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ENVIRONMENTAL PR OTECTION AGENCY 40 CFR Part 320 [EPA-HQ-SFUND-2009-0265; FRL --] RIN 2050-AG56 Identification of Additional Cl asses of Facilities for Developmen t of Financial Responsibility Requirements under CERCLA Section 108(b) AGENCY: Environmental Protection Agency (EPA). ACTION: Advanced Notice of Proposed Rulemaking (ANPRM) SUMMARY: Section 108(b) of the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) of 1980, as amended, establis hes certain regulatory authorities concerning financial responsibility requirements. Speci fically, the statutory language addresses the promulgation of regulations that require classes of facilities to establish and maintain evidence of financial responsibility consistent with the degr ee and duration of risk associated with the production, transportation, treatment, storage, or disposal of hazardous substances. In a July 28, 2009, Federal Register notice, the Environmental Protec tion Agency (EPA or the Agency) identified classes of facilities within the Hardrock Mining industr y as those for which the Agency will first develop financial responsibi lity requirements under CERCLA Section 108(b). In that notice, EPA also stated its belief that additional cla sses of facilities – that is , other than those in the Hardrock Mining industry, also may warrant the development of financial responsibility requirements under CERCLA Section 108(b), and stated that EPA would publish a FederalRegister notice, by December 2009, identifying additional classes of facilities it plans to evaluate regarding the development of financial responsibility requirements. As a result of examining available data and information, the Agency is id entifying the classes of f acilities within three industries -- that is, the Chemical Manufacturi ng industry (NAICS 325), th e Petroleum and Coal Products Manufacturing industry (NAICS 324), and the Electric Power Generation, Transmission, and Distribution industry (NAICS 2211), as those for which the Agency plans to develop a proposed regulation under CERCLA Sec tion 108(b). In addition, this Federal Register notice identifies the Waste Management and Remedi ation Services industr y (NAICS 562), the Wood Product Manufacturing industry ( NAICS 321), the Fabricated Metal Product Manufacturing (NAICS 332) industry, and the Electronics and Electrical Equipment Ma nufacturing industry (NAICS 334 and 335), as well as facilities enga ged in the recycling of materials containing CERCLA hazardous substances – as requiring furt her study before EPA begins development of a proposed regulation under CERCLA Section 108(b). In identifying classes of facilities within these industries in this notice, the Agency does not intend to indicate that other classes in other industry sectors are no lo nger being considered. DATES : Submit comments on or before [insert 30 days following publication in the FEDERAL REGISTER]. ADDRESSES: Submit your comments, identified by Docket ID No. EPA-HQ-SFUND-2009- 0834, by one of the following methods:

• Electronic docket at: www.regulations.gov: Follow the on-line instructions for submitting

comments.

• Email: Comments may be sent by electronic mail (e-mail) to superfund.docket@epa.gov, Attention Docket ID No. EPA-HQ-SFUND-2009- 0834. In contrast to EPA’s electronic

2public docket, EPA’s e-mail system is not an ‘‘anonymous access’’ system. If you send an e-mail comment directly to the Docket w ithout going through EP A’s electronic public docket, EPA’s e-mail system automatically cap tures your e-mail address. E-mail addresses that are automatically captured by EPA’s e-mail system are included as part of the comment that is placed in the official public docket, and made available in EPA’s electronic public docket.

• Fax : Comments may be faxed to 202–566–0272; Attention Docket ID No. EPA-HQSFUND-2009-0834 .

• Mail: Send your comments to the Identification of Additional Classes of Facilities for Development of Financial Responsibility Requirements under CERCLA Section 108(b) Docket, Attention Docket ID No., EP A-HQ-SFUND-2009-0834, Enviro nmental Protection Agency, Mailcode: 5305T, 1200 Pennsylvania Ave., NW, Washington, DC 20460. Please include a total of two copies.

• Hand Delivery: Deliver two copies of your comments to the Identification of Additional Classes of Facilities for De velopment of Financial Responsibility Requirements under CERCLA Section 108(b) Docket, Attent ion Docket ID No., EPA-HQ-SFUND-2009-0834, EPA/DC, EPA West, Room 3334, 1301 Cons titution Ave., NW, Washington, DC 20460. Such deliveries are only accepted during the Docket’s normal hours of operation, and special arrangements should be made for deliveries of boxed information.
Instructions: Direct your comments to Docket ID No. EPA-HQ-SFUND-2009-0834. EPA's policy is that all comments received will be included in the public docket without change and may be made available online at www.regulations.gov , including any personal information provided, unless the comment includes information claimed to be CBI or other information whose disclosure

3is restricted by statute. Do not submit information that you cons ider to be CBI or otherwise protected through www.regulations.gov or e-mail . The www.regulations.gov website is an “anonymous access” system, which means EPA will not know your identity or contact information unless you provide it in the body of your comment. If you send an e-mail comment directly to EPA without going through www.regulations.gov, your e-ma il address will be automatically captured and included as part of the comment that is pl aced in the public docket and made available on the Internet. If you submit an electr onic comment, EPA recommends that you include your name and other contact information in the body of your comment and with any disk or CD-ROM you submit. If EPA cannot read your comment due to tec hnical difficulties and cannot contact you for clarification, EPA may not be able to consider your comment. El ectronic files should avoid the use of special characters, any form of encryption, and be free of any def ects or viruses. For additional information about EPA’s public docket, vi sit the EPA Docket Center homepage at http://www.epa.gov/epahome/dockets.htm. For additional instructions on submitting comments, go to the SUPPLEMENTARY INFORMATION section of this document. Docket: All documents in the docket are listed in the www.regulations.gov index. Although listed in the index, some information is not publicly available, e.g., CBI or other information whose disclosure is restricted by statute. Certain other material, such as copyrighted material, will be publicly available only in hard copy. Publicly available docket material s are available either electronically in www.regulations.gov or in hard c opy at the Identification of Additional Classes of Facilities for Development of Financial Re sponsibility Requirements under CERCLA Section 108(b) Docket, Docket ID No. EPA-HQ-SFUND-2009-0834, EPA/ DC, EPA West, Room 3334, 1301 Constitution Ave., NW., Washington, DC 20460. This Docket Facility is open from 8:30 a.m. to 4:30 p.m., Monday through Friday, excluding legal holidays. The Docket telephone

4number is (202) 566–0276. The Public Reading Ro om is open from 8:30 a.m. to 4:30 p.m., Monday through Friday, excluding legal holidays. The telephone number for the Public Reading Room is (202) 566-1744. FOR FURTHER INFORMATION CONTACT: For more information on this notice, contact Ben Lesser, U.S. Environmental Protection Ag ency, Office of Resource Conservation and Recovery, Mail Code 5302P, 1200 Pennsylvania Av e., NW., Washingto n, DC 20460; telephone (703) 308-0314; or (email) Lesser.Ben@epa.gov ; or Barbara Foster, U.S. Environmental Protection Agency, Office of Resource Conservation and Recovery, Mail Code 5303P, 1200 Pennsylvania Ave., NW., Washington, DC 20460; te lephone (703) 308-7057; or (email) Foster.Barbara@epa.gov. SUPPLEMENTARY INFORMATION: A. How Can I Get Copies of This Do cument and Other Related Information? This Federal Register notice and supporting documentati on are available in a docket EPA has established for this action under Docket ID No. EPA-HQ-SFUND-2009-0834. All documents in the docket are listed on the http://www.regulations.gov web site. Although listed in the index, some information may not be publicly available, because for example, it may be CBI or other information, the disclosure of which is restricted by statute. Certain materi al, such as copyrighted material, is not placed on the Internet and will be publicly available onl y in hard copy form. Publicly available docket materials are available either el ectronically through http://www.regulations.gov or in hard copy at the Identificati on of Additional Classes of Facilities for Development of Financial Responsibil ity Requirements under CERCLA Section 108(b) Docket, Docket ID No. EPA-HQ-SFUND- 2009-0834, EPA/DC, EPA West, Room 3334, 1301 Constitution Avenue, NW, Washington, DC. The Dock et Facility is open from 8:30 a.m. to 4:30

5p.m., Monday through Friday, excluding legal holid ays. The telephone number for the Public Reading Room is (202) 566-1744, a nd the telephone number for the Superfund Docket is (202) 566-0270. A reasonable fee may be charged for copying docket materials. B. Table of Contents I. Introduction II. EPA's Approach for Identifyi ng Additional Classes of Facilities A. Analysis of National Priority List Information B. Analysis of RCRA Biennial Report a nd Toxics Release Inventory Data C. Conclusions from the NPL/BR/TRI Analyses D. Additional Information Regarding the Classe s of Facilities for Which EPA Plans to Develop a Proposed Regulation 1. Chemical Manufactur ing (NAICS 325) 2. Petroleum and Coal Products Manufacturing (NAICS 324) 3. Electric Power Generation, Transmissi on, and Distribution (NAICS 2211) E. Additional Classes of Facilities Requiring Further Study 1. Waste Management and Remediation Servi ces (NAICS 562) and Facilities Engaged in the Recycling of Materials Contai ning CERCLA Hazardous Substances 2. Wood Product Manufacturing (NAICS 321), Fabricated Metal Product Manufacturing (NAICS 332), and Electronics and Electrica l Equipment Manufacturing (NAICS 334 and 335) III. Request for Public Comment IV. Conclusion 

### I. Introduction Section 108(b), 42 U.S.C. 9608 of the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA), as ame nded, requires in specified circumstances that owners and operators of facilities establish evidence of fina ncial responsibility. Specifically, it requires the promulgation of regulations that requir e classes of facilities to establish and maintain evidence of financial responsibility consistent with the degree and dur ation of risk associated with the production, transportation, treatmen t, storage, or disposal of h azardous substances. The section also instructs that the President: 1

1 Executive Order 12580 delegates this responsibility to the Ad ministrator of the U.S. Environmental Protection Agency ("EPA" or "the Agency") for non-transportation related facilities. ( See 52 FR 2923, January 29, 1987 ).

