notations in record]

[PPG Emblem}

INDUSTRIES

0520 00004

(318) 882-1200

FTS 687-4181

PPG Industries, Inc. Industrial Chemical Division

P. O. Box 1000 Lake Charles, La. 70601

T.C. TAYLOR

Technical Manager

November 12, 1976

Mr. O. W. Lively, Acting Director

Enforcement Division

U. S. Environmental Protection Agency

First International Building

1201 Elm Street

Dallas, Texas 75270

Dear Mr. Lively:

We had hoped to discuss with you in person some of the

points raised in your letter dated October 5, 1976. Since

this meeting has been postponed, we respectfully request

you to reconsider the matter of the two waste heat steam

generators of Powerhouse C for the reasons given below.

If you agree, a meeting may not be necessary.

We contend that the gas turbine purchased in 1970 is

relevant with respect to the waste heat boilers. Actually,

this purchase was part of a commitment, including design

and engineering, to a total power/steam generation pack-

age for our new chlor-alkali production facilities,

Unlike commercial power plant installations, which pro-

duce only electric power, Powerhouse C had to be de-

signed to satisfy the power and steam requirements of

the chemical complex it would serve. A reliable source

of both steam and power is essential to chlorine plants

where electrolysis of brine and concentration of caustic

by evaporators are major process steps. Due to the vari-

able requirements for both power and steam within the

process units, flexibility was a key ingredient in the de-

sign of the new powerhouse. PPG selected as the most

efficient method of satisfying the required power/steam

balance a combined-cycle system consisting of two gas

turbines exhausting into two eupplementally-fired waste

heat boilers, the steam from which would be used to

drive one turbogenerator, which, in turn, furnishes steam

for the caustic evaporators and other process steam users.

(See Sargent & Lundy Dwg. M-105, dated 1-26-71, at-

tached. )

On November 11, 1970, PPG issued the attached purchase

order (267-001) to General Electric Company for the

two gas turbines and turbogenerator. Item 3, the turbo-

generator, would be completely useless without the steam

generators (waste heat boilers) that were subsequently

purchased. The turbines and boilers will operate as one

unit and each was designed in conjunction with the

other. The fact that the waste heat boilers were pur-

chased separately and at a different time was dictated

by the long delivery time of the turbines and generator

and by the need for efficient utilization of capital.

The purchase of the gas turbines and turbogenerator in

1970 represents a commitment of $9.4 million, covering

two-thirds of the equipment purchased in the combined-

cycle power plant. Thus, we contend that, with the design

engineering and substantiation as evidenced by the above-

stated purchase order, all committed prior to August 17,

1971, for the construction of a combined-cycle plant, PPG

“commenced” a continuous program of construction which

excepts Powerhouse C from Part 60, New Stationary

Sources Regulation.

If you have further questions, we believe that a confer-

ence in person would best expedite this serious misunder-

standing. Please direct your inquiries to me. Thank you

for your courtesies and prompt attention to this matter.

Sincerely,

T.G. Taylor

T. G. Taylor

edh

Attachments

ec: G. P. Cheney

J. F. Coerver

(Italicized material appears as handwritten

notations in record]

[PPG Emblem]

INDUSTRIES

One Gateway Center

Pittsburgh, Pa. 15222

Order No. 267-001

Requested by Requisition No. Charge Number

F. E. Landry CE-001 G.O. 267

Affirming Verbal Order Inquiry No. Date of Order

Below See Reply 11-11-70

Notify Required Delivery Quoted Delivery

F. E. Landry As Below As Below

Rhodes Quotation No./Date FOB

See Below Factory/Frt. Allow !

Terms Ship VIA

See Below Best Way

General Electric Company

Industrial Sales

Oliver Building

Mellon Square

Pittsburgh, PA 15222

Atten: Mr. H. E. Finke

Quantity Description Price

General Electric heavy duty MS 7000 Series |

combustion gas turbine generator units,

each unit consisting of the equipment listed

on the G. E. Quotation No. 341-78254 dated

October 30, 1970, and signed by Howard

E. Finke (Rev. 11-12-70)

$7,656,600.00/

Lot

Technical direction of installation for the

gas turbines as per quotation No. 4251-

70007 dated 9-15-70 and signed by M. I.

Cleveland

$38,020.00/each

General Electric steam turbine sized for the

following conditions:

Inlet conditions: 1250 psig—960°F. Auto- (

, Matic Extraction 216,000 #/hr. @ 600 psig.

Automatic Extraction—483,000 #/hr. @

260 psig. Exhaust—217,000 #/hr. @ 120

psig. Complete with hydrogen cooled 44,000

KVA, .85 power factor, 60 cycle, 3 phase,

3,600 RPM, 13,800 Volts, 158 short circuit

ratio, synchronous generator, with coolers

designed for 95°F and 125 psig cooling

water. To be complete with accessories and

other equipment listed on G. E. Quotation

# 341-73254-B (Rev.) dated November 6,

1970, and signed by Howard E. Finke. This

price covers technical supervision of instal-

lation

$1,786,805.00/

Lot

All prices above for both gas turbines,

generators, steam turbines, etc. cover

freight to accessible railsiding nearest cus-

tomer’s site.

Any omissions in this Purchase Order, but

specified in the quotations of General Elec-

tric Company (“seller’’) referred to above,

will apply.

PPG Industries, Inc. “purchaser” reserves

the right to accept or reject a five year,

40,000 hour, maintenance contract on the

gas turbines beginning on the commercial

operating date at a cost of $13.75 per fired

hour per unit based on base load service,

natural gas fuel and one start per 1000

hours or less. The $13.75 per fired hour

would be subject to change each year after

“the first year of the contract based on esca-

lation of labor and/or materials from the

_ date of commercial operation. This decision

on the maintenance contract does not have

to be made by the purchaser until the com-

mercial operating date.

The price would cover parts or repair, tech-

nical direction, monthly inspection and labor

for all normal maintenance. This does not

include breakdown coverage.

The purchaser has the right to purchase a

spare rotor for the gas turbines within

twelve months after date of purchase order,

for a price of $590,000.

Terms of Payment

Eighty percent upon shipment from seller’s

factory, fifteen percent thirty days from

date of shipment and five percent upon com-

pletion but not later than 180 days from

date of shipment, provided that sellers shall

have fulfilled all provisions of the Purchase

Order as far as possible up to the time

specified.

Cancellation

The purchaser shall have the right to termi-

nate this Purchase Order by written notice

to seller on or before May 1, 1971, if pur-

chaser’s Board of Directors have not there-

tofore authorized the construction by pur-

chaser of a 1500 tons per day chlorine

caustic soda plant facility at Lake Charles,

Louisiana, and the requisite power gener-

ating facilities therefore, or if the plant

facility thus authorized shall not require

gas turbines; provided, however, that if

purchaser shall so terminate this Purchase

Order, purchaser shall pay seller a termi-

nation charge in the amount of $21,000,

upon payment of which sum all obligations

of either party to the other hereunder shall

terminate. The purchaser shall have the

right to terminate this Purchase Order after

May 1, 1971, but prior to June 1, 1971,

under sam terms, for an additional charge

in the amount of $10,000 for steam turbine

and not to exceed $150,000/Lot for two

(2) gas turbines.

Delivery

Seller will ship the gas turbines by Septem-

ber, 1972. The steam turbine will be shipped

18 months after final steam output quanti-

ties are decided upon. Seller will provide

purchaser with production schedule promptly

and on a monthly basis thereafter.

Transfer of Ownership

Purchaser reserves the right to assign or

transfer this Purchase Order in its entirety

to a third party, without any additional cost

or penalties whatsoever to purchaser or such

third party assignee as a result of such

assignment; provided such third party as-

signee shall undertake to construct and own

the power generating facilities requisite to

purchaser’s said chlorine-caustic soda plant

facility.

Performance and Material Warranty

The seller has the obligation to make at its

own expense such alterations and additions

or replacements as required to meet specifi-

cations for a period of one year after start-

up date.

Guarantee

The seller will guarantee materials or equip-

ment and workmanship to be free of defects

for a period of one year from start-up or

18 months after delivery whichever comes

first. Any repairs, alterations, or replace-

ments found to be necessary shall be made

at no cost whatsoever to purchaser. Each

such repair, modification, or replacement

shall carry same warranty commencing on

the date of the installation as the original.

If the seller does not remedy and/or replace

the work to comply with the foregoing re-

quirements within a reasonable time after

written notice, the purchaser may remedy

and/or replace it at sellers expense.

Seller will furnish as soon as possible:

Copies Title

7 Certified dimension prints

7 Performance curves

7 Installation, operation and mainten-

ence instructions

7 Parts list and assembly drawings

including bearings identification by

Bearing Mfg. name and symbol or

number, etc.

