Solicitation of Additional Pilot Projects Under Project XL; June 12, 1998

ENVIRONMENTAL PROTECTION AGENCY

[FRL-6113-5]

Solicitation of Additional Pilot Projects Under Project XL; June

12, 1998

AGENCY: Environmental Protection Agency (EPA).

ACTION: Notice; solicitation of additional pilot projects under project

XL to ``Reinvent'' Environmental Regulations and Policies.

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SUMMARY: Project XL, which stands for ``eXcellence and Leadership,'' is

a national pilot program that provides a unique opportunity to test

innovative ways of achieving better and more cost-effective public

health and environmental protection. Under Project XL, EPA offers

flexibility in its regulations, policies, procedures, processes and

guidance, as well as other benefits to encourage companies, communities

and other project sponsors to develop and test ``cleaner, cheaper and

smarter'' alternatives to the current system. As of May 1998, seven

pilot projects are being implemented and 20 more are in development.

Several project sponsors have already achieved a number of significant

benefits by participating in XL, including substantial cost savings,

increased operational flexibility, better stakeholder relationships,

increased environmental protection, and the ability to adapt processes

and products more quickly to changes in consumer demand.

One company, for example, in just the first year of its pilot

project, was able to consolidate a number of routine reports into two

per year and use alternative means to meet air pollution control

technology requirements. In addition, the company was able to achieve

substantial environmental improvements while saving nearly $176,000 in

operating costs. The company is also expecting to avoid $10 million in

future capital spending.

Another company--also just in its project's first year--has avoided

millions of dollars worth of production delays by eliminating 30-50

permit reviews while substantially increasing recycling, reducing solid

and hazardous

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waste, and applying stricter air pollution controls. For other

examples, please refer to Project XL's Web site at: www.epa.gov/

ProjectXL

In developing innovative proposals, project sponsors, regulators,

and stakeholders alike must be willing to make resource and time

commitments commensurate with designing and implementing new approaches

in a multi-stakeholder environment. For some projects, resource

commitments have been significant. However, as current project sponsors

are eager to attest, the reward lies in the outcome: superior

environmental results for the facility and the community, and

substantial operational and financial benefits for the project sponsor.

The Agency, its co-regulators, and other XL partners have been and are

continuing to work hard on streamlining the proposal development

process and reducing ``transaction costs.'' EPA has learned a great

deal from the first set of proposals that has gone through the process,

and as one of the lessons learned, urges potential project sponsors to

discuss their idea with Agency and State staff as early as possible.

Substantive and process issues can then be raised and addressed early

before substantial time and resource investments have been made.

This Federal Register document is organized into four sections

which have the following purpose: Section A--to clarify the role of

regulatory and policy flexibility in XL pilot projects; Section B--to

solicit additional ideas for experimental projects under XL (please

note that no funding is associated with this solicitation); Section C--

to stimulate ideas through a list of optional Project XL themes (note

that the suggested themes are entirely optional, and have the sole

purpose of conveying a sample of general areas of innovation EPA and

others in the regulated and environmental community are interested in

exploring under Project XL); and Section D--to describe key elements of

good XL proposals that increase EPA receptivity and make the review

process easier and faster.

EFFECTIVE DATE: June 23, 1998; an open solicitation with no set end

date; project sponsors may submit more than one proposal.

FOR FURTHER INFORMATION CONTACT:

(1) For XL projects for private and federal facilities, states, and

industrial sectors: Contact Christopher Knopes, Office of Reinvention

Programs, United States Environmental Protection Agency, Room 1029, 401

M Street SW, Mail Code 1802, Washington, DC 20460. The telephone number

for the Office is (202) 260-5754; the facsimile number is (202) 401-

6637.

(2) For XL projects for communities: Contact Kristina Heinemann,

Office of Sustainable Ecosystems and Communities, USEPA, 401 M Street

SW, Mail Code 2182, Washington, DC, 20460. The telephone number is

(202) 260-5355; the facsimile number is (202) 260-7875.

(3) Additional information on Project XL, including documents

referenced in this document, other EPA policy documents related to

Project XL, EPA regional contacts, application information, and

descriptions of existing XL projects and proposals, is available via

the Internet: For private and federal facilities, states, and sectors

at ``http://www.epa.gov/ProjectXL''; and for communities at http://

www.epa.gov/ProjectXLC. Faxed information is also available via an

automated fax-on-demand menu at (202) 260-8590 both for XL facilities

and communities.

SUPPLEMENTARY INFORMATION: President Clinton announced on March 16,

1995, a portfolio of reinvention initiatives to be implemented by the

Environmental Protection Agency as a part of its efforts to achieve

greater public health and environmental protection at a more reasonable

cost. Project XL is one of these reinvention priorities. Through a

series of site-specific agreements with project sponsors, EPA expects

to gather data and experiences that will help the Agency make

improvements in the current system of environmental protection. Project

XL conducts experiments in four areas: facilities, sectors, federal

facilities, and communities. State projects are also welcome.

XL projects directly benefit the local environment, participating

facilities--both public and private--and their communities. But the

benefits of Project XL extend beyond its participants, because EPA,

working with state environmental agencies, intends to incorporate

successful approaches into the current system of environmental

protection.

Much information on Project XL has been provided in previous

Federal Register documents. In Project XL's first Federal Register

document on May 23, 1995 (60 FR 27282), EPA described Project XL as a

program that offers a balanced set of benefits to the environment, the

regulated community and the public, and issued a general solicitation

for proposals. In that document, Project XL also defined the following

eight criteria by which proposals are selected for participation. The

criteria help evaluate whether the project can:

Produce superior environmental results;

Produce benefits such as cost savings, paperwork

reduction, and operational flexibility;

Garner stakeholder involvement and support;

Achieve innovation and multi-media pollution prevention;

Be transferable to other facilities, sectors, communities,

etc.;

Be feasible (technically and administratively);

Identify monitoring, reporting, accountability, and

evaluation methods; and

Avoid shifting the risk burden.

A successful project sponsor must also have a solid record of

compliance. For more detailed descriptions and definitions of these

criteria, please refer to the Federal Register documents of May 23,

1995 (60 FR 27282) and April 23, 1997 (62 FR19872).