6...identify those classes for which require ments will be first developed and publish notice of such identification in the Federal Register

. On July 28, 2009, EPA published that notice ( see 74 FR 37213). In that notice, EPA identified classes of facilities within the Ha rdrock Mining industry as its priority for the development of financial responsibility re quirements under CERCLA Section 108(b). For purposes of that notice, “hardr ock mining” was defined as th e extraction, beneficiation, or processing of metals (e.g., copper, gold, iron, l ead, magnesium, molybdenum, silver, uranium, and zinc) and non-metallic, non-fuel minerals (e .g., asbestos, phosphate rock, and sulfur). The notice also stated the Agency’s belief that classes of facilities, in addition to those within the Hardrock Mining industry, may warrant the development of financial responsibility requirements under CERCLA Section 108(b), that th e Agency would continue to gather and analyze data on additional classe s of facilities, and w ould consider them for possible development of CERCLA Section 108(b) financia l responsibility requirements. The Agency indicated its plans to publish a Federal Register notice addressing these additional classes of facilities by December 2009. This Federal Register notice identifies additional classes of facilities – the classes within three industry sectors -- for which the Agency plan s to develop proposed regulations. This notice also identifies classes of facilities within four add itional industry sectors, as well as the classes of facilities engaged in recycling activities associat ed with materials containing CERCLA hazardous substances, which do not fit within a particular industry sector, as those classes for which the Agency plans to conduct further in -depth study before deciding whether to begin the development of a proposed regulation. 2

2 Today’s notice, its identification of classes, and its announcement of further study of other classes is not itself a rule, and does not create any bindi ng duties or obligations on any party. Additional

7II. EPA's Approach for Identifying Additional Classes of Facilities EPA has worked to determine which classes of faci lities it should identify in this notice for evaluation regarding financial resp onsibility requirements. In c ontrast to the statutory mandate under CERCLA Section 108(b)(1) to publish the prior ity notice (that EPA sa tisfied in July 2009), there is no statutory requirement for EPA to publis h today’s notice. However, EPA is doing so as announced in the July 2009 notice. 3 As was the case with the July 2009 notice, EPA looked to the text of CERCLA Section 108(b) to inform its identif ication of facility classes. To begin with, the last sentence of Section 108(b)(1 ) states that “[p]riority in the development of such requirements shall be accorded to those classes of facilities...which the President determines present the highest level of risk of injury.” Examination of CERCLA Section 108(b) as a whol e also reveals repeated references to the concept of “risk.” The first sentence of paragraph (b)(1) refers to “requirements

... that classes of
facilities establish and maintain evidence of fi nancial responsibility consistent with the degree and duration of risk ” and paragraph (b)(2) states that “[t]he level of financ ial responsibility shall be initially established, and, when necessary, adjusted to protect against the level of risk which the President in his discretion believes is appropriate

... .” (emphasis added). Accordingly, EPA chose
to look for indicators of risk and related effects to inform the selection of classes of facilities for developing requirements under CERCLA Section 108(b). The Agency indicated in the July 2009 notice that it “may take into account factors such as: (1) the amounts of hazardous substa nces released to the environm ent; (2) the toxicity of these substances; (3) the existence and proximity of po tential receptors; (4) cont amination historically research, outreach to stakeholders, proposed regulations, review of public comments, and finalization of those regulations are needed before any facilitie s are subject to any financial responsibility requirements. 3 See 74 FR 37213 at 37219.

8found from facilities; (5) whether the causes of this contamination still exist; (6) e xperiences from Federal cleanup programs; (7) proj ected costs of Federal clean-up programs; and (8) corporate structures and bankruptcy potenti al.” EPA also indicated that it would “...consider whether financial responsibility require ments under CERCLA Section 108(b) will effectively reduce these risks.” While some of the factors reflect the basi c elements of risk evaluation (i.e., the probability of release, exposure, and toxicity 4 ), others more closely relate to the severity of consequences that result when risks are realized, su ch as the releases’ dur ation and the exposures that can result if releases are not prevented or quickly controlled (e .g., as a result of economic constraints). 5 Finally, the Agency identified the following specific classes of facilities for examination: 6 hazardous waste generators, 7 hazardous waste recyclers, metal finishers, wood treatment facil ities, and chemical manufacturers 8 ( see 74 FR 37213 at 37219, July 28, 2009).

4 See Risk Assessment in the Federal Government: Managing the Process. National Research Council. National Academy Press, Washington, DC. 1983. 5 These eight factors are similar to the eight fact ors the Agency considered when it evaluated the Hardrock Mining industry ( see 74 FR 37213 at 37214), and serve the same general purpose – by considering such factors, the Agency can evalua te the risks posed, and thereby determine whether the development of a proposed rule for financial responsibility for classes within these industry sectors is appropriate. 6 The Agency indicated that the list of additional classes of facilities “may be revised as the Agency’s evaluation proceeds.” (See 74 FR 37213 at 37219). 7 In the July 2009 notice, EPA iden tified hazardous waste generators , a diverse group of facilities, defined by the RCRA regulations, as a class of faciliti es it would consider as part of its analysis leading up to this Federal Register notice. However, to conduct its analysis for purposes of this notice, the Agency relied primarily on NAICS codes to define groups of facilities for purposes of comparison. The Agency believes those classes of facilities within NAICS codes 325 and 324 (identified for the development of financial resp onsibility requirements in this notice), and those within the Hardrock Mining industr y (identified for financial respons ibility requirements in the July 2009 notice), effectively cover the vast majority of hazardous waste generated (see Table 2). The Agency, therefore, believes that this is a more workable approach to addr essing this diverse group of facilities. 8 In a letter from Lisa Evans, Senior Admini strative Counsel, Earth Justice, to Jim Berlow, Director, Program Implementation and Informa tion Division, US EPA, dated September 1, 2009, Earth Justice recommended several categories of f acilities for financial responsibility requirements under CERCLA Section 108(b) – coal mining, lumber products and wood preserving facilities,

9To develop the list of classes of facilities discussed in this notice, EPA’s analysis used information related to sites listed on the National Priorities List (NPL), data on hazardous waste generation from the 2007 Resource Conservation a nd Recovery Act (RCRA) Biennial Report (BR), and data from the Toxics Release Inventory (TRI). 9 These information sources will be explained below. EPA chose these sources because they are well-established, reliable sources of information on facilities associated with haza rdous substances, and were read ily available to the Agency. Moreover, these data sources generally address all of the factors noted in the July 2009 notice and cited above, either directly or indirectly. More specifically,

• The NPL information addresses the following factor s (either directly or indirectly): (1) the amounts of hazardous substances released to the environment; (2) the toxicity of these substances; (3) the existence and proximity of potential receptors; (4) contamination historically found from facilities; (5) whether th e causes of this contam ination sti ll exist; (6) experiences from Federal cleanup programs; (7) projected costs of Fe deral cleanup programs; and (8) corporate structures and bankruptcy potential. 10

hazardous waste recycling facilitie s, chemical manufacturers, oil and gas refineries, coal-fired power plants, electronic and elec tric equipment manufacturers, dr y cleaners, fabric manufacturers and tanneries, coke production faci lities, radioactive products facili ties, and agricultu ral operations. This letter can be found in the docket for this Federal Registe r notice, along with other correspondence related to this notice, received from: the Associati on of State and Territorial Solid Waste Management Officials; Tr eated Wood Council; Southern Pr essure Treaters ’ Association; Superfund Settlements Project and RCRA Correc tive Action Project, and American Chemistry Council, American Petroleum Institute, and the So ciety of Chemical Manufactures and Affiliates,. 9 TRI estimates include all on-site releases of CERCLA hazardous s ubstances to the land, air and surface water, including those disposed of in RC RA Subtitle C hazardous waste land disposal units and Safe Drinking Water Act (SDWA) perm itted underground injection (UIC) wells. 10 While CERCLIS, the Superfund program’s data base, and NPL site files do not account for corporate structures or bankruptcy potential, EPA notes that, as a practical matter and consistent with EPA’s “enforcement first” policies, the lack of a viable party at a site is often a consideration that goes into the decision to list a particular site on the NPL.

10• The BR information addresses (either direct ly or indirectly) (1) the amounts of RCRA hazardous wastes 11 generated or managed.

• The TRI information addresses the following factor s (either directly or indirectly): (1) the amounts of hazardous substances released to the environment; (2) the toxicity of these substances; and (5) whether the causes of this contamination still exist. The following sections describe EPA’s evaluation a nd its results. However, EPA notes that while, in general, the Agency chose to identify those classes of facilities comprising a relatively large percentage or amounts of hazardous substances, it should not be assumed that other industry classes are no longer being considered and w ill not be identified for future rulemakings.
A . Analysis of National Priority List Information The NPL is a list of national priorities for cleanups among the known or threatened releases of hazardous substances, pollutants, or contaminants throughout the U. S. (In addition to the list of sites on the NPL, file information about individual sites was also considered in developing today’s notice.) The Hazard Ranking System, the scoring sy stem EPA uses to assess the relative threat associated with releases or poten tial releases from a site, is the primary method used to determine whether a site should be placed on the NPL. 12 The HRS takes into account the three elements of environmental and human health risk: (1) probabili ty of release; (2) expos ure; and (3) toxicity. EPA generally will list on the NPL sites with sc ores of 28.50 or above. The HRS is a proven and accepted tool for evaluating and prio ritizing the releases that may pos e threats to human health and the environment throughout the nation. As of October, 2009, there were 1,495 non-Federal, proposed, final, and deleted NPL sites. For purpo ses of this analysis, the Agency assigned each of

11 RCRA hazardous wastes are, under CERCLA S ection 101(14), define d as CERCLA hazardous substances. 12 EPA 2007 Introduction to the Hazard Ranking System (HRS) . Accessed at: http://www.epa.gov/superfund/ programs/npl_hrs/hrsint.htm

11the NPL sites the three-digit NAICS code 13 that best identified the activities at the site, using available data and best professiona l judgment. The analys is thus identified the relative prevalence of industry sectors on the NPL. 14 Based on this analysis, the Agency identif ied six industry sector s, and one group of facilities, on which to focus further: (1) the Waste Management and Reme diation Services industry (NAICS 562) (including municipa l and industrial landfills), with 465 sites; (2) the Chemical Manufacturing industry (NAICS 325), with 181 sites; (3) facilities engaged in the recycling of materials containing CERCLA hazardous substances, with 138 sites; 15 (4) the Wood Product Manufacturing industry (NAICS 321), with 94 sites; (5) the Fabricated Metal Product Manufacturing industry (NAICS 332), with 91sites; (6) the Electronics an d Electrical Equipment Manufacturing industry (NAICS 334 and 335) with 71 sites 16 ; and (7) the Petroleum and Coal Products Manufacturing industry ( NAICS 324) with 30 sites. EPA focused on these seven industry categories because they comprise 1073 sites, or approxi mately 70 percent of all non-

13 North American Industry Classification System (NAICS) - the standard used by federal statistical agencies in classifying business establishments fo r the purpose of collecting, analyzing, and publishing statistical data related to the U.S. business economy. NAICS codes are available at www.census.gov 14 In this analysis, EPA excluded sites identified within those classes of Hardrock Mining already discussed in the July 2009 notice. 15 In the Agency’s Superfund program database, some facilities were simply classified in categories that do not directly correspond w ith NAICS. Recyclers (REC), Tr ansportation-related facilities (TS) and Product Storage fac ilities (PS) are included in these categories. 16 In CERCLIS, the Superfund program’s data ba se, NPL sites are not categorized by NAICS codes. Rather, CERCLIS uses “site types” to de scribe each of the NPL s ites. These site types include the fields: manufactur ing/processing/maintenance, recycling, waste management, and other. Within each site type, there are various “subtypes.” Manufacturing/processing/maintenance contains the following subtypes: chemicals and allied products, el ectronic/electrical equipment, lumber and wood products, oil and gas refining, and other. When assigning NAICS codes to facilities within the subtype “electronic/electri cal equipment,” the Agency could not, based on information from the data base, distinguish be tween facilities within NAICS 334 and NAICS 335, so conducted its analysis tr eating them as one industry sector. An analysis more detailed than that performed by the Agency for purposes of this no tice will be necessary to further delineate the prevalence of each of these two industry sectors on the NPL.

