1776 K STREET NW 

WASHINGTON, DC 20006 

PHONE 202.719.7000 

FAX 202.719.7049 

7925 JONES BRANCH DRIVE 

MCLEAN, VA 22102 

PHONE 703.905.2800 

FAX 703.905.2820 

www.wileyrein.com 

Tracy Heinzman 

202.719.7106 

theinzman@wileyrein.com 

November 16, 2012 

VIA E-MAIL 

Ms. Gina McCarthy 

Assistant Administrator, Office of Air and Radiation 

U.S. Environmental Protection Agency 

1200 Pennsylvania Avenue, NW 

Mail Code 6101-A 

Washington, DC 20460 

Ms. Cynthia Giles 

Assistant Administrator, Office Enforcement and Compliance Assurance 

U.S. Environmental Protection Agency 

1200 Pennsylvania Avenue, NW 

Mail Code 2201-A 

Washington, DC 20460 

Re: Methyl Bromide Critical Use Allowances – Upcoming Expiration of 

 Allowances 

Dear Ms. McCarthy and Ms. Giles: 

I write on behalf of the Methyl Bromide Industry Panel LLC (MBIP) regarding 

allowances for critical uses of methyl bromide issued under Title VI of the federal 

Clean Air Act (CAA). The member companies of the MBIP hold all existing 

production and consumption (import) allowances for critical uses of methyl 

bromide under that title of the CAA. They are Albemarle Corporation, ICL-IP 

America, Inc. (formerly Ameribrom, Inc.), Great Lakes Chemical Corporation (a 

Chemtura Company) and TriCal, Inc. 

Under EPA’s “critical use exemption” framework regulations, allowances for 

critical uses of methyl bromide are set on an annual, calendar basis beginning on 

January 1, and expiring on December 31. Unfortunately, we are now in a situation 

where the annual production and import allowances will expire at the end of this 

year without new allowances in place for next year. If no allowances (or other 

bridging mechanisms) are in place, no production or imports can occur after 

December 31, 2012, to meet the needs of growers for Spring planting applications 

in critical states. A delay in production and imports beyond the beginning of the 

New Year will make it extremely difficult, if not impossible, to get material into the 

hands of users in time for those applications. 
Ms. Gina McCarthy 

Ms. Cynthia Giles 

November 16, 2012 

Page 2 

The risk that growers will not have critical use material in time for the 2013 

planting season is very real. The proposed rulemaking for the 2013 allowances has 

not yet been released. Given the short time between now and the end of the 

calendar year along with the comment period required for rulemaking, it seems 

highly unlikely that the necessary allowances for 2013 will be published for 

comment and finally promulgated before January 1, 2013. 

Similar situations arose at the end 2008, 2009, 2010, and 2011 because of delays in 

promulgating the allowances. In every case, the Agency issued a “no action 

assurance” letter to allow production and imports after January 1 on an interim basis 

until the new annual allowances were put in place. A “no action” letter (or similar 

decision) is again necessary to avert a gap in the allowances for 2013. 

We respectfully request that a “no action” letter for 2013 authorize the full amount 

of allowances in the anticipated 2013 proposed rule, instead of only 50% as EPA 

provided in 2012. The 2012 proposed rule allowed for 760 metric tons of new 

production/imports, but the no action assurance letter only permitted 380 metric 

tons. (This was a departure from prior years, where EPA applied the assurance to 

the full amount.) With the final 2012 rule not coming out until mid-May, the 

industry was under a significant hardship to supply the needs of its customers, 

which comes largely in the first and second quarter of the year. Growers have tight 

application windows, and the delay of supply for even a short time can force them 

to miss an entire season of production. 

In 2013, the volume authorized by the Parties is only 562 metric tons and there are 

already concerns among growers that this amount will be insufficient to meet needs 

due to the removal of a key alternative (iodomethane) from the market. Thus, it is 

even more important that EPA authorize production/import of the full amount of the 

proposed allowances in the no action assurance. 

The remainder of this letter provides background on the methyl bromide allowance 

system, the 2013 critical use rulemaking, and the impacts that will likely occur if 

there is a gap in the authorization of allowances. 

Given the impending expiration of the current allowances, and the time sensitivity 

involved, we would like to know if EPA intends to issue the “no action” letter as 

soon as possible. 
Ms. Gina McCarthy 

Ms. Cynthia Giles 

November 16, 2012 

Page 3 

Background 

Methyl bromide is an agricultural fumigant, used to treat soil prior to planting 

crops, food processing facilities and imported commodities to prevent the 

introduction of unwanted pests into the U.S. food supply. Methyl bromide is used 

throughout the calendar year, with heavy use beginning in the first quarter of the 

year for as growers in various geographic regions treat their soil prior to the start of 

the Spring planting season. 

