Document V3gYeDkq2ddayGeEXvXm2DGbN

Interoffice Communication To Distribution FrotT1 Date Subject Garreli Bottoms November 12, 1981 Construction Permits - VCM Expansion kt.CElVED The decision to stage the construction of the VCM Plant Expansion <ie, proceed with conversion of oxychlorination, delaying the remainder of the work for an indeterminate time period) requires that we assess our situation regarding permits issued by the Louisiana Ehviornmental Control Commission (LECC) and the Enviornmental Protection Agency (EPA). Jim Hally Joe Ledvina, Brad Raffle and Garreli Bottoms met on November 11 to develop the following status report and action plan. SUMMARY 1) Our LECC Permit requires reduction of emissions from the oxy vent by May 31, 1983. We currently are scheduled to meet that commitment, subject to problems created by the current operating mode of the plant. 2) The EPA ruled that PSD review was not required for the project as originally submitted. There are specific requirements for construction timing which apparently we can meet, even with a three year delay in project completion. However, there is a possibility that the EPA could rule that we have not complied with the intent as originally proposed. To counter this risk, a program to develop our position and present our case to both the LECC and EPA has been initiated. If the Agencies were to rule unfavorably, we would have to undergo PSD review for the expansion phase of the project. This could likely create a requirement for additional fuel handling facilities. 3) To meet the requirements of the proposed New Source Performance Standard (NSPS) for fugitive emissions of volatile organic compounds (VOC), we will proceed to modify the existing plant to offset increased fugitive emissions from the oxy conversion. The cost for this work will be included in the oxy revamp project. It is proposed that a letter, setting forth our program and calculation methods, be forwarded to the EPA for their review and approved. VEV-266553 vve 000013306 DISCUSSION LECC PfeSMIT A significant requirement of our agreement with the state is that we reduce hydrocarbon emissions from the oxy vent. We must be in compliance no later than May 3i, 1983. Our current schedule forecasts completion of the project in April 1983. This schedule is based, however, on plant shutdowns slated for May 1982 and February 1983. If the current operating mode requires significant departures from the norm, our planned approach to construction could be changed dramatically. We will continue to react to this situation as it occurs, with the intent to minimize cost impact while insuring we meet our commitment to the May 31, 1983 date. 3oe Ledvina stated that if the plant was in a shutdown mode on that date for completion of the oxy conversion, this would fulfill our requirement. In this case our emissions would be nil during the shutdown. On startup, we would be operating at our agreed upon emission rates. EPA PERMITS EPA determined that a PSD permit was not required for the expansion project as originally submitted on April 11, 1980. It is to our advantage to insure that this non-applicability decision is not affected by the delay to portions of the project. If the EPA determined that our approach no longer met the original intent, we could be required to undergo PSD review for the expansion phase. A likely result would require we change from 1% to 0.7% sulfur fuel oil, necessitating the addition of an appropriate handling system. The exemption from PSD review was contingent on the following: 1) Construction must be commenced by February 7, 1982. This requirement has been satisfied. New foundation work, etc, was completed during the August 1981 plant shutdown 2) Construction must not be discontinued for a period of 18 months or more. As stated, our current schedule calls for construction completion of the oxy revamp in April 1983. An 18 month hiatus would place construction start (major foundations in place) in October 1984. If the expansion is delayed two years (process engineering completion in 1982, mechanical engineering start January 1983) the October 1984 date will create no problem, however; if the project is delayed three years special efforts must be made to achieve a construction start by that date. 3) Construction must be completed within a reasonable time. Brad Raffle stated there was no legal definition of this term. The interpretation is essentially in the hands of the Agency. UEU 6*554 001330T vvc 00 On the surface it appears that we can prudently meet tile above requirements, thereby maintaining our permit to build the plant without undergoing PSD review. However, Raffle stated that the EPA could take a position that (1) we had not started construction of the entire project, only a conversion of one segment of the plant, and (2) that our original argument that PSD review, if required, would significantly delay the project no longer applies. To counter these possible objections and maintain our relationship with the State and Federal agencies, the following program was agreed upon: 1) Meet with VCM plant personnel on November 23 to develop specific strategies and arguments for presentation to LECC and the EPA. 2) Set meeting dates with both Agencies in the near future. It is proposed that plant personnel lead in these meetings, and that our current program be