Because community-based XL projects differ from projects sponsored

by other public or private-sector facilities and sectors, EPA addressed

the distinction in a separate Federal Register document on November 1,

1995 (60 FR 55569). In addition to the criteria listed above, the

November 1, 1995, Federal Register document included several unique

criteria for XL community-sponsored projects. XL for Communities

encourages projects that:

Build capacity for community participation;

Create economic opportunity; and

Promote community planning.

In another Federal Register document on September 11, 1996 (61 FR

47929), EPA supplemented the general solicitation with an invitation

for projects specifically aimed at creating innovative environmental

technologies. EPA retains a strong interest in proposals in this area.

An April 23, 1997, Federal Register document (62 FR 19872) more

clearly defined the criteria of superior environmental performance,

regulatory flexibility, and stakeholder involvement. In addition, the

document identified several more potential project themes that are

important to pursue in the context of testing innovations for 21st

century environmental protection. It also included revisions to the

process by which an idea becomes an XL project. Emphasis is placed on

pre-proposal planning and communication with stakeholders, on EPA's

improved internal management of project reviews, and on the need for a

close partnership with the states.

Since Project XL is continuously evolving, EPA is always open to

and

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welcomes comments on the various aspects of the program.

(A) The Role of Flexibility in XL Pilot Projects

Flexibility is an important and essential component of Project XL.

As an incentive to undertake an XL project, EPA is offering project

sponsors flexibility in regulations, policies, guidance, procedures and

processes, provided the flexibility does not violate statutory

requirements. Please note that regulatory flexibility is only one kind

of flexibility offered as a benefit. It can be granted through site-

specific rules that replace otherwise applicable requirements; existing

waiver mechanisms; alternative permits; and generally applicable

interpretive statements. Other tools may be identified on a case by

case basis as projects are developed. (For more details, please refer

to the Federal Register document of April 23, 1997 (62 FR 19872). Cost

savings and burden reduction are other examples of incentives and

benefits to a project sponsor. Communities may be particularly

interested in visibility and recognition for innovative ideas and

superior environmental performance that can result from participation

in Project XL. To date, XL has implemented projects that take advantage

of each type of flexibility and benefit offered.

In summary, XL is about testing new approaches which:

--May require regulatory flexibility or involve changes to policy,

guidance, procedures, or processes; and

--Test a different way of doing something, even if EPA already has

the authority to do so under the current system, but is not doing

it.

Whenever a project also meets the other applicable XL facility or

community decision criteria, EPA will aggressively offer the necessary

flexibility to produce superior environmental performance and promote

greater accountability to stakeholders.

(B) Solicitation of Additional Ideas for Pilot Projects

EPA encourages private and public sector facilities, sectors,

states, local governments, and communities to use this opportunity to

sponsor projects that can truly reinvent the way they conduct

environmental management. EPA is also interested in having stakeholders

not directly connected with regulated facilities come forward with XL

proposal ideas or co-sponsor projects with companies, local

governments, or other community organizations. Project XL offers

environmental leaders and average performers alike a tremendous

opportunity to think ``outside the box'' of our current system and to

find solutions to obstacles that limit environmental performance.

To stimulate new XL project ideas, EPA is publishing the optional

project themes listed in the next section. Because the total number of

projects is limited to 50, it is vital that each project test new ideas

with potential for wide application and broad environmental benefits.

EPA is promoting XL projects, both for facilities and communities,

which test the following:

Broader concepts, e.g. projects defined on a geographic

basis; projects involving a larger number of facilities; projects which

demonstrate Community-Based Environmental Protection (CBEP); projects

with a broader, more comprehensive scope. This does not exclude

smaller, more incremental, yet significant ideas;

New strategies, e.g., market-based incentives, paperwork

reduction, and environmental information and management systems;

New tools and technologies, e.g. performance measurement

tools and innovative environmental technologies; and

Approaches for dealing with new environmental challenges,

such as control of non-point sources, urban sprawl, and ecosystem

protection.

(C) List of Optional New Themes for XL Projects

The potential themes listed below are entirely optional and have

the sole purpose of conveying which general areas of innovation EPA and

others in the regulated and environmental community are interested in

exploring under Project XL. In category I below, EPA is suggesting a

number of fairly detailed, program-specific themes. In category II,

several ideas are listed that have been suggested by outside

organizations as worth testing under Project XL and are not explored at

the same level of detail. This should in no way discourage

consideration of these less developed themes.

In considering XL projects for selection, EPA makes a determination

of whether a proposal presents a new approach that EPA wants to test.

Proposals which address any of the themes in category I below have the

advantage that the Agency has already made that determination. While

these proposals must still meet the XL criteria for facilities or for

communities and go through a review and negotiation process like other

proposals, EPA is committed to streamlining the processing of proposals

submitted under any of the themes in category I.

It is important to emphasize again, that this list of themes in no

way precludes any other innovative ideas to be tested under Project XL

facilities and XL communities, as long as they meet the XL criteria,

have a solid compliance record, and can produce ``cleaner, cheaper, and

smarter solutions.''

The themes are organized into two broad categories, as summarized

below:

Category I: Themes Developed by EPA

Testing New Strategies

(in alphabetic order:)

1. Air: Existing Preconstruction Requirements for Major Sources of Air

Pollution in Attainment Areas

2. Air: U.S.-Mexico Border Emissions Trading

3. Environmental Management Systems (EMS)

4. Hazardous Waste: Reduction of Persistent, Bioaccumulative, and Toxic

(PBT) Chemicals in Hazardous Waste

5. Permitting

6. Superfund Cleanup: Innovative Contracting Approaches

7. Superfund Cleanup: Partnering with Industry to Enhance Completion of

Cleanup at Hazardous Waste Sites

8. Superfund Cleanup: Sustainable Reuse--``Recycling'' of Superfund

Sites

9. Sustainability of Natural Ecosystems

10. Water: Environmental Performance Measures for Waste Water

Pretreatment Programs

Developing New Tools and Technologies

(in alphabetic order)

11. Air: Continuous Monitoring Units for Radionuclides

12. Air: Leak Detection Technology

13. Air: Maximum Achievable Control Technology (MACT) for the Coke Oven

Push and Quench Process

14. Multi-media Pollution Prevention: Using the Pollution Prevention

(P2) Assessment Framework to Assess Manufacturing Processes

Category II: Themes Suggested by External Organizations

The first group of themes below include brief descriptions, while

the ideas in the second group were suggested merely as topics to be

explored: (in alphabetic order):

