Approval and Promulgation of Implementation Plan; Illinois

ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[IL 12-40-6888; FRL-5281-4]

Approval and Promulgation of Implementation Plan; Illinois

AGENCY: Environmental Protection Agency.

ACTION: Final rule.

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SUMMARY: On June 29, 1990, the United States Environmental Protection

Agency (USEPA) promulgated Federal stationary source Volatile Organic

Compound (VOC) control measures representing Reasonably Available

Control Technology (RACT) for emission sources located in six

northeastern Illinois (Chicago area) counties: Cook, DuPage, Kane,

Lake, McHenry and Will. USEPA also took final rulemaking action on

certain VOC RACT rules previously adopted and submitted by the State of

Illinois for inclusion in its State Implementation Plan (SIP). Included

in USEPA's rule was a requirement that paper coating facilities, such

as Riverside Laboratories' (Riverside) Kane County facility, be subject

to specified emission limits. On August 20, 1991, Riverside filed a

petition for reconsideration with USEPA in which it contended, based on

its economic situation, that the Federal rules were not RACT for its

facility. As a result of USEPA's reconsideration, it proposed revised

RACT requirements for Riverside's facility on December 16, 1993. In

this rule the USEPA is promulgating site-specific RACT limits that are

generally the same as those in the proposed rule. USEPA is also

withdrawing the June 23, 1992, stay.

EFFECTIVE DATE: This rule is effective September 20, 1995.

ADDRESSES: The docket for this action (Docket No. A-92-66), which

contains the public comments, is located for public inspection and

copying at the following addresses. A reasonable fee may be charged for

copying. We recommend that you contact Randolph O. Cano (312/886-6036)

before visiting the Chicago location and Rachel Romine (202/245-3639)

before visiting the Washington, DC location.

U.S. Environmental Protection Agency, Region 5, Regulation Development

Branch, Eighteenth Floor, Southeast, 77 West Jackson Street, Chicago,

Illinois 60604.

Office of Air and Radiation Docket and Information Center (Air Docket

6102), U.S. Environmental Protection Agency, Docket No. A-92-66, Room

M1500, Waterside Mall, 401 M Street. SW., Washington, DC 20460.

FOR FURTHER INFORMATION CONTACT: Steve Rosenthal, Regulation

Development Branch, U.S. Environmental Protection Agency, Region 5,

(312) 886-6052, at the Chicago address indicated above.

SUPPLEMENTARY INFORMATION:

I. Background

In an effort to comply with certain requirements under part D of

the Clean Air Act (Act), 42 U.S.C. 7401 et seq., the Illinois Pollution

Control Board (IPCB) promulgated certain (RACT I) VOC regulations

applicable to sources covered by USEPA's initial round of CTGs 1

(Group I) on July 12, 1979. This requirement is discussed in EPA's

April 4, 1979, General Preamble for Proposed Rulemaking (44 FR 20372).

Although these regulations addressed emissions from paper coating, they

did not explicitly deal with their applicability to operations where

paper is coated by the saturation process, such as at Riverside's

operations. As a result of this perceived ambiguity in its regulations,

the IPCB held, on January 5, 1989, that Riverside was not a paper

coater under the Illinois rules. Riverside Laboratories Inc. v. IEPA,

PCB 87-62.2

\1\ CTGs, which contain information on available air pollution

control techniques, their costs and effectiveness, provide

recommendations on what EPA calls the ``presumptive norm'' for RACT.

EPA has published three groups of CTGs (Group I, Group II and Group

III).

\2\ The Appellate Court of Illinois dismissed IEPA's appeal of

the IPCB Order on November 17, 1989. See Illinois v. Riverside

Laboratories, Inc., Case No. 2-89-0340.

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USEPA's position on the definition of papercoating is contained in

its November 24, 1987, Post-1987 Ozone and Carbon Monoxide Policy (52

FR 45108). Appendix D of this policy, ``Discrepancies and

Inconsistencies Found in Current SIPs,'' states that ``[p]aper and

fabric coating should cover saturation operations as well as strictly

coating operations.''

On May 26, 1988, USEPA notified then Governor James R. Thompson

that the Illinois SIP was substantially inadequate to achieve the ozone

National Ambient Air Quality Standards (NAAQS) in the Chicago and East

St. Louis areas. On June 17, 1988, a follow-up letter was sent to

Illinois which specifically identified its VOC SIP deficiencies. One of

these itemized deficiencies was that the definition of paper coating

needed to include ``saturation operations.''

On April 1, 1987, the State of Wisconsin filed a complaint in the

United States District Court for the Eastern District of Wisconsin

against USEPA and sought a judgment that USEPA, among other requested

actions, be required to promulgate revisions to the Illinois ozone SIP

for northeastern Illinois. Wisconsin v. Reilly, No. 87-C-0395, E.D.