explained and justified. We feel this approach minimizes the risk of obtaining an unfavorable ruling on our desire to proceed with the phased project under the current permit status. NSPS REGULATIONS FOR VOC FUGITIVE EMISSIONS This regulation, proposed in January 1981, requires that the VCM plant be in compliance with the regulation upon promulgation. Our oxy conversion triggers the necessity to offset any fugitive emission increase by like fugitive emission decrease or to initiate an extensive monitoring program. Since the law is not yet promulgated it is subject to delay, revision or cancellation. However, Joe Ledvina is confident that the regulation will be finalized and that it will probably continue to require any plant modified after January 1981 to be in compliance. There is a possibility that the Clean Air Act will be revised such that NSPS are only applicable upon promulgation, not when proposed. There again there is no assurance this will be the case. Plant personnel have calculated that we can offset the increased fugitive emissions from oxy conversion by installation of rupture disks under relief valves discharging to atmosphere. A program to identify the exact valves and modification requirements is underway. The estimated cost for this work will be included in the definitive estimate. To insure the EPA agrees with our approach, especially the emission factors we are using in our calculations, it is proposed that Joe Ledvina prepare a letter to the EPA for DeBernardi's signature. This would spell out in detail our program and calculation methods, and request their agreement that we will be in compliance with the proposed regulation. This should be done shortly after we meet with the EPA on the PSD question. ^7Sh S Garrell C. Bottoms Distribution: J.3. Hall J.C. Ledvina J.A. DeBernardx G. L. Foshee M.G. Hayes H. J. Neeld R. D. Gamblin B.I. Raffle D. S. Huber G. J. Fryar ii E1,/- oooov VVC Interoffice Communication To From Date Subject M. G. Hayes, Westlake B. I. Raffle, Houston October 5, 1981 VCM EXPANSION - PSD fc. *0 ' Og lit,0, As you pointed out to me in your memorandum of 9/22/81, the PSD non-applicability determination which EPA issued to us in December of 1980 for the VCM Expansion imposes three requirements: 1) Construction must be commenced within 18 months of August 7, 1980 - i.e. by February 7, 1982; 2) Construction must not be discontinued for a period of 18 months or more; and 3) Construction must be completed within a reasonable time. These requirements are required by the PSD rules (40 CFR Section 52.21 (i) (4) (v), August 7, 1980.) This memorandum addresses each of the four questions which you raised concerning these requirements. QUESTION 1 1) EPA's non-applicability determination states tKat construction must commence within 18 months of August 7, 1980. Does conversion^of the oxy process constitute commencement of construction for expansion purposes? Assuming that the oxy process conversion was part of the project originally permitted by the State of Louisiana, it is my opinion that, by commencing construction of the oxy conversion, we will have "commenced construction" on the overall expansion project. QUESTION 2 2) What constitutes a break in construction if the oxy conversion is considered "commencement" for PSD purposes? What time frame should be considered? VVC 00001331^ M. G. Hayes Page TWO October 5, 1981 / Assuming we commence construction on the Expansion prog^ct (by initiating the oxy conversion) prior to 2/7/82^the rules will require us to commence construction pw^other parts of the Expansion by no later than(^8/7/83>:' Furthermore, we would have to be able to show that the entire Expansion project was going to be completed within a reasonable time. I am not able to judge what a "reasonable" time frame is for completion of this project since it involves a case by case technical determination. QUESTION 3 3) Is there a mechanism bv which the nonapplicability determination may be extended? If so, for how long? Although the PSD rules do not expressly authorize EPA to extend the above-mentioned deadlines, the agency retains such authority under its general rulemaking powers pursuant to Section 301 of the Clean Air Act. The preamble to the current PSD rules recognizes such authority. 45 FR 52683, August 7, 1980 (footnote 5). Obtaining such an extension would involve negotiation with EPA Region VI. If an appropriate extension cannot be secured and we are unable to meet an applicable deadline, we would be forced to obtain a PSD permit for all phases of the VCM Expansion, including the oxy conversion which, by that time, will have , already been completed. I should point out that if this were to occur, it is very doubtful that EPA (or the State of Louisiana) would require Conoco to cease operation of the revamped oxy process pending receipt of the PSD permit. A more likely option would be to require a PSD analysis and permit without requiring a shutdown. An alternative available to Conoco in this situation would be to have our state permit for the VCM Expansion rescinded. Assuming the oxy conversion project, by itself, would not have triggered PSD review under the 1980 PSD rules (i.e. had less than "significant" emissions of SO,/ NO,, PM and CO) we would not be subject to enforcement action for having constructed it without a PSD permit. oooo^11 ijcvj A