Document y3VEo8arE4koz8waOY6BwKd3

TAB K KELLER AND HECKMAN REPORT To The VINYL INSTITUTE EXECUTIVE BOARD April 15f 1985 This report summarizes Keller and Heckman activities since our last report of December 21, 1984. It also addresses related activities of the Society of the Plastics Industry, Inc. (SPI) or other matters of particular interest to the Vinyl Institute. A. EPA Revisions to Vinyl Chloride Standard The Vinyl Institute filed comments on March 15, 1985 which, in general, support EPA's proposed amendments to the Clean Air Act vinyl chloride standard. 50 Fed. Reg. 1182 (January 9, 1985). The major benefit of the proposal is the substitution of a numerical limit for relief valve discharges (up to 4 reactor relief valve discharges per year). The current standard prohibits all but "emergency" relief valve discharges. The Institute comments agree with EPA that there is no new technology to permit further tightening or extension of the standard, but request clarification of several concepts such as ethylene dichloride purification, reporting of releases under Superfund, and the terms "leak" and "relief valve." Modification of language is suggested in sections concerning reactor relief discharges, discharge events, the calculation of numerical limits, and polymerization batches at bulk plants. The comments oppose the imposition of the generic leak detection and elimination requirements found in Subpart V of the hazardous air pollutant regulations; retention of the existing regulations under the vinyl chloride standard is supported. We reviewed the Environmental Protection Agency's (EPA) docket for the* proposed amendments to the vinyl chloride standard. A total of 14 comments were filed. The commenting parties were: Natural Resources Defense Council (jointly with the Environmental Defense Fund) U.S. Representative Thomas R. Carper (D-Del.) Delaware State Representative Jeffrey G. Mack National Solid Wastes Management Association Georgia Gulf Corporation Chemical Manufacturers Association Air Products and Chemicals, Inc. BFGoodrich Company Dow Chemical U.S.A. Occidental Chemical Corporation TEN 3157 ~rri': 2- - PPG Industries, Inc. Shell Oil Company Vista Chemical Company SPI Vinyl Institute The Natural Resources Defense Council (NRDC) stressed the need for a zero emissions policy and opposed withdrawal of the 1977 proposal to amend the vinyl chloride standard. NRDC argued that Section 112 of the Clean Air Act is technology-forcing and that EPA should further limit discharges of vinyl chloride. Turning to the 1985 proposed amendments, NRDC contended that the use of a numerical limit grants the industry a "free" number of discharges. The comments also support the use of gas holder systems to contain releases. NRDC supported retention of the current leak detection and elimination program under the vinyl chloride standard rather than the leak detection program under Subpart V of the hazardous air pollutant regulations. The Council opposed changing the 10-day reporting requirement to a quarterly requirement and argued that any non-emergency preventable release must be reported under CERCLA. The NRDC comments were filed jointly with the Environmental Defense Fund (EDF). Representative Thomas R. Carper's comments focused on the Formosa Plastics Corporation ligitation. He contends that the 1985 proposal should not be enacted and that the 1977 proposal should be finalized. Carper argued that if the 1985 proposal was enacted, it would have "virtually no impact" on Formosa even though it had "31 discharges over a 3-1/2-year period." Delaware State Representative Jeffrey G. Mack commented that EPA should withdraw its current proposal and replace it with one which provides added measures of risk reduction. Representative Mack noted that the State of Delaware and Formosa Plastics Corporation entered into a consent agreement under which Formosa agreed to design and construct a containment system for capturing releases of vinyl chloride monomer (VCM) from reactors and other vessels. His comments suggest that EPA impose similar obligations on the entire industry. Comments by the National Solid Wastes Management Association (NSWMA) raise a concern with VCM contamination of ground water. The comments contend that the permissible VCM levels in resins could lead to ground water contamination. Thus, NSWMA argues, the vinyl chloride standard reflects a lack of coordination among EPA's various programs. The strong implication is that polyvinyl chloride resins be treated as hazardous waste. Comments filed by the Chemical Manufacturers Association (CMA) made several additional suggestions for the leak detection and elimination provisions of Subpart V as well as comments on Method 21. TEN 3158 72 -3- B. NRDC v. EPA On March 8, 1985, the Natural Resources Defense Council (NRDC) filed a petition for review of the U.S. Court of Appeals for the District of Columbia Circuit challenging EPA's withdrawal of the Agency's 1977 proposed amendments to the vinyl chloride standard. EPA withdrew the 1977 proposal when it published the January 1985 proposed amendments. The 1977 proposal, if finalized, would lower the current 10 parts per million (ppm) emission limitation to 5 ppm and make other restrictive changes. We understand that EPA plans to contest the NRDC challenge. The Vinyl Institute filed a Motion to Intervene. A primary concern was that the Vinyl Institute be permitted to participate as a party in this litigation and in any settlement negotiations. For example, when the Environmental Defense Fund instituted litigation after