Recommended spare parts list with

prices

Lubrication manuals

Wiring diagrams

Any other data necesary to install,

maintain, and operate the above

equipment

Aaa 4

(One (1) reproducible of each may

be furnished in lieu of copies as

shown)

Confirming verbal order of November 11,

1970, to: J. J. Broussard, H. E. Finke, Don

Govdon, Jack Hull

4pproved Nov. 11, 1970

L. W. Wilcox

[Italicized material appears as handwritten

notation in record]

i na a 5 TE LE Ta i

LA O S 20-04

NSPS

DEC 23 1976

Mr. T. G. Taylor

Technical Manager

PPG Industries, Inc.

P.O. Box 1000

Lake Charles, Louisiana 70601

Dear Mr. Taylor:

We have reviewed your letter of November 12, 1976

concerning the two steam generators of Powerhouse C.

As we stated in our letter of October 5, 1976, the ap-

plicability of the New Source Performance Standards

(NSPS) depends solely on the facts relating to the types

of equipment for which NSPS regulations have been

issued. The regulations apply to a facility the construc-

tion or modification of which is commenced after the

date of publication of any standard (or, if earlier, the

date of publication of any proposed standard) applicable

to that facility. The information you have provided shows

that the commencement of the construction of the two

steam generators was after the publication of the pro-

posed regulation for fossil fuel fired steam generators.

Even though you may have ordered equipment before the

date of the proposed regulations that would be com-

pletely useless without the steam generators, that action

is irrelevant to determine the applicability of the regula-

tions to the two steam generators.

We hope that this discussion makes it clear why the two

steam generators are subject to the provisions of the

Standards of Performance for New Stationary Sources,

40 CFR Part 60.

If you still desire to have a meeting discussing this de-

termination, please contact Mr. James Veach of my staff

by letter or by telephone at (214) 749-2142.

Sincerely yours,

Original Signed By

O. W. LIVELY

Acting Director

Enforcement Division

JV12/6

6AEL:J Veach :ma:X2142:11-76:Retyped :12-6-76

JV12/6

6AEL

Collins

6AEA

Bernath

Fahrenthold

6AEA

12/17/76

ec: Mr. James F. Coerver

Technical Secretary

Louisiana Air Control

Commission

P. O. Box 60630

New Orleans, Louisiana 70160

bec:DSSE

[Italicized material appears as handwritten

notation in record]

DS Sa Vane Seen)

2S ee

ENVIRONMENTAL PROTECTION AGENCY

VI Bila

File Code

12-29-76

MEMORANDUM:

SUBJECT: Determination of Applicability to NSPS

Subpart D.

FROM: Director, Division of Stationary Source

Enforcement

TO: | O.W. Lively, Acting Director

Enforcement Division (6AE)

This is in response to your memo of December 7, 1976,

requesting a determination as to whether a waste heat

recovery boiler used to produce steam would fall under

NSPS for fossil fuel fired steam generators.

Section 60.41(a) defines a fossil fuel fired steam gen-

erating unit to be “a furnace or boiler used in the proc-

ess of burning fossil fuel for the purpose of producing

steam by heat transfer.”

Since the boiler in question is not used in the process

of burning fossil fuel, but rather in the process of waste

heat recovery, it is our determination that the boiler in

question would not be a fossil fuel fired steam generator

as defined under NSPS, Subpart D.

If you have any further questions on this determina-

tion, please contact Craig Cobert (202) 755-2564 of my

staff.

/s/ EER

Edward E. Reich

[Italicized material appears as handwritten material in

record; concurrence and routing notations and date-

received stamp omitted in printing]

UNITED STATES ENVIRONMENTAL

PROTECTION AGENCY

DATE: Dec. 7, 1976

SUBJECT: Request for Determination Relative to Subpart

D, NSPS

FROM: O. W. Lively, Acting Director

Enforcement Division (6AE)

TO: Ed Reich, Director

Division of Stationary Source Enforcement

(EN-341)

This is to request that you render a determination of

applicability to NSPS, Subpart D, for the following situ-

ation.

A power generating station is operating gas and oil fired

turbines. The exhaust from the turbines is routed to a

waste heat recovery boiler where it is used to produce

steam. However, no combustion of either the exhaust

gases or supplementary fuels occurs in the boiler. The

heat input to the boiler as a result of the exhaust gases

is in excess of 250 MM Btu/hr.

The question of applicability arises from a reading of

Section 60.40 and 60.41(a). The former states that Sub-

part D applies to each fossil-fuel fired steam generating

unit (of appropriate size). Section 60.41(a) defines a

steam generating unit to mean a boiler “used in the

process” of generating steam. What we have is a boiler

“used in the process” of generating steam, although the

combustion of the fossil fuel takes place in the turbine

unit rather than the boiler.

We feel this situation to be of sufficient novelty to re-

quest your determination. Should you need additional

information, you may contact Gary Bernath of my staff

at (214) 749-7675.

[Handwritten notations omitted in printing]

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[PPG Emblem]

INDUSTRIES

PPG Industries, Inc./One Gateway Center

Pittsburgh, Pennsylvania 15222/Area 412/434-2145

GEORGE P. CHANEY, JR., Assistant Counsel

April 13, 1977

[Received EPA Region VI, 1977 Apr. 14 AM 9:07,

Enforcement Division ]

Mr. Howard Bergman

Director, Enforcement Division

Environmental Protection Agency

Region VI

1600 Patterson Street :

Dallas, Texas 75201

Re: Request for Determinations under 40 C.F.R.

§ 60.5.

Dear Mr. Bergman:

By this letter, PPG Industries, Incorporated, (“PPG”),

seeks a determination that construction of two “waste

heat” boilers, components of “Power Plant C” at PPG’s

Lake Charles, Louisiana works (“Lake Charles Works’’)

was “commenced” within the meaning of Section 111

(a) (2) of the Clean Air Act, as amended, 42 U.S.C.

§ 1857c-6, prior to August 17, 1971, the date of proposed

“new source” emission regulations for fossil-fuel fired

steam generators. Alternatively, PPG seeks a determi-

nation that the regulations for fossil-fuel fired steam

generators do not apply to waste heat boilers such as

those being installed at the Lake Charles works. This

request for determinations is submitted pursuant to 40

C.F.R. § 60.5 (captioned “Determination of construction

or modification”’).

Power Plant C is a fully coordinated power generating

system, composed of two gas.turbine generators (produc- .

ing electricity) and two “waste heat” boilers (producing

process steam). The first of the gas turbines will begin

operation by the end of April of this year, and the com-

panion “waste heat” boiler is projected to go on line in

June. The second set of such units (turbine plus “waste

heat” boiler) is scheduled for start-up in the third quar-

ter of 1978. The determinations sought by PPG are

essential to clarify tentative findings contained in a

letter from Mr. O. W. Lively, Acting Director, Enforce-

ment Division, Region VI, dated October 5, 1976, which

findings have been the subject of continuing subsequent

correspondence and discussion.

Should it be determined both that construction of the

“waste heat” boilers of Power Plant C was not “com-

menced” until after August 17, 1971, and that the new

source regulations for fossil-fuel fired steam generators

apply to such “waste heat” boilers, PPG by this letter

seeks an interpretation of the regulations as applied to the

“waste heat” boilers. Because of the manner in which

the standards of performance are written (explicit for-

mulas set out allowable emissions where specified fuels

are used), they cannot be readily applied to the “waste

heat” boilers. The regulations would in some way have

to be adapted to take into account the fact that only

part of the heat used is created by the firing of fuel

within the boilers themselves.

To aid in your consideration of this request, two memo-

randa are appended. Appendix A is a statement of the

facts relevant to the determinations sought by PPG. Ap-

pendix B is a memorandum prepared by counsel based on

those facts analyzing the relevant provisions of the

Clean Air Act and implementing regulations.

The long and short of the matter is that the present

regulations for steam generators seem to have been con-

strued to prevent, or at least to tend to prevent, the

possibility of “recapturing” waste heat, a very desirable

goal from both an energy conservation and economic

standpoint. On the other hand, if the turbines were

operated independently of the boilers, i.e., if no attempt

were made to use the waste heat from the turbine exhaust

in the boilers, full compliance with the EPA standards

of performance could be achieved. This anomaly is espe-

cially troubling to PPG since the design of and course of

construction for the combined turbine-“waste heat’’ boiler

units was set in 1970, well before the advent of the

standards of performance.

Very truly yours,

/s/ George P. Cheney, Jr.

GEORGE P. CHENEY, JR.