Wis. On January 18, 1989, the District Court ordered USEPA to

promulgate an ozone implementation plan for northeastern Illinois

within 14 months of the date of that order. On September 22, 1989,

USEPA and the States of Illinois and Wisconsin signed a settlement

agreement in an attempt to substitute a more acceptable schedule for

promulgation of a plan for the control of ozone in the Chicago area. On

November 6, 1989, the District Court vacated its prior order and

ordered all further proceedings stayed, pending the performance of the

settlement agreement.

The settlement agreement called for the use of a more sophisticated

air quality model, allowed more time for USEPA to promulgate a Federal

Implementation Plan (FIP) using the

[[Page 43389]]

model 3 and requires interim emission reductions while the

modeling study is being performed. The interim emission reductions were

to be achieved through Federal promulgation of required Volatile

Organic Material (VOM) 4 RACT rules which remedy deficiencies in

Illinois' regulations.

\3\ USEPA is no longer required to promulgate a FIP using the

modeling results because the settlement agreement relieves USEPA of

such responsibility in the event that amendments to the Act

establish new deadlines for States to achieve attainment of the

ozone standard. The primary responsibility for developing any

remaining revisions to Illinois' SIP belongs to Illinois because the

Clean Air Act Amendments of 1990 establish such new deadlines.

\4\ The State of Illinois uses the term ``VOM'' in its

regulations. For the purposes of this RACT analysis, this term is

considered equivalent to USEPA's use of the term ``VOC.''

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On December 27, 1989 (54 FR 53080), USEPA proposed to disapprove a

number of Illinois rules for their failure to meet RACT requirements.

This included the definition of paper coating, which did not address

saturation operations. On that date, USEPA also proposed its own RACT

rules, including a definition of paper coating to include the

``application of coatings by impregnation and/or saturation.'' On June

29, 1990 (55 FR 26814), USEPA took final action to disapprove the

Illinois rules and promulgate the proposed Federal rules, including the

proposed definition of paper coating.

On August 30, 1990, Riverside filed a petition for review of

USEPA's June 29, 1990, rulemaking in the United States Court of Appeals

for the Seventh Circuit. Nine other parties filed petitions for review,

which were ultimately consolidated by the Court as Illinois

Environmental Regulatory Group (``IERG'') et al. v. Reilly, No. 90-

2778.

On August 20, 1991, Riverside filed a petition for reconsideration

with the Agency in which it contends that its economic status prevents

the Federal rules from being RACT for its facility. Riverside further

amended that petition on September 5, 1991. In support of its

contention, Riverside has submitted new information to USEPA concerning

its financial situation. Based on this information, USEPA agreed to

reconsider the RACT rules for Riverside.

On November 6, 1991, USEPA issued a 3-month stay pending

reconsideration of the applicable FIP rules for Riverside (and one

other petitioner). This stay was published on November 20, 1991 (56 FR

33712). On June 23, 1992 (57 FR 27935), USEPA published an extension of

the stay, but only if and as necessary to complete reconsideration of

the subject rules (including any appropriate regulatory action),

pursuant to USEPA's authority to revise the Federal rules in sections

110(c) and 301(a) of the Act, 42 U.S.C. 7410(c) and 7601(a).

II. Riverside's Operations

Riverside's Kane County facility produces thermoset laminating

paper products. These products, which include kitchen cabinets and

laminated furniture, are produced by saturating materials composed

mainly of cellulose fibers with a resin and solvent mixture in a dip

tank, i.e., a trough filled with resin.

Prior to 1989, Riverside operated four lines--one solvent-based

fabric coating line and three solvent-based polyester lines. These

lines emitted (and continue to emit) VOCs. The fabric coating line is

not a part of this action.

Since the purchase of Riverside by its current owner in 1986, the

company has investigated VOC compliance options, including

reformulation of noncompliant coatings and the installation of

pollution control equipment. Riverside contends that none of the

options investigated was technically feasible or economically

reasonable.

In December 1988, Riverside purchased a new water-based coating

technology intended (according to Riverside) to reduce plantwide

emissions while increasing production. This process, known as the

melamine resin process, is utilized on one additional line, and

produces no VOC emissions.

III. Proposed Rule

As a result of USEPA's decision to reconsider the Federal rules as

applicable to Riverside, USEPA conducted a review of economic

information submitted by Riverside. In addition to the information

provided in its August 20, 1991, petition for reconsideration, the

documentation which Riverside submitted to USEPA concerning its

financial situation included the following:

1. A March 27, 1991, table which contains Riverside's annual sales

figures for the years 1987 through 1990. This table is an attachment to

an April 8, 1991, letter from Riverside's Counsel to USEPA.

2. A July 15, 1991, letter from Riverside's Counsel to USEPA, and

enclosures to this letter titled ``Technical Justification for Phased-

RACT for Riverside Laboratories, Inc.'' and exhibit B to this Technical

Justification, which is an ``Annual Statistical Report for Calendar

1990'' by the Laminating Materials Association, Inc.

3. A September 11, 1991, letter from Riverside's Counsel to USEPA,

and Attachment C to this letter titled ``Riverside Laboratories, Inc.