promulgation of the 1976 standard, SPI was excluded from the settlement negotiations which ultimately led to EPA's 1977 proposal. Thus, we were particularly pleased to obtain a letter from the Justice Department stating that it will not oppose the Vinyl Institute's Motion to Intervene, will treat the Vinyl Institute as any other party in the case, and will involve the Vinyl Institute in any settlement proceedings. This Justice Depart ment letter, therefore, offers us the opportunity to effectively represent the .interests of the Vinyl Institute and its members. We ask that you treat this information as confidential at the present time and not publicly discuss it. Subsequently, the Justice Department filed its reponse to the Institute's Motion to Intervene. As expected, the Department's pleading did not oppose interven tion. C. EPA Enforcement As you are aware, in the Ethyl case, the United States Court of Appeals for the Fifth Circuit is reviewing whether the emergency relief valve provisions of the vinyl chloride standard are an impermissible work practice or an acceptable emission limitation. Copies of EPA's January 1985 proposed amend ments to the vinyl chloride standard were filed with the court which then asked for comments on whether the proposal mooted the lawsuits. A response was filed by the government and industry defendents. There is no reliable indication of when a decision might be expected. D. FDA Regulation In recent discussions, the Food and Drug Administration staff has informed us that the long-awaited PVC regulation is in the final stages of review and conceivably could be issued in April or May. It is our understanding that the only further action expected is the final review of a revised version that TEN 3159 TFX) //.0/^5W7 -4 - responds to concerns expressed by the FDA General Counsel's office. If this revised draft gains the needed approvals within FDA, the proposed PVC regulation finally will be published. As you are aware, FDA promised that it would issue this proposed rule last fall governing the use of polyvinyl chloride for food contact use, including packaging alcoholic beverages. As reported previously, Brown-Forman Distillers wrote to FDA encouraging publication of the PVC rule. In a January 23, 1985 letter, FDA responded to Brown-Forman's letter and stated that the Agency is "proceeding with the 'authorization' for PVC bottles." While we continue to press for the rapid publication of the PVC regulation, it is our sense that FDA's delay is attributable to resource allocation. The Agency currently is embroiled in a politically sensitive controversy over colors, especially those used in cosmetics (but not to be confused with the colorants used in plastics), which has diverted FDA's attention. E. ATF Action on Polyethylene Liner Bodes Well For PVC The Department of the Treasury's Bureau of Alcohol, Tobacco, and Firearms (ATF) announced that polyethylene liners may be used as the lining in a distinctive liquor bottle. Industry Circular No. 85-1 (February 25, 1985). In and of itself, this approval is certainly welcome news; however, the fact that it has been published with a minimum of fuss and bother may be the most noteworthy aspect of the approval. Following the procedure pioneered by polyethylene terephthalate (PET) liquor bottles, this clearance for polyethylene liners is being published simply as a notice that ATF has made a determination as required under various sections of Title 27 of the Code of Federal Regulations that the use of another plastic material will adequately protect the revenue. You will recall that the validity of this particular procedure was challenged by the Glass Packaging Institute (GPI) when PET was approved. On behaif of the Plastic Bottle Institute (PBI), the Society of the Plastics Industry, Inc. intervened in that litigation to support the position that ATF acted properly. GPI lost at every stage of the litigation, including its petition to the U.S. Supreme Court for it to issue a writ of certiorari. The ruling provides confirmation that once FDA is able to overcome its bureaucratic difficulties in affirming the conditions for the safe use of PVC, ATF's clearance for use of PVC as a material for manufacturing liquor bottles should follow without undue delay. This approval took four months to be cleared through ATF's review channels once the shelf life studies were completed. Shelf life studies for PVC were completed several years ago. rEN 3160 477 X i(2 [Cft - 9 -5- F. Indianhead v. Allied On April 10, 1985, the jury returned a liability verdict in favor of Indianhead (Carlon) during the first phase of Indianhead's antitrust suit against Allied relating to the National Electric Code (NEC) and manipulation of a National Fire Protection Association (NFPA) meeting. While reports have been general, it appears that the jury answered a list of questions indicating its conclusions that Allied improperly interfered with the NFPA/NEC process. This finding of antitrust liability may be tempered by a further finding that Allied had reasonable cause to be concerned with the safety of PVC conduit. This jury decision ends the liability phase of the proceedings. The damage phase should be heard by the jury during late April, together with judicial consideration of certain legal defenses Allied will present in mitigation of damages. G. New York Combustion Toxicity Proceedings In its continuing effort to require toxicity/combustion data filing, the New York Fire Prevention and Building Code Council issued a regulatory impact statement in accordance