Assistant Counsel

emr

Attachments

ec: Edward E. Reich

Director, Division of Stationary

Source Enforcement

Environmental Protection Agency

401 M Street, S.W.

Washington, D.C. 20460

[Italicized material appears as

handwritten material in record]

APPENDIX A

MEMORANDUM OF FACTS

This memorandum sets out circumstances surrounding

the design and construction of a new power plant at the

Lake Charles, Louisiana works (“Lake Charles works’)

of PPG Industries, Inc. (“PPG”). The purpose of this

new power plant, known as “Power Plant C”, was and

is to generate electricity and process steam for the manu-

facture of chlorine and caustic soda at the works.

A. Design Work

PPG became engaged in the overall design and construc-

tion of Power Plant C in 1970. The design established

at that time called for the construction of two gas tur-

bine generators (producing electricity) and two “waste

heat” boilers (producing process steam). The “waste

heat” boilers, as their name suggests, were designed to

recapture the turbine exhaust gases from the gas turbine

generators. The boilers would do so by using the heat

within those exhausts, which would otherwise be waste-

fully dissipated into the atmosphere, for the generation

of steam. The costs associated with the generation of

electricity in Power Plant C were such that the project

could not have been contemplated without having built

into it a capacity to make fruitful use of the heat cast

off by the gas turbines.

Based upon the design specifications for the “waste

heat” boilers, 38.3 percent of the heat used to generate

steam within the “waste heat” boilers will be supplied by

the exhausts from the gas turbine generators. The re-

mainder of the heat used by the “waste heat” boilers will

be produced by the firing of fuel oil or gas within the

units themselves.!

* Taking on. of the boilers hy itself, 598 MM BTU/hr is to be

provided by the firing of oil, and 371.2 MM BTU/hr is to be pro-

vided by the “waste heat” from the exhaust from one of the

turbines.

B. Contracts

The gas turbine generators were ordered in Novem-

ber, 1970. The specification book for the whole of Power

Plant C was completed by the end of February, 1971.

Once the design of the gas turbines was determined

and orders for them were placed, there were very few

design options as to how the “waste heat” boilers could

be built to accommodate the turbines. In fact, insofar

as the quality of emissions might be affected, only three

possible methods of firing the “waste heat’ boilers ex-

isted: (1) front firing, (2) tangential firing, and (3) gas

recirculation. The design actually chosen by PPG—tan-

gential firing—minimizes the amount of nitrogen oxides

passed by the system into the atmosphere. Thus, once the

design of the gas turbines was settled and the turbines

were placed on order, PPG could not have constructed

“waste heat” boilers with emission characteristics more

favorable than those actually constructed, while the eco-

nomics of the system as a whole absolutely required that

some form of “waste heat” boiler be built.

C. Construction Work

Some early work on the site of Power Plant C (level-

ing, cutting trees, general site preparation, etc.) was

carried out in the summer of 1971. Further construction

was not conducted immediately. In addition to the fact

that the turbines had not been delivered, PPG encoun-

tered serious difficulties in securing a long-term supplier

of fuel. Both matters were resolved, but the resolution

of them took time.

1. The first set of turbine-boiler units.

In October of 1974, the purchase order for the first

of the two “waste heat” boilers was issued to Combus-

tion Engineering, Inc. The foundation for the first of the

“waste heat” boilers of Power Plant C was poured on

September 18, 1975, and the actual assembly of this boiler

began on February 1, 1976. The foundation for the first

of the gas turbine generators was poured beginning on

November 19, 1975; the assembly of this gas turbine

began on April 8, 1976.

The first of the gas turbines was accepted from the

contractor on February 23, 1977. This turbine is ex-

pected to begin operation on- or about the first week of

May. Acceptance of the first “waste heat” boiler is an-

ticipated on or about May 15, 1977, and actual start-up

of this boiler is expected around June 1, 1977.

2. The second set of turbine-boiler units.

The foundation for the second of the gas turbine gen-

erators ordered in 1970 was poured on February 15,

1977. It is anticipated that this second gas turbine will

be in operation by mid-1978. The order for a “waste

heat” boiler to be associated with this second gas turbine

generator was placed on June 16, 1976, and the founda-

tion for this second boiler was poured on December 22,

1976. Operation of this “waste heat” boiler is expected

in the third quarter of 1978.

D. Projected Operating Characteristics

On the basis that 1 percent sulfur No. 6 fuel oil will

be fired in the “waste heat” boilers, the amount ‘of sul-

phur dioxide discharged by those boilers will be 0.67 lbs.

per million BTU of heat from all sources used in the

“waste heat” units themselves, and 0.50 Ibs. per million

BTU of heat introduced into the electricity and steam

generating system of Power Plant C as a whole.

Projections for emissions of Nitrogen oxides from the

combined turbine “waste heat” boiler units are uncertain.

However, on the basis of the engineering work completed

to date, the total amount of nitrogen oxides discharged

under gas turbine inlet conditions of 75° farenheit and

60 percent relative humidity by the “waste heat” boilers

should be approximately 0.39 lbs. per million BTU of

heat from all sources used in the “waste heat” boilers.?

2 The “waste heat” in the turbine exhausts entering the boilers

should contain approximately 0.63 Ibs. NOx per MM BTU. The

amount of nitrogen oxides discharged by the “waste heat” boilers

attributable solely to fossil fuels fired within the boilers themselves

This is equivalent to approximately 0.29 lbs. per million

BTU of heat introduced into the system of Power Plant C

as a whole from all sources of energy.

Were the exhausts from the gas turbine generator al-

lowed to pass directly into the atmosphere without being

recaptured by the “waste heat” boilers, they would be ex-

pected to contain 0.835 lbs. of nitrogen oxides per MM

BTU of heat derived from fossil fuel combustion within

the turbine generator.

/s/ George P. Chenep

GEORGE P. CHENEY, JR.

Assistant Counsel

PPG Industries, Inc.

One Gateway Center

Pittsburgh, Pennsylvania

15222

(412) 434-2145

Dated: April 12, 1977

[Italicized material appears as handwritten

material in record]

is expected to be roughly 0.24 Ibs. per MM BTU derived from

such fossil fuels. The NOx discharged by the “waste heat” boilers

per MM BTU from all sources entering the boiler is:

X = (598.3) (0.24 + (371.2) (0.63) =0.39

969.5

APPENDIX B

MEMORANDUM OF LAW

This memorandum first assays the statutory provisions

and regulations applicable to a determination whether the

“waste heat” boilers at the Lake Charles, Louisiana

works (“Lake Charles works”) of PPG Industries, Inc.

(“PPG”), are new sources within the meaning of the

Clean Air Act. Then it turns to a consideration of

whether the “waste heat” boilers are covered or affected

by the new source standards of performance for fossil-

fuel fired steam generators. Finally, this memorandum

assesses the difficulties of application which arise if the

new source regulations are deemed to pertain to the

“waste heat” boilers. The factual basis for the discussion

in this memorandum is contained in the accompanying

Memorandum of Facts.

Suggested determinations are set out in the conclusion

of this memorandum.

I. THE “WASTE HEAT” BOILERS OF POWER

PLANT C ARE NOT “NEW SOURCES” WITH-

IN THE MEANING OF THE CLEAN AIR ACT

A. Power Plant C As A Whole Is Clearly Not A

“New Source” Within The Meaning Of The

Clean Air Act And Implementing Regulations

Under Section 111(a) (2) of the Clean Air Amend-

ments of 1970, as amended, 42 U.S.C. § 1857c-6 (a) (2),

the term “new source” means “any stationary source, the

construction or modification of which is commenced after

the publication of regulations (or, if earlier, proposed

regulations) describing a standard of performance under

this section which will be applicable to such source.”

Under the EPA regulations, construction has “com-

menced” if “an owner or operator has undertaken a

continuous program of construction .. . or has entered

into a contractual obligation to undertake and complete,

within a reasonable time, a continuous program of con-

struction... .” 40 C.F.R. § 60.2(i). Proposed regula-

tions for fossil-fuel fired steam generators were promul-

gated on August 17, 1971. Well before that date, PPG

had undertaken a continuous program of construction re-

specting Power Plant C.

The planning and design for Power Plant C were be-

gun in the 1960’s. The order for the construction of the

central facilities of Power Plant C, the gas turbine gen-

erators, were issued on November 11, 1970. The specifica-

tion book for the whole of Power Plant C was completed

by the end of February, 1971. Site preparation work

was accomplished in the summer of 1971. PPG thus

established the course of construction in November of

1970 and that course has been continuous down to the

present and will remain so until the entire system is

complete.