12Federal, proposed, finalized, and deleted sites on the NPL. The findings of the NPL analysis are shown in Table 1.
TABLE 1 Top Industries Listed on the CERCLA National Priorities List from 1981-2009 Category or NAICS Code Includes NPL Sites Identified as: Total Number of Sites Percentage of Total Number of Sites 562 Waste Management and Remediation Services Industrial waste facility (non-generator), municipal solid waste landfill; co-disposal landfills (municipal and industrial) 468 30.7%
325 Chemical Manufacturing Chemicals/ chemical waste re covery 181 11.9% REC Recycling of materials containing CERCLA hazardous substances Recycled oil/reclaimed copper; solvent recovery/reclamation; repr ocessed solvent; recovered metals; used oil recycling, drums/tanks recycling 138 9.1%

321 Wood Products Manufacturing Lumber, wood and paper bag products; wood preservers 94 6.2%
332 Fabricated Metal Product Manufacturing Metal fabrication/finishing/coating and allied industries 91 6.0% 334 Computer and electronic Product Manufacturing 335 Electrical Equipment, Appliance, and Component Manufacturing* Electronic/electrical equipment 71 4.7%

324 Petroleum and Coal Products Manufacturing Oil and gas refining, coke production 30 1.9% TS Transportation-related facilities Trucks/ships/trains related components 25 1.6% PS Product Storage Product storage/distribution 20 1.3% 812 Personal and Laundry Services Dry cleaners 19 1.3% * The Agency’s CERCLA database does not differentiate facilities in NAICS 334 from those in NAICS 335 ( see footnote 17). The Agency next considered BR and TRI data . Those analyses are explained below.
B. Analysis of RCRA Biennial Report and Toxics Release Inventory Data EPA, in partnership with the States, bienni ally collects information from large quantity hazardous waste generators, transporters, and treatm ent, storage, and disposal facilities regarding the generation, management, and final disposition of hazardous waste regulated under RCRA. The BR data, which includes the report ing facilities’ NAICS codes, s hows that in 2007 there are two

13industry sectors that generate th e majority of hazardous waste 17 – the Chemical Manufacturing industry (NAICS 325) (approximately 16.5 million t ons), and the Petroleum and Coal Products Manufacturing industry (NAICS 324) (approximately 4.2 million tons). These two industry categories comprise more than 20 million tons, or approximately 65 percent of the total amount of hazardous waste generated annually ( see Table 2), and with the Hardrock Mining industry, represent approximately 73 per cent of all RCRA hazardous wast e generated by large quantity generators. While the next thr ee industry sectors – Waste Management and Remediation Services, Electronic and Electric Equipmen t Manufacturing, and Fabricated Metals Product Manufacturing – would include an additional 4.4 million tons (or appr oximately 14 percent) of additional hazardous waste, as is discussed later in th is notice, the Agency believes, for the reasons discussed later in this notice, that it needs to conduct fu rther investigation of these three industry sectors before it makes the decision to develop financial responsibility requirements for th ese classes of facilities.

17 It should be noted that CERCLA hazardous substances include RCRA hazardous wastes

.

14TABLE 2 RCRA 2007 Biennial Reporting Data on Waste Ge neration of NPL-Identified Industrial Sectors NAICS Code Description Generated Tons Percentage of Total Amount of Hazardous Waste Generated 325 Chemical Manufacturing 16,459,890 52.7% 324 Petroleum and Coal Products Manufacturing 4,189,468 13.4% 562 Waste Management and Remediation Services 2,690,809 8.6% 334- 335 Electronic and Electric Equipment Manufacturing 1,155,014 3.7%
332 Fabricated Metals Product Manufacturing 621,739 2.0% 321 Wood Products Manufacturing 48,923 0.16% 2211 Electric Power Generation, Transmission and Distribution 15,703 0.05% Total Amount of Hazardous Waste Generated 31,212,874

TRI is a database that contains detailed in formation on nearly 650 chemicals and chemical categories, many of which are hazardous substa nces under CERCLA, that over 23,000 industrial and other facilities manage through disposal or other releases, recycling, energy recovery, or treatment. The TRI data, which includes the repor ting facilities’ NAICS code s, shows that in 2007 two industry sectors identified in the NPL analysis were also among those reporting the largest quantities of on-site releases (not including the Hardrock Mining industry) – i.e., the Chemical Manufacturing industry (NAICS 325) (reporting the larges t quantity); and the Waste Management and Remediation Services industry (NAICS 562). In addition, another sector emerged from the TRI analysis -- the Electric Power Generation, Transmission and Distri bution industry (NAICS 2211) was the sector reporting the second- largest quantity of on-site releases. 18 ( See Table 3.) These three industry sectors comprise approxi mately 530 million pounds, or approximately 25 percent, of the total amount of on-site releas es of CERCLA hazardous substances, and with the

18 Primarily due to reporting of coal ash/combusti on residue, i.e., on-site land releases of CERCLA hazardous substances from NAICS 221112.

15Hardrock Mining industry represent over 75 percen t of the total amount of on-site releases of CERCLA hazardous substances. TABLE 3 2007 TRI On-Site Releases of CERCLA Haza rdous Substances for NPL-Identified Industrial Sectors NAICS

Code Description On-Site Releases (1,000 lbs) Percentage of Total On-Site Releases

325 Chemicals Manufacturing 220,246 10.2% 2211 Electric Power Generation, Transmission and Distribution 161,053 7.5% 562 Waste Management and Remediation Services 152,397 7.1% 324 Petroleum and Coal Products Manufacturing 46,052 2.1% 332 Fabricated Metals Product Manufacturing 10,292 0.5% 321 Wood Products Manufacturing 6,479 0.3% 334-335 Electronic and Electric Equipment Manufacturing 5,900 0.3%
C. Conclusions from the NPL/BR/TRI analyses. The analysis described above provided the Agency with seven i ndustry sectors and one additional category of facilities (recyclers of materials containing CERCLA hazardous substances) to consider for financial respons ibility requirements under CERCLA S ection 108)(b) in this notice. EPA looked at the commonalities across the top- ranked categories, using NAICS code as the common identifier. EPA weighed the results of it s analysis for each facility category, and then considered additional factors, which will be disc ussed below, to determine whether to develop a proposed rulemaking at this time. The classes of facilities with in two industry sectors emerge d as clearly appropriate for development of a proposed rule based on the results of the analysis -- th e Chemical Manufacturing industry (NAICS 325) and the Petr oleum and Coal Products Manufactur ing industry (NAICS 324). Specifically, the Chemical Manufacturing industr y (NAICS 325) was ranked second on the NPL analysis (representing ap proximately 12 percent of the NPL s ites), ranked first on the BR analysis (representing approximately 53 percent of the to tal amount of hazardous waste generated), and

16ranked first on the TRI analyses (representing ap proximately 10 percent of the total on-site releases). With respect to th e Petroleum and Coal Products Ma nufacturing industry (NAICS 324), it ranked second on the BR analysis (representing approximately 13 percent of the total amount of hazardous waste generated), and fourth on the TRI analysis (representing approximately 2 percent of the total on-site rel eases). While this industry sector did rank lower on the NPL analysis, we would note that many petroleum refineries, as part of their operations, have released and are likely continuing to release hazardous substances to the environment, and thus, the actual number of facilities in this industry sector that have created environmental damage is much larger than as measured by the NPL. Based on these data, the Ag ency believes it is appropriate to identify the classes within these tw o industry sectors as among those fo r which it will develop a proposed rulemaking regarding financial responsib ility under CERCLA Section 108(b). In addition, the Agency believes it is appropriate to also identify classes of facilities within the Electric Power Generation, Transmission, a nd Distribution industry (NAICS 2211) as among those for which it will develop a proposed ru lemaking regarding financial responsibility under CERCLA Section 108(b). Our basis for this is se veral-fold. First, this industry sector ranked second in the TRI analysis, repres enting approximately 7.5 percent of the total on-site releases. Further, although it did not rank high in the BR anal yses, it would not be e xpected to produce these results since coal combustion residuals (CCRs) are “Bevill exempt” 19 wastes, and thus not subject to BR reporting requirements. In addition, while th is industry sector was not identified in the NPL analysis, the Agency has documented evidence of proven damages to groundwater or surface water in 27 damage cases involving these wastes - 17 cases of damage to groundwater, and ten cases of

19 The “Bevill” exemption is codified at 40 CFR 261.4(b)(7).

17damage to surface water, including ecological damages in seven of the ten. 20 Finally, a recent catastrophic release in Tennessee of about one billion gallons of coal ash from the Tennessee Valley Authority’s Kingston Plant has demonstrat ed the significant cleanup costs that can be generated by this industry sector. (This is so even though this industry sect or was not identified as a relatively common presence on the NPL in the analysis above.) This additional information, which is discussed more fully in section II.C.3 of this notice, supplements the NPL, BR, and TRI analyses to confirm that development of proposed financial responsibilit y requirements for this industry sector is appropriate. As a result of evaluating this information, the Agency is today identifying classes of facilities within three industries -- the Ch emical Manufacturing industry (NAICS 325), the Petroleum and Coal Products Manufacturing in dustry (NAICS 324), and the Electric Power Generation, Transmission, and Distri bution industry (NAICS 2211) as those for which the Agency plans to develop a proposed regulation identifying appropriate financial responsibility requirements under CERCLA Section 108(b). In identifying classes of facilities within thes e industries in this notice, the Agency does not intend to indicate that other classes in othe r industry sectors are no longer being considered. ( See Section E for discussion of additional classes of facilities that EPA plans to study further before deciding whet her to initiate the development of a proposed regulation.) D. Additional Information Regarding the Classes of Facilities for Which EPA Plans to Develop a Proposed Regulation

20 The 24 cases identified in EPA’s Coal Combustion Waste Damage Case Assessments , July 9, 2007, available at: www.regulations.gov/fdmspublic/component/main?main=Document Detail&d=EPA-HQ-RCRA-2006-0796-0015; with the addition of Martin Creek, Pennsylvania, where in August, 2005, a dam confining a 40-ac re CCR surface impoundment failed, resulting in the discharge of 100 million gallons of coal ash and contaminant water; Gambrills, MD; and Kingston/TVA, TN.

18As was discussed above, the Agency is identifying in this Federal Register notice the classes of facilities within the Chemical Manufacturing (NAICS 325), Petroleum and Coal Products Manufacturing (NAICS 324), and Electric Power Generation, Transmission, and Distribution (NAICS 2211) industries as those for which EPA will begin the development of a proposed rule regarding financial responsibil ity requirements under CERCLA Section 108(b). EPA identified the classes within these industry se ctors on the analyses an d information described above. As was also discussed above, the Agency identi fied, in the July 2009 notice, eight factors it would take into consideration when evaluating any additional classes of faci lities. To take these factors into account in its analys is, the Agency relied on readily av ailable, reliable sources of information that reflected the f actors -- i.e., the NPL, BR, and TR I (see discussion in section II of this notice). After identifying the classes of facilities in the Chemical Manufactur ing, Petroleum and Coal Products Manufacturing, and Electric Power Genera tion, Transmission, and Distribution industries, the Agency further evaluated those industry sector s by gathering additional information related to the eight factors, to the extent it was practicable to do so. The results verified the Agency’s analysis. The following discussion describes the results for each of the industry sectors, in turn.
1. Chemical Manufacturing (NAICS 325) For purposes of this Federal Register notice, EPA has included the following classes of facilities, which are encompassed by the NAICS code 325 definition of the “Chemical Manufacturing” industry: faciliti es involved in the transformati on of organic and inorganic raw

19materials by a chemical process a nd in the formulation of products. 21 As is explained below, chemical manufacturing facilities share common charac teristics, and are thus being identified as a group. At the same time, those f acilities included in the definition above differ such that “chemical manufacturing facilities” are properly considered to encompass multiple “classes” of facilities. The various classes in this Federal Register notice’s definition of chemi cal manufacturing are primarily involved in one or more of three general activities: (1) preparat ion of raw material inputs, (2) chemical reactions and synthesis, and (3) re covery of reaction products through purification, isolation, separation, drying, and a vari ety of other methods, to create a good that can be either sold as a finished material or as an intermediate for further processing by other manufacturers. The chemical industry is an integral part of the United States’ (U.S.) economy, converting various raw materials into more than 70,000 dive rse products. These raw material inputs are generally either organic (oil, natu ral gas) or inorganic raw material s (ores or natural elements taken from the earth). 22 In many instances, these raw materi al inputs need to undergo chemical or physical processes before they are introduced in the chemical reaction, and these processes tend to be a large source of hazardous s ubstances. For example, in the production of chlorine, raw brine requires the removal of impurities, such as calcium, magnesium, and other trace metals, to obtain the process input sodium chloride. 23 The removal of impurities leads to the formation of brine

21 Within NAICS 325 belong the following: Basi c Chemical Manufacturi ng (NAICS 3251); Resin, Synthetic Rubber, and Artificial Synthetic Fibers and Filaments Manufacturing (NAICS 3252); Pesticides, Fertilizer, and Other Agricultu ral Chemical Manufacturing (NAICS 3253); Pharmaceutical and Medicine Manufacturing (N AICS 3254); Paint, Coating, and Adhesive Manufacturing (NAICS 3255); Soap, Cleaning Co mpound, and Toilet Preparation Manufacturing (NAICS 3256); and Other Chemical Product a nd Preparation Manufactur ing (NAICS 3259). 22 Department of Energy. Office of Industria l Technologies. (2000). Energy and Environmental Profile of the U.S. Chemical Industry. Co lumbia, MD: ENERGETICS Inc. Available: http://www1.eere.energy .gov/industry/chemicals/tools_profile.html 23 EPA (U.S. Environmental Protection Agency). 1995. U.S. EPA Office of Compliance Sector Notebook: Profile of the Inorganic Chemi cal Industry. EPA/310-R-95-004 SIC Code: 281.

