Water Div i sion UNITED STATES ENVIRONMENTAL PROTECTION AGENCY Pacific Southw est Region 75 Haw t horne Street San Francisco, California 94105-3901 Mail Code: WTR-7 June 4, 2004

Mr. Jam e s J. Dragna Bingham McCutchen LLP 355 South Grand Avenue, Suite 4400 Los Angeles, California 90071-1560 Dear Mr. Dragna: This is in follow-up to our m eeting on January 21, 2004 and your February 5, 2004 letter regarding the industrial pretreatm e nt water pollution requirem e nts that apply to the Air Products Electronic Chem icals facility in Carlsbad, California. In mySeptem ber 20, 2002 letter to Mr. Randy Skow of Air Products, I explained that the facility in question is perform i ng chem ical etching, which is regulated under the m e tal fini shing categorical standards at 40 CFR Part 433. After careful consideration of Air Products’ vi ews, we affirm the Septem ber 20, 2002 decision. In addition to reviewing the inform ation Air Products provided to us during our m e eting and in your February 5 letter, we have considered your earlier April 11, 2003 letter to Ms. Julia Jackson of our Office of Regional Counsel regarding this m atter. In consideration of Air Products’ views, we also reviewed this m atter w ith the Engineering and Analysis Division at our Headquarters office. The Agency’s coordinated determ ination is that Air Products’ process wastewater discharge to the Encina W a stewater Authority is subject to the m e tal f i nishing categorical pretreatm e nt requirem e nts. The provisions at 40 CFR 433.10(a) describe the facilities that are subject to the m e tal finishing requirem e nts as follows: Except as noted in paragraphs (b) and (c), of this section, the provisions of this subpart apply to plants which perform any of the following six m e tal finishing operations on any basis m aterial: Electroplating, Electroless Plating, Anodizing, Coating (chrom ating, phosphating, and coloring), Chem ical Etching and Milling, and Printed Circuit Board Manufacture. ... In addition, the m e tal finishing regulations are supported by the U.S. Environm ental Protection Agency’s (EPA’s) technical conclusions detailed in the Developm ent Docum e nt for Effluent Lim itations Guidelines and Standards for the Metal Finishing Point Source Category(EPA 440/1-83/091, June, 1983) (See 48 FR 32462 (July 15, 1983)). Page III-25 of the Developm ent Docum e nt describes chem ical etching as follows: Etching and Chem ical Milling- These processes are used to produce specific design configurations and tolerances or surface appearances on parts (or m e talclad plastic in the case of printed circuit boards) by controlled dissolution withMr. James J. Dragna Page 2 of 8 Air Products and Chemicals, Inc. J une 4, 2004