Administrative Paperwork Reduction

Community-Based Water Protection

Concentrated Animal Feeding Operations

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Hazardous Waste: Land Disposal Restrictions Regulations

Market-Based Approaches

Multi-facility and Multi-media Projects

Multi-media Pollution Prevention: Using ``Green Chemistry'' To

Make Manufacturing Processes ``Greener''

Other ideas suggested by external organizations that the Agency

considers worthy of further exploration:

Alternatives for reducing persistent toxins in the Great Lakes

Conservation and sustainable use of biodiversity and ecosystem

services

Energy conservation

Environmental consequences of urban sprawl

Global warming/climate change

Green spaces

Habitat preservation

Improved management of timberland

Watershed management

The full write-ups of the themes follow:

Category I: Themes Developed by EPA

Testing New Strategies

The themes below would test strategies that could help EPA move

toward a new system of environmental protection or make improvements in

the current system.

1. Air: Existing Preconstruction Requirements for Major Sources of Air

Pollution in Attainment Areas

Background: Currently, before beginning construction of a major new

air pollution source or a major modification at an existing source in

an attainment area, the source must undergo preconstruction review

pursuant to the applicable Prevention of Significant Deterioration

(PSD) program (see, e.g., 40 CFR 52.21). This review, which involves

permitting, technology requirements, and air quality monitoring and

analysis, is time and resource intensive. The monitoring responsibility

imposes a significant time restriction on when a source can begin

construction and, in turn, start operations. The impact of this delay

can be of particular concern in northern areas where the construction

season is limited.

Idea or approach to be tested: This idea is aimed at reducing the

preconstruction waiting period in exchange for corresponding benefits

to the environment. The premise is simple: to ascertain if the EPA and

permitting agencies can predict whether certain types of construction

will adversely impact air quality. This would allow for confirmatory

monitoring rather than monitoring in advance of construction. At this

time, EPA is only soliciting comment on the concept and determining the

level of interest in such a study. If EPA determines that there is

sufficient interest to proceed, it will issue a more detailed

description of the study and solicit requests from sources wishing to

participate. At that time, the Agency will discuss in more detail the

possible mechanisms for implementing the study, including whether a

rulemaking will be required. This XL concept is also discussed in more

detail in a memorandum available on the Internet. For further

information, please review the memorandum available on the XL homepage

at ``http://www.epa.gov/ProjectXL or at www.epa.gov/TTN/OARPG

Regulatory or other flexibility needed: By providing superior

benefits to the environment and agreeing to offset any adverse impacts

on air quality, a participant in the study could obtain a PSD permit

and begin construction prior to completing all air quality analysis,

which can take up to twelve months or more. This could occur as long as

the source: (1) satisfied all other applicable PSD permitting

requirements, including installation and operation of the best

available control technology (BACT), as agreed to by EPA and the

permitting authority; (2) agreed to purchase impact offsets if the

completed monitoring or modeling demonstrated a violation of the

National Ambient Air Quality Standards or exceedance of any applicable

increments; and (3) agreed to superior environmental performance that

would at a minimum include the installation and operation of continuous

emissions monitors. Although the source would still be required to

obtain the necessary monitoring data, it would not need to complete the

monitoring prior to the permit issuance and beginning of construction.

Thus, in exchange for undertaking some superior environmental

performance and agreeing to offset any prohibited impacts on air

quality through the purchase of offsets, a source could begin

construction and start operations up to a year earlier than currently

allowed under existing regulations. At this time, the Agency

anticipates applying at least the following restrictions to

participation: (1) the project would not extend to sources in

nonattainment areas, areas considered unclassifiable, or sources that

may require Class I impact analysis; (2) EPA would not select sources

that are in violation of the PSD program; (3) EPA believes that the

study should include only participants for which the relevant state and

EPA agree that the proposed construction is not likely to improperly

exceed available air quality increments or violate the National Ambient

Air Quality Standards.

For more information on this particular theme, please refer to

EPA's Project XL home page at http://www.epa.gov/ProjectXL.

2. Air: U.S.-Mexico Border Emissions Trading

Background: The border between the U.S. and Mexico runs through the

center of the sister cities El Paso and Ciudad Juarez. This common

airshed does not meet U.S. standards for ozone, PM and CO. The air

pollution problem will not be solved by the U.S. side alone--

significant reductions from Mexican sources will be required. Business,

environmental and community groups from both sides of the border have

been working together to develop solutions to the air pollution

problem, including market incentives.

Idea/approach that could be tested: U.S.-Mexico Border emissions

trading.

Technology that could be tested: Retrofit technologies (including

conversions to natural gas) for older vehicles and brick making

facilities.

Possible superior environmental performance: A source facing a

pollution control requirement in El Paso could probably achieve far

more reductions at lower cost and with greater environmental benefit to

El Paso by cleaning up sources in Mexico.

Regulatory or other flexibility needed: The trading requirements

that credits be surplus and enforceable would be the most difficult to

comply with in a U.S.-Mexico emissions trading program. EPA's revised

Economic Incentives Program will help with determination of surplus

credits. Mexican environmental law contains provisions for enforcement.

Work with our Mexican counterparts on enforcement is ongoing and would

be further benefited by an XL project. (Legal analysis is available)

Possible candidate applicants: Utility companies along the U.S.-

Mexico border.

3. Environmental Management Systems (EMS)

Background: EPA recently published a position statement on EMSs in

the Federal Register (63 FR 10294, March 12, 1998), in which it

encouraged the use of EMSs in general, and especially those that

address overall environmental performance and compliance. It also

encouraged the inclusion of stakeholders in EMS development. That

statement described a data-gathering effort that EPA is

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undertaking, along with a number of states, to evaluate the effect of

EMSs.

Today's solicitation of XL proposals in the EMS area is distinct

from the data-gathering effort described in the Federal Register

mentioned above, although a facility participating in that effort could

also participate in Project XL. As in all XL projects, EPA would expect

a commitment not simply to adopt an EMS, but to attain environmental

results better than those that would occur without the project. EPA

would be most interested in proposals that involve an exceptionally

high quality EMS that appears likely to provide substantial

environmental improvements.