B. The “Waste Heat” Boilers Are Fully Inte-

grated Parts Of Power Plant C, And The

Course Of Their Construction Cannot Be

Severed From That Of The Power Plant As

A Whole

As a matter both of design and economics the construc-

tion of “waste heat” boilers could never have been con-

sidered, and was not considered, to be a matter separate

from the construction of the gas turbine generators or of

Power Plant C as a whole. The design work for the

turbines reflects the design criteria for the “waste heat”

boilers, and vice versa. The Lake Charles works needs

the new power plant both to generate electricity and to

manufacture process steam for the production of chlorine

and caustic soda at the works. The most energy-efficient

way to accomplish these twin goals is to employ a design

which recaptures the very considerable heat value in the

exhaust gases from the gas turbine generators. “Waste

heat” boilers provide the mechanism for this recapture.

From both an economic and an energy standpoint, the

project would not be feasible unless the “waste heat”

boilers could be employed as a complement to the gas

turbine generators.

In short, once PPG was committed to building the gas

turbine generators, it was not less committed to build the

“waste heat” boilers. Even though the actual order for

the first “waste heat” boiler was not made to Combustion

Engineering until October of 1974, PPG was bound to

construct the “waste heat” boilers as of the time (No-

vember 1970) it was committed to the purchase of two

gas turbine generators. The “waste heat” boilers cannot

be severed from the turbine generators upon which they

depend. Looking merely to the October 1974 date on a

written communication between PPG and Combustion

Engineering as the sole basis for determining when con-

struction of the “waste heat” boilers was “undertaken”

(the term used in the regulations) by PPG, is, in the

context of this integrated facility, very misleading. The

undertaking was begun much earlier. The preliminary

work and initial site preparation for all the components

of Power Plant C were begun at one time; there was no

separate program for constructing gas turbine generators

apart from “waste heat” boilers.

C The Decided Cases Do Not Warrant Treating

The “Waste Heat” Boilers Of Power Plant C

As “New Sources”

The purpose for distinguishing “new sources” from

other sources under the Act and regulations is to avoid

undue burdens on those owners or operators who have no

means of adjusting their existing facilities or their in-

escapable obligations. Once committed to the construction

of the gas turbine generator component of Power Plant

C, PPG had (and now has) no choice but to press the

project to its conclusion by constructing the necessary

“waste heat” boilers. No design adopted by PPG could

have reduced emissions below the levels associated with

the current “waste heat’ boilers.

Two recent judicial decisions bear on resolution of

when PPG “commenced” construction of Power Plant C.

In Montana Power Company v. Environmental Protection

Agency, F. Supp. ——, 2 PCG { 40,065 (D. Mont.,

decided January 27, 1977), the court concluded that con-

struction of a power plant had commenced prior to the

effective date of EPA’s regulations for the prevention of

significant deterioration, within the definition of “com-

mence” in 40 C.F.R. § 52.21(b) (7). In the Montana

Power case, although actual on-site construction had not

begun by the effective date, the court found that EPA

had failed to give due consideration to the prior irre-

vocable commitment of substantial funds and resources

to the project and thus that construction had in fact

“commenced” within the meaning of the regulations.

On the other hand, another federal court recently de-

termined that a coal-fired generating plant actually or-

dered by a municipality after the promulgation of stand-

ards affecting such facilities was a “new source” within

the meaning of the Clean Air Act and regulations.

United States v. City of Painesville, —— F. Supp. .

Civil Action No. 76-234 (N. D. Ohio, decided J anuary 19,

1977). The court concluded that the City of Painesville,

unlike PPG in the present situation, had entered into no

binding commitment to build anything at all until after

the date upon which the “new source” standards began

to apply. The court further found that the City had

actually changed the specifications of its coal-fired gener-

ating plant in January of 1972, well after the August

1971 effective date for the regulations.

The present circumstances are comparable to the facts

in the Montana Power case, and differ considerably from

the setting of the Painesville decision. PPG was fully

committed to the construction of Power Plant C before the

new source standards for fossil-fuel fired steam genera-

tors were proposed. Second, in the Painesville case the

court stresses the fact that no purchase of equipment

actually made by the municipality prior to the promulga-

tion of new source standards would have been “incom-

patible” with a facility which complied with the new

source standards. (Slip opinion, at 6.) By way of con-

trast, in the present situation, PPG had by August 1971

committed itself to the combined turbine“waste heat”

boiler design which is at odds with the new source stand-

ards for boilers.

Especially noteworthy is the fact that preclusion of use

of the waste heat in the boilers would have no favorable

effects whatsoever on the environment; the exhausts from

the gas turbine of Power Plant C would then pass di-

ee ee a ee re

rectly into the atmosphere with their full cargo of pol-

lutants, and process steam would have to be generated

entirely by firing fossil fuel. Additional reasons for

avoiding such an unwholesome result, both environmen-

tally and economically, will be reviewed in Part II below.

Il. EVEN IF IT IS CONSIDERED THAT CON-

STRUCTION DID NOT COMMENCE PRIOR TO

AUGUST 17, 1971, A “WASTE HEAT” BOILER

IS NOT A FACILITY COVERED BY THE REG-

ULATIONS GOVERNING “NEW SOURCES”

A. The Existing Regulations Are Not Structured

To Apply To Steam Generators Fired By A

Combination Of Fossil Fuels And “Waste

Heat”

The only regulations that could possibly establish emis-

sions standards for “waste heat” boilers are those gov-

erning “fossil-fired steam generators” in Part 60, Sub-

part D, of Title 40 of the Code of Federal Reg»lations.

Those regulations govern facilities that produce steam by

burning “fossil fuel.” 40 C.F.R. § 60.41. But “waste

heat” boilers are fired by a combination of waste heat

and fossil fuel, and it is the special circumstances aris-

ing from the combination which the regulations do not

address.

As promulgated, the regulations were not written to

pertain to boilers relying in significant part on certain

waste fuels. The standard for nitrogen oxides, for exam-

ple, excluded from its coverage situations where new

boilers were built for fuel consisting of “lignite or a

solid fossil fuel containing 25 percent by weight, or more

of coal refuse....” 40 C.FR. § 60.44(b). A recently

proposed amendment to the regulations would, however,

establish standards for emissions of nitrogen oxides from

new lignite-fired steam generators. See 41 Fed. Reg.

55792 (December 22, 1976).

In addition, the standards were amended on Novem-

ber 22, 1976, to provide specific language bearing on

fossil-fuel fired steam generators which also used wood

residue as fuel (commonly called “hog boilers”). See 41

Fed. Reg. 51897-51400 (November 22, 1976).

These recent changes and proposed changes in the

regulations clarify matters for those who wish to fire

boilers with waste fuels. However, they do not address

specifically the present situation where “waste heat”’ it-

self is sent to the boiler. The regulations simply are not

structured to apply to the present situation.

B. The Existing Regulations Should Be Deemed

Not To Apply To “Waste Heat” Boilers

Where regulations are not written to apply to a special

set of facts, the regulations should be deemed not to apply

in circumstances where the special facts are present.

See WAIT Radio v. Federal Communications Commission,

135 U.S. App. D.C. 317, 321, 418 F.2d 1158, 1157 (1969).

The Agency has already adopted this. course of action in

adopting the special regulatory provisions for hog boil-

ers referred to above. Similarly, the existing regulations

should be deemed not to apply to “waste heat’ boilers.

Ill. IF THE REGULATIONS ARE DEEMED TO

APPLY TO THE “WASTE HEAT” BOILERS

AT THE LAKE CHARLES WORKS, THEY

SHOULD BE ADAPTED TO TAKE INTO AC-

COUNT THE FACT THAT ONLY PART OF

THE HEAT USED IS CREATED BY THE

FIRING OF FUEL WIHIN THE BOILERS

THEMSELVES

A. The Standards For Nitrogen Oxides Cannot

Be Brought To Bear On The “Waste Heat

Boiler

The standards for nitrogen oxides in 40 C.F.R. § 60.44

cannot readily be applied to the “waste heat” boilers of

Power Plant C, as they make no provision for the use

of the exhausts from the gas turbine generators as a

source of heat in the boilers.' The exhausts from the gas

‘Exhausts from gas turbine generators are at present unregu-

lated by new source standards. Even if such standards for gas

turbines should be promulgated, the gas turbine generators of

Power Plant C would clearly not be “new sources” for purposes

turbine generators are not subject to emissions standards

upon their discharge from the turbines themselves. In

such circumstances equitable considerations suggest that

passage of the turbine exhausts through the» “waste

heat” boilers should no less receive similar treatment,

i.e., be deemed to fall outside the new source standards

of performance.