chem ical reagents or etchants. Included in this classification are the processes of chem ical m illing, chem ical etching and br ight dipping. Chem ical etching is the sam e process as chem ical m illing except the rates and depths of m e tal rem oval are usually m u ch greater in chem ical m illing. Typical solutions for chem ical m illing and etching include ferric chloride, nitric acid, amm onium persulfate, chrom i c acid, cupric chloride, hydrochloric acid and com b inations of these reagents. Bright dipping is a specialized form of etching and is used to rem ove oxide and tarnish from ferrous and nonferrous m aterials and is frequently perform e d just prior to anodizing. Bright dipping can produce a range of surface appearances from bright clean to brilliant depending on the surface sm oothness desired for the finished part. Bright dipping solutions usua lly involve m i xtures of two or m o re of sulfuric, chrom i c, phosphoric, nitric and hydrochloric acids. Also included in this unit operation is the stripping of m e tallic coatings. Air Products’ May 20, 2002 letter explains that the process in question involves disassem b ling stainless steel shipping containers and applyi ng a 50/50 m i xture of nitric acid and hydrofluoric acid to the containers and the disassem b led parts, followed by a rinse. Air Products’ April 11, 2003 letter explains that the Com p any uses an acid solution of 6 - 25% nitric acid and 0.5 - 8% hydrofluoric acid. This process rem oves m e tal oxides from the work piece surfaces by chem ical dissolution. W e conclude that Air Products Electr onic Chem icals is perform i ng a m e tal finishing operation that is included under the m e tal finishing description of chem ical etching and, consequently, the process operation in question is covered under 40 CFR 433.10(a). The application of the m e tal finishing requirem e nts under 40 CFR Part 433 is related to the earlier electroplating regulations under Part 413. The pream ble to the m e tal finishing final rule (48 FR 32463, July 15, 1983) explains the hist ory and application of the m e tal finishing pretreatm e nt requirem e nts as follows: There are 13,500 plants in the electroplating/m e tal finishing industry. Many discharge wastewaters from several m e tal finishing operations other than, and in addition to, electroplating. Part 413 (electroplating) currently applies only to flows from the six specified electr oplating processes. These Part 433 (m etal f i nishing regulations) will apply to those electroplating stream s and also to wastestream s from m o st other m e tal finishing operations within the sam e plants. The Part 433 PSES will apply only to plants already covered by Part 413; however Part 433 will often cover additiona l wastewater within the sam e plants. Thus, the Part 433 lim its on discharge of toxic m e tals, toxic organics, and cyanide will apply to m o st facilities in the electroplating/m e tal finishing industry. ... As discussed above, the electroplating/m e tal finishing industry is currently covered by Part 413 PSES for the Electroplating Category prom ulgated on Septem ber 7, 1979, and am ended on January 28, 1981. The effect of today’s am endm ents is to create a new category -- Metal Finishing (Part 433) -- and to shif t most electroplaters to it, replacing their current PSES with new lim its which apply uniform ly to discharges from their electroplating and other m e tal finishing operations. This m eets industry’s requests for equivalent lim its for process linesMr. James J. Dragna Page 3 of 8 Air Products and Chemicals, Inc. J une 4, 2004

often found together and greatly reduces the need to rely on the Com b ined W a ste Stream Form ula f o r integrated m e tal f i nishing f acilities. Direct discharger and new source requirem e nts are also being issued as part of the m e tal finishing regulations. Indirect discharging job shop electroplaters and independent printed circuit board m anufacturers, however, would be left under the existing Part 413 PSES for Electroplating and are exem pted from Part 433. This is consistent with a 1980 Settlem e nt Agreem ent in which the National Association of Metal Finishers (NAMF), and the Institute for Interconnecting and Packaging Electronic Circuits (IIPEC) agreed not to challenge the Part 413 PSES in return for the 1981 am endm ents and EPA’s comm itm ent that the Agency did not intend to develop significantly m o re stringent standards for those plants for the next several years. ... The Metal Finishing Category covers plants which perform one or m o re of the following six operations: electroplating, electroless plating, anodizing, coating (phosphating, chrom ating, and coloring), chem ical etching and m illing, or printed circuit board m anufacture. If a plant perform s any of those six operations then discharges from the 46 operations listed in Appendix C are covered by these standards.

Wh en Part 433 becam e effective, the electroplating requirem e nts under Part 413 for chem ical etching and m illing fully covered operations invol ving the dissolution of m e tal. The definition of the term operation in the Chem ical Etching and Milling Subcategory of the electroplating categorical standards at 40 CFR Part 413.61(b) establishes the broad scope of the electroplating pretreatm e nt standards as follows:
The term operation shall m ean any step in the chem ical m illing or etching processes in which m e tal is chem ically or electrochem ically rem oved from the work piece and which is followed by a rinse; this includes related m e tal cleaning operations which preceded chem ical m illing or etching, when each operation is followed by a rinse. Under this definition, the prim ary criterion for determ ining whether chem ical etching and m illing is occurring is whether m e tal is chem ically or electrochem ically rem oved f r om the work piece. The operation of this requirem e nt is consistent with the objectives of the electroplating and m e tal finishing categori cal standards to control toxic pollutants, including dissolved m e tals, that could pass through a m unicipal sewage treatm e nt plant inadequately treated, or interfere with the treatm e nt processes at such plants due to the toxicity of the pollutants. This application and definition of chem ical etching is continued under the m e tal finishing standards under Part 433. Air Products’ view of a pplying an acid solution to its stainless steel containers as acid cleaning rather than chem ical etching, and to then exclude it from regulation under the m e tal finishing requirem e nts of Part 433, is inconsistent with the regulatory history and intent because it would result in the m e tal finishing standards under Part 433 being m o reMr. James J. Dragna Page 4 of 8 Air Products and Chemicals, Inc. J une 4, 2004