Methyl bromide is subject to the Montreal Protocol on Substances that Deplete the 

Ozone Layer, of which the United States is a signatory. The United States fulfills 

its obligations under the Protocol through a series of regulations set forth at 40 

C.F.R. Part 82. Under those regulations, methyl bromide production and imports 

are strictly controlled. All production and imports were banned as of January 1, 

2005, except for certain “critical” and quarantine/pre-shipment uses. 

Production and imports for “critical” uses are controlled and capped through an 

allowance system. The allowances are derived from “critical use exemptions” 

approved on an annual basis by the Parties to the Protocol. EPA authorizes 

production and imports of methyl bromide to fulfill the exemptions by granting 

allowances to the MBIP members. EPA issues the allowances annually — i.e., the 

allowances become effective on January 1 and expire on December 31 of each year. 

Production and imports are strictly prohibited in the absence of allowances, with 

stiff civil monetary and criminal penalties imposed for non-compliance. 

Furthermore, methyl bromide produced using critical use allowances must be sold 

in the year produced; otherwise, producers are penalized with deductions from 

future allowances. 

Because EPA has chosen to implement the critical use allowance program on a 

year-by-year basis, it must engage in a notice and comment rulemaking each year to 

set new allowances before the existing allowances expire at the end of the calendar 

year. 

The 2013 Critical Use Exemption (CUE) Rulemaking 

The allowances and critical uses for 2013 were previously approved by the Parties 

to the Montreal Protocol at a meeting held on November 21-25, 2011 (Decision 

XXIII/4). EPA has not yet published the proposed rule for the 2013 allowances in 
Ms. Gina McCarthy 

Ms. Cynthia Giles 

November 16, 2012 

Page 4 

the Federal Register. Once published, EPA must accept comments from the public, 

and then review the comments it receives on the proposed rule – a process that 

generally takes EPA several months to complete – before it can publish the final 

rule with the 2013 allowances in the Federal Register. 

Given the limited number of days left in the calendar year, it does not appear that 

EPA will have enough time to promulgate the proposed rule, review the comments 

it receives on the proposed rule, and promulgate a final rule for the 2013 allowances 

before the current allowances expire on December 31. Furthermore, given the 

Agency’s history of delay in promulgating final rules – the final 2012 rule was not 

promulgated until May 17, 2012 – the final 2013 rule is not likely to be 

promulgated until sometime well into next year. In the meantime, existing 

allowances will expire and MBIP members will face significant legal penalties if 

they produce or import methyl bromide to fill critical use needs in the interim. 

The Supply Impacts From Delays 

A delay in the authorization of production and import allowances for 2013 beyond 

January 1 is likely to create significant negative impacts in the methyl bromide 

supply chain. 

As noted above, methyl bromide use is concentrated in the early part of the year and 

coincides with the growing season. Demand is heaviest in the first quarter of the 

year as the material must be applied to soil in advance of planting crops, which 

predominantly occurs in the Spring. The earliest soil applications for 2013 begin in 

January and February, and Spring usage in some geographic areas, such as Florida 

accounts for a significant portion of the total acreage treated for the entire year. 

Because of the structure of the supply chain, material does not instantaneously 

appear in the hands of users after it is produced or imported. Packaging, 

distribution and transportation must occur once the product is manufactured or 

imported. 

There is only one location in the United States where methyl bromide is produced. 

That facility is located in Arkansas. Primary use areas are located in California and 

the Southeastern region of the United States. Thus, the areas where the product is 

used are geographically dispersed from the manufacturing point. Even under 
Ms. Gina McCarthy 

Ms. Cynthia Giles 

November 16, 2012 

Page 5 

normal production conditions, it takes four weeks after production begins to get 

product to the field. 

Imported material is produced at a facility in Israel, and arrives in the U.S. by ship. 

Under normal circumstances, it takes at least six weeks to transport material from 

Israel to the U.S. port of entry. At that point, the material has to be further 

distributed, packaged and transported to users, which depending on location, adds 

another two weeks to the distribution process. 

Given the timing of the use season and these logistical realities, a delay in 

production and imports beyond two to three weeks into 2012 will make it extremely 

difficult if not impossible to get material into the hands of users in time for Spring 

planting applications in critical areas. 

Although there is a very limited amount of methyl bromide stock that was produced 

and/or imported with regular allowances prior to the 2005 phase-out remaining in 

the supply chain, we cannot rely on the availability of these stocks to meet demand 

for critical uses while production and imports are halted pending the completion of 

the 2013 rulemaking process. 

As a threshold matter, the amount of pre-2005 stocks has fallen to dramatically low 

levels in the last six years, as EPA has reduced the level of CUE allowances 

available to producers. MBIP expects that the level of stocks at the start of 2013 

will be significantly below the amount approved by the Parties to the Montreal 

Protocol for critical uses next year. Absent new production and imports, many 

critical users would not be able to apply methyl bromide to their fields in time for 

the Spring planting season due to the low level of stocks. 

In addition, there are other constraints on using stocks that must be considered. 