Idea/approach to be tested: The purpose of this initiative would be

to test the use of comprehensive EMSs, including those based on the ISO

14001 International EMS Standard that can also meet the criteria for

Project XL, such as superior environmental results and stakeholder

involvement. Organizations or communities interested in these projects

would be asked to collect information and report on implementation of

the EMS in a number of key areas, like environmental performance for

both regulated and unregulated activities, compliance, pollution

prevention, EMS costs and benefits, and, where feasible, changes in

environmental conditions. The value of third-party certification of

EMSs and how certification relates to environmental performance may be

another area to test.

Regulatory or other flexibility needed: An EMS must achieve

compliance, but since XL projects are designed to test new approaches,

EPA would consider streamlining or otherwise modifying existing

regulatory requirements to achieve the superior environmental

performance objectives established through an EMS. Any proposals for

regulatory relief should be linked to exploring ways in which an EMS

may create opportunities for transferable improvements in the

regulatory system (e.g. by simplifying reporting or procedural

requirements).

Possible superior environmental performance: A project might, for

example, provide superior environmental results by committing to a

reduction in emissions that was expected to result from implementation

of the EMS.

4. Hazardous Waste: Reduction of Persistent, Bioaccumulative, and Toxic

(PBT) Chemicals in Hazardous Waste

Background: The Agency is committed to working with the States and

regulated community to reduce by the year 2005 50% of the most

persistent, bioaccumulative, and toxic chemicals contained in

industrial hazardous waste. Many of the approximately 25,000 companies

regulated as large quantity generators under the RCRA hazardous waste

laws have demonstrated that reduction of hazardous chemicals at the

source of production, using pollution prevention and recycling

technology, is in the long run more cost-effective than end-of-the-pipe

waste treatment and disposal methods, and that pollution prevention

rather than treatment and disposal provides more enhanced protection of

human health and the environment and relief from liability than

traditional end-of-pipe methods. EPA's Waste Minimization National Plan

lays out a strategy for a voluntary program that carries these efforts

to the 50% reduction goal by the year 2005.

Idea/approach that could be tested: EPA invites companies to

explore experiments in regulatory reinvention that promote pollution

prevention technologies over waste treatment and disposal technologies.

For example, a company may wish to pursue process redesign, equipment

modifications, or materials substitutions that would reduce PBT levels

in hazardous waste to an extent that would render wastes non-hazardous,

reduce the level of treatment needed, and/or reduce the amount of

treatment capacity needed--however, compliance requirements for other

regulations (e.g. permit modification schedules, effective dates for

Land Disposal Restrictions standards, trial burns for combustion units)

may impede or preclude achieving this objective.

Possible superior environmental performance: Earlier and more cost-

effective methods for achieving compliance and reducing risks posed by

hazardous waste.

Regulatory or other flexibility needed: We would be willing to

consider changes to existing policies, procedures, and other

requirements to make this possible.

Possible candidate applicants: ``Good citizen'' companies,

preferably those managing or influencing numerous sites, who have

provided leadership in cooperating with other companies and

facilitating issue resolution on their own.

5. Permitting

Background: EPA believes that innovative technologies and

alternative strategies are stepping stones to cleaner, cheaper, smarter

environmental management. Elements of some permit programs may,

however, impede use of innovative technologies or alternative pollution

prevention strategies. Efforts to streamline permitting may be adding

further complications by favoring ``routine'' permit actions that may

be faster and easier to process over permit actions that involve

innovative technologies or alternative strategies. The Agency is

looking for approaches that create and maintain enough flexibility

within the permitting process to support continued innovation. EPA has

already tested some approaches to permit flexibility for innovative

technologies, and some permit programs (e.g. the prevention of

significant deterioration program for air pollutants, 40 CFR 52.21 (v))

already have approval processes for alternative technologies. The

Agency is interested in testing additional techniques.

Idea/approach to be tested: EPA is interested in developing a menu

of potential permit conditions that could encourage innovation and

accommodate the possibility that an innovative or alternative strategy

may not perform as expected. Adequate safeguards would be built in to

fully protect human health and the environment, and stakeholders would

have a role in the decision making.

Possible superior environmental performance: Development of more

effective environmental technologies and strategies.

Regulatory or other flexibility needed: EPA would be willing to

consider options, such as compliance schedules providing enough time to

get new technologies up and running, offset by interim emissions

reductions or decreased emissions over the long term; a reasonable time

frame for reinstalling traditional controls if a new technology fails

to perform; provisions for reopening the permit; or alternative

strategies for sharing legal and financial risks. In return for a

superior environmental outcome, EPA would also be willing to consider

providing flexibility in areas such as consolidating or streamlining

certain administrative requirements, expediting the permitting process,

pre-approving certain process changes in lieu of permit modifications,

or experimenting with alternative monitoring strategies.

Possible candidate applicants: Public and private sector permitted

entities.

6. Superfund Cleanup: Innovative Contracting Approaches

Background: The FY 1998 House Appropriations Committee Report

expressed interest in using fixed-price, ``at-risk contracting'' for

the cleanup of an ``orphan'' Superfund site. (``Orphan sites'' are

sites where there are no viable

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responsible parties able to do necessary cleanup. EPA uses money from

the Superfund Trust Fund to clean up these sites.) The appropriations

language indicated a belief that this type of contracting, once tested,

holds potential for speeding up site cleanup and reducing related

costs.

Idea/approach that could be tested: A cleanup contractor would

submit to EPA a complete cost package based on completion of the Record

of Decision, which identifies the cleanup remedy selected for a

specific site. The contractor would guarantee a fixed price for

implementing the remedy selected by EPA and would absorb any cost

overruns.

To the extent permitted by law, EPA would select the cleanup

contractor at a pilot site based on the best combination of reasonable

cleanup costs and economic reuse of the site.

Possible superior environmental performance: Linking site cleanup

and site economic reuse assures that cleanup decisions provide maximum

protection of workers during cleanup and construction of the intended

reuse of the site, and for the public living in proximity to the site

and frequenting the site after development. Cleanup decisions are made

up-front, with input from the developer, the community, local

government, State government, as well as the Federal government.

Controlling costs at individual sites will allow EPA to eliminate risks

at more sites more quickly.

Regulatory or other flexibility needed: EPA would be willing to

consider addressing potential Superfund liability concerns regarding

waste existing at the site; participating in cleanup costs necessary

for reuse which are not inconsistent with the cleanup specified in the

Record of Decision, and modifying existing procurement procedures

consistent with such a test of an alternate procurement process.