narrowly applied than the electroplating standards under Part 413 which were largely replaced by the m e tal finishing requirem e nts. Air Products explains that it uses an acid solution to rem ove m e tal oxides from the surface of the stainless steel containers that are the result of product decom position. The source of the m e tal oxides is not relevant to coverage under the m e tal finishing standards. The regulatory history establishes the prim ary criterion for determ ining whether chem ical etching is occurring as whether m e tal is chem ically or electrochem ically rem oved from the work piece. This operation is consistent with the objectives of the electroplating and m e tal finishing categorical standards to control toxic pollutant s, including dissolved m e tals, that could pass through a m unicipal sewage treatm e nt plant inadequately treated, or interfere with the treatm e nt processes at such plants due to the toxicity of the pollutants. Air Products’ suggestion that coverage under the m e tal finishing standards be based on the source of m e tal oxides is unworkable. Such a schem e would require detailed, burdensom e studies of process operations and surface chem istry to determ ine the application of the m e tal finishing standards. The six core m e tal finishing operations nearly always result in dissolved m e tals entering wastewater, frequently from the application of an acid on m e tal. EPA’s im plem entation of the m e tal finishing applicability requirem e nts under 40 CFR 433.10(a) provide industry with a clear basis for determ ining the coverage of the standards. Air Products believes that its “squirt and swish” operation is too sm all to be covered under the m e tal finishing standards. EPA considers the m e tal finishing standards to apply to all f acilities, including sm all f acilities, that perf orm the regulated operations. The pream ble to the m e tal finishing final rule (48 FR 32478, July 15, 1983) explains the application of the m e tal f i nishing pretreatm e nt standards to sm all f acilities as f o llows:
8. Comm e nt: Som e comm e nters suggested a sm all plant exem ption from the Metal Finishing regulations, arguing that an exem ption should be granted sim ilar to that provided by Part 413 for plants discharging less than 10,000 gallons per day. Response: Sm all indirect discharging facilities (<10,000 GPD discharge) were given less stringent requirem e nts in the Electroplating Pretreatm e nt Standards. Many of these facilities are job shops and for the reasons stated above will not be covered by the Part 433 requirem e nts. The Agency re-exam i ned the effect of the Part 433 m e tal finishing regulations on sm all facilities, and, has determ ined that because job shops and IPCBMs are exem pted from the m e tal finishing PSES there would be no significant econom ic im pacts if the rem a inder were covered by the m e tal finishing standards. For indirect captives discharging less than 10,000 GPD, the investm e nt cost would am ount to $36 m illion with annual costs of $12 m illion. There are no estim ated plant closure or divestitures. A sm all f acility exem ption is not warranted f o r the Metal Finishing regulation.Mr. James J. Dragna Page 5 of 8 Air Products and Chemicals, Inc. J une 4, 2004

