15304 Federal Register / Vol. 62, No. 61 / Monday, March 31, 1997 / Proposed Rules

ENVIRONMENTAL PROTECTION

AGENCY

40 CFR Parts 52, 60, 264 and 265

[FRL–5803–7]

Project XL Site-specific Rulemaking for

Merck & Co., Inc. Stonewall Plant

AGENCY: Environmental Protection

Agency (EPA).

ACTION: Proposed rule.

SUMMARY: The EPA is proposing to

implement a project under the Project

XL program for the Merck & Co., Inc.

(Merck) Stonewall Plant, in Elkton,

Virginia. The terms of the project are

defined in a proposed Final Project

Agreement (FPA) which is being made

available for public review and

comment by this document. In addition,

EPA is proposing today a site-specific

rule, applicable only to the Merck

Stonewall Plant, to facilitate

implementation of the project. By this

document, EPA solicits comment on the

proposed rule, the proposed FPA, and

the project generally.

This proposed site-specific rule is

intended to provide regulatory changes

under the Clean Air Act and the

Resource Conservation and Recovery

Act (RCRA) to implement Merck’s XL

project, which will result in superior

environmental performance and, at the

same time, provide Merck with greater

operational flexibility. The proposed

site-specific rule would change the

Clean Air Act requirements which apply

to the Merck Stonewall Plant for the

prevention of significant deterioration of

air quality and certain new source

performance standards. EPA also

proposes a site-specific rulemaking

under RCRA to provide regulatory

changes pertaining to air emissions

standards to implement this XL project.

DATES: Comments. All public comments

must be received on or before April 30,

1997. If a public hearing is held, the

public comment period will remain

open until May 15, 1997.

Public Hearing. A public hearing will

be held, if requested, to provide

interested persons an opportunity for

oral presentation of data, views, or

arguments concerning this proposed

rule to implement Merck’s XL project. If

anyone contacts the EPA requesting to

speak at a public hearing by April 10,

1997, a public hearing will be held on

April 14, 1997. Additional information

is provided in the section entitled

ADDRESSES.

Request to Speak at Hearing. Persons

wishing to present oral testimony must

contact Ms. Robin Moran at the EPA by

April 10, 1997. Additional information

is provided in the section entitled

ADDRESSES.

ADDRESSES: Comments. Written

comments should be submitted in

duplicate to: Ms. Robin Moran, U.S.

Environmental Protection Agency,

Region III, Air, Radiation & Toxics

Division, 841 Chestnut Street (3AT23),

Philadelphia, PA, 19107–4431, (215)

566–2064.

Docket. A docket containing

supporting information used in

developing this proposed rulemaking is

available for public inspection and

copying at U.S. EPA, Region III, 841

Chestnut Street, Philadelphia, PA,

19107–4431, (215) 566–2064, during

normal business hours, and at EPA’s

Water docket (Docket name ‘‘XLMerck’’); 401 M Street, SW, Washington,

DC 20460. For access to the Water

docket materials, call (202) 260–3027

between 9:00 a.m. and 3:30 p.m.

(Eastern time) for an appointment. A

reasonable fee may be charged for

copying. A docket is also available for

public inspection at the Virginia

Department of Environmental Quality,

Valley Regional Office, 4411 Early Road,

P.O. Box 1129, Harrisonburg, Virginia

22801–1129, (540) 574–7800.

Public Hearing. If a public hearing is

held, it will be held at 7:00 p.m. at the

following location: Virginia Department

of Environmental Quality, Valley

Regional Office, 4411 Early Road, P.O.

Box 1129, Harrisonburg, Virginia

22801–1129, (540) 574–7800. Persons

interested in attending the hearing

should notify Ms. Robin Moran, (215)

566–2064, to verify that a hearing will

be held.

FOR FURTHER INFORMATION CONTACT: Ms.

Robin Moran, U.S. Environmental

Protection Agency, Region III, Air,

Radiation & Toxics Division, 841

Chestnut Street (3AT23), Philadelphia,

PA, 19107–4431, (215) 566–2064.

SUPPLEMENTARY INFORMATION:

Outline of This Document

I. Authority

II. Background

A. Overview of Project XL

B. Overview of the Merck XL Project

1. Introduction

2. Merck XL Project Description

3. Environmental Benefits

4. Stakeholder Involvement

5. Compliance

III. Clean Air Act Requirements

A. Summary of Regulatory Requirements for

the Merck XL Project

B. Prevention of Significant Deterioration

1. Requirements of the Clean Air Act

2. Permit Modifications

C. State Implementation Plan Requirements

D. New Source Performance Standards

E. Title V Operating Permit

IV. Resource Conservation and Recovery Act

Requirements

V. Additional Information

A. Public Hearing

B. Executive Order 12866

C. Regulatory Flexibility

D. Paperwork Reduction Act

E. Unfunded Mandates Reform Act

I. Authority

This regulation is being proposed

under the authority of sections

101(b)(1), 110, 111, 161–169, 169A, and

301(a)(1) of the Clean Air Act, and

sections 1006, 2002, 3001–3007, 3010,

and 7004 of the Solid Waste Disposal

Act of 1970, as amended by the

Resource Conservation and Recovery

Act, as amended (42 U.S.C. 6905, 6921–

6927, 6930, and 6974). EPA has

determined that this rulemaking is

subject to the provisions of section

307(d) of the Clean Air Act.

II. Background

A. Overview of Project XL

This proposed site-specific rule is

designed to implement a project

developed under Project XL, an

important EPA initiative to allow

regulated entities to achieve better

environmental results at less cost.

Project XL—for ‘‘excellence and

leadership’’—was announced on March

16, 1995, as a central part of the

National Performance Review’s and

EPA’s effort to reinvent environmental

protection. See 60 FR 27282 (May 23,

1995). Project XL provides a limited

number of private and public regulated

entities an opportunity to develop their

own pilot projects to provide regulatory

flexibility that will result in

environmental protection that is

superior to what would be achieved

through compliance with current and

reasonably anticipated future

regulations. These efforts are crucial to

the Agency’s ability to test new

regulatory strategies that reduce

regulatory burden and promote

economic growth while achieving better

environmental and public health

protection. The Agency intends to

evaluate the results of this and other

Project XL projects to determine which

specific elements of the project, if any,

should be more broadly applied to other

regulated entities to the benefit of both

the economy and the environment.

In Project XL, participants in four

categories—facilities, industry sectors,

governmental agencies and

communities—are offered the flexibility
Federal Register / Vol. 62, No. 61 / Monday, March 31, 1997 / Proposed Rules 15305

1For more information about the XL criteria,

readers should refer to the May 23, 1995 Federal

Register notice (60 FR 27282) and the December 1,

1995 ‘‘Principles for Development of Project XL

Final Project Agreements’’ document, both

contained in the docket for this action.

to develop common sense, cost-effective

strategies that will replace or modify

specific regulatory requirements, on the

condition that they produce and

demonstrate superior environmental

performance. To participate in Project

XL, applicants must develop alternative

pollution reduction strategies pursuant

to eight criteria—superior

environmental performance; cost

savings and paperwork reduction; local

stakeholder involvement and support;

test of an innovative strategy;

transferability; feasibility; identification

of monitoring, reporting and evaluation

methods; and avoidance of shifting risk

burden.1 They must have full support of

affected Federal, state and tribal

agencies to be selected.

The XL program is intended to allow

EPA to experiment with untried,

potentially promising regulatory

approaches, both to assess whether they

provide benefits at the specific facility

affected, and whether they should be

considered for wider application. Such

pilot projects allow EPA to proceed

more quickly than would be required to

undertake changes on a nationwide

basis. As part of this experimentation,

EPA may try out approaches or legal

interpretations that depart from or are

even inconsistent with longstanding

Agency practice, so long as those

interpretations are within the broad

range of discretion enjoyed by the

Agency in interpreting statutes that it

implements. EPA may also modify rules

that represent one of several possible

policy approaches within a more

general statutory directive, so long as

the alternative being used is permissible

under the statute.

Adoption of such alternative

approaches or interpretations in the

context of a given XL project does not,

however, signal EPA’s willingness to

adopt that interpretation as a general

matter, or even in the context of other

XL projects. It would be inconsistent

with the forward-looking nature of these

pilot projects to adopt such innovative

approaches prematurely on a

widespread basis without first finding

out whether or not they are viable in

practice and successful in the particular

projects that embody them.

Furthermore, as EPA indicated in

announcing the XL program, the Agency

expects to adopt only a limited number

of carefully selected projects. These

pilot projects are not intended to be a

means for piecemeal revision of entire

programs. Depending on the results in

these projects, EPA may or may not be

willing to consider adopting the

alternative interpretation again, either

generally or for other specific facilities.

EPA believes that adopting alternative

policy approaches and interpretations,

on a limited, site-specific basis and in

connection with a carefully selected

pilot project, is consistent with the

expectations of Congress about EPA’s

role in implementing the environmental

statutes (so long as the Agency acts

within the discretion allowed by the

statute). Congress’ recognition that there

is a need for experimentation and

research, as well as ongoing reevaluation of environmental programs,

is reflected in a variety of statutory

provisions, such as sections 101(b) and

103 of the Clean Air Act. In some cases,

as in this XL project, such

experimentation requires an alternative

regulatory approach that, while

permissible under the statute, was not

the one adopted by EPA historically or

for general purposes.

B. Overview of the Merck XL Project

1. Introduction

This proposed site-specific rule

supports a draft permit and Project XL

proposed Final Project Agreement (FPA)

that have been developed by the Merck

XL stakeholder group, namely Merck,

EPA, Virginia Department of

Environmental Quality (VADEQ), U.S.

Department of the Interior (DOI)/

National Park Service (NPS), and

community representatives. Several

environmental organizations offered

valuable input during the stakeholder

process, including Southern

Environmental Law Center, the Virginia

Consortium for Clean Air, and the

Natural Resources Defense Council. The

proposed FPA and draft permit are

available for review in the docket for

today’s action and also are available on

the world wide web at http://

www.epa.gov/ProjectXL. The proposed

FPA outlines how the project addresses

the eight Project XL criteria, in

particular how the project will produce,

measure, monitor, report, and

demonstrate superior environmental

benefits. In today’s action, the Agency is

soliciting comment on proposed sitespecific regulatory changes to

implement the project. The draft permit

is available on the world wide web and

in the docket file for today’s action;

however the draft permit is made

available for informational purposes

only. The Commonwealth of Virginia is

conducting the official comment period

for the draft permit, and initiated a

public comment period for the draft

PSD permit and a proposed variance on

January 28, 1997.

EPA also seeks comment on the

proposed FPA, which is available on the

world wide web and in the docket file

for today’s action, in light of the criteria

outlined in the Agency’s May 23, 1995,

Federal Register notice (60 FR 27282)

regarding Regulatory Reinvention (XL)

Pilot Projects. Those criteria are: (1)

Environmental performance superior to

what would be achieved through

compliance with current and reasonably

anticipated future regulations; (2) cost

savings or economic opportunity, and/

or decreased paperwork burden; (3)

stakeholder support; (4) test of

innovative strategies for achieving

environmental results; (5) approaches

that could be evaluated for future

broader application; (6) technical and

administrative feasibility; (7)

mechanisms for monitoring, reporting,

and evaluation; and (8) consistency with

Executive Order 12898 on

Environmental Justice (avoidance of

shifting of risk burden).

2. Merck XL Project Description

The Merck Stonewall Plant is a

pharmaceutical manufacturing facility,

built in 1941, located near Elkton,

Virginia. The facility is located

approximately 2 kilometers from the

Shenandoah National Park, a Federal

Class I area under the Clean Air Act.

Currently, the plant employs about 800

people in a range of pharmaceutical

manufacturing activities such as

fermentation, solvent extraction, organic

chemical synthesis, and finishing

operations. The facility’s products

include broad spectrum antibiotics,

anti-parasitic drugs for human and

animal health, a cholesterol lowering

drug, a drug for the treatment of

Parkinson’s disease, and a new drug for

the treatment of human

immunodeficiency virus (HIV).

To remain competitive in the

worldwide pharmaceutical industry, the

Merck Stonewall Plant must respond

rapidly to changing market conditions

and product demands. To get new

pharmaceutical products to market

quickly, Merck requires flexible

manufacturing operations that can make

a broad range of products with the same

manufacturing equipment using a wide

array of raw materials and solvents.

Merck also continually evaluates

existing products for yield and process

improvements, which results in a need

for frequent manufacturing changes.

Thus, Merck’s facilities often modify

environmental permits after a product

line is first permitted.

The goal of this XL project is to

develop a regulatory structure for the
15306 Federal Register / Vol. 62, No. 61 / Monday, March 31, 1997 / Proposed Rules

2The criteria pollutants included in the total

emissions cap are sulfur dioxide, nitrogen oxides,

carbon monoxide, ozone (using volatile organic

compounds as a surrogate), and particulate matter

with aerodynamic diameter less than 10 microns.

Thus, the total emissions cap includes all existing

criteria pollutants except lead. Merck will comply

directly with any applicable requirements for the

control of lead emissions. Merck currently emits a

very low amount of lead emissions (0.3 tons per

year), which will be virtually eliminated when the

facility converts the coal-burning powerhouse to

natural gas. Merck also will comply directly with

any applicable requirements for new criteria

pollutants which are not included in the total

emissions cap.

Merck Stonewall Plant that both

facilitates flexible manufacturing

operations and achieves superior

environmental performance. The

existing preconstruction air permitting

regulations that govern modifications at

the facility, specifically the Prevention

of Significant Deterioration (PSD)

permitting regulations and the minor

New Source Review (NSR) regulations,

require that most changes to Merck’s

manufacturing processes must be

reviewed and approved in advance by

the VADEQ. In reviewing permit

changes, the VADEQ consults with the

Federal Land Manager (FLM) for

Shenandoah National Park in

accordance with the Memorandum of

Understanding between the DOI/NPS

and VADEQ. Typically, the more

changes that are made or the larger the

change, the more time and resources are

necessary for permit review. The

complexity of the regulations requires a

considerable effort by the facility as well

as the regulators to prepare and review

permit applications for process

modifications.

Merck’s XL project seeks to replace

this complex permitting system with a

simpler system of compliance with

criteria air pollutant regulations.

Through a site-specific rulemaking and

enforceable permit conditions, the

facility’s total emissions of criteria

pollutants (except lead) 2 would be

capped below the level at which the

plant operated over recent years (at

approximately 1500 tons per year

(TPY)). Within the site-wide total

emissions cap, the facility will also be

subject to individual pollutant caps

(subcaps), established near or below

recent actual emission levels, for sulfur

dioxide (SO2), nitrogen oxides (NOX),

and particulate matter with an

aerodynamic diameter less than 10

microns (PM10). In addition to accepting

these site-wide emissions caps, Merck

will modify its existing coal-burning

powerhouse to burn natural gas, a

cleaner burning fuel that generates

substantially fewer emissions than coal.