Anticipated future change in EPA's approach to environmental

protection: The Congress, in the FY 1998 House Appropriations Committee

Report, appears to encourage EPA's investigation of more fixed-price

contracts in an effort to better contain cleanup costs, and the use of

``at-risk contracting'' where the government does not bear all the

risks associated with hazardous site remediation. Both these efforts

are intended to control the cost of Superfund cleanups and add an

additional contracting mechanism.

Possible candidate applicants: Cleanup contractors, real estate

developers, or a joint venture of several companies would be likely

candidates for this project. Eligible sites include those on the

National Priority List which lack viable responsible parties to

implement the necessary cleanup.

7. Superfund Cleanup: Partnering With Industry To Enhance Completion of

Cleanup at Hazardous Waste Sites

Background: With sufficient funding from Congress, the President

has committed to enhance protection of human health and the environment

by completing cleanup construction at a greatly accelerated rate. More

than two-thirds of Superfund sites are being cleaned up by potentially

responsible parties (PRPs). The program is faster, fairer, and more

efficient due in part to the administrative reforms instituted by the

Agency. EPA must continue to find better ways to identify and resolve

scientific and technical problems, legal and policy issues, or other

potential impediments that may delay the completion of construction at

National Priority List sites in order to expedite cleanups that protect

human health and the environment.

Idea/approach that could be tested: Taking care not to interfere

with ongoing enforcement, EPA would partner with companies and affected

states to develop new mechanisms for early resolution of potential

problems. EPA would also like to find ways to promote waste

minimization strategies and innovative cleanup technologies, examine

``batching of remedies'' for certain technologies to enable larger-

scale (and lower-priced) approaches to cleanup, and collaborate on

research related to hazardous waste cleanup methodologies to facilitate

cleanup.

Possible superior environmental performance: Earlier elimination of

threats to human health and the environment related to risks posed by

hazardous waste sites; ``smarter cleanup solutions'' which make

treatment cost-effective by optimizing remedy costs over multiple

sites, increasing the volume of waste to be treated, or blending waste

from multiple sites to make treatment operations more efficient; and

greater use of innovative and more effective cleanup technologies.

Regulatory or other flexibility needed: EPA would be willing to

consider changes to existing policies, procedures, and other

requirements to make this possible, being mindful of limitations posed

by existing settlements or orders for the performance of work.

Anticipated future change in EPA's approach to environmental

protection: More collaborative and efficient partnership with PRPs in

getting Superfund sites cleaned up in a timely manner. This may have

broader application to other environmental cleanup programs.

Possible candidate applicants: ``Good citizen'' companies,

preferably those managing or influencing numerous sites who have

provided leadership in cooperating with other companies and

facilitating issue resolution that have resulted in expeditious site

cleanup.

8. Superfund Cleanup: Sustainable Reuse-``Recycling'' of Superfund

Sites

Background: EPA has made substantial progress in speeding cleanup

at Superfund sites, but until cleaned-up sites are put back into

productive use, the nation will fail to reap the full benefits of the

Superfund program. Brownfields programs have successfully leveraged

resources from a wide range of stakeholders to clean up properties to

facilitate their redevelopment, but these programs have been limited to

sites that are not on the Superfund National Priority List.

Idea/approach that could be tested: EPA would consider offering

procedural flexibility and addressing potential Superfund liability to

facilitate redevelopment of cleaned-up Superfund National Priority List

sites. EPA would also be willing to offer technical expertise to

support local efforts, advice in involving the community, use of

helpful information resources, and coordination of access to other

agencies and resources.

Possible superior environmental performance: Converting cleaned-up,

but otherwise underused properties into valuable community assets. In

addition, incorporating redevelopment considerations into the cleanup

process can (1) lead to faster cleanups with consequent faster

environmental protection as parties take voluntary actions to achieve

the desired redevelopment use; (2) ensure binding agreements are in

place to monitor institutional controls that are necessary at sites

with waste left on-site, and (3) in many cases, result in environmental

enhancements that are associated with the reuse (e.g., cleanup of

nearby creeks to support fishing and recreation).

Regulatory or other flexibility needed: EPA would be willing to

consider changes to its existing policies, procedures, and guidance in

order to minimize or eliminate, where appropriate, barriers to the

redevelopment of cleaned-up Superfund National Priority List sites

posed by the potential applicability of the Federal Superfund statute

and regulations. EPA may also consider expediting the release of parts

of sites from the Superfund process if they would be returned to

productive use through redevelopment.

[[Page 34167]]

Cleanups consistent with the National Contingency Plan would still be

required.

Anticipated future change in EPA's approach to environmental

protection: Removal or minimization of barriers to returning cleaned-up

Superfund sites to productive use. This may have broader application to

other environmental cleanup programs.

Possible candidate applicants: Companies with expertise in

redeveloping properties, communities interested in regional

redevelopment opportunities or in combining multiple sites for economic

and environmental master plans, and Community Development Corporations.

9. Sustainability of Natural Ecosystems

Sustainability is a concept that describes the balance between

conservation of natural resources and economic development. The

following is a possible project scenario for testing an approach that

includes sustainability as a key feature.

Background: In an effort to address threats to ecosystem viability

arising from sedimentation and non-point source runoff caused by local

farming in river watersheds, EPA is interested in testing the idea of

stakeholders developing and implementing resource plans for watersheds.

Idea/approach that could be tested: Restoration approaches through

community planning and local involvement. A planning committee of local

farmers, landowners, and environmentalists could be formed. That

committee would develop a resource plan that identifies a vision for

the restoration and protection of the area that includes the type of

future conditions they want to obtain and target for restoration. They

also could identify issues of concern including ecological diversity,

erosion, open dumping, and ground and surface water quality, and seek

to address these issues in a manner compatible with a healthy economy

and high quality of life. Issues of concern could be identified through

committee discussions, watershed assessment field trips, and public

meetings. Representatives from conservation organizations and local

universities could also support the committee. Ultimately, this effort

could provide a model for partnerships between EPA and local

communities to solve long-term ecosystem problems.

Technology that could be tested: Community visioning and long-term

planning for preservation of local natural resources and a sustainable

economy that integrates economic, social, and environmental goals.

Planning that involves a diverse cross-section of the community.