Pounds/Batch and VOC Content of Coatings.''

4. An October 1, 1991, letter from Riverside's Counsel to USEPA,

and an attached July 12, 1990, table titled ``Riverside Laboratories

Compliance Plan (Polyester Production).''

5. A February 5, 1992, letter from K. J. Guillette, President of

Riverside, to Louise Gross, Assistant Regional Counsel, Office of

Regional Counsel, USEPA, Region 5.

USEPA reviewed these documents, copies of which are available in

the docket. USEPA's analysis is presented in a February 18, 1992,

memorandum from Tom Walton of USEPA's Cost and Economic Impact Section,

to Steve Rosenthal of USEPA's Region 5 Air and Radiation Division (a

copy of which is also available in the docket).

According to these documents, for Riverside to control its three

polyester lines, an annualized control cost would be incurred of at

least $283,000 per year. In addition, based upon the polyester and

melamine sales figures for 1987-90, Riverside would have had to

increase its polyester prices significantly to offset this annualized

control cost. The declining market in polyester sales and the

elasticity of that market, however, would impede Riverside's ability to

raise its prices by the full per unit cost of control without reducing

its sales. In addition, the information provided by Riverside supported

its assertion that it had limited, if any, ability to obtain capital

through conventional means in order to finance additional pollution

control equipment.

Based on this review, USEPA proposed revised RACT rules for

Riverside on December 16, 1993 (58 FR 65688). The proposed site-

specific RACT limitations for Riverside's three polyester lines, Lines

C, D, and E are as follows. First, Lines C, D, and E shall comply with

a VOC emission limitation of 2.9 pounds per gallon (lbs./gal.) no later

than December 31, 1996. Prior to December 31, 1996, Lines C, D, and E

shall comply with an emission limitation of 3.5 lbs./gal., with the

following exception: the VOC content of some specified solutions on

Line E may exceed the 3.5 lbs./gal. limitation so long as these

coatings do not exceed the 1990 maximum emission levels provided in the

rule. Finally, the proposed rule establishes annual limits or ``caps''

on polyester production. Riverside's July 15, 1991, letter documents

that the company will be able to achieve a VOC RACT level of 2.9 lbs./

gal., at least in part due to the

[[Page 43390]]

decline in the polyester market, by December 31, 1996.

IV. Response to Comments

In response to the proposal, comments were submitted by Riverside

on January 18, 1994. In addition, on January 5, 1994, Pioneer Plastics

Corporation (PPC) requested a hearing, which was held on April 6, 1994.

Comments were submitted at the hearing and after the hearing by PPC.

Additional comments were submitted after the hearing by Riverside.

A. Riverside January 18, 1994, Comments

(1) Riverside Comment

Riverside requests that the provision contained in proposed 40 CFR

52.741(e)(10)(iii), establishing a square feet-per-year production cap

on coating lines C, D, and E be clarified to include only production

involving coatings which are not controlled to the 2.9 pounds/gallon

limitation. Riverside believes that this interpretation is implicit in

the rule.

USEPA Response. USEPA disagrees with Riverside's ``clarification

request.'' The purpose of the production cap is to achieve interim VOC

emission reductions for the period (through the end of 1996) during

which Riverside is to receive less stringent emission limits than other

paper coaters. The cap is based on annual production limits, which are

a more enforceable surrogate for annual emissions. The July 12, 1990,

table upon which the interim production limits are based was supplied

by Riverside and is clearly based on total polyester production. If

only polyester production involving coatings greater than 2.9 pounds/

gallon coatings was considered for the cap, then total VOC emissions

could increase during this period. Furthermore, Riverside did not

present any alternative (to polyester production) limits that would

ensure interim emission reductions.

(2) Riverside Comment

Riverside does not believe that PPC has standing to request a

public hearing on this matter, since it is not an ``interested person''

under the statute.

USEPA Response. USEPA disagrees with Riverside's position that PPC

lacks standing to request a public hearing in this rulemaking. USEPA

has broad discretion in determining whether a party is an ``interested

person'' under section 307(d)(5)(ii) of the Act. USEPA believes that

PPC's position as a competitor of Riverside provides a sufficient basis

for its status as an ``interested person'' entitled to request a

hearing.

B. PPC April 6, 1994, and Riverside May 16, 1994, Comments

PPC presented both oral testimony and written comments on April 6,

1994. It also submitted comments clarifying an Appendix to its April 6,

1994, written comments on April 7, 1994, and additional comments on May

5, 1994 (which are discussed in a later section). PPC's comments are

intended to support its position that USEPA should reject Riverside's

Petition for Reconsideration and Riverside should not be given interim

relief from the paper coating limit in paragraph 52.741(e). Riverside

submitted a May 16, 1994, supplemental comment to respond to PPC's

April 6, 1994, comments. PPC's comments are followed by Riverside's

rebuttal to PPC's comments, which are in turn followed by USEPA's

response to PPC's comments.

