1101 K Street, NW, Suite 450, Washington, DC 20005 p: 202. 44 6.1700 f: 202. 2 16.9745 www.sia

- online.org

October 24, 2011

BY EMAIL

The Honorable Lisa P. Jackson Administrator Environmental Protection Agency Ariel Rios Building (1101A) 1200 Pennsylvania Ave NW Washington, DC 20 460

Petition For Reconsideration Of The Final Rule Pertaining To Pr otection Of Confidential Business Information Under The Mandatory Reporting Rules For Greenhouse Gases Docket No. E PA

- H Q

- O AR

- 2010

- 0929

Dear Administrator Jackson:

The Semiconductor Industry Association (“SIA”) 1 petitions EPA for reconside ration of the final rule published on August 25, 2011 pertaining to the availability of confidential business information (CBI) protections under the greenhouse gas (GHG) emissions reporting regulation. 2 We do so pursuant to Section 307(d)(7)(B) of the Cl ean Air Act 3 , which mandates that EPA “shall” grant reconsideration for “objections” “impractica ble ” to raise during the rulemaking and of “central relevance.” 4

SIA seeks reconsideration on the three grounds explained below.

1 SIA is a trade association for the U.S. semiconductor industry, uniting companies resp onsible for more than 85 percent of U.S. sem iconductor production. SIA is dedicated to maintaining our Nation’s world leadership in semiconductor technology
, while at the same time supporting its members ’ workplace safety and environmental protection effo rts. Collectively, the semiconductor industry employs a domestic workforce of approximately 200,000 people, and is our Nation’s largest exporting industry over the last five years

. More information about the SIA can be found at www.sia

- online.org

.
2 See Change to the Reporting Date for Certain Data Elements Required Under the Mandatory Reporting of Greenhouse Gases Rule; Final Rule, 76 Fed. Reg. 53057 (Aug. 25, 2011) [hereinafter “Final CBI Rule” or “Final Rule”]. SIA filed comments on at least two Federal Register Notices that served as the predicate for the Final CBI Rule: (1) Proposed Confidentiality Determinations for Data Required Under the Mandatory Greenhouse Gas Reporting Rule and Proposed Amendment to Special Rules Governing Certain Information Obtained Under the Clean Air Act , 75 Fed. Reg. 38,959 (July 7, 2010) and (2) Call for Information: Information on Inputs to Emission Equations Under the Mandatory Reporting of Gree nhouse Gases Rule” published by the U.S. Environmental Protection Agency (EPA or the Agency) at 75 Fed. Reg. 81365 (Dec. 27, 2010)

.
3 42 U.S.C. § 7607(b)(1)

.
4 At the same time, SIA is filing Petition for Review of the Final CBI Rule with the United Stat es Appellate Court of Appeals for the District of Columbia Circuit pursuant to Section 307(b)(1) of the Clean Air Act, 42 U.S.C. § 7607(b)(1), and Rule 15(a) of the Federal Rules of Appellate Procedure

.1101 K Street, NW, Suite 450, Washington, DC 20005 p: 202. 44 6.1700 f: 202. 2 16.9745 www.sia

- online.org 1. The Final CBI Rule Raises One O f The Same “Objections” As SIA’s Petition For Reconsideration Of the Final Subpart I

On January 31, 2011, SIA petitioned for judicial review and reconsideration of the Final Subpart I 5 of the GHG emissions reporting regulation

. 6 Among the “objections” rai sed in our Subpart I petition for reconsideration is the following that pertains to the vulnerability of intellectual property:

[T] he serious confidentiality concerns relating to the sharing of intellectual property inherent to [the current Subpart I’s] .

. . recipe

based reporting requirement

. 7

The Final CBI Rule raises precisely th is same intellectual property

- vulnerability “objection”.

In particular, t he Final CBI Rule codifies EPA’s legal position that “inputs” to GHG “emissions equations” constitut e “emissions data” that are not eligible for CBI protections and then applies this position to various elements of the current Subpart I

. 8 At the time of our Subpart I Petition for Reconsideration , this legal position had been proposed and not finalized
, 9 but we covered in some detail in our petition the serious consequences for our intellectual property

- vulnerability “objection”

5 Mandatory Reporting of Greenhouse Gases: Addition al Sources of Fluorinated GHGs; Final Rule, 75 Fed. Reg. 74,774 (Dec. 1, 2010), Subpart I to be codified at 40 C.F.R. § 98.90, et seq . (hereinafter “Final Subpart I” or “Final Rule”).