Conceptually, one might consider carving up the nitro-

gen oxides emitted from the “waste heat” boilers into

two segments, one attributable to the “waste heat” com-

ponent and the other to the oil-fired component. The

nitrogen oxides attributable to the oil-fired component

would, however, be difficult to regulate separably under

the present standards because process and analytical

limitations would prevent obtaining a precise and mean-

ingful allocation between the two components of the

nitrogen oxides emissions.?

B. The Standards For Sulfur Dioxide Require Con-

siderable Adaptation To Test Compliance

Against “Total Heat Input”, As The Regula-

tions Require

The standards for sulfur dioxide of 40 C.F.R. $ 60.43

indicate that the sulfur dioxide discharged into the at-

mosphere shall be measured against the heat derived from

various fossil fuels. If these standards are nonetheless

applied to the “waste heat” boilers, some very consider-

able accommodations by way of interpretation must be

made.

Section 60.43(c) provides specifically that “[c] ompli-

ance shall be based on the total heat input from all fossil

fuels burned, including gaseous fuels.” The “waste heat”

entering the boilers should be included in this “total heat

input”, even though the actual “waste heat” input to the

of such regulations. PPG could thus, if it chose, allow the exhausts

from the gas turbine generators to pass freely into the atmosphere.

It obviously prefers not to adopt such a wasteful course of action.

2 The same circumstances would prevent a meaningful and pre-

cise allocation of the particulate emissions.

boiler is in the form of hot gases. These gases were the

product of a prior combustion.

This construction of the standards is supported by

prior Agency decisions. As noted previously, recent

amendments to the standards of performance for fossil-

fuel fired steam generators enlarged their scope to in-

clude facilities burning wood residues in combination

with fossil-fuels. The preamble to this recent amend-

ment makes clear that fuel mixtures can play a critical

role in achieving compliance with the standards:

Complying with the standard by firing low sulfur

fossil fuel requires an adequate supply of fuel with

a sulfur content low enough to meet the standard.

However, it would be possible for the owner or opera-

tor to fire, for example, a relatively high sulfur

fossil fuel with a very low sulfur fossil fuel (e.9.,

natural gas) to obtain a fuel mixture which would

meet the standard. The low sulfur fuel adds to the

heat input but not to the sulfur dioxide emissions

_and, thereby, has an overall fuel sulfur reduction

effect.

41 Fed. Reg. 51397.( November 22, 1976)

CONCLUSION

Power Plant C at the Lake Charles works has been

designed as an energy-efficient and economical supplier

of both electricity and steam to an industrial process

which needs both items. If deemed to apply, however, the

new source standards for fossil-fuel fired steam genera-

tors threaten to prevent use of the critical “waste heat”

component of the feed to the boiler segment of the power

plant. The complementary turbine-boiler aspects of the

power plant should be considered in the Agency’s consid-

eration of the request for determinations under 40 C.F.R.

§ 6.05.

Specifically, PPG asks

(1) that the Agency determine that PPG had em-

barked upon a continuous course of construction

at Power Plant U prior to August 17, 1971, such

that the new source standards for fossil-fuel

fired steam generators do not apply; or alterna-

tively,

(2) that the Agency determine that the regulations

for fossil-fuel fired steam generators do not ap-

ply to “waste heat” boilers such as those being

installed at Power Plant C.

In the event that the Agency determines that the “waste

heat” boilers at Power Plant C are subject to new source

standards for fossil-fuel fired steam generators, the

Agency should (1) conclude that the standards for nitro-

gen oxides cannot meaningfully be applied to the emis-

sions discharged by the “waste heat” boilers, and (2)

measure compliance with the standards for sulfur dioxide

against the total heat input to the boiler, as required,

while construing total heat input ‘: include the “waste

heat” charged to the boiler.

Respectfully submitted,

/s/ George P. Cheney, Jr.

GEORGE P. CHENEY, JR.

PPG Industries, Inc.

One Gateway Center

Pittsburgh, Pennsylvania 15222

(412) 434-2145

/s/ Charles F. Lettow

CHARLES F. LETTOW

Joseph Isenbergh

Cleary, Gottlieb, Steen &

Hamilton

1250 Connecticut Avenue, N.W.

Washington, D.C. 20036

April 12, 1977 (202) 223-2151

[Italicized material appears as handwritten

material in record]

-— —~

ENVIRONMENTAL PROTECTION AGENCY

Apr. 14, 1977

NSPS Compliance Testing

Original Signed by O. W. Lively, Jr. for

Howard G. Bergman

Director

Enforcement Division (6AE)

Ed Reich

Director, Stationary Sources

Enforcement Division (EN-341)

PPG Industries, Inc. at its Lake Charles, Louisiana, plant

is constructing two fossil fuel fired steam generators

which are part of a combined-cycle power plant. Natural

gas is burned in two gas turbines. The gases from the

two turbines are fed into the two steam generators. In

addition fuel oil is burned in the steam generators. The

heat input from each turbine is about 679 million Btu.

The fuel oil heat input to each steam generator is about

608 million Btu. The steam from the generators will be

used to drive one turbo-generator which furnishes steam

for the chemical complex.

PPG has requested that the compliance testing be done

while the steam generators are operating on fuel oil and

the turbine gases. PPG is planning to use fuel oil with a

sulfur content of 1% by weight. PPG estimates that if

required to conduct performance tests while burning

100% fuel oil the steam generators will exceed the sulfur

dioxide standard.

It is our understanding of prior determinations that the

proper performance testing in this case would be a single

test while burning 100% fuel oil. However, the change

to allow the use of wood residue in compliance testing

implies a change in approach; therefore, we request clari-

fication of the policy.

[Handwritten notations and routing and concurrence

notations omitted in printing]

(1) Gael Bergman

CLEARY, GOTTLIEB, STEEN & HAMILTON

1250 Connecticut Avenue, N.W.

Washington, D.C. 20036

(202) 228-2151

Cable: Cleargolaw Washi

KENNETH L. BACHMAN, JR.

CHARLES F. LETTOW

RICHARD deC. HINDS

RESIDENT PARTNERS

MATTHEW HALE

WASHINGTON COUNSEL

SARA D. SCHOTLAND

ERIC SCHWARTZ

JOHN S. MAGNEY

Twx 7108220108

GEORGE W. BALL

COUNSEL

NEW YORK OFFICE

ONE STATE STREET PLAZA

NEW YORK 10004

PARIS OFFICE

41, AVENUE de FRIEDLAND

75008 PARIS, FRANCE

BRUSSELS OFFICE

RUE de la LOI, 23

1040 BRUSSELS, BELGIUM

LONDON OFFICE

WINCHESTER HOUSE

77 LONDON WALL

LONDON EC2N IDA, ENGLAND

THOMAS C. HILL

JOSEPH ISENBERGH

April 29, 1977

Received EPA Region VI

1977 May—2 AM 10:11

Enforcement Division

Received May 2, 1977—9 A.M.

EPA Region VI—Legal

Mr. Howard Bergman

Director, Enforcement Division

Environmental Protection Agency

Region VI

1600 Patterson Street

Dallas, Texas 75201

Mr. Edward E. Reich

Director, Division of Stationary

Source Enforcement

Environmental Protection Agency

401 M Street, S.W.

Washington, D.C. 20460

Dear Messrs. Bergman and Reich:

On April 14, 1977, Mr. George P. Cheney, Jr., Assistant

Counsel, PPG Industries, Inc., filed a request for determi-

nations under 40 C.F.R. § 60.5 (the request is dated

April 18, 1977). This request pertains to “waste heat”

boilers at PPG’s Lake Charles works.

On April 20, 1977, in an address to a Joint Session

of Congress, President Carter spoke of measures “to en-

courage industries and utilities to expand what is called

“cogeneration’ projects, which capture the steam which is

now wasted from the electrical power production.” (White

House Press Release, at 5.) The “ ‘cogeneration’ projects”

of which President Carter spoke and what the PPG re-

quest denominates as “waste heat” boilers are the same

thing. A copy of President Carter’s address is attached.

Very truly yours,

/s/ Charles F. Lettow

CHARLES F, LETTOW

CFL/ce

Attachment

ee: George P. Cheney, Jr., Esq.

(w/attachment)

[Italicized material appears as handwritten

material in record]

For Immediate Release April 20, 1977

OFFICE OF THE WHITE HOUSE

PRESS SECRETARY

THE WHITE HOUSE

REMARKS OF THE PRESIDENT TO A

JOINT SESSION OF CONGRESS

THE CAPITOL

9:05 P.M. EST

Mr. President, Mr. Speaker, Members of the Congress,

and distinguished guests:

The last time we met as a group was exactly three

months ago today on Inauguration Day. We have had

a good beginning as partners in addressing our Nation’s

problems.