with the New York Administrative Procedure Act. This impact statement has been assessed as inadequate by the Office of Business Permits and Regulatory Review. By order of the Governor, publication of the proposal for data filing requirements and scheduling of public hearings will not proceed until the impact statement is approved. On February 22, 1985, the Office of Business Permits notified the Building Code Council that the draft regulatory impact statement and Flexibility analysis failed to comply with the New York State Administrative Procedures Act in that: 1. The proposal is not clearly written; 2. The specific legislative authority is not clear; 3. There is apparent duplication with existing Federal statutes; 4. The impact statement is deficient with respect to: legislative authority; costs to be regulated; paperwork required; statutory duplication; and alternatives considered; 5. The flexibility analysis is deficient with respect to: information on the small businesses affected; reporting and other compliance requirements; cost estimates; efforts to minimize impacts on small business; and opportunities for small businesses to partici pate in the rulemaking. TEN 3161 ) LID. I, <I -6 - In the wake of this action, the Code Council voted unanimously to send the proposal back to the Toxicity Subcommittee of the Council for further work. The Office of Business Permits may intervene to cause delay in regulatory proceedings, but, in itself, has no power to halt a rulemaking proceeding. The Office of Business Permits generally does not analyze and comment on an agency's proposed rule and accompanying regulatory impact statement until after the proposal has been published in the state register. Input from the Office of Business Permits, however, is significant since copies of the Office's concerns regarding the statutory authority of the measure, the necessity for the rule, and its relationship with existing state and federal laws must be sent to the Governor, his secretary, the temporary President of the Senate, Speaker of the House, and Administrative Regulations Review Commission, and will be part of the record of the rulemaking proceeding. H. FTC Complaint to be Filed on "Burning Issue" SPI is considering filing a request for investigation with the Federal Trade Commission (FTC) complaining about the film presentation, "The Burning Issue," co-produced by ATCOR, Inc. (parent corporation of Allied Tube and Conduit). The film is misleading and deceptive in many respects, and is highly sensational and prejudicial. It wrongfully represents that plastics products are unusually hazardous when they burn, and suggests that the small-scale com bustion toxicity test developed at the University of Pittsburgh should be relied upon when making product choices. The film has been aired in several cities and shown before legislative bodies. Broadcasters have been alerted to the one-sided and unfair nature of the film and, as a result, panel discussions on the issue with industry representatives have been held in lieu of or in addition to "The Burning Issue". I. Plastics Recycling Foundation Negotiations have proven successful in the effort to create a univer sity/industry center for research and development of technologies for recycling and disposing of plastics. An agreement has been finalized with Rutgers University to establish the Plastics Recycling Institute, and recycling equipment (purchased from Owens-Illinois) already has been shipped to the pilot recycling plant at the University. J. Vinyl Window Certification Program The Product Certification Committee carefully considered the Vinyl Window and Door Institute proposal for an SPI sponsored program involving TEN 3162 /LX' ^6*5 -7- manufacturer's certification of vinyl prime windows. The program would entitle qualifying manufacturers to place a program label on their products indicating the manufacturer's certification of compliance to the ASTM standard,V and further indicating that the program is sponsored by SPI and administered by an independent third-party testing laboratory (provided that participating manu facturers and the laboratory enter into valid agreements with SPI). The Committee has agreed that the program meets the general criteria and guidelines for an acceptable program, and that it is in the interest of the vinyl window industry as well as that of SPI. Accordingly, it was recommended to the Board that the program be approved, and that the Board authorize the use of the SPI name or logo on the products of qualifying manufacturers, subject to final approval of the contract language. A resolution to this effect was offered to the Board for approval, and was adopted by the same at the February 8, 1985 meeting. Negotiations are actively underway between SPI and two independent administering laboratories in an effort to begin the program. A meeting with the laboratories was held on April 2, 1985. In addition to these agreements, SPI/manufacturer and manufacturer/laboratory contracts will be required in order to facilitate program operations. Revised program contracts and guide lines are now under review and should be finalized in late April or early May. K. Oral Argument in OSHA Right-to-Know Case Following the November 1983 promulgation of the Occupational Safety and Health Administration (OSHA) Hazard Communication Standard (which deals with the identification and communication of hazards related to workplace, chemicals within the manufacturing sector), unions and other critics filed or intervened in suits challenging the legality of the