Consistent with the pream ble, the m e tal finishing standards do not contain an exem ption for sm all facilities and Air Products’ facility is covered by these standards. Air Products believes that its facility should not be covered by the m e tal finishing standards because its operations are not “m etal m anufacturing” which involve m aterials that begin as raw stock such as rods, bars, sheet, cas tings, or forgings. Air Products asserts that the m e tal finishing standards only apply to such com p anies rather than its use of acid solution on reusable stainless steel packaging and shipping containers. The provisions at 40 CFR 433.10(a) describe the facilities that are subject to the m e tal finishing requirem e nts in pertinent part as follows: Except as noted in paragraphs (b) and (c), of this section, the provisions of this subpart apply to plants which perform any of the following six m e tal finishing operations on any basis m aterial: Electroplating, Electroless Plating, Anodizing, Coating (chrom ating, phosphating, and coloring), Chem ical Etching and Milling, and Printed Circuit Board Manufacture. ... Under this provision, facilities perform i ng one of the listed operations are subject to the m e tal finishing requirem e nts. Air Products is straining to narrow the application of the m e tal finishing requirem e nts to operations only on basis (or raw) m aterials. This is clearly inconsistent with the plain m eaning of the rule. To support its view, Air Products cites the following language in the pream ble of the final m e tal finishing regulations (48 FR 32464 (July 15, 1983)): These plants m anufacture a variety of products that are constructed prim arily of m e tals. The operations, which involve m aterials that begin as raw stock (rods, bars, sheet, castings, forgings, etc.), can include the m o st sophisticated surface finishing technologies. This passage is derived from page III-19 of the m e tal finishing Developm ent Docum e nt, which states in part: These plants are engaged in the m anufacturing of a variety of products that are constructed prim arily by using m e tals. The operations perform e d (Table 3-1) usually(em phasis added) begin with m aterials in the form of raw stock (rods, bars, sheet, castings, forgings, etc.) and can progress to the m o st sophisticated surface finishing operations. This pream ble and Developm ent Docum e nt language addresses one aspect of the m e tal finishing regulations, but they cannot be expanded to create a lim itation in the applicability of the m e tal finishing standards, particularly when such a lim itation is not contained in the final regulation. Imm e diately following the passage cited by Air Products, the pream ble continues with:Mr. James J. Dragna Page 6 of 8 Air Products and Chemicals, Inc. J une 4, 2004

These facilities include both captives and job shops. They vary greatly in size, age, num ber of em ployees, and num ber and type of operations perform e d. They range from very sm all job shops with less than 10 em ployees to large facilities em ploying thousands of production workers. Because of differences in size and processes, production facilities are custom tailored to the individual plant. Som e com p lex products m ay require the use of nearly all of the 46 unit operations m e ntioned above; a sim p le product m ay require only one. The purpose of this discussion in the pream ble is to describe the m e tal finishing industry as varied and broad. The m e tal finishing appli cability requirem e nts at 40 CFR 433.10(a) reflect these industry characteristics and include Air Products’ operations.
An exam ple of the broad coverage of the m e tal finishing standards concerns the inclusion of service com p anies under these standards. The m e tal finishing requirem e nts apply to both service com p anies and m anuf acturers. Facilities that perf orm m e tal f i nishing as a service are defined as “job shops” under the m e tal the fi nishing requirem e nts at 40 CFR 433.11(c) which states: The term “job shop” shall m ean a facility which owns not m o re than 50% (annual area basis) of the m aterials undergoing m e tal finishing. The pream ble to the m e tal finishing proposed rule (47 FR 38463 (August 31, 1982)) discusses the characteristics of the m e tal finishing industry including service com p anies as follows: These facilities are either “captives” (those which own the m aterial they process); or “job shops” (those which treat m e tal as service and do not own the m aterial they process). Page 38464 of the m e tal finishing proposed rule also states: These facilities include both “captives” (which own the goods they process) and “job shops” (which process others’ goods, as a service). Finally, Table 3 titled “Applicability” in the pream ble to the f i nal m e tal f i nishing regulations (48 FR 32475 (July 15, 1983)) clearly indicates that job shops are regulated under the m e tal finishing requirem e nts. The m e tal finishing applicability requirem e nts at 40 CFR 433.10(a) reflect a broad and varied range of facilities including Air Products’ operations.
Air Products believes that the criteria and provisions of ASTM Standard A 380-99 (Standard Practice for Cleaning, Descaling, and Pa ssivation of Stainless Steel Parts, Equipm ent, and System s) should govern whether Air Products’ operation is covered as etching by the m e tal finishing standards. In developing the m e tal fi nishing standards, EPA considered m any sources of inform ation including industry data and practices. Please see the list of references included in the m e tal finishing Developm ent Docum e nt be ginning on page XV-1. The final m e tal finishing regulations reflect EPA’s consideration of i ndustry inform ation, along with m any other factors the Agency m u st consider in developing pretreatm e nt standards under the Clean W ater Act. TheMr. James J. Dragna Page 7 of 8 Air Products and Chemicals, Inc. J une 4, 2004