(1) PPC Comment

PPC claims that the ``Background Document on Riverside Laboratories

Issues'' (Background Document), May 1990, should have been in the

rulemaking docket on December 16, 1993, and available to the public at

that time.

USEPA Response. The relevant portion of that document, the

annualized cost of add-on control for Riverside, was included in the

docket (in the February 18, 1992, Tom Walton memorandum). This was the

only information from the Background Document on which EPA relied in

developing its proposed action. Furthermore, the Background Document,

which established these costs, was available to any interested parties

as part of the docket for the Federal rules promulgated on June 29,

1990. USEPA referred to this rulemaking action and that docket in the

proposed rule. PPC admitted to receiving this document on March 24,

1994, or over seven weeks prior to the close of the public comment

period. Therefore, any harm allegedly caused by EPA's failure to

include the entire document in the docket as of the time the proposed

rule was published was cured because PPC had a longer period to review

this document than was originally provided in the NPR.

(2) PPC Comment

On November 20, 1991, USEPA announced a three-month stay pending

reconsideration of the Federal RACT rules as they apply to Riverside.

This stay expired on February 6, 1992. A stay beyond this date is in

violation of the Act.

USEPA Response. On November 20, 1991, USEPA proposed to extend the

3-month stay pending reconsideration, but only if and as long as

necessary to complete reconsideration of the rule (56 FR 58528). No

public comments were received on this proposal. On June 23, 1992 (57 FR

27935), USEPA published the final rule extending the stay. The time for

seeking judicial review of the stay expired on August 22, 1992. The

stay is not at issue in this current rulemaking action. Furthermore, as

stated in the proposed and final rulemaking actions, USEPA believes

that sections 110(c), 301(a) and 307(d)(1)(B) of the Act provide

sufficient statutory support for extending the stay, since the

extension was deemed necessary in order to complete action on the

reconsideration request.

(3) PPC Comment

The USEPA has failed to perform the required conformity analysis.

Section 176 of the Act requires all Federal actions to conform to an

applicable implementation plan. PPC disagrees with USEPA's position

that 40 CFR 93.153(c)(2)(iii) automatically exempts rulemaking actions

from the requirement to perform a conformity analysis.

USEPA Response. PPC is mistaken in its interpretation of the

requirements of section 176 of the Act and of the conformity

regulations in 40 CFR Part 93. The applicability portion of the

conformity regulations exempt ``Actions which would result in no

emissions increase or an increase in emissions that is clearly de

minimis.'' (40 CFR 93.153(c)(2)). ``Rulemaking and policy development

and issuance'' are specifically identified (40 CFR 93.153(c)(2)(iii))

as a category of activities that are exempt because they do not cause

an increase in emissions--which is different than not requiring as much

reductions as would be required by RACT. This rulemaking action is,

therefore, clearly exempt from the requirement to perform a conformity

analysis.

(4) PPC Comment

Riverside has failed to submit an acceptable RACT demonstration

necessary to justify a relaxed RACT emission limit. The USEPA has

established guidelines in its November 9, 1988, Easco proposed

rulemaking regarding what constitutes an acceptable RACT investigation.

USEPA outlined in Appendix A (53 FR 45287-88) to the Easco proposed

rulemaking action a

[[Page 43391]]

detailed discussion of what it considers to be an acceptable RACT

investigation. Riverside's RACT investigation fails to meet the

``reasonable efforts standard'' (in Appendix A) and, therefore, USEPA

should reject Riverside's Petition for Reconsideration.

Riverside Response. The procedure contained in Appendix A to the

Easco rulemaking does not apply to the Riverside rulemaking. USEPA was

not required to follow the procedure outlined in Appendix A in

determining whether Riverside should have a different RACT standard

than other paper coating operations. Even if one accepts PPC's premise,

PPC's conclusion does not follow. Riverside has demonstrated to USEPA

that it could qualify for an ``adjusted RACT'' standard in two ways.

First, Riverside has demonstrated that it could qualify for an

``adjusted RACT'' standard through the use of ``cross-line averaging''

and the ``plant-wide bubble'' concept. Second, Riverside has made

``reasonable efforts'' to demonstrate that an alternative RACT standard

is appropriate and has provided USEPA with all the economic and

technical information requested by USEPA. Contrary to PPC's assertions,

the actions listed in Appendix A are only examples of ``reasonable

efforts'' and are not the sole means by which a source can demonstrate

that an alternative RACT standard is appropriate.

USEPA Response. Appendix A in the Easco proposal presents a policy

(not regulatory) discussion of what constitutes an acceptable

investigation of the availability of complying low-solvent coatings. It

does not establish the full range of procedures for determining whether

alternative RACT is appropriate for a specific source. USEPA agrees

that similar facilities were using add-on control but determined that

use of such add-on controls was not economically feasible for Riverside

prior to the end of 1996.