regulations and the preemption of inconsistent state law by the Standard. The suits were consolidated in the Third Circuit, and oral argument in this litigation was held on March 18th in Philadelphia. The court heard oral argument from the parties on three important issues: preemption (conflict with state laws), merits of the Standard (limitation to employees in the manufacturing sector, and procedure for hazard identifica tion), and trade secrets (protectability and confidentiality). As initial compliance dates approach, questions concerning the Standard and the issues it addresses have intensified. It can be expected that the Third Circuit panel will take many months to examine these challenges to the OSHA Standard. Due to overlapping issues and concerns, it is conceivable that the case may be decided simultaneously with the separate appeal of the New Jersey District Court ruling striking down that TEN 3163 a? *5 / -8 - state's right-to-know law as being preempted by the OSHA Standard (see January 17, 1985 report, p. 1). This is a distinct possibility in light of the fact that the same court panel may be assigned to that case. Since the appeal has only recently been filed and initial briefing of the case will not commence until late April, this may slow down resolution of the OSHA case for some months. Thus, it would be surprising if a ruling in the Steelworkers' appeal is issued much before the end of 1985, and it may not appear for several months beyond that date. In any event; it is now widely expected that the many issues of Federal preemption'and other matters raised in the litigation will ultimately be resolved by the LJ.S. Supreme Court. That forecast carries with it the likelihood that the Standard's effective dates will arrive before all questions concerning the OSHA rule and its relation to the many state right-to-know laws are decided. L. SPI Comments on PMN Rule In comments filed on February 25th in response to proposed revisions to the Premanufacture Notification (PMN) rule, SPI supported the Environmental Protection Agency's (EPA) proposal to permit the commercial sale of materials containing research and development (R&D) chemicals as impurities, and of articles into which R&D chemicals have been incorporated as part of the R&D process. (By way of background, EPA originally promulgated the final PMN rule on May 13, 1983. The portion of the rule regarding the R<ScD exemption was stayed, and is the subject of the current proposal). SPI noted that the plastics industry would benefit from this proposal in situations where, for example, a new chemical substance is used as a catalyst in a polymerization reaction. In such cases, a small amount of catalyst (the minimum necessary for R&D) typically produces a significant quantity of a polymer which is already on the TSCA Inventory. EPA's proposal would permit the sale of this inventoried polymer since the R&D substance (the catalyst) would be present in the finished polymer only in trace amounts as an impurity. In addition to being fully consistent with Section 5 of TSCA and EPA's PMN regulations, this interpretation provides a reasonable outlet for the use of material which might otherwise have to be stored at significant expense until a new chemical substance could be added to the inventory or would have to be disposed of if, for one reason or another, no PMN was ever filed. The proposed rule would also be beneficial in situations where a new chemical substance is incorporated into a plastic article as part of the R&D evaluation of the additive which usually constitutes only a small percentage of the finished article. The finished article(s) may have significant commercial value regardless of whether the R&D substance functions as predicted. The comments supported EPA's proposal to permit the sale of such articles. TEN 3164 77TXj C/ ^ * -9- SPI's comments noted that the availability of a commercial outlet for R&D-produced articles and for substances containing R&D impurities was essential to keeping down the cost of R&D for these classes of materials, and pointed out an additional category of materials that should be accorded similar treatment. This category of materials is the narrowly defined, but commercially significant, class of non-reactive thermoplastic polymers that have been pre viously defined by SPI as structural polymers. The comments proposed that new chemical substances- that meet the structural polymer definition which are formed as a result of R&D activities be exempt from the prohibition on commercial sale whether or not the process of manufacturing such structural polymers into articles would be termed an R&D activity. SPI also expressed concern about EPA's proposal to establish a threshold of 100 kilograms per year of a substance as a basis for triggering detailed recordkeeping and reporting requirements. A greater threshold of 10,000 kilograms per year was recommended for structural polymers because of their negligible risk to health and environment, and the significant quantities that must be produced for R&D. Finally, SPI commented on the recordkeeping requirements related to the incorporation of R&D substances into articles which are subsequently sold under the proposed article exemption. SPI noted that an excessive burden would be imposed by the proposed requirement that a manu facturer maintain for five years the names and addresses of all recipients of the substance and the method of disposal. SPI urged that EPA require only documentation of the specific articles produced and the quantities sold. TEN 3165 7ZXj 53