Either propane or number 2 fuel oil

would be used as a backup fuel. This

multi-million dollar project is not

otherwise required by regulations and

the boilers do not need to be replaced

for other reasons (e.g., operation, age or

capacity). The powerhouse conversion

would result in an up-front estimated

reduction of over 900 TPY of actual

criteria air pollutants, primarily SO2 and

NOX emissions. After this powerhouse

conversion, Merck would reduce its

total emissions cap by 20 percent,

thereby permanently retiring at least 300

TPY of criteria pollutant emissions.

Further, Merck also will reduce the

pollutant-specific subcaps for SO2 and

NOX by 25 percent and 10 percent,

respectively.

Merck’s XL project would be

implemented through issuance of a sitewide PSD permit, authorized by this

proposed site-specific rulemaking. For

the reader’s convenience, a copy of the

draft PSD permit is included in the

docket for today’s action. Under the sitespecific rule and permit, the Merck

Stonewall Plant would be required to

maintain its emissions below the total

emissions cap, as well as the subcaps for

SO2, NOX and PM10. Under the sitewide emissions caps, changes or

additions to facility operations would

no longer need prior approval under

PSD or NSR. The subcaps will keep SO2

and NOX emissions below recent actual

emission levels and PM10 emissions will

not significantly increase above the

recent actual emissions level. The

statutory PSD requirements for the VOC

and CO emission increases that are

possible under the total emissions cap

will be satisfied pursuant to this sitespecific rule and the PSD permit. So

long as the facility complies with the

total emissions cap, subcaps, and other

permit requirements, it would have the

flexibility to make modifications and to

operate in a manner that supports

Merck’s objective to deliver high quality

products quickly and efficiently to

improve human and animal health

without undergoing permit review for

each modification.

As an alternative to the current PSD

permitting system, the total emissions

cap and subcaps will provide an

incentive for Merck to identify and

promptly implement ongoing emission

reductions at the facility to provide

operating room under the cap for future

modifications and expansions. The XL

project also provides an additional

incentive for Merck to minimize

emissions—a system of ‘‘tiered’’

monitoring, recordkeeping and

reporting requirements. The draft permit

provides that the monitoring,

recordkeeping and reporting

requirements become more stringent as

the facility’s actual emissions approach

the total emissions cap. This tiered

monitoring system provides Merck

another built-in incentive to minimize

emissions and to find opportunities to

implement emission reductions.

3. Environmental Benefits

The Merck XL Project is designed to

deliver superior environmental

performance while allowing flexible

operations at the facility. The sitespecific rule and simplified air permit

would provide significant benefits to the

environment by substantially reducing

pollutant emissions near the

Shenandoah National Park and the

surrounding community.

The Merck Stonewall Plant is located

within 2 kilometers of Shenandoah

National Park, a Federal Class I area.

The facility’s proximity to this

nationally significant resource

highlights the need for serious

consideration of opportunities for better

protection of the environment. Air

quality is of special concern in

Shenandoah National Park. Under the

Clean Air Act, as amended in 1977,

Shenandoah National Park was

classified as a mandatory Federal Class

I air quality area. Under the PSD

program, the Federal Class I designation

allows very little additional

deterioration of the air quality from

established baseline concentrations of

certain air pollutants, and none of

National Ambient Air Quality Standards

(NAAQS) are to be exceeded. The DOI’s

Assistant Secretary for Fish and Wildlife

and Parks is the Federal Land Manager

(FLM) charged with direct responsibility

to protect the air quality related values

(AQRVs) of the Park. In 1990, the FLM

for Shenandoah National Park notified

the public that visibility is seriously

degraded, that sensitive streams and

watersheds are being acidified, and that

park vegetation is being injured by

ozone and sulfur dioxide levels. See 55

FR 38403–38408 (September 18, 1990).

Certain criteria pollutants have been

demonstrated to have a significant

adverse effect on the environmental

quality of the Shenandoah National

Park. In particular, SO2 emissions

contribute to visibility problems in the

region, and NOX emissions combine

with other chemicals in the atmosphere

to form ground-level ozone, which has

been determined to cause vegetation

damage. Emissions of SO2 and NOX also

contribute to the formation of acid rain

and associated adverse impacts. Merck’s

powerhouse conversion would achieve

an up-front reduction of these

pollutants—SO2 emissions are expected

to decrease by 679 TPY (94 percent) and

NOX emissions are expected to decrease

by 254 TPY (87 percent), from baseline
Federal Register / Vol. 62, No. 61 / Monday, March 31, 1997 / Proposed Rules 15307

3 See July 1, 1996 letter from the Merck XL

community representatives to the County

Administrator and Members of the Rockingham

County Board of Supervisors (contained in the

docket).

4 See December 18, 1996 letter from David W.

Carr, Jr., Staff Attorney, Southern Environmental

Law Center, to EPA Administrator Carol Browner

and Deputy Assistant Administrator Richard D.

Wilson; December 18, 1996 letter from Betty S.

Sellers, Community Representative-Merck XL

Project, to EPA Administrator Carol Browner and

Regional Administrator Michael McCabe; and

December 20, 1996 letter from Betty S. Sellers to

EPA Administrator Carol Browner and Deputy

Assistant Administrator Richard D. Wilson

(contained in the docket).

actual emission levels. After the

powerhouse conversion, the total

emissions cap and subcaps would

ensure a continuing, permanent

reduction of these pollutants, as well as

provide an ongoing incentive to

minimize actual emissions to preserve

the operating margin under the caps.

Besides the significant reduction in

criteria pollutants resulting from the

project, the conversion to natural gas

also will result in a reduction of about

47 TPY (65 percent) of hazardous air

pollutants (HAPs), specifically hydrogen

chloride and hydrogen fluoride. These

two HAPs are generated by burning coal

and are also associated with the

formation of acid rain. Reducing

emissions of these chemicals also will

contribute to efforts to improve air

quality in the Shenandoah National

Park and the surrounding community.

Although the facility’s VOC and CO

emissions would be allowed to increase

above recent actual emission levels (but

within the total emissions cap), there

are no identified adverse effects from

the maximum allowable levels of these

pollutants under the total emissions

cap. Moreover, the statutory PSD

requirements for VOC and CO will be

satisfied pursuant to this proposed sitespecific rulemaking and issuance of the

PSD permit. Section III.B.1 of the

preamble describes the analysis of

possible VOC and CO emission

increases.

4. Stakeholder Involvement

The Merck XL project enhances the

involvement of the community and

other stakeholders in understanding and

evaluating environmental impacts of the

facility. Stakeholders will have an

unprecedented opportunity to

participate in the ongoing evaluation of

the project and to recommend any

necessary changes to the project. The

draft PSD permit provides that the

stakeholders review and evaluate the

project at least every five years. If the

project signatories (i.e., signatories to

the Final Project Agreement, namely

EPA, VADEQ, Merck, DOI Federal Land

Manager, and Rockingham County

Board of Supervisors) give full consent

to any necessary permit changes, the

permitting authority may process a

permit modification according to the

requisite permit modification

procedures (see Section III.B.2 of this

preamble and proposed § 52.2454(n)).

Any stakeholder may raise issues about

the project at any time for discussion by

the stakeholder group. The draft permit

(Condition 6.1) identifies numerous

issues that may be considered by the

project stakeholders during each five

year review, including: (1) Significant

changes in emissions calculation

methods; (2) changes in the list of

criteria pollutants or the NAAQS; (3)

review of example ‘‘good environmental

engineering practice’’ control

technologies required for significant

new installations or modifications; (4)

adequacy of the monitoring,

recordkeeping and reporting

requirements; (5) review procedure for

compliance with newly-applicable

criteria pollutant regulations; (6) review

of the permit termination criteria; (7)

review of ambient modeling for shortterm PM10 and SO2 emissions; (8)

review of the determination that the

area is NOx-limited for ozone formation;

and (9) review of the periodic review

criteria. In addition to these five-year

review criteria, the stakeholders,

including the National Park Service,

also will be involved in considering

project changes based on the review of

the effects of VOC emissions on AQRVs

in Shenandoah National Park and the

review of the public health effects of

VOC emissions, if VOC emissions at the

site reach specified threshold levels. See

Condition 6.2 of the draft PSD permit.

The review criteria related to VOC

emissions are described in more detail

in Section III.B.1 of the preamble.

The draft PSD permit (Condition 12.6)

defines ‘‘project stakeholders’’ as the

project signatories to the FPA (i.e., EPA,

VADEQ, Merck, DOI Federal Land

Manager, and Rockingham County

Board of Supervisors), plus other parties

as follows: (1) Up to three other

community representatives shall be

included as nominated by the

Rockingham County Board of

Supervisors, and agreed to by full

consent of the project signatories to the

FPA. Community representatives are

defined as local government and/or

community residents with an ongoing

stake in the project; and (2) Up to one

representative from a regional public

interest group shall be included as

nominated by any project signatory and

agreed to by full consent of the project

signatories. This group of stakeholders

will convene every five years to review

whether changes to the permit are

required. As discussed above, the draft

permit establishes that full consent from

the project signatories, and not each

member of the stakeholder group, is

necessary before permit changes can be

made. This stakeholder process for fiveyear reviews is consistent with the

process used in the development of the

proposed FPA and draft permit. The

Chairman of the Rockingham County

Board of Supervisors is the signatory to

the FPA (i.e., a project signatory)

representing community interests. The

three additional members of the

community team (two neighbors of the

Merck Stonewall Plant and the Town

Manger of Elkton) also actively

participated in the stakeholder group.

The County was designated as a project

signatory at the request of the

community team in order to insure longterm representation and continuity of

community interests.3 This model of

stakeholder involvement provided all

stakeholders with full information and

ability to shape the development of the

project. EPA believes that it is an

appropriate model which should apply

in the same manner for the future

evaluation of the project.

EPA has received comments

expressing concerns about the adequacy

of the role of the stakeholders who are

not also signatories—the regional public

interest group and the three community

representatives other than the

Rockingham County Board of

Supervisors.4 As described above, the

draft permit establishes that full consent

from the project signatories is needed to

make permit changes (i.e., to

recommend that the permitting

authority process a permit

modification). EPA interprets the permit

to be designed such that the nonsignatory stakeholders will be fully

involved in the deliberation of all

permit issues, as in the development of

the Merck XL project. During the

development of the Merck XL project,

all stakeholders, as well as several

environmental groups that were not part

of the stakeholder group, provided

valuable comments on the draft permit.

These comments were fully considered

by the project signatories and helped to

shape the project. EPA expects that the

same interaction among stakeholders

will occur during the five-year permit

reviews, and that the project signatories

will fully consider concerns and issues

raised by all the stakeholders before

reaching decisions on permit changes.

EPA invites public comment on the

approach to stakeholder involvement
15308 Federal Register / Vol. 62, No. 61 / Monday, March 31, 1997 / Proposed Rules

5 EPA plans to delegate the site-specific PSD rule

(40 CFR 52.2454) to the VADEQ upon

promulgation.

6This variance provision previously has been

approved into the Virginia SIP at 40 CFR 52.2420(c)

(15) and (89).

during the implementation of this XL

project.

This XL project also greatly improves

the stakeholders’ access to information

about the site’s environmental

performance. Merck will provide the

stakeholders, and other interested

parties, an annual progress report that

describes the site’s environmental

performance under the XL project. This

report will include a summary of the

site’s actual emissions and the total

emissions cap and subcaps, a

description of emissions prevented as a

result of operating under this proposed

rule and the PSD permit, and other

information about the site’s operations.

5. Compliance

Under the terms of this proposed rule

and the draft PSD permit, Merck’s actual

emissions of criteria pollutants cannot

exceed the total emissions cap, and

emissions of SO2, NOx and PM10 cannot

exceed the individual subcaps for the

life of the permit. Compliance with the

site-wide total emissions cap and the

subcaps will be determined by using a

12-month rolling total calculation of the

site’s actual emissions. The site-wide

emissions will be calculated by using

methods described in the permit. In

addition to submitting to the project

signatories semi-annual reports

documenting the site’s emissions, Merck

will submit an annual progress report to

the project stakeholders and other

interested parties (as described in the

previous section).

This proposed rule and draft permit

will provide EPA and VADEQ with

greater authority to enforce the terms of

the permit. As with all permits, the

permit terms can be enforced through

standard procedures under the Clean

Air Act (Act). In addition, unlike typical

PSD permits, the draft permit expressly

allows for termination of the permit

under the following conditions: (1) If

EPA or VADEQ determines that

continuation of this permit is an

imminent and substantial endangerment

to public health or welfare, or the

environment; (2) if Merck knowingly

falsifies emissions data; (3) if Merck

fails to implement the powerhouse

conversion project within 30 months

after the effective date of the PSD

permit; (4) if Merck receives four

consent orders or two judgments

adverse to Merck arising from noncompliance with this permit in a five

year period that are deemed material; (5)

upon full consent of all project

signatories; (6) if Merck’s actual

emissions exceed the total emissions

cap; and (7) for other reasons for which

the VADEQ has statutory authority to

terminate the permit.

EPA and VADEQ will continue to

possess all the administrative and

judicial authority to enforce the

provisions of the site-specific rule and

permit that is currently available under

sections 113 and 307 of the Act and

under Virginia law.5 This site-specific

rule and the PSD permit would not limit

the authority of EPA or VADEQ to take

administrative enforcement measures or

to seek legal or equitable relief to

enforce the terms of this rule or the

permit, including, but not limited to, the

right to seek injunctive relief, and

imposition of statutory penalties, fines

and/or punitive damages. Further, this

site-specific rule and the permit would

not limit the authority of EPA or

VADEQ to undertake any actions in

response to conditions which present an

imminent and substantial endangerment

to public health or welfare, or the

environment.

III. Clean Air Act Requirements

A. Summary of Regulatory

Requirements for the Merck XL Project

The alternate regulatory system that

would be established under this

proposed site-specific rule and the draft

permit addresses the existing criteria

pollutants (and does not include lead).

Merck will fully comply with all

requirements for the control of HAPs,

including the forthcoming Maximum

Achievable Control Technology (MACT)

standard for the pharmaceutical

industry. Merck also will comply with

all existing and future environmental

requirements not specifically amended

pursuant to EPA’s site-specific

rulemaking for this project or pursuant

to the variance expected to be approved

by the Commonwealth of Virginia.

In today’s action, EPA proposes a sitespecific PSD rule for the Merck

Stonewall Plant in order to implement

the proposed XL project for the site. See

proposed § 52.2454. This site-specific

rule would replace (in most

circumstances) the existing PSD rules at

40 CFR 52.21 for the Merck Stonewall

Plant only, and would establish the

legal authority to issue the PSD permit

to the Merck Stonewall Plant. The

proposed site-specific PSD requirements

are described in Section III.B.1 of this

preamble.