First, pre-2005 stocks are not uniformly distributed, either geographically, 

commercially or by formulation. Although some amount of stock may theoretically 

be available, if it is not in the right location or in the correct formulation, it will be 

of no use to the grower or applicator. 

Second, the vast majority of the stocks is concentrated in the hands of only a few 

distributors, and may already be allocated or contracted to particular non-critical 

users. As such, they would not be available to critical users who need to fumigate 

before new material can be distributed through the supply chain. Moreover, there 
Ms. Gina McCarthy 

Ms. Cynthia Giles 

November 16, 2012 

Page 6 

are many distributors who have little or no pre-2005 stocks. Delays in authorizing 

new production and imports will unfairly put distributors with no pre-2005 material 

at a commercial disadvantage. 

Third, EPA’s regulations prohibit a user from applying critical use methyl bromide 

to a field that has been fumigated with stocks. A grower who is forced to fumigate 

with stocks in early 2013, will be prohibited from subsequently using critical use 

material once the 2013 rule is authorized and may thus lose the opportunity to avail 

himself of the critical use exemptions. 

Finally, it is important to note that the rulemaking for the allowances will establish 

the uses of methyl bromide that are recognized as “critical” for 2013. (Like 

allowances, the uses expire at the end of the calendar year.) Thus, even if there is 

any 2012 “critical use” methyl bromide in the supply chain that is carried over into 

2013 (which based on historical data is unlikely), that material cannot be supplied to 

users until the final 2013 rule is promulgated. The current regulations prohibit 

critical use methyl bromide from being used for any purpose other than critical use 

applications. Since those applications won’t be established until the final rule is 

promulgated, a grower that was able to obtain material carried over from 2011 

production would be prohibited from using that material on his field until the 

application was designated as “critical” under the new rule. 

Prior Rulemaking Delays and No Action Assurances 

A situation similar to the one presented developed at the end of 2008, 2009, 2010 

and last year when EPA was delayed in promulgating critical use production and 

import allowances for 2009, 2010, 2011, and 2012 respectively. In every case, EPA 

recognized the significant supply constraints that would occur if production and 

imports were halted pending the establishment of the annual allowances and issued 

a “no action assurance” letter. The letters for each year authorized production and 

imports on an interim basis until the rulemaking process was completed or, in some 

cases, a set date was reached. This allowed the supply of methyl bromide for 

critical uses to continue without interruption and ensured that growers’ needs in the 

first quarters of 2009, 2010, 2011, and 2012 were met. 

We respectfully request that the “no action” letter for 2013 authorize the full 

amount of allowances in the anticipated 2013 proposed rule as provided in 2009, 

2010 and 2011. In 2012, EPA departed from this practice and only authorized one-
Ms. Gina McCarthy 

Ms. Cynthia Giles 

November 16, 2012 

Page 7 

half of the full amount. The 2012 proposed rule allowed for 760 metric tons of new 

production/imports, but the no action assurance letter only permitted 380 metric 

tons. With the final 2012 rule not coming out until mid-May, the industry was 

under a significant hardship to supply the needs of its customers, which comes 

largely in the first and second quarter of the year. As noted above, growers have 

tight application windows, and the delay of supply for even a short time can force 

them to miss an entire season of production. 

In 2013, the volume authorized by the Parties is only 562 metric tons and there are 

already concerns among growers that this amount will be insufficient to meet needs 

due to the removal of a key alternative (iodomethane) from the market. Thus, it is 

even more important that EPA authorize production/import of the full amount of the 

proposed allowances in the no action assurance. 

Conclusion 

In short, the delay in the 2013 critical use rulemaking is putting both the industry 

and methyl bromide users on a course for a disruption in methyl bromide supplies 

for the coming year. The MBIP member-companies must be able to continue to 

produce and import methyl bromide for critical uses in early 2013 to avert that 

situation. Thus, we seek the Agency’s assurance that it will not take action against 

any MBIP members that produce and import methyl bromide in accordance with 

interim allowance levels until the final 2013 rule is made effective. 

Granting the assurance would impose little burden on the Agency. In addition, 

there would be no increased environmental impact as the production and imports at 

issue would occur anyway if the rule was promulgated on a normal schedule. In 

this case, the member companies of the MBIP are simply trying to do their best to 

supply material to meet grower needs identified as “critical” while ensuring that 
Ms. Gina McCarthy 

Ms. Cynthia Giles 

November 16, 2012 

Page 8 

their activities comply with the spirit and the letter of EPA’s regulations and 

enforcement policy. It is surely in EPA’s interest to further both the goals of the 

critical use program, and encourage such responsible corporate action. 

Sincerely, 

Tracy A. Heinzman 

Counsel to the Methyl Bromide Industry Panel 

cc: Larry Elworth, Agricultural Counselor 

Sarah Dunham, OAP 

Drucilla Hufford, SPD 

Phillip Brooks, OCE/AED 

David Donaldson, SPD 

Jeremy Arling, SPD 

MBIP Members