6 Semiconductor Industry Association v. EPA , Case No. 11

- 1024 (D.C. Cir . Filed Jan. 31, 2011); Semiconductor Industry Association Petition For Reconsideration And Request For Stay Pending Reconsideration Of Subpart I Of The Final Rule For Mandatory Reporting Of Greenhouse Gases Docket No. EPA

- HQ

- OAR

- 2009

- 0927 (filed Jan. 31, 2011).

7 Petition for Reconsideration, at 3.

8 See Final CBI Rule, 76 Fed. Reg. at 53,062. In particular, the Final Rule makes determinations

-- specific to the current Subpart I

-- that certain reporting elements constitute “inputs” to “emissions equat ions” not entitled to CBI protections:

EPA agrees with the comments that the six data elements described above [pertaining to subparts Y and TT] are inputs to emission equations. In light of these comments, EPA reviewed the data elements lists to assure p roper categorization and identified . . . additional data elements that are inputs to emission equations, but were not included in the December 27, 2010 deferral proposal. These data elements are the following:

• Subpart I: Fraction of each fluorinated GHG or N 2 O destroyed or removed in abatement systems connected to process tools where recipe, process sub

- type, or process type j is used (40 CFR 98.96(o)).2

• Subpart I: All inputs and results of calculations made accounting for the uptime of abatement systems used during the reporting year, in accordance with Equations I

– 14 and I

– 15 of this subpart (40 CFR 98.96(q)(2)).

9 See Proposed Confidentiality Determinations for Data Required Under the Mandatory Greenhouse Gas Reporting Rule and Proposed Amendm ent to Special Rules Governing Certain Information Obtained Under the Clean Air Act , 75 Fed. Reg. 38,959 (July 7, 2010).1101 K Street, NW, Suite 450, Washington, DC 20005 p: 202. 44 6.1700 f: 202. 2 16.9745 www.sia

- online.org that would flow from this legal position, if finalized and applied to the current Subpart I . We excerpt pertinent portions of o ur P etition below : 10

Final Subpart I, although it does not mandate the submission of any full recipe, does require reporting of certain recipe

- specific information. As explained below, this information could provide enough specific knowledge of proprietar y device designs and manufacturing processes to allow for reverse engineering of individual recipes and otherwise would compromise the trade secrets within a company’s recipe portfolio. 11

In particular, Section 98.96 of the Final Subpart I requires faciliti es to report the following information:

 Type of each gas used for each set of similar recipes; 12

 Recipe

- specific utilization and byproduct rates ( i.e. , emission factors); 13

 The film or substrate that was etched or cleaned and the feature type that was etch ed for each recipe in Part 98.96(f)(1); 14

10 Subpart I Petition for Reconsideration, at 18

- 22 (re

- printed in the text of this petition below, with original footnotes).

11 In the semiconductor industry, reverse engineering involves starting with a known product and working backwards to discover the process by which it was developed and manufactured. People v. Gopal , 171 Cal. App. 3d 524, 533, (1985) (citing Kewanee Oil v. Bicron
, supra , criminal conviction of misappropriation of trade secrets concerning semiconductors affirmed). It can be an arduous and expensive process that entails the purchase of a competitor ’s chips
, the cutting of chip cross

- sections and the analy sis of elem ental materials through sophisticated atomic

- level analytical techniques, stripping layers, photographing the circuitry of each layer through a scanning electron microscope, dissecting the chip to discover the layout design, constructing an electrical sche matic of the circuitry, and then drawing inferences about the technical process used to make the device. Id

. The information implicated by the Final Subpart I reporting requirements ( e.g ., chemical identities, amounts, emitted, apportionment by process type, facility

- wide consumption, annual gas consumption) is the type of information that c ould aid a competitor by short circuiting the time, effort, and money necessary to conduct reverse engineering or to conduct its own research and development. Moreo ver, these specific details would not necessarily be discernable, even from sophisticated reverse engineering. And, the details at issue here are not for sale or otherwise available to the competition at a price. Keeping the details of valuable processes secret is critical to maintaining a competitive edge. This type of information clearly qualifies as trade secret. People v. Gopal, 171 Cal. App. 3d 524, 539 (1985) (information that would substantially reduce reverse engineering time is a trade secret)