EPA also proposes a site-specific rule

which establishes an alternative means

of compliance for the Merck Stonewall

Plant for two New Source Performance

Standards (NSPS)—Subpart Db

(Standards of Performance for

Industrial-Commercial-Institutional

Steam Generating Units) and Subpart Kb

(Standards of Performance for Volatile

Organic Liquid Storage Vessels). For

NSPS other than Subpart Kb that may

become applicable to the site in the

future, EPA proposes an alternative

compliance provision that would allow

the facility the option of complying with

the NSPS by reducing its site-wide

emissions caps. However, under this

latter approach, EPA has an opportunity

to require Merck to comply directly

with the applicable NSPS. These

alternate compliance provisions are

necessary to implement a simpler

compliance approach for the facility

that is more consistent with the

principles of the site-wide emissions

caps. The alternate compliance

provisions are described further in

Section III.D of this preamble.

On January 28, 1997, VADEQ initiated

public comment on a proposed variance

for the Merck Stonewall Plant, pursuant

to section 10.1–1307 of the Virginia Air

Pollution Control Law. 6 The VADEQ

plans to request that the State Air

Pollution Control Board approve the

variance for Merck in April 1997.

Among other things, the variance would

provide Merck an alternate means of

compliance with newly-applicable

criteria pollutant regulations

promulgated by the VADEQ. This

alternate compliance option would

allow Merck in most situations either to

comply with new criteria pollutant

regulations as written, or to reduce the

total emissions cap (or subcaps,

depending on the pollutant) by an

equivalent amount of emission

reductions. VADEQ also plans in the

future to promulgate a source-specific

regulation for the Merck XL project that

would serve as an alternate to the

regulations cited in the draft permit.

EPA understands that VADEQ plans to

submit this regulation to the EPA for

approval as a source-specific SIP

revision. EPA would then take action on

the expected source-specific SIP

revision in a future rulemaking action.

This approach is described further in

Section III.C of this preamble.

In addition to Clean Air Act

requirements, the Merck XL project

would establish alternate regulatory

requirements for the Resource

Conservation and Recovery Act (RCRA)

air emission standards. These

requirements are described in Section

IV of the preamble.
Federal Register / Vol. 62, No. 61 / Monday, March 31, 1997 / Proposed Rules 15309

7The Commonwealth of Virginia currently

implements 40 CFR 52.21 under a delegation of

authority from EPA. See 40 CFR 52.2451.

8 If Merck were to emit significant quantities of

non-criteria air pollutants regulated under 40 CFR

52.21, Merck would be required to comply directly

with any applicable requirements for these

pollutants. For the Merck Stonewall Plant only,

EPA proposes in this rulemaking to extend the

policy set forth in the October 16, 1995 policy

memorandum entitled ‘‘Definition of Regulated

Pollutant for Particulate Matter for Purposes of Title

V,’’ which is contained in the docket for this

rulemaking, to consider PM10, and not particulate

matter, as the regulated form of particulate matter

for purposes of PSD applicability.

9See New Source Review Reform proposal, 61 FR

38264–38266 (July 23, 1996).

B. Prevention of Significant

Deterioration

1. Requirements of the Clean Air Act

The NSR program is a preconstruction

review and permitting program

applicable to new or modified stationary

sources of air pollutants regulated under

the Act. In attainment areas (i.e., areas

meeting the NAAQS), the NSR

requirements for the prevention of

significant deterioration of air quality

(PSD) under part C of title I of the Act

apply. The PSD provisions of the Act

are a combination of air quality

planning and air pollution control

technology program requirements for

new or modified stationary sources of

air pollution. Each SIP is required to

contain a preconstruction review

program for the construction and

modification of any stationary source of

air pollution to assure that the NAAQS

are achieved and maintained; to protect

areas of clean air; to protect AQRVs

(including visibility) in national parks

and other natural areas of concern; to

assure appropriate emission controls are

applied; to maximize opportunities for

economic development consistent with

the preservation of clean air resources;

and to ensure that any decision to

increase air pollution is made only after

full public consideration of all the

consequences of such a decision. See

sections 101(b)(1), 110(a)(2)(C) and 160

of the Act.

The Merck Stonewall Plant is located

in an area that meets the NAAQS for all

criteria air pollutants (attainment area)

and, thus, the PSD program under part

C of title I of the Act applies. Today,

EPA proposes a site-specific PSD rule

for the Merck Stonewall Plant in order

to implement the proposed XL project

for the site. Below, EPA describes how

the proposed site-specific rule satisfies

the statutory PSD permitting criteria in

section 165(a) of the Act.

Sections 165(a)(1) and 169(2)(c)

require Merck to obtain a permit for a

proposed modification setting forth

emission limitations which conform to

the requirements of part C of title I of

the Act. The proposed site-specific rule

would authorize a permit to be issued

to Merck based, in part, on the

establishment of a site-wide emissions

cap for criteria air pollutants (total

emissions cap). The criteria pollutants

included in the total emissions cap are

SO2, NOX, PM10, CO and ozone (using

VOC as a surrogate). Thus, all existing

criteria pollutants except lead are

included in the total emissions cap.

Merck would comply directly with any

applicable requirements, including the

existing PSD regulations at 40 CFR

52.21, for the control of lead emissions

and any new criteria pollutants

promulgated by EPA.7 Further, Merck

will comply with any applicable

requirements, including the existing

PSD regulations at 40 CFR 52.21 for

emissions of non-criteria air pollutants

(e.g., hydrogen sulfide, total reduced

sulfur).8

This proposed rule would require the

PSD permit to contain initial site-wide

emissions caps based on the site’s actual

emissions during a time period, within

five years of permit issuance, which

represents normal site operation, or a

different time period if it is more

representative of normal source

operation. The PSD permit that would

be issued in accordance with the

proposed site-specific rule would

require the baseline for establishing the

site-wide emissions caps to be the

annual average of the facility’s actual

criteria pollutant emissions during 1992

and 1993, the recent years considered

most representative of typical

operations. Under the total emissions

cap, emissions of SO2, NOx and PM10

would also be capped (subcaps) at the

1992–93 actual emissions baseline.

After the facility converts its coalburning powerhouse to natural gas, the

total emissions cap would be reduced

by 20% from the baseline level. This

cap adjustment will result in a

permanent retiring of approximately 300

tons per year (TPY) of total criteria

pollutants. Similarly, the subcaps for

SO2 and NOx will be reduced by 25%

and 10%, respectively, after the

powerhouse conversion. Detailed

information about the establishment of

the emission caps, including

documentation of the baseline

emissions calculations, is contained in

the docket for today’s action.

Merck will be allowed to vary its

emission levels under the total

emissions cap, constrained by the

individual pollutant subcaps.

Modifications at the facility that

normally would be considered to result

in emission increases would no longer

need prior approval by the permitting

authority under PSD or minor NSR,

based on the facility’s site-wide,

federally-enforceable emission

limitations. The emission limitations

would keep SO2 and NOx emissions

well below recent actual emissions. The

emission limitations for PM10 will not

significantly increase above the recent

actual emissions level. Emissions of

VOC and CO will not have subcaps,

however, the statutory PSD

requirements for increases of VOC and

CO will be satisfied pursuant to this

site-specific rulemaking.

The individual pollutant subcaps for

SO2, NOx, and PM10 function similarly

to plantwide applicability limits

(PALs),9 but with important

distinctions. A PAL is an emissions cap

established for a particular pollutant for

PSD (or nonattainment NSR)

applicability purposes only. Under a

PAL, a source could make modifications

without triggering PSD as long as

emissions remain below the PAL. If a

source needed to make a modification

that would increase emissions above the

PAL, the source would be able to make

the modification after undergoing PSD

or NSR review and obtaining the

necessary permits. Unlike a PAL, under

the site-specific rule and permit Merck

will no longer be able to obtain

additional PSD permits to increase

emissions above the caps. In fact,

pursuant to this site-specific rule, if

Merck’s emissions were to exceed the

site-wide total emissions cap, the EPA

or VADEQ could terminate the permit

(See section II.B.5 of this preamble).

Section 165(a)(2) of the Act requires

the proposed permit to be subject to a

review in accordance with section 165

of the Act, the required analysis to be

conducted in accordance with

regulations promulgated by the

Administrator, and a public hearing to

be held. This proposed site-specific rule

would establish the applicable sitespecific PSD regulations for the Merck

Stonewall Plant, and would therefore

form the basis for the analysis required

by section 165(a)(2) of the Act. The draft

PSD permit that would be issued to the

Merck Stonewall Plant under the

authority of the new site-specific PSD

rule is available to the public and

contained in the docket file for this

rulemaking. While the Agency may

receive public comments on the draft

PSD permit during the public comment

period for this proposed rulemaking, in

many instances the Agency may simply

forward any such comments to VADEQ

which will conduct the official public

comment period and public hearing for
15310 Federal Register / Vol. 62, No. 61 / Monday, March 31, 1997 / Proposed Rules

10The VADEQ currently implements the PSD

program at 40 CFR 52.21 under a delegation of

authority from EPA. See 40 CFR 52.2451.

11Although VOC and CO emissions may increase,

there are no PSD increments for VOC and CO.

the proposed permit.10 On January 28,

1997, the VADEQ began a public

comment period for the proposed PSD

permit and a proposed variance that

will serve as the Commonwealth’s legal

mechanism to issue the PSD permit to

Merck. The VADEQ plans to request

that the Virginia State Air Pollution

Control Board approve the variance in

April 1997. Once EPA’s final sitespecific rule for the Merck Stonewall

Plant is promulgated, EPA plans to

delegate to VADEQ the authority to

issue the permit pursuant to the sitespecific PSD rule. The VADEQ will have

authority to issue the PSD permit to

Merck after the Virginia State Air

Pollution Control Board approves the

variance and after this delegation is

complete.

Section 165(a)(3) of the Act requires

the owner or operator of a proposed

major emitting facility to demonstrate

that emissions from construction or

operation of the facility will not cause

or contribute to air pollution in excess

of any (a) maximum allowable increase

(PSD increments), (b) national ambient

air quality standards (NAAQS), or (c)

any other applicable emission standard

or standard of performance.

Under the existing PSD rules at 40

CFR 52.21 (k) and (m), the Merck permit

would not need a PSD increment or

NAAQS compliance analysis, since

emissions of SO2 and NOX will not be

increased above baseline levels, and

emissions of PM10 will not be increased

significantly above baseline levels.

Further, the subcaps for SO2 and NOX

will be reduced by 25% and 10%,

respectively, below baseline levels after

completion of the powerhouse

conversion. EPA proposes that this sitespecific rule also not require a PSD

increment or NAAQS compliance

analysis for pollutants which will be

capped near or below baseline

emissions levels.11 The draft PSD permit

would not cause or contribute to

emissions in excess of any other

applicable emission standard or

standard of performance. For more

information, see the permit support

document contained in the docket file

and Sections III. C and D of this

preamble.

To assure continued compliance with

the NAAQS consistent with the minor

NSR program, Merck conducted

dispersion modeling to demonstrate that

it does not cause or contribute to a

violation of the short-term PM10 and

SO2 NAAQS. This modeling was based

on worst case emission rates. The

modeling results added to background

levels indicate that the short-term

NAAQS for PM10 and SO2 would not be

violated. Merck’s maximum modeled

impact was 15% of the 3-hour SO2

NAAQS, 13% of the 24-hour SO2

NAAQS, and 10% of the 24-hour PM10

NAAQS. Merck also modeled the worstcase CO emissions that could be

achieved under the total emissions cap.

The modeling demonstrated that

Merck’s maximum modeled impact

would not exceed 1% of the CO

NAAQS. The permit support document

contained in the docket includes a

description of the modeling analysis.

Based on the modeling results and

other information provided in support

of the draft permit, EPA believes that

modifications at the site occurring

within the first five year period of the

permit that comply with this proposed

rule and the permit will not cause or

contribute to a violation of the NAAQS

for the criteria pollutants included in

the total emissions cap. Merck’s ambient

impact will be reevaluated as prescribed

in the permit during each five year

periodic review. Condition 6.1.7 of the

draft permit requires that Merck perform

an updated modeling analysis for SO2

and PM10 at each five year review

period, if requested by EPA or VADEQ,

if major changes have been made at the

site that are not reflected in the most

recent modeling analysis. Merck must

submit to the project stakeholders

information necessary to determine

whether additional modeling is

required. Such information includes,

but is not limited to, the following: (1)

The current plant configuration,

including building locations and

dimensions; and (2) information on

emission sources, including stack

dimensions, operating parameters, and

emission rates for actual operating

conditions as well as worst case shortterm (3 and 24-hour) operating

conditions.

As Merck operates under the total

emissions cap, it is permissible that over

time VOC emissions will increase above

the baseline VOC levels. The Merck

Stonewall Plant is located in an area

that is generally recognized to be NOXlimited for ozone formation. The term

‘‘NOX-limited’’ means that the amount

of NOX available is generally the

controlling factor in determining how

much ozone will be formed. In a NOXlimited area, reduced NOx emissions

will result in reduced ozone formation,

and increased NOX emissions will result

in increased ozone formation. Further,

increased VOC emissions generally will

not result in additional ozone formation

unless accompanied by additional NOX

emissions.

A report contained in the docket

analyzed the worst case potential

impact of VOC emissions on ozone

formation in the area, based on an

evaluation of urban airshed modeling

developed for State Implementation

Planning purposes in two urban areas.

The potential for ozone formation was

evaluated under the following worst

case conditions: (1) If Merck were

located in a VOC-limited area; (2) if the

reactivity of Merck’s VOC emissions

were significantly higher than typical

VOCs currently emitted at the facility

(i.e., if the reactivity of Merck’s VOC

emissions were that of typical urban air

or auto exhaust); and (3) if Merck’s VOC

emissions consumed the entire sitewide cap (i.e., a VOC emissions increase

of approximately 600 TPY). Under this

worst case scenario, which is highly

improbable, the expected ozone increase

from Merck’s VOC emissions would be

less than 1 μg/m3 (.5 ppb), which is less

than 0.5% of the ozone NAAQS. EPA

believes that this is a highly

conservative worst case analysis and

that the potential ozone formation

would be negligible under actual

conditions. The worst case scenario is

highly conservative because in actuality:

(1) Merck is located in a NOX-limited

area; (2) the reactivity of the typical

VOC emissions currently emitted by

Merck is much lower than that of

typical urban air or auto exhaust; and

(3) it is unlikely that VOC emissions

could consume Merck’s entire site-wide

cap, since a portion of the cap

necessarily will be consumed by SO2,

NOX, PM10 and CO from combustion

sources (e.g., the natural gas-fired

boilers) and other sources at the facility.

Moreover, the NOX emission reductions

achieved as a result of Merck’s

powerhouse conversion and the

establishment of permanent NOX

subcaps should help to reduce local

ozone formation. Therefore, EPA

believes that the maximum potential

VOC emission increases allowed under

Merck’s site-wide cap will continue to

provide protection of the ozone

NAAQS.