But in the months ahead, we must work together even

more closely, to deal with the greatest domestic challenge

that our Nation will face in our lifetime. We must act

now—together—to devise and to implement a compre-

hensive national energy plan to cope with a crisis that

otherwise could overwhelm us.

This cannot be an inspirational speech tonight. I don’t

expect much applause. It is a sober and a different pres-

entation. During the last three months, I have come to

realize very clearly why a comprehensive energy policy

has not already been evolved. It has been a thankless job,

but it is our job, and I believe that we have a fair,

well-balanced and effective plan to present to you. It can

lead to an even better life for the people of America.

The heart of our energy policy is—the heart of our

energy problem is that we have too much demand for

fuel that keeps going up too quickly, while production

goes down, and our primary means of solving this prob-

lem is to reduce waste and inefficiency.

Oil and natural gas make up about 75 percent of our

consumption in this country, but they only compromise

about 7 percent of our reserves. Our demand for oil has

been rising by more than 5 percent each year, but do-

mestic oil supplies have been dropping more than 6

percent.

Therefore, our imports have risen sharply—making us

more and more vulnerable if supplies are interrupted—

but early in the 1980’s even foreign oil will become in-

creasingly scarce. If it were possible for world demand

to continue rising during the next few years at the rate

of 5 percent a year, we could use up all the proven

reserves in the entire world by the end of the next decade.

Our trade deficits are growing. We imported more

than $35 billion worth of oil last year, and we will spend

much more than that this year. The time has come to

draw the line.

We could continue to ignore this problem—as many

have done in the past—but to do so would subject our

people to an impending catastrophy. That is why we

need a comprehensive national energy policy. Your ad-

vice has been an important influence as this plan has

taken shape. Many of its proposals will be built on the

legislative initiatives that you have taken in the Con-

gress in the last few years.

Two nights ago, I spoke to the American people about

the principles behind our plan and our specific goals

for 1985:

To reduce the annual growth rate in energy consump-

tion by more than 2 percent;

To reduce gasoline consumption by 10 percent;

To cut imports of foreign oil to less than 6 million

barrels a day, less than half the amount that we will

be importing if we do not conserve;

To establish a strategic petroleum reserve supply of

at least a billion barrels, which will meet our needs for

about 10 months;

To increase our coai production by more than two-

thirds, over 1 billion tons a year;

To insulate 90 percent of American homes and all

new buildings; and

To use solar energy in more than 214 million American

homes.

Now, I hope that the Congress will adopt these goals

by joint resolution as a demonstration of our mutual

commitment to achieve them.

Tonight I want to outline the specific steps by which

we can reach those goals. The proposals fall into these

central categories: First, conservation; second, produc-

tion; third, conversion; fourth, development; and, of

course, fairness or equity, which is a primary considera-

tion of all of our proposals.

We prefer to reach those goals through voluntary co-

operation with a minimum of coercion. In many cases,

we propose financial incentives, which will encourage

people to save energy and will harness the power of our

free economy to meet our needs.

But I must say to you that voluntary compliance will

not be enough—the problem is too large and the time is

too short. In a few cases, penalties and restrictions to

reduce waste are essential.

Our first goal is conservation. It is the cheapest, most

practical way to meet our energy needs and to reduce

our growing dependence on foreign supplies of oil. With

proper planning, economic growth, enhanced job oppor-

tunities and a higher quality of life can result even while

we eliminate the waste of energy.

The two areas where we waste most of our energy are

transportation and our heating and cooling systems.

Transportation consumes 26 percent of all our energy—

and as much as half of that is waste. In Europe the

average automobile weighs 2,700 pounds; in our country,

4,100 pounds.

Now, the Congress has already taken fuel efficiency

steps and set standards which will require new auto-

mobiles to have an average efficiency of miles per gallon

of 27.5 by 1985 instead of the 18 among new cars today.

The entire fleet of cars is only 14 miles per gallon at

this time.

To insure that this existing congressional mandate is

met, I am proposing first of all a graduated excise tax

on new gas guzzlers that do not meet Federal mileage

standards. This tax will start low and then rise each

year until 1985. In 1978, for instance, a tax of $180

will be levied on a car getting only 15 miles per gallon,

and for an 11-mile-per-gallon car the tax will be $450.

That is at the beginning. By 1985 the taxes on these

wasteful new cars with the same lew mileage, 15 miles

per gallon or 11 miles per gallon, will have risen to

$1,600 and $2,500.

All of the money collected by this tax on wasteful

automobiles will be returned to consumers through re-

bates on automobiles that are more efficient than the

mileage standards. We expect both better efficiency and

also more automobile production and sales under this

proposal. We will insure that American automobile work-

ers and their families do not bear an unfair share of

the burden.

And of course we will also work with our foreign

trading partners to see that they are treated fairly.

Now I want to discuss one of the most controversial

and most misunderstood parts of the energy proposal—

a standby tax on automobile gasoline. Gasoline consump-

tion represents half of our total oil usage. We simply

must save gasoline, and I believe that the American

people can meet this challenge. It is a matter of patri-

otism and a matter of commitment.

Between now and 1980 we expect gasoline consump-

tion to rise slightly above the present level. For the fol-

lowing five years, when we have the more efficient cars

on the road, we need to reduce consumption each year

to reach our targets for 1985.

I propose that we commit ourselves to these fair,

reasonable and necessary goals and at the same time

write into law a gasoline tax of an additional five cents

per gallon that will automatically take effect each year

that we fail to meet our annual targets in the previous

year. As an added incentive, if we miss one year, but

are back on the track the next year, then the additional

tax should come off. Now, if the American people re-

spond to this challenge, we can meet these targets, and

under these circumstances this gasoline tax will never

have to be imposed. I know and you know that it can be

done.

As with other taxes, we must minimize the adverse

effects on our economy—we must reward those who con-

serve, and penalize those who waste. Therefore, any pro-

ceeds from the tax—if it is triggered by excessive con-

sumption—should be returned to the general public in

an equitable manner.

I will also propose a variety of other measures to make

our transportation system more efficient.

One of the side effects of conserving gasoline, for in-

Stance, is that state governments who have a limited

amount of tax per gallon collect less money through

gasoline taxes. To reduce their hardships and to insure

adequate highway maintenance, we should compensate

states for this loss through the Highway Trust Fund.

The second major area where we can reduce waste is

in our homes and buildings. Some buildings waste half

the energy used for heating and cooling. From now on

we must make sure that new buildings are as efficient as

possible, and that old buildings are equipped—or “retro-

fitted” —with insulation and heating systems that dramat-

ically reduce the use of fuel.

The Federal Government should set an example. I will

issue an Executive Order establishing strict conservation

goals for both new and old Federal buildings, a 45 per-

cent increase in efficiency for new buildings and a 20

percent increase in efficiency for old buildings by 1985.

We also need incentives, though, for those who own

homes and businesses so that they will conserve. Those

who weatherize buildings to make them more efficient will

be eligible for a tax credit of 25 percent of the first $800

invested in conservation and 15 percent for the next

$1,400.

If homeowners prefer, they may take advantage of a

weatherization service which will be required from all

regulated utility companies to offer. The utilities would

arrange for contractors and provide reasonable financing

to the homeowners. The customer would pay for the im-

provements through small, regular additions to the

monthly utility bills. In many instances, these additional

charges would be almost entirely offset by lower energy

consumption brought about by energy savings.

$$ —$— Eee ~—

Other proposals for conservation in homes and build-

ings include: First, direct Federal help for low-income

residents; next, an additional 10 percent tax credit for

business investments and conservation; third, Federal

matching grants to non-profit schools and hospitals; and

public works money for weatherizing State and local gov-

ernment buildings.

While improving the efficiency of our businesses and

homes, we must also make electrical home appliances

more efficient. I propose legislation that would for the

first time impose stringent efficiency standards for house-

hold appliances by 1980.

We must also reform our utility rate structure. For

many years we have rewarded waste by offering the

cheapest rates to the largest users. It is difficult for

individual States to make such reforms because of the

intense competition in one State for new industry. The

only fair way is to adopt a set of principles to be applied

nationwide.

I am therefore proposing legislation which would re-

quire the following steps over the next two years:

First, phasing out promotional rates and other pricing

systems that make natur’ gas and electricity artificially

cheap for high-volume users and which do not accurately

reflect actual costs;

Next, offering users peak-load pricing techniques which

set higher charges during the day when demand is great

and lower charges during the day when the demand is

small.

We also need individual meters for each apartment in

in new buildings instead of one master meter. Tests

have shown that this will have 30 percent of the electrical

costs in the apartment buildings.

Plans have already been discussed for the TVA—the

whole system—to act as a model in implementing such

new programs which I have described to conserve energy.