.
12 § 98.96(c)(2)

.
13 § 98.96(f)(1)

.
14 § 98.96(f)(2).1101 K Street, NW, Suite 450, Washington, DC 20005 p: 202. 44 6.1700 f: 202. 2 16.9745 www.sia

- online.org  Quantity of each gas used for each set of “similar” recipes, to be reported on an annualized basis; 15

 All apportioning factors used to apportion F

- gas and N2O consumption; 16 and

 Identification of the quantifiable metric used in a facility

specific engineering model to apportion gas consumption. 17

The level of intellectual property inherent in the foregoing information is significant. Essentially, SIA understands these reporting requirements to require that a compan y reveal the quantity of gas being used (1) for each type of “film” being etched ( e.g ., oxide, nitride) and (2) for each “feature” within that film ( e.g ., gate, deep trench). 18 As result, a company would be revealing information about its process and parti cular recipes used in that process which it, in many cases, has never shared publicly and which it regards as intellectual property. For example, a company would need, under these information requirements, to reveal that in its 300 millimeter fabrication process, for a specific group of “similar” recipes it uses X kg of SF6 and Y kg of CHF3 to etch silicon nitride layers in gate stack in year 2010.

In addition, Final Subpart I would require each facility to maintain recipe

- specific records in order to docu ment compliance with the requirements of the Rule and make such records available to EPA. In particular, Section 98.97(b) of the Rule requires the following records be kept by any facility that estimates emissions using recipe

- specific emission factors, i .e. , “large” facilities:

(1) “Complete documentation and final report for measurements for recipe specific [emission factors]”; and

(2) “Documentation that recipe

- specific [emission factors] developed for your facility are measured for recipes that are s imilar to those used at your facility, as defined in § 98.98. The documentation must include, at a minimum, recorded to the appropriate number of

15 § 98.96(k).

16 § 98.96(l)

.
17 § 98.96(m)(i)

.
18 As defined in Section 3.1 of EPA’s Technical Support Document, a “film” is the material being etched, e.g. , oxide, nitride, etc., while “feature” ref ers to the structure within which the film occurs, e.g. , gate, deep trench, etc. See U.S. Environmental Protection Agency Office of Air and Radiation, Technical Support Document for Process Emissions from Electronics Manufacture ( e.g. , Micro

- Electro

- Mecha nical Systems, Liquid Crystal Displays, Photovoltaics, and Semiconductors): Proposed Rule for Mandatory Reporting of Greenhouse Gases, Revised, November 2010 (“Technical Support Document”).1101 K Street, NW, Suite 450, Washington, DC 20005 p: 202. 44 6.1700 f: 202. 2 16.9745 www.sia

- online.org significant figures, reactor pressure, flow rates, chemical composition, applied RF power, direct current (DC) bias, temperature, flow stabilization time, and duration.” 19

Of particular concern to SIA and its members is that these records could become subject to inquiries as to their content and sufficiency not only by EPA in an enforcement context, but also by loc al residents and other private citizens in future permitting and related contexts ( e.g. , a Freedom of Information Act Request or through discovery in a citizen suit filed under the Clean Air Act). 20 Etch recipes are considered trade secrets and, as such, a re tightly controlled. Most semiconductor companies

– even very prolific patentees

– opt to protect their recipes as trade secrets, rather than through patents, which require disclosure of the recipe. If these records are made public, they could loose th eir status as trade secrets, allowing competitors to reverse engineer recipes, thereby compromising the value of information worth up to several billion dollars to each company.

The loss of trade secret protection for semiconductor etch recipe informatio n through its public disclosure via the Final Rule could
amount to a regulatory taking of intellectual property. 21 It does not appear that EPA (or the Office of Management and Budget) has undertaken any analysis of this potential erosion of private intelle ctual property value. In addition to this potential takings issue, disclosure of recipe information may also present national security concerns at those semiconductor facilities that are designated Trusted Foundries by the U.S. National Security Agency. 22

Moreover, EPA has not yet finalized its position on what information submitted under the Reporting Rule constitutes “emissions data” that are not subject to confidential treatment under the CAA. Section 114(c) of the Clean Air Act provides that “records, reports or information” submitted to EPA in connection with a rulemaking or “standards” development or as part of an ongoing compliance requirement or through an investigation or enforcement proceeding may be maintained as confidential so long as they do n ot constitute

19 § 98.97 ( b )

.
20 As of July 1, 2011, many semiconductor facilitie s will be subject to the CAA’s Prevention of Significant Deterioration permitting under the GHG “Tailoring Rule.” See Prevention of Significant Deterioration and Title V Greenhouse Gas Tailoring Rule; Final Rule , 75 Fed. Reg. 31,514 (June 3, 2010).