According to PPC, there are three sources in the country that

produce polyester saturated papers (see pp. 12-13 of the April 6, 1994,

hearing Transcript). These companies are Riverside, PPC and Dyno. On

pp. 64-66 of the Hearing Transcript, PPC states that low-solvent

complying polyester resins do not exist. Therefore, Riverside's

contention that low VOC complying coatings are unavailable was

confirmed by PPC. Since that fact has been firmly established, the

extent to which Riverside documented that it performed the actions laid

out in Appendix A is of no consequence.

(5) PPC Comment

Riverside has failed to demonstrate that the ``presumptive norm''

is not economically feasible. PPC does not consider Riverside's

purchase of a new melamine paper coating line as a valid reason for not

purchasing pollution control equipment. Riverside's decision to enter a

new market cannot be used as an argument to obtain a RACT relaxation on

the polyester lines. Riverside had the capital in 1988 and could have

easily made the business decision to invest in pollution control

equipment for the polyester lines and comply with the RACT limitations.

This decision should not now be rewarded by the USEPA in the form of an

extension to comply with the presumptive norm. PPC also believes that

Riverside's economic condition has improved since 1991.

Riverside Comment. Riverside has demonstrated that the RACT

limitation applicable to other paper coating operations is not

economically feasible for its facility. Riverside submitted to USEPA

extensive economic information and completed an economic analysis

pursuant to USEPA's economic guidance. In a March 18, 1991, letter to

USEPA, Riverside provided USEPA with a revised economic analysis of its

operations pursuant to USEPA policy. This analysis demonstrated that a

significant impact would result if Riverside were required to install

pollution control equipment at its facility.

In 1989, Riverside was a small operation with approximately 25

employees and annual sales of approximately $5.5 million. Currently,

Riverside has approximately 31 employees, and in 1993, Riverside had

annual sales of approximately $6 million. Contrary to PPC's claims that

Riverside's economic condition has drastically improved, these figures

demonstrate that Riverside is in a similar position to its position in

1989.

USEPA Response. USEPA maintains that its economic analysis, which

was presented in a February 18, 1992, memorandum was an adequate basis

for allowing Riverside additional time to comply with the paper coating

limits in the FIP. This economic analysis is discussed in the December

16, 1993, proposed rule. Although purchase of a melamine line--and

subsequent melamine production--may not directly replace polyester

production, there appear to be undeniable benefits from shifting to a

zero emitting coating technology.

(6) PPC Comment

Riverside has failed to demonstrate that the proposed limit

(including the increasingly more stringent annual production caps) is

the most stringent limit that is technologically and economically

feasible.

Riverside Comment. As stated in its initial request for site-

specific relief, Riverside intends to continue to decrease its

polyester production and does not believe that a revision of the

polyester production cap is necessary. Riverside believes that the

proposed rule reflects the most stringent RACT limitation which is

currently achievable at its facility and that the proposed compliance

plan will guarantee that Riverside is in full compliance with RACT

requirements contained in the FIP by 1996.

USEPA Response. USEPA has only temporarily relaxed the control

requirements for Riverside and expects it to fully comply with the FIP

paper coating limits at the end of the extension that was proposed and

is being established by today's final action. USEPA disagrees with PPC

about the merit of cheaper, and less effective, control scenarios that

would reduce the feasibility of fully controlling VOC emissions from

all three paper coating lines at the end of the proposed extension. In

other words, mandatory partial controls in the interim would likely

interfere with subsequent full control of Riverside's three lines (in

the event that Riverside is unable to switch to low VOC coatings).

USEPA rejects PPC's scenario of shutting down two lines and

increasing production on a third line with add-on control. USEPA does

not consider scenarios that involve shutting down lines to be

reasonable approaches to establishing ``the most stringent limit that

is technologically and economically feasible''.

USEPA also disagrees with PPC about the increasingly more stringent

production caps that were proposed. These will ensure lower production,

and VOC emissions, than have occurred in the past.

(7) PPC Comment

The USEPA's economic analysis is too limited and no longer

accurate. USEPA should not rely on this economic analysis for two

reasons. First, the analysis is limited to the affordability of a RACT

``presumptive norm'' scenario. There is no analysis as to the economic

feasibility of less expensive control scenarios which would achieve VOC

control. Second, the analysis drafted in February of 1992 is now

outdated and

[[Page 43392]]

no longer accurately reflects the polyester market nor Riverside's

economic position in this market.

Riverside Comment. While Riverside's financial condition has

improved since 1989, PPC's claims that Riverside can now afford control

technology are based on an incomplete understanding of this rulemaking.

The purpose of this proposed rule was to allow Riverside to maintain

employment while taking steps to attain compliance with the general

RACT standards applicable to paper coating operations. Under the

proposed rule, it was anticipated that Riverside's financial condition

would improve as it increased melamine production. Eventually, due to

this improved financial condition, Riverside could either phase out its

polyester production lines or mechanically alter these lines to comply

with the paper coating limitation.

