To all: Report on the status of the GOE plant upgrade permit.
I have spent something over five hours on the phone with people at GRNO, Regulatory Strategies (GRNO's environmental engineering consultants), and DHEC regarding the permit--technically, a construction permit--to allow the GOE Plant Partnership to make the alterations necessary to operate the Charleston plant as a 1000 gph processor. I believe I have a rough sense of when certain kinds of things occurred in the process of making this application, though I have variant stories from all three groups as to the reasons why the process has taken as long as it has. I've organized this report around a time frame of events that seem not to be in dispute, within which I have described and occasionally commented upon the various points of contention. I am sorry for the length, but it is as short as I could make it and still convey the circumstances and nature of my understanding of this permit process based on my conversations.
1)During the application process for the initial construction permit last summer, GRNO informally began talks with DHEC about filing a second application for the upgraded processor (the existing processor had been running at about 550 gph of diesel output during the period prior to the formal stack test last June, though this was varied a lot because of testing and modification needs). GRNO believes that DHEC advised them not to apply until the initial construction permit was awarded, so that the application could take into account any conditions and determinations in that permit. Robert Brown, the principal engineer at DHEC Bureau of Air Quality dealing with the GRNO applications, stated that he did not know why GRNO did not apply for the enhanced operating level in the first application. GRNO states that they were advised to abide strictly by the terms of the court order overturning DHEC's initial denial of the permit to operate at the Mt. Pleasant location, so that there would be no pretext for further delays, revisions, and tests.
2) About 2-3 weeks after receiving the construction permit (i.e., about mid-October), GRNO initiated formal talks with DHEC. DHEC, as is usually the case with such applications, required pre-application meetings.
3) In late November, there was a meeting with GRNO, Regulatory Strategies, and about 20 persons from DHEC. The intent was to make everybody aware of the coming application and to coordinate what kinds of permits were to be required.
4) On November 25, Robert Brown at DHEC received a letter from RS on behalf of GRNO making the case that subsection NNN of the DSPS regulations should not apply, under the "minor source" waiver rule, in determining the standards to be used in evaluating the operations and emissions from the processor.
5) Sometime in January, DHEC internally determined that their policy will be that subsection NNN standards do apply, but that this is not a cut-and-dried case and that final determination should be made by the regional EPA authority (DHEC is the local agency charged with applying and enforcing federal EPA laws and regulations in South Carolina). GRNO believes that because DHEC is deferring the decision to the EPA that they have a legal responsibility to initiate promptly a request for determination. DHEC believes that they have no obligation nor need to write EPA until they have a formal application to consider (since everything is hypothetical until that point). It is not clear to me whether DHEC has ever formally rejected GRNO's position in the letter of November 25, but everyone knows DHEC's position.
6) Sometime between the end of January and early March, RS wrote formally to the EPA regional authority asking for a determination in this matter and submitting their arguments. Both RS and DHEC informally discussed issues with EPA authorities. As of this morning, DHEC has not sent any formal request to the EPA for a determination, nor have they responded to what is at least an informal request from EPA to provide their opinion and reasons for EPA consideration. Brown promised me that this letter would be sent by the end of this week. RS states that he has been making the same promise every week for the last 10 weeks. The EPA cannot make a final determination without input from their local agency. Brown admits that DHEC has "not been as prompt as they should have been" on this issue, and cites loss of a succession of key personnel and a high priority to complete Title V permits by the June 30 deadline. RS states that law requires construction permit applications to have a higher priority on agency time than Title V permits.
7) Between November and March, and especially between January and March, RS was working on the scaling and modeling necessary to establish the emission consequences for the larger machine (the application is 64 pages long, most of it consisting of detailed data and computations). Doing so requires consultation with DHEC, so that all reasonable issues can be addressed in the application. The number of, nature of, extent of, and initiative for these meetings are disputed issues between RS sources and DHEC sources. RS says that their work on these calculations could have been accomplished in less time only had more resources been devoted to it, at a cost of up to as much as six times the current cost, for a top priority rush job, and that GRNO did not ask for such higher cost activity.
9) On March 27, RS informed DHEC that they believed they had completed everything needed for the application. It is this document, along with a cover letter dated March 31, that was sent to Charles King and me. Further discussion with DHEC lead to DHEC requiring more information on two technical points. Following revision, the document is resubmitted on April 9 and logged in on April 10. Earlier this week, DHEC returned the application because it is missing a mandatory signature from a professional engineer. RS dispatched the application back to Columbia this morning; Brown stated that he expected it back this afternoon at DHEC.