20muds, a large waste stream containing the haza rdous substances sulfate, chloride, and carbon tetrachloride. 24 The next step in the chemical and allied produc ts manufacturing process, chemical reaction and/or synthesis, exhibits vari ety both across and within sector s in the chemical manufacturing industry, although with the common characteristic of using a chemical process to formulate a product. Some examples of chemical reac tions include oxidation in the formation of formaldehyde, and polymerization in the formation of plastic resins. Inputs will often go through more than one reaction. In many sectors, a reactor vessel acts as a host to the reaction, as well as sometimes acting as a crystallizer , heater, mixer, or evaporator. 25 Chemical synthesis can be responsible for significant emissions of hazar dous substances, including ammonia, ethylene, aromatics, alcohols, oxides, acids, and chlorine. 26 In organic chemical manufacturing, inputs are generally added by either a batch process, in whic h all reactant chemicals are added to a reaction vessel at the same time and the products are emptie d completely when the reaction is finished, or by a continuous process, in which reactants are added and products are removed at a constant rate. Chemicals may be emitted more at the beginning and end of the reaction during operations, such as vessel loading and product transfer. 27 , 28

Available on-line at: http://www.epa.gov/compliance/res ources/publications/assistance/se ctors/notebooks/inorganic.html 24 International Finance Corpor ation, World Bank Group 2007. “Envir onment, Health, and Safety Guidelines: Large Volume Inorganic Compounds Manufacturing and Coal Tar Distillation.” Available at http://www.ifc.org/ifcext/sustainabil ity.nsf/Content/EnvironmentalGuidelines 25 EPA 1997. Office of Compliance Sector Notebook: Pr ofile of the Pharmaceutical Industry

. EPA/310-R-97-005: 283. Available on-line at: http://www.epa.gov/compliance/re sources/publications/assistanc e/sectors/notebooks/pharmaceutica l.html 26 EPA 2002. Office of Compliance Sector Notebook: Pr ofile of the Organic Chemical Industry

. EPA/310-R-02-001 SIC Code: 281. http://www.epa.gov/compliance/resources/publications/assistance/ sectors/notebooks/organic.html 27 Ibid

21The desired end products are rare ly obtained in pure form out of the reaction or synthesis process, and by-products and unreacted inputs must be removed. Once the reaction occurs, the targeted product or products must be isolated and purified, and this purification process will vary based on inputs, processes, and the targeted pr oduct. For example, co mmon separation methods used by the organic chemical manuf acturing industry include filtra tion, extraction, or distillation, the latter a method used to separa te or purify volatile components from less volatile components. Some environmental concerns associ ated with distillation include rel eases to the air from condenser vents, waste streams, and wastes from cleaning. Pharmaceutical manufacturers typically utilize a series of separation, crystallization, purificati on, and drying stages in formulating a product. 29 These steps can lead to the emission of hazardou s substances from uncontained filtering systems and dryers, and wastewaters may be formed fr om equipment cleaning, spills, leaks, and spent purification solvents. In the pr oduction of chlorine and caustic s oda, classified under the inorganic chemical manufacturing industry, re covered chlorine gas is proce ssed with sulfuric acid, which may then be released to water or disposed on the land. 30 Other wastes from the production of chlorine and caustic soda include chlorine gas emissions (both fugitive and point sources); spent acids; Freon (both fugitive and point source); and pollutants originating from electrolytic cell materials and other system parts. 31

28 EPA 1997. Office of Compliance Sector Notebook: Profile of the Pharmaceutical Industry

. EPA/310-R-97-005: 283. Available on-line at: http://www.epa.gov/compliance/re sources/publications/assistanc e/sectors/notebooks/pharmaceutica l.html 29 Ibid. 30 EPA 1995. Office of Compliance Sector Notebook: Profile of the Pharmaceutical Industry

. EPA/310-R-95-004: 281. Available on-line at: http://www.epa.gov/compliance/res ources/publications/assistance/se ctors/notebooks/inorganic.html 31 EPA 1995. Office of Compliance Sector Notebook: Profile of the Pharmaceutical Industry

. EPA/310-R-97-005: 283. Available on-line at:

22Both because of the way that the facilities covered by this Federal Register notice fit together, and because of the range of activit ies that they cover, EPA believes chemical manufacturing is properly identified as a group and considered to incl ude multiple classes of facilities.

a. Releases and Exposure to Hazardous Substances The Chemical Manufacturing industr y typically operates on a large sc ale, with releases to the environment and, in some situations, subsequent exposure of humans, organisms, and ecosystems to hazardous substances on a simila rly large scale. As was previously discussed, the Agency’s TRI data revealed that the Chemical Manufacturing industry released large quantities of CERCLA hazardous substances, approximately 220 million pounds , or approximately 10 percent of the total on-site releases of hazardous substances reported under TRI. This overall percentage has remained relatively stable since 2001, ranging from 291 million pounds of total on-site releases of hazardous substances in 2001 to 233 million pounds in 2006. In 2007, the majority of on-site releases of hazardous substances from the Chemical Manufact uring industry were to underground injection, with additional releases to the air, water, and land. 32 Further, according to the 2007 RCRA BR, the Chemical Manufacturing industry generated approximately 16.5 million tons of hazardous waste, or approximately 53 percent of the total amount of hazardous waste reported by large quantity generators. This waste can take a variety of forms, including spent solvents, distillation bottoms and side-cuts, off speci fication or unused toxic

http://www.epa.gov/compliance/re sources/publications/assistanc e/sectors/notebooks/pharmaceutica l.html 32 See TRI data from Bill Kline, U.S. EPA. On-site Releases of ASTDR Hazardous Substances Reported to TRI for 2001 through 2007, by Industry and Year , October 8, 2009.

23chemicals, wastewater, wastewater treatment slu dge, emission control sludges, filter cake, spent catalysts, by-products, reactor clean out wastes, and container residues. 33 Finally, the potential for releases of and exposure to hazardous substances is reflected in the large number of active facilities operating in the U.S. While es timates of the number of active chemical manufacturing facilities vary, in 2007, th e Census Bureau estimated that there were approximately 13,000 chemical manufact uring facilities in the U.S. 34 In some cases, these wastes have led to ground and surface water contamination when improperly managed. 35 In particular, EPA’s review of its NPL site information underscores the risk of chemical manufacturing faci lities. To begin with, that re view showed almost 180 facilities with sites included on the NPL. Pemaco Mayw ood, a four-acre facility in Maywood, California, that housed a chemical blending plant operati ng between the 1940s and 1991, is a prominent example of a facility with high risk to the e nvironment and human health . During its years of operation, hazardous chemicals were stored in both above- and below-ground tanks, and drums included chlorinated and aromatic solvents, fla mmable liquids, petroleum hydrocarbons, and other VOCs. In a later study of contamination of the site, several volatile organic chemicals (VOCs) were identified as infiltrating soil and wells drawing from groundwater. Aqueous samples taken from the wells contained highly toxic hydrocarbons, such as vinyl chloride, trichloroethene (TCE), 1,1,1-trichloroethane (TCA), 1,1- a nd 1,2-dichloroethenes, and 1,1-dich loroethane, all listed on the

33 European Commission. Integrated Po llution Prevention and Control (IPPC). Reference Document on Best Available Techniques in th e Large Volume Organic Chemical Industry . 2003. European Commission Joint Research Centre. Available at: <ftp://ftp.jrc.es/pub/eipp cb/doc/lvo_bref_0203.pdf>. 34 American Fact Finder. 325 Chemical Ma nufacturing. U.S. Census Bureau, 2007 Economic Census. Last Updated: March. Available: http://factfinder.census.gov/ servlet/IBQTable?_bm=y&- ds_name=EC0700CADV1&-NAICS2007=325&-_lang=en . Accessed September 9, 2009. 35 See, for example, “NPL Site Narrative fo r Diaz Chemical Corpor ation,” available at www.epa.gov/superfund/sites/npl/nar1708.htm , or “NPL Site Narrative for Standard Chlorine Chemical Company,” available at www. epa.gov/superfund/sites/npl/nar1672.htm.

242007 CERCLA Priority List of Hazardous Substances. 36 The site is of particular concern because 13 water purveyors draw groundwater from 78 wells within four miles of the site to supply drinking water to approximately 339,000 people. Furthe rmore, the site is in a mixed industrial and residential community, with a residential tract across the street. 37 Similarly, the Woolfolk Chemical Superfund site, in Fort Valley, Georgia, a full-line pesticide plant formulating products in liquid, dust, and granular forms for the agricultu ral, lawn, and garden markets emitted a large amount of chemicals throughout its years of operation. Monitors de tected metals and pesticides, including lead, arsenic, chlord ane, DDT, lindane, and toxaphene, in on-site so il and groundwater, and in an open ditch south of th e plant. Three of the five Fort Valley municipal water supply wells are within 1,000 feet of the facility, and an estimated 10,000 pe ople obtain drinking water from municipal wells within three miles of the site. 38 , 39
b. Severity of Consequences Resulting from Re leases and Exposure to Hazardous Substances. These situations, as well as others, EPA believes, have led to, and will continue to lead to, impacts to public health and the environment as a result of releases and exposure of hazardous

36 ATSDR (Agency for Toxic Substances and Diseas e Registry). 2007. “CERCLA Priority List of Hazardous Substances.” U.S. Department of Health and Human Services. Available: http://www.atsdr.cdc.gov/cercla/07list.html . CERCLA Section 104 (i), as amended by the Superfund Amendments and Reauthorization Act (SARA), requires ATSDR and EPA to prepare a list, in order of priority, of substances that are most commonl y found at facilitie s on the NPL and that are determined to pose the most significant po tential threat to human health due to their known or suspected toxicity and potential fo r human exposure at these NPL sites. 37 EPA 2009. NPL Site Narrative for Pemaco Maywood . Available at: http://www.epa.gov/superfund/sites/npl/nar1517.htm 38 EPA 2009. NPL Site Narrative for Woolfolk Chemical Works, Inc ., available at: http://www.epa.gov/superfund/sites/nplsnl/n0401315.pdf 39 Envirofacts Warehouse, “Facility Detail Report.” Available: http://oaspub.epa.gov/enviro/fii_m aster.fii_retrieve?f ac_search=handler_id&fac_value=GAD00326 9578&fac_search_type=Beginning+With&postal_c ode=&location_address= &add_search_type=Be ginning+With&all_programs=YES&univ_search=0&univA=1&univB=1&LIBS=&procname=&pr ogram_search=2&report=1&page_no=1&output_ sql_switch=TRUE&database_type=RCRAINFO