Agency’s electroplating and m e tal finishing rulem aking included substantial public notice and opportunity to comm e nt on EPA’s actions. The result is the final electroplating and m e tal finishing regulations, including the applicab ility requirem e nts at 40 CFR 433.10(a), which are appropriate for water pollution control and the varied and broad m e tal finishing industry. Air Products would prefer the applicability of the m e tal finishing standards to its facility be based on industry technical standards. Industry changes and updates to those docum ents could change the applicability and stringency of the m e tal f i nishing standards in ways that are contrary to the Act and without proper public notice and comm e nt. The applicability of the m e tal finishing requirem e nts to Air Products are based on the existing m e tal finishing regulations and supporting inform ation. Air Products’ operation falls under one of the operations listed under 40 CFR 433.10(a); chem ical etching and, consequently, Air Products is perform i ng a m e tal finishing operation that is subject to the m e tal finishing standards.

W e disagree with Air Products’ analysis of the pharm aceutical m anufacturing pretreatm e nt requirem e nts with respect to Air Products’ facility. The Air Products facility is a supplier of chem ical products to sem i conductor m anufacturers rather than a m anufacturer of pharm aceuticals under 40 CFR Part 439. The requirem e nts under 40 CFR Part 439 do not apply to the Air Products facility. The m e tal finishing discussion in the pharm aceutical m anufacturing pream ble (63 FR 50415 (Septem b er 21, 1998)) addresses the application of the m e tal finishing requirem e nts to pharm aceutical production equipm ent that: “includes m any interconnected pipes, storage vessels, and reactors.” The Air Products facility in question perform s m e tal finishing operations on work pieces in a m anner that is covered under the m e tal finishing categorical pretreatm e nt standards under 40 CFR Part 433.
The Air Products Electronic Chem icals facilityin Carlsbad, California is perform i ng chem ical etching, which is regulated under the m e tal finishing categorical standards at 40 CFR Part 433.
The m e tal finishing standards were established in the early 1980’s with substantial industry involvem e nt and they have proven to be achievable and have greatly reduced toxic pollutants in wastewater. Air Products is a large high-technology global corporation and its comm itm ent to innovation, sustainability, and environm ental responsibility as described in its 2003 Corporate Responsibility Annual Report is consistent with com p liance with these water pollution requirem e nts. If you have any questions regarding this m atter, please contact Julia Jackson of our Office of Regional Counsel at 415.972.3948. Sincerely, Original Signed By:

Alexis Strauss Director W ater DivisionMr. James J. Dragna Page 8 of 8 Air Products and Chemicals, Inc. J une 4, 2004

Cc: D r. Nirm al Chatterjee Vice President EH&S and Corporate Engineering Air Products and Chem icals, Inc. Mr. Raym ond R. Skow Field Environm ental Health and Safety Air Products and Chem icals, Inc. Ms. Debra Biggs Enforcem ent and Com p liance Officer Encina W a stewater Authority
Mr. Hashim Navrozali San Diego Regional W ater Quality Control Board State of California