Citizen monitoring of water quality and tracking of results.

Possible superior environmental performance: Preservation of an

ecosystem important to the local community both for quality of life and

economic reasons.

Regulatory or other flexibility needed: The community may desire

flexibility in an area being addressed by the project or in another

area where federal or state regulations, policies, guidance or Agency

standard operating procedure present obstacles to achieving better

environmental results.

Possible candidate applicants: Communities--local governments,

community organizations, regional planning associations, and any other

interested public or private entity. Projects addressing this theme

could also be implemented through regional or ecosystem-scale

initiatives like some of the National Estuary Projects that have

resulted in comprehensive conservation and management plans, and other

efforts such as the work in EPA's Atlanta Office (Region IV) with the

Southern Appalachia Project that could result in recommendations that

could be implemented through XL.

10. Water: Environmental Performance Measures for Waste Water

Pretreatment Programs

Background: The Pretreatment Program is a cooperative effort of

federal, state, and local regulatory environmental agencies established

to protect water quality. Generally, the Program is implemented by

Publicly-Owned Treatment Works with the objective of reducing the

amount of pollutants discharged by industry and other non-domestic

wastewater sources into municipal sewer systems, and thereby, reducing

the amount of pollutants released into the environment from wastewater

treatment plants.

Idea or approach that could be tested: EPA is interested in

exploring alternative environmental performance-based pretreatment

programs on a pilot basis. The intent of this effort is to investigate

ways of increasing the effectiveness of the pretreatment program and

thus obtain greater environmental benefit. Please refer to a separate

segment of this Federal Register Notice, in which the Agency announces

and describes its interest in exploring alternatives in this area in

much greater detail. It is also available from Patrick Bradley,

telephone number 202-260-6963.

Regulatory or other flexibility needed: EPA would be willing to

provide POTWs regulatory relief from certain programmatic requirements

(e.g., specific monitoring frequencies, specific control mechanism

issuance requirements, etc.), so that they could implement alternative

programs that would increase the environmental benefits. EPA is willing

to consider various concepts of what an adequate environmental

performance-based program might be, what POTWs would qualify for

administering such a program, and what existing pretreatment program

requirements would not be applicable to approved pilot programs.

Developing New Tools and Technologies

The themes listed below suggest ways that could help EPA improve

current monitoring, measurement, and assessment tools and technologies.

1. Air: Continuous Monitoring Units for Radionuclides

Background: DOE is planning to use mixed waste incinerators to

process high BTU content waste. Process pollution control equipment,

when operating properly, captures most of the radionuclides. To

determine if there are any releases, a filter is examined and tested on

a daily or weekly basis to gather data. Many gases (CO, NOX,

SOX) are monitored real or near real time, but radionuclides

are monitored periodically. Thus, incinerators may potentially expose

individuals to radionuclides during the time elapsed between periodic

testing and actions taken to shut down the incinerator.

Idea/approach that could be tested: Continuous monitoring units for

radionuclides. On time reporting of this information to the public

could be another dimension of this project.

Technology that could be tested: A real or near real time monitor

for radionuclides.

Possible superior environmental performance: A rugged and reliable

unit which provides continuous real time monitoring data would allow

almost simultaneous shut down of the incinerator if radionuclides are

emitted. Thus, potential exposure to radionuclides should be reduced.

Regulatory or other flexibility needed: Radionuclide emissions from

DOE facilities are regulated under 40 CFR part 61, subpart H

(radionuclides NESHAPs). Subpart H allows use of environmental

measurements to demonstrate compliance under certain conditions and

with prior EPA approval. The project would require EPA flexibility in

granting prior

[[Page 34168]]

approval to test the units and possibly relaxing the criteria for

approval.

12. Air: Leak Detection Technology

Background: The chemical and petroleum refinery industries have to

deal with a large number of potential emission points and a personnel-

intensive approach to monitoring them under the Leak Detection and

Repair provisions of current air rules (CAAA section 111 and 112). The

number of components requiring emissions monitoring at refineries can

range from 60,000 at small facilities to 500,000 at large facilities.

While these provisions were developed via regulatory negotiation with

industry and environmentalists, there may be alternative approaches to

reduce emissions from these sources that are less burdensome and

potentially more productive.

Idea/approach that could be tested: The Consolidated Air Rule and

the Petroleum Refinery subcommittee of EPA's Common Sense Initiative

are both exploring the question of whether industry can demonstrate

that certain valves, pumps or seals do not leak as much as others and

thereby reduce the frequency that they must be monitored. However,

there will always be some amount of monitoring required.

Independent studies conducted by the Petroleum Refining Common

Sense Initiative (CSI) Subcommittee and the American Petroleum

Institute (API) suggest that the incidence of leaks in the population

of refinery equipment is ``essentially random in well-controlled

plants'' and that chronic leakers of regulatory significance (>10,000

ppm) are difficult, if not impossible to identify.

This XL project would explore whether there are other monitoring

technologies that may be equally or more effective at identifying leaks

than EPA's rules require, but that may be cheaper and easier to use for

industry. Another aspect of this project may be to verify the CSI and

API studies by exploring how much a component may leak and use that

information to target the big leakers.

Technology that could be tested: There are new advances in leak

detection that could be explored for industry use. One leak detection

technology currently under development is a periodically-poled lithium

niobate (PPLN) laser imaging system which, if proven effective, could

be used to identify Volatile Organic Compound emissions from groups of

components. Based on information provided by the Petroleum CSI

Subcommittee, the CSI Council has recommended that the Agency prepare

to engage in a process to test, verify, and approve this new leak

detection technology that might be proposed as an alternative to

current monitoring requirements. Subcommittee members informed the

Council that the U.S. Department of Energy has pledged financial

support for the development of a PPLN laser imaging system prototype.

Industry, through API, has pledged in-kind services in terms of

facilities and personnel to field test the technology. The CSI

Subcommittee plans to fund an evaluation of the pilot test.

Possible superior environmental performance: If leaking components

can be more effectively identified, overall emissions to the

environment can be reduced. At the same time, EPA could potentially

reduce burden and cost to industry.

Regulatory or other flexibility needed: EPA would need to allow

participating plants the flexibility to use monitoring approaches other

than the prescribed rule approach.

Possible candidate applicants: Any of the Consolidated Air Rule

participants in the chemical industry, American Petroleum Institute, or

the National Petroleum Refiners Association may be interested.