. Accessed: September 4, 2009

25substances. Specifically, the seve rity of consequences posed by chemical manufacturing facilities is evident in the large costs associated with past and estimated future actio ns necessary to protect public health and the environment through what are often extensive and long-term remediation efforts. In other words, the documented expend itures for cleanup reflect efforts to correct the realized risks from chemical ma nufacturing facilities. As noted earlier, chemical manufacturing facilities release, and ha ve the potential to releas e, large quantities of hazardous substances, which can affect the environment and populations. Gr oundwater and soil contamination require longterm management and treatment. Remediation of these chemical manufacturing facilities has therefore been historically costly. For the NP L sites identified in the NAICS 325 category, EPA has spent approximately $2.7 billion through FY 2009. 40 41 For example, Whitmoyer Laboratories, a veterinary and pharmaceutical ma nufacturing plant, produced, store d, and disposed of arsenic on its 22-acre site. Over the years, the laboratory changed ow nership and in 1964 detectable levels of arsenic were found in the soil, groundwater and surf ace water. This site was added to the NPL in 1987, and remediation efforts included demolishing th e 17 abandoned buildings and the removal of

40 This number is in constant 2009 dollars, and repr esents the Office of Superfund Remediation and Technology Innovation’s (OSRTI) analysis of end ofFY 2009, cumulative, site-specific, agencywide, direct expenditures of Supe rfund appropriated and reimbursabl e resources extracted from the EPA Integrated Financial Management System (IFMS). Expenditure data include all direct costs, including, but not limited to site assessments, remedial, removal, enforcement, and oversight costs. Data do not include indirect cost s, costs incurred by private or ot her parties performing response actions, or future costs to be incurred at these s ites and may not be used for cost recovery purposes. See email from Alan Youkeles to Elaine Eby entitled: Cost Data for NAICS Sites , October 30, 2009. 41 Expenditure data are converted into 2009 consta nt dollars using GDP deflation factors derived from: Table 10.1 – Gross Domestic Product and Deflators Used in the Historical Tables: 1940- 2009, from the Budget of the U.S., FY 2005 Online via GPO access.

26more than 50,000 tons of arsenic-contaminated waste and soils, with a projected cost of $124
million. 42 , 43 Thus, EPA’s past experience with NPL s ites leads it to conclude that chemical manufacturing facilities are likely to and continue to present a substantial financial burden that could be met by financial responsibility requirements. Common corporate structures a nd interrelated corporate failures within the Chemical Manufacturing industry also incr ease the likelihood of uncontro lled releases of hazardous substances being left unmanaged, increasing risks . In particular, the existence of a parent-subsidiary relationship can present several risks. First, cor porate structures may allow parent corporations to
shield themselves from liabilities of their subsidiaries. 44 In a 2005 study, GAO cited chemical manufacturing as an example of businesses at risk of incurring substantial liability and transferring the most valuable assets to a parent that could not be reached for cleanup. 45 Second, chemical manufacturing sites tend to change ownership, making the assignment of appropriate responsibility for re mediation costs difficult. For instance, a 500-600 acre Brunswick, Georgia site that was most recently owned by LCP Chemicals has a long history of turnover between owners. The site was originally owned and operated by a petroleum refinery from 1919 until 1930, while portions of the site were also owned by a paint manufacturer and an energy provider. Allied Chemical bought the site in the mid-1950s and manuf actured caustic soda,

42 Congress of the U.S. Congressi onal Budget Office. A CBO Study. 1994. The Total Cost of Cleaning Up Non-Federal Superfund Sites , at p.22. Available at: http://www.cbo.gov/ftpdocs/48xx/doc4845/EntireReport.pdf 43 EPA, Mid-Atlantic Superfund Site. Accessed at: http://www.epa.gov/reg3hwmd/npl/PAD003005014.htm 44 See United States v. Bestfoods , 542 U.S. 51, 61(1998)

. 45 U.S. Government Accountability Office. 2005. Environmental Liabilities: EPA Should Do More to Ensure That Liable Partie s Meet Their Cleanup Obligations . Report to Congressional Requesters. GAO-05-658, pp. 21-24. Accessed at: http://www.gao.gov/highlights/d05658high.pdf

27chlorine, and hydrochloric acid, until the s ite was purchased by LCP Chemicals in 1979. Investigation of the area has f ound on-site contamination of mercur y, lead and PCBs. Since being added to the NPL, several diffe rent potentially responsibility parties have been identified. 46 Furthermore, there have been a number of bankruptcies in the Chemical Manufacturing industry that resulted in or will likely require significant Federal responses, such as:

• When the owner/operator of Vertac Chemical Company filed for bankruptcy, it left behind nearly 29,000 drums of chemical waste in J acksonville, Arkansas. EPA’s remediation efforts included the incineration and off-site sh ipment of these drums, as well as clean-up of contaminated soil and destruction of the rema ining industrial structures. These efforts resulted in a cost to EPA of over $127 million and ongoing disputes over legal responsibility. 47

• Chemical releases from a Delaware chlorina ted benzene manufacturing facility that went bankrupt in 2002 have led to contamination of soil, sediment, a groundwater aquifer, and nearby surface water. Cleanup at this site has included th e completion of a groundwater barrier and pump-and-treat system and treatm ent of contaminated soils. As of 2005, EPA estimated that it had incurred about $28 million in cleanup costs, and that the total cost will eventually rise to up to $100 million. 48 Considering all of this information, EPA concl udes that the classes of facilities within the Chemical Manufacturing industr y are among those for which EPA should develop a proposed

46 EPA 2009. “NPL Site Narrative for LCP Chemicals Georgia.” Available at: http://www.epa.gov/superfund/sites/npl/nar1458.htm 47 EPA 2007. “Compliance and Enforcement Annu al Results: FY2007 Superfund Enforcement.” Available at: http://www.epa.gov/compliance/resour ces/reports/endofyear/eoy2007/2007-spsuperfund.html

. 48 U.S. Government Accountability Office (US GAO). 2005. Environmental Liabilities: EPA Should Do More to Ensure That Liable Parties Meet Their Cleanup Obligations . Washington, D.C. Page 37. August 2005. GAO-05-658. www.gao.gov/cgi-bin/ getrpt?GAO-05-658

28regulation that will identify appropriate financial respons ibility requirements under CERCLA Section 108(b).
2. Petroleum and Coal Products Manufacturing (NAICS 324) For purposes of this Federal Register notice, EPA has included the following classes of facilities that are encompassed by the NAICS co de 324 definition of the “Petroleum and Coal Products Manufacturing” industry: facilities that transform crude petroleum and coal into usable products (e.g., gasoline, diesel fu el, asphalt base and coatings, hea ting oil, kerosene, and liquefied petroleum gas). 49 The dominant process in this industry sect or (which we discuss in this notice) is petroleum refining which involves the separation of crude petroleum into component products through such techniques as fractionation, distilla tion, and/or cracking. (H owever, this industry sector includes activities, such as the production of coke oven products that are not produced at steel mills, including tar derivatives, ammonia, light oil derivatives, and coke oven gas.) Facilities in this industry sector share comm on characteristics, and are, thus , being identified as a group. At the same time, facilities included in the class diffe r, and thus, are properly considered to encompass multiple classes of facilities. The various classes in this Federal Register notice’s definition of petroleum refining are involved in one or more of three general activities: (1) fractionation; (2) straight distillation of crude oi l; and (3) cracking. Depending on the product sought, any or all of these processes may be used. The operations that comprise this indu stry sector are all part of a sequential process of converting crude petroleum into marketable petroleum-based products, even though the intermediate and end products may differ.

49 Within NAICS 324 belongs the following: Petroleum Refineries (NAICS 32411); Asphalt Paving, Roofing, and Saturated Materials Manuf acturing (NAICS 32412); and Other Petroleum and Coal Products Manuf acturing (NAICS 32419).

29Both because of the way that the facilities covered by this Federal Register notice fit together, and because of the range of activities th at they cover, EPA believes petroleum and coal products manufacturing is properly identified as a group and considered to include multiple classes of facilities. Faci lities not considered not to be part of the Petroleum and Coal Products Manufacturing industry – that is, not part of NAICS 324 -- include establishments that focus primarily on the further processing of refined petroleum products to produce products, such as petrochemicals. For example, facilities that are exclusively involved with any of the following processes are not considered to be part of NAICS 324 -- the Petroleum and Coal Products Manufacturing industry:

• Manufacturing paper mats and felt s and saturating them with as phalt or tar into rolls and sheets (NAICS code 322121);

• Manufacturing synthetic lubricating oils and greases (NAICS code 325998) 50 ;

• Recovering natural gas and/or liquid hydrocar bons from oil and gas field gases (NAICS code 21111);

• Manufacturing acyclic and cyclic aromatic hydrocarbons (i.e., petrochemicals) from refined petroleum or liquid hydrocarbons (NAICS code 325110);

• Manufacturing cyclic and acycl ic chemicals (except petrochemicals) (NAICS code 32519); and

• Manufacturing coke oven products in steel mills (NAICS code 331111).

a. Releases and Exposure to Hazardous Substances

50 It should be noted, however, that some of thes e processes fall within cl asses identified elsewhere in this Federal Register notice – in this case, th e classes within NAICS 325.