PPC claims that Riverside's share of the polyester market rose from

43 percent to 90 percent in the years 1989 through 1992. PPC's

production information is incorrect and--based on more accurate

reporting methods--Riverside's market share has dropped from 40 percent

to approximately 25 percent. In addition, there is no proof that

Riverside has used its extension to decrease its prices below the

market rate.

USEPA Response. First, USEPA restates its response (regarding the

lack of merit of partial controls) to the previous comment. In

addition, USEPA's economic analysis, which was based on an adequate

level of information on Riverside's financial status, established that

Riverside may not have been able to obtain capital through conventional

means and, even if it could obtain the capital, the inability to

completely recover the control cost might have made remaining in

business unattractive. USEPA proposed additional time for Riverside (to

comply with the FIP papercoating limits) to enable its financial

position to improve sufficiently for it to both remain in business and

afford to comply at the end of the proposed extension. In fact, USEPA

would not have proposed to grant additional time to Riverside had the

company not demonstrated that it would be able to comply at the end of

the proposed extension. It is, therefore, to be expected that

Riverside's financial position would be better now than in 1992.

However, there is insufficient basis for revising Riverside's final

compliance date.

C. PPC May 5, 1994 Comment

On April 16, 1992, USEPA published the General Preamble for future

proposed rulemaking for the implementation of Title I of the Act

Amendments of 1990. 57 FR 13498, April 16, 1992. The Appendices to the

General Preamble containing important supporting materials referenced

throughout the General Preamble were published in the Federal Register

a short time later. 57 FR 18070, April 28, 1992. PPC quotes from

Appendix C4 (57 FR 18074) as follows:

Economic feasibility rests very little on the ability of a

particular source to ``afford'' to reduce emissions to the level of

similar sources. Less efficient sources would be rewarded by having

to bear lower emission reduction costs if affordability were given

high consideration. Rather, economic feasibility for RACT purposes

is largely determined by evidence that other sources in a source

category have in fact applied the control technology in question.

PPC added that other similar facilities control their VOC emissions

through thermal incineration meeting the RACT presumptive norm

limitation. It also added that Riverside had not provided the USEPA

with the required supporting data--listed in Appendix C4--necessary for

an economic feasibility exemption petition.

USEPA Response. The Clean Air Act requires that implementation

plans for nonattainment areas must provide for, inter alia, the

implementation of RACT as expeditiously as practicable. See

Sec. 172(c)(1). USEPA has defined RACT as the lowest emission

limitation that a particular source is capable of meeting by the

application of control technology that its reasonably available

considering technological and economic feasibility. 44 FR 53762

(September 17, 1979) (emphasis added). In its June 29, 1990

promulgation of the Chicago FIP, USEPA reiterated this definition. It

also acknowledged that for certain sources the RACT ``presumptive

norm'' may not be appropriate, due to the source's particular economic

and/or technical circumstances. See 55 FR 26832.5

\5\ ``However, recommended controls are based on capabilities

and problems which are general to the industry; they do not take

into account the unique circumstances of each facility. * * * States

are urged to judge the feasibility of imposing the recommended

controls on particular sources, and adjust the controls accordingly.

* * *'' 55 FR 26832, fn 15.

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In the June 29, 1990 rulemaking, EPA also addressed a comment

submitted by Riverside that it was ``unfair and unreasonable to require

a small business such as Riverside, which has just made a substantial

investment in order to reduce its rate of emissions, to place add-on

controls on production lines which may be shut down in the near

future.'' 55 FR at 26843. In response, EPA stated its concern about the

economic impact that the FIP's regulatory requirements could have on

small businesses; and indicated its willingness to evaluate individual

cases if it were provided with sufficient data on each business seeking

to be exempted based on unreasonable economic impacts. EPA further

noted that Riverside had not provided such information, but could in

the future in connection with a site-specific SIP revision. 55 FR

26844.6 As a result, in conjunction with its petition for

reconsideration, Riverside has provided substantial documentation

concerning the economic feasibility of the FIP limits. See 58 FR at

65889-65890. Based upon this information, EPA determined in the

December 16, 1993 proposal that Riverside had made a sufficient

showing, and proposed to defer the final compliance date to December

31, 1996.

\6\ See, also, response to ``affordability'' comments submitted

by Viskase. 55 FR 26846.

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The paragraph quoted by PPC in the April 28, 1992 Appendices to the

General Preamble does not preclude the establishment of a site-specific

RACT determination based on economic (in)feasibility. Rather, it

recognizes that affordability can, in certain cases, be considered.

More importantly, the language following the paragraph excised by PPC

contains a discussion of the types of cost information which EPA would

use in addressing an affordability claim. 57 FR 18074. EPA's analysis

of the FIP's impact on Riverside was based on similar parameters,

including capital and annualized costs, sales figures and its debt/

asset ratio. See February 18, 1992 memorandum from Tom Walton of EPA's

Cost and Economic Impact Section (available in the docket, and

discussed in greater detail in the December 16, 1993 proposal).

