February 17, 2010

SUBJECT: Minutes from Meeting with the Society of Chemical Manufactures and a Number of Their Member Companies Regarding the Definition of Solid Waste Final Rule and the Current CERCLA 108(b) Rulemaking Effort

FROM: Matt Straus, Adv isor to Assistant Administrator of OSWER

TO: DSW and CERCLA 108(b) Dockets

On February

12, staff from the Society of Chemical Manufacturers (SOCMA) and representatives of a number of their member companies had a conference call with Mathy Stanislaus, A ssistant Administrator for the Office of Solid Waste and Emergency Response (OSWER) and Barry Breen and Lisa Feldt, Deputy Assistant Administrators to OSWER to discuss the definition of solid waste (DSW) final rule (which was promulgated on October 30, 200 8) and the current rulemaking effort for determining financial responsibility

requirements under the section 108(b) of the Comprehensive Emergency

Response, Compensation, and L iability Act (CERCLA). Also on the call were representatives for the Office of Resource Conservation and Recovery (ORCR) within OSWER , the Office of General Counsel, and the Office of Enforcement and Compliance Assurance. This note briefl y describes what was discussed during the conference call.

Initiall y, SOCMA described who the y are and represent, and generally how their member companies operate. They noted that they have approximately 300 member companies, of which about 70 percent are small businesses, and thus, one of the themes of their discussions reflected upon the impact of these rulemaking efforts on small businesses.

Definition of Solid Waste

 SOCMA indicated that they have worked closely

with staff in ORCR, previously known as the Office of Solid Waste, since the early 1990s in order that the DSW final rule would prod

uce environmental benefits from increased recy cling, while at the same time sav e costs to small businesses. As part of those discussions, SOCMA stated that it was their suggestion , in part, that tolling arrangements be considered differently

from third party

transactions.

 SOCMA stated that environmental justice was a major focus at the public hearing that was held on June 30, 2009 on the definition of solid waste, and indicated that while environmental justice “deserves it due,” they also said that holding up this reform effort is a significant issue for industry

.  At that point, Mathy Stanislaus indicated that while he is a strong supporter of recy cling and reuse, he also noted that the Agency needs to take a hard look atenvironmental justice in this rule , to ensure that no unintended consequences will
occur. He also asked SOCMA staff and their member companies whether they had an y comments on the U.S. Environmental Protection Agency ’s ( EPA’s ) recentl y released “Draft Environmental Justice Methodology for the Definition of Solid Waste Rule,” which is EPA’s draft plan for conducting a more robust anal ys is on the environmental justice impacts to the final rule.

 SOCMA and their members did not have an y immediate reaction to the draft environmental justice methodology , but did indicate that they would like th is anal ys is to be conducted

/ completed as quickl y as possible, and that the Agency reach resolution of Sierra Club’s administrative petition to the DSW final rule in a relativel y quick timeframe. Specifical ly , they indicated their view that as long as EPA was conducting this anal ys is and considering Sierra Club’s administrative petition, the states will likely not adopt the rule because of its uncertaint y , and instead will wait to see if EPA will be making any changes to the DSW final rule. (Note: SOCMA stated that it recognizes that the DSW final rule is in effect and that the states can adopt the rule now, but expressed concern that as long as this additional anal ys is is underway , that the States will be reluctant to adopt the rule.)

 One suggestion that SOCMA did make was for EPA to signal to the states that th e part of the rule that deals with “under the control of the generator,” that the states could go ahead with authorization with this portion of the final rule since there is less uncertaint y with this aspect of the final rule . Specificall y, it was noted in EPA’s May

27, 2009 Federal Register notice in which EPA announced the June 30, 2009 public meeting, that EPA is not likely to repeal the exclusio n for hazardous secondary

materials reclaimed under the control of the generator

— see 74 FR 25202 where it states, “Because the final revisions to the definition of solid waste are closel y tied to EPA’s interpretation of the concept of “discard,” EPA does n ot plan to repeal the rule in whole or stay its implementation. Such an action could result in hazardous secondary materials that are not discarded from being regulated as hazardous waste. In particular, EPA does not expect to repeal either the exclusion for hazardous secondary materials reclaimed under the control of the generator or the non

- waste determination petition process.”

 SOCMA stated that they believe this could be done without going through any rulemaking process, but could be done through outr each to the states to remind them that this portion of the final rule is unlikel y to change. 1

 Finally , it was noted to SOCMA and its member companies that the environmental justice analy sis will be conducted for the entire rule, including those hazardous s econdary materials that are reclaimed under the control of the generator. Thus, it was suggested that SOCMA may want to submit comments on the draft methodology , particularl y if they thought that the anal ys is should be different for those hazardous second ar y m aterials reclaimed under the control of the generator. SOCMA indicated that they will look at this, and will get

1 EPA notes that while the FR notice cited by SOCMA says that EPA does not expect to repeal the “generator

- controlled exclusion,” this should not be interpreted as saying that EPA will not make changes that may impact this exclusion. On the contrary, a number of the possible changes discussed in the FR notice (e.g., definition of “contained,” notification as a possible condition, and definition of “legitimacy”
wo uld affect the “generator

- controlled exclusion.” See 74 FR 25202

- 25204.comments to the Agency before the end of the comment deadline of March 15, 2010.
CERCLA 108(b)

 SOCMA first discussed the letter they c o
- signed with the American Chemistry Council and other organizations, which was sent to EPA in the fall of 2009 and before EPA published its Advance Notice of Proposed Rulemaking regarding additional classes of facilities that the Agency will evaluate rega rding the development of financial responsibility requirements under CERCL A 108(b).

 Among other things, SOCMA stated that the letter indicated that CERCL A 108(b) looks at prospective risks and that past practices is not a reliable indicator of what will happen in the future

—they stated that the world in the 1980’s and before is much different from the world in the 1990’s and later and that needs to be considered in determining whether financial responsibility requirements are appropriate. SOCMA also sta ted that since man y of their members are small businesses, such a rule could have a significant impact on SOCMA’s members. (See attached letter for additional arguments made in the letter.)

 Th e n one of SOCMA’s member companies

— Rhodia, discussed their exp erience with their facilities, many of which they

said they acquired through acquisition, in the S tate of New Jersey , that alread y has a rule requiring financial responsibility

. They also stated that they use d to have five facilities in the State of New J ersey , but no longer have an y facilities.

 One of the primary arguments Rhodia made was that to be competitive in the world today , they

need to make quality

products, and that environmental costs come off the bottom line. Thus, Rhodia said that if all the ir facilities needed financial responsibility , it could make them less competitive , particularl y if in addition to putting aside funds for financial responsibility , they also needed to pay fees that the states may

impose.

 In response to an EPA question on the ty pes of financial responsibility mechanism s they

used, Rhodia indicated that if corporate guarantee was allowed, they thought that would be helpful, but they did indicate that with the one facility in New Jersey

that they discussed, the facility

did n ot qualify

for a corporate guarantee, and thus, they

needed to get a letter of credit. They also indicated that if the facility

already had financial responsibility requirements in place, that it would be helpful if that could be used and not have the CE RCL A 108(b) requirement be in addition to those requirements alread y in place.

 At the end, Math y Stanislaus indicated that he would like to set up a face

- to face discussion on CERCL A 108(b), at the appropriate time

— probably , after the close of the commen t period to the ANPRM, so that he can better understand the points raised b y SOCMA and their member companies, such as wh y the y view past history as not being a good indicator of future actions, and the ir views on the impact such a requirement would have o n small businesses.