21 Tra de secrets have long been recognized as property protected by the United States Constitution and other laws. Ruckelshaus v. Monsanto Co ., 467 U.S. 986 (1984) (environmental data can be trade secret; unauthorized disclosure is a taking)

.
22 See http://www. nsa.gov/business/programs/tapo.shtml

.1101 K Street, NW, Suite 450, Washington, DC 20005 p: 202. 44 6.1700 f: 202. 2 16.9745 www.sia

- online.org “emissions data.” 23 Under EPA’s regulations, the determination of which information is “emissions data” has been made on a case

- by

case basis based on information submitted by individual emission

sources. 24

In July 2010, EPA published a prop osal (hereinafter “Proposed CBI Rule”) that, if finalized, will constitute EPA’s prospective determination of which information required to be submitted under Subpart I will qualify as “emissions data” and, therefore, will not be eligible for confidential treatment under the Rule. 25 T he Proposed CBI Rule identifies which information EPA will consider “emissions data” by reference to specific sections in Subpart I. At the time of its publication in July 2010, the Proposed CBI Rule referred to the informatio n requirements of Subpart I as they existed then; this was the Re

- Proposed Subpart I, which, as described in Section II(B)(1)(a) above, required submission of information, including emission factors under § 98.96(d), only for certain process categories, an d not on a recipe

- specific basis. Therefore, the determination of which data submitted under Subpart I constitute “emissions data” was made by EPA without any evaluation of the Final Subpart I’s recipe

specific reporting regime.

If EPA were to persist i n its position articulated in the Proposed CBI Rule, much of the information underlying the Final Subpart I’s emissions calculations, 26 including the recipe

- specific emissions factors, would constitute “emissions data,” thereby making recipe

specific inform ation vulnerable to public disclosure even more broadly outside the enforcement and permitting contexts described above. Although SIA commented on the Proposed CBI Rule, 27 it was obviously impracticable for SIA to comment on the Proposed CBI Rule as it wou ld ultimately apply

-- i.e. , to the submission of recipe

specific emission factors.

23 42 U.S.C. § 7471(c).

24 See 40 C.F.R. § 2.301 et seq

.
25 See Proposed Confidentiality Determinations for Data Required Under the Mandatory Greenhouse Gas Reporting Rule and Proposed Amendment to Special Rules Gover ning Certain Information Obtained Under the Clean Air Act , 75 Fed. Reg. 38,959 (July 7, 2010).

26 See EPA, “Data category assignments for reporting elements to be reported under 40 CFR part 98 and its amendments,” pp. 18

- 21, available at http://www.epa.gov /climatechange/emissions/downloads10/CBI_Data

- Category.pdf).

27 See Comments of the Semiconductor Industry Association on EPA’s Proposed Confidentiality Determinations for Data Required Under the Mandatory Greenhouse Gas Reporting Rule and Proposed Amendme nt to Special Rules Governing Certain Information Obtained Under the Clean Air Act, EPA Docket No. EPA

- HQ

- OAR

- 20 09

- 0924

- 0043.1 (Sept. 7, 2010)

.1101 K Street, NW, Suite 450, Washington, DC 20005 p: 202. 44 6.1700 f: 202. 2 16.9745 www.sia

- online.org The mere fact that the Final Subpart I would probe so deeply into the semiconductor fabrication process as to create such vulnerabilities to intellectual property undersc ores why an individual recipe

- based approach is not sound for the long term, even if EPA were to address the definitional and other issues to render the Final Subpart I technically feasible. In addition, EPA utterly failed to recognize and address these i ntellectual property threats when promulgating the Final Subpart I, and therefore, EPA must grant reconsideration on this issue to rectify these serious gaps in its legal and policy analysis.