One of the five-year periodic review

criteria in the draft permit provides that

any project stakeholder may present

technical papers or studies that change

the recognized determination that the

area is NOX-limited for ozone formation.

Based on the stakeholders’’ evaluation

of this information, changes to the

project may be considered if necessary.

Section 165(a)(4) of the Act requires

the proposed facility to be subject to the

best available control technology for

each pollutant subject to regulation
Federal Register / Vol. 62, No. 61 / Monday, March 31, 1997 / Proposed Rules 15311

under the Act emitted from such

facility. Section 169(3) of the Act

defines ‘‘best available control

technology’’ (BACT) as an emission

limitation based on the maximum

degree of reduction of each pollutant

subject to regulation under the Act

emitted from or which results from any

major emitting facility, which the

permitting authority, on a case-by-case

basis, taking into account energy,

environmental, and economic impacts

and other costs, determines is

achievable for such facility through

application of production processes and

available methods, systems, and

techniques, including fuel cleaning,

clean fuels, or treatment or innovative

fuel combustion techniques for control

of each such pollutant.

Under the existing PSD rules at 40

CFR 52.21(j), the Merck permit would

be required to apply BACT only for

pollutants which would be allowed to

increase above the significance levels in

40 CFR 52.21(b)(23). Under the sitewide emissions caps, VOC and CO are

the only pollutants that can be increased

above the existing PSD significance

levels (i.e., 40 TPY for VOC and 100

TPY for CO). EPA proposes that this

site-specific rule also require BACT

(according to the interpretation

proposed below) only for pollutants

which will be allowed to increase

significantly under the permit (i.e., VOC

and CO). For purposes of this sitespecific rule only, EPA proposes to

interpret section 165(a)(4) to allow the

BACT determination for the Merck

Stonewall Plant to take into account the

environmental impacts and benefits of

foregoing traditional BACT for VOC and

CO emission increases, and associated

compliance costs, in favor of an

innovative BACT determination for

VOC and CO emission increases which

relies on otherwise voluntary SO2 and

NOX reductions from the powerhouse

conversion and the site-wide emissions

caps. Merck will implement the

powerhouse conversion solely as a

means of achieving superior

environmental benefit under Project XL.

There are no current or reasonably

anticipated regulatory requirements that

would require Merck to replace the coal

boilers with natural gas boilers, and the

boilers do not need to be replaced for

other reasons (e.g., age, capacity,

performance). The existing coal-fired

boilers that will be replaced were

installed in 1982 and have a useful life

of about 40 years. Merck estimates that

the powerhouse conversion will cost

approximately $10 million in capital

cost, and an additional $1 million per

year in increased operational costs due

to the currently higher price of natural

gas.

The environmental benefits from the

powerhouse conversion include over

900 TPY (60% of baseline) of up-front

criteria pollutant emission reductions

(SO2 and NOX) and about 47 TPY (65%

of baseline) of HAP emissions

reductions (hydrogen chloride and

hydrogen fluoride). The 20 percent

reduction of the total emissions cap

after the powerhouse conversion will

‘‘lock-in’’ at least 300 TPY of these SO2

and NOX reductions. Further, Merck

will have permanent site-wide

emissions caps for SO2 and NOX,

established at levels 25% and 10%,

respectively, below recent actual

emissions. These caps will permanently

lock in a significant portion of the

environmental benefit from the

powerhouse conversion, and provide

incentives for Merck to minimize actual

emissions in order to preserve an

operating margin for future growth. The

environmental benefits from the

powerhouse conversion and emissions

caps include the following: (1) Visibility

in nearby Shenandoah National Park

should be improved from the SO2

reductions; (2) acid deposition should

be reduced from the substantial SO2 and

NOX reductions, as well as the hydrogen

chloride and hydrogen fluoride

reductions; and (3) local ozone

formation should be reduced from the

NOX reductions.

EPA proposes that the significant

environmental benefits from the

powerhouse conversion and site-wide

emissions caps should be considered

when determining appropriate BACT for

future VOC and CO emission increases

under the total emissions cap. EPA

believes this is an approach that, while

not the one historically adopted by the

Agency under section 165(a)(4), merits

consideration on a pilot project basis. If

the project demonstrates that such an

approach leads to superior

environmental and economic results

and if EPA determines that such an

approach is transferrable to other

situations, it could be considered for

broader application. EPA emphasizes

that this innovative approach to BACT

determinations is not being adapted at

this time for any source other than the

Merck Stonewall Plant, and that the

decision to make it available at this

facility takes into account the totality of

the obligations undertaken by Merck in

this project. Thus, EPA believes that the

BACT determination may consider the

innovative nature of the site-wide

emissions caps, and the tiered

monitoring approach, in providing

incentives for Merck to minimize actual

emissions. In addition, the proposed

rule would require Merck to install

‘‘good environmental engineering

practice’’ technology on significant new

installations or significant modifications

for pollutants covered by the site-wide

emissions cap. The draft PSD permit

includes examples of emission controls

that qualify as good environmental

engineering practice technology in the

pharmaceutical or batch processing

industry. For example, for VOC control,

the draft permit lists carbon adsorption,

condensation, or thermal oxidation as

example control technologies that could

be used depending on the concentration

and flow rate of the VOC streams. The

EPA believes that the combination of

substantial SO2 and NOX reductions,

site-wide emissions caps, and the good

environmental engineering practice

requirement satisfy the statutory BACT

requirement for possible VOC and CO

emission increases as authorized in this

site-specific rule.

There are several other aspects of the

Merck XL project that will serve to keep

VOC emissions well-controlled as

Merck operates under the site-wide cap.

First, Merck will comply with all

requirements for the control of HAPs

under section 112 of the Act, including

the forthcoming MACT standard for the

pharmaceutical industry. EPA expects

that the pharmaceutical MACT standard

will require control of emissions from

process vents, wastewater, equipment

leaks, and storage tanks. Merck’s

compliance with the pharmaceutical

MACT will also provide co-control of

some VOC emissions. For example, if a

process vent stream contains HAPs as

well as VOCs (or HAPs that are also

VOC), the VOCs emissions would likely

be controlled in accordance with the

MACT standard. Second, Merck will

conduct property line modeling of nonHAP VOCs to determine whether the

emission levels are protective of public

health. This modeling will be conducted

when VOC emissions reach 125% of the

VOC baseline (i.e., 510 TPY) and

whenever VOC emissions increase by

additional 100 TPY increments (i.e., 610

TPY, 710 TPY, and 810 TPY). This draft

PSD permit provision (Condition 6.2.2)

was developed to address the

community stakeholders’ concerns

about the potential public health effects

of Merck’s VOC emissions. Third, the

tiered monitoring provisions were

designed to create an added incentive

for Merck to minimize actual emissions.

The monitoring, recordkeeping and

reporting requirements increase in

stringency as Merck’s actual emissions

approach the cap. This approach creates

an incentive for Merck to minimize VOC

emission increases, through the use of
15312 Federal Register / Vol. 62, No. 61 / Monday, March 31, 1997 / Proposed Rules

12See 55 FR 38403–38408 (September 18, 1990).

13See October 16, 1996 letter from Richard D.

Wilson, Deputy Assistant Administrator, Office of

Air and Radiation, U.S. Environmental Protection

Agency, to George Frampton, Assistant Secretary for

Fish and Wildlife and Parks, U.S. Department of the

Interior; and October 17, 1996 letter from George T.

Frampton to Richard D. Wilson (contained in

docket file).

14EPA has not promulgated general procedures to

modify PSD permits. See 40 CFR 124.5(g)(1). The

language in the draft PSD permit is intended to

provide that if the Agency were to promulgate

generally applicable regulations, not solely

applicable to the Merck PSD permit, establishing

the procedures for sources and permitting

authorities to modify PSD permits, then the Merck

PSD permit also would be subject to such

procedures.

good emissions control technology,

pollution prevention, or other

techniques, so that site-wide emissions

remain in the lowest tier of monitoring.

The EPA acknowledges that the BACT

provisions, as well as other provisions,

of this proposed rule and the draft

permit are in some ways in conflict with

existing Agency guidance and

interpretations of the Act. The Agency

believes that it nonetheless has

authority to apply today’s proposed rule

and the draft permit to Merck under

Project XL as a unique, site-specific

pilot project to explore and evaluate this

innovative approach to environmental

regulation consistent with the Act.

Section 165(a)(5) of the Act requires

that major emitting facilities comply

with the provisions of section 165(d)

with respect to Federal Class I areas.

Section 165(d)(2) provides that the FLM

and the Federal official charged with

direct responsibility for management of

any Federal lands within a Class I area

have an affirmative responsibility to

protect the AQRVs (including visibility)

of such lands. The FLM has a

responsibility to consider, in

consultation with the EPA

Administrator, whether a proposed

major emitting facility will have an

adverse impact on any AQRV.

The U.S. Department of the Interior

(DOI) is the FLM for the Shenandoah

National Park, a Federal Class I area

within 2 kilometers of the Merck

Stonewall Plant. The DOI, specifically

the National Park Service (NPS), is a key

stakeholder in developing the Merck XL

project. Issues involving the potential

impacts of the project on AQRVs in the

Park were discussed at length among the

project stakeholders. Because Merck

will convert its powerhouse from

burning coal to natural gas, the

proposed XL project will achieve

significant up-front reductions of SO2

and NOX, two pollutants associated

with existing adverse impacts on the

Park.12 Another pollutant of concern is

ozone, because of its potential effects on

park resources, such as vegetation.

However, ozone levels are not expected

to increase as a result of this project. As

explained above, the area generally is

considered to be NOX-limited for

purposes of ozone formation and,

therefore, increases in VOC emissions

are not expected to cause increased

ozone levels without additional

increases of NOX. Thus, the allowable

increase of VOC emissions under

Merck’s total emissions cap is not likely

to contribute significantly to ozone

formation, as described above.

Moreover, the Merck XL project should

help reduce the formation of local ozone

due to decreases in NOX emissions.

Aside from the impact of VOC

emissions as a precursor to ozone

formation, the FLM also expressed

concern during the Merck XL

stakeholder discussions regarding the

potential impacts of future VOC

emissions increases directly on AQRVs

in the Park. Therefore, the draft PSD

permit for the Merck XL project requires

Merck to evaluate the effects of VOC on

AQRVs in the Park upon certain ‘‘trigger

levels’’ of VOC emission increases.

Merck will perform an AQRV

assessment upon either of the following

events: (1) After the first time the sitewide VOC emissions reach a level that

is double the baseline VOC emissions

(i.e., if site-wide VOC emissions reach

816 TPY); or (2) after installation of any

individual new process or process

modification that results in a net

emissions increase of the site’s actual

VOC emissions of 100 TPY or more.

Under condition 6.2.1 of the draft

permit, if the project signatories agree

that Merck’s VOC emissions are the

cause of adverse impact on any AQRVs

at the Federal Class I area, Merck shall

implement mitigation measures that are

agreed to by the project signatories.

However, Merck does not have the

obligation under the permit to mitigate

if there are other contributing sources to

the AQRV adverse impact.

EPA believes that it has the authority

under the Clean Air Act to address

adverse impacts on AQRVs in Federal

Class I areas from both new and existing

sources. EPA intends to undertake a

future rulemaking to require State

Implementation Plans to prevent

significant deterioration of air quality by

adopting mitigation measures to address

such adverse impacts. Merck agrees that

EPA should undertake the rulemaking

approach, described above, to address

environmental problems indicated by

adverse impacts on AQRV’s in Federal

Class I areas.

DOI also expressed an interest in

further understanding the impacts of

VOC emissions generally on resources

in Shenandoah National Park. EPA and

DOI have agreed to work cooperatively

to better understand background VOC

levels in the Park, through monitoring,

sampling or other appropriate analyses,

and their potential impacts on park

resources.13

Section 165(a)(6) of the Act requires

an analysis of any air quality impacts

projected for the area as a result of

growth associated with the proposed

permit. The Merck Stonewall Plant is an

existing source, in operation since 1941.

There is not expected to be any

significant growth associated with the

Merck Stonewall Plant in the area that

would affect air emissions.

Section 165(a)(7) of the Act requires

the owner or operator to conduct

monitoring as may be necessary to

determine the effect which emissions

increases may have, or are having, on air

quality. Under the Merck XL project,

Merck will not have a significant

increase of SO2, NOX or PM10 above

baseline levels. Moreover, allowable

SO2 and NOX emissions (i.e., subcaps)

will be reduced from the actual

emissions baseline levels by 25% and

10%, respectively, after the powerhouse

conversion. As described above, Merck

has conducted modeling to demonstrate

that its maximum possible CO

emissions under the cap would

consume less than 1% of the NAAQS.

Because the area is NOX limited for

ozone formation and the Agency

believes that the maximum potential

VOC emission increases allowed under

Merck’s total emissions cap will not

increase ozone levels (see previous

discussion in this section of the

preamble), EPA does not believe that

Merck’s allowable VOC emission

increases warrant a requirement to

conduct ambient ozone monitoring.

Therefore, EPA believes that there are

no ambient monitoring requirements

necessary to satisfy this provision of the

Act for the Merck project.

2. Permit Modifications

As described in Section II.B.4 of the

preamble, the stakeholders will

periodically review the PSD permit and

consider whether any changes are

required. Changes to the permit may be

made either after full consent of the

project signatories and subject to the

permit modification procedures

promulgated in this site-specific rule, or

pursuant to PSD permit modification

procedures generally applicable to other

PSD permits.14

As part of the site-specific PSD rule,

EPA is proposing procedures to be

followed by the permitting authority for
Federal Register / Vol. 62, No. 61 / Monday, March 31, 1997 / Proposed Rules 15313

15These provisions apply only to regulations that

would apply to the criteria pollutants included

within the site-wide emissions cap and listed in

Section 1.1 of the draft permit, namely SO2, NOX,

PM10, CO, and ozone (using VOC as surrogate).

processing modifications to the Merck

PSD permit. See proposed § 52.2454(n).

These provisions also define criteria for

the types of changes that may be

processed as PSD administrative permit

modifications. See proposed

§ 52.2454(n)(2). These procedures apply

only to the permit issued pursuant to

the site-specific PSD rule for the Merck

Stonewall Plant.

C. State Implementation Plan

Requirements

The Merck XL project would involve

alternative compliance provisions for

several Virginia SIP requirements. In the

next few months, prior to issuance of

the Merck PSD permit, VADEQ plans to

propose that the Virginia State Air

Pollution Control Board approve a

variance for the Merck Stonewall Plant,

pursuant to section 10.1–1307 of the

Virginia Air Pollution Control Law. This

variance provision previously has been

approved into the Virginia SIP at 40

CFR 52.2420(c) (15) and (89). The

variance would allow Merck to operate

under the PSD permit, which represents

compliance for the Virginia regulations

cited in Section 3 of the draft permit.

