ILLINOIS POLLUTION CONTROL BOARD

January 31, 2008

IN THE MATTER OF: )

)

ABBOTT LABORATORIES' PROPOSED )

SITE SPECIFIC AMENDMENT TO )

APPLICABILITY SECTION OF ORGANIC )

MATERIAL EMISSION STANDARDS AND )

LIMITATIONS FOR THE CHICAGO AREA; )

SUBPART T: PHARMACEUTICAL )

MANUFACTURING (35 ILL. ADM. CODE )

218.480(b»

R08-8

(Rulemaking - Air)

IEPA ATTACHMENT NO. 5

ReCEIVED

CLERK'S OFFICE

JAN 3 12008

;;:)STATE OF'LUNQ'S . Ollutl(In Contro' Board

NOTICE OF HEARING

DATE, TIME, PLACE:

FRIDAY, MARCH 7, 2008, 1:00 p.m.

Village Hall, Village of Libertyville

118 W. Cook Street-Second Floor

Libertyville, I11inois

PURPOSE OF HEARING:

ATTENDING BOARD MEMBER:

HEARING OFFICER:

Merit and economic

Nicholas J. Melas

Kathleen M. Crowley

HEARING OFFICER ORDER

Procedural History

On September 4,2007, Abbott Laboratories (Abbott) filed a proposal for site-specific

rulemaking pursuant to Section 28 ofEnvironmental Protection Act (Act) (415 ILCS 5/28

(2006», to allow it "additional operational flexibility" with regard to emissions from certain

tunnel dryers and fluid bed dryers at its pharmaceutical manufacturing facility (the Facility)

located in Libertyville Township, Lake County.

Abbott's operations are subject to 35 Ill. Adm. Code, Subpart T - Pharmaceutical

Manufacturing (Subpart T). As currently written, Subpart T in Section 218.480(b) contains

certain exemptions that are only applicable to Abbott's air suspension coater/dryer, fluid bed

In eomplial1~e with the Americans With Disabilities Act and other applicable federal and State laws. the hearings will be accessible to

individuals with disabilities_ Persons requiring auxiliary aids should conlact John T. Therriault. Assistant Clerk of the Board. 100 West

Randolph Streel. Suite 11-500. Chieagll. Illinois 6060I, at telephone number (312) l1l4-3620. or 'l'DD number 0 12) 814-6032. at least live

days before the pUI1icu Inr hearing.
2

dryers, tunnel dryers, and Accelacotas located at the Facility. Abbott is proposing to amend these

site-specific exemptions by "capping" and lowering the overall emissions allowable under the

exemptions from its tunnel dryers numbered #1, #2, #3 and #4, and fluid bed dryers numbered

#1, #2 and #3, and calculating the amount of exempted emissions from the dryers based on the

actual combined emissions from the dryers. Abbott believes that, if adopted, the proposed

amendment would reduce the overall allowable emissions from these units while increasing

Abbott's operational flexibility, by allowing it to make preferential use ofthe more efficient fluid

bed dryers.

In an October 4, 2007 order, the Board accepted the proposal for hearing. The Board also

authorized publication ofthe proposal (without comment on the proposal's merits) in the l11inois

Register as required by the Illinois Administrative Procedure Act (IAPA), 5 ILCS 100 et seq.

(2006). The proposed rules were published at 31 Ill. Reg. 14581 (October 26,2007). No public

comments or requests for hearing were received during the IAPA first-notice public comment

period, which ended December 10, 2007.

On October 18, 2007, as required under Section 27(b)(1) ofthe Act, 415 ILCS

5/27(b)(1)(2006), the Board requested that the Department ofCommerce and Economic

Opportunity (DCEO) conduct a study ofthe economic impact ofthe proposed rules. DCEO has not

responded to that request, and has not submitted a study.

By letter ofOctober 19,2007, the Joint Committee on Administrative Rules (JCAR)

requested the Board to make an analysis ofthe economic and budgetary effects ofthe proposed rule

under Section 5-40(c) ofthe IAPA (5 ILCS 100/5-40(c)(2006». The Board must submit the

analysis along with its submission ofthe rule for lCAR's second-notice review under the IAPA.

Hearing and Prefiling Deadlines

As noted above, the hearing in this rulemaking will be held in Libertyville on March 7,

2008, beginning at 1:00 p.m. Both the technical justification and economic impact ofthe rules will

be addressed at this hearing, as the Board presently does not intend to schedule another hearing.

See Section 27 (b)ofthe Act, 415ILCS 5/27(b) (2006) and Section 102.414 ofthe Board's

procedural rules, 35 Ill. Adm. Code 102.414.

As proponent, Abbott will first present testimony and exhibits in support ofits proposal;

and answer questions posed by the Illinois Environmental Protection Agency (IEPA) and any

other hearing participants. Then, the IEPA, followed by any other hearing participants, may

present testimony and exhibits concerning the proposed rule. All participants are requested to

address economic and budgetary effects issues, to provide the Board with a record on which to

address lCAR's concerns.

Abbott, the tEPA, and any other persons who wish to testify at the hearing must prefile

their testimony and any related exhibits with the Board no later than February 22, 2008. See 35

Ill. Adm. Code 102.424. The "mailbox rule" (35 Ill. Adm. Code 101.300(b)(2» does not apply
3

to this filing-therefore, the Clerk ofthe Board must receive the prefiled testimony by February

22,2008. In the interests of hearing efficiency, participants are requested, but are not required. to

advise one another in advance of hearing of questions they may wish to ask based on the prefiled

testimony.

Timely prefiled testimony will be entered into the record as ifread. Those who prefile

must be prepared to provide oral summaries oftheir prefiled testimony at hearing. Others who

do not prefile may testify only as time permits. All persons who testify will beswom and subject

to questioning.

Abbott's proposal and various other filings in this rulemaking may be obtained on the

Board's Web Site through the Clerk's Office On-Line (COOL) at www.ipcb.statc.il.us. Please

note that prefiled testimony may be filed through COOL. Any questions about electronic filing

through COOL should be directed to the Clerk's Office at (312) 814-3629.

Prefiled testimony filed with the Board must also be served on those persons on the

Service List. Before filing with the Clerk, please check with Don Brown at (312) 814-3461 or

hrownd(ii!ipcb.state.il.us or the hearing officer to ensure that you have the most recent version of

the Service List.

At the close of hearing, the hearing officer will set a date by which the record will close

and all public comments must be submitted. See 35 Ill. Adm. Code 102.108. As the Board is

aware that Abbott would appreciate Board decision-making as soon as possible, the posthearing

comment period will not be lengthy unless unanticipated circumstances dictate otherwise.

IT IS SO ORDERED.

~P1.~ Kathleen M. Crowley

Hearing Officer, Illinois Pollution Control Board

100 West Randolph Street, Suite 11-500

Chicago, Illinois 60601

(312) 814-6929 crowlek@ipcb.state.il.us
JEPA ATTACHMENT NO.

Electronic Filing· Received, Clerk"s Office, February 22, 2008

BEFORE THE ILLINOIS POLLUTION CONTROL BOARD

IN THE MATTER OF: )

)

ABBOTI LABORATORIES' PROPOSED )

SITE-SPECIFIC AMENDMENT TO )

APPLICABILITY SECTION OF ORGANIC )

MATERIAL EMISSION STANDARDS AND )

LIMITATIONS FOR THE CHICAGO AREA;)

SUBPART T: PHARMACEUTICAL )

MANUFACTURING (35 ILL. ADM. CODE )

218.480(b» )

R08-8

(Rulemaking -Air)

NOTICE OF FILING

TO: Mr. John Therriault

Assistant Clerk ofthe Board

Illinois Pollution Control Board

100 West Randolph Street

Suite 11-500

Chicago, Illinois 60601

(VIA ELECTRONIC MAIL)

Kathleen M. Crowley

Hearing Officer

Illinois Pollution Control Board

100 West Randolph Street

Suite 11-500

Chicago, Illinois 60601

(VIA U.S. MAIL)

(PERSONS ON ATTACHED SERVICE LIST)

PLEASE TAKE NOTICE that I have today filed with the Office ofthe Clerk of

the Illinois Pollution Control Board ENTRY OF APPEARANCE OF LAUREN C.

LURKINS, PREFILED TESTIMONY OF DIANE BENO IN SUPPORT OF

PROPOSED SITE-SPECIFIC AMENDMENT, and PREFILED TESTIMONY OF

ROBERT C. WELLS IN SUPPORT OF PROPOSED SITE-SPECIFIC

AMENDMENT, copies of which are herewith served upon you.

Respectfully submitted,

By: /s/ Katherine D. Hodge

Katherine D. Hodge

Dated: February 22, 2008

Katherine D. Hodge

Lauren C. Lurkins

HODGE DWYER ZEMAN

3150 Roland Avenue

Post Office Box 5776

Springfield, Illinois 62705-5776

(217) 523·4900
Electronic Filing • Received, Clerk"s Office, February 22, 2008

CERTIFICATE OF SERVICE

I, Katherine D. Hodge, the undersigned, hereby certifY that I have served the

ENTRY OF APPEARANCE OF LAUREN C. LURKINS, PREFILED TESTIMONY OF

DIANE BENO IN SUPPORT OF PROPOSED SITE-SPECIFIC AMENDMENT, and

PREFILED TESTIMONY OF ROBERT C. WELLS IN SUPPORT OF PROPOSED

SITE-SPECIFIC AMENDMENT upon:

Mr. John Therriault

Assistant Clerk ofthe Board

Illinois Pollution Control Board

100 West Randolph Street

Suite 11-500

Chicago, ILlinois 60601

via electronic mail on February 22,2008; and upon:

Kathleen M. Crowley

Hearing Officer

Illinois Pollution Control Board

James R. Thompson Center

100 West Randolph Street, Suite 11-500

Chicago, I1linois 60601

Charles E. Matoesian, Esq.

Assistant Counsel

Division ofLegal Counsel

Illinois Environmental Protection Agency

1021 North Grand Avenue East

Post Office Box 19276

Springfield, Illinois 62794-9276

Matthew J. Dunn, Chief

Environmental Bureau North

Office ofthe Attorney General

69 West Washington Street, Suite 1800

Chicago, Illinois 60602

Office ofLegal Services

Illinois Department ofNatural Resources

One Natural Resources Way

Springfield, Illinois 62702-1271

by depositing said document in the United States Mail, postage prepaid, in Springfield,

Illinois on February 22,2008.

lsI Katherine D. Hodge

Katherine D. Hodge

ABOT:003/FilingsINOF. PreFiled Testimony
Electronic Filing· Received, Clerk"s Office, February 22, 2008

BEFORE THE ILLINOIS POLLUTION CONTROL BOARD

IN THE MATTER OF: )

)

ABBOTT LABORATORIES' PROPOSED )

SITE-SPECIFIC Alv.ffiNDMENT TO )

APPLICABILITY SECTION OF ORGANIC )

MATERIAL EMISSION STANDARDS AND)

LIMITAnONS FOR THE CHICAGO AREA;)

SUBPART T: PHARMACEUTICAL )

MANUFACTURING (35 ILL. ADM. CODE )

218.480(b» )

R08-8

(Rulemaking -Air)

ENTRY OF APPEARANCE OF LAUREN C. LURKINS

NOW COMES Lamen C. Lurkins. ofthe law finn HODGE DWYER ZEMAN,

and hereby enters her appearance in this matter on behalf of Abbott Laboratories.

Respectfully submitted,

By::~~l{LU---.!~~~

Lauren C. Lurkins

Dated: February 22. 2008

Lauren C. Lurkins

HODGE DWYER ZEMAN

3150 Roland Avenue

Post Office Box 5776

Springfield, Illinois 62705-5776

(217) 523-4900

ABOT:003/FiIIEOA - LCL
Electronic Filing· Received, Clerk's Office, February 22, 2008

BEFORE THE ILLINOIS POLLUTION CONTROL BOARD

IN THE MATIER OF: )

)

ABBOTT LABORATORIES' PROPOSED )

SITE-SPECIFIC AMENDMENT TO )

APPLICABILITY SECTION OF ORGANIC )

MATERIAL EMISSION STANDARDS AND)

LIMITATIONS FOR THE CHICAGO AREA;)

SUBPART T: PHARMACEUTICAL )

MANUFACTURING (35 ILL. ADM. CODE )

218.480(b» )

R08-8

(Rulemaking -Air)

PRE-FILED TESTIMONY OF DIANE BENO,

IN SUPPORT OF PROPOSED SITE-SPECIFIC AMENDMENT

NOW COMES ABBOTT LABORATORIES, by and through its attorneys,

HODGE DWYER ZEMAN, and pursuant to 35 Ill. Admin. Code § 102.424 and the

Hearing Officer Order. dated January 31, 2008, submits the following Pre-Filed

Testimony ofDiane BenD for presentation at the March 7, 2008 hearing scheduled in the

above-referenced matter:

TESTIMONY OF DIANE BENO

My name is Diane Beno. I am the plant manager ofthe portion ofthe Abbott

Laboratories facility internally known as Building AP16. The operations contained in

Building AP16 produce intermediate and final pharmaceutical product formulations,

including liquids, tablets and capsules packaged in bottles and blister formats. The

general process flow involves: receipt of raw materials; weighing ofingredients; massing

and granulation ofingredients; compressing granulated product into tablets; coating

tablets or particles; printing symbols onto tablets; and packaging finished products for

distribution.
Electronic Filing. Received, Clerk's Office, February 22, 2008

Over the course of a year, we produce many different products in Building AP16.

For example, we produce pharmaceuticals that treat diseases in the field of neuroscience

such as epilepsy and bipolar disorder, we make antiviral products for the treatment of

AIDS, we manufacture antibiotics to fight infection, we package products that help

patients achieve healthy cholesterol levels, and products that improve the lives ofpeople

with rheumatoid arthritis, psoriasis and Crolm's disease.

We manufacture our products using batch production processes. In batch

production, all ofthe processing equipment in a process train, including the dryers,

manufactures one product at a time. Each batch is completed before the manufacture of

the next batch begins. In a typical process, the active and inactive ingredients are

combined with a liquid in a process called '"massing!' This massing process forms

uniform granules. The wet granules are dried in tUlUlel dryers or fluid bed dryers and

then further processed into tablets or capsules.

The massing fluid, which is typically either water or ethanol, is evaporated from

the solid material in the drying step. If an organic solvent is volatilized from the dryer, it

is emitted to the ambient air as volatile organic material ('"VOM") or volatile organic

compounds C"VOCs"). The quantity of YOM emissions will vary for different products,

and is calculated from the quantity ofVOM added to the mixture and loss factors defined

for the dryers and specified in the Clean Air Act Permitting Program ("CAAPP") Permit

for the facility. It is also important to note that the organic solvent currently used in

granulation and dried from the granulated mixtures at Building AP16 is ethanol. Ethanol

is a YOM, but is not considered a hazardous air pollutant ("HAP"). The proposed sitespecific amendment will have no effect on HAP emissions.

2
Electronic Filing. Received, Clerk's Office, February 22, 2008

Abbott's proposed site~specific amendment for Building AP16 covers four tunnel

dryers and three fluid bed dryers. One additional fluid bed dryer. located in Building

AP16, is used exclusively for research and development operations and is not involved in

the normal operating processes in Building AP16. Therefore, our proposed amendment

does not include that dryer.

The tunnel dryers and fluid bed dryers operate on different principles. In the use

oftunnel dryers, materials to be dried are spread on trays and placed in a wanning

chamber or "tunnel" that circulates warm air over and under the trays.

A fluid bed dryer is a large vertical cylindrical shaped vessel with a diffuser that

blows warm air up from the bottom ofthe vessel. The wet intermediate granules are

loaded into the dryer and flow upward, suspended in the warm air stream. Abbott has

increased its use offluid bed dryers for recently developed products because they are

more efficient and produce a more uniform product than the tunnel dryers. Abbott

anticipates increased use of water for the massing fluid in future products. Abbott

expects that this preferential use offluid bed dryers and water-based products will

continue. That is, many new products are expected to use fluid bed dryers and waterbased formulations. while older products will continue to be manufactured using tunnel

dryers.

Batches ofspecific products are typically manufactured using either one or more

tunnel dryers. or one or more fluid bed dryers. but not both, because the technologies are

not interchangeable. Individual dryers ofthe same type can typically be used in

combination or interchangeably in many cases, but specific dryers are preferable for

3
Electronic Filing. Received, Clerk's Office, February 22, 2008

combining with other equipment in a process train to manufacture certain products from

an operational efficiency standpoint.

Abbott manufactures its products using batch processes whereby each

manufacturing process train and its associated equipment (including the dryers) produces

one product at a time in fixed batch sizes. Process trains are designed to accommodate

batches of different scales, with some for large batches and others for small batches.

Therefore, the scale of a given batch plays an important role in detennining which ofthe

dryers will he most efficient. Additionally, in accordance with United States Food and

Drug Administration ("US FDA") current Good Manufacturing Practice ("cGMP")

guidelines, extensive equipment cleaning is required between batches ofdifferent

products, resulting in up to three days oflost production time. Therefore, Abbott uses a

campaign strategy to continue running batches ofthe same product consecutively in the

process train to minimize this cleaning time.

As currently written, Section 218.480(b) effectively defines a 12·month total

YOM limit on each individual dryer. This can limit Abbott's ability to schedule the

campaigns ofcertain products to maximize the efficiency ofthe processes. In other

words. to ensure compliance with the current running 12-month total YOM limit on each

dryer, for a particular batch, Abbott may be required to utilize a dryer with low YOM

emissions during the last 12 months instead ofusing the dryer that is the most efficient

from a production-scale standpoint. Such selection ofdryers, based only on the amount

ofVOM that has been emitted from an individual dryer during the preceding 12 months.

is an inefficient approach to scheduling the use ofAbbott's equipment and resources.

Additionally, the dryer selected for a given campaign also depends on dryer availability

4
Electronic Filing • Received, Clerk's Office, February 22, 2008

and other factors. For example, one dryer may be temporarily out of use to allow for

cleaning or for unscheduled maintenance requirements. Therefore. the standards, as

currently defined, can result in wasted resources by requiring Abbott to dry a small batch

ofproduct in our large-scale process train to maintain our equipment-specific YOM

limits.

Total alUmal emissions from a dryer result from the quantity of organic solvent

removed from the different products processed in a dryer over a rolling 12-month period.

The material is processed in a number ofindividual campaigns for particular products,

each consisting ofmultiple individual batches. The assignment of a campaign of a

particular product to one or more dryers involves a number of operating factors, such as

scale and equipment availability. that contribute to the efficiency ofmanufacturing. The

YOM emission threshold effectively acts as an overriding factor that can force a

particular production campaign with YOM emissions to be scheduled using equipment

that has low enough recent emissions to avoid exceeding a dryer threshold, but that may

not otherwise be the optimal or most efficient equipment for the campaign. This

scheduling shift increases the operational cost, but results in no environmental benefit,

because the actual emissions will be the same as ifthe campaign would have used the

optimal equipment.

In order to ensure Abbott's Lake County manufacturing facilities remain

competitive with our national and global competitors, Abbott must continually seek ways

of making our manufacturing operations more efficient. The scheduling inefficiency

created by Subpart T was identified as one area where improvements in efficiency could

be made and is the basis for the proposed amendment. This seems particularly

5
Electronic Filing· Received, Clerk"s Office, February 22, 2008

appropriate, as the business cost created by this inefficiency results in no enviromnental

benefit.

The most efficient method to manufacture Abbott's products in Building AP16

would be to use the dryer that is best suited to the requirements ofthe production

schedule and scale, regardless ofthe amount ofVOM that has been emitted from that

dryer in the past 12 months. Provided that the combined YOM emissions from all ofthe

dryers are less than the combined amount allowed under Section 218.480(b), this method

of operation would not require an increase in allowable YOM emissions from the

Facility. In fact, the proposed amendment would provide Abbott improved production

flexibility to utilize the most efficient dryers for a given product, while significantly

lowering the total allowed YOM emissions from all the dryers combined.

Thank you. I'll be happy to answer any questions.

* ole ole

Abbott reserves the right to supplement or modify this pre-filed testimony.

Respectfully submitted,

ABBOTT LABORATORIES,

By:/s/ Katherine D. Hodae

One ofits Attorneys

Dated: February 22, 2008

Katherine D. Hodge

Lauren C. Lurkins

HODGE DWYER ZEMAN

3150 Roland Avenue

Post Office Box 5776

Springfield, Illinois 62705-5776

(217) 523-4900

ABOT:003/FilingsIBeno Prefiled TesLimony - Final Draft

6
Electronic Filing· Received, Clerk"s Office, February 22, 2008

BEFORE THE ILLINOIS POLLUTION CONTROL BOARD

IN THE MATTER OF: )

)

ABBOTT LABORATORIES' PROPOSED )

SITE-SPECIFIC AMENDMENT TO )

APPLICABILITY SECTION OF ORGANIC )

MATERIAL EMISSION STANDARDS AND)

LIMITAnONS FOR THE CHICAGO AREA;)

SUBPARTT: PHARMACEUTICAL )

MANUFACTURING (35 ILL. ADM. CODE )

218.480(b» )

R08-8

(Rulemaking -Air)

PRE-FILED TESTIMONY OF ROBERT C. WELLS,

IN SUPPORT OF PROPOSED SITE-SPECIFIC AMENDMENT

NOW COMES ABBOTT LABORATORIES, by and through its attorneys,

HODGE DWYER ZEMAN, and pursuant to 35 Ill. Admin. Code § 102.424 and the

Hearing Officer Order, dated January 31,2008, submits the following Pre-Filed

Testimony ofRobert C. Wells for presentation at the March 7, 2008 hearing scheduled in

the above-referenced matter:

TESTIMONY OF ROBERT C. WELLS

My name is Robert C. Wells. I am employed by Abbott Laboratories as Air

Manager for Environmental Support in Abbott's Global Environmental Health and Safety

Department. I provide assistance to Abbott facilities such as Building AP16 with regard

to environmental compliance and managing environmental performance at our facilities

under various air regulations. I have twenty-nine years of experience in air quality

management and the analysis of air emissions, emission control and ambient air quality.

I hold a Bachelor of Science degree in Engineering from Cornell University.

My testimony today concerns technical aspects ofAbbott's proposal for a sitespecific amendment to Illinois air regulations at 35 Ill. Admin. Code Part 218.480(b), in
Electronic Filing • Received, Clerk's Office, February 22, 2008

Subpart T ofPart 218. Abbott's proposed site-specific amendment concerns provisions

impacting the four (4) tunnel dryers (also referred to as warm air dryers) and three (3)

fluid bed dryers located in Building AP16 at the Abbott Park facility. The dryers are

used to dry mixtures of active pharmaceutical ingredients ("APls"), excipient ingredients,

and massing fluid after they have been processed to produce a solid material with an

appropriate granule size. The granulated mixture is then used to manufacture dosage

form products (i.e., tablets, capsules, and granules).

The tunnel dryers and fluid bed dryers are currently subject to air regulations for

Volatile Organic Material ("VOM") emissions under 35 Ill. Admin. Code Part 218,

Subpart T. Under this standard, an individual dryer is required to control YOM

emissions ifits annual emissions exceed 7.5 tons per year (ton/yr) for a tunnel dryer or 5

ton/yr for a fluid bed dryer.

Emissions from anyone dryer vary from year to year. Historically, emissions

from each dryer have been significantly below the level that would trigger the

requirement for add·on control. Emissions from individual dryers have been held below

these limits in part by planning production to distribute VOM.emitting production among

the different equipment. Because ofthe variability, and because ofthe significant cost to

install and operate controls for a dryer that would not be justified, these control

thresholds effectively act as the upper limit for annual YOM emissions from an

individual dryer.

At this time, production scheduling can be forced to assign one or more dryers to

a production campaign based on the dryers' recent past YOM emissions, assigning one or

more dryers that have low enough recent emissions to avoid exceeding a dryer threshold,

2
Electronic Filing. Received, Clerk"s Office, February 22, 2008

but that may not otherwise be the optimal or most efficient equipment for the campaign.

This scheduling shift increases the operational cost, but results in no environmental

benefit, because the actual emissions will be the same as ifthe campaign would have

used the optimal equipment. This scheduling inefficiency was identified as one area

where improvements in efficiency could be made, while not increasing the environmental

impact of Abbott's operations.

Two environmental management approaches were identified and considered in

order to alleviate the inefficiency ofthe Subpart T operating constraints. One alternative

would be to increase the threshold that would trigger the emission control requirement for

one or more individual dryers. Such an increase would be justified ifthe cost of control

is greater than what is considered economically achievable for Reasonably Available

Control Technology ("RACY'), which was the justification for establishing the original

thresholds in Subpart T. A preliminary review of emission control costs indicated that

RACT controls would not be justified even at emission thresholds significantly higher

than the current limits specified in Subpart T. A second alternative would be to treat the

current control threshold as a combined threshold equal to the sum ofthe individual unit

thresholds for the seven manufacturing dryers. This approach would remove a

manufacturing constraint without increasing the allowable YOM emissions from the

facility.

The above alternatives were first evaluated internally within Abbott. Under the

first approach, while Abbott believes that it would be justifiable to increase the emission

threshold for one or more dryers, it would also act to increase the facility's allowable

emissions, which is not necessary to solve problems ofmanufacturing efficiency. The

3
Electronic Filing. Received, Clerk"s Office, February 22, 2008

second approach, to re-define the emission threshold as a combined threshold for all

dryers, would remedy manufacturing inefficiencies without increasing overall allowable

YOM emissions.

Both ofthese approaches were discussed with the Illinois Environmental

Protection Agency ("Illinois EPA"). At that time, Illinois EPA indicated that both

Illinois EPA policy and United States Environmental Protection Agency C"USEPA")

regulations and guidelines would need to be considered in order for the agency to support

a site-specific amendment to 35 Ill. Admin. Code Part 218.

Subsequent discussions among Illinois EPA, USEPA, and Abbott's

representatives identified an existing USEPA program that would provide similar

operational benefits as the combined threshold approach discussed above. USEPA's

Economic Incentive Programs ("EIPs") are described in USEPA's document, Improving

Air Qualify With Economic Incentive Programs, EPA-452/R-OI-00l, January 2001,

which was provided as Exhibit 2 to the Statement ofReasons for the proposed sitespecific amendment. Among other programs, this guidance includes provisions for a

Source-Specific Emission Cap ("SSEC") as an altemative regulatory approach for

emission limits that can regulate emissions with greater flexibility and efficiency than

conventional approaches.

Discussions with Illinois EPA and USEPA indicated that a SSEC could allow

individual emission limits to be combined into an aggregate cap for the tunnel dryers and

fluid bed dryers, provided that the SSEC is set to a level which is less than the units'

combined historical actual emissions, rather than equal to current combined allowable

emissions. Both Illinois EPA and USEPA indicated that a SSEC ElP would be an

4
Electronic Filing • Received, Clerk's Office, February 22, 2008

acceptable method to address the applicability provisions of Section 218.480(b) with

respect to Abbott's tunnel dryers and fluidized bed dryers.

Under the current regulatory standard, the combined allowable emission threshold

for Abbott's dryers is 45 ton/yr ofVOM emissions. This is based on the sum ofthe

allowable emissions for four tunnel dryers at 7.5 tonlyr each and three fluid bed dryers at

5.0 ton/yr each. A SSEC within the EIPs would typically require allowable emissions to

be reduced below a baseline level defined by the historical actual emissions for the units.

Under USEPA guidelines, historical actual emissions are defined as the highest actual

emissions from any 2-year period within the last 10 years ofoperation. In addition, the

EIP requires a demonstration of environmental benefit, which can be achieved by setting

an emission limit 10 percent below the baseline emissions. Such a program would be

more constraining than either ofthe two alternatives proposed by Abbott. However,

while either ofAbbott's original alternatives would likely be approvable, it was

recognized that it would be more administratively efficient to work within the EIPs

framework ifit were otherwise acceptable to achieve Abbott's goals.

Abbott reviewed its historical actual emissions to determine ifa SSEC would be

appropriate. Actual emissions from the seven dryers are shown in Exhibit 3 ofthe

Statement ofReasons for this site-specific amendment. In accordance with USEPA

guidance, the baseline emissions for Building AP16 were calculated to be 22.9 ton/yr

based on the historical actual emissions from the highest 2-year period ofthe past 10

years. Thus, in order to demonstrate environmental benefit as described in the ElP

guidance, the total allowable combined emissions from the seven dryers under the

5
Electronic Filing • Received, Clerk's Office, February 22, 2008

proposed SSEC would need to be set at a level 10 percent lower than the calculated

baseline emissions, or 20.6 tonlyr ofVOM.

In comparison with this prospective limit, the current combined allowable YOM

emission rate, based on the individual thresholds for each ofthe seven dryers, is 45

tonlyr. Although Abbott could operate at this emission level ifneeded for operations, its

historical actual emissions have consistently been lower than the current combined

allowable emissions for the seven dryers. Thus, the current allowable combined emission

rate is higher than what Abbott is proposing under the amended site~specific standard.

Abbott considers the flexibility to shift production among the dryers to be more important

than the ability to operate with current maximum overall emissions. Therefore, the

principal requirement for a SSEC under the EIP, a combined allowable emission

threshold lower than historical actual emissions, would be an acceptable alternative to

Abbott.

In order to ensure that the proposed site-specific amendment to 35 Ill. Admin.

Code § 218,480(b) is consistent with USEPA guidance regarding EIPs, and to realize the

administrative benefit of a program that is acceptable to all prospective parties, the

program must satisfy three fundamental principles of USEPA's EIP program: integrity,

equity and environmental benefit. These are defined and discussed in USEPA's

Improving Air Quality with Economic Incentive Program. See Exhibit 2, Statement of

Reasons. Consistency with each ofthese three principles is discussed separately below.

The principle ofintegrity consists offour elements: emissions must be surplus,

quantifiable. enforceable, and permanent. Note that these terms have specific meanings,

and are different for a SSEC than for other programs addressed by the policy. I4.. at 35.

6
Electronic Filing· Received, Clerk"s Office, February 22, 2008

• Emissions are surplus because the baseline for the prospective SSEC for

the seven dryers is based on the historical actual emissions for these units,

and because the program will reduce emissions below this baseline.

• Emissions are quantifiable because the calculation of both baseline

emissions and future emissions under the SSEC is based on a mass

balance for a solvent evaporation process with YOM among the materials

used. A mass-balance calculation is considered to be a very reliable

methodology for quantifying YOM emissions on a 12-month average

basis. The methodology for quantifying emissions from the dryers is

already well documented in the facility's CAAPP Pennit.

• Emissions are enforceable because the program is to be incorporated into

35 Ill. Admin. Code Part 218, approved by USEPA as part ofIllinois'

State Implementation Plan for ozone attainment, and incorporated into the

facility's CAAPP Permit as an applicable requirement. Enforcement will

be based on the same program that is now in place in the CAAPP Permit,

where emissions are tracked by mass-balance emission calculations based

on production records.

• Emissions are permanent because the site-specific amendment to 35 Ill.

Admin. Code Part 218 will memorialize the conditions.

The principle of equity is evaluated to ensure that the EIPs program does not

result in "an uneven distribution of emissions or ... effects," I4.. at 46. This program is

not ofconcern for equity issues for three reasons.

• This program focuses exclusively on YOM emissions from one particular

facility. Therefore, there is no concern for impacts in one area that must

be balanced equitably with reductions in another area. In addition, the EIP

will result in lower emissions than the historic actual emissions for the

units in the sole area ofimpact. Therefore, there will be no area of

increased environmental impact that must be balanced against an overall

impact reduction. In concWTence, USEPA guidance indicates that equity

issues are typically not of concern for a single-site SSEC program. Id. at

50.

• Emissions ofYOM have environmental effects on a regional scale rather

than a localized impact. Also, the overall impact ofthe program will be

positive because both allowable and historical actual emissions will be

reduced.

The principle of environmental benefit is satisfied by the intention for the

program to reduce emissions 10 percent below historical actual levels. While other

7
Electronic Filing • Received, Clerk"s Office, February 22, 2008

demonstrations ofbenefits may be appropriate, the 10 percent emission reduction criteria

is clearly defined by USEPA as appropriate for demonstration of environmental benefit.

Id. at 51. Illinois EPA and USEPA both agreed that Abbott's proposal met the criteria for

a SSEC EIP.

In swnmary, the proposed site"specific amendment will result in significant

environmental benefits. Maximum future allowable emissions of20.6 tonlyr from the

seven dryers will be 10 percent below the historical actual emissions determined by

USEPA criteria (22.9 ton/yr). Future actual combined emissions from the seven dryers

will be well below what is currently allowed for the units (45 ton/yr).

At the same time, the proposed site-specific amendment will provide increased

operational efficiency and flexibility that will be valuable to Abbott in addressing our

national and global competitors. As importantly to the overall result, Abbott's increased

flexibility can be achieved without relaxing the stringency ofthe current emission control

thresholds.

I would like to thank the Board for itstime and attention in considering our

proposal and my testimony. I would also like to thank the Illinois EPA for working with

Abbott to identify a practical site-specific amendment for greater regulatory efficiency. I

would be happy to answer any questions.

*

8

*
Electronic Filing· Received, Clerk's Office, February 22, 2008

Abbott reserves the right to supplement or modify this pre-filed testimony.

Respectfully submitted,

ABBOTT LABORATORIES,

By:/s/ Katherine D. Hodge

One ofits Attorneys

Dated: February 22, 2008

Katherine D. Hodge

Lauren C. Lurkins

HODGE DWYER ZEMAN

3150 Roland Avenue

Post Office Box 5776

Springfield, Illinois 62705-5776

(217) 523-4900

ABOT:003/FilingsfWells Prefiled Testimony - Final Draft

9
R08~8

(Rulemaking - Air)

IEPA ATTACHMENT NO.L

Electronic filing· Received, Clerk's Office, February 29, 2008

BEFORE THE ILLINOIS POLLUTION CONTROL BOARD

IN THE MATTER OF: )

)

ABBOTT LABORATORIES' PROPOSED )

SITE-SPECIFIC AMENDMENT TO )

APPLICABILITY SECTION OF ORGANIC )

MATERIAL EMISSION STANDARDS AND )

LIMITATIONS FOR THE CHICAGO AREA; )

SUBPARTT: PHARMACEUTICAL )

MANUFACTURING (35 ILL. ADM. CODE )

218.480(b» )

NOTICE OF FILING

TO: Mr. John Therriault Kathleen M. Crowley

Assistant Clerk ofthe Board Hearing Officer

Illinois Pollution Control Board Illinois Pollution Control Board

100 West Randolph Street 100 West Randolph Street

Suite 11-500 Suite 11-500

Chicago, TIlinois 60601 Chicago, Illinois 60601

(VIA ELECTRONIC MAIL) (VIA U.S. MAIL)

(PERSONS ON ATTACHED SERVICE LIST)

PLEASE TAKE NOTICE that I have today filed with the Office ofthe Clerk of

the Illinois Pollution Control Board ABBOTT LADORATORIES' MOTION TO

FILE REVISED EXmBIT 3 AND MINOR REVISION TO PROPOSED

SUBSECTION 218.480(b)(4), a copy ofwhich is herewith served upon you.

Respectfully submitted,

By: lsi Katherine D. Hodge

Katherine D. Hodge

Dated: February 29, 2008

Katherine D. Hodge

Lauren C. Lurkins

HODGE DWYER ZEMAN

3150 Roland Avenue

Post Office Box 5776

Springfield, Illinois 62705-5776

(217) 523-4900

THIS FILING SUBMITTED ON RECYCLED PAPER
Electronic filing • Received, Clerk's Office, February 29, 2008

CERTIFICATE OF SERVICE

I, Katherine D. Hodge, the undersigned, hereby certify that I have served

ABBOTT LABORATORIES' MOTION TO FILE REVISED EXHIBIT 3 AND

MINOR REVISION TO PROPOSED SUBSECTION 218.480(b)(4) upon:

Mr. John Therriault

Assistant Clerk ofthe Board

Illinois Pollution Control Board

100 West Randolph Street

Suite 11-500

Chicago. Illinois 60601

via electronic mail on February 29, 2008; and upon:

Kathleen M. Crowley

Hearing Officer

Illinois Pollution Control Board

James R. Thompson Center

100 West Randolph Street, Suite 11-500

Chicago, Illinois 60601

Charles E. Matoesian. Esq.

Assistant Counsel

Division of Legal Counsel

Illinois Environmental Protection Agency

1021 North Grand Avenue East

Post Office Box 19276

Springfield, Illinois 62794-9276

Matthew J. Dunn, Chief

Environmental Bureau North

Office ofthe Attorney General

69 West Washington Street, Suite 1800

Chicago, Illinois 60602

Office ofLegal Services

Illinois Department ofNatural Resources

One Natural Resources Way

Springfield, Illinois 62702-1271

by depositing said document in the United States Mail, postage prepaid, in Springfield,

Illinois on February 29,2008.

lsi Katherine D. Hodge

Katherine D. Hodge

ABOT:003/FilingsINOF. Exhibit J
Electronic filing· Received, Clerk's Office, February 29, 2008

BEFORE THE ILLINOIS POLLUTION CONTROL BOARD

IN THE MATTER OF )

)

ABBOIT LABORATORIES' PROPOSED )

SITE-SPECIFIC AMENDMENT TO )

APPLICABILITY SECTION OF ORGANIC )

MATERIAL EMISSION STANDARDS AND )

LIMITAnONS FOR THE CHICAGO AREA; )

SUBPART T: PHARMACEUTICAL )

MANUFACTURING (35 ILL. ADM. CODE )

218.480(b» )

R08-8

(Rulemaking - Air)

ABBOTT LADORATORIES'

MOTION TO FILE REVISED EXHIBIT 3 AND

MINOR REVISION TO PROPOSED SUBSECTION 218.480Cb)(4)

NOW COMES ABBOTT LABORATORIES ("Abbott''), by and through its

attorneys, HODGE DWYER ZEMAN, and hereby requests the Illinois Pollution Control

Board ("Board") to accept for filing Abbott's Revised Exhibit 3 and Minor Revision to

proposed 35 Ill. Admin. Code Subsection 218.480(b)(4). In support ofthis Motion,

Abbott states as follows:

1. Abbott filed its original Proposal of Amendments to 35 Ill. Admin. Code

Part 218.480(b) ("Original Proposal of Amendments") with the Board on September 4,

2007.

2. Abbott's Original Proposal ofAmendments included: 1) the Proposed

Amendments; 2) the Statement of Reasons; 3) Appearances for the attorneys representing

Abbott; 4) a Motion to Waive Requirement to Submit 200 Signatures; 5) a Motion for

Expedited Review; 6) Exhibit 1, Aerial Photograph ofAbbott Park and Vicinity,

Libertyville Township, Illinois; 7) Exhibit 2, Improving Air Quality with Economic

Incentive Programs~ United States Environmental Protection Agency, January 2001; and
Electronic filing. Received, Clerk"s Office, February 29, 2008

8) Exhibit 3, a table entitled "Historical YOM Air Emissions from Tunnel Dryers and

Fluid Bed Dryers at the Abbott Park Facility."

3. Since filing its Original Proposal of Amendments, Abbott has discovered

that several revisions and clarifications were necessary to Exhibit 3, the table entitled

"Historical YOM Air Emissions from Tunnel Dryers and Fluid Bed Dryers at the Abbott

Park Facility."

4. Therefore, Abbott seeks to file Revised Exhibit 3 with the Board that

includes the following changes: 1) correct a typographical error for the 1999 total,

changing 26.1 to 25.1; 2) show single-unit data at 2 decimal places; 3) add a line for 90%

ofthe baseline, with the corrected value 0[20.6 tons per year; 4) add Note c to identify

the round-offissue and specify that totals are correct based on calculations with more

significant figures; and 5) update the reference in Note a to reflect the correct condition in

the renewed CAAPP Permit, issued on September 26, 2007.

5. In addition, Abbott also seeks to file a minor revision to Proposed Section

218,480(b)(4) to reflect the change made to the 90% baseline calculation, as follows:

11 For fluid bed dryers #1. #2. and #3 and for tunnel duers #1. #2. #3

and #4. the combined total annual emissions from the dryers listed

in this subsection 218.480(b)(4) shall not exceed 18,779 18,688

kg/year (;;Q.,.7 20.6 tons/year). [BOARD NOTE: tunnel dr.yers are

otherwise referred to as warm air dryers]; and

... ... *

2
Electronic filing • Received, Clerk"s Office, February 29, 2008

WHEREFORE, for the above and foregoing reasons, ABBOTT

LABORATORIES hereby respectfully requests the Illinois Pollution Control Board to

accept for filing ABBOTT LABORATORIES' Revised Exhibit 3 and Minor Revision to

Proposed Subsection 218.480(b)(4).

Respectfully submitted,

ABBOTTLABORATORlliS

By: Is/Katherine D. Hodge

One ofIts Attorneys

Date: February 29, 2008

Katherine D. Hodge

Lauren C. Lurkins

HODGE DWYER ZEMAN

3150 Roland Avenue

Post Office Box 5776

Springfield, Illinois 62705-5776

(217) 523-4900

ABOT:003/FilingsINOF Motion to file Revised Exhibit 3 lIIId Amended Proposal

3
Electronic filing • Received, Clerk"s Office, February 29, 2008

Revised Exhibit 3 (2/29/08)

Historical YOM Air Emissions from Tunnel Dryers and Fluid Bed Dryers at the Abbott Park Facility a

(tons per year) C

Total Total Total

Fluid Fluid Fluid Tunnel Fluid Bed Dryer

Tunnel Tunnel Tunnel Tunnel Bed Bed Bed Dryer Dryer VOM

Year Dryer 1 Dryer 2 Dryer 3 Dryer 4 Dryer 1 Dryer 2 Dryer 3 Emissions Emissions Emissions

1998 2.65 2.19 2.59 3.27 1.34 1.12 b 10.7 2.5 13.2

1999 4.52 5.58 5.31 5.16 2.35 2.15 b 20.6 4.5 25.1

2000 3.79 4.01 3.15 3.30 3.16 3.16 0.17 14.2 6.5 20.7

2001 0.70 1.60 1.70 1.30 1.70 1.60 1.70 5.3 5.0 10.3

2002 1.80 1.80 1.80 1.20 0.90 0.90 3.10 6.6 4.9 11.5

2003 2.40 2.10 2.20 1.20 1.00 1.00 2.90 7.9 4.9 12.8

2004 3.40 1.70 1.50 0.60 0.00 0.00 3.90 7.2 3.9 11.1

2005 2.10 1.50 1.20 0.00 0.10 0.10 3.00 4.8 3.2 8.0

2006 1.00 1.11 0.91 0.00 0.66 0.66 2.97 3.0 4.3 7.3

2007 1.71 0.69 1.03 0.00 0.41 0.41 3.19 3.4 4.0 7.5

Average of Years 1999 & 2000 (baseline) 22.9

90 Percent of Baseline 20.6

Notes to Exhibit 3

a Emissions of VOM were calculated based on records of production batches, corresponding VOM content of the batch, and

specified loss factors for the respective equipment, as detailed in CAAPP Permit Section 7.1.12(e).

b Fluid Bed Dryer 3 was not operating prior to 2000.

c Some data were included in calculations to more precision than one decimal place. which can result in apparent discrepancies for

total emissions. Total emissions are calculated with available precision and rounded to one decimal place.
ILLINOIS POLLUTION CONTROL BOARD

March 4, 2008

tEPA ATTACHMENT NO.-1iRECEIVED

CLERK'S OFFICE

MAR - 2008

STATE OF ILUNOIS

Pollution Control Board

IN THE MATTER OF: )

)

ABBOTT LABORATORIES' PROPOSED )

SITE SPECIFIC AMENDMENT TO )

APPLICABILITY SECTION OF ORGANIC )

MATERIAL EMISSION STANDARDS AND )

LIMITATIONS FOR THE CHICAGO AREA; )

SUBPART T: PHARMACEUTICAL )

MANUFACTURING (35 ILL. ADM. CODE )

218.480(b»

R08-8

(Rulemaking - Air)

HEARING OFFICER ORDER

On September 4, 2007, Abbott Laboratories (Abbott) filed a proposal for site-specific

rulemaking pursuant to Section 28 ofEnvironmental Protection Act (Act) (415 ILCS 5/28

(2006», to allow it "additional operational flexibility" with regard to emissions from certain

tunnel dryers and fluid bed dryers at its pharmaceutical manufacturing facility (the Facility)

located in Libertyville Township, Lake County.

As explained in the January 31, 2008 hearing officer order, the hearing in this rulemaking

will be held in Libertyville on March 7, 2008, beginning at 1:00 p.m. Both the technical

justification and economic impact ofthe rules will be addressed at this hearing; as the Board

presently does not intend to schedule another hearing. See Section 27 (b) ofthe Act, 415 ILCS

5/27(b) (2006) and Section 102.414 ofthe Board's procedural rules, 35 Ill. Adm. Code 102.414.

On February 22, 2008, consistent with the hearing officer order, Abbott prefiled testimony

of Diane Beno and Robert C. Wells. The Illinois Environmental Protection Agency (Agency)

has not prefiled any testimony. No other testimony has been prefiled.

In the interest offacilitating the hearing process, the Board has reduced to writing

questions it would like the participants to address at hearing, and is making them available to

participants in advance of hearing. These questions appear on pages 2-5 ofthis order. While

some questions are addressed to particular witnesses, any participant is free to address any ofthe

questions.

The hearing officer has today telephoned counsel for Abbott and the Agency to advise

them ofissuance ofthis order. The Board's Clerk's Office is placing this order on the Board's

website today, and is advising counsel who have filed appearances ofits availability. This order

will also be served on all parties on the notice list for this proceeding.
2

Questions on Proposal & Pre-filed Testimony

Statement of Reasons

1. On page 3, the Statement ofReasons (SOR) states that the current YOM requirements at

Section 218.480(b) are based on the provisions of Section 215.480(b), which was adopted

by the Board on April 7, 1988 in Docket R86-1 O. Further, the SOR states that during

the rulemaking in R86-1 0 both the petitioner and IEPA "provided technical

documentation and testimony to the effect that certain emission sources, including tunnel

dryers and fluid bed dryers, would be economically infeasible to control at the levels

required for certain other emission sources at the facility."

a) Please comment on whether the information/testimony presented in the R86-

10 rulemaking regarding economic feasibility of controlling emissions from

Abbott's tunnel dryers and fluid bed dryers is still valid.

b) Has there been in any development in emissions control technology since the

adoption ofthe original rules that addresses the economic concerns associated

with control ofemissions from the affected dryers?

2. On page 6, the SOR notes that the average actual emissions from the fluid bed dryers and

tunnel dryers for 1999 and 2000 were used to determine the proposed combined emission

limit of20.7 tons per year. (This was revised to 20.6 tons per year in Abbott's February

29,2008 motion to amend.) According to Exhibit 3, total emissions from years 1999 and

2000 represent the highest actual emissions. Starting from 2001 and until 2007, the total

actual emissions from the affected dryers are approximately halfthe total emissions in

1999 and 2000. Further, the YOM emissions data show a declining trend.

a) Please explain the reasons for the significantly lower actual emissions from

the dryers since year 2000.

b) The amended Exhibit 3 indicates that tunnel dryer #4 has zero YOM

emissions since 2005. Please explain whether Abbott has stopped operating

dryer #4.

Prefiled Testimony - Diane Beno

I. On page 2, you state that the organic solvent currently used for massing fluid in AP-16 is

ethanol. Please comment on whether Abbott has used organic solvents other than ethanol

in the manufacture ofpharmaceuticals in the past. Ifso, please provide names ofother

solvents used for massing fluid.

2. Please explain the basis for choosing the type ofsolvent used for massing fluid, i.e.

whether the solvent type is mainly dependent on the product being manufactured or the

type ofsolvent is also dependent on the type of dryer being used in the process.
3

3. On page 3, you state that Abbott has increased the use offluid dryers for recently

developed products, and anticipates increased use of water for the massing fluid.

a. Please comment on whether Abbott anticipates increased use ofwater in product

lines using both tunnel dryers and fluid bed dryers.

b. Is the anticipated increase in use of water for massing fluid intended to reduce

YOM emissions? Ifso, have you made any estimates ofthe amount ofVOM

reductions that may result from increased use of water?

c. Please elaborate on why Abbot considers water-based products as a "preferential

use",

d. Please explain what role, if any, pollution prevention (PP) plays in increasing the

use of water for massing fluid in future products. Does Abbott have some type of

an in-house PP incentive program to reduce YOM emissions? Please elaborate on

Abbott's PP activities as they may relate to the affected dryers.

4. Also on page 3, you note that increased use offluid dryers is mainly because they are

more efficient and produce a more unifotn1 product than tunnel dryers.

a. Please explain how the fluid bed dryers are more efficient than the tunnel dryers.

b. Does Abbott have any plans to replace the tunnel dryers with fluid dryers?

5. On page 4, you state that under the current rules, Abbott may be required to utilize a

dryer with low YOM emissions during the last 12 months instead of using the dryer that

is most efficient from a production-scale standpoint to ensure compliance with the current

running 12-month total YOM limit on each dryer.

a. Please clarify what you mean by "using the dryer that is most efficient from a

production-scale standpoint."

b. Other than a dryer's previous 12-month YOM emissions, what factors are

considered in deciding the type ofdryer used for a particular campaign?

Prefiled Testimony - Robert Wells

1. On page 5, you state that under USEPA guidelines, "historical actual emissions" are

defined as the highest actual emissions from any 2-year period within the last 10 years of

operation. Please clarify :whether the definition of "historical actual emissions" used in

your testimony is based on the USEPA's Economic Incentive Program (EIP) guidelines.

lfnot, please provide a complete citation to the appropriate USEPA publication, which

defines what constitutes historical actual emissions.
4

2. The USEPA's ElP guidelines at page 166 defines "historical actual emissions" as "actual

emissions associated with a source in a time period prior to the source's participation in

EIP, usually representing the average emissions ofthe past two years or some other more

representative period."

a. Please explain why the baseline was not calculated on the basis of average

emissions ofthe past two years (2006 & 2007).

b. Ifthe basis for using the average emissions from 1999 and 2000 is because that

period is more representative, please explain why that time period is considered

representative. Particularly, since the emissions data indicate significantly lower

emission during 2001 to 2005.

USEPA's Economic Incentive Program Guidance

1. At page 3, the EIP guidance states that the guidance applies if a state or tribe wants to

establish a discretionary EIP for attaining or maintaining the national ambient air quality

standards (NAAQS) for criteria pollutants. Further, the guidance notes that any

government agency with the authority to administer a SIP or TIP may adopt a

discretionary EIP.

a. Does the above statement imply that the state should first adopt some type of a

discretionary EIP policy before considering a request such as the one made by

Abbott?

b. Ifso, has the Agency adopted an EIP policy for Illinois? If not, should this

rulemaking be considered as the State's adoption ofthe EIP policy?

c. Please comment on whether Abbott's proposal is the first request made under the

USEPA's EIP in Illinois.

2. At page 6, Mr. Wells states that in order to ensure that the proposed site-specific

amendment is consistent with USEPA EIP guidance, and to realize the administrative

benefit of a program, the program must satisfy three fundamental principles ofUSEPA's

EIP program: integrity, equity and environmental benefit. Does the Agency believe that

the proposed rule along with the supporting documentation satisfies the EIP principles?

3. At page 6 ofMr. Wells' testimony, Mr. Wells states that the principle ofintegrity consists

offour elements: emissions must be surplus. quantifiable, enforceable, and pennanent.

Further he notes that these tenns have specific meanings, and are different for a source

specific emissions cap (SSEC) than for other programs addressed by the policy.

a. Please clarify whether the SSEC elements are those described under Section

4.1 (b) ofthe guidance at page 38.
5

b. Regarding emissions being surplus, is there any concern that the proposed

combined YOM limit may not be consistent with the EIP guidance since the

baseline is calculated on the basis of highest actual emissions?

Proposed Amendments

1. Abbott's proposal amends the existing rules at 35 Ill. Adm. Code 218.480(b), which

sets forth that the YOM limits apply to air suspension dryers, fluid bed dryers, tunnel

dryers, and Accelacotas located in Libertyville Township, Lake County, Illinois.

Please comment on whether the rules should specifically state that the YOM limits

apply to dryers located at the Abbott Laboratories, Building API6, especially since

the proposed amendments at Section 218.480(b)(4) refer specifically to certain

numbered fluid bed dryers, and tunnel dryers.

Abbot's February 29, 2008 Motion to Amend

This order does not address Abbott's February 29,2008 motion to amend Exhibit 3 as

well as the text ofits proposal. This motion is better addressed at hearing.

Again, at the close ofhearing, the hearing officer will set a date by which the record will

close and all public comments must be submitted. See 35 Ill. Adm. Code 102.1 08. As the Board

is aware that Abbott would appreciate Board decision making as soon as possible, the

posthearing comment period will not be lengthy unless unanticipated circumstances dictate

otherwise.

IT IS SO ORDERED.

Hearing Officer, Illinois Pollution Control Boar

100 West Randolph Street, Suite 11-500

Chicago, Illinois 60601

(312) 814-6929 crowlek@ipcb.state.il.us
1 BEFORE THE ILLINOIS POLLUTION CONTROL BOARD

2

3 IN THE MATTER OF:

4

5 ABBOTT LABORATORIES'

6 PROPOSED SITE-SPECIFIC

7 AMENDMENT TO APPLICABILITY

IEPA ATTACHMENTNo.l

1

8

9

SECTION OF ORGANIC MATERIAL

EMISSION STANDARDS AND

NO. R08-8

(Rulemaking-Air)

10 LIMITATIONS FOR THE CHICAGO

11 AREA; SUBPART T:PHARMACEUTICAL

12 MANUFACTURING (35 ILL.ADM.CODE

13 218.480(b)

14

15

16 REPORT OF PROCEEDINGS had before the

17 ILLINOIS POLLUTION CONTROL BOARD held on March 8,

18 2008, at 1:00 o'clock p.m. at the Libertyville

19 Village Hall, 118 Cook Road, Libertyville, Illinois.

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1 A P PEA RAN C E S:

2

MEMBERS PRESENT:

3

4 ANAD RAO, CHAIRMAN

THOMAS E. JOHNSON, MEMBER

5 NICHOLAS J. MELAS, MEMBER

6

7 CHARLES MATOESIAN

8 Illinois Environmental Protection Agency

9

HODGE DWYER ZEMAN

10 BY: MS. KATHERINE D. HODGE

3150 Roland Avenue

11 Post Office Box 5776

Springfield, Illinois 62705-5776

12 (217) 523-4900

13 On behalf of Abbott Laboratories;

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MS. CROWLEY: Good afternoon. This is

a hearing being conducted by the Illinois

Pollution Control Board in a matter of

our docket number R08-8 Abbott Laboratories

proposed site specific amendment to

applicability section of organic material

emission standards and limitations for the

Chicago, Subpart-T, Pharmaceutical

manufacturing at 35 Illinois Administrative

Code 218.408(b).

The Board opened this docket

October 4th to consider Abbott's proposal for

site specific rulemaking. In addition to

myself, present from the Board today are

seated to my immediate right, Board member

Nicholas J. Melas, who is the lead Board

member for this rulemaking. Seated to my

immediate left is Anad Rao, an environmental

engineer on the board's technical staff, and

seated to Mr. Rae's left is Board member

Thomas E. Johnson.

Board member Andrea Moore asked me

to remind you that she is abstaining from any

participation in the hearing or decision

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making in this rulemaking as she owns a small

amount of stock in Abbott and also has close

family members who are employed by Abbott.

Would you like to make any remarks at this

point, Mr. Melas?

MEMBER MELAS: Nothing else but to

welcome you all here. It will be a pleasure

listening to the answers to the pre-filed

questions.

MS. CROWLEY: Today we're holding the

first and only hearing currently scheduled in

this rule making. I see that there are no

members of the public present so I will cut

short the introductory remarks that we

usually make a little bit.

The proceeding is governed by the

Board's procedural rules. All information

that is relevant and not repetitious is

admitted into the record. The Board makes

its rulings on the basis of its sworn and

transcribed records. So the hearing officer

will be asked to swear in the witnesses. I

also want to remind you that any questions

that may be posed today by any member of the

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Board or staff are intended solely to develop

a complete and clear record for the Board and

are not intended to reflect any prejudgment

of the proposal.

The hearing today will consider

both the technical justification of the

proposal, as well as any economic impact of

the proposed rules as required by Section

27-B of the Environmental Protection Act. On

October 18, 2007 the Board requested The

Department of Commerce and Economic

Opportunity to conduct an economic impact

study. That department has not responded to

this request or pre-filed a study within the

45-day period the Act provides, so the Board

will be basing its decision on the economic

information that is provided today and in any

post-hearing comments. The Board has

received pre-filed testimony in this

proceeding only from the two witnesses from

Abbott. We also have some pre-filed

questions that were developed by the Board

and given to the parties on March 4, 2008.

So we will begin, I think, by asking the

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attorneys to introduce themselves and then we

will turn the proceedings over to Ms. Hodge

for Abbott.

MS. HODGE: Thank you very much. Good

afternoon, everyone. Thank you for allowing

us to come here today to present support for

our proposal. My name is Katherine Hodge,

H-O-D-G-E, and I'm with the Hodge Dwyer

Zeeman here today representing Abbott

Laboratories.

MR. MATOESIAN: Good afternoon. I'm

Charlie Matoesian. I'm with the Illinois

Environmental Protection agency. I'm hearing

appearing for the agency, although we are not

part of the filing per se.

MS. HODGE: Also present with me today

on behalf of Abbott Labs is Mr. Steve

Ziesmann, right here. He is the senior

counsel for legal and regulatory compliance

for Abbott. Diane Beno, to my immediate

left. She is the manager of Abbott's

operations in building AB16, some of which

are the topic for this proceeding. Mr. Bob

Wells to her left, and Bob is the air manager

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for environmental support in Abbott's global

environmental health and safety department

and then Mr. Keith Marhafka, and he is the

environmental health and safety manager for

building AB16.

MS. CROWLEY: I'm sorry, I didn't

catch the first and last names, if we could

say them again.

MS. HODGE: Steven Ziesmann,

Z-I-E-S-M-A-N-N. Diane Beno. Robert Wells.

You have that, and Mr. Keith Marhafka, M-A-RH-A-F-K-A.

MS. CROWLEY: Thank you.

MS. HODGE: And I have just a short

opening statement to make, and then we'll

move on to our two witnesses for today.

Abbott owns a pharmaceutical

manufacturing building located at 100 Abbott

Park Road in Unincorporated Lake County in

Libertyville Township, Illinois. Abbott

produces a number of pharmaceutical products

at this facility. And these operations are

subject to 35 Illinois Administrative Code,

Subpart-T, Pharmaceutical Manufacturing. As

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it is currently written, Subpart-T, and in

particular section 218.480(b) contains

certain exemptions that are applicable to

Abbott's air suspension of coater dryers,

fluid bed dryers, tunnel dryers, and

accelacotas, a-c-c-e-l-a-c-o-t-a-s, located

in building AB16 of the facility.

Today through our testimony and in

response to questions, we intend to

demonstrate that Abbott's proposal to amend

these site specific exceptions will, one,

allow Abbott to use the combined actual

emissions from its effective tunnel bed

dryers and fluid bed dryers to determine the

applicability of Subpart-T to these units;

and, two, decrease the overall VOM emissions

that would be allowed below the level of

historical actual emissions from the tunnel

dryers and fluid bed dryers as a group

relating to the 35 Illinois Administrative

Code, Section 218.480(b), the VOM exemption,

while at the same time increasing operational

flexibility by allowing preferential use of

the more efficient dryer or dryers for a

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particular manufacturing campaign.

The proposed amendment also will

not impose any new control requirements on

any other source other than Abbott's

facility. The proposed amendment will not

result in any increase in emissions. First

before offering testimony in support of our

proposal, I would like to address a matter

raised in the hearing officer order dated

January 31, 2008. As you know, Ms. Crowley

requested Abbott to address economic and

budgetary effects, issues associated with our

proposal. In that regard, the proposed rule

if adopted by the Board apply only to

specific emission units within Abbott's

facility, and again the proposed rule will

allow for increased operational flexibility

at Abbott's facility which in turn will

result in more efficient and cost effective

production of pharmaceutical products.

Moreover the proposal will not impose any new

requirements upon the Illinois EPA, so there

will be no budgetary effect. In light of the

limited and site specific nature of the

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proceeding and the information set forth in

Abbott's proposal and the testimony to be

presented today in answers to questions,

Abbott believes there's sufficient

information in this record for the Board to

make an analysis of the economic and

budgetary effects of the proposal. However,

Abbott would be happy to answer any questions

the Board may have on this topic.

Abbott will present two witnesses

today, and first Ms. Diane Beno. She is the

plant manager of the portion of the Abbott

facility internally known as Building AB16.

Ms. Beno will provide information about the

processes carried out in Building AB16 and

the products manufactured at that location.

Mr. Robert Wells is the air manager for

environmental support in Abbott's Global and

Environmental Health and Safety Department,

and he will testify as to the technical

description of the process and dryers at

issue in this rulemaking. He will also

discuss the current rule and explain how it

causes inefficiencies in the operations, and

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then he will discuss the methods Abbott has

utilized in an attempt to alleviate those

inefficiencies. Finally, Mr. Wells will

discuss the emissions from the effected

dryers from both a historical and prospective

perspective. The testimony of these two

witnesses also will demonstrate that Abbott

has worked closely with the Illinois EPA and

the US EPA on this issue over the course of

several years. We thank both the Illinois

EPA and the US EPA for working with us in

trying to resolve this issue and we

appreciate Illinois EPA's participation here

today.

As set forth in Abbott's proposal

that was filed with the Board on September 4,

2007, Abbott's testimony today will focus on

the concept called the "Source Specific

Emissions Cap EIP." Abbott included a full

copy of the US EPA guidance document entitled

"Improving Air Quality With Economic

Incentives Program," and that was included as

Exhibit 2 to our initial proposal. The EIP

guidance provides direction on a number of

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types of EIPs, including the source specific

emission caps. The EIP guidance provides

that there are fundamental principles that

must be included in every EIPi number one,

integritYi number two, equitYi and three,

environmental benefit. All EIP's must

contain four elements that compose the

integrity principle: Surplus, quantifiable,

enforceable and permanent. Second, with

regard to the equity principle, all EIP's

must contain an element of general equity.

Finally as noted, all EIP's must demonstrate

environmental benefit.

A source specific emissions cap

EIP allows a specified stationary source or a

limited group of sources that are subject to

a rate based emission limit to meet that

requirement by accepting a mass based

emission limit or cap rather than complying

directly with the rate based limit. The US

EPA's stated goal for this type of EIP is

compliance flexibility. Abbott in

consultation with both the Illinois EPA and

the US EPA relied upon and followed this

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federal guidance in formulating its proposal.

Mr. Wells will provide additional detail in

how Abbott's proposal is consistent with the

Federal guidance for source specific

emissions cap EIP's.

With that, if there are no

questions, I would like to move ahead with

the testimony of Ms. Diane Beno and Mr. Bob

Wells. And Ms. Beno is going to, her

testimony is short and she would like to go

ahead and read that into the record. Bob's

testimony, we're happy to enter into the

record as if read, but he would like to offer

a summary, and we'll be happy to move to

Board questions or, you know, to agency

questions as appropriate.

MS. CROWLEY: Can we go off the record

for a one moment.

(Discussion off the record, after

which the following proceedings

were had:)

MS. CROWLEY: Go back on the record.

We discussed briefly entering some of the

exhibits to the original proposal as hearing

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exhibits just to keep the record tidy. So

the first Exhibit will be Exhibit 1, which is

an aerial photograph of Abbott Park and

vicinity in Libertyville Township and is so

labeled. The second will be the US EPA

document that is entitled "Improving Air

Quality With Economic Incentive Programs"

prepared by the United States Environmental

Protection Agency, dated January 2001, and

that is EPA document number EPA-452/R-OI-00l.

And then finally, the third exhibit is

Exhibit 3 entitled "Revised Exhibit 3," dated

2-29-08 entitled "Historical VOM Air

Emissions From Tunnel Dryers And Fluid Bed

Dryers At The Abbott Park Facility." For the

record this is slightly revised from the copy

that was attached as Exhibit 3 to Abbott's

original September 4th proposal. So those

are marked and entered into the record as

exhibits.

Now you may proceed.

MS. HODGE: Thank you. I do have

extra copies of this pre-filed testimony here

today, but I'm assuming everyone has a copy.

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With that, I think we're ready to move ahead

with Ms. Beno. And I'm not sure how you want

to handle the --

MS. CROWLEY: I'm sorry, I didn't

quite hear that.

MS. HODGE: I think we're ready to

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7 move forward.

8 MS. CROWLEY: Yes, go ahead.

9 (WITNESSES SWORN.)

10 DIANE BENO

11 Having been first duly sworn, was examined and

12 testified as follows:

13 BY MS. BENO:

14 Thank you for the opportunity to

15 speak here today. My name is Diane Beno. I am the

16 plant manager of the portion of the Abbott

17 Laboratories facility internally known as AB16. The

18 operations contained in AB16 produce intermediate

19 and final product formulations including liquids,

20 tablets, capsules packaged in bottles and blister

21 formats. The general process flow includes receipt

22 of raw materials, weighing of ingredients, massing

23 and granulation of ingredients, coating tablets or

24 particles, printing sYmbols onto tablets and
1 packaging finished products for distribution.

2 Over the course of a year we

3 produce many different products in building AB16.

4 For example, we produce products that treat diseases

5 in the field of neuroscience such as epilepsy and

6 bipolar disorder. We make anti-viral products for

7 the treatment of AIDS. We manufacture products to

8 fight infection. We package products that help

9 patients achieve healthy cholesterol levels and

10 products that improve the lives of people with

11 rheumatory arthritis, psoriasis and Crohn's disease.

12 We manufacture our products using batch production

13 processes. In batch production all of the

14 processing equipment in a process train, including

15 the dryers, manufactures one product at a time.

16 Each batch is completed before the manufacture of

17 the next batch begins. In a typical process, the

18 active and inactive ingredients are combined with

19 the liquid in a process called massing. The massing

20 process forms uniform granules. The wet granules

21 are dried in tunnel dryers or in fluid bed dryers

22 and then further processed into tablets or capsules.

23 The massing fluid which is typically either water or

24 ethanol is evaporated from the solid material in the

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1 drying step. If an organic solvent is volatilized

2 from the dryer, it is emitted to the ambient air as

3 VOM or VOC. The quantity of VOM emissions will vary

4 for different products and is calculated from the

5 quantity of VOM added to the mixture and loss

6 factors defined for the dryers and specified in the

7 Clean Air Act permitting Program permit for the

8 facility. It's also important to note that the ,

9 organic solvent currently used in granulation and

10 dried from the granulated mixtures in building AB16

11 is ethanol. Ethanol is a VOM, but it's not

12 considered a Hazardous Air Pollutant or HAP. The

13 proposed site specific amendment will have no impact

14 on HAP emissions.

15 Abbott's proposed site specific

16 amendment for building AB16 covers four tunnel

17 dryers and three fluid bed dryers. One additional

18 fluid bed dryer located in building AB16 is used

19 exclusively for research and development and is not

20 involved in the normal operating processes in

21 building AB16; therefore our proposed amendment does

22 not include that dryer. The tunnel dryers and fluid

23 bed dryers operate on different principles. We have

24 some diagrams here to help explain this point, so

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1 I'll go ahead and pass these out. I think this will

2 help us make a point. I think this will be helpful

3 as we get into the pre-filed questions later on. So

4 as I stated

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MS. CROWLEY: Just one moment. I'd

like to mark this as Exhibit 4, if you have

no objection, and it's a single-page document

with a heading "Granulation Process Fluid Bed

Drawing. " Thank you. Go ahead.

MS. BENO: The tunnel dryers and fluid

bed dryers operator on different principles.

In the use of tunnel dryers depicted on the

lower half of the exhibit, materials are

spread on trays and placed in a warming

chamber or tunnel that circulates warm air

over and under the trays. As shown in the

upper portion of the diagram, a fluid bed

dryer is a large vertical cylindrical shaped

vessel with a diffuser that blows warm air up

from the bottom of the vessel. The wet

intermediate granules are loaded into the

dryer, and flow upward suspended in a warm

air stream.

Abbott has increased its use of
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fluid air dryers for recently developed

products because they are more efficient and

produce a more uniform product than the

tunnel dryers. Abbott anticipates increased

use of water for massing fluid in future

products, and Abbott expects that this

preferential use of fluid bed dryers and

water based products will continue. That is,

many new products are expected to use fluid

bed dryers and water based formulations,

while older products continue to be

manufactured using tunnel dryers.

Batches of specific products are

typically manufactured using either one or

more tunnel dryers or one or more fluid bed

dryers, but not both because the technologies

are not interchangeable. Individual dryers

of the same type can typically be used in

combination or interchangeably in many cases,

but specific dryers are preferable for

combining with other equipment in a process

train to manufacture certain products from an

operational efficiency standpoint.

Abbott manufactures its batch

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processes whereby each manufacturing process

train and its associated equipment, including

the dryers, produces one product at a time in

fixed batch sizes. Process trains are

designed to accommodate batches of different

scales with some for large batches and some

for small batches. Therefore, the scale of a

given batch plays an important role in

determining which of the dryers will be most

efficient. Additionally, in accordance with

the u.s. Food and Drug Administration current

good manufacturing processes, extensive

equipment cleaning is required between

batches of different products, resulting in

up to three days of lost production time.

Therefore Abbott uses a campaign strategy to

continue running batches of the same product

consecutively in the process train to

minimize this cleaning time.

As currently written 218.480(b)

effectively defines a 12 month total VOM

limit on each individual dryer. This can

limit Abbott's ability to schedule the

campaigns of certain products to maximize the

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efficiency of the processes. In other words,

to insure compliance with the current 12

month VOM limit on each dryer for a

particular batch, Abbott may be required to

utilize a dryer with a low VOM emissions

during the last 12 months, instead of using

the dryer that is most efficient from a

production scale standpoint. Such selection

of dryers is based only on the amount of VOM

that has been emitted from an individual

dryer during the preceding 12 months is an

inefficient approach to the scheduling of

Abbott's equipment and resources.

Additionally, the dryer selected for a given

campaign also depends on dryer availability

and other factors. For example, one dryer

may be temporarily out of use to allow for

cleaning or for unscheduled maintenance

requirements; therefore the standards as

currently defined can result in wasted

resources by requiring Abbott to dry a small

batch of our product in our large scale

process train to maintain our equipment

specific VOM limits. Total annual emissions

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from a dryer result in a quantity of organic

solvent removed from the different products

processed in a dryer over a 12-month rolling

period. The material is processed in a

number of individual campaigns for particular

products each consisting of multiple

individual batches. The assignment of a

campaign of a particular product to one or

more dryers involves a number of operating

factors, such as the scale and equipment

availability that contribute to the

efficiency of manufacturing. The VOM

emission threshold effectively acts as an

overriding factor that can force a particular

production campaign with VOM emissions to be

scheduled using equipment that has low enough

recent emissions to avoid exceeding a dryer's

threshold, but that may not otherwise be the

optimal or most efficient equipment for the

campaign. This scheduling shift increases

the operational cost, but results in no

environmental benefit because the actual

emissions will be the same as if the campaign

would have used the optimal equipment.

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In order to assure Abbott's Lake

County manufacturing facilities remain

competitive with our national and global

competitors Abbott must continually seek ways

of making our manufacturing operations more

efficient. The scheduling inefficiency

created by Subpart-T was identified as one

area where improvements in efficiency could

be made and is the basis for the proposed

amendment. This seems particularly

appropriate as the business costs created by

this efficiency results in no environmental

benefit. The most efficient method to

manufacture Abbott's products in AB16 would

be to use the dryer that is best suited to

the requirements of the production schedule

and scale, regardless of the amount of VOM

that has been emitted from that dryer in the

past 12 months. Provided that the combined

VOM emissions from all of the dryers are less

than the combined amount allowed under

section 218.480(bl, this method of operation

would not require an increase in allowable

VOM emissions from the facility. In fact,

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the proposed amendment would provide Abbott

improved production flexibility to utilize

the most efficient dryers for a given product

while significantly lowering the total

allowed VOM emissions for all of the dryers

combined.

Thank you. I'll be happy to

answer any questions.

MS. HODGE: Shall we move on to Bob.

Why don't you go through a summary of your

testimony, and then we'll be happy to turn to

the Board's questions well.

MS. CROWLEY: That's certainly

acceptable.

MR. WELLS: I am going to attempt to

summarize my testimony in a shorter summary

than the actual testimony. My name is a

Robert Wells. I'm air manager for

Environmental Support in Abbott's Global EHS

Department. I've been assisting the EHS

staff with regulatory statutes with our

proposal, and I'm going to touch on some of

the technical points that relate to why we

proposed what we did and where we see that

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we're consistent with the approaches that

we've proposed.

The concern today is for

provisions applicable to seven of the Abbott

parking units, four tunnel dryers and three

fluid bed dryers. Subpart-T requires VOM

controls for tunnel dryers and fluid bed

dryers if their annual emissions exceed

seven-and-a-half tons per year for an

individual tunnel dryer and five tons per

year for individual fluid bed dryers. The

seven units therefore have a total potential

emissions without control of 45 tons per

year. Because of the cost associated with

VOM control for this type of equipment, it is

impractical to add control. So effectively

the limits before control is required act as

upper limits on the air emissions from the

seven units. The actual emissions from these

units vary year to year based on the quantity

of production and based on the different

materials produced. In recent years the

tunnel dryer emissions have varied from

six-tenths of a ton to 5.6 per year, each

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year. Fluid bed dryer emissions have varied

from .1 tons to 3.9 tons per year each where

the units have been operating. And you can

see from Exhibit 3 that's where those numbers

came from, although they were not in my

pre-filed testimony.

Abbott sought solutions to

eliminate manufacturing constraints that

effected the efficiency of the overall

operation, and two options were initially

considered. One be would be to request an

increase in the threshold that would have to

be exceeded before control were required, and

the second would be to refine Subpart-T so

that the individual unit control would be

applied as a group to the combined emissions

of the combined allowed emissions of the

seven dryers. We evaluated the alternatives,

and we did some analysis that demonstrated to

us that it would be justifiable to increase

the limit for each dryer, that the cost of

control was such that at the levels that the

threshold of requiring control and at higher

levels, that the cost would be beyond

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reasonably available control technology or

RACT.

Considering the combined emission

controlled threshold, we determined that the

flexibility that we were looking for would

fit well within that so that there was -- we

could go forward with that program without

increasing the allowable emissions from the

units. We discussed these alternatives with

Illinois EPA and later with both IEPA and US

EPA through our attorneys Hodge Dwyer Zeeman.

And IEPA and US EPA identified a third

alternative that was preferable to them and

that was a source specific emission cap,

SSEC, under US EPA's economic incentive

program or EIP. The source specific emission

cap would allow us to combine our future

emission limits for all the dryers but set to

a limit below the historical actual emissions

rather than the previously allowable

emissions or emissions allowable without

control. The historical emissions could be

based on a concept called baseline actual

emissions defined as the highest two year

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period in the last ten years. I know there

was some confusion about that following my

filing of the pre-filed testimony and we're

prepared to answer that question in detail

when we go through the prepared questions.

This is a change from the original definition

of historical actual emissions that the US

EPA included in their 2001 guidance. Abbott

reviewed the actual emissions that we've had

from the dryers in the most recent ten years,

and we identified the maximum two-year period

with emissions of 22.9 tons per year in 1999

and 2000. As I'll discuss later, a reduction

of ten percent of that level is applied to

insure environmental benefit and that results

in an emission limit for the seven units of

20.6 tons per year. This restriction would

be less than half of the 45 ton per year

effective limit that now applies to the seven

units taken together. This significantly

lower allowable limit though is acceptable to

Abbott's anticipated business and meets our

needs for flexibility.

Abbott considered the requirements

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of the EIP program in going forward with this

in order to define our conformance with the

three general principles for an EIP,

integrity, equity and environmental benefit.

Integrity, the integrity principle focuses on

the emission reductions themselves and

requires them to be surplus, bonafiable,

enforceable and permanent. This proposal

satisfies those conditions. The emissions

are surplus because our future allowable

emissions will be below past baseline

emissions for the dryers. Our emissions are

quantifiable because the VOM emissions can be

readily calculated from process record

keeping as established in the facility's

title five permit. The limits are

enforceable because they will be included in

Illinois's state implementation plan and also

in our Title V permit for Abbott Park and

they are permanent for the same reason. They

will be established as continuing limits on

our operations.

The proposed program satisfies the

equity principle because it involves only

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emissions at one facility. There is no

instance of relative increases and decreases

that must be balanced against one another.

The program satisfies the environmental

benefit principle because future emissions

will be reduced by ten percent below our

baseline actual emissions.

So in summary, the proposal limits

our maximum future allowable emissions to a

level below what we historically had really

in the course of the variations in our

manufacturing, but it will give us the

flexibility to operate more efficiently.

Thank you. I'll be happy to

answer any further questions.

MS. HODGE: Thank you very much.

We're ready to move on to the Board's

questions unless counsel for Illinois EPA has

anything now?

MS. CROWLEY: If we could first mark

as Exhibit No.5, the pre-filed testimony

submitted by Mr. Wells on February 22nd, as

I'm sure he would like the complete testimony

included in this record.

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MS. HODGE: Yes, he would.

MS. CROWLEY: We will do that.

MS. HODGE: Now, we'll turn to the

questions of the Board that were included in

the hearing officer order dated March 4,

2008.

MS. CROWLEY: And let's mark that as

Exhibit 8.

MS. HODGE: And we're not going to

read the questions. We'll just go straight

to the answers, if that's acceptable.

MS. CROWLEY: Unless you are more

comfortable having us read the questions, we

can dispense with that.

MS. HODGE: Okay. Then we'll probably

answer the questions certainly in order. And

No.1, we'll start with --

MR. WELLS: Question 1-A refers to

whether the economic feasability for the

original rule making still applies? The

answer to that is yes. As a part of this

process we analyzed the cost of control using

a methodology developed by the United States

EPA for what's referred to as BACT analysis,

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Best Available Controlled Technology, and

using this analysis we found that the cost of

control was continued to be significantly in

excess of what's normally considered

reasonably available control technology. So

essentially the economics have not changed.

And as to question 1-B, there have been no

fundamental changes in emission control

technology that would be applicable to the

facility since that original rule making. So

what we were looking at were the same control

technologies that were considered at that

time.

MEMBER RAO: We're fine with that.

MS. HODGE: Thank you. And let's move

on to the Board's question No.2 dealing with

emission trends.

MS. BENO: Okay. 2-A is in regard to

the lower actual emissions since 2000.

That's due to many factors. For example,

pharmaceutical manufacturing business

activity is highly variable year over year.

The types of products that we produce in a

given year can vary based on a number of

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market factors and patient demand. So

therefore, as I stated in the testimony,

different products emit different levels of

VOM. So product mix is a primary factor in

regard to the variability of our emissions.

MEMBER RAO: Has there been any change

in terms of production itself because when we

look at this, we see some variation but there

is also a significant, you know, reduction in

VOM emissions since 2000?

MS. BENO: As stated in the testimony

many new products where possible utilize

water based massing fluid, and so we make an

attempt using water instead of ethanol or

other VOM. So therefore the new products

that have been introduced to the facility

typically have used water based solvents.

MEMBER JOHNSON: And there's no VOM

produced when you use water as a fluid?

MS. BENO: No, no.

MEMBER RAO: Do you anticipate VOM

emissions to increase over time?

MS. BENO: We don't anticipate them to

increase over time.

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MEMBER MELAS: I have a question. You

stated earlier that the fluid bed drying is a

more efficient way of doing it. Do you

contemplate over the course of time now that

you will be phasing out the tunnel drying

equipment and concentrate on buying or

purchasing new fluid drying equipment?

MS. BENO: No, that's not currently

the plan. In fact, the products that we

manufacture in the tunnel dryers, we will

continue to manufacture those in the tunnel

dryers. To switch between the technologies

can have an impact on the safety or efficacy

of the drug product. So it would require a

lengthy amount of process development and

studies potentially, even clinical trials, so

that is the lengthy FDA process I referred

to.

MEMBER MELAS: You say there is a

one-on-one relationship to the type of

product to the type of dryer?

MS. BENO: Yes, absolutely.

MEMBER JOHNSON: Let me ask then.

There is then in your mind a potential any

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way that your company will begin some time in

the future to manufacture products that

either can't use the water as a massing fluid

and have to use ethanol; there is a potential

that you'll get back up to VOM rates

comparable to what they were in '99 and 2000?

MS. BENO: I wouldn't rule it out. It

certainly wouldn't be our intent, but I

wouldn't rule out the possibility.

I'll move on to B?

MS. HODGE: Yes.

MS. BENO: B is in regard to tunnel

dryer number four specifically, and in

Exhibit 3 it was noted that there was no VOM

from tunnel dryer three since 2005, and based

on Abbott's production needs, tunnel dryer

No.4 has not been in use since 2005.

However, it remains fully validated and

maintained and available for use should

production needs demand. So it serves us as

a back up in the event that one of the other

tunnel dryers would become unavailable for

use.

MEMBER RAO: Since the emissions for

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all these dryers that you have listed in

revised Exhibit 3 are significantly lower

than the applicable limits, does Abbott have

enough flexibility under the current rule

itself or do you need to have the combined

limit to provide you that flexibility?

MS. BENO: We believe we need the

combined limit to provide flexibility.

MEMBER RAO: Can you explain a little

more why, if you don't have enough

flexibility under the current rule?

MS. BENO: It's based on the highly

variable nature of the product mix in the

facility. So in the event we were to run

more or some the products that have an

ethanol based mass in fluid, it would prevent

us from using the most effective and

efficient equipment.

MEMBER RAO: Have you had that kind of

situation in the past?

MS. BENO: What specific situation?

MEMBER RAO: Where you were not able

to use whatever dryer you wanted to under the

current rules.

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MS. BENO: It's become very close.

MEMBER RAO: Looking at this data that

you have provided, fluid bed dryer 3

obviously could be the one which is kind of

closer to its limit?

MS. BENO: Right.

MEMBER RAO: Is that a situation where

you see and you'd need to use another dryer

similar to that again?

MS. BENO: Yes, absolutely. Fluid bed

dryer 3 in Exhibit 3, as you noted, has

reached 3.9 in recent years which approaches

our current limit.

MEMBER RAO: Thank you.

MS. HODGE: Let's move on to the

questions in the Board's order relating to

the pre-filed testimony of Ms. Beno, and

question No.1.

MS. BENO: This is in regard to the

type of organic massing fluid that we

currently use, and ethanol has been the only

organic massing fluid that we've used in

building AB16 during the ten-year period

under review for this proposal. I do want to

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note that prior to late 2002 the type of

ethanol used was denatured ethanol which

contains a small percentage of methanol as

the denaturant, but since late 2002 we've

converted to all beverage grade ethanol which

does not contain methanol as the denaturant.

MS. HODGE: Question number two?

MS. BENO: Again, number two is in

regards for the basis for choosing the

massing fluid, and the choice of massing

fluid is dependent on the particular

properties of a product. For example, the

relative solubility of the product in either

water or ethanol plays a key role in

determining which solvent will be required

for the massing fluid. So it's really

related to the various properties of the

product we're intending to manufacture

whether or not water is an option for us or

not.

MEMBER RAO: So it's got nothing to do

with the type of dryer you are using; it's

all the product you are manufacturing?

MS. BENO: No, either can be used in

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either dryer. Water or ethanol can be used

in either drying technology.

MS. HODGE: Question number three?

MS. BENO: No.3, this is in regard to

increased use of fluid bed dryers and water

for massing fluid. Abbott does in fact

expect there will be an increased mass for

water in new products as I indicated. It's

not practical to change the ethanol based

processes to a water based process because of

the FDA considerations that I indicated

before had the opportunity to influence the

safety and efficacy of the product. But we

do consider the type of massing fluid as we

developed new products with a preference to

using water. So accordingly we expect there

will be an increased use of water for the

massing fluid for new products. Questions

there?

B, this is in regard to the use of

water to avoid VOM emissions. And in fact

VOM emission avoidance is one of several

factors that we consider as one of the

benefits resulting from increased use of

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water for the massing fluid. Other benefits

include increased raw material costs, reduced

worker exposure to organic materials in the

work place and improved safety due to

reduction of flammable solvents.

In regard to C, water based

products are preferable for a number of

reasons. As described previously, they are

preferable because they don't contribute to

VOM emissions, reduced raw material costs,

reduced worker exposure and improve overall

safety to the facility. Those were similar

questions.

In regard to the fluid bed dryers

being more efficient, it's mainly related to

the way they operate. If you refer to the

diagram, you can see in a fluid bed dryer,

individual granules, very small pieces of the

product are airborne in the warm air stream

and the air moves around freely on all

surfaces of the particle or granule drying

the drying process. This results in a much

more even drying process and higher quality

end product because of the evenness of the

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drying. Tunnel dryers on the other hand are

like cookie sheets in an oven. You hand-load

the material onto the cookie sheet, onto the

big rack, push the rack into the tunnel dryer

and it's exposed to air movement in the

tunnel. What can happen in a tunnel dryer

similar to in baking, you could have parts of

the cookie that are more done than other

parts of the cookie. Whereas in the fluid

bed drying technology, a smaller portion of

the product is exposed to the warm air across

the entire surface. So it makes for a much

more uniform drying process which makes the

downstream processing much easier.

MEMBER RAO: I think you answered 4B

already.

MS. BENO: Yes, yes. Thank you.

MS. HODGE: Number five?

MS. BENO: Selection of the dryers.

One example of the inefficiencies created by

the current rule is that the most

appropriately sized equipment may not be

chosen. As I mentioned in the testimony, we

have small scale process trains and large

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scale process trains. Now, in the event that

the small scale process train would be

approaching its limit, we may be forced to

use the large scale process train to process

smaller batches than would normally be

processed in that particular process train.

So that is the main consideration in regards

to inefficiency of the scheduling that could

be influenced by the current rule. It's much

like flying a plane half full or running a

dishwasher half full, you are not utilizing

the full capacity of the equipment in that

particular area.

MR. RAO: In this regard, I didn't see

any information about the drying capacity of

these dryers. Are they all about the same or

each dryer is different.

MS. BENO: It has to do with the

processing suits that they are in. We have

one dryer in one processing suit, and we have

two dryers in another processing suit.

That's our large scale processing train

versus our small scale processing train. As

I mentioned, you can only run one product in

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a process train at any given time.

MEMBER RAO: Thank you.

MS. BENO: So there was one final

question regarding how we select which dryer

to use for a given campaign. And the

selection of dryers is mainly based on the

technology first. As I mentioned there is a

one to one relationship of which product goes

in which type of technology. Meaning a

tunnel dryer or a fluid bed dryer. The

second consideration would be the scale,

whether it's a large scale batch or a small

scale batch, and then the third consideration

is general availability; do we have more

products running in one size suit than the

other or is one of the suits down for

maintenance or cleaning. So those are the

critical factors that we consider when

scheduling the production in the dryers.

MEMBER RAO: Thank you.

MEMBER JOHNSON: The amount of VOM

produced is dependent upon the amount of

ethanol, use not on your choice of which

drying --

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MS. BENO: Absolutely because we're

going to be drying to the specification of

the product so we'll always be drying off the

same amount of VOM for a given product for a

given batch.

MS. HODGE: Thank you. Anything else?

MS. CROWLEY: Mr. Matoesian, have you

had any questions?

MR. MATOESIAN: No, not so far.

MS. CROWLEY: I've been keeping an eye

on you, but I just wanted to state it for the

record.

MS. HODGE: Let's move on to the

questions of the pre-filed testimony of

Mr. Wells.

MR. WELLS: I talked briefly earlier

about the two-year period. What has happened

is that there has been a change in philosophy

on the conceptual level in US EPA's

application of historical emissions.

The definition of historical

actual emissions that appears in the 2001

guidelines, the US EPA developed is the same

as the concept in prevention of significant

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deterioration, PSD, or non-attainment new

source review, netting that US EPA has

previously used and what was in place at the

time; that is , the two years immediately

preceding the action or another two year

period, if it's determined to be more

representative. There's been a lot of

problems historically in the determination of

whether a particular period is

representative, and the US EPA in 2002

changed the definition of actual emissions.

They defined a term "baseline actual

emissions" for the PSD and the non-attainment

new source review program. And what they

said was that you can use any 24-month period

in the preceding ten years. That assures

that you can look back far enough to see a

representative business cycle so that you can

see the periods when your normal fluctuation

of business would result in relatively higher

emissions. But at the same time it gives a

simple concrete basis to make that decision.

That was originally suggested to us in the

conversations that our attorneys had with

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IEPA and with US EPA. That was the

recommended interpretation at the time, and

as we understand it, US EPA guidance is now,

their guideline on the EIP process, which is

not a regulation. It is guidance, is being

interpreted differently to allow the use of

that two-year period as far back as ten

years. I'll also point you to the revised

Exhibit 3. If you notice, 1999 and 2000 were

the highest years. 1998 was actually lower

than the emissions in either 1999 or 2000.

So it is in fact a peak that we are talking

about rather than just a continuing decline.

MEMBER RAO: And, Mr. Wells, do you

have any specific US EPA publication or

memorandum that talks about this change in

their policy?

MR. WELLS: Well, the baseline actual

emissions were established in a federal

register notice amending the PSR rules at 67

Federal Register 80.186.

MEMBER JOHNSON: We, as good corporate

citizens, it's to your benefit to keep your

VOM emissions as low as possible, but what

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you want to be able to do, at least I take it

is, that the demand for whatever product you

are producing in 1999 and 2000 were to return

and you had to use the same drying system or

use the ethanol rather than water on that to

develop that or make that particular product,

you want to be covered so that you can do

that and fulfill the demand. And that's why

even though these VOM emissions are at least

twice as much as the next five years, that's

why you want to have that set as your

baseline?

MR. WELLS: Exactly.

MS. HODGE: And, again, just to note

for the record, that historical baseline is

being reduced by ten percent, you know, in

the limit that we're requesting.

MEMBER JOHNSON: And in fact, the

reduction from what it is now is

significantly more than that. If you ran all

of your dryers at capacity, you would produce

45 tons, and this site specific rule as

proposed reduces that by over 30 tons, right?

MEMBER RAO: Half.

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MR. WELLS: Over half, a little over

half.

MEMBER RAO: Thank you.

MR. WELLS: Question two, I think it

kind of follows question one.

MS. HODGE: We're good there. Shall

we move on the economic incentive program

guidance? Question No.1. And this is

something that we thought might be more

properly addressed to the Illinois EPA.

MR. MATOESIAN: That's fine. Charles

Matoesian speaking. With me today I have

Mr. Yoginder Mohajan (Phonetic), who is an

engineer with the Illinois Environmental

Protection Agency, he is here to answer some

questions from the board. He is currently in

the air quality planning section of the

Bureau of Air and has prepared some answers

for these questions.

MS. CROWLEY: Would you swear him in?

48

21 YOGINDER MAHAJAN

22 having been first duly sworn, was examined and

23 testified as follows:

24 Question No. 1 on page three, the
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guidance states that the guidance applies if

state applies --

MS. CROWLEY: Off the record.

(Discussion off the record.)

MS. CROWLEY: Go back on the record.

MR. MAHAJAN: The answer to the

question, I spoke with the US EPA, Mr. Steve

Rosenthal. He told me that the option of the

EIP is not required. It is recommended. It

is nice if you have it adopted, but it's not

required and the agency's intention is not to

adopt it. It will deal with it on a case by

case basis.

Question No.2, yes, the agency

has discussed this with the US EPA and

confirmed that this amendment is consistent

with the EIP guidelines.

No.3, yes. And question No. 3B

is also no. Regarding emissions being

surplus is there any concern? No we don't

have any concern. It's discussed with the US

EPA, and they said that it is consistent with

the EIP guidelines.

MEMBER RAO: Thank you.

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MS. HODGE: Do you have any other

questions?

MEMBER RAO: There was one question

about the proposed amendment.

MS. HODGE: We're ready to move to

that.

MEMBER RAO: No follow-ups.

MS. CROWLEY: Do you have any

follow-ups for this.

MS. HODGE: No. So we'll move on to

the question on the proposed amendments,

question No.1.

MR. WELLS: Yes. The only concern

that we had with the specification of the

equipment was that we not specify that --

28.480(b) now covers the entire facility,

more than just building AB16. We would not

have a problem if the specification were made

on the SSEC that we've been discussing today.

As far as specifically 218.480(b) (4), as far

as the general applicability of 218.480(b),

it's our understanding that still applies to

the facility, and it is possible that we

might find the need to install a fluid bed

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dryer in another building for a totally

unrelated manufacturing process.

MEMBER RAO: You are comfortable with

the way the rule is proposed now?

MR. WELLS: That's correct.

MEMBER RAO: I think that question was

triggered because the way 218.480(b) is now

currently written, Abbott's name is not

mentioned in that section at all. And I know

it's highly unlikely that somebody else would

set up shop with four dryers and give them

names and take advantage of this rule, but in

most of our site specific rules we have the

name of the company involved in it. So I

just wanted to know what your thoughts were

on it.

MR. WELLS: In terms of identifying

the company, I don't think we have any

objection to it. The drafting of the

original rule was before my time. I'm not

sure where the language came from, but that

wouldn't be a problem. Again, the only thing

we wanted to be sure was that it wasn't

defined specifically to cover building AB16,

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just to allow us the same flexibility in the

future.

MEMBER RAO: Okay.

MEMBER JOHNSON: The road is named

after you so --

MEMBER RAO: Thank you very much.

MS. HODGE: Thank you.

We have one more issue that we'd

like to address, and this deals with a

request that has been made by US EPA through

the Illinois EPA, and they had asked if we

could submit to them some of the supporting

emission calculations for the baseline years,

1999 and 2000. We've talked with IEPA about

how the emissions are calculated and US EPA

wants a little bit more information. We are

currently preparing that, and we will submit

additional information in response to that

request subject to CBI, confidential business

information requirements on that. So that

will be forthcoming, and I understand from

talking with counsel for IEPA, that you would

like to have some of that in this board's

record, that IEPA would like to have some of

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that in the Board's record.

MS. CROWLEY: I understand that.

Please if any of it is confidential business

information or trade secrets, that when it is

submitted that it is properly submitted with

a redacted copy, as well as the copy that you

would like to have protected so that there

isn't any problem with that.

MS. HODGE: We can do that, and we

will work with IEPA and Mr. Steve Rosenthal

at US EPA to make sure that everyone is

comfortable with what we submit.

With that, I don't have anything

else.

MR. MATOESIAN: We have nothing.

MS. CROWLEY: One little left over bit

was the motion to file the amendment, Exhibit

3, and the motion to amend the proposal

specifically as it regards proposed

218.480(b) (4) to reflect the change to the 90

percent baseline calculations. Do you have

any objection to that?

MR. MATOESIAN: No.

MS. CROWLEY: Thank you. That motion

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then is granted. Let's go off the record for

a moment.

(Discussion off the record.)

MS. CROWLEY: Back on the record. We

have had a brief discussion about what would

be a reasonable post-hearing comment period.

We have chosen May 1st as the close comment

period date subject to an extension if

necessary to allow completion of data

gathering for US EPA or if any other person

needs additional time. We specifically do

request that the agency file, even if short,

some comment on this record indicating their

view of whether this rule should or should

not be granted. If there is nothing else --

MR. MATOESIAN: We can say, the Agency

can state that it supports the petition.

MS. CROWLEY: Okay, fine. If there's

nothing else then, I thank you all for your

participation. The Board again thanks Abbott

for its patience in bearing with our

scheduling problems. We will try to render a

decision in an expedited fashion once the

record is closed. Again, thank you all very

54
1 much.

2 STATE OF ILLINOIS

SS.

3 COUNTY OF COOK

4

5 I, DENISE ANDRAS, being a Certified

6 Shorthand Reporter doing business in the City of Des

7 Plaines, Illinois, County of Cook, certify that I

8 reported in shorthand the proceedings had at the

9 foregoing hearing of the above-entitled cause. And

10 I certify that the foregoing is a true and correct

11 transcript of all my shorthand notes so taken as

12 aforesaid and contains all the proceedings had at

13 the said meeting of the above-entitled cause.

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DENISE Andras, CSR

CSR NO. 084-003437