As the foregoing excerpt from our Subpart I Petition for Reconsi deration indicates, the Final CBI Rule raises the same intellectual property

- vulnerability “objection” as our petition. Thus, t o preserve our legal rights as to this objection, SIA submits today’s petition for reconsideration of the Final CBI Rule.

2. The Fi nal CBI Rule Is Material To The Current Effort

-- Pursuant To SIA’s Subpart I Petitions For Reconsideration And For Judicial Review

-- To Develop GHG Reporting Alternatives

EPA granted SIA’s Subpart I Petition for Reconsideration in part to defer the recip e

- based reporting requirement for 3 years. 28 SIA and EPA are now engaged in data gathering and discussions aimed at exploring three potential alternatives to the current Subpart I. These discussions are occurring pursuant to the grant in part of SIA’s P et ition for R econsideration as well as its P etition for Ju dicial R eview, which is currently being held in abeyance.

As noted above, the Final CBI Rule codifies the legal position that “inputs” to GHG “emissions equations” constitute “emissions data” that are not eligible for CBI protections. In doing so, however, the Final Rule defers the effective date of this legal position so that EPA can analyze its CBI implications for each subpart, and, if warranted and feasible for any subpart, engage in further rulem aking to revise that subpart in a manner that would avoid making CBI public. 29

H aving a separate process to address CBI that is disconnected from the current effort to develop alternatives to the current Subpart I will

-- by definition

-- deprive SIA and its members of their due process rights. T he viability of any alternative to the current Subpart I now being discussed with EPA depends upon ensuring adequate resolution of SIA’s intellectual property

- vulnerability “objection” raised in its Subpart I Peti tion for Reconsideration and now raised, as discussed in Section 1. above, in this petition for reconsideration. The notion that the alternatives to the current Subpart I would be adopted, and only then evaluated separately for CBI protection

-- with the possibility that EPA would conclude, based in its legal position, that intellectual property underlying an alternative are not eligible for CBI protections and mus t be made public

– would have the result of nullifying SIA’s intellectual property

- vulnerabil ity “ objection ” for both its Subpart I Petition for Reconsideration and this current petition

.

28 Mandatory Reporting of Greenhouse Gases: Changes to Provisions for Electronics Manufacturing to Provide Flex ibility, 76 Fed. Reg. 59,542 (Sept. 27, 2011).

29 Final CBI Rule, 76 Fed. Reg. 53061.1101 K Street, NW, Suite 450, Washington, DC 20005 p: 202. 44 6.1700 f: 202. 2 16.9745 www.sia

- online.org As further evidence of such nullification, EPA has indicated during discussions to date that the Agency may not replace the current recipe

- based approach with one or more alternatives, but instead, retain it as one reporting “option”. Although SIA believes that the recipe

- based approach is not legally permissible for various reasons addressed in our Subpart I Petition for Reconsideration , should EPA decide to r etain it, then the 2

- part process envisioned by the Final CBI Rule likewise would not allow for resolution of our intellectual property

- vulnerability “ objection ” through our Subpart I Petition for Reconsideration and this current petition

. As the foregoing indicates, SIA’s “objection” to the two

- part process established by the Final CBI rule more than satisfies the Section 307(d)(7)(B) reconsideration standard: Indeed, SIA’s “objection” to the 2

- part process certainly was “impractica ble ” to raise during th e rulemaking for the Final CBI Rule. Moreover, it is clearly of “central relevance given that such a disconnected, 2

- part process would undermine proper and full resolution of its intellectual property

- vulnerability “objection” raised in this as well as S IA’s Subpart I Petition for Reconsideration

.

3. The Procedural Confusion Surrounding The Final CBI Rule Likewise Provides A clear Basis For Reconsideration

As described in its Preamble, 30 the Final CBI Rule grows out of a web of regulatory actions, including :

 A July 7, 2010 proposal that would (a) codify the legal position that “inputs” to “emissions equations” constitute “emissions data” for which CBI protections are not available and (b) categorize the various data elements of each Part 98 GHG reporting subpa rt based on th is legal position.

 A July 27, 2010 supplemental proposal to the July 7, 2010 proposal to address revised and new Part 98 data elements.

 An August 11, 2010 proposal that would revise Part 98 to change the description of some data elements and to add others.