The permit support document contained

in the docket file for this rulemaking

describes the basis for determining that

the XL project should serve as

alternative compliance to these

regulations. VADEQ also plans in the

future to promulgate a source-specific

regulation for the Merck XL project that

would serve as an alternate to the

regulations cited in the draft permit.

VADEQ plans to submit this regulation

to the EPA for approval as a sourcespecific SIP revision. EPA would then

take action on the expected sourcespecific SIP revision in a future

rulemaking action.

One of the key SIP requirements that

the Merck XL project will replace is

minor NSR permitting. The new PSD

permit would replace the previouslyissued minor NSR permits for the

Stonewall Plant. Merck currently has 14

minor NSR permits for the Stonewall

Plant. Pursuant to the variance and SIP

revision procedure described above, this

proposed rule and the draft permit

would be substituted for the existing

Virginia minor NSR SIP program for the

Merck Stonewall Plant. The draft PSD

permit requires Merck to continue to

operate and maintain the emission

control equipment that is currently

permitted. By operating under the

permit, including the site-wide

emissions caps, modifications at the

facility would not be required to

undergo traditional minor NSR permit

reviews.

If the area in which the Merck

Stonewall Plant is located becomes a

nonattainment area for any of the

criteria air pollutants included in the

total emissions cap, the facility will be

grandfathered from any new

nonattainment NSR requirements, as

long as the PSD permit issued pursuant

to this proposed site-specific

rulemaking is in effect. This is because

the PSD permit authorizes construction

and operation of any new or modified

sources of emissions of the pollutants

included in the total emissions cap. All

changes at the facility covered by the

PSD permit would not be subject to any

additional major NSR permitting

requirements, whether PSD or

nonattainment NSR. This grandfathered

status does not apply to any other Title

I nonattainment requirements (see the

following discussion pertaining to

newly applicable criteria pollutant

regulations).

The draft permit also contains

provisions for Merck to comply in an

alternative means with applicable future

criteria pollutant regulations 15

including regulations promulgated

pursuant to the AQRV SIP rulemaking

described above. Under this approach,

Merck would have the option of either

complying with a new criteria pollutant

regulation as written, or by reducing its

total emissions cap or subcaps

(depending on the pollutant). If Merck

chooses the option of reducing its total

emissions cap or subcaps, Merck would

determine the reduction in total actual

emissions that would result from

complying with the regulation, and

reduce its total emissions cap or

subcaps by that amount. If the criteria

pollutant regulation would result in the

control of SO2, NOX, or PM10, Merck

would reduce its subcaps for SO2, NOX,

or PM10, respectively (or comply

directly with the applicable regulation).

If the criteria pollutant regulation would

result in the control of VOC or CO,

Merck would reduce its total emissions

cap (or comply directly with the

applicable regulation). The draft permit

sets forth the process by which the

administering agency (EPA or VADEQ)

will approve Merck’s emission

reduction determination. For certain

types of criteria pollutant regulations,

namely, Federal Implementation Plans

(FIP) and most NSPS, EPA will

determine whether such alternative

compliance provisions are appropriate,

as discussed below. For SIP

requirements, this approach is

contingent on authorizing language in

the Virginia SIP, which will be

accomplished initially through

Virginia’s approval of a variance. (See

previous discussion in this section). The

permit support document contained in

the docket describes this approach in

more detail.

This alternative compliance option is

a significant element of the overall

Merck XL project. Merck has expressed

that this option could be useful when,

for example, a rule requires controls on

an emission unit(s) that Merck may be

planning to shut down or replace soon

after the rule’s compliance date (e.g.,

phase-out of certain pharmaceutical

products) and it would not be costeffective to comply with the rule

directly. As another example, Merck

may decide that it should achieve actual

emission reductions to keep site-wide

actual emissions well below the cap

(e.g., within Tier I monitoring), but the

new rule will not result in cost-effective

reductions. In this case, Merck could

choose to reduce the cap in lieu of

complying directly with the regulation,

but may voluntarily install more

effective emission controls on other

emission units to minimize site-wide

actual emissions and preserve its

operating margin under the caps.

The Commonwealth of Virginia plans

to include this compliance option for

the Merck Stonewall Plant for SIP rules

in a future source-specific SIP revision.

EPA believes that it is acceptable to

allow such a source-specific compliance

option for SIP purposes as part of the

Merck XL project, because it is the

Commonwealth’s responsibility to

design SIP control strategies that ensure

that the area attains and maintains the

NAAQS, and the Commonwealth

generally determines which sources

must achieve emissions reductions.

Virginia is making an up front decision

that, for future SIP regulations, the

Commonwealth may not achieve

planned levels of actual emission

reductions from the Merck Stonewall

Plant as a result of such regulations (i.e.,

if Merck chooses to reduce its total

emissions cap or subcaps instead). EPA

has informed Virginia that the

Commonwealth could not receive

emission reduction credit in an

attainment plan if Merck chooses the

option of reducing its site-wide cap or

subcaps. If the criteria pollutant

regulation is promulgated by EPA in a

FIP, it would be EPA’s responsibility to

ensure adequate emission reductions to

attain and maintain the NAAQS.

Therefore, if Merck is subject to a future

FIP requirement for criteria pollutants

covered by the total emissions cap the
15314 Federal Register / Vol. 62, No. 61 / Monday, March 31, 1997 / Proposed Rules

16See letter dated December 11, 1996 from Mr.

Tedd Jett, Manager of Environmental Engineering,

Merck & Co., Inc., Stonewall Plant, included as

Appendix 4 of the PSD permit support document

(contained in the docket).

draft permit provides that EPA will

determine whether it is appropriate for

Merck to have the option of reducing

the total emissions cap or subcaps in

lieu of complying with the FIP

regulation.

D. New Source Performance Standards

EPA is proposing a site-specific rule

that would establish an alternate means

of compliance for the Merck Stonewall

Plant for two existing New Source

Performance Standards (NSPS)—

Subpart Db (Standards of Performance

for Industrial-Commercial-Institutional

Steam Generating Units) and Subpart Kb

(Standards of Performance for Volatile

Organic Liquid Storage Vessels)—as

well as for future applicable NSPS.

These alternate compliance provisions

are necessary to implement a simpler

compliance approach for the facility

that is more consistent with the

principles of the site-wide emissions

cap.

A key innovation in this XL project is

to demonstrate that incentives to

minimize emissions can be achieved

through compliance with a site-wide

total emissions cap, established at a

level 20 percent below recent actual

emissions (i.e., an ‘‘actuals-based’’ cap),

as well as subcaps for SO2, NOX, and

PM10. Thus, under this project, total

criteria pollutant emissions must

decrease substantially from recent

actual emissions. Under this proposed

rule and the draft permit, Merck would

achieve significant environmental

benefits by converting its coal-burning

powerhouse to natural gas and by

complying with the actuals-based sitewide emissions caps.

Under the existing regulations, the

new natural-gas fired boilers would be

subject to NSPS Subpart Db. EPA

proposes to promulgate a site-specific

NSPS rule establishing an alternate

means of compliance for the Merck

Stonewall Plant’s planned natural gasfired boilers that would be subject to

NSPS Subpart Db. See proposed

§ 60.49b(u). The key emission limitation

requirement of NSPS Subpart Db for

natural gas-fired boilers is a NOX

emissions standard of 0.10 lb/mmBTU

heat input. The proposed alternate

compliance provisions would require

Merck to install low-NOX technology on

the new natural gas-fired boilers instead

of meeting a specific NOX emission

standard for the boilers. See proposed

§ 60.49b(u)(1)(i). The requirement to

comply with the total emissions cap

(established at a level 20 percent below

recent actual emissions), as well as the

NOX subcap, establishes an incentive to

minimize actual emissions. In selecting

low NOX technology for installation

with the new natural gas boilers, Merck

plans to install technology that will

achieve a NOX emission rate of 0.035 lb/

mmBtu—an emission rate well below

the applicable NSPS standard. The

docket file contains a letter from Merck

stating its commitment to specify low

NOX technology that will achieve a NOX

emission rate of 0.035 lb/mmBtu or less

when seeking bids for the new boilers.16

Under the alternate compliance

provisions, Merck would be required to

perform emissions testing and

monitoring requirements that are

substantively equivalent to the

requirements of NSPS Subpart Db,

including the emissions monitoring

requirements in 40 CFR 60.48b. Merck

would be required to perform a stack

test within 180 days of completing the

powerhouse conversion to quantify the

criteria pollutant emissions from the

new boilers. Merck also would be

required to continuously monitor and

record NOX and opacity using a

continuous emissions monitoring

system or predictive emissions

monitoring system.

EPA also proposes to promulgate a

site-specific NSPS rule establishing an

alternate means of compliance for

volatile organic liquid (VOL) storage

vessels (including petroleum liquid

storage vessels) that would be subject to

NSPS Subpart Kb. See proposed

§ 60.112b(c). The recordkeeping

provisions of 40 CFR 60.116b (b) and (c)

require certain records to be kept

depending on the size of the vessel and

the vapor pressure of the VOL stored. At

this time, the Merck Stonewall Plant

operates VOL storage vessels that are

subject only to these recordkeeping

requirements. EPA believes that the

monitoring, recordkeeping and

reporting requirements of this proposed

rule and the draft PSD permit are

adequate to ensure compliance with the

provisions of the draft PSD permit at the

site. Therefore, EPA proposes that, for

storage vessels not subject to the control

technology requirements of Subpart Kb

(see discussion below), the requirements

of 40 CFR 60.116b (b) and (c) and the

NSPS General Provisions (40 CFR Part

60, Subpart A) not be applicable to the

Merck Stonewall Plant. See proposed

§ 60.112b(c)(2).

For storage vessels with a certain

design capacity and storing a VOL with

a certain vapor pressure, Subpart Kb (40

CFR 60.112b (a) and (b)) requires that

the storage vessels be equipped with

control technology. The control

technology options of 40 CFR 60.112b(a)

include: (1) A fixed roof tank with an

internal floating roof; (2) an external

floating roof; (3) a closed vent system

and control device with 95% control

efficiency; and (4) a system of

equivalent control to options 1–3. In

addition, certain EPA notifications are

applicable for such new or modified

facilities in accordance with the NSPS

General Provisions (Subpart A). Storage

vessels storing material with high vapor

pressures do not have the option to use

floating roof controls, but must be

equipped with a closed vent system and

control device or meet an equivalent

standard (40 CFR 60.112b(b)). Merck

currently has no storage vessels that are

subject to the Subpart Kb control

technology requirements. EPA also

proposes to promulgate a site-specific

NSPS rule establishing an alternate

means of compliance that would apply

if in the future Merck installs such

storage vessels, or changes the operation

of existing storage vessels, such that

they would otherwise be subject to the

control technology requirements of

Subpart Kb (40 CFR 60.112b (a) or (b)).

EPA proposes that Merck would have

the option of reducing the site-wide

emissions cap in lieu of complying

directly with the NSPS Subpart Kb

requirements. This option would be

implemented in the same manner as

that described above for alternate

compliance for SIP rules (see Section

III.C of this preamble). See proposed

§ 60.112b(c)(1) and condition 1.2.2.c.iii.

of the draft PSD permit.

For future applicable NSPS other than

Subpart Kb, including future

promulgated NSPS, this proposed rule

and the draft permit would allow Merck

to seek the same alternative compliance

option as for Subpart Kb, that is, the

option to reduce the site-wide emissions

cap(s) in lieu of complying directly with

the applicable NSPS rule. See proposed

§ 60.1(d). However, the proposed rule

and draft permit provide EPA an

opportunity to require Merck to comply

with the NSPS regulation as written,

rather than exercise the option to reduce

the site-wide emissions cap(s). See

proposed § 60.1(d)(3). Condition

1.2.2.c.iii. of the draft PSD permit

provides that, for any NSPS other than

Subpart Kb, Merck shall implement the

regulation as written by the compliance

date if: (1) EPA determines that

compliance with the regulation instead

of a cap adjustment is necessary for

achieving the objectives of the

regulation, and (2) EPA notifies Merck

in writing within 60 days of Merck’s

notification that it is newly subject to

the regulation.
Federal Register / Vol. 62, No. 61 / Monday, March 31, 1997 / Proposed Rules 15315

17See 61 FR 34202–34249 (July 1, 1996).

EPA emphasizes that the alternative

approaches to compliance with Clean

Air Act requirements adopted in this

rule are being adopted only for this

facility, on a pilot project basis. The

approach is not available to other

facilities, and the decision to make it

available at this facility is linked to the

full set of the facility’s obligations in

this project. Based on the experience in

this project, EPA could propose to adopt

such an approach more widely at some

future time, but the rule proposed today

is limited to the Merck Stonewall Plant

and should not be interpreted as a more

general revision of NSPS regulations, or

even as initiating a process toward such

a general revision.

E. Title V Operating Permit

Today’s proposed site-specific

rulemaking does not amend or add any

new Title V requirements for the Merck

Stonewall Plant. Merck will be required

to obtain a Title V operating permit,

pursuant to the applicable Title V

program in the Commonwealth of

Virginia. The 40 CFR Part 71 Federal

Operating Permit Program is currently

effective in Virginia.17 However, EPA

plans in the near future to propose

approval of Virginia’s Title V program

pursuant to 40 CFR Part 70 (State

Operating Permit Programs), which,

when finalized, would replace the Part

71 program in Virginia. EPA expects

that Merck’s Title V permit would be

issued under Virginia’s Title V program

after it is approved, rather than under

the Part 71 program requirements.

However, Merck has requested that EPA

clarify some interpretations about how

the Part 71 program would apply to the

facility, particularly, how the provisions

of the PSD permit would be treated as

an underlying set of applicable

requirements within the Title V permit.

As part of Merck’s Title V permit, the

new PSD permit would become the

principal set of applicable requirements

for criteria pollutants for the facility.

Other applicable requirements would

include the future pharmaceutical

MACT and any other requirements

pertaining to HAP emissions, any SIP or

NSPS rules that the facility complies

with directly, as well as any other rules

promulgated in the future that would

apply to the facility.

The draft PSD permit has substantial

requirements for monitoring,

recordkeeping and reporting in order to

ensure compliance with the PSD permit.

As described previously in this

preamble, the monitoring,

recordkeeping and reporting provisions

of the PSD permit increase in stringency

as Merck’s emissions approach the total

emissions cap. EPA does not believe

that any additional monitoring

requirements (e.g., periodic monitoring

or ‘‘gap-filling’’) would need to be

added to Merck’s Title V permit in order

to demonstrate compliance with the

PSD permit. Therefore, EPA interprets

that the monitoring, recordkeeping and

reporting requirements of the PSD

permit constitute compliance with the

monitoring requirements of 40 CFR

71.6(a)(3) that would be applicable to

the PSD permit (as a set of applicable

requirements in the Title V permit).