30EPA’s research indicates that while the pe troleum refining industry has facilities throughout the U.S., it is also geographically concentrated, with the highest number of facilities located in Texas (27 facilities), California (20 f acilities), and Louisiana (19 facilities). 51 Thus, releases to the environment have resulted, in some situations, in subsequent exposure of humans, organisms, and ecosystems to hazardous substances on a regional scale. As was previously discussed, the Agency’s TR I data revealed that the Petroleum and Coal Products Manufacturing industry re leased approximately 46 milli on pounds of CERCLA hazardous substances, or approximately 2.0 percent of the total on-site releases by U.S. industry reporting to
TRI. 52 This overall percentage has remained relatively stable since 2001, ranging from approximately 41 million pounds of total on-site releases of hazardous substances in 2003 to approximately 47 million pounds in 2006. In 2007, the majo rity of on-site releases were to surface water and air, with additional releas es to the land and underground injection. 53 The potential for releases of and exposure to hazardous substances is also reflected in the number of active facilities operating in the U.S. In 2007, the U.S. Census Bureau estimated the number of active petroleum and coal products ma nufacturing facilities at approximately 2,300. Of this total, there are approximately 190 operating petroleum refining facilities. 54 Currently operating petroleum refining faciliti es tend to be very large, high-volume facilities. For example, the aggregate output of the 93 U.S. petroleum refi neries listed on the Fina ncial Reporting System

51 Energy Information Administration. U. S. Depa rtment of Energy. Refinery Capacity Report 2009, Released June 25, 2009. Available at www.eia.doe.gov/oil_gas/petroleum/data_publications /refinery_capacity_data/refcapacity.html. 52 See : TRI data from Bill Kline, EPA. Onsite Releases of ATSDR Hazardous Substances Reported to TRI for 2001 through 2007, By Industry and Year , October 8, 2007. 53 See : TRI data from Bill Kline, EPA. Onsite Releases of ATSDR Hazardous Substances Reported to TRI for 2001 through 2007, By Industry and Year , October 8, 2007. 54 U.S. Census Bureau, 2009. 2007 Economic Census. Accessed at: http://factfinder.census.gov/servlet/ IBQTable?_bm=y&-ds_name=EC0731I1&- NAICS2007=324110&-ib_type=NAICS2007&-geo_id=&-_industry=324110&-_lang=en

31(FRS) 55 was 14.17 million barrels per calendar day in 2007. 56 Because refineries tend to be operated for decades, there is a long timeframe for potential releases a nd exposure of hazardous substances to occur. In addition, because of their need for large amounts of cooling water for operations, refineries tend to be located near na vigable waterways or on the seashore, which likely increases the potential to impact groundwater, surface water, aquatic biota, and aquatic vegetation. Other impacts to terrestrial vegeta tion, wetlands, wildlife, soils, ai r, cultural resources, and humans that use these resources recreationally or for subsistence also are likely. Facilities in the Petroleum and Coal Pr oducts Manufacturing industry also generate significant quantities of hazardous wastes, which ma y increase the risk of releases of hazardous substances. According to the 2007 RCRA BR, a pproximately 4.2 million tons of hazardous waste was generated by this industrial sector (second on ly to the Chemical Manufacturing industry). These wastes, which include primary and secondary sludges, spent catalysts, filter cakes, sour water, heavy ends (distillation bottoms), dissolv ed air/nitrogen flotati on (DAF/DNF), flotation debris, waste soils, oily sludge, tank bottom sl udge, clarified slurry oil, and tank bottoms 57 have the potential to result in adverse environmental c onsequences if not prope rly managed. Hazardous wastes generated by the Petroleum and Coal Products Manufacturing industry can contain significant concentrations of certa in toxic chemicals (benzene, arsenic, and polycyclic aromatic hydrocarbons (PAHs)).

55 FRS is a reporting system operated by the Energy Information Administration (EIA) through which major energy-producing companies based in the U.S. annually report their worldwide financial and operating data on a uniform and standardi zed basis via Form EIA-28. 56 EIA Official Statisti cs from the U.S. Government, 2009. U. S. and Foreign Petroleum Refining Statistics for FRS Companies. Accessed at: http://tonto.eia.doe.gov/cfapps/frs/frstables.cfm?tableNumber =28&startYear=1998&endYear=2007 57 See Memorandum from Cpan Lee, to Elaine Eby, EPA, entitled: Wastes Description Generated by Petroleum Refineries (NAICS 3241xx ). November 4, 2009.

32In some cases, these wastes have led to ground and surface water contamination when improperly managed. In particular, EPA’s analysis of NPL sites shows that 30 currently listed NPL sites have been attributed to petroleum and coal products manufacturing processes; of this total, 22 have been attributed to petroleum re finery operations. Sites contaminated by these processes typically contain a number of different contaminants, including toxic organics, such as benzene, polychlorinated biphenyls, phenol, and volatile organic compounds; and heavy metals, such as barium, cadmium, chromium, copper, lea d, selenium, and zinc. The Falcon Refinery provides an example of contaminat ion resulting from petroleum refi ning. The Falcon Refinery site occupies approximately 104 acres in San Patricio County, Texas. The site was proposed to be added to the NPL based on evidence that hazardo us substances (including arsenic, barium, chromium, copper, lead, manganese, mercury, nick el, selenium, vanadium, zinc, and PAHs) have migrated or could potentially migrate from the facility to active fisheries and sensitive environments within the adjacent wetlands of Re dfish Bay, Aranas Bay, and Corpus Christi Bay. The Falcon Refinery operated intermittently si nce 1980, and is currently inactive. When in operation, the refinery operated at a capacity of 40,000 barrels per day with primary products consisting of diesel, fuel oil, jet fuel, kerose ne, and naphtha. The Fa lcon Refinery processed material that consisted of not only crude oil, but also contained RCRA hazardous wastes, including EPA Hazardous Waste Nos. K048 (dissolved air fl otation float), K049 (slop oil emulsion solids), K050 (heat exchanger bundle cleani ng sludge), and K051 (API separa tor sludge). Other hazardous wastes at the site include: (1 ) vinyl acetate, (2) cooling tower sludges co ntaining chromium, (3) non-crude oil constituents detected in a pipeline sp ill, (4) untreated wastewater released inside tank berms, and (5) leaking drums. 58

58 See www.epa.gov/superfund/sites/npl/nar1667.htm.

33Another example demonstrating the mismanag ement of hazardous substances at such facilities is the Tennessee Products site in Chat tanooga, Tennessee. The site consists of two distinct source areas of contamination: (1) ce rtain areas in the flood pl ain containing uncontrolled coal-tar constituents; and (2) sediments along ap proximately 2.5 miles of Chattanooga Creek that were contaminated with coal-tar constituents. C ontamination in the creek was caused, in part, by a former coal carbonization facility (coke plant). This facility was operated from approximately 1918 until 1987. Various companies operated the f acility throughout its history. The Tennessee Products Corporation operated it the longest, from 1926 to 1964. Unc ontrolled dumping of coal-tar wastes contaminated the facility, the groundwat er underlying the facility, and sediments and surface water in Chattanooga Creek downstream of the facility. Th ese coal-tar wastes contained high levels of various polynuclear aromatic hydr ocarbons (PAHs). Residents from nearby housing projects and homes in this urban area used Ch attanooga Creek for swimming, playing, and fishing by both children and adults. After the Tennessee Department of Environment and Conservation issued a health advisory for the Creek in 1983 and a fish consumption advisory in 1992, EPA fenced a section of the Creek to prevent public ac cess. After the site was listed on the NPL in 1995, EPA conducted a removal action that removed approximately 25,350 cubic yards of coal-tar and contaminated sediment from the s ite at a cost of $12 million dollars. 59 From 2005 to 2007, a remedial action excavated approximately 107,000 t ons of stabilized sediment from the creek channel and transported it for dispos al at an off-site landfill. A protective banner also was installed over 5,740 linear feet of creek channel to guard against potential recontamination. 60

59 EPA Superfund Update. Proposed Plan Fact Sheet. Clea nup of Chattanooga Creek – Tennessee Products Superfund Site, Chattanooga, Hamilton County, Tennessee . August 2002. 60 See Tennessee Products (ChattanoogaCreek) at https://www.epa.gov/Region 4/waste/npl/npltn/tennprtn.htm#progress.

34In addition to sites that have been listed on the NPL, EPA notes that many petroleum refineries, as part of their opera tions, have released and may be continuing to release hazardous substances to the environment, including to gr oundwater. In certain instances, the amount of hydrocarbons released to th e groundwater is such that these refi neries are actually pumping out the hydrocarbons from the groundwater table, and recovering them back in the refinery, 61 which demonstrates the significant extent to which these materials have been mismanaged. b. Severity of Consequences Resulting from Releas es and Exposure to Hazardous Substances The severity of the consequences impacting human health and the environment as a result of releases and exposure of hazardous substances at petroleum and coal products manufacturing processes is evident by analyzing a number of factors. Specificall y, the severity of consequences posed by this industry sector is ev ident in the large cost s associated with past and estimated future costs necessary to protect public health and the environment through what are often extensive and long-term remediation efforts. In other words, the documented expenditures reflect efforts to correct the realized risks from petroleum and coal products manufacturing facilities. These facilities release hazardous substances, which have, in some instances, resulted in contamination that requires long-term management and treatment. Remediation of these sites, therefore, has been historically costly. For the NPL sites identified as petroleum re fineries in the NAICS 324 category,

61 RCRA Facility Investigations (RFIs) document releases to the environment from regulated units subject to corrective acti on under Subtitle C. These RFIs ar e used to characterize the nature, extent, and rate of migration of contaminant releas es to soils, ground water, s ubsurface gas, air, and surface water. They also provide guidance to the regulatory agen cy to determine if interim corrective measures may be necessary. EPA has reviewed RFIs from petroleum refineries and finds that released hydrocarbons are being recovered from th e groundwater and recovered and reprocessed into the faci lities oil refining process. For example, Sunoco, Inc Tulsa Refinery includes a “Light Non-Aqueous Phase Liquid (L NAPL) Recovery Plan” in its Closure and Corrective Action Permit (OKD058078775-PC). 61 See 55 FR 11798, March 29, 1990, 55 FR 40834, October 5, 1990, 56 FR 3978, February 1, 1991, and 56 FR 13406, April 2, 1991.

35EPA has spent approximately $250 million through FY 2009. 62 63 Thus, EPA’s past experience with these sites leads it to conclude that petr oleum and coal products ma nufacturing facilities are likely to continue to present a substantial fi nancial burden that could be met by financial responsibility requirements. Exampl es of such releases include:

• The Indian Refinery – Texaco Lawrenceville site, located in Lawrenceville, Illinois, was active as a petroleum refinery from the early 1900s until 1995. During its operation, the refinery produced many products. A variety of waste products was also generated and disposed of or released on and off-site. Petroleum products and hazardous substances, including an acidic sludge (lube oil acid sludge and lube oil f ilter cake sludge), polycyclic aromatic hydrocarbons (PAHs), benzene, toluen e, ethyl-benzene, xylene, cadmium, lead, and other metals have been detected in su rface waters, soil, and in groundwater on or adjacent to the site. This site is being a ddressed in two stages – immediate actions and long-term actions, focusing on cleanup of the entire (940 acres) site, which are still ongoing.

• The Double Eagle and 4 th Street Refineries, located acro ss the street from each other in Oklahoma County, Oklahoma, were proposed fo r listing on the NPL in 1988, subsequently

62 This number is in constant 2009 dollars, and re presents the Office of Superfund Remediation and Technology Innovation’s (OSRTI) analysis of end ofFY 2009, cumulative, site-specific, agencywide, direct expenditures of Supe rfund appropriated and reimbursabl e resources extracted from the EPA Integrated Financial Management System (IFMS). Expenditure data include all direct costs, including, but not limited to site assessments, remedial, removal, enforcement, and oversight costs. Data do not include indirect cost s, costs incurred by private or ot her parties performing response actions, or future costs to be incurred at these s ites and may not be used for cost recovery purposes. See email from Alan Youkeles to Elaine Eby entitled: Cost Data for NAICS Sites , October 30, 2009. 63 Expenditure data are converted into 2009 consta nt dollars using GDP deflation factors derived from: Table 10.1 – Gross Domestic Product and Deflators Used in the Historical Tables: 1940- 2009, from the Budget of the U.S., FY 2005 Online via GPO access.