For these reasons, EPA has concluded that the current FIP RACT

limits are not economically feasible for the Kane County facility at

this time; and that Riverside should have additional time--until

December 31, 1996--to comply.

V. Photochemical Reactivity of Acetone

USEPA requires that VOCs be regulated because of their contribution

to ground level (tropospheric) ozone. Accordingly, USEPA specifically

excludes any organic compounds from the definition of VOC which it has

determined to have negligible contribution to tropospheric ozone

formation. On September 30, 1994, (59 FR 49877)--in response to

petitions filed by three parties--USEPA proposed to add acetone to the

list of compounds that are excluded from the definition of

[[Page 43393]]

VOC. On June 16, 1995, USEPA took final action (60 FR 31633) on the

exclusion of acetone from the definition of VOC.

A variety of scientific materials were submitted to USEPA

supporting the assertion of several petitioners that acetone is of

negligible photochemical reactivity. The petitioners based their

request for the exclusion of acetone on a demonstration that the

photochemical reactivity of acetone is not appreciably different from

that of ethane, which is the most reactive compound on the current list

of compounds which are named in the definition of VOC as being of

negligible reactivity. Based on the scientific data presented in the

materials submitted by the petitioners, demonstrating that acetone is

not appreciably different from ethane in terms of photochemical

reactivity and is therefore negligibly reactive and should be excluded

from the definition of VOC, and after USEPA's review and consideration

of all comments received during the public comment period, USEPA added

acetone to the list of compounds that are excluded from the definition

of VOC (60 FR 31633). As stated in this final rule, ``The revised

definition will also apply in the Chicago ozone nonattainment area

pursuant to the 40 CFR 52.741(a)(3) definition of volatile organic

material or VOC compound.''

Mr. Ken Guilette, President of Riverside Laboratories, provided

information about Riverside's solvent use in a September 23, 1994,

letter to USEPA. In this letter, Mr. Guilette stated that, as of about

five years ago, ``all solvents except acetone were eliminated from the

formulations. Any purchased raw materials or additives which contain

VOCs use acetone exclusively.'' Mr. Guilette added that acetone is the

only VOC emitted by Riverside Laboratories.

V. Summary and Conclusions

This rule establishes revised RACT limitations for Riverside's Kane

County facility. Under this rule, Lines C, D and E will be required to

comply with a VOC limit of 2.9 lbs./gal. no later than December 3l,

l996. Prior to that time, interim emission limits are established for

both VOC emissions and polyester production. In addition, any paper

coatings which contain any VOC other than acetone are required to

comply with a VOC limit of 2.9 lbs./gal. upon publication of this rule

in the Federal Register. These requirements are based upon the

information contained in the notice of proposed rulemaking, USEPA's and

Riverside's responses to comments, USEPA's exclusion of acetone from

the definition of VOC, and Riverside's statement that it uses no VOCs

except acetone.

This action completes USEPA's reconsideration proceedings.

Consequently, USEPA is withdrawing the June 23, 1992, stay.

The Office of Management and Budget (OMB) has exempted this

regulatory action from Executive Order 12866 review.

Under the Regulatory Flexibility Act, 5 U.S.C. 600 et seq., USEPA

must prepare a regulatory flexibility analysis assessing the impact of

any proposed or final rule on small entities. 5 U.S.C. 603 and 604.

Alternatively, USEPA may certify that the rule will not have a

significant impact on a substantial number of small entities. Small

entities include small businesses, small not-for-profit enterprises,

and government entities with jurisdiction over populations of less than

50,000. This action involves only one source, Riverside Laboratories,

Inc. Therefore, USEPA certifies that this RACT promulgation does not

have a significant impact on a substantial number of small entities.

Under Sections 202, 203 and 205 of the Unfunded Mandates Reform Act

of 1995 (``Unfunded Mandates Act''), signed into law on March 22, 1995,

USEPA must undertake various actions in association with proposed or

final rules that include a Federal mandate that may result in estmated

costs of $100 million or more to the private sector, or to a State,

local, and/or tribal government(s) in the aggregrate.

These apply to a single private sector source located in the

Chicago ozone nonattainment area. To the extent that the rules being

promulgated by this action will impose any mandate upon this source,

such a mandate will not result in estimated annual costs of $100

million or more to that source.

Under section 307(b)(1) of the Act, petitions for judicial review

of this action must be filed in the United States Court of Appeals for

the appropriate circuit by October 20, 1995. Filing a petition for

reconsideration by the Administrator of this final rule does not affect

the finality of this rule for the purpose of judicial review nor does

it extend the time within which a petition for judicial review may be

filed, and shall not postpone the effectiveness of such rule or action.

This action may not be challenged later in proceedings to enforce its

requirements (see section 307(b)(2)).

List of Subjects in 40 CFR Part 52

Environmental protection, Air pollution control, Hydrocarbons,

Incorporation by reference, Intergovernmental relations, Ozone.