 A December 27, 2010 interim final rule that deferred reporting of “inputs” to “emissions equations” until August 31, 2011.

 A December 27, 2010 “call for information” relevant to EPA’s “evaluation of data elements being deferred”.

 A March 18, 2011 interim final rule that extended the reporting deadline for all information until September 30, 2011.

This web of actions has created a confusing and uncertain situation

-- especially for SIA and its member companies

-- that provides an independent b asis for reconsideration pursuant to Section 307(d)(7)(B) ’s mandate that EPA “shall” grant reconsideration for “objections” “impractica ble ” to raise during the rulemaking and of “central relevance.

30 Final CBI Rule, 76 Fed. Reg. 53060

- 61.1101 K Street, NW, Suite 450, Washington, DC 20005 p: 202. 44 6.1700 f: 202. 2 16.9745 www.sia

- online.org In particular, t he Final CBI Rule appears to finalize the notice and comment rulemaking process for at least two of the foregoing actions: (1) The July 7, 2010 proposal and (2) the December 27, 2010 “call for information”. SIA lacked adequate opportunity to comment on each of these actions.

As to the first acti on, publication of the Final Subpart I

-- on December 1, 2010

-- occurred many months after the July 7, 2010 action in which EPA proposed a legal position that , as explained in Section 2 above, goes to the heart of our intellectual property

- vulnerability “ objection ”. It is clear, therefore, that SIA lacked an adequate opportunity to comment on the July 7, 2010 action with respect to the full and specific import of this legal position, given that Subpart I had, at that point, been proposed, then withdrawn a nd re

- proposed, but had not been finalized

. As to the second action, publication of the Final Subpart I

-- on December 1, 2010

-- occurred just a few weeks before th e December 27, 2010 action . By December 27th
, SIA already had met several times with EPA informally to request withdrawal of the Final Subpart I, based in part on its intellectual property

- vulnerability “ objection ”
, and then made this request in writing only a two days after December 27 th

. 31 On or about January 19, 2011, SIA learned that EPA would not withdraw Subpart I and that a petition for reconsideration would be needed to address SIA’s concerns, and on that same date, EPA extended the scheduled close of the comment period for the December 27 th action to February 3, 2011. A few weeks lat er, on January 31, 2011, SIA filed its Subpart I Petition for Reconsideration in which we formally lodged our intellectual property

- vulnerability “objection” ; comments on the December 27, 2011 action were due a few days later, and in those comments, SIA n oted this same “objection

. 32

Under the circumstances, SIA seeks reconsideration of the Final CBI Rule to address its inadequate opportunity to comment. We also do so as a precautionary measure due to the confusion and uncertain situation created by the w eb of actions that preceded the Final CBI Rule.

* * * As the foregoing indicates, SIA has more than ample grounds to obtain reconsideration of the Final Subpart I under Clean Air Act Section 307(d)(7)(B)’s 2

- part “impracticable” and “central relevanc e” test. SIA requests that EPA grant our petition for reconsideration of the Final CBI Rule and consolidate our “objections” with the current effort to resolve SIA’s Subpart I petitions for reconsideration and judicial review.

Sincerely,

David Isaacs Vice President, Government Policy

31 Letter to Administrator Jackson from SIA re: “Subpart I of Recently Finalized GHG Reporting Rule for Additional Sources of F luorinated Gases: Request for Withdrawal” (Dec. 29, 2010).

32 Comments on the December 27 action were originally due on February 3, 2011, and SIA’s Subpart I Petition for Reconsideration was due (and was filed) on January 31, 2011. On January 19, 2011, the February 3, 2011 deadline was extended to March 7, 2011.1101 K Street, NW, Suite 450, Washington, DC 20005 p: 202. 44 6.1700 f: 202. 2 16.9745 www.sia

- online.org Cc: Carole Cook C limate Change Division Office of Atmospheric Programs (MC

– 6207J) Environmental Protection Agency 1200 Pennsylvania Ave., NW. Washington, DC 20460

Associate General Counsel for the Air and Radiation Law Office Office of Ge neral Counsel (Mail Code 2344A) Environmental Protection Agency 1200 Pennsylvania Ave., NW. Washington, DC 200041101 K Street, NW, Suite 450, Washington, DC 20005 p: 202. 44 6.1700 f: 202. 2 16.9745 www.sia

- online.org