One final step toward conservation is to encourage

industries and utilities to expand what is called “cogen-

eration” projects, which capture the steam which is now

wasted from the electrical power production. In Ger-

many, for instance, 29 percent of total energy comes

ah at's

from cogeneration. In this country, it was formerly

about 19 percent, but now it is only 4 percent in the

United States.

I propose a special 10 percent tax credit for invest-

ments in cogeneration.

Along with conservation, our second major strategy

is production and rational pricing. We can never increase

our produciion of oil and natural gas by enough to meet

our demand, but we must be sure that our pricing sys-

tem is sensible, that it discourages waste and encourages

exploration and new production.

One of the principles of our energy policy is that the

price of energy should reflect its true replacement cost,

as a means of bringing supply and demand into balance

over the long run. Realistic pricing is especially im-

portant for our scarcest fuels, oil and natural gas. How-

ever, proposals for immediate and total decontrol of do-

mestic oil and natural gas prices will be disastrous for

our economy and also for the American families. It

would not solve the long-range problems of dwindling

supplies. (Applause)

The price of newly discovered oil will be allowed to

rise, over a three-year period, to the 1977 world market

price, with allowances from then on for inflation. The

current return to producers for previously discovered oil,

that which already exists, would remain the same, except

for adjustments because of inflation.

Because fairness is an essential strategy of our energy

policy, we do not want to give producers windfall profits,

beyond the incentives that they do need for exploration

and production. (Applause) But we are simply mislead-

ing ourselves, if we do not recognize the replacement

costs of energy in our pricing system.

Therefore, I propose that we phase in a wellhead tax

on existing supplies of domestic oil, equal to the difference

between the present controlled price of oil and the world

price, and return that money collected by this tax to the

consumers and the workers of America.

We should also end the artificial distortions in natural

gas prices in different parts of the country which have

caused people in the producing States to pay exorbitant

prices, while creating shortages, unemployment, and eco-

nomic stagnation, particularly in the Northeast. We

must not permit energy shortages to divide or balkanize

our country.

We want to work with the Congress to give gas pro-

ducers an adequate incentive for exploration, working

carefully toward deregulation of newly discovered gas as

market conditions permit.

I propose now that the price limit of all new gas sold

anywhere in this country be set at the price of the

equivalent energy value of domestic crude oil, beginning

late next year, 1978. This proposal will apply both to

new gas and to expiring intrastate contracts. It would

not affect existing contracts that are presently in effect.

We must be sure that oil and natural gas are not

wasted by industries that could use coal. Our third

strategy will be therefore conversion from scarce fuels to

coal wherever possible.

Although coal now provides only 18 percent of our total

energy needs, it makes up 90 percent of our energy

reserves. Its production and use do create environ-

mental difficulties, but I believe that we can cope with

them through strict strip-mining and clean air standards.

To increase the use of coal by 400 million tons or

about 65 percent—we now use about 600 million tons—

in industry and utilities by 1985, I propose a sliding scale

tax, starting in 1979, on large industrial users of oil and

natural gas. Fertilizer manufacturers and so forth which

must use gas will be exempt from the tax. Utilities would

not be subject to the tax until 1983, because it will simply

take them longer to convert to coal.

I will also submit proposals for expanded research

and development in coal. We need to find better ways

to mine it safely and to burn it cleanly, and to use it

to produce other clean energy sources like liquefied and

gasified coal. (Applause.) We have already spent bil-

lions of dollars on research and development on nuclear

power, but very little on coal. Investments here can pay

rich dividends.

Even with this conversion effort, we still face a gap—

between the energy we need and the energy that we can

produce or import. Therefore, as a last resort we must

continue to use increasing amounts of nuclear energy.

We now have 63 nuclear power plants, producing about

three percent of our total energy, and we also have about

70 more nuclear power plants which are licensed for con-

struction. Domestic uranium supplies can support this

number of plants just by the most conservative estimate

for another 75 years at least. Effective conservation ef-

forts can minimize the shift toward nuclear power. There

is no need to enter the plutonium age by licensing or

building a fast breeder reactor such as the proposed

demonstration plant at Clinch River. (Applause. )

We must, however, increase our capacity to produce

enriched uranium fuels for light water nuclear power

plants, using the new centrifuge technology, which con-

sumes only about one-tenth the energy of existing gaseous

diffusion plants.

We must also reform the nuclear licensing procedures.

New plants should not be located near earthquake fault

zones or near population centers, safety standards should

be strengthened and enforced, designs standardized as

much as possible, and we need more adequate storage

for spent fuel supplies.

However, even with the most thorough safeguards, it

should not take 10 years to license a plant. It only takes

three years— (Applause) —it only takes three years to

license, design and build a plant in a country like J apan.

I propose that we establish reasonable, objective criteria

for licensing and the plants which are based on the stand-

ard design not require extensive design studies before the

license is granted.

Our fourth strategy is to develop permanent and reli-

able new energy sources. The most promising, of course,

is solar energy for which most of the technology is al-

ready available. Solar water heaters and solar space

heaters are ready now for commercialization. All they

need is some initiative to initiate the growth of a large

new market in ovr country.

Therefore, I am proposing a gradual decreasing tax

credit, to run from now through 1984, for those who

purchase approved solar heating equipment. Initially, it

would be 40 percent of the first $1,000 and 25 percent

of the next $6,400 invested to provide solar heating for

homes.

Increased production of geothermal energy can be in-

sured by providing the same tax incentives as exist

for gas and oil dri ing operations.

Our guiding principle, as we developed this plan, was

that above all it must be fair. None of our people must

make an unfair sacrifice. None should reap an unfair

benefit.

The desire for equity is reflected throughout our plan:

In the wellhead tax, which encourages conservation

but is returned to the public;

In a dollar-for-dollar refund of the wellhead tax as it

affects home heating oil, particularly in the Northeast ;

In reducing the unfairness of natural gas pricing;

In insuring that homes will have the oil and natural

gas they need, while industry turns toward the more

abundant coal that can also suit its needs;

In basing utility prices on true cost, so every user

pays a fair share;

In the automobile tax and rebate system, which re-

wards those who save our energy and penalize those who

waste it.

I propose one other step to insure proper balance in

our plan. We need more accurate information about the

supplies of energy, and about the companies which pro-

duce energy.

If we are asking sacrifices of ourselves, we need facts

that we can count on. We need an independent informa-

tion system that will give us reliable data about energy

reserves and production, emergency capabilities and fi-

nancial data from the energy producers.

I happen to believe in competition, and we don’t have

enough of it right now. (Applause) During this time of

increasing scarcity, competition among energy producers

and distributors must simply be guaranteed. I recom-

mend that individual accounting be required from energy

companies for production, refining, distribution and mar-

keting—separately for domestic and foreign operations.

Strict enforcement of the antitrust laws based on this

data may prevent the need for divestiture.

Profiteering through tax shelters should be prevented,

and independent drillers should have the same intangible

tax credits as the major corporations. (Applause)

The energy industry should not reap large unearned

profits. Increasing taxes—increasing prices on existing

inventories of oil should not result in windfall gains but

should be captured for the people of our country.

(Applause)

Now, we must make it clear from now on to everyone

that our people, through their Government, will now be

setting the energy policy for our country.

The New Department of Energy which the Congress

is already considering should be established without de-

lay. Continued fragmentation of Government authority

and responsibility of our energy program for this Nation

is both dangerous and unnecessary.

Two nights ago, I said that this difficult effort which

I have outlined would be the moral equivalent of war.

If successful, this effort will protect our jobs, it will pro-

tect our environment, it will protect our national inde-

pendence, it will protect our standard of living, and it

will also protect our future.

Our energy policy will be innovative, but it will be

fair and predictable. It will not be easy. It will demand

the best of us—our vision, our dedication, our courage,

and our sense of common purpose.

This is a carefully balanced program, depending for

its fairness on all its major component parts. It will be

a test of our basic political strength and ability.

But we have met challenges before, and our Nation has

been the stronger for it after the challenge was met.

That is the responsibility that we face—you in the Con-

gress, the members of my own Administration, and all

the people of our country. I am confident that together

we will succeed.

Thank you very much, and goodnight.

END

(At 9:33 p.m. EST)

Slain cm ns Sn reesei

[SEAL]

4. 5. 6.

UNITED STATES

ENVIRONMENTAL PROTECTION AGENCY

Washington, D.C. 20460

May 5, 1977

OFFICE OF ENFORCEMENT

MEMORANDUM

SUBJECT: Determination of Applicability to NSPS,

Subpart D

FROM: Director, (EN-341)

Division of Stationary Source Enforce-

ment

TO: Howard G. Bergman, Director

Enforcement Division (6AE)

This is in response to your request of April 14, 1977,

for a determination as to whether the contribution from

turbine exhaust gases may be added to a fossil fuel-fired

steam generator’s combustion effluent in determining com-

pliance with NSPS.