36remediated, and deleted from the NPL in 2008. Cleanup costs were estimated at $30
million. Considering all of this information, EPA conc ludes that the Petroleum and Coal Products Manufacturing industry (NAICS 324) consists of classes of facilities for which EPA should develop a proposed regulation that will identify appropriate financial re sponsibility requirements under CERCLA Section 108(b).
3. Electric Power Generation, Transmissi on, and Distribution (NAICS 2211). For purposes of this Federal Register notice, EPA has included the following classes of facilities that are encompassed by the NAICS code 2211 definition of the “Electric Power Generation, Transmission and Dist ribution (NAICS 2211): facilities primarily engaged in generating, transmitting, and distributi ng electric power. Establishments in this industry group may perform one or more of the follo wing activities: (1) generate electric energy; (2) operate transmission systems that convey the electricity from the generation facility to the distribution system; and (3) operate distribution systems th at convey electric pow er received from the generation facility or the transmission system to the final consumer. Various sources of energy can be converted into electric energy or electricity. The major, or dominant, sources include fossil fuels, uranium, and water. About 72 pe rcent of electric power generation in the U.S., however, come s from fossil fuels (i.e., coal, oi l, or gas). Coal and natural gas are currently the domin ant fossil fuels used by the industry. The use of coal results in large quantities of solid waste includi ng coal combustion residuals (CCR). 64 The majority of the electricity generated in the U.S. is produced by facilities that employ steam turbine systems. The proce ss of generating electricity from steam comprises four parts: a

64 See: www.eia.doe.gov/cneaf/electri city/page/prim2/toc2.html

. Electric Power Industry Overview 2007.

37heating subsystem (fuel to pr oduce the steam), a steam subsystem (boiler and steam delivery system), a steam turbine, and a condenser (for cond ensation of used steam). Heat for the system is usually provided by the combustion of coal, natural gas, or oil. The fuel is pumped into the boiler’s furnace. The boilers generate steam in pressurize d vessels in small boilers ; or in water-wall tube systems in modern utility and industrial boilers. High-temperature, high-pressure steam drives turbine blades, which power the ge nerator to prod uce electricity. 65
Wastes from the combustion of fossil fuels in clude fly ash, bottom ash, boiler slag, and flue gas desulfurization materials. Fly ash is lightwei ght, uncombusted material that is carried out of the boiler with flue gases. The fly ash is capture d in the exhaust stack by electrostatic precipitators, fabric filters, mechanical collect ors, or scrubbers. Bottom ash is h eavier uncombusted material that settles to the bottom of the boiler. Bottom ash doe s not melt and, therefore, remains in the form of unconsolidated ash. Boiler slag is uncombusted material that settle s to the bottom of the boiler. Slag, unlike bottom ash, forms when operating temp eratures exceed ash fusion temperature, and remains in a molten state until it is drained from the boiler bottom. Flue gas desulfurization material is produced during the process of removing sulfur oxide gases from the flue gases using wet or dry scrubbers. 66 In addition, non-combustion wastes, such as cooling, process, and storm water containing hazardous substances, such as ch lorine and heavy metals are also generated and discharged into surface waters. Burning of foss il fuels also creates air emissions of hazardous substances, such as volatile organic com pounds (VOCs), organic hydrocarbons, and metals. 67

a. Releases and Exposure to Hazardous Substances

65 Profile of the Fossil Fuel Electric Power Generation Industry, EPA, September, 2007. 66 Report to Congress: Wastes from the Com bustion of Fossil Fuels: Volume 2, Methods, Findings, and Recommendations (EPA530-R-99-010). (http://www/epa.gov/epawaste/nonhaz/i ndustrial/special/f ossil/volume_2.pdf) 67 Profile of the Fossil Fuel Electric Power Generation Industry, EPA, September, 1997. (http://www.epa.gov/compliance/res ources/publications/assistance/ sectors/notebooks/fossil.html)

38EPA’s research indicates that the Elec tric Power Generation, Distribution, and Transmission industry operates on a large scale, w ith releases to the environment (and, in some situations subsequent exposure to humans, organisms, and ecosystems) of hazardous substances on a similarly large scale. As an i ndication of the scope or scale of this industry, the Electric Power, Generation, Distribution, and Transm ission industry reported high levels of on-site releases to TRI – third in quantity af ter Hardrock Mining and Chemical Ma nufacturing. That is, the Agency’s 2007 TRI data revealed that the Electric Power Generation, Transmission, and Distribution industry (NAICS 2211) reported 161 million pounds of on-site releases of CERCLA hazardous substances, or approximately 7.5 percent of the total on-s ite releases by U.S. i ndustry reporting to TRI. 68 Of this total, 93.8 percent (or approximately 150 million pounds) was re leased from fossil fuel electric power generation, primarily to the la nd, with additional on-site releases to the air and surface water. This overall percentage of on- site releases has been declining somewhat, ranging from approximately 175 million pounds of total on-site releases of hazardous substances in 2005 to approximately 163 million pounds in 2006. 69 The types of hazardous su bstances that have been released or potentially released vary depending on the types of coal or fuel used, and may include aluminum, arsenic, barium, cadmium, chromium, iron, lead, magnesium, mercury, and silicon. In addition, a number of the hazardous substances that are released or potentia lly released, including hydrogen fluoride and arseni c, are very toxic. The industry reported approxima tely 16,000 tons of RCRA ha zardous waste generated in the 2007 RCRA BR. However, coal combustion residua ls are a very large industrial waste stream containing arsenic, se lenium, mercury, and other toxic me tals, and dwarfing the volume of

68 See TRI data from Bill Kline, U.S. EPA. On-site Releases of ASTDR Hazardous Substances Reported to TRI for 2001 through 2007, by Industry and Year , October 8, 2009. 69 See TRI data from Bill Kline, EPA., Onsite Releases of ATSDR Hazardous Substances Reported to TRI for 2001 through 2007, by Industry and Year , October 8, 2009.

39hazardous waste generated in the U.S. In 2007, 131 million tons of CCRs were generated in the U.S., with 75 million tons being disposed of in landfills and surface impoundments, 49.3 million tons being beneficially used, and 6.7 million tons being placed in minefilling operations. These matreials, which include fly ash, bottom ash, boiler slag (all composed predominantly of silica and aluminosilicates), and flue gas desulfurization ma terials (predominantly Ca-SOx compounds), have the potential to result in adverse environmental c onsequences if not properly managed. Because of historical and current mismanagement practices, EPA is taking regulator y action under RCRA to regulate these materials. The potential for releases of and exposure to hazardous substances is also reflected in the number of active facilities operati ng in the U.S. While estimates of the number of active facilities in this class vary, in 2007, the Census Bureau esti mated that there were 9, 642 such facilities in the U.S., including 1,270 fossil fuel elec tric power generation facilities. 70 In some cases, these wastes have led to ground and surface water contamination when improperly managed. In particular, the Agency’s assessment of CCRs has documented evidence of proven damages 71 to groundwater or surface water in 27 damage cases involving CCRs - 17 to groundwater, and 10 to surface water, including ec ological damages in seven of the ten cases. 72

70 U.S. Census Bureau, 2007 Economic Census. Available at: http://factfinder.census.gov

. 71 Per the May 2000 Regulatory Determination ( see 65 FR 32224), proven damage cases are those with (i) documented exceedances of primary MCLs or other health -based standards measured in groundwater at sufficient distance from the wast e management unit to indicate that hazardous constituents have migrated tot the extent that th ey could cause human health concerns, and/or (ii) where a scientific study demonstrat es there is documented evidence of anther type of damage to human health or the environment (e.g., ecological da mage), and/or (iii) where there has been an administrative ruling or court decision with an e xplicit finding of specific damage to human heath and the environment. 72 The 24 cases identified in EPA’s Coal Combustion Waste Damage Case Assessments , July 9, 2007, available at: www.regulations.gov/fdmspublic/component/main?main=Document Detail&d=EPA-HQ-RCRA-2006-0796-0015; with the addition of Martin Creek, Pennsylvania, where in August, 2005, a dam confining a 40-ac re CCR surface impoundment failed, resulting in

40Sixteen of the 17 proven damages to groundwater involved disposal in unlined units (for the remaining unit it is unclear whether a liner was pr esent), which continues to occur. EPA also has identified 40 cases of potential damage 73 to groundwater or surface water. 74 Another two cases were determined to be potential ecological dama ge cases. In one recent damage case example, BBBS Sand and Gravel Quarries, in Gambrills, Mary land, a consent order was filed to settle an environmental enforcement action that was taken ag ainst the owner of a sand and gravel quarry and the owner of two Maryland coal fired power plants (defendants) that generated the wastes that contaminated the public drinking water wells in the vicinity of the sa nd and gravel quarry. Beginning in 1995, fly ash and bottom ash from the tw o power plants were used to fill excavated portions of two sand and gravel quarries. Gr oundwater samples collected in 2006 and 2007 from residential drinking water wells near the site indicated that, in certa in locations, hazardous substances, including heavy metals and sulfates, were present at or a bove groundwater quality standards. Under the terms of the consent order, the defendants are required to pay a fine, remediate the groundwater in the area, and provide replacement water supplies for 40 properties. In addition to these cases of proven or poten tial damage, EPA’s analys is of the NPL shows that four sites containing CCRs ha ve been listed on the NPL: (1) Chisman Creek, Virginia; (2) the discharge of 100 million gallons of coal ash and contaminant water. Gambrills, MD; and Kingston/TVA, TN. 73 Per the May 2000 Regulatory Determination ( see 65 FR 32224), potential damage cases are those with (i) documented exceedances of primary MCLs or other health-b ased standards only directly beneath or in very close proximity to the wast e source, and/or (ii) documented exceedances of secondary MCLs or other non-health-bas ed standards on-site or off-site. 74 The 39 cases of potential da mages from CCR identified in EPA’s Coal Combustion Waste Damage Case Assessments , July 9, 2007 available at: www.regulations.gov/fdmspublic/component/main? main=Document Detail&d=EPA-HQ-RCRA2006-0796-0015; excluding the four damage cases from oil combustion wastes, but including Battlefield Golf Course, Chesapeake, Virginia. This site is a 216-acre site contoured with 1.5 million tons of fly ash as fill material (considered a beneficial use under Virginia’s Administrative Code, without a liner, as long as the fly ash wa s placed at least two feet above groundwater and covered by an 18-inch soil cap).

41Salem Acres, Massachusetts; (e) Lemberger Landfill, Wisconsin; and (4) U.S. Department of Energy Oakridge Reservation, Tennessee. At these sites, groundwater and surface water contaminated with a variety of hazardous substances including arsenic, nickel, selenium, sulfate, as well as volatile organic compounds, trichloroethylene, vinyl chlori de, and methylene chloride, as been documented. b

. Severity of Consequences Resulting from Releases and Exposure to Hazardous Substances. The severity of the consequences impacting pub lic health and the envi ronment as a result of releases and exposure of hazardous substan ces posed by the Electric Power Generation, Distribution, and Transmission indus try is evident in the large co sts associated with past and estimated future costs necessary to protect pub lic health and the environment through what are often extensive and long-term remediation efforts. That is, these facili ties release hazardous substances which have, in some instances, resu lted in contamination that requires long-term management and treatment. Remediation of these sites, therefore, has been quite costly. For example, the costs to clean up the damage from th e recent catastrophic release in Tennessee of over one billion gallons of coal ash from the Tenne ssee Valley Authority’s Kingston Plant has been estimated to range from $933 million to $1.2 billion. 75 In addition, for the Chisman Creek NPL site, EPA has spent approximately $1.4 million through September 2009. 76 77

75 See TVA’s July 31, 2009 quarterly report, available at: http://www.tva.gov/kingst on/admin_record/pdf/51.pdf. 76 This number is in constant 2009 dollars, and repr esents the Office of Superfund Remediation and Technology Innovation’s (OSRTI) analysis of end ofFY 2009, cumulative, site-specific, agencywide, direct expenditures of Supe rfund appropriated and reimbursabl e resources extracted from the EPA Integrated Financial Management System (IFMS). Expenditure data include all direct costs, including, but not limited to site assessments, remedial, removal, enforcement, and oversight costs. Data do not include indirect cost s, costs incurred by private or ot her parties performing response actions, or future costs to be incurred at these s ites and may not be used for cost recovery purposes. See email from Alan Youkeles to Elaine Eby entitled: Cost Data for NAICS Sites , October 30, 2009.