Similarly, EPA interprets that the

recordkeeping and reporting

requirements of the draft PSD permit

satisfy compliance with the

recordkeeping and reporting

requirements of 40 CFR 71.6(a)(3)(ii)

and 71.6(a)(3)(iii)(A) that would be

applicable to provisions of the PSD

permit (as a set of applicable

requirements in the Title V permit). See

condition 3.4.2 of the draft PSD permit.

Further, EPA intends that the

forthcoming Compliance Assurance

Monitoring (CAM) rule would not

impose additional monitoring

requirements through Merck’s Title V

permit for applicable requirements in

the PSD permit.

Merck also wants to ensure that the

Title V permit modification provisions

would not undermine the flexibility

gained through the XL project. Because

the draft PSD permit would not require

modifications at the site to undergo

case-by-case permitting approval, so

long as Merck is in compliance with the

site-wide emission caps, EPA expects

that there would be relatively few

changes at the site that would

necessitate a Title V permit revision.

Merck specifically asked EPA to clarify

what type of Title V permit revision

process would apply to an operational

change that would add, delete or

otherwise change Title V permit terms

related to MACT standards promulgated

under 112(d) of the Act (e.g., adding a

process unit that would be subject to

MACT permit terms already listed in the

permit for other emission units). Under

the existing 40 CFR 70 and 71, EPA

interprets that the minor permit

modification process generally would

apply to a change at the site that would

affect permit terms related to MACT

standards, so long as the change did not

specifically meet the conditions for a

significant permit modification (e.g.,

relaxation of applicable monitoring,

recordkeeping or reporting

requirements). The minor permit

modification would apply in a situation

where a physical change or a change in

method of operation of a source changed

the applicability of a 112(d) standard by

deleting an existing 112(d) requirement

that no longer applied to the source. For

example, if use of a storage tank is

changed from storage of a high vapor

pressure solvent to a low vapor pressure

solvent, that change in method of

operation may eliminate a 112(d)

requirement to control emissions from

the tank and perhaps add a new

recordkeeping requirement. Such a

change in the applicability of the 112(d)

standard to the source would not be

considered a ‘‘relaxation of monitoring,

recordkeeping and reporting

requirements,’’ and therefore, would

qualify for the minor permit

modification procedure. The minor

permit modification process allows the

source to operate the change

immediately after the source files the

Title V permit application for the

modification. EPA plans to promulgate

final revisions to the Part 70 regulations

in the near future. EPA expects that the

final Part 70 rules may provide options

for an even more streamlined permit

revisions process for certain types of

changes to MACT permit terms.

IV. Resource Conservation and

Recovery Act Requirements

The RCRA subpart AA, BB, and CC air

emission standards under 40 CFR parts

264 and 265 are applicable to certain

existing hazardous waste units at the

Merck Stonewall Plant. These standards

also may be applicable to equipment

brought into hazardous waste service in

the future. The RCRA air standards

contain both substantive emission

control requirements and administrative

requirements (e.g., reporting and

recordkeeping) applicable to certain

hazardous waste management units.

Under this XL project, the Merck

Stonewall Plant will be subject to a sitespecific exemption from the RCRA air

emission standards under 40 CFR parts

264 and 265. Additionally, the Merck

Stonewall Plant will be subject to an

enforceable PSD permit, as described in

Section II.B.2 of this preamble, and will

continue to conduct a preventive

maintenance program. Although the

PSD permit and the preventive

maintenance program address both

inorganic and organic air emissions

from many types of units located at the

plant, the RCRA air emission standards

only address organic air emissions from

RCRA hazardous waste management

units.

The following hazardous waste

management equipment is currently in

operation at the Merck Stonewall Plant:

A RCRA-permitted container storage

area; three accumulation tanks; less than
15316 Federal Register / Vol. 62, No. 61 / Monday, March 31, 1997 / Proposed Rules

90-day accumulation containers; three

pumps; approximately 50 valves; and

associated fittings (e.g., flanges and

sampling connections). In absence of

this XL project, this hazardous waste

management equipment would be

subject to both the substantive and

administrative requirements contained

in the RCRA air standards. Any new

hazardous waste management units, or

existing units newly placed in

hazardous waste service, would also be

subject to those substantive and

administrative requirements.

For hazardous waste tanks and

containers located at the Merck

Stonewall Plant, the PSD permit

includes air emission control

requirements that are identical to the

substantive requirements under the

RCRA air standards. For process vents

that would otherwise be subject to the

subpart AA process vent regulations,

and for equipment that would otherwise

be subject to the subpart BB equipment

leak regulations, the Merck Stonewall

Plant will implement air emission

control requirements that are similar,

though not identical, to those that are

included in the nationwide standards.

For all affected hazardous waste

equipment, this site-specific regulation

will exempt the Merck Stonewall Plant

from the administrative requirements of

the RCRA air standards; the PSD permit

and, when issued, the Clean Air Act

(CAA) Title V permit, will subject the

plant to alternative administrative

requirements. The nationwide RCRA air

standards contain an allowance that a

unit operated with air emission

controls, in compliance with a CAA

standard in 40 CFR parts 60, 61, or 63,

is exempt from the RCRA standards.

Among other requirements, this

nationwide allowance exempts a unit

from the administrative requirements of

the RCRA air standards, provided that

the air emission controls on that unit are

operated in compliance with the

requirements of the CAA part 60, 61, or

63 standard, including administrative

requirements. In such cases, the

administrative requirements would

ultimately be enforceable through a

CAA permit. Under this XL project, the

Agency is allowing the Merck Stonewall

Plant to comply with the administrative

requirements that will be contained in

the plant’s CAA PSD and Title V

permits, which is analogous to the

existing nationwide RCRA air standards

provision that allows facilities the

alternative to operate air emission

controls in compliance with standards

under 40 CFR parts 60, 61 or 63. Thus,

the Agency considers the administrative

requirements under this XL project for

affected hazardous waste management

units at the Merck Stonewall Plant to be

equivalent to the administrative

requirements of the nationwide RCRA

air standards.

The Merck Stonewall Plant does not

currently have any units or emission

points that would be subject to the

subpart AA process vent standards.

Over the life of the PSD permit, it is

conceivable that the Merck Stonewall

Plant may make facility or process

alterations resulting in emission points

that become newly subject to subpart

AA. To address this possibility, the

terms of the PSD permit require the

Merck Stonewall Plant to route any

hazardous waste process vent emissions

to a secondary brine condenser or

thermal oxidizer, and monitor the

performance of these organic control

devices. The subpart AA nationwide

standards would require that these

process vent emissions be routed to a

95% organic emission control device

and monitor control device

performance, only if the total facilitywide hazardous waste process vent

emissions exceed 3.1 tons per year or 3

pounds per hour. However, under the

PSD permit, all hazardous waste process

vents which would otherwise be subject

to subpart AA will be controlled for

organic emissions, regardless of the

facility-wide emission rates. Because the

PSD permit will require organic air

emission controls on each hazardous

waste process vent operated at the

Merck Stonewall Plant, the Agency

considers that compliance with the PSD

permit will achieve greater emission

reductions from these hazardous waste

process vents than would be achieved

by compliance with the nationwide

subpart AA standards.

For subpart BB leak detection and

repair requirements, the Merck

Stonewall Plant does have hazardous

waste management units that are subject

to the RCRA air standards. Under this

XL project, the Merck Stonewall Plant

will be addressing the organic emissions

which would otherwise be addressed

through compliance with the subpart BB

nationwide standards, through the

continued performance of a preventive

maintenance program that is in place at

its facility. This maintenance program is

applicable to all existing and future

equipment that would otherwise be

subject to the nationwide subpart BB

standards. The program includes semiannual, quarterly, and monthly visual

inspections, depending on the

equipment type, and routine

maintenance and repair procedures. The

Merck Stonewall Plant has submitted

site-specific leak rate data for subpart

BB equipment which has been subject to

this program; that data indicates low

leak rates and low incidence of leaking

equipment for all the hazardous waste

components at the plant. For this XL

project, the Agency is assuming that the

continued performance of this program

will result in similar leak rates over the

life of the PSD permit.

The sampling connection systems and

open-ended valves or lines that would

otherwise be subject to subpart BB

standards are designed and operated in

a manner consistent with the

requirements of the subpart BB

standards. The preventive maintenance

program includes periodic visual

inspections and subsequent repair of

detected leaks for flanges and other

connectors, which is consistent with the

subpart BB requirements under 40 CFR

part 264.1058(a) for that equipment.

Because the Merck Stonewall Plant

preventive maintenance program

includes these requirements, the Agency

is assuming that this program will

effectively accomplish the same organic

emission controls as the substantive

subpart BB nationwide standards for

flanges and other connectors, sampling

connection systems, and open-ended

valves or lines at that Plant.

The EPA has reviewed facilityspecific component leak rate data

provided by the Merck Stonewall Plant

and found that less than 2% of the

affected valves leak, and none of the

three hazardous waste pumps leak or

have detectable emissions. Under the

provisions of subpart BB in 40 CFR part

264.1061, a facility at which less than

2% of affected valves leak can choose to

comply with subpart BB through a

performance standard that includes an

annual performance test using EPA

Method 21 instrument monitoring.

Under subpart BB in 40 CFR part

264.1052, these hazardous waste

pumps, which are in light liquid

service, would be subject to monthly

leak detection and repair monitoring

using EPA Method 21. Under this XL

project, this hazardous waste equipment

will be exempt from the subpart BB

standards. Instead, the Merck Stonewall

Plant will include this hazardous waste

equipment in their preventive

maintenance program; this program

includes visual inspection of all valves

and pumps and repair of any detected

leaks. In allowing this alternative for the

Merck Stonewall Plant, the Agency is

assuming that the preventive

maintenance program for valves and

pumps will maintain the low leak rates

that have been previously demonstrated

for these existing hazardous waste

valves and pumps, and will achieve

similarly low leak rates for any valves

and pumps placed in hazardous waste

service in the future. The component-
Federal Register / Vol. 62, No. 61 / Monday, March 31, 1997 / Proposed Rules 15317

specific leak rates demonstrated for this

equipment are within the range that the

Agency would expect to be achieved by

compliance with the subpart BB

nationwide standards for hazardous

waste valves and pumps. The

preventive maintenance program has

been in place at the Merck Stonewall

Plant for several years, and the EPA is

assuming that the very low leak rates for

the affected equipment have resulted

from a combination of: the effectiveness

of the Merck Stonewall Plant preventive

maintenance program; the quality of the

valves, pumps and associated

equipment that are used at the plant; the

properties of the hazardous waste which

this equipment contacts; and the

specific parameters for the hazardous

waste processes. The Agency is also

assuming that requiring the Merck

Stonewall Plant to continue this

preventive maintenance program under

this XL project will preserve the low

component leak rates for hazardous

waste management units at the plant.

For subpart CC standards applicable

to tanks and containers, the Merck

Stonewall Plant is currently in

compliance with the substantive organic

air emission control requirements of

those nationwide standards. For the

hazardous waste containers at the Merck

Stonewall Plant, the nationwide subpart

CC standards would require that the

containers be operated with covers that

have no visible openings; the PSD

permit includes this same requirement

for all hazardous waste containers

currently operated, or operated in the

future, at the plant. For the hazardous

waste accumulation and/or storage

tanks at the Merck Stonewall Plant, the

nationwide subpart CC standards would

require that the tanks be operated with

a cover that has no visible openings or

gaps; the PSD permit contains this same

requirement for all hazardous waste

accumulation and/or storage tanks

currently operated, or operated in the

future, at the plant. The Merck

Stonewall Plant does not operate any

hazardous waste tanks that would be

classified as Level 2 tanks under the

RCRA subpart CC standards. However,

it is conceivable that during the life of

the PSD permit, the plant may operate

this type of tank. To address this

possibility, the PSD permit contains a

requirement that any hazardous waste

treatment tank operated at the plant

must be equipped with a fixed cover

and either a floating roof or a vent

system that routes the tank emissions to

a secondary brine condenser or a

thermal oxidizer. These requirements

are among the compliance options

allowed under the nationwide subpart

CC standards, and would constitute

compliance with the substantive

requirements of those nationwide

standards. Therefore, the Agency

considers the requirements of the PSD

permit for the hazardous waste

containers and tanks at the Merck

Stonewall Plant to be the same as the

substantive requirements of the

nationwide RCRA air rules for those

units.

The Merck Stonewall Plant does not

currently operate any hazardous waste

surface impoundments, nor do they

expect to operate any in the future. For

this reason, the Plant is not seeking

relief from the surface impoundment

RCRA air emission standards. The

Merck Stonewall Plant has agreed that

any hazardous waste surface

impoundment that may be operated at

the facility in the future will be installed

and operated to comply with the

applicable requirements of the

nationwide subpart CC air emission

standards. Therefore, the site-specific

regulation exempts the Merck Stonewall

Plant from all the subpart CC

requirements except for the

requirements that are applicable to

surface impoundments.

Overall, the Agency considers this to

be a viable approach to addressing

organic air emission from hazardous

waste units, which is worthy of further

evaluation through the Project XL

program.

V. Additional Information

A. Public Hearing

A public hearing will be held, if

requested, to provide opportunity for

interested persons to make oral

presentations regarding the proposed

regulation in accordance with section

307(d)(5) of the Clean Air Act. Persons

wishing to make oral presentation on

the proposed rule to implement Merck’s

XL project should contact the EPA at the

address given in the ADDRESSES section

of this document. Any member of the

public may file a written statement

before, during, or within 30 days after

the hearing. Written statements should

be sent to EPA at the addresses given in

the ADDRESSES section of this document.

If a public hearing is held, a verbatim

transcript of the hearing and written

statements will be available for

inspection and copying during normal

business hours at the EPA addresses

given in the ADDRESSES section of this

document.

B. Executive Order 12866

Under Executive Order 12866 (58 FR

51735, October 4, 1993) the Agency

must determine whether the regulatory

action is ‘‘significant’’ and therefore

subject to Office of Management and

Budget (OMB) review and the

requirements of the Executive Order.

The Order defines ‘‘significant

regulatory action’’ as one that is likely

to result in a rule that may:

(1) Have an annual effect on the

economy of $100 million or more or

adversely affect in a material way the

economy, a sector of the economy,

productivity, competition, jobs, the

environment, public health or safety, of

State, local, or tribal governments or

communities;

(2) Create a serious inconsistency or

otherwise interfere with an action taken

or planned by another agency;

(3) Materially alter the budgetary

impact of entitlement, grants, user fees,

or loan programs of the rights and

obligations of recipients thereof; or

(4) Raise novel legal or policy issues

arising out of legal mandates, the

President’s priorities, or the principles

set forth in the Executive Order.

Because the annualized cost of this

final rule would be significantly less

than $100 million and would meet none

of the other criteria specified in the

Executive Order, it has been determined

that this rule is not a ‘‘significant

regulatory action’’ under the terms of

Executive Order 12866, and is therefore

not subject to OMB review.