On April 17, 1972, the Office of Enforcement ruled, in

a similar case, that:

“The combustion turbine facility clearly is not sub-

ject to the present Federal regulations, and both the

combustion effluent and thermal energy from the tur-

bine may be discharged to the atmosphere without

being limited by the standards. There would be no

logic, then in penalizing an owner or operator who

chooses to use the exhaust heat, which otherwise

would be wasted, in a waste heat recovery steam

generator unit, with or without supplemental fuel.”

“Accordingly, we agree that both the heat input and

the emission contribution of the combustion turbine

will be excluded in determining whether the steam

generator plant complies with the standards. Com-

pliance will be judged only on the amount of heat

and combustion effluents added by supplemental fuel

used in the waste heat recovery steam generator,

which is the affected facility.”

Furthermore, we did not think we could justify the

inclusion of waste materials in determining compliance

with NSPS simply because the Agency, when it estab-

lished NSPS for fossil fuel-fired steam generators on De-

cember 23, 1971, had gathered data for only units which

burn 100 percent fossil fuel.

On November 22, 1976, EPA amended NSPS to permit

blending of wood residue and fossil fuel during the per-

formance tests. Several companies requested this amend-

ment to enable them to comply with the SO, standard by

burning a combination of wood residue and high sulfur

fossil fuels. However, this amendment applies only to

combinations of fossil fuel and food residue and to no

other combination of fossil fuel and waste material.

Therefore, any steam generator, which is burning a com-

bination of fossil fuel and gas turbine exhaust gases and

is subject to NSPS, is required to conduct the perform-

ance tests, as required by section 60.8, while burning

100% fossil fuel. This is to prevent interference from

the gas turbine exhaust gases which might adversely

affect emissions of NOx.

In accordance with this ruling, it will be necessary for

PPG either to obtain lower sulfur fuel oil or to combine

FGD with 1% fuel oil in order to comply with the SO,

standard.

If either PPG or the Regional Office is not satisfied

with the present regulation, we suggest that you express

your concerns to the Emissions Standards and Engineer-

ing Division in Durham, N.C.

If you have any further questions on this determina-

tion do not hesitate to contact Craig Cobert of my staff

at 755-2564.

/s/ Ed

EDWARD E. REICH

[Italicized material appears as handwritten

material in record]

Received

EPA Region VI

1977 May 11 PM 12:12

Enforcement Division

a es os

—

SI a nee areata eta iE,

ENVIRONMENTAL PROTECTION AGENCY

Jun 8 1977

CERTIFIED MAIL—

RETURN RECEIPT REQUESTED 37560130

Mr. George P. Cheney, Jr.

Assistant Counsel

PPG Industries, Inc.

One Gateway Center

Pittsburgh, Pennsylvania 15522

Dear Mr. Cheney:

We have reviewed your letter of April 13, 1977, and

the memoranda attached thereto, concerning the two

“waste heat” boilers of “Power Plant C” at PPG’s Lake

Charles, Louisiana plant. We considered your letter as

a request for reconsideration of the determination given

in our letter of October 5, 1976. After consulting with

the Division of Stationary Source Enforcement, we reaf-

firm our prior determination that the two “waste heat”

boilers are subject to provisions of Standards of Per-

formance for Fossil Fuel Fired Steam Generators, 40

CFR, Part 60, Subpart D.

As stated in our letter of December 22, 1976, to PPG,

the determination of when a facility (subject to a Stand-

ard of Performance) commenced construction depends

solely on the construction of that facility. Therefore, we

cannot favorably consider your request that the com-

mencement of construction of two “waste heat’ boilers

be tied to the construction of the entire Power Plant C.

The two boilers each have the capability of operating

at more than 250 million British thermal units per hour

heat input. For this reason the boilers come within the

scope of the Standards of Performance for fossil fuel

fired steam generating units even though the boilers can

burn a combination of fuel and turbine exhaust gases.

As to the question of how to determine compliance,

on April 17, 1972, the Office of Enforcement ruled, in a

similar case that:

The combustion turbine facility clearly is not sub-

ject to the present Federal regulations, and both the

combustion effluent and thermal energy from the

turbine may be discharged to the atmosphere with-

out being limited by the standards. There would be

no logic, then in penalizing an owner or operator

who chooses to use the exhaust heat, which other-

wise would be wasted, in a waste heat recovery

— generator unit, with or without supplemental

uel.

Accordingly, we agree that both the heat input and

the emission contribution of the combustion turbine

will be excluded in determining whether the steam

generator plant complies with the standards. Com-

pliance will be judged only on the amount of heat

and combustion effluents added by supplemental fuel

used in the waste heat recovery steam generator,

which is the affected facility.

Therefore, it is necessary for the performance tests to

be conducted on 100% fossil fuel.

If you have any additional questions on this matter,

please contact Mr. James Veach at (214) 749-2142.

Sincerely yours,

/3/ J. Paul Comola for

JOHN E. WHITE

Regional Administrator

bee: Larsen, DSSE

knudson (6S&A)

[Concurrence and routing notations and handwritten

notations omitted in printing]

Vernet

CLEARY, GOTTLIEB, STEEN & HAMILTON

1250 Connecticut Avenue, N.W.

Washington, D.C. 20036

(202) 228-2151

Cable: Cleargolaw Washington

Twx 7108220108

ROBERT C. BARNARD GEORGE W. BALL

FRED D. TURNAGE COUNSEL

R. MICHAEL DUNCAN

DONALD L. MORGAN

CHARLES D. MAHAFFIE, JR.

NEW YORK OFFICE

ONE STATE STREET PLAZA

DOUGLAS Ee KLinVER NEW YORK 10004

DANIEL B. SILVER

KENNETH L. BACHMAN, JR. PADIS OFIICE

CHARLES F. LETTOW

RICHARD deC. HINDS

RESIDENT PARTNERS

41, AVENUE de FRIEDLAND

76008 PARIS, FRANCE

MATTHEW HALE ely 4 LoL, =

WASHINGTON COUNSEL 1040 BRUSSELS, BELGIUM

SARA D. SCHOTLAND LONDON OFFICE

WINCHESTER HOUSE

77 LONDON WALL

LONDON EC2N IDA, ENGLAND

EUGENE M. GOOTT

THOMAS C. HILL

JOSEPH ISENBERGH

July 18, 1977

Mr. Edward E. Reich

Director, Division of Stationary Source Enforcement

Environmental Protection Agency

401 M Street, S. W.

Washington, D. C. 20460

Dear Mr. Reich:

By letter dated June 8, 1977, from Mr. John C. White,

Region VI Administrator, to Mr. George P. Cheney, Jr.

of PPG Industries, Inc., the Agency stated its decision

that two waste-heat boilers being constructed at PPG’s

Lake Charles, Louisiana works were subject to certain

provisions of the Standards of Performance for Fossil-

Fuel Fired Steam Generators, 40 C.F.R. Part 60, Sub-

part D. Mr. White’s letter emphasized that the waste-

heat boilers were capable of operation with 100 percent

fossil fuel without use of turbine exhaust gases, even

though the boilers normally would operate with a sub-

100

stantial waste-heat imput from the turbine exhaust gases.

The letter quotes from a prior determination made by the

Agency in 1972 on another waste-heat recovery system

(“D-1”), and it states that the performance tests on the

boilers should be conducted with 100 percent fossil fuel.

PPG will conduct the performance test in the boilers in

accordance with this requirement.

In connection with this matter, as PPG’s legal counsel,

we have discussed the operation of the boilers with mem-

bers of your staff. We also have reviewed an EPA-

prepared summary of “applicability determinations” re-

garding the Agency’s NSPS, and we have reviewed the

actual text of several of these determinations. As your

staff stated, these various determinations “clarify”

earlier determinations and the standards themselves.

Particularly because of the somewhat informal nature of

the reporting system for the prior precedents (the appli-

cability determinations), it seems desirable to set out our

understanding of these determinations and of related

developments within the Agency.

Mr. White’s letter of June 8, 1977, states that PPG is

to conduct performance tests with use of 100 percent

fossil fuel and without any waste-heat input. Applicabil-

ity Determination D-35 states: “The continuous monitor-

ing requirements only apply when 100% fossil fuel is

burned in any one or both boilers [which also were to

use “carbon black waste off-gas imput].” Applicability

Determination D-69 holds: “A waste heat recovery boiler

does not fit the definition of a fossil fuel fired steam

generator.”

It is our understanding confirmed by members of yo

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