42Considering all of this information, and consid ering that many facilitie s within the Electric Power Generation, Distribution and Transmission industry generate coal combustion residuals, EPA believes that this industry consists of clas ses of facilities for which EPA should develop a proposed regulation that will identify appropriate financial responsibility requirements under CERCLA Section 108(b). E. Additional Classes of Facilities Requiring Further Study As mentioned previously in this notice, EPA has identified classes of facilities within four industry sectors – the Waste Management and Re mediation Services industry NAICS 562; the Wood Product Manufacturing indus try (NAICS 321); the Fabricat ed Metal Product Manufacturing industry (NAICS 332); and the Elect ronics and Electrical Equipmen t Manufacturing industry -- as well as facilities engaged in th e recycling of materials contai ning CERCLA hazardous substances as those for which the Agency plans to conduct fu rther in-depth study before deciding whether to begin the development of a proposed regulation. The classes of facilities within these industry sectors comprise a large portion of the sites on th e NPL (see Table 1), and ranked highly, in some cases, in the Agency’s analyses of BR and TRI data (see Tables 2 and 3). However, for the reasons, described below, EPA is not prepared at this time to identify these classes of facilities as those for which the Agency will begin development of a proposed rulemaking. The Agency believes that a more robust analys is of the NPL information, and review of data from State cleanup and other types of remediation programs (e.g., EPA’s Brownfields program), as well as any other relevant data, s hould be conducted before the Agency begins the development of any proposed regulations for these additional classes of facilities.

77 Expenditure data are converted into 2009 consta nt dollars using GDP deflation factors derived from: Table 10.1 – Gross Domestic Product and Deflators Used in the Historical Tables: 1940- 2009, from the Budget of the U.S., FY 2005. Online via GPO access.

431. Waste Management and Remediation Services (NAICS 562) and Facilities Engaged in the Recycling of Materials Containi ng CERCLA Hazardous Substances. The Waste Management and Remediation Servic es industry ranked highest in the Agency’s NPL analysis (with 465 sites), a nd ranked highly on both the BR and TR I analyses (see Tables 1, 2 and 3). This would appear, at first glance, to i ndicate that the classes of facilities within this industry sector should also be considered for development of proposed regulations. However, because of the way that this category is tracked by the Superfund program ( see footnote 17), the industrial categories th at fall within it are not as clearly deli neated as was the case for some of the other sectors and, as a result, the data analyzed for purposes of this noti ce provided only a limited categorization of the types of facilities that are included in this category. Facilities that recycle materials contai ning CERCLA hazardous substances presented a similar situation. As classified on the NPL, this sector includes an assortment of operations, which EPA is not currently prepared to characterize. Therefore, before EPA decide s to develop a financial re sponsibility regulation under CERCLA Section 108(b), we believe more informa tion is needed regarding the types of facilities included in these categories, and th e risks that they might present. Thus, the Agency is identifying these sectors as among those it plans to furthe r evaluate regarding fi nancial responsibility requirements under CERCLA Section 108(b).
2. Wood Product Manufacturing (NAICS 321), Fabric ated Metal Product Manufacturing (NAICS 332), and Electronics and Electrical E quipment Manufacturing (NAICS 334 and 335)

. The three remaining industry sector s identified in the NPL analysis –the Wood Product Manufacturing industry, the Fabri cated Metal Product Manufacturing, and the Electronics and Electrical Equipment Manufacturing industry – are among the industry sectors that have undergone significant structural or operationa l changes in recent years. For example, regulatory changes have

44affected the types of chemical substances used to treat wood and the pr ocess operations at wood preserving sites. 78 In the case of each of these three sect ors, EPA believes it is necessary to further investigate the extent to which these changes have affected the risks that each of these sectors present. Thus, the Agency is identifying these sectors as among those it plans to further evaluate regarding financial resp onsibility requirements under CERCLA Section 108(b). III. Request for Public Comment Consistent with the Agency’s approach in the July 2009 notice, EPA is not requesting comment in this Federal Register notice on its methodology for dete rmining that the Chemical Manufacturing industry, the Petrol eum and Coal Manufacturing indus try, and the Electrical Power and Generation, Transmission, and Distribution indus try represent classes of facilities for which EPA plans to develop proposed regulations that will identify appropriate financial responsibility requirements under CERCLA Section 108(b). The Ag ency is, however, interested in receiving comments on several issues. With respect to the classes within those indus tries for which EPA has decided to begin the regulation development process -- the Chemical Manufacturing industry, th e Petroleum and Coal Manufacturing industry, and the Electrical Power and Generation, Transmission, and Distribution industry -- the Agency requests information on wh ether EPA should develop a proposed regulation under CERCLA Section 108(b) for any class or classes, or for the industry as a whole, including information demonstrating why such financial res ponsibility requirements w ould not be appropriate for those particular class(es).

78 See: Profile of the Lumber and Wood Produc ts Industry. EPA, Office of Enforcement and Compliance Assurance. EPA 310-R-95-006. Sept ember 1995; EPA Final Best Demonstrated Available Technology (BDAT) Background Docume nt for Wood Preserving Wastes FO32, FO34, and FO35. April 17, 1996. Available at: www.epa.gov/waste/hazar d/tsd/ldr/wood/bdat_bd.pdf , and Memorandum from Elaine E by, to The Record, entitled: The Wood Preserving Industry , 2009..

45The Agency also requests the following in formation (for any or all of the industry categories discussed in this notice), wh ich could inform its future actions:

• Data on facility operations w ithin these industries, and on the classes within these industries.

• Data on the risk evaluation approaches used by various industries (o r by industry insurers) when seeking (or providing) insurance or bonding coverage.

• Data on the prevalence of financial assurance mechanisms used in various sectors, and the reasons therefor.

• Information demonstrating the extent to which facilities within the industry categories are currently subject to financia l responsibility provisions under other federal or state requirements.

• Information about financial res ponsibility instruments, particul arly, information on the type and duration of financial instruments currently used to demonstrate fi nancial responsibility, and on the default rates of those instruments.

• Information EPA may consider in setting le vels of financial responsibility under CERCLA 108(b) on the payment experience, incl uding voluntary sett lements, of :

o the commercial insurance,

o surety bond industries, and

o State cleanup programs and their participants. For purposes of developing any proposed regula tions, EPA expects that it will be most useful to receive payment amounts on a site-speci fic basis (including site locations, facility type, and usage), the basis on which these paymen ts were calculated (i ncluding the specific

46types of incidents and circumst ances), and the types of liabilities for which the payments were made.

• Information and advice from the insurance and su rety industries, and from their regulators and customers, on how they think they can be st inform EPA as it develops regulations under CERCLA 108 (b). For example:

o Are there particular companies, associati ons, producers, policyhol ders, or regulators EPA should contact in the development of these requirements?

o What policy or other contractual terms should EPA consider specifying, and how will these support a sound financial res ponsibility program under CERCLA 108(b)?

o What are the maximum amounts of coverage th at insurers or sureties offer for the various classes noted above, how have these varied over time, and what caused the variations?

• Information on the reliability, availability, and affordability of existing financial responsibility mechanis ms. For example:

o What has been the experience of environmental financial assurance program regulators who have attempted to access funds or compel performance assured by insurance, guarantees, surety bonds, lett ers of credit and self insurance?

o What data have shown some of these mechanis ms to be more effective than others?

o If there were payment delays, what caused them?

o If the payment of funds or desired pe rformance did not occur, what factors contributed to this?

o For regulators who do not accept self in surance, what experience or other information supports your reasons?

47o For regulators who do accept self insurance, what criteria (such as financial test ratios, and please be specific), ratings, or other criteria have been most effective in terms of striking an appropriate balance between allowing companies to use selfinsurance when they can fulfill their oblig ations, and disallowing those that later could not or would not m eet their obligations?

o Can regulators provide data on specific sites that show that guarantees, or other instruments, have been difficult to enfo rce or are otherwise problematic?

o Are there particular regulato ry requirements that may affect (either by increasing or decreasing) the numbers and types of issuers, e.g. banks or insurers, that would be willing to offer coverage under CERCLA 108(b)?

o What factors, including thos e that may be beyond the Agency’s control, affect the availability of mechanisms and how do these factors operate?

o What information should the Agency cons ider in assessing incremental, annual increases in the requirements?

o Are there specific qualifications or other re quirements for issuers that are necessary to ensure the payment of funds when need ed? If so, how, if at all, would these qualifications affect the availability of coverage?

o For the various mechanisms, how are pric es, for example, collateral requirements and fees, or insurance premiums, determin ed, and what information should EPA use to assess the costs of such coverage?

o What factors or information are used by issuers to determine the amounts of coverage provided?

o How do issuers determine what types of co sts should be covered or excluded?

48o How are fees or coverage amounts adjusted to account for risk information such as from risk assessments, site-specific ex emptions, or positive risk management incentives?

o Are there particular environmental fina ncial responsibility programs that EPA should look to as models in the design a nd implementation of CERCLA 108(b) If so, what factors lead to their effectiven ess or efficiency, and what independent assessments support these conclusions?

o Alternatively, are there exam ples of practices that EP A should seek to avoid and what documentation supports these conclusions? As EPA evaluates the classes within the groups identified in this notice, in the course of developing a proposed regulation, or in the course of deciding whether to develop a proposed regulation, the Agency will consider in formation it receives on these issues. IV. Conclusion In today’s notice, EPA has identified classe s of facilities within (1) the Chemical Manufacturing industry (NAICS 325) , (2) the Petroleum and Coal Products Manufacturing industry (NAICS 324), and (3) the Elect ric Power Generation, Transmission, and Distribution industry (NAICS 2211), as those for which EPA plans to de velop a proposed regulation that will identify any appropriate financial responsibility requ irements under CERCLA Section 108(b). EPA will carefully examine specific activit ies, practices, and processes i nvolving hazardous substances at these facilities, as well as Federa l and State authorities, policies, and practices to determine the risks posed by these classes of facilities and whether requirements unde r CERLCA Section 108(b) will effectively reduce these risks. Any financ ial responsibility regulations developed by the

49Agency as the result of its analysis will be proposed in the Federal Register for public notice and

comment. In addition, the Agency has identified classes of facilities within: (1) the Waste Management and Remediation Services industr y (NAICS 562), (2) faci lities engaged in the recycling of materials containing CERCLA hazardous substances, (3) the Wood Product Manufacturing industry (NAICS 321), (4) the Fa bricated Metal Product Manufacturing industry (NAICS 332), and (5) the Electr onics and Electrical Equipmen t Manufacturing industry (NAICS 334 and 335), as classes of facilities that require further study before EPA begins development of a proposed regulation under CERCLA S ection 108(b). Once the in-depth analysis is complete, the Agency will decide whether to begin developmen t of a proposed regulation for these classes of facilities 79

.

Dated Lisa P. Jackson, Administrator

79 As part of developing proposed and final rules, th e Agency will consider wh ether facilities within the classes identified in this not ice that have RCRA permits or are subject to interim status requirements under RCRA, and already are subject to RCRA financial assura nce and facility-wide corrective action requirement s, also need to be subject to fi nancial responsibility requirements under CERCLA Section 108(b). In addition, EPA is aw are, and will consider in its development of proposed and final rules, that some facilities with in the classes identified in this notice may be subject to other financial responsibility requirements.

50