Dated: August 7, 1995.

Carol M. Browner,

Administrator.

For the reasons set out in the preamble, part 52, chapter I, title

40 0f the Code of Federal regulations is amended as follows:

PART 52--[AMENDED]

1. The authority citation for part 52 continues to read as follows:

Authority: 42 U.S.C. 7401-7671q.

Subpart O--Illinois

2. Section 52.741 is amended by adding new paragraph (e)(10) and

removing and reserving paragraph (z)(4) to read as follows:

Sec. 52.74l Control strategy: Ozone control measures for Cook, DuPage,

Kane, Lake, McHenry and Will Counties.

* * * * *

(e) * * *

(10) Until December 31, 1996, the control and recordkeeping

requirements in this paragraph apply to the three solvent-based

polyester paper coating lines (Lines C, D and E) at Riverside

Laboratories' Kane County, Illinois facility, instead of the control

requirements in paragraphs (e)(1) and (e)(2) of this section and the

recordkeeping requirements in paragraph (e)(6) of this section.

Compliance with this paragraph must be demonstrated through the

applicable coating analysis test methods and procedures specified in

paragraph (a)(4)(i) of this section. The requirements in paragraphs

(e)(1), (e)(2), and (e)(6) of this section shall apply to Riverside on

and after December 31, 1996.

(i) After December 21, 1995, no coatings shall at any time be

applied on Lines C, D or E which exceed 3.5 pounds (lbs.) volatile

organic material (VOM) per gallon of coating (minus water and any

compounds which are specifically exempted from the definition of VOM),

except as provided in paragraph (e)(10)(ii) of this section.

(ii) After December 21, 1995, the following specifically identified

coatings may exceed 3.5 lbs. VOM per gallon of coating (minus water and

any compounds which are specifically exempted from the definition of

VOM) only if they are applied on Line E and they do not exceed the

limits indicated below (minus water and any compounds which are

specifically exempted from the definition of VOM):

EXP-5027--4.34 lbs./gallon

[[Page 43394]]

PD 75 CLR--4.19 lbs./gallon

PD 75 BRN--4.18 lbs./gallon

SQZ-54--3.88 lbs./gallon

SPX-34GL--3.51 lbs./gallon

(iii) That portion of Riverside's polyester production which is

manufactured with the use of any VOC, from Lines C, D, and E, may not

exceed the following levels: 35 million square feet per year during and

after 1992, 29 million square feet per year during and after 1994, and

25 million square feet during 1996. Compliance with this requirement

shall be determined by adding the polyester production from any 12

consecutive months during and after the years indicated, through 1996.

That is, the polyester production for any 12 consecutive months

starting with January 1992 cannot exceed 35 million square feet; the

polyester production from any 12 consecutive months starting with

January 1994 cannot exceed 29 million square feet; and the polyester

production for the twelve months from January through December 1996

cannot exceed 25 million square feet. Only those square feet of

polyester whose production involves the use of VOC need to be

restricted by the production levels in this paragraph (e)(10)(iii) of

this section.

(iv) By December 21, 1995, Riverside shall certify to the

Administrator that its polyester coating operations will be in

compliance with paragraphs (e)(10)(i), (e)(10)(ii), and (e)(10)(iii) of

this section. Such certification shall include the following:

(A) The name and identification number of each coating as applied

on coating lines C, D and E.

(B) The weight of VOM per volume of each coating (minus water and

any compounds which are specifically exempted from the definition of

VOM) as applied on each coating line.

(v) The Administrator must be notified at least 10 days prior to

the use of any polyester coating not previously identified pursuant to

paragraph (e)(10)(iv) of this section. This notification must include

the information specified in paragraphs (e)(10)(iv)(A) and

(e)(10)(iv)(B) of this section.

(vi) On and after December 21, 1995, Riverside shall collect and

record all of the following information each day for each coating and

maintain the information at the facility for a period of 3 years:

(A) The name and identification number of each coating as applied.

(B) The weight of VOM per volume of each coating (minus water and

any compounds which are specifically exempted from the definition of

VOM) as applied each day.

(C) Any record showing a VOM content in excess of the emission

limits in paragraph (e)(10)(i) or (e)(10)(ii) of this section shall be

reported by sending a copy of such record to the Administrator within

30 days following its collection.

(D) Any VOM besides acetone used in any coating must be identified.

(vii) Starting with the first full month after December 21, 1995,

Riverside shall collect and record the figures on polyester production

(in square feet), for each month and maintain the information at the

facility for a period of at least 3 years.

(viii) Regardless of any other provision of paragraph (e)(10) of

this section, after August 21, 1995 no coating which contains any VOM

other than acetone shall at any time be applied on Line C, D, or E

which exceeds 2.9 lbs. VOM per gallon of coating (minus water and any

compounds which are specifically exempted from the definition of VOM).

* * * * *

[FR Doc. 95-20649 Filed 8-18-95; 8:45 am]

BILLING CODE 6560-50-P