13. Air: Maximum Achievable Control Technology (MACT) for the Coke Oven

Push and Quench Process

Background: The coke oven push and quench process is a listed

source category to be regulated under Title III. EPA is required to

promulgate a final Maximum Achievable Control Technology (MACT)

standard by November 2000. The push and quench operations deal with the

removal and cooling of coke from coke ovens. Once the coal to coke

conversion is complete inside of the coking ovens, the hot coke is

pushed by a ram from the oven into a quenching car. The quenching car

of hot coke is moved by rail to the quench tower, where several

thousand gallons of water are used to cool the coke. The push and

quench process at coke oven facilities is a very large source of

fugitive dust (PM10, PM2.5) organic Hazardous Air

Pollutants (HAPs) and waste water. Conventional control technologies

(i.e., localized hooding and control) are only marginally successful

due to technical and economical limitations. As such, the MACT for this

significant source category, if based on conventional technologies,

will result in minimal benefits.

Technology that could be tested: The Kress Indirect Dry Cooling

(KIDC) System replaces the quenching car with a box that is slightly

wider and deeper than the coke charge. A carrier positions the box

flush against the coke oven where the box can receive the push. After

the push is complete and the pusher ram is withdrawn, the KIDC box's

guillotine door closes. Fugitive dust is nearly eliminated from the

push operation. VOCs which continue to offgass from the coke are

controlled by a flare at the rear of the box. Following the push, the

carrier moves the box to the quench station, and onto a cooling rack.

Cooling water runs over the box to cool the coke indirectly. In

addition to the environmental benefits, the KIDC system is intended to

improve coke quality due to the indirect cooling.

In 1990, EPA/ORD began a demonstration of KIDC system at the

Bethlehem Steel Coke Plant at Sparrows Point, Maryland. Unfortunately,

the demonstration was interrupted and not completed for reasons

unrelated to the KIDC system. However, preliminary data received from

the demonstration were promising. Based on visible emission

observations, emissions of particulate from the pushing operations were

reduced by roughly 75% while emissions during quenching were virtually

eliminated.

Possible superior environmental performance: The KIDC system has

the potential to greatly reduce the air and water pollution resulting

from the coke oven push and quench processes.

Emissions, based on AP-42 emission factors and the preliminary data

for KIDC, are as follows:

------------------------------------------------------------------------

TSP Conventional KIDC

------------------------------------------------------------------------

Coke Pushing.................... 2.0 lb/ton........ 0.5 lb/ton.

Quenching....................... 1.0 lb/ton........ 0.0 lb/ton.

------------------------------------------------------------------------

------------------------------------------------------------------------

VOC Conventional KIDC

------------------------------------------------------------------------

Coke Pushing.................... 0.2 lb/ton........ 0.15 lb/ton.

Quenching....................... Unknown........... 0.00 lb/ton.

------------------------------------------------------------------------

Regulatory or other flexibility needed: Substantial capital and

time would be required to modify an existing facility and install the

demonstration equipment. There are no guarantees that the equipment

will work as planned (although the design indicates that it would

likely be superior to the technology upon which the MACT standard would

be based) or that the demonstration would be complete by the MACT

standard compliance date. For these reasons, the facility would need

some guarantee of relief from the MACT standard for a defined period of

time, in order to protect the facility's capital investment in the

demonstration project.

[[Page 34169]]

Possible candidate applicants: Other integrated steel mills.

14. Multi-media Pollution Prevention: Using the Pollution Prevention

(P2) Assessment Framework to Assess Manufacturing Processes

Background: When designing an industrial process and producing new

chemicals (in the form of new products or waste), industry often does

not have any guidance from EPA to help them assess the potential

regulatory burden associated with products of a new process. The

Pollution Prevention Assessment Framework (P2 Assessment Framework),

developed by EPA, packages a number of hazard, exposure and risk

assessment methodologies that EPA uses in evaluating chemicals for

which there are little or no data. The goal of the P2 Assessment

Framework is to provide industry with methodologies that can identify

problematic chemicals early in the design or manufacturing stage, or to

assess the risk of chemical options for a specific purpose. The P2

Assessment Framework can aid industry in fostering pollution prevention

as well as saving time and money, as demonstrated by a pilot project

with the Eastman Kodak Company. Kodak recently issued a press release

describing the business benefits of using EPA's P2 Assessment

Framework. Kodak's press release indicated that the P2 Framework ``. .

. saved Kodak tens of thousands of dollars in development costs . . .

with each one tested.'' EPA is interested in doing further testing of

the tool in addition to the Kodak pilot.

Idea or approach to be tested: The P2 Assessment Framework can help

industry practice cost-effective pollution prevention by reducing the

regulatory burden associated with the production or use of new or

existing high-risk chemicals. A wide array of chemicals can be screened

quickly, thereby saving time and money by identifying potentially

problematic chemicals early in the process, and finding more benign

substitutes for them.

Possible superior environmental performance: Prevention of the

production of potentially more hazardous chemicals (either as product

or waste) from a production facility.

Regulatory or other flexibility needed: We would consider changes

to existing policies, procedures, or permitting requirements to make

this possible.

Possible candidate applicants: Any company developing new chemical

substances, reformulating existing products or processes, or choosing

among competing chemical substances for product development and

manufacturing.

Category II: Themes Suggested by External Organizations

To stimulate additional ideas, EPA is including some themes in this

Notice that were suggested as good ideas for Project XL pilots by

representatives of public and private sector organizations during

numerous meetings around the country. These ideas are briefly described

below and, based on Agency review, are considered worthy of further

exploration.

Administrative Paperwork Reduction

Record-keeping and reporting-burden reductions could be achieved

through projects that provide EPA with the same information but in

formats and ways that are more useful to EPA and less burdensome to the

regulated entity. For example, EPA might agree to drop requirements for

hard copy reporting of data in exchange for electronic submission of

data. Superior environmental performance could be achieved, for

example, by reinvesting cost savings in other areas that produce such

results.

Community-Based Water Protection

Municipalities are required to implement multiple water protection

programs, most notably the operation of publicly-owned treatment works,

the storm water program and pretreatment programs, and in some cases

combined sewer overflow programs. In many cases, these programs are

implemented independently with little or no coordination or

communication between them. In some communities, non-point sources that

are not addressed by these programs may pose significant threats to

water quality. The suggestion is to explore possible ways of

integrating multiple water protection programs.