C. Regulatory Flexibility

The Regulatory Flexibility Act (RFA)

generally requires an agency to conduct

a regulatory flexibility analysis of any

rule subject to notice and comment

rulemaking requirements unless the

agency certifies that the rule will not

have a significant economic impact on

a substantial number of small entities.

Small entities include small businesses,

small not-for-profit enterprises, and

small governmental jurisdictions. This

proposed rule would not have a

significant impact on a substantial

number of small entities because it only

affects one source, the Merck Stonewall

Plant, which is not a small entity.

Therefore, EPA certifies that this action

will not have a significant economic

impact on a substantial number of small

entities.

D. Paperwork Reduction Act

This action applies only to one

company, and therefore requires no

information collection activities subject

to the Paperwork Reduction Act, and

therefore no information collection

request (ICR) will be submitted to the

Office of Management and Budget

(OMB) for review in compliance with

the Paperwork Reduction Act, 44 U.S.C.

3501 et seq.
15318 Federal Register / Vol. 62, No. 61 / Monday, March 31, 1997 / Proposed Rules

E. Unfunded Mandates Reform Act

Title II of the Unfunded Mandates

Reform Act of 1995 (UMRA), Public

Law 104–4, establishes requirements for

Federal agencies to assess the effects of

their regulatory actions on State, local,

and tribal governments and the private

sector. Under section 202 of the UMRA,

EPA generally must prepare a written

statement, including a cost-benefit

analysis, for proposed and final rules

with ‘‘Federal mandates’’ that may

result in expenditures to State, local,

and tribal governments, in the aggregate,

or to the private sector, of $100 million

or more in any one year. Before

promulgating an EPA rule for which a

written statement is needed, section 205

of the UMRA generally requires EPA to

identify and consider a reasonable

number of regulatory alternatives and

adopt the least costly, most costeffective or least burdensome alternative

that achieves the objectives of the rule.

The provisions of section 205 do not

apply when they are inconsistent with

applicable law. Moreover, section 205

allows EPA to adopt an alternative other

than the least costly, most cost-effective

or least burdensome alternative if the

Administrator publishes with the final

rule an explanation why that alternative

was not adopted. Before EPA establishes

any regulatory requirements that may

significantly or uniquely affect small

governments, including tribal

governments, it must have developed

under section 203 of the UMRA a small

government agency plan. The plan must

provide for notifying potentially

affected small governments, enabling

officials of affected small governments

to have meaningful and timely input in

the development of EPA regulatory

proposals with significant Federal

intergovernmental mandates, and

informing, educating, and advising

small governments on compliance with

the regulatory requirements.

As noted above, this rule is limited to

Merck’s facility in Elkton, Virginia. EPA

has determined that this rule contains

no regulatory requirements that might

significantly or uniquely affect small

governments. EPA has also determined

that this rule does not contain a Federal

mandate that may result in expenditures

of $100 million or more for State, local,

and tribal governments, in the aggregate,

or the private sector in any one year.

Thus, today’s rule is not subject to the

requirements of sections 202 and 205 of

the UMRA.

List of Subjects

40 CFR Part 52

Environmental protection, Air

pollution control, Carbon monoxide,

Intergovernmental Relations, Lead,

Nitrogen dioxide, Ozone, Particulate

matter, Reporting and recordkeeping

requirements, Sulfur oxides, Volatile

organic compounds.

40 CFR Part 60

Environmental protection, Air

pollution control, Carbon monoxide,

Intergovernmental Relations, Lead,

Nitrogen dioxide, Particulate matter,

Reporting and recordkeeping

requirements, Sulfur oxides, Volatile

organic compounds.

40 CFR Part 264

Environmental protection, Air

pollution control, Container, Control

device, Hazardous waste, Monitoring,

Reporting and recordkeeping

requirements, Surface impoundment,

Tank, Treatment storage and disposal

facility, Waste determination.

40 CFR Part 265

Environmental protection, Air

pollution control, Container, Control

device, Hazardous waste, Monitoring,

Reporting and recordkeeping

requirements, Surface impoundment,

Tank, Treatment storage and disposal

facility, Waste determination.

Dated: March 21, 1997.

Carol M. Browner,

Administrator.

For the reasons set forth in the

preamble, parts 52, 60, 264 and 265 of

chapter I of title 40 of the Code of

Federal Regulations are proposed to be

amended as follows:

PART 52—APPROVAL AND

PROMULGATION OF

IMPLEMENTATION PLANS

1. The authority citation for part 52

continues to read as follows:

Authority: 42 U.S.C. 7401–7671q.

Subpart VV—[Amended]

2. Subpart VV is amended by adding

a new § 52.2454 to read as follows:

§ 52.2454 Prevention of significant

deterioration of air quality for Merck & Co.,

Inc.’s Stonewall Plant in Elkton, Virginia

(a) Applicability.

(1) This section applies only to the

pharmaceutical manufacturing facility,

commonly referred to as the Stonewall

Plant, located at Route 340 South, in

Elkton, Virginia (‘‘site’).

(2) This section sets forth the

prevention of significant deterioration of

air quality preconstruction review

requirements for the following

pollutants only: carbon monoxide,

nitrogen oxides, ozone (using volatile

organic compounds as surrogate),

particulate matter with an aerodynamic

diameter less than 10 microns (PM–10),

and sulfur dioxide. This section applies

in lieu of § 52.21 for the pollutants

identified in this paragraph as well as

particulate matter; however, the

preconstruction review requirements of

§ 52.21, or other preconstruction review

requirements that the Administrator

approves as part of the plan, shall

remain in effect for any pollutant which

is not specifically identified in this

paragraph and is subject to regulation

under the Act.

(b) Definitions. For the purposes of

this section:

12-month rolling total for an

individual pollutant or the total criteria

pollutants, as specified in paragraph (d)

of this section, is calculated on a

monthly basis as the sum of all actual

emissions of the respective pollutant(s)

from the previous 12 months.

Act means the Clean Air Act, as

amended, 42 U.S.C. 7401, et seq.

Completion of the powerhouse

conversion means the date upon which

the new boilers, installed pursuant to

paragraph (g) of this section, are

operational. This determination shall be

made by the site based on the boiler

manufacturer’s installation, startup and

shakedown specifications.

Permitting authority means either of

the following:

(1) The Administrator, in the case of

an EPA-implemented program; or

(2) The State air pollution control

agency, or other agency delegated by the

Administrator, pursuant to paragraph

(o) of this section, to carry out this

permit program.

Process unit means:

(1) Manufacturing equipment

assembled to produce a single

intermediate or final product, and

(2) Any combustion device.

Responsible official means:

(1) The president, secretary, treasurer,

or vice-president of the business entity

in charge of a principal business

function, or any other person who

performs similar policy or decisionmaking functions for the business

entity; or

(2) A duly authorized representative

of such business entity if the

representative is responsible for the

overall operation of one or more

manufacturing, production, or operating

facilities applying for or subject to a

permit and either:

(i) The facilities employ more than

250 persons or have gross annual sales

or expenditures exceeding $25 million

(in second quarter 1980 dollars); or

(ii) The authority to sign documents

has been assigned or delegated to such
Federal Register / Vol. 62, No. 61 / Monday, March 31, 1997 / Proposed Rules 15319

representative in accordance with

procedures of the business entity.

Site means the contiguous property at

Route 340 South, Elkton, Virginia,

under common control by Merck & Co.,

Inc., and its successors in ownership,

known as the Stonewall site.

(c) Authority to issue permit. The

permitting authority may issue to the

site a permit which complies with the

requirements of paragraphs (d) through

(n) of this section. The Administrator

may delegate, in whole or in part,

pursuant to paragraph (o) of this section,

the authority to administer the

requirements of this section to a State

air pollution control agency, or other

agency authorized by the Administrator.

(d) Site-wide emissions caps. The

permit shall establish site-wide

emissions caps as provided in this

paragraph.

(1) Initial site-wide emissions caps.

The initial site-wide emissions caps

shall be based on the site’s actual

emissions during a time period, within

five years of the date of permit issuance,

which represents normal site operation.

The permitting authority may allow the

use of a different time period upon a

determination that it is more

representative of normal source

operation. Actual site-wide emissions

shall be calculated using the actual

operating hours, production rates, and

types of materials processed, stored, or

combusted during the selected time

period.

(i) Total criteria pollutant emissions

cap. The permit shall establish a total

criteria pollutant emissions cap (total

emissions cap). The criteria pollutants

included in the total emissions cap are

the following: carbon monoxide,

nitrogen oxides, ozone (using volatile

organic compounds as surrogate),

particulate matter with an aerodynamic

diameter less than 10 microns, and

sulfur dioxide.

(ii) Individual pollutant caps. The

permit shall establish individual

pollutant caps for sulfur dioxide,

nitrogen oxides and PM–10.

(2) Adjustments to the site-wide

emissions caps.

(i) The permit shall require that upon

completion of the powerhouse

conversion, the site shall reduce the

site-wide emissions caps as follows:

(A) The total emissions cap shall be

reduced by 20 percent from the initial

site-wide emissions cap established

pursuant to paragraph (d)(1)(i) of this

section.

(B) The sulfur dioxide cap shall be

reduced by 25 percent from the initial

site-wide emissions cap established

pursuant to paragraph (d)(1)(ii) of this

section.

(C) The nitrogen oxide cap shall be

reduced by 10 percent from the initial

site-wide emissions cap established

pursuant to paragraph (d)(1)(ii) of this

section.

(ii) The permit may specify other

reasons for adjustment of the site-wide

emissions caps.

(e) Operating under the site-wide

emissions caps.

(1) The permit shall require that the

site’s actual emissions of criteria

pollutants shall not exceed the total

emissions cap established pursuant to

paragraph (d) of this section.

(2) The permit shall require that the

site’s actual emissions of sulfur dioxide,

nitrogen oxides and PM–10 shall not

exceed the respective individual

pollutant cap established pursuant to

paragraph (d) of this section.

(3) Compliance with the total

emissions cap and individual pollutant

caps shall be determined by comparing

the respective cap to the 12-month

rolling total for that cap. Compliance

with the total emissions cap and

individual pollutant caps shall be

determined within one month of the

end of each month based on the prior

12 months. The permit shall set forth

the emission calculation techniques

which the site shall use to calculate sitewide actual criteria pollutant emissions.

(4) Installation of controls for

significant modifications and significant

new installations.

(i) This paragraph applies to

significant modifications and significant

new installations. Significant

modifications for the purposes of this

section are defined as changes to an

existing process unit that result in an

increase of the potential emissions of

the process unit, after consideration of

existing controls, of more than the

significance levels listed in paragraph

(e)(4)(ii) of this section. Significant new

installations for the purposes of this

section are defined as new process units

with potential emissions before controls

that exceed the significance levels listed

in paragraph (e)(4)(ii) of this section. For

purposes of this section, potential

emissions means process unit point

source emissions that would be

generated by the process unit operating

at its maximum capacity.

(ii) The significance levels for

determining significant modifications

and significant new installations are:

100 tons per year of carbon monoxide;

40 tons per year of nitrogen oxides; 40

tons per year of sulfur dioxide; 40 tons

per year of volatile organic compounds;

and 15 tons per year of PM–10.

(iii) For any significant modification

or significant new installation, the

permit shall require that the site install,

at the process unit, emission controls,

pollution prevention or other

technology that represents good

environmental engineering practice in

the pharmaceutical or batch processing

industry, based on the emission

characteristics (such as flow, variability,

pollutant properties) of the process unit.

(f) Operation of control equipment.

The permit shall require that the site

shall continue to operate the emissions

control equipment that was previously

subject to permit requirements at the

time of issuance of a permit pursuant to

this section. This equipment shall be

operated in a manner which minimizes

emissions, considering the technical

and physical operational aspects of the

equipment and associated processes.

This operation shall include an

operation and maintenance program

based on manufacturers’ specifications

and good engineering practice.

(g) Powerhouse conversion. The

permit shall require that the site convert

the steam-generating powerhouse from

burning coal as the primary fuel to

burning natural gas as the primary fuel

and either No. 2 fuel oil or propane as

backup fuel.

(1) The new boilers shall be equipped

with low nitrogen oxides technology.

(2) The site shall complete the

powerhouse conversion (completion of

the powerhouse conversion) no later

than 30 months after the effective date

of the permit.

(h) Monitoring, recordkeeping and

reporting.

(1) The permit shall set forth

monitoring, recordkeeping, and

reporting requirements sufficient to

demonstrate compliance with the sitewide emissions caps. The monitoring,

recordkeeping and reporting

requirements shall be structured in a

tiered system, such that the

requirements become more stringent as

the site’s emissions approach the total

emissions cap.

(2) At a minimum, the permit shall

require that the site submit to the

permitting authority semi-annual

reports of the site-wide criteria pollutant

emissions (expressed as a 12-month

rolling total) for each month covered by

the report. These reports shall include a

calculation of the total emissions cap, as

well as, the emissions of sulfur dioxide,

nitrogen oxides, carbon monoxide,

volatile organic compounds and PM–10.

(3) Any reports required by the permit

to be submitted on an annual or semiannual basis shall contain a certification

by the site’s responsible official that to

his belief, based on reasonable inquiry,

the information submitted in the report

is true, accurate, and complete.
15320 Federal Register / Vol. 62, No. 61 / Monday, March 31, 1997 / Proposed Rules

(4) Any records required by the

permit shall be retained on site for at

least five years.

(i) Air quality analysis. The permittee

shall demonstrate, prior to permit

issuance and on a periodic basis which

shall be specified in the permit, that

emissions from construction or

operation of the site will not cause or

contribute to air pollution in excess of

any:

(1) maximum allowable increase or

maximum allowable concentration for

any pollutant, pursuant to § 165 of the

Act;

(2) national ambient air quality

standard or;

(3) other applicable emission standard

or standard of performance under the

Act.

(j) Termination.

(1) The permit may be terminated as

provided in this paragraph for reasons

which shall include the following, as

well as any other termination provisions

specified in the permit:

(i) If the Administrator or the

permitting authority determines that

continuation of the permit is an

imminent and substantial endangerment

to public health or welfare, or the

environment;

(ii) If the permittee knowingly falsifies

emissions data;

(iii) If the permittee fails to implement

the powerhouse conversion pursuant to

paragraph (g);

(iv) If the permittee receives four

consent orders or two judgments

adverse to the site arising from noncompliance with this permit in a five

year period that are deemed material by

the Administrator or the permitting

authority; or

(v) If the total emissions cap is

exceeded.

(2) In the event of termination, the

Administrator or the permitting

authority shall provide the permittee

with written notice of its intent to

terminate the permit. Within 30

calendar days of the site’s receipt of this

notice, the site may take corrective

action to remedy the cause of the

termination. If this remedy, which may

include a corrective action plan and

schedule, is deemed acceptable by the

Administrator or the permitting

authority (whichever agency provided

written notice of its intent to terminate

the permit), the action to terminate the

permit shall be withdrawn. Otherwise,

the permit shall be terminated in

accordance with procedures specified in

the permit.