10) Once the completed application is officially accepted by DHEC, it begins their 90-day clock for consideration and awarding of a permit. Everyone believes that once they have all required materials, EPA will make a determination about applicability of NNN within 30 days. Both sides believe that the EPA will eventually support their position. DHEC believes that this period will not delay a permit because it will take more than 30 days to advertise the application, hold a public hearing, etc. DHEC believes that a public hearing will be required under EPA regulations regardless of the decision on NNN. RS believes that no public hearings are required on a "minor source," assuming NNN does not apply. If NNN does apply, then public hearings are clearly mandated.
11) Subsection NNN governs permits for oil refineries, chemical manufacturing plants, and the like. Everyone agrees that no one had the GRNO processor in mind when the law and regulations were being written, so none of the processes referred to, here or elsewhere, exactly fit what this processor does. DHEC believes that by analogy chemical manufacturing which employs "a continuous distillation process" seems closest (DHEC apparently took several months to decide that the sections dealing with oil refining did not apply, since the source material was not crude oil). RS believes that by context and intent the chemical manufacturing sections of the law apply to distinctly different types of operations, none of which are close to what this processor actually does. There are at least four consequences stemming from the determination of the applicability of NNN standards: A) NNN requires a public hearing, along with a different standard about relevant testimony. Such hearings will slow by at least 45 days action on the application. Brown stated that, assuming no relevant adverse commentary (as was the case last year), the permit can still be issued by sometime in July. B) NNN would require full stack testing (this was the $40,000 job of last June) upon any modification or application for an initial or extension of an operating permit (different from a construction permit, but automatic as long as tests show the actual machine performs as described in the construction permit--GRNO is still operating under the original construction permit, which is valid for about another 6 months). Operating permits are good for 5 years. Continuous monitoring of emissions output is required under any permit. Under "minor source" rules, this monitoring supplies sufficient evidence for operating permits. C) NNN requires meeting 98% clean emission standards instead of 90%. Actual testing and modeling put the processor at an average of 99.6%. However, the lower standards will unquestionably speed up the process of approval elsewhere, since 99+% efficiency on a 90% standard is not likely to trigger tests, hearings, etc., elsewhere. A determination by this regional EPA will be valid for other EPA regions. D) If NNN standards _clearly_ do not apply, then GRNO believes it would have a basis for seeking an injunction and damages, based on apparent violation of the previous court order, which effectively enjoined DHEC from making decisions other than upon the law and the facts of the case. In that case, one of the DHEC administrators admitted under oath that he had never read the environmental law that he was charged with enforcing, prior to the denial of GRNO's application. This individual is now Robert Brown's supervisor. I believe that much of the delay last summer that GRNO did not originally anticipate nor communicate to us came from DHEC's unexpected application of NNN standards; it was sometime after this determination that GRNO engaged RS. If NNN standards do not apply, then DHEC is open to a lawsuit for damages from wrongly requiring them; if they do apply, they have a stronger defense, but are still open to a suit for not obtaining EPA determination last summer (which they now believe necessary) and thus preventing delays in this second application. Faced with this dilemma, I can understand why DHEC may prefer not to communicate with the EPA at all, if they think they can persuade RS and GRNO to agree to accept NNN standards. GRNO believes that further DHEC delays will simply strengthen GRNO's case.
12) When I asked Brown about matters of law, regulation, application procedures, calculations for chemical modeling, etc., his response language was direct, detailed, clear, and authoritative. When I expressed concern about the extent of time that had passed since the internal decision on NNN of last January (I asked who made it; Brown said he did, but only after extensive consultation with other individuals in the department) and the communication of that decision to the EPA, or about the frequency and speed of DHEC replies to RS requests for responses during the period of calculations on the modeling, he language shifted to passive voice, many hesitations as if searching carefully for words, more generic and vague descriptions about what or when things might have occurred. Within this language, he claimed responsibility for DHEC on working with GRNO, and declined to accept my suggestions that essential policy decisions on this case were being made by his supervisor or elsewhere. RS believes that Brown's supervisor has openly expressed hostility to GRNO as a company. RS also believes that, for both political and structural reasons that extend throughout the agency, there is a tendency for DHEC employees to respond negatively to any apparent pressure coming from outside the agency, and that the best way to secure cooperation lies in prompt, thorough, and continual face-to-face meetings in which documents can be discussed and decisions facilitated. I was profuse in my thanks to Brown for his time and he stated that he would see to it that the GRNO application was dealt with as promptly as possible within the constraints of the law, which I said I would communicate in my report.
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