Concentrated Animal Feeding Operations

Nationally there are approximately 7,000 concentrated animal

feeding operations (CAFOs). Under the Clean Water Act, CAFOs are

``point sources'' and subject to the National Pollutant Discharge

Elimination System (NPDES) permitting requirements. The largest

operations are also subject to the feedlots requirements under the

Effluent Limitation Guidelines. The current technology standard

specifies ``no discharge.'' The applicable NPDES and Effluent Guideline

regulations have not kept pace with technology improvements nor the

changing nature of the animal agriculture industry. Potential projects

could test innovative approaches, such as watershed permits, or

innovative technologies for the management of animal manure.

Hazardous Waste: Land Disposal Restrictions Regulations

Industry has often suggested that if they had more time to come

into compliance with new land disposal restriction regulations that

they would be able to make significant steps towards waste

minimization, potentially even eliminating a particular waste stream.

Companies may be able to develop approaches that allow complete

elimination of a waste stream, specifically under the technology-based

treatment standards that hazardous waste must meet before being placed

in or on the land.

Market-Based Approaches

Economic and market incentives could be developed for better

environmental performance, including exploring financial instruments;

the insurance industry; lenders, (e.g. for the redevelopment of

brownfields); ways to combine sources of funding to help pay for the

development and testing of new technologies; and ways to provide

economic incentives for environmentally beneficial behavior, e.g.

credits for using solar power.

Multi-facility and Multi-media Projects

Projects might test strategies for large companies that have many

site locations or manufacturing and supplier chains; or strategies for

related industries in different geographic locations, such as hazardous

waste disposal and treatment companies; or auto companies, body shops,

and paint shops. An example might be: Establishing a network of

preconstruction air monitoring for a group of facilities giving relief

from individual monitoring requirements. Even though these types of

projects are very broad and may pose considerable management and

implementation challenges, EPA is eager to entertain ideas along these

lines as opportunities for truly innovative environmental protection

approaches.

Multi-media Pollution Prevention: Using ``Green Chemistry'' To Make

Manufacturing Processes ``Greener'

The Green Chemistry program is designed to foster chemical methods

that reduce or eliminate the use or generation of toxic substances

during the design, manufacturing, and use of chemical products and

processes. A part of the Green Chemistry program promotes partnership

with industry in developing green chemistry

[[Page 34170]]

technologies. A possible XL project may involve the use of green

chemistry that would make a production process cleaner, and reduce the

regulatory burden that would be required of the production facility.

Other Ideas Suggested by External Organizations that the Agency

Considers Worthy of Further Exploration:

These ideas were proposed merely as topics that would need to be

fleshed out. (in alphabetic order)

Alternatives for reducing persistent toxins in the Great Lakes

Conservation and sustainable use of biodiversity and ecosystem

services (for example, pollination, natural pest control, natural water

flow management, and natural filtering and breakdown processes of

pollutants)

Energy conservation

Environmental consequences of urban sprawl

Global warming/climate change

Green spaces

Habitat preservation

Improved management of timberland

Watershed management

(D) Key Elements of Good XL Proposals

A successful project sponsor must have a solid record of compliance

and demonstrate that the proposed XL project meets the eight XL

criteria, as discussed in previous Federal Register documents and

summarized in the ``Supplementary Information'' section in the

beginning of this document. The review process will be easier and EPA,

States, and other stakeholders will be more receptive to proposals if

they:

Clearly lay out what is innovative about the approach to

be tested and the potential benefits of applying the approach to other

facilities, sectors, or communities, i.e. its transferability;

Clearly identify the area(s) of flexibility needed in EPA

regulations, policies, and/or procedures;

Be as clear as possible about the benefits the project

sponsor will derive from implementing the project, such as

environmental improvements at the facility and in the community, worker

health protection improvements, time-to-market savings and/ or

paperwork reductions. EPA is also very interested in measurements of

resources and cost savings.

Avoid being focused primarily on the requirement the

project sponsor wants to avoid, but focus instead on the new approach

to be tested;

Have early stakeholder support and a well-developed plan

for facilitated stakeholder involvement;

Plan your idea in pre-proposal discussions before the

actual proposal is formally submitted; pre-proposal discussions with

EPA, States and other stakeholders go a long way toward reducing

``transaction costs'' (i.e. time and resources) in the selection and

negotiation of projects;

Lay out a plan for how environmental baselines will be

measured and superior environmental performance achieved. For more

information on baselines, please refer to the Federal Register document

(62 FR 19872) issued on April 23, 1997.

Propose a workable schedule for the development of a

final project agreement and a plan for how the project will be managed.

EPA encourages potential project sponsors to talk early to EPA

before submitting a formal proposal. This allows the Agency to help

develop the proposal and to explain the process. The Agency recognizes

that community project sponsors may require special assistance from EPA

in developing proposals and any resulting projects. This assistance

could include working with community project sponsors to help identify

additional resources to support development and implementation of XL

projects.

Proposals, in brief, will go through the following process: EPA

will evaluate all proposals with input from relevant EPA and State

offices to determine whether a proposal has the potential of meeting

Project XL's set of criteria for facilities and/or communities, and

whether it contains environmental, regulatory, and policy concepts

worth testing in Project XL. If the Agency and the relevant State(s)

determine that it is appropriate to proceed with proposal development,

the project sponsor then leads a process involving all affected

stakeholders to develop an agreement on the project.

Conclusion

Project XL presents a unique opportunity for private and public

sector facilities, states, sectors, and local communities to design and

test alternative approaches, while deriving substantial benefits for

themselves and the communities around them. 27 facilities, sectors,

states, and communities are already implementing or developing such

innovations. EPA has integrated many ``lessons learned'' into its

regulatory and policy-setting system. In addition, the Agency has

learned how to process XL proposals with greater efficiency and

efficacy. EPA's goal of implementing 50 XL pilot projects will provide

the Agency with a range of innovations that can create a better system

of protecting our environment and our health in the 21st century.

Dated: June 11, 1998.

J. Charles Fox,

Associate Administrator, Office of Reinvention.

[FR Doc. 98-16398 Filed 6-22-98; 8:45 am]

BILLING CODE 6560-50-P