(3) Termination of the permit does not

waive the site’s obligation to complete

any corrective actions relating to noncompliance under the permit.

(k) Inspection and entry.

(1) Upon presentation of credentials

and other documents as may be required

by law, the site shall allow authorized

representatives of the Administrator and

the permitting authority to perform the

following:

(i) Enter upon the site;

(ii) Have access to and copy, at

reasonable times, any records that must

be kept under the conditions of the

permit;

(iii) Have access at reasonable times to

batch and other plant records needed to

verify emissions.

(iv) Inspect at reasonable times any

facilities, equipment (including

monitoring and control equipment),

practices, or operations required under

the permit;

(v) Sample or monitor any substances

or parameters at any location, during

operating hours, for the purpose of

assuring permit compliance or as

otherwise authorized by the Act.

(2) No person shall obstruct, hamper,

or interfere with any such authorized

representative while in the process of

carrying out his official duties. Refusal

of entry or access may constitute

grounds for permit violation and

assessment of civil penalties.

(3) Such site, facility and equipment

access, and sampling and monitoring

shall be subject to the site’s safety and

industrial hygiene procedures, and Food

and Drug Administration Good

Manufacturing Practice requirements

(21 CFR 210 and 211) in force at the site.

(l) Transfer of ownership. The terms

of the permit are transferable to a new

owner upon sale of the site, in

accordance with provisions specified by

the permit.

(m) Permit issuance. The permitting

authority shall provide for public

participation prior to issuing a permit

pursuant to this section. At a minimum,

the permitting authority shall:

(1) Make available for public

inspection, in at least one location in

the area of the site, the information

submitted by the permittee, the

permitting authority’s analysis of the

effect on air quality including the

preliminary determination, and a copy

or summary of any other materials

considered in making the preliminary

determination;

(2) Notify the public, by

advertisement in a newspaper of general

circulation in the area of the site, of the

application, the preliminary

determination, and of the opportunity

for comment at a public hearing as well

as written public comment;

(3) Provide a 30-day period for

submittal of public comment;

(4) Send a copy of the notice of public

comment to the following:

theTAdministrator, through the

appropriate Regional Office; any other

State or local air pollution control

agencies, the chief executives of the city

and county where the site is located;

any State, Federal Land Manager, or

other governing body whose lands may

be affected by emissions from the site.

(5) Provide opportunity for a public

hearing for interested persons to appear

and submit written or oral comments on

the air quality impact of the site, the

control technology required, and other

appropriate considerations.

(n) Permit modifications. The permit

shall specify the conditions under

which the permit may be modified by

the permitting authority. The permitting

authority shall modify the permit in

accordance with the procedures set

forth in this paragraph.

(1) Permit modifications that require

public participation. For any change

that does not meet the criteria for an

administrative permit modification

established in paragraph (n)(2)(i) of this

section, the permitting authority shall

provide an opportunity for public

participation, consistent with the

provisions of paragraph (m) of this

section, prior to processing the permit

modification.

(2) Administrative permit

modification.

(i) An administrative permit

modification is a permit revision that:

(A) Corrects typographical errors;

(B) Identifies a change in the name,

address, or phone number of any person

identified in the permit, or provides a

similar minor administrative change at

the site;

(C) Requires more frequent

monitoring, recordkeeping, or reporting

by the permittee;

(D) Allows for a change in ownership

or operational control of a source where

the permitting authority determines that

no other change in the permit is

necessary, provided that a written

agreement containing a specific date for

transfer of permit responsibility,

coverage, and liability between the

current and new permittee has been

submitted to the permitting authority.

(E) Updates the emission calculation

methods specified in the permit,

provided that the change does not also

involve a change to any site-wide

emissions cap.

(F) Changes the monitoring,

recordkeeping or reporting requirements

for equipment that has been shutdown

or is no longer in service.

(G) Any other change that is

stipulated in the permit as qualifying as

an administrative permit modification,
Federal Register / Vol. 62, No. 61 / Monday, March 31, 1997 / Proposed Rules 15321

provided that the permit condition

which includes such stipulation has

already undergone public participation

in accordance with paragraph (m) of this

section.

(ii) An administrative permit

modification may be made by the

permitting authority consistent with the

following procedures:

(A) The permitting authority shall

take final action on any request for an

administrative permit modification

within 60 days from receipt of the

request, and may incorporate such

changes without providing notice to the

public, provided that the permitting

authority designates any such permit

revisions as having been made pursuant

to this paragraph.

(B) The permitting authority shall

submit a copy of the revised permit to

the Administrator.

(C) The site may implement the

changes addressed in the request for an

administrative permit modification

immediately upon submittal of the

request to the permitting authority.

(o) Delegation of authority.

(1) The Administrator shall have the

authority to delegate the responsibility

to implement this section in accordance

with the provisions of this paragraph.

(2) Where the Administrator delegates

the responsibility for implementing this

section to any agency other than a

Regional Office of the Environmental

Protection Agency, the following

provisions shall apply:

(i) Where the delegate agency is not

an air pollution control agency, it shall

consult with the appropriate State and

local air pollution control agency prior

to making any determination under this

section. Similarly, where the delegate

agency does not have continuing

responsibility for managing land use, it

shall consult with the appropriate State

and local agency primarily responsible

for managing land use prior to making

any determination under this section.

(ii) The delegate agency shall send a

copy of any public comment notice

required under paragraph (n) of this

section to the Administrator through the

appropriate Regional Office.

PART 60—STANDARDS OF

PERFORMANCE FOR NEW

STATIONARY SOURCES

1. The authority citation for part 60

continues to read as follows:

Authority: 42 U.S.C. 7401–7671q.

2. Section 60.1 is amended by adding

paragraph (d) to read as follows:

§ 60.1 Applicability.

* * * * *

(d) Site-specific standard for Merck &

Co., Inc.’s Stonewall Plant in Elkton,

Virginia. (1) This paragraph applies only

to the pharmaceutical manufacturing

facility, commonly referred to as the

Stonewall Plant, located at Route 340

South, in Elkton, Virginia (‘‘site’’).

(2) Except for compliance with 40

CFR 60.49b(u), the site shall have the

option of either complying directly with

the requirements of this part, or

reducing the site-wide emissions caps in

accordance with the procedures set

forth in a permit issued pursuant to 40

CFR 52.2454. If the site chooses the

option of reducing the site-wide

emissions caps in accordance with the

procedures set forth in such permit, the

requirements of such permit shall apply

in lieu of the otherwise applicable

requirements of this part.

(3) Notwithstanding the provisions of

paragraph (d)(2) of this section, for any

provisions of this part except for

Subpart Kb, the owner/operator of the

site shall comply with the applicable

provisions of this part if the

Administrator determines that

compliance with the provisions of this

part is necessary for achieving the

objectives of the regulation and the

Administrator notifies the site in

accordance with the provisions of the

permit issued pursuant to 40 CFR

52.2454.

3. Section 60.49b is amended by

adding paragraph (u) to read as follows:

§ 60.49b Reporting and recordkeeping

requirements.

* * * * *

(u) Site-specific standard for Merck &

Co., Inc.’s Stonewall Plant in Elkton,

Virginia.

(1) This paragraph applies only to the

pharmaceutical manufacturing facility,

commonly referred to as the Stonewall

Plant, located at Route 340 South, in

Elkton, Virginia (‘‘site’’) and only to the

natural gas-fired boilers installed as part

of the powerhouse conversion required

pursuant to 40 CFR 52.2454(g). The

requirements of this paragraph shall

apply, and the requirements of 40 CFR

60.40b through 60.49b shall not apply,

to the natural gas-fired boilers installed

pursuant to 40 CFR 52.2454(g).

(i) The site shall equip the natural gasfired boilers with low nitrogen oxide

(NOX) technology.

(ii) The site shall install, calibrate,

maintain, and operate a continuous

monitoring and recording system for

measuring NOX emissions discharged to

the atmosphere and opacity using a

continuous emissions monitoring

system or a predictive emissions

monitoring system.

(iii) Within 180 days of the

completion of the powerhouse

conversion, as required by 40 CFR

52.2454, the site shall perform a stack

test to quantify criteria pollutant

emissions.

(2) [Reserved]

4. Section 60.112b is amended by

adding paragraph (c), to read as follows:

§ 60.112b Standard for volatile organic

compounds (VOC).

* * * * *

(c) Site-specific standard for Merck &

Co., Inc.’s Stonewall Plant in Elkton,

Virginia. This paragraph applies only to

the pharmaceutical manufacturing

facility, commonly referred to as the

Stonewall Plant, located at Route 340

South, in Elkton, Virginia (‘‘site’’).

(1) For any storage vessel that

otherwise would be subject to the

control technology requirements of

paragraph (a) or (b) of this section, the

site shall have the option of either

complying directly with the

requirements of this subpart, or

reducing the site-wide total criteria

pollutant emissions cap (total emissions

cap) in accordance with the procedures

set forth in a permit issued pursuant to

40 CFR 52.2454. If the site chooses the

option of reducing the total emissions

cap in accordance with the procedures

set forth in such permit, the

requirements of such permit shall apply

in lieu of the otherwise applicable

requirements of this subpart for such

storage vessel.

(2) For any storage vessel at the site

not subject to the requirements of 40

CFR 60.112b (a) or (b), the requirements

of 40 CFR 60.116b (b) and (c) and the

General Provisions (Subpart A of this

part) shall not apply.

PART 264—STANDARDS FOR

OWNERS AND OPERATORS OF

HAZARDOUS WASTE TREATMENT,

STORAGE, AND DISPOSAL

FACILITIES

1. The authority citation for part 264

continues to read as follows:

Authority: 42 U.S.C. 6905, 6912(a), 6924,

and 6925.

Subpart AA—[Amended]

2. Section 264.1030 is amended by

adding paragraph (d) to § 264.1030 to

read as follows:

§ 264.1030 Applicability.

* * * * *

(d) The requirements of this subpart

do not apply to the pharmaceutical

manufacturing facility, commonly

referred to as the Stonewall Plant,

located at Route 340 South, Elkton,
15322 Federal Register / Vol. 62, No. 61 / Monday, March 31, 1997 / Proposed Rules

Virginia, provided that facility is

operated in compliance with the

requirements contained in a Clean Air

Act permit issued pursuant to 40 CFR

52.2454. The requirements of this

subpart shall apply to the facility upon

termination of the Clean Air Act permit

issued pursuant to 40 CFR 52.2454.

3. Subpart BB is amended by adding

paragraph (g) to § 264.1050 to read as

follows:

§ 264.1050 Applicability.

* * * * *

(g) The requirements of this subpart

do not apply to the pharmaceutical

manufacturing facility, commonly

referred to as the Stonewall Plant,

located at Route 340 South, Elkton,

Virginia, provided that facility is

operated in compliance with the

requirements contained in a Clean Air

Act permit issued pursuant to 40 CFR

52.2454. The requirements of this

subpart shall apply to the facility upon

termination of the Clean Air Act permit

issued pursuant to 40 CFR 52.2454.

4. Subpart CC is amended by adding

paragraph (e) to § 264.1080 to read as

follows:

§ 264.1080 Applicability.

* * * * *

(e)(1) Except as provided in paragraph

(e)(2) of this section, the requirements of

this subpart do not apply to the

pharmaceutical manufacturing facility,

commonly referred to as the Stonewall

Plant, located at Route 340 South,

Elkton, Virginia, provided that facility is

operated in compliance with the

requirements contained in a Clean Air

Act permit issued pursuant to 40 CFR

52.2454. The requirements of this

subpart shall apply to the facility upon

termination of the Clean Air Act permit

issued pursuant to 40 CFR 52.2454.

(2) Notwithstanding paragraph (e)(1)

of this section, any hazardous waste

surface impoundment operated at the

Stonewall Plant is subject to:

(i) the standards in § 264.1085 and all

requirements related to hazardous waste

surface impoundments that are

referenced in or by § 264.1085,

including the closed-vent system and

control device requirements of

§ 264.1087 and the recordkeeping

requirements of § 264.1089(c); and

(ii) the reporting requirements of

§ 264.1090 that are applicable to surface

impoundments and/or to closed-vent

systems and control devices associated

with a surface impoundment.

PART 265—INTERIM STATUS

STANDARDS FOR OWNERS AND

OPERATORS OF HAZARDOUS WASTE

TREATMENT, STORAGE, AND

DISPOSAL FACILITIES

1. The authority citation for part 265

continues to read as follows:

Authority: 42 U.S.C. 6905, 6906, 6912,

6922, 6923, 6924, 6925, 6935, 6936, and

6937, unless otherwise noted.

2. Subpart AA is amended by adding

paragraph (c) to § 265.1030 to read as

follows:

§ 265.1030 Applicability.

* * * * *

(c) The requirements of this subpart

do not apply to the pharmaceutical

manufacturing facility, commonly

referred to as the Stonewall Plant,

located at Route 340 South, Elkton,

Virginia, provided that facility is

operated in compliance with the

requirements contained in a Clean Air

Act permit issued pursuant to 40 CFR

52.2454. The requirements of this

subpart shall apply to the facility upon

termination of the Clean Air Act permit

issued pursuant to 40 CFR 52.2454.

3. Subpart BB is amended by adding

paragraph (f) to § 265.1050 to read as

follows:

§ 265.1050 Applicability.

* * * * *

(f) The requirements of this subpart

do not apply to the pharmaceutical

manufacturing facility, commonly

referred to as the Stonewall Plant,

located at Route 340 South, Elkton,

Virginia, provided that facility is

operated in compliance with the

requirements contained in a Clean Air

Act permit issued pursuant to 40 CFR

52.2454. The requirements of this

subpart shall apply to the facility upon

termination of the Clean Air Act permit

issued pursuant to 40 CFR 52.2454.

4. Subpart CC is amended by adding

paragraph (e) to § 265.1080 to read as

follows:

§ 265.1080 Applicability.

* * * * *

(e)(1) Except as provided in paragraph

(e)(2) of this section, the requirements of

this subpart do not apply to the

pharmaceutical manufacturing facility,

commonly referred to as the Stonewall

Plant, located at Route 340 South,

Elkton, Virginia, provided that facility is

operated in compliance with the

requirements contained in a Clean Air

Act permit issued pursuant to 40 CFR

52.2454. The requirements of this

subpart shall apply to the facility upon

termination of the Clean Air Act permit

issued pursuant to 40 CFR 52.2454.

(2) Notwithstanding paragraph (e)(1)

of this section, any hazardous waste

surface impoundment operated at the

Stonewall Plant is subject to the

standards in § 265.1086 and all

requirements related to hazardous waste

surface impoundments that are

referenced in or by § 265.1086,

including the closed-vent system and

control device requirements of

§ 265.1088 and the recordkeeping

requirements of § 265.1090(c).

[FR Doc. 97–7949 Filed 3–28–97; 8:45 am]